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, 2012



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



COMMISSION FILE NUMBER: 0-50398






TICC CAPITAL CORP.

(Exact name of registrant as specified
in its charter)








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

8 SOUND SHORE DRIVE, SUITE 255 GREENWICH,
CONNECTICUT 06830

(Address of principal executive office)



(203) 983-5275

(Registrant’s telephone number,
including area code)






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



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



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



|                        |                                                      |                           |  
|----------------------- | ---------------------------------------------------- | ------------------------- | -
|Large accelerated filer |  ̈                                                    | Accelerated filer         | x
|                        |                                                      |                           |  
|Non-accelerated filer   |  ̈  (do not check
    if a smaller reporting company) | Smaller reporting company |  ̈



Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   ̈    No  
x



Indicate the number of shares outstanding
of each of the issuer’s classes of common stock, as of the latest practicable date. The number of shares of the issuer’s
Common Stock, $0.01 par value, outstanding as of May 9, 2012 was 37,754,774.

















TICC CAPITAL CORP.

TABLE OF CONTENTS



|                              |                                                                                                                                 |   
|----------------------------- | ------------------------------------------------------------------------------------------------------------------------------- | --
|PART I. FINANCIAL INFORMATION | 3                                                                                                                              
|                              |                                                                                                                                 |   
|Item 1.                       | Financial Statements (Unaudited)                                                                                                | 3 
|                              |                                                                                                                                 |   
|                              | Consolidated Statements of Assets and Liabilities as of March 31, 2012 and December 31, 2011                                    | 3 
|                              |                                                                                                                                 |   
|                              | Consolidated Schedule of Investments as of March 31, 2012                                                                       | 4 
|                              |                                                                                                                                 |   
|                              | Consolidated Schedule of Investments as of December 31, 2011                                                                    | 9 
|                              |                                                                                                                                 |   
|                              | Consolidated Statements of Operations for the three months ended March 31, 2012 and 2011                                        | 14
|                              |                                                                                                                                 |   
|                              | Consolidated Statements of Changes in Net Assets for the three months ended March 31, 2012 and the year ended December 31, 2011 | 15
|                              |                                                                                                                                 |   
|                              | Consolidated Statements of Cash Flows for the three months ended March 31, 2012 and 2011                                        | 16
|                              |                                                                                                                                 |   
|                              | Notes to Consolidated Financial Statements                                                                                      | 17
|                              |                                                                                                                                 |   
|Item 2.                       | Management’s Discussion and Analysis of Financial Condition and Results of Operations                                           | 27
|                              |                                                                                                                                 |   
|                              | Cautionary Statements Regarding Forward-Looking Statements                                                                      | 27
|                              |                                                                                                                                 |   
|                              | Overview                                                                                                                        | 31
|                              |                                                                                                                                 |   
|                              | Critical Accounting Policies                                                                                                    | 28
|                              |                                                                                                                                 |   
|                              | Portfolio Composition and Investment Activity                                                                                   | 35
|                              |                                                                                                                                 |   
|                              | Results of Operations                                                                                                           | 39
|                              |                                                                                                                                 |   
|                              | Liquidity and Capital Resources                                                                                                 | 45
|                              |                                                                                                                                 |   
|                              | Recent Developments                                                                                                             | 48
|                              |                                                                                                                                 |   
|Item 3.                       | Quantitative and Qualitative Disclosures About Market Risk                                                                      | 49
|                              |                                                                                                                                 |   
|Item 4.                       | Controls and Procedures                                                                                                         | 49
|                              |                                                                                                                                
|PART II. OTHER INFORMATION    | 49                                                                                                                             
|                              |                                                                                                                                 |   
|Item 1.                       | Legal Proceedings                                                                                                               | 49
|                              |                                                                                                                                 |   
|Item 1A.                      | Risk Factors                                                                                                                    | 49
|                              |                                                                                                                                 |   
|Item 2.                       | Unregistered Sales of Equity Securities and Use of Proceeds                                                                     | 66
|                              |                                                                                                                                 |   
|Item 3.                       | Defaults Upon Senior Securities                                                                                                 | 66
|                              |                                                                                                                                 |   
|Item 4.                       | Mine Safety Disclosures                                                                                                         | 66
|                              |                                                                                                                                 |   
|Item 5.                       | Other Information                                                                                                               | 66
|                              |                                                                                                                                 |   
|Item 6.                       | Exhibits                                                                                                                        | 67
|                              |                                                                                                                                
|SIGNATURES                    | 68                                                                                                                             



2





PART I—FINANCIAL INFORMATION



ITEM 1.	FINANCIAL
STATEMENTS (UNAUDITED)



TICC CAPITAL CORP.



CONSOLIDATED STATEMENTS OF ASSETS AND
LIABILITIES

(unaudited)



|                                                                                                   |  | March
    31, 2012 |             |   | December
    31, 2011 |  
|-------------------------------------------------------------------------------------------------- |  | ------------------ | ----------- | - | --------------------- | -
|                                                                                                   |  |                    |             |   |                       |  
|ASSETS                                                                                             |  |                    |             |   |                       |  
|                                                                                                   |  |                    |             |   |                       |  
|Non-affiliated/non-control
    investments (cost: $418,041,284 @ 3/31/12; $372,091,255 @ 12/31/11) |  | $                  | 429,372,564 |   |                       | $
|Control
    investments (cost: $17,453,000 @ 3/31/12; $17,434,371 @ 12/31/11)                      |  |                    | 16,700,000  |   |                       |  
|Total
    investments at fair value                                                                |  |                    | 446,072,564 |   |                       |  
|Cash and
    cash equivalents                                                                      |  |                    | 30,726,275  |   |                       |  
|Restricted
    cash                                                                                |  |                    | 11,776,290  |   |                       |  
|Deferred
    debt issuance costs                                                                   |  |                    | 2,820,451   |   |                       |  
|Interest
    and distributions receivable                                                          |  |                    | 3,822,288   |   |                       |  
|Other
    assets                                                                                   |  |                    | 173,101     |   |                       |  
|Total
    assets                                                                                   |  | $                  | 495,390,969 |   |                       | $
|LIABILITIES                                                                                        |  |                    |             |   |                       |  
|Notes payable,
    net of discount                                                                 |  | $                  | 99,763,301  |   |                       | $
|Accrued
    interest payable                                                                       |  |                    | 529,528     |   |                       |  
|Investment
    advisory fee payable to affiliate                                                   |  |                    | 3,336,688   |   |                       |  
|Accrued
    capital gains incentive fee to affiliate                                               |  |                    | 2,174,412   |   |                       |  
|Securities
    purchased not settled                                                               |  |                    | 30,016,336  |   |                       |  
|Accrued
    expenses                                                                               |  |                    | 1,055,842   |   |                       |  
|Total
    liabilities                                                                              |  |                    | 136,876,107 |   |                       |  
|                                                                                                   |  |                    |             |   |                       |  
|NET
    ASSETS                                                                                     |  |                    |             |   |                       |  
|Common stock,
    $0.01 par value, 100,000,000 shares authorized, and 37,754,774 and               |  |                    |             |   |                       |  
|32,818,428
    issued and outstanding, respectively                                                |  |                    | 377,548     |   |                       |  
|Capital in excess of par value                                                                     |  |                    | 422,386,613 |   |                       |  
|Net unrealized
    appreciation on investments                                                     |  |                    | 10,578,280  |   |                       |  
|Accumulated
    net realized losses on investments                                                 |  |                    | (70,014,327 | ) |                       |  
|Distributions
    in excess of investment income                                                   |  |                    | (4,813,252  | ) |                       |  
|Total
    net assets                                                                               |  |                    | 358,514,862 |   |                       |  
|                                                                                                   |  |                    |             |   |                       |  
|Total
    liabilities and net assets                                                               |  | $                  | 495,390,969 |   |                       | $
|                                                                                                   |  |                    |             |   |                       |  
|Net asset value per common share                                                                   |  | $                  | 9.50        |   |                       | $





See Accompanying Notes.



3





TICC CAPITAL CORP.



CONSOLIDATED SCHEDULE OF INVESTMENTS

MARCH 31, 2012

(unaudited)





|COMPANY(1)                                 |  | INDUSTRY                        |  | INVESTMENT                                      |  | PRINCIPAL
AMOUNT |            | COST |   | FAIR
    VALUE(2) |  | %
    of Net
    Assets |           
|------------------------------------------ |  | ------------------------------- |  | ----------------------------------------------- |  | ---------------- | ---------- | ---- | - | ----------------- |  | ----------------------- | ----------
|                                           |  |                                 |  |                                                 |  |                  |            |      |   |                   |  |                         |           
|Senior Secured Notes                       |  |                                 |  |                                                 |  |                  |            |      |   |                   |  |                        
|                                           |  |                                 |  |                                                 |  |                  |            |      |   |                   |  |                         |           
|Airvana Network
    Solutions, Inc.        |  | telecommunication
    services  |  | senior secured
    notes (4)(5)(6)(9)           |  | $                | 4,910,714  |      | $ | 4,835,074         |  | $                       | 4,665,178 
|                                           |  |                                 |  | (10.00%, due
    March 25, 2015)                |  |                  |            |      |   |                   |  |                         |           
|                                           |  |                                 |  |                                                 |  |                  |            |      |   |                   |  |                         |           
|AKQA, Inc.                                 |  | advertising                     |  | senior secured
    notes(4)(6)(9)               |  |                  | 5,896,448  |      |   | 5,896,448         |  |                         | 5,778,513 
|                                           |  |                                 |  | (4.98%, due
    March 20, 2013)                 |  |                  |            |      |   |                   |  |                         |           
|                                           |  |                                 |  |                                                 |  |                  |            |      |   |                   |  |                         |           
|Algorithmic
    Implementations, Inc.      |  | software                        |  | senior secured
    notes(4)(5)(6)               |  |                  | 14,550,000 |      |   | 14,453,000        |  |                         | 14,550,000
|(d/b/a "Ai
    Squared")                   |  |                                 |  | (9.84%, due
    September 11, 2013)             |  |                  |            |      |   |                   |  |                         |           
|                                           |  |                                 |  |                                                 |  |                  |            |      |   |                   |  |                         |           
|American Integration
    Technologies, LLC |  | semiconductor
    capital       |  | senior secured
    notes(4)(5)                  |  |                  | 23,401,906 |      |   | 21,388,002        |  |                         | 22,699,849
|                                           |  | equipment                       |  | (11.75%, due
    December 31, 2013)             |  |                  |            |      |   |                   |  |                         |           
|                                           |  |                                 |  |                                                 |  |                  |            |      |   |                   |  |                         |           
|Anchor Glass
    Container Corporation     |  | packaging and
    glass         |  | senior secured
    notes(4)(9)                  |  |                  | 4,957,465  |      |   | 4,957,465         |  |                         | 4,955,928 
|                                           |  |                                 |  | (6.00%, due
    March 2, 2016)                  |  |                  |            |      |   |                   |  |                         |           
|                                           |  |                                 |  |                                                 |  |                  |            |      |   |                   |  |                         |           
|Attachmate Corporation                     |  | enterprise software             |  | senior secured
    notes(4)(5)(6)(9)            |  |                  | 4,875,000  |      |   | 4,736,351         |  |                         | 4,835,415 
|                                           |  |                                 |  | (6.50%, due
    April 27, 2017)                 |  |                  |            |      |   |                   |  |                         |           
|                                           |  |                                 |  |                                                 |  |                  |            |      |   |                   |  |                         |           
|Band Digital
    Inc.                      |  | IT consulting                   |  | senior secured
    notes(4)(6)                  |  |                  | 1,900,500  |      |   | 1,900,500         |  |                         | 1,900,500 
|(F/K/A "WHITTMANHART,
    Inc.")           |  |                                 |  | (15.58%, due
    December 31, 2012)             |  |                  |            |      |   |                   |  |                         |           
|                                           |  |                                 |  |                                                 |  |                  |            |      |   |                   |  |                         |           
|Blue Coat System,
    Inc.                 |  | software                        |  | first lien senior
    secured notes(4)(5)(9)    |  |                  | 3,500,000  |      |   | 3,431,004         |  |                         | 3,478,125 
|                                           |  |                                 |  | (7.50%, due
    February 15, 2018)              |  |                  |            |      |   |                   |  |                         |           
|                                           |  |                                 |  |                                                 |  |                  |            |      |   |                   |  |                         |           
|                                           |  |                                 |  | second lien
    senior secured notes(4)(5)      |  |                  | 5,214,286  |      |   | 5,143,563         |  |                         | 5,279,465 
|                                           |  |                                 |  | (11.50%, due
    August 15, 2018)               |  |                  |            |      |   |                   |  |                         |           
|                                           |  |                                 |  |                                                 |  |                  |            |      |   |                   |  |                         |           
|BNY Convergex                              |  | financial intermediaries        |  | second lien
    senior secured notes(4)(5)(9)   |  |                  | 1,875,000  |      |   | 1,863,386         |  |                         | 1,856,250 
|                                           |  |                                 |  | (8.75%, due
    December 17, 2017)              |  |                  |            |      |   |                   |  |                         |           
|                                           |  |                                 |  |                                                 |  |                  |            |      |   |                   |  |                         |           
|CHS/Community
    Health Systems, Inc.     |  | healthcare                      |  | senior secured
    notes(4)(5)(6)(9)(10)        |  |                  | 3,879,093  |      |   | 3,644,803         |  |                         | 3,821,411 
|                                           |  |                                 |  | (4.03%, due
    July 25, 2014)                  |  |                  |            |      |   |                   |  |                         |           
|                                           |  |                                 |  |                                                 |  |                  |            |      |   |                   |  |                         |           
|Decision Resources,
    LLC                |  | healthcare                      |  | first lien senior
    secured notes(4)(5)(6)(9) |  |                  | 4,950,000  |      |   | 4,893,214         |  |                         | 4,752,000 
|                                           |  |                                 |  | (7.00%, due
    December 28, 2016)              |  |                  |            |      |   |                   |  |                         |           
|                                           |  |                                 |  |                                                 |  |                  |            |      |   |                   |  |                         |           
|                                           |  |                                 |  | second lien
    senior secured notes(4)(5)      |  |                  | 5,333,333  |      |   | 5,284,988         |  |                         | 5,226,667 
|                                           |  |                                 |  | (9.50%, due
    May 13, 2018)                   |  |                  |            |      |   |                   |  |                         |           
|                                           |  |                                 |  |                                                 |  |                  |            |      |   |                   |  |                         |           
|Diversified
    Machine, Inc.              |  | auto parts
    manufacturer     |  | first lien senior
    secured notes(4)(5)(6)(9) |  |                  | 4,987,500  |      |   | 4,917,320         |  |                         | 4,975,031 
|                                           |  |                                 |  | (9.25%, due
    December 1, 2016)               |  |                  |            |      |   |                   |  |                         |           
|                                           |  |                                 |  |                                                 |  |                  |            |      |   |                   |  |                         |           
|Embanet-Compass
    Knowledge Group, Inc.  |  | education                       |  | senior secured
    notes(4)(5)(6)(9)            |  |                  | 4,962,500  |      |   | 4,824,900         |  |                         | 4,912,875 
|                                           |  |                                 |  | (5.50%, due
    June 27,  2017)                 |  |                  |            |      |   |                   |  |                         |           
|                                           |  |                                 |  |                                                 |  |                  |            |      |   |                   |  |                         |           
|Emdeon, Inc.                               |  | healthcare                      |  | senior secured
    notes(4)(5)(6)(9)            |  |                  | 1,945,125  |      |   | 1,889,308         |  |                         | 1,970,256 
|                                           |  |                                 |  | (6.75%, due
    November 2,  2018)              |  |                  |            |      |   |                   |  |                         |           
|                                           |  |                                 |  |                                                 |  |                  |            |      |   |                   |  |                         |           
|Endurance International
    Group, Inc.    |  | web hosting                     |  | first lien senior
    secured notes(4)(5)(6)(9) |  |                  | 9,975,000  |      |   | 9,878,101         |  |                         | 9,975,000 
|                                           |  |                                 |  | (7.75%, due
    December 28, 2016)              |  |                  |            |      |   |                   |  |                         |           
|                                           |  |                                 |  |                                                 |  |                  |            |      |   |                   |  |                         |           
|GenuTec Business
    Solutions, Inc.       |  | interactive
    voice messaging |  | senior secured
    notes(4)(5)(7)               |  |                  | 3,476,000  |      |   | 3,163,772         |  |                         | -         
|                                           |  | services                        |  | (0.0%, due October
    30, 2014)                |  |                  |            |      |   |                   |  |                         |           
|                                           |  |                                 |  |                                                 |  |                  |            |      |   |                   |  |                         |           
|Getty Images,
    Inc.                     |  | printing and
    publishing     |  | senior secured
    notes(4)(5)(9)               |  |                  | 5,000,000  |      |   | 4,944,020         |  |                         | 5,017,500 
|                                           |  |                                 |  | (5.25%, due
    November 5,  2016)              |  |                  |            |      |   |                   |  |                         |           
|                                           |  |                                 |  |                                                 |  |                  |            |      |   |                   |  |                         |           
|Global Tel Link
    Corp.                  |  | telecommunication
    services  |  | senior secured
    notes(4)(5)(6)(9)            |  |                  | 5,803,636  |      |   | 5,705,997         |  |                         | 5,790,578 
|                                           |  |                                 |  | (7.00%, due
    December 14,  2017)             |  |                  |            |      |   |                   |  |                         |           
|                                           |  |                                 |  |                                                 |  |                  |            |      |   |                   |  |                         |           
|Goodman Global,
    Inc.                   |  | building and
    development    |  | senior secured
    notes(4)(5)(6)(9)            |  |                  | 4,860,748  |      |   | 4,781,909         |  |                         | 4,882,039 
|                                           |  |                                 |  | (5.75%, due
    October 28, 2016)               |  |                  |            |      |   |                   |  |                         |           
|                                           |  |                                 |  |                                                 |  |                  |            |      |   |                   |  |                         |           
|GRD Holding
    III                        |  | retail                          |  | senior secured
    notes(4)(5)(6)(9)            |  |                  | 3,950,000  |      |   | 3,573,132         |  |                         | 3,643,875 
|                                           |  |                                 |  | (8.75%, due
    October 5, 2017)                |  |                  |            |      |   |                   |  |                         |           
|                                           |  |                                 |  |                                                 |  |                  |            |      |   |                   |  |                         |           
|Grede Holdings
    LLC                     |  | auto parts
    manufacturer     |  | senior secured
    notes(4)(9)                  |  |                  | 5,000,000  |      |   | 4,915,000         |  |                         | 4,975,000 
|                                           |  |                                 |  | (7.00%, due
    April 3, 2017)                  |  |                  |            |      |   |                   |  |                         |           
|                                           |  |                                 |  |                                                 |  |                  |            |      |   |                   |  |                         |           
|GXS Worldwide
    Inc.                     |  | business services               |  | senior secured
    notes(5)(9)                  |  |                  | 8,000,000  |      |   | 7,912,507         |  |                         | 7,840,000 
|                                           |  |                                 |  | (9.75%, due
    June 15, 2015)                  |  |                  |            |      |   |                   |  |                         |           









(Continued on next page)



See Accompanying Notes.



4





TICC CAPITAL CORP.



CONSOLIDATED SCHEDULE OF INVESTMENTS
- (Continued)

MARCH 31, 2012

(unaudited)





