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 September
30, 2018



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 814-00908



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, Suite 1450



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,” and “emerging
growth 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 | ☐
|                        |  |                                                 |  | Emerging growth company   | ☐



If an emerging growth company, indicate
by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act.



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 November 14, 2018, the Registrant
had 1,580,469.90 shares of Class A common stock, $0.001 par value, outstanding.











TABLE OF CONTENTS



|Part I—Financial Information                                                                   | 3 
|---------------------------------------------------------------------------------------------- | --
|Item 1: Financial Statements                                                                   | 3 
|Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations. | 28
|Item 3: Quantitative and Qualitative Disclosures About Market Risk.                            | 50
|Item 4: Controls and Procedures.                                                               | 51
|Part II—Other Information                                                                      | 51
|Item 1: Legal Proceedings.                                                                     | 51
|Item 1A: Risk Factors.                                                                         | 51
|Item 2: Unregistered Sales of Equity Securities and Use of Proceeds.                           | 52
|Item 3: Defaults Upon Senior Securities.                                                       | 53
|Item 4: Mine Safety Disclosures.                                                               | 53
|Item 5: Other Information.                                                                     | 53
|Item 6: Exhibits.                                                                              | 54
|SIGNATURES                                                                                     | 55



2







Part I—Financial Information



|Item 1: Financial Statements
|----------------------------



Triton
Pacific Investment Corporation, Inc.



CONSOLIDATED
StatementS of Financial Position







|                                                                                                                                           |  | September 30, |            |   |              |  
|------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------- | ---------- | - | ------------ | -
|                                                                                                                                           |  | 2018          |            |   | December 31, |  
|                                                                                                                                           |  | (unaudited)   |            |   | 2017         |  
|ASSETS                                                                                                                                     | 
|                                                                                                                                           |  |               |            |   |              |  
|Affiliate Investments, at fair value (amortized cost - $1,916,389 and $1,916,389, respectively)                                            |  | $             | 501,742    |   |              | $
|Non-affiliate Investments, at fair value (amortized cost - $13,189,371 and $11,633,659, respectively)                                      |  |               | 13,003,062 |   |              |  
|Cash                                                                                                                                       |  |               | 4,921,673  |   |              |  
|Principal and interest receivable                                                                                                          |  |               | 25,410     |   |              |  
|Prepaid expenses                                                                                                                           |  |               | 10,697     |   |              |  
|Reimbursement due from Adviser (see Note 4)                                                                                                |  |               | -          |   |              |  
|Due from affiliates                                                                                                                        |  |               | 886        |   |              |  
|Deferred offering costs                                                                                                                    |  |               | 205,174    |   |              |  
|                                                                                                                                           |  |               |            |   |              |  
|TOTAL ASSETS                                                                                                                               |  | $             | 18,668,644 |   |              | $
|                                                                                                                                           |  |               |            |   |              |  
|LIABILITIES AND NET ASSETS                                                                                                                 |  |               |            |   |              |  
|                                                                                                                                           |  |               |            |   |              |  
|LIABILITIES                                                                                                                                |  |               |            |   |              |  
|Payable for investments purchased                                                                                                          |  | $             | 495,000    |   |              | $
|Accounts payable and accrued liabilities                                                                                                   |  |               | 129,510    |   |              |  
|Due to related parties (see Note 4)                                                                                                        |  |               | 119,980    |   |              |  
|TOTAL LIABILITIES                                                                                                                          |  |               | 744,490    |   |              |  
|                                                                                                                                           |  |               |            |   |              |  
|COMMITMENTS AND CONTINGENCIES (see Note
    9)                                                                                             |  |               |            |   |              |  
|                                                                                                                                           |  |               |            |   |              |  
|NET ASSETS                                                                                                                                 |  |               |            |   |              |  
|Common stock, $0.001 par value, 75,000,000 shares
    authorized, 1,573,804.22 and 1,417,233.32 shares issued and outstanding respectively |  |               | 1,571      |   |              |  
|Capital in excess of par value                                                                                                             |  |               | 20,899,977 |   |              |  
|Accumulated undistributed net realized gains                                                                                               |  |               | 37,415     |   |              |  
|Accumulated overdistributed net investment income                                                                                          |  |               | (1,413,853 | ) |              |  
|Accumulated unrealized depreciation on investments                                                                                         |  |               | (1,600,956 | ) |              |  
|TOTAL NET ASSETS                                                                                                                           |  |               | 17,924,154 |   |              |  
|                                                                                                                                           |  |               |            |   |              |  
|TOTAL LIABILITIES AND NET ASSETS                                                                                                           |  | $             | 18,668,644 |   |              | $
|                                                                                                                                           |  |               |            |   |              |  
|Net asset value per share of common stock at period end                                                                                    |  | $             | 11.39      |   |              | $



The accompanying notes are an integral
part of these statements.



3







Triton
Pacific Investment Corporation, Inc.



CONSOLIDATED
Statements of Operations



THREE AND NINE MONTHS ENDED SEPTEMBER
30, 2018 AND 2017



(Unaudited)





|                                                                                  |  |                    |           |   |                   |   |           |      |  |   |           |  
|--------------------------------------------------------------------------------- |  | ------------------ | --------- | - | ----------------- | - | --------- | ---- |  | - | --------- | -
|                                                                                  |  | Three months ended |           |   | Nine months ended |  
|                                                                                  |  | September 30,      |           |   | September 30,     |  
|                                                                                  |  | 2018               |           |   | 2017              |   |           | 2018 |  |   | 2017      |  
|INVESTMENT INCOME                                                                 |  |                    |           |   |                   |   |           |      |  |   |           |  
|Interest from affiliate investments                                               |  | $                  | -         |   |                   | $ | -         |      |  | $ | -         |  
|Interest from non-control/ non-affiliate investments                              |  |                    | 302,265   |   |                   |   | 198,075   |      |  |   | 849,536   |  
|Fee income from non-control/ non-affiliate investments                            |  |                    | 277       |   |                   |   | 29,413    |      |  |   | 7,502     |  
|                                                                                  |  |                    |           |   |                   |   |           |      |  |   |           |  
|Total investment income                                                           |  |                    | 302,542   |   |                   |   | 227,488   |      |  |   | 857,038   |  
|                                                                                  |  |                    |           |   |                   |   |           |      |  |   |           |  
|OPERATING EXPENSES                                                                |  |                    |           |   |                   |   |           |      |  |   |           |  
|Management fees                                                                   |  |                    | 91,593    |   |                   |   | 83,459    |      |  |   | 269,189   |  
|Capital gains incentive fees (see Notes 2 and 4)                                  |  |                    | -         |   |                   |   | -         |      |  |   | -         |  
|Administrator expense                                                             |  |                    | 66,558    |   |                   |   | 70,495    |      |  |   | 215,786   |  
|Professional fees                                                                 |  |                    | 134,179   |   |                   |   | 99,062    |      |  |   | 368,899   |  
|Insurance expense                                                                 |  |                    | 17,791    |   |                   |   | 17,779    |      |  |   | 57,317    |  
|Offering expense                                                                  |  |                    | 83,942    |   |                   |   | -         |      |  |   | 170,932   |  
|Other operating expenses                                                          |  |                    | 27,339    |   |                   |   | 13,095    |      |  |   | 56,487    |  
|                                                                                  |  |                    |           |   |                   |   |           |      |  |   |           |  
|Total operating expenses                                                          |  |                    | 421,402   |   |                   |   | 283,890   |      |  |   | 1,138,610 |  
|                                                                                  |  |                    |           |   |                   |   |           |      |  |   |           |  
|Expense reimbursement from Sponsor                                                |  |                    | -         |   |                   |   | -         |      |  |   | -         |  
|                                                                                  |  |                    |           |   |                   |   |           |      |  |   |           |  
|Net operating expenses                                                            |  |                    | 421,402   |   |                   |   | 283,890   |      |  |   | 1,138,610 |  
|                                                                                  |  |                    |           |   |                   |   |           |      |  |   |           |  
|Net investment income/ (loss)                                                     |  |                    | (118,860  | ) |                   |   | (56,402   | )    |  |   | (281,572  | )
|                                                                                  |  |                    |           |   |                   |   |           |      |  |   |           |  
|REALIZED AND UNREALIZED GAIN/(LOSS)                                               |  |                    |           |   |                   |   |           |      |  |   |           |  
|Net realized gain on non-affiliated investments                                   |  |                    | 3,740     |   |                   |   | 26,569    |      |  |   | 32,960    |  
|Net decrease in unrealized appreciation on affiliate investments                  |  |                    | (782      | ) |                   |   | (88,923   | )    |  |   | (36,161   | )
|Net decrease in unrealized appreciation on non-control/ non-affiliate investments |  |                    | (13,607   | ) |                   |   | (42,474   | )    |  |   | (50,285   | )
|                                                                                  |  |                    |           |   |                   |   |           |      |  |   |           |  
|Total net realized and unrealized loss on investments                             |  |                    | (10,649   | ) |                   |   | (104,828  | )    |  |   | (53,486   | )
|                                                                                  |  |                    |           |   |                   |   |           |      |  |   |           |  
|NET DECREASE IN NET ASSETS  FROM OPERATIONS                                       |  | $                  | (129,509  | ) |                   | $ | (161,230  | )    |  | $ | (335,058  | )
|                                                                                  |  |                    |           |   |                   |   |           |      |  |   |           |  
|PER SHARE INFORMATION - Basic and Diluted                                         |  |                    |           |   |                   |   |           |      |  |   |           |  
|Net decrease in net assets from operations per share                              |  | $                  | (0.08     | ) |                   | $ | (0.13     | )    |  | $ | (0.22     | )
|                                                                                  |  |                    |           |   |                   |   |           |      |  |   |           |  
|Weighted average common shares outstanding - basic and diluted                    |  |                    | 1,544,718 |   |                   |   | 1,266,225 |      |  |   | 1,500,612 |  





The accompanying notes are an integral
part of these statements.



4







Triton
Pacific Investment Corporation, Inc.



CONSOLIDATED
StatementS of CHANGES IN NET ASSETS



NINE
MONTHS ended SEPTEMBER 30, 2018 AND 2017



(Unaudited)





|                                                                    |  |                   |            |   |      |  
|------------------------------------------------------------------- |  | ----------------- | ---------- | - | ---- | -
|                                                                    |  | Nine months ended |           
|                                                                    |  | September 30,     |           
|                                                                    |  | 2018              |            |   | 2017 |  
|Operations                                                          |  |                   |            |   |      |  
|Net investment income/ (loss)                                       |  | $                 | (281,572   | ) |      | $
|Net realized gain on investments                                    |  |                   | 32,960     |   |      |  
|Net decrease in unrealized appreciation on investments              |  |                   | (86,446    | ) |      |  
|Net decrease in net assets resulting from operations                |  |                   | (335,058   | ) |      |  
|Stockholder distributions (see Note 5)                              |  |                   |            |   |      |  
|Distributions from net investment income                            |  |                   | (395,356   | ) |      |  
|Distributions from net realized gain on investments                 |  |                   | (60,908    | ) |      |  
|Net decrease in net assets resulting from stockholder distributions |  |                   | (456,264   | ) |      |  
|Capital share transactions                                          |  |                   |            |   |      |  
|Issuance of common stock (see Note 3)                               |  |                   | 1,686,734  |   |      |  
|Reinvestment of stockholder distributions (see Note 3)              |  |                   | 256,864    |   |      |  
|Repurchase of shares of common stock                                |  |                   | (77,359    | ) |      |  
|Net increase in net assets from capital share transactions          |  |                   | 1,866,239  |   |      |  
|                                                                    |  |                   |            |   |      |  
|Total increase in net assets                                        |  |                   | 1,074,917  |   |      |  
|Net assets at beginning of period                                   |  |                   | 16,849,237 |   |      |  
|Net assets at end of period                                         |  | $                 | 17,924,154 |   |      | $
|Accumulated overdistributed net investment income                   |  | $                 | (1,413,853 | ) |      | $
|Accumulated undistributed net realized gains                        |  | $                 | 37,415     |   |      | $





The accompanying notes are an integral
part of these statements.





5







Triton
Pacific Investment Corporation, Inc.

CONSOLIDATED
Statements of CASH FLOWS



NINE MONTHS ENDED SEPTEMBER 30, 2018
AND 2017



(Unaudited)





|                                                                                                                       |  | Nine months ended |           
|---------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ----------
|                                                                                                                       |  | September 30,     |           
|                                                                                                                       |  | 2018              |           
|CASH FLOWS FROM OPERATING ACTIVITIES                                                                                   |  |                   |           
|Net decrease in net assets resulting from operations                                                                   |  | $                 | (335,058  
|Adjustments to reconcile net decrease in net assets resulting from operations to net cash used by operating activities |  |                   |           
|Purchases of investments                                                                                               |  |                   | (4,426,250
|Proceeds from sales and repayments of investments                                                                      |  |                   | 2,928,272 
|Net realized gain from investments                                                                                     |  |                   | (32,960   
|Net change in unrealized appreciation (depreciation) on investments                                                    |  |                   | 86,445    
|Accretion of discount                                                                                                  |  |                   | (24,773   
|Net increase in paid-in-kind interest                                                                                  |  |                   | -         
|Amortization of deferred offering costs                                                                                |  |                   | 170,932   
|Change in assets and liabilities                                                                                       |  |                   |           
|Principal and interest receivable                                                                                      |  |                   | 15,617    
|Prepaid expenses                                                                                                       |  |                   | 37,394    
|Deferred transaction costs                                                                                             |  |                   | -         
|Reimbursement due from Adviser                                                                                         |  |                   | 257,628   
|Due from affiliates                                                                                                    |  |                   | (886      
|Payable for investments purchased                                                                                      |  |                   | (495,000  
|Accounts payable and accrued liabilities                                                                               |  |                   | (120,400  
|Due to related parties                                                                                                 |  |                   | 94,268    
|NET CASH USED BY OPERATING ACTIVITIES                                                                                  |  |                   | (1,844,771
|                                                                                                                       |  |                   |           
|CASH FLOWS FROM FINANCING ACTIVITIES                                                                                   |  |                   |           
|Issuance of common stock                                                                                               |  |                   | 1,686,734 
|Payments on repurchases of shares of common stock                                                                      |  |                   | (77,359   
|Stockholder distributions                                                                                              |  |                   | (199,400  
|Increases in distributions payable                                                                                     |  |                   | -         
|Offering costs                                                                                                         |  |                   | (292,036  
|NET CASH PROVIDED BY FINANCING ACTIVITIES                                                                              |  |                   | 1,117,939 
|                                                                                                                       |  |                   |           
|NET INCREASE (DECREASE) IN CASH                                                                                        |  |                   | (726,832  
|                                                                                                                       |  |                   |           
|CASH - BEGINNING OF PERIOD                                                                                             |  | $                 | 5,648,505 
|                                                                                                                       |  |                   |           
|CASH  - END OF PERIOD                                                                                                  |  | $                 | 4,921,673 
|                                                                                                                       |  |                   |           
|Supplemental schedule of non-cash investing activities                                                                 |  |                   |           
|Reinvestment of stockholder distributions                                                                              |  | $                 | 256,864   





The accompanying notes are an integral
part of these statements.



