Table of Contents






UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549






FORM
10-Q








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



For
the Quarterly Period Ended March 31, 2016



OR

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



For
the transition period from to



Commission
File Number 333-174873



Triton
Pacific Investment Corporation, Inc.



(Exact
name of registrant as specified in its charter)

|                                                                                                                   |  |                                                             
|------------------------------------------------------------------------------------------------------------------ |  | ------------------------------------------------------------
|Maryland                                                                                                           |  | 45-2460782                                                  
|(State
                                    or other jurisdiction of
        incorporation
        or organization) |  | (I.R.S.
        Employer
        Identification
        No.)



6701
Center Drive West, 14th Floor

Los
Angeles, CA 90045

(Address
of principal executive offices)



(310)
943-4990

(Registrant’s
telephone number, including area code)



(Former
name, former address and former fiscal year, if changed since last report)



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 ☒  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 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         | ☐
|--------------------------- | ------------------------------------------------------------ | ----------------------------- | -
|                            |                                                              |                               |  
|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 ☒



As
of May 16, 2016, the Registrant had 776,833.80 shares of common stock, $0.001 par value, outstanding.

















TABLE
OF CONTENTS



|Part
    I—Financial Information | 3                                                                                                
|-------------------------------- | -------------------------------------------------------------------------------------------------
|                                 |                                                                                                  
|                                 | Item
    1: Financial Statements                                                                 
|                                 |                                                                                                  
|                                 | Item
    2: Management’s Discussion and Analysis of Financial Condition and Results of Operations
|                                 |                                                                                                  
|                                 | Item
    3: Quantitative and Qualitative Disclosures About Market Risk                           
|                                 |                                                                                                  
|                                 | Item
    4: Controls and Procedures.                                                             
|                                 |                                                                                                  
|Part
    II—Other Information    | 41                                                                                               
|                                 |                                                                                                  
|                                 | Item
    1: Legal Proceedings                                                                    
|                                 |                                                                                                  
|                                 | Item
    1A: Risk Factors                                                                        
|                                 |                                                                                                  
|                                 | Item
    2: Unregistered Sales of Equity Securities and Use of Proceeds                          
|                                 |                                                                                                  
|                                 | Item
    3: Defaults Upon Senior Securities                                                      
|                                 |                                                                                                  
|                                 | Item
    4: Mine Safety Disclosures                                                              
|                                 |                                                                                                  
|                                 | Item
    5: Other Information                                                                    
|                                 |                                                                                                  
|                                 | Item
    6: Exhibits                                                                             
|                                 |                                                                                                  
|SIGNATURES                       | 44                                                                                               
|                                 |                                                                                                  



2




Table of Contents



Part
I—Financial Information



Item
1: Financial Statements



Triton
Pacific Investment Corporation, Inc.

CONSOLIDATED
StatementS of Financial Position

|                                                                                                                                        |  |                              |           |  
|--------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------- | --------- | -
|                                                                                                                                        |  | March
    31,2016(unaudited) |           |  
|ASSETS                                                                                                                                  |  |                              |           |  
|                                                                                                                                        |  |                              |           |  
|Affiliate
    Investments, at fair value (amortized cost - $1,868,379 and $1,859,219, respectively)                                     |  | $                            | 2,160,521 |  
|Non-affiliate
    Investments, at fair value (amortized cost - $4,198,333 and $3,491,770, respectively)                                 |  |                              | 4,111,109 |  
|Cash                                                                                                                                    |  |                              | 3,356,967 |  
|Principal
    and interest receivable                                                                                                   |  |                              | 17,601    |  
|Prepaid
    expenses                                                                                                                    |  |                              | 19,795    |  
|Reimbursement
    due from Adviser (see Note 4)                                                                                         |  |                              | 239,465   |  
|                                                                                                                                        |  |                              |           |  
|TOTAL
    ASSETS                                                                                                                        |  | $                            | 9,905,458 |  
|                                                                                                                                        |  |                              |           |  
|LIABILITIES
    AND NET ASSETS                                                                                                          |  |                              |           |  
|                                                                                                                                        |  |                              |           |  
|LIABILITIES                                                                                                                             |  |                              |           |  
|Payable
    for investments purchased                                                                                                   |  | $                            | 246,250   |  
|Accounts
    payable and accrued liabilities                                                                                            |  |                              | 225,000   |  
|Stockholder
    distributions payable                                                                                                   |  |                              | 3,188     |  
|Due
    to related parties (see Note 4)                                                                                                 |  |                              | 54,839    |  
|TOTAL
    LIABILITIES                                                                                                                   |  |                              | 529,277   |  
|                                                                                                                                        |  |                              |           |  
|COMMITMENTS
    AND CONTINGENCIES (see Note 9)                                                                                          |  |                              |           |  
|                                                                                                                                        |  |                              |           |  
|NET
    ASSETS                                                                                                                          |  |                              |           |  
|Common
    stock, $0.001 par value, 75,000,000 shares authorized,  682,942.25 and 532,977.19 shares issued and outstanding respectively |  |                              | 682       |  
|Capital
    in excess of par value                                                                                                      |  |                              | 9,201,348 |  
|Accumulated
    undistributed net realized gains                                                                                        |  |                              | 2,192     |  
|Accumulated
    undistributed net investment income                                                                                     |  |                              | (32,962   | )
|Accumulated
    unrealized appreciation on investments                                                                                  |  |                              | 204,921   |  
|TOTAL
    NET ASSETS                                                                                                                    |  |                              | 9,376,181 |  
|                                                                                                                                        |  |                              |           |  
|TOTAL
    LIABILITIES AND NET ASSETS                                                                                                    |  | $                            | 9,905,458 |  
|                                                                                                                                        |  |                              |           |  
|Net
    asset value per share of common stock at year end                                                                               |  | $                            | 13.73     |  



The
accompanying notes are an integral part of these statements.





3




Table of Contents





Triton
Pacific Investment Corporation, Inc.

CONSOLIDATED
Statements of Operations

THREE
MONTHS ENDED MARCH 31, 2016 AND 2015

(Unaudited)



|                                                                       |  | 2016 |          |   | 2015 |  
|---------------------------------------------------------------------- |  | ---- | -------- | - | ---- | -
|                                                                       |  |      |          |  
|INVESTMENT
    INCOME                                                  |  |      |          |   |      |  
|Interest
    from affiliate investments                                |  | $    | 9,157    |   |      | $
|Interest
    from non-control/ non-affiliate investments               |  |      | 71,424   |   |      |  
|Fee
    income from non-control/ non-affiliate investments             |  |      | 249      |   |      |  
|                                                                       |  |      |          |   |      |  
|Total
    investment income                                            |  |      | 80,830   |   |      |  
|                                                                       |  |      |          |   |      |  
|OPERATING
    EXPENSES                                                 |  |      |          |   |      |  
|Management
    fees                                                    |  |      | 43,154   |   |      |  
|Capital
    gains incentive fees (see Notes 2 and 4)                   |  |      | 5,434    |   |      |  
|Administrator
    expense                                              |  |      | 82,322   |   |      |  
|Professional
    fees                                                  |  |      | 17,000   |   |      |  
|Insurance
    expense                                                  |  |      | 13,811   |   |      |  
|Other
    operating expenses                                           |  |      | 1,709    |   |      |  
|                                                                       |  |      |          |   |      |  
|Total
    operating expenses                                           |  |      | 163,430  |   |      |  
|                                                                       |  |      |          |   |      |  
|Expense
    reimbursement and management fee offsets from Adviser      |  |      | (157,996 | ) |      |  
|                                                                       |  |      |          |   |      |  
|Net
    expenses                                                       |  |      | 5,434    |   |      |  
|                                                                       |  |      |          |   |      |  
|Net
    investment income                                              |  |      | 75,396   |   |      |  
|                                                                       |  |      |          |   |      |  
|REALIZED
    AND UNREALIZED GAINS                                      |  |      |          |   |      |  
|Net
    realized gain on unaffiliated investments                      |  |      | —        |   |      |  
|Net
    increase in unrealized appreciationon unaffiliated investments |  |      | 27,173   |   |      |  
|                                                                       |  |      |          |   |      |  
|Total
    net realized and unrealized gain on investments              |  |      | 27,173   |   |      |  
|                                                                       |  |      |          |   |      |  
|NET
    INCREASE IN NET ASSETS  FROM OPERATIONS                        |  | $    | 102,569  |   |      | $
|                                                                       |  |      |          |   |      |  
|PER
    SHARE INFORMATION - Basic and Diluted                          |  |      |          |   |      |  
|Net
    increase in net assets resulting from operations per share     |  | $    | 0.17     |   |      | $
|                                                                       |  |      |          |   |      |  
|Weighted
    average common shares outstanding - basic and diluted     |  |      | 603,230  |   |      |  





The
accompanying notes are an integral part of these statements.





4




Table of Contents





Triton
Pacific Investment Corporation, Inc.

CONSOLIDATED
StatementS of CHANGES IN NET ASSETS

three
MONTHS ended march 31, 2016 and 2015

(Unaudited)





|                                                                         |  |   | 2016      |   |  |   | 2015      |  
|------------------------------------------------------------------------ |  | - | --------- | - |  | - | --------- | -
|Operations                                                               |  |   |           |   |  |   |           |  
|Net
    investment income                                                |  | $ | 75,396    |   |  | $ | 28,530    |  
|Net
    realized gain on investments                                     |  |   | —         |   |  |   | 3,542     |  
|Net
    increase in unrealized appreciation on investments               |  |   | 27,173    |   |  |   | 27,069    |  
|Net
    increase in net assets resulting from operations                 |  |   | 102,569   |   |  |   | 59,141    |  
|Stockholder
    distributions (see Note 5)                               |  |   |           |   |  |   |           |  
|Distributions
    from net investment income                             |  |   | (81,992   | ) |  |   | (16,211   | )
|Distributions
    from net realized gain on investments                  |  |   | —         |   |  |   | (1,103    | )
|Net
    decrease in net assets resulting from stockholder distributions  |  |   | (81,992   | ) |  |   | (17,314   | )
|Capital
    share transactions                                           |  |   |           |   |  |   |           |  
|Issuance
    of common stock (see Note 3)                                |  |   | 1,987,605 |   |  |   | 191,139   |  
|Reinvestment
    of stockholder distributions (see Note 3)               |  |   | 41,346    |   |  |   | 8,934     |  
|Offering
    costs                                                       |  |   | —         |   |  |   | (42,300   | )
|Net
    increase in net assets resulting from capital share transactions |  |   | 2,028,951 |   |  |   | 157,773   |  
|                                                                         |  |   |           |   |  |   |           |  
|Total
    increase in net assets                                         |  |   | 2,049,528 |   |  |   | 199,600   |  
|Net
    assets at beginning of period                                    |  |   | 7,326,653 |   |  |   | 1,916,867 |  
|Net
    assets at end of period                                          |  | $ | 9,376,181 |   |  | $ | 2,116,467 |  
|Accumulated
    undistributed (overdistributed) net investment income    |  | $ | (32,962   | ) |  | $ | 28,530    |  
|Accumulated
    undistributed net realized gains                         |  | $ | 2,192     |   |  | $ | —         |  





The
accompanying notes are an integral part of these statements.





5




Table of Contents





Triton
Pacific Investment Corporation, Inc.

CONSOLIDATED
Statements of CASH FLOWS

THREE
MONTHS ENDED MARCH 31, 2016 AND 2015

(Unaudited)





|                                                                                                                           |  | 2016    |           |   | 2015 |       
|-------------------------------------------------------------------------------------------------------------------------- |  | ------- | --------- | - | ---- | ------
|CASH
    FLOWS FROM OPERATING ACTIVITIES                                                                                   |  |         |           |   |      |       
|Net
    increase in net assets resulting from operations                                                                   |  | $       | 102,569   |   |      | $     
|Adjustments
    to reconcile net increase in net assets resulting from operations to net cash used by operating activities |  |         |           |   |      |       
|Purchases
    of investments                                                                                               |  |         | (716,250  | ) |      |       
|Proceeds
    from sales and repayments of investments                                                                      |  |         | 13,136    |   |      |       
|Net
    realized gain from investments                                                                                     |  |         | —         |   |      |       
|Net
    increase in unrealized appreciation on investments                                                                 |  |         | (27,173   | ) |      |       
|Accretion
    of discount                                                                                                  |  |         | (3,450    | ) |      |       
|Net
    increase in paid-in-kind interest                                                                                  |  |         | (9,157    | ) |      |       
|Increases
    and decreases in assets and liabilities                                                                      |  |         |           |   |      |       
|Principal and interest
    receivable                                                                                      |  |         | (5,894    | ) |      |       
|Receivable for investments
    sold                                                                                        |  |         | —         |   |      |       
|Prepaid expenses                                                                                                           |  |         | 13,811    |   |      |       
|Reimbursement
    due from Adviser                                                                                         |  | (13,968 | )         |   |      | 40,363
|Payable for investments
    purchased                                                                                      |  |         | 246,250   |   |      |       
|Accounts payable
    and accrued liabilities                                                                               |  |         | —         |   |      |       
|Due
    to related parties                                                                                                 |  |         | 7,082     |   |      |       
|NET
    CASH USED BY OPERATING ACTIVITIES                                                                                  |  |         | (393,044  | ) |      |       
|                                                                                                                           |  |         |           |   |      |       
|CASH
    FLOWS FROM FINANCING ACTIVITIES                                                                                   |  |         |           |   |      |       
|Issuance
    of common stock                                                                                               |  |         | 1,987,605 |   |      |       
|Stockholder
    distributions                                                                                              |  |         | (40,645   | ) |      |       
|Increases
    in distributions payable                                                                                     |  |         | (9,290    | ) |      |       
|Offering
    costs                                                                                                         |  |         | —         |   |      |       
|NET
    CASH PROVIDED BY FINANCING ACTIVITIES                                                                              |  |         | 1,937,670 |   |      |       
|                                                                                                                           |  |         |           |   |      |       
|NET
    INCREASE (DECREASE) IN CASH                                                                                        |  |         | 1,544,626 |   |      |       
|                                                                                                                           |  |         |           |   |      |       
|CASH
    - BEGINNING OF PERIOD                                                                                             |  | $       | 1,812,341 |   |      | $     
|                                                                                                                           |  |         |           |   |      |       
|CASH  -
    END OF PERIOD                                                                                                  |  | $       | 3,356,967 |   |      | $     
|                                                                                                                           |  |         |           |   |      |       
|Supplemental
    schedule of non-cash investing activities                                                                 |  |         |           |   |      |       
|Reinvestment
    of stockholder distributions                                                                              |  | $       | 41,346    |   |      | $     







The
accompanying notes are an integral part of these statements.





6




Table of Contents





TRITON PACIFIC INVESTMENT CORPORATION, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

AS OF MARCH 31, 2016

(UNAUDITED)





|Portfolio
    Company                              |  | Footnotes       |  | Industry                                     |  | Rate
    (b) |                                                            | Floor |   | Maturity  |      | Principal
    
Amount/ Number 
of Shares |   | Amortized
    
Cost(f) |           | Fair
    Value(c)
|-------------------------------------------------- |  | --------------- |  | -------------------------------------------- |  | ------------ | ---------------------------------------------------------- | ----- | - | --------- | ---- | ---------------------------------------- | - | ---------------------- | --------- | -----------------
|Senior
    Secured Loans—First Lien—33.16%         |  |                 |  |                                              |  |              |                                                            |       |   |           |      |                                          |   |                        |           |                  
|CareCentrix                                        |  |                 |  | Healthcare
    & Pharmaceuticals             |  |              | L+5.00%
                                         (6.00%)   |       |   |           | 1.0% |                                          |   | 7/8/2021               |           |                  
|Curo
    Health                                    |  |                 |  | Healthcare
    & Pharmaceuticals             |  |              | L+5.50%
                                         (6.50%)   |       |   |           | 1.0% |                                          |   | 2/7/2022               |           |                  
|FHC
    Health Systems, Inc.                       |  |                 |  | Healthcare
    & Pharmaceuticals             |  |              | L+4.00%
                                         (5.00%)   |       |   |           | 1.0% |                                          |   | 12/23/2021             |           |                  
|Flavors
    Holdings, Inc. Tranche B               |  |                 |  | Beverage,
    Food & Tobacco                 |  |              | L+5.75%
                                         (6.75%)   |       |   |           | 1.0% |                                          |   | 4/3/2020               |           |                  
|GK
    Holdings, Inc.                              |  |                 |  | Business
    Services                        |  |              | L+5.50%
                                         (6.50%)   |       |   |           | 1.0% |                                          |   | 1/20/2021              |           |                  
|Global
    Healthcare Exchange                     |  |                 |  | Healthcare
    & Pharmaceuticals             |  |              | L+4.50%
                                         (5.50%)   |       |   |           | 1.0% |                                          |   | 8/15/2022              |           |                  
|Imagine
    Print Solutions                        |  |                 |  | Business
    Services                        |  |              | L+6.00%
                                         (7.00%)   |       |   |           | 1.0% |                                          |   | 3/30/2022              |           |                  
|Jackson
    Hewitt                                 |  |                 |  | Business
    Services                        |  |              | L+7.00%
                                         (8.00%)   |       |   |           | 1.0% |                                          |   | 7/30/2020              |           |                  
|Jeld-Wen,
    Inc.                                 |  |                 |  | Wholesale
    Trade-Durable Goods            |  |              | L+4.25%
                                         (5.25%)   |       |   |           | 1.0% |                                          |   | 10/15/2021             |           |                  
|Mister
    Car Wash, Inc.                          |  |                 |  | Automotive
    Repair, Services, and Parking |  |              | L+4.00%
                                         (5.00%)   |       |   |           | 1.0% |                                          |   | 8/20/2021              |           |                  
|Natel
    Engineering                              |  |                 |  | High
    Tech Industries                     |  |              | L+5.75%
                                         (6.75%)   |       |   |           | 1.0% |                                          |   | 4/10/2020              |           |                  
|Omnitracs,
    LLC                                 |  |                 |  | Transportation:
    Cargo                    |  |              | L+3.75%
                                         (4.75%)   |       |   |           | 1.0% |                                          |   | 11/25/2020             |           |                  
|Paradigm
    Outcomes                              |  |                 |  | Healthcare
    & Pharmaceuticals             |  |              | L+5.00%
                                         (6.00%)   |       |   |           | 1.0% |                                          |   | 6/2/2022               |           |                  
|Ranpak
    Corp.                                   |  |                 |  | Paper
    and Allied Products                |  |              | L+3.25%
                                         (4.75%)   |       |   |           | 1.0% |                                          |   | 10/1/2021              |           |                  
|SCS
    Holdings I                                 |  |                 |  | High
    Tech Industries                     |  |              | L+5.00%
                                         (6.00%)   |       |   |           | 1.0% |                                          |   | 10/31/2022             |           |                  
|SITEL
    Worldwide                                |  |                 |  | Business
    Services                        |  |              | L+5.50%
                                         (6.50%)   |       |   |           | 1.0% |                                          |   | 9/20/2021              |           |                  
|SolarWinds,
    Inc.                               |  |                 |  | High
    Tech Industries                     |  |              | L+5.50%
                                         (6.50%)   |       |   |           | 1.0% |                                          |   | 2/3/2023               |           |                  
|TIBCO
    Software                                 |  |                 |  | High
    Tech Industries                     |  |              | L+5.50%
                                         (6.50%)   |       |   |           | 1.0% |                                          |   | 12/4/2020              |           |                  
|Verdesian
    Life Sciences LLC                    |  |                 |  | Wholesale
    Trade-Nondurable Goods         |  |              | L+5.00%
                                         (6.00%)   |       |   |           | 1.0% |                                          |   | 7/1/2020               |           |                  
|Vivid
    Seats Ltd.                               |  |                 |  | Consumer
    Services                        |  |              | L+6.00%
                                         (7.00%)   |       |   |           | 1.0% |                                          |   | 3/1/2022               |           |                  
|Total
    Senior Secured Loans—First Lien          |  |                 |  |                                              |  |              |                                                            |       | $ | 3,192,929 |      |                                          | $ | 3,131,086              |           |                  
|                                                   |  |                 |  |                                              |  |              |                                                            |       |   |           |      |                                          |   |                        |           |                  
|Senior
    Secured Loans—Second Lien—10.69%        |  |                 |  |                                              |  |              |                                                            |       |   |           |      |                                          |   |                        |           |                  
|Flavors
    Holdings, Inc.                         |  |                 |  | Beverage,
    Food & Tobacco                 |  |              | L+10.00%
                                         (11.00%) |       |   |           | 1.0% |                                          |   | 10/7/2021              |           |                  
|FullBeauty
    Brands Holding                      |  |                 |  | High
    Tech Industries                     |  |              | L+9.00%
                                         (10.00%)  |       |   |           | 1.0% |                                          |   | 10/13/2023             |           |                  
|GK
    Holdings, Inc.                              |  |                 |  | Business
    Services                        |  |              | L+9.50%
                                         (10.50%)  |       |   |           | 1.0% |                                          |   | 1/21/2022              |           |                  
|Hostess
    Brands                                 |  |                 |  | Beverage,
    Food & Tobacco                 |  |              | L+7.50%
                                         (8.50%)   |       |   |           | 1.0% |                                          |   | 8/3/2023               |           |                  
|Oxbow                                              |  |                 |  | Metals
    & Mining                          |  |              | L+7.00%
                                         (8.00%)   |       |   |           | 1.0% |                                          |   | 1/19/2020              |           |                  
|SCS
    Holdings I                                 |  |                 |  | High
    Tech Industries                     |  |              | L+9.50%
                                         (10.50%)  |       |   |           | 1.0% |                                          |   | 10/13/2023             |           |                  
|Total
    Senior Secured Loans—Second Lien         |  |                 |  |                                              |  |              |                                                            |       |   |           |      |                                          |   | $                      | 1,125,000 |                  
|                                                   |  |                 |  |                                              |  |              |                                                            |       |   |           |      |                                          |   |                        |           |                  
|Subordinated
    Convertible Debt—6.60%            |  |                 |  |                                              |  |              |                                                            |       |   |           |      |                                          |   |                        |           |                  
|Javlin
    Capital LLC Subordinated Convertible No |  | (a)
    (e)     |  | Specialty
    Finance                        |  |              | 6.00%                                                      |       |   |           |      |                                          |   |                        | 3/31/2020 |                  
|Total
    Subordinated Convertible Debt            |  |                 |  |                                              |  |              |                                                            |       |   |           |      |                                          |   | $                      | 600,099   |                  
|                                                   |  |                 |  |                                              |  |              |                                                            |       |   |           |      |                                          |   |                        |           |                  
|Equity/Other—16.45%                                |  |                 |  |                                              |  |              |                                                            |       |   |           |      |                                          |   |                        |           |                  
|ACON
    IWP Investors I, L.L.C.                   |  | (a)             |  | Healthcare
    & Pharmaceuticals             |  |              |                                                            |       |   |           |      |                                          |   |                        |           |                  
|Javlin
    Capital LLC Class C-2 Preferred Units   |  | (a)
    (d) (e) |  | Specialty
    Finance                        |  |              |                                                            |       |   |           |      |                                          |   |                        |           |                  
|Total
    Equity/Other                             |  |                 |  |                                              |  |              |                                                            |       |   |           |      |                                          |   |                        |           |                  
|TOTAL
    INVESTMENTS—66.89%                       |  |                 |  |                                              |  |              |                                                            |       |   |           |      |                                          |   |                        |           |                  
|OTHER
    ASSETS IN EXCESS OF LIABILITIES—33.11%   |  |                 |  |                                              |  |              |                                                            |       |   |           |      |                                          |   |                        |           |                  
|NET
    ASSETS - 100.0%                            |  |                 |  |                                              |  |              |                                                            |       |   |           |      |                                          |   |                        |           |                  