|COMPANY(1)                             |  | INDUSTRY                       |  | INVESTMENT                                         |  | PRINCIPAL AMOUNT |            | COST |   | FAIR VALUE(2) |  | %
    of Net
    Assets |           
|-------------------------------------- |  | ------------------------------ |  | -------------------------------------------------- |  | ---------------- | ---------- | ---- | - | ------------- |  | ----------------------- | ----------
|                                       |  |                                |  |                                                    |  |                  |            |      |   |               |  |                         |           
|Senior
    Secured Notes - (continued) |  |                                |  |                                                    |  |                  |            |      |   |               |  |                        
|                                       |  |                                |  |                                                    |  |                  |            |      |   |               |  |                         |           
|HHI Holdings
    LLC                   |  | auto parts manufacturer        |  | senior secured
    notes(4)(5)(6)(9)               |  | $                | 4,455,011  |      | $ | 4,437,671     |  | $                       | 4,455,011 
|                                       |  |                                |  | (7.00%, due
    March 21, 2017)                    |  |                  |            |      |   |               |  |                         |           
|                                       |  |                                |  |                                                    |  |                  |            |      |   |               |  |                         |           
|Immucor, Inc.                          |  | healthcare                     |  | senior secured
    term B notes(4)(5)(6)(9)        |  |                  | 4,477,500  |      |   | 4,325,702     |  |                         | 4,522,275 
|                                       |  |                                |  | (7.25% , due
    August 19, 2018)                  |  |                  |            |      |   |               |  |                         |           
|                                       |  |                                |  |                                                    |  |                  |            |      |   |               |  |                         |           
|Integra Telecom
    Holdings, Inc.     |  | telecommunication
    services |  | first lien senior
    secured notes(4)             |  |                  | 7,843,984  |      |   | 7,441,887     |  |                         | 7,441,588 
|                                       |  |                                |  | (9.25%, due
    August 15, 2015)                   |  |                  |            |      |   |               |  |                         |           
|                                       |  |                                |  |                                                    |  |                  |            |      |   |               |  |                         |           
|InfoNXX Inc.                           |  | telecommunication
    services |  | second lien
    senior secured notes(4)(5)(9)      |  |                  | 7,000,000  |      |   | 6,730,473     |  |                         | 6,440,000 
|                                       |  |                                |  | (6.49% , due
    December 1, 2013)                 |  |                  |            |      |   |               |  |                         |           
|                                       |  |                                |  |                                                    |  |                  |            |      |   |               |  |                         |           
|Mercury Payment
    Systems, LLC       |  | financial intermediaries       |  | senior secured
    notes(4)(6)(9)                  |  |                  | 3,970,000  |      |   | 3,970,000     |  |                         | 3,984,888 
|                                       |  |                                |  | (5.50%, due
    July 1, 2017)                      |  |                  |            |      |   |               |  |                         |           
|                                       |  |                                |  |                                                    |  |                  |            |      |   |               |  |                         |           
|Merrill Communications,
    LLC        |  | printing and
    publishing    |  | second lien
    senior secured notes(3)(4)(5)(9)   |  |                  | 6,261,343  |      |   | 6,226,877     |  |                         | 5,603,902 
|                                       |  |                                |  | (11.75% cash/2.69%
    PIK, due November 15, 2013) |  |                  |            |      |   |               |  |                         |           
|                                       |  |                                |  |                                                    |  |                  |            |      |   |               |  |                         |           
|Mirion Technologies,
    Inc.          |  | utilities                      |  | senior secured
    notes(4)(9)                     |  |                  | 2,500,000  |      |   | 2,450,000     |  |                         | 2,450,000 
|                                       |  |                                |  | (6.25%, due
    March 30, 2018)                    |  |                  |            |      |   |               |  |                         |           
|                                       |  |                                |  |                                                    |  |                  |            |      |   |               |  |                         |           
|National Healing
    Corp.             |  | healthcare                     |  | senior secured
    notes(4)(5)(6)(9)               |  |                  | 5,985,000  |      |   | 5,696,654     |  |                         | 5,865,300 
|                                       |  |                                |  | (8.25%, due
    November 30, 2017)                 |  |                  |            |      |   |               |  |                         |           
|                                       |  |                                |  |                                                    |  |                  |            |      |   |               |  |                         |           
|Nextag, Inc.                           |  | retail                         |  | senior secured
    notes(4)(5)(6)(9)               |  |                  | 10,625,000 |      |   | 10,046,782    |  |                         | 10,208,819
|                                       |  |                                |  | (7.00%, due
    January 27, 2016)                  |  |                  |            |      |   |               |  |                         |           
|                                       |  |                                |  |                                                    |  |                  |            |      |   |               |  |                         |           
|Pegasus Solutions,
    Inc.            |  | enterprise software            |  | first lien senior
    secured notes(4)(5)(6)(9)    |  |                  | 2,536,659  |      |   | 2,432,208     |  |                         | 2,466,901 
|                                       |  |                                |  | (7.75%, due
    April 17, 2013)                    |  |                  |            |      |   |               |  |                         |           
|                                       |  |                                |  | second lien
    senior secured notes(3)(5)         |  |                  | 6,000,838  |      |   | 4,408,383     |  |                         | 5,550,775 
|                                       |  |                                |  | (0.00% Cash/13.00%
    PIK, due April 15, 2014)    |  |                  |            |      |   |               |  |                         |           
|                                       |  |                                |  |                                                    |  |                  |            |      |   |               |  |                         |           
|Petco, Inc.                            |  | retail                         |  | senior secured
    notes(4)(5)(6)(9)               |  |                  | 4,949,495  |      |   | 4,728,801     |  |                         | 4,944,545 
|                                       |  |                                |  | (4.50%, due
    November 24, 2017)                 |  |                  |            |      |   |               |  |                         |           
|                                       |  |                                |  |                                                    |  |                  |            |      |   |               |  |                         |           
|Phillips Plastics
    Corporation      |  | healthcare                     |  | senior secured
    notes(4)(5)(6)(9)               |  |                  | 2,985,000  |      |   | 2,961,184     |  |                         | 2,966,344 
|                                       |  |                                |  | (6.50%, due
    February 12, 2017)                 |  |                  |            |      |   |               |  |                         |           
|                                       |  |                                |  |                                                    |  |                  |            |      |   |               |  |                         |           
|Power Tools,
    Inc.                  |  | software                       |  | senior secured
    notes(4)(5)(6)                  |  |                  | 7,500,000  |      |   | 7,455,340     |  |                         | 6,975,000 
|                                       |  |                                |  | (12.00%, due
    May 16, 2014)                     |  |                  |            |      |   |               |  |                         |           
|                                       |  |                                |  |                                                    |  |                  |            |      |   |               |  |                         |           
|Presidio IS
    Corp.                  |  | business services              |  | senior secured
    notes(4)(6)(9)                  |  |                  | 4,617,785  |      |   | 4,617,785     |  |                         | 4,663,963 
|                                       |  |                                |  | (7.25%, due
    March 31, 2017)                    |  |                  |            |      |   |               |  |                         |           
|                                       |  |                                |  |                                                    |  |                  |            |      |   |               |  |                         |           
|RBS Holding
    Company                |  | printing and
    publishing    |  | term B senior
    secured notes(4)(5)(6)(9)        |  |                  | 4,950,000  |      |   | 4,908,882     |  |                         | 2,970,000 
|                                       |  |                                |  | (9.25%, due
    March 23, 2017)                    |  |                  |            |      |   |               |  |                         |           
|                                       |  |                                |  |                                                    |  |                  |            |      |   |               |  |                         |           
|Renaissance
    Learning               |  | education                      |  | senior secured
    notes(4)(5)(6)(9)               |  |                  | 3,980,000  |      |   | 3,829,071     |  |                         | 3,980,000 
|                                       |  |                                |  | (7.75%, due
    October 19, 2017)                  |  |                  |            |      |   |               |  |                         |           
|                                       |  |                                |  |                                                    |  |                  |            |      |   |               |  |                         |           
|Securus Technologies                   |  | telecommunication
    services |  | second lien
    senior secured notes(4)(5)(9)      |  |                  | 5,400,000  |      |   | 5,301,225     |  |                         | 5,296,482 
|                                       |  |                                |  | (10.00%, due
    May 18, 2018)                     |  |                  |            |      |   |               |  |                         |           
|                                       |  |                                |  |                                                    |  |                  |            |      |   |               |  |                         |           
|Shield Finance
    Co.                 |  | software                       |  | first lien term
    notes(4)(5)(9)(10)(11)         |  |                  | 3,761,142  |      |   | 3,638,934     |  |                         | 3,779,948 
|                                       |  |                                |  | (7.75%, due
    June 15, 2016)                     |  |                  |            |      |   |               |  |                         |           
|                                       |  |                                |  |                                                    |  |                  |            |      |   |               |  |                         |           
|SkillSoft Corporation                  |  | business services              |  | senior secured
    notes(4)(5)(9)                  |  |                  | 5,000,000  |      |   | 4,954,141     |  |                         | 4,996,250 
|                                       |  |                                |  | (6.50%, due
    May 26, 2017)                      |  |                  |            |      |   |               |  |                         |           
|                                       |  |                                |  |                                                    |  |                  |            |      |   |               |  |                         |           
|SonicWall, Inc.                        |  | software                       |  | first lien senior
    secured notes(4)(5)(6)(9)    |  |                  | 878,226    |      |   | 856,248       |  |                         | 878,226   
|                                       |  |                                |  | (8.25%, due
    January 23, 2016)                  |  |                  |            |      |   |               |  |                         |           
|                                       |  |                                |  | second lien
    senior secured notes(4)(5)(9)      |  |                  | 5,000,000  |      |   | 4,878,255     |  |                         | 5,100,000 
|                                       |  |                                |  | (12.00%, due
    January 23, 2017)                 |  |                  |            |      |   |               |  |                         |           









(Continued on next page)



See Accompanying Notes.



5





TICC CAPITAL CORP.



CONSOLIDATED SCHEDULE OF INVESTMENTS
- (Continued)

MARCH 31, 2012

(unaudited)





|COMPANY(1)                                            |  | INDUSTRY                       |  | INVESTMENT                                      |  | PRINCIPAL
    AMOUNT |            | COST        |   | FAIR
    VALUE(2) |             | %
    of Net
    Assets |          
|----------------------------------------------------- |  | ------------------------------ |  | ----------------------------------------------- |  | -------------------- | ---------- | ----------- | - | ----------------- | ----------- | ----------------------- | ---------
|                                                      |  |                                |  |                                                 |  |                      |            |             |   |                   |             |                         |          
|Senior Secured Notes - (continued)                    |  |                                |  |                                                 |  |                      |            |             |   |                   |             |                        
|                                                      |  |                                |  |                                                 |  |                      |            |             |   |                   |             |                         |          
|SourceHOV, LLC                                        |  | business services              |  | second lien
    senior secured notes(4)(5)      |  | $                    | 8,000,000  |             | $ | 7,671,056         |             | $                       | 6,250,000
|                                                      |  |                                |  | (10.50%, due
    May 19, 2018)                  |  |                      |            |             |   |                   |             |                         |          
|                                                      |  |                                |  |                                                 |  |                      |            |             |   |                   |             |                         |          
|Sterling Infosystems,
    Inc.                        |  | business services              |  | senior secured
    notes(4)(5)(9)               |  |                      | 2,750,000  |             |   | 2,696,020         |             |                         | 2,743,125
|                                                      |  |                                |  | (7.27%, due
    February 1, 2018)               |  |                      |            |             |   |                   |             |                         |          
|                                                      |  |                                |  |                                                 |  |                      |            |             |   |                   |             |                         |          
|Stratus Technologies,
    Inc.                        |  | computer hardware              |  | first lien high
    yield notes(5)(9)           |  |                      | 9,753,000  |             |   | 9,138,753         |             |                         | 8,497,301
|                                                      |  |                                |  | (12.00%, due
    March 29, 2015)                |  |                      |            |             |   |                   |             |                         |          
|                                                      |  |                                |  |                                                 |  |                      |            |             |   |                   |             |                         |          
|Sunquest Information
    Systems, Inc.                |  | healthcare                     |  | senior secured
    notes(4)(5)(6)(9)            |  |                      | 4,962,500  |             |   | 4,860,525         |             |                         | 4,950,094
|                                                      |  |                                |  | (6.25%, due
    December 16, 2016)              |  |                      |            |             |   |                   |             |                         |          
|                                                      |  |                                |  |                                                 |  |                      |            |             |   |                   |             |                         |          
|Syniverse Holdings,
    Inc.                          |  | telecommunication
    services |  | senior secured
    notes(4)(5)(6)(9)            |  |                      | 3,969,849  |             |   | 3,831,218         |             |                         | 3,979,774
|                                                      |  |                                |  | (5.25%, due
    December 21, 2017)              |  |                      |            |             |   |                   |             |                         |          
|                                                      |  |                                |  |                                                 |  |                      |            |             |   |                   |             |                         |          
|Teleguam Holdings,
    LLC                            |  | telecommunication
    services |  | second lien
    senior secured notes(4)(5)(9)   |  |                      | 4,687,500  |             |   | 4,645,414         |             |                         | 4,640,625
|                                                      |  |                                |  | (9.75%, due
    June 9, 2017)                   |  |                      |            |             |   |                   |             |                         |          
|                                                      |  |                                |  |                                                 |  |                      |            |             |   |                   |             |                         |          
|Unitek Global
    Services, Inc.                      |  | IT consulting                  |  | tranche B term
    loan (4)(5)(6)(9)            |  |                      | 7,920,000  |             |   | 7,700,939         |             |                         | 7,761,600
|                                                      |  |                                |  | (9.00%, due
    April 15, 2018)                 |  |                      |            |             |   |                   |             |                         |          
|                                                      |  |                                |  |                                                 |  |                      |            |             |   |                   |             |                         |          
|US FT HoldCo.
    Inc.                                |  | financial intermediaries       |  | senior secured
    notes(4)(5)(6)(9)            |  |                      | 5,985,000  |             |   | 5,834,141         |             |                         | 5,980,032
|(A/K/A Fundtech)                                      |  |                                |  | (7.50%, due
    November 30,  2017)             |  |                      |            |             |   |                   |             |                         |          
|                                                      |  |                                |  |                                                 |  |                      |            |             |   |                   |             |                         |          
|Vision Solutions,
    Inc                             |  | software                       |  | second lien
    senior secured notes(4)(5)(9)   |  |                      | 10,000,000 |             |   | 9,912,259         |             |                         | 9,600,000
|                                                      |  |                                |  | (9.50%, due
    July 23, 2017)                  |  |                      |            |             |   |                   |             |                         |          
|                                                      |  |                                |  |                                                 |  |                      |            |             |   |                   |             |                         |          
|WEB.COM Group,
    Inc.                               |  | web hosting                    |  | senior secured
    notes(4)(5)(6)(9)(10)        |  |                      | 4,904,167  |             |   | 4,360,670         |             |                         | 4,848,995
|                                                      |  |                                |  | (7.00%, due
    October 27, 2017)               |  |                      |            |             |   |                   |             |                         |          
|                                                      |  |                                |  |                                                 |  |                      |            |             |   |                   |             |                         |          
|Total Senior Secured Notes                            |  |                                |  |                                                 |  |                      | $          | 305,881,262 |   | $                 | 302,573,218 |                         | 84.4     
|                                                      |  |                                |  |                                                 |  |                      |            |             |   |                   |             |                         |          
|Subordinated
    Notes                                |  |                                |  |                                                 |  |                      |            |             |   |                   |             |                         |          
|                                                      |  |                                |  |                                                 |  |                      |            |             |   |                   |             |                         |          
|Fusionstorm,
    Inc.                                 |  | IT value-added
    reseller    |  | subordinated
    notes(4)(5)(6)                 |  | $                    | 797,500    |             | $ | 797,351           |             | $                       | 765,042  
|                                                      |  |                                |  | (11.74%, due
    February 28, 2013)             |  |                      |            |             |   |                   |             |                         |          
|                                                      |  |                                |  |                                                 |  |                      |            |             |   |                   |             |                         |          
|Shearer's Food
    Inc.                               |  | food products
    manufacturer |  | subordinated
    notes(3)(4)(5)(9)              |  |                      | 4,261,646  |             |   | 4,185,575         |             |                         | 4,091,180
|                                                      |  |                                |  | (12.00% Cash/3.75%
    PIK, due March 31, 2016) |  |                      |            |             |   |                   |             |                         |          
|                                                      |  |                                |  |                                                 |  |                      |            |             |   |                   |             |                         |          
|Total Subordinated Notes                              |  |                                |  |                                                 |  |                      | $          | 4,982,926   |   | $                 | 4,856,222   |                         | 1.3      
|                                                      |  |                                |  |                                                 |  |                      |            |             |   |                   |             |                         |          
|Collateralized
    Loan Obligation - Debt Investments |  |                                |  |                                                 |  |                      |            |             |   |                   |             |                         |          
|                                                      |  |                                |  |                                                 |  |                      |            |             |   |                   |             |                         |          
|Avenue CLO V
    LTD 2007-5A, 5X D1                   |  | structured finance             |  | CLO secured
    notes(4)(5)(10)(11)             |  | $                    | 4,574,756  |             | $ | 2,370,298         |             | $                       | 2,903,827
|                                                      |  |                                |  | (4.01%, due
    April 25, 2019)                 |  |                      |            |             |   |                   |             |                         |          
|                                                      |  |                                |  |                                                 |  |                      |            |             |   |                   |             |                         |          
|Canaras CLO
    - 2007-1A E                           |  | structured finance             |  | CLO secured
    notes(4)(5)(10)(11)             |  |                      | 3,500,000  |             |   | 1,906,169         |             |                         | 2,485,000
|                                                      |  |                                |  | (4.82%, due
    June 19, 2021)                  |  |                      |            |             |   |                   |             |                         |          
|                                                      |  |                                |  |                                                 |  |                      |            |             |   |                   |             |                         |          
|CIFC CLO - 2006-1A
    B2L                            |  | structured finance             |  | CLO secured
    notes(4)(5)(10)(11)             |  |                      | 3,247,284  |             |   | 1,702,246         |             |                         | 2,296,966
|                                                      |  |                                |  | (4.56%, due
    October 20, 2020)               |  |                      |            |             |   |                   |             |                         |          
|                                                      |  |                                |  |                                                 |  |                      |            |             |   |                   |             |                         |          
|Emporia CLO
    2007 3A E                             |  | structured finance             |  | CLO secured
    notes(4)(5)(10)(11)             |  |                      | 5,391,000  |             |   | 4,164,042         |             |                         | 3,638,925
|                                                      |  |                                |  | (4.26%, due
    April 23, 2021)                 |  |                      |            |             |   |                   |             |                         |          
|                                                      |  |                                |  |                                                 |  |                      |            |             |   |                   |             |                         |          
|Flagship 2005-4A
    D                                |  | structured finance             |  | CLO secured
    notes(4)(5)(10)(11)             |  |                      | 2,612,988  |             |   | 1,673,936         |             |                         | 2,064,261
|                                                      |  |                                |  | (5.24%, due
    June 1, 2017)                   |  |                      |            |             |   |                   |             |                         |          
|                                                      |  |                                |  |                                                 |  |                      |            |             |   |                   |             |                         |          
|Harbourview
    CLO VI LTD 6 6X D                     |  | structured finance             |  | CLO secured
    notes(4)(5)(10)(11)             |  |                      | 5,000,000  |             |   | 3,250,122         |             |                         | 3,250,000
|                                                      |  |                                |  | (4.17%, due
    December 27, 2019)              |  |                      |            |             |   |                   |             |                         |          
|                                                      |  |                                |  |                                                 |  |                      |            |             |   |                   |             |                         |          
|Harch 2005-2A
    BB CLO                              |  | structured finance             |  | CLO secured
    notes(4)(5)(10)(11)             |  |                      | 4,819,262  |             |   | 2,636,380         |             |                         | 3,650,591
|                                                      |  |                                |  | (5.56%, due
    October 22, 2017)               |  |                      |            |             |   |                   |             |                         |          
|                                                      |  |                                |  |                                                 |  |                      |            |             |   |                   |             |                         |          
|Hewetts Island
    CDO 2007 - 1RA E                   |  | structured finance             |  | CDO secured
    notes(4)(5)(10)(11)             |  |                      | 3,132,057  |             |   | 1,911,176         |             |                         | 2,505,645
|                                                      |  |                                |  | (7.26%, due
    November 12, 2019)              |  |                      |            |             |   |                   |             |                         |          
|                                                      |  |                                |  |                                                 |  |                      |            |             |   |                   |             |                         |          
|Hewetts Island
    CDO III 2005-1A D                  |  | structured finance             |  | CDO secured
    notes(4)(5)(6)(10)(11)          |  |                      | 6,416,825  |             |   | 3,619,779         |             |                         | 5,275,762
|                                                      |  |                                |  | (6.27%, due
    August 9, 2017)                 |  |                      |            |             |   |                   |             |                         |          
|                                                      |  |                                |  |                                                 |  |                      |            |             |   |                   |             |                         |          
|Hewetts Island
    CDO IV 2006-4 E                    |  | structured finance             |  | CDO secured
    notes(4)(5)(10)(11)             |  |                      | 7,897,268  |             |   | 5,630,847         |             |                         | 6,076,948
|                                                      |  |                                |  | (5.07%, due
    May 9, 2018)                    |  |                      |            |             |   |                   |             |                         |          
|                                                      |  |                                |  |                                                 |  |                      |            |             |   |                   |             |                         |          
|Kingsland LTD
    2007 4A E                           |  | structured finance             |  | CDO secured
    notes(4)(5)(10)(11)             |  |                      | 4,000,000  |             |   | 2,500,814         |             |                         | 2,500,000
|                                                      |  |                                |  | (3.92%, due
    April 16, 2021)                 |  |                      |            |             |   |                   |             |                         |          









(Continued on next page)



See Accompanying Notes.



6





TICC CAPITAL CORP.



CONSOLIDATED SCHEDULE OF INVESTMENTS
- (Continued)

MARCH 31, 2012

(unaudited)





|COMPANY(1)                                                          |  | INDUSTRY                       |  | INVESTMENT                                       |   | PRINCIPAL AMOUNT |           | COST |            | FAIR VALUE(2) |      | %
    of Net
    Assets |           
|------------------------------------------------------------------- |  | ------------------------------ |  | ------------------------------------------------ | - | ---------------- | --------- | ---- | ---------- | ------------- | ---- | ----------------------- | ----------
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|Collateralized
    Loan Obligation - Debt Investments - (continued) |  |                                |  |                                                  |   |                  |           |      |            |               |      |                        
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|Landmark V CDO
    LTD                                              |  | structured finance             |  | CDO senior secured
    notes(4)(5)(6)(10)(11)    |   | $                | 3,646,669 |      | $          | 2,283,044     |      | $                       | 2,906,395 
|                                                                    |  |                                |  | (5.74%, due
    June 1, 2017)                    |   |                  |           |      |            |               |      |                         |           
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|Latitude II
    CLO 2006 2A D                                       |  | structured finance             |  | CLO senior secured
    notes(4)(5)(6)(10)(11)    |   |                  | 2,828,018 |      |            | 1,601,927     |      |                         | 1,923,052 
|                                                                    |  |                                |  | (4.22%, due
    December 15, 2018)               |   |                  |           |      |            |               |      |                         |           
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|Latitude III
    CLO 2007-3A                                        |  | structured finance             |  | CLO secured
    notes(4)(5)(10)(11)              |   |                  | 4,000,000 |      |            | 1,962,736     |      |                         | 2,640,000 
|                                                                    |  |                                |  | (4.33%, due
    April 11, 2021)                  |   |                  |           |      |            |               |      |                         |           
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|Lightpoint CLO
    2007-8A                                          |  | structured finance             |  | CLO secured
    notes(4)(5)(10)(11)              |   |                  | 5,000,000 |      |            | 2,940,230     |      |                         | 4,150,000 
|                                                                    |  |                                |  | (7.07%, due
    July 25, 2018)                   |   |                  |           |      |            |               |      |                         |           
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|Loomis Sayles
    CLO 2006-1AE                                      |  | structured finance             |  | CLO secured
    notes(4)(5)(10)(11)              |   |                  | 3,322,992 |      |            | 1,926,260     |      |                         | 2,342,710 
|                                                                    |  |                                |  | (4.41%, due
    October 26, 2020)                |   |                  |           |      |            |               |      |                         |           
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|Marlborough
    Street CLO LTD 2007 1A E                            |  | structured finance             |  | CLO secured
    notes(4)(5)(10)(11)              |   |                  | 3,000,000 |      |            | 2,070,105     |      |                         | 2,070,000 
|                                                                    |  |                                |  | (4.21%, due
    April 18, 2019)                  |   |                  |           |      |            |               |      |                         |           
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|Muir Grove CLO
    LTD 2007 1X E                                    |  | structured finance             |  | CLO secured
    notes(4)(5)(10)(11)              |   |                  | 7,690,915 |      |            | 6,768,988     |      |                         | 6,768,005 
|                                                                    |  |                                |  | (8.56%, due
    March 25, 2020)                  |   |                  |           |      |            |               |      |                         |           
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|Ocean Trails
    CLO II 2007-2a-d                                   |  | structured finance             |  | CLO subordinated
    secured notes(4)(5)(10)(11) |   |                  | 3,649,700 |      |            | 2,106,697     |      |                         | 2,500,045 
|                                                                    |  |                                |  | (5.08%, due
    June 27, 2022)                   |   |                  |           |      |            |               |      |                         |           
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|Primus 2007
    2X Class E CLO                                      |  | structured finance             |  | CLO notes (4)(5)(10)(11)                         |   |                  | 2,834,633 |      |            | 2,179,867     |      |                         | 1,927,551 
|                                                                    |  |                                |  | (5.32%, due
    July 15, 2021)                   |   |                  |           |      |            |               |      |                         |           
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|Prospero CLO
    II BV                                              |  | structured finance             |  | CLO senior secured
    notes(4)(5)(10)(11)       |   |                  | 9,900,000 |      |            | 4,442,410     |      |                         | 6,633,000 
|                                                                    |  |                                |  | (4.51%, due
    October 20, 2022)                |   |                  |           |      |            |               |      |                         |           
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|Total
    Collateralized Loan Obligation  - Debt Investments        |  |                                |  |                                                  | $ | 59,648,073       |           | $    | 70,508,683 |               | 19.7 | %                      
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|Collateralized
    Loan Obligation - Equity Investments             |  |                                |  |                                                  |   |                  |           |      |            |               |      |                        
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|ACA CLO 2006-2,
    Limited                                         |  | structured finance             |  | CLO preferred
    equity(10)(11)                 |   | $                | -         |      | $          | 2,200,000     |      | $                       | 4,200,000 
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|ACA CLO 2007-1a
    sub                                             |  | structured finance             |  | CLO preferred
    equity(10)(11)                 |   |                  |           |      |            | 10,583,500    |      |                         | 10,248,000
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|Canaras CLO
    Equity - 2007-1A, 1X                                |  | structured finance             |  | CLO income notes(10)(11)                         |   |                  | -         |      |            | 4,355,000     |      |                         | 4,275,000 
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|GALE 2007-4A
    CLO                                                |  | structured finance             |  | CLO income notes(10)(11)                         |   |                  | -         |      |            | 1,965,000     |      |                         | 2,400,000 
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|GSC Partners
    2007-8X Sub CDO                                    |  | structured finance             |  | CLO income notes(10)(11)                         |   |                  | -         |      |            | 4,110,000     |      |                         | 4,800,000 
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|Harbourview
    - 2006A CLO Equity                                  |  | structured finance             |  | CDO subordinates
    notes(10)(11)               |   |                  | -         |      |            | 3,639,870     |      |                         | 3,491,800 
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|Jersey Street
    2006-1A CLO LTD                                   |  | structured finance             |  | CLO income notes(10)(11)                         |   |                  | -         |      |            | 4,924,238     |      |                         | 4,554,550 
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|Kingsland LTD
    2007-4X Sub                                       |  | structured finance             |  | CLO income notes(10)(11)                         |   |                  | -         |      |            | 402,500       |      |                         | 490,000   
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|Lightpoint CLO
    2005-3X                                          |  | structured finance             |  | CLO income notes(10)(11)                         |   |                  | -         |      |            | 3,330,000     |      |                         | 3,183,750 
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|Lightpoint CLO
    VII LTD 2007-7                                   |  | structured finance             |  | CLO subordinated
    notes(10)(11)               |   |                  | -         |      |            | 1,562,500     |      |                         | 1,630,000 
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|Marlborough
    Street 2007-1A                                      |  | structured finance             |  | CLO income notes(10)(11)                         |   |                  | -         |      |            | 1,739,000     |      |                         | 1,974,000 
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|OCT11 2007-1A
    CLO                                               |  | structured finance             |  | CLO income notes(10)(11)                         |   |                  | -         |      |            | 2,434,162     |      |                         | 2,475,000 
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|Rampart 2007-1A
    CLO Equity                                      |  | structured finance             |  | CLO subordinated
    notes(10)(11)               |   |                  | -         |      |            | 3,412,500     |      |                         | 2,940,000 
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|Sargas CLO 2006
    -1A                                             |  | structured finance             |  | CLO subordinated
    notes(10)(11)               |   |                  | -         |      |            | 4,945,500     |      |                         | 6,767,000 
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|Stone Tower
    CLO LTD 2007 7X                                     |  | structured finance             |  | CLO subordinated
    notes(10)(11)               |   |                  | -         |      |            | 6,265,391     |      |                         | 6,265,000 
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|Total
    Collateralized Loan Obligation  - Equity Investments      |  |                                |  |                                                  | $ | 55,869,161       |           | $    | 59,694,100 |               | 16.7 | %                      
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|Common
    Stock                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|Algorithmic
    Implementations, Inc.                               |  | software                       |  | common stock                                     |   | $                | -         |      | $          | 3,000,000     |      | $                       | 2,150,000 
|(d/b/a "Ai
    Squared")                                            |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|Integra Telecom
    Holdings, Inc.                                  |  | telecommunication
    services |  | common stock(7)                                  |   |                  | -         |      |            | 1,712,397     |      |                         | 2,750,374 
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|Pegasus Solutions,
    Inc.                                         |  | enterprise software            |  | common equity(7)                                 |   |                  | -         |      |            | 62,595        |      |                         | 273,081   
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|Stratus Technologies,
    Inc.                                      |  | computer hardware              |  | common equity(7)                                 |   |                  | -         |      |            | 377,928       |      |                         | -         
|                                                                    |  |                                |  |                                                  |   |                  |           |      |            |               |      |                         |           
|Total
    Common Stock Investments                                  |  |                                |  |                                                  | $ | 5,152,920        |           | $    | 5,173,455  |               | 1.4  | %                      









(Continued on next page)



See Accompanying Notes.



