UNITED
STATES



SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549



FORM 10-Q



(Mark One)

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



For the quarterly period ended March
31, 2019



OR



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



Commission File Number 814-00908



TP FLEXIBLE
INCOME FUND, INC.

(Exact name of Registrant as specified in
its charter)



|Maryland                                                      |  | 45-2460782                          
|------------------------------------------------------------- |  | ------------------------------------
|(State or other jurisdiction ofincorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                              |  |                                     
|10 East 40th Street,
42nd Floor
        New York, NY          |  | 10016                               
|(Address of principal executive offices)                      |  | (Zip Code)                          



Registrant’s
telephone number, including area code: (212) 448-0702



Triton Pacific Investment Corporation,
Inc.; 6701 Center Drive West, Suite 1450, Los Angeles, CA 90045; December 31

(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 every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☐  No ☐



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



|Large accelerated filer | ☐ | Accelerated filer         | ☐
|----------------------- | - | ------------------------- | -
|Non-accelerated filer   | ☒ | 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 ☒



Securities
registered pursuant to Section 12(b) of the Act:

|                    |                   |                                          
|------------------- | ----------------- | -----------------------------------------
|Title of each class | Trading Symbol(s) | Name of each exchange on which registered
|None                | None              | None                                     



The number of shares of the issuer’s Common Stock, $.001
par value, outstanding as of May 17, 2019 was 2,409,557.











TP FLEXIBLE INCOME FUND, INC.

TABLE
OF CONTENTS



|                                                                                                                      |  | Page
|--------------------------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                                      |  |     
|PART
    I. FINANCIAL INFORMATION                                                                                     |  |     
|                                                                                                                      |  |     
|Item
    1. Financial Statements                                                                                      |  |     
|                                                                                                                      |  |     
|Statements
    of Assets and Liabilities as of March 31, 2019 (unaudited) and June 30, 2018                           |  | 3   
|                                                                                                                      |  |     
|Statements
    of Operations for the three and nine months ended March 31, 2019 and March 31, 2018 (unaudited)        |  | 4   
|                                                                                                                      |  |     
|Statements of Changes in Net Assets for the three and nine months ended March 31, 2019 and March 31, 2018 (unaudited) |  | 5   
|                                                                                                                      |  |     
|Statements
    of Cash Flows for the nine months ended March 31, 2019 and March 31, 2018 (unaudited)                  |  | 7   
|                                                                                                                      |  |     
|Schedule
    of Investments as of March 31, 2019 (unaudited)                                                          |  | 8   
|                                                                                                                      |  |     
|Schedule
    of Investments as of June 30, 2018                                                                       |  | 11  
|                                                                                                                      |  |     
|Notes
    to Financial Statements as of March 31, 2019                                                                |  | 13  
|                                                                                                                      |  |     
|Item
    2. Management’s Discussion and Analysis of Financial Condition and Results of Operations                     |  | 44  
|                                                                                                                      |  |     
|Item 3. Quantitative and Qualitative Disclosures About Market Risk                                                    |  | 62  
|                                                                                                                      |  |     
|Item
    4. Controls and Procedures                                                                                   |  | 63  
|                                                                                                                      |  |     
|PART
    II. OTHER INFORMATION                                                                                        |  |     
|                                                                                                                      |  |     
|Item
    1. Legal Proceedings                                                                                         |  | 63  
|                                                                                                                      |  |     
|Item
    1A. Risk Factors                                                                                             |  | 63  
|                                                                                                                      |  |     
|Item
    2. Unregistered Sales of Equity Securities and Use of Proceeds                                               |  | 64  
|                                                                                                                      |  |     
|Item
    3. Defaults Upon Senior Securities                                                                           |  | 64  
|                                                                                                                      |  |     
|Item
    4. Mine Safety Disclosures                                                                                   |  | 64  
|                                                                                                                      |  |     
|Item
    5. Other Information                                                                                         |  | 64  
|                                                                                                                      |  |     
|Item
    6. Exhibits                                                                                                  |  | 64  
|                                                                                                                      |  |     
|SIGNATURES                                                                                                            |  | 65  



- 2 -







PART
I. FINANCIAL INFORMATION



Item
1. Financial Statements



TP FLEXIBLE
INCOME FUND, INC.STATEMENTS OF ASSETS AND LIABILITIES



|                                                                                                                                          |  | March
                                         31, 2019  (unaudited) |            |   | June
    30, 2018 (1) |  
|----------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------- | ---------- | - | --------------------- | -
|                                                                                                                                          |  |                                                                      |            |   |                       |  
|ASSETS                                                                                                                                    |  |                                                                      |            |   |                       |  
|Affiliate
    investments at fair value (cost of $500,000 and $0, respectively)                                                           |  | $                                                                    | 507,988    |   |                       | $
|Non-control/non-affiliate
    investments at fair value (cost of $20,914,507 and $11,296,565, respectively)                               |  |                                                                      | 19,105,297 |   |                       |  
|Total investments
    at fair value (cost of $21,414,507 and $11,296,565, respectively)                                                   |  |                                                                      | 19,613,285 |   |                       |  
|Cash                                                                                                                                      |  |                                                                      | 5,171,847  |   |                       |  
|Interest receivable                                                                                                                       |  |                                                                      | 161,855    |   |                       |  
|Due
    from Adviser (2)                                                                                                                  |  |                                                                      | -          |   |                       |  
|Deferred offering costs                                                                                                                   |  |                                                                      | 205,110    |   |                       |  
|Prepaid expenses and other assets                                                                                                         |  |                                                                      | 361,648    |   |                       |  
|Due
    from Affiliate (2)                                                                                                                |  |                                                                      | 13,194     |   |                       |  
|Total
    assets                                                                                                                          |  |                                                                      | 25,526,939 |   |                       |  
|                                                                                                                                          |  |                                                                      |            |   |                       |  
|LIABILITIES                                                                                                                               |  |                                                                      |            |   |                       |  
|Due
    to Adviser (2)                                                                                                                    |  |                                                                      | 49,829     |   |                       |  
|Revolving Credit Facility (Note 11)                                                                                                       |  |                                                                      | -          |   |                       |  
|Accrued expenses                                                                                                                          |  |                                                                      | 331,830    |   |                       |  
|Due
    to Administrator (2)                                                                                                              |  |                                                                      | 36,797     |   |                       |  
|Dividends payable                                                                                                                         |  |                                                                      | -          |   |                       |  
|Due
    to Affiliates (2)                                                                                                                 |  |                                                                      | 21,801     |   |                       |  
|Interest payable                                                                                                                          |  |                                                                      | -          |   |                       |  
|Total
    liabilities                                                                                                                     |  |                                                                      | 440,257    |   |                       |  
|Commitments and contingencies
    (Note 10)                                                                                               |  |                                                                      |            |   |                       |  
|Net assets                                                                                                                                |  | $                                                                    | 25,086,682 |   |                       | $
|                                                                                                                                          |  |                                                                      |            |   |                       |  
|NET ASSETS                                                                                                                                |  |                                                                      |            |   |                       |  
|Common
Stock, par value $0.001 per share 75,000,000 shares authorized; 2,403,349 shares issued and outstanding at March 31, 2019,)        |  | $                                                                    | 2,403      |   |                       | $
|Common Stock of PWAY, par value $0.01 per share 200,000,000 shares authorized; 844,708 shares issued and outstanding
at June 30, 2018(3)) |  |                                                                      | -          |   |                       |  
|Paid-in capital in excess of par (Note 6)                                                                                                 |  |                                                                      | 31,129,277 |   |                       |  
|Distributable earnings (accumulated loss) (Noted 9)                                                                                       |  |                                                                      | (6,044,998 | ) |                       |  
|Total
    net assets                                                                                                                      |  | $                                                                    | 25,086,682 |   |                       | $
|Net
    asset value per share                                                                                                             |  | $                                                                    | 10.44      |   |                       | $



| | 1) | See Notes 1,3 and 9.
| | -- | --------------------



| | 2) | This
                                         balance references a related-party transaction. Refer to “Note 4—Related
                                         Party Transactions and Arrangements” for more detail.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3) | Net
                                         asset value per share and June 30, 2018 shares for Pathway Capital Opportunity Fund, Inc. ("PWAY") has been adjusted by the exchange ratio
                                         used in the merger.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



See
notes to financial statements (unaudited).



- 3 -





TP
FLEXIBLE INCOME FUND, INC.STATEMENTS OF OPERATIONS

(Unaudited)



|                                                                                       |  | Three
    Months Ended March 31, |            |   | Nine
    Months Ended March 31, |  
|-------------------------------------------------------------------------------------- |  | -------------------------------- | ---------- | - | ------------------------------- | -
|                                                                                       |  | 2019
    (1)                     |            |   | 2018
    (1)                    |  
|INVESTMENT INCOME                                                                      |  |                                  |            |   |                                 |  
|Interest
    Income from non-control/non-affiliate investments                         |  | $                                | 251,386    |   |                                 | $
|Total
    investment income                                                            |  |                                  | 251,386    |   |                                 |  
|                                                                                       |  |                                  |            |   |                                 |  
|OPERATING EXPENSES                                                                     |  |                                  |            |   |                                 |  
|Amortization
    of offering costs (2)                                                 |  |                                  | -          |   |                                 |  
|Administrator
    costs (3)                                                            |  |                                  | 36,797     |   |                                 |  
|Base
    management fees (3)                                                           |  |                                  | 43,813     |   |                                 |  
|Adviser
    shared service expense (3)                                                 |  |                                  | 5,477      |   |                                 |  
|Valuation services                                                                     |  |                                  | 41,826     |   |                                 |  
|Audit and tax expense                                                                  |  |                                  | 83,778     |   |                                 |  
|Transfer agent’s fees and expenses                                                     |  |                                  | 59,325     |   |                                 |  
|Insurance expense                                                                      |  |                                  | 9,285      |   |                                 |  
|Interest expense                                                                       |  |                                  | 5,277      |   |                                 |  
|Report and notice to shareholders                                                      |  |                                  | -          |   |                                 |  
|Legal expense                                                                          |  |                                  | 148,537    |   |                                 |  
|General and administrative                                                             |  |                                  | 5,326      |   |                                 |  
|Due diligence expense                                                                  |  |                                  | -          |   |                                 |  
|Shareholder fees                                                                       |  |                                  | -          |   |                                 |  
|Excise
    taxes                                                                       |  |                                  | -          |   |                                 |  
|Total
    operating expenses                                                           |  |                                  | 439,441    |   |                                 |  
|Waiver
    of offering costs (2)                                                       |  |                                  | (1,492,252 | ) |                                 |  
|Expense support reimbursement (2)                                                      |  |                                  | -          |   |                                 |  
|Expense
    limitation payment (2)                                                     |  |                                  | -          |   |                                 |  
|Total
    net operating expenses                                                       |  |                                  | (1,052,811 | ) |                                 |  
|Net investment income                                                                  |  |                                  | 1,304,197  |   |                                 |  
|                                                                                       |  |                                  |            |   |                                 |  
|Net realized gain (loss) on:                                                           |  |                                  |            |   |                                 |  
|Non-control/non-affiliate
    investments                                              |  |                                  | -          |   |                                 |  
|Total
    net realized gain (loss)                                                     |  |                                  | -          |   |                                 |  
|Net change in unrealized gain
    (loss) on:                                           |  |                                  |            |   |                                 |  
|Non-control/non-affiliate
    investments                                              |  |                                  | 175,862    |   |                                 |  
|Total
    net change in unrealized gain (loss) on investments                          |  |                                  | 175,862    |   |                                 |  
|                                                                                       |  |                                  |            |   |                                 |  
|Total
    net realized gain (loss) and change in unrealized gain (loss) on investments |  |                                  | 175,862    |   |                                 |  
|Net
    increase (decrease) in net assets resulting from operations                    |  | $                                | 1,480,059  |   |                                 | $
|Net
    increase in net assets resulting from operations per share (Note 12)           |  | $                                | 1.90       |   |                                 | $
|                                                                                       |  |                                  |            |   |                                 |  

| | (1) | See
                                         Notes 1 and 9.
| | --- | -----------------------------------------------------------



| | (2) | This
                                         balance relates to organization and offering costs that were no longer reimbursable to
                                         the the former investment adviser to PWAY, Pathway Capital Opportunity Fund Management, LLC as a result of the Merger.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | This
                                         balance references a related-party transaction. Refer to “Note 4—Related
                                         Party Transactions and Arrangements” for more detail.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



See
notes to financial statements (unaudited).



- 4 -







TP
FLEXIBLE INCOME FUND, INC.STATEMENTS OF CHANGES IN NET ASSETS

(Unaudited)





|For the three months ended March 31, 2019                             |  |              |           |   |     |   |        |                                      |  |   |                                                  |   |  |            |           
|--------------------------------------------------------------------- |  | ------------ | --------- | - | --- | - | ------ | ------------------------------------ |  | - | ------------------------------------------------ | - |  | ---------- | ----------
|                                                                      |  |              |           |   |     |   |        |                                      |  |   |                                                  |   |  |            |           
|                                                                      |  | Common Stock |           |   |     |   |        |                                      |  |   |                                                 
|                                                                      |  | Shares       |           |   | Par |   |        | Paid-in Capital in
    Excess of Par |  |   | Distributable Earnings (Accumulated
    Loss)(1) |   |  | Net Assets |           
|Balance as of December 31, 2018                                       |  |              | 617,189   |   |     | $ | 6,172  |                                      |  | $ | 8,137,765                                        |   |  | $          | (1,829,322
|Net Increase in net assets resulting from operations                  |  |              |           |   |     |   |        |                                      |  |   |                                                  |   |  |            |           
|Net investment income (loss)                                          |  |              |           |   |     |   |        |                                      |  |   |                                                  |   |  |            | 1,304,197 
|Net realized gain (loss) on investments                               |  |              |           |   |     |   |        |                                      |  |   |                                                  |   |  |            | -         
|Net change in unrealized gain (loss) on investments                   |  |              |           |   |     |   |        |                                      |  |   |                                                  |   |  |            | 175,862   
|Distributions to Shareholders (Note 5)                                |  |              |           |   |     |   |        |                                      |  |   |                                                  |   |  |            |           
|Distributions from earnings -Class A (Previously Class R)             |  |              |           |   |     |   |        |                                      |  |   |                                                  |   |  |            | (43,919   
|Distributions from earnings -Class I (Previously Class RIA and I)     |  |              |           |   |     |   |        |                                      |  |   |                                                  |   |  |            | (2,494    
|Return of capital distributions -Class A (Previously Class R)         |  |              |           |   |     |   |        |                                      |  |   | (46,742                                          | ) |  |            |           
|Return of capital distributions -Class I (Previously Class RIA and I) |  |              |           |   |     |   |        |                                      |  |   | (2,654                                           | ) |  |            |           
|Shares issued through reinvestment of dividends                       |  |              | 3,822     |   |     |   | 38     |                                      |  |   | 43,924                                           |   |  |            |           
|Repurchase of common shares                                           |  |              | (17,748   | ) |     |   | (177   | )                                    |  |   | (191,495                                         | ) |  |            |           
|Offering costs (Note 7)                                               |  |              |           |   |     |   |        |                                      |  |   | 482,981                                          |   |  |            | -         
|Tax Reclassification of Net Assets                                    |  |              |           |   |     |   |        |                                      |  |   | 899,819                                          |   |  |            | (899,819  
|Recapitalization and merger (Notes 1, 3 and 9)                        |  |              | 1,800,086 |   |     |   | (3,630 | )                                    |  |   | 21,805,679                                       |   |  |            | (4,749,503
|Total Increase (Decrease) for the three months ended March 31, 2019   |  |              | 1,786,160 |   |     |   | (3,769 | )                                    |  |   | 22,991,512                                       |   |  |            | (4,215,676
|Balance as of March 31, 2019                                          |  |              | 2,403,349 |   |     | $ | 2,403  |                                      |  | $ | 31,129,277                                       |   |  | $          | (6,044,998
|                                                                      |  |              |           |   |     |   |        |                                      |  |   |                                                  |   |  |            |           



|For the three months ended March 31, 2018                             |  |              |         |   |     |   |       |                                   |  |   |                                                  |   |  |            |         
|--------------------------------------------------------------------- |  | ------------ | ------- | - | --- | - | ----- | --------------------------------- |  | - | ------------------------------------------------ | - |  | ---------- | --------
|                                                                      |  |              |         |   |     |   |       |                                   |  |   |                                                  |   |  |            |         
|                                                                      |  | Common Stock |         |   |     |   |       |                                   |  |   |                                                 
|                                                                      |  | Shares       |         |   | Par |   |       | Paid-in Capital
    Excess of Par |  |   | Distributable Earnings
    (Accumulated Loss)(2) |   |  | Net Assets |         
|Balance as of December 31, 2017                                       |  |              | 667,852 |   |     | $ | 6,679 |                                   |  | $ | 8,817,889                                        |   |  | $          | 174,451 
|Net Increase in net assets resulting from operations                  |  |              |         |   |     |   |       |                                   |  |   |                                                  |   |  |            |         
|Net investment income (loss)                                          |  |              |         |   |     |   |       |                                   |  |   |                                                  |   |  |            | 127,842 
|Net realized gain (loss) on investments                               |  |              |         |   |     |   |       |                                   |  |   |                                                  |   |  |            | 8,850   
|Net change in unrealized gain (loss) on investments                   |  |              |         |   |     |   |       |                                   |  |   |                                                  |   |  |            | (208,255
|Distributions to Shareholders (Note 5)                                |  |              |         |   |     |   |       |                                   |  |   |                                                  |   |  |            |         
|Distributions from earnings -Class A (Previously Class R)             |  |              |         |   |     |   |       |                                   |  |   |                                                  |   |  |            | -       
|Distributions from earnings -Class I (Previously Class RIA and I)     |  |              |         |   |     |   |       |                                   |  |   |                                                  |   |  |            | -       
|Return of capital distributions -Class A (Previously Class R)         |  |              |         |   |     |   |       |                                   |  |   |                                                  |   |  |            | (136,381
|Return of capital distributions -Class I (Previously Class RIA and I) |  |              |         |   |     |   |       |                                   |  |   |                                                  |   |  |            | (7,076  
|Shares sold                                                           |  |              | 5,032   |   |     |   | 50    |                                   |  |   | 69,950                                           |   |  |            |         
|Commissions and fees on shares sold                                   |  |              |         |   |     |   |       |                                   |  |   | (3,075                                           | ) |  |            |         
|Shares issued through reinvestment of dividends                       |  |              | 4,991   |   |     |   | 50    |                                   |  |   | 67,470                                           |   |  |            |         
|Repurchase of common shares                                           |  |              | (5,690  | ) |     |   | (57   | )                                 |  |   | (77,095                                          | ) |  |            |         
|Tax Reclassification of Net Assets                                    |  |              |         |   |     |   |       |                                   |  |   | (143,457                                         | ) |  |            | 143,457 
|Total Increase (Decrease) for the three months ended March 31, 2018   |  |              | 4,333   |   |     |   | 43    |                                   |  |   | (86,207                                          | ) |  |            | (71,563 
|Balance as of March 31, 2018                                          |  |              | 672,185 |   |     | $ | 6,722 |                                   |  | $ | 8,731,682                                        |   |  | $          | 102,888 



See
notes to financial statements (unaudited).



(1) The following table provides the reconciliation of the components of distributable earnings to conform to
    the current period presentation for the quarter to date ended March 31, 2019



|                                                                    |  | Distributable Earnings (Loss)     |           
|------------------------------------------------------------------- |  | --------------------------------- | ----------
|                                                                    |  | Accumulated Net Investment (Loss) |           
|Balance at December 31, 2018                                        |  | $                                 | (519,519  
|Net Increase in net assets resulting from operations                |  |                                   |           
|Net investment income (loss)                                        |  |                                   | 1,304,197 
|Net realized gain (loss) on investments                             |  |                                   |           
|Net change in unrealized gain (loss) on investments                 |  |                                   |           
|Distributions to Shareholders (Note 5)                              |  |                                   |           
|Distributions from earnings -Class A (Previously Class R)           |  |                                   | (43,919   
|Distributions from earnings -Class I (Previously Class RIA and I)   |  |                                   | (2,494    
|Tax Reclassification of Net Assets                                  |  |                                   | (899,819  
|Recapitalization and merger (Notes 1, 3 and 9)                      |  |                                   | (2,379,861
|Total Increase (Decrease) for the three months ended March 31, 2019 |  |                                   | (2,021,896
|Balance as of March 31, 2019                                        |  | $                                 | (2,541,415



|(2) The following table provides the reconciliation of the components of distributable earnings to conform to
    the current period presentation for the quarter to date ended March 31, 2018 |  |                                       |         
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------- | --------
|                                                                                                                                                                                               |  |                                       |         
|                                                                                                                                                                                               |  | Distributable Earnings (Loss)         |         
|                                                                                                                                                                                               |  | Accumulated Net
    Investment (Loss) |         
|Balance at December 31, 2017                                                                                                                                                                   |  | $                                     | (170,455
|Net Increase in net assets resulting from operations                                                                                                                                           |  |                                       |         
|Net Investment income (loss)                                                                                                                                                                   |  |                                       | 127,842 
|Net realized gain (loss) on investments                                                                                                                                                        |  |                                       |         
|Net change in unrealized gain (loss) on investments                                                                                                                                            |  |                                       |         
|Tax Reclassification of Net Assets                                                                                                                                                             |  |                                       |         
|Total Increase (Decrease) for the three months ended March 31, 2018                                                                                                                            |  |                                       | 127,842 
|Balance as of March 31, 2018                                                                                                                                                                   |  | $                                     | (42,613 





- 5 -





|For the nine months ended March 31, 2019                              |  |              |           |   |     |   |        |                                  |  |   |                                               |   |  |            |           
|--------------------------------------------------------------------- |  | ------------ | --------- | - | --- | - | ------ | -------------------------------- |  | - | --------------------------------------------- | - |  | ---------- | ----------
|                                                                      |  |              |           |   |     |   |        |                                  |  |   |                                               |   |  |            |           
|                                                                      |  | Common Stock |           |   |     |   |        |                                  |  |   |                                              
|                                                                      |  | Shares       |           |   | Par |   |        | Paid-in Capital in Excess of Par |  |   | Distributable Earnings (Accumulated Loss) (1) |   |  | Net Assets |           
|Balance as of June 30, 2018                                           |  |              | 657,370   |   |     | $ | 6,574  |                                  |  | $ | 8,859,427                                     |   |  | $          | (512,837  
|Net Increase in net assets resulting from operations                  |  |              |           |   |     |   |        |                                  |  |   |                                               |   |  |            |           
|Net investment income (loss)                                          |  |              |           |   |     |   |        |                                  |  |   |                                               |   |  |            | 978,224   
|Net realized gain (loss) on investments                               |  |              |           |   |     |   |        |                                  |  |   |                                               |   |  |            | (45,453   
|Net change in unrealized gain (loss) on investments                   |  |              |           |   |     |   |        |                                  |  |   |                                               |   |  |            | (769,197  
|Distributions to Shareholders (Note 5)                                |  |              |           |   |     |   |        |                                  |  |   |                                               |   |  |            |           
|Distributions from earnings -Class A (Previously Class R)             |  |              |           |   |     |   |        |                                  |  |   |                                               |   |  |            | (43,919   
|Distributions from earnings -Class I (Previously Class RIA and I)     |  |              |           |   |     |   |        |                                  |  |   |                                               |   |  |            | (2,494    
|Return of capital distributions -Class A (Previously Class R)         |  |              |           |   |     |   |        |                                  |  |   | (263,668                                      | ) |  |            |           
|Return of capital distributions -Class I (Previously Class RIA and I) |  |              |           |   |     |   |        |                                  |  |   | (14,558                                       | ) |  |            |           
|Shares issued through reinvestment of dividends                       |  |              | 14,537    |   |     |   | 145    |                                  |  |   | 170,127                                       |   |  |            |           
|Repurchase of common shares                                           |  |              | (68,644   | ) |     |   | (686   | )                                |  |   | (810,530                                      | ) |  |            |           
|Offering costs (Note 7)                                               |  |              |           |   |     |   |        |                                  |  |   | 482,981                                       |   |  |            |           
|Tax Reclassification of Net Assets                                    |  |              |           |   |     |   |        |                                  |  |   | 899,819                                       |   |  |            | (899,819  
|Recapitalization and merger (Notes 1, 3 and 9)                        |  |              | 1,800,086 |   |     |   | (3,630 | )                                |  |   | 21,805,679                                    |   |  |            | (4,749,503
|Total Increase (Decrease) for the nine months ended March 31, 2019    |  |              | 1,745,979 |   |     |   | (4,171 | )                                |  |   | 22,269,850                                    |   |  |            | (5,532,161
|Balance as of March 31, 2019                                          |  |              | 2,403,349 |   |     | $ | 2,403  |                                  |  | $ | 31,129,277                                    |   |  | $          | (6,044,998
|                                                                      |  |              | -         |   |     |   | -      |                                  |  |   | -                                             |   |  |            | -         



|For the nine months ended March 31, 2018                              |  |              |         |   |     |   |       |                                      |  |   |                                              |   |  |            |         
|--------------------------------------------------------------------- |  | ------------ | ------- | - | --- | - | ----- | ------------------------------------ |  | - | -------------------------------------------- | - |  | ---------- | --------
|                                                                      |  |              |         |   |     |   |       |                                      |  |   |                                              |   |  |            |         
|                                                                      |  | Common Stock |         |   |     |   |       |                                      |  |   |                                             
|                                                                      |  | Shares       |         |   | Par |   |       | Paid-in Captial in
    Excess of Par |  |   | Distributable Earnings (Accumulated Loss)(2) |   |  | Net Assets |         
|Balance as of June 30, 2017                                           |  |              | 621,376 |   |     | $ | 6,214 |                                      |  | $ | 8,457,153                                    |   |  | $          | (57,623 
|Net Increase in net assets resulting from operations                  |  |              |         |   |     |   |       |                                      |  |   |                                              |   |  |            |         
|Net investment income (loss)                                          |  |              |         |   |     |   |       |                                      |  |   |                                              |   |  |            | 381,390 
|Net realized gain (loss) on investments                               |  |              |         |   |     |   |       |                                      |  |   |                                              |   |  |            | 146,199 
|Net change in unrealized gain (loss) on investments                   |  |              |         |   |     |   |       |                                      |  |   |                                              |   |  |            | (367,078
|Distributions to Shareholders (Note 5)                                |  |              |         |   |     |   |       |                                      |  |   |                                              |   |  |            |         
|Distributions from earnings -Class A (Previously Class R)             |  |              |         |   |     |   |       |                                      |  |   |                                              |   |  |            | -       
|Distributions from earnings -Class I (Previously Class RIA and I)     |  |              |         |   |     |   |       |                                      |  |   |                                              |   |  |            | -       
|Return of capital distributions -Class A (Previously Class R)         |  |              |         |   |     |   |       |                                      |  |   |                                              |   |  |            | (413,930
|Return of capital distributions -Class I (Previously Class RIA and I) |  |              |         |   |     |   |       |                                      |  |   |                                              |   |  |            | (21,875 
|Shares sold                                                           |  |              | 50,514  |   |     |   | 505   |                                      |  |   | 759,395                                      |   |  |            |         
|Commissions and fees on shares sold                                   |  |              | -       |   |     |   | -     |                                      |  |   | (51,667                                      | ) |  |            |         
|Shares issued through reinvestment of dividends                       |  |              | 16,031  |   |     |   | 160   |                                      |  |   | 216,124                                      |   |  |            |         
|Repurchase of common shares                                           |  |              | (15,736 | ) |     |   | (157  | )                                    |  |   | (213,518                                     | ) |  |            |         
|Tax Reclassification of Net Assets                                    |  |              |         |   |     |   |       |                                      |  |   | (435,805                                     | ) |  |            | 435,805 
|Total Increase (Decrease) for the nine months ended March 31, 2018    |  |              | 50,809  |   |     |   | 508   |                                      |  |   | 274,529                                      |   |  |            | 160,511 
|Balance as of March 31, 2018                                          |  |              | 672,185 |   |     | $ | 6,722 |                                      |  | $ | 8,731,682                                    |   |  | $          | 102,888 



(1) The following table provides the reconciliation of the components of distributable earnings to conform
    to the current period presentation for the year to date ended March 31, 2019.