| | (a) | Affiliated investment
                                         as defined by the 1940 Act, whereby the Company owns between 5% and 25% of the portfolio
                                         company’s outstanding voting securities and the investments are not classified
                                         as controlled investments. Affiliated funds that are managed by an affiliate of Triton
                                         Pacific Adviser, LLC also hold investments in this security. The aggregate fair value
                                         of non-controlled, affiliated investments at March 31, 2016 represented 23.04% of the
                                         Company’s net assets. Fair value as of March 31, 2016 along with transactions during
                                         the period ended March 31, 2016 in affiliated investments were as follows):
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|                                           |  |   |                                                                         |  |  | Three
    months ended March 31, 2016 |                                                                 |  |  |   |                                                                  
|------------------------------------------ |  | - | ----------------------------------------------------------------------- |  |  | ------------------------------------- | --------------------------------------------------------------- |  |  | - | -----------------------------------------------------------------
|Non-controlled,
    Affiliated Investments |  |   | Fair
                                         Value atDecember 31, 2015 |  |  |                                       | Gross
                                         Additions(Cost)* |  |  |   | Gross
                                         Reductions(Cost)**
|ACON IWP Investors I, L.L.C.               |  | $ | 738,266                                                                 |  |  | $                                     | —                                                               |  |  | $ | —                                                                
|Javlin Capital, LLC, Convertible Note      |  |   | 609,219                                                                 |  |  |                                       | 9,157                                                           |  |  |   | —                                                                
|Javlin Capital, LLC, C-2 Preferred Units   |  |   | 750,000                                                                 |  |  |                                       | —                                                               |  |  |   | —                                                                
|Total                                      |  | $ | 2,097,485                                                               |  |  | $                                     | 9,157                                                           |  |  | $ | —                                                                





*Gross additions include increases in the cost basis of investments resulting
from new portfolio investments, PIK interest, the amortization of unearned income, the exchange of one or more existing securities
for one or more new securities and the movement of an existing portfolio company into this category from a different category.

**Gross reductions include decreases in the cost basis of investments resulting
from principal collections related to investment repayments or sales, the exchange of one or more existing securities for one or
more new securities and the movement of an existing portfolio company out of this category into a different category.



| | (b) | Certain variable
                                         rate securities in the Company’s portfolio bear interest at a rate determined by a publicly
                                         disclosed base rate spread. As of March 31, 2016, the three-month London Interbank Offered
                                         Rate, or LIBOR, was 0.6251%.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | Fair value and
                                         market value are determined by the Company’s board of directors (see Note 7.)
| | --- | -------------------------------------------------------------------------------------------------------------------------------------



| | (d) | Security held
                                         within TPJ Holdings, Inc., a wholly-owned subsidiary of the Company. See Note 2 for a
                                         dicussion on the basis of consolidation.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|    | (e)                                                                                                    | The investment
                                         is not a qualifying asset under the Investment Company Act of 1940, as amended. A business
                                         development company may not acquire any asset other than a qualifying asset, unless,
                                         at the time the acquisition is made, qualifying assets represent at least 70% of the
                                         business development company’s total assets. As of March 31, 2016, 85.5% of the
                                         Company’s total assets represented qualifying assets.
|--- | ------------------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(f) | See
                                         Note 5 for a discussion of the tax cost of the portfolio.





The accompanying notes are an integral part of
these statements.





7




Table of Contents





TRITON PACIFIC INVESTMENT CORPORATION, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

AS OF DECEMBER 31, 2015



|                                                     |  |                 |  |                                              |  |         |                                                            |       |  |          |     |                                          |  |                        |            |                  
|---------------------------------------------------- |  | --------------- |  | -------------------------------------------- |  | ------- | ---------------------------------------------------------- | ----- |  | -------- | --- | ---------------------------------------- |  | ---------------------- | ---------- | -----------------
|Portfolio
    Company                                |  | Footnotes       |  | Industry                                     |  | Rate(b) |                                                            | Floor |  | Maturity |     | Principal
    
Amount/ Number 
of Shares |  | Amortized
    
Cost(f) |            | Fair
    Value(c)
|Senior Secured Loans—First Lien—32.46%               |  |                 |  |                                              |  |         |                                                            |       |  |          |     |                                          |  |                        |            |                  
|CareCentrix,
    Inc.                                |  |                 |  | Healthcare
    & Pharmaceuticals             |  |         | L+5.00%
                                         (6.00%)   |       |  |          | 1.0 | %                                        |  |                        | 7/8/2021   |                  
|Curo
    Health Services Holdings, Inc.              |  |                 |  | Healthcare
    & Pharmaceuticals             |  |         | L+5.50%
                                         (6.50%)   |       |  |          | 1.0 | %                                        |  |                        | 2/7/2022   |                  
|FHC
    Health Systems, Inc.                         |  |                 |  | Healthcare
    & Pharmaceuticals             |  |         | L+4.00%
                                         (5.00%)   |       |  |          | 1.0 | %                                        |  |                        | 12/23/2021 |                  
|Flavors
    Holdings, Inc. Tranche B                 |  |                 |  | Beverage,
    Food & Tobacco                 |  |         | L+5.75%
                                         (6.75%)   |       |  |          | 1.0 | %                                        |  |                        | 4/7/2020   |                  
|GK
    Holdings, Inc.                                |  |                 |  | Business
    Services                        |  |         | L+5.50%
                                         (6.50%)   |       |  |          | 1.0 | %                                        |  |                        | 1/20/2021  |                  
|Global
    Healthcare Exchange                       |  |                 |  | Healthcare
    & Pharmaceuticals             |  |         | L+4.50%
                                         (5.50%)   |       |  |          | 1.0 | %                                        |  |                        | 8/15/2022  |                  
|Jackson
    Hewitt                                   |  |                 |  | Business
    Services                        |  |         | L+7.00%
                                         (8.00%)   |       |  |          | 1.0 | %                                        |  |                        | 7/30/2020  |                  
|Jeld-Wen,
    Inc.                                   |  |                 |  | Wholesale
    Trade-Durable Goods            |  |         | L+4.25%
                                         (5.25%)   |       |  |          | 1.0 | %                                        |  |                        | 10/15/2021 |                  
|Mister
    Car Wash, Inc.                            |  |                 |  | Automotive
    Repair, Services, and Parking |  |         | L+4.00%
                                         (5.00%)   |       |  |          | 1.0 | %                                        |  |                        | 8/20/2021  |                  
|Natel
    Engineering                                |  |                 |  | High
    Tech Industries                     |  |         | L+5.75%
                                         (6.75%)   |       |  |          | 1.0 | %                                        |  |                        | 4/10/2020  |                  
|Omnitracs,
    LLC                                   |  |                 |  | Transportation:
    Cargo                    |  |         | L+3.75%
                                         (4.75%)   |       |  |          | 1.0 | %                                        |  |                        | 11/25/2020 |                  
|Paradigm
    Outcomes                                |  |                 |  | Healthcare
    & Pharmaceuticals             |  |         | L+5.00%
                                         (6.00%)   |       |  |          | 1.0 | %                                        |  |                        | 6/2/2022   |                  
|Ranpak
    Corp.                                     |  |                 |  | Paper
    and Allied Products                |  |         | L+3.25%
                                         (4.25%)   |       |  |          | 1.0 | %                                        |  |                        | 10/1/2021  |                  
|SCS
    Holdings I                                   |  |                 |  | High
    Tech Industries                     |  |         | L+5.00%
                                         (6.00%)   |       |  |          | 1.0 | %                                        |  |                        | 10/31/2022 |                  
|SITEL
    Worldwide                                  |  |                 |  | Business
    Services                        |  |         | L+5.50%
                                         (6.50%)   |       |  |          | 1.0 | %                                        |  |                        | 9/20/2021  |                  
|TIBCO
    Software                                   |  |                 |  | High
    Tech Industries                     |  |         | L+5.50%
                                         (6.50%)   |       |  |          | 1.0 | %                                        |  |                        | 12/4/2020  |                  
|Verdesian
    Life Sciences LLC                      |  |                 |  | Wholesale
    Trade-Nondurable Goods         |  |         | L+5.00%
                                         (6.00%)   |       |  |          | 1.0 | %                                        |  |                        | 7/1/2020   |                  
|Total
    Senior Secured Loans—First Lien            |  |                 |  |                                              |  |         |                                                            |       |  |          |     |                                          |  |                        |            |                  
|                                                     |  |                 |  |                                              |  |         |                                                            |       |  |          |     |                                          |  |                        |            |                  
|Senior
    Secured Loans—Second Lien—14.15%          |  |                 |  |                                              |  |         |                                                            |       |  |          |     |                                          |  |                        |            |                  
|Flavors
    Holdings, Inc.                           |  |                 |  | Beverage,
    Food & Tobacco                 |  |         | L+10.00%
                                         (11.00%) |       |  |          | 1.0 | %                                        |  |                        | 10/7/2021  |                  
|FullBeauty
    Brands Holding                        |  |                 |  | High
    Tech Industries                     |  |         | L+9.00%
                                         (10.00%)  |       |  |          | 1.0 | %                                        |  |                        | 10/13/2023 |                  
|GK
    Holdings, Inc.                                |  |                 |  | Business
    Services                        |  |         | L+9.50%
                                         (10.50%)  |       |  |          | 1.0 | %                                        |  |                        | 1/21/2022  |                  
|Hostess
    Brands                                   |  |                 |  | Beverage,
    Food & Tobacco                 |  |         | L+7.50%
                                         (8.50%)   |       |  |          | 1.0 | %                                        |  |                        | 8/3/2023   |                  
|Oxbow
    Carbon LLC                                 |  |                 |  | Metals
    & Mining                          |  |         | L+7.00
                                         (8.00%)    |       |  |          | 1.0 | %                                        |  |                        | 1/19/2020  |                  
|SCS
    Holdings I                                   |  |                 |  | High
    Tech Industries                     |  |         | L+9.50%
                                         (10.50%)  |       |  |          | 1.0 | %                                        |  |                        | 10/13/2023 |                  
|Total
    Senior Secured Loans—Second Lien           |  |                 |  |                                              |  |         |                                                            |       |  |          |     |                                          |  | $                      | 1,125,000  |                  
|                                                     |  |                 |  |                                              |  |         |                                                            |       |  |          |     |                                          |  |                        |            |                  
|Subordinated
    Convertible Debt—8.27%              |  |                 |  |                                              |  |         |                                                            |       |  |          |     |                                          |  |                        |            |                  
|Javlin
    Capital LLC Subordinated Convertible Note |  | (a)
    (e)     |  | Specialty
    Finance                        |  |         | 6.00%                                                      |       |  |          |     |                                          |  |                        | 3/31/2020  |                  
|Total
    Subordinated Convertible Debt              |  |                 |  |                                              |  |         |                                                            |       |  |          |     |                                          |  |                        |            |                  
|                                                     |  |                 |  |                                              |  |         |                                                            |       |  |          |     |                                          |  |                        |            |                  
|Equity/Other—20.22%                                  |  |                 |  |                                              |  |         |                                                            |       |  |          |     |                                          |  |                        |            |                  
|ACON
    IWP Investors I, L.L.C.                     |  | (a)             |  | Healthcare
    & Pharmaceuticals             |  |         |                                                            |       |  |          |     |                                          |  |                        |            |                  
|Javlin
    Capital LLC Class C-2 Preferred Units     |  | (a)
    (d) (e) |  | Specialty
    Finance                        |  |         |                                                            |       |  |          |     |                                          |  |                        |            |                  
|Total
    Equity/Other                               |  |                 |  |                                              |  |         |                                                            |       |  |          |     |                                          |  |                        |            |                  
|                                                     |  |                 |  |                                              |  |         |                                                            |       |  |          |     |                                          |  |                        |            |                  
|TOTAL
    INVESTMENTS—75.10%                         |  |                 |  |                                              |  |         |                                                            |       |  |          |     |                                          |  |                        |            |                  
|OTHER
    ASSETS IN EXCESS OF LIABILITIES—24.90%     |  |                 |  |                                              |  |         |                                                            |       |  |          |     |                                          |  |                        |            |                  
|NET
    ASSETS - 100.00%                             |  |                 |  |                                              |  |         |                                                            |       |  |          |     |                                          |  |                        |            |                  














| | (a) | Affiliated investment
                                         as defined by the 1940 Act, whereby the Company owns between 5% and 25% of the portfolio
                                         company’s outstanding voting securities and the investments are not classified
                                         as controlled investments. Affiliated funds that are managed by an affiliate of Triton
                                         Pacific Adviser, LLC also hold investments in this security. The aggregate fair value
                                         of non-controlled, affiliated investments at December 31, 2015 represented 28.49% of
                                         the Company’s net assets. Fair value as of December 31, 2015 along with transactions
                                         during the period ended December 31, 2015 in affiliated investments were as follows:
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|                                           |  |   |                                                                         |  |  | Year
    Ended December 31, 2015 |                                                                
|------------------------------------------ |  | - | ----------------------------------------------------------------------- |  |  | -------------------------------- | ---------------------------------------------------------------
|Non-controlled,
    Affiliated Investments |  |   | Fair
                                         Value atDecember 31, 2014 |  |  |                                  | Gross
                                         Additions(Cost)*
|ACON IWP Investors I, L.L.C.               |  | $ | —                                                                       |  |  | $                                | 500,000                                                        
|Javlin Capital, LLC, Convertible Note      |  |   | —                                                                       |  |  |                                  | 600,000                                                        
|Javlin Capital, LLC, C-2 Preferred Units   |  |   | —                                                                       |  |  |                                  | 750,000                                                        
|Total                                      |  | $ | —                                                                       |  |  | $                                | 1,850,000                                                      









*Gross additions include increases in the cost basis of
investments resulting from new portfolio investments, PIK interest, the amortization of unearned income, the exchange of one or
more existing securities for one or more new securities and the movement of an existing portfolio company into this category from
a different category.

**Gross reductions include decreases in the cost basis
of investments resulting from principal collections related to investment repayments or sales, the exchange of one or more existing
securities for one or more new securities and the movement of an existing portfolio company out of this category into a different
category.



| | (b) | Certain variable
                                         rate securities in the Company’s portfolio bear interest at a rate determined by a publicly
                                         disclosed base rate spread. As of December 31, 2015, the three-month London Interbank
                                         Offered Rate, or LIBOR, was 0.61220%.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | Fair value and
                                         market value are determined by the Company’s board of directors (see Note 7.)
| | --- | -------------------------------------------------------------------------------------------------------------------------------------

| | (d) | Security held
                                         within TPJ Holdings, Inc., a wholly-owned subsidiary of the Company. See Note 2 for a
                                         discussion on the basis of consolidation.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|    | (e)                                                                                                    | The investment
                                         is not a qualifying asset under the Investment Company Act of 1940, as amended. A business
                                         development company may not acquire any asset other than a qualifying asset, unless,
                                         at the time the acquisition is made, qualifying assets represent at least 70% of the
                                         business development company’s total assets. As of December 31, 2015, 81.45% of
                                         the Company’s total assets represented qualifying assets.
|--- | ------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(f) | See
                                         Note 5 for a discussion of the tax cost of the portfolio.



The accompanying notes are an integral part of
these statements.





8




Table of Contents



Triton
Pacific Investment Corporation, Inc.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



NOTE 1 – DESCRIPTION OF BUSINESS



Triton Pacific Investment Corporation, Inc. (the “Company”),
incorporated in Maryland on April 29, 2011, is publically registered, non-traded fund focused on private equity, structured as
a business development company, that primarily makes structured equity and debt investments in small to mid-sized private U.S.
companies. Structured equity refers to derivative investment products, including convertible notes and warrants, designed to facilitate
highly customized risk-return objectives. Pursuant to the Articles of Incorporation, the Company is authorized to issue 75,000,000
shares of common stock with a par value of $0.001 per share. Additionally, the Company is authorized to issue 25,000,000 shares
of preferred stock with a par value of $0.001 per share. The Company is currently offering for sale a maximum of $300,000,000 of
shares of common stock on a “best efforts” basis pursuant to a registration statement on Form N-2 filed with the Securities
and Exchange Commission under the Securities Act of 1933, as amended (the “Offering”). On June 25, 2014, the Company
met its minimum offering requirement of $2,500,000 and released all shares held in escrow.