7





TICC CAPITAL CORP.



CONSOLIDATED SCHEDULE OF INVESTMENTS

MARCH 31, 2012(unaudited)





|                                       |  |                                 |  |                                      |   | PRINCIPAL |   |             |           |                   |             |        |           | % of
    Net | 
|-------------------------------------- |  | ------------------------------- |  | ------------------------------------ | - | --------- | - | ----------- | --------- | ----------------- | ----------- | ------ | --------- | ------------ | 
|COMPANY(1)                             |  | INDUSTRY                        |  | INVESTMENT                           |   | AMOUNT    |   | COST        |           | FAIR
    VALUE(2) |             | Assets |          
|                                       |  |                                 |  |                                      |   |           |   |             |           |                   |             |        |           |              | 
|Preferred
    Equity                   |  |                                 |  |                                      |   |           |   |             |           |                   |             |        |           |             
|                                       |  |                                 |  |                                      |   |           |   |             |           |                   |             |        |           |             
|GenuTec Business
    Solutions, Inc.   |  | interactive voice
    messaging |  |                                      |   |           |   |             |           |                   |             |        |           |              | 
|                                       |  | services                        |  | convertible preferred stock(7)       |   | $         | - |             | $         | 1,500,000         |             | $      | -         |              | 
|                                       |  |                                 |  |                                      |   |           |   |             |           |                   |             |        |           |              | 
|Pegasus Solutions, Inc.                |  | enterprise software             |  | preferred equity(3)                  |   |           | - |             |           | 1,198,320         |             |        | 1,939,648 |              | 
|                                       |  |                                 |  | (14.00% PIK dividend)                |   |           |   |             |           |                   |             |        |           |              | 
|                                       |  |                                 |  |                                      |   |           |   |             |           |                   |             |        |           |              | 
|Stratus Technologies, Inc.             |  | computer hardware               |  | preferred equity(7)                  |   |           | - |             |           | 186,622           |             |        | 329,238   |              | 
|                                       |  |                                 |  |                                      |   |           |   |             |           |                   |             |        |           |              | 
|Total
    Preferred Equity Investments |  |                                 |  |                                      | $ | 2,884,942 |   | $           | 2,268,886 |                   | 0.6         | %     
|                                       |  |                                 |  |                                      |   |           |   |             |           |                   |             |       
|                                       |  |                                 |  |                                      |   |           |   |             |           |                   |             |        |           |              | 
|Warrants                               |  |                                 |  |                                      |   |           |   |             |           |                   |             |        |           |              | 
|                                       |  |                                 |  |                                      |   |           |   |             |           |                   |             |        |           |              | 
|Band Digital Inc.                      |  | IT consulting                   |  | warrants to purchase common stock(7) |   | $         | - |             | $         | -                 |             | $      | -         |              | 
|(F/K/A "WHITTMANHART, Inc.")           |  |                                 |  |                                      |   |           |   |             |           |                   |             |        |           |              | 
|                                       |  |                                 |  |                                      |   |           |   |             |           |                   |             |        |           |              | 
|Fusionstorm, Inc.                      |  | IT value - added reseller       |  | warrants to purchase common stock(7) |   |           | - |             |           | 725,000           |             |        | 578,000   |              | 
|                                       |  |                                 |  |                                      |   |           |   |             |           |                   |             |        |           |              | 
|Power Tools, Inc.                      |  | software                        |  | warrants to purchase common stock(7) |   |           | - |             |           | 350,000           |             |        | 420,000   |              | 
|                                       |  |                                 |  |                                      |   |           |   |             |           |                   |             |        |           |              | 
|Total
    Warrants                     |  |                                 |  |                                      |   |           | $ | 1,075,000   |           | $                 | 998,000     |        | 0.3       | %           
|                                       |  |                                 |  |                                      |   |           |   |             |           |                   |             |        |           |             
|Total
    Investments                  |  |                                 |  |                                      |   |           | $ | 435,494,284 |           | $                 | 446,072,564 |        | 124.4     | %           













---





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

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

| | (3) | Portfolio includes $16,523,827 of principal amount of
debt investments which contain a PIK provision. Portfolio also includes one preferred equity position which contains a PIK dividend
provision.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

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

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



| | (8) | Aggregate gross unrealized appreciation for federal income
tax purposes is $25,838,923; aggregate gross unrealized depreciation for federal income tax purposes is $33,789,162. Net unrealized
depreciation is $7,950,239 based upon a tax cost basis of $454,022,803.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

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







See Accompanying Notes.



8





TICC CAPITAL CORP.



CONSOLIDATED SCHEDULE OF INVESTMENTS

DECEMBER 31, 2011



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





(Continued on next page)



See Accompanying Notes.



9







TICC CAPITAL CORP.



CONSOLIDATED SCHEDULE OF INVESTMENTS
– (Continued)

DECEMBER 31, 2011



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





(Continued on next page)



See Accompanying Notes.



10







TICC CAPITAL CORP.



CONSOLIDATED SCHEDULE OF INVESTMENTS
– (Continued)

DECEMBER 31, 2011



|COMPANY(1)                                                     |  | INDUSTRY                    |  | INVESTMENT                                                                                                                                                                 |  | PRINCIPAL AMOUNT |            | COST        |   | FAIR VALUE(2) |             | %
    of Net
    Assets |          
|-------------------------------------------------------------- |  | --------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------- | ---------- | ----------- | - | ------------- | ----------- | ----------------------- | ---------
|Senior Secured Notes—(continued)                               |  |                             |  |                                                                                                                                                                            |  |                  |            |             |   |               |             |                         |          
|                                                               |  |                             |  |                                                                                                                                                                            |  |                  |            |             |   |               |             |                         |          
|SourceHOV, LLC                                                 |  | business services           |  | second lien senior secured notes(4)(5)
        (10.50%, due May 19, 2018)                                                                                                  |  | $                | 8,000,000  |             | $ | 7,661,825     |             | $                       | 6,560,000
|                                                               |  |                             |  |                                                                                                                                                                            |  |                  |            |             |   |               |             |                         |          
|Stratus Technologies,
    Inc.                                 |  | computer hardware           |  | first
                                                                                  lien high yield notes(5)(9)
        (12.00%, due March 29,
        2015)           |  |                  | 9,753,000  |             |   | 9,098,094     |             |                         | 9,753,000
|                                                               |  |                             |  |                                                                                                                                                                            |  |                  |            |             |   |               |             |                         |          
|Sunquest Information Systems, 
    Inc.                        |  | healthcare                  |  | senior secured notes(4)(5)(6)(9)
                                                                                  (6.25%, due December 16, 2016)                          |  |                  | 4,975,000  |             |   | 4,868,469     |             |                         | 4,912,813
|                                                               |  |                             |  |                                                                                                                                                                            |  |                  |            |             |   |               |             |                         |          
|Syniverse Holdings,
    Inc.                                   |  | telecommunication
services  |  | senior
                                                                                  secured notes(4)(5)(6)(9)
        (5.25%, due December 21,
        2017)          |  |                  | 3,979,900  |             |   | 3,836,252     |             |                         | 3,971,622
|                                                               |  |                             |  |                                                                                                                                                                            |  |                  |            |             |   |               |             |                         |          
|Teleguam Holdings,
    LLC                                     |  | telecommunication
services  |  | second lien senior secured notes(4)(5)(9)
        (9.75%, due June 9, 2017)                                                                                                |  |                  | 4,687,500  |             |   | 4,643,890     |             |                         | 4,593,750
|                                                               |  |                             |  |                                                                                                                                                                            |  |                  |            |             |   |               |             |                         |          
|Unitek Global Services,
    Inc.                               |  | IT consulting               |  | tranche
                                                                                  B term loan(4)(5)(9)
        (9.00%, due April 15,
        2018)                 |  |                  | 7,940,000  |             |   | 7,713,041     |             |                         | 7,701,800
|                                                               |  |                             |  |                                                                                                                                                                            |  |                  |            |             |   |               |             |                         |          
|US FT HoldCo. Inc.
        (A/K/A US FT HoldCo. 
        Inc.) |  | financial intermediaries    |  | senior
                                                                                  secured notes(4)(5)(6)(9)
        (7.50%, due November 30,
        2017)          |  |                  | 6,000,000  |             |   | 5,844,017     |             |                         | 5,880,000
|                                                               |  |                             |  |                                                                                                                                                                            |  |                  |            |             |   |               |             |                         |          
|Vision Solutions,
    Inc.                                     |  | software                    |  | second lien senior
    secured notes(4)(5)(9) (9.50%, due July 23, 2017)                                                                                                   |  |                  | 10,000,000 |             |   | 9,908,753     |             |                         | 9,600,000
|                                                               |  |                             |  |                                                                                                                                                                            |  |                  |            |             |   |               |             |                         |          
|WEB.COM Group,
    Inc.                                        |  | web hosting                 |  | senior
                                                                                  secured notes(4)(5)(9)(10)
        (7.00%, due October 27,
        2017)          |  |                  | 5,000,000  |             |   | 4,428,688     |             |                         | 4,575,000
|                                                               |  |                             |  |                                                                                                                                                                            |  |                  |            |             |   |               |             |                         |          
|Total Senior Secured Notes                                     |  |                             |  |                                                                                                                                                                            |  |                  | $          | 290,647,712 |   | $             | 289,913,551 |                         | 95.0     
|                                                               |  |                             |  |                                                                                                                                                                            |  |                  |            |             |   |               |             |                         |          
|                                                               |  |                             |  |                                                                                                                                                                            |  |                  |            |             |   |               |             |                         |          
|Subordinated
    Notes                                         |  |                             |  |                                                                                                                                                                            |  |                  |            |             |   |               |             |                         |          
|                                                               |  |                             |  |                                                                                                                                                                            |  |                  |            |             |   |               |             |                         |          
|Fusionstorm, Inc.                                              |  | IT value-added
    reseller |  | subordinated
                                                                                  notes(4)(5)(6)
        (11.74%, due February
        28, 2013)              |  | $                | 1,022,500  |             | $ | 1,022,351     |             | $                       | 962,939  
|                                                               |  |                             |  |                                                                                                                                                                            |  |                  |            |             |   |               |             |                         |          
|Shearer’s
    Food Inc.                                        |  | food products
manufacturer  |  | subordinated notes(3)(4)(5)(9)
(12.00% Cash/3.75% PIK, due March 31,  2016)                                                                                                |  |                  | 4,221,193  |             |   | 4,141,875     |             |                         | 3,967,921
|                                                               |  |                             |  |                                                                                                                                                                            |  |                  |            |             |   |               |             |                         |          
|Total Subordinated Notes                                       |  |                             |  |                                                                                                                                                                            |  |                  | $          | 5,164,226   |   | $             | 4,930,860   |                         | 1.6      
|                                                               |  |                             |  |                                                                                                                                                                            |  |                  |            |             |   |               |             |                         |          
|                                                               |  |                             |  |                                                                                                                                                                            |  |                  |            |             |   |               |             |                         |          
|Collateralized  Loan Obligation—Debt Investments               |  |                             |  |                                                                                                                                                                            |  |                  |            |             |   |               |             |                         |          
|                                                               |  |                             |  |                                                                                                                                                                            |  |                  |            |             |   |               |             |                         |          
|Avenue CLO V LTD
    2007-5A D1                                |  | structured finance          |  | CLO
                                                                                  secured notes(4)(5)(10)(11)
        (3.87%, due April 25,
        2019)              |  | $                | 4,574,756  |             | $ | 2,327,337     |             | $                       | 2,511,999
|                                                               |  |                             |  |                                                                                                                                                                            |  |                  |            |             |   |               |             |                         |          
|Canaras CLO—2007-1A
    E                                      |  | structured finance          |  | CLO
                                                                                  secured notes(4)(5)(10)(11)
        (4.91%, due June 19, 2021)                       |  |                  | 3,500,000  |             |   | 1,884,762     |             |                         | 2,152,500
|                                                               |  |                             |  |                                                                                                                                                                            |  |                  |            |             |   |               |             |                         |          
|CIFC CLO—2006-1A
    B2L                                       |  | structured finance          |  | CLO
                                                                                  secured notes(4)(5)(10)(11)
        (4.41%, due October 20,
        2020)            |  |                  | 3,247,284  |             |   | 1,679,332     |             |                         | 2,061,863
|                                                               |  |                             |  |                                                                                                                                                                            |  |                  |            |             |   |               |             |                         |          
|Emporia CLO 2007
    3A E                                      |  | structured finance          |  | CLO
                                                                                  secured notes(4)(5)(10)(11)
        (4.12%, due April 23,
        2021)              |  |                  | 5,391,000  |             |   | 4,140,712     |             |                         | 3,180,690
|                                                               |  |                             |  |                                                                                                                                                                            |  |                  |            |             |   |               |             |                         |          
|Flagship 2005-4A
    D                                         |  | structured finance          |  | CLO
                                                                                  secured notes(4)(5)(10)(11)
        (5.28%, due June 1, 2017)                        |  |                  | 2,612,988  |             |   | 1,644,453     |             |                         | 1,835,624
|                                                               |  |                             |  |                                                                                                                                                                            |  |                  |            |             |   |               |             |                         |          
|Harch 2005-2A BB
    CLO                                       |  | structured finance          |  | CLO
                                                                                  secured notes(4)(5)(10)(11)
        (5.42%, due October 22,
        2017)            |  |                  | 4,819,262  |             |   | 2,580,789     |             |                         | 3,108,424
|                                                               |  |                             |  |                                                                                                                                                                            |  |                  |            |             |   |               |             |                         |          
|Hewetts Island
    CDO 2007—1RA E                              |  | structured finance          |  | CDO
                                                                                  secured notes(4)(5)(10)(11)
        (7.20%, due November 12,
        2019)           |  |                  | 3,132,057  |             |   | 1,890,861     |             |                         | 2,380,363
|                                                               |  |                             |  |                                                                                                                                                                            |  |                  |            |             |   |               |             |                         |          
|Hewetts Island
    CDO III 2005-1A D                           |  | structured finance          |  | CDO
                                                                                  secured notes(4)(5)(6)(10)(11)
        (6.19%, due August 9,
        2017)           |  |                  | 6,456,937  |             |   | 3,587,739     |             |                         | 5,072,944
|                                                               |  |                             |  |                                                                                                                                                                            |  |                  |            |             |   |               |             |                         |          
|Hewetts Island
    CDO IV 2006-4 E                             |  | structured finance          |  | CDO
                                                                                  secured notes(4)(5)(10)(11)
        (4.99%, due May 9, 2018)                         |  |                  | 7,897,268  |             |   | 5,575,257     |             |                         | 5,176,396
|                                                               |  |                             |  |                                                                                                                                                                            |  |                  |            |             |   |               |             |                         |          
|Landmark V CDO
    LTD.                                        |  | structured finance          |  | CDO
                                                                                  senior secured notes(4)(5)(6)(10)(11)
        (5.78%, due June 1, 2017)              |  |                  | 3,646,669  |             |   | 2,243,178     |             |                         | 2,511,825
|                                                               |  |                             |  |                                                                                                                                                                            |  |                  |            |             |   |               |             |                         |          
|Latitude II CLO
    2006 2A D                                  |  | structured finance          |  | CLO
                                                                                  senior secured notes(4)(5)(6)(10)(11)
        (4.30%, due December 15,
        2018) |  |                  | 2,828,018  |             |   | 1,575,173     |             |                         | 1,753,371





(Continued on next page)



See Accompanying Notes.



11







TICC CAPITAL CORP.



CONSOLIDATED SCHEDULE OF INVESTMENTS
– (Continued)

DECEMBER 31, 2011



|COMPANY(1)                                                           |  | INDUSTRY                        |  | INVESTMENT                                                                   |   | PRINCIPAL AMOUNT |           | COST |            | FAIR VALUE(2) |      | %
of Net
Asset |          
|-------------------------------------------------------------------- |  | ------------------------------- |  | ---------------------------------------------------------------------------- | - | ---------------- | --------- | ---- | ---------- | ------------- | ---- | -------------- | ---------
|Collateralized Loan Obligation - 
    Debt Investments — (continued) |  |                                 |  |                                                                              |   |                  |           |      |            |               |      |               
|                                                                     |  |                                 |  |                                                                              |   |                  |           |      |            |               |      |                |          
|Latitude III CLO
    2007-3A                                         |  | structured
    finance          |  | CLO secured notes(4)(5)(10)(11)
    (4.14%, due April 11, 2021)              |   | $                | 4,000,000 |      | $          | 1,935,665     |      | $              | 2,360,000
|Liberty CDO LTD 2005-1A C                                            |  | structured
    finance          |  | CDO secured notes(4)(5)(6)(10)(11)
    (2.33%, due November 1, 2017)         |   |                  | 1,986,259 |      |            | 1,155,372     |      |                | 1,311,924
|Lightpoint CLO
    2007-8A                                           |  | structured
    finance          |  | CLO secured notes(4)(5)(10)(11)
    (6.90%, due July 25, 2018)               |   |                  | 5,000,000 |      |            | 2,896,267     |      |                | 3,700,000
|Loomis Sayles CLO
    2006-1AE                                       |  | structured
    finance          |  | CLO secured notes(4)(5)(10)(11)
    (4.27%, due October 26, 2020)            |   |                  | 3,322,992 |      |            | 1,903,601     |      |                | 1,993,795
|Ocean Trails CLO
    II 2007-2a-d                                    |  | structured
    finance          |  | CLO subordinated secured 
    notes(4)(5)(10)(11) (4.90%, due June 27, 2022) |   |                  | 3,649,700 |      |            | 2,079,669     |      |                | 2,189,820
|Primus 2007 2X
    Class E CLO                                       |  | structured
    finance          |  | CLO notes
    (4)(5)(10)(11) (5.15%, due July 15, 2021)                      |   |                  | 2,834,633 |      |            | 2,168,472     |      |                | 1,686,607
|Prospero CLO II
    BV                                               |  | structured
    finance          |  | CLO senior secured notes(4)(5)(10)(11)
    (4.20%, due October 20, 2022)     |   |                  | 9,900,000 |      |            | 4,389,696     |      |                | 5,940,000
|                                                                     |  |                                 |  |                                                                              |   |                  |           |      |            |               |      |                |          
|Total Collateralized Loan Obligation—Debt Investments                |  |                                 |  |                                                                              | $ | 45,658,335       |           | $    | 50,928,145 |               | 16.7 | %             
|                                                                     |  |                                 |  |                                                                              |   |                  |           |      |            |               |      |                |          
|                                                                     |  |                                 |  |                                                                              |   |                  |           |      |            |               |      |               
|Collateralized Loan Obligation—Equity Investments                    |  |                                 |  |                                                                              |   |                  |           |      |            |               |      |               
|                                                                     |  |                                 |  |                                                                              |   |                  |           |      |            |               |      |                |          
|ACA CLO 2006-2,
    Limited                                          |  | structured
    finance          |  | CLO preferred
    equity(10)(11)                                             |   | $                | —         |      | $          | 2,200,000     |      | $              | 3,750,000
|                                                                     |  |                                 |  |                                                                              |   |                  |           |      |            |               |      |                |          
|Canaras CLO Equity
    - 2007-1A, 1X                                 |  | structured
    finance          |  | CLO income
    notes(10)(11)                                                 |   |                  | —         |      |            | 4,355,000     |      |                | 3,825,000
|                                                                     |  |                                 |  |                                                                              |   |                  |           |      |            |               |      |                |          
|GALE 2007-4A CLO                                                     |  | structured
    finance          |  | CLO income
    notes(10)(11)                                                 |   |                  | —         |      |            | 1,965,000     |      |                | 1,950,000
|                                                                     |  |                                 |  |                                                                              |   |                  |           |      |            |               |      |                |          
|GSC Partners 2007-8X
    Sub CDO                                     |  | structured
    finance          |  | CLO income
    notes(10)(11)                                                 |   |                  | —         |      |            | 4,110,000     |      |                | 4,560,000
|                                                                     |  |                                 |  |                                                                              |   |                  |           |      |            |               |      |                |          
|Harbourview - 2006A
    CLO Equity                                   |  | structured
    finance          |  | CDO subordinates notes(10)(11)                                               |   |                  | —         |      |            | 3,639,870     |      |                | 2,729,350
|                                                                     |  |                                 |  |                                                                              |   |                  |           |      |            |               |      |                |          
|Jersey Street 2006-1A
    CLO LTD.                                   |  | structured
    finance          |  | CLO income
    notes(10)(11)                                                 |   |                  | —         |      |            | 4,924,237     |      |                | 4,229,225
|                                                                     |  |                                 |  |                                                                              |   |                  |           |      |            |               |      |                |          
|Kingsland LTD 2007-4X
    Sub.                                       |  | structured
    finance          |  | CLO income
    notes(10)(11)                                                 |   |                  | —         |      |            | 402,500       |      |                | 376,250  
|                                                                     |  |                                 |  |                                                                              |   |                  |           |      |            |               |      |                |          
|Lightpoint CLO
    2005-3X                                           |  | structured
    finance          |  | CLO income
    notes(10)(11)                                                 |   |                  | —         |      |            | 3,330,000     |      |                | 3,116,250
|                                                                     |  |                                 |  |                                                                              |   |                  |           |      |            |               |      |                |          
|Lightpoint CLO
    VII LTD 2007-7                                    |  | structured
    finance          |  | CLO subordinated notes(10)(11)                                               |   |                  | —         |      |            | 1,562,500     |      |                | 1,360,000
|                                                                     |  |                                 |  |                                                                              |   |                  |           |      |            |               |      |                |          
|Marlborough Street
    2007-1A                                       |  | structured
    finance          |  | CLO income
    notes(10)(11)                                                 |   |                  | —         |      |            | 1,739,000     |      |                | 1,504,000
|                                                                     |  |                                 |  |                                                                              |   |                  |           |      |            |               |      |                |          
|OCT11 2007-1A CLO                                                    |  | structured
    finance          |  | CLO income
    notes(10)(11)                                                 |   |                  | —         |      |            | 2,434,162     |      |                | 2,351,250
|                                                                     |  |                                 |  |                                                                              |   |                  |           |      |            |               |      |                |          
|Rampart 2007-1A
    CLO Equity                                       |  | structured
    finance          |  | CLO subordinated notes(10)(11)                                               |   |                  | —         |      |            | 3,412,500     |      |                | 2,870,000
|                                                                     |  |                                 |  |                                                                              |   |                  |           |      |            |               |      |                |          
|Sargas CLO 2006
    -1A                                              |  | structured
    finance          |  | CLO subordinated notes(10)(11)                                               |   |                  | —         |      |            | 4,945,500     |      |                | 6,666,000
|                                                                     |  |                                 |  |                                                                              |   |                  |           |      |            |               |      |                |          
|Total Collateralized Loan Obligation—Equity Investments              |  |                                 |  |                                                                              | $ | 39,020,269       |           | $    | 39,287,325 |               | 12.9 | %             
|                                                                     |  |                                 |  |                                                                              |   |                  |           |      |            |               |      |                |          
|                                                                     |  |                                 |  |                                                                              |   |                  |           |      |            |               |      |                |          
|Common
    Stock                                                     |  |                                 |  |                                                                              |   |                  |           |      |            |               |      |                |          
|                                                                     |  |                                 |  |                                                                              |   |                  |           |      |            |               |      |                |          
|Algorithmic Implementations,
    Inc.                                |  | software                        |  | common stock                                                                 |   | $                | —         |      | $          | 3,000,000     |      | $              | 1,125,000
|(d/b/a “Ai
    Squared”)                                             |  |                                 |  |                                                                              |   |                  |           |      |            |               |      |                |          
|                                                                     |  |                                 |  |                                                                              |   |                  |           |      |            |               |      |                |          
|Integra Telecomm,
    Inc.                                           |  | telecommunication 
    services |  | common stock(7)                                                              |   |                  | —         |      |            | 1,712,397     |      |                | 1,051,271
|                                                                     |  |                                 |  |                                                                              |   |                  |           |      |            |               |      |                |          
|Pegasus Solutions,
    Inc.                                          |  | enterprise
    software         |  | common equity(7)                                                             |   |                  | —         |      |            | 62,595        |      |                | 959,999  
|                                                                     |  |                                 |  |                                                                              |   |                  |           |      |            |               |      |                |          
|Stratus Technologies,
    Inc.                                       |  | computer
    hardware           |  | common equity(7)                                                             |   |                  | —         |      |            | 377,928       |      |                | —        
|                                                                     |  |                                 |  |                                                                              |   |                  |           |      |            |               |      |                |          
|Total Common Stock Investments                                       |  |                                 |  |                                                                              | $ | 5,152,920        |           | $    | 3,136,270  |               | 1.0  | %             