6







TRITON PACIFIC INVESTMENT CORPORATION,
INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

AS OF SEPTEMBER 30, 2018

(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—44.55%     |  |           |  |                                   |  |                   |  |       |   |          |            |                                          |   |         |                        |           |   |                   |  
|LSF9 Atlantis
    Holdings, LLC                |  |           |  | Telecommunications                |  | L+6.00% (8.12%)   |  | 2.12  | % |          | 5/1/2023   |                                          | $ | 484,375 |                        |           | $ | 480,491           |  
|California Pizza Kitchen,
    Inc.             |  |           |  | Beverage, Food & Tobacco          |  | L+6.00% (8.39%)   |  | 2.39  | % |          | 8/19/2022  |                                          |   | 343,000 |                        |           |   | 340,751           |  
|CareerBuilder                                  |  |           |  | Business Services                 |  | L+6.75% (9.14%)   |  | 2.39  | % |          | 7/27/2023  |                                          |   | 369,112 |                        |           |   | 357,002           |  
|Coronado Curragh LLC - Term
    Loan B         |  |           |  | Metals & Mining                   |  | L+6.50% (8.89%)   |  | 2.39  | % |          | 3/29/2025  |                                          |   | 345,543 |                        |           |   | 334,639           |  
|Coronado Curragh LLC - Term
    Loan C         |  |           |  | Metals & Mining                   |  | L+6.50% (8.89%)   |  | 2.39  | % |          | 3/21/2025  |                                          |   | 94,475  |                        |           |   | 92,018            |  
|Deluxe Entertainment Services
    Group, Inc.  |  |           |  | Media: Diversified and Production |  | L+5.50% (7.84%)   |  | 2.34  | % |          | 2/28/2020  |                                          |   | 333,512 |                        |           |   | 329,039           |  
|Flavors Holdings, Inc. Tranche
    B           |  |           |  | Beverage, Food & Tobacco          |  | L+5.75% (8.14%)   |  | 2.39  | % |          | 4/3/2020   |                                          |   | 98,839  |                        |           |   | 97,511            |  
|GK Holdings, Inc.                              |  |           |  | Business Services                 |  | L+6.00% (8.39%)   |  | 2.39  | % |          | 1/20/2021  |                                          |   | 120,313 |                        |           |   | 119,976           |  
|GoWireless Holdings, Inc.                      |  |           |  | Consumer Services                 |  | L+6.50% (8.74%)   |  | 2.24  | % |          | 12/20/2024 |                                          |   | 481,250 |                        |           |   | 476,768           |  
|InfoGroup Inc.                                 |  |           |  | Business Services                 |  | L+5.00% (7.39%)   |  | 2.39  | % |          | 3/28/2023  |                                          |   | 492,500 |                        |           |   | 488,744           |  
|Isagenix International LLC                     |  |           |  | Healthcare & Pharmaceuticals      |  | L+5.75% (8.14%)   |  | 2.39  | % |          | 4/25/2025  |                                          |   | 493,750 |                        |           |   | 489,056           |  
|McAfee LLC                                     |  |           |  | Business Services                 |  | L+4.50% (6.74%)   |  | 2.24  | % |          | 9/27/2024  |                                          |   | 247,500 |                        |           |   | 245,353           |  
|Moran Foods, LLC                               |  |           |  | Beverage, Food & Tobacco          |  | L+6.00% (8.24%)   |  | 2.24  | % |          | 12/5/2023  |                                          |   | 343,875 |                        |           |   | 336,121           |  
|Prospect Medical Holdings,
    Inc.            |  |           |  | Healthcare & Pharmaceuticals      |  | L+5.50% (7.63%)   |  | 2.13  | % |          | 2/22/2024  |                                          |   | 497,500 |                        |           |   | 488,527           |  
|Quidditch Acquisition, Inc.                    |  |           |  | Beverage, Food & Tobacco          |  | L+7.00% (9.17%)   |  | 2.17  | % |          | 3/14/2025  |                                          |   | 497,500 |                        |           |   | 488,237           |  
|Raley’s                                        |  |           |  | Beverage, Food & Tobacco          |  | L+5.25% (7.49%)   |  | 2.24  | % |          | 5/18/2022  |                                          |   | 187,277 |                        |           |   | 187,277           |  
|Sahara Parent Inc                              |  |           |  | Business Services                 |  | L+5.00% (7.26%)   |  | 2.26  | % |          | 8/16/2024  |                                          |   | 346,500 |                        |           |   | 343,533           |  
|Strike, LLC                                    |  |           |  | Energy: Oil & Gas                 |  | L+8.00% (10.59%)  |  | 2.59  | % |          | 11/30/2022 |                                          |   | 319,375 |                        |           |   | 312,126           |  
|Travel Leaders Group, LLC                      |  |           |  | Hotel, Gaming & Leisure           |  | L+4.00% (6.16%)   |  | 2.16  | % |          | 1/25/2024  |                                          |   | 498,750 |                        |           |   | 497,795           |  
|TruGreen Limited Partnership                   |  |           |  | Consumer Services                 |  | L+4.00% (6.13%)   |  | 2.13  | % |          | 4/13/2023  |                                          |   | 343,035 |                        |           |   | 339,583           |  
|Verdesian Life Sciences
    LLC                |  |           |  | Wholesale Trade-Nondurable Goods  |  | L+5.00% (7.34%)   |  | 2.34  | % |          | 7/1/2020   |                                          |   | 199,417 |                        |           |   | 198,695           |  
|Wirepath LLC                                   |  |           |  | Consumer Services                 |  | L+4.50% (6.74%)   |  | 2.24  | % |          | 8/5/2024   |                                          |   | 495,009 |                        |           |   | 492,873           |  
|Yak
    Access LLC                             |  |           |  | Construction &
    Building       |  | L+5.00% (7.14%)   |  | 2.14  | % |          | 6/29/2025  |                                          |   | 500,000 |                        |           |   | 485,424           |  
|Total Senior Secured Loans—First Lien          |  |           |  |                                   |  |                   |  |       |   |          | $          | 8,132,407                                |   |         | $                      | 8,021,538 |   |                   | $
|                                               |  |           |  |                                   |  |                   |  |       |   |          |            |                                          |   |         |                        |           |   |                   |  
|Senior Secured Loans—Second Lien—27.99%        |  |           |  |                                   |  |                   |  |       |   |          |            |                                          |   |         |                        |           |   |                   |  
|DG Investment Intermediate
    Holdings 2 Inc. |  |           |  | Business Services                 |  | L+6.75% (8.99%)   |  | 2.24  | % |          | 2/1/2026   |                                          |   | 500,000 |                        |           |   | 497,706           |  
|Encino Acquisition Partners
    Holdings, LLC  |  |           |  | Energy: Oil & Gas                 |  | L+6.75% (7.75%)   |  | 1.00  | % |          | 9/26/2025  |                                          |   | 500,000 |                        |           |   | 495,000           |  
|Flavors Holdings, Inc.                         |  |           |  | Beverage, Food & Tobacco          |  | L+10.00% (12.39%) |  | 2.39  | % |          | 10/7/2021  |                                          |   | 125,000 |                        |           |   | 122,885           |  
|FullBeauty Brands Holding                      |  |           |  | High Tech Industries              |  | L+9.00% (11.34%)  |  | 2.34  | % |          | 10/13/2023 |                                          |   | 250,000 |                        |           |   | 219,377           |  
|GK Holdings, Inc.                              |  |           |  | Business Services                 |  | L+10.25% (12.64%) |  | 2.39  | % |          | 1/21/2022  |                                          |   | 125,000 |                        |           |   | 123,830           |  
|Inmar                                          |  |           |  | Business Services                 |  | L+8.00% (10.24%)  |  | 2.24  | % |          | 5/1/2025   |                                          |   | 500,000 |                        |           |   | 493,807           |  
|McAfee LLC                                     |  |           |  | Business Services                 |  | L+8.50% (10.74%)  |  | 2.24  | % |          | 9/26/2025  |                                          |   | 500,000 |                        |           |   | 497,338           |  
|Neustar, Inc.                                  |  |           |  | High Tech Industries              |  | L+8.00% (10.24%)  |  | 2.24  | % |          | 2/28/2025  |                                          |   | 749,792 |                        |           |   | 740,292           |  
|NPC International, Inc.                        |  |           |  | Beverage, Food & Tobacco          |  | L+7.50% (9.58%)   |  | 2.08  | % |          | 3/28/2025  |                                          |   | 500,000 |                        |           |   | 498,846           |  
|Oxbow Carbon LLC                               |  |           |  | Metals & Mining                   |  | L+7.50% (9.74%)   |  | 2.24  | % |          | 1/4/2024   |                                          |   | 500,000 |                        |           |   | 495,575           |  
|Patriot Container Corp.                        |  |           |  | Environmental                     |  | L+7.75% (9.96%)   |  | 2.21  | % |          | 3/16/2026  |                                          |   | 500,000 |                        |           |   | 490,680           |  
|Rocket
    Software, Inc.                      |  |           |  | Business Services                 |  | L+9.50% (11.89%)  |  | 2.39  | % |          | 10/14/2024 |                                          |   | 500,000 |                        |           |   | 492,497           |  
|Total Senior Secured Loans—Second Lien         |  |           |  |                                   |  |                   |  |       |   |          | $          | 5,249,792                                |   |         | $                      | 5,167,833 |   |                   | $



The accompanying notes are an integral
part of these statements.



7







TRITON PACIFIC INVESTMENT CORPORATION,
INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

AS OF SEPTEMBER 30, 2018 (CONTINUED)

(UNAUDITED)



|Portfolio Company                                    |  | Footnotes   |  | Industry                     |  | Rate (b) |  | Floor |  | Maturity |           | Principal

    Amount/ Number
 of Shares |   |         | Amortized

    Cost(f) |            |   | Fair
    Value(c) |  
|---------------------------------------------------- |  | ----------- |  | ---------------------------- |  | -------- |  | ----- |  | -------- | --------- | ---------------------------------------- | - | ------- | ---------------------- | ---------- | - | ----------------- | -
|Subordinated Convertible
    Debt—0.00%              |  |             |  |                              |  |          |  |       |  |          |           |                                          |   |         |                        |            |   |                   |  
|Javlin
    Capital LLC Subordinated Convertible Note |  | (a) (e)     |  | Specialty Finance            |  | 6.00%    |  |       |  |          | 3/31/2020 |                                          |   | 666,389 |                        |            |   | 666,389           |  
|Total Subordinated Convertible
    Debt              |  |             |  |                              |  |          |  |       |  |          |           |                                          | $ | 666,389 |                        |            | $ | 666,389           |  
|                                                     |  |             |  |                              |  |          |  |       |  |          |           |                                          |   |         |                        |            |   |                   |  
|Equity/Other—2.80%                                   |  |             |  |                              |  |          |  |       |  |          |           |                                          |   |         |                        |            |   |                   |  
|ACON IWP Investors I, L.L.C.                         |  | (a)         |  | Healthcare & Pharmaceuticals |  |          |  |       |  |          |           |                                          |   | 500,000 |                        |            |   | 500,000           |  
|Javlin
    Capital LLC Class C-2 Preferred Units     |  | (a) (d) (e) |  | Specialty Finance            |  |          |  |       |  |          |           |                                          |   | 214,286 |                        |            |   | 750,000           |  
|Total Equity/Other                                   |  |             |  |                              |  |          |  |       |  |          |           |                                          |   | 714,286 |                        |            | $ | 1,250,000         |  
|                                                     |  |             |  |                              |  |          |  |       |  |          |           |                                          |   |         |                        |            |   |                   |  
|TOTAL INVESTMENTS—75.34%                             |  |             |  |                              |  |          |  |       |  |          |           |                                          |   |         | $                      | 15,105,760 |   |                   | $
|OTHER
    ASSETS IN EXCESS OF LIABILITIES—24.66%     |  |             |  |                              |  |          |  |       |  |          |           |                                          |   |         |                        |            |   |                   | $
|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 September 30, 2018 represented
                                         2.80% of the Company’s net assets. Fair value as of December 31, 2017 along with
                                         transactions during the nine months ended September 30, 2018 in affiliated investments
                                         were as follows):
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                         |  |                   |         |                                  |   | Nine months ended September 30, 2018 |  |                            |  
|---------------------------------------- |  | ----------------- | ------- | -------------------------------- | - | ------------------------------------ |  | -------------------------- | -
|Non-controlled, Affiliated Investments   |  | Number of  Shares |         | Fair Value at  December 31, 2017 |   | Gross Additions  (Cost)*             |  | Gross Reductions  (Cost)** |  
|ACON IWP Investors I, L.L.C.             |  |                   | 500,000 |                                  | $ | 537,903                              |  | $                          | -
|Javlin Capital, LLC, Convertible Note    |  |                   | 666,389 |                                  |   | -                                    |  |                            | -
|Javlin Capital, LLC, C-2 Preferred Units |  |                   | 214,286 |                                  |   | -                                    |  |                            | -
|Total                                    |  |                   |         |                                  | $ | 537,903                              |  | $                          | -





*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 September 30, 2018, the three-month London Interbank Offered Rate, or LIBOR, was 2.39600%.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------



| | (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 September 30, 2018, 100%
                                         of the Company’s total assets represented qualifying assets based on fair market
                                         value, though the company does own non-qualifying assets as noted by this footnote (e).
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (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









TRITON PACIFIC INVESTMENT CORPORATION,
INC.