The Company invests either alone or together with
other private equity sponsors. The Company is an externally managed, non-diversified closed-end investment company that has elected
to be treated as a business development company, or BDC, under the Investment Company Act of 1940, or the Company Act. As a BDC,
the Company is required to comply with certain regulatory requirements. The Company has elected to be treated for U.S. federal
income tax purposes, and intends to annually qualify as a regulated investment company, or RIC, under Subchapter M of the Internal
Revenue code of 1986, as amended, or the Code. As of March 31, 2016, the Company has one wholly-owned subsidiary through which
it holds interest in a non-controlled, affiliated portfolio company. The consolidated financial statements include both the Company’s
accounts and the accounts of its wholly-owned subsidiary as of March 31, 2016. All significant intercompany transactions have been
eliminated in consolidation. The Company’s consolidated subsidiary is subject to U.S. federal and state income taxes. No
taxes were accrued or paid by the wholly-owned subsidiary for the three months ended March 31, 2016.



Triton Pacific Adviser, LLC (“Adviser”)
serves as the Investment Adviser and TFA Associates, LLC (“TFA”) serves as the Administrator. Each of these entities
are affiliated with Triton Pacific Group, Inc., a private equity investment management firm, and its subsidiary Triton Pacific
Capital Partners, LLC, a private equity investment fund management company, each focused on debt and equity investments for small
to mid-sized private companies.



The Adviser was formed in Delaware as a private
investment management firm and is registered as an investment adviser with the Securities and Exchange Commission (“SEC”)
under the Investment Advisers Act of 1940, or the Advisers Act. The Adviser oversees the management of the Company’s activities
and is responsible for making the investment decisions for the portfolio.



NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Basis of Presentation.These financial statements have
been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”)
for interim financial information, including accounting for investment companies under ASC Topic 946, and the rules and regulations
of the Securities and Exchange Commission for interim financial statements. These financial statements reflect all adjustments
and accruals of a normal recurring nature that, in the opinion of management, are necessarily indicative of results expected for
any future period. These interim, unaudited financial statements and related notes should be read in conjunction with the financial
statements and related notes included in the Company’s annual report on Form 10-K for the year ended December 31, 2015.



9




Table of Contents



Management Estimates and Assumptions.The preparation
of unaudited financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the
amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.



Cash.All cash balances are maintained with high credit
quality financial institutions which are members of the Federal Deposit Insurance Corporation. The Company maintains cash balances
that may exceed federally insured limits.



Valuation of Portfolio Investments.The Company determines
the net asset value of its investment portfolio each quarter. Securities that are publicly-traded are valued at the reported closing
price on the valuation date. Securities that are not publicly-traded are valued at fair value as determined in good faith by the
Company’s board of directors. In connection with that determination, the Adviser provides the Company’s board of directors
with portfolio company valuations which are based on relevant inputs which may include indicative dealer quotes, values of like
securities, recent portfolio company financial statements and forecasts, and valuations prepared by third-party valuation services.



Accounting Standards Codification Topic 820, Fair Value Measurements
and Disclosure, or ASC Topic 820, issued by the Financial Accounting Standards Board, clarifies the definition of fair value
and requires companies to expand their disclosure about the use of fair value to measure assets and liabilities in interim and
annual periods subsequent to initial recognition. ASC Topic 820 defines fair value as the price that would be received from the
sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
ASC Topic 820 also establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These
tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, which includes inputs such
as quoted prices for similar securities in active markets and quoted prices for identical securities where there is little or no
activity in the market; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring
an entity to develop its own assumptions.



With respect to investments for which market quotations are not readily
available, the Company undertakes a multi-step valuation process each quarter, as described below:



| | • | the Company’s quarterly valuation process begins with the Adviser’s management team providing a preliminary valuation of each portfolio company or investment to the Company’s board of directors, which valuation may be obtained from an independent valuation firm or Adviser, if applicable;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| | • | preliminary valuation conclusions are then documented and discussed with the Company’s board of directors;
| | - | ----------------------------------------------------------------------------------------------------------



| | • | the Company’s board of directors reviews the preliminary valuation and the Adviser’s management team, together with its independent valuation firm, if applicable, responds and supplements the preliminary valuation to reflect any comments provided by the board of directors; and
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | the Company’s board of directors discusses valuations and determines the fair value of each investment in the Company’s portfolio in good faith based on various statistical and other factors, including the input and recommendation of the Adviser and any third-party valuation firm, if applicable.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Determination of fair value involves subjective judgments and estimates.
Accordingly, these notes to the Company’s financial statements refer to the uncertainty with respect to the possible effect
of such valuations and any change in such valuations on the Company’s financial statements. Below is a description of factors
that the Company’s board of directors may consider when valuing the Company’s debt and equity investments.



10




Table of Contents





Valuation of fixed income investments, such as loans and debt securities,
depends upon a number of factors, including prevailing interest rates for like securities, expected volatility in future interest
rates, call features, put features and other relevant terms of the debt. For investments without readily available market prices,
the Company may incorporate these factors into discounted cash flow models to arrive at fair value. Other factors that the Company’s
board of directors may consider include the borrower’s ability to adequately service its debt, the fair market value of the
portfolio company in relation to the face amount of its outstanding debt and the quality of collateral securing the Company’s
debt investments. The determination of fair market value for the equity positions were determined by considering, among other factors,
various income scenarios and multiples of earnings before interest, taxes, depreciation and amortization, or EBITDA, cash flows,
net income, revenues and market comparables.



The fair values of the Company’s investments are determined in
good faith by the Company’s board of directors. The Company’s board of directors is solely responsible for the valuation
of the Company’s portfolio investments at fair value as determined in good faith pursuant to the Company’s valuation
policy and consistently applied valuation process.



Revenue Recognition.Security transactions are accounted
for on the trade date. The Company records interest income on an accrual basis to the extent it expects to collect such amounts.
The Company records dividend income on the ex-dividend date. The Company does not accrue as a receivable interest or dividends
on loans and securities if it has reason to doubt its ability to collect such income. Loan origination fees, original issue discount
and market discount are capitalized and the Company amortizes such amounts as interest income over the respective term of the loan
or security. Upon the prepayment of a loan or security, any unamortized loan origination fees and original issue discount are recorded
as interest income. Upfront structuring fees are recorded as fee income when earned. The Company records prepayment premiums on
loans and securities as fee income when it receives such amounts.



Net Realized Gains or Losses, and Net Change in Unrealized Appreciation
or Depreciation. Gains or losses on the sale of investments are calculated by using the specific identification
method. The Company measures realized gains or losses by the difference between the net proceeds from the repayment or sale and
the amortized cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized, but
considering unamortized upfront fees. Net change in unrealized appreciation or depreciation reflects the change in portfolio investment
values during the reporting period, including any reversal of previously recorded unrealized gains or losses when gains or losses
are realized.



Capital Gains Incentive Fees. The Company has entered
into an investment advisory agreement with the Adviser dated as of July 27, 2012. Pursuant to the terms of the investment advisory
agreement, the Incentive Fee shall be determined and payable in arrears as of the end of each quarter, upon liquidation of the
Company or upon termination of this Agreement, as of the termination date, and shall equal 20.0% of the Company’s realized
capital gains, if any, on a cumulative basis from inception through the end of each quarter, computed net of all realized capital
losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid Incentive Fees.
The fee for the three months ended March 31, 2016 and 2015 was $5,434 and $5,964, respectively, of which $0 and $708, respectively,
was for Incentive Fees calculated on unrealized gains.



For purposes of calculating the foregoing: (1) the calculation of the
Incentive Fee shall include any capital gains that result from cash distributions that are treated as a return of capital; (2)
any such return of capital shall be treated as a decrease in the Company’s cost basis of an investment; and (3) all fiscal
year-end valuations shall be determined by the Company in accordance with generally accepted accounting principles, applicable
provisions of the Company Act (even if such valuation is made prior to the date on which the Company has elected to be regulated
as a BDC) and the Company’s pricing procedures. In determining the Incentive Fee payable to the Adviser, the Company will
calculate the aggregate realized capital gains, aggregate realized capital losses and aggregate unrealized capital depreciation,
as applicable, with respect to each of the investments in its portfolio. For this purpose, aggregate realized capital gains, if
any, will equal the sum of the differences between the net sales price of each investment, when sold, and the original cost of
such investment since inception. Aggregate realized capital losses will equal the sum of the amounts by which the net sales price
of each investment, when sold, is less than the cost of such investment since inception. Aggregate unrealized capital depreciation
will equal the sum of the difference, if negative, between the valuation of each investment as of the applicable date and the original
cost of such investment. At the end of the applicable period, the amount of capital gains that serves as the basis for the Company’s
calculation of the Incentive Fees will equal the aggregate realized capital gains less aggregate realized capital losses and less
aggregate unrealized capital depreciation with respect to its portfolio of investments. If this number is positive at the end of
such period, then the Incentive Fees for such period will be equal to 20% of such amount, less the aggregate amount of any Incentive
Fees paid in respect of its portfolio in all prior periods.



11




Table of Contents



Offering Costs.The Company will incur certain expenses
in connection with registering to sell shares of its common stock in connection with the Offering. These costs principally relate
to professional and filing fees. Upon recognition or repayment to the Adviser of these costs, they will be capitalized as deferred
offering expenses and then subsequently expensed over a 12-month period. The Adviser may reimburse the Company for all or part
of these amounts pursuant to the Expense Support and Conditional Reimbursement Agreement (“Expense Reimbursement Agreement”)
discussed below. As of March 31, 2016 and December 31, 2015, $2,087,887 and $1,854,992, respectively, of offering costs have been
reclassified and included as part of the Expense Reimbursement Agreement and accordingly included in Reimbursement due from the
Adviser.



Distributions. Distributions to the Company’s stockholders
are recorded as of the record date. Subject to the discretion of the Company’s board of directors and applicable legal restrictions,
the Company intends to authorize and declare ordinary cash distributions on a monthly basis and pay such distributions on a monthly
basis.



Income Taxes.The Company has elected to be treated for
federal income tax purposes, and intends to annually qualify thereafter, as a regulated investment company (“RIC”)
under Subchapter M of the Code. Generally, a RIC is exempt from federal income taxes if it distributes at least 90% of “Investment
Company Taxable Income,” as defined in the Code, each year. Dividends paid up to 8.5 months after the current tax year can
be carried back to the prior tax year for determining the dividends paid in such tax year. The Company intends to distribute sufficient
dividends to maintain its RIC status each year. The Company is also subject to nondeductible federal excise taxes if it does not
distribute at least 98% of net ordinary income, 98.2% of capital gain income, if any, and any recognized and undistributed income
from prior years for which it paid no federal excise tax. The Company will generally endeavor each year to avoid any federal excise
taxes.



GAAP requires management to evaluate tax positions taken by the Company
and recognize a tax liability if the Company has taken an uncertain position that more likely than not would not be sustained upon
examination by the Internal Revenue Service or other tax authorities. Management has analyzed the tax positions taken by the Company,
and has concluded that as of March 31, 2016 and March 31, 2015, there are no uncertain positions taken or expected to be taken
that would require recognition of a liability or disclosure in the financial statements. The Company is subject to routine audits
by the Internal Revenue Service or other tax authorities, generally for three years after the tax returns are filed; however, there
are currently no audits for any tax periods in progress.



NOTE 3 – SHARE TRANSACTIONS



Below is a summary of transactions with respect to shares of the Company’s
common stock during the three months ended March 31, 2016 and 2015:



|                                                |  |        |                                                                       |  |        |   |           |        |  |  |           |  |  |   |         |  
|----------------------------------------------- |  | ------ | --------------------------------------------------------------------- |  | ------ | - | --------- | ------ |  |  | --------- |  |  | - | ------- | -
|                                                |  |        | Three
                                         months ended March 31, | 
|                                                |  | 2016   |                                                                       |  | 2015  
|                                                |  | Shares |                                                                       |  | Amount |   |           | Shares |  |  | Amount   
|Gross proceeds from Offering                    |  |        | 147,027.05                                                            |  |        | $ | 2,163,173 |        |  |  | 14,158.46 |  |  | $ | 211,989 |  
|Reinvestment of Distributions                   |  |        | 2,937.41                                                              |  |        |   | 41,346    |        |  |  | 626.95    |  |  |   | 8,934   |  
|Commissions and Dealer Manager Fees             |  |        | —                                                                     |  |        |   | (175,568  | )      |  |  | —         |  |  |   | (20,850 | )
|Net Proceeds to Company from Share Transactions |  |        | 149,964.46                                                            |  |        | $ | 2,028,951 |        |  |  | 14,785.41 |  |  | $ | 200,073 |  





Status of Continuous Public Offering



During the three months ended March 31, 2016 and 2015, the Company sold
147,027.05 and 14,158.46 shares of common stock, respectively, for gross proceeds of approximately $2,163,173 and $211,989, at
an average price per share of $14.71 and $14.97, respectively. The increase in Capital in excess of par during the three months
ended March 31, 2016 and 2015 include reinvested stockholder distributions of $41,346 and $8,934, respectively, for which the Company
issued 2,937.41 and 626.95 shares of common stock, respectively.



12




Table of Contents



The proceeds from the issuance of common stock as presented on the accompanying
statements of changes in net assets and statements of cash flows are presented net of selling commissions and dealer manager fees
of $175,568 and $20,850 for the three months ended March 31, 2016 and 2015, respectively.



NOTE 4 – RELATED PARTY TRANSACTIONS AND ARRANGEMENTS





The Adviser and TFA and their affiliates will receive
compensation and reimbursement for services relating to our offering and the investment and management of its assets.



In connection with the Offering, the Company has incurred registration,
organization, operating and offering costs. Such costs have been advanced by the Adviser. As discussed below, the Company has entered
into an Expense Reimbursement Agreement with its Adviser. For the period from inception through March 31, 2016, certain registration,
organization, operating and offering costs have been accounted for under the Expense Reimbursement Agreement and accordingly included
in Reimbursement due from the Adviser on the statements of financial position.



The chart below, on a cumulative
basis, discloses the components of the Reimbursement due from Adviser reflected on the Statements of Financial Position:





|                                     |  | March 31, |            | December 31, |     
|------------------------------------ |  | --------- | ---------- | ------------ | ----
|                                     |  | 2016      |            |              | 2015
|Operating Expenses                   |  | $         | 1,383,591  |              |     
|Offering Costs                       |  |           | 2,087,887  |              |     
|Due to related party offset          |  |           | (2,889,746 | )            |     
|Reimbursements received from Adviser |  |           | (342,715   | )            |     
|Other amounts due to affiliates      |  |           | 448        |              |     
|Total Reimbursement due from Adviser |  | $         | 239,465    |              |     





Operating Expenses are the amounts reimbursed
by the Adviser for our operating costs and offering costs are the cumulative amount of organizational and offering expenses
reimbursed to us by the Adviser and subject to future reimbursement per the terms of our expense reimbursement agreement.



Due to related party offset represents the
cash the Adviser paid directly for our operating and offering expenses and reimbursements received from sponsor are the
amounts the Adviser paid in cash to us for reimbursement of our operating and offering costs.



The Company compensates the Adviser for investment services per an Investment
Adviser Agreement (“Agreement”), approved by the Company’s directors, calculated as the sum of (1) base management
fee, calculated quarterly at 0.5% of the Company’s average gross assets payable quarterly in arrears, and (2) an incentive
fee upon capital gains determined and payable in arrears as of the end of each quarter or upon liquidation of the Company or upon
termination of Agreement at 20% of Company’s realized capital gains, as defined. The Agreement expires July 2016 and may
continue automatically for successive annual periods, as approved by the Company. All management fees earned by the Adviser prior
to January 1, 2014 were waived by the Adviser.



As a BDC, we will be subject to certain regulatory restrictions in
making our investments. For example, we generally will not be permitted to co-invest alongside our Adviser and its affiliates
unless we obtain an exemptive order from the SEC or the transaction is otherwise permitted under existing regulatory
guidance, such as syndicated transactions where price is the only negotiated term, and approval from our independent
directors. As of March 31, 2016 the Company has two affiliate investments in ACON IWP Investors I, L.L.C and Javlin Capital,
LLC (held by TPJ Holdings, Inc., a wholly-owned subsidiary.)



The Company compensates TFA for administration services per an Administration
Agreement for costs and expenses incurred with the administration and operation of the Company. Such agreement expires July 2016
and may continue automatically for successive annual periods, as approved by the Company. These fees have been reimbursed from
the Adviser pursuant to the Expense Reimbursement Agreement discussed below.



13




Table of Contents



The following table describes the fees and expenses accrued under the
investment advisory and administration agreement and the dealer manager agreement during the three months ended March 31, 2016
and 2015:



|                                   |  |                                  |  |                                      |  |                                  |        |      |  |   |        | 
|---------------------------------- |  | -------------------------------- |  | ------------------------------------ |  | -------------------------------- | ------ | ---- |  | - | ------ | 
|                                   |  |                                  |  |                                      |  | Three
    months ended March 31,
|Related
    Party                  |  | Source
    Agreement             |  | Description                          |  | 2016                             |        | 2015
|Triton
    Pacific Adviser, LLC    |  | Investment
    Adviser Agreement |  | Base
    Management Fees             |  | $                                | 43,154 |      |  | $ | 18,408 | 
|Triton
    Pacific Adviser, LLC    |  | Investment
    Adviser Agreement |  | Capital
    Gains Incentive Fees(1)  |  | $                                | 5,434  |      |  | $ | 5,964  | 
|TFA
    Associates, LLC            |  | Administration
    Agreement     |  | Administrative
    Services Expenses |  | $                                | 82,322 |      |  | $ | 63,074 | 
|Triton
    Pacific Securities, LLC |  | Dealer
    Manager Agreement     |  | Dealer
    Manager Fees(2)           |  | $                                | 47,841 |      |  | $ | 4,240  | 












| | (1) | During the three months ended March 31, 2016 and 2015, the Company earned capital gains incentive fees of $5,434 and $5,964,
respectively, based on the performance of its portfolio, of which $5,434 and $5,256, respectively, was based on unrealized gains,
and $0 and $708, respectively, was based on realized gains. No capital gains incentive fees are actually payable by the Company
with respect to unrealized gains unless and until those gains are actually realized. See Note 2 for a discussion of the methodology
employed by the Company in calculating the capital gains incentive fees.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | During the three months ended March 31, 2016 and 2015, the Company paid the Dealer Manager $175,568 and $20,850, respectively,
in sales commissions and dealer fees. $47,841 and $4,240 were retained by TPS, respectively, and the remainder re-allowed to third
party participating broker dealers.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Director’s Fees



On December 15, 2014, the Company entered into
an agreement (the “Director Agreement”) with its three independent directors, Marshall Goldberg, William Pruitt and
Ronald Ruther (collectively, the “Independent Directors”), whereby the Independent Directors agreed to certain revisions
to their compensation for serving as members of the Company’s Board. Specifically, effective October 1, 2014, the fees payable
to an Independent Director shall be determined based on the Company’s net assets as of the end of each fiscal quarter and
be paid quarterly in arrears as follows:



|Net
    Asset Value        |  | Annual
    Cash Retainer Fee |  | Board
    Meeting Fee |  | Annual
    Audit Committee Chairperson Fee |  | Annual
    Audit Committee Member Fee |  | Audit
    Committee Meeting Fee
|-------------------------- |  | ---------------------------- |  | --------------------- |  | ------------------------------------------ |  | ------------------------------------- |  | -------------------------------
|$0 to $25 million          |  | —                            |  | —                     |  | —                                          |  | —                                     |  | —                              
|$25 million to $75 million |  | $20,000                      |  | $1,000                |  | $10,000                                    |  | $2,500                                |  | $500                           
|over $75 million           |  | $30,000                      |  | $1,000                |  | $12,500                                    |  | $2,500                                |  | $500                           



No Director’s fees were accrued for the three months ended March
31, 2016 and 2015.