See
notes to financial statements (unaudited).



|                                                                   |  | Accumulated Net Investment (Loss) |            |   | Realized Gain (Loss) |   |            | Net Unrealized
    Gain (Loss) |  |   | Distributable Earnings (Accumulated Loss) |  
|------------------------------------------------------------------ |  | --------------------------------- | ---------- | - | -------------------- | - | ---------- | ------------------------------ |  | - | ----------------------------------------- | -
|Balance as of June 30, 2018                                        |  | $                                 | (193,546   | ) |                      | $ | 37,094     |                                |  | $ | (356,385                                  | )
|Net Increase in net assets resulting from operations               |  |                                   |            |   |                      |   |            |                                |  |   |                                           |  
|Net investment income (loss)                                       |  |                                   | 978,224    |   |                      |   |            |                                |  |   |                                           |  
|Net realized gain (loss) on investments                            |  |                                   |            |   |                      |   | (45,453    | )                              |  |   |                                           |  
|Net change in unrealized gain (loss) on investments                |  |                                   |            |   |                      |   |            |                                |  |   | (769,197                                  | )
|Distributions to Shareholders (Note 5)                             |  |                                   |            |   |                      |   |            |                                |  |   |                                           |  
|Distributions from earnings -Class A (Previously Class R)          |  |                                   | (43,919    | ) |                      |   |            |                                |  |   |                                           |  
|Distributions from earnings -Class I (Previously Class RIA and I)  |  |                                   | (2,494     | ) |                      |   |            |                                |  |   |                                           |  
|Tax Reclassification of Net Assets                                 |  |                                   | (899,819   | ) |                      |   |            |                                |  |   |                                           |  
|Recapitalization and merger (Notes 1, 3 and 9)                     |  |                                   | (2,379,861 | ) |                      |   | (1,694,002 | )                              |  |   | (675,640                                  | )
|Total Increase (Decrease) for the nine months ended March 31, 2019 |  |                                   | (2,347,869 | ) |                      |   | (1,739,455 | )                              |  |   | (1,444,837                                | )
|Balance as of March 31, 2019                                       |  | $                                 | (2,541,415 | ) |                      | $ | (1,702,361 | )                              |  | $ | (1,801,222                                | )



|(2) The following table provides the reconciliation of the components of distributable earnings to conform
    to the current period presentation for the year to date ended March 31, 2018. |  |                                     |         
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------- | --------
|                                                                                                                                                                                             |  |                                     |         
|                                                                                                                                                                                             |  |                                     |         
|                                                                                                                                                                                             |  | Accumulated Net
    Investment Loss |         
|Balance as of June 30, 2017                                                                                                                                                                  |  | $                                   | (424,003
|Net Increase in net assets resulting from operations                                                                                                                                         |  |                                     |         
|Net investment income (loss)                                                                                                                                                                 |  |                                     | 381,390 
|Net realized gain (loss) on investments                                                                                                                                                      |  |                                     |         
|Net change in unrealized gain (loss) on investments                                                                                                                                          |  |                                     |         
|Total Increase (Decrease) for the nine months ended March 31, 2018                                                                                                                           |  |                                     | 381,390 
|Balance as of March 31, 2018                                                                                                                                                                 |  | $                                   | (42,613 



See
notes to financial statements (unaudited).





- 6 -





TP
FLEXIBLE INCOME FUND, INC.STATEMENTS OF CASH FLOWS



(Unaudited)



|                                                                                                                                |  | Nine
    Months Ended March 31, |           
|------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------- | ----------
|                                                                                                                                |  | 2019                            |           
|Cash flows from
    operating activities:                                                                                       |  |                                 |           
|Net increase in net
    assets resulting from operations                                                                        |  | $                               | 163,574   
|Adjustments
    to reconcile net increase in net assets resulting from operations to net cash provided by operating activities: |  |                                 |           
|Amortization
    of offering costs                                                                                              |  |                                 | 64,500    
|Purchases of investments                                                                                                        |  |                                 | (35,015   
|Proceeds from
    sales of investments                                                                                          |  |                                 | 2,068,610 
|Net change
    in unrealized loss on investments                                                                                |  |                                 | 769,197   
|Net realized
    gain/(loss) on investments                                                                                     |  |                                 | 45,453    
|Amortization
    of fixed income premium or discounts                                                                           |  |                                 | (90,111   
|Waiver of offering costs                                                                                                        |  |                                 | (1,975,233
|Changes in other
    assets and liabilities:                                                                                    |  |                                 |           
|Interest receivable                                                                                                             |  |                                 | 51,723    
|Due from Adviser
    (Note 7)                                                                                                   |  |                                 | 118,109   
|Deferred offering
    costs (Note 7)                                                                                            |  |                                 | -         
|Prepaid expenses                                                                                                                |  |                                 | 23,346    
|Reimbursement
    due from Adviser                                                                                              |  |                                 | -         
|Due from Affiliate
    (Note 7)                                                                                                 |  |                                 | 960       
|Due to Adviser
    (Note 7)                                                                                                     |  |                                 | 49,289    
|Revolving Credit
    Facility (Note 6)                                                                                          |  |                                 | -         
|Accrued expenses                                                                                                                |  |                                 | 162,732   
|Accrued management
    fees                                                                                                     |  |                                 | -         
|Due to Administrator
    (Note 7)                                                                                               |  |                                 | (9,036    
|Dividends payable                                                                                                               |  |                                 | -         
|Due to Affiliates
    (Note 7)                                                                                                  |  |                                 | 849       
|Interest
    payable                                                                                                            |  |                                 | (5,108    
|Net cash provided
    by operating activities                                                                                   |  |                                 | 1,403,839 
|                                                                                                                                |  |                                 |           
|Cash flows from
    investing activities:                                                                                       |  |                                 |           
|Cash
    acquired in connection with merger (Note 9)                                                                            |  |                                 | 5,055,456 
|Net cash provided
    by investing activities                                                                                   |  |                                 | 5,055,456 
|                                                                                                                                |  |                                 |           
|Cash flows from
    financing activities:                                                                                       |  |                                 |           
|Gross proceeds
    from shares sold (Note 5)                                                                                    |  |                                 | -         
|Commissions
    and fees on shares sold (Note 7)                                                                                |  |                                 | -         
|Distributions
    paid to stockholders                                                                                          |  |                                 | (196,935  
|Repurchase of common shares                                                                                                     |  |                                 | (811,216  
|Borrowings
    under Revolving Credit Facility                                                                                  |  |                                 | -         
|Repayments
    under Revolving Credit Facility                                                                                  |  |                                 | (1,350,000
|Offering
    Costs                                                                                                              |  |                                 | 482,981   
|Net cash used
    in financing activities                                                                                       |  |                                 | (1,875,170
|                                                                                                                                |  |                                 |           
|Net increase in cash                                                                                                            |  |                                 | 4,584,125 
|Cash at beginning of period                                                                                                     |  |                                 | 587,722   
|Cash at end of period                                                                                                           |  | $                               | 5,171,847 
|                                                                                                                                |  |                                 |           
|Supplemental
    disclosure of cash flow financing activities:                                                                  |  |                                 |           
|Net
    assets (exclusive of cash) of $11,997,093 acquired as a result of recapitalization and merger                           |  | $                               | 11,997,090



See notes to financial
statements (unaudited).

- 7 -







TP
FLEXIBLE INCOME FUND, INC.

SCHEDULE
OF INVESTMENTS as of March 31, 2019

(Unaudited)





|Portfolio
    Company / Security Type            | Industry                                      | Acquisition
    Date | Coupon/Yield
    (b) | Floor |   |  | Legal
    Maturity |   | Principal/
    Quantity |   | Amortized
Cost (d) |   | Fair
    Value (c) |  | %
    ofNetAssets |  
|------------------------------------------------ | --------------------------------------------- | -------------------- | -------------------- | ----- | - |  | ------------------ | - | ----------------------- | - | ------------------ | - | ------------------ |  | ----------------- | -
|Senior Secured Loans—First Lien
    (j)          |                                               |                      |                      |       |   |  |                    |   |                         |   |                    |   |                    |  |                   |  
|LSF9 Atlantis Holdings, LLC                      | Retail                                        | 4/21/2017            | 1ML+6.00% (8.48%)    | 1.00  | % |  | 5/1/2023           | $ | 478,125                 | $ | 473,344            | $ | 446,151            |  | 1.78              | %
|California Pizza Kitchen, Inc.                   | Hotel, Gaming &
    Leisure                   | 8/19/2016            | 1ML+6.00% (8.50%)    | 1.00  |   |  | 8/23/2022          |   | 341,250                 |   | 337,837            |   | 330,588            |  | 1.32              |  
|CareerBuilder                                    | Services: Consumer                            | 7/27/2017            | 3ML+6.75% (9.35%)    | 1.00  |   |  | 7/31/2023          |   | 356,625                 |   | 345,927            |   | 357,963            |  | 1.43              |  
|Deluxe Entertainment Services Group, Inc.        | Services: Business                            | 11/8/2016            | 3ML+5.50% (8.24%)    | 1.00  |   |  | 2/28/2020          |   | 329,012                 |   | 319,141            |   | 289,394            |  | 1.15              |  
|Flavors Holdings, Inc. Tranche B                 | Beverage, Food &
    Tobacco                  | 10/7/2014            | 3ML+5.75% (8.35%)    | 1.00  |   |  | 4/3/2020           |   | 96,875                  |   | 93,000             |   | 90,578             |  | 0.36              |  
|GK Holdings, Inc.                                | Media: Broadcasting
    & Subscription        | 1/30/2015            | 3ML+6.00% (8.60%)    | 1.00  |   |  | 1/20/2021          |   | 119,688                 |   | 118,490            |   | 107,718            |  | 0.43              |  
|GoWireless Holdings,
    Inc.                    | Retail                                        | 12/21/2017           | 1ML+6.50% (9.00%)    | 1.00  |   |  | 12/22/2024         |   | 468,750                 |   | 464,062            |   | 459,960            |  | 1.83              |  
|InfoGroup Inc.                                   | Media: Advertising,
    Printing & Publishing | 3/28/2017            | 3ML+5.00% (7.60%)    | 1.00  |   |  | 4/3/2023           |   | 490,000                 |   | 485,100            |   | 482,035            |  | 1.92              |  
|Isagenix International
    LLC                   | Healthcare & Pharmaceuticals                  | 6/14/2018            | 3ML+5.75% (8.35%)    | 1.00  |   |  | 6/14/2025          |   | 481,250                 |   | 476,438            |   | 431,922            |  | 1.72              |  
|McAfee LLC                                       | High Tech Industries                          | 9/27/2017            | 1ML+3.75% (6.25%)    | 1.00  |   |  | 9/30/2024          |   | 243,504                 |   | 241,069            |   | 243,657            |  | 0.97              |  
|Moran Foods, LLC                                 | Beverage, Food &
    Tobacco                  | 12/2/2016            | 3ML+6.00% (8.60%)    | 1.00  |   |  | 12/5/2023          |   | 342,125                 |   | 331,861            |   | 196,723            |  | 0.78              |  
|Prospect Medical Holdings,
    Inc.              | Healthcare & Pharmaceuticals                  | 2/16/2018            | 1ML+5.50% (8.00%)    | 1.00  |   |  | 2/22/2024          |   | 495,000                 |   | 485,100            |   | 452,512            |  | 1.80              |  
|Quidditch Acquisition,
    Inc.                  | Beverage, Food &
    Tobacco                  | 3/16/2018            | 1ML+7.00% (9.49%)    | 1.00  |   |  | 3/21/2025          |   | 495,000                 |   | 485,100            |   | 499,950            |  | 1.99              |  
|Vero Parent Inc. (Sahara)                        | High Tech Industries                          | 8/11/2017            | 1ML+4.50% (7.00%)    | 1.00  |   |  | 8/16/2024          |   | 344,768                 |   | 341,320            |   | 344,014            |  | 1.37              |  
|Strike, LLC                                      | Energy: Oil &
    Gas                         | 11/21/2016           | 1ML+8.00% (10.60%)   | 1.00  |   |  | 11/30/2022         |   | 4,375                   |   | 4,244              |   | 4,359              |  | 0.02              |  
|Strike, LLC                                      | Energy: Oil &
    Gas                         | 11/21/2016           | 6ML+8.00% (10.65%)   | 1.00  |   |  | 11/30/2022         |   | 306,250                 |   | 297,063            |   | 305,102            |  | 1.22              |  
|Travel Leaders Group,
    LLC                    | Hotel, Gaming &
    Leisure                   | 1/19/2017            | 1ML+4.00% (6.48%)    | 1.00  |   |  | 1/25/2024          |   | 496,250                 |   | 495,009            |   | 497,902            |  | 1.98              |  
|Verdesian Life Sciences
    LLC                  | Wholesale Trade-Nondurable
    Goods          | 9/19/2014            | 3ML+5.00% (7.74%)    | 1.00  |   |  | 7/1/2020           |   | 193,094                 |   | 191,164            |   | 173,786            |  | 0.69              |  
|Wirepath LLC                                     | Services: Business                            | 7/31/2017            | 3ML+4.00% (6.63%)    | 1.00  |   |  | 8/5/2024           |   | 492,534                 |   | 490,072            |   | 485,147            |  | 1.93              |  
|Yak Access LLC                                   | Construction &
    Building                   | 7/19/2018            | 1ML+5.00% (7.50%)    | 1.00  |   |  | 7/11/2025          |   | 493,750                 |   | 478,938            |   | 422,157            |  | 1.68              |  
|Total Senior Secured Loans—First
    Lien        |                                               |                      |                      |       |   |  |                    |   |                         |   | 6,954,279          |   | 6,621,618          |  | 26.36             |  
|                                                 |                                               |                      |                      |       |   |  |                    |   |                         |   |                    |   |                    |  |                   |  
|Senior Secured Loans—Second Lien(j)              |                                               |                      |                      |       |   |  |                    |   |                         |   |                    |   |                    |  |                   |  
|DG Investment Intermediate Holdings 2 Inc.       | Services: Business                            | 1/29/2018            | 1ML+6.75% (9.25%)    | 0.75  |   |  | 2/2/2026           |   | 500,000                 |   | 497,500            |   | 488,750            |  | 1.95              |  
|Encino Acquisition Partners Holdings, LLC        | Energy: Oil &
    Gas                         | 9/25/2018            | 1ML+6.75% (9. 25%)   | 1.00  |   |  | 10/29/2025         |   | 500,000                 |   | 495,000            |   | 485,000            |  | 1.93              |  
|Flavors Holdings, Inc.                           | Beverage, Food & Tobacco                      | 10/7/2014            | 3ML+10.00% (12.60%)  | 1.00  |   |  | 10/3/2021          |   | 125,000                 |   | 120,000            |   | 100,625            |  | 0.40              |  
|FullBeauty Brands Holding                        | Retail                                        | 2/15/2019            | L+7.00% (0.00%)      | 1.00  |   |  | 10/13/2023         |   | 10,960                  |   | 9,457              |   | 7,609              |  | 0.03              |  
|GK Holdings, Inc.                                | Media: Broadcasting
    & Subscription        | 1/30/2015            | 3ML+10.25% (12.85%)  | 1.00  |   |  | 1/21/2022          |   | 125,000                 |   | 122,500            |   | 103,125            |  | 0.41              |  
|Inmar                                            | Media: Advertising,
    Printing & Publishing | 4/25/2017            | 3ML+8.00% (10.50%)   | 1.00  |   |  | 5/1/2025           |   | 500,000                 |   | 492,500            |   | 496,250            |  | 1.98              |  
|McAfee LLC                                       | High Tech Industries                          | 9/27/2017            | 1ML+8.50% (11.00%)   | 1.00  |   |  | 9/29/2025          |   | 458,333                 |   | 455,469            |   | 463,604            |  | 1.85              |  
|Neustar, Inc.                                    | High Tech Industries                          | 3/2/2017             | 1ML+8.00% (10.50%)   | 1.00  |   |  | 8/8/2025           |   | 749,792                 |   | 738,545            |   | 737,297            |  | 2.94              |  
|NPC International, Inc.                          | Hotel, Gaming &
    Leisure                   | 3/30/2017            | 2ML+7.50% (10.13%)   | 1.00  |   |  | 4/18/2025          |   | 500,000                 |   | 497,500            |   | 434,375            |  | 1.73              |  
|Oxbow Carbon LLC                                 | Energy: Oil &
    Gas                         | 12/18/2017           | 1ML+7.50% (10.00%)   | 1.00  |   |  | 1/4/2024           |   | 500,000                 |   | 495,000            |   | 502,500            |  | 2.00              |  
|Patriot Container Corp.                          | Capital Equipment                             | 3/28/2018            | 1ML+7.75% (10.25%)   | 1.00  |   |  | 3/20/2026          |   | 500,000                 |   | 490,000            |   | 482,500            |  | 1.92              |  
|Total Senior Secured Loans—Second
    Lien       |                                               |                      |                      |       |   |  |                    |   |                         |   | 4,413,471          |   | 4,301,635          |  | 17.14             |  
|                                                 |                                               |                      |                      |       |   |  |                    |   |                         |   |                    |   |                    |  |                   |  
|Senior Unsecured
    Bonds (i) (a)               |                                               |                      |                      |       |   |  |                    |   |                         |   |                    |   |                    |  |                   |  
|Ace Cash Express, Inc.                           | Financial                                     | 12/15/2017           | 12.00%               | N/A   |   |  | 12/15/2022         |   | 450,000                 |   | 444,670            |   | 425,813            |  | 1.70              |  
|Archrock Partners, LP                            | Energy                                        | 12/22/2016           | 6.00%                | N/A   |   |  | 4/1/2021           |   | 500,000                 |   | 497,877            |   | 500,459            |  | 1.99              |  
|Brand Energy & Infrastructure Services,
    Inc. | Energy                                        | 6/21/2017            | 8.50%                | N/A   |   |  | 7/15/2025          |   | 1,000,000               |   | 1,000,000          |   | 898,750            |  | 3.58              |  







See notes
to financial statements (unaudited).



- 8 -







|Portfolio
    Company / Security Type                   | Industry                     | Acquisition
    Date | Coupon/Yield
    (b) | Floor |  |  | Legal
    Maturity |   | Principal/
    Quantity |   | Amortized
Cost (d) |   | Fair
    Value (c) |  | %
    ofNetAssets |  
|------------------------------------------------------- | ---------------------------- | -------------------- | -------------------- | ----- |  |  | ------------------ | - | ----------------------- | - | ------------------ | - | ------------------ |  | ----------------- | -
|Calumet Specialty Products                              | Energy                       | 10/16/2015           | 7.75%                | N/A   |  |  | 4/15/2023          | $ | 550,000                 | $ | 527,241            | $ | 490,188            |  | 1.95              | %
|CSI Compressco LP                                       | Energy                       | 9/17/2015            | 7.25%                | N/A   |  |  | 8/15/2022          |   | 750,000                 |   | 686,895            |   | 661,249            |  | 2.64              |  
|Global Partners LP                                      | Energy                       | 10/2/2015            | 7.00%                | N/A   |  |  | 6/15/2023          |   | 350,000                 |   | 333,356            |   | 347,375            |  | 1.38              |  
|Jonah Energy LLC                                        | Energy                       | 10/3/2017            | 7.25%                | N/A   |  |  | 10/15/2025         |   | 1,000,000               |   | 1,000,000          |   | 535,625            |  | 2.14              |  
|Martin Midstream Partners LP                            | Energy                       | 9/10/2015            | 7.25%                | N/A   |  |  | 2/15/2021          |   | 500,000                 |   | 488,911            |   | 488,125            |  | 1.95              |  
|Weatherford Bermuda                                     | Energy                       | 11/24/2015           | 9.88%                | N/A   |  |  | 3/1/2039           |   | 350,000                 |   | 323,178            |   | 225,751            |  | 0.90              |  
|Total Senior
    Unsecured Bonds                        |                              |                      |                      |       |  |  |                    |   |                         |   | 5,302,128          |   | 4,573,335          |  | 18.23             |  
|                                                        |                              |                      |                      |       |  |  |                    |   |                         |   |                    |   |                    |  |                   |  
|Senior Secured Bonds(i) (a)                             |                              |                      |                      |       |  |  |                    |   |                         |   |                    |   |                    |  |                   |  
|Hexion Inc.                                             | Chemicals                    | 9/8/2015             | 6.63%                | N/A   |  |  | 4/15/2020          |   | 550,000                 |   | 527,947            |   | 462,688            |  | 1.84              |  
|                                                        |                              |                      |                      |       |  |  |                    |   |                         |   |                    |   |                    |  |                   |  
|Structured subordinated
    notes (a) (e)(f)(j)         |                              |                      |                      |       |  |  |                    |   |                         |   |                    |   |                    |  |                   |  
|Carlyle Global Market Strategies CLO 2014-4-R,
    Ltd. | Structured Finance           | 6/29/2018            | 21.94%               | N/A   |  |  | 7/15/2030          |   | 250,000                 |   | 166,932            |   | 183,776            |  | 0.73              |  
|Carlyle Global Market Strategies CLO 2017-5,
    Ltd.   | Structured Finance           | 1/30/2018            | 16.65%               | N/A   |  |  | 1/22/2030          |   | 500,000                 |   | 491,054            |   | 459,517            |  | 1.83              |  
|Galaxy XIX CLO, Ltd.                                    | Structured Finance           | 12/8/2016            | 15.18%               | N/A   |  |  | 7/24/2030          |   | 250,000                 |   | 169,812            |   | 129,041            |  | 0.51              |  
|GoldenTree Loan Opportunities IX, Ltd.                  | Structured Finance           | 7/27/2017            | 15.16%               | N/A   |  |  | 10/29/2029         |   | 250,000                 |   | 186,911            |   | 148,816            |  | 0.59              |  
|Madison Park Funding XIII, Ltd.                         | Structured Finance           | 11/12/2015           | 21.62%               | N/A   |  |  | 4/22/2030          |   | 250,000                 |   | 181,141            |   | 186,311            |  | 0.74              |  
|Madison Park Funding XIV, Ltd.                          | Structured Finance           | 11/19/2015           | 16.19%               | N/A   |  |  | 10/22/2030         |   | 250,000                 |   | 190,015            |   | 183,829            |  | 0.73              |  
|Octagon Investment Partners XIV, Ltd.                   | Structured Finance           | 12/6/2017            | 17.73%               | N/A   |  |  | 7/16/2029          |   | 850,000                 |   | 542,050            |   | 473,896            |  | 1.89              |  
|Octagon Investment Partners XXI, Ltd.                   | Structured Finance           | 1/13/2016            | 16.70%               | N/A   |  |  | 2/14/2031          |   | 387,538                 |   | 221,300            |   | 208,148            |  | 0.83              |  
|Octagon Investment Partners 30, Ltd.                    | Structured Finance           | 11/21/2017           | 15.85%               | N/A   |  |  | 3/17/2030          |   | 475,000                 |   | 455,249            |   | 409,666            |  | 1.63              |  
|OZLM XII, Ltd.                                          | Structured Finance           | 1/20/2017            | 12.64%               | N/A   |  |  | 4/30/2027          |   | 275,000                 |   | 222,936            |   | 174,019            |  | 0.69              |  
|Voya IM CLO 2013-1, Ltd.                                | Structured Finance           | 6/14/2016            | 15.51%               | N/A   |  |  | 10/15/2030         |   | 278,312                 |   | 188,306            |   | 163,994            |  | 0.65              |  
|Voya CLO 2016-1, Ltd.                                   | Structured Finance           | 2/25/2016            | 21.04%               | N/A   |  |  | 1/21/2031          |   | 250,000                 |   | 215,948            |   | 223,390            |  | 0.89              |  
|THL Credit Wind River 2013-1 CLO, Ltd.                  | Structured Finance           | 11/3/2017            | 15.42%               | N/A   |  |  | 7/30/2030          |   | 325,000                 |   | 245,898            |   | 201,618            |  | 0.80              |  
|Total Structured
    subordinated notes(e)(f)           |                              |                      |                      |       |  |  |                    |   |                         |   | 3,477,552          |   | 3,146,021          |  | 12.51             |  
|                                                        |                              |                      |                      |       |  |  |                    |   |                         |   |                    |   |                    |  |                   |  
|Equity/Other(j)                                         |                              |                      |                      |       |  |  |                    |   |                         |   |                    |   |                    |  |                   |  
|ACON IWP Investors I, L.L.C. (g) (h)                    | Healthcare & Pharmaceuticals |                      |                      |       |  |  |                    |   | 500,000                 |   | 500,000            |   | 507,988            |  | 2.02              |  
|FullBeauty Brands Holding, Common Stock
    (h)         | High Tech Industries         | 4/30/2015            |                      |       |  |  |                    |   | 239,130                 |   | 239,130            |   | 0                  |  | -                 |  
|Total Equity/Other                                      |                              |                      |                      |       |  |  |                    |   |                         |   | 739,130            |   | 507,988            |  | 2.02              |  
|                                                        |                              |                      |                      |       |  |  |                    |   |                         |   |                    |   |                    |  |                   |  
|Total Portfolio Investments                             |                              |                      |                      |       |  |  |                    |   |                         | $ | 21,414,507         | $ | 19,613,285         |  | 78.10             | %
|                                                        |                              |                      |                      |       |  |  |                    |   |                         |   |                    |   |                    |  |                   |  
|                                                        |                              |                      |                      |       |  |  |                    |   |                         |   |                    |   |                    |  |                   |  







See notes
to financial statements (unaudited).





- 9 -







TP
FLEXIBLE INCOME FUND, INC.

SCHEDULE
OF INVESTMENTS as of March 31, 2019

(Unaudited)
(Continued)





| | (a) | Indicates assets that the Company believes do not represent “qualifying assets” under
Section 55(a) of the Investment Company Act of 1940, as amended (the “1940 Act”). Of the Company’s total investments
as of March 31, 2019, 32% are non-qualifying assets as a percentage of assets.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (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 which reset 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 March 31, 2019. Certain investments are subject to a LIBOR or Prime interest rate floor. As of March 31, 2019, the one-month,
two-month, three-month, and six-month LIBOR rates were 2.50%, 2.56%, 2.60%, and 2.65%, respectively.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | Fair value and market value are determined by the Company’s board of directors (see Note
2.)
| | --- | --------------------------------------------------------------------------------------------

| | (d) | See Note 6 for a discussion of the tax cost of the portfolio.
| | --- | -------------------------------------------------------------

| | (e) | The structured subordinated notes and preference/preferred shares are considered equity positions
in the Collateralized Loan Obligations (“CLOs”). The CLO equity investments are entitled to recurring distributions
which are generally equal to the excess cash flow generated from the underlying investments after payment of the contractual payments
to debt holders and fund expenses. The current estimated yield is based on the current projections of this excess cash flow taking
into account assumptions which have been made regarding expected prepayments, losses and future reinvestment rates. These assumptions
are periodically reviewed and adjusted. Ultimately, the actual yield may be higher or lower than the estimated yield if actual
results differ from those used for the assumptions.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (f) | All structured subordinated notes are co-investments with other entities managed by an affiliate
of the Adviser (see Note 4).
| | --- | -----------------------------------------------------------------------------------------------------------------------------

| | (g) | Affiliated investment as defined by the 1940 Act, whereby the Company owns between 5% and 25% of
the portfolio company’s outstanding voting securities and the investments are not classified as controlled investments. Affiliated
funds that are managed by an affiliate of Triton Pacific Adviser, LLC also hold investments in this security. The aggregate fair
value of non-controlled, affiliated investments at March 31, 2019 represented 2.04% of the Company’s net assets. Fair value
as of March 31, 2019 along with transactions during the period ended March 31, 2019 in affiliated investments were as follows:
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Non-controlled, Affiliated Investments |  | Number
    
    of  Shares |         |  | Fair
    Value at  December 31,
    2018 |   |         | Gross
    
    Additions  (Cost)* |  |   | Gross
    
    Reductions (Cost)** |  |  | Unrealized 
    Change in 
    FMV |   |  | Net
    Realized  Gain (Loss) |   |        | Fair
    Value
    at  March 31, 
    2019 |  |   | Interest
                                         &Dividends Credited
                  toIncome | 
|-------------------------------------- |  | -------------------------- | ------- |  | ---------------------------------------- | - | ------- | --------------------------------- |  | - | ---------------------------------- |  |  | ---------------------------------- | - |  | ----------------------------- | - | ------ | ------------------------------------------ |  | - | ------------------------------------------------------------------------------------------------ | 
|                                       |  |                            |         |  |                                          |   |         |                                   |  |   |                                    |  |  |                                    |   |  |                               |   |        |                                            |  |   |                                                                                                  | 
|ACON IWP Investors
    I, L.L.C.       |  |                            | 500,000 |  |                                          | $ | 495,651 |                                   |  | $ | —                                  |  |  | $                                  | — |  |                               | $ | 12,337 |                                            |  | $ | —                                                                                                | 
|                                       |  |                            |         |  |                                          |   |         |                                   |  |   |                                    |  |  |                                    |   |  |                               |   |        |                                            |  |   |                                                                                                  | 
|Total                                  |  |                            |         |  |                                          | $ | 495,651 |                                   |  | $ | —                                  |  |  | $                                  | — |  |                               | $ | 12,337 |                                            |  | $ | —                                                                                                | 
|                                       |  |                            |         |  |                                          |   |         |                                   |  |   |                                    |  |  |                                    |   |  |                               |   |        |                                            |  |   |                                                                                                  | 



*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.

| | (h) | Represents non-income producing security that has not paid a dividend in the year preceding the
reporting date.
| | --- | ---------------------------------------------------------------------------------------------------------------

| | (i) | All investments in this category are categorized as Level 2 investments per ASC 820.
| | --- | ------------------------------------------------------------------------------------

| | (j) | All investments in this category are valued using significant unobservable inputs and are categorized
as Level 3 investments per ASC 820. See Notes 2 & 3.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------



- 10 -







TP
FLEXIBLE INCOME FUND, INC.



