UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549








FORM 10-Q






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



For the Quarterly Period
Ended June 30, 2016



OR



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



For
the transition period from to



Commission
File Number 814-00908



Triton Pacific Investment Corporation, Inc.

(Exact name of registrant as specified in its charter)



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



6701
Center Drive West, 14th Floor

Los
Angeles, CA 90045

(Address of principal executive offices)



(310)
943-4990

(Registrant’s telephone number, including area
code)



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



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



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



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



|Large accelerated filer |  | ☐                                                            |  | Accelerated filer         |  | ☐
|----------------------- |  | ------------------------------------------------------------ |  | ------------------------- |  | -
|                        |  |                                                              |  |                           |  |  
|Non-accelerated filer   |  | ☒          (Do
    not check if a smaller reporting company) |  | Smaller reporting company |  | ☐



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



As of August
15, 2016, the Registrant had 833,683.64 shares of Class A common stock, $0.001 par value, outstanding.
















TABLE
OF CONTENTS



|Part I—Financial Information                                                                  |  | 3 
|--------------------------------------------------------------------------------------------- |  | --
|                                                                                              |  |   
|Item 1: Financial Statements                                                                  |  | 3 
|                                                                                              |  |   
|Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations |  | 24
|                                                                                              |  |   
|Item 3: Quantitative and Qualitative Disclosures About Market Risk                            |  | 42
|                                                                                              |  |   
|Item 4: Controls and Procedures                                                               |  | 43
|                                                                                              |  |   
|Part II—Other Information                                                                     |  | 43
|                                                                                              |  |   
|Item 1: Legal Proceedings                                                                     |  | 43
|                                                                                              |  |   
|Item 1A: Risk Factors                                                                         |  | 43
|                                                                                              |  |   
|Item 2: Unregistered Sales of Equity Securities and Use of Proceeds                           |  | 43
|                                                                                              |  |   
|Item 3: Defaults Upon Senior Securities                                                       |  | 43
|                                                                                              |  |   
|Item 4: Mine Safety Disclosures                                                               |  | 43
|                                                                                              |  |   
|Item 5: Other Information                                                                     |  | 43
|                                                                                              |  |   
|Item 6: Exhibits                                                                              |  | 44
|                                                                                              |  |   
|SIGNATURES                                                                                    |  | 45



2







Part I—Financial Information



Item 1: Financial Statements



TRITON PACIFIC INVESTMENT CORPORATION, INC.CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

|                                                                                                                                   |  |                               |            |  
|---------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------- | ---------- | -
|                                                                                                                                   |  | June
    30, 2016 (unaudited) |            |  
|ASSETS                                                                                                                             |  |                               |            |  
|                                                                                                                                   |  |                               |            |  
|Affiliate Investments, at fair value (amortized cost - $1,877,675 and $1,859,219, respectively)                                    |  | $                             | 2,169,820  |  
|Non-affiliate Investments, at fair value (amortized cost - $5,091,629 and $3,491,770, respectively)                                |  |                               | 5,078,954  |  
|Cash                                                                                                                               |  |                               | 4,327,714  |  
|Principal and interest receivable                                                                                                  |  |                               | 25,593     |  
|Prepaid expenses                                                                                                                   |  |                               | 5,985      |  
|Reimbursement due from Adviser (see Note 4)                                                                                        |  |                               | 252,490    |  
|                                                                                                                                   |  |                               |            |  
|TOTAL ASSETS                                                                                                                       |  | $                             | 11,860,556 |  
|                                                                                                                                   |  |                               |            |  
|LIABILITIES AND NET ASSETS                                                                                                         |  |                               |            |  
|                                                                                                                                   |  |                               |            |  
|LIABILITIES                                                                                                                        |  |                               |            |  
|Payable for investments purchased                                                                                                  |  | $                             | 336,000    |  
|Accounts payable and accrued liabilities                                                                                           |  |                               | 293,000    |  
|Stockholder distributions payable                                                                                                  |  |                               | 15,676     |  
|Due to related parties (see Note 4)                                                                                                |  |                               | 55,893     |  
|TOTAL LIABILITIES                                                                                                                  |  |                               | 700,569    |  
|                                                                                                                                   |  |                               |            |  
|COMMITMENTS AND CONTINGENCIES(see Note 9)                                                                                          |  |                               |            |  
|                                                                                                                                   |  |                               |            |  
|NET ASSETS                                                                                                                         |  |                               |            |  
|Common stock, $0.001 par value, 75,000,000 shares authorized, 808,444.99 and 532,977.19 shares issued and outstanding respectively |  |                               | 808        |  
|Capital in excess of par value                                                                                                     |  |                               | 10,933,161 |  
|Accumulated undistributed net realized gains                                                                                       |  |                               | 1,025      |  
|Accumulated overdistributed net investment income                                                                                  |  |                               | (54,477    | )
|Accumulated unrealized appreciation on investments                                                                                 |  |                               | 279,470    |  
|TOTAL NET ASSETS                                                                                                                   |  |                               | 11,159,987 |  
|                                                                                                                                   |  |                               |            |  
|TOTAL LIABILITIES AND NET ASSETS                                                                                                   |  | $                             | 11,860,556 |  
|                                                                                                                                   |  |                               |            |  
|Net asset value per share of common stock at year end                                                                              |  | $                             | 13.80      |  