Expense Reimbursement Agreement



On March 27, 2014, the Company and its Adviser
agreed to an Expense Support and Conditional Reimbursement Agreement, or the Expense Reimbursement Agreement. The Expense Reimbursement
Agreement was amended and restated effective November 17, 2014. Under the Expense Reimbursement Agreement, as amended, the Adviser,
in consultation with the Company, will pay up to 100% of both the Company’s organizational and offering expenses and its
operating expenses, all as determined by the Company and the Adviser. As used in the Expense Reimbursement Agreement, operating
expenses refer to third party operating costs and expenses incurred by the Company, as determined under GAAP for investment management
companies. Organizational and offering expenses include expenses incurred in connection with the organization of the Company and
expenses incurred in connection with its offering, which are recorded as a component of equity. The Expense Reimbursement Agreement
states that until the net proceeds to the Company from its offering are at least $25 million, the Adviser will pay up to 100% of
both the Company’s organizational and offering expenses and its operating expenses. After the Company receives at least $25
million in net proceeds from its offering, the Adviser may, with the Company’s consent, continue to make expense support
payments to the Company in such amounts as are acceptable to the Company and the Adviser. Any expense support payments shall be
paid by the Adviser to the Company in any combination of cash, and/or offsets against amounts otherwise due from the Company to
the Adviser.



14




Table of Contents



Under the Expense Reimbursement Agreement as amended,
once the Company has received at least $25 million in net proceeds from its offering, during any quarter occurring within three
years of the date on which the Company incurred any expenses that are funded by the Adviser, the Company is required to reimburse
the Adviser for any expense support payments the Company received from them. However, with respect to any expense support payments
attributable to the Company’s operating expenses, (i) the Company will only reimburse the Adviser for expense support
payments made by the Adviser to the extent that the payment of such reimbursement (together with any other reimbursement paid during
such fiscal year) does not cause “other operating expenses” (as defined below) (on an annualized basis and net of any
expense reimbursement payments received by the Company during such fiscal year) to exceed the percentage of the Company’s
average net assets attributable to shares of its common stock represented by “other operating expenses” during the
fiscal year in which such expense support payment from the Adviser was made (provided, however, that this clause (i) shall
not apply to any reimbursement payment which relates to an expense support payment from the Adviser made during the same fiscal
year); and (ii) the Company will not reimburse the Adviser for expense support payments made by the Adviser if the annualized
rate of regular cash distributions declared by the Company at the time of such reimbursement payment is less than the annualized
rate of regular cash distributions declared by the Company at the time the Adviser made the expense support payment to which such
reimbursement relates. “Other operating expenses” means the Company’s total operating expenses excluding base
management fees, incentive fees, organization and offering expenses, financing fees and costs, interest expense, brokerage commissions
and extraordinary expenses.







|Quarter
    Ended      |  | Amount
    of Expense Payment Obligation |  | Amount
    of Offering Cost Payment Obligation |  | Operating
    Expense Ratio as of the Date Expense Payment Obligation Incurred(1) |  | Annualized
    Distribution Rate as of the Date Expense Payment Obligation Incurred(2) |  | Eligible
    for Reimbursement Through
|---------------------- |  | ---------------------------------------- |  | ---------------------------------------------- |  | --------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------- |  | --------------------------------------
|September
    30, 2012 |  | $21,826                                  |  |                                                |  | 432.69%                                                                           |  | —                                                                                      |  | September
    30, 2015                
|December
    31, 2012  |  | $26,111                                  |  |                                                |  | 531.09%                                                                           |  | —                                                                                      |  | December
    31, 2015                 
|March
    31, 2013     |  | $30,819                                  |  |                                                |  | N/A                                                                               |  | —                                                                                      |  | March
    31, 2016                    
|June
    30, 2013      |  | $59,062                                  |  |                                                |  | N/A                                                                               |  | —                                                                                      |  | June
    30, 2016                     
|September
    30, 2013 |  | $65,161                                  |  |                                                |  | N/A                                                                               |  | —                                                                                      |  | September
    30, 2016                
|December
    31, 2013  |  | $91,378                                  |  |                                                |  | 455.09%                                                                           |  | —                                                                                      |  | December
    31, 2016                 
|March
    31, 2014     |  | $68,293                                  |  |                                                |  | 148.96%                                                                           |  | —                                                                                      |  | March
    31, 2017                    
|June
    30, 2014      |  | $70,027                                  |  | $898,518                                       |  | 23.17%                                                                            |  | —                                                                                      |  | June
    30, 2017                     
|September
    30, 2014 |  | $92,143                                  |  | $71,060                                        |  | 20.39%                                                                            |  | —                                                                                      |  | September
    30, 2017                
|December
    31, 2014  |  | $115,777                                 |  | $90,860                                        |  | 11.15%                                                                            |  | —                                                                                      |  | December
    31, 2017                 
|March
    31, 2015     |  | $134,301                                 |  | $106,217                                       |  | 13.75%                                                                            |  | 2.01%                                                                                  |  | March
    31, 2018                    
|June
    30, 2015      |  | $166,549                                 |  | $167,113                                       |  | 14.10%                                                                            |  | 3.20%                                                                                  |  | June
    30, 2018                     
|September
    30, 2015 |  | $147,747                                 |  | $240,848                                       |  | 10.45%                                                                            |  | 3.20%                                                                                  |  | September
    30, 2018                
|December
    31, 2015  |  | $136,401                                 |  | $280,376                                       |  | 7.41%                                                                             |  | 3.60%                                                                                  |  | December
    31, 2018                 
|March
    31, 2016     |  | $157,996                                 |  | $232,895                                       |  | 6.00%                                                                             |  | 3.52%                                                                                  |  | March
    31, 2019                    





|(1) | “Operating Expense Ratio” includes all expenses borne by us, except for organizational and offering expenses, base management and incentive fees owed to our Adviser,financing fees and costs, interest expense, brokerage commissions and extraordinary expenses.The Company did not achieve its minimum offering amount until June 25, 2014 and as a result, did not invest the proceeds from the offering and realize any income from investments prior to the end of its fiscal quarter.                                                                                                                                                                    
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | “Annualized Distribution Rate” equals the annualized rate of distributions paid to stockholders based on the amount of the regular cash distribution paid immediately prior to the date the expense support payment obligation was incurred by our Adviser. “Annualized Distribution Rate” does not include special cash or stock distributions paid to stockholders. The Company did not achieve its minimum offering amount until June 25, 2014 and as a result, did not have an opportunity to invest the proceeds from the offering and realize any income from investments or pay any distributions to stockholders prior to the end of its fiscal quarter.



In addition, with respect to any expense support
payment attributable to the Company’s organizational and offering expenses, the Company will only reimburse the Adviser for
expense support payments made by the Adviser to the extent that the payment of such reimbursement (together with any other reimbursement
for organizational and offering expenses paid during such fiscal year) is limited to 15% of cumulative gross sales proceeds from
the Company’s offering including the sales load (or dealer manager fee) paid by the Company.



15




Table of Contents



The Company or the Adviser may terminate the Expense
Reimbursement Agreement at any time upon thirty days’ written notice; however, the Adviser has indicated that it expects
to continue such reimbursements until it deems that the Company has achieved economies of scale sufficient to ensure that the Company
bears a reasonable level of expenses in relation to its income. The Expense Reimbursement Agreement will automatically terminate
upon termination of the Investment Advisory Agreement or upon the Company’s liquidation or dissolution.



The Expense Reimbursement Agreement is, by its
terms, effective retroactively to the Company’s inception date of April 29, 2011 for Operating Expenses and from the break
of escrow on June 25, 2014 for Offering Expenses. As of March 31, 2016, $3,471,478 has been recorded as Reimbursement due from
the Adviser pursuant to the Expense Reimbursement Agreement. Of this, $2,889,746, representing an amount due to the Adviser, was
netted against the Reimbursement due from Adviser and $342,715 was paid to the Company by the Adviser. Of these Operating Expenses
in the table above, $78,756 has exceeded the three year period for repayment and will not be repayable by the Company.



NOTE 5 – DISTRIBUTIONS



The following table reflects the cash distributions per share that
the Company declared and paid on its common stock during the three months ended March 31, 2016 and 2015:



|                           |  |              |         |        |   |        | 
|-------------------------- |  | ------------ | ------- | ------ | - | ------ | 
|                           |  | Distribution |        
|For the Three Months Ended |  | Per Share    |         | Amount |  
|Fiscal 2016                |  |              |         |        |   |        | 
|Janary 22, 2016            |  | $            | 0.045   |        | $ | 25,244 | 
|February 16, 2016          |  | $            | 0.045   |        | $ | 26,477 | 
|March 23, 2016             |  | $            | 0.045   |        | $ | 30,271 | 
|Fiscal 2015                |  |              |         |        |   |        | 
|January 20, 2015           |  | $            | 0.07545 |        | $ | 17,314 | 





Prior to April 2015, the Company’s distributions were paid quarterly
in arrears.  On April 2, 2015, the Company authorized and declared a first quarter cash distribution of $0.116 per share,
to the shareholders of record as of April 13, 2015. Beginning April 2015, the Company commenced the declaration and payment of
monthly distributions, payable in advance, in each case, subject to the discretion of the Company’s board of directors and
applicable legal restrictions.



On April 20, 2016, the Company authorized and declared a cash distribution
of $0.045 per share for the month of April 2016, to the shareholders of record as of April 21, 2016. The timing and amount of any
future distributions to stockholders are subject to applicable legal restrictions and the sole discretion of the Company’s
board of directors.



The Company has adopted an “opt in” distribution reinvestment
plan for its stockholders. As a result, if the Company makes a cash distribution, its stockholders will receive distributions in
cash unless they specifically “opt in” to the distribution reinvestment plan so as to have their cash distributions
reinvested in additional shares of the Company’s common stock. However, certain state authorities or regulators may impose
restrictions from time to time that may prevent or limit a stockholder’s ability to participate in the distribution reinvestment
plan.



The Company may fund its cash distributions to stockholders from any
sources of funds legally available to it, including offering proceeds, borrowings, net investment income from operations, capital
gains proceeds from the sale of assets, non-capital gains proceeds from the sale of assets, dividends or other distributions paid
to the Company on account of preferred and common equity investments in portfolio companies and expense reimbursements from the
Adviser. The Company has not established limits on the amount of funds it may use from available sources to make distributions.



16




Table of Contents





The following table reflects the sources of the cash distributions
on a tax basis that the Company paid on its common stock during the three months ended March 31, 2016 and 2015:

|                                                          |  |                                  |        |  |            |  |     |                     |  |   |            |  |  |  |     |  
|--------------------------------------------------------- |  | -------------------------------- | ------ |  | ---------- |  | --- | ------------------- |  | - | ---------- |  |  |  | --- | -
|                                                          |  | Three months ended
    March 31, |       
|                                                          |  | 2016                             |        |  | 2015       | 
|Source of Distribution                                    |  | Distribution Amount              |        |  | Percentage |  |     | Distribution Amount |  |   | Percentage | 
|Offering proceeds                                         |  | $                                | —      |  |            |  | —   |                     |  | $ | —          |  |  |  | —   |  
|Borrowings                                                |  |                                  | —      |  |            |  | —   |                     |  |   | —          |  |  |  | —   |  
|Net investment income(1)                                  |  |                                  | —      |  |            |  | —   |                     |  |   | —          |  |  |  | —   |  
|Short-term capital gains proceeds from the sale of assets |  |                                  | —      |  |            |  | —   |                     |  |   | 1,103      |  |  |  | 6   | %
|Long-term capital gains proceeds from the sale of assets  |  |                                  | —      |  |            |  | —   |                     |  |   | —          |  |  |  | —   |  
|Expense reimbursement from sponsor                        |  |                                  | 81,992 |  |            |  | 100 | %                   |  |   | 16,211     |  |  |  | 94  | %
|Total                                                     |  | $                                | 81,992 |  |            |  | 100 | %                   |  | $ | 17,314     |  |  |  | 100 | %












|(1) | During the three months ended March 31,
    2016 and 2015, 84.4% and 96.6%, respectively, of the Company’s gross investment income was attributable to cash income
    earned, and 15.6% and 3.4%, resepctively was attributable to non-cash accretion of discount.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                    





The Company’s net investment income on a tax basis for
the three months ended March 31, 2016 and 2015 was $78,748 and $33,786, respectively. As of March 31, 2016 and 2015, the Company
had $8,132 and $32,844, respectively, of undistributed net investment income and realized gains on a tax basis.



The primary difference between the Company’s GAAP-basis
net investment income and its tax-basis net investment income is due to the reversal of the required accrual for GAAP purposes
of incentive fees on unrealized gains even though no such incentive fees on unrealized gains are payable by the Company for the
three months ended March 31, 2016 and 2015.



The following table sets forth reconciliation between GAAP
basis net investment income and tax basis net investment income for the three months ended March 31, 2016 and 2015:





|                                                          |  |                                  |        |   |      |   |        | 
|--------------------------------------------------------- |  | -------------------------------- | ------ | - | ---- | - | ------ | 
|                                                          |  | Three
    months ended March 31, |       
|                                                          |  | 2016                             |        |   | 2015 |  
|GAAP basis
    net investment income                      |  | $                                | 75,396 |   |      | $ | 28,530 | 
|Reversal of incentive
    fee accrual on unrealized gains |  |                                  | 5,434  |   |      |   | 5,256  | 
|Other book-tax differences                                |  |                                  | (2,082 | ) |      |   | —      | 
|Tax-basis net investment
    income                       |  | $                                | 78,748 |   |      | $ | 33,786 | 



The determination of the tax attributes of the Company’s
distributions is made annually as of the end of the Company’s fiscal year based upon the Company’s taxable income for
the full year and distributions paid for the full year. The actual tax characteristics of distributions to stockholders are reported
to stockholders annually on Form 1099-DIV.



As of March 31, 2016 and 2015, the components of accumulated
earnings on a tax basis were as follows:



|                                                                    |  |                              |         |  |      |   |        | 
|------------------------------------------------------------------- |  | ---------------------------- | ------- |  | ---- | - | ------ | 
|                                                                    |  | Three months ended March 31, |        
|                                                                    |  | 2016                         |         |  | 2015 |  
|Distributable ordinary income (income and short-term capital gains) |  | $                            | 5,940   |  |      | $ | 39,187 | 
|Distributable realized gains (long-term capital gains)              |  |                              | 2,192   |  |      |   | —      | 
|Net unrealized appreciation (depreciation) on investments           |  |                              | 204,921 |  |      |   | 26,399 | 
|                                                                    |  | $                            | 213,053 |  |      | $ | 65,586 | 







The $204,921 of net appreciation as
of March 31, 2016 includes gross appreciation over amortized tax cost of $312,089 and gross depreciation under amortized tax cost
of $105,086. The $26,399 of net appreciation as of March 31, 2015 is entirely due to gross appreciation over amortized tax cost.





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The aggregate cost of the Company’s
investments for U.S. federal income tax purposes totaled $6,064,628 and $2,085,673 as of March 31, 2016 and 2015, respectively.
The aggregate net unrealized appreciation on investments on a tax basis was $204,921 and $26,399 as of March 31, 2016 and 2015,
respectively.



NOTE 6 – INVESTMENT PORTFOLIO



The following table summarizes the composition of the Company’s
investment portfolio at amortized cost and fair value as of March 31, 2016 and December 31, 2015:



|                                 |  |                                                   |           |                              |                                  |                                                                 |  |  |                                                          |   |                              |   |                                                                 |  |   |           |  |  |     |  
|-------------------------------- |  | ------------------------------------------------- | --------- | ---------------------------- | -------------------------------- | --------------------------------------------------------------- |  |  | -------------------------------------------------------- | - | ---------------------------- | - | --------------------------------------------------------------- |  | - | --------- |  |  | --- | -
|                                 |  | Three
    months ended March 31, 2016 (Unaudited) |           |                              | Year
    Ended December 31, 2015 |                                                                
|                                 |  | Investments
        at  Amortized
        Cost(1) |           | Investments
    atFair Value |                                  | Fair
        Value
        Percentage
        ofTotal Portfolio |  |  | Investments
        at
        Amortized
        Cost(1) |   | Investments
    atFair Value |   | Fair
        Value
        Percentage
        ofTotal Portfolio | 
|Senior Secured Loans—First Lien  |  | $                                                 | 3,131,086 |                              | $                                | 3,109,235                                                       |  |  | 50                                                       | % |                              | $ | 2,426,089                                                       |  | $ | 2,389,377 |  |  | 43  | %
|Senior Secured Loans—Second Lien |  |                                                   | 1,067,248 |                              |                                  | 1,001,874                                                       |  |  | 16                                                       | % |                              |   | 1,065,681                                                       |  |   | 1,041,875 |  |  | 19  | %
|Subordinated Debt                |  |                                                   | 618,376   |                              |                                  | 618,376                                                         |  |  | 10                                                       | % |                              |   | 609,219                                                         |  |   | 609,219   |  |  | 11  | %
|Equity/Other                     |  |                                                   | 1,250,000 |                              |                                  | 1,542,145                                                       |  |  | 24                                                       | % |                              |   | 1,250,000                                                       |  |   | 1,488,266 |  |  | 27  | %
|Total                            |  | $                                                 | 6,066,710 |                              | $                                | 6,271,630                                                       |  |  | 100                                                      | % |                              | $ | 5,350,989                                                       |  | $ | 5,528,737 |  |  | 100 | %





|(1) | Amortized cost represents the original cost adjusted for the amortization of premiums and/or accretion of discounts, as applicable, on investments.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------



The table below describes investments by industry classification
and enumerates the percentage, by fair value, of the total portfolio assets in such industries as of March 31, 2016 and December
31, 2015:



|                                         |  |                                |           |                                         |                       |       |                    |  |                                         |           |  |  |       |  
|---------------------------------------- |  | ------------------------------ | --------- | --------------------------------------- | --------------------- | ----- | ------------------ |  | --------------------------------------- | --------- |  |  | ----- | -
|                                         |  | March
    31, 2016 (Unaudited) |           |                                         | December
    31, 2015 |      
|Industry
    Classification              |  | Fair
        Value             |           | Percentage
        of
        Portfolio |                       |       | Fair
        Value |  | Percentage
        of
        Portfolio |          
|Automotive Repair, Services, and Parking |  | $                              | 121,738   |                                         |                       | 1.9   | %                  |  | $                                       | 122,458   |  |  | 2.2   | %
|Beverage, Food & Tobacco                 |  |                                | 450,313   |                                         |                       | 7.2   | %                  |  |                                         | 470,860   |  |  | 8.5   | %
|Business Services                        |  |                                | 889,487   |                                         |                       | 14.2  | %                  |  |                                         | 633,547   |  |  | 11.5  | %
|Consumer Services                        |  |                                | 234,063   |                                         |                       | 3.7   | %                  |  |                                         | —         |  |  | 0.0   | %
|Healthcare & Pharmaceuticals             |  |                                | 1,499,273 |                                         |                       | 23.9  | %                  |  |                                         | 1,445,024 |  |  | 26.1  | %
|High Tech Industries                     |  |                                | 935,175   |                                         |                       | 14.9  | %                  |  |                                         | 697,895   |  |  | 12.6  | %
|Metals & Mining                          |  |                                | 197,708   |                                         |                       | 3.2   | %                  |  |                                         | 210,521   |  |  | 3.8   | %
|Paper and Allied Products                |  |                                | 111,685   |                                         |                       | 1.8   | %                  |  |                                         | 118,972   |  |  | 2.2   | %
|Specialty Finance                        |  |                                | 1,368,376 |                                         |                       | 21.8  | %                  |  |                                         | 1,359,219 |  |  | 24.6  | %
|Transportation: Cargo                    |  |                                | 121,370   |                                         |                       | 1.9   | %                  |  |                                         | 121,371   |  |  | 2.2   | %
|Wholesale Trade-Durable Goods            |  |                                | 123,540   |                                         |                       | 2.0   | %                  |  |                                         | 122,874   |  |  | 2.2   | %
|Wholesale Trade-Nondurable Goods         |  |                                | 218,902   |                                         |                       | 3.5   | %                  |  |                                         | 225,996   |  |  | 4.1   | %
|Total                                    |  | $                              | 6,271,630 |                                         |                       | 100.0 | %                  |  | $                                       | 5,528,737 |  |  | 100.0 | %





NOTE 7 – FAIR VALUE OF FINANCIAL INSTRUMENTS



Under existing accounting guidance, fair value is defined as
the price that the Company would receive upon selling an investment or pay to transfer a liability in an orderly transaction to
a market participant in the principal or most advantageous market for the investment. This accounting guidance emphasizes that
valuation techniques maximize the use of observable market inputs and minimize the use of unobservable inputs. Inputs refer broadly
to the assumptions that market participants would use in pricing an asset or liability, including assumptions about risk. Inputs
may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing
an asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are
inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on the best
information available in the circumstances.