SCHEDULE
OF INVESTMENTS as of June 30, 2018 (h)



|Portfolio
    Company / Security Type                   | Industry           | Acquisition
    Date | Interest
    Rate/Yield (b) | Floor |  |  | Maturity   |   | Principal
    / Quantity |   | Amortized
    Cost (c) |   | Fair
    Value(d) |  | %
    of Net Assets |  
|------------------------------------------------------- | ------------------ | -------------------- | --------------------------- | ----- |  |  | ---------- | - | ------------------------ | - | ---------------------- | - | ----------------- |  | ------------------- | -
|                                                        |                    |                      |                             |       |  |  |            |   |                          |   |                        |   |                   |  |                     |  
|Senior Unsecured
    Bonds (f)                          |                    |                      |                             |       |  |  |            |   |                          |   |                        |   |                   |  |                     |  
|Ace Cash Express, Inc.                                  | Financial          | 12/15/2017           | 12.00                       | N/A   |  |  | 12/15/2022 | $ | 500,000                  | $ | 493,110                | $ | 545,750           |  | 6.50                | %
|Archrock Partners, LP                                   | Energy             | 12/22/2016           | 6.00                        | N/A   |  |  | 4/1/2021   |   | 500,000                  |   | 497,145                |   | 499,027           |  | 6.00                |  
|Brand Energy & Infrastructure Services,
    Inc.        | Energy             | 6/21/2017            | 8.50                        | N/A   |  |  | 7/15/2025  |   | 1,000,000                |   | 1,000,000              |   | 1,017,427         |  | 12.20               |  
|Calumet Specialty Products                              | Energy             | 10/16/2015           | 7.75                        | N/A   |  |  | 4/15/2023  |   | 550,000                  |   | 523,838                |   | 551,287           |  | 6.60                |  
|Carrizo Oil and Gas, Inc.                               | Energy             | 9/3/2015             | 7.50                        | N/A   |  |  | 9/15/2020  |   | 191,000                  |   | 193,012                |   | 192,074           |  | 2.30                |  
|CSI Compressco LP                                       | Energy             | 9/17/2015            | 7.25                        | N/A   |  |  | 8/15/2022  |   | 750,000                  |   | 675,537                |   | 687,188           |  | 8.20                |  
|Ferrellgas Partners LP                                  | Energy             | 9/9/2015             | 8.63                        | N/A   |  |  | 6/15/2020  |   | 750,000                  |   | 750,000                |   | 727,500           |  | 8.70                |  
|Global Partners LP                                      | Energy             | 10/2/2015            | 7.00                        | N/A   |  |  | 6/15/2023  |   | 350,000                  |   | 330,947                |   | 349,540           |  | 4.20                |  
|Jonah Energy LLC                                        | Energy             | 10/3/2017            | 7.25                        | N/A   |  |  | 10/15/2025 |   | 1,000,000                |   | 1,000,000              |   | 811,964           |  | 9.70                |  
|Martin Midstream Partners LP                            | Energy             | 9/10/2015            | 7.25                        | N/A   |  |  | 2/15/2021  |   | 500,000                  |   | 484,935                |   | 495,000           |  | 5.90                |  
|NGL Energy Partners
    LP                              | Energy             | 9/2/2015             | 6.88                        | N/A   |  |  | 10/15/2021 |   | 750,000                  |   | 745,753                |   | 763,327           |  | 9.10                |  
|RSP Permian, Inc.                                       | Energy             | 9/10/2015            | 6.63                        | N/A   |  |  | 10/1/2022  |   | 300,000                  |   | 292,376                |   | 315,397           |  | 3.80                |  
|Weatherford Bermuda                                     | Energy             | 11/24/2015           | 9.88                        | N/A   |  |  | 3/1/2039   |   | 350,000                  |   | 322,886                |   | 340,764           |  | 4.10                |  
|Total Senior
    Unsecured Bonds                        |                    |                      |                             |       |  |  |            |   |                          |   | 7,309,539              |   | 7,296,245         |  | 87.30               |  
|                                                        |                    |                      |                             |       |  |  |            |   |                          |   |                        |   |                   |  |                     |  
|Senior Secured Bonds(f)                                 |                    |                      |                             |       |  |  |            |   |                          |   |                        |   |                   |  |                     |  
|Hexion Inc.                                             | Chemicals          | 9/8/2015             | 6.63                        | N/A   |  |  | 4/15/2020  |   | 550,000                  |   | 524,156                |   | 516,038           |  | 6.20                |  
|Total Senior
    Secured Bonds                          |                    |                      |                             |       |  |  |            |   |                          |   | 524,156                |   | 516,038           |  | 6.20                |  
|                                                        |                    |                      |                             |       |  |  |            |   |                          |   |                        |   |                   |  |                     |  
|Structured subordinated
    notes (c)(d)(h)             |                    |                      |                             |       |  |  |            |   |                          |   |                        |   |                   |  |                     |  
|Carlyle Global Market Strategies CLO 2014-4-R,
    Ltd. | Structured Finance | 6/29/2018            | 20.67                       | N/A   |  |  | 7/15/2030  |   | 250,000                  |   | 174,970                |   | 184,133           |  | 2.20                |  
|Carlyle Global Market Strategies CLO 2017-5,
    Ltd.   | Structured Finance | 1/30/2018            | 15.86                       | N/A   |  |  | 1/22/2030  |   | 500,000                  |   | 506,401                |   | 457,386           |  | 5.50                |  
|Galaxy XIX CLO, Ltd.                                    | Structured Finance | 12/8/2016            | 12.13                       | N/A   |  |  | 7/24/2030  |   | 250,000                  |   | 166,384                |   | 139,761           |  | 1.70                |  
|GoldenTree 2013-7A, Ltd.(e)                             | Structured Finance | 5/24/2016            | —                           | N/A   |  |  | 10/29/2026 |   | 250,000                  |   | 73,064                 |   | 55,357            |  | 0.70                |  
|GoldenTree Loan Opportunities IX, Ltd.                  | Structured Finance | 7/27/2017            | 12.84                       | N/A   |  |  | 10/29/2026 |   | 250,000                  |   | 180,520                |   | 168,922           |  | 2.00                |  
|Madison Park Funding XIII, Ltd.                         | Structured Finance | 11/12/2015           | 18.76                       | N/A   |  |  | 4/22/2030  |   | 250,000                  |   | 176,111                |   | 166,338           |  | 2.00                |  
|Madison Park Funding XIV, Ltd.                          | Structured Finance | 11/19/2015           | 17.32                       | N/A   |  |  | 7/20/2026  |   | 250,000                  |   | 194,188                |   | 190,356           |  | 2.30                |  
|Octagon Investment Partners XIV, Ltd.                   | Structured Finance | 12/6/2017            | 18.07                       | N/A   |  |  | 7/16/2029  |   | 850,000                  |   | 506,864                |   | 431,794           |  | 5.20                |  
|Octagon Investment Partners XXI, Ltd.                   | Structured Finance | 1/13/2016            | 19.37                       | N/A   |  |  | 11/14/2026 |   | 300,000                  |   | 181,468                |   | 190,379           |  | 2.30                |  
|Octagon Investment Partners 30, Ltd.                    | Structured Finance | 11/21/2017           | 15.73                       | N/A   |  |  | 3/17/2030  |   | 475,000                  |   | 454,309                |   | 398,348           |  | 4.80                |  
|OZLM XII, Ltd.                                          | Structured Finance | 1/20/2017            | 10.53                       | N/A   |  |  | 4/30/2027  |   | 275,000                  |   | 216,577                |   | 166,721           |  | 2.00                |  
|Voya IM CLO 2013-1, Ltd.                                | Structured Finance | 6/14/2016            | 16.2                        | N/A   |  |  | 10/15/2030 |   | 278,312                  |   | 179,813                |   | 163,625           |  | 1.90                |  
|Voya CLO 2016-1, Ltd.                                   | Structured Finance | 2/25/2016            | 20.9                        | N/A   |  |  | 1/21/2031  |   | 250,000                  |   | 208,899                |   | 212,472           |  | 2.50                |  
|THL Credit Wind River 2013-1 CLO, Ltd.                  | Structured Finance | 11/3/2017            | 16.13                       | N/A   |  |  | 7/30/2030  |   | 325,000                  |   | 243,302                |   | 202,304           |  | 2.40                |  
|Total Structured
    subordinated notes (c)(d)          |                    |                      |                             |       |  |  |            |   |                          |   | 3,462,870              |   | 3,127,896         |  | 37.50               |  
|                                                        |                    |                      |                             |       |  |  |            |   |                          |   |                        |   |                   |  |                     |  
|Total Portfolio Investments                             |                    |                      |                             |       |  |  |            |   |                          | $ | 11,296,565             | $ | 10,940,179        |  | 131.00              | %
|                                                        |                    |                      |                             |       |  |  |            |   |                          |   |                        |   |                   |  |                     |  





See notes to financial statements (unaudited).





- 11 -







TP
FLEXIBLE INCOME FUND, INC.



SCHEDULE
OF INVESTMENTS as of June 30, 2018





| | (a) | Fair value and market value are determined by the Company’s board of directors (see Note
2.)
| | --- | --------------------------------------------------------------------------------------------

| | (b) | See Note 6 for a discussion of the tax cost of the portfolio.
| | --- | -------------------------------------------------------------

| | (c) | The structured subordinated notes and preference/preferred shares are considered equity positions
in the Collateralized Loan Obligations (“CLOs”). The CLO equity investments are entitled to recurring distributions
which are generally equal to the excess cash flow generated from the underlying investments after payment of the contractual payments
to debt holders and fund expenses. The current estimated yield is based on the current projections of this excess cash flow taking
into account assumptions which have been made regarding expected prepayments, losses and future reinvestment rates. These assumptions
are periodically reviewed and adjusted. Ultimately, the actual yield may be higher or lower than the estimated yield if actual
results differ from those used for the assumptions.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d) | All structured subordinated notes are co-investments with other entities managed by an affiliate
of the Adviser (see Note 4).
| | --- | -----------------------------------------------------------------------------------------------------------------------------

| | (e) | Security was called for redemption and the liquidation of the underlying loan portfolio is ongoing
| | --- | --------------------------------------------------------------------------------------------------

| | (f) | All Level 2 securities are pledged as collateral supporting the amounts outstanding under a revolving
credit facility with BNP Paribas Prime Brokerage International, Ltd.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (g) | Reflects the balances of Pathway Capital Opportunity Fund, Inc. as of June 30, 2018 as filed on
form N-CSR with the SEC.
| | --- | ------------------------------------------------------------------------------------------------------------------------

| | (h) | All investments in this category are valued using significant unobservable inputs and are categorized
as Level 3 investments per ASC 820. See Notes 2 & 3.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------





See notes to financial statements (unaudited).



- 12 -







TP
FLEXIBLE INCOME FUND, INC.

Notes
to Financial Statements – March 31, 2019





NOTE
1 – NATURE OF OPERATIONS



TP
Flexible Income Fund, Inc. (f/k/a Triton Pacific Investment Corporation, Inc.) (the “Company”, “our”,
“us”, “we”), incorporated in Maryland on April 29, 2011, is an externally managed, non-diversified, closed-end
management investment company that has elected to be regulated as a business development company (“BDC”) under the
Investment Company Act of 1940, as amended (the “1940 Act”). Our investment objective is to generate current income
and, as a secondary objective, capital appreciation by targeting investment opportunities with favorable risk-adjusted returns.
We intend to meet our investment objective by primarily lending to and investing in the debt of privately-owned U.S. middle market
companies, which we define as companies with annual revenue between $50 million and $2.5 billion. We expect that at least 70%
of our portfolio of investments will consist primarily of syndicated senior secured first lien loans, syndicated senior secured
second lien loans, and to a lesser extent, subordinated debt, and that up to 30% of our portfolio of investments will consist
of other securities, including private equity (both common and preferred), dividend-paying equity, royalties, and the equity and
junior debt tranches of a type of pools of broadly syndicated loans known as collateralized loan obligations (“CLOs”).
Pursuant to our Articles of Incorporation, as amended, restated and supplemented, 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 (“SEC”) 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.



On
August 10, 2018, we (in our capacity as Triton Pacific Investment Corporation, Inc., which we refer to as TPIC) entered into an
agreement and plan of merger with Pathway Capital Opportunity Fund, Inc. (“PWAY”) pursuant to which PWAY agreed to
merge with and into TPIC (the “Merger”), and, as the combined legal surviving company, we were renamed as TP Flexible
Income Fund, Inc. (we were formerly known as Triton Pacific Investment Corporation, Inc.). The agreement and plan of merger was
amended and restated effective February 12, 2019. On March 15, 2019 the Merger was approved by the stockholders of TPIC and PWAY
and was consummated effective as of March 31, 2019 at 11:59 p.m. eastern time (the “Effective Time”). As part of the
Merger each outstanding Class A and Class I share of PWAY common stock was cancelled and retired in exchange for 1.2848 and 1.2884
shares, respectively, of TPIC Class A common stock as consideration for the Merger. From and after the Effective Time, shares
of PWAY common stock are no longer outstanding and cease to exist.



We
will be subject to certain regulatory restrictions in making our investments. The parent company of Prospect Flexible Income Management,
LLC, our investment adviser (the “Adviser”) received an exemptive order from the SEC (the “Order”) granting
the ability to negotiate terms, other than price and quantity, of co-investment transactions with other funds managed by our Adviser
or certain affiliates, including us, Prospect Capital Corporation and Priority Income Fund, Inc., subject to certain conditions
included therein. Under the terms of the Order permitting us to co-invest with other funds managed by our Adviser or its affiliates,
a majority of our independent directors who have no financial interest in the transaction must make certain conclusions in connection
with a co-investment transaction, including that (1) the terms of the proposed transaction, including the consideration to be
paid, are reasonable and fair to us and our stockholders and do not involve overreaching of us or our stockholders on the part
of any person concerned and (2) the transaction is consistent with the interests of our stockholders and is consistent with our
investment objective and strategies. The Order also imposes reporting and record keeping requirements and limitations on transactional
fees. We may only co-invest with certain entities affiliated with our Adviser in negotiated transactions originated by our Adviser
or its affiliates in accordance with such Order and existing regulatory guidance. These co-investment transactions may give rise
to conflicts of interest or perceived conflicts of interest among us and the other participating accounts. To mitigate these conflicts,
our Adviser and its affiliates will seek to allocate portfolio transactions for all of the participating investment accounts,
including us, on a fair and equitable basis, taking into account such factors as the relative amounts of capital available for
new investments, the applicable investment programs and portfolio positions, the clients for which participation is appropriate
and any other factors deemed appropriate. We intend to make all of our investments in compliance with the 1940 Act and in a manner
that will not jeopardize our status as a BDC or RIC (as such term is defined herein).



The
Adviser was formed in Delaware as a private investment management firm and is registered as an investment adviser with the 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.



Although
PWAY merged into TPIC in connection with the Merger, PWAY is considered the accounting survivor of the Merger and its historical
financial statements are included and discussed in this report and the Company adopted PWAY’s fiscal year end of June 30.



- 13 -







TP
FLEXIBLE INCOME FUND, INC.

Notes
to Financial Statements – March 31, 2019





As
a result of the Merger several significant changes occurred:



| | ● | New
                                         Investment Adviser. Prospect Flexible Income Management, LLC now serves as our investment
                                         adviser, replacing our former investment adviser, Triton Pacific Adviser, LLC (the “Former
                                         Adviser”). The Adviser is an affiliate of PWAY and the investment professionals
                                         of PWAY’s investment adviser have investment discretion at the Adviser.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Increased
                                         Leverage. Following the Merger, our asset coverage ratio requirement was reduced
                                         from 200% to 150%, which allows us to incur double the maximum amount of leverage that
                                         was previously permitted. As a result, we are now able to borrow substantially more money
                                         and take on substantially more debt than we previously were able to. Leverage may increase
                                         the risk of loss to investors and is generally considered a speculative investment technique.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Special
                                         Repurchase Offer. As a condition to being able to increase our leverage, we will
                                         offer to repurchase certain of our outstanding shares. In connection with this special
                                         repurchase offer, stockholders should be aware that:
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ○ | Only
                                         stockholders of TPIC as of March 15, 2019, the date of TPIC’s annual stockholder
                                         meeting, will be allowed to participate in the special repurchase offer, and they may
                                         have up to 100% of their shares repurchased (former stockholders of PWAY and stockholders
                                         who acquired their shares after March 15, 2019, will not be able to participate in the
                                         special repurchase offer).
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ○ | If
                                         a substantial number of the eligible stockholders take advantage of this opportunity,
                                         it could minimize or eliminate the expected benefits of the Merger and it could:
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ■ | significantly
                                         decrease our asset size;
| | - | -------------------------------------------------------------------------------



| | ■ | require
                                         us to sell our investments earlier than the Adviser would have otherwise desired, which
                                         may result in selling investments at inopportune times or significantly depressed prices
                                         and/or at losses; or
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ■ | cause
                                         us to incur additional leverage solely to meet repurchase requests.
| | - | ------------------------------------------------------------------------------------------------------------------



| | ● | New
                                         Board of Directors. Following the Merger, the composition of our board of directors
                                         changed and now consists of Craig J. Faggen, TPIC’s former President and Chief
                                         Executive Officer, M. Grier Eliasek, PWAY’s Former President and Chief Executive
                                         Officer, Andrew Cooper, William Gremp and Eugene Stark. Messrs. Cooper, Gremp and Stark
                                         are our independent directors and were formally independent directors of PWAY.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



NOTE
2 – 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”). The Company is considered an investment company under GAAP and follows the
accounting and reporting guidance applicable to investment companies under Accounting Standards Codification (“ASC”)
946, Financial Services – Investment Companies. The Company has evaluated the impact of subsequent events through the date
the financial statements were issued and filed with the SEC.



Management
Estimates and Assumptions. The preparation of the financial statements in accordance with GAAP requires us to make estimates
and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported
amounts of income, expenses, and gains and losses during the reported period. Changes in the economic environment, financial markets,
creditworthiness of the issuers of our investment portfolio and any other parameters used in determining these estimates could
cause actual results to differ, and these differences could be material.



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



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



We
follow guidance under U.S. GAAP, which classifies the inputs used to measure fair values into the following hierarchy:



- 14 -







TP
FLEXIBLE INCOME FUND, INC.

Notes
to Financial Statements – March 31, 2019





Level
1. Unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access 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
on an inactive market, 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 is determined based
on the lowest level input that is significant to the fair value measurement in its entirety. The 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.



Investments
for which market quotations are readily available are valued at such market quotations and are classified in Level 1 of the fair
value hierarchy.



Securities
traded on a national securities exchange are valued at the last sale price on such exchange on the date of valuation or, if there
was no sale on such day, at the mean between the last bid and asked prices on such day or at the last bid price on such day in
the absence of an asked price. Securities traded on the Nasdaq market are valued at the Nasdaq official closing price (“NOCP”)
on the day of valuation or, if there was no NOCP issued, at the last sale price on such day. Securities traded on the Nasdaq market
for which there is no NOCP and no last sale price on the day of valuation are valued at the mean between the last bid and asked
prices on such day or at the last bid price on such day in the absence of an asked price.



Securities
traded in the over-the-counter market are valued by an independent pricing agent or more than one principal market maker, if available,
otherwise a principal market maker or a primary market dealer. We value over-the-counter securities 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 an independent pricing
agent and screened for validity by such service. Such securities are categorized in Level 2 of the fair value hierarchy.



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 for each quarter, as described below,
and such investments are classified in Level 3 of the fair value hierarchy:



| | 1. | Each
    portfolio investment is reviewed by investment professionals of the Adviser with the independent valuation firm engaged by
    our board of directors.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2. | The
    independent valuation firm prepares independent valuations based on its own independent assessments and issue its report.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------

| | 3. | The
    audit committee of our board of directors (the “Audit Committee”) reviews and discusses with the independent valuation
    firm the valuation report, and then makes a recommendation to our board of directors of the value for each investment.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4. | Our
    board of directors discusses valuations and determines the fair value of such investments in our portfolio in good faith based
    on the input of the Adviser, the respective independent valuation firm and the Audit Committee.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Generally,
our investments in loans are classified as Level 3 fair value measured securities under Financial Accounting Standards Board (“FASB”)
Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures (“ASC 820”) and are valued utilizing
a combination of yield analysis and discounted cash flow technique, as appropriate. The yield analysis uses loan spreads and other
relevant information implied by market data involving identical or comparable assets or liabilities. The discounted cash flow
technique converts future cash flows or earnings to a range of fair values from which a single estimate may be derived utilizing
an appropriate yield, i.e. discount rate. The measurement is based on the net present value indicated by current market expectations
about those future amounts.



Our
investments in CLOs are classified as Level 3 fair value measured securities under ASC 820 and are valued using a discounted multi-path
cash flow model. The CLO structures are analyzed to identify the risk exposures and to determine an appropriate call date (i.e.,
expected maturity). These risk factors are sensitized in the multi-path cash flow model using Monte Carlo simulations, which is
a simulation used to model the probability of different outcomes, to generate probability-weighted (i.e., multi-path) cash flows
from the underlying assets and liabilities. These cash flows are discounted using appropriate market discount rates, and relevant
data in the CLO market as well as certain benchmark credit indices are considered, to determine the value of each CLO. In addition,
we generate a single-path cash flow utilizing our best estimate of expected cash receipts, and assess the reasonableness of the
implied discount rate that would be effective for the value derived from the multi-path cash flows. We are not responsible for
and have no influence over the asset management of the portfolios underlying the CLO investments we hold, as those portfolios
are managed by non-affiliated third party CLO collateral managers. The main risk factors are default risk, prepayment risk, interest
rate risk, downgrade risk, and credit spread risk.



- 15 -







TP
FLEXIBLE INCOME FUND, INC.

Notes
to Financial Statements – March 31, 2019



The
types of factors that are taken into account in fair value determination include, as relevant, market changes in expected returns
for similar investments, performance improvement or deterioration, security covenants, call protection provisions, and information
rights, the nature and realizable value of any collateral, the issuer’s ability to make payments and its earnings and cash
flows, the principal markets in which the issuer does business, comparisons to traded securities, and other relevant factors.



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.



Investment
Risks



Our
investments are subject to a variety of risks. Those risks include the following:



Market
Risk



Market
risk represents the potential loss that can be caused by a change in the fair value of the financial instrument.



Credit
Risk



Credit
risk represents the risk that we would incur if the counterparties failed to perform pursuant to the terms of their agreements
with us.



Liquidity
Risk



Liquidity
risk represents the possibility that we may not be able to rapidly adjust the size of our investment positions in times of high
volatility and financial stress at a reasonable price.



Interest
Rate Risk



Interest
rate risk represents a change in interest rates, which could result in an adverse change in the fair value of an interest-bearing
financial instrument.



Prepayment
Risk



Many
of our debt investments allow for prepayment of principal without penalty. Downward changes in interest rates may cause prepayments
to occur at a faster than expected rate, thereby effectively shortening the maturity of the security and making us less likely
to fully earn all of the expected income of that security and reinvesting in a lower yielding instrument.



Structured
Credit Related Risk



CLO
investments may be riskier and less transparent to us than direct investments in underlying companies. CLOs typically will have
no significant assets other than their underlying senior secured loans. Therefore, payments on CLO investments are and will be
payable solely from the cash flows from such senior secured loans.



- 16 -







TP
FLEXIBLE INCOME FUND, INC.

Notes
to Financial Statements – March 31, 2019





Investment
Classification. We are a non-diversified company within the meaning of the 1940 Act. As required by the 1940 Act, we classify
our investments by level of control. As defined in the 1940 Act, “Control Investments” are those where there is the
ability or power to exercise a controlling influence over the management or policies of a company. Control is generally deemed
to exist when a company or individual possesses or has the right to acquire within 60 days or less, a beneficial ownership of
more than 25% of the voting securities of an investee company. Under the 1940 Act, “Affiliate Investments” are defined
by a lesser degree of influence and are deemed to exist through the possession outright or via the right to acquire within 60
days or less, beneficial ownership of 5% or more of the outstanding voting securities of another person. “Non-Control/Non-Affiliate
Investments” are those that are neither Control Investments nor Affiliate Investments.



As
a BDC, we must not acquire any assets other than “qualifying assets” specified in the 1940 Act unless, at the time
the acquisition is made, at least 70% of our total assets are qualifying assets (with certain limited exceptions).



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.



Interest
income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis. Accretion of such purchase
discounts or amortization of such premiums is calculated using the effective interest method as of the settlement date and adjusted
only for material amendments or prepayments. Upon the prepayment of a bond, any unamortized discount or premium is recorded as
interest income.



Interest
income from investments in the “equity” positions of CLOs (typically income notes or subordinated notes) is recorded
based on an estimation of an effective yield to expected maturity utilizing assumed future cash flows. The Company monitors the
expected cash inflows from CLO equity investments, including the expected residual payments, and the estimated effective yield
is determined and updated periodically.



Effective
January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers, or ASC Topic 606. The application of
this guidance did not have a material impact on our financial statements.



Due
to and from Adviser. Amounts due from the Adviser are for payments under the ELA and amounts due to the Adviser are for
base management fees, incentive fees, routine non-compensation overhead, operating expenses paid on our behalf and offering and
organization expenses paid on our behalf. The due to and due from Adviser balances are presented net on the Statement of Assets
and Liabilities in accordance with ASC 210-20-45-1 because the amounts owed between the two parties are determinable, we have
the right to offset the amount owed from the Adviser against the amount that we owe the Adviser and we intend to offset these
balances. Amounts included on the Statement of Assets and Liabilities are presented net only to the extent that we or the
Adviser have a current obligation to pay the amounts. All balances due from the Adviser are settled quarterly.



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 and nine months ended March 31, 2019, and 2018, respectively, interest income did not include any PIK interest.
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.



Offering
Costs and Expenses. The Company will incur certain costs and expenses in connection with registering to sell shares of
its common stock. These costs and expenses principally relate to certain costs and expenses for advertising and sales, printing
and marketing costs, professional and filing fees. Offering costs incurred by the Company were capitalized to deferred offering
costs on the Statement of Assets and Liabilitiesand amortized to expense over the 12 month period following such capitalization
on a straight line basis. Prior to the Merger, there were offering and organizational costs due to the PWAY Adviser (as such term
is defined below). With the approval of the Merger Agreement, the offering of PWAY ended and the offering and organization costs
are no longer reimbursable, which resulted in a reversal of offering costs of $1,975,233.



- 17 -







TP
FLEXIBLE INCOME FUND, INC.

Notes
to Financial Statements – March 31, 2019





Distributions.Distributions to the Company’s stockholders are recorded as of the declaration 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.



Investment
Transactions. Investments are recognized when we assume an obligation to acquire a financial instrument and assume the
risks for gains or losses related to that instrument. Specifically, we record all security transactions on a trade date basis.
Investments are derecognized when we assume an obligation to sell a financial instrument and forego the risks for gains or losses
related to that instrument. In accordance with ASC 325-40, Beneficial Interest in Securitized Financial Assets, investments
in CLOs are periodically assessed for other-than-temporary impairment ("OTTI"). When the Company determines that a CLO has OTTI,
the amortized cost basis of the CLO is written down to its fair value as of the date of the determination based on events and
information evaluated and that write-down is recognized as a realized loss.



Federal
and State Income Taxes.The Company has elected to be treated as a regulated investment company (“RIC”) under
Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), and intends to continue to comply with
the requirements of the Code applicable to RICs. As a RIC, the Company is required to distribute at least 90% of its investment
company taxable income and intends to distribute (or retain through a deemed distribution) all of its investment company taxable
income and net capital gain to stockholders; therefore, the Company has made no provision for income taxes. The character of income
and gains that the Company will distribute is determined in accordance with income tax regulations that may differ from GAAP.
Book and tax basis differences relating to stockholder dividends and distributions and other permanent book and tax differences
are reclassified to paid-in capital.



If
the Company does not distribute (or is not deemed to have distributed) at least 98% of its annual ordinary income and 98.2% of
its net capital gains in the calendar year earned, it will generally be required to pay an excise tax equal to 4% of the amount
by which 98% of its annual ordinary income and 98.2% of its capital gains exceeds the distributions from such taxable income for
the year. To the extent that the Company determines that its estimated current year annual taxable income will be in excess of
estimated current year dividend distributions from such taxable income, it accrues excise taxes, if any, on estimated excess taxable
income. As of March 31, 2019, the Company does not expect to have any excise tax due for the 2019 calendar year. Thus, the Company
has not accrued any excise tax for this period.



If
the Company fails to satisfy the annual distribution requirement or otherwise fails to qualify as a RIC in any taxable year, it
would be subject to tax on all of its taxable income at regular corporate income tax rates. The Company would not be able to deduct
distributions to stockholders, nor would it be required to make distributions. Distributions would generally be taxable to the
Company’s individual and other non-corporate taxable stockholders as ordinary dividend income eligible for the reduced maximum
rate applicable to qualified dividend income to the extent of its current and accumulated earnings and profits, provided certain
holding period and other requirements are met. Subject to certain limitations under the Code, corporate distributions would be
eligible for the dividends-received deduction. To qualify again to be taxed as a RIC in a subsequent year, the Company would be
required to distribute to our shareholders our accumulated earnings and profits attributable to non-RIC years. In addition, if
the Company failed to qualify as a RIC for a period greater than two taxable years, then, in order to qualify as a RIC in a subsequent
year, it would be required to elect to recognize and pay tax on any net built-in gain (the excess of aggregate gain, including
items of income, over aggregate loss that would have been realized if we had been liquidated) or, alternatively, be subject to
taxation on such built-in gain recognized for a period of five years.



The
Company follows ASC 740, Income Taxes (“ASC 740”). ASC 740 provides guidance for how uncertain tax positions
should be recognized, measured, presented, and disclosed in the financial statements. ASC 740 requires the evaluation of tax positions
taken or expected to be taken in the course of preparing our tax returns to determine whether the tax positions are “more-likely-than-not”
of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold are recorded
as a tax benefit or expense in the current year. As of March 31, 2019, the Company did not record any unrecognized tax benefits
or liabilities. Management’s determinations regarding ASC 740 may be subject to review and adjustment at a later date based
upon factors including, but not limited to, an on-going analysis of tax laws, regulations and interpretations thereof. Although
the Company files both federal and state income tax returns, its major tax jurisdiction is federal. The Company’s federal
tax returns for the tax years ended December 31, 2015 and thereafter remain subject to examination by the Internal Revenue Service.