(Continued on next page)



See Accompanying Notes.



12







TICC CAPITAL CORP.



CONSOLIDATED SCHEDULE OF INVESTMENTS
– (Continued)

DECEMBER 31, 2011



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



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

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

| | (3) | Portfolio includes $16,441,941 of principal amount of debt investments which contain a PIK provision. Portfolio also includes
one preferred equity position which contains a PIK dividend provision. For the year ending December 31, 2011, total PIK income
is $1,474,475, which is derived from the following investments with a PIK provision: Merrill Communications, LLC ($150,893), Pegasus
Solutions, Inc. ($710,143), Pegasus Solutions, Inc. Preferred Equity ($463,295) and Shearer’s Food Inc. ($150,144). See also
Note 2 to the Consolidated Financial Statements.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

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

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



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

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

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

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



See Accompanying Notes.



13





TICC CAPITAL CORP.



CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)



|                                                                    |  | Three Months Ended March 31, 2012 |            |  | Three Months Ended March 31, 2011 |  
|------------------------------------------------------------------- |  | --------------------------------- | ---------- |  | --------------------------------- | -
|                                                                    |  |                                   |            |  |                                   |  
|INVESTMENT INCOME                                                   |  |                                   |            |  |                                   |  
|From non-affiliated/non-control investments:                        |  |                                   |            |  |                                   |  
|Interest income - debt investments                                  |  | $                                 | 8,710,252  |  |                                   | $
|Distributions from securitization vehicles and equity investments   |  |                                   | 5,549,647  |  |                                   |  
|Commitment, amendment fee income and other income                   |  |                                   | 107,355    |  |                                   |  
|Total investment income from non-affiliated/non-control investments |  |                                   | 14,367,254 |  |                                   |  
|From control investments:                                           |  |                                   |            |  |                                   |  
|Interest income - debt investments                                  |  |                                   | 380,351    |  |                                   |  
|Total investment income                                             |  |                                   | 14,747,605 |  |                                   |  
|EXPENSES                                                            |  |                                   |            |  |                                   |  
|Compensation expense                                                |  |                                   | 270,334    |  |                                   |  
|Investment advisory fees                                            |  |                                   | 2,143,357  |  |                                   |  
|Professional fees                                                   |  |                                   | 790,827    |  |                                   |  
|Interest expense and other debt financing expenses                  |  |                                   | 836,777    |  |                                   |  
|General and administrative                                          |  |                                   | 292,797    |  |                                   |  
|Total expenses before incentive fees                                |  |                                   | 4,334,092  |  |                                   |  
|Net investment income incentive fees                                |  |                                   | 1,193,330  |  |                                   |  
|Capital gains incentive fees                                        |  |                                   | 1,065,663  |  |                                   |  
|Total incentive fees                                                |  |                                   | 2,258,993  |  |                                   |  
|Total expenses                                                      |  |                                   | 6,593,085  |  |                                   |  
|Net investment income                                               |  |                                   | 8,154,520  |  |                                   |  
|Net change in unrealized appreciation on investments                |  |                                   | 8,635,067  |  |                                   |  
|Net realized gains on investments                                   |  |                                   | 293,781    |  |                                   |  
|Net increase in net assets resulting from operations                |  | $                                 | 17,083,368 |  |                                   | $
|                                                                    |  |                                   |            |  |                                   |  
|Net increase in net assets resulting from net investment income per |  |                                   |            |  |                                   |  
|common share:                                                       |  |                                   |            |  |                                   |  
|Basic and diluted                                                   |  | $                                 | 0.24       |  |                                   | $
|Net increase in net assets resulting from operations per            |  |                                   |            |  |                                   |  
|common share:                                                       |  |                                   |            |  |                                   |  
|Basic and diluted                                                   |  | $                                 | 0.51       |  |                                   | $
|Weighted average shares of common stock outstanding:                |  |                                   |            |  |                                   |  
|Basic and diluted                                                   |  |                                   | 33,410,298 |  |                                   |  





See Accompanying Notes.



14





TICC CAPITAL CORP.



CONSOLIDATED STATEMENTS OF CHANGES IN
NET ASSETS

(unaudited)



|                                                                  |  | Three Months Ended March 31, 2012 |             |   | Year Ended December 31, 2011 |  
|----------------------------------------------------------------- |  | --------------------------------- | ----------- | - | ---------------------------- | -
|                                                                  |  |                                   |             |   |                              |  
|Increase in net assets from operations:                           |  |                                   |             |   |                              |  
|Net investment income                                             |  | $                                 | 8,154,520   |   |                              | $
|Net realized gains on investments                                 |  |                                   | 293,781     |   |                              |  
|Net change in unrealized appreciation on investments              |  |                                   | 8,635,067   |   |                              |  
|                                                                  |  |                                   |             |   |                              |  
|Net increase in net assets resulting from operations              |  |                                   | 17,083,368  |   |                              |  
|                                                                  |  |                                   |             |   |                              |  
|                                                                  |  |                                   |             |   |                              |  
|Distributions to shareholders                                     |  |                                   | (10,180,597 | ) |                              |  
|                                                                  |  |                                   |             |   |                              |  
|Capital share transactions:                                       |  |                                   |             |   |                              |  
|Issuance of common stock (net of offering costs of                |  |                                   |             |   |                              |  
|$2,645,162 and $318,630, respectively)                            |  |                                   | 46,034,340  |   |                              |  
|Reinvestment of dividends                                         |  |                                   | 475,760     |   |                              |  
|                                                                  |  |                                   |             |   |                              |  
|Net increase in net assets from capital share transactions        |  |                                   | 46,510,100  |   |                              |  
|                                                                  |  |                                   |             |   |                              |  
|Total increase (decrease) in net assets                           |  |                                   | 53,412,871  |   |                              |  
|Net assets at beginning of period                                 |  |                                   | 305,101,991 |   |                              |  
|Net assets at end of period (including over distributed           |  |                                   |             |   |                              |  
|net investment income of $4,813,252 and $3,852,838, respectively) |  | $                                 | 358,514,862 |   |                              | $
|Capital share activity:                                           |  |                                   |             |   |                              |  
|Shares sold                                                       |  |                                   | 4,887,500   |   |                              |  
|Shares issued from reinvestment of dividends                      |  |                                   | 48,846      |   |                              |  
|                                                                  |  |                                   |             |   |                              |  
|Net increase in capital share activity                            |  |                                   | 4,936,346   |   |                              |  





See Accompanying Notes.



15





TICC CAPITAL CORP.



CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)



|                                                                            |  | Three Months
EndedMarch 31, 2012 |             |   | Three
    Months
EndedMarch 31, 2011 |  
|--------------------------------------------------------------------------- |  | -------------------------------- | ----------- | - | ------------------------------------ | -
|                                                                            |  |                                  |             |   |                                      |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                        |  |                                  |             |   |                                      |  
|Net increase in net assets resulting from operations                        |  | $                                | 17,083,368  |   |                                      | $
|Adjustments to reconcile net increase in net assets resulting from          |  |                                  |             |   |                                      |  
|operations to net cash used by operating activities:                        |  |                                  |             |   |                                      |  
|Amortization of discounts                                                   |  |                                  | (1,374,281  | ) |                                      |  
|Increase in investments due to PIK                                          |  |                                  | (197,665    | ) |                                      |  
|Purchases of investments                                                    |  |                                  | (40,847,413 | ) |                                      |  
|Repayments of principal and reductions to investment cost value             |  |                                  | 4,425,573   |   |                                      |  
|Proceeds from the sale of investments                                       |  |                                  | 8,982,745   |   |                                      |  
|Net realized gains on investments                                           |  |                                  | (293,781    | ) |                                      |  
|Net change in unrealized appreciation on investments                        |  |                                  | (8,635,067  | ) |                                      |  
|Amortization of discount on notes payable and deferred debt issuance costs  |  |                                  | 127,897     |   |                                      |  
|Increase in interest and distributions receivable                           |  |                                  | (1,984,406  | ) |                                      |  
|Increase (decrease) in other assets                                         |  |                                  | 65,384      |   |                                      |  
|Decrease  in accrued interest payable                                       |  |                                  | (546,585    | ) |                                      |  
|Increase in investment advisory fee payable                                 |  |                                  | 440,889     |   |                                      |  
|Increase in accrued capital gains incentive fee                             |  |                                  | 1,065,663   |   |                                      |  
|Increase in accrued expenses                                                |  |                                  | 182,250     |   |                                      |  
|Net cash used by operating activities                                       |  |                                  | (21,505,429 | ) |                                      |  
|CASH FLOWS FROM INVESTING ACTIVIES                                          |  |                                  |             |   |                                      |  
|Change in restricted cash                                                   |  |                                  | 11,407,408  |   |                                      |  
|Net cash provided  by investing activities                                  |  |                                  | 11,407,408  |   |                                      |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                        |  |                                  |             |   |                                      |  
|Proceeds from the issuance of common stock                                  |  | $                                | 48,679,502  |   |                                      | $
|Offering expenses from the issuance of common stock                         |  |                                  | (2,645,162  | ) |                                      |  
|Distributions paid (net of stock issued under dividend reinvestment plan of |  |                                  |             |   |                                      |  
|$475,760 and $641,626, respectively)                                        |  |                                  | (9,704,837  | ) |                                      |  
|Net cash provided (used) by financing
    activities                        |  |                                  | 36,329,503  |   |                                      |  
|                                                                            |  |                                  |             |   |                                      |  
|Net  increase (decrease) in cash and cash equivalents                       |  |                                  | 26,231,482  |   |                                      |  
|                                                                            |  |                                  |             |   |                                      |  
|Cash and cash equivalents, beginning of period                              |  |                                  | 4,494,793   |   |                                      |  
|                                                                            |  |                                  |             |   |                                      |  
|Cash and cash equivalents, end of period                                    |  | $                                | 30,726,275  |   |                                      | $
|                                                                            |  |                                  |             |   |                                      |  
|NON-CASH FINANCING ACTIVITIES                                               |  |                                  |             |   |                                      |  
|Value of shares issued in connection with dividend reinvestment plan        |  | $                                | 475,760     |   |                                      | $
|                                                                            |  |                                  |             |   |                                      |  
|SUPPLEMENTAL DISCLOSURES                                                    |  |                                  |             |   |                                      |  
|Securities purchased not settled                                            |  | $                                | 30,016,336  |   |                                      | $
|Cash paid for interest                                                      |  | $                                | 1,255,466   |   |                                      | $





See Accompanying Notes.



16





TICC CAPITAL CORP.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2012



NOTE 1. UNAUDITED INTERIM FINANCIAL STATEMENTS



Interim consolidated financial
statements of TICC Capital Corp. (“TICC” and, together with its subsidiaries, the “Company”) are
prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information
and pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain
disclosures accompanying annual financial statements prepared in accordance with GAAP are omitted. In the opinion of
management, all adjustments, consisting solely of normal recurring accruals, necessary for the fair presentation of
consolidated financial statements for the interim periods have been included. The current period’s consolidated results
of operations are not necessarily indicative of results that may be achieved for the year. The interim consolidated financial
statements and notes thereto should be read in conjunction with the financial statements and notes thereto included in the
Company’s Form 10-K for the year ended December 31, 2011, as filed with the Securities and Exchange
Commission (“SEC”).



NOTE 2. ORGANIZATION



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



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



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



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



NOTE 3. INVESTMENT VALUATION



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



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





17







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



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



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



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



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



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



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



18







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



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



The Company’s assets measured at
fair value on a recurring basis subject to the disclosure requirements of ASC 820-10-35 at March 31, 2012, were as follows:



|                            |  |                                                                 |     |  |                                                |   |      |                                           |  |   |       | 
|--------------------------- |  | --------------------------------------------------------------- | --- |  | ---------------------------------------------- | - | ---- | ----------------------------------------- |  | - | ----- | 
|($ in millions)             |  | Fair Value Measurements at Reporting Date Using                 |     |  |                                                |  
|Assets                      |  | Quoted Prices in Active  Markets for Identical Assets (Level 1) |     |  | Significant Other  Observable Inputs (Level 2) |   |      | Significant Unobservable Inputs (Level 3) |  |   | Total | 
|Cash equivalents            |  | $                                                               | 0.0 |  |                                                | $ | 0.0  |                                           |  | $ | 0.0   | 
|Senior Secured Notes        |  |                                                                 | 0.0 |  |                                                |   | 10.7 |                                           |  |   | 291.9 | 
|CLO Debt                    |  |                                                                 | 0.0 |  |                                                |   | 0.0  |                                           |  |   | 70.5  | 
|CLO Equity                  |  |                                                                 | 0.0 |  |                                                |   | 0.0  |                                           |  |   | 59.7  | 
|Subordinated Notes          |  |                                                                 | 0.0 |  |                                                |   | 0.0  |                                           |  |   | 4.9   | 
|Common Stock                |  |                                                                 | 0.0 |  |                                                |   | 0.0  |                                           |  |   | 5.1   | 
|Preferred Shares            |  |                                                                 | 0.0 |  |                                                |   | 0.0  |                                           |  |   | 2.3   | 
|Warrants to purchase equity |  |                                                                 | 0.0 |  |                                                |   | 0.0  |                                           |  |   | 1.0   | 
|                            |  |                                                                 |     |  |                                                |   |      |                                           |  |   |       | 
|Total                       |  | $                                                               | 0.0 |  |                                                | $ | 10.7 |                                           |  | $ | 435.4 | 





Significant Unobservable
Inputs for Level 3 Investments



In accordance with ASU 2011-04,
the following table provides quantitative information about the Company’s Level 3 fair value measurements as of March
31, 2012. The Company’s valuation policy, as described above, establishes parameters for the sources and types of
valuation analysis, as well as the methodologies and inputs that the Company uses in determining fair value. If the Valuation
Committee or TICC Management determines that additional techniques, sources or inputs are appropriate or necessary in a
given situation, such additional work will be undertaken. The table, therefore, is not all-inclusive, but provides
information on the significant Level 3 inputs that are pertinent to the Company’s fair value measurements. The weighted
average calculations in the table below are based on principal balances for all debt related calculations and CLO
equity, and cost basis for other investments related calculations.





|($ in millions)                              |  | Quantitative Information about Level 3 Fair Value Measurements |       | 
|-------------------------------------------- |  | -------------------------------------------------------------- | ----- | 
|                                             |  |                                                                |       | 
|                                             |  | Fair Value as of                                               |       | 
|Assets                                       |  | March 31, 2012                                                 |       | 
|Corporate debt investments                   |  |                                                                |       | 
|syndicated                                   |  | $                                                              | 249.9 | 
|bilateral                                    |  |                                                                | 46.9  | 
|                                             |  |                                                                |       | 
|                                             |  |                                                                |       | 
|CLO Debt                                     |  |                                                                | 70.5  | 
|CLO Equity                                   |  |                                                                | 59.7  | 
|Other investments                            |  |                                                                | 8.4   | 
|Total Fair Value for Level
    3 Investments |  | $                                                              | 435.4 | 









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

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

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

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





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

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

Financial Instruments Disclosed, But Not Carried, At Fair
Value



The following table presents the carrying value and fair value
of the Company's financial liabilities disclosed, but not carried, at fair value as of March 31, 2012 and the level of each financial
liability within the fair value hierarchy:



|(In thousands) | Carrying Value | Fair Value | Level 1 | Level 2 | Level 3 
|-------------- | -------------- | ---------- | ------- | ------- | --------
|Class A Notes  | $99,763        | $100,491   | $  -    | $ -     | $100,491



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



19





A reconciliation of the fair value of
investments for three months ended March 31, 2012, utilizing significant unobservable inputs, is as follows:



|                                                                                                                                                                                                                                                                                                                            |  |                                                                                                      |       |   |                                                                                                                      |   |      |                                                                                                                        |  |   |                                                                                                    |  |  |                                                                                               |      |   |                                                                                                         |   |     |                                                                                                                    |  |   |       |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------- | ----- | - | -------------------------------------------------------------------------------------------------------------------- | - | ---- | ---------------------------------------------------------------------------------------------------------------------- |  | - | -------------------------------------------------------------------------------------------------- |  |  | --------------------------------------------------------------------------------------------- | ---- | - | ------------------------------------------------------------------------------------------------------- | - | --- | ------------------------------------------------------------------------------------------------------------------ |  | - | ----- | -
|($
                                                         in millions)                                                                                                                                                                                                                                                    |  | Senior
                                                                     Secured Note Investments |       |   | Collateralized
                                                                     Loan Obligation Debt Investments |   |      | Collateralized
                                                                     Loan Obligation Equity Investments |  |   | Subordinated
                                                                     Note Investments |  |  | Common
                                                                     Stock Investments |      |   | Preferred
                                                                     Share Equity Investments |   |     | Warrants to
                                                                     Purchase Common Stock Investments |  |   | Total |  
|Balance at December
    31, 2011                                                                                                                                                                                                                                                                                            |  | $                                                                                                    | 279.2 |   |                                                                                                                      | $ | 51.0 |                                                                                                                        |  | $ | 39.3                                                                                               |  |  | $                                                                                             | 4.9  |   |                                                                                                         | $ | 3.1 |                                                                                                                    |  | $ | 2.5   |  
|Realized
    Gains included in earnings                                                                                                                                                                                                                                                                                     |  |                                                                                                      | 0.1   |   |                                                                                                                      |   | 0.2  |                                                                                                                        |  |   | 0.0                                                                                                |  |  |                                                                                               | 0.0  |   |                                                                                                         |   | 0.0 |                                                                                                                    |  |   | 0.0   |  
|Unrealized
    appreciation included in earnings                                                                                                                                                                                                                                                                            |  |                                                                                                      | (2.7  | ) |                                                                                                                      |   | 5.6  |                                                                                                                        |  |   | 3.6                                                                                                |  |  |                                                                                               | 0.1  |   |                                                                                                         |   | 2.0 |                                                                                                                    |  |   | (0.3  | )
|Accretion of discount                                                                                                                                                                                                                                                                                                       |  |                                                                                                      | 0.7   |   |                                                                                                                      |   | 0.6  |                                                                                                                        |  |   | 0.0                                                                                                |  |  |                                                                                               | 0.0  |   |                                                                                                         |   | 0.0 |                                                                                                                    |  |   | 0.0   |  
|Purchases                                                                                                                                                                                                                                                                                                                   |  |                                                                                                      | 26.2  |   |                                                                                                                      |   | 14.6 |                                                                                                                        |  |   | 16.8                                                                                               |  |  |                                                                                               | 0.0  |   |                                                                                                         |   | 0.0 |                                                                                                                    |  |   | 0.0   |  
|Repayments
    and Sales (1)                                                                                                                                                                                                                                                                                                |  |                                                                                                      | (11.6 | ) |                                                                                                                      |   | (1.5 | )                                                                                                                      |  |   | 0.0                                                                                                |  |  |                                                                                               | (0.1 | ) |                                                                                                         |   | 0.0 |                                                                                                                    |  |   | 0.1   |  
|Transfers
    in and/or out of level 3                                                                                                                                                                                                                                                                                      |  |                                                                                                      | 0.0   |   |                                                                                                                      |   | 0.0  |                                                                                                                        |  |   | 0.0                                                                                                |  |  |                                                                                               | 0.0  |   |                                                                                                         |   | 0.0 |                                                                                                                    |  |   | 0.0   |  
|                                                                                                                                                                                                                                                                                                                            |  |                                                                                                      |       |   |                                                                                                                      |   |      |                                                                                                                        |  |   |                                                                                                    |  |  |                                                                                               |      |   |                                                                                                         |   |     |                                                                                                                    |  |   |       |  
|Balance
    at March 31, 2012                                                                                                                                                                                                                                                                                               |  | $                                                                                                    | 291.9 |   |                                                                                                                      | $ | 70.5 |                                                                                                                        |  | $ | 59.7                                                                                               |  |  | $                                                                                             | 4.9  |   |                                                                                                         | $ | 5.1 |                                                                                                                    |  | $ | 2.3   |  
|                                                                                                                                                                                                                                                                                                                            |  |                                                                                                      |       |   |                                                                                                                      |   |      |                                                                                                                        |  |   |                                                                                                    |  |  |                                                                                               |      |   |                                                                                                         |   |     |                                                                                                                    |  |   |       |  
|The
    amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses
    relating to our Level 3 assets still held at the reporting date and reported within the net change in unrealized gains or
    losses on investments in our Statement of Operations |  | $                                                                                                    | (2.7  | ) |                                                                                                                      | $ | 5.6  |                                                                                                                        |  | $ | 3.6                                                                                                |  |  | $                                                                                             | 0.1  |   |                                                                                                         | $ | 2.0 |                                                                                                                    |  | $ | (0.3  | )



---



(1)  	Includes
PIK income of approximately $198,000.