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The Company classifies the inputs used to measure these fair
values into the following hierarchy as defined by current accounting guidance:



Level 1: Inputs that are quoted
prices (unadjusted) in active markets for identical assets or liabilities.



Level 2: Inputs that are quoted
prices for similar assets or liabilities in active markets.



Level 3: Inputs that are unobservable
for an asset or liability.



A financial instrument’s categorization within the valuation
hierarchy is based upon the lowest level of input that is significant to the fair value measurement.



As of March 31, 2016 and December 31, 2015, the Company’s
investments were categorized as follows in the fair value hierarchy):



|                                            |  |                                                   |           |  |                                  |   |           | 
|------------------------------------------- |  | ------------------------------------------------- | --------- |  | -------------------------------- | - | --------- | 
|Valuation Inputs                            |  | Three
    months ended March 31, 2016 (Unaudited) |           |  | Year
    ended December 31, 2015 |  
|Level 1—Price quotations in active markets  |  | $                                                 | —         |  |                                  | $ | —         | 
|Level 2—Significant other observable inputs |  |                                                   | —         |  |                                  |   | —         | 
|Level 3—Significant unobservable inputs     |  |                                                   | 6,271,630 |  |                                  |   | 5,528,737 | 
|Total                                       |  | $                                                 | 6,271,630 |  |                                  | $ | 5,528,737 | 





The Company’s investments as of March 31, 2016 consisted
of debt securities that are traded on a private over-the-counter market for institutional investors, a subordinated convertible
note and two equity investments. The Company valued its debt investments by using the midpoint of the prevailing bid and ask prices
from dealers on the date of the relevant period end, which were provided by independent third-party pricing services and screened
for validity by such services. The determination of fair market value for the equity positions and subordinated convertible loan
were determined by considering, among other factors, various income scenarios and multiples of earnings before interest, taxes,
depreciation and amortization, or EBITDA, cash flows, net income, revenues and market comparables, book value multiples, economic
profits and portfolio multiples.



The Company may periodically benchmark the bid and ask prices
it receives from the third-party pricing services against the actual prices at which the Company purchases and sells its investments.
Based on the results of the benchmark analysis and the experience of the Company’s management in purchasing and selling
these investments, the Company believes that these prices are reliable indicators of fair value. However, because of the private
nature of this marketplace (meaning actual transactions are not publicly reported), the Company believes that these valuation
inputs are classified as Level 3 within the fair value hierarchy. The Company’s board of directors reviewed and approved
the valuation determinations made with respect to these investments in a manner consistent with the Company’s valuation
process.



The significant unobservable inputs used in the market approach
of fair value measurement of our investments are the market multiples of EBITDA of comparable companies. The Company selects a
population of companies for each investment with similar operations and attributes of the portfolio company. Using these guideline
companies’ data, a range of multiples of enterprise value to EBITDA is calculated. The Company selects percentages from
the range of multiples for purposes of determining the portfolio company’s estimated enterprise value based on said multiple
and generally the latest twelve months’ EBITDA of the portfolio company. Significant increases or decreases in enterprise
value may result in increases or decreases in the fair value estimate of the equity investment.





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The following is a reconciliation for the three months ended
March 31, 2016 and 2015 of investments for which significant unobservable inputs (Level 3) were used in determining fair value:



The valuation techniques and significant unobservable inputs
used in recurring Level 3 fair value measurements of assets as of March 31, 2016 were as follows:

|                                                                                                                                                                                                           |  |                                           |           |   |                                        |   |           |                               |  |   |              |  |  |       |           |  |  |   |           |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------- | --------- | - | -------------------------------------- | - | --------- | ----------------------------- |  | - | ------------ |  |  | ----- | --------- |  |  | - | --------- | -
|                                                                                                                                                                                                           |  | For the three months ended March 31, 2016 |          
|                                                                                                                                                                                                           |  | Senior Secured Loans - First
    Lien     |           |   | Senior Secured Loans - Second
    Lien |   |           | Subordinated Convertible Debt |  |   | Equity/Other |  |  | Total |          
|Fair value at beginning of period                                                                                                                                                                          |  | $                                         | 2,389,377 |   |                                        | $ | 1,041,875 |                               |  | $ | 609,219      |  |  | $     | 1,488,266 |  |  | $ | 5,528,737 |  
|Accretion of discount (amortization of premium)                                                                                                                                                            |  |                                           | 1,883     |   |                                        |   | 1,567     |                               |  |   | —            |  |  |       | —         |  |  |   | 3,450     |  
|Net realized gain (loss)                                                                                                                                                                                   |  |                                           | —         |   |                                        |   | —         |                               |  |   | —            |  |  |       | —         |  |  |   | —         |  
|Net change in unrealized appreciation (depreciation)                                                                                                                                                       |  |                                           | 14,861    |   |                                        |   | (41,568   | )                             |  |   | —            |  |  |       | 53,879    |  |  |   | 27,172    |  
|Purchases                                                                                                                                                                                                  |  |                                           | 716,250   |   |                                        |   | —         |                               |  |   | —            |  |  |       | —         |  |  |   | 716,250   |  
|Paid-in-kind interest                                                                                                                                                                                      |  |                                           | —         |   |                                        |   | —         |                               |  |   | 9,157        |  |  |       | —         |  |  |   | 9,157     |  
|Sales and redemptions                                                                                                                                                                                      |  |                                           | (13,136   | ) |                                        |   | —         |                               |  |   | —            |  |  |       | —         |  |  |   | (13,136   | )
|Net transfers in or out of Level 3                                                                                                                                                                         |  |                                           | —         |   |                                        |   | —         |                               |  |   | —            |  |  |       | —         |  |  |   | —         |  
|Fair value at end of period                                                                                                                                                                                |  | $                                         | 3,109,235 |   |                                        | $ | 1,001,874 |                               |  | $ | 618,376      |  |  | $     | 1,542,145 |  |  | $ | 6,271,630 |  
|                                                                                                                                                                                                           |  |                                           |           |   |                                        |   |           |                               |  |   |              |  |  |       |           |  |  |   |           |  
|The amount of total gains or losses for the period included in changes in net assets
    attributable to the change in unrealized gains or losses relating to investments still held at the reporting date |  | $                                         | 14,861    |   |                                        | $ | (41,568   | )                             |  | $ | —            |  |  | $     | 53,879    |  |  | $ | 27,172    |  





|                                                                                                                                                                                                               |  |                                          |           |                                        |   |                                   |   |              |         |       |   |           |  |   |           |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------- | --------- | -------------------------------------- | - | --------------------------------- | - | ------------ | ------- | ----- | - | --------- |  | - | --------- | -
|                                                                                                                                                                                                               |  | For
    the year ended December 31, 2015 |          
|                                                                                                                                                                                                               |  | Senior
    Secured Loans - First Lien    |           | Senior
    Secured Loans - Second Lien |   | Subordinated
Convertible
    Debt |   | Equity/Other |         | Total |  
|Fair value at beginning of period                                                                                                                                                                              |  | $                                        | 1,351,932 |                                        | $ | 119,375                           |   | $            | —       |       | $ | —         |  | $ | 1,471,307 |  
|Accretion of discount (amortization of premium)                                                                                                                                                                |  |                                          | 4,185     |                                        |   | 2,389                             |   |              | —       |       |   | —         |  |   | 6,574     |  
|Net realized gain (loss)                                                                                                                                                                                       |  |                                          | 7,321     |                                        |   | —                                 |   |              | —       |       |   | —         |  |   | 7,321     |  
|Net change in unrealized appreciation (depreciation)                                                                                                                                                           |  |                                          | (36,715   | )                                      |   | (23,014                           | ) |              | —       |       |   | 238,266   |  |   | 178,537   |  
|Purchases                                                                                                                                                                                                      |  |                                          | 1,477,625 |                                        |   | 943,125                           |   |              | 600,000 |       |   | 1,250,000 |  |   | 4,270,750 |  
|Paid-in-kind interest                                                                                                                                                                                          |  |                                          | —         |                                        |   | —                                 |   |              | 9,219   |       |   | —         |  |   | 9,219     |  
|Sales and redemptions                                                                                                                                                                                          |  |                                          | (414,971  | )                                      |   | —                                 |   |              | —       |       |   | —         |  |   | (414,971  | )
|Net transfers in or out of Level 3                                                                                                                                                                             |  |                                          | —         |                                        |   | —                                 |   |              | —       |       |   | —         |  |   | —         |  
|Fair value at end of period                                                                                                                                                                                    |  | $                                        | 2,389,377 |                                        | $ | 1,041,875                         |   | $            | 609,219 |       | $ | 1,488,266 |  | $ | 5,528,737 |  
|                                                                                                                                                                                                               |  |                                          |           |                                        |   |                                   |   |              |         |       |   |           |  |   |           |  
|The amount of total gains or losses for the
    period included in changes in net assets attributable to the change in unrealized gains or losses relating to investments
    still held at the reporting date |  | $                                        | (36,715   | )                                      | $ | (23,014                           | ) | $            | —       |       | $ | 238,266   |  | $ | 178,537   |  









The valuation techniques and significant
unobservable inputs used in recurring Level 3 fair value measurements of assets as of March 31, 2016 were as follows:

|                                |  |            |           |                             |                    |  |                     |                          |  |       |                |  |                  |       |  | 
|------------------------------- |  | ---------- | --------- | --------------------------- | ------------------ |  | ------------------- | ------------------------ |  | ----- | -------------- |  | ---------------- | ----- |  | 
|Asset Category                  |  | Fair Value |           | Primary Valuation Technique |                    |  | Unobservable Inputs |                          |  | Range |                |  | Weighted Average |      
|Senior Secured First Lien Debt  |  | $          | 3,109,235 |                             | Market quotes      |  |                     | Indicative dealer quotes |  |       | 89.00 - 100.75 |  |                  | 97.46 | 
|Senior Secured Second Lien Debt |  |            | 1,001,874 |                             | Market quotes      |  |                     | Indicative dealer quotes |  |       | 77.58 - 99.00  |  |                  | 89.70 | 
|Subordinated Debt               |  |            | 618,376   |                             | Market comparables |  |                     | Book value multiples (x) |  |       | 1.1x - 3.1x    |  |                  | 2.0x  | 
|Equity/Other                    |  |            | 750,000   |                             | Market comparables |  |                     | Book value multiples (x) |  |       | 1.1x - 3.1x    |  |                  | 2.0x  | 
|Equity/Other                    |  |            | 792,145   |                             | Market comparables |  |                     | EBITDA multiples (x)     |  |       | 8.15x          |  |                  | 8.15x | 
|Total                           |  | $          | 6,271,630 |                             |                    |  |                     |                          |  |       |                |  |                  |       | 





The valuation techniques and significant
unobservable inputs used in recurring Level 3 fair value measurements of assets as of December 31, 2015 were as follows:



|                                |  |            |           |                             |                    |  |                     |                          |  |       |                |  |                  |       |  | 
|------------------------------- |  | ---------- | --------- | --------------------------- | ------------------ |  | ------------------- | ------------------------ |  | ----- | -------------- |  | ---------------- | ----- |  | 
|Asset Category                  |  | Fair Value |           | Primary Valuation Technique |                    |  | Unobservable Inputs |                          |  | Range |                |  | Weighted Average |      
|Senior Secured First Lien Debt  |  | $          | 2,389,377 |                             | Market quotes      |  |                     | Indicative dealer quotes |  |       | 87.00 - 100.00 |  |                  | 97.36 | 
|Senior Secured Second Lien Debt |  |            | 1,041,875 |                             | Market quotes      |  |                     | Indicative dealer quotes |  |       | 83.17 - 99.88  |  |                  | 93.01 | 
|Subordinated Debt               |  |            | 609,219   |                             | Market comparables |  |                     | Book value multiples (x) |  |       | 1.2x - 2.6x    |  |                  | 1.9x  | 
|Equity/Other                    |  |            | 750,000   |                             | Market comparables |  |                     | Book value multiples (x) |  |       | 1.2x - 2.6x    |  |                  | 1.9x  | 
|Equity/Other                    |  |            | 738,266   |                             | Market comparables |  |                     | EBITDA multiples (x)     |  |       | 8.15x          |  |                  | 8.15x | 
|Total                           |  | $          | 5,528,737 |                             |                    |  |                     |                          |  |       |                |  |                  |       | 







20





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NOTE 8 – FINANCIAL HIGHLIGHTS



The following is a schedule of financial highlights of the
Company for the three months ended March 31, 2016 and the year ended December 31, 2015:

|                                                                                |  |                                                   |           |   |                                   |   |           |  
|------------------------------------------------------------------------------- |  | ------------------------------------------------- | --------- | - | --------------------------------- | - | --------- | -
|                                                                                |  | Three Months Ended
    March 31, 2016 (Unaudited) |           |   | Year Ended
 December
    31, 2015 |  
|Per Share Data:                                                                 |  |                                                   |           |   |                                   |   |           |  
|Net asset value, beginning of period                                            |  | $                                                 | 13.75     |   |                                   | $ | 13.50     |  
|Results of operations(1)                                                        |  |                                                   |           |   |                                   |   |           |  
|Net investment income (loss)                                                    |  |                                                   | 0.12      |   |                                   |   | 0.41      |  
|Net realized and unrealized appreciation (depreciation) on investments          |  |                                                   | 0.05      |   |                                   |   | 0.41      |  
|Net increase (decrease) in net assets resulting from operations                 |  |                                                   | 0.17      |   |                                   |   | 0.82      |  
|Stockholder distributions(2)                                                    |  |                                                   |           |   |                                   |   |           |  
|Distributions from net investment income                                        |  |                                                   | (0.14     | ) |                                   |   | (0.55     | )
|Distributions from net realized gain on investments                             |  |                                                   | —         |   |                                   |   | (0.02     | )
|Net decrease in net assets resulting from stockholder distributions             |  |                                                   | (0.14     | ) |                                   |   | (0.57     | )
|Capital share transactions                                                      |  |                                                   |           |   |                                   |   |           |  
|Issuance of common stock(3)                                                     |  |                                                   | (0.05     | ) |                                   |   | 0.03      |  
|Offering costs(1)                                                               |  |                                                   | —         |   |                                   |   | (0.03     | )
|Net increase (decrease) in net assets resulting from capital share transactions |  |                                                   | (0.05     | ) |                                   |   | —         |  
|Net asset value, end of period                                                  |  | $                                                 | 13.73     |   |                                   | $ | 13.75     |  
|Shares outstanding, end of period                                               |  |                                                   | 682,942   |   |                                   |   | 532,978   |  
|Total return(4)                                                                 |  |                                                   | 0.8       | % |                                   |   | 6.1       | %
|Ratio/Supplemental Data:                                                        |  |                                                   |           |   |                                   |   |           |  
|Net assets, end of period                                                       |  | $                                                 | 9,376,181 |   |                                   | $ | 7,326,653 |  
|Ratio of net investment income to average net assets                            |  |                                                   | 0.9       | % |                                   |   | 3.0       | %
|Ratio of total operating expenses to average net assets                         |  |                                                   | 2.0       | % |                                   |   | 13.4      | %
|Ratio of expenses reimbursed by sponsor to average net assets                   |  |                                                   | 1.9       | % |                                   |   | 12.7      | %
|Ratio of expense recoupment payable to sponsor to average net assets(5)         |  |                                                   | 0.0       | % |                                   |   | 0.0       | %
|Ratio of capital gain incentive fee to average net assets                       |  |                                                   | 0.07      | % |                                   |   | 0.80      | %
|Ratio of net operating expenses to average net assets                           |  |                                                   | 0.1       | % |                                   |   | 0.8       | %
|Portfolio turnover(5)                                                           |  |                                                   | 0.2       | % |                                   |   | 9.0       | %





|(1) | The per share data was derived by using the weighted average shares outstanding for the three months ended March 31, 2016 and the year ended December 31, 2015.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | The per share data for distributions reflects the actual amount of distributions paid per share during the applicable period.
|--- | -----------------------------------------------------------------------------------------------------------------------------



|(3) | The issuance of common stock on a per share basis reflects the incremental net asset value changes as a result of the issuance of shares of common stock in the Company’s continuous public offering and pursuant to the Company’s distribution reinvestment plan. The issuance of common stock at an offering price, net of sales commissions and dealer manager fees, that is greater or less than the net asset value per share results in an increase or decrease in net asset value per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(4) | The total return for each period presented was calculated by taking the net asset value per share as of the end of the applicable period, adding the cash distributions per share which were declared during the applicable calendar year and dividing the total by the net asset value per share at the beginning of the applicable year. The total return does not consider the effect of the sales load from the sale of the Company’s common stock. The total return includes the effect of the issuance of shares at a net offering price that is greater than net asset value per share, which causes an increase in net asset value per share. The historical calculation of total return in the table should not be considered a representation of the Company’s future total return, which may be greater or less than the return shown in the table due to a number of factors, including the Company’s ability or inability to make investments in companies that meet its investment criteria, the interest rate payable on the debt securities the Company acquires, the level of the Company’s expenses, variations in and the timing of the recognition of realized and unrealized gains or losses, the degree to which the Company encounters competition in its markets and general economic conditions. As a result of these factors, results for any previous period should not be relied upon as being indicative of performance in future periods. The total return calculations set forth above represent the total return on the Company’s investment portfolio during the applicable period and are calculated in accordance with GAAP. These return figures do not represent an actual return to stockholders.
|(5) | Portfolio turnover for the three months ended March 31, 2016 is not annualized.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        





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NOTE 9 – COMMITMENTS AND CONTINGENCIES



The Company enters into contracts that contain a variety of
indemnification provisions. The Company’s maximum exposure under these arrangements is unknown; however, the Company has
not had prior claims or losses pursuant to these contracts. Management has reviewed the Company’s existing contracts and
expects the risk of loss to the Company to be remote.



The Company is not currently subject to any material legal
proceedings and, to the Company’s knowledge, no material legal proceedings are threatened against the Company. From time
to time, the Company may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating
to the enforcement of the Company’s rights under contracts with its portfolio companies. While the outcome of these legal
proceedings cannot be predicted with certainty, the Company does not expect that any such proceedings will have a material effect
upon its financial condition or results of operations.



NOTE 10 – SUBSEQUENT EVENTS



Management has evaluated all known subsequent events through
the date the accompanying financial statements were available to be issued on May 16, 2016, and notes the following:



For the period beginning April 1, 2016 and ending May 16, 2016,
the Company sold 92,560.29 shares of its common stock for total gross proceeds of $1,394,293, and issued amounts pursuant to its
distribution reinvestment plan in the amount of $18,372.



22





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|Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|----------------------------------------------------------------------------------------------



The following discussion and analysis should
be read in conjunction with our financial statements and related notes and other financial information appearing elsewhere in this
quarterly report on Form 10-Q.



Except as otherwise specified, references
to “we,” “us,” “our,” or the “Company,” refer to Triton Pacific Investment Corporation,
Inc.