CONSOLIDATED SCHEDULE OF INVESTMENTS



AS OF DECEMBER 31, 2017



|                                          |  |           |  |                                   |  |                   |  |                  |  |            |  |                                     |           |  |                    |   |           |               | 
|----------------------------------------- |  | --------- |  | --------------------------------- |  | ----------------- |  | ---------------- |  | ---------- |  | ----------------------------------- | --------- |  | ------------------ | - | --------- | ------------- | 
|Portfolio Company                         |  | Footnotes |  | Industry                          |  | Rate(b)           |  | Base  Rate
Floor |  | Maturity   |  | Principal  Amount/ Number of Shares |           |  | Amortized
 Cost(f) |   |           | Fair Value(c) | 
|Senior Secured Loans—First Lien—45.65%    |  |           |  |                                   |  |                   |  |                  |  |            |  |                                     |           |  |                    |   |           |               | 
|LSF9 Atlantis Holdings, LLC               |  |           |  | Telecommunications                |  | L+6.00% (7.36%)   |  | 1.4%             |  | 5/1/2023   |  | $                                   | 493,750   |  |                    | $ | 489,235   |               | 
|California Pizza Kitchen, Inc.            |  |           |  | Beverage, Food & Tobacco          |  | L+6.00% (7.57%)   |  | 1.6%             |  | 8/19/2022  |  |                                     | 345,625   |  |                    |   | 342,933   |               | 
|CareCentrix, Inc.                         |  |           |  | Healthcare & Pharmaceuticals      |  | L+5.00% (6.69%)   |  | 1.7%             |  | 7/8/2021   |  |                                     | 195,500   |  |                    |   | 192,300   |               | 
|CareerBuilder                             |  |           |  | Business Services                 |  | L+6.75% (8.44%)   |  | 1.7%             |  | 7/27/2023  |  |                                     | 493,750   |  |                    |   | 479,771   |               | 
|Coronado Group LLC                        |  |           |  | Metals & Mining                   |  | L+7.00% (8.33%)   |  | 1.3%             |  | 6/6/2023   |  |                                     | 386,565   |  |                    |   | 372,948   |               | 
|CRCI Holdings, Inc.                       |  |           |  | Business Services                 |  | L+5.50% (7.19%)   |  | 1.7%             |  | 8/31/2023  |  |                                     | 324,563   |  |                    |   | 321,740   |               | 
|Deluxe Entertainment Services Group, Inc. |  |           |  | Media: Diversified and Production |  | L+5.50% (6.88%)   |  | 1.4%             |  | 2/28/2020  |  |                                     | 340,762   |  |                    |   | 333,958   |               | 
|Flavors Holdings, Inc. Tranche B          |  |           |  | Beverage, Food & Tobacco          |  | L+5.75% (7.44%)   |  | 1.7%             |  | 4/3/2020   |  |                                     | 104,687   |  |                    |   | 102,670   |               | 
|GK Holdings, Inc.                         |  |           |  | Business Services                 |  | L+6.00% (7.69%)   |  | 1.7%             |  | 1/20/2021  |  |                                     | 121,250   |  |                    |   | 120,778   |               | 
|GoWireless Holdings, Inc.                 |  |           |  | Consumer Services                 |  | L+6.50% (8.16%)   |  | 1.7%             |  | 12/20/2024 |  |                                     | 500,000   |  |                    |   | 495,000   |               | 
|IG Investments Holdings, LLC              |  |           |  | Business Services                 |  | L+3.50% (5.19%)   |  | 1.7%             |  | 10/29/2021 |  |                                     | 345,543   |  |                    |   | 344,239   |               | 
|InfoGroup Inc.                            |  |           |  | Business Services                 |  | L+5.00% (6.69%)   |  | 1.7%             |  | 3/28/2023  |  |                                     | 496,250   |  |                    |   | 491,871   |               | 
|Jackson Hewitt, Inc.                      |  |           |  | Business Services                 |  | L+7.00% (8.38%)   |  | 1.4%             |  | 7/30/2020  |  |                                     | 186,139   |  |                    |   | 183,882   |               | 
|McAfee LLC                                |  |           |  | Business Services                 |  | L+4.50% (6.07%)   |  | 1.6%             |  | 9/27/2024  |  |                                     | 249,375   |  |                    |   | 246,960   |               | 
|Moran Foods, LLC                          |  |           |  | Beverage, Food & Tobacco          |  | L+6.00% (7.57%)   |  | 1.6%             |  | 12/5/2023  |  |                                     | 346,500   |  |                    |   | 337,622   |               | 
|Pre-Paid Legal Services, Inc              |  |           |  | Consumer Services                 |  | L+5.25% (6.82%)   |  | 1.6%             |  | 7/1/2019   |  |                                     | 317,021   |  |                    |   | 316,483   |               | 
|Raley’s                                   |  |           |  | Beverage, Food & Tobacco          |  | L+5.25% (6.82%)   |  | 1.6%             |  | 5/18/2022  |  |                                     | 285,967   |  |                    |   | 285,967   |               | 
|Sahara Parent Inc                         |  |           |  | Business Services                 |  | L+5.00% (6.69%)   |  | 1.7%             |  | 8/16/2024  |  |                                     | 349,125   |  |                    |   | 345,783   |               | 
|SITEL Worldwide Corporation               |  |           |  | Business Services                 |  | L+5.50% (6.88%)   |  | 1.4%             |  | 9/20/2021  |  |                                     | 195,500   |  |                    |   | 195,212   |               | 
|Strike, LLC                               |  |           |  | Energy: Oil & Gas                 |  | L+8.00% (9.50%)   |  | 1.5%             |  | 11/30/2022 |  |                                     | 332,500   |  |                    |   | 323,942   |               | 
|Travel Leaders Group, LLC                 |  |           |  | Hotel, Gaming & Leisure           |  | L+4.50% (5.92%)   |  | 1.4%             |  | 1/25/2024  |  |                                     | 347,379   |  |                    |   | 345,866   |               | 
|TruGreen Limited Partnership              |  |           |  | Consumer Services                 |  | L+4.00% (5.54%)   |  | 1.5%             |  | 4/13/2023  |  |                                     | 345,634   |  |                    |   | 341,640   |               | 
|Verdesian Life Sciences LLC               |  |           |  | Wholesale Trade-Nondurable Goods  |  | L+5.00% (6.38%)   |  | 1.4%             |  | 7/1/2020   |  |                                     | 208,335   |  |                    |   | 207,283   |               | 
|Wirepath LLC                              |  |           |  | Consumer Services                 |  | L+5.25% (6.87%)   |  | 1.6%             |  | 8/5/2024   |  |                                     | 498,750   |  |                    |   | 496,340   |               | 
|Total Senior Secured Loans—First Lien     |  |           |  |                                   |  |                   |  |                  |  |            |  | $                                   | 7,810,470 |  |                    | $ | 7,714,423 |               | 
|                                          |  |           |  |                                   |  |                   |  |                  |  |            |  |                                     |           |  |                    |   |           |               | 
|Senior Secured Loans—Second Lien—22.59%   |  |           |  |                                   |  |                   |  |                  |  |            |  |                                     |           |  |                    |   |           |               | 
|Flavors Holdings, Inc.                    |  |           |  | Beverage, Food & Tobacco          |  | L+10.00% (11.69%) |  | 1.7%             |  | 10/7/2021  |  |                                     | 125,000   |  |                    |   | 122,343   |               | 
|FullBeauty Brands Holding                 |  |           |  | High Tech Industries              |  | L+9.00% (10.57%)  |  | 1.6%             |  | 10/13/2023 |  |                                     | 250,000   |  |                    |   | 218,903   |               | 
|GK Holdings, Inc.                         |  |           |  | Business Services                 |  | L+10.25% (11.94%) |  | 1.7%             |  | 1/21/2022  |  |                                     | 125,000   |  |                    |   | 123,559   |               | 
|Inmar                                     |  |           |  | Business Services                 |  | L+8.00% (9.42%)   |  | 1.4%             |  | 5/1/2025   |  |                                     | 500,000   |  |                    |   | 493,103   |               | 
|McAfee LLC                                |  |           |  | Business Services                 |  | L+8.50% (10.07%)  |  | 1.6%             |  | 9/26/2025  |  |                                     | 500,000   |  |                    |   | 496,986   |               | 
|Neustar, Inc.                             |  |           |  | High Tech Industries              |  | L+8.00% (9.40%)   |  | 1.4%             |  | 2/28/2025  |  |                                     | 750,000   |  |                    |   | 739,275   |               | 
|NPC International, Inc.                   |  |           |  | Beverage, Food & Tobacco          |  | L+7.50 (9.05%)    |  | 1.6%             |  | 3/28/2025  |  |                                     | 500,000   |  |                    |   | 498,135   |               | 
|Oxbow Carbon LLC                          |  |           |  | Metals & Mining                   |  | L+7.00 (8.24%)    |  | 1.2%             |  | 1/19/2020  |  |                                     | 250,000   |  |                    |   | 240,350   |               | 
|Oxbow Carbon LLC                          |  |           |  | Metals & Mining                   |  | L+6.00 (10.50%)   |  | 4.5%             |  | 1/4/2024   |  |                                     | 500,000   |  |                    |   | 495,034   |               | 
|Rocket Software, Inc.                     |  |           |  | Business Services                 |  | L+9.50% (11.19%)  |  | 1.7%             |  | 10/14/2024 |  |                                     | 500,000   |  |                    |   | 491,548   |               | 
|Total Senior Secured Loans—Second Lien    |  |           |  |                                   |  |                   |  |                  |  |            |  | $                                   | 4,000,000 |  |                    | $ | 3,919,236 |               | 



The accompanying notes are an integral
part of these statements.





9







TRITON PACIFIC INVESTMENT CORPORATION,
INC.



CONSOLIDATED SCHEDULE OF INVESTMENTS



AS OF DECEMBER 31, 2017 (CONTINUED)



|                                                     |  |             |  |                              |  |         |  |                       |  |           |  |                                         |         |  |                        |   |            |                   | 
|---------------------------------------------------- |  | ----------- |  | ---------------------------- |  | ------- |  | --------------------- |  | --------- |  | --------------------------------------- | ------- |  | ---------------------- | - | ---------- | ----------------- | 
|Portfolio
    Company                                |  | Footnotes   |  | Industry                     |  | Rate(b) |  | Base
     Rate  Floor |  | Maturity  |  | Principal
     Amount/ Number of Shares |         |  | Amortized

    Cost(f) |   |            | Fair
    Value(c) | 
|Subordinated Convertible
    Debt—0.00%              |  |             |  |                              |  |         |  |                       |  |           |  |                                         |         |  |                        |   |            |                   | 
|Javlin Capital
    LLC Subordinated Convertible Note |  | (a) (e)     |  | Specialty Finance            |  | 6.00%   |  |                       |  | 3/31/2020 |  |                                         | 666,389 |  |                        |   | 666,389    |                   | 
|Total Subordinated
    Convertible Debt              |  |             |  |                              |  |         |  |                       |  |           |  | $                                       | 666,389 |  |                        | $ | 666,389    |                   | 
|                                                     |  |             |  |                              |  |         |  |                       |  |           |  |                                         |         |  |                        |   |            |                   | 
|Equity/Other—3.19%                                   |  |             |  |                              |  |         |  |                       |  |           |  |                                         |         |  |                        |   |            |                   | 
|ACON IWP Investors I, L.L.C.                         |  | (a)         |  | Healthcare & Pharmaceuticals |  |         |  |                       |  |           |  |                                         | 500,000 |  |                        |   | 500,000    |                   | 
|Javlin Capital LLC Class
    C-2 Preferred Units     |  | (a) (d) (e) |  | Specialty Finance            |  |         |  |                       |  |           |  |                                         | 214,286 |  |                        |   | 750,000    |                   | 
|Total Equity/Other                                   |  |             |  |                              |  |         |  |                       |  |           |  |                                         | 714,286 |  |                        | $ | 1,250,000  |                   | 
|                                                     |  |             |  |                              |  |         |  |                       |  |           |  |                                         |         |  |                        |   |            |                   | 
|TOTAL INVESTMENTS—71.43%                             |  |             |  |                              |  |         |  |                       |  |           |  |                                         |         |  |                        | $ | 13,550,048 |                   | 
|OTHER ASSETS IN EXCESS
    OF LIABILITIES—28.57%     |  |             |  |                              |  |         |  |                       |  |           |  |                                         |         |  |                        |   |            |                   | 
|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, 2017 represented 68.24% of the Company’s net assets. Fair value as of December 31, 2017 along with transactions
during the period ended December 31, 2017 in affiliated investments were as follows:
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                         |  |                                  |           |  | Year Ended December 31, 2017 |   |        |                            | 
|---------------------------------------- |  | -------------------------------- | --------- |  | ---------------------------- | - | ------ | -------------------------- | 
|Non-controlled, Affiliated Investments   |  | Fair Value at  December 31, 2016 |           |  | Gross Additions (Cost)*      |   |        | Gross Reductions  (Cost)** | 
|ACON IWP Investors I, L.L.C.             |  | $                                | 691,072   |  |                              | $ | -      |                            | 
|Javlin Capital, LLC, Convertible Note    |  |                                  | 646,901   |  |                              |   | 19,488 |                            | 
|Javlin Capital, LLC, C-2 Preferred Units |  |                                  | 537,229   |  |                              |   | -      |                            | 
|Total                                    |  | $                                | 1,875,202 |  |                              | $ | 19,488 |                            | 



*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) | The majority of the investments
bear interest at a rate that may be determined by reference to London Interbank Offered Rate (“LIBOR” or “L”)
or Prime Rate (“Prime” or “P”) which reset daily, monthly, quarterly, or semiannually. For each such investment,
the Company has provided the spread over LIBOR or Prime and the current contractual interest rate in effect at December 31, 2017.
Certain investments are subject to a LIBOR or Prime interest rate floor. As of December 31, 2017, the three-month London Interbank
Offered Rate, or LIBOR, was 1.69465%.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (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, 2017, 100% 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.





10







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 a publicly
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. 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. 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 and nine months ended September 30, 2018 and 2017.



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 Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 946, Financial
Services – Investment Companies, 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, 2017.



Management
Estimates and Assumptions.The preparation of unaudited, consolidated financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the amounts of assets





11







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 also may include valuations prepared by third-party valuation services.



ASC
Topic 820, Fair Value Measurement, 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.



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





12







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, waterfall and liquidation priority
and market comparables, book value multiples, economic profits and portfolio multiples.



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.



Paid-In-Kind
Interest.The company has certain investments in its portfolio that contain a payment-in-kind (“PIK”) interest
provision, which represents contractual interest or dividends that are added to the principal balance and recorded as income.
For the three months ended September 30, 2018 and 2017, interest income included -0- and -0- of PIK interest, respectively. For
the nine months ended September 30, 2018 and 2017, interest income included -0- and $19,488 of PIK interest, respectively. The
Company stops accruing PIK interest when it is determined that PIK interest is no longer collectible. To maintain RIC tax treatment,
and to avoid corporate tax, substantially all of this income must be paid out to the stockholders in the form of distributions,
even though the Company has not yet collected the cash.



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 September 30, 2018 and 2017 was
-0- and -0-, respectively. The fee for the nine months ended September 30, 2018 and 2017 was -0- and ($334), respectively, of
which all 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





13







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.