The accompanying notes are an integral part of these
statements.



3







TRITON PACIFIC INVESTMENT CORPORATION, INC.CONSOLIDATED STATEMENTS OF OPERATIONSTHREE AND SIX MONTHS ENDED JUNE 30, 2016 AND 2015(UNAUDITED)

|                                                                                                 |  |                             |          |                           |      |   |          |     
|------------------------------------------------------------------------------------------------ |  | --------------------------- | -------- | ------------------------- | ---- | - | -------- | ----
|                                                                                                 |  | Three months ended
June 30, |          | Six months ended
June 30,
|                                                                                                 |  | 2016                        |          |                           | 2015 |   |          | 2016
|INVESTMENT INCOME                                                                                |  |                             |          |                           |      |   |          |     
|Interest from affiliate investments                                                              |  | $                           | 9,296    |                           |      | $ | —        |     
|Interest from non-control/ non-affiliate investments                                             |  |                             | 88,086   |                           |      |   | 32,285   |     
|Fee income from non-control/ non-affiliate investments                                           |  |                             | —        |                           |      |   | 313      |     
|                                                                                                 |  |                             |          |                           |      |   |          |     
|Total investment income                                                                          |  |                             | 97,382   |                           |      |   | 32,598   |     
|                                                                                                 |  |                             |          |                           |      |   |          |     
|OPERATING EXPENSES                                                                               |  |                             |          |                           |      |   |          |     
|Management fees                                                                                  |  |                             | 53,179   |                           |      |   | 20,933   |     
|Capital gains incentive fees (see Notes 2 and 4)                                                 |  |                             | 14,910   |                           |      |   | (521     | )   
|Administrator expense                                                                            |  |                             | 81,170   |                           |      |   | 62,805   |     
|Professional fees                                                                                |  |                             | 54,566   |                           |      |   | 62,412   |     
|Insurance expense                                                                                |  |                             | 13,810   |                           |      |   | 16,766   |     
|Other operating expenses                                                                         |  |                             | 4,208    |                           |      |   | 4,154    |     
|                                                                                                 |  |                             |          |                           |      |   |          |     
|Total operating expenses                                                                         |  |                             | 221,843  |                           |      |   | 166,549  |     
|                                                                                                 |  |                             |          |                           |      |   |          |     
|Expense reimbursement and management fee offsets from Adviser                                    |  |                             | (206,933 | )                         |      |   | (166,549 | )   
|                                                                                                 |  |                             |          |                           |      |   |          |     
|Net expenses                                                                                     |  |                             | 14,910   |                           |      |   | —        |     
|                                                                                                 |  |                             |          |                           |      |   |          |     
|Net investment income                                                                            |  |                             | 82,472   |                           |      |   | 32,598   |     
|                                                                                                 |  |                             |          |                           |      |   |          |     
|REALIZED AND UNREALIZED GAIN/(LOSS)                                                              |  |                             |          |                           |      |   |          |     
|Net realized gain (loss) on non-control/ non-affiliate investments                               |  |                             | (1,167   | )                         |      |   | 3,779    |     
|Net increase in unrealized appreciation on affiliate investments                                 |  |                             | —        |                           |      |   | —        |     
|Net increase in unrealized appreciation (depreciation) on non-control/ non-affiliate investments |  |                             | 74,549   |                           |      |   | (6,384   | )   
|                                                                                                 |  |                             |          |                           |      |   |          |     
|Total net realized and unrealized gain (loss) on investments                                     |  |                             | 73,382   |                           |      |   | (2,605   | )   
|                                                                                                 |  |                             |          |                           |      |   |          |     
|NET INCREASE IN NET ASSETS FROM OPERATIONS                                                       |  | $                           | 155,854  |                           |      | $ | 29,993   |     
|                                                                                                 |  |                             |          |                           |      |   |          |     
|PER SHARE INFORMATION - Basic and Diluted                                                        |  |                             |          |                           |      |   |          |     
|Net increase in net assets resulting from operations per share                                   |  | $                           | 0.20     |                           |      | $ | 0.10     |     
|                                                                                                 |  |                             |          |                           |      |   |          |     
|Weighted average common shares outstanding - basic and diluted                                   |  |                             | 763,860  |                           |      |   | 289,359  |     