Recent
Accounting Pronouncements. In August 2018, the FASB issued Accounting Standards Update 2018-13, Fair Value Measurement—Disclosures
Framework—Changes to Disclosure Requirements of Fair Value Measurement (Topic 820), or ASU 2018-13. ASU 2018-13 introduces
new fair value disclosure requirements and eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13
is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is
currently evaluating the impact of ASU 2018-13 on its financial statements.



In
June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial
Instruments(“ASU 2016-13”), which amends the financial instruments impairment guidance so that an entity is required
to measure expected credit losses for financial assets based on historical experience, current conditions and



- 18 -







TP
FLEXIBLE INCOME FUND, INC.

Notes
to Financial Statements – March 31, 2019

reasonable
and supportable forecasts. As such, an entity will use forward-looking information to estimate credit losses. ASU 2016-13 also
amends the guidance in FASB ASC Subtopic No. 325-40, Investments-Other, Beneficial Interests in Securitized Financial Assets,
related to the subsequent measurement of accretable yield recognized as interest income over the life of a beneficial interest
in securitized financial assets under the effective yield method. ASU 2016-13 is effective for financial statements issued for
fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted
as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently
evaluating the impact, if any, of adopting this ASU on our financial statements.



In
March 2017, the FASB issued ASU 2017-08, Receivables - Nonrefundable Fees and Other Costs(“ASU 2017-08). The amendments
in ASU 2017-08 require premiums on purchased callable debt securities to be amortized to the security’s earliest call date.
Prior to this ASU, premiums and discounts on purchased callable debt securities were generally required to be amortized to the
security’s maturity date. The amendments in ASU 2017-08 do not require any changes to treatment of securities held at a
discount. ASU 2017-08 is effective on January 1, 2019, with early adoption permitted. Although the Company is still evaluating
the effect of ASU 2017-08, it does not expect the amendments to have a material impact on its financial statements.



SEC
Disclosure Update and Simplification

In
August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain
disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. The amendments are intended to
facilitate the disclosure of information to investors and simplify compliance. The effective date for the SEC amendments was November
5, 2018; however, in light of the timing and proximity of effectiveness to the filing date for most filers’ quarterly reports,
the SEC Staff commented that it would not object if the first presentation of the changes in shareholders’ equity is included
in a filer’s Form 10-Q for the quarter that begins after the effective date of the amendments. We have adopted the amendments
for the fiscal quarter ended March 31, 2019.



Prior
to adoption and in accordance with previous SEC rules, we presented distributable earnings (loss) on the Statements of Assets
and Liabilities, as three components: 1) accumulated overdistributed net investment income; 2) accumulated net unrealized
gain (loss) on investments; and 3) accumulated net realized gain (loss) on investments. We also presented distributions from earnings
on the Statements of Changes in Net Assets as distributions from net investment income. In accordance with the SEC Release,
distributable earnings and distributions from distributable earnings are shown in total on the Statements of Assets and Liabilitiesand Statements of Changes in Net Assets, respectively. The changes in presentation have been retrospectively applied
to the prior period statements presented.



- 19 -







TP
FLEXIBLE INCOME FUND, INC.

Notes
to Financial Statements – March 31, 2019



NOTE
3 – SHARE TRANSACTIONS



Prior
to the recapitalization, below is a summary of transactions with respect to shares of PWAY’s common stock during the nine
months ended March 31, 2019 and 2018:





|                                                      |  | Class
    A Shares |         |   | Class
    I Shares |   |          | Total  | 
|----------------------------------------------------- |  | ------------------ | ------- | - | ------------------ | - | -------- | ------ | 
|Nine
    Months Ended March 31, 2019                  |  | Shares             |         |   | Amount             |   |          | Shares | 
|Shares
    sold                                       |  |                    | —       |   |                    | $ | —        |        | 
|Shares
    issued from reinvestment of distributions  |  |                    | 14,376  |   |                    |   | 168,381  |        | 
|Repurchase
    of common shares                       |  |                    | (68,301 | ) |                    |   | (806,866 | )      | 
|Net
    increase (decrease) from capital transactions |  |                    | (53,925 | ) |                    | $ | (638,485 | )      | 





|                                                      |  |  | Class
    R Shares |          |   | Class
    RIA Shares |   |            | Class
    A Shares |  |  | Class
    I Shares |   |  | Total  |        
|----------------------------------------------------- |  |  | ------------------ | -------- | - | -------------------- | - | ---------- | ------------------ |  |  | ------------------ | - |  | ------ | -------
|Nine
    Months Ended March 31, 2018                  |  |  | Shares             |          |   | Amount               |   |            | Shares             |  |  | Amount             |   |  | Shares |        
|                                                      |  |  |                    |          |   |                      |   |            |                    |  |  |                    |   |  |        |        
|Shares
    sold                                       |  |  |                    | 41,068   |   |                      | $ | 629,900    |                    |  |  | —                  |   |  | $      | —      
|Shares
    issued from reinvestment of distributions  |  |  |                    | 9,224    |   |                      |   | 124,160    |                    |  |  | 94                 |   |  |        | 1,264  
|Repurchase
    of common shares                       |  |  |                    | (10,046  | ) |                      |   | (136,524   | )                  |  |  | —                  |   |  |        | —      
|Transfer
    of shares (out)(1)                       |  |  |                    | (628,825 | ) |                      |   | (8,501,714 | )                  |  |  | (6,454             | ) |  |        | (87,258
|Transfer
    of shares in(1)                          |  |  |                    | —        |   |                      |   | —          |                    |  |  | —                  |   |  |        | —      
|Net
    increase/(decrease) from capital transactions |  |  |                    | (588,579 | ) |                      | $ | (7,884,178 | )                  |  |  | (6,360             | ) |  | $      | (85,994



(1)
This represent the transfer of shares that occurred as part of the conversion to an interval fund.





(1)
This represents the transfer of shares that occurred as a part of the conversion to an interval fund.



Status
of Continuous Public Offering



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 as noted in the table above for the nine months
March 31, 2019, and 2018.



The
increase in capital in excess of par value during the nine months ended March 31, 2019, and 2018 also includes reinvested stockholder
distributions as noted in the table above for the nine months March 31, 2019, and 2018.



Merger
Shares



Upon
consummation of the Merger, each outstanding Class A and Class I share of PWAY common stock was cancelled and retired in exchange
for 1.2848 and 1.2884 shares, respectively, of TPIC Class A common stock. This resulted in 775,193 shares of TPIC common stock
being issued to former PWAY investors and all outstanding PWAY shares were retired. For financial reporting purposes, the conversion
of PWAY shares to TPIC shares was accounted for as a recapitalization of PWAY (see Note 9).



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:



- 20 -







TP
FLEXIBLE INCOME FUND, INC.

Notes
to Financial Statements – March 31, 2019





| | ● | 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 stockholders submit for repurchase.
If we do not repurchase the full amount of the shares that stockholders have requested to be repurchased, or we determine not
to make repurchases of our shares, stockholders 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 1940 Act.



Special
Repurchase Offer



At
the 2019 Annual Meeting of TPIC Stockholders (the “2019 Annual Meeting”), TPIC’s stockholders approved a proposal
allowing us to modify our asset coverage ratio requirement from 200% to 150%. Because our securities are not listed on a national
securities exchange, we are required to conduct four special repurchase offers that, taken together, will allow all of the Eligible
Stockholders (former stockholders of TPIC as of March 15, 2019, the date of the 2019 Annual Meeting) to have those shares that
such Eligible Stockholders held as of that date to be repurchased by us. PWAY stockholders who became our stockholders in connection
with the Merger will not be eligible to participate in these special repurchase offers. In addition, shares of our common stock
acquired after the date of the 2019 Annual Meeting will not be eligible for repurchase in these special repurchase offers. These
special repurchase offer will be separate and apart from our share repurchase program discussed above.



The
special repurchase offer will consist of four quarterly tender offers, with the first occurring in the second fiscal quarter of
2019 and the remainder occurring in each of the following three fiscal quarters. Each of the four tender offers that is part of
the special repurchase offer will allow the Eligible Stockholders to tender for repurchase up to 25% of their shares held as of
the date of the 2019 Annual Meeting. The repurchase price for any shares tendered during the special repurchase offer will be
equal to the net asset value per share of our common stock as of the date of each such repurchase.



In
connection with each tender offer that is part of the special repurchase offer, we plan to provide notice to all Eligible Stockholders
describing the terms of the special repurchase offer and other information such Eligible Stockholders should consider in deciding
whether to tender their shares to us in the special repurchase offer. These documents will also be made available on our website
at www.flexbdc.com. Each Eligible Stockholder will have not less than 20 business days from the date of that notice to elect to
tender their shares back to us.



The
payment for the eligible shares that are tendered in each special repurchase offer is expected to be paid promptly at the end
of the applicable special repurchase offer in accordance with the 1940 Act. At the discretion of our board of directors, we may
use cash on hand, cash available from borrowings, cash available from the issuance of new shares of our common stock and cash
from the sale of our investments to fund the aggregate purchase price payable as a result of any special repurchase offer. If
substantial numbers of the Eligible Stockholders take advantage of this opportunity, it could significantly decrease our asset
size, require us to sell our investments earlier than our Adviser would have otherwise desired, which may result in selling investments
at inopportune times or significantly depressed prices and/or at losses, or cause us to incur additional leverage solely to meet
repurchase requests.



- 21 -







TP
FLEXIBLE INCOME FUND, INC.

Notes
to Financial Statements – March 31, 2019



Below
is a summary of transactions with respect to shares of PWAY’s common stock during the nine months ended March 31, 2019 and
2018:





|Quarterly
    Offer Date                       |  | Repurchase
     Date  |  |  | Shares
    Repurchased |        |  | Percentage
    of Shares
    Tendered That Were
    Repurchased |  |        | Repurchase
    Price 
    Per Share |  |                     | Aggregate
                                         Consideration for
                                         Repurchased Shares |  
|---------------------------------------------- |  | --------------------- |  |  | ---------------------- | ------ |  | --------------------------------------------------------------- |  | ------ | ----------------------------------- |  | ------------------- | -------------------------------------------------------------------------------------------------------------------------------- | -
|Nine
    months ended March 31, 2019           |  |                       |  |  |                        |        |  |                                                                 |  |        |                                     |  |                     |                                                                                                                                  |  
|                                               |  |                       |  |  |                        |        |  |                                                                 |  |        |                                     |  |                     |                                                                                                                                  |  
|June
    30, 2018                              |  | August
    7, 2018    |  |  |                        | 31,715 |  |                                                                 |  | 100.00 | %                                   |  | Class
    A: $12.67 |                                                                                                                                  | $
|                                               |  |                       |  |  |                        |        |  |                                                                 |  |        |                                     |  | Class
    I: $12.70 |                                                                                                                                  |  
|                                               |  |                       |  |  |                        |        |  |                                                                 |  |        |                                     |  |                     |                                                                                                                                  |  
|September
    30, 2018                         |  | November
    13, 2018 |  |  |                        | 19,180 |  |                                                                 |  | 100.00 | %                                   |  | Class
    A: $11.35 |                                                                                                                                  |  
|                                               |  |                       |  |  |                        |        |  |                                                                 |  |        |                                     |  |                     |                                                                                                                                  |  
|December
    31, 2018                          |  | February
    15, 2019 |  |  |                        | 17,747 |  |                                                                 |  | 100.00 | %                                   |  | Class
    A: $10.80 |                                                                                                                                  |  
|                                               |  |                       |  |  |                        |        |  |                                                                 |  |        |                                     |  |                     |                                                                                                                                  |  
|Total
    for nine months ended March 31, 2019 |  |                       |  |  |                        | 68,642 |  |                                                                 |  |        |                                     |  |                     |                                                                                                                                  | $
|                                               |  |                       |  |  |                        |        |  |                                                                 |  |        |                                     |  |                     |                                                                                                                                  |  
|Nine
    months ended March 31, 2018           |  |                       |  |  |                        |        |  |                                                                 |  |        |                                     |  |                     |                                                                                                                                  |  
|June
    30, 2017                              |  | July
    31, 2017     |  |  |                        | 4,801  |  |                                                                 |  | 61     | %                                   |  | 13.61               |                                                                                                                                  |  
|                                               |  |                       |  |  |                        |        |  |                                                                 |  |        |                                     |  |                     |                                                                                                                                  |  
|September
    30, 2017                         |  | October
    30, 2017  |  |  |                        | 5,246  |  |                                                                 |  | 81     | %                                   |  | 13.57               |                                                                                                                                  |  
|                                               |  |                       |  |  |                        |        |  |                                                                 |  |        |                                     |  |                     |                                                                                                                                  |  
|December
    31, 2017                          |  | January
    23, 2018  |  |  |                        | 5,689  |  |                                                                 |  | 100    | %                                   |  | 13.56               |                                                                                                                                  |  
|                                               |  |                       |  |  |                        |        |  |                                                                 |  |        |                                     |  |                     |                                                                                                                                  |  
|Total
    for nine months ended March 31, 2018 |  |                       |  |  |                        | 15,736 |  |                                                                 |  |        |                                     |  |                     |                                                                                                                                  | $



NOTE
4 – RELATED PARTY TRANSACTIONS AND ARRANGEMENTS



Administration
Agreement



On
September 2, 2014, PWAY entered into an administration agreement (the “Administration Agreement”) with Prospect Administration
LLC (the “Administrator”), an affiliate of the Adviser. Pursuant to the agreement and plan of merger as amended and
restated, between TPIC and PWAY, Prospect Administration LLC became the administrator for the Company. The Administrator performs,
oversees and arranges for the performance of administrative services necessary for the operation of the Company. These services
include, but are not limited to, accounting, finance and legal services. For providing these services, facilities and personnel,
the Company reimburses the Administrator for the Company’s actual and allocable portion of expenses and overhead incurred
by the Administrator in performing its obligations under the Administration Agreement, including rent and the Company’s
allocable portion of the costs of its Chief Financial Officer and Chief Compliance Officer and her staff. For the three months
ended March 31, 2019 and March 31, 2018, administrative costs incurred by the Company to the Administrator were $36,797 and $68,750.
For the nine months ended March 31, 2019 and March 31, 2018, administrative costs incurred by the Company to the Administrator
were $122,671 and $289,242, respectively. As of March 31, 2019 and June 30, 2018, $36,797 and $45,833 was payable to the Administrator.



Investment
Advisory Agreement



The
Company has entered into an Investment Advisory Agreement with our Adviser (the “Investment Advisory Agreement”).
We will pay our Adviser a fee for its services under the Investment Advisory Agreement consisting of two components—a base
management fee and an incentive fee. The cost of both the base management fee payable to the Adviser and any incentive fees it
earns will ultimately be borne by our stockholders.



- 22 -







TP
FLEXIBLE INCOME FUND, INC.

Notes
to Financial Statements – March 31, 2019





Base
Management Fee. The base management fee will be calculated at an annual rate of 1.75% (0.4375% quarterly) of our average
total assets, which will include any borrowings for investment purposes. For the first quarter of our operations commencing with
the date of the Investment Advisory Agreement, the base management fee will be calculated based on the average value of our total
assets as of the date of the Investment Advisory Agreement and at the end of the calendar quarter in which the date of the Investment
Advisory Agreement falls, and will be appropriately adjusted for any share issuances or repurchases during the current calendar
quarter. Subsequently, the base management fee will be payable quarterly in arrears, and will be calculated based on the average
value of our total assets at the end of the two most recently completed calendar quarters, and will be appropriately adjusted
for any share issuances or repurchases during the then current calendar quarter. Base management fees for any partial month or
quarter will be appropriately pro-rated. At the Adviser’s option, the base management fee for any period may be deferred,
without interest thereon, and paid to the Adviser at any time subsequent to any such deferral as the Adviser determines. The Company
also pays routine non-compensation overhead expenses of the Adviser in an amount up to 0.0625% per quarter (0.25% annualized)
of the Company’s average total assets. The Company did not pay fees to the Investment Adviser for the three months ended
March 31, 2019 as the Merger closed on the last day of the quarter.



The
total base management fee incurred to the favor of PWAY’s Investment Adviser was $43,813 and $65,951 during the three months
ended March 31, 2019 and March 31, 2018, respectively. The total base management fee incurred to the favor of PWAY’s Investment
Adviser was $152,226 and $202,561 during the nine months ended March 31, 2019 and March 31, 2018, respectively. There were $43,813
and $61,540 in base management fees due to PWAY’s investment adviser as of March 31, 2019 and June 30, 2018, respectively.



Incentive
Fee- Subordinated Incentive Fee on Income. The first part of the incentive fee, which is referred to as the subordinated incentive
fee on income, will be calculated and payable quarterly in arrears based upon our “pre-incentive fee net investment income”
for the immediately preceding calendar quarter. For this purpose “pre-incentive fee net investment income” means interest
income, dividend income and distribution cash flows from equity investments and any other income (including any other fees, such
as commitment, origination, structuring, diligence and consulting fees or other fees that we receive) accrued during the calendar
quarter, deducted by the operating expenses for the quarter (including the base management fee, expenses payable under the Administration
Agreement, any interest expense and dividends paid on any issued and outstanding preferred shares, but excluding the organization
and offering expenses and incentive fees on income). Pre-incentive fee net investment income includes, in the case of investments
with a deferred interest feature (such as original issue discount, debt instruments with payment-in-kind interest and zero coupon
securities), accrued income that we have not yet received in cash. Pre-incentive fee net investment income does not include any
realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. Pre-incentive fee net investment
income, expressed as a rate of return on the value of our net assets at the end of the immediately preceding calendar quarter,
will be compared to a preferred return, or “hurdle,” of 1.5% per quarter (6.0% annualized) and a “catch-up”
feature measured as of the end of each calendar quarter as discussed below. The subordinated incentive fee on income for each
calendar quarter will be paid to our Adviser as follows: (1) no incentive fee is payable to our Adviser in any calendar quarter
in which our pre-incentive fee net investment income does not exceed the fixed preferred return rate of 1.5%; (2) 100% of our
pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any,
that exceeds the fixed preferred return but is less than or equal to 1.875% in any calendar quarter (7.5% annualized); and (3)
20.0% of the amount of our pre-incentive fee net investment income, if any, that exceeds 1.875% in any calendar quarter (7.5%
annualized). This reflects that once the fixed preferred return is reached and the catch-up is achieved, 20.0% of all pre-incentive
fee net investment income thereafter is allocated to our Adviser. These calculations will be appropriately prorated for any period
of less than three months and adjusted for any share issuances or repurchases during the current quarter.



Incentive
Fee- Capital Gains Incentive Fee. The second part of the incentive fee, which is referred to as the capital gains incentive
fee, is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory
Agreement, as of the termination date), and equals 20.00% of our realized capital gains for the calendar year, if any, computed
net of all realized capital losses and unrealized capital depreciation at the end of such year. In determining the capital gains
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 investment that has been in our portfolio.
For the purpose of this calculation, an “investment” is defined as the total of all rights and claims which may be
asserted against a portfolio company arising from our participation in the debt, equity, and other financial instruments issued



- 23 -







TP
FLEXIBLE INCOME FUND, INC.

Notes
to Financial Statements – March 31, 2019



by
that company. Aggregate realized capital gains, if any, equal the sum of the differences between the aggregate net sales price
of each investment and the aggregate amortized cost basis of such investment when sold or otherwise disposed. Aggregate realized
capital losses equal the sum of the amounts by which the aggregate net sales price of each investment is less than the aggregate
amortized cost basis of such investment when sold or otherwise disposed. Aggregate unrealized capital depreciation equals the
sum of the differences, if negative, between the aggregate valuation of each investment and the aggregate amortized cost basis
of such investment as of the applicable calendar year-end. At the end of the applicable calendar year, the amount of capital gains
that serves as the basis for our calculation of the capital gains incentive fee involves netting aggregate realized capital gains
against aggregate realized capital losses on a since-inception basis and then reducing this amount by the aggregate unrealized
capital depreciation. If this number is positive, then the capital gains incentive fee payable is equal to 20.00% of such amount,
less the aggregate amount of any capital gains incentive fees paid since inception. Operating expenses are not taken into account
when determining capital gains incentive fees.



There
were $0 in fees accrued for as of March 31, 2019 and June 30, 2018. There were no incentive fees accrued for the three and nine
months ended March 31, 2019, and March 31, 2018.



Co-Investments



On
February 10, 2014, the parent company of the Adviser received an exemptive order from the SEC (the “Order”) granting
the ability to negotiate terms other than price and quantity of co-investment transactions with other funds managed by the Adviser
or certain affiliates, including Prospect Capital Corporation (“PSEC”) and Priority Income Fund, Inc. (“PRIS”),
subject to the conditions included therein. Under the terms of the relief permitting the Company to co-invest with other funds
managed by the Adviser or its affiliates, a “required majority” (as defined in Section 57(o) of the 1940 Act) of the
Company’s independent directors must make certain conclusions in connection with a co-investment transaction, including
that (1) the terms of the proposed transaction, including the consideration to be paid, are reasonable and fair to the Company
and its stockholders and do not involve overreaching of the Company or its stockholders on the part of any person concerned and
(2) the transaction is consistent with the interests of the Company’s stockholders and is consistent with the Company’s
investment objective and strategies. In certain situations where co-investment with one or more funds managed by the Adviser or
its affiliates is not covered by the Order, such as when there is an opportunity to invest in different securities of the same
issuer, the personnel of the Adviser or its affiliates will need to decide which fund will proceed with the investment. Such personnel
will make these determinations based on policies and procedures, which are designed to reasonably ensure that investment opportunities
are allocated fairly and equitably among affiliated funds over time and in a manner that is consistent with applicable laws, rules
and regulations. Moreover, except in certain circumstances, when relying on the Order, the Company will be unable to invest in
any issuer in which one or more funds managed by the Adviser or its affiliates has previously invested.



As
of March 31, 2019, the Company and PRIS both hold Carlyle Global Market Strategies CLO 2017-5, Ltd., Galaxy XIX CLO, Ltd., GoldenTree
Loan Opportunities IX, Ltd., Madison Park Funding XIII, Ltd., Madison Park Funding XIV, Ltd., Octagon Investment Partners XIV,
Ltd., Octagon Investment Partners XXI, Ltd., Octagon Investment Partners 30, Ltd., OZLM XII, Ltd., Voya IM CLO 2013-1, Ltd., Voya
CLO 2016-1, Ltd. and THL Credit Wind River 2013-1 CLO, Ltd. (f/k/a Wind River 2013-1 CLO, Ltd.); however only Voya CLO 2016-1,
Ltd. is a co-investment pursuant to the Order because all the others were purchased on the secondary market.



As
of March 31, 2019, the Company and PSEC both hold an investment in Carlyle Global Market Strategies CLO 2014-4-R, Ltd. (f/k/a
Carlyle Global Market Strategies CLO 2014-4, Ltd.) however this investment is not considered a co-investment pursuant to the Order
as it was purchased on the secondary market.



Allocation
of Expenses



The
cost of valuation services for CLOs is initially borne by PRIS, which then allocates to the Company its proportional share of
such expense. During the three months ended March 31, 2019 and March 31, 2018, PRIS incurred $41,826 and $45,084, respectively,
in expenses related to valuation services that are attributable to the Company. During the nine months ended March 31, 2019 and
March 31, 2018, PRIS incurred $123,596 and $99,807, respectively, in expenses related to valuation services that are attributable
to the Company. The Company reimburses PRIS for these expenses and includes them as part of valuation services on the Statement
of Operations. As of March 31, 2019, $13,987 of expense is due to PRIS, which is presented as part of due to affiliates on
the Statement of Assets and Liabilities.



The
cost of filing software is initially borne by PSEC, which then allocates to the Company its proportional share of such expense.
During the three months ended March 31, 2019 and March 31, 2018, PSEC incurred $5,326 and $6,868,



- 24 -







TP
FLEXIBLE INCOME FUND, INC.

Notes
to Financial Statements – March 31, 2019



respectively,
in expenses related to the filing services that are attributable to the Company. The Company reimburses PSEC for these expenses
and includes them as part of general and administrative expenses on the Statement of Operations. As of March 31, 2019 and
June 30, 2018, $7,814 and $2,374 of expense was due to PSEC, respectively, which is presented as part of due to affiliates on
the Statement of Assets and Liabilities.



The
cost of portfolio management software is initially borne by the Company, which then allocates to PSEC its proportional share of
such expense. During the three months ended March 31, 2019 and March 31, 2018, the Company incurred $11,058 and $5,987, respectively,
in expenses related to the portfolio management software that is attributable to PSEC. During the nine months ended March 31,
2019 and March 31, 2018, the Company incurred $13,463 and $17,572, respectively, in expenses related to the portfolio management
software that is attributable to PSEC. PSEC reimburses the Company for these expenses and included them as part of general and
administrative expenses on the Statement of Operations. As of March 31, 2019 and June 30, 2018, $11,058 and $12,018 of
expense is due from PSEC, respectively, which is presented as due from affiliate on the Statement of Assets and Liabilities.



Officers
and Directors



Certain
officers and directors of the Company are also officers and directors of the Adviser and its affiliates. There were no fees paid
to the independent directors of the Company as the Company did not exceed the minimum net asset value required (i.e., greater
than $100 million) to receive a fee for the three or nine months ended March 31, 2019. The officers do not receive any direct
compensation from the Company.



Expense
Limitation and Expense Reimbursement Agreements



Expense
Reimbursement Agreement with TPIC, and the Former Adviser



On
March 27, 2014, TPIC and the Former Adviser entered into an Expense Reimbursement Agreement. The Expense Reimbursement Agreement
was amended and restated effective April 5, 2018. Under the Expense Reimbursement Agreement, as amended, the Former Adviser, in
consultation with TPIC, could pay up to 100% of both of TPIC’s organizational and offering expenses and TPIC’s operating
expenses, all as determined by TPIC and the Former Adviser. The Expense Reimbursement Agreement stated that until the net proceeds
to TPIC from its offering are at least $25 million, the Former Adviser could pay up to 100% of both of TPIC’s organizational
and offering expenses and TPIC’s operating expenses. After TPIC received at least $25 million in net proceeds from its offering,
the Former Adviser could, with TPIC’s consent, continue to make expense support payments to TPIC in such amounts as are
acceptable to TPIC and the Former Adviser. The Expense Reimbursement Agreement terminated on December 31, 2018. The Former Adviser
had agreed to reimburse a total of $5,292,192 as of December 31, 2018. However, as part of the Merger, the Former Adviser agreed
to waive any amounts owed to it under the Expense Reimbursement Agreement.



Expense
Limitation Agreement with the Adviser



Concurrently
with the closing of the Merger, we entered into an Expense Limitation Agreement with our Adviser (the “ELA”). Pursuant
to the ELA, our Adviser, in its sole discretion, may waive a portion or all of the investment advisory fees that it is entitled
to receive pursuant to the Investment Advisory Agreement in order to limit our Operating Expenses (as defined below) to an annual
rate, expressed as a percentage of our average quarterly net assets, equal to 8.00% (the “Annual Limit”). For purposes
of the ELA, the term “Operating Expenses” with respect to the fund, is defined to include all expenses necessary or
appropriate for the operation of the fund, including but not limited to our Adviser’s base management fee, any and all costs
and expenses that qualify as line item “organization and offering” expenses in the financial statements of the fund
as the same are filed with the SEC and other expenses described in the Investment Advisory Agreement, but does not include any
portfolio transaction or other investment-related costs (including brokerage commissions, dealer and underwriter spreads, prime
broker fees and expenses and dividend expenses related to short sales), interest expenses and other financing costs, extraordinary
expenses and acquired fund fees and expenses. Upfront shareholder transaction expenses (such as sales commissions, dealer manager
fees, and similar expenses) are not Operating Expenses.



Any
amount waived pursuant to the ELA is subject to repayment to our Adviser (an “ELA Reimbursement”) by us within the
three years following the end of the quarter in which the waiver was made by our Adviser. If the ELA is terminated or expires
pursuant to its terms, our Adviser maintains its right to repayment for any waiver it has made under the ELA, subject to the Repayment
Limitations (discussed below).



An
ELA Reimbursement can be made solely in the event that we have sufficient excess cash on hand at the time of any proposed ELA
Reimbursement and shall be limited to the lesser of (i) the excess of the Annual Limit applicable to such quarter over the Company’s
actual Operating Expenses for such quarter and (ii) the amount of ELA Reimbursement which, when added to the Company’s expenses
for such quarter, permits the Company to pay the then-current aggregate quarterly distribution to its shareholders, at a minimum
annualized rate of at least 6.00% (based on the gross offering prices of Company shares) (the “Distribution”) from
the sum of (x) the Company’s net investment income (loss) for such quarter plus (y) the Company’s net realized gains
(losses) for such quarter (collectively, the “Repayment Limitations”). For the purposes of the calculations pursuant
to (i) and (ii) of the preceding sentence, any ELA Reimbursement will be treated as an expense of the Company for such quarter,
without regard to the GAAP treatment of such expense. In the event that the Company is





- 25 -







TP
FLEXIBLE INCOME FUND, INC.