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 September 30, 2018, $3,089,687 of offering costs
have been reclassified and included as part of the Expense Reimbursement Agreement and accordingly included in Reimbursement due
from the Adviser. Of these expenses, $1,574,616 has exceeded the three-year period for repayment and will not be repayable by
the Company. $225,000 of offering costs from contingent expenses recorded in prior periods were deemed to be non-payable and the
Reimbursement from the Adviser was adjusted accordingly. For the three and nine months ended September 30, 2018, the Company incurred
$73,477 and $292,036, respectively, in offering costs that were not reimbursed by the Sponsor, of which $83,942 and $170,932,
respectively, was expensed by the Company for the three and nine months ended September 30, 2018.



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 September 30, 2018 and 2017, 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 nine months ended September
30, 2018 and 2017:





14









|                                                |  | Nine months ended September 30,
|----------------------------------------------- |  | -------------------------------
|                                                |  | 2018                           
|                                                |  | Shares                         
|Gross proceeds from Offering                    |  | 141,332.86                     
|Reinvestment of Distributions                   |  | 21,626.05                      
|Commissions and Dealer Manager Fees             |  | -                              
|Net Proceeds to Company from Share Transactions |  | 162,958.91                     



During
the nine months ended September 30, 2018 and 2017, the Company sold 141,322.86 and 362,028.61 shares of common stock,
respectively, for gross proceeds of approximately $1,865,205 and $5,320,227, at an average price per share of $13.20 and
$14.70, respectively. The increase in capital in excess of par value during the nine months ended September 30, 2018 and 2017
include reinvested stockholder distributions of $256,864 and $214,336, respectively, for which the Company issued 21,626.05
and 16,105.02 shares of common stock, respectively.



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 $178,471 and $502,640 for the nine months ended
September 30, 2018 and 2017, respectively.



Share
Repurchase Program



The
Company intends to continue to conduct quarterly tender offers pursuant to its share repurchase program. The Company’s board
of directors will consider the following factors, among others, in making its determination regarding whether to cause the Company
to offer to repurchase shares of common stock and under what terms:



| | ● |  | the
    effect of such repurchases on the Company’s qualification as a RIC (including the consequences of any necessary asset
    sales);
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------

| | ● |  | the
    liquidity of the Company’s assets (including fees and costs associated with disposing of assets);
| | - |  | ---------------------------------------------------------------------------------------------------------

| | ● |  | the
    Company’s investment plans and working capital requirements;
| | - |  | --------------------------------------------------------------------

| | ● |  | the
    relative economies of scale with respect to the Company’s size;
| | - |  | -----------------------------------------------------------------------

| | ● |  | the
    Company’s history in repurchasing shares of common stock or portions thereof; and
| | - |  | -----------------------------------------------------------------------------------------

| | ● |  | the
    condition of the securities markets.
| | - |  | --------------------------------------------

The
Company currently intends to limit the number of shares of common stock to be repurchased during any calendar year to the number
of shares of common stock it can repurchase with the proceeds it receives from the issuance of shares of common stock under its
distribution reinvestment plan. At the discretion of the Company’s board of directors, the Company may also use cash on
hand, cash available from borrowings and cash from the liquidation of securities investments as of the end of the applicable period
to repurchase shares of common stock. In addition, the Company will limit the number of shares of common stock to be repurchased
in any calendar year to 10% of the weighted average number of shares of common stock outstanding in the prior calendar year, or
2.5% in each calendar quarter, though the actual number of shares of common stock that the Company offers to repurchase may be
less in light of the limitations noted above.



Our
board of directors reserves the right, in its sole discretion, to limit the number of shares to be repurchased for each class
by applying the limitations on the number of shares to be repurchased, noted above, on a per class basis. We further anticipate
that we will offer to repurchase such shares on each date of repurchase at a price equal to 90% of the current offering price
on each date of repurchase. If the amount of repurchase requests exceeds the number of shares we seek to repurchase, we will repurchase
shares on a pro-rata basis. As a result, we may repurchase less than the full amount of shares that shareholders submit for repurchase.
If we do not repurchase the full amount of the shares that shareholders have requested to be repurchased, or we determine not
to make repurchases of our shares, shareholders may not be able to dispose of their shares. Any periodic repurchase offers will
be subject in part to our available cash and compliance with the Company Act.





15







The
following table provides information concerning the Company’s repurchase of shares of common stock during the nine months
ended September 30, 2018 and 2017:





|For the Nine Months Ended |                                                             | Repurchase Date |                    | Shares Repurchased |          | Percentage of Shares Tendered That Were Repurchased |     |  | Average Price Paid Per Share |   | Aggregate Consideration for Repurchased Shares
|------------------------- | ----------------------------------------------------------- | --------------- | ------------------ | ------------------ | -------- | --------------------------------------------------- | --- |  | ---------------------------- | - | ----------------------------------------------
|Fiscal 2018               |                                                             |                 |                    |                    |          |                                                     |     |  |                              |  
|                          | March
                                         31, 2018     |                 | March 28, 2018     |                    | 6,388.01 |                                                     | 11% |  |                              | $ | 12.11                                         
|Fiscal 2017               |                                                             |                 |                    |                    |          |                                                     |     |  |                              |   |                                               
|                          | March
                                         31, 2017     |                 | January 20, 2017   |                    | 8,482.60 |                                                     | 27% |  |                              |   | 13.87                                         
|                          | June
                                         30, 2017      |                 | May 12, 2017       |                    | 1,936.81 |                                                     | 6%  |  |                              |   | 13.55                                         
|                          | September
                                         30, 2017 |                 | September 25, 2017 |                    | 5,968.22 |                                                     | 9%  |  |                              |   | 12.30                                         



The
Company and its board did not authorize a repurchase for the three months ended September 30, 2018 nor the three months ended
June 30, 2018.



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 September 30, 2018, 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
table below, on a cumulative basis, discloses the components of the Reimbursement due from Adviser reflected on the Consolidated
Statements of Financial Position:





|                                     |  | September 30, |            |   | December 31, |  
|------------------------------------ |  | ------------- | ---------- | - | ------------ | -
|                                     |  | 2018          |            |   | 2017         |  
|Operating Expenses                   |  | $             | 1,977,504  |   |              | $
|Offering Costs                       |  |               | 3,089,687  |   |              |  
|Due to related party offset          |  |               | (4,724,476 | ) |              |  
|Reimbursements received from Adviser |  |               | (342,715   | ) |              |  
|Other amounts due to affiliates      |  |               | 886        |   |              |  
|Total Reimbursement due from Adviser |  | $             | 886        |   |              | $



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





16







July 2019 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 September 30, 2018, 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 2019 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.



The
following table describes the fees and expenses accrued under the investment advisory and administration agreement and the dealer
manager agreement during the three and nine months ended September 30, 2018 and 2017:





|                               |  |                              |  |                                     |  | Three
    months ended September 30, |        |  | Nine
    months ended September 30, |  
|------------------------------ |  | ---------------------------- |  | ----------------------------------- |  | ------------------------------------ | ------ |  | ----------------------------------- | -
|Related Party                  |  | Source Agreement             |  | Description                         |  | 2018                                 |        |  | 2017                                |  
|Triton Pacific Adviser, LLC    |  | Investment Adviser Agreement |  | Base Management Fees                |  | $                                    | 91,593 |  |                                     | $
|Triton Pacific Adviser, LLC    |  | Investment Adviser Agreement |  | Capital Gains Incentive
    Fees(1) |  | $                                    | -      |  |                                     | $
|TFA Associates, LLC            |  | Administration Agreement     |  | Administrative Services Expenses    |  | $                                    | 66,558 |  |                                     | $
|Triton Pacific Securities, LLC |  | Dealer Manager Agreement     |  | Dealer Manager Fees(2)              |  | $                                    | 11,427 |  |                                     | $








| | (1) | During
                                         the nine months ended September 30, 2018 and 2017, the Company earned capital gains incentive
                                         fees of -0- and ($334), respectively, based on the performance of its portfolio, of which
                                         all were based on unrealized losses, respectively. 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 nine months ended September 30, 2018 and 2017, the Company paid the Dealer Manager
                                         $178,471 and $502,640, respectively, in sales commissions and dealer fees. $34,809 and
                                         $97,435 were retained by TPS, respectively, and the remainder re-allowed to third party
                                         participating broker dealers.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
following table describes the amounts owed to affiliates as of September 30, 2018:





|                                |  | September 30, |        
|------------------------------- |  | ------------- | -------
|                                |  | 2018          |        
|Management fees payable         |  | $             | 91,593 
|Dealer manager fees payable     |  |               | 5,610  
|Other amounts due to affiliates |  |               | 22,777 
|Total due to affiliates         |  | $             | 119,980



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





17







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.



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                                  |  | $0                                             |  | 432.69%                                                                           |  | -                                                                                      |  | September 30, 2015                    
|December 31, 2012  |  | $26,111                                  |  | $0                                             |  | 531.09%                                                                           |  | -                                                                                      |  | December 31, 2015                     
|March 31, 2013     |  | $30,819                                  |  | $0                                             |  | N/A                                                                               |  | -                                                                                      |  | March 31, 2016                        
|June 30, 2013      |  | $59,062                                  |  | $0                                             |  | N/A                                                                               |  | -                                                                                      |  | June 30, 2016                         
|September 30, 2013 |  | $65,161                                  |  | $0                                             |  | N/A                                                                               |  | -                                                                                      |  | September 30, 2016                    
|December 31, 2013  |  | $91,378                                  |  | $0                                             |  | 455.09%                                                                           |  | -                                                                                      |  | December 31, 2016                     
|March 31, 2014     |  | $68,293                                  |  | $0                                             |  | 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                        
|June 30, 2016      |  | $206,933                                 |  | $285,878                                       |  | 4.95%                                                                             |  | 3.52%                                                                                  |  | June 30, 2019                         
|September 30, 2016 |  | $201,573                                 |  | $223,020                                       |  | 4.52%                                                                             |  | 3.13%                                                                                  |  | September 30, 2019                    
|December 31, 2016  |  | $104,561                                 |  | $168,876                                       |  | 4.45%                                                                             |  | 3.11%                                                                                  |  | December 31, 2019                     
|March 31, 2017     |  | $80,847                                  |  | $252,875                                       |  | 4.21%                                                                             |  | 3.19%                                                                                  |  | March 31, 2020                        
|June 30, 2017      |  | $0                                       |  | $176,963                                       |  | 3.98%                                                                             |  | 3.18%                                                                                  |  | June 30, 2020                         
|September 30, 2017 |  | $0                                       |  | $119,188                                       |  | 4.19%                                                                             |  | 3.00%                                                                                  |  | September 30, 2020                    
|December 31, 2017  |  | $0                                       |  | $0                                             |  | N/A                                                                               |  | N/A                                                                                    |  | N/A                                   



|(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





18







| |  | 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.



The
Company or the Adviser may terminate the Expense Reimbursement Agreement at any time upon thirty days’ written notice.
The Expense Reimbursement Agreement will automatically terminate upon termination of the Investment Advisory Agreement or
upon our liquidation or dissolution. The Expense Reimbursement Agreement expires by its
terms on December 31, 2018, unless extended with the mutual consent of  the Company and our Adviser. Upon termination
of the Expense Reimbursement Agreement we may be required to repay our Adviser all expense support payments made by our
Adviser within three years of the date of termination, subject to the limitations contained in the agreement.



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 September 30, 2018, $5,067,191
has been recorded as Reimbursement due from the Adviser pursuant to the Expense Reimbursement Agreement. Of this, $4,724,476,
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.



Beginning
the year ended December 31, 2016, the Adviser began to reimburse less than 100% of operating expenses, and for the year ended
December 31, 2017, the Adviser did not reimburse any operating expenses after the first quarter. Additionally, the Adviser did
not reimburse any offering expenses for the first nine months of 2018 and fourth quarter of 2017. Of these Operating Expenses
in the table above, $2,663,810 has exceeded the three-year period for repayment and will not be repayable by the Company. $2,403,381
remains that could potentially be subject to repayment 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 nine
months ended September 30, 2018 and 2017:





19









|                          |  |  | Distribution |        
|------------------------- |  |  | ------------ | -------
|For the Nine Months Ended |  |  | Per Share    |        
|Fiscal 2018               |  |  |              |        
|January 29, 2018          |  |  | $            | 0.03370
|February 28, 2018         |  |  | $            | 0.03370
|March 28, 2018            |  |  | $            | 0.03370
|April 26, 2018            |  |  | $            | 0.03370
|May 29, 2018              |  |  | $            | 0.03370
|June 27, 2018             |  |  | $            | 0.03370
|July 27, 2018             |  |  | $            | 0.03370
|August 27, 2018           |  |  | $            | 0.03370
|September 25, 2018        |  |  | $            | 0.03370
|                          |  |  |              |        
|Fiscal 2017               |  |  |              |        
|January 27, 2017          |  |  | $            | 0.04000
|February 24, 2017         |  |  | $            | 0.04000
|March 23, 2017            |  |  | $            | 0.04000
|April 27, 2017            |  |  | $            | 0.04000
|May 25, 2017              |  |  | $            | 0.04000
|June 23, 2017             |  |  | $            | 0.04000
|July 21, 2017             |  |  | $            | 0.04000
|August 29, 2017           |  |  | $            | 0.03417
|September 28, 2017        |  |  | $            | 0.03417



On
October 23, 2018, the Company authorized and declared a cash distribution of $0.0337 per share for the month of October 2018,
to the shareholders of record as of October 25, 2018. 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.



The
following table reflects the sources of the cash distributions on a tax basis that the Company paid on its common stock during
the nine months ended September 30, 2018 and 2017:





20







|                                                          |  | Nine months ended September 30, |        
|--------------------------------------------------------- |  | ------------------------------- | -------
|                                                          |  | 2018                            |        
|Source
of Distribution                                    |  | Distribution Amount             |        
|Offering proceeds                                         |  | $                               | -      
|Borrowings                                                |  |                                 | -      
|Net investment income(1)                                  |  |                                 | -      
|Short-term capital gains proceeds from the sale of assets |  |                                 | 13,000 
|Long-term capital gains proceeds from the sale of assets  |  |                                 | 47,908 
|Distributions from common equity (return of capital)      |  |                                 | 395,356
|Expense reimbursement from sponsor                        |  |                                 | -      
|Total                                                     |  | $                               | 456,264










|(1) | During
                                         the nine months ended September 30, 2018 and 2017, 97.1% and 92.7%, respectively, of
                                         the Company’s gross investment income was attributable to cash income earned, and
                                         2.9% and 7.3%, resepctively was attributable to non-cash accretion of discount and paid
                                         in-kind interest.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
Company’s net investment income (loss) on a tax basis for the nine months ended September 30, 2018 and 2017 was ($281,572)
and ($77,447), respectively. As of September 30, 2018 and 2017, the Company had ($1,316,612) and ($356,802), 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 nine months ended September 30, 2018 and ($334) was
reversed for the nine months ended September 30, 2017.