Forward-Looking Statements



Some of the statements in this quarterly
report on Form 10-Q constitute forward-looking statements, which relate to future events or our performance or financial condition.
The forward-looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties, including, but
not limited to, statements as to:



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



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



| | • |  | changes in the economy;
| | - |  | -----------------------



| | • |  | risk associated with possible disruptions in our operations or the economy generally;
| | - |  | -------------------------------------------------------------------------------------



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



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



| | • |  | actual and potential conflicts of interest with Triton Pacific Adviser, LLC and its affiliates;
| | - |  | -----------------------------------------------------------------------------------------------



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



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



| | • |  | the use of borrowed money to finance a portion of our investments;
| | - |  | ------------------------------------------------------------------



| | • |  | the adequacy of our financing sources and working capital;
| | - |  | ----------------------------------------------------------



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



| | • |  | the ability of Triton Pacific Adviser, LLC and its Sub-Adviser to locate suitable investments for us and to monitor and administer our investments;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------



| | • |  | the ability of Triton Pacific Adviser, LLC, its Sub-Adviser and its affiliates to attract and retain highly talented professionals;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------



| | • |  | our ability to qualify and maintain our qualification as a RIC and as a BDC; and
| | - |  | --------------------------------------------------------------------------------



| | • |  | the effect of changes in laws or regulations affecting our operations or to tax legislation and our tax position.
| | - |  | -----------------------------------------------------------------------------------------------------------------



Such forward-looking statements may include
statements preceded by, followed by or that otherwise include the words “trend,” “opportunity,” “pipeline,”
“believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,”
“estimate,” “position,” “assume,” “potential,” “outlook,” “continue,”
“remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions,
or future or conditional verbs such as “will,” “would,” “should,” “could,” “may,”
or similar expressions. The forward looking statements contained in this annual report involve risks and uncertainties. Our actual
results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the
factors set forth as “Risk Factors” in this report and in our last effective registration statement filed on form N-2
dated March 16, 2016, filed with the Securities and Exchange Commission (the “SEC”) on the same day.



We have based the forward-looking statements
included in this report on information available to us on the date of this report, and we assume no obligation to update any such
forward-looking statements. Actual results could differ materially from those anticipated in our forward-looking statements, and
future results could differ materially from historical performance. Although we undertake no obligation to revise or update any
forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any
additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the
SEC, including quarterly reports on Form 10-Q, annual reports on Form 10-K, and current reports on Form 8-K.



23





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Overview



We are a publically registered, non-traded
fund focused on private equity, structured as a business development company that primarily makes equity, structured equity, and
debt investments in small to mid-sized private U.S. companies.  Structured equity refers to derivative investment products,
including convertible notes and warrants, designed to facilitate highly customized risk-return objectives. Our private equity investments
will generally take the form of direct investments in common and preferred equity, as well as structured equity investments such
as convertible notes and warrants. We are an externally managed, closed-end, non-diversified management investment company that
has elected to be treated as a business development company under the Company Act. Triton Pacific Adviser, LLC (“Triton Pacific
Adviser”), which is a registered investment adviser under the Investment Advisers Act of 1940, as amended, (the “Advisers
Act”) serves as our investment adviser and TFA Associates, LLC serves as our administrator. Each of these companies is affiliated
with Triton Pacific Group, Inc., a private equity investment management firm, and its subsidiary, Triton Pacific Capital Partners,
LLC (“TPCP”), a private equity investment fund management company, each focused on debt and equity investments in small
to mid-sized private companies.



We primarily make debt investments likely
to generate current income and equity investments in small to mid-sized private U.S. companies either alone or together with other
private equity sponsors. Our investment objective is to generate current income and long term capital appreciation.



Triton Pacific Adviser is responsible for
sourcing potential investments, conducting due diligence on prospective investments, analyzing investment opportunities, structuring
investments and monitoring our portfolio on an ongoing basis. In addition, we have elected and intend to annually qualify to be
treated, for U.S. federal income tax purposes, as a regulated investment company (“RIC”), under subchapter M of the
Internal Revenue Code of 1986, as amended (the “Code”).



Our investment objectives are to maximize
our investment portfolio’s total return by generating long-term capital appreciation from our private equity investments
and current income from our debt investments. We intend to make both our debt and private equity investments in small to mid-sized
private U.S. companies either alone or together with other private equity sponsors.



We are offering for sale a maximum of $300,000,000
of our common stock. We commenced our initial continuous public offering of shares through
our initial registration statement (File No. 333-174873) that was declared effective by the SEC on September 4, 2012. Rule 415
promulgated under the Securities Act requires that a registration statement not be used for more than three years from its effective
date, subject to a 180-day grace period. On September 2, 2015, we filed a registration statement with the SEC (File No. 333-206730)
in order to continue our continuous public offering of shares for an additional three years or until all of the shares registered
herein are sold. The registration statement for our follow-on offering was declared effective by the SEC on March 17, 2016.As
of May 16, 2016, we have sold a total of 776,833.80 shares of common stock for gross proceeds of approximately $11,443,711, including
shares issued pursuant to its distribution reinvestment plan in the amount of $156,472, and 14,815 shares of common stock sold
to Triton Pacific Adviser in exchange for gross proceeds of $200,003.



Our investment objective is to maximize
our portfolio’s total return by generating current income from our debt investments and long term capital appreciation from our
equity investments. We will seek to meet our investment objectives by:



-Focusing primarily on debt and equity investments
in small and mid-sized private U.S. companies, which we define as companies with annual revenue of from $10 million to $ 250 million
at the time of investment;



-Leveraging the experience and expertise of our Adviser,
its Sub-Adviser and its affiliates in sourcing, evaluating and structuring transactions;



-Employing disciplined underwriting policies and
rigorous portfolio management;



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-Developing our equity portfolio through our Adviser’s
Value Enhancement Program, more fully discussed below in “Investment Objectives and Policies – Investment Process”;
and



-Maintaining a well balanced portfolio.



We intend to be active in both debt and
equity investing. We will seek to provide current income to our investors through our debt investments while seeking to enhance
our investors’ overall returns through long term capital appreciation of our equity investments. We intend to be opportunistic
in our investment approach, allocating our investments between debt and equity, depending on:



-Investment opportunities



-Market conditions



-Perceived Risk



Depending on the amount of capital we raise
in the Offering and subject to subsequent changes in our capital base, we expect that our investments will generally range between
$250,000 and $25 million per portfolio company, although this range may change in the discretion of our Adviser, subject to oversight
by our board of directors. Prior to raising sufficient capital to finance investments in this range and as a strategy to manage
excess cash, we may make smaller and differing types of investments in, for example, high quality debt securities, and other public
and private yield-oriented debt and equity securities, directly and through our Sub-Adviser.



Our Adviser has engaged ZAIS to act as our
investment sub-adviser. ZAIS assists our Adviser with identifying, evaluating, negotiating and structuring syndicated debt investments
and makes investment recommendations for approval by our Adviser. ZAIS is a Delaware limited liability company and is a registered
investment adviser under the Advisers Act and had approximately $4.157 billion in assets under management as of December 31, 2015.
ZAIS is not an affiliate of us or our Adviser and does not own any of our shares.



We will generally source our private equity
investments through third party intermediaries and our debt investments primarily through our Adviser and Sub-Adviser. We will
invest only after we conduct a thorough evaluation of the risks and strategic opportunities of an investment and a price (or interest
rate in the case of debt investments) has been established that reflects the intrinsic value of the investment opportunity. We
will endeavor to identify the best exit strategy for each private equity investment, including methodology (for example, a sale,
company redemption, or public offering) and an appropriate time horizon. We will then attempt to influence the growth and development
of each portfolio company accordingly to maximize our potential return on investment using such exit strategy or another strategy
that may become preferable due to changing market conditions. We anticipate that the holding period for most of our private equity
investments will range from four to six years, but we will be flexible in order to take advantage of market opportunities or to
overcome unfavorable market conditions.



We intend to generate the majority of our
current income by investing in senior secured loans, second lien secured loans and, to a lesser extent, subordinated loans of small
to mid-sized private U.S. companies. We may purchase interests in loans through secondary market transactions in the “over-the-counter”
market for institutional loans or directly from our target companies as primary market investments. In connection with our debt
investments, we may on occasion receive equity interests such as warrants or options as additional consideration. The senior secured
and second lien secured loans in which we invest generally will have stated terms of three to seven years and any subordinated
investments that we make generally will have stated terms of up to ten years. However, there is no limit on the maturity or duration
of any security we may hold in our portfolio. The loans in which we intend to invest are often rated by a nationally recognized
ratings organization, and generally carry a rating below investment grade (rated lower than “Baa3” by Moody’s
Investors Service or lower than “BBB-” by Standard & Poor’s Corporation – also known as “junk
bonds”). However, we may also invest in non-rated debt securities.





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As a BDC, we are subject to certain regulatory
restrictions in making our investments. For example, we generally will not be permitted to co-invest alongside our Adviser, including
TPCP and certain of its affiliates, unless we obtain an exemptive order from the SEC or the transaction is otherwise permitted
under existing regulatory guidance, such as syndicated transactions where price is the only negotiated term, and approval from
our independent directors. We have applied for an exemptive relief order for co-investments, though there is no assurance that
such exemptions will be granted, and in either instance, conflicts of interests with affiliates of our Adviser might exist. Should
such conflicts of interest arise, we and the Adviser have developed policies and procedures for dealing with such conflicts which
require the Adviser to (i) execute such transactions for all of the participating investment accounts, including ours, on a fair
and equitable basis, taking into account such factors as the relative amounts of capital available for new investments, the then-current
investment objectives and portfolio positions of each party, and any other factors deemed appropriate and (ii) endeavor to obtain
the advice of Adviser personnel not directly involved with the investment giving rise to the conflict as to such appropriateness
and other factors as well as the fairness to all parties of the investment and its terms. We intend to make all of our investments
in compliance with the Company Act and in a manner that will not jeopardize our status as a BDC or RIC.



As a BDC, we are permitted under the Company
Act to borrow funds to finance portfolio investments. To enhance our opportunity for gain, we intend to employ leverage as market
conditions permit, but, as required under the Company Act, in no event will our leverage exceed 50% of the value of our assets.
While we have not yet determined the amount of leverage we will use, we do not currently anticipate that we would approach the
50% maximum level frequently or at all. The use of leverage, although it may increase returns, may also increase the risk of loss
to our investors, particularly if the level of our leverage is high and the value of our investments declines.



Revenues



We generate revenue in the form of dividends,
interest and capital gains on the debt securities and equity interests that we hold. In addition, we may generate revenue from
our portfolio companies in the form of commitment, origination, structuring or diligence fees, monitoring fees, fees for providing
managerial assistance and possibly consulting fees and performance-based fees. Any such fees will be recognized as earned.



Expenses



Our primary operating expenses will be the
payment of advisory fees and other expenses under the proposed investment adviser agreement. The advisory fees will compensate
our Adviser for its work in identifying, evaluating, negotiating, executing, monitoring and servicing our investments.



We will bear all other expenses of our operations
and transactions, including (without limitation) fees and expenses relating to:



| | · | corporate and organizational expenses
relating to offerings of our common stock, subject to limitations included in the investment advisory and management services agreement;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | the cost of calculating our net asset
value, including the cost of any third-party valuation services;
| | - | ------------------------------------------------------------------------------------------------------



| | · | the cost of effecting sales and repurchase
of shares of our common stock and other securities;
| | - | ----------------------------------------------------------------------------------------------



| | · | investment advisory fees;
| | - | -------------------------



| | · | fees payable to third parties relating
to, or associated with, making investments and valuing investments, including fees and expenses associated with performing due
diligence reviews of prospective investments;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | transfer agent and custodial fees;
| | - | ----------------------------------



| | · | fees and expenses associated with marketing
efforts;
| | - | ----------------------------------------------------



| | · | federal and state registration fees;
| | - | ------------------------------------





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| | · | federal, state and local taxes;
| | - | -------------------------------



| | · | independent directors’ fees and
expenses;
| | - | -----------------------------------------



| | · | costs of proxy statements, stockholders’
reports and notices;
| | - | -------------------------------------------------------------



| | · | fidelity bond, directors and officers/errors
and omissions liability insurance and other insurance premiums;
| | - | ------------------------------------------------------------------------------------------------------------



| | · | direct costs such as printing, mailing,
long distance telephone, and staff;
| | - | ---------------------------------------------------------------------------



| | · | fees and expenses associated with independent
audits and outside legal costs, including compliance with the Sarbanes-Oxley Act;
| | - | -------------------------------------------------------------------------------------------------------------------------------



| | · | costs associated with our reporting and
compliance obligations under the Company Act and applicable federal and state securities laws;
| | - | --------------------------------------------------------------------------------------------------------------------------------------



| | · | brokerage commissions for our investments;
| | - | ------------------------------------------



| | · | legal, accounting and other costs associated
with structuring, negotiating, documenting and completing our investment transactions;
| | - | -----------------------------------------------------------------------------------------------------------------------------------



| | · | all other expenses incurred by our Adviser,
in performing its obligations, subject to the limitations included in the investment adviser agreement; and
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | all other expenses incurred by either
our Administrator or us in connection with administering our business, including payments to our Administrator under the administration
agreement that will be based upon our allocable portion of its overhead and other expenses incurred in performing its obligations
under the administration agreement, including rent and our allocable portion of the costs of compensation and related expenses
of our chief executive officer, chief compliance officer and chief financial officer and their respective staffs.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Reimbursement of TFA Associates, LLC for Administrative Services



We will reimburse TFA Associates for the
administrative expenses necessary for its performance of services to us. Such costs will be reasonably allocated to us on the basis
of assets, revenues, time records or other reasonable methods. However, such reimbursement is made in an amount equal to the lower
of the Administrator’s actual costs or the amount that we would be required to pay for comparable administrative services
in the same geographic location. We will not reimburse our Administrator for any services for which it receives a separate fee
or for rent, depreciation, utilities, capital equipment or other administrative items allocated to a controlling person of TFA
Associates.



Portfolio and Investment Activity



During the three months ended March 31,
2016, we made investments in portfolio companies totaling $716,250. During the same period, we did not sell any investments and
received principal repayments of $13,136. As of March 31, 2016, our investment portfolio, with a total fair value of $6,271,630,
consisted of interests in 25 portfolio companies (49.6% in first lien senior secured loans, 16.0% in second lien senior secured
loans, 9.9% in subordinated convertible debt and 24.6% in equity). The portfolio companies that comprised our portfolio as of such
date had an average annual EBITDA of approximately $129.2 million. As of March 31, 2016, the investments in our debt portfolio
were purchased at a weighted average price of 97.5% of par or stated value, and the weighted average credit rating of the investments
in our portfolio that were rated (constituting 65.5% of our portfolio based on the fair value of our investments) was B2 based
upon the Moody’s scale. Our estimated gross annual portfolio yield was 5.58% based upon the amortized cost of our investments
and was 7.03% on the debt portfolio alone. Our gross annual portfolio yield represents the expected yield to be generated by us
on our investment portfolio based on the composition of our portfolio as of March 31, 2016. The portfolio yield does not represent
an actual investment return to stockholders.



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Total Portfolio Activity



The following tables
present certain selected information regarding our portfolio investment activity for the three months ended March 31, 2016 and
the year ended December 31, 2015:



The following table
presents the composition of the total purchases for the three months ended March 31, 2016 and the year ended December 31, 2015.



|                        |  |                                           |         |   |                                      |  
|----------------------- |  | ----------------------------------------- | ------- | - | ------------------------------------ | -
|Net Investment Activity |  | Three
    months ended
    March 31, 2016 |         |   | Year
    ended
    December 31, 2015 |  
|Purchases               |  | $                                         | 716,250 |   |                                      | $
|Sales and Redemptions   |  |                                           | (13,136 | ) |                                      |  
|Net Portfolio Activity  |  | $                                         | 703,114 |   |                                      | $



The following tables summarize
the composition of our investment portfolio at amortized cost and fair value as of March 31, 2016 and December 31, 2015:



|                                 |  | Three
    months ended March 31, 2016 |           |  |                               |                                                                       |           |                                              |  |  |                                      |   |  |                               |          
|-------------------------------- |  | ------------------------------------- | --------- |  | ----------------------------- | --------------------------------------------------------------------- | --------- | -------------------------------------------- |  |  | ------------------------------------ | - |  | ----------------------------- | ---------
|                                 |  | (Unaudited)                           |           |  |                               | Year
                                         Ended December 31, 2015 |          
|                                 |  | Investments
    at Amortized Cost(1)  |           |  | Investments
    at Fair Value |                                                                       |           | Fair
    Value Percentage of Total Portfolio |  |  | Investments
    at Amortized Cost(1) |   |  | Investments
    at Fair Value |          
|Senior Secured Loans—First Lien  |  | $                                     | 3,131,086 |  |                               | $                                                                     | 3,109,235 |                                              |  |  | 50                                   | % |  | $                             | 2,426,089
|Senior Secured Loans—Second Lien |  |                                       | 1,067,248 |  |                               |                                                                       | 1,001,874 |                                              |  |  | 16                                   | % |  |                               | 1,065,681
|Subordinated Debt                |  |                                       | 618,376   |  |                               |                                                                       | 618,376   |                                              |  |  | 10                                   | % |  |                               | 609,219  
|Equity/Other                     |  |                                       | 1,250,000 |  |                               |                                                                       | 1,542,145 |                                              |  |  | 24                                   | % |  |                               | 1,250,000
|Total                            |  | $                                     | 6,066,710 |  |                               | $                                                                     | 6,271,630 |                                              |  |  | 100                                  | % |  | $                             | 5,350,989



(1) Amortized cost
represents the original cost adjusted for the amortization of premiums and/or accretion of discounts, as applicable, on investments.



|                                                                         |  | March
    31, 2016 |         |  | December 31, 2015 | 
|------------------------------------------------------------------------ |  | ------------------ | ------- |  | ----------------- | 
|Number of Portfolio Companies                                            |  |                    | 25      |  |                   | 
|% Variable Rate (based on fair value)                                    |  |                    | 65.5%   |  |                   | 
|% Fixed Rate (based on fair value)                                       |  |                    | 9.9%    |  |                   | 
|% Non-Income Producing Equity or Other Investments (based on fair value) |  |                    | 24.6%   |  |                   | 
|Average Annual EBITDA of Portfolio Companies                             |  |                    | 129.2MM |  |                   | 
|Weighted Average Credit Rating of Investments that were Rated            |  |                    | B2      |  |                   | 
|% of Investments on Non-Accrual                                          |  |                    | —       |  |                   | 
|Gross Portfolio Yield Prior to Leverage (based on amortized cost)        |  |                    | 5.6%    |  |                   | 





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The table below describes
investments by industry classification and enumerates the percentage, by fair value, of the total portfolio assets in such industries
as of March 31, 2016 and December 31, 2015:



|                                         |  | March 31, 2016(Unaudited) |           |  | December 31, 2015      | 
|---------------------------------------- |  | ------------------------- | --------- |  | ---------------------- | 
|Industry Classification                  |  | FairValue                 |           |  | Percentage ofPortfolio | 
|Automotive Repair, Services, and Parking |  | $                         | 121,738   |  |                        | 
|Beverage, Food & Tobacco                 |  |                           | 450,313   |  |                        | 
|Business Services                        |  |                           | 889,487   |  |                        | 
|Consumer Services                        |  |                           | 234,063   |  |                        | 
|Healthcare & Pharmaceuticals             |  |                           | 1,499,273 |  |                        | 
|High Tech Industries                     |  |                           | 935,175   |  |                        | 
|Metals & Mining                          |  |                           | 197,708   |  |                        | 
|Paper and Allied Products                |  |                           | 111,685   |  |                        | 
|Specialty Finance                        |  |                           | 1,368,376 |  |                        | 
|Transportation: Cargo                    |  |                           | 121,370   |  |                        | 
|Wholesale Trade-Durable Goods            |  |                           | 123,540   |  |                        | 
|Wholesale Trade-Nondurable Goods         |  |                           | 218,902   |  |                        | 
|Total                                    |  | $                         | 6,271,630 |  |                        | 



We do not “control”
any of our portfolio companies, each as defined in the Company Act. We are an affiliate of two portfolio companies, Javlin Capital,
LLC (held through TPJ Holdings, Inc. and a convertible note) and Injured Workers Pharmacy, LLC (held through ACON IWP Investors
I, L.L.C.). In general, under the Company 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.