Notes
to Financial Statements – March 31, 2019



unable
to make a full payment of any ELA Reimbursements due for any applicable quarter because the Company does not have sufficient excess
cash on hand, any such unpaid amount shall become a payable of the Company for accounting purposes and shall be paid when the
Company has sufficient cash on hand (subject to the Repayment Limitations); provided, that in the case of any ELA Reimbursements,
such payment shall be made no later than the date that is three years following the end of the quarter in which the applicable
waiver was made by our Adviser.



PWAY’s
Expense Support and Expense Limitation Agreement



PWAY
entered into an expense support and conditional reimbursement agreement (the “Expense Support Agreement”) with Pathway
Capital Opportunity Fund Management, LLC (the “PWAY Adviser”), whereby the PWAY Adviser agreed to reimburse PWAY for
operating expenses in an amount equal to the difference between distributions to its stockholders for which a record date has
occurred in each quarter less the sum of our net investment income, the net realized capital gains/losses and dividends and other
distributions paid to us from our portfolio investments during such period (“Expense Support Reimbursement”). To the
extent that there were no dividends or other distributions to our stockholders for which a record date had occurred in any given
quarter, then the Expense Support Reimbursement for such quarter was equal to such amount necessary in order for available operating
funds for the quarter to equal zero. The Expense Support Agreement including any amendments, terminated on October 31, 2017. PWAY
had a conditional obligation to reimburse PWAY’s investment adviser for any amounts funded by PWAY’s investment adviser
under the Expense Support Agreement. Following any calendar quarter in which Available Operating Funds in such calendar quarter
exceed the cumulative distributions to stockholders for which a record date has occurred in such calendar quarter (“Excess
Operating Funds”) on a date mutually agreed upon by PWAY’s investment adviser and PWAY (each such date, a “Reimbursement
Date”), PWAY paid such Excess Operating Funds, or a portion thereof, to the extent that PWAY had cash available for such
payment, to PWAY’s investment adviser until such time as all Expense Payments made by PWAY’s investment adviser to
PWAY had been reimbursed; provided that (i) the operating expense ratio as of such Reimbursement Date is equal to or less than
the operating expense ratio as of the Expense Payment Date attributable to such specified Expense Payment; (ii) the annualized
distribution rate, which included all regular cash distributions paid and excluded special distributions or the effect of any
stock dividends paid, as of such Reimbursement Date was equal to or greater than the annualized distribution rate as of the Expense
Payment Date attributable to such specified Expense Payment; and (iii) such specified Expense Payment Date was not earlier than
three years prior to the Reimbursement Date. PWAY did not receive expense support payments for the three months ended March 31,
2019 or March 31, 2018. PWAY received Expense Support Reimbursement from the PWAY adviser of $0 and $456,660 for the nine months
ended March 31, 2019 and March 31, 2018, respectively.



The
PWAY Adviser and PWAY entered into an Expense Limitation Agreement on October 31, 2017 under which the PWAY Adviser agreed contractually
to waive its fees and to pay or absorb the operating expenses of PWAY, including offering expenses, any shareholder servicing
fees, and other expenses described in the Investment Advisory Agreement of PWAY, but not including any portfolio transaction or
other investment-related costs (including brokerage commissions, dealer and underwriter spreads, prime broker fees and expenses
and dividend expenses related to short sales), interest expenses and other financing costs, distribution fees, extraordinary expenses
and acquired fund fees and expenses, to the extent that they exceed the expense limitation per class on a per annum basis of PWAY's
average weekly net assets, through October 31, 2018 (the “Expense Limitation”). In consideration of the PWAY Adviser's
agreement to limit the PWAY's expenses, PWAY agreed to repay the PWAY Adviser in the amount of any fees waived and PWAY expenses
paid or absorbed, subject to the limitations that: (1) the reimbursement will be made only for fees and expenses incurred not
more than three years following the end of the fiscal quarter in which they were incurred; and (2) the reimbursement may not be
made if it would cause the Expense Limitation, or any lower limit that has been put in place, to be exceeded. On October 31, 2018,
the Expense Limitation Agreement expired. PWAY received expense limitation payments from the PWAY
adviser of $0 and $279,811 for the three months ended March 31, 2019 and March 31, 2018, respectively. PWAY received expense limitation
payments from the PWAY adviser of $181,029 and $522,569 for the nine months ended March 31, 2019 and March 31, 2018, respectively.



On
May 11, 2018, the PWAY Adviser agreed to permanently waive its right to any reimbursement (the “Waiver”) to which
it may be entitled pursuant to the Expense Support Agreement, and any amendments, or the Expense Limitation Agreement, between
PWAY and the PWAY Adviser, in the event PWAY (i) consummates a transaction (a “Transaction”) in which PWAY (x) merges
with and into another company, or (y) sells all or substantially all of its assets to one or more third parties, or (ii) liquidates
its assets and dissolves in accordance with PWAY’s charter and bylaws (a “Dissolution” and together with a Transaction,
an “Exit Event”). The Waiver was effective on August 10, 2018 which is when PWAY’s board of directors approved
an Exit Event via a merger with TPIC. As such, PWAY is no longer obligated to reimburse the PWAY Adviser per the Waiver. This
resulted in a reversal of offering cost of $1,975,233 of which $1,492,252 is presented as a reduction to expenses on the Statements
of Operations and $482,981 is presented as an increase to capital on the Statements of Changes in Net Assets.



- 26 -







TP
FLEXIBLE INCOME FUND, INC.

Notes
to Financial Statements – March 31, 2019



NOTE
5 – DISTRIBUTIONS



The
following table reflects the cash distributions per share that the PWAY declared and paid on its common stock during the three
and nine months ended March 31, 2019 and 2018:



|                                                       |  |  | Distribution          |        
|------------------------------------------------------ |  |  | --------------------- | -------
|For
    the Nine Months Ended                          |  |  | Per
    Class A Share |        
|Fiscal
    2019                                        |  |  |                       |        
|July
    5, 12, 19 and 26, 2018                        |  |  | $                     | 0.06392
|August
    2, 9, 16, 23 and 30, 2018                   |  |  | $                     | 0.06405
|September
    6, 13, 20 and 27, 2018                   |  |  | $                     | 0.06076
|October
    4, 11, 19 and 26, 2018                     |  |  | $                     | 0.05960
|November
    1, 8, 15, 23 and 29, 2018                 |  |  | $                     | 0.05925
|December
    6, 14, 21 and 28, 2018                    |  |  | $                     | 0.05460
|January
    3, 10, 17, 24 and 31, 2019                 |  |  | $                     | 0.05035
|February
    1, 8, 15 and 22, 2019                     |  |  | $                     | 0.05300
|March
    7, 14, 21 and 27, 2019                       |  |  | $                     | 0.05385
|                                                       |  |  |                       |        
|Fiscal
    2018                                        |  |  |                       |        
|July
    7, 14, 21 and 28, 2017 (*)                    |  |  | $                     | 0.07088
|August
    4, 11, 18 and 25, 2017 (*)                  |  |  | $                     | 0.07088
|September
    1, 8, 15, 22 and 29, 2017 (*)            |  |  | $                     | 0.08860
|October
    6, 13, 20 and 27, 2017 (*)                 |  |  | $                     | 0.07088
|November
    2, 9, 16 and 25, 2017                     |  |  | $                     | 0.07088
|November
    30, 2017, December 7, 14, 21 and 28, 2017 |  |  | $                     | 0.07825
|January
    4, 11, 18 and 25, 2018                     |  |  | $                     | 0.06224
|February
    1, 8, 15 and 22, 2018                     |  |  | $                     | 0.06880
|March
    1, 8, 15, 22 and 29, 2018                    |  |  | $                     | 0.08365



|                                                       |  |  | Distribution          |        
|------------------------------------------------------ |  |  | --------------------- | -------
|For
    the Nine Months Ended                          |  |  | Per
    Class I Share |        
|Fiscal
    2019                                        |  |  |                       |        
|July
    5, 12, 19 and 26, 2018                        |  |  | $                     | 0.06404
|August
    2, 9, 16, 23 and 30, 2018                   |  |  | $                     | 0.06415
|September
    6, 13, 20 and 27, 2018                   |  |  | $                     | 0.06092
|October
    4, 11, 19 and 26, 2018                     |  |  | $                     | 0.05976
|November
    1, 8, 15, 23 and 29, 2018                 |  |  | $                     | 0.05940
|December
    6, 14, 21 and 28, 2018                    |  |  | $                     | 0.05476
|January
    3, 10, 17, 24 and 31, 2019                 |  |  | $                     | 0.05048
|February
    1, 8, 15 and 22, 2019                     |  |  | $                     | 0.05314
|March
    7, 14, 21 and 27, 2019                       |  |  | $                     | 0.05400
|                                                       |  |  |                       |        
|Fiscal
    2018                                        |  |  |                       |        
|July
    7, 14, 21 and 28, 2017 (**)                   |  |  | $                     | 0.07088
|August
    4, 11, 18 and 25, 2017 (**)                 |  |  | $                     | 0.07088
|September
    1, 8, 15, 22 and 29, 2017 (**)           |  |  | $                     | 0.08860
|October
    6, 13, 20 and 27, 2017 (**)                |  |  | $                     | 0.07088
|November
    2, 9, 16 and 25, 2017                     |  |  | $                     | 0.07088
|November
    30, 2017, December 7, 14, 21 and 28, 2017 |  |  | $                     | 0.07825
|January
    4, 11, 18 and 25, 2018                     |  |  | $                     | 0.06224
|February
    1, 8, 15 and 22, 2018                     |  |  | $                     | 0.06880
|March
    1, 8, 15, 22 and 29, 2018                    |  |  | $                     | 0.08370





- 27 -







TP
FLEXIBLE INCOME FUND, INC.

Notes
to Financial Statements – March 31, 2019



(*)
These amounts represent the distributions paid to Class R which converted into Class A.



(**)
These amounts represent the distributions paid to Class I & RIA which converted into Class I.



The
following distributions were previously declared and have record dates subsequent to March 31, 2019:



|Record
    Date                    |  | Payment
    date |  | Total
    Amount per Share |        
|---------------------------------- |  | ---------------- |  | -------------------------- | -------
|April
    5, 12, 19 and 26, 2019   |  | May
    3, 2019  |  | $                          | 0.05260
|May
    3, 10, 17, 27 and 31, 2019 |  | June
    3, 2019 |  | $                          | 0.06575



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.







NOTE
6 – INCOME TAXES



On
March 31, 2019 PWAY’s outstanding shares were cancelled and retired in exchange for TPIC common stock. The merger should
qualify as a “tax-free reorganization” within the meaning of Section 368(a) of the Code, and the merger agreement
constituted a “plan of reorganization” for such purposes. As such, this transaction is intended to qualify as a nontaxable
merger under Section 368 of the Code. Due to this transaction, PWAY dissolved for income tax purposes as of March 31, 2019. As
such, PWAY will file a final tax return for the nine-month period ended March 31, 2019. The Company will continue to file its
income tax returns using a calendar year end. The Company will reflect all items of income, deduction, gain, and loss generated
from the assets obtained from the merger transaction beginning on April 1, 2019. Former PWAY shareholders will receive a final
Form 1099-DIV for the 2019 year reflecting the character of PWAY’s distributions made between January 1, 2019 and March
31, 2019. The Company’s shareholders will receive a Form 1099-DIV for the 2019 calendar year reflecting TPIC’s distributions
made between January 1, 2019 and March 31, 2019 and FLEX’s distributions made between April 1, 2019 and December 31, 2019.



PWAY
Income Taxes – Pre-Merger



As
of March 31, 2019, PWAY’s cost basis of investments for tax purposes was $8,992,503 resulting in an estimated net unrealized
loss of $810,460. As of March 31, 2019, the gross unrealized gains and losses were $225,370 and $1,035,830, respectively. As a
result of the tax-free reorganization on March 31, 2019, PWAY’s tax basis in its assets have been carried over to the Company.



For
the short tax year ended March 31, 2019, PWAY had no cumulative taxable income in excess of cumulative distributions. For the
short tax year ended March 31, 2019, PWAY estimated $107,683 in capital loss carryforwards available for future use. This amount
will be available for utilization by the Company beginning with the tax year ended December 31, 2019.



All
amounts related to taxable income for the short tax year ended March 31, 2019 are estimates and will not be fully determined until
PWAY’s final income tax returns are filed.





- 28 -







TP
FLEXIBLE INCOME FUND, INC.

Notes
to Financial Statements – March 31, 2019





TPIC/FLEX
Income Taxes – Pre-Merger



Prior
to the merger, the TPIC’s cost basis of investments for tax purposes was $12,106,882 resulting in an estimated net unrealized
loss of $675,641. Prior to the merger, the gross unrealized gains and losses were $70,589 and $746,230 respectively.





Following
the merger, the Company's cost basis of investments for tax purposes is $21,099,385, resulting in an estimated net unrealized
loss of $1,486,101. Following the merger, the gross unrealized gains and losses were $295,959 and $1,782,060, respectively.





For
the tax year ended December 31, 2018, TPIC had no cumulative taxable income in excess of cumulative distributions.



For
the tax year ended December 31, 2018, TPIC had $1,360,149 capital loss carryforwards available for future use. Combined with PWAY’s
capital loss carryforward of $107,683, the Company will have a combined capital loss carryforward of $1,467,832 available for
future utilization.



All
amounts related to taxable income for the tax year ended December 31, 2018 are estimates and will not be fully determined until
the Company’s 2018 tax income returns are filed.



For
income tax purposes, dividends paid and distributions made to shareholders are reported as ordinary income, capital gains, non-taxable
return of capital, or a combination thereof. The likely and expected tax character of distributions declared and paid to PWAY’s
shareholders during the year ended June 30, 2018 was as follows:





|                      |  | Year  EndedJune 30, 2018 |        
|--------------------- |  | ------------------------ | -------
|Ordinary
    income   |  | $                        | —      
|Capital
    gain      |  |                          | 161,753
|Return
    of capital |  |                          | 403,766
|                      |  | $                        | 565,519





The
likely and expected tax character of distributions declared and paid to PWAY’s shareholders during the three months ended
March 31, 2019 was as follows:





|Character
    of Distributions |  |                            |       
|------------------------------ |  | -------------------------- | ------
|                               |  | 3
    months ended 3/31/19 |       
|Ordinary
    Income            |  | $                          | 46,413
|Capital
    Gain               |  | $                          | -     
|Return
    of Capital          |  | $                          | 49,396
|Total                          |  | $                          | 95,809





In
general, we may make certain adjustments to the classification of net assets as a result of permanent book-to-tax differences,
which may include differences in the book and tax basis of certain assets and liabilities, amortization of offering costs, expense
payments, nondeductible federal excise taxes and net operating losses, among other items. For the nine months ended March 31,
2019, we increased accumulated net investment loss by $899,819 increased additional paid in capital by $899,819.



NOTE
7 – INVESTMENT PORTFOLIO



The
following tables summarizes the composition of the Company’s investment portfolio at amortized cost and fair value as of
March 31, 2019 and June 30, 2018:



|                                     |  | March
    31, 2019 (unaudited)     |           
|------------------------------------ |  | ---------------------------------- | ----------
|                                     |  | Investments
    atAmortizedCost(1) |           
|                                     |  |                                    |           
|Senior
    Secured Loans—First Lien  |  | $                                  | 6,954,279 
|Senior
    Secured Loans—Second Lien |  |                                    | 4,413,471 
|Equity/Other                         |  |                                    | 739,130   
|Senior
    Unsecured Bonds           |  |                                    | 5,302,128 
|Senior
    Secured Bonds             |  |                                    | 527,947   
|Structured
    subordinated notes    |  |                                    | 3,477,552 
|Total
    Portfolio Investments      |  | $                                  | 21,414,507





- 29 -









TP
FLEXIBLE INCOME FUND, INC.

Notes
to Financial Statements – March 31, 2019



|                                  |  | June
    30, 2018                  |           
|--------------------------------- |  | ---------------------------------- | ----------
|                                  |  | Investments
    atAmortizedCost(1) |           
|                                  |  |                                    |           
|Senior
    Unsecured Bonds        |  | $                                  | 7,309,539 
|Senior
    Secured Bonds          |  |                                    | 524,156   
|Structured
    subordinated notes |  |                                    | 3,462,870 
|                                  |  |                                    |           
|Total Portfolio
    Investments   |  | $                                  | 11,296,565

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



The
table below describes investments by industry classification and enumerates the percentage, by fair value, of the total portfolio
assets in such industries as of March 31, 2019 and June 30, 2018:



|                                              |  | March
    31, 2019            |           
|--------------------------------------------- |  | ----------------------------- | ----------
|Industry                                      |  | Investments
    at Fair Value |           
|                                              |  |                               |           
|Energy                                        |  | $                             | 4,147,522 
|Structured
    Finance                        |  |                               | 3,146,021 
|High
    Tech Industries                      |  |                               | 1,788,572 
|Healthcare
    & Pharmaceuticals              |  |                               | 1,392,422 
|Energy:
    Oil & Gas                         |  |                               | 1,296,962 
|Services:
    Business                        |  |                               | 1,263,290 
|Hotel,
    Gaming & Leisure                   |  |                               | 1,262,865 
|Media:
    Advertising, Printing & Publishing |  |                               | 978,285   
|Retail                                        |  |                               | 913,720   
|Beverage,
    Food & Tobacco                  |  |                               | 887,876   
|Capital
    Equipment                         |  |                               | 482,500   
|Chemicals                                     |  |                               | 462,688   
|Financial                                     |  |                               | 425,813   
|Construction
    & Building                   |  |                               | 422,157   
|Services:
    Consumer                        |  |                               | 357,963   
|Media:
    Broadcasting & Subscription        |  |                               | 210,843   
|Wholesale
    Trade-Nondurable Goods          |  |                               | 173,786   
|Total                                         |  | $                             | 19,613,285





- 30 -









TP
FLEXIBLE INCOME FUND, INC.

Notes
to Financial Statements – March 31, 2019



|                       |  | June
    30, 2018             |           
|---------------------- |  | ----------------------------- | ----------
|Industry               |  | Investments
    at Fair Value |           
|                       |  |                               |           
|Energy                 |  | $                             | 6,750,495 
|Structured
    Finance |  |                               | 3,127,896 
|Financial              |  |                               | 545,750   
|Chemicals              |  |                               | 516,038   
|Total                  |  | $                             | 10,940,179



On
February 2, 2019, one investment on nonaccrual status, Fullbeauty Brands Holding, was restructured and second lien holders received
a pro rata share of a new junior loan and 10% of the new common stock.



NOTE
8 – FAIR VALUE OF FINANCIAL INSTRUMENTS



The
following table presents information about the Company’s assets measured at fair value as of March 31, 2019 and June 30,
2018, respectively:



|                                     |  | As
    of March 31, 2019 |  
|------------------------------------ |  | ------------------------ | -
|                                     |  | Level
    1              |  
|Portfolio
    Investments            |  |                          |  
|Senior
    Secured Loans—First Lien  |  | $                        | -
|Senior
    Secured Loans—Second Lien |  |                          | -
|Equity/Other                         |  |                          | -
|Senior
    Unsecured Bonds           |  |                          | -
|Senior
    Secured Bonds             |  |                          |  
|Structured
    subordinated notes    |  |                          | -
|Total
    Portfolio Investments      |  | $                        | -



|                                  |  | As
    of June 30, 2018 |  
|--------------------------------- |  | ----------------------- | -
|                                  |  | Level
    1             |  
|Portfolio
    Investments         |  |                         |  
|Senior
    Unsecured Bonds        |  | $                       | -
|Senior
    Secured Bonds          |  |                         | -
|Structured
    subordinated notes |  |                         | -
|Total
    Portfolio Investments   |  | $                       | -



The
Company’s investments as of March 31, 2019 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, 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.





- 31 -









TP
FLEXIBLE INCOME FUND, INC.

Notes
to Financial Statements – March 31, 2019



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.



In
determining the range of values for our investments in CLOs, the independent valuation firm uses a discounted multi-path cash
flow model. The valuations were accomplished through the analysis of the CLOs deal structures to identify the risk exposures from
the modeling point of view as well as to determine an appropriate call date (i.e., expected maturity). These risk factors are
sensitized in the multi-path cash flow model using Monte Carlo simulations to generate probability-weighted (i.e., multi-path)
cash flows for the underlying assets and liabilities. These cash flows are discounted using appropriate market discount rates,
and relevant data in the CLO market and certain benchmark credit indices are considered, to determine the value of each CLOs investment.
In addition, we generate a single-path cash flow utilizing our best estimate of expected cash receipts, and assess the reasonableness
of the implied discount rate that would be effective for the value derived from the corresponding multi-path cash flow model.



The
significant unobservable input used to value the CLOs is the discount rate applied to the estimated future cash flows expected
to be received from the underlying investment, which includes both future principal and interest payments. Included in the consideration
and selection of the discount rate are the following factors: risk of default, comparable investments, and call provisions. An
increase or decrease in the discount rate applied to projected cash flows, where all other inputs remain constant, would result
in a decrease or increase, respectively, in the fair value measurement.



The
Company is not responsible for and has no influence over the management of the portfolios underlying the CLO investments the Company
holds as those portfolios are managed by non-affiliated third party CLO collateral managers. CLO investments may be riskier and
less transparent to the Company than direct investments in underlying companies. CLOs typically will have no significant assets
other than their underlying senior secured loans. Therefore, payments on CLOs are and will be payable solely from the cash flows
from such senior secured loans.



The
Company’s subordinated (i.e., residual interest) investments in CLOs involve a number of significant risks. CLOs are typically
very highly levered (10 - 14 times), and therefore the residual interest tranches that the Company invests in are subject to a
higher degree of risk of total loss. In particular, investors in CLO residual interests indirectly bear risks of the underlying
loan investments held by such CLOs. The Company generally has the right to receive payments only from the CLOs, and generally
does not have direct rights against the underlying borrowers or the entity that sponsored the CLOs. While the CLOs the Company
targets generally enable the investor to acquire interests in a pool of senior loans without the expenses associated with directly
holding the same investments, the Company’s prices of indices and securities underlying CLOs will rise or fall. These prices
(and, therefore, the values of the CLOs) will be influenced by the same types of political and economic events that affect issuers
of securities and capital markets generally. The failure of a CLO investment to satisfy financial covenants, including with respect
to adequate collateralization and/or interest coverage tests, could lead to a reduction in its payments to the Company. In the
event that a CLO fails certain tests, holders of debt senior to the Company may be entitled to additional payments that would,
in turn, reduce the payments the Company would receive. Separately, the Company may incur expenses to the extent necessary to
seek recovery upon default or to negotiate new terms with a defaulting CLO or any other investment the Company may make. If any
of these occur, it could materially and adversely affect the Company’s operating results and cash flows.



The
interests the Company has acquired in CLOs are generally thinly traded or have only a limited trading market. CLOs are typically
privately offered and sold, even in the secondary market. As a result, investments in CLOs may be characterized as illiquid securities.
In addition to the general risks associated with investing in debt securities, CLOs residual interests carry additional risks,
including, but not limited to: (i) the possibility that distributions from collateral securities will not be adequate to make
interest or other payments; (ii) the quality of the collateral may decline in value or default; (iii) the fact that the Company’s
investments in CLO tranches will likely be subordinate to other senior classes of note tranches thereof; and (iv) the complex
structure of the security may not be fully understood at the time of investment and may produce disputes with the CLOs investment
or unexpected investment results. The Company’s net asset value may also decline over time if the Company’s principal
recovery with respect to CLOs residual interests is less than the price that the Company paid for those investments. The Company’s
CLOs and/or the underlying senior secured loans may prepay more quickly than expected, which could have an adverse impact on its
value.



- 32 -







TP
FLEXIBLE INCOME FUND, INC.

Notes
to Financial Statements – March 31, 2019





An
increase in LIBOR would materially increase the CLOs financing costs. Since most of the collateral positions within the CLOs have
LIBOR floors, there may not be corresponding increases in investment income (if LIBOR increases but stays below the LIBOR floor
rate of such investments) resulting in materially smaller distribution payments to the residual interest investors.



On
July 27, 2017, the Financial Conduct Authority (“FCA”) announced that it will no longer persuade or compel banks to
submit rates for the calculation of the LIBOR rates after 2021 (the “FCA Announcement”). Furthermore, in the United
States, efforts to identify a set of alternative U.S. dollar reference interest rates include proposals by the Alternative Reference
Rates Committee of the Federal Reserve Board and the Federal Reserve Bank of New York. On August 24, 2017, the Federal Reserve
Board requested public comment on a proposal by the Federal Reserve Bank of New York, in cooperation with the Office of Financial
Research, to produce three new reference rates intended to serve as alternatives to LIBOR. These alternative rates are based on
overnight repurchase agreement transactions secured by U.S. Treasury Securities. On December 12, 2017, following consideration
of public comments, the Federal Reserve Board concluded that the public would benefit if the Federal Reserve Bank of New York
published the three proposed reference rates as alternatives to LIBOR (the “Federal Reserve Board Notice”). Recently,
the CLOs we have invested in have included, or have been amended to include, language permitting the CLOs investment manager to
implement a market replacement rate (like those proposed by the Alternative Reference Rates Committee of the Federal Reserve Board
and the Federal Reserve Bank of New York) upon the occurrence of certain material disruption events. However, we cannot ensure
that all CLOs in which we are invested will have such provisions, nor can we ensure the CLOs investment managers will undertake
the suggested amendments when able.



At
this time, it is not possible to predict the effect of the FCA Announcement, the Federal Reserve Board Notice, or other regulatory
changes or announcements, any establishment of alternative reference rates or any other reforms to LIBOR that may be enacted in
the United Kingdom, the United States or elsewhere. As such, the potential effect of any such event on our net investment income
cannot yet be determined. The CLOs notes in which the Company is invested generally contemplate a scenario where LIBOR is no longer
available by requiring the CLOs administrator to calculate a replacement rate primarily through dealer polling on the applicable
measurement date. However, there is uncertainty regarding the effectiveness of the dealer polling processes, including the willingness
of banks to provide such quotations, which could adversely impact our net investment income. In addition, the effect of a phase
out of LIBOR on U.S. senior secured loans, the underlying assets of the CLOs in which we invest, is currently unclear. To the
extent that any replacement rate utilized for senior secured loans differs from that utilized for a CLO that holds those loans,
the CLOs would experience an interest rate mismatch between its assets and liabilities which could have an adverse impact on the
Company’s net investment income and portfolio returns.



If
the Company acquires more than 10% of the shares in a foreign corporation that is treated as a CFC (including residual interest
tranche investments in a CLO treated as a CFC), for which the Company is treated as receiving a deemed distribution (taxable as
ordinary income) each year from such foreign corporation in an amount equal to its pro rata share of the corporation’s income
for the tax year (including both ordinary earnings and capital gains), the Company is required to include such deemed distributions
from a CFC in its income and the Company is required to distribute such income to maintain its RIC tax treatment regardless of
whether or not the CFC makes an actual distribution during such year.



The
Company owns shares in PFICs (including residual interest tranche investments in CLOs that are PFICs), and may be subject to federal
income tax on a portion of any “excess distribution” or gain from the disposition of such shares even if such income
is distributed as a taxable dividend to its stockholders. Certain elections may be available to mitigate or eliminate such tax
on excess distributions, but such elections (if available) will generally require the Company to recognize its share of the PFICs
income for each year regardless of whether the Company receives any distributions from such PFICs. The Company must nonetheless
distribute such income to maintain its tax treatment as a RIC.



If
the Company is required to include amounts in income prior to receiving distributions representing such income, the Company may
have to sell some of its investments at times and/or at prices management would not consider advantageous, raise additional debt
or equity capital or forgo new investment opportunities for this purpose. If the Company is not able to obtain cash from other
sources, it may fail to qualify for RIC tax treatment and thus become subject to corporate-level income tax.



A
portion of the Company’s portfolio is concentrated in CLOs, which is subject to a risk of loss if that sector experiences
a market downturn. The Company is subject to credit risk in the normal course of pursuing its investment objectives. The Company’s
maximum risk of loss from credit risk for the portfolio of CLO investments is the inability of the CLOs collateral managers to
return up to the cost value due to defaults occurring in the underlying loans of the CLOs.





- 33 -







TP
FLEXIBLE INCOME FUND, INC.

Notes
to Financial Statements – March 31, 2019



Investments
in CLOs residual interests generally offer less liquidity than other investment grade or high-yield corporate debt, and may be
subject to certain transfer restrictions. The Company’s ability to sell certain investments quickly in response to changes
in economic and other conditions and to receive a fair price when selling such investments may be limited, which could prevent
the Company from making sales to mitigate losses on such investments. In addition, CLOs are subject to the possibility of liquidation
upon an event of default of certain minimum required coverage ratios, which could result in full loss of value to the CLOs interests
and junior debt investors.



The
fair value of the Company’s investments may be significantly affected by changes in interest rates. The Company’s
investments in senior secured loans through CLOs are sensitive to interest rate levels and volatility. In the event of a significant
rising interest rate environment and/or economic downturn, loan defaults may increase and result in credit losses which may adversely
affect the Company’s cash flow, fair value of its investments and operating results. In the event of a declining interest
rate environment, a faster than anticipated rate of prepayments is likely to result in a lower than anticipated yield.