The
following table sets forth reconciliation between GAAP basis net investment income and tax basis net investment income for the
nine months ended September 30, 2018 and 2017:





|                                                      |  | Nine months ended September 30, |         
|----------------------------------------------------- |  | ------------------------------- | --------
|                                                      |  | 2018                            |         
|GAAP basis net investment income (loss)               |  | $                               | (281,572
|Reversal of incentive fee accrual on unrealized gains |  |                                 | -       
|Other book-tax differences                            |  |                                 | -       
|Tax-basis net investment income (loss)                |  | $                               | (281,572



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 September 30, 2018 and 2017, the components of accumulated earnings on a tax basis were as follows:





|                                                                                      |  | Nine months ended September 30, |           
|------------------------------------------------------------------------------------- |  | ------------------------------- | ----------
|                                                                                      |  | 2018                            |           
|Undistributed (overdistributed) ordinary income (income and short-term capital gains) |  | $                               | (1,354,027
|Distributable realized gains (long-term capital gains)                                |  |                                 | 37,415    
|Net unrealized appreciation (depreciation) on investments                             |  |                                 | (1,600,956
|                                                                                      |  | $                               | (2,917,568



The
($1,600,956) of net depreciation as of September 30, 2018 includes gross appreciation over amortized tax cost of $200,456 and
gross depreciation under amortized tax cost of $1,801,412. The ($1,448,359) of net depreciation as





21







of September 30, 2017 includes
gross appreciation over amortized tax cost of $191,929 and gross depreciation under amortized tax cost of $1,640,288.



The
aggregate cost of the Company’s investments for U.S. federal income tax purposes totaled $15,105,760 and $12,934,038 as
of September 30, 2018 and 2017, respectively. The aggregate net unrealized appreciation (depreciation) on investments on a tax
basis was ($1,600,956) and ($1,448,359) as of September 30, 2018 and 2017, 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
September 30, 2018 and December 31, 2017:





|                                    |  | Nine months ended September 30,
    2018 |            |  |                                    |   |            |                                                        |  |  |                                    |  
|----------------------------------- |  | ---------------------------------------- | ---------- |  | ---------------------------------- | - | ---------- | ------------------------------------------------------ |  |  | ---------------------------------- | -
|                                    |  | (Unaudited)                              |            |  | Year Ended December
    31, 2017   |  
|                                    |  | Investments
    atAmortizedCost(1)       |            |  | Investments
    at 
    Fair Value |   |            | Fair
    Value 
    Percentage of 
    Total Portfolio |  |  | Investments
    atAmortizedCost(1) |  
|Senior Secured Loans—First
    Lien |  | $                                        | 8,021,538  |  |                                    | $ | 7,985,641  |                                                        |  |  | 59                                 | %
|Senior Secured Loans—Second Lien    |  |                                          | 5,167,833  |  |                                    |   | 5,017,421  |                                                        |  |  | 37                                 | %
|Subordinated Debt                   |  |                                          | 666,389    |  |                                    |   | -          |                                                        |  |  | 0                                  | %
|Equity/Other                        |  |                                          | 1,250,000  |  |                                    |   | 501,742    |                                                        |  |  | 4                                  | %
|Total                               |  | $                                        | 15,105,760 |  |                                    | $ | 13,504,804 |                                                        |  |  | 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 September 30, 2018 and December 31, 2017:





|                                      |  | September
    30, 2018  (Unaudited) |            |  | December
    31, 2017   | 
|------------------------------------- |  | ----------------------------------- | ---------- |  | ----------------------- | 
|Industry
    Classification           |  | Fair Value                          |            |  | Percentage of Portfolio | 
|Beverage,
    Food & Tobacco          |  |                                     | 1,987,287  |  |                         | 
|Business
    Services                 |  |                                     | 3,700,395  |  |                         | 
|Construction
    & Building           |  |                                     | 483,750    |  |                         | 
|Consumer
    Services                 |  |                                     | 1,316,527  |  |                         | 
|Energy:
    Oil & Gas                 |  |                                     | 826,666    |  |                         | 
|Environmental                         |  |                                     | 490,000    |  |                         | 
|Healthcare
    & Pharmaceuticals      |  |                                     | 1,502,310  |  |                         | 
|High
    Tech Industries              |  |                                     | 768,043    |  |                         | 
|Hotel,
    Gaming & Leisure           |  |                                     | 505,296    |  |                         | 
|Media:
    Diversified and Production |  |                                     | 306,831    |  |                         | 
|Metals
    & Mining                   |  |                                     | 958,018    |  |                         | 
|Telecommunications                    |  |                                     | 469,238    |  |                         | 
|Wholesale
    Trade-Nondurable Goods  |  |                                     | 190,443    |  |                         | 
|Total                                 |  | $                                   | 13,504,804 |  |                         | 



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





22







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.



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 September 30, 2018 and December 31, 2017, the Company’s investments were categorized as follows in the fair value hierarchy):





|Valuation Inputs                            |  | Nine months ended
September 30, 2018
(Unaudited) |            |  | Year ended 
December 31, 
2017 |  
|------------------------------------------- |  | ------------------------------------------------ | ---------- |  | ------------------------------ | -
|Level 1—Price quotations in active markets  |  | $                                                | -          |  |                                | $
|Level 2—Significant other observable inputs |  |                                                  | -          |  |                                |  
|Level 3—Significant unobservable inputs     |  |                                                  | 13,504,804 |  |                                |  
|Total                                       |  | $                                                | 13,504,804 |  |                                | $



The
Company’s investments as of September 30, 2018 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 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, waterfall and liquidation
priority 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.



The
following is a reconciliation for the nine months ended September 30, 2018 and year ended December 31, 2017 of investments for
which significant unobservable inputs (Level 3) were used in determining fair value:





23









|                                                                                                                                                                                                               |  | For the nine
    months ended September 30, 2018 |           
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------ | ----------
|                                                                                                                                                                                                               |  | Senior
    Secured 
Loans - First Lien           |           
|Fair value at beginning of
    period                                                                                                                                                                          |  | $                                                | 7,690,952 
|Accretion of discount
    (amortization of premium)                                                                                                                                                            |  |                                                  | 18,119    
|Net realized gain (loss)                                                                                                                                                                                       |  |                                                  | 23,310    
|Net change in unrealized
    appreciation (depreciation)                                                                                                                                                       |  |                                                  | (12,425   
|Purchases                                                                                                                                                                                                      |  |                                                  | 2,943,750 
|Paid-in-kind interest                                                                                                                                                                                          |  |                                                  | -         
|Sales and redemptions                                                                                                                                                                                          |  |                                                  | (2,678,064
|Net transfers in or
    out of Level 3                                                                                                                                                                         |  |                                                  | -         
|Fair value at end of period                                                                                                                                                                                    |  | $                                                | 7,985,642 
|                                                                                                                                                                                                               |  |                                                  |           
|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 |  | $                                                | (12,425   



|                                                                                                                                                                                                               |  | For the year ended December 31, 2017   |           
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------- | ----------
|                                                                                                                                                                                                               |  | Senior
    Secured 
Loans - First Lien |           
|Fair
    value at beginning of period                                                                                                                                                                          |  | $                                      | 6,761,313 
|Accretion
    of discount (amortization of premium)                                                                                                                                                            |  |                                        | 21,761    
|Net
    realized gain (loss)                                                                                                                                                                                   |  |                                        | 50,321    
|Net
    change in unrealized appreciation (depreciation)                                                                                                                                                       |  |                                        | (104,169  
|Purchases                                                                                                                                                                                                      |  |                                        | 4,392,250 
|Paid-in-kind
    interest                                                                                                                                                                                      |  |                                        | -         
|Sales and redemptions                                                                                                                                                                                          |  |                                        | (3,430,524
|Net
    transfers in or out of Level 3                                                                                                                                                                         |  |                                        | -         
|Fair
    value at end of period                                                                                                                                                                                |  | $                                      | 7,690,952 
|                                                                                                                                                                                                               |  |                                        |           
|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 |  | $                                      | (104,169  





The
valuation techniques and significant unobservable inputs used in recurring Level 3 fair value measurements of assets as of September
30, 2018 were as follows:





|Asset
    Category                     |  | Fair
    Value |            | Primary
    Valuation Technique |                                                    | Unobservable
    Inputs      |                              | Range             |                    | Weighted
    Average
|-------------------------------------- |  | -------------- | ---------- | ------------------------------- | -------------------------------------------------- | ---------------------------- | ---------------------------- | ----------------- | ------------------ | --------------------
|Senior
    Secured Loans - First Lien  |  |                | 7,985,642  |                                 | Market
    quotes                                  |                              | Indicative
    dealer quotes |                   | 71.89
    - 102.25 |                     
|Senior
    Secured Loans - Second Lien |  | 5,017,420      |            | Market
    quotes               |                                                    | Indicative
    dealer quotes |                              | 7.10
    - 103.00 |                    | 99.64               
|Subordinated
    Debt                  |  |                | -          |                                 | Distribution
    waterfall/ liquidation priorities |                              | N/A                          |                   | N/A                |                     
|Equity/Other                           |  |                | -          |                                 | Distribution
    waterfall/ liquidation priorities |                              | N/A                          |                   | N/A                |                     
|Equity/Other                           |  |                | 501,742    |                                 | Market
    comparables                             |                              | EBITDA
    multiples (x)     |                   | 6.50x
    - 8.50x  |                     
|Total                                  |  | $              | 13,504,804 |                                 |                                                    |                              |                              |                   |                    |                     



The
valuation techniques and significant unobservable inputs used in recurring Level 3 fair value measurements of assets as of December
31, 2017 were as follows:





|Asset
    Category                     |  | Fair
    Value |            | Primary
    Valuation Technique |                                                    | Unobservable
    Inputs      |                              | Range              |                    | Weighted
    Average
|-------------------------------------- |  | -------------- | ---------- | ------------------------------- | -------------------------------------------------- | ---------------------------- | ---------------------------- | ------------------ | ------------------ | --------------------
|Senior
    Secured Loans - First Lien  |  |                | 7,690,952  |                                 | Market
    quotes                                  |                              | Indicative
    dealer quotes |                    | 78.05
    - 102.00 |                     
|Senior
    Secured Loans - Second Lien |  | 3,806,683      |            | Market
    quotes               |                                                    | Indicative
    dealer quotes |                              | 26.67
    - 103.00 |                    | 98.55               
|Subordinated
    Debt                  |  |                | -          |                                 | Distribution
    waterfall/ liquidation priorities |                              | Book
    value multiples (x) |                    | N/A                |                     
|Equity/Other                           |  |                | -          |                                 | Distribution
    waterfall/ liquidation priorities |                              | Book
    value multiples (x) |                    | N/A                |                     
|Equity/Other                           |  |                | 537,903    |                                 | Market
    comparables                             |                              | EBITDA
    multiples (x)     |                    | 7.15x
    - 9.15x  |                     
|Total                                  |  | $              | 12,035,538 |                                 |                                                    |                              |                              |                    |                    |                     



On
June 30, 2017, the Company made the decision to write down the carrying value of its investment value in Javlin Financial. The
decision was due to performance issues within Javlin Financial’s core business and a breakdown in restructuring negotiations
between the Company, its lenders, and Javlin Financial’s controlling shareholder. It is unknown at this time if there will
be any value to the investment.





24







NOTE
8 – FINANCIAL HIGHLIGHTS



The
following is a schedule of financial highlights of the Company for the nine months ended September 30, 2018 and the year ended
December 31, 2017:





|                                                                                |  | Nine Months Ended
September 30, 2018
(Unaudited) |            |   | Year Ended 
December 31, 2017 |  
|------------------------------------------------------------------------------- |  | ------------------------------------------------ | ---------- | - | ----------------------------- | -
|Per Share Data:                                                                 |  |                                                  |            |   |                               |  
|Net asset value, beginning of period                                            |  | $                                                | 11.89      |   |                               | $
|Results of operations(1)                                                        |  |                                                  |            |   |                               |  
|Net investment income (loss)                                                    |  |                                                  | (0.19      | ) |                               |  
|Net realized and unrealized appreciation (depreciation) on investments(2)       |  |                                                  | (0.03      | ) |                               |  
|Net increase (decrease) in net assets resulting from operations                 |  |                                                  | (0.22      | ) |                               |  
|Stockholder distributions(3)                                                    |  |                                                  |            |   |                               |  
|Distributions from net investment income                                        |  |                                                  | (0.29      | ) |                               |  
|Distributions from net realized gain on investments                             |  |                                                  | (0.01      | ) |                               |  
|Net decrease in net assets resulting from stockholder distributions             |  |                                                  | (0.30      | ) |                               |  
|Capital share transactions                                                      |  |                                                  |            |   |                               |  
|Issuance of common stock(4)                                                     |  |                                                  | 0.02       |   |                               |  
|Net increase (decrease) in net assets resulting from capital share transactions |  |                                                  | 0.02       |   |                               |  
|Net asset value, end of period                                                  |  | $                                                | 11.39      |   |                               | $
|Shares outstanding, end of period                                               |  |                                                  | 1,573,804  |   |                               |  
|Total return(5)                                                                 |  |                                                  | -1.7       | % |                               |  
|Ratio/Supplemental Data:                                                        |  |                                                  |            |   |                               |  
|Net assets, end of period                                                       |  | $                                                | 17,924,154 |   |                               | $
|Ratio of net investment income to average net assets                            |  |                                                  | -1.6       | % |                               |  
|Ratio of total operating expenses to average net assets                         |  |                                                  | 6.5        | % |                               |  
|Ratio of expenses reimbursed by sponsor to average net assets                   |  |                                                  | 0.0        | % |                               |  
|Ratio of expense recoupment payable to sponsor to average net assets            |  |                                                  | 0.0        | % |                               |  
|Ratio of capital gain incentive fee to average net assets                       |  |                                                  | 0.0        | % |                               |  
|Ratio of net operating expenses to average net assets                           |  |                                                  | 6.5        | % |                               |  
|Portfolio turnover(6)                                                           |  |                                                  | 16.8       | % |                               |  



|(1) | The per share data was derived by using the
    weighted average shares outstanding for the nine months ended September 30, 2018 and the year ended December 31, 2017.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | The amount shown for a share outstanding throughout
    the year may not agree with the change in the aggregate gains and losses in portfolio securities for the year because of the
    timing of sales of the Company’s shares in relation to fluctuating market values for the portfolio.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(3) | The per share data for distributions reflects
    the actual amount of distributions paid per share during the applicable period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(4) | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(5) | 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





25









|    | investment
    portfolio during the applicable period and are calculated in accordance with GAAP. These return figures do not represent an
    actual return to stockholders.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(6) | Portfolio turnover for the nine months ended
    September 30, 2018 is not annualized.                                                                                       



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
November 14, 2018, and notes the following:



For
the period beginning October 1, 2018 and ending November 14, 2018, the Company sold 4,097.98 shares of its common stock for total
gross proceeds of $52,700, and issued amounts pursuant to its distribution reinvestment plan in the amount of $29,708.31.