20





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



|                            |  |                                                                 |     |  |                                                |   |      |                                           |  |   |       | 
|--------------------------- |  | --------------------------------------------------------------- | --- |  | ---------------------------------------------- | - | ---- | ----------------------------------------- |  | - | ----- | 
|($ in millions)             |  | Fair Value Measurements at Reporting Date Using                 |     |  |                                                |  
|Assets                      |  | Quoted Prices in Active  Markets for Identical Assets (Level 1) |     |  | Significant Other  Observable Inputs (Level 2) |   |      | Significant Unobservable Inputs (Level 3) |  |   | Total | 
|Cash equivalents            |  | $                                                               | 0.0 |  |                                                | $ | 0.0  |                                           |  | $ | 0.0   | 
|Senior Secured Notes        |  |                                                                 | 0.0 |  |                                                |   | 10.7 |                                           |  |   | 279.2 | 
|CLO Debt                    |  |                                                                 | 0.0 |  |                                                |   | 0.0  |                                           |  |   | 51.0  | 
|CLO Equity                  |  |                                                                 | 0.0 |  |                                                |   | 0.0  |                                           |  |   | 39.3  | 
|Subordinated Notes          |  |                                                                 | 0.0 |  |                                                |   | 0.0  |                                           |  |   | 4.9   | 
|Common Stock                |  |                                                                 | 0.0 |  |                                                |   | 0.0  |                                           |  |   | 3.1   | 
|Preferred Shares            |  |                                                                 | 0.0 |  |                                                |   | 0.0  |                                           |  |   | 2.5   | 
|Warrants to purchase equity |  |                                                                 | 0.0 |  |                                                |   | 0.0  |                                           |  |   | 0.8   | 
|                            |  |                                                                 |     |  |                                                |   |      |                                           |  |   |       | 
|Total                       |  | $                                                               | 0.0 |  |                                                | $ | 10.7 |                                           |  | $ | 380.8 | 



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



|                                                                                                                                                                                                                                                                                                                            |  |                                                                                                      |        |   |                                                                                                                      |    |      |                                                                                                                        |  |    |                                                                                                    |   |  |                                                                                               |      |   |                                                                                                         |    |      |                                                                                                              |  |   |       | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------- | ------ | - | -------------------------------------------------------------------------------------------------------------------- | -- | ---- | ---------------------------------------------------------------------------------------------------------------------- |  | -- | -------------------------------------------------------------------------------------------------- | - |  | --------------------------------------------------------------------------------------------- | ---- | - | ------------------------------------------------------------------------------------------------------- | -- | ---- | ------------------------------------------------------------------------------------------------------------ |  | - | ----- | 
|($
                                                         in millions)                                                                                                                                                                                                                                                    |  | Senior
                                                                     Secured Note Investments |        |   | Collateralized
                                                                     Loan Obligation Debt Investments |    |      | Collateralized
                                                                     Loan Obligation Equity Investments |  |    | Subordinated
                                                                     Note Investments |   |  | Common
                                                                     Stock Investments |      |   | Preferred
                                                                     Share Equity Investments |    |      | Warrants
                                                                     to Purchase Equity Investments |  |   | Total | 
|Balance at December 31,
    2010                                                                                                                                                                                                                                                                                            |  | $                                                                                                    | 173.9  |   |                                                                                                                      | $  | 50.4 |                                                                                                                        |  | $  | 8.9                                                                                                |   |  | $                                                                                             | 6.0  |   |                                                                                                         | $  | 5.8  |                                                                                                              |  | $ | 2.0   | 
|Realized
    Losses included in  earnings                                                                                                                                                                                                                                                                                   |  |                                                                                                      | 2.7    |   |                                                                                                                      |    | 0.9  |                                                                                                                        |  |    | 0.0                                                                                                |   |  |                                                                                               | 0.0  |   |                                                                                                         |    | 0.0  |                                                                                                              |  |   | 0.0   | 
|Unrealized
    (depreciation) appreciation included in earnings                                                                                                                                                                                                                                                             |  |                                                                                                      | (5.7   | ) |                                                                                                                      |    | (9.5 | )                                                                                                                      |  |    | (1.5                                                                                               | ) |  |                                                                                               | (0.4 | ) |                                                                                                         |    | (2.7 | )                                                                                                            |  |   | 0.1   | 
|Accretion of discount                                                                                                                                                                                                                                                                                                       |  |                                                                                                      | 2.8    |   |                                                                                                                      |    | 2.2  |                                                                                                                        |  |    | 0.0                                                                                                |   |  |                                                                                               | 0.0  |   |                                                                                                         |    | 0.0  |                                                                                                              |  |   | 0.0   | 
|Purchases                                                                                                                                                                                                                                                                                                                   |  |                                                                                                      | 230.0  |   |                                                                                                                      |    | 10.6 |                                                                                                                        |  |    | 31.9                                                                                               |   |  |                                                                                               | 0.0  |   |                                                                                                         |    | 0.0  |                                                                                                              |  |   | 0.0   | 
|Repayments
    and Sales(1)                                                                                                                                                                                                                                                                                                 |  |                                                                                                      | (113.8 | ) |                                                                                                                      |    | (3.6 | )                                                                                                                      |  |    | 0.0                                                                                                |   |  |                                                                                               | (0.7 | ) |                                                                                                         |    | 0.0  |                                                                                                              |  |   | 0.4   | 
|Transfers
    in and/or out of level 3                                                                                                                                                                                                                                                                                      |  |                                                                                                      | (10.7  | ) |                                                                                                                      |    | 0.0  |                                                                                                                        |  |    | 0.0                                                                                                |   |  |                                                                                               | 0.0  |   |                                                                                                         |    | 0.0  |                                                                                                              |  |   | 0.0   | 
|Balance
    at December 31, 2011                                                                                                                                                                                                                                                                                            |  | $                                                                                                    | 279.2  |   |                                                                                                                      | $  | 51.0 |                                                                                                                        |  | $  | 39.3                                                                                               |   |  | $                                                                                             | 4.9  |   |                                                                                                         | $  | 3.1  |                                                                                                              |  | $ | 2.5   | 
|The
    amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses
    relating to our Level 3 assets still held at the reporting date and reported within the net change in unrealized gains or
    losses on investments in our Statement of Operations |  | ($                                                                                                   | 4.1    | ) |                                                                                                                      | ($ | 8.8  | )                                                                                                                      |  | ($ | 1.3                                                                                                | ) |  | ($                                                                                            | 0.3  | ) |                                                                                                         | ($ | 2.7  | )                                                                                                            |  | $ | 0.1   | 



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



NOTE 4. BORROWINGS



In accordance with the 1940 Act, with certain
limited exceptions, the Company is only allowed to borrow amounts such that its asset coverage, as defined in the 1940 Act, is
at least 200% after such borrowing. As of March 31, 2012, the Company’s asset coverage for borrowed amounts was 453%.



On August 10, 2011, the Company
completed a $225.0 million debt securitization financing transaction. The Class A Notes offered in the securitization
were issued by TICC CLO, and are secured by the assets held by the trustee on behalf of the Securitization Issuer. The
securitization was executed through a private placement of $101.25 million of Aaa/AAA Class A Notes which bear interest,
after the effective date, at three-month London Inter Bank Offered Rate (“LIBOR”) plus 2.25% (prior to the
effective date, the Class A Notes bear interest at five-month LIBOR plus 2.25%). The notes were sold at a discount to
par, and the amount of the discount is being amortized over the term of the notes. The Class A Notes are included in the
March 31, 2012 consolidated statements of assets and liabilities. On January 25, 2012, the Class A note holders were
paid interest on the Class A notes of approximately $1.3 million. Holdings retained all of the subordinated notes totaling
$123.75 million and all of the membership interests in the Securitization Issuer. The subordinated notes do not bear
interest, but are entitled to the residual economic interest in the Securitization Issuer.



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



21







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



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



As of March 31, 2012, there were 47
investments in portfolio companies with a total fair value of approximately $223.8 million, securing the Class A Notes. The
pool of loans in the securitization must meet certain requirements, including asset mix and concentration, collateral coverage,
term, agency rating, minimum coupon, minimum spread and sector diversity requirements.



For the period from January 1, 2012
to January 24, 2012, the interest charged under the securitization was based on an interpolated five-month LIBOR, which as
of January 24, 2011 was 0.40%. Effective January 25, 2012 and through March 31, 2012, the interest rate of
2.81% charged under the securitization was based on three-month LIBOR of 0.56%. For the three months ended March 31, 2012, the
effective annualized average interest rate, which includes amortization of discount and debt issuance costs on the
securitization, was 3.31%. For the three months ended March 31, 2012, interest expense, including the amortization of deferred
debt issuance costs and the discount on the face amount of the Class A Notes, was $836,777. Cash paid for interest
during the three months ended March 31, 2012 was $1,255,466.





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



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



The following are the carrying values and fair values of the
Company’s debt liabilities as of March 31, 2012 and December 31, 2011. Fair value is based upon the bid price provided
by the placement agent at the measurement date.



|              |  | As of March 31, 2012 (in thousands) |        |  | As of December 31, 2011 (in thousands) |  
|------------- |  | ----------------------------------- | ------ |  | -------------------------------------- | -
|              |  | Carrying Value                      |        |  | Fair Value                             |  
|Class A Notes |  | $                                   | 99,763 |  |                                        | $



Deferred debt issuance costs
represent fees and other direct incremental costs incurred in connection with the Company’s debt securitization. As of
March 31, 2011, the Company had deferred financing costs of approximately $2.8 million. Discount on the Notes at the time of
issuance totaled approximately $1.6 million. These amounts are being amortized and included in interest expense in the
consolidated statements of operations over the term of the debt securitization. Amortization expense for the three months
ended March 31, 2012 was approximately $128,000. The amortization expense for the year ended December 31, 2011 was
approximately $167,000.



22





NOTE 5. EARNINGS PER SHARE



The following table sets forth the computation
of basic and diluted net increase in net assets resulting from operations per share for the three months ended March 31, 2012
and 2011, respectively:



|                                                                                                                 |  | Three Months Ended March 31, 2012 |            |  | Three Months Ended March 31, 2011 |  
|---------------------------------------------------------------------------------------------------------------- |  | --------------------------------- | ---------- |  | --------------------------------- | -
|Numerator for basic and diluted income per share—net increase in net assets resulting from net investment income |  | $                                 | 8,154,520  |  |                                   | $
|Numerator for basic and diluted income per share—net increase in net assets resulting from operations            |  | $                                 | 17,083,368 |  |                                   | $
|Denominator for basic and diluted income per share —weighted average shares                                      |  |                                   | 33,410,298 |  |                                   |  
|Basic and diluted net investment income per common share                                                         |  | $                                 | 0.24       |  |                                   | $
|Basic and diluted net increase in net assets resulting from operations per common share                          |  | $                                 | 0.51       |  |                                   | $



NOTE 6. RELATED PARTY TRANSACTIONS



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



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



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



The second part of the incentive fee is
determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement,
as of the termination date), and equals 20% of the Company’s “Incentive Fee Capital Gains,” which consist of
the Company’s realized capital gains for each calendar year, computed net of all realized capital losses and unrealized capital
depreciation for that calendar year. For accounting purposes only, in order to reflect the theoretical capital gains incentive
fee that would be payable for a given period as if all unrealized gains were realized, we will accrue a capital gains incentive
fee based upon net realized capital gains and unrealized capital depreciation for that calendar year (in accordance with the terms
of the Investment Advisory Agreement), plus unrealized capital appreciation on investments held at the end of the period. It should
be noted that a fee so calculated and accrued would not necessarily be payable under the Investment Advisory Agreement, and may
never be paid based upon the computation of capital gains incentive fees in subsequent periods. Amounts paid under the Investment
Advisory Agreement will be consistent with the formula reflected in the Investment Advisory Agreement. For the year ended December
31, 2011, such   accrual was not required under the terms of the Investment Advisory Agreement.



23







Incentive fees, based upon pre-incentive
fee net investment income, were approximately $1.2 million and $378,000 for the quarters ended March 31, 2012 and 2011, respectively.
The net investment income incentive fee payable to TICC Management for the first quarter of 2012 and 2011, were approximately $1.2
million and $378,000, respectively.



For the quarter ended March 31, 2012,
the capital gains incentive fee expense was approximately $1.1 million compared with $6.5 million for the quarter ended March 31,
2011. The amount of capital gains incentive fee expense related to the hypothetical liquidation of the portfolio (and assuming
no other changes in realized or unrealized gains and losses) would only become payable to TICC Management in the event of a complete
liquidation of TICC’s portfolio as of period end and the termination of the Investment Advisory Agreement on such date. Also, it should
be noted that the capital gains incentive fee expense fluctuates with our overall investment results.



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



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



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



For the quarters ended March 31, 2012
and 2011, respectively, TICC incurred investment advisory fees of approximately $2.1 million and $1.6 million in accordance with
the terms of the Investment Advisory Agreement, and incurred approximately $270,000 and $238,000 in compensation expenses for the
services of employees allocated to the administrative activities of TICC, pursuant to the Administration Agreement with BDC Partners.
In addition, TICC incurred approximately $16,000 and $17,000 for facility costs allocated under the agreement for the three months
March 31, 2012 and 2011, respectively. At March 31, 2012 and 2011, respectively, $2.1 million and $1.6 million of investment
advisory fees remained payable to TICC Management. At March 31, 2012 and 2011, respectively, approximately $150,000 and $117,000
was accrued for compensation expense.



NOTE 7. DIVIDENDS



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



24







On March 30, 2012, the Company paid
a dividend of $0.27 per share. The Company has a dividend reinvestment plan under which all distributions are paid to stockholders
in the form of additional shares, unless a stockholder elects to receive cash.



NOTE 8. NET ASSET VALUE PER SHARE



The Company’s net asset value per
share at March 31, 2012 was $9.50, and at December 31, 2011 was $9.30. In determining the Company’s net asset value
per share, the Board of Directors determined in good faith the fair value of the Company’s portfolio investments for which
reliable market quotations are not readily available.



NOTE 9. PAYMENT-IN-KIND 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 7 above), this non-cash source of income
must be paid out to stockholders in the form of dividends, even though the Company has not yet collected the cash. Amounts necessary
to pay these dividends may come from available cash or the liquidation of certain investments. For the three months ended March
31, 2012 and 2011, the Company recorded approximately $198,000 and $72,000 in PIK income, respectively.



In addition, the Company recorded original
issue discount income of approximately $1.4 million and $1.2 million for the three months ended March 31, 2012 and 2011, respectively,
representing the amortization of the discount attributed to certain debt securities purchased by the Company, including original
issue discount (“OID”) and market discount.



NOTE 10. OTHER INCOME



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



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



NOTE 11. DISTRIBUTIONS FROM SECURITIZATION VEHICLES
AND EQUITY INVESTMENTS



The Company also receives
distributions on the “equity” tranches of securitization vehicles in which it invests. These tranches represent
the residual economic interests in such securitization vehicles, and those distributions are determined by the respective
trustee on a quarterly basis. The distributions are recognized in the period that they are finally determined and payable.
The Company earned approximately $5.5 million in such distributions during the quarter ended March 31, 2012, compared to
approximately $2.3 million during the quarter ended March 31, 2011.



25







NOTE 12. FINANCIAL HIGHLIGHTS



Financial highlights for the three months
ending March 31, 2012 and 2011, respectively, are as follows:



|                                                                        |  | Three Months Ended March 31, 2012 (unaudited) |            |   | Three Months Ended March 31, 2011 (unaudited) |  
|----------------------------------------------------------------------- |  | --------------------------------------------- | ---------- | - | --------------------------------------------- | -
|                                                                        |  |                                               |            |   |                                               |  
|Per Share Data                                                          |  |                                               |            |   |                                               |  
|Net asset value at beginning of period                                  |  | $                                             | 9.30       |   |                                               | $
|                                                                        |  |                                               |            |   |                                               |  
|Net investment income(1)                                                |  |                                               | 0.24       |   |                                               |  
|Net realized and unrealized capital gains(2)                            |  |                                               | 0.27       |   |                                               |  
|                                                                        |  |                                               |            |   |                                               |  
|Total from net investment operations                                    |  |                                               | 0.51       |   |                                               |  
|                                                                        |  |                                               |            |   |                                               |  
|Distributions per share from net investment
    income                  |  |                                               | (0.27      | ) |                                               |  
|                                                                        |  |                                               |            |   |                                               |  
|Distributions based on weighted average share
    impact                |  |                                               | (0.04      | ) |                                               |  
|                                                                        |  |                                               |            |   |                                               |  
|Distributions from net realized capital gains                           |  |                                               | -          |   |                                               |  
|                                                                        |  |                                               |            |   |                                               |  
|Tax return of capital distributions                                     |  |                                               | -          |   |                                               |  
|                                                                        |  |                                               |            |   |                                               |  
|Total distributions(3)                                                  |  |                                               | (0.31      | ) |                                               |  
|                                                                        |  |                                               |            |   |                                               |  
|Effect of shares issued,
    net of offering expenses(6)                |  |                                               | -          |   |                                               |  
|                                                                        |  |                                               |            |   |                                               |  
|Net asset value at end of period                                        |  | $                                             | 9.50       |   |                                               | $
|                                                                        |  |                                               |            |   |                                               |  
|Per share market value at beginning of period                           |  | $                                             | 8.65       |   |                                               | $
|Per share market value at end of period                                 |  | $                                             | 9.74       |   |                                               | $
|Total return(4)                                                         |  |                                               | 15.72      | % |                                               |  
|Shares outstanding at end of period                                     |  |                                               | 37,754,774 |   |                                               |  
|Ratios/Supplemental Data                                                |  |                                               |            |   |                                               |  
|Net assets at end of period (000’s)                                     |  |                                               | 358,515    |   |                                               |  
|Average net assets (000’s)                                              |  |                                               | 316,154    |   |                                               |  
|Ratio of expenses to average net assets:                                |  |                                               |            |   |                                               |  
|Expenses before incentive fees(5)                                       |  |                                               | 5.48       | % |                                               |  
|Net investment income incentive fees(5)                                 |  |                                               | 1.51       | % |                                               |  
|Capital gains incentive fees(5)                                         |  |                                               | 1.35       | % |                                               |  
|                                                                        |  |                                               |            |   |                                               |  
|Total ratio of expenses to average net assets(5)                        |  |                                               | 8.34       | % |                                               |  
|                                                                        |  |                                               |            |   |                                               |  
|Ratio of expenses, excluding interest expense, to average net assets(5) |  |                                               | 7.28       | % |                                               |  
|                                                                        |  |                                               |            |   |                                               |  
|Ratio of net investment income to average net assets(5)                 |  |                                               | 10.32      | % |                                               |  





---



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

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

| | (3) | Management monitors available taxable earnings, including net investment income and realized capital gains, to determine if
a tax return of capital may occur for the year. To the extent the Company’s taxable earnings fall below the total amount
of the Company’s distributions for that fiscal year, a portion of those distributions may be deemed a tax return of capital
to the Company’s stockholders. The tax character of distributions will be determined at the end of the fiscal year. However,
if the character of such distributions were determined as of March 31, 2012, none of the distributions for 2012 would have
been characterized as a tax return of capital to the Company’s stockholders; this tax return of capital may differ from the
return of capital calculated with reference to net investment income for financial reporting purposes.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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



| | (6) | There was an accretion of approximately $0.02 per share based on the actual number of
                                                                               offering shares sold. Based                                                                                on
                                                                               weighted                                                                                                            average
                                                                               shares,                                                                                     the
                                                                               impact is                                                                                                            less
                                                                               than $0.01 per                                                                                share.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



26







NOTE 13. CASH AND CASH EQUIVALENTS



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



|                          |  | March 31, 2012 |            |  | December 31, 2011 |  
|------------------------- |  | -------------- | ---------- |  | ----------------- | -
|Total Cash Equivalents    |  | $              | —          |  |                   | $
|                          |  |                |            |  |                   |  
|Cash                      |  |                | 30,726,275 |  |                   |  
|Restricted Cash           |  |                | 11,776,290 |  |                   |  
|                          |  |                |            |  |                   |  
|                          |  |                |            |  |                   |  
|Cash and Cash Equivalents |  | $              | 42,502,565 |  |                   | $



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



NOTE 14. COMMITMENTS



As of March 31, 2012, the Company had
not issued any commitment to purchase additional debt investments and/or warrants from any portfolio companies.



NOTE 15. SUBSEQUENT EVENTS



On May 2, 2012, the Board of Directors
declared a distribution of $0.27 per share for the second quarter, payable on June 29, 2012 to shareholders of record as of June 15,
2012.



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



CAUTIONARY STATEMENT
REGARDING FORWARD-LOOKING STATEMENTS





This Quarterly Report on Form 10-Q contains
forward-looking statements that involve substantial risks and uncertainties. These forward-looking statements are not historical
facts, but rather are based on current expectations, estimates and projections about TICC, our current and prospective portfolio
investments, our industry, our beliefs, and our assumptions. Words such as “anticipates,” “expects,” “intends,”
“plans,” “will,” “may,” “continue,” “believes,” “seeks,”
“estimates,” “would,” “could,” “should,” “targets,” “projects,”
and variations of these words and similar expressions are intended to identify forward-looking statements. The forward-looking
statements contained in this Quarterly Report on Form 10-Q involve risks and uncertainties, including statements as to:



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



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



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



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



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



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



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



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



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



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



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



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



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





27









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



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



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



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



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





OVERVIEW



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



Our investment activities are
managed by TICC Management, a registered investment adviser under the Investment Advisers Act of 1940, as amended. TICC
Management is owned by BDC Partners, its managing member, and Charles M. Royce, our non-executive Chairman, who holds a
minority, non-controlling interest in TICC Management. Jonathan H. Cohen, our Chief Executive Officer, and Saul B. Rosenthal,
our President and Chief Operating Officer, are the members of BDC Partners. Under an investment advisory agreement (the
“Investment Advisory Agreement”), we have agreed to pay TICC Management an annual base fee calculated on gross
assets, and an incentive fee based upon our performance. Under an amended and restated administration agreement (the
“Administration Agreement”), we have agreed to pay or reimburse BDC Partners, as administrator, for certain
expenses incurred in operating TICC. Our executive officers and directors, and the executive officers of TICC Management and
BDC Partners, serve or may serve as officers and directors of entities that operate in a line of business similar to our own.
Accordingly, they may have obligations to investors in those entities, the fulfillment of which might not be in the best
interests of us or our stockholders. For more information, see “Risk Factors—Risks Relating to our Business and
Structure—There are significant potential conflicts of interest, which could impact our investment returns.”



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



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



We generally expect to invest between
$5 million and $25 million in each of our portfolio companies, although this investment size may vary proportionately as the size
of our capital base changes and market conditions warrant, and accrue interest at fixed or variable rates. We expect that our investment
portfolio will be diversified among a large number of investments with few investments, if any, exceeding 5% of the total portfolio.
As of March 31, 2012, our debt investments had stated interest rates of between 3.92% and 15.75% (excluding our investment
in GenuTec Business Solutions, Inc. which carries a zero interest rate through October 30, 2014) and maturity dates of between
9 and 127 months. In addition, our total portfolio had a weighted average yield on debt investments of approximately 11.6% including
GenuTec Business Solutions, Inc.