Due
to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the
fair value of the Company’s investments may fluctuate from period to period. Additionally, the fair value of the Company’s
investments may differ significantly from the values that would have been used had a ready market existed for such investments
and may differ materially from the values that we may ultimately realize. Further, such investments are generally subject to legal
and other restrictions on resale or otherwise are less liquid than publicly traded securities. If the Company was required to
liquidate a portfolio investment in a forced or liquidation sale, the Company could realize significantly less than the value
at which the Company has recorded it.



In
addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains
or losses ultimately realized on these investments to be different than the unrealized gains or losses reflected in the currently
assigned valuations.



The
following is a reconciliation for the nine months ended March 31, 2019 and year ended June 30, 2018 of investments for which significant
unobservable inputs (Level 3) were used in determining fair value:



|                                                                                                            |  | Senior
                                                                                Secured
                                                                                Loans
                                         –
                                                                                Frist
                                         Lien |           |  | Senior
                                                                                Secured
                                                                                Loans
                                         –
                                                                                Second
                                         Lien |   |           | Equity/Other |  |   | Structured
                                                                                                 subordinated
                                                                                notes |  |  | Total |          
|----------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | --------- | ------------ |  | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | ----- | ---------
|                                                                                                            |  |                                                                                                                                                                                                                                                                                                                                                                     |           |  |                                                                                                                                                                                                                                                                                                                                                                      |   |           |              |  |   |                                                                                                                                                                                                                |  |  |       |          
|Fair Value
    at June 30, 2018                                                                             |  | $                                                                                                                                                                                                                                                                                                                                                                   | -         |  |                                                                                                                                                                                                                                                                                                                                                                      | $ | -         |              |  | $ | -                                                                                                                                                                                                              |  |  | $     | 3,127,896
|Realized loss on investments                                                                                |  |                                                                                                                                                                                                                                                                                                                                                                     | -         |  |                                                                                                                                                                                                                                                                                                                                                                      |   | -         |              |  |   | -                                                                                                                                                                                                              |  |  |       | (16,627  
|Net increase in unrealized
    gain on investments                                                          |  |                                                                                                                                                                                                                                                                                                                                                                     | -         |  |                                                                                                                                                                                                                                                                                                                                                                      |   | -         |              |  |   | -                                                                                                                                                                                                              |  |  |       | 3,442    
|Purchases of investments                                                                                    |  |                                                                                                                                                                                                                                                                                                                                                                     | -         |  |                                                                                                                                                                                                                                                                                                                                                                      |   | -         |              |  |   | -                                                                                                                                                                                                              |  |  |       | 35,015   
|Proceeds from redemption
    of investment                                                                  |  |                                                                                                                                                                                                                                                                                                                                                                     | -         |  |                                                                                                                                                                                                                                                                                                                                                                      |   | -         |              |  |   | -                                                                                                                                                                                                              |  |  |       | (56,437  
|Accretion (amortization)
    of purchase discount and premium, net                                          |  |                                                                                                                                                                                                                                                                                                                                                                     | -         |  |                                                                                                                                                                                                                                                                                                                                                                      |   | -         |              |  |   | -                                                                                                                                                                                                              |  |  |       | 52,732   
|Assets acquired via
    merger                                                                              |  |                                                                                                                                                                                                                                                                                                                                                                     | 6,621,618 |  |                                                                                                                                                                                                                                                                                                                                                                      |   | 4,301,635 |              |  |   | 507,988                                                                                                                                                                                                        |  |  |       | -        
|                                                                                                            |  |                                                                                                                                                                                                                                                                                                                                                                     |           |  |                                                                                                                                                                                                                                                                                                                                                                      |   |           |              |  |   |                                                                                                                                                                                                                |  |  |       |          
|Fair
    Value at March 31, 2019                                                                            |  | $                                                                                                                                                                                                                                                                                                                                                                   | 6,621,618 |  |                                                                                                                                                                                                                                                                                                                                                                      | $ | 4,301,635 |              |  | $ | 507,988                                                                                                                                                                                                        |  |  | $     | 3,146,021
|                                                                                                            |  |                                                                                                                                                                                                                                                                                                                                                                     |           |  |                                                                                                                                                                                                                                                                                                                                                                      |   |           |              |  |   |                                                                                                                                                                                                                |  |  |       |          
|Net increase in unrealized
    gain attributable to Level 3 investments still held at the end of the period |  | $                                                                                                                                                                                                                                                                                                                                                                   | -         |  |                                                                                                                                                                                                                                                                                                                                                                      | $ | -         |              |  | $ | -                                                                                                                                                                                                              |  |  | $     | 3,442    





- 34 -







TP
FLEXIBLE INCOME FUND, INC.

Notes
to Financial Statements – March 31, 2019



|                                                                                                            |  | Second
                                         Lien Term
                                                                                Loan |            |   | Structured
                                                                                subordinated
                                         notes |   |           | Total | 
|----------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------- | ---------- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------ | - | --------- | ----- | 
|                                                                                                            |  |                                                                                                                                                |            |   |                                                                                                                                                        |   |           |       | 
|Fair Value
    at June 30, 2017                                                                             |  | $                                                                                                                                              | 967,000    |   |                                                                                                                                                        | $ | 1,680,205 |       | 
|Realized gain on investments                                                                                |  |                                                                                                                                                | -          |   |                                                                                                                                                        |   | -         |       | 
|Net increase/(decrease)
    in unrealized gain on investments                                               |  |                                                                                                                                                | 11,515     |   |                                                                                                                                                        |   | (195,356  | )     | 
|Purchases of investments                                                                                    |  |                                                                                                                                                | -          |   |                                                                                                                                                        |   | 1,832,522 |       | 
|Proceeds from redemption
    of investment                                                                  |  |                                                                                                                                                | (1,000,000 | ) |                                                                                                                                                        |   | -         |       | 
|Accretion (amortization)
    of purchase discount and premium, net                                          |  |                                                                                                                                                | 21,485     |   |                                                                                                                                                        |   | 61,545    |       | 
|                                                                                                            |  |                                                                                                                                                |            |   |                                                                                                                                                        |   |           |       | 
|Fair
    Value at March 31, 2018                                                                            |  | $                                                                                                                                              | -          |   |                                                                                                                                                        | $ | 3,378,916 |       | 
|                                                                                                            |  |                                                                                                                                                |            |   |                                                                                                                                                        |   |           |       | 
|Net increase in unrealized
    loss attributable to Level 3 investments still held at the end of the period |  | $                                                                                                                                              | -          |   |                                                                                                                                                        | $ | (195,356  | )     | 



The
following table provides quantitative information regarding significant unobservable inputs used in the fair value measurement
of Level 3 investments as of March 31, 2019:





|Asset
    Category                  |  | Fair
    Value |            |  | Primary
    ValuationTechnique |                      |  | Unobservable Inputs |                              |  | Range |  |                                                         | WeightedAverage | 
|----------------------------------- |  | -------------- | ---------- |  | ------------------------------ | -------------------- |  | ------------------- | ---------------------------- |  | ----- |  | ------------------------------------------------------- | --------------- | 
|                                    |  |                |            |  |                                |                      |  |                     |                              |  |       |  |                                                         |                 | 
|Senior
    Secured First Lien Debt  |  | $              | 6,621,618  |  |                                | Market
    quotes    |  |                     | Indicative
    dealer quotes |  |       |  | 57.5.00-101.00                                          |                 | 
|Senior
    Secured Second Lien Debt |  |                | 4,301,635  |  |                                | Market quotes        |  |                     | Indicative dealer
    quotes |  |       |  | 70.00
                                         - 100.15 |                 | 
|Equity/Other                        |  |                | 507,988    |  |                                | Market comparables   |  |                     | EBITDA multiples
    (x)     |  |       |  | 6.50x
                                         - 8.50x  |                 | 
|Subordinated
    structured notes   |  |                | 3,146,021  |  |                                | Discounted Cash Flow |  |                     | Discount rate                |  |       |  | 17.18-23.41%                                            |                 | 
|Total                               |  | $              | 14,577,262 |  |                                |                      |  |                     |                              |  |       |  |                                                         |                 | 







The
following table provides quantitative information regarding significant unobservable inputs used in the fair value measurement
of Level 3 investments as of June 30, 2018:



|Description                       |  | Fair
    Value |           |  | Valuation
    Technique |                          |  | Unobservable Inputs |                   |  | Range
                                         (1)(2) (Weighted
                                                                                Average)
                                         (1)(2) |                            
|--------------------------------- |  | -------------- | --------- |  | ----------------------- | ------------------------ |  | ------------------- | ----------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------
|                                  |  |                |           |  |                         |                          |  |                     |                   |  |                                                                                                                                                                                                          |                            
|Structured
    subordinated notes |  | $              | 3,127,896 |  |                         | Discounted
    Cash Flow |  |                     | Discount
    Rate |  |                                                                                                                                                                                                          | 15.78%
    - 22.78%(19.74%)
|Total
    Level 3 Investments     |  | $              | 3,127,896 |  |                         |                          |  |                     |                   |  |                                                                                                                                                                                                          |                            



(1)Excludes investments that have been called for redemption.

(2)Represents the implied discount rate based on our internally generated single-cash flows that is derived from the fair value
estimated by the corresponding multi-path cash flow model utilized by the independent valuation firm.



NOTE
9 – MERGER



Effective
March 31, 2019, TPIC and PWAY entered into a tax free business combination. Concurrent with the merger, TPIC, the legal acquirer
was renamed TP Flexible Income Fund, Inc. As a result of the merger the Company issues 775,193 shares of the Company’s Common
Stock to the former shareholders of PWAY and all shares of PWAY were retired.







For
financial reporting purposes, the Merger was treated as a recapitalization of PWAY followed by the reverse acquisition of TPIC
by PWAY for a purchase price equivalent to the fair value of TPIC’s net assets.



Consistent
with tax free business combinations of investment companies, for financial reporting purposes, the reverse merger accounting was
recorded at fair value; however, the cost basis of the investments received from TPIC was carried forward to align ongoing financial
reporting of the Company’s realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes.
Further, the components of net assets of the Company reflect the combined components of net assets of both PWAY and TPIC.







- 35 -







TP
FLEXIBLE INCOME FUND, INC.

Notes
to Financial Statements – March 31, 2019



In
accordance with the accounting and presentation for reverse acquisitions, the historical financial statements of the Company,
prior to the date of the Merger reflect the financial positions and results of operations of PWAY, with the exception of the components
of net assets described above, with the results of operations of TPIC being included commencing on April 1, 2019. Effective with
the completion of the Merger, TPIC, changed its fiscal year end to be the last day of June consistent with PWAY’s fiscal
year.



In
the Merger, common shareholders of PWAY received newly-issued common shares in the Company having an aggregate net asset value
equal to the aggregate net asset value of their holdings of PWAY Class A and/or PWAY Class I common shares, as applicable, as
determined at the close of business on March 27, 2019, as permitted by the Merger agreement. The differences in net asset value
between March 27, 2019 and March 31, 2019 were not material. Relevant details pertaining to the mergers are as follows:



|                                                    |  | NAV/Share
                                                                                ($) |       |  | Conversion
    Ratio | 
|--------------------------------------------------- |  | --------------------------------------------------------------------------------------------- | ----- |  | -------------------- | 
|Triton
    Pacific Investment Corporation, Inc.     |  |                                                                                               | 10.48 |  |                      | 
|Pathway Capital Opportunity
    Fund, Inc.: Class A |  |                                                                                               | 13.46 |  |                      | 
|Pathway Capital Opportunity
    Fund, Inc.: Class I |  |                                                                                               | 13.50 |  |                      | 



Investments



The
cost, fair value and net unrealized appreciation (depreciation) of the investments of TPIC as of the date of the merger, was as
follows:



|                                                              |  | TPIC |           
|------------------------------------------------------------- |  | ---- | ----------
|Cost of investments                                           |  |      | 12,106,879
|Fair value of investments                                     |  |      | 11,431,241
|Net unrealized appreciation
    (depreciation) on investments |  |      | (675,638  



Common
Shares



The
common shares outstanding, net assets applicable to common shares and NAV per common share outstanding immediately before and
after the mergers were as follows:



|Accounting
    Acquirer – Prior to Merger  |  | PWAY
    Class A |            |  | PWAY
    Class I |  
|------------------------------------------ |  | ---------------- | ---------- |  | ---------------- | -
|Common shares outstanding                  |  |                  | 570,431    |  |                  |  
|Net assets applicable
    to common shares |  | $                | 7,679,839  |  |                  | $
|NAV
    per common share                   |  | $                | 13.46      |  |                  | $
|Legal
    Acquiring Fund – Prior to Merger |  |                  | TPIC       |  |                  |  
|Common shares outstanding                  |  |                  | 1,614,221  |  |                  |  
|Net assets applicable
    to common shares |  | $                | 16,915,592 |  |                  |  
|NAV
    per common share                   |  | $                | 10.48      |  |                  |  
|Legal
    Acquiring Fund – Post Merger     |  |                  | FLEX       |  |                  |  
|Common shares outstanding                  |  |                  | 2,403,349  |  |                  |  
|Net assets applicable
    to common shares |  | $                | 25,086,682 |  |                  |  
|NAV
    per common share                   |  | $                | 10.44      |  |                  |  







- 36 -







TP
FLEXIBLE INCOME FUND, INC.

Notes
to Financial Statements – March 31, 2019



Cost
and Expenses



In
connection with the Merger, PWAY incurred certain associated costs and expenses of approximately $709,000. These costs and expenses
were expensed by PWAY.



Purchase
Price Allocation



PWAY
as the accounting acquiror acquired 32% of the voting interests of TPIC. The below summarized the purchase price allocation from
TPIC:



|                             |  | PWAY as
    acquiror |           
|---------------------------- |  | -------------------- | ----------
|Value of Common Stock Issued |  |                      | 17,052,546
|Assets acquired:             |  |                      |           
|Investments                  |  |                      | 11,431,241
|Cash and cash equivalents    |  |                      | 5,055,456 
|Other assets                 |  |                      | 607,163   
|Total assets acquired        |  |                      | 17,093,860
|Total liabilities assumed    |  |                      | 41,314    
|Net assets acquired          |  |                      | 17,052,546
|Total purchase price         |  |                      | 17,052,546



Pro
Forma Results of Operations



For
the three months and nine months ended March 31, 2019, the results of operations of TPIC, are as follows:



|Legal
    Acquiring Fund – Results from Operations (unaudited) |  | TPIC  Three
                                         months
                                                                                                                                                                                                                                                                                  ended |          |   | TPIC  Nine
                                         months
                                                                                                                                                                                                                                                                                  ended |  
|-------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -
|Net investment
    income (loss)                               |  | $                                                                                                                                                                                                                                                                                                                                                   | (716,195 | ) |                                                                                                                                                                                                                                                                                                                                                    | $
|Net realized and unrealized
    gains (losses)                 |  |                                                                                                                                                                                                                                                                                                                                                     | (59,751  | ) |                                                                                                                                                                                                                                                                                                                                                    |  
|Change
    in net assets resulting from operations             |  |                                                                                                                                                                                                                                                                                                                                                     | (775,946 | ) |                                                                                                                                                                                                                                                                                                                                                    |  



Assuming
the acquisition had been completed on July 1, 2018, the beginning of the fiscal reporting period of PWAY, the accounting survivor,
the pro forma results of operations for the period ended March 31, 2019, are as follows:



|The
    Company – Pro Forma Results Operations (unaudited) |  | FLEX  Three
                                         months
                                                                                                                                                                                                                                                                                  ended |         |  | FLEX  Nine
                                         months
                                                                                                                                                                                                                                                                                  ended |  
|---------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -
|Net investment
    income (loss)                           |  | $                                                                                                                                                                                                                                                                                                                                                   | 588,002 |  |                                                                                                                                                                                                                                                                                                                                                    | $
|Net realized and unrealized
    gains (losses)             |  |                                                                                                                                                                                                                                                                                                                                                     | 116,111 |  |                                                                                                                                                                                                                                                                                                                                                    |  
|Change
    in net assets resulting from operations         |  |                                                                                                                                                                                                                                                                                                                                                     | 704,113 |  |                                                                                                                                                                                                                                                                                                                                                    |  





- 37 -







TP
FLEXIBLE INCOME FUND, INC.

Notes
to Financial Statements – March 31, 2019



NOTE
10 – 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 has a conditional obligation to reimburse the Adviser for any amounts funded by the Adviser under the Expense Limitation
Agreement for any payments made by the Adviser. The Expense Limitation Agreement payments are subject to repayment by the Company
within the three years following the end of the quarter in which the payment was made by the Adviser; provided that any such repayments
shall be subject to the then-applicable expense limitation, if any, and the limit that was in effect at the time when the Adviser
made the payment that is subject to repayment.



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 any legal proceedings cannot be predicted with certainty, the Company does not expect that any
such proceedings will have a material adverse effect upon its financial condition or results of operations.



NOTE
11 – REVOLVING CREDIT FACILITY



On
August 25, 2015, PWAY closed on a credit facility with BNP Paribas Prime Brokerage International, Ltd. (the “Revolving Credit
Facility”). The Revolving Credit Facility included an accordion feature which allowed commitments to be increased up to
$25,000,000 in the aggregate. Interest on borrowings under the Revolving Credit Facility is three-month LIBOR plus 120 basis points
with no minimum LIBOR floor.



As
of March 31, 2019 and June 30, 2018, we had $0 and $1,350,000 outstanding on our Revolving Credit Facility as the credit facility
was closed prior to the Merger.



The
agreement that governed the PWAY Revolving Credit Facility requires us to comply with certain financial and operational covenants.



These
covenants included:



●
Restrictions on the level of indebtedness that we are permitted to incur in relation to the value of our assets;

●
Restrictions on our ability to incur liens; and

●
Maintenance of a minimum level of stockholders’ equity.



During
the three months ended March 31, 2019 and March 31, 2018 and nine months ended March 31, 2019, and 2018, respectively, we recorded
$5,277, $14,805, $24,871 and $51,535 of interest expense related to our revolving credit facility.



- 38 -





NOTE
12– FINANCIAL HIGHLIGHTS



|                                                                    |  | Three
    Months Ended |            |    | Three
    Months Ended |  
|------------------------------------------------------------------- |  | ---------------------- | ---------- | -- | ---------------------- | -
|                                                                    |  | March
    31, 2019     |            |    | March
    31, 2018     |  
|                                                                    |  |                        |            |    | Class
    A            |  
|Per Share Data:                                                     |  |                        |            |    |                        |  
|Net asset value at beginning
    of period                          |  | $                      | 7.96       |    |                        | $
|Net investment (income)(a)                                          |  |                        | 1.66       |    |                        |  
|Net
    realized and unrealized (loss) on investments               |  |                        | 0.22       |    |                        |  
|Net
    increase (decrease) in net assets resulting from operations |  |                        | 1.88       |    |                        |  
|Distributions(b)                                                    |  |                        |            |    |                        |  
|Return
    of capital distributions                                 |  |                        | (0.06      | )  |                        |  
|Dividends
    from net investment income                            |  |                        | (0.06      | )  |                        |  
|Total Distributions                                                 |  |                        | (0.12      | )  |                        |  
|Offering costs                                                      |  |                        | 0.61       |    |                        |  
|Other
    (c)                                                       |  |                        | 0.11       |    |                        |  
|Net asset value
    at end of period                                |  | $                      | 10.44      |    |                        | $
|Total return based
    on net asset value (2)                       |  |                        | 31.99      | %  |                        |  
|                                                                    |  |                        |            |    |                        |  
|Supplemental
    Data:                                              |  |                        |            |    |                        |  
|Net assets at end of
    period                                     |  | $                      | 25,086,682 |    |                        | $
|Average net assets                                                  |  | $                      | 8,559,110  |    |                        | $
|Average shares outstanding                                          |  |                        | 738,961    |    |                        |  
|Ratio
    to average net assets:                                    |  |                        |            |    |                        |  
|Expenses
    without fees waived/expenses paid by Adviser(e)        |  |                        | (60.60     | )% |                        |  
|Expenses
    after fees waived/expenses paid by Adviser(e)          |  |                        | 25.30      | %  |                        |  
|Net
    investment (income)(e)                                      |  |                        | 75.07      | %  |                        |  
|                                                                    |  |                        |            |    |                        |  
|Portfolio Turnover                                                  |  |                        | (0.32      | )% |                        |  





- 39 -







TP
FLEXIBLE INCOME FUND, INC.

Notes
to Financial Statements – March 31, 2019



|                                                                    |  | Nine
    Months Ended |            |    | Nine
    Months Ended |  
|------------------------------------------------------------------- |  | --------------------- | ---------- | -- | --------------------- | -
|                                                                    |  | March
    31, 2019    |            |    | March
    31, 2018    |  
|                                                                    |  |                       |            |    | Class
    A           |  
|Per Share Data:                                                     |  |                       |            |    |                       |  
|Net asset value at beginning
    of period                          |  | $                     | 9.89       |    |                       | $
|Net investment (income)(a)                                          |  |                       | 1.21       |    |                       |  
|Net
    realized and unrealized (loss) on investments               |  |                       | (1.01      | )  |                       |  
|Net
    increase (decrease) in net assets resulting from operations |  |                       | 0.20       |    |                       |  
|Distributions(b)                                                    |  |                       |            |    |                       |  
|Return
    of capital distributions                                 |  |                       | (0.35      | )  |                       |  
|Dividends
    from net investment income                            |  |                       | (0.05      | )  |                       |  
|Total Distributions                                                 |  |                       | (0.40      | )  |                       |  
|Offering costs                                                      |  |                       | 0.61       |    |                       |  
|Other
    (c)                                                       |  |                       | 0.14       |    |                       |  
|Net asset value
    at end of period                                |  | $                     | 10.44      |    |                       | $
|Total return based
    on net asset value (2)                       |  |                       | 9.63       | %  |                       |  
|                                                                    |  |                       |            |    |                       |  
|Supplemental
    Data:                                              |  |                       |            |    |                       |  
|Net assets at end of
    period                                     |  | $                     | 25,086,682 |    |                       | $
|Average net assets                                                  |  | $                     | 8,935,514  |    |                       | $
|Average shares outstanding                                          |  |                       | 762,829    |    |                       |  
|Ratio
    to average net assets:                                    |  |                       |            |    |                       |  
|Expenses
    without fees waived/expenses paid by Adviser(e)        |  |                       | 27.93      | %  |                       |  
|Expenses
    after fees waived/expenses paid by Adviser(c)          |  |                       | (2.27      | )% |                       |  
|Net
    investment (income)(e)                                      |  |                       | 17.63      | %  |                       |  
|                                                                    |  |                       |            |    |                       |  
|Portfolio Turnover                                                  |  |                       | (0.34      | )% |                       |  



|(a)Calculated
    based on weighted average shares outstanding.                                                                                                                                                                                                                                                                                                                                                                                             
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b)The
    per share data for distributions is the actual amount of distributions paid or payable per share of common stock outstanding
    during the year. Distributions per share are rounded to the nearest $0.01.                                                                                                                                                                                                                                      
|(c) The
    amount shown represents the balancing figure derived from the other figures in the schedule, and is primarily attributable
    to the accretive effects from the sales of the Company’s shares and the effects of share repurchases during the year.                                                                                                                                                                                            
|(d) Total
    return is based upon the change in net asset value per share between the opening and ending net asset values per share during
    the year and assumes that distributions are reinvested in accordance with the Company’s dividend reinvestment plan.
    The computation does not reflect the sales load for any class of shares. Total return based on market value is not presented
    since the Company’s shares are not publicly traded.
|(e) Annualized
    for the three months ended March 31, 2019, and 2018, respectively.                                                                                                                                                                                                                                                                                                                                                                       

- 40 -







|                                                                    |  | Three
    Months Ended |            |    | Three
    Months Ended |  
|------------------------------------------------------------------- |  | ---------------------- | ---------- | -- | ---------------------- | -
|                                                                    |  | March
    31, 2019     |            |    | March
    31, 2018     |  
|                                                                    |  |                        |            |    | Class
    I            |  
|Per Share Data:                                                     |  |                        |            |    |                        |  
|Net asset value at beginning
    of period                          |  | $                      | 7.96       |    |                        | $
|Net investment (income)(a)                                          |  |                        | 1.66       |    |                        |  
|Net
    realized and unrealized (loss) on investments               |  |                        | 0.22       |    |                        |  
|Net
    increase (decrease) in net assets resulting from operations |  |                        | 1.88       |    |                        |  
|Distributions(b)                                                    |  |                        |            |    |                        |  
|Return
    of capital distributions                                 |  |                        | (0.06      | )  |                        |  
|Dividends
    from net investment income                            |  |                        | (0.06      | )  |                        |  
|Total Distributions                                                 |  |                        | (0.12      | )  |                        |  
|Offering costs                                                      |  |                        | 0.61       |    |                        |  
|Other
    (c)                                                       |  |                        | 0.11       |    |                        |  
|Net asset value
    at end of period                                |  | $                      | 10.44      |    |                        | $
|Total return based
    on net asset value (2)                       |  |                        | 32.00      | %  |                        |  
|                                                                    |  |                        |            |    |                        |  
|Supplemental
    Data:                                              |  |                        |            |    |                        |  
|Net assets at end of
    period                                     |  | $                      | 25,086,682 |    |                        | $
|Average net assets                                                  |  | $                      | 491,446    |    |                        | $
|Average shares outstanding                                          |  |                        | 42,286     |    |                        |  
|Ratio
    to average net assets:                                    |  |                        |            |    |                        |  
|Expenses
    without fees waived/expenses paid by Adviser(e)        |  |                        | (60.60     | )% |                        |  
|Expenses
    after fees waived/expenses paid by Adviser(e)          |  |                        | 25.30      | %  |                        |  
|Net
    investment (income)(e)                                      |  |                        | 75.07      | %  |                        |  
|                                                                    |  |                        |            |    |                        |  
|Portfolio Turnover                                                  |  |                        | 0.00       | %  |                        |  





- 41 -







TP
FLEXIBLE INCOME FUND, INC.

Notes
to Financial Statements – March 31, 2019



|                                                                    |  | Nine
    Months Ended |            |    | Nine
    Months Ended |  
|------------------------------------------------------------------- |  | --------------------- | ---------- | -- | --------------------- | -
|                                                                    |  | March
    31, 2019    |            |    | March
    31, 2018    |  
|                                                                    |  |                       |            |    | Class
    I           |  
|Per Share Data
    (1):                                             |  |                       |            |    |                       |  
|Net asset value at beginning
    of period                          |  | $                     | 9.89       |    |                       | $
|Net investment (income)(a)                                          |  |                       | 1.29       |    |                       |  
|Net
    realized and unrealized (loss) on investments               |  |                       | (1.03      | )  |                       |  
|Net
    increase (decrease) in net assets resulting from operations |  |                       | 0.26       |    |                       |  
|Distributions(b)                                                    |  |                       |            |    |                       |  
|Return
    of capital distributions                                 |  |                       | (0.35      | )  |                       |  
|Dividends
    from net investment income                            |  |                       | (0.06      | )  |                       |  
|Total Distributions                                                 |  |                       | (0.41      | )  |                       |  
|Offering costs                                                      |  |                       | 0.62       |    |                       |  
|Other
    (c)                                                       |  |                       | 0.08       |    |                       |  
|Net asset value
    at end of period                                |  | $                     | 10.44      |    |                       | $
|Total return based
    on net asset value (2)                       |  |                       | 9.73       | %  |                       |  
|                                                                    |  |                       |            |    |                       |  
|Supplemental
    Data:                                              |  |                       |            |    |                       |  
|Net assets at end of
    period                                     |  | $                     | 25,086,682 |    |                       | $
|Average net assets                                                  |  | $                     | 496,110    |    |                       | $
|Average shares outstanding                                          |  |                       | 42,293     |    |                       |  
|Ratio
    to average net assets:                                    |  |                       |            |    |                       |  
|Expenses
    without fees waived/expenses paid by Adviser(e)        |  |                       | (39.11     | )% |                       |  
|Expenses
    after fees waived/expenses paid by Adviser(e)          |  |                       | 28.17      | %  |                       |  
|Net
    investment (income)(e)                                      |  |                       | 37.79      | %  |                       |  
|                                                                    |  |                       |            |    |                       |  
|Portfolio Turnover                                                  |  |                       | 0.00       | %  |                       |  



|(a)Calculated
    based on weighted average shares outstanding.                                                                                                                                                                                                                                                                                                                                                                                             
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b)The
    per share data for distributions is the actual amount of distributions paid or payable per share of common stock outstanding
    during the year. Distributions per share are rounded to the nearest $0.01.                                                                                                                                                                                                                                      
|(c) The
    amount shown represents the balancing figure derived from the other figures in the schedule, and is primarily attributable
    to the accretive effects from the sales of the Company’s shares and the effects of share repurchases during the year.                                                                                                                                                                                            
|(d) Total
    return is based upon the change in net asset value per share between the opening and ending net asset values per share during
    the year and assumes that distributions are reinvested in accordance with the Company’s dividend reinvestment plan.
    The computation does not reflect the sales load for any class of shares. Total return based on market value is not presented
    since the Company’s shares are not publicly traded.
|(e) Annualized
    for the nine months ended March 31, 2019, 2018, respectively.                                                                                                                                                                                                                                                                                                                                                                            
|(f) All
    amounts reflected have been adjusted by the Merger ratio of 1.2848 and 1.2884 shares for Class A and Class I, respectively                                                                                                                                                                                                                                                                                                                      



NOTE
13 – SUBSEQUENT EVENTS



Management
has evaluated all known subsequent events through the date the accompanying financial statements were available to be issued on
May 17, 2019 and notes the following:





- 42 -







TP
FLEXIBLE INCOME FUND, INC.