On
March 23, 2018, an amendment to Section 61(a) of the Company Act was signed into law to permit BDCs to reduce the minimum “asset
coverage” ratio from 200% to 150%, so long as certain approval and disclosure requirements are satisfied. As a result, these
amendments permit BDCs to potentially increase their debt-to-equity ratio from a maximum of 1 to 1 to a maximum of 2 to 1. In
addition, for BDCs like the Company whose securities are not listed on a national securities exchange, the Company is also required
to offer to repurchase its outstanding shares at the rate of 25% per quarter over four calendar quarters. Under the existing 200%
minimum asset coverage ratio, the Company is permitted to borrow up to one dollar for investment purposes for every one dollar
of investor equity, and under the 150% minimum asset coverage ratio, the Company will be permitted to borrow up to two dollars
for investment purposes for every one dollar of investor equity.



On
April 18, 2018, the Board of Directors of the Company, including a “required majority” (as such term is defined in
Section 57(o) of the Company Act), approved the application to the Company of the 150% minimum asset coverage ratio set forth
in Section 61(a)(2) of the Company Act. As a result, and subject to certain additional disclosure requirements, the minimum asset
coverage ratio applicable to the Company will be reduced from 200% to 150%, effective as of April 18, 2019. In addition, in order
to provide the Company with the maximum financial flexibility at the earliest possible date, the Board of Directors also authorized
the submission of a proposal for stockholders to approve the application of the 150% minimum asset coverage ratio to the Company
at the Company’s 2018 annual meeting of stockholders (the “2018 Annual Meeting”). If the Company’s stockholders
approve such proposal at the 2018 Annual Meeting, the 150% minimum asset coverage ratio will then apply effective as the first
day after the 2018 Annual Meeting and, as a result, the Company will be permitted to incur double the maximum amount of leverage
that the Company is able to incur currently approximately ten months earlier than if the Company’s stockholders do not vote
to approve such proposal.



On
August 10, 2018, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Pathway Capital
Opportunity Fund, Inc. (“PWAY”), a registered closed-end investment company that operates as an interval fund pursuant
to Rule 23c-3 under the Company Act. Pursuant to the Merger Agreement,





26







and
subject to certain conditions described therein, PWAY will merge with and into the Company, with the Company as the
surviving legal entity in the merger (the “Merger”). It is expected that PWAY will be the surviving accounting
entity. The respective boards of directors of the Company and PWAY, including the directors who are not “interested
persons” as defined in Section 2(a)(19) of the Company Act, determined that the Merger would be in the best interests
of each of the Company and PWAY, and further approved the Merger upon the terms and subject to the conditions and limitations
set forth in the Merger Agreement. If the proposed Merger is consummated, the holders of shares of PWAY’s Class A
common stock, par value $0.01 per share (“PWAY Class A Shares”), will have a right to receive a number of shares
of the Company’s Class A common stock, par value $0.001 per share (“TPIC Common Stock”), equal to the
result of (A) the PWAY Class A per-share net asset value (“NAV”) divided by (B) the Company per-share NAV, in
each case determined in accordance with the Merger Agreement, and the holders of shares of PWAY’s Class I common stock,
par value $0.01 per share (“PWAY Class I Shares” and, together with the PWAY Class A Shares, the
“PWAY Common Stock”), will have a right to receive a number of shares of TPIC Common Stock equal to the result of
(A) the PWAY Class I per-share NAV divided by (B) the Company per-share NAV, in each case determined in accordance with the
Merger Agreement. The closing of the Merger is subject to a number of closing conditions, including the approval of the
stockholders of both the Company and PWAY.



27







|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 with the SEC on
June 22, 2018 and declared effective on June 25, 2018.



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,
shareholders are advised to consult any additional disclosures that we may make directly to them 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.





28







Overview



We
are a publicly 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 and our most-recent post-effective amendment to our registration was declared effective
by the SEC on June 25, 2018.As of November 14, 2018, we have sold a total of 1,580,469.90 shares of common stock for gross
proceeds of approximately $23,022,029.93 including shares issued pursuant to our distribution reinvestment plan in the amount
of $890,616.79, including the reduction due to $604,017.28 in shares repurchased pursuant to the Company’s Repurchase Program,
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;





29







-Employing
disciplined underwriting policies and rigorous portfolio management;



-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 $5.221 billion in
assets under management as of June 30, 2018. 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.





30







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. The Company Act generally prohibits us from incurring indebtedness
unless immediately after such borrowing we have an asset coverage for total borrowings of at least 200% (i.e., the amount of debt
may not exceed 50% of the value of our assets). However, recent legislation has modified the Company Act by allowing a BDC to
increase the maximum amount of leverage it may incur from an asset coverage ratio of 200% to an asset coverage ratio of 150%,
if certain requirements are met. Under the legislation, we are allowed to increase our leverage capacity if stockholders representing
at least a majority of the votes cast, when quorum is met, approve a proposal to do so. If we receive stockholder approval, we
would be allowed to increase our leverage capacity on the first day after such approval. Alternatively, the legislation allows
the majority of our independent directors to approve an increase in our leverage capacity, and such approval would become effective
after one year. In either case, we would be required to make certain disclosures on our website and in SEC filings regarding,
among other things, the receipt of approval to increase our leverage, our leverage capacity and usage, and risks related to leverage.
As a non-traded BDC, we would also be required to offer to repurchase our outstanding shares at the rate of 25% per quarter over
four calendar quarters.



At
a meeting held on April 18, 2018, our Board of Directors, including a “required majority” (as defined in Section 57(o)
of the Company Act) approved the application of the modified asset coverage requirements from 200% asset coverage to 150% asset
coverage. As a result, and subject to certain additional disclosure requirements as well as the repurchase obligations, both as
described above, the 150% minimum asset coverage ratio will apply to the Company effective as of April 18, 2019. We intend to
seek stockholder approval to accelerate the decrease of the required asset coverage ratio from 200% to 150%, which would give
us the ability to increase the amount of leverage we could incur effective the day after stockholder approval is received.



Proposed
Merger with Pathway Capital Opportunity Fund



On
August 10, 2018, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Pathway Capital
Opportunity Fund, Inc. (“PWAY”), a registered closed-end investment company that operates as an interval fund pursuant
to Rule 23c-3 under the Company Act. Pursuant to the Merger Agreement,    and subject to certain conditions described
therein, PWAY will merge with and into the Company, with the Company as the surviving entity in the merger (the “Merger”).
The respective boards of directors of the Company and PWAY, including the directors who are not “interested persons”
as defined in Section 2(a)(19) of the Company Act, determined that the Merger would be in the best interests of each of the Company
and PWAY, and further approved the Merger upon the terms and subject to the conditions and limitations set forth in the Merger
Agreement. The closing of the Merger (the “Closing”) is subject to the satisfaction or waiver of certain closing conditions,
as described below. It is expected that the Merger will qualify as a “reorganization” under the provisions of Section
368(a) of Internal Revenue Code of 1986, as amended (the “Code”) and shareholders of PWAY generally will not recognize
gain or loss in connection with the exchange of their shares of PWAY common stock for shares of the Company’s common stock
pursuant to the Merger Agreement.





31







If
the proposed Merger is consummated, the holders of shares of PWAY’s Class A common stock, par value $0.01 per share (“PWAY
Class A Shares”), will have a right to receive a number of shares of the Company’s Class A common stock, par value
$0.001 per share (“TPIC Common Stock”), equal to the result of (A) the PWAY Class A per-share net asset value (“NAV”)
divided by (B) the Company per-share NAV, in each case determined in accordance with the Merger Agreement, and the holders of
shares of PWAY’s Class I common stock, par value $0.01 per share (“PWAY Class I Shares” and, together with the
PWAY Class A Shares, the “PWAY Common Stock”), will have a right to receive a number of shares of TPIC Common Stock
equal to the result of (A) the PWAY Class I per-share NAV divided by (B) the Company per-share NAV, in each case determined in
accordance with the Merger Agreement. Until the Merger is completed, the value of the shares of TPIC Common Stock to be issued
in the Merger and the number of shares of the Company Common Stock to be issued to PWAY stockholders may fluctuate or change.



Triton
Pacific Adviser and ZAIS Group, LLC currently serve as the investment adviser and investment sub-adviser, respectively, to the
Company. These entities are expected to no longer serve in such capacities following completion of the Merger, and Prospect Flexible
Income Management, LLC (the “New Investment Adviser”), subject to the approval of the Company’s stockholders,
is expected to serve as the investment adviser to the combined company following completion of the Merger. In addition, TFA Associates,
LLC, which currently serves as the administrator to the Company is also expected to cease to serve in such capacity, and Prospect
Administration LLC (“Prospect Administration”) is expected to serve as the administrator and TFA Associates, LLC is
expected to serve as the sub-administrator to the combined surviving company following completion of the Merger. Finally, in accordance
with the provisions of the Maryland General Corporation Law, the Company’s board of directors has approved the change in
the Company’s name to TP Flexible Income Fund, Inc. (“FLEX”), subject to and effective upon consummation of
the Merger.



At
the effective time of the Merger, the Company’s board of directors will continue to consist of five directors, with each
of Prospect Capital Management L.P. (“Prospect Capital Management”) and Triton Pacific Adviser having the right to
nominate one individual for election to the board of directors of the combined surviving company so long as (i) the New Investment
Adviser is the investment adviser to the combined surviving company and (ii) such nomination is (A) in accordance with the combined
surviving company’s charter, bylaws and applicable law, and (B) consistent with the duties of the board of directors of
the combined surviving company. Prospect Capital Management has nominated M. Grier Eliasek, PWAY’s existing Chief Executive
and Officer and President, to the combined surviving company’s board of directors, and Triton Pacific Adviser has nominated
Craig J. Faggen, TPIC’s existing Chief Executive Officer and member of its board of directors, to the combined surviving
company’s board of directors. In addition, the Company has nominated three new independent directors to the combined surviving
company’s board of directors, each of whom is currently an independent director on PWAY’s board of directors. The
terms of each of these nominated directors is effective upon consummation of the Merger.



The
Merger Agreement contains (a) customary representations and warranties made by each party to the other party, and (b) customary
covenants and agreements, including: (i) a covenant by each party to cooperate in the preparation of the proxy materials
to be filed in connection with the Merger; and (ii) a covenant by each party to take actions reasonably necessary, proper
or advisable to consummate and make effective the transactions contemplated by the Merger Agreement.



As
more fully described in the Merger Agreement, the obligations of PWAY and the Company to complete the Merger are subject to the
satisfaction or, where permissible, waiver of, certain conditions including the following: (i) the approvals of PWAY and
the Company stockholders are obtained at their respective stockholder meetings; (ii) a joint proxy statement and prospectus filed
by the Company on Form N-14 (the “Registration Statement”) has become effective and no stop order suspending its effectiveness
has been issued and no proceedings for that purpose have been initiated or threatened by the SEC; (iii) all necessary regulatory and statutory approvals (if any) are obtained by each of PWAY and the
Company and remain in full force and effect and all statutory waiver periods in respect thereof have expired or been terminated;
(iv) any applicable waiting period applicable to the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, has expired or been terminated; (v) no order, injunction or decree or law preventing or making illegal the consummation
of the Merger or any of the other transactions contemplated by the Merger Agreement is in effect, and no such suit or proceeding
is pending; (vi) the New Investment Adviser is duly registered as an investment adviser under the Investment Advisers Act of 1940,
as amended; (vii) a new investment advisory





32







agreement
is duly executed and delivered by FLEX and the New Investment Adviser; (viii) a new administration agreement is duly executed
and delivered by FLEX and Prospect Administration; (ix) an expense limitation agreement by and between FLEX and the New Investment
Adviser (as described in the Registration Statement), is duly executed and delivered by such parties; (x) the Triton Termination
and Waiver Agreement (as defined and described in the Registration Statement) is duly executed and delivered by the relevant parties;
(xi) a distribution agreement, by and between FLEX and Triton Pacific Securities, LLC, is duly executed and delivered by such
parties; and (xii) the truth and accurateness of the representations and warranties and compliance with covenants of each other
party in the Merger Agreement, subject to the materiality standards provided in the Merger Agreement.



As
more fully described in the Merger Agreement, the Merger Agreement contains certain termination rights for PWAY or the Company,
as applicable, including if: (i) the parties mutually agree to terminate; (ii) the Merger has not been completed by December 31,
2018, unless extended in writing with the mutual consent of the Company and PWAY; (iii) any regulatory or statutory approvals
required to be obtained by either PWAY or the Company with respect to the Merger or any of the other transactions contemplated
by the Merger Agreement have been denied and such denials have become final and nonappealable; (iv) a governmental entity has
issued a final and non-appealable order or promulgated a law prohibiting or making illegal the Merger or any of the other transactions
contemplated by the Merger Agreement; (v) the stockholders of PWAY fail to approve the Merger and the transactions contemplated
thereby (collectively, the “PWAY Stockholder Proposals”); (vi) the PWAY board of directors has changed its recommendation
in favor of the PWAY Stockholder Proposals; (vii) the stockholders of the Company fail to approve the Merger and the transactions
contemplated thereby (collectively, the “the Company Stockholder Proposals”); (viii) the Company board of directors
has changed its recommendation in favor of the Company Stockholder Proposals; (ix) either the Company or PWAY receives a Superior
Proposal (as defined in the Merger Agreement) by a third party and the board of directors of the Company or PWAY, as the case
may be, approves such entity to enter into definitive documentation with respect to such Superior Proposal and such entity pays
the other entity the reasonable, documented out-of-pocket expenses incurred in connection transactions contemplated by the Merger
Agreement; or (x) either party breaches its representations, warranties or covenants in the Merger Agreement such that the closing
conditions cannot be satisfied. The Merger Agreement provides that, in connection with the termination of the Merger Agreement
under specified circumstances, the Company or PWAY, as the terminating party, will be required to pay the other party, as the
non-terminating party, in cash, an amount equal to such non-terminating party’s reasonable, documented out-of-pocket expenses
incurred in connection with the transactions contemplated by the Merger Agreement.