28







Our loans may carry a provision for deferral
of some or all of the interest payments and amendment fees, which will be added to the principal amount of the loan. This form
of deferred income is referred to as “payment-in-kind,” or “PIK,” interest or other income and, when earned,
is recorded as interest or other income and an increase in the principal amount of the loan. For the quarter ended March 31,
2012, we recognized approximately $198,000 of PIK income associated with our investments in Pegasus Solutions, Inc., Merrill Communications,
LLC., Shearers Food, Inc. and Band Digital Inc., compared to PIK interest of approximately $72,000 for the   quarter ended
March 31, 2011.



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



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



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



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



During the quarter ended March 31, 2012,
we closed approximately $57.5 million in portfolio investments, including additional investments of approximately $15.3 million
in existing portfolio companies and approximately $42.2 million in new portfolio companies. During the quarter ended March 31,
2012, we recognized a total of $4.4 million from principal repayments on debt investments, and we recognized approximately $9.0
million from the sale of portfolio investments. We realized net gains on investments during the quarter ended March 31, 2012 in
the amount of approximately $294,000. For the quarter ended March 31, 2012, we had net unrealized appreciation of approximately
$8.6 million.



29





Based upon the fair value determinations
made in good faith by the Board of Directors, during the quarter ended March 31, 2012, we had net unrealized appreciation of approximately
$8.6 million, comprised of $15.8 million in gross unrealized appreciation, $7.0 million in gross unrealized depreciation and approximately
$0.2 million relating to the reversal of prior period net unrealized appreciation as an investment was realized. The most significant
changes in net unrealized appreciation and depreciation during the quarter ended March 31, 2012 were as follows (in millions):



|Portfolio Company                              |  | Unrealized appreciation (depreciation) |     
|---------------------------------------------- |  | -------------------------------------- | ----
|Integra Telecom Holdings, Inc. common stock    |  | $                                      | 1.7 
|Algorithmic Implementations, Inc. common stock |  |                                        | 1.0 
|Hewetts Island CDO IV 2006-4 E                 |  |                                        | 0.8 
|Harbourview - 2006A CLO Equity                 |  |                                        | 0.8 
|Prospero CLO II BV                             |  |                                        | 0.6 
|Harch 2005-2A BB CLO                           |  |                                        | 0.5 
|Marlborough Street 2007-1A                     |  |                                        | 0.5 
|ACA CLO 2006-2, Limited                        |  |                                        | 0.5 
|Canaras CLO Equity - 2007-1A, 1X               |  |                                        | 0.5 
|GALE 2007-4A CLO                               |  |                                        | 0.5 
|Emporia CLO 2007 3A E                          |  |                                        | 0.4 
|Lightpoint CLO 2007-8A                         |  |                                        | 0.4 
|Pegasus Solutions, Inc. common stock           |  |                                        | (0.7
|RBS Holding Company                            |  |                                        | (0.9
|Stratus Technologies, Inc.                     |  |                                        | (1.3
|GenuTec Business Solutions, Inc.               |  |                                        | (2.0
|Net all other                                  |  |                                        | 5.3 
|                                               |  |                                        |     
|Total                                          |  | $                                      | 8.6 
|                                               |  |                                        |     



For the quarter ended March 31, 2011, we
recorded net realized gains on investments of approximately $1.9 million, which represents relatively small gains on several different
investments.



30





Based upon the fair value determinations
made in good faith by the Board of Directors, during the quarter ended March 31, 2011, we had net unrealized gains of approximately
$9.1 million, comprised of $13.3 million in gross unrealized appreciation, $2.7 million in gross unrealized depreciation and approximately
$1.5 million relating to the reversal of prior period net unrealized appreciation as certain investments were realized. The most
significant changes in net unrealized appreciation and depreciation during the quarter ended March 31, 2011 were as follows
(in millions):



|Portfolio Company                                   |  | Unrealized appreciation (depreciation) |     
|--------------------------------------------------- |  | -------------------------------------- | ----
|                                                    |  |                                        |     
|ACA CLO 2006-2, Limited                             |  | $                                      | 1.6 
|Sargas CLO 2006 -1A                                 |  |                                        | 1.2 
|Pegasus Solutions, Inc. common and preferred equity |  |                                        | 1.0 
|American Integration Technologies, LLC              |  |                                        | 0.8 
|Prospero II-XD BB CLO                               |  |                                        | 0.7 
|Latitude III CLO 2007-3A                            |  |                                        | 0.7 
|Harch 2005-2A BB CLO                                |  |                                        | 0.6 
|Fusionstorm, Inc.                                   |  |                                        | 0.5 
|Avenue CLO V LTD 2007-5A D1                         |  |                                        | 0.4 
|Latitude II CLO 2006 2A D                           |  |                                        | 0.4 
|Landmark V CDO LTD.                                 |  |                                        | 0.4 
|Del Mar CLO I Ltd. 2006-1                           |  |                                        | (0.4
|Net all other                                       |  |                                        | 1.2 
|                                                    |  |                                        |     
|Total                                               |  | $                                      | 9.1 





Current Market and Economic Conditions



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



These events constrained the
availability of capital for the market as a whole, and the financial services sector in particular. During 2009, the
syndicated corporate loans market experienced both unprecedented price declines and volatility. While prices remained
depressed across many sectors and ratings categories through most of 2009, we witnessed a strong upward move during the
second half of 2009, which continued through 2010. During 2011 and through the quarter ended March 31, 2012, we saw ongoing
price volatility for corporate loans, consistent with many other parts of the debt and equity markets. Although corporate
loan prices may still be below historical averages, our view is that certain, primarily larger-issuer, broadly syndicated
corporate loans still may not adequately reflect the spreads necessary to compensate investors for the risks involved. In
view of the above circumstances, we continue to focus more heavily on middle-market issuers and to a limited extent larger
issuers, and, opportunistically, on certain structured finance investments, including collateralized loan obligation
(“CLO”) investment vehicles, and have  made a number of selective purchases in these markets.





CRITICAL ACCOUNTING POLICIES



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



Investment Valuation



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



31





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



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



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



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



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



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



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



32







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



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



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



The Company’s assets measured at
fair value on a recurring basis subject to the disclosure requirements of ASC 820-10-35 at March 31, 2012, were as follows:



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





33





A reconciliation of the fair value of
investments for three months ended March 31, 2012, utilizing significant unobservable inputs, is as follows:



|($
                                                         in millions)                                                                                                                                                                                                                                                    |  | Senior
                                                                     Secured Note Investments |       |   | Collateralized
                                                                     Loan Obligation Debt Investments |   |      | Collateralized
                                                                     Loan Obligation Equity Investments |  |   | Subordinated
                                                                     Note Investments |  |  | Common
                                                                     Stock Investments |      |   | Preferred
                                                                     Share Equity Investments |   |     | Warrants to
                                                                     Purchase Common Stock Investments |  |   | Total |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------- | ----- | - | -------------------------------------------------------------------------------------------------------------------- | - | ---- | ---------------------------------------------------------------------------------------------------------------------- |  | - | -------------------------------------------------------------------------------------------------- |  |  | --------------------------------------------------------------------------------------------- | ---- | - | ------------------------------------------------------------------------------------------------------- | - | --- | ------------------------------------------------------------------------------------------------------------------ |  | - | ----- | -
|Balance at December
    31, 2011                                                                                                                                                                                                                                                                                            |  | $                                                                                                    | 279.2 |   |                                                                                                                      | $ | 51.0 |                                                                                                                        |  | $ | 39.3                                                                                               |  |  | $                                                                                             | 4.9  |   |                                                                                                         | $ | 3.1 |                                                                                                                    |  | $ | 2.5   |  
|Realized
    Gains included in earnings                                                                                                                                                                                                                                                                                     |  |                                                                                                      | 0.1   |   |                                                                                                                      |   | 0.2  |                                                                                                                        |  |   | 0.0                                                                                                |  |  |                                                                                               | 0.0  |   |                                                                                                         |   | 0.0 |                                                                                                                    |  |   | 0.0   |  
|Unrealized
    appreciation included in earnings                                                                                                                                                                                                                                                                            |  |                                                                                                      | (2.7  | ) |                                                                                                                      |   | 5.6  |                                                                                                                        |  |   | 3.6                                                                                                |  |  |                                                                                               | 0.1  |   |                                                                                                         |   | 2.0 |                                                                                                                    |  |   | (0.3  | )
|Accretion of discount                                                                                                                                                                                                                                                                                                       |  |                                                                                                      | 0.7   |   |                                                                                                                      |   | 0.6  |                                                                                                                        |  |   | 0.0                                                                                                |  |  |                                                                                               | 0.0  |   |                                                                                                         |   | 0.0 |                                                                                                                    |  |   | 0.0   |  
|Purchases                                                                                                                                                                                                                                                                                                                   |  |                                                                                                      | 26.2  |   |                                                                                                                      |   | 14.6 |                                                                                                                        |  |   | 16.8                                                                                               |  |  |                                                                                               | 0.0  |   |                                                                                                         |   | 0.0 |                                                                                                                    |  |   | 0.0   |  
|Repayments
    and Sales (1)                                                                                                                                                                                                                                                                                                |  |                                                                                                      | (11.6 | ) |                                                                                                                      |   | (1.5 | )                                                                                                                      |  |   | 0.0                                                                                                |  |  |                                                                                               | (0.1 | ) |                                                                                                         |   | 0.0 |                                                                                                                    |  |   | 0.1   |  
|Transfers
    in and/or out of level 3                                                                                                                                                                                                                                                                                      |  |                                                                                                      | 0.0   |   |                                                                                                                      |   | 0.0  |                                                                                                                        |  |   | 0.0                                                                                                |  |  |                                                                                               | 0.0  |   |                                                                                                         |   | 0.0 |                                                                                                                    |  |   | 0.0   |  
|                                                                                                                                                                                                                                                                                                                            |  |                                                                                                      |       |   |                                                                                                                      |   |      |                                                                                                                        |  |   |                                                                                                    |  |  |                                                                                               |      |   |                                                                                                         |   |     |                                                                                                                    |  |   |       |  
|Balance
    at March 31, 2012                                                                                                                                                                                                                                                                                               |  | $                                                                                                    | 291.9 |   |                                                                                                                      | $ | 70.5 |                                                                                                                        |  | $ | 59.7                                                                                               |  |  | $                                                                                             | 4.9  |   |                                                                                                         | $ | 5.1 |                                                                                                                    |  | $ | 2.3   |  
|                                                                                                                                                                                                                                                                                                                            |  |                                                                                                      |       |   |                                                                                                                      |   |      |                                                                                                                        |  |   |                                                                                                    |  |  |                                                                                               |      |   |                                                                                                         |   |     |                                                                                                                    |  |   |       |  
|The
    amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses
    relating to our Level 3 assets still held at the reporting date and reported within the net change in unrealized gains or
    losses on investments in our Statement of Operations |  | $                                                                                                    | (2.7  | ) |                                                                                                                      | $ | 5.6  |                                                                                                                        |  | $ | 3.6                                                                                                |  |  | $                                                                                             | 0.1  |   |                                                                                                         | $ | 2.0 |                                                                                                                    |  | $ | (0.3  | )



---

(1)  	Includes
PIK income of approximately $198,000.



34





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



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



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



|($
                                                         in millions)                                                                                                                                                                                                                                                    |  | Senior
                                                                     Secured Note Investments |        |   | Collateralized
                                                                     Loan Obligation Debt Investments |    |      | Collateralized
                                                                     Loan Obligation Equity Investments |  |    | Subordinated
                                                                     Note Investments |   |  | Common
                                                                     Stock Investments |      |   | Preferred
                                                                     Share Equity Investments |    |      | Warrants
                                                                     to Purchase Equity Investments |  |   | Total | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------- | ------ | - | -------------------------------------------------------------------------------------------------------------------- | -- | ---- | ---------------------------------------------------------------------------------------------------------------------- |  | -- | -------------------------------------------------------------------------------------------------- | - |  | --------------------------------------------------------------------------------------------- | ---- | - | ------------------------------------------------------------------------------------------------------- | -- | ---- | ------------------------------------------------------------------------------------------------------------ |  | - | ----- | 
|Balance at December 31,
    2010                                                                                                                                                                                                                                                                                            |  | $                                                                                                    | 173.9  |   |                                                                                                                      | $  | 50.4 |                                                                                                                        |  | $  | 8.9                                                                                                |   |  | $                                                                                             | 6.0  |   |                                                                                                         | $  | 5.8  |                                                                                                              |  | $ | 2.0   | 
|Realized
    Losses included in  earnings                                                                                                                                                                                                                                                                                   |  |                                                                                                      | 2.7    |   |                                                                                                                      |    | 0.9  |                                                                                                                        |  |    | 0.0                                                                                                |   |  |                                                                                               | 0.0  |   |                                                                                                         |    | 0.0  |                                                                                                              |  |   | 0.0   | 
|Unrealized
    (depreciation) appreciation included in earnings                                                                                                                                                                                                                                                             |  |                                                                                                      | (5.7   | ) |                                                                                                                      |    | (9.5 | )                                                                                                                      |  |    | (1.5                                                                                               | ) |  |                                                                                               | (0.4 | ) |                                                                                                         |    | (2.7 | )                                                                                                            |  |   | 0.1   | 
|Accretion of discount                                                                                                                                                                                                                                                                                                       |  |                                                                                                      | 2.8    |   |                                                                                                                      |    | 2.2  |                                                                                                                        |  |    | 0.0                                                                                                |   |  |                                                                                               | 0.0  |   |                                                                                                         |    | 0.0  |                                                                                                              |  |   | 0.0   | 
|Purchases                                                                                                                                                                                                                                                                                                                   |  |                                                                                                      | 230.0  |   |                                                                                                                      |    | 10.6 |                                                                                                                        |  |    | 31.9                                                                                               |   |  |                                                                                               | 0.0  |   |                                                                                                         |    | 0.0  |                                                                                                              |  |   | 0.0   | 
|Repayments
    and Sales(1)                                                                                                                                                                                                                                                                                                 |  |                                                                                                      | (113.8 | ) |                                                                                                                      |    | (3.6 | )                                                                                                                      |  |    | 0.0                                                                                                |   |  |                                                                                               | (0.7 | ) |                                                                                                         |    | 0.0  |                                                                                                              |  |   | 0.4   | 
|Transfers
    in and/or out of level 3                                                                                                                                                                                                                                                                                      |  |                                                                                                      | (10.7  | ) |                                                                                                                      |    | 0.0  |                                                                                                                        |  |    | 0.0                                                                                                |   |  |                                                                                               | 0.0  |   |                                                                                                         |    | 0.0  |                                                                                                              |  |   | 0.0   | 
|Balance
    at December 31, 2011                                                                                                                                                                                                                                                                                            |  | $                                                                                                    | 279.2  |   |                                                                                                                      | $  | 51.0 |                                                                                                                        |  | $  | 39.3                                                                                               |   |  | $                                                                                             | 4.9  |   |                                                                                                         | $  | 3.1  |                                                                                                              |  | $ | 2.5   | 
|The
    amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses
    relating to our Level 3 assets still held at the reporting date and reported within the net change in unrealized gains or
    losses on investments in our Statement of Operations |  | ($                                                                                                   | 4.1    | ) |                                                                                                                      | ($ | 8.8  | )                                                                                                                      |  | ($ | 1.3                                                                                                | ) |  | ($                                                                                            | 0.3  | ) |                                                                                                         | ($ | 2.7  | )                                                                                                            |  | $ | 0.1   | 



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





PORTFOLIO COMPOSITION AND INVESTMENT
ACTIVITY



The total fair value of our investment
portfolio was approximately $446.1 million and $391.5 million as of March 31, 2012 and December 31, 2011, respectively. The
increase in investments during the three month period was due primarily to new investments of approximately $57.5 million and net
unrealized appreciation of approximately $8.6 million. These increases were partially offset by debt repayments and sales of securities
totaling approximately $13.4 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, 2012, we recognized approximately $9.0 million from the sales
of our debt investments in Hyland Software, Inc. ($2.8 million), RCN Telecom Services, LLC ($4.8 million) and Liberty CDO LTD 2005-11AC
($1.4 million), whereas for the year ended December 31, 2011, we recognized proceeds of approximately $11.3 million from the sales
of securities. Also, during the quarter ended March 31, 2012, we had repayments and amortization payments of approximately $4.4
million, whereas, for the year ended December 31, 2011, we had repayments and amortization payments of approximately $107.9
million.



35







As of March 31, 2012, we had investments
in debt securities of, or loans to, 75 portfolio companies, with a fair value of approximately $378.0 million, and equity investments
in 23 portfolio companies, with a fair value of approximately $68.1 million. As of December 31, 2011, we had investments in
debt securities of, or loans to, 69 portfolio companies, with a fair value of approximately $345.8 million, and equity investments
in 21 portfolio companies, with a fair value of approximately $45.7 million.



A reconciliation of the investment portfolio
for the three months ended March 31, 2012 and the year ended December 31, 2011 follows:



|                                           |  | March 31, 2012        |       |   | December 31, 2011     |  
|------------------------------------------ |  | --------------------- | ----- | - | --------------------- | -
|                                           |  | (dollars in millions) |       |   | (dollars in millions) |  
|Beginning Investment Portfolio             |  | $                     | 391.5 |   |                       | $
|Portfolio Investments Acquired             |  |                       | 57.5  |   |                       |  
|Debt repayments                            |  |                       | (4.4  | ) |                       |  
|Sales of securities                        |  |                       | (9.0  | ) |                       |  
|Payment in Kind                            |  |                       | 0.2   |   |                       |  
|Original Issue Discount                    |  |                       | 1.4   |   |                       |  
|Net Unrealized (Depreciation) Appreciation |  |                       | 8.6   |   |                       |  
|Net Realized Gains (Losses)                |  |                       | 0.3   |   |                       |  
|                                           |  |                       |       |   |                       |  
|Ending Investment Portfolio                |  | $                     | 446.1 |   |                       | $



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



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



36





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



|                     |  | March 31, 2012            |       |  | December 31, 2011             | 
|-------------------- |  | ------------------------- | ----- |  | ----------------------------- | 
|                     |  | Investments at Fair Value |       |  | Percentage of Total Portfolio | 
|                     |  | (dollars in millions)     |       |  |                               | 
|Senior Secured Notes |  | $                         | 302.6 |  |                               | 
|CLO Debt             |  |                           | 70.5  |  |                               | 
|CLO Equity           |  |                           | 59.7  |  |                               | 
|Subordinated Notes   |  |                           | 4.9   |  |                               | 
|Common Stock         |  |                           | 5.1   |  |                               | 
|Preferred Shares     |  |                           | 2.3   |  |                               | 
|Warrants             |  |                           | 1.0   |  |                               | 
|                     |  |                           |       |  |                               | 
|Total                |  | $                         | 446.1 |  |                               | 



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



|                                     |  | March 31, 2012            |       |  | December 31, 2011        | 
|------------------------------------ |  | ------------------------- | ----- |  | ------------------------ | 
|                                     |  |                           |       |  |                          | 
|                                     |  | Investments at Fair Value |       |  | Percentage of Fair Value | 
|Structured finance                   |  | $                         | 130.2 |  |                          | 
|Software                             |  |                           | 52.2  |  |                          | 
|Telecommunication services           |  |                           | 41.0  |  |                          | 
|Business services                    |  |                           | 32.4  |  |                          | 
|Healthcare                           |  |                           | 28.2  |  |                          | 
|Semiconductor capital equipment      |  |                           | 22.7  |  |                          | 
|Retail                               |  |                           | 18.8  |  |                          | 
|Enterprise software                  |  |                           | 15.1  |  |                          | 
|Web hosting                          |  |                           | 14.8  |  |                          | 
|Auto parts manufacturer              |  |                           | 14.4  |  |                          | 
|Printing and publishing              |  |                           | 13.6  |  |                          | 
|Financial intermediaries             |  |                           | 11.8  |  |                          | 
|IT consulting                        |  |                           | 9.7   |  |                          | 
|Education                            |  |                           | 8.9   |  |                          | 
|Computer hardware                    |  |                           | 8.8   |  |                          | 
|Advertising                          |  |                           | 5.8   |  |                          | 
|Packaging and glass                  |  |                           | 5.0   |  |                          | 
|Building and development             |  |                           | 4.9   |  |                          | 
|Food products manufacturer           |  |                           | 4.1   |  |                          | 
|Utlities                             |  |                           | 2.4   |  |                          | 
|IT value-added reseller              |  |                           | 1.3   |  |                          | 
|Cable/satellite television           |  |                           | 0.0   |  |                          | 
|Interactive voice messaging services |  |                           | 0.0   |  |                          | 
|                                     |  |                           |       |  |                          | 
|Total                                |  | $                         | 446.1 |  |                          | 
|                                     |  |                           |       |  |                          | 



PORTFOLIO GRADING



We have adopted a credit grading system
to monitor the quality of our debt investment portfolio. As of March 31, 2012 and December 31, 2011, our portfolio had
a weighted average grade of 2.1 and 2.2, respectively, based upon the fair value of the debt investments in the portfolio. Equity
securities are not graded.



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



37







|      |  |                                                                                                                              |  | March 31, 2012        |      
|----- |  | ---------------------------------------------------------------------------------------------------------------------------- |  | --------------------- | -----
|Grade |  | Summary Description                                                                                                          |  | Principal Value       |      
|      |  |                                                                                                                              |  | (dollars in millions) |      
|1     |  | Company is ahead of expectations and/or outperforming financial covenant requirements and such trend is expected to continue |  | $                     | 5.9  
|2     |  | Full repayment of principal and interest is expected                                                                         |  |                       | 345.0
|3     |  | Closer monitoring is required. Full repayment of principal and interest is expected                                          |  |                       | 63.9 
|4     |  | A reduction of interest income has occurred or is expected to occur. No loss of principal is expected                        |  |                       | —    
|5     |  | A loss of some portion of principal is expected                                                                              |  |                       | 3.5  
|      |  |                                                                                                                              |  |                       |      
|      |  |                                                                                                                              |  | $                     | 418.3



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



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



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



38





RESULTS OF OPERATIONS



Set forth below is a comparison of our results of operations
for the three months ended March 31, 2012 to the three months ended March 31, 2011.

Investment Income



As of March 31, 2012, our debt investments
had stated interest rates of between 3.92% and 15.75% (excluding our investment in GenuTec Business Solutions, Inc. which carries
a zero interest rate through October 30, 2014) and maturity dates of between 9 and 127 months. In addition, our total portfolio
had a weighted average yield on debt investments of approximately 11.6% including GenuTec Business Solutions, Inc., compared with
13.3% as of March 31, 2011.



Investment income for the
three months ended March 31, 2012 was approximately $14.7 million compared to approximately $9.8 million for the three months
ended March 31, 2011. This increase was due largely to an increase in the amount of performing assets in the portfolio
and distributions from the equity interests in our CLO vehicle investments. The total principal value of income producing
debt investments as of March 31, 2012 and March 31, 2011 was approximately $414.9 million and $266.8 million,
respectively. For the quarter ended March 31, 2012, investment income consisted of approximately $7.5 million in cash
interest from portfolio investments, approximately $1.4 million in amortization of original issue and market discount,
approximately $52,000 of discount income derived from unscheduled principal cash remittances at par on discounted debt
securities, approximately $5.5 million in distributions from the equity interest in securitized vehicle investments and
approximately $198,000 in PIK interest income.



For the quarter ended March 31, 2012,
fee income of approximately $107,000 was recorded, compared to fee income of approximately $159,000 for the quarter ended March 31,
2011. Fee income consists of non-recurring fees in connection with our investments in portfolio companies, including commitment
fees, origination fees and amendment fees.



Operating Expenses



Total expenses for the quarter ended March
31, 2012 were $6.6 million, which includes the accrued capital gains incentive fee of approximately $1.1 million.