Portfolio Asset Quality



In
addition to various risk management and monitoring tools, our Subadviser uses an investment rating system to characterize and
monitor the expected level of returns on each investment in our debt portfolio. All of the investments included in our Subadviser’s
rating systems refer to non-rated debt securities or rated debt securities that carry a rating below investment grade (rated lower
than “Baa3” by Moody’s Investors Service or lower than “BBB-” by Standard & Poor’s Corporation
also known as “junk bonds”). These ratings are on a scale of 1 to 8 as follows:



| | 1. | Highest
                                         quality obligors, minimal medium term default risk; possibly moving towards investment
                                         grade status.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | High
                                         quality obligors, but not likely to move towards investment grade in the medium term;
                                         performing at or in excess of expected levels; solid liquidity; conservative credit statistics.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. | Credits
                                         of with a history of performing with leverage (repeat issuers); moderate credit statistics
                                         currently performing at or in excess of expected levels; solid liquidity; no expectation
                                         of covenant defaults or third party ratings downgrades.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. | Credits
                                         new to the leveraged loan universe; currently performing within a range of expected performance;
                                         moderate to aggressive credit statistics.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. | Credits
                                         new to the leveraged loan universe; currently performing within a range of expected performance;
                                         aggressive credit statistics or weak industry characteristics.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 6. | Credits
                                         placed in this category are experiencing potential liquidity problems but the issues
                                         are not imminent (more than 12 months).
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 7. | Credits
                                         placed in this category are experiencing nearer-term liquidity problems (within 12 months).
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------



| | 8. | Credits
                                         placed in this category have experienced either a technical or actual payment default
                                         which may require a write-down within our respective portfolios.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Categories 1 through 5 are performing in line with
expectation, while categories 6-8 are closely watched for or have experienced liquidity problems and/or default.



The following table shows the distribution of our
investments on the 1 to 8 scale at fair value as of March 31, 2016 and December 31, 2015:





|                      |   |  | March
    31, 2016 |   |           | December 31,
    2015 | 
|--------------------- | - |  | ------------------ | - | --------- | --------------------- | 
|Investment
    Rating |   |  | Fair
    Value     |   |           | Percentage            | 
|                      | 1 |  |                    | $ | —         |                       | 
|                      | 2 |  |                    |   | 123,540   |                       | 
|                      | 3 |  |                    |   | 668,957   |                       | 
|                      | 4 |  |                    |   | 2,056,177 |                       | 
|                      | 5 |  |                    |   | 1,262,435 |                       | 
|                      | 6 |  |                    |   | —         |                       | 
|                      | 7 |  |                    |   | —         |                       | 
|                      | 8 |  |                    |   | —         |                       | 
|                      |   |  |                    | $ | 4,111,109 |                       | 





Results of Operations



Investment Income



For the three months ended March 31, 2016
and 2015, we generated $80,830 and $28,530, respectively, in investment income in the form of interest and fees earned on senior
secured loans. Such revenues represent $68,223 of cash income and $12,607 in non-cash portions related to the accretion of discounts
and paid-in-kind interest for the three months ended March 31, 2016. We expect the dollar amount of interest that we earn to
continue to increase as the size of our investment portfolio increases.



Operating Expenses



Total operating expenses before reimbursement
from the sponsor and management fee waiver totaled $163,430  for the three months ended March 31, 2016, and consisted of base management fees, adviser and administrator reimbursements, professional fees, insurance expense, directors’
fees and other general and administrative fees. The base management fees for the quarter were $43,154 and the incentive fees for
the quarter were $5,434. Pursuant to the Expense Reimbursement Agreement (discussed below), the sponsor reimbursed the Company
$157,996 for the three months ended March 31, 2016.



Total operating expenses before reimbursement
from the sponsor and management fee waiver totaled $134,301 for the three months ended March 31, 2015, and consisted of base management
fees, adviser and administrator reimbursements, professional fees, insurance expense, directors’ fees and other general and
administrative fees. The base management fees for the quarter were $18,408 and the incentive fees for the quarter were $5,964.   Pursuant
to the Expense Reimbursement Agreement (discussed below), the sponsor reimbursed the Company $134,301 for the three months ended
March 31, 2015.





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Our other general and administrative expenses
totaled $1,709 and $2,350 for the three months ended March 31, 2016 and 2015, respectively and consisted of the following:





|                     |  | Three months ended
March 31, 2016 |       |  | Three months ended
March 31, 2015 |  
|-------------------- |  | --------------------------------- | ----- |  | --------------------------------- | -
|Printing fees        |  | $                                 | 364   |  |                                   | $
|Licenses and permits |  |                                   | 1,054 |  |                                   |  
|Other                |  |                                   | 291   |  |                                   |  
|Total                |  | $                                 | 1,709 |  |                                   | $





Net Investment Income



Our net investment income totaled $75,396
and $28,530 ($0.12 and $0.12 per share based on weighted average shares outstanding) for the three months ended March 31, 2016
and 2015, respectively.



Net Realized Gains/Losses from Investments



We measure realized gains or losses by the
difference between the net proceeds from the disposition and the amortized cost basis of investment, without regard to unrealized
gains or losses previously recognized.



For the three months ended March 31, 2016,
we  received principal payments of $13,136. For the three months
ended March 31, 2015, we sold investments and received principal payments of $133,306, from which we realized a net gain of $3,542.



Net Unrealized Appreciation/Depreciation on Investments



Net change in unrealized appreciation on
investments reflects the net change in the fair value of our investment portfolio. For the three months ended March 31, 2016 and
2015, net unrealized appreciation totaled $27,173 and $27,069, respectively.



Changes
in Net Assets from Operations



For the three months ended March 31, 2016,
we recorded a net income of $102,569 versus net income of $59,141 for the three months ended March 31, 2015.



Based on 603,230 weighted average common
shares outstanding for the three months ended March 31, 2016, basic and diluted, our per share net increase in net assets resulting
from operations was $0.17.



Based on 235,886 weighted average common
shares outstanding for the three months ended March 31, 2015, basic and diluted, our per share net increase in net assets resulting
from operations was $0.25



Financial Condition, Liquidity and Capital Resources



We generate cash primarily from the net
proceeds of our offering, and from cash flows from fees (such as management fees), interest and dividends earned from our investments
and principal repayments and proceeds from sales of our investments. Our primary use of funds is investments in companies, and
payments of our expenses and distributions to holders of our common stock.



The offering of our common stock represents
a continuous offering of our shares. The initial offering of our common stock commenced on September 4, 2012 and terminated on
March 1, 2016. On March 17, 2016, we commenced the follow-on offering of our common stock, which follow-on offering is currently
ongoing. We intend to file post-effective amendments to our registration statement to allow us to continue our offering for three
years. The Dealer Manager is not required to sell any specific number or dollar amount of shares but will use its best efforts
to sell the shares offered. The minimum investment in shares of our common stock is $5,000.





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The current offering price for our shares
is $15.33 per share; however, to the extent our net asset value increases, we will sell at a price necessary to ensure that shares
are not sold at a price per share, after deduction of selling commissions and dealer manager fees, that is below our net asset
value per share. In connection with each closing, our board of directors or a committee thereof is required, within 48 hours of
the time that each closing and sale is made, to make the determination that we are not selling shares of any class of our common
stock at a price per share which, after deducting upfront selling commissions, if any, is below the then-current net asset value
per share of the applicable class. Promptly following any such adjustment to the offering price per share, we will file a prospectus
supplement with the SEC disclosing the adjusted offering price, and we appropriately publish the updated information. The Dealer
Manager for this offering is an affiliate of our Adviser.



During the three months ended March
31, 2016, we sold 149,027.05 shares of our common stock for gross proceeds of $2,163,173 at an average price per share of
$14.70. The increase in Capital in excess of par during the three months ended March 31, 2016 include reinvested
stockholder distributions of $41,346 for which we issued 2,937.41 shares of common stock. The sales commissions and dealer
manager fees related to the sale of our common stock were $175,568 for the three months ended March 31, 2016. These sales
commissions and fees include $47,841 retained by the dealer manager, Triton Pacific Securities, LLC, which is an affiliate of
ours.Our offering expenses are capitalized as deferred offering expenses and then
subsequently expensed over a 12-month period.



We may borrow funds to make investments
at any time, including before we have fully invested the proceeds of our offering, to the extent we determine that additional capital
would allow us to take advantage of investment opportunities, or if our board of directors determines that leveraging our portfolio
would be in our best interests and the best interests of our stockholders. We have not yet decided, however, whether, and to what
extent, we will finance portfolio investments using debt. We do not currently anticipate issuing any preferred stock.



Contractual Obligations



We have entered into certain contracts
under which we have material future commitments. On July 27, 2012, we entered into the investment advisory agreement with Triton
Pacific Adviser, LLC in accordance with the 1940 Act. The investment advisory agreement became effective on June 25, 2014, the
date that we met the minimum offering requirement. Triton Pacific Adviser serves as our investment advisor in accordance with
the terms of our investment advisory agreement. Payments under our investment advisory agreement in each reporting period will
consist of (i) a management fee equal to a percentage of the value of our gross assets and (ii) a capital gains incentive fee
based on our performance.



On July 27, 2012, we entered into the administration
agreement with TFA Associates, LLC pursuant to which TFA Associates furnishes us with administrative services necessary to conduct
our day-to-day operations. TFA Associates is reimbursed for administrative expenses it incurs on our behalf in performing its obligations.
Such costs are reasonably allocated to us on the basis of assets, revenues, time records or other reasonable methods. We do not
reimburse TFA Associates for any services for which it receives a separate fee or for rent, depreciation, utilities, capital equipment
or other administrative items allocated to a controlling person of TFA Associates. At the time of our offering, our Administrator
has contracted with Bank of New York Mellon and affiliated entities to provide additional administrative services, while we have
directly engaged Bank of New York Mellon and affiliated entities to act as our custodian. We have also contracted with Gemini Fund
Services to act as our transfer agent, plan administrator, distribution paying agent and registrar.



If any of our contractual obligations discussed
above are terminated, our costs may increase under any new agreements that we enter into as replacements. We would also likely
incur expenses in locating alternative parties to provide the services we expect to receive under the investment advisory agreement
and administration agreement. Any new investment advisory agreement would also be subject to approval by our stockholders.



Off-Balance Sheet Arrangements



Other than contractual commitments and
other legal contingencies incurred in the normal course of our business, we do not have any off-balance sheet financings or liabilities.





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Distributions



We elected to be treated, beginning with
our fiscal year ending December 31, 2012, and intend to qualify annually thereafter, as a RIC under the Code. To obtain and maintain
RIC tax treatment, we must, among others things, distribute at least 90% of our net ordinary income and net short-term capital
gains in excess of net long-term capital losses, if any, to our stockholders. In order to avoid certain excise taxes imposed on
RICs, we must distribute during each calendar year an amount at least equal to the sum of: (i) 98% of our ordinary income for the
calendar year, (ii) 98.2% of our capital gains in excess of capital losses for the one-year period generally ending on October
31 of the calendar year (unless an election is made by us to use our taxable year) and (iii) any ordinary income and net capital
gains for preceding years that were not distributed during such years and on which we paid no federal income tax.



While we intend to distribute any income
and capital gains in the manner necessary to minimize imposition of the 4% U.S. federal excise tax, sufficient amounts of our
taxable income and capital gains may not be distributed to avoid entirely the imposition of the tax. In that event, we will be
liable for the tax only on the amount by which we do not meet the foregoing distribution requirement.



Commencing in the second quarter of 2015,
and subject to our board of directors’ discretion and applicable legal restrictions, our board of directors intends to authorize
and declare a monthly distribution amount per share of our common stock. We will then calculate each stockholder’s specific
distribution amount for the month using record and declaration dates, and your distributions will begin to accrue on the date we
accept your subscription for shares of our common stock. From time to time, we may also pay interim distributions at the discretion
of our board. Each year a statement on Internal Revenue Service Form 1099-DIV (or any successor form) identifying the source of
the distribution (i.e., paid from ordinary income, paid from net capital gain on the sale of securities, and/or a return of paid-in
capital surplus which is a nontaxable distribution) will be mailed to our stockholders. Our distributions may exceed our earnings,
especially during the period before we have substantially invested the proceeds from our offering. As a result, a portion of the
distributions we make may represent a return of capital for tax purposes.



We have adopted an “opt in”
distribution reinvestment plan for our common stockholders. As a result, when we make a distribution, stockholders will receive
distributions in cash unless they specifically “opt in” to the distribution reinvestment plan so as to have their cash
distributions reinvested in additional shares of our common stock. Any distributions reinvested under the plan will nevertheless
remain taxable to U.S. stockholders.



The following table reflects the cash distributions per share
that we have declared and paid on our common stock through March 31, 2016:







|                               |  |  | Distribution |          
|------------------------------ |  |  | ------------ | ---------
|For
    the Three Months Ended |  |  |              | Per Share
|Fiscal 2016                    |  |  |              |          
|Janary 22, 2016                |  |  | $            | 0.045    
|February 16, 2016              |  |  | $            | 0.045    
|March 23, 2016                 |  |  | $            | 0.045    
|Fiscal 2015                    |  |  |              |          
|January 20, 2015               |  |  | $            | 0.07545  
|April 13, 2015                 |  |  | $            | 0.11600  
|April 29, 2015                 |  |  | $            | 0.04000  
|May 29, 2015                   |  |  | $            | 0.04000  
|June 29, 2015                  |  |  | $            | 0.04000  
|July 30, 2015                  |  |  | $            | 0.04000  
|August 28, 2015                |  |  | $            | 0.04000  
|September 29, 2015             |  |  | $            | 0.04000  
|October 22.2015                |  |  | $            | 0.04500  
|November 25, 2015              |  |  | $            | 0.04500  
|December 24, 2015              |  |  | $            | 0.04500  







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Our distributions previously were paid quarterly
in arrears.  On January 15, 2015, our Board declared a quarterly cash distribution for the fourth quarter of 2014 of
$0.07545 per share payable on January 30, 2015, to shareholders of record as of January 20, 2015. In addition, on April 2, 2015,
our Board declared a cash distribution for the first quarter of 2015 of $0.116 per share payable on April 13, 2015, to shareholders
of record as of April 6, 2015. Commencing in April 2015, and subject to our board of directors’ discretion and applicable
legal restrictions, our board of directors began to authorize and declare a monthly distribution amount per share of our common
stock, payable in advance.  We then calculate each stockholder’s specific distribution amount for the month using
record and declaration dates, and your distributions will begin to accrue on the date we accept your subscription for shares of
our common stock.  No distributions were declared for the years before 2015.



The Company may fund its cash distributions
to stockholders from any sources of funds legally available to it, including offering proceeds, borrowings, net investment income
from operations, capital gains proceeds from the sale of assets, non-capital gains proceeds from the sale of assets, dividends
or other distributions paid to the Company on account of preferred and common equity investments in portfolio companies and expense
reimbursements from the Adviser. The Company has not established limits on the amount of funds it may use from available sources
to make distributions.



The following table reflects the sources
of the cash distributions on a tax basis that the Company paid on its common stock during the three months ended March 31, 2016
and March 31, 2015:





|                                                          |  | Three months
    ended March 31, |       
|--------------------------------------------------------- |  | -------------------------------- | ------
|                                                          |  | 2016                             |       
|Source of Distribution                                    |  | Distribution
Amount              |       
|Offering proceeds                                         |  | $                                | —     
|Borrowings                                                |  |                                  | —     
|Net investment income(1)                                  |  |                                  | —     
|Short-term capital gains proceeds from the sale of assets |  |                                  | —     
|Long-term capital gains proceeds from the sale of assets  |  |                                  | —     
|Expense reimbursement from sponsor                        |  |                                  | 81,992
|Total                                                     |  | $                                | 81,992












| | (1) | During
                                         the three months ended March 31, 2016 and 2015, 84.4% and 96.6%, respectively, of
                                         the Company’s gross investment income was attributable to cash income earned, and
                                         15.6% and 3.4%, resepctively was attributable to non-cash accretion of discount.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





Related Party Transactions



We have entered into an investment and advisory
agreement with Triton Pacific Adviser in which our senior management holds equity interest. Members of our senior management also
serve as principals of other investment managers affiliated with Triton Pacific Adviser that do and may in the future manage investment
funds, accounts or other investment vehicles with investment objectives similar to ours.



We have entered into an administration agreement
with TFA Associates in which our senior management holds equity interest and act as principals.



We have entered into a dealer manager agreement
with Triton Pacific Securities, LLC and pay them a fee of up to 10% of gross proceeds raised in the offering, some of which will
be re-allowed to other participating broker-dealers. Triton Pacific Securities, LLC is an affiliated entity of Triton Pacific Adviser.



We have entered into a license agreement
with Triton Pacific Group, Inc. under which Triton Pacific Group, Inc. has granted us a non-exclusive, royalty-free license to
use the name “Triton Pacific” for specified purposes in our business. Under this agreement, we have the right to use
the “Triton Pacific” name, subject to certain conditions, for so long as Triton Pacific Adviser or one of its affiliates
remains our investment advisor. Other than with respect to this limited license, we have no legal right to the “Triton Pacific”
name.





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We have entered into an expense support
and conditional reimbursement agreement with Triton Pacific Adviser pursuant to which the Adviser will pay up to 100% of the Company’s
organization, offering and operating expenses, subject to repayment by us to the Adviser, in order for the Company to achieve a
reasonable level of expenses relative to its investment income, as determined by the Company and the Adviser. our Adviser has agreed
to make advances to us to cover certain of our operating expenses. (See “Expense Reimbursement Agreement”, below)



Management Fee



Pursuant to the investment adviser agreement,
we pay our Adviser a fee for investment advisory and management services consisting of a base management fee and an incentive fee.



The base management fee is calculated at
a quarterly rate of 0.5% of our average gross assets (including amounts borrowed for investment purposes) and payable quarterly
in arrears. For the first quarter of our operations, the base management fee was calculated based on the initial value of our gross
assets. Subsequently, the base management fee for any calendar quarter is calculated based on the average value of our gross assets
at the end of that and the immediately preceding quarters, appropriately adjusted for any share issuances or repurchases during
that quarter. The base management fee may or may not be taken in whole or in part at the discretion of our Adviser. All or any
part of the base management fee not taken as to any quarter shall be accrued without interest and may be taken in such other quarter
as our Adviser shall determine. The base management fee for any partial quarter will be appropriately pro-rated.



Though, in accordance with the Advisers
Act, the Adviser could have received an incentive fee on both current income earned and income from capital gains, the Adviser
has agreed to waive any incentive fees from current income. As such, the Adviser will be paid an incentive fee only upon the realization
of a capital gain from the sale of an investment. The incentive fee will be calculated and payable quarterly in arrears or as of
the date of our liquidation or the termination of the investment adviser agreement, and will equal 20% of our realized capital
gains on a cumulative basis from inception through the end of each quarter, computed net of all realized capital losses and unrealized
capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees.



For purposes of the foregoing: (1) the calculation
of the incentive fee shall include any capital gains that result from cash distributions that are treated as a return of capital,
(2) any such return of capital will be treated as a decrease in our cost basis for the relevant investment and (3) all fiscal year-end
valuations will be determined by us in accordance with GAAP, applicable provisions of the Company Act and our pricing procedures.
In determining the incentive fee payable to our Adviser, we will calculate the aggregate realized capital gains, aggregate realized
capital losses and aggregate unrealized capital depreciation, as applicable, with respect to each of the investments in our portfolio.
For this purpose, aggregate realized capital gains, if any, will equal the sum of the positive differences between the net sales
prices of our investments, when sold, and the cost of such investments since inception. Aggregate realized capital losses will
equal the sum of the amounts by which the net sales prices of our investments, when sold, is less than the original cost of such
investments since inception. Aggregate unrealized capital depreciation will equal the sum of the difference, if negative, between
the valuation of each investment as of the applicable date and the original cost of such investment. At the end of the applicable
period, the amount of capital gains that serves as the basis for our calculation of the capital gains incentive fee will equal
the aggregate realized capital gains less aggregate realized capital losses and less aggregate unrealized capital depreciation
with respect to our portfolio investments. If this number is positive at the end of such period, then the incentive fee for such
period will be equal to 20% of such amount, less the aggregate amount of any incentive fees paid in all prior periods.



While the investment advisory agreement
neither includes nor contemplates the inclusion of unrealized gains in the calculation of the capital gains incentive fee, pursuant
to an interpretation of an American Institute of Certified Public Accountants, or AICPA, Technical Practice Aid for investment
companies, we include unrealized gains in the calculation of the capital gains incentive fee expense and related accrued capital
gains incentive fee. This accrual reflects the incentive fees that would be payable to our Advisor as if our entire portfolio was
liquidated at its fair value as of the balance sheet date even though our Adviser is not entitled to an incentive fee with respect
to unrealized gains unless and until such gains are actually realized.