Notes
to Financial Statements – March 31, 2019





Management
has evaluated all known subsequent events through the date the accompanying financial statements were available to be issued on
May 17, 2019 and notes the following:

Sales
of Common Stock

For
the period beginning April 1, 2019 and ending May 17, 2019, the Company did not sell any shares of its common and issued amounts
pursuant to its distribution reinvestment plan in the amount of $66,847.

Investment
Activity



During
the period from April 1, 2019 and ending May 17, 2019, the Company made 15 investments totaling $7.9 million. During the period
from April 1, 2019 and ending May 17, 2019, the Company sold 15 investments totaling $6.1 million.



As
was previously disclosed in the Company’s Form 8-K filed with the SEC on May 8, 2019, in connection with the Merger, the
Company expected to have its portfolio repositioned, including by selling portfolio investments that were not “qualifying
assets” under the 1940 Act, for cash and re-investing such proceeds in assets that were “qualifying assets”
under the 1940 Act and consistent with the Company’s investment strategy. As of April 30, 2019, a substantial amount of
such portfolio repositioning was completed and the Company published an updated Schedule of Investments as of April 30, 2019 (the
“Schedule of Investments”). For additional detail, including the Schedule of Investments, please refer to such Form
8-K filed with the SEC on May 8, 2019.

Distributions



On
April 5, 2019, the Company’s board of directors declared distributions for the months of April 2019 and May 2019,
which reflected an annualized distribution rate of 6.0%. The distributions have weekly record dates as of the close of
business of each week in April 2019 and May 2019 and equal a weekly amount of $0.01315 per share of common stock. The distributions
will be payable monthly to stockholders of record as of the weekly record dates set forth below.



|Record
    Date | Payment
    Date | Distribution
    Amount
|--------------- | ---------------- | -----------------------
|4/5/2019        | 4/29/2019        | $0.01315               
|4/12/2019       | 4/29/2019        | $0.01315               
|4/19/2019       | 4/29/2019        | $0.01315               
|4/26/2019       | 4/29/2019        | $0.01315               
|5/3/2019        | 6/3/2019         | $0.01315               
|5/10/2019       | 6/3/2019         | $0.01315               
|5/17/2019       | 6/3/2019         | $0.01315               
|5/24/2019       | 6/3/2019         | $0.01315               
|5/31/2019       | 6/3/2019         | $0.01315               



On
May 13, 2019, the Board of the Company declared distributions for the months of June, July and August 2019, which reflect an annualized
distribution rate of 6.0%. The distributions have weekly record dates as of the close of business of each week in June, July and
August 2019 and equal a weekly amount of $0.01315 per share of common stock. The distributions will be payable monthly to stockholders
of record as of the weekly record dates set forth below.



|Record
    Date | Payment
    Date | Distribution
    Amount
|--------------- | ---------------- | -----------------------
|6/7/2019        | 7/1/2019         | 0.01310                
|6/14/2019       | 7/1/2019         | 0.01310                
|6/21/2019       | 7/1/2019         | 0.01310                
|6/28/2019       | 7/1/2019         | 0.01310                
|7/5/2019        | 7/29/2019        | 0.01310                
|7/12/2019       | 7/29/2019        | 0.01310                
|7/19/2019       | 7/29/2019        | 0.01310                
|7/26/2019       | 7/29/2019        | 0.01310                
|8/2/2019        | 9/3/2019         | 0.01310                
|8/9/2019        | 9/3/2019         | 0.01310                
|8/16/2019       | 9/3/2019         | 0.01310                
|8/23/2019       | 9/3/2019         | 0.01310                
|8/30/2019       | 9/3/2019         | 0.01310                





Code
of Ethics



At
a meeting held on April 22, 2019, the Company’s board of directors unanimously agreed to amend and restate the Company’s
Code of Ethics in its entirety (The Code of Ethics was amended and restated in connection with the Merger to reflect current best
practices. Specifically, the amendments included clarifications and enhancements to the description of the duties and responsibilities
of the Company’s Chief Compliance Officer, increased reporting and certification requirements, and an enhanced description
of the restrictions on the outside business activities of the directors and officers of the Company and its investment adviser.
The foregoing summary of the terms of the Code of Ethics is not intended to be exhaustive and is qualified in its entirety by
reference to the Code of Ethics, a copy of which is attached as Exhibit 14.1 to the Company’s Form 8-K filed with the SEC
on April 26, 2019.

Change in Independent Accounting Firm



As
reported on the Company’s Form 8-K filed with the SEC on April 26, 2019, on April 22, 2019, upon the recommendation
of the audit committee, the Company’s board of directors appointed BDO USA, LLP (“BDO”) to serve as the Company’s
independent registered accounting firm for the fiscal year ending June 30, 2019 and dismissed FGMK, LLC. BDO previously served
as PWAY’s independent registered accounting firm and audited the financial statements of PWAY as of and for the years ended
June 30, 2018 and 2017. For more information regarding the change in the Company’s independent registered accounting firm,
please refer to the Company’s Form 8-K filed with the SEC on April 26, 2019.



Credit
Facility

On
May 16, 2019, TP Flexible Income Fund, Inc. (the “Company”) established a $50 million senior secured revolving
credit facility (the “Credit Facility”) with Royal Bank of Canada, a Canadian chartered bank, acting as administrative
agent. In connection with this senior secured revolving credit facility, the Company’s wholly owned financing subsidiary,
TP Flexible Funding, LLC (the “SPV”), as borrower, and each of the other parties thereto entered into a Revolving
Loan Agreement (the “Loan Agreement”).  Under the Credit Facility the SPV has made certain customary representations
and warranties, and is required to comply with various covenants, including leverage restrictions, reporting requirements and
other customary requirements for similar credit facilities. The Credit Facility includes usual and customary events of default
for credit facilities of this nature.



Offering
Pricing



On
May 17, 2019, the Company decreased its offering price from $11.43 per share to $11.38 per share. The decrease in the offering
price is effective for all closings occurring on or after May 17, 2019.







- 43 -







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 annual report on Form 10-Q.



Except
as otherwise specified, references to “we,” “us,” “our,” “FLEX” or the “Company,”
refer to TP Flexible Income Fund, 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 Prospect Flexible Income Management, 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 Prospect Flexible Income Management, LLC to locate suitable investments for
                                         us and to monitor and administer our investments;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | the
                                         ability of Prospect Flexible Income Management, LLC 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 post-effective, amended registration statement filed with the SEC on April 18, 2019 and declared effective on
April 19, 2019.



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



As
a result of Pathway Capital Opportunity Fund, Inc. (“PWAY”) being the accounting survivor of the Merger, certain financial
information and performance of operations regarding each of PWAY and FLEX pre-Merger are discussed below. The information in this
section contains forward-looking statements that involve risks and uncertainties. Please see “Risk Factors” and “Special
Note Regarding Forward Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with
these statements. You should read the following discussion in conjunction with the financial statements and related notes and
other financial information appearing elsewhere in this prospectus.





- 44 -







Overview



We
are an externally managed, non-diversified, closed-end management investment company that has elected to be regulated
as a business development company (“BDC”) under the Investment Company Act of 1940,
as amended (the “1940 Act”). Our investment objective is to generate current income and, as a secondary objective,
capital appreciation by targeting investment opportunities with favorable risk-adjusted returns. We intend to meet our investment
objective by primarily lending to and investing in the debt of privately-owned U.S. middle market companies, which we define as
companies with annual revenue between $50 million and $2.5 billion. We have elected and intend to continue to qualify annually
to be taxed for U.S. federal income tax purposes as a RIC under the Code.



On
August 10, 2018, we (in our capacity as TPIC) entered into an agreement and plan of merger with PWAY (which was amended and restated
effective February 12, 2019) pursuant to which PWAY merged with and into TPIC and, as the combined surviving company, we were
renamed as TP Flexible Income Fund, Inc. (we were formerly known as Triton Pacific Investment Corporation, Inc.). TPIC’s
board of directors and PWAY’s board of directors each approved the transaction. Completion of the Merger was subject to
a number of conditions, including, among other things, the approval by TPIC’s stockholders and PWAY’s stockholders
of the Merger and the Merger Agreement. The Merger was approved by TPIC’s stockholders at the 2019 Annual Meeting and by
PWAY’s stockholders at a special meeting of stockholders held on March 15, 2019. The Merger was completed on March 31, 2019.



As
a result of the Merger several significant changes occurred:



| | ● | New
                                         Investment Adviser. Prospect Flexible Income Management, LLC now serves as our investment
                                         adviser, replacing our former investment adviser, Triton Pacific Adviser, LLC (the “Former
                                         Adviser”). The Adviser is an affiliate of PWAY and the investment professionals
                                         of PWAY’s investment adviser have investment discretion at the Adviser.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Increased
                                         Leverage. Following the Merger, our asset coverage ratio requirement was reduced
                                         from 200% to 150%, which allows us to incur double the maximum amount of leverage that
                                         was previously permitted. As a result, we are now able to borrow substantially more money
                                         and take on substantially more debt than we previously were able to. Leverage may increase
                                         the risk of loss to investors and is generally considered a speculative investment technique.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Special
                                         Repurchase Offer. As a condition to being able to increase our leverage, we will
                                         offer to repurchase certain of our outstanding shares. In connection with this special
                                         repurchase offer, stockholders should be aware that:
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ○ | Only
                                         stockholders of TPIC as of March 15, 2019, the date of TPIC’s annual stockholder
                                         meeting, will be allowed to participate in the special repurchase offer, and they may
                                         have up to 100% of their shares repurchased (former stockholders of PWAY and stockholders
                                         who acquired their shares after March 15, 2019, will not be able to participate in the
                                         special repurchase offer).
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ○ | If
                                         a substantial number of the eligible stockholders take advantage of this opportunity,
                                         it could minimize or eliminate the expected benefits of the Merger and it could:
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ■ | significantly
                                         decrease our asset size;
| | - | -------------------------------------------------------------------------------



| | ■ | require
                                         us to sell our investments earlier than the Adviser would have otherwise desired, which
                                         may result in selling investments at inopportune times or significantly depressed prices
                                         and/or at losses; or
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ■ | cause
                                         us to incur additional leverage solely to meet repurchase requests.
| | - | ------------------------------------------------------------------------------------------------------------------



| | ● | New
                                         Board of Directors. Following the Merger, the composition of our board of directors
                                         changed and now consists of Craig J. Faggen, TPIC’s former President and Chief
                                         Executive Officer, M. Grier Eliasek, PWAY’s Former President and Chief Executive
                                         Officer, Andrew Cooper, William Gremp and Eugene Stark. Messrs. Cooper, Gremp and Stark
                                         are our independent directors and were formally independent directors of PWAY.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Prospect
Flexible Income Management, LLC serves as our investment adviser. The engagement of the Adviser was approved by TPIC’s stockholders
at the 2019 Annual Meeting, concurrently with the approval of the Merger and the Merger Agreement. Prospect Administration LLC,
an affiliate of our Adviser, serves as our administrator and TFA Associates, LLC serves as our sub-administrator. We have engaged
Triton Pacific Securities, LLC to serve as the dealer manager of our offering. 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.





We
are offering for sale a maximum amount of $300,000,000 our shares of 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. We are currently offering to sell our Class A Shares up to the maximum
offering amount, at an offering price of $11.43 per Class A Share. Our offering is being conducted on a “best efforts”
basis pursuant to a registration statement on Form N-2 filed with the SEC under the Securities Act. As of May 17, we have sold
a total of 2,409,557 shares of common stock, including 88,471 shares issued pursuant to our distribution reinvestment plan, for
gross proceeds of approximately $24,260,379, including the reduction due to $(604,017) in shares repurchased pursuant to the Company’s
share repurchase program and 14,815 shares of common stock sold to our Former Adviser in exchange for gross proceeds of $200,003.
As a result of the merger, the Company issued 775,193 shares.





Our
Adviser



Our
Adviser is a Delaware limited liability company and is registered as an investment adviser under the Advisers Act. Our Adviser
is controlled by Prospect Capital Management, who owns a majority of its voting units. Mr. Eliasek is the principal officer of
the Adviser.



Investments



We
intend to primarily lend to and invest in the debt of privately-owned U.S. middle market companies. We may on occasion invest
in smaller or larger companies if an attractive opportunity presents itself, especially when there are dislocations in the capital
markets. We expect to focus primarily on making investments in syndicated senior secured first lien loans, syndicated senior secured
second lien loans, and to a lesser extent, subordinated debt, of middle market companies in a broad range of industries. Syndicated
secured loans refer to commercial loans provided by a group of lenders that are structured, arranged, and administered by one
or several commercial or investment banks, known as arrangers. These loans are then sold (or syndicated) to other banks or institutional
investors. Syndicated secured loans may have a first priority lien on a borrower’s assets (i.e., senior secured first lien
loans), a second priority lien on a borrower’s assets (i.e., senior secured second lien loans), or a lower lien or unsecured
position on the borrower’s assets (i.e., subordinated debt). We expect our target credit investments will typically have
initial maturities between three and ten years and generally range in size between $1 million and $100 million, although the investment
size will vary with the size of our capital base. We expect that the majority of our





- 45 -







debt
investments will bear interest at floating interest rates, but our portfolio may also include fixed-rate investments. We also
expect to make our investments directly through the primary issuance by the borrower or in the secondary market.



We
will generally source our investments primarily through our Adviser. We believe the investment management team of our Adviser
has a significant amount of experience in the credit business, including originating, underwriting, principal investing and loan
structuring. Our Adviser, through Prospect Capital Management, has access to over 106 professionals, including over 51 investments,
origination and credit management professionals, and over 55 operations, marketing and distribution professionals, each with extensive
experience in their respective disciplines.



We
expect to dynamically allocate our assets in varying types of investments based on our analysis of the credit markets, which may
result in our portfolio becoming more concentrated in particular types of credit instruments (such as senior secured loans) and
less invested in other types of credit instruments. 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 “high
yield” or “junk bonds”). However, we may also invest in non-rated debt securities.



To
seek to enhance our returns, we may employ leverage as market conditions permit and at the discretion of our Adviser, but in no
event will leverage employed exceed the maximum amount permitted by the 1940 Act.



As
part of our investment objective to generate current income, we expect that at least 70% of our investments will consist primarily
of syndicated senior secured first lien loans, syndicated senior secured second lien loans, and to a lesser extent, subordinated
debt. We expect that up to 30% of our investments will consist of other securities, including private equity (both common and
preferred), dividend-paying equity, royalties, and the equity and junior debt tranches of CLOs. The senior secured loans underlying
our CLO investments are expected typically to be BB or B rated (non-investment grade, which are often referred to as “high
yield” or “junk”) and in limited circumstances, unrated, senior secured loans.



- 46 -





As
a BDC, we are subject to certain regulatory restrictions in making our investments. For example, we have in the past and expect
in the future to co-invest on a concurrent basis with certain affiliates, consistent with applicable regulations and our allocation
procedures. The parent company of our Adviser has received an exemptive order from the SEC granting the ability to negotiate terms,
other than price and quantity, of co-investment transactions with other funds managed by our Adviser or certain affiliates, including
us, Prospect Capital Corporation and Priority Income Fund, Inc., subject to certain conditions included therein. Under the terms
of the Order permitting us to co-invest with other funds managed by our Adviser or its affiliates, a majority of our independent
directors who have no financial interest in the transaction must make certain conclusions in connection with a co-investment transaction,
including that (1) the terms of the proposed transaction, including the consideration to be paid, are reasonable and fair to us
and our stockholders and do not involve overreaching of us or our stockholders on the part of any person concerned and (2) the
transaction is consistent with the interests of our stockholders and is consistent with our investment objective and strategies.
The Order also imposes reporting and record keeping requirements and limitations on transactional fees. We may only co-invest
with certain entities affiliated with our Adviser in negotiated transactions originated by our Adviser or its affiliates in accordance
with such Order and existing regulatory guidance. See “Additional Relationships and Related Party Transactions—Allocation
of Investments.” These co-investment transactions may give rise to conflicts of interest or perceived conflicts of interest
among us and the other participating accounts. To mitigate these conflicts, our Adviser and its affiliates will seek to allocate
portfolio transactions for all of the participating investment accounts, including us, on a fair and equitable basis, taking into
account such factors as the relative amounts of capital available for new investments, the applicable investment programs and
portfolio positions, the clients for which participation is appropriate and any other factors deemed appropriate. We intend to
make all of our investments in compliance with the 1940 Act and in a manner that will not jeopardize our status as a BDC or RIC.



As
a BDC, we are permitted under the 1940 Act to borrow funds to finance portfolio investments. To enhance our opportunity for gain,
we intend to employ leverage as market conditions permit. At the 2019 Annual Meeting, TPIC’s stockholders approved a proposal
allowing us to modify our asset coverage ratio requirement from 200% to 150%. As a result, we are allowed to increase our leverage
capacity. The use of leverage, although it may increase returns, may also increase the risk of loss to our investors, particularly
if the level of our leverage is high and the value of our investments declines.





Effective
March 31, 2019, TPIC and PWAY entered into a tax free business combination. Concurrent with the merger, TPIC, the legal acquirer
was renamed TP Flexible Income Fund, Inc. As a result of the merger the Company issued 775,193 shares of the Company’s common
stock to the former shareholders of PWAY and all shares of PWAY were retired.



After
a review of available strategic alternatives, PWAY and TPIC’s board of directors believed the Merger to be in the best interests
of the respective companies and their respective stockholders because of FLEX’s expected economies of scale, investment
objectives and strategy, investment portfolio, capital structure and increased market capitalization, and the experience and expertise
of the FLEX’s new investment adviser.



For
financial reporting purposes, the Merger was treated as a recapitalization of PWAY followed by the reverse acquisition of TPIC
by PWAY for a purchase price equivalent to the fair value of TPIC’s net assets.



Consistent
with tax free business combinations of investment companies, for financial reporting purposes, the reverse merger accounting was
recorded at fair value; however, the cost basis of the investments received from TPIC was carried forward to align ongoing financial
reporting of the Company’s realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes.
Further, the components of net assets of the Company reflect the combined components of net assets of both PWAY and TPIC.



In
accordance with the accounting and presentation for reverse acquisitions, the historical financial statements of the Company,
prior to the date of the Merger reflect the financial positions and results of operations of PWAY, with the results of operations
of TPIC being included commencing on April 1, 2019. Effective with the completion of the Merger, TPIC, changed its fiscal year
end to be the last day of June consistent with PWAY’s fiscal year.



In
the Merger, common shareholders of PWAY received newly-issued common shares in the Company having an aggregate net asset value
equal to the aggregate net asset value of their holdings of PWAY Class A and/or PWAY Class I common shares, as applicable, as
determined at the close of business on March 27, 2019, as permitted by the Merger agreement. The differences in net asset value
between March 27, 2019 and March 31, 2019 were not material. Relevant details pertaining to the mergers are as follows:

|                                                    | NAV/Share
    ($) | Conversion
    Ratio
|--------------------------------------------------- | ----------------- | --------------------
|Triton
    Pacific Investment Corporation, Inc.     | 10.48             | N/A                 
|Pathway
    Capital Opportunity Fund, Inc.: Class A | 13.46             | 1.2848              
|Pathway
    Capital Opportunity Fund, Inc.: Class I | 13.50             | 1.2884              



Investments

The
cost, fair value and net unrealized appreciation (depreciation) of the investments of TPIC as of the date of the merger, was as
follows:

|                                                              | TPIC      
|------------------------------------------------------------- | ----------
|Cost
    of investments                                       | 12,106,879
|Fair
    value of investments                                 | 11,431,241
|Net
    unrealized appreciation (depreciation) on investments | (675,638) 



- 47 -





Common
Shares

The
common shares outstanding, net assets applicable to common shares and NAV per common share outstanding immediately before and
after the mergers were as follows:

|Accounting
    Acquirer – Prior to Merger  |   | PWAYClass A |   | PWAYClass I
|------------------------------------------ | - | ----------- | - | -----------
|Common
    shares outstanding              |   | 570,431     |   | 32,834     
|Net
    assets applicable to common shares | $ | 7,679,839   | $ | 443,296    
|NAV
    per common share                   | $ | 13.46       | $ | 13.50      
|Legal
    Acquiring Fund – Prior to Merger |   | TPIC        |   |            
|Common
    shares outstanding              |   | 1,614,221   |   |            
|Net
    assets applicable to common shares | $ | 16,915,592  |   |            
|NAV
    per common share                   | $ | 10.48       |   |            
|Legal
    Acquiring Fund – Post Merger     |   | FLEX        |   |            
|Common
    shares outstanding              |   | 2,403,349   |   |            
|Net
    assets applicable to common shares | $ | 25,086,682  |   |            
|NAV
    per common share                   | $ | 10.44       |   |            



Cost
and Expenses

In
connection with the Merger, PWAY incurred certain associated costs and expenses of approximately $709,000. These costs and expenses
were expensed by PWAY.

Purchase
Price Allocation



PWAY
as the accounting acquiror acquired 32% of the voting interests of TPIC. The below summarized the purchase price allocation from
TPIC:

|                                 | PWAY
    as acquiror
|-------------------------------- | --------------------
|Value
    of Common Stock Issued | 17,052,546          
|Assets
    acquired:             |                     
|Investments                      | 11,431,241          
|Cash
    and cash equivalents    | 5,055,456           
|Other
    assets                 | 607,163             
|Total
    assets acquired        | 17,093,860          
|Total
    liabilities assumed    | 41,314              
|Net
    assets acquired          | 17,052,546          
|Total
    purchase price         | 17,052,546          



Pro
Forma Results of Operations

For
the three months and nine months ended March 31, 2019, the results of operations of TPIC, are as follows:

|Legal
    Acquiring Fund – Results from Operations (unaudited) |   | TPIC
        Three
        months ended |   | TPIC
        Nine
        months ended
|-------------------------------------------------------------- | - | --------------------------------------- | - | --------------------------------------
|Net
    investment income (loss)                               | $ | (716,195)                               | $ | (895,057)                             
|Net
    realized and unrealized gains (losses)                 |   | (59,751)                                |   | (486,900)                             
|Change
    in net assets resulting from operations             |   | (775,946)                               |   | (1,381,957)                           



Assuming
the acquisition had been completed on July 1, 2018, the beginning of the fiscal reporting period of PWAY, the accounting survivor,
the pro forma results of operations for the period ended March 31, 2019, are as follows:

|The
    Company – Pro Forma Results Operations (unaudited) |   | FLEX
        Three
        months ended |   | FLEX
        Nine
        months ended
|---------------------------------------------------------- | - | --------------------------------------- | - | --------------------------------------
|Net
    investment income (loss)                           | $ | 588,002                                 | $ | 83,166                                
|Net
    realized and unrealized gains (losses)             |   | 116,111                                 |   | (1,301,550)                           
|Change
    in net assets resulting from operations         |   | 704,113                                 |   | (1,218,384)                           





Revenues



We
generate revenue in the form of dividends, interest and capital gains on the debt securities, equity interests and CLOs that we
hold. In addition, we may generate revenue from our portfolio companies in the form of commitment, origination,





- 48 -







structuring
or diligence fees, monitoring fees, fees for providing managerial assistance and possibly consulting fees and performance-based
fees. Any such fees will be recognized as earned.



Expenses



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



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



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



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



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



| | ● | investment advisory fees;
| | - | -------------------------





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



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



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



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





| | ● | 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 1940 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 Advisory 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.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





- 49 -







Reimbursement
of our Administrator for Administrative Services



We
will reimburse our Administrator 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 our Administrator.



Portfolio
and Investment Activity



PWAY
(Accounting Survivor) – Pre-Merger



During
the six months ended December 31, 2018, there were no purchases of investment securities (excluding short-term securities). During
the same period, sales and redemptions of investment securities (excluding short-term securities) were $2,068,610. As of December
31, 2018, our investment portfolio, with a total fair value of $7,943,823, consisted of interests in 23 portfolio companies (5%
in senior secured bonds, 57% in senior unsecured bonds, and 38% in CLO – subordinated notes).



During
the year ended June 30, 2018, purchases of investment securities (excluding short-term securities) were $4,551,898. During the
same period, sales and redemptions of investment securities (excluding short-term securities) were $5,230,764. As of June 30,
2018, our investment portfolio, with a total fair value of $10,940,179, consisted of interests in 28 portfolio companies (5% in
senior secured bonds, 67% in senior unsecured bonds, and 28% in CLO – subordinated notes).



During
the year ended June 30, 2017, purchases of investment securities (excluding short-term securities) were $5,967,933. During the
same period, sales and redemptions of investment securities (excluding short-term securities) were $2,829,360. As of June 30,
2017, our investment portfolio, with a total fair value of $12,060,436, consisted of interests in 28 portfolio companies (8% in
second lien term loans, 7% in senior secured bonds, 71% in senior unsecured bonds, and 14% in CLO – subordinated notes).



Portfolio
Holdings and Investment Activity



As
of March 31, 2019, our investment portfolio, with a total fair value of $19,613,285, consisted of interests in 40 portfolio companies
and 13 Structured subordinated notes. The following table presents certain selected information regarding our portfolio composition
and weighted average yields as of March 31, 2019, and June 30, 2018:



|                                             |  | As
    of March 31, 2019 |            |   | As
    of June 30, 2018            |  
|-------------------------------------------- |  | ------------------------ | ---------- | - | ---------------------------------- | -
|                                             |  | Fair
    Value           |            |   | As
    Percent of Total Fair Value |  
|                                             |  |                          |            |   |                                    |  
|Senior
    Secured Loans—First Lien          |  | $                        | 6,621,618  |   |                                    | $
|Senior
    Secured Loans—Second Lien         |  |                          | 4,301,635  |   |                                    |  
|Equity/Other                                 |  |                          | 507,988    |   |                                    |  
|Senior
    Unsecured Bonds                   |  |                          | 4,573,335  |   |                                    |  
|Senior
    Secured Bonds                     |  |                          | 462,688    |   |                                    |  
|Structured
    subordinated notes            |  |                          | 3,146,021  |   |                                    |  
|Total                                        |  | $                        | 19,613,285 |   |                                    | $
|                                             |  |                          |            |   |                                    |  
|Number
    of portfolio companies            |  |                          | 40         |   |                                    |  
|Number
    of Structured subordinated notes  |  |                          | 13         |   |                                    |  
|                                             |  |                          |            |   |                                    |  
|%
    Variable Rate (based on fair value)(1) |  |                          | 68.44      | % |                                    |  
|%
    Fixed Rate (based on fair value)(1)    |  |                          | 31.60      | % |                                    |  



| | (1) | The
                                         interest rate by type information is calculated using the Company’s debt portfolio
                                         and excludes equity and Structured subordinated notes
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





- 50 -







The
table below describes investments by industry classification and enumerates the percentage, by fair value, of the total portfolio
assets in such industries as of March 31, 2019 and June 30, 2018:



|                                              |  | March
    31, 2019            |           
|--------------------------------------------- |  | ----------------------------- | ----------
|Industry                                      |  | Investments
    at Fair Value |           
|                                              |  |                               |           
|Energy                                        |  | $                             | 4,147,522 
|Structured Finance                            |  |                               | 3,146,021 
|High Tech Industries                          |  |                               | 1,788,572 
|Healthcare & Pharmaceuticals                  |  |                               | 1,392,422 
|Energy: Oil & Gas                             |  |                               | 1,296,962 
|Services: Business                            |  |                               | 1,263,290 
|Hotel, Gaming &
    Leisure                   |  |                               | 1,262,865 
|Media: Advertising,
    Printing & Publishing |  |                               | 978,285   
|Retail                                        |  |                               | 913,720   
|Beverage, Food &
    Tobacco                  |  |                               | 887,876   
|Capital Equipment                             |  |                               | 482,500   
|Chemicals                                     |  |                               | 462,688   
|Financial                                     |  |                               | 425,813   
|Construction &
    Building                   |  |                               | 422,157   
|Services: Consumer                            |  |                               | 357,963   
|Media: Broadcasting
    & Subscription        |  |                               | 210,843   
|Wholesale Trade-Nondurable
    Goods          |  |                               | 173,786   
|                                              |  |                               |           
|Total                                         |  | $                             | 19,613,285
|                                              |  |                               |           



|                   |  | June
    30, 2018             |           
|------------------ |  | ----------------------------- | ----------
|Industry           |  | Investments
    at Fair Value |           
|                   |  |                               |           
|Financial          |  | $                             | 545,750   
|Energy             |  |                               | 6,750,495 
|Chemicals          |  |                               | 516,038   
|Structured Finance |  |                               | 3,127,896 
|                   |  |                               |           
|Total              |  | $                             | 10,940,179



We
do not “control” any of our portfolio companies, each as defined in the 1940 Act. We are an affiliate of Injured Workers
Pharmacy, LLC (held through ACON IWP Investors I, L.L.C.). In general, under the 1940 Act, we would be presumed to “control”
a portfolio company if we owned 25% or more of its voting securities and would be an “affiliate” of a portfolio company
if we owned 5% or more of its voting securities.