Expenses before incentive fees, for the
quarter ended March 31, 2012, were approximately $4.3 million. This amount consisted of investment advisory fees, professional
fees, compensation expense, and general and administrative expenses. Expenses before incentive fees increased approximately $2.0
million from the quarter ended March 31, 2011, attributable primarily to higher investment advisory fees (consisting of the base
management fee), interest expense associated with the senior notes issued under our collateralized loan obligation transaction
as well as increased professional fees associated with our legal and audit expenses. Expenses before incentive fees for the quarter
ended March 31, 2011 were approximately $2.4 million.



The investment advisory fee for the first
quarter of 2012 was approximately $2.1 million, representing the base fee as provided for in the Investment Advisory Agreement.
The investment advisory fee in the comparable period in 2011 was approximately $1.6 million. The increase of approximately $529,000
is due to an increase in average gross assets. At each of March 31, 2012 and December 31, 2011, respectively, approximately $3.3
million and $2.9 million of investment advisory fees remained payable to TICC Management, including the net investment income incentive
fee discussed below.



Interest expense and other debt
financing expenses for the first quarter of 2012 was approximately $837,000, which was directly related to our debt
securitization financing transaction. In August 2011, senior notes in the amount of $101,250,000 were issued by a newly
formed special purpose vehicle in which a wholly-owned subsidiary of TICC owns all of the equity. Under this structure, the
notes bear interest, after the effective date, at three-month London Inter Bank Offered Rate (“LIBOR”) plus
2.25% (prior to the effective date, the Class A Notes bear interest at five-month LIBOR plus 2.25%). The accrued
interest payable on these notes during the first quarter of 2012 was $530,000. Additionally, for the quarter ended March 31,
2012, the amortization of the discount on the issued notes was approximately $52,500 and amortization of deferred debt
issuance costs was approximately $75,400.



Professional fees, consisting of
legal, valuation, audit and consulting fees, were approximately $791,000 for the quarter ended March 31, 2012, compared to
approximately $293,000 for the quarter ended March 31, 2011. This was the result of an increase in audit fees and legal
services which were approximately $407,000 and $331,000, respectively.



Compensation expenses were approximately
$270,000 for the quarter ended March 31, 2012, compared to approximately $238,000 for the quarter ended March 31, 2011, reflecting
the allocation of compensation expenses for the services of our chief financial officer, chief compliance officer, controller and
senior accountant, and other administrative support personnel. At March 31, 2012 and December 31, 2011, respectively, approximately
$150,000 and $605,000 of compensation expenses remained payable.



39





General and administrative expenses, consisting
primarily of directors’ fees, insurance, listing fees, transfer agent and custodian fees, office supplies, facilities costs
and other expenses, were approximately $293,000 for the three months ended March 31, 2012 compared to approximately $219,000 for
the same period in 2011. Office supplies, facilities costs and other expenses are allocated to us under the terms of the Administration
Agreement.



Incentive Fees



The net investment income incentive fee
for the first quarter of 2012 was approximately $1.2 million compared to $378,000 in the first quarter of 2011. The net investment
income incentive fee is calculated and payable quarterly in arrears based on our “Pre-Incentive Fee Net Investment
Income” for the immediately preceding calendar quarter subject to a hurdle rate which is determined as of December 31
of the preceding year. For this purpose, “Pre-Incentive Fee Net Investment Income” means interest income, dividend
income and any other income accrued during the calendar quarter minus our operating expenses for the quarter (including
the base fee, expenses payable under the Administration Agreement with BDC Partners, and any interest expense and dividends paid
on any issued and outstanding preferred stock, but excluding the incentive fee).



The capital gains incentive fee expense
for the first quarter ended March 31, 2012 was approximately $1.1 million. The capital gains incentive fee expense, as reported
under generally accepted accounting principles, is calculated on the basis of net realized and unrealized gains and losses at the
end of each period. The expense related to the hypothetical liquidation of the portfolio (and assuming no other changes in realized
or unrealized gains and losses) would only become payable to our investment adviser in the event of a complete liquidation of our
portfolio as of period end and the termination of the Investment Advisory Agreement on such date. The $2.2 million capital gains
incentive fee accrual as of March 31, 2012 relates entirely to this hypothetical liquidation calculation. For the quarter
ended March 31, 2011, approximately $6.5 million was recorded.



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



Realized and Unrealized Gains/Losses on Investments



For the quarter ended March 31, 2012,
we recorded net realized gains on investments of approximately $294,000, which represents the gains on the sale of our investments
in Hyland Software, Inc., RCN Telecom Service, LLC and Liberty CDO LTD 2005-1A C.



40





Based upon the fair value determinations
made in good faith by the Board of Directors, during the quarter ended March 31, 2012, we had net unrealized appreciation of approximately
$8.6 million, comprised of $15.8 million in gross unrealized appreciation, $7.0 million in gross unrealized depreciation and approximately
$0.2 million relating to the reversal of prior period net unrealized appreciation as an investment was realized. The most significant
changes in net unrealized appreciation and depreciation during the quarter ended March 31, 2012 were as follows (in millions):



|Portfolio Company                              |  | Unrealized appreciation (depreciation) |     
|---------------------------------------------- |  | -------------------------------------- | ----
|Integra Telecom Holdings, Inc. common stock    |  | $                                      | 1.7 
|Algorithmic Implementations, Inc. common stock |  |                                        | 1.0 
|Hewetts Island CDO IV 2006-4 E                 |  |                                        | 0.8 
|Harbourview - 2006A CLO Equity                 |  |                                        | 0.8 
|Prospero CLO II BV                             |  |                                        | 0.6 
|Harch 2005-2A BB CLO                           |  |                                        | 0.5 
|Marlborough Street 2007-1A                     |  |                                        | 0.5 
|ACA CLO 2006-2, Limited                        |  |                                        | 0.5 
|Canaras CLO Equity - 2007-1A, 1X               |  |                                        | 0.5 
|GALE 2007-4A CLO                               |  |                                        | 0.5 
|Emporia CLO 2007 3A E                          |  |                                        | 0.4 
|Lightpoint CLO 2007-8A                         |  |                                        | 0.4 
|Pegasus Solutions, Inc. common stock           |  |                                        | (0.7
|RBS Holding Company                            |  |                                        | (0.9
|Stratus Technologies, Inc.                     |  |                                        | (1.3
|GenuTec Business Solutions, Inc.               |  |                                        | (2.0
|Net all other                                  |  |                                        | 5.3 
|                                               |  |                                        |     
|Total                                          |  | $                                      | 8.6 
|                                               |  |                                        |     



For the quarter ended March 31, 2011, we
recorded net realized gains on investments of approximately $1.9 million, which represents relatively small gains on several different
investments.



41





Based upon the fair value determinations
made in good faith by the Board of Directors, during the quarter ended March 31, 2011, we had net unrealized gains of approximately
$9.1 million, comprised of $13.3 million in gross unrealized appreciation, $2.7 million in gross unrealized depreciation and approximately
$1.5 million relating to the reversal of prior period net unrealized appreciation as certain investments were realized. The most
significant changes in net unrealized appreciation and depreciation during the quarter ended March 31, 2011 were as follows
(in millions):



|Portfolio Company                                   |  | Unrealized appreciation (depreciation) |     
|--------------------------------------------------- |  | -------------------------------------- | ----
|                                                    |  |                                        |     
|ACA CLO 2006-2, Limited                             |  | $                                      | 1.6 
|Sargas CLO 2006 -1A                                 |  |                                        | 1.2 
|Pegasus Solutions, Inc. common and preferred equity |  |                                        | 1.0 
|American Integration Technologies, LLC              |  |                                        | 0.8 
|Prospero II-XD BB CLO                               |  |                                        | 0.7 
|Latitude III CLO 2007-3A                            |  |                                        | 0.7 
|Harch 2005-2A BB CLO                                |  |                                        | 0.6 
|Fusionstorm, Inc.                                   |  |                                        | 0.5 
|Avenue CLO V LTD 2007-5A D1                         |  |                                        | 0.4 
|Latitude II CLO 2006 2A D                           |  |                                        | 0.4 
|Landmark V CDO LTD.                                 |  |                                        | 0.4 
|Del Mar CLO I Ltd. 2006-1                           |  |                                        | (0.4
|Net all other                                       |  |                                        | 1.2 
|                                                    |  |                                        |     
|Total                                               |  | $                                      | 9.1 



Please see “—Portfolio Grading” for more information.



Net Increase in Net Assets Resulting from Net Investment
Income



Net investment income for the quarter
ended March 31, 2012 and 2011 was $8.2 million and $0.5 million, respectively. This increase was due largely to an increase in
the amount of performing assets in the portfolio and distributions from the equity interests in our CLO vehicle investments as
well as the impact of the lower expense for the capital gains incentive fee.



Excluding the impact of the capital
gains incentive fee of $1.1 million, net investment income for the quarter ended March 31, 2012 was approximately $9.2
million compared to approximately $7.0 million for the same period in 2011.



Based on a weighted-average of 33,410,298
shares outstanding (basic and diluted), the net increase in net assets resulting from net investment income per common share for
the quarter ended March 31, 2012 was approximately $0.24 for basic and diluted, compared to approximately $0.02 per share for the
same period in 2011. Excluding the impact of the accrued capital gains incentive fee, the net increase in net assets
resulting from core net investment income per common share would have been $0.28, basic and diluted, compared to $0.22 per share
for the same period in 2011.



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



Net Increase in Net Assets Resulting from Operations



We had a net increase in net assets resulting
from operations of approximately $17.1 million for the quarter ended March 31, 2012, compared to a net increase of approximately
$11.6 million for the comparable period in 2011. This increase was attributable to greater net investment income partially offset set by lower net unrealized appreciation and net realized
gains.



Based on a weighted-average of 33,410,298
shares outstanding (basic and diluted), the net increase in net assets resulting from operations per common share for the quarter
ended March 31, 2012 was approximately $0.51 for basic and diluted, compared to a net increase in net assets resulting from operations
of approximately $0.36 per share for the same period in 2011.



Excluding the impact of the accrued capital
gains incentive fee, the core net increase in net assets resulting from operations per common share would have been $0.54,
basic and diluted, compared to an increase of $0.56 per share for the same period in 2011.



42







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



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



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



The following table provides a reconciliation
of net investment income to core net investment income (for the three months ended March 31, 2012 and 2011):





|                            |  | Three Months Ended March 31, 2012 |           |  | Three Months Ended March 31, 2011 |  
|--------------------------- |  | --------------------------------- | --------- |  | --------------------------------- | -
|                            |  | Amount                            |           |  | Per Share Amounts                 |  
|Net investment income       |  | $                                 | 8,154,520 |  |                                   | $
|Capital gains incentive fee |  |                                   | 1,065,663 |  |                                   |  
|                            |  |                                   |           |  |                                   |  
|Core net investment income  |  | $                                 | 9,220,183 |  |                                   | $





The following table provides a reconciliation
of net increase in net assets resulting from operations to core net increase in net assets resulting from operations (for the three
months ended March 31, 2012 and 2011):



|                                                           |  | Three Months Ended March 31, 2012 |            |  | Three Months Ended March 31, 2011 |  
|---------------------------------------------------------- |  | --------------------------------- | ---------- |  | --------------------------------- | -
|                                                           |  | Amount                            |            |  | Per Share Amounts                 |  
|Net  increase in net assets resulting from operations      |  | $                                 | 17,083,368 |  |                                   | $
|Capital gains incentive fee                                |  |                                   | 1,065,663  |  |                                   |  
|                                                           |  |                                   |            |  |                                   |  
|Core net  increase in net assets resulting from operations |  | $                                 | 18,149,031 |  |                                   | $



43





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



|                                                                                                                                  |  | Three Months Ended March 31, 2012 |       |   | Three Months Ended March 31, 2011 | 
|--------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------- | ----- | - | --------------------------------- | 
|Ratio of core net investment income to average net assets, for the three month period ended March 31, 2012 and 2011, respectively |  |                                   | 11.67 | % |                                   | 



The following table provides a reconciliation
of the ratio of net investment income to average net assets to the ratio of core net investment income to average net assets, for
the three month periods ended March 31, 2012 and 2011, respectively.



|                                                          |  | Three Months Ended March 31, 2012 |       |   | Three Months Ended March
                                                                                                     31, 2011 | 
|--------------------------------------------------------- |  | --------------------------------- | ----- | - | -------------------------------------------------------------------------------------------------------------------------------------- | 
|Ratio of net investment income to average net assets      |  |                                   | 10.32 | % |                                                                                                                                        | 
|Ratio of capital gain incentive fee to average net assets |  |                                   | 1.35  | % |                                                                                                                                        | 
|                                                          |  |                                   |       |   |                                                                                                                                        | 
|Ratio of core net investment income to average net assets |  |                                   | 11.67 | % |                                                                                                                                        | 



44





LIQUIDITY AND CAPITAL RESOURCES



In the first quarter of 2012, we issued
approximately 4.9 million shares in a follow-on equity offering, raising approximately $46.0 million in net proceeds.



During the three months ended
March 31, 2012, cash and cash equivalents increased from approximately $4.5 million at the beginning of the period to
approximately $30.7 million at the end of the period. Net cash used by operating activities for the period, consisting
primarily of the items described in “—Results of Operations,” was approximately $21.5 million, largely
reflecting purchases of new investments of approximately $40.8 million offset by proceeds from principal repayments and sales
of investments of approximately $13.4 million. Net cash used by investing activities reflects the change in restricted cash
in the debt securitization entity. During the period, net cash provided by financing activities was approximately $36.3
million reflecting primarily the net proceeds of approximately $46.0 million resulting from the follow-on equity offering
partially offset by the distribution of dividends.





Contractual Obligations



We have certain obligations with
respect to the investment advisory and administration services we receive. See “–Overview”. We incurred
approximately $2.1 million for investment advisory services, excluding pre-incentive net investment income incentive fees and
approximately $293,000 for administrative services for the three months ended March 31, 2012.



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



Off-Balance Sheet Arrangements



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



Borrowings



On August 10, 2011, the Company
completed a $225.0 million debt securitization financing transaction. The Class A Notes offered in the securitization
were issued by TICC CLO LLC, and are secured by the assets held by the trustee on behalf of the Securitization Issuer. The
notes are an obligation of TICC CLO. The securitization was executed through a private placement of $101.25 million of
Aaa/AAA Class A Notes which bear interest, after the effective date, at three-month LIBOR plus 2.25% (prior to the
effective date, the Class A Notes bear interest at five-month LIBOR plus 2.25%). The notes were sold at a discount to
par, and the amount of the discount is being amortized over the term of the notes. The Class A Notes are included in the
March 31, 2012 consolidated statements of assets and liabilities. On January 25, 2012, the Class A note holders were paid
interest on the Class A notes of approximately $1.3 million. Holdings retained all of the Subordinated Notes totaling $123.75
million and all of the membership interests in the Securitization Issuer. The Subordinated Notes do not bear interest, but
are entitled to the residual economic interest in the Securitization Issuer.



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.



45







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



|Date Declared    |  | Record Date        |  | Payment Date       |  | Amount |     
|---------------- |  | ------------------ |  | ------------------ |  | ------ | ----
|                 |  |                    |  |                    |  |        |     
|Fiscal 2012      |  |                    |  |                    |  |        |     
|May 2, 2012      |  | June 15, 2012      |  | June 29, 2012      |  | $      | 0.27
|March 1, 2012    |  | March 21, 2012     |  | March 30, 2012     |  |        | 0.27
|                 |  |                    |  |                    |  |        |     
|Total (2012)     |  |                    |  |                    |  |        | 0.54
|                 |  |                    |  |                    |  |        |     
|Fiscal 2011      |  |                    |  |                    |  |        |     
|November 3, 2011 |  | December 16, 2011  |  | December 30, 2011  |  |        | 0.25
|July 28, 2011    |  | September 16, 2011 |  | September 30, 2011 |  |        | 0.25
|May 3, 2011      |  | June 16, 2011      |  | June 30, 2011      |  |        | 0.25
|March 3, 2011    |  | March 21, 2011     |  | March 31, 2011     |  |        | 0.24
|                 |  |                    |  |                    |  |        |     
|Total (2011)     |  |                    |  |                    |  |        | 0.99
|                 |  |                    |  |                    |  |        |     
|Fiscal 2010      |  |                    |  |                    |  |        |     
|November 2, 2010 |  | December 10, 2010  |  | December 31, 2010  |  |        | 0.24
|July 29, 2010    |  | September 10, 2010 |  | September 30, 2010 |  |        | 0.22
|April 29, 2010   |  | June 10, 2001      |  | June 30, 2010      |  |        | 0.20
|March 4, 2010    |  | March 24, 2010     |  | March 31, 2010     |  |        | 0.15
|                 |  |                    |  |                    |  |        |     
|Total (2010)     |  |                    |  |                    |  |        | 0.81
|                 |  |                    |  |                    |  |        |     
|Fiscal 2009      |  |                    |  |                    |  |        |     
|October 29, 2009 |  | December 10, 2009  |  | December 31, 2009  |  |        | 0.15
|July 30, 2009    |  | September 10, 2009 |  | September 30, 2009 |  |        | 0.15
|May 5, 2009      |  | June 10, 2009      |  | June 30, 2009      |  |        | 0.15
|March 5, 2009    |  | March 17, 2009     |  | March 31, 2009     |  |        | 0.15
|                 |  |                    |  |                    |  |        |     
|Total (2009)     |  |                    |  |                    |  |        | 0.60



46







|Date Declared        |  | Record Date        |  | Payment Date       |  | Amount |     
|-------------------- |  | ------------------ |  | ------------------ |  | ------ | ----
|Fiscal 2008          |  |                    |  |                    |  |        |     
|October 30, 2008     |  | December 10, 2008  |  | December 31, 2008  |  |        | 0.20
|July 31, 2008        |  | September 10, 2008 |  | September 30, 2008 |  |        | 0.20
|May 1, 2008          |  | June 16, 2008      |  | June 30, 2008      |  |        | 0.30
|March 11, 2008       |  | March 21, 2008     |  | March 31, 2008     |  |        | 0.36
|                     |  |                    |  |                    |  |        |     
|Total (2008)         |  |                    |  |                    |  |        | 1.06
|                     |  |                    |  |                    |  |        |     
|Fiscal 2007          |  |                    |  |                    |  |        |     
|October 25, 2007     |  | December 10, 2007  |  | December 31, 2007  |  |        | 0.36
|July 26, 2007        |  | September 7, 2007  |  | September 28, 2007 |  |        | 0.36
|April 30, 2007       |  | June 8, 2007       |  | June 29, 2007      |  |        | 0.36
|February 27, 2007    |  | March 9, 2007      |  | March 30, 2007     |  |        | 0.36
|                     |  |                    |  |                    |  |        |     
|Total (2007)         |  |                    |  |                    |  |        | 1.44
|                     |  |                    |  |                    |  |        |     
|Fiscal 2006          |  |                    |  |                    |  |        |     
|December 20, 2006    |  | December 29, 2006  |  | January 17, 2007   |  |        | 0.12
|October 26, 2006     |  | December 8, 2006   |  | December 29, 2006  |  |        | 0.34
|July 26, 2006        |  | September 8, 2006  |  | September 29, 2006 |  |        | 0.32
|April 26, 2006       |  | June 9, 2006       |  | June 30, 2006      |  |        | 0.30
|February 9, 2006     |  | March 10, 2006     |  | March 31, 2006     |  |        | 0.30
|                     |  |                    |  |                    |  |        |     
|Total (2006)         |  |                    |  |                    |  |        | 1.38
|                     |  |                    |  |                    |  |        |     
|Fiscal 2005          |  |                    |  |                    |  |        |     
|December 7, 2005     |  | December 30, 2005  |  | January 18, 2006   |  |        | 0.12
|October 27, 2005     |  | December 9, 2005   |  | December 30, 2005  |  |        | 0.30
|July 27, 2005        |  | September 10, 2005 |  | September 30, 2005 |  |        | 0.25
|April 27, 2005       |  | June 10, 2005      |  | June 30, 2005      |  |        | 0.20
|February 9, 2005     |  | March 10, 2005     |  | March 31, 2005     |  |        | 0.14
|                     |  |                    |  |                    |  |        |     
|Total (2005)         |  |                    |  |                    |  |        | 1.01
|                     |  |                    |  |                    |  |        |     
|Fiscal 2004          |  |                    |  |                    |  |        |     
|October 27, 2004     |  | December 10, 2004  |  | December 31, 2004  |  |        | 0.11
|July 28, 2004        |  | September 10, 2004 |  | September 30, 2004 |  |        | 0.11
|May 5, 2004          |  | June 10, 2004      |  | June 30, 2004      |  |        | 0.11
|February 2, 2004     |  | March 15, 2004     |  | April 5, 2004      |  |        | 0.10
|                     |  |                    |  |                    |  |        |     
|Total (2004)         |  |                    |  |                    |  |        | 0.43
|                     |  |                    |  |                    |  |        |     
|Total Distributions: |  |                    |  |                    |  | $      | 8.26



---



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

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

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

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

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



47





Related Parties





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



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



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



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



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



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



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



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





RECENT DEVELOPMENTS



On May 2, 2012, the Board of Directors
declared a distribution of $0.27 per share for the second quarter, payable on June 29, 2012 to shareholders of record as of June
15, 2012.



48





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, 2012, three debt investments in our portfolio were at a fixed rate, and
the remaining seventy-six debt investments were at variable rates, representing approximately $23.4 million and $394.7 million
in principal debt, respectively. At March 31, 2012, $391.3 million of our variable rate investments were income producing. The
variable rates are based upon the five-year Treasury note, the Prime rate or LIBOR, and, in the case of our bilateral investments,
are generally reset annually, whereas our non-bilateral investments generally reset quarterly. We expect that future debt investments
will generally be made at variable rates. Many of the variable rate investments contain floors.



To illustrate the potential impact of
a change in the underlying interest rate on our net increase in net assets resulting from operations, we have assumed a 1% increase
or decrease in the underlying five-year Treasury note, the Prime rate or LIBOR, and no other change in our portfolio as of March
31, 2012. We have also assumed outstanding borrowings of $101,250,000. Under this analysis, net investment income would be essentially
unchanged on an annual basis, due to the amount of investments in our portfolio which have implied floors that would be unaffected
by a 1% change in the underlying interest rate. However, if the increase in rates was more significant, such as 5%, the net effect
on the net increase in net assets resulting from operations would be an increase of approximately $9.9 million. To the extent
that the rate underlying certain investments, as well as our borrowings, is at an historic low, it may not be possible for the
underlying rate to decrease by 1% or 5%, and the impact of that reality is reflected in this analysis. Although management believes
that this analysis is indicative of our existing interest rate sensitivity, it does not adjust for changes in the credit quality,
size and composition of our portfolio, and other business developments, including a change in the level of our borrowings, that
could affect the net increase in net assets resulting from operations. Accordingly, no assurances can be given that actual results
would not differ materially from the results under this hypothetical analysis.



We may in the future hedge against interest
rate fluctuations by using standard hedging instruments such as futures, options and forward contracts. While hedging activities
may insulate us against adverse changes in interest rates, they may also limit our ability to participate in the benefits of lower
interest rates with respect to the investments in our portfolio with fixed interest rates.



ITEM  4.	CONTROLS
AND PROCEDURES.



As of March 31, 2012, we, including our
Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure
controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). Based on that evaluation, the
Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective in timely
alerting management, including the Chief Executive Officer and Chief Financial Officer, of material information about us required
to be included in periodic SEC filings.



There have been no changes in our internal
control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) that occurred during
the quarter ended March 31, 2012 that have materially affected, or are reasonably likely to materially affect, our internal control
over financial reporting.





PART II—OTHER INFORMATION



ITEM 1.	LEGAL PROCEEDINGS.