In
connection with the proposed Merger, the Company has filed with the SEC a Registration Statement on Form N-14 that includes proxy
statements of the Company and PWAY and that also constitutes a prospectus of the Company regarding the TPIC Common Stock to be
issued to the stockholders of PWAY in connection with the Merger. The Registration Statement will be mailed to the stockholders
of TPIC and PWAY if and when it is declared effective by the SEC.



The
description of the Merger Agreement set forth above is qualified in its entirety by reference to the full text of the Merger Agreement,
which is attached as an exhibit to the Registration Statement on Form N-14 filed by the Company with the SEC on August 13, 2018.



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





33







We
also 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;
| | - | -----------------------------------------------------------------------------



| | ● | 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.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





34







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 nine months ended September 30, 2018, we made investments in portfolio companies totaling $4,426,250. During the same period,
we sold investments and received principal repayments of $2,928,272. As of September 30, 2018, our investment portfolio, with
a total fair value of $13,504,804, consisted of interests in 33 portfolio companies (59.1% in first lien senior secured loans,
37.2% in second lien senior secured loans, 0% in subordinated convertible debt and 3.7% in equity). The portfolio companies that
comprised our portfolio as of such date had an average annual EBITDA of approximately $167.3 million. As of September 30, 2018,
the investments in our debt portfolio were purchased at a weighted average price of 98.4% of par or stated value, and the weighted
average credit rating of the investments in our portfolio that were rated (constituting 96.3% 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 7.8% based
upon the amortized cost of our investments and was 8.5% 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 September
30, 2018. The portfolio yield does not represent an actual investment return to stockholders.



Total
Portfolio Activity



|                                                                         | September 30, 2018 |  | December 31, 2017
|------------------------------------------------------------------------ | ------------------ |  | -----------------
|Number of Portfolio Companies                                            | 33                 |  | 32               
|% Variable Rate (based on fair value)                                    | 96.3%              |  | 95.5%            
|% Fixed Rate (based on fair value)                                       | 0.0%               |  | 0.0%             
|% Non-Income Producing Equity or Other Investments (based on fair value) | 3.7%               |  | 4.5%             
|Average Annual EBITDA of Portfolio Companies                             | 167.3MM            |  | 162.3MM          
|Weighted Average Credit Rating of Investments that were Rated            | B2                 |  | B2               
|% of Investments on Non-Accrual (based on amortized cost)                | —                  |  | —                
|Gross Portfolio Yield Prior to Leverage (based on amortized cost)        | 7.8%               |  | 6.7%             



The
following tables present certain selected information regarding our portfolio investment activity for the nine months ended September
30, 2018 and year ended December 31, 2017:



|Net Investment Activity |  | Nine months ended  September 30, 2018 |            |   | Year ended 
December 31, 2017 |  
|----------------------- |  | ------------------------------------- | ---------- | - | ----------------------------- | -
|Purchases               |  | $                                     | 4,426,250  |   |                               | $
|Sales and Redemptions   |  |                                       | (2,928,272 | ) |                               |  
|Net Portfolio Activity  |  | $                                     | 1,497,978  |   |                               | $



The
following table presents the composition of the total purchases for the nine months ended September 30, 2018:



35







|                                 |  | Nine months ended September 30, 2018 
(unaudited) |           |  | Year ended December 31, 2017 |     
|-------------------------------- |  | ------------------------------------------------- | --------- |  | ---------------------------- | ----
|                                 |  | Purchases                                         |           |  | Percentage of  Portfolio     |     
|Senior Secured Loans—First Lien  |  | $                                                 | 2,943,750 |  |                              | 67% 
|Senior Secured Loans—Second Lien |  |                                                   | 1,482,500 |  |                              | 33% 
|Subordinated Debt                |  |                                                   | -         |  |                              | 0%  
|Equity/Other                     |  |                                                   | -         |  |                              | 0%  
|Total                            |  | $                                                 | 4,426,250 |  |                              | 100%



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 September 30, 2018 and December 31, 2017:



|                                  |  | September 30, 2018  (Unaudited) |            | December 31, 2017
|--------------------------------- |  | ------------------------------- | ---------- | -----------------
|Industry Classification           |  | Fair  Value                     |            |                  
|Beverage, Food & Tobacco          |  |                                 | 1,987,287  |                  
|Business Services                 |  |                                 | 3,700,395  |                  
|Construction & Building           |  |                                 | 483,750    |                  
|Consumer Services                 |  |                                 | 1,316,527  |                  
|Energy: Oil & Gas                 |  |                                 | 826,666    |                  
|Environmental                     |  |                                 | 490,000    |                  
|Healthcare & Pharmaceuticals      |  |                                 | 1,502,310  |                  
|High Tech Industries              |  |                                 | 768,043    |                  
|Hotel, Gaming & Leisure           |  |                                 | 505,296    |                  
|Media: Diversified and Production |  |                                 | 306,831    |                  
|Metals & Mining                   |  |                                 | 958,018    |                  
|Telecommunications                |  |                                 | 469,238    |                  
|Wholesale Trade-Nondurable Goods  |  |                                 | 190,443    |                  
|Total                             |  | $                               | 13,504,804 |                  



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.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



36







| | 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.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------



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 senior secured loan investments on the 1 to 8 scale at fair value as of
September 30, 2018 and December 31, 2017:



|                  |  |  | September 30, 2018 |            |  | December 31, 2017 | 
|----------------- |  |  | ------------------ | ---------- |  | ----------------- | 
|Investment Rating |  |  | Fair Value         |            |  | Percentage        | 
|1                 |  |  | $                  | 188,447    |  |                   | 
|2                 |  |  |                    | 695,361    |  |                   | 
|3                 |  |  |                    | 2,005,301  |  |                   | 
|4                 |  |  |                    | 3,309,314  |  |                   | 
|5                 |  |  |                    | 5,923,983  |  |                   | 
|6                 |  |  |                    | 858,656    |  |                   | 
|7                 |  |  |                    | 22,000     |  |                   | 
|8                 |  |  |                    | -          |  |                   | 
|                  |  |  | $                  | 13,003,062 |  |                   | 



Results
of Operations



Investment
Income



For
the three months ended September 30, 2018 and 2017, we generated $302,542 and $227,488, respectively, in investment income in
the form of interest and fees earned on our debt portfolio. Such revenues represent $293,723 of cash income and $8,819 in non-cash
portions related to the accretion of discounts and paid-in-kind interest for the three months ended September 30, 2018. We expect
the dollar amount of interest that we earn to continue to increase as the size of our investment portfolio increases.



For
the nine months ended September 30, 2018 and 2017, we generated $857,038 and $596,666, respectively, in investment income in the
form of interest and fees earned on our debt portfolio. Such revenues represent $832,265 of cash income and $24,773 in non-cash
portions related to the accretion of discounts and paid-in-kind interest for the nine months ended September 30, 2018.



Operating
Expenses



Total
operating expenses before reimbursement from the sponsor and management fee waiver totaled $421,402 and $283,890 for the three
months ended September 30, 2018 and 2017, respectively, and consisted of



37







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 quarters were $91,593 and $83,459, respectively, and the incentive fees for the quarters were -0- and -0-, respectively.
Pursuant to the Expense Reimbursement Agreement (discussed below), the sponsor did not reimburse the Company for the three months
ended September 30, 2018 and 2017.



Total
operating expenses before reimbursement from the sponsor and management fee waiver totaled $1,138,610 and $754,626 for the nine
months ended September 30, 2018 and 2017, respectively, 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 periods were $269,189 and $246,154, respectively, and the incentive fees for the quarters were -0- and ($334), respectively.
Pursuant to the Expense Reimbursement Agreement (discussed below), the sponsor reimbursed the Company -0- and $80,847 for the
nine months ended September 30, 2018 and 2017.



Our
other general and administrative expenses totaled $27,339 and $13,095 for the three months ended September 30, 2018 and 2017,
respectively, and $56,487 and $23,168 for the nine months ended September 30, 2018 and 2017, respectively, and consisted of the
following:





|                     |  | Three months ended  September
    30, 2018 |        |  | Three months ended  September
    30, 2017 |   |        | Nine months ended  September
    30, 2018 |  |   | Nine months ended  September
    30, 2017 | 
|-------------------- |  | ------------------------------------------ | ------ |  | ------------------------------------------ | - | ------ | ----------------------------------------- |  | - | ----------------------------------------- | 
|Licenses and permits |  | $                                          | -      |  |                                            | $ | -      |                                           |  | $ | 623                                       | 
|Outside Services     |  |                                            | 1,763  |  |                                            |   | 9,753  |                                           |  |   | 1,859                                     | 
|Printing fees        |  |                                            | 9,841  |  |                                            |   | 2,408  |                                           |  |   | 20,356                                    | 
|Travel expenses      |  |                                            | 14,685 |  |                                            |   | -      |                                           |  |   | 25,774                                    | 
|Other                |  |                                            | 1,050  |  |                                            |   | 934    |                                           |  |   | 7,875                                     | 
|Total                |  | $                                          | 27,339 |  |                                            | $ | 13,095 |                                           |  | $ | 56,487                                    | 



Net
Investment Income



Our
net investment income totaled ($118,860) (($0.08) per share based on weighted average shares outstanding) for the three months
ended September 30, 2018 and ($56,402) (($0.04) per share based on weighted average shares outstanding) for the three months
ended September 30, 2017.



Our
net investment income totaled ($281,572) (($0.19) per share based on weighted average shares outstanding) for the nine months
ended September 30, 2018 and ($77,113) (($0.07) per share based on weighted average shares outstanding) for the nine months ended
September 30, 2017.



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 and nine months ended September 30, 2018, we sold investments and received principal payments of $1,069,852 and $2,928,272,
from which we realized a net gain of $3,740 and $32,960, respectively. For the three and nine months ended September 30, 2017,
we sold investments and received principal payments of $1,313,279 and $3,926,031, from which we realized a net gain of $31,093
and $95,657, respectively.



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 and nine months ended September 30, 2018, net changes in unrealized appreciation were ($14,389) and ($86,445), respectively.
For the three and nine months ended September 30, 2017, net changes in unrealized appreciation were ($131,397) and ($1,450,025),
respectively.



On
June 30, 2017, we made the decision to fully mark down its remaining investment value in Javlin Financial as an unrealized loss.
The decision was due to performance issues within Javlin Financial’s core business and a breakdown in restructuring negotiations
between the Company, its lenders, and Javlin Financial’s controlling shareholder. It is unknown at this time if there will
be any value to the investment.



38







Changes
in Net Assets from Operations



For
the three and nine months ended September 30, 2018, we recorded a net income of ($129,509) and ($335,058), respectively versus
net income of ($161,230) and ($1,436,004), respectively, for the three and nine months ended September 30, 2017.



Based
on 1,544,718 and 1,500,612 weighted average common shares outstanding for the three and nine months ended September 30, 2018,
basic and diluted, our per share net increase in net assets resulting from operations was ($0.08) and ($0.22).



Based
on 1,266,225 and 1,143,880 weighted average common shares outstanding for the three and nine months ended September 30, 2017,
basic and diluted, our per share net increase in net assets resulting from operations was ($0.13) and ($1.26).



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. Our most recent post-effective amendment was filed with the SEC on June 22, 2018
and was declared effective by the SEC on June 25, 2018. 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.



The
current offering price for our shares is $12.66 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 nine months ended September 30, 2018, we sold 141,332.86 shares of our common stock for gross proceeds of $1,865,205 at
an average price per share of $13.20. The increase in capital in excess of par value during the nine months ended September
30, 2018 include reinvested stockholder distributions of $256,864 for which we issued 21,626.05 shares of common stock. The
sales commissions and dealer manager fees related to the sale of our common stock were $178,471 for the nine months ended
September 30, 2018. These sales commissions and fees include $34,809 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.



39







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 Company 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 Phoenix American Financial Services to act as our transfer agent, plan administrator, distribution
paying agent and registrar. In April 2018, our Administrator contracted with SS&C Technologies, Inc. to provide additional
accounting services beginning the fourth quarter.



On
August 10, 2018, we entered into the Merger Agreement, discussed above under the heading Merger with Pathway Capital Opportunity
Fund.



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.



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 other 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.



Our
board of directors has authorized, and has declared, cash distributions on our common stock on a monthly basis since the second
quarter of 2015. The amount of each such distributions is subject to our board of directors’ discretion and applicable legal
restrictions related to the payment of distributions. We calculate each



40







stockholder’s specific distribution amount for the
month using record and declaration dates, and distributions will begin to accrue on the date we accept subscriptions 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 September
30, 2018:



41







|                          |  |  | Distribution |        
|------------------------- |  |  | ------------ | -------
|For the Nine Months Ended |  |  | Per Share    |        
|Fiscal 2018               |  |  |              |        
|January 29, 2018          |  |  | $            | 0.03370
|February 28, 2018         |  |  | $            | 0.03370
|March 28, 2018            |  |  | $            | 0.03370
|April 26, 2018            |  |  | $            | 0.03370
|May 29, 2018              |  |  | $            | 0.03370
|June 27, 2018             |  |  | $            | 0.03370
|July 27, 2018             |  |  | $            | 0.03370
|August 27, 2018           |  |  | $            | 0.03370
|September 25, 2018        |  |  | $            | 0.03370
|                          |  |  |              |        
|Fiscal 2017               |  |  |              |        
|January 27, 2017          |  |  | $            | 0.04000
|February 24, 2017         |  |  | $            | 0.04000
|March 23, 2017            |  |  | $            | 0.04000
|April 27, 2017            |  |  | $            | 0.04000
|May 25, 2017              |  |  | $            | 0.04000
|June 23, 2017             |  |  | $            | 0.04000
|July 21, 2017             |  |  | $            | 0.04000
|August 29, 2017           |  |  | $            | 0.03417
|September 28, 2017        |  |  | $            | 0.03417
|October 26, 2017          |  |  | $            | 0.03417
|November 27, 2017         |  |  | $            | 0.03370
|December 26, 2017         |  |  | $            | 0.03370
|                          |  |  |              |        
|Fiscal 2016               |  |  |              |        
|January 22, 2016          |  |  | $            | 0.04500
|February 16, 2016         |  |  | $            | 0.04500
|March 23, 2016            |  |  | $            | 0.04500
|April 21, 2016            |  |  | $            | 0.04500
|May 19, 2016              |  |  | $            | 0.04500
|June 23, 2016             |  |  | $            | 0.04500
|July 21, 2016             |  |  | $            | 0.04000
|August 25, 2016           |  |  | $            | 0.04000
|September 22, 2016        |  |  | $            | 0.04000
|October 20, 2016          |  |  | $            | 0.04000
|November 18, 2016         |  |  | $            | 0.04000
|December 20, 2016         |  |  | $            | 0.04000



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 distributions will begin to accrue on the date we accept
subscriptions 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



42







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 nine months ended September 30, 2018 and September 30, 2017:





|                                                          |  | Nine months ended September 30, |        
|--------------------------------------------------------- |  | ------------------------------- | -------
|                                                          |  | 2018                            |        
|Source of Distribution                                    |  | Distribution  Amount            |        
|Offering proceeds                                         |  | $                               | -      
|Borrowings                                                |  |                                 | -      
|Net investment income(1)                                  |  |                                 | -      
|Short-term capital gains proceeds from the sale of assets |  |                                 | 13,000 
|Long-term capital gains proceeds from the sale of assets  |  |                                 | 47,908 
|Distributions from common equity (return of capital)      |  |                                 | 395,356
|Expense reimbursement from sponsor                        |  |                                 | -      
|Total                                                     |  | $                               | 456,264




| | (1) | During
                                         the nine months ended September 30, 2018 and 2017, 97.1% and 92.7%, respectively, of
                                         the Company’s gross investment income was attributable to cash income earned, and
                                         2.9% and 7.3%, resepctively was attributable to non-cash accretion of discount and paid
                                         in-kind interest.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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.