The
following table shows the composition of our investment portfolio by level of control as of March 31, 2019 and June 30, 2018:





- 51 -







|                          |  | March
    31, 2019 |            |  | June
    30, 2018  | 
|------------------------- |  | ------------------ | ---------- |  | ------------------ | 
|Level
    of Control      |  | Cost               |            |  | %
    of Portfolio | 
|Affiliate                 |  | $                  | 500,000    |  |                    | 
|Non-Control/Non-Affiliate |  |                    | 20,914,508 |  |                    | 
|Total Investments         |  | $                  | 21,414,507 |  |                    | 



The
following tables present certain selected information regarding our portfolio investment activity for the three and nine months
ended March 31, 2019, and 2018:





|                          |  | Three
    Months Ended |       
|------------------------- |  | ---------------------- | ------
|                          |  | March
    31, 2019     |       
|Purchases                 |  | $                      | 35,015
|Sales
    and Redemptions |  |                        | 0     
|Net Portfolio Activity    |  | $                      | 35,015





|                          |  | Nine
    Months Ended |           
|------------------------- |  | --------------------- | ----------
|                          |  | March
    31, 2019    |           
|Purchases                 |  | $                     | 35,015    
|Sales
    and Redemptions |  |                       | (2,068,610
|Net Portfolio Activity    |  | $                     | (2,033,595



Results
of Operations



Investment
Income



For
the three months ended March 31, 2019, and 2018, we generated $251,386, and $322,245 respectively, in investment income in the
form of interest and fees earned on our debt portfolio. Such revenues were entirely cash income and non-cash portions related
to the accretion of discounts. There was no paid-in-kind interest for the three months ended March 31, 2019, and 2018.



For
the nine months ended March 31, 2019, and 2018, we generated $850,356, and $973,159 respectively, in investment income in the
form of interest and fees earned on our debt portfolio. Such revenues were entirely cash income and non-cash portions related
to the accretion of discounts. There was no paid-in-kind interest for the nine months ended March 31, 2019, and 2018 respectively.



Operating
Expenses



Total
operating expenses before expense limitation support and waiver of offering costs totaled $439,441 and $474,214 for the three
months ended March 31, 2019, and 2018, respectively, and consisted primarily of amortization of offering costs, base management
fees, administrator costs, legal expense, audit and tax expense, and adviser shared service expense. The base management fees
for the three months ended March 31, 2019 and 2018, respectively, were $43,813, and $65,951. The amortization of offering costs
for the three months ended March 31, 2019 and 2018, respectively, were $0, and $98,875. As part of the Merger, the Former PWAY’s
investment Adviser waived reimbursed with the approval of a merger. As part of the Merger $(1,492,252) of offering costs was waived.



Total
operating expenses before expense limitation support totaled $1,545,413 and $1,570,998 for the nine months ended March 31, 2019,
and 2018, respectively, and consisted primarily of amortization of offering costs, administrator costs, adviser shared service
expense, and legal expenses. The amortization of offering costs for the nine months ended March 31, 2019 and 2018, respectively,
were $64,500, and $282,121. The administrator costs for the nine months ended March 31, 2019 and 2018, respectively, were $122,671,
and $289,242. The adviser shared service expense for the nine months ended March 31, 2019 and 2018, respectively, were $19,028,
and $203,412. The legal expenses for the nine months ended March 31, 2019 and 2018, respectively, were $729,381, and $37,728.
Pursuant to the expense limitation support payment (discussed below), the sponsor reimbursed the Company $(181,029) and $(979,229)
for the nine months ended March 31, 2018 and 2019, respectively. As part of the Merger $(1,492,252) of offering costs was waived.





- 52 -







Net
Investment Income



Our
net investment income totaled $1,304,197, and $127,842 for the three months ended March 31, 2019, and 2018, respectively. The
increase in net investment income for the three months ended March 31, 2019 compared to the three months ended March 31, 2018
was primarily driven by the reversal of previously expensed organization and offering costs.



Our
net investment income totaled $978,224, and $381,390 for the nine months ended March 31, 2019, and 2018, respectively.



Net
Realized Gains/Losses from Investments



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



For
the three months ended March 31, 2019, and 2018, respectively, we received proceeds from sales and repayments on unaffiliated
investments of $0 and $472,678, from which we realized a net gain of $0 and $8,850.



For
the nine months ended March 31, 2019, and 2018, respectively, we received proceeds from sales and repayments on unaffiliated investments
of $2,068,610 and $4,787,784, from which we realized a net gain (loss) of $(45,453) and $146,199.



Net
Unrealized Appreciation/Depreciation on Investments



Net
change in unrealized appreciation (depreciation) on investments reflects the net change in the fair value of our investment portfolio.
For the three months ended March 31, 2019, and 2018, respectively, net unrealized appreciation (depreciation) totaled $175,862
and $(208,255), respectively.



Net
change in unrealized appreciation (depreciation) on investments reflects the net change in the fair value of our investment portfolio.
For the nine months ended March 31, 2019, and 2018, respectively, net unrealized appreciation (depreciation) totaled $(769,197)
and $(367,078), respectively.



Financial
Condition, Liquidity and Capital Resources



We
will 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 will be 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. On March 13, 2019, we filed a registration statement with the SEC in order to continue
our continuous public offering of shares for an additional three years. The registration statement for this follow-on offering
is still under review by the SEC.



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.



We
will sell our shares on a continuous basis at a price of $11.43 per share. 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 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.





- 53 -







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



Contractual
Obligations



We
have entered into certain contracts under which we have material future commitments. On March 31, 2019, we entered into the Investment
Advisory Agreement with Prospect Flexible Income Management, LLC in accordance with the 1940 Act. The Investment Advisory Agreement
became effective upon consummation of the Merger. Prospect Flexible Income Management serves as our investment adviser in accordance
with the terms of the Investment Advisory Agreement. Payments under the 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) income and capital gains
incentive fees based on our performance.



On
March 31, 2019, we entered into the Administration Agreement with Prospect Administration pursuant to which Prospect Administration
furnishes us with administrative services necessary to conduct our day-to-day operations. The Administration Agreement with Prospect
Administration became effective upon consummation of the Merger. We reimburse Prospect Administration for its allocable portion
of overhead incurred by Prospect Administration in performing its obligations under the Administration Agreement, including rent
and its allocable portion of the costs of our chief financial officer and chief compliance officer and their respective staffs
and other administrative support personnel. We have 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.



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 the 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.



Recent
developments





Management
has evaluated all known subsequent events through the date the accompanying financial statements were available to be issued on
May 17, 2019 and notes the following:

Sales
of Common Stock

For
the period beginning April 1, 2019 and ending May 17, 2019, the Company did not sell any shares of its common and issued amounts
pursuant to its distribution reinvestment plan in the amount of $66,847.

Investment
Activity



During
the period from April 1, 2019 and ending May 17, 2019, the Company made 15 investments totaling $7.9 million. During the period
from April 1, 2019 and ending May 17, 2019, the Company sold 15 investments totaling $6.1 million.



As
was previously disclosed in the Company’s Form 8-K filed with the SEC on May 8, 2019, in connection with the Merger, the
Company expected to have its portfolio repositioned, including by selling portfolio investments that were not “qualifying
assets” under the 1940 Act, for cash and re-investing such proceeds in assets that were “qualifying assets”
under the 1940 Act and consistent with the Company’s investment strategy. As of April 30, 2019, a substantial amount of
such portfolio repositioning was completed and the Company published an updated Schedule of Investments as of April 30, 2019 (the
“Schedule of Investments”). For additional detail, including the Schedule of Investments, please refer to such Form
8-K filed with the SEC on May 8, 2019.

Distributions



On
April 5, 2019, the Company’s board of directors declared distributions for the months of April 2019 and May 2019,
which reflected an annualized distribution rate of 6.0%. The distributions have weekly record dates as of the close of
business of each week in April 2019 and May 2019 and equal a weekly amount of $0.01315 per share of common stock. The distributions
will be payable monthly to stockholders of record as of the weekly record dates set forth below.



|Record
    Date | Payment
    Date | Distribution
    Amount
|--------------- | ---------------- | -----------------------
|4/5/2019        | 4/29/2019        | $0.01315               
|4/12/2019       | 4/29/2019        | $0.01315               
|4/19/2019       | 4/29/2019        | $0.01315               
|4/26/2019       | 4/29/2019        | $0.01315               
|5/3/2019        | 6/3/2019         | $0.01315               
|5/10/2019       | 6/3/2019         | $0.01315               
|5/17/2019       | 6/3/2019         | $0.01315               
|5/24/2019       | 6/3/2019         | $0.01315               
|5/31/2019       | 6/3/2019         | $0.01315               



On
May 13, 2019, the Board of the Company declared distributions for the months of June, July and August 2019, which reflect an annualized
distribution rate of 6.0%. The distributions have weekly record dates as of the close of business of each week in June, July and
August 2019 and equal a weekly amount of $0.01315 per share of common stock. The distributions will be payable monthly to stockholders
of record as of the weekly record dates set forth below.



|Record
    Date | Payment
    Date | Distribution
    Amount
|--------------- | ---------------- | -----------------------
|6/7/2019        | 7/1/2019         | 0.01310                
|6/14/2019       | 7/1/2019         | 0.01310                
|6/21/2019       | 7/1/2019         | 0.01310                
|6/28/2019       | 7/1/2019         | 0.01310                
|7/5/2019        | 7/29/2019        | 0.01310                
|7/12/2019       | 7/29/2019        | 0.01310                
|7/19/2019       | 7/29/2019        | 0.01310                
|7/26/2019       | 7/29/2019        | 0.01310                
|8/2/2019        | 9/3/2019         | 0.01310                
|8/9/2019        | 9/3/2019         | 0.01310                
|8/16/2019       | 9/3/2019         | 0.01310                
|8/23/2019       | 9/3/2019         | 0.01310                
|8/30/2019       | 9/3/2019         | 0.01310                





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Code
of Ethics



At
a meeting held on April 22, 2019, the Company’s board of directors unanimously agreed to amend and restate the Company’s
Code of Ethics in its entirety (The Code of Ethics was amended and restated in connection with the Merger to reflect current best
practices. Specifically, the amendments included clarifications and enhancements to the description of the duties and responsibilities
of the Company’s Chief Compliance Officer, increased reporting and certification requirements, and an enhanced description
of the restrictions on the outside business activities of the directors and officers of the Company and its investment adviser.
The foregoing summary of the terms of the Code of Ethics is not intended to be exhaustive and is qualified in its entirety by
reference to the Code of Ethics, a copy of which is attached as Exhibit 14.1 to the Company’s Form 8-K filed with the SEC
on April 26, 2019.

Change in Independent Accounting Firm



As
reported on the Company’s Form 8-K filed with the SEC on April 26, 2019, on April 22, 2019, upon the recommendation
of the audit committee, the Company’s board of directors appointed BDO USA, LLP (“BDO”) to serve as the Company’s
independent registered accounting firm for the fiscal year ending June 30, 2019 and dismissed FGMK, LLC. BDO previously served
as PWAY’s independent registered accounting firm and audited the financial statements of PWAY as of and for the years ended
June 30, 2018 and 2017. For more information regarding the change in the Company’s independent registered accounting firm,
please refer to the Company’s Form 8-K filed with the SEC on April 26, 2019.



Credit
Facility

On
May 16, 2019, TP Flexible Income Fund, Inc. (the “Company”) established a $50 million senior secured revolving
credit facility (the “Credit Facility”) with Royal Bank of Canada, a Canadian chartered bank, acting as administrative
agent. In connection with this senior secured revolving credit facility, the Company’s wholly owned financing subsidiary,
TP Flexible Funding, LLC (the “SPV”), as borrower, and each of the other parties thereto entered into a Revolving
Loan Agreement (the “Loan Agreement”).  Under the Credit Facility the SPV has made certain customary representations
and warranties, and is required to comply with various covenants, including leverage restrictions, reporting requirements and
other customary requirements for similar credit facilities. The Credit Facility includes usual and customary events of default
for credit facilities of this nature.



Offering
Pricing



On
May 17, 2019, the Company decreased its offering price from $11.43 per share to $11.38 per share. The decrease in the offering
price is effective for all closings occurring on or after May 17, 2019.





Distributions



General



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 distribution is subject to our board of directors’ discretion and applicable legal
restrictions related to the payment of distributions. We 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. From time to time, we may also pay interim distributions at the discretion of our board of directors. 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,





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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.



Related
Party Transactions



Administration
Agreement



On
September 2, 2014, Pathway Capital Opportunity Fund, Inc. ("PWAY") entered into an administration agreement (the "Administration
Agreement") with Prospect Administration LLC (the "Administrator"), an affiliate of the Adviser. Pursuant to the merger agreement
between Triton Pacific Investment Corporation, Inc ("TPIC") and PWAY, Prospect Administration LLC will remain the administrator
for TP Flexible Income Fund, Inc. (f/k/a Triton Pacific Investment Corporation, Inc.) (the "Company"). The Administrator performs,
oversees and arranges for the performance of administrative services necessary for the operation of the Company. These services
include, but are not limited to, accounting, finance and legal services. For providing these services, facilities and personnel,
the Company reimburses the Administrator for the Company's actual and allocable portion of expenses and overhead incurred by the
Administrator in performing its obligations under the Administration Agreement, including rent and the Company's allocable portion
of the costs of its Chief Financial Officer and Chief Compliance Officer and her staff. For the three months ended March 31, 2019
and March 31, 2018, administrative costs incurred by the Company to the Administrator were $36,797 and $68,750. For the nine months
ended March 31, 2019 and March 31, 2018, administrative costs incurred by the Company to the Administrator were $122,671 and $289,242,
respectively. As of March 31, 2019 and June 30, 2018, $36,797 and $45,833 was payable to the Administrator.



Allocation
of Expenses





The
cost of valuation services for CLOs is initially borne by PRIS, which then allocates to the Company its proportional share of
such expense. During the three months ended March 31, 2019 and March 31, 2018, PRIS incurred $41,826 and $45,084, respectively,
in expenses related to valuation services that are attributable to the Company. During the nine months ended March 31, 2019 and
March 31, 2018, PRIS incurred $123,596 and $99,807, respectively, in expenses related to valuation services that are attributable
to the Company. The Company reimburses PRIS for these expenses and includes them as part of valuation services on the Statement
of Operations. As of March 31, 2019, $13,987 of expense is due to PRIS, which is presented as part of due to affiliates on
the Statement of Assets and Liabilities.

The
cost of filing software is initially borne by PSEC, which then allocates to the Company its proportional share of such expense.
During the three months ended March 31, 2019 and March 31, 2018, PSEC incurred $5,326 and $6,868, respectively, in expenses related
to the filing services that are attributable to the Company. The Company reimburses PSEC for these expenses and includes them
as part of general and administrative expenses on the Statement of Operations. As of March 31, 2019 and June 30, 2018,
$7,814 and $2,374 of expense was due to PSEC, respectively, which is presented as part of due to affiliates on the Statement
of Assets and Liabilities.

The cost of portfolio management
software is initially borne by the Company, which then allocates to PSEC its proportional share of such expense. During the three
months ended March 31, 2019 and March 31, 2018, the Company incurred $11,058 and $5,987, respectively, in expenses related to
the portfolio management software that is attributable to PSEC. During the nine months ended March 31, 2019 and March 31, 2018,
the Company incurred $13,463 and $17,572, respectively, in expenses related to the portfolio management software that is attributable
to PSEC. PSEC reimburses the Company for these expenses and included them as part of general and administrative expenses on the
Statement of Operations. As of March 31, 2019 and June 30, 2018, $11,058 and $12,018 of expense is due from PSEC, respectively,
which is presented as due from affiliate on the Statement of Assets and Liabilities.





Expense
Limitation Agreement



Expense
Reimbursement Agreement with our Former Adviser



On
March 27, 2014, we and our Former Adviser entered into an Expense Reimbursement Agreement. The Expense Reimbursement Agreement
was amended and restated effective April 5, 2018. Under the Expense Reimbursement Agreement, as amended, our Former Adviser, in
consultation with the Company, could pay up to 100% of both our organizational and offering expenses and our operating expenses,
all as determined by us and our Former Adviser. The Expense Reimbursement Agreement stated that until the net proceeds to us from
our offering are at least $25 million, our Former Adviser could 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 Former Adviser could,
with our consent, continue to make expense support payments to us in such amounts as are acceptable to us and our Former Adviser.
The Expense Reimbursement Agreement terminated on December 31, 2018. Our Former Adviser has agreed to reimburse a total of $5,292,192
as of December 31, 2018. However, as part of the Merger, the Former Adviser agreed to waive any amounts owed to it under the Expense
Reimbursement Agreement.





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Expense
Limitation Agreement with the Adviser



Concurrently
with the closing of the Merger, we entered into an Expense Limitation Agreement with our Adviser (the “ELA”). Pursuant
to the ELA, our Adviser, in its sole discretion, may waive a portion or all of the investment advisory fees that it is entitled
to receive pursuant to the Investment Advisory Agreement in order to limit our Operating Expenses (as defined below) to an annual
rate, expressed as a percentage of our average quarterly net assets, equal to 8.00% (the “Annual Limit”). For purposes
of the ELA, the term “Operating Expenses” with respect to the fund, is defined to include all expenses necessary or
appropriate for the operation of the fund, including but not limited to our Adviser’s base management fee, any and all costs
and expenses that qualify as line item “organization and offering” expenses in the financial statements of the fund
as the same are filed with the SEC and other expenses described in the Investment Advisory Agreement, but does not include any
portfolio transaction or other investment-related costs (including brokerage commissions, dealer and underwriter spreads, prime
broker fees and expenses and dividend expenses related to short sales), interest expenses and other financing costs, extraordinary
expenses and acquired fund fees and expenses. Upfront shareholder transaction expenses (such as sales commissions, dealer manager
fees, and similar expenses) are not Operating Expenses.



Any
amount waived pursuant to the ELA is subject to repayment to our Adviser (an “ELA Reimbursement”) by us within the
three years following the end of the quarter in which the waiver was made by our Adviser. If the ELA is terminated or expires
pursuant to its terms, our Adviser maintains its right to repayment for any waiver it has made under the ELA, subject to the Repayment
Limitations (discussed below).



Any
ELA Reimbursement can be made solely in the event that we have sufficient excess cash on hand at the time of any proposed ELA
Reimbursement and shall be limited to the lesser of (i) the excess of the Annual Limit applicable to such quarter over the fund’s
actual Operating Expenses for such quarter and (ii) the amount of ELA Reimbursement which, when added to the fund’s expenses
for such quarter, permits the fund to pay the then-current aggregate quarterly distribution to its shareholders, at a minimum
annualized rate of at least 6.00% (based on the gross offering prices of fund shares) (the “Distribution”) from the
sum of (x) the fund’s net investment income (loss) for such quarter plus (y) the fund’s net realized gains (losses)
for such quarter (collectively, the “Repayment Limitations”). For the purposes of the calculations pursuant to (i)
and (ii) of the preceding sentence, any ELA Reimbursement will be treated as an expense of the fund for such quarter, without
regard to the GAAP treatment of such expense. In the event that the fund is unable to make a full payment of any ELA Reimbursements
due for any applicable quarter because the fund does not have sufficient excess cash on hand, any such unpaid amount shall become
a payable of the fund for accounting purposes and shall be paid when the fund has sufficient cash on hand (subject to the Repayment
Limitations); provided, that in the case of any ELA Reimbursements, such payment shall be made no later than the date that is
three years following the end of the quarter in which the applicable waiver was made by our Adviser.



Investment
Advisory Fees



Pre-Merger



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



Though,
in accordance with the Advisers Act, the Adviser could have received an incentive fee on both current income earned and income
from capital gains, the Adviser agreed to waive any incentive fees from current income. As such, the Adviser is paid an incentive
fee only upon the realization of a capital gain from the sale of an investment. The incentive fee is calculated and payable quarterly
in arrears or as of the date of our liquidation or the termination of the investment advisory agreement, and equals 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.





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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 1940 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%.



Post-Merger



Following
the Merger, we entered into a new investment advisory agreement (the “New Advisory Agreement”) with the New Adviser.
Pursuant to which we pay the New Adviser a fee for investment advisory and management services consisting of a base management
fee and an incentive fee.



Base
Management Fee. The base management fee will be calculated at an annual rate of 1.75% (0.4375% quarterly) of our average total
assets, which will include any borrowings for investment purposes. For the first quarter of our operations following the Merger,
the base management fee will be calculated based on the average value of our total assets as of the date of the New Advisory Agreement
and at the end of the calendar quarter in which the date of the New Advisory Agreement falls, and will be appropriately adjusted
for any share issuances or repurchases during the current calendar quarter. Subsequently, the base management fee will be payable
quarterly in arrears, and will be calculated based on the average value of our total assets at the end of the two most recently
completed calendar quarters, and will be appropriately adjusted for any share issuances or repurchases during the then current
calendar quarter. Base management fees for any partial month or quarter will be appropriately pro-rated. At the New Adviser’s
option, the base management fee for any period may be deferred, without interest thereon, and paid to the New Adviser at any time
subsequent to any such deferral as the Adviser determines.





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Incentive
Fee. The incentive fee consists of two parts: (1) the subordinated incentive fee on income and (2) the capital gains incentive
fee.



Subordinated
Incentive Fee on Income. The first part of the incentive fee, which is referred to as the subordinated incentive fee on income,
will be calculated and payable quarterly in arrears based upon our “pre-incentive fee net investment income” for the
immediately preceding quarter. For purposes of this fee “pre-incentive fee net investment income” means interest income,
dividend income and distribution cash flows from equity investments and any other income (including any other fees, such as commitment,
origination, structuring, diligence and consulting fees or other fees that we receive) accrued during the calendar quarter, minus
our operating expenses for the quarter (including the base management fee, expenses reimbursed under the New Advisory Agreement
and our new Administration Agreement, any interest expense and dividends paid on any issued and outstanding preferred shares,
but excluding the organization and offering expenses and subordinated incentive fee on income). Pre-incentive fee net investment
income includes, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments
with payment-in-kind interest and zero coupon securities), accrued income that we have not yet received in cash. Pre-incentive
fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation
or depreciation. The subordinated incentive fee on income will be subject to a quarterly fixed preferred return to investors,
expressed as a rate of return on the value of our net assets at the end of the immediately preceding calendar quarter, of 1.5%
(6.0% annualized), subject to a “catch up” feature. Operating expenses are included in the calculation of the subordinated
incentive fee on income.



We
will pay our New Adviser a subordinated incentive fee on income for each calendar quarter as follows:



| | ● | No incentive fee
    will be payable to our New Adviser in any calendar quarter in which our pre-incentive fee net investment income does not exceed
    the preferred return rate of 1.5%.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | 100% of our pre-incentive
    fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds
    the preferred return but is less than or equal to 1.875% in any calendar quarter (7.5% annualized). We refer to this portion
    of our pre-incentive fee net investment income (which exceeds the preferred return but is less than or equal to 1.875%) as
    the “catch-up.” The effect of the “catch-up” provision is that, if our pre-incentive fee net investment
    income reaches 1.875% in any calendar quarter, our New Adviser will receive 20.0% of our pre-incentive fee net investment
    income as if a preferred return did not apply.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | 20.0% of the amount
    of our pre-incentive fee net investment income, if any, that exceeds 1.875% in any calendar quarter (7.5% annualized) will
    be payable to our New Adviser. This reflects that once the preferred return is reached and the catch-up is achieved, 20.0%
    of all pre-incentive fee net investment income thereafter will be allocated to our New Adviser.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Capital
Gains Incentive Fee. The second part of the incentive fee, which is referred to as the capital gains incentive fee, is determined
and payable in arrears as of the end of each calendar year (or upon termination of the New Advisory Agreement, as of the termination
date), and equals 20.00% of our realized capital gains for the calendar year, if any, computed net of all realized capital losses
and unrealized capital depreciation at the end of such year. In determining the capital gains incentive fee payable to the New
Adviser, we will calculate the aggregate realized capital gains, aggregate realized capital losses and aggregate unrealized capital
depreciation, as applicable, with respect to each investment that has been in our portfolio. For the purpose of this calculation,
an “investment” is defined as the total of all rights and claims which may be asserted against a portfolio company
arising from our participation in the debt, equity, and other financial instruments issued by that company. Aggregate realized
capital gains, if any, equal the sum of the differences between the aggregate net sales price of each investment and the aggregate
amortized cost basis of such investment when sold or otherwise disposed. Aggregate realized capital losses equal the sum of the
amounts by which the aggregate net sales price of each investment is less than the aggregate amortized cost basis of such investment
when sold or otherwise disposed. Aggregate unrealized capital depreciation equals the sum of the differences, if negative, between
the aggregate valuation of each investment and the aggregate amortized cost basis of such investment as of the applicable calendar
year-end. At the end of the applicable calendar year, the amount of capital gains that serves as the basis for our calculation
of the capital gains incentive fee involves netting aggregate realized capital gains against aggregate realized capital losses
on a since-inception basis and then reducing this amount by the aggregate unrealized capital depreciation. If this number is positive,
then the capital gains incentive fee payable is equal to 20.00% of such amount, less the aggregate amount of any capital gains
incentive fees paid since inception. Operating expenses are not taken into account when determining capital gains incentive fees.





- 59 -







Asset
Coverage



In
accordance with the 1940 Act, the Company is currently only allowed to borrow amounts such that its “asset coverage,”
as defined in the 1940 Act, is at least 150% 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 1940
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 March 31, 2019, the
Company did not have any senior securities.



On
March 23, 2018, an amendment to Section 61(a) of the 1940 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 1940 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 Company’s board of directors, including a “required majority” (as such term is defined in
Section 57(o) of the 1940 Act), approved the application to the Company of the 150% minimum asset coverage ratio set forth in
Section 61(a)(2) of the 1940 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 Company’s 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. If the Company’s stockholders
approve such proposal at the 2018 Annual Meeting, the 150% minimum asset coverage ratio will then apply effective as of June 21,
2018, 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.



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





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



We
have adopted ASC Topic 820, Fair Value Measurements and Disclosures, 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.





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



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



Payment-in-Kind
Interest



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



Organization
and Offering Expenses



We
have incurred certain expenses in connection with the registration of shares of our common stock for sale as discussed in Note
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 March 31, 2019, 55.7% (based on fair value)
of our investments paid variable interest rates, 41.7% paid fixed rates, and 2.6% 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 in effect as of March 31, 2019:



|LIBOR
    Basis Point Change | Interest
    Income
|---------------------------- | -------------------
|Up
    300 basis points      | 345,631            
|Up
    200 basis points      | 230,257            
|Up
    100 basis points      | 114,884            
|Down
    25 basis points     | (29,195)           



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



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



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





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



Disclosure
Controls



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



Change
in Internal Control Over Financial Reporting



No
change occurred in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act)
during the three months ended March 31, 2019 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, 2018.



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



None.



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



None.



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



None.



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



None.



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



EXHIBIT
INDEX



|Number |  | Description                                                                                                                                                                                                                                                                                                                     
|------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |  |                                                                                                                                                                                                                                                                                                                                 
|3.1    |  | Fourth
    Articles of Amendment and Restatement of Triton Pacific Investment Corporation. (Incorporated by reference to the Company’s
    registration statement on Form N-2 (File No. 333-174873) filed on November 1, 2013.)                                                                                                 
|3.2    |  | Articles
                                         Supplementary of the Company. (Incorporated by reference to the Company's Pre-Effective
                                         amendment no. 1 to registration statement on Form N-2 (File No. 333-206730) filed on
                                         March 3, 2016.)
|3.3    |  | Articles
    of Merger of the Company (Incorporated by Reference to Exhibit 3.1 to the Company's Current Report on Form 8-K, filed on April
    1, 2019)                                                                                                                                                                        
|3.4    |  | Amended
    and Restated Bylaws of the Company. (Incorporated by reference to the Company's registration statement on Form N-2 (File No.
    333-174873) filed on March 15, 2013.)                                                                                                                                              
|3.5    |  | Amendment
    No. 1 to Amended and Restated Bylaws of the Registrant (Incorporated by Reference to Exhibit 3.2 to the Company's Current
    Report on Form 8-K, filed on April 1, 2019)                                                                                                                                         
|10.1   |  | Investment
Advisory Agreement, by and between the Company and Prospect Flexible Income Management, LLC (Incorporated by Reference to Exhibit
10.1 to the Company's Current Report on Form 8-K, filed on April 1, 2019)                                                                                                          
|10.2   |  | Amended
    and Restated Dealer Manager Agreement, by and between the Company and Triton Pacific Securities, LLC (Incorporated by Reference
    to Exhibit 10.3 to the Company's Current Report on Form 8-K, filed on April 1, 2019)                                                                                            
|10.3   |  | Administration
    Agreement, by and between the Company and Prospect Administration LLC (Incorporated by Reference to Exhibit 10.4 to the Company's
    Current Report on Form 8-K, filed on April 1, 2019)                                                                                                                    
|10.4   |  | Expense
Limitation Agreement, by and between the Company and Prospect Flexible Income Management, LLC (Incorporated by Reference to Exhibit 10.3 to the Company's Current Report on Form 8-K, filed on April 1, 2019)                                                                                                           
|14.1   |  | Code
    of Ethics (Incorporated by reference to the Exhibit 14.1 to the Company's Form 8-K filed with the SEC on April 22, 2019)                                                                                                                                                                                               
|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.                                                                                                                                                                                                     



- 64 -







SIGNATURES



Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.



|Dated: May 17, 2019 | TP Flexible Income Fund, Inc.
|------------------- | -----------------------------
|                    |                              
|                    | By:                          
|                    |                              
|                    |                              



|Dated: May 17, 2019 | TP Flexible Income Fund, Inc.
|------------------- | -----------------------------
|                    |                              
|                    | By:                          
|                    |                              
|                    |                              



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