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The organizational and offering expense
and other expense reimbursements may include a portion of costs incurred by our Adviser or its members or affiliates on our behalf
for legal, accounting, printing and other offering expenses, including for marketing, salaries and direct expenses of its employees,
employees of its affiliates and others while engaged in registering and marketing the shares of our common stock, which shall include
development of marketing and marketing presentations and training and educational meetings and generally coordinating the marketing
process for us and may also include amounts reimbursed by us to our Dealer Manager for actual bona fide due diligence expenses
incurred by our Dealer Manager or participating broker-dealers in an aggregate amount that is reasonable in relation to the gross
proceeds raised in our offering and which are supported by detailed, itemized invoices. None of the reimbursements referred to
above will exceed actual expenses incurred by our Adviser, its members or affiliates. Our Adviser will reimburse to us, without
recourse or reimbursement by us, any organizational and offering expenses to the extent those expenses, when aggregated with sales
load, exceed 15.0%.



Expense Reimbursement Agreement



On March 27, 2014, we and our Adviser agreed
to an Expense Support and Conditional Reimbursement Agreement, or the Expense Reimbursement Agreement. The Expense Reimbursement
Agreement was amended and restated effective November 17, 2014. Under the Expense Reimbursement Agreement, as amended, our Adviser,
in consultation with the Company, will pay up to 100% of both our organizational and offering expenses and our operating expenses,
all as determined by us and our Adviser. As used in the Expense Reimbursement Agreement, operating expenses refer to third party
operating costs and expenses incurred by us, as determined under generally accepted accounting principles for investment management
companies. Organizational and offering expenses include expenses incurred in connection with the organization of our company and
expenses incurred in connection with our offering, which are recorded as a component of equity. The Expense Reimbursement Agreement
states that until the net proceeds to us from our offering are at least $25 million, our Adviser will pay up to 100% of both our
organizational and offering expenses and our operating expenses. After we received at least $25 million in net proceeds from our
offering, our Adviser may, with our consent, continue to make expense support payments to us in such amounts as are acceptable
to us and our Adviser. Any expense support payments shall be paid by the Adviser to the Company in any combination of cash, and/or
offsets against amounts otherwise due from the Company to the Adviser.



Under the Expense Reimbursement Agreement
as amended, once we have received at least $25 million in net proceeds from our offering,we are required to reimburse our Adviser for any expense support payments we received from themoccurring within three years of the date on which we incurred such expenses.However, with respect to any expense support
payments attributable to our operating expenses,(i) we will only reimburse our Adviser
for expense support payments made by our Adviser to the extent that the payment of such reimbursement (together with any other
reimbursement paid during such fiscal year) does not cause “other operating expenses” (as defined below) (on an annualized
basis and net of any expense reimbursement payments received by us during such fiscal year) to exceed the percentage of our average
net assets attributable to shares of our common stock represented by “other operating expenses” during the fiscal year
in which such expense support payment from our Adviser was made (provided, however, that this clause (i) shall not apply to
any reimbursement payment which relates to an expense support payment from our Adviser made during the same fiscal year); and (ii) we
will not reimburse our Adviser for expense support payments made by our Adviser if the annualized rate of regular cash distributions
declared by us at the time of such reimbursement payment is less than the annualized rate of regular cash distributions declared
by us at the time our Adviser made the expense support payment to which such reimbursement relates. “Other operating expenses”
means our total operating expenses excluding base management fees, incentive fees, organization and offering expenses, financing
fees and costs, interest expense, brokerage commissions and extraordinary expenses.



In
addition, with respectto any expense support payment attributable to our organizational and offering expenses,we will only reimburse our Adviser for expense support payments made by our Adviser to the extent that the payment of such reimbursement
(together with any other reimbursement for organizational and offering expenses paid during such fiscal year) is limited to 15%
of cumulative gross sales proceeds including the sales load (or dealer manager fee) paid by us.





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Under the Expense Reimbursement Agreement,
any unreimbursed expense support payments may be reimbursed by us within a period not to exceed three years from the end of the
quarter in which we incurred the expense.



We or our Adviser
may terminate the expense reimbursement agreement at any time upon thirty days’ written notice, however our Adviser has indicated
that it expects to continue such reimbursements until it deems that we have achieved economies of scale sufficient to ensure that
we bear a reasonable level of expenses in relation to our income. The expense reimbursement agreement will automatically terminate
upon termination of the Investment Advisory Agreement or upon our liquidation or dissolution.



The Expense Reimbursement
Agreement is, by its terms, effective retroactively to our inception date of April 29, 2011. As a result, our Adviser has agreed
to reimburse a total of $3,471,478 as of March 31, 2016, which amounts have consisted of offsets against amounts owed by us to
our Adviser since our inception.



Below is a table
that provides information regarding expense support payments incurred by our Adviser pursuant to the Expense Support Agreement
as well as other information relating to our ability to reimburse our Adviser for such payments.





|                   |  |                    |  |                         |  | Operating Expense  |  |                             |  |                   
|------------------ |  | ------------------ |  | ----------------------- |  | ------------------ |  | --------------------------- |  | ------------------
|                   |  |                    |  |                         |  | Ratio as of the    |  | Annualized Distribution     |  |                   
|                   |  |                    |  |                         |  | Date Expense       |  | Rate as of the Date         |  | Eligible for      
|                   |  | Amount of Expense  |  | Amount of Offering Cost |  | Payment Obligation |  | Expense Payment             |  | Reimbursement     
|Quarter Ended      |  | Payment Obligation |  | Payment Obligation      |  | Incurred
    (1)   |  | Obligation
    Incurred (2) |  | Through           
|September 30, 2012 |  | $21,826            |  |                         |  | 432.69%            |  | —                           |  | September 30, 2015
|December 31, 2012  |  | $26,111            |  |                         |  | 531.09%            |  | —                           |  | December 31, 2015 
|March 31, 2013     |  | $30,819            |  |                         |  | N/A                |  | —                           |  | March 31, 2016    
|June 30, 2013      |  | $59,062            |  |                         |  | N/A                |  | —                           |  | June 30, 2016     
|September 30, 2013 |  | $65,161            |  |                         |  | N/A                |  | —                           |  | September 30, 2016
|December 31, 2013  |  | $91,378            |  |                         |  | 455.09%            |  | —                           |  | December 31, 2016 
|March 31, 2014     |  | $68,293            |  |                         |  | 148.96%            |  | —                           |  | March 31, 2017    
|June 30, 2014      |  | $70,027            |  | $898,518                |  | 23.17%             |  | —                           |  | June 30, 2017     
|September 30, 2014 |  | $92,143            |  | $71,060                 |  | 20.39%             |  | —                           |  | September 30, 2017
|December 31, 2014  |  | $115,777           |  | $90,860                 |  | 11.15%             |  | —                           |  | December 31, 2017 
|March 31, 2015     |  | $134,301           |  | $106,217                |  | 13.75%             |  | 2.01%                       |  | March 31, 2018    
|June 30, 2015      |  | $166,549           |  | $167,113                |  | 14.10%             |  | 3.20%                       |  | June 30, 2018     
|September 30, 2015 |  | $147,747           |  | $240,848                |  | 10.45%             |  | 3.20%                       |  | September 30, 2018
|December 31, 2015  |  | $136,401           |  | $280,376                |  | 7.41%              |  | 3.60%                       |  | December 31, 2018 
|March 31, 2016     |  | $157,996           |  | $232,895                |  | 6.00%              |  | 3.52%                       |  | March 31, 2019    







|(1) | “Operating Expense Ratio” includes all expenses borne by us, except for organizational and offering expenses, base management and incentive fees owed to our Adviser,financing fees and costs, interest expense, brokerage commissions and extraordinary expenses.The Company did not achieve its minimum offering amount until June 25, 2014 and as a result, did not invest the proceeds from the offering and realize any income from investments prior to the end of its fiscal quarter.                                                                                                                                                                    
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | “Annualized Distribution Rate” equals the annualized rate of distributions paid to stockholders based on the amount of the regular cash distribution paid immediately prior to the date the expense support payment obligation was incurred by our Adviser. “Annualized Distribution Rate” does not include special cash or stock distributions paid to stockholders. The Company did not achieve its minimum offering amount until June 25, 2014 and as a result, did not have an opportunity to invest the proceeds from the offering and realize any income from investments or pay any distributions to stockholders prior to the end of its fiscal quarter.



Of these Operating Expenses, $78,756 has
exceeded the three-year period for repayment and will not be repayable by the Company.



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The chart below, on a cumulative
basis, discloses the components of the Reimbursement due from Sponsor reflected on the chart above:



|                                     |  |                   |            |   |                      |   |            |  
|------------------------------------ |  | ----------------- | ---------- | - | -------------------- | - | ---------- | -
|                                     |  | March
    31,2016 |            |   | December
    31,2015 |  
|Operating Expenses                   |  | $                 | 1,383,591  |   |                      | $ | 1,225,595  |  
|Offering Costs                       |  |                   | 2,087,887  |   |                      |   | 1,854,993  |  
|Due to related party offset          |  |                   | (2,889,746 | ) |                      |   | (2,512,824 | )
|Reimbursements received from Adviser |  |                   | (342,715   | ) |                      |   | (342,715   | )
|Other amounts due to affiliates      |  |                   | 448        |   |                      |   | 448        |  
|Total Reimbursement due from Adviser |  | $                 | 239,465    |   |                      | $ | 225,497    |  





Operating Expensesare the amounts
reimbursed by the Adviser for our operating costs and Offering Costs are the cumulative amount of organizational
and offering expenses reimbursed to us by the Adviser and subject to future reimbursement per the terms of our expense reimbursement
agreement.



Due to related party offsetrepresents the cash the Adviser
paid directly for our operating and offering expenses and Reimbursements received from sponsorare the amounts
the Adviser paid in cash to us for reimbursement of our operating and offering costs.



Either we or our Adviser may terminate the Expense Support Agreement
at any time, except that if our Adviser terminates the agreement, it may not terminate its obligations to provide expense support
payments after the commencement of any monthly period. If we terminate the Investment Advisory Agreement, we will be required to
repay our Adviser all expense support payments made by our Adviser within three years of the date of termination.



Critical Accounting Policies



This discussion of our expected operating plans
is based upon our expected financial statements, which will be prepared in accordance with accounting principles generally accepted
in the United States, or GAAP. The preparation of these financial statements will require our management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Changes in the economic environment,
financial markets and any other parameters used in determining such estimates could cause actual results to differ. In addition
to the discussion below, we will describe our critical accounting policies in the notes to our future financial statements.



Valuation of Investments



Our board of directors has established procedures
for the valuation of our investment portfolio. These procedures are detailed below.



Investments for which market quotations are readily
available will be valued at such market quotations. For most of our investments, market quotations will not be available. With
respect to investments for which market quotations are not readily available or when such market quotations are deemed not to represent
fair value, our board of directors has approved a multi-step valuation process each quarter, as described below:



| | 1. | Each portfolio company or investment will be valued by our Adviser, potentially with assistance
from one or more independent valuation firms engaged by our board of directors;
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | the independent valuation firm, if involved, will conduct independent appraisals and make an independent
assessment of the value of each investment;
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------



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| | 3. | the audit committee of our board of directors will review and discuss the preliminary valuation
prepared by our Adviser and that of the independent valuation firm, if any; and
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. | the board of directors will discuss the valuations and determine the fair value of each investment
in our portfolio in good faith based on the input of our Adviser, the independent valuation firm, if any, and the audit committee.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Investments will be valued utilizing a cost approach,
a market approach, an income approach, or a combination of approaches, as appropriate. The cost approach is most likely only to
be used early in the life of an investment or if we determine that there has been no material change in the investment since purchase.
The market approach uses prices and other relevant information generated by market transactions involving identical or comparable
assets or liabilities (including a business). The income approach uses valuation techniques to convert future amounts (for example,
cash flows or earnings) to a single present value amount, calculated using an appropriate discount rate. The measurement is based
on the net present value indicated by current market expectations about those future amounts. In following these approaches, the
types of factors that we may take into account in fair value pricing our investments include, as relevant: available current market
data, including relevant and applicable market trading and transaction comparables, applicable market yields and multiples, security
covenants, call protection provisions, information rights, the nature and realizable value of any collateral, the Company’s
ability to make payments, its earnings and discounted cash flows, the markets in which the Company does business, comparisons of
financial ratios of peer companies that are public, M&A comparables, the principal market and enterprise values, among other
factors.



We have adopted Financial Accounting Standards
Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures
(formerly Statement of Financial Accounting Standards No. 157, Fair Value Measurements), which defines fair value, establishes
a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about
fair value measurements.



ASC Topic 820 provides a consistent definition
of fair value which focuses on exit price and prioritizes, within a measurement of fair value, the use of market-based inputs over
entity-specific inputs. It defines fair value as the price an entity would receive when an asset is sold or when a liability is
transferred in an orderly transaction between market participants at the measurement date. In addition, ASC Topic 820 provides
a framework for measuring fair value and establishes a three-level hierarchy for fair value measurements based upon the transparency
of inputs to the valuation of an asset or liability as of the measurement date. The three levels of valuation hierarchy established
by ASC Topic 820 are defined as follows:



Level 1: Quoted prices in active markets for identical assets
or liabilities, accessible by the company at the measurement date.



Level 2: Quoted prices for similar assets or liabilities in
active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or other observable
inputs other than quoted prices.



Level 3: Unobservable inputs for the asset or liability.



In all cases, the level in the fair value hierarchy
within which the fair value measurement in its entirety falls has been determined based on the lowest level of input that is significant
to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety
requires judgment and considers factors specific to each investment.



In accordance with ASC Topic 820, the fair value
of our investments is defined as the price that we would receive upon selling an investment in an orderly transaction to an independent
buyer in the principal or most advantageous market in which that investment is transacted.



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Revenue Recognition



We record interest income on an accrual basis to
the extent that we expect to collect such amounts. For loans and debt securities with contractual PIK interest, which represents
contractual interest accrued and added to the principal balance, we generally will not accrue PIK interest for accounting purposes
if the portfolio company valuation indicates that such PIK interest is not collectible. We do not accrue as a receivable interest
on loans and debt securities for accounting purposes if we have reason to doubt our ability to collect such interest. Original
issue discounts, market discounts or premiums are accreted or amortized using the effective interest method as interest income.
We record prepayment premiums on loans and debt securities as interest income. Dividend income, if any, is recognized on an accrual
basis to the extent that we expect to collect such amount.



Net Realized Gains or Losses and Net Change in Unrealized Appreciation
or Depreciation



We will measure net realized gains or losses by
the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, without regard
to unrealized appreciation or depreciation previously recognized, but considering unamortized upfront fees and prepayment penalties.
Net change in unrealized appreciation or depreciation will reflect the change in portfolio investment values during the reporting
period, including any reversal of previously recorded unrealized appreciation or depreciation, when gains or losses are realized.



Payment-in-Kind Interest



We may have investments in our portfolio that contain
a PIK interest provision. Any PIK interest will be added to the principal balance of such investments and is recorded as income,
if the portfolio company valuation indicates that such PIK interest is collectible. In order to maintain our status as a RIC, substantially
all of this income must be paid out to stockholders in the form of distributions, even if we have not collected any cash.



Organization and Offering Expenses



We have incurred certain expenses in connection
with the registration of shares of our common stock for sale as discussed in Note 1 of our financial statements– Description
of Business and Summary of Significant Accounting Policies. These costs principally relate to professional fees, fees paid to the
SEC and fees paid to the Financial Industry Regulatory Authority. These costs were included in deferred offering costs in the accompanying
balance sheets. Simultaneous with the sale of common shares, the deferred offering costs will be reclassified to stockholders’
equity upon the issuance of shares.



Federal Income Taxes



We elected to be treated, beginning with our fiscal
year ending December 31, 2012, and intend to qualify annually thereafter, as a RIC under Subchapter M of the Code. As a RIC, we
generally will not have to pay corporate-level federal income taxes on any ordinary income or capital gains that we distribute
to our stockholders from our tax earnings and profits. To maintain our RIC tax treatment, we must, among other things, meet specified
source-of-income and asset diversification requirements and distribute annually 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.



| | 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, 2016, 65.1% (based on fair value) of our investments paid variable interest rates, 9.8%
paid fixed rates, and 25.1% were non-income producing equity. A rise in the general level of interest rates can be expected to
lead to higher interest rates applicable to certain variable rate investments we hold and to declines in the value of any fixed
rate investments we may hold in the future.



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The following table shows the effect over a twelve-month
period of changes in interest rates on our interest income, interest expense and net interest income, assuming no changes in our
investment portfolio and borrowing arrangements in effect as of March 31, 2016:





|LIBOR
    Basis Point Change |  | PercentageChange in NetInterest Income | 
|---------------------------- |  | -------------------------------------- | 
|Down 25 basis points         |  | 0.00%                                  | 
|Current LIBOR                |  | 0.00%                                  | 
|Up 100 basis points          |  | 8.99%                                  | 
|Up 200 basis points          |  | 23.37%                                 | 
|Up 300 basis points          |  | 37.76%                                 | 



Because we may borrow money to make investments,
our net investment income may be dependent on the difference between the rate at which we borrow funds and the rate at which we
invest these funds. In periods of increasing interest rates, our cost of funds would increase, which may reduce our net investment
income. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse
effect on our net investment income.



We may also face risk due to the lack of liquidity
in the marketplace which could prevent us from raising sufficient funds to adequately invest in a broad pool of assets. We are
subject to other financial market risks, including changes in interest rates. However, at this time, with no portfolio investments,
this risk is immaterial.



In addition, we may have risk regarding portfolio
valuation. See “Part I - Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical
Accounting Policies—Valuation of Portfolio Investments.”



|Item
    4: | Controls
    and Procedures.
|----------- | ----------------------------



Disclosure Controls



In accordance with Rules 13a-15(b) and 15d-15(b)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we, under the supervision and with the participation
of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls
and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this
Quarterly Report on Form 10-Q and determined that the disclosure controls and procedures are effective.





Change in Internal Control Over Financial Reporting



No change occurred in our internal control over
financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act) during the three months ended March 31, 2016
that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



Part
II—Other Information



|Item
    1: | Legal
    Proceedings.
|----------- | ----------------------



The Company is not currently subject to any legal
proceedings, nor, to our knowledge, are any legal proceedings threatened against us or our subsidiaries.



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



There have
been no material changes from the risk factors set forth in our annual report on Form 10-K for the fiscal year ended December 31,
2015.



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|Item
    2: | Unregistered
    Sales of Equity Securities and Use of Proceeds.
|----------- | ----------------------------------------------------------------

None.



|Item
    3: | Defaults
    Upon Senior Securities.
|----------- | ------------------------------------



None.



|Item
    4: | Mine
    Safety Disclosures.
|----------- | ----------------------------



None.



| | Item
                           5: | Other Information.
| | ---------------------------------- | ------------------



|
|

None.



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|Item
    6: | Exhibits.
|----------- | ---------



EXHIBIT INDEX

|       |  |                                                                                                                                                       
|------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------
|Number |  | Description                                                                                                                                           
|       |  |                                                                                                                                                       
|       |  |                                                                                                                                                       
|31.1   |  | Certification by Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|31.2   |  | Certification by Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|32.1   |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                               



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SIGNATURES



Pursuant to the requirements 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.



|                    |                                             |                                             
|------------------- | ------------------------------------------- | --------------------------------------------
|Dated: May 16, 2016 | Triton Pacific Investment Corporation, Inc.
|                    |                                             |                                             
|                    | By                                          | /s/ Craig J. Faggen                         
|                    |                                             | Craig J. Faggen                             
|                    |                                             | Chief Executive Officer                     
|                    |                                             | (Principal Executive Officer)               
|                    |                                             |                                             
|Dated: May 16, 2016 | By                                          | /s/ Michael L. Carroll                      
|                    |                                             | Michael L. Carroll                          
|                    |                                             | Chief Financial Officer                     
|                    |                                             | (Principal Accounting and Financial Officer)





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