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



Item  1A.	Risk Factors



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



RISKS RELATING TO OUR BUSINESS AND STRUCTURE



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



49







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



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



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



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



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



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



We operate in a highly competitive market for investment
opportunities.



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



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



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



We may not realize gains from our equity investments.



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



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



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



50







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



Our Board of Directors retains ultimate
authority as to the third-party review cycle as well as the appropriate valuation of each investment. The types of factors that
the Valuation Committee takes into account in providing its fair value recommendation to our Board of Directors includes, as relevant,
the nature and value of any collateral, the portfolio company’s ability to make payments and its earnings, the markets in
which the portfolio company does business, comparison to valuations of publicly traded companies, comparisons to recent sales of
comparable companies, the discounted value of the cash flows of the portfolio company and other relevant factors. Because such
valuations are inherently uncertain and may be based on estimates, our determinations of fair value may differ materially from
the values that would be assessed if a readily available market for these securities existed.



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



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



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



We may experience fluctuations in our quarterly results,
and as a result, our financial results for any period should not be relied upon as being indicative of performance of future periods.



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



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



51







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



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



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



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



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



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



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



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



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



52







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



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



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



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



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



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



53





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



As a BDC, we are required to carry our
investments at 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. Depending on market conditions, we may incur substantial losses in future periods, which could have a material adverse
impact on our business, financial condition and results of operations.



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



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



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



On August 10, 2011, we completed
a $225,000,000 debt securitization financing transaction. The notes were issued by a newly formed special purpose vehicle in which
our wholly-owned subsidiary owns all of the equity. The notes have an initial face amount of $101,250,000, are rated AAA/Aaa by
Standard & Poor’s Ratings Services and Moody’s Investors Service, Inc., respectively, and bear interest,
after the effective date, at three-month London Inter Bank Offered Rate (“LIBOR”) plus 2.25% (prior to the effective
date, the Class A Notes bear interest at five-month LIBOR plus 2.25%). The notes have a stated maturity date of July 25,
2021 and are subject to a three year non-call period. TICC CLO has a three year reinvestment period.



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 stockholders. If the value of
our assets increases, then leveraging would cause the net asset value attributable to our common stock to increase more sharply
than it would have had we not leveraged. Conversely, if the value of our assets decreases, leveraging would cause net asset value
to decline more sharply than it otherwise would have had we not leveraged. Similarly, any increase in our income in excess of
interest payable on the borrowed funds would cause our net income to increase more than it would without the leverage, while any
decrease in our income would cause net income to decline more sharply than it would have had we not borrowed. Such a decline could
negatively affect our ability to make common stock dividend payments. Leverage is generally considered a speculative investment
technique. Our ability to service any debt that we incur will depend largely on our financial performance and will be subject
to prevailing economic conditions and competitive pressures. Moreover, as the management fee payable to TICC Management will be
payable on our gross assets, including those assets acquired through the use of leverage, TICC Management may have a financial
incentive to incur leverage which may not be consistent with our stockholders’ interests. In addition, our common stockholders
will bear the burden of any increase in our expenses as a result of leverage, including any increase in the management fee payable
to TICC Management.



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



|                                           |  | Assumed total return on our portfolio
                                                                                                      (net of expenses) |      
|------------------------------------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----
|                                           |  |                                                                                                                                                               | (10.0
|Corresponding
    return to stockholder(1) |  |                                                                                                                                                               | (14.3



| | (1) | Assumes $404.8
                                                                                                           million in total assets
                                                                                                           and $101.25 million
                                                                                                           in total debt outstanding,
                                                                                                           which reflects our
                                                                                                           total assets and total
                                                                                                           debt outstanding as
                                                                                                           of December 31,
                                                                                                           2011, and a cost of
                                                                                                           funds of 3.0%. Excludes
                                                                                                           non-portfolio investment
                                                                                                           assets and non-leverage
                                                                                                           related liabilities.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



54







We are subject to risks associated with the debt securitization
financing transaction that we completed on August 10, 2011.



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



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



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



The Subordinated Notes and membership interests
in the Securitization Issuer are subordinated obligations of the Securitization Issuer.



The Subordinated Notes are the junior class
of notes issued by the Securitization Issuer, are subordinated in priority of payment to the Class A Notes issued by the Securitization
Issuer and are subject to certain payment restrictions set forth in the indenture governing the notes. Therefore, Holdings only
receives cash distributions on the Subordinated Notes if the Securitization Issuer has made all cash interest payments on the Class A
Notes it has issued, and we only receive cash distributions in respect of our indirect ownership of the Securitization Issuer to
the extent that Holdings receives any cash distributions in respect of its direct ownership of the Securitization Issuer. The Subordinated
Notes are also unsecured and rank behind all of the secured creditors, known or unknown, of the Securitization Issuer, including
the holders of the Class A Notes it has issued. Consequently, to the extent that the value of the Securitization Issuer’s
portfolio of loan investments has been reduced as a result of conditions in the credit markets, or as a result of defaulted loans
or individual fund assets, the value of the Subordinated Notes at their redemption could be reduced. Accordingly, our investment
in the Securitization Issuer may be subject to complete loss.



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



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



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



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



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



55







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



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



Under the documents governing the debt
securitization financing transaction, there are two asset coverage tests applicable to the Class A Notes. The first such test
compares the amount of interest received on the portfolio loans held by the Securitization Issuer to the amount of interest payable
in respect of the Class A Notes, interest received on the portfolio loans must equal at least 200% or greater (based upon
a graduated scale provided for in the indenture) of the interest payable in respect of the Class A Notes. The second such
test compares the principal amount of the portfolio loans to the aggregate outstanding principal amount of the Class A Notes.
To meet this test at any time, the aggregate principal amount of the portfolio loans must equal at least 135% of the outstanding
principal amount of the Class A Notes. If either coverage test is not satisfied, interest and principal received by the Securitization
Issuer are diverted on the following payment date to pay the Class A Notes in full to the extent necessary to cause all coverage
tests to be satisfied on a pro forma basis after giving effect to all payments made in respect of the notes, which we refer to
as a mandatory redemption. If any asset coverage test with respect to the Class A Notes is not met or if the Securitization
Issuer fails to obtain a confirmation of the initial ratings of the Class A Notes after the effective date (defined under
the indenture as the earlier to occur of April 3, 2012 or the time that the Securitization Issuer has acquired (or committed
to acquire) at least $224.1 million in assets), proceeds from the portfolio of loan investments that otherwise would have been
distributed to the Securitization Issuer and the holders of the Subordinated Notes will instead be used to redeem first the Class A
Notes, to the extent necessary to satisfy the applicable asset coverage tests or to obtain the necessary ratings confirmation.



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



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



We may be required to assume liabilities of the
Securitization Issuer.



As part of the debt securitization financing
transaction, we entered into a master loan sale agreement under which we would be required to repurchase any loan (or participation
interest therein) which was sold to the Securitization Issuer in breach of any representation or warranty made by us with respect
to such loan on the date such loan was sold. To the extent we fail to satisfy any such repurchase obligation, the trustee may,
on behalf of the Securitization Issuer, bring an action against us to enforce these repurchase obligations.



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



56







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



Our ability to grow our business requires
a substantial amount of capital, which we may acquire from the following sources:



Senior Securities and Other Indebtedness



We may issue debt securities or preferred
stock and/or borrow money from banks or other financial institutions, which we refer to collectively as “senior securities,”
up to the maximum amount permitted by the 1940 Act. Under the provisions of the 1940 Act, we are permitted, as a business development
company, to issue senior securities in amounts such that our asset coverage ratio, as defined in the 1940 Act, equals at least
200% of gross assets less all liabilities and indebtedness not represented by senior securities, after each issuance of senior
securities. This requirement of sustaining a 200% asset coverage ratio limits the amount that we may borrow. Because we will continue
to need capital to grow our loan and investment portfolio, this limitation may prevent us from incurring debt. Further additional
debt financing may not be available on favorable terms, if at all, or may be restricted by the terms of our debt facilities. If
we are unable to incur additional debt, we may be required to raise additional equity at a time when it may be disadvantageous
to do so.



As a result of the issuance of senior securities,
including preferred stock and debt securities, we are exposed to typical risks associated with leverage, including an increased
risk of loss and an increase in expenses, which are ultimately borne by our common stockholders. Because we may incur leverage
to make investments, a decrease in the value of our investments would have a greater negative impact on the value of our common
stock. When we issue debt securities or preferred stock, it is likely that such securities will be governed by an indenture or
other instrument containing covenants restricting our operating flexibility. In addition, such securities may be rated by rating
agencies, and in obtaining a rating for such securities, we may be required to abide by operating and investment guidelines that
could further restrict our operating flexibility.



On August 10, 2011, we completed a
$225,000,000 debt securitization financing transaction. The notes were issued by a newly formed special purpose vehicle in which
our wholly-owned subsidiary owns all of the equity. The notes have an initial face amount of $101,250,000, are rated AAA/Aaa by
Standard & Poor’s Ratings Services and Moody’s Investors Service, Inc., respectively, and bear interest, after
the effective date, at three-month LIBOR plus 2.25% (prior to the effective date, the Class A Notes bear interest at five-month
LIBOR plus 2.25%). The notes have a stated maturity date of July 25, 2021 and are subject to a three year non-call period.
TICC CLO has a three year reinvestment period.



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



Common Stock



We are not generally able to issue and
sell our common stock at a price below net asset value per share. We may, however, sell our common stock, or warrants, options
or rights to acquire our common stock, at a price below the then-current net asset value of our common stock if our Board of Directors
determines that such sale is in the best interests of TICC and its stockholders, and our stockholders approve such sale. In certain
limited circumstances, pursuant to an SEC staff interpretation, we may also issue shares at a price below net asset value in connection
with a transferable rights offering so long as: (1) the offer does not discriminate among stockholders; (2) we use our
best efforts to ensure an adequate trading market exists for the rights; and (3) the ratio of the offering does not exceed
one new share for each three rights held. If we raise additional funds by issuing more common stock or senior securities convertible
into, or exchangeable for, our common stock, the percentage ownership of our stockholders at that time would decrease and they
may experience dilution. Moreover, we can offer no assurance that we will be able to issue and sell additional equity securities
in the future, on favorable terms or at all.



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



Our charter permits our Board of Directors
to reclassify any authorized but unissued shares of stock into one or more classes of preferred stock. We are currently authorized
to issue up to 100,000,000 shares of common stock, of which 37,754,774 shares are issued and outstanding as of May 9, 2012.
In the event our Board of Directors opts to reclassify a portion of our unissued shares of common stock into a class of preferred
stock, those preferred shares would have a preference over our common stock with respect to dividends and liquidation. The cost
of any such reclassification would be borne by our existing common stockholders. The class voting rights of any preferred shares
we may issue could make it more difficult for us to take some actions that may, in the future, be proposed by our Board of Directors
and/or the holders of our common stock, such as a merger, exchange of securities, liquidation, or alteration of the rights of a
class of our securities, if these actions were perceived by the holders of preferred shares as not in their best interests. The
issuance of preferred shares convertible into shares of common stock might also reduce the net income and net asset value per share
of our common stock upon conversion. These effects, among others, could have an adverse effect on your investment in our common
stock.



57







A change in interest rates may adversely affect our profitability.



On August 10, 2011, we completed a
$225,000,000 debt securitization financing transaction. The notes were issued by a newly formed special purpose vehicle in which
our wholly-owned subsidiary owns all of the equity. The notes have an initial face amount of $101,250,000, are rated AAA/Aaa by
Standard & Poor’s Ratings Services and Moody’s Investors Service, Inc., respectively, and bear interest, after
the effective date, at three-month LIBOR plus 2.25% (prior to the effective date, the Class A Notes bear interest at five-month
LIBOR plus 2.25%). As a result, a portion of our income will depend upon the difference between LIBOR and the interest rate on
the debt securities in which we invest.



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



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



To remain entitled to the tax benefits
accorded to RICs under the Code, we must meet certain income source, asset diversification and annual distribution requirements.
In order to qualify as a RIC, we must derive each taxable year at least 90% of our gross income from dividends, interest, payments
with respect to certain securities loans, gains from the sale of stock or other securities, or other income derived with respect
to our business of investing in such stock or securities. The annual distribution requirement for a RIC is satisfied if we distribute
at least 90% of our ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses,
if any, to our stockholders on an annual basis. Because we use debt financing, we are subject to certain asset coverage ratio requirements
under the 1940 Act and financial covenants under loan and credit agreements that could, under certain circumstances, restrict us
from making distributions necessary to satisfy the annual distribution requirement. If we are unable to obtain cash from other
sources, we may fail to qualify for special tax treatment as a RIC and, thus, may be subject to corporate-level income tax on all
of our income.



In addition, we have purchased and may
in the future purchase residual or subordinated interests in CLOs that are treated for U.S. federal income tax purposes as shares
in a PFIC. We may be subject to U.S. federal income tax on our allocable share of a portion of any “excess distribution”
received on, or any gain from the disposition of, such shares even if our allocable share of such income is distributed as a taxable
dividend to the PFIC’s stockholders. Additional charges, in the nature of interest, generally will be imposed on us in respect
of deferred taxes arising from any such excess distribution or gain. If we elect to treat a PFIC as a QEF under the Code, in lieu
of the foregoing requirements, we will be required to include in income each year our proportionate share of the ordinary earnings
and net capital gain of the QEF, even if such income is not distributed by the QEF. Alternatively, we may elect mark-to-market
treatment for a PFIC; in this case, we will recognize as ordinary income our allocable share of any increase in the value of such
shares, and as ordinary loss our allocable share of any decrease in such value to the extent that any such decrease does not exceed
prior increases included in our income. Under either election, we may be required to recognize in a year income in excess of distributions
from PFICs and proceeds from dispositions of PFIC shares during that year, and such income will nevertheless be subject to the
annual distribution requirement described above.



58





To qualify as a RIC, we must also meet
certain asset diversification requirements at the end of each calendar quarter. Failure to meet these tests may result in our having
to dispose of certain investments quickly in order to prevent the loss of RIC status. Because most of our investments will be in
private companies, any such dispositions could be made at disadvantageous prices and may result in substantial losses. If we fail
to qualify as a RIC for any reason and remain or become subject to corporate income tax, the resulting corporate taxes could substantially
reduce our net assets, the amount of income available for distribution and the amount of our distributions. Such a failure would
have a material adverse effect on us and our stockholders.



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



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



Where Revenue Procedure 2010-12 is not
currently applicable, the IRS has also issued private letter rulings on cash/stock dividends paid by RICs and real estate investment
trusts using a 20% cash standard (and, more recently, the 10% cash standard of Revenue Procedure 2010-12) if certain requirements
are satisfied. Stockholders receiving such dividends will be required to include the full amount of the dividend (including the
portion payable in stock) as ordinary income (or, in certain circumstances, long-term capital gain) to the extent of our current
and accumulated earnings and profits for federal income tax purposes. As a result, stockholders may be required to pay income taxes
with respect to such dividends in excess of the cash dividends received. If a U.S. stockholder sells the common stock that it receives
as a dividend in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the dividend,
depending on the market price of our common stock at the time of the sale. Furthermore, with respect to non-U.S. stockholders,
we may be required to withhold U.S. tax with respect to such dividends, including in respect of all or a portion of such dividend
that is payable in common stock. In addition, if a significant number of our stockholders determine to sell shares of our common
stock in order to pay taxes owed on dividends, it may put downward pressure on the trading price of our common stock. It is unclear
whether and to what extent we will be able to pay taxable dividends of the type described in this paragraph (whether pursuant to
Revenue Procedure 2010-12, a private letter ruling or otherwise). We have no current intention to make a taxable dividend payable
in our stock.



We may have difficulty paying our required distributions
if we recognize income before or without receiving cash representing such income.



For federal income tax purposes, we will
include in income certain amounts that we have not yet received in cash, such as original issue discount, which may arise if we
receive warrants in connection with the making of a loan or possibly in other circumstances, or contracted PIK interest, which
represents contractual interest added to the loan balance and due at the end of the loan term. In addition, we may be required
to accrue for federal income tax purposes amounts attributable to our investment in CLOs that may differ from the distributions
received in respect of such investments. We also may be required to include in income certain other amounts that we will not receive
in cash.



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



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



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



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



59







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



In addition, our executive officers and
directors, and the executive officers of TICC Management, and its managing member, BDC Partners, serve or may serve as officers
and directors of entities that operate in a line of business similar to our own. Accordingly, they may have obligations to investors
in those entities, the fulfillment of which might not be in the best interests of us or our stockholders. Charles M. Royce,
the non-executive Chairman of our Board of Directors, holds a minority, non-controlling interest in our investment adviser. BDC
Partners is the managing member of Oxford Gate Capital, LLC, a private fund in which Messrs. Cohen, Rosenthal and Conroy, along
with certain investment and administrative personnel of TICC Management, are invested.



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



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



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



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



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



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



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



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As a business development company, we may
not acquire any assets other than “qualifying assets” unless, at the time of and after giving effect to such acquisition,
at least 70% of our total assets are qualifying assets.



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



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



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



RISKS RELATED TO OUR INVESTMENTS



Our investment portfolio may be concentrated in a limited
number of portfolio companies, which will subject us to a risk of significant loss if any of these companies defaults on its obligations
under any of its debt securities that we hold or if the sectors in which we invest experience a market downturn.



A consequence of our limited number of
investments is that the aggregate returns we realize may be significantly adversely affected if a small number of investments perform
poorly or if we need to write down the value of any one investment. Beyond our income tax asset diversification requirements, we
do not have fixed guidelines for diversification, and our investments could be concentrated in relatively few issuers. On December 3,
2007, we changed our name from Technology Investment Capital Corp. to TICC Capital Corp. While we have historically focused on
the technology sector, we expect to actively seek new investment opportunities outside this sector that otherwise meet our investment
criteria. As a result, a market downturn, including a downturn in the sectors in which we invest, could materially adversely affect
us.



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



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



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



We invest in companies which may have relatively
short operating histories. The revenues, income (or losses) and valuations of these companies can and often do fluctuate suddenly
and dramatically. Also, the technology-related sector, on which we have historically focused, in particular, is generally characterized
by abrupt business cycles and intense competition. The recent cyclical economic downturn has resulted in substantial decreases
in the market capitalization of many companies. While such valuations have recovered to some extent, we can offer no assurance
that such decreases in market capitalizations will not recur, or that any future decreases in valuations will be insubstantial
or temporary in nature. Therefore, our portfolio companies may face considerably more risk of loss than companies in other industry
sectors.



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



61







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



Although a prospective portfolio company’s
assets are one component of our analysis when determining whether to provide debt capital, we generally do not base 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, any of which could cause
us to lose part or all of our investment.



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



| | • | these companies may have limited financial resources and may be unable to meet their obligations under their debt securities
that we hold, which may be accompanied by a deterioration in the value of any collateral and a reduction in the likelihood of us
realizing any value from the liquidation of such collateral;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



| | • | because many of them tend to be privately owned, there is generally little publicly available information about these businesses;
therefore, although TICC Management’s agents will perform “due diligence” investigations on these portfolio companies,
their operations and their prospects, we may not learn all of the material information we need to know regarding these businesses;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



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



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



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



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



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



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



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



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



62







Our portfolio companies may incur debt that ranks equally
with, or senior to, our investments in such companies.



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



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



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



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



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



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



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



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



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



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



63







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



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



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



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



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



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



RISKS RELATED TO AN INVESTMENT IN OUR COMMON STOCK



Our common stock price may be volatile.



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



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



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



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



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



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



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



64







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



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



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



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



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



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



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



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



65





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



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



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



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



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



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, 2012, we issued a total of 48,846 shares
of common stock under our dividend reinvestment plan. This issuance was not subject to the registration requirements of
the Securities Act of 1933, as amended. The aggregate valuation price for the shares of common stock issued under the dividend
reinvestment plan was approximately $475,760.



ITEM  3.	DEFAULTS UPON SENIOR
SECURITIES.



Not applicable.



ITEM 4. MINE
SAFETY DISCLOSURES



Not applicable.



ITEM  5.	OTHER INFORMATION.



Not applicable.



66





ITEM 6. 	EXHIBITS.



(a) EXHIBITS



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



|3.1   | Articles of Incorporation (Incorporated by reference to the Registrant’s Registration Statement on Form N-2  (File No. 333-109055), filed on September 23, 2003).                                                                                             
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                               
|3.2   | Articles of Amendment (Incorporated by reference to Current Report on Form 8-K (File No. 814-00638) filed December 3, 2007).                                                                                                                                  
|      |                                                                                                                                                                                                                                                               
|3.3   | Amended and Restated Bylaws (Incorporated by reference to Pre-Effective Amendment No. 2 to the Registrant’s Registration Statement on Form N-2 (File No. 333-109055), filed on November 19, 2003).                                                            
|      |                                                                                                                                                                                                                                                               
|4.1   | Form of Share Certificate (Incorporated by reference to the Registrant’s Registration Statement on Form N-2 (File No. 333-109055), filed on September 23, 2003).                                                                                              
|      |                                                                                                                                                                                                                                                               
|10.1  | Investment Advisory Agreement between Registrant and TICC Management, LLC (Incorporated by reference to Exhibit 10.1 to the Registrant’s report on Form 8-K filed on July 1, 2011).                                                                           
|      |                                                                                                                                                                                                                                                               
|10.2  | Custodian Agreement between Registrant and State Street Bank and Trust Company (Incorporated by reference to Pre-Effective Amendment No. 2 to the Registrant’s Registration Statement on Form N-2 (File No. 333-109055), filed on November 19, 2003).         
|      |                                                                                                                                                                                                                                                               
|10.3  | Amended and Restated Administration Agreement between Registrant and BDC Partners, LLC.*                                                                                                                                                                      
|      |                                                                                                                                                                                                                                                               
|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).                                                              
|      |                                                                                                                                                                                                                                                               
|10.5  | Purchase Agreement by and among the Registrant, TICC Capital Corp. 2011-1 Holdings, LLC, TICC CLO LCC and Guggenheim Securities, LLC (Incorporated by reference to Exhibit 10.1 to the Registrant’s report on Form 8-K filed on August 11, 2011).             
|      |                                                                                                                                                                                                                                                               
|10.6  | Master Loan Sale Agreement by and among the Registrant, TICC Capital Corp. 2011-1 Holdings, LLC and TICC CLO LLC (Incorporated by reference to Exhibit 10.2 to the Registrant’s report on Form 8-K filed on August 11, 2011).                                 
|      |                                                                                                                                                                                                                                                               
|10.7  | Indenture by and between TICC CLO LLC and The Bank of New York Mellon Trust Company, National Association (Incorporated by reference to Exhibit 10.3 to the Registrant’s report on Form 8-K filed on August 11, 2011).                                        
|      |                                                                                                                                                                                                                                                               
|10.8  | Collateral Management Agreement by and between TICC CLO LLC and the Registrant (Incorporated by reference to Exhibit 10.4 to the Registrant’s report on Form 8-K filed on August 11, 2011).                                                                   
|      |                                                                                                                                                                                                                                                               
|10.9  | Collateral Administration Agreement by and among TICC CLO LLC, the Registrant and The Bank of New York Mellon Trust Company, National Association (Incorporated by reference to Exhibit 10.5 to the Registrant’s report on Form 8-K filed on August 11, 2011).
|      |                                                                                                                                                                                                                                                               
|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
| | - | --------------



67





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 CAPITALCORP.
|                   |  |                   |                                                                                         
|Date: May 10, 2012 |  | By:               | /
        s / Jonathan H. Cohen                                                         
|                   |  |                   | Jonathan H. Cohen
        Chief Executive Officer                                       
|                   |  |                   |                                                                                         
|Date: May 10, 2012 |  | By:               | /
        s / Patrick F. Conroy                                                         
|                   |  |                   | Patrick F. Conroy
        Chief Financial Officer
        (Principal Accounting Officer)



68