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 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.



43







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.



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%.



44







Expense
Reimbursement Agreement



On
March 27, 2014, we and our Adviser agreed to the Expense Reimbursement Agreement. The Expense Reimbursement Agreement was amended
and restated effective April 5, 2018. Under the Expense Reimbursement Agreement, as amended, our Adviser, in consultation with
the Company, may 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 may 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 them occurring
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.



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. The Expense
Reimbursement Agreement will automatically terminate upon termination of the Investment Advisory Agreement or upon our liquidation
or dissolution. The Expense Reimbursement Agreement expires by its terms on December 31,
2018, unless extended with the mutual consent of us and our Adviser. Upon termination of the Expense Support Agreement
we may be required to repay our Adviser all expense support payments made by our Adviser within three years of the date of termination,
subject to the limitations contained in the agreement.





45







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 $5,067,191 as of September 30, 2018. This amount reflects the aggregate amount
advanced by the Adviser to us and is not the amount that is currently due and owed by us to our Adviser.



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:





|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                                  |  | $0                                             |  | 432.69%                                                                           |  | -                                                                                      |  | September 30, 2015                    
|December 31, 2012  |  | $26,111                                  |  | $0                                             |  | 531.09%                                                                           |  | -                                                                                      |  | December 31, 2015                     
|March 31, 2013     |  | $30,819                                  |  | $0                                             |  | N/A                                                                               |  | -                                                                                      |  | March 31, 2016                        
|June 30, 2013      |  | $59,062                                  |  | $0                                             |  | N/A                                                                               |  | -                                                                                      |  | June 30, 2016                         
|September 30, 2013 |  | $65,161                                  |  | $0                                             |  | N/A                                                                               |  | -                                                                                      |  | September 30, 2016                    
|December 31, 2013  |  | $91,378                                  |  | $0                                             |  | 455.09%                                                                           |  | -                                                                                      |  | December 31, 2016                     
|March 31, 2014     |  | $68,293                                  |  | $0                                             |  | 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                        
|June 30, 2016      |  | $206,933                                 |  | $285,878                                       |  | 4.95%                                                                             |  | 3.52%                                                                                  |  | June 30, 2019                         
|September 30, 2016 |  | $201,573                                 |  | $223,020                                       |  | 4.52%                                                                             |  | 3.13%                                                                                  |  | September 30, 2019                    
|December 31, 2016  |  | $104,561                                 |  | $168,876                                       |  | 4.45%                                                                             |  | 3.11%                                                                                  |  | December 31, 2019                     
|March 31, 2017     |  | $80,847                                  |  | $252,875                                       |  | 4.21%                                                                             |  | 3.19%                                                                                  |  | March 31, 2020                        
|June 30, 2017      |  | $0                                       |  | $176,963                                       |  | 3.98%                                                                             |  | 3.18%                                                                                  |  | June 30, 2020                         
|September 30, 2017 |  | $0                                       |  | $119,188                                       |  | 4.19%                                                                             |  | 3.00%                                                                                  |  | September 30, 2020                    
|December 31, 2017  |  | $0                                       |  | $0                                             |  | N/A                                                                               |  | N/A                                                                                    |  | N/A                                   



|(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.

Beginning
with the year ended December 31, 2016, the Adviser began to reimburse less than 100% of operating expenses, and for the year ended
December 31, 2017, the Adviser did not reimburse any operating expenses after the first quarter. Additionally, the Adviser did
not reimburse any offering expenses for the first three quarters of 2018. Of these offering and operating expenses, $2,663,810
has exceeded the three-year period for repayment and will not be repayable by us. $225,000 of offering costs from contingent expenses
recorded in prior periods were deemed to be non-payable and the Reimbursement from the Adviser was adjusted accordingly. $2,403,381
remains that could potentially be subject to repayment by the Company.



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





46









|                                         |  | September
    30, |            |   | December
    31, |  
|---------------------------------------- |  | ----------------- | ---------- | - | ---------------- | -
|                                         |  | 2018              |            |   | 2017             |  
|Operating
    Expenses                   |  | $                 | 1,977,504  |   |                  | $
|Offering Costs                           |  |                   | 3,089,687  |   |                  |  
|Due to related party
    offset          |  |                   | (4,724,476 | ) |                  |  
|Reimbursements received
    from Adviser |  |                   | (342,715   | ) |                  |  
|Other
    amounts due to affiliates      |  |                   | 886        |   |                  |  
|Total
    Reimbursement due from Adviser |  | $                 | 886        |   |                  | $





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.



Asset
Coverage



In
accordance with the Company Act, the Company is currently only allowed to borrow amounts such that its “asset coverage,”
as defined in the Company Act, is at least 200% after such borrowing. “Asset coverage” generally refers to a company’s
total assets, less all liabilities and indebtedness not represented by “senior securities,” as defined in the Company
Act, divided by total senior securities representing indebtedness and, if applicable, preferred stock. “Senior securities”
for this purpose includes borrowings from banks or other lenders, debt securities and preferred stock. As of September 30,
2018 and December 31, 2017, the Company did not have any senior securities.



On
March 23, 2018, an amendment to Section 61(a) of the Company Act was signed into law to permit BDCs to reduce the minimum “asset
coverage” ratio from 200% to 150%, so long as certain approval and disclosure requirements are satisfied. In addition, for
BDCs like the Company whose securities are not listed on a national securities exchange, the Company is also required to offer
to repurchase its outstanding shares at the rate of 25% per quarter over four calendar quarters. Under the existing 200% minimum
asset coverage ratio, the Company is permitted to borrow up to one dollar for investment purposes for every one dollar of investor
equity, and under the 150% minimum asset coverage ratio, the Company will be permitted to borrow up to two dollars for investment
purposes for every one dollar of investor equity. In other words, Section 61(a) of the Company Act, as amended, permits BDCs to
potentially increase their debt-to-equity ratio from a maximum of 1 to 1 to a maximum of 2 to 1.



On
April 18, 2018, the Board of Directors of the Company, including a “required majority” (as such term is defined in
Section 57(o) of the Company Act), approved the application to the Company of the 150% minimum asset coverage ratio set forth
in Section 61(a)(2) of the Company Act. As a result, and subject to certain additional disclosure requirements and the repurchase
obligations described above, the minimum asset coverage ratio applicable to the Company will be reduced from 200% to 150%, effective
as of April 18, 2019. In addition, in order to provide the Company with the maximum financial flexibility at the earliest possible
date, the Board of Directors also authorized the submission of a proposal for stockholders to approve the application of the 150%
minimum asset coverage ratio to the Company. The Company intends to ask its stockholders to approve the application of the 150%
minimum asset coverage ratio in connection with their approval of the Merger Agreement and the related



47







transactions. If the Company’s
stockholders approve such proposal, the 150% minimum asset coverage ratio will then apply effective as of the first day after
stockholder approval. As a result, the Company will be permitted to incur double the maximum amount of leverage that the Company
is able to incur significantly earlier than if the Company’s stockholders do not vote to approve such proposal.



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



| | 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.





48







We
have adopted ASC Topic 820, Fair Value Measurement, 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.



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.





49







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
2 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 September 30, 2018, 96.3% (based on fair value)
of our investments paid variable interest rates, 0% paid fixed rates, and 3.7% 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.



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 September
30, 2018:





|LIBOR
    Basis Point Change |  | Percentage
    Change in  Net
    Interest Income |      
|---------------------------- |  | ------------------------------------------------- | -----
|Down
    25 basis points     |  |                                                   | -2.86
|Current
    LIBOR            |  |                                                   | 0.00 
|Up
    100 basis points      |  |                                                   | 27.36
|Up
    200 basis points      |  |                                                   | 38.78
|Up
    300 basis points      |  |                                                   | 50.20



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.





50







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 September 30, 2018 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,
2017 except as follows:



Risks
Related to Debt Financing



If
we borrow money, which we currently intend to do, the potential for gain or loss on amounts invested in our common stock will
be magnified and may increase the risk of investing in our common stock.



The
use of borrowings and other types of financing, also known as leverage, magnify the potential for gain or loss on amounts invested
and, therefore, increase the risks associated with investing in our shares. If we use leverage to partially finance our investments,
through borrowing from banks and other lenders we, and therefore you, will experience increased risks of investing in our common
stock. Any lenders and debt holders would have fixed dollar claims on our assets that are superior to the claims of our stockholders.
If the value of our assets increases, then leverage would cause the net asset value attributable to our common stock to increase
more sharply than it would have had we not leveraged. Conversely, if the value of our assets decreases, leverage would cause net
asset value to decline more sharply than it otherwise would have had we not leveraged. Similarly, any increase in our income in
excess of interest payable on the borrowed funds would cause our net investment income to increase more than it would without
the leverage, while any decrease in our income would cause net investment income to decline more sharply than it would have had
we not borrowed. Such a decline could negatively affect our ability to make distributions to stockholders. Leverage is generally
considered a speculative investment technique. In addition, the decision to utilize leverage will increase our assets and, as
a result, will increase the amount of base management fees payable to or Adviser.



Changes
in interest rates may affect our cost of capital and net investment income.



Because
we intend to use debt to finance investments, our net investment income will depend, in part, upon the difference between the
rate at which we borrow funds and the rate at which we invest those funds. As a result, we





51







can offer no assurance that a significant
change in market interest rates will not have a material adverse effect on our net investment income. In periods of rising interest
rates when we have debt outstanding, our cost of funds will increase, which could reduce our net investment income. We may use
interest rate risk management techniques in an effort to limit our exposure to interest rate fluctuations. These techniques may
include various interest rate hedging activities to the extent permitted by the Company Act. These activities may limit our ability
to participate in the benefits of lower interest rates with respect to the hedged portion of our portfolio. Adverse developments
resulting from changes in interest rates or hedging transactions could have a material adverse effect on our business, financial
condition and results of operations. Also, we have limited experience in entering into hedging transactions, and we will initially
have to develop such expertise or arrange for such expertise to be provided.



Risks
Related to our Failure to Complete Our Merger with PWAY



Termination
of the Agreement and Plan of Merger Agreement with Pathway Global Opportunity Fund, Inc. (“PWAY”) or the failure to
close the Merger could negatively impact PWAY and the Company.



On
August 10, 2018, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with PWAY. The
merger of PWAY into the Company as contemplated by the Merger Agreement (the “Merger”) is subject to a number of closing
conditions, including obtaining stockholder approval of the Merger. If these conditions are not satisfied and the Merger Agreement
is terminated, there may be various consequences, including:



| | ● | The
                                         Company’s business may have been adversely impacted by the failure to pursue other
                                         beneficial opportunities due to the focus of management on the Merger, without realizing
                                         any of the anticipated benefits of completing the Merger; and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | the
                                         payment of any expense reimbursement to the non-terminating party, if required under
                                         the circumstances, could adversely affect the financial condition and liquidity of the
                                         Company.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
Merger may not be completed. If the Merger is not completed, the Company will have incurred substantial expenses for which no
ultimate benefit will have been received. The Company has incurred out-of-pocket expenses in connection with the Merger for legal
and accounting fees and financial printing and other related charges, much of which will be incurred even if the Merger is not
completed.



Federal
Income Tax Risks



We
cannot predict how tax reform legislation will affect us, our investments, or our stockholders, and any such legislation could
adversely affect our business.



Legislative
or other actions relating to taxes could have a negative effect on us. The rules dealing with U.S. federal income taxation are
constantly under review by persons involved in the legislative process and by the Internal Revenue Service and the U.S. Treasury
Department. In December 2017, the U.S. House of Representatives and U.S. Senate passed tax reform legislation, which the President
signed into law. Such legislation has made many changes to the Code, including significant changes to the taxation of business
entities, the deductibility of interest expense, and the tax treatment of capital investment. We cannot predict with certainty
how any changes in the tax laws might affect us, our stockholders, or our portfolio investments. New legislation and any U.S.
Treasury regulations, administrative interpretations or court decisions interpreting such legislation could significantly and
negatively affect our ability to qualify for tax treatment as a RIC or the U.S. federal income tax consequences to us and our
stockholders of such qualification, or could have other adverse consequences. Stockholders are urged to consult with their tax
advisor regarding tax legislative, regulatory, or administrative developments and proposals and their potential effect on an investment
in our securities.



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



None.





52







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



None.



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



None.



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



None.



53







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



EXHIBIT
INDEX



|Number |  | Description                                                                                                                                                                                                                                                                  
|------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |  |                                                                                                                                                                                                                                                                              
|2.1    |  | Agreement
    and Plan of Merger, dated August 10, 2018, between the Registrant and Pathway Capital Opportunity Fund, Inc. (Filed as Annex
    A to the Registrant’s Registration Statement on Form N-14 (SEC File No. 333-226861) filed with the SEC on August 13,
    2018)
|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.                                                                                                                                                      



54







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:
    November 14, 2018 |  |  |  | Triton
    Pacific Investment Corporation, Inc.
|                             |  |  | 
|                             |  |  |  | By                                              |  | /s/
    Craig J. Faggen                                                                                
|                             |  |  |  |                                                 |  | Craig
J. Faggen
        Chief
Executive Officer
        (Principal
Executive Officer)                  
|                             |  |  | 
|Dated:
    November 14, 2018 |  |  |  | By                                              |  | /s/
    Michael L. Carroll                                                                             
|                             |  |  |  |                                                 |  | Michael
L. Carroll
        Chief
Financial Officer
        (Principal
Accounting and Financial Officer)



55