The accompanying notes are an integral part of these
statements.



4







TRITON PACIFIC INVESTMENT CORPORATION, INC.CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSSIX MONTHS ENDED JUNE 30, 2016 AND 2015(UNAUDITED)

|                                                                     |  |      |            |   |      |   |           |  
|-------------------------------------------------------------------- |  | ---- | ---------- | - | ---- | - | --------- | -
|                                                                     |  | 2016 |            |   | 2015 |  
|Operations                                                           |  |      |            |   |      |   |           |  
|Net investment income                                                |  | $    | 157,868    |   |      | $ | 61,128    |  
|Net realized gain (loss) on investments                              |  |      | (1,167     | ) |      |   | 7,321     |  
|Net increase in unrealized appreciation on investments               |  |      | 101,722    |   |      |   | 20,685    |  
|Net increase in net assets resulting from operations                 |  |      | 258,423    |   |      |   | 89,134    |  
|Stockholder distributions (see Note 5)                               |  |      |            |   |      |   |           |  
|Distributions from net investment income                             |  |      | (185,980   | ) |      |   | (77,338   | )
|Distributions from net realized gain on investments                  |  |      | —          |   |      |   | (4,119    | )
|Net decrease in net assets resulting from stockholder distributions  |  |      | (185,980   | ) |      |   | (81,457   | )
|Capital share transactions                                           |  |      |            |   |      |   |           |  
|Issuance of common stock (see Note 3)                                |  |      | 3,660,998  |   |      |   | 1,391,937 |  
|Reinvestment of stockholder distributions (see Note 3)               |  |      | 99,893     |   |      |   | 42,620    |  
|Offering costs                                                       |  |      | —          |   |      |   | (9,922    | )
|Net increase in net assets resulting from capital share transactions |  |      | 3,760,891  |   |      |   | 1,424,635 |  
|                                                                     |  |      |            |   |      |   |           |  
|Total increase in net assets                                         |  |      | 3,833,334  |   |      |   | 1,432,312 |  
|Net assets at beginning of period                                    |  |      | 7,326,653  |   |      |   | 1,916,867 |  
|Temporary equity reclassed as permanent equity                       |  |      | —          |   |      |   | 615,437   |  
|Net assets at end of period                                          |  | $    | 11,159,987 |   |      | $ | 3,964,616 |  
|Accumulated undistributed (overdistributed) net investment income    |  | $    | (54,477    | ) |      | $ | —         |  
|Accumulated undistributed net realized gains                         |  | $    | 1,025      |   |      | $ | —         |  



The accompanying notes are an integral part of these
statements.



5







TRITON PACIFIC INVESTMENT CORPORATION, INC.CONSOLIDATED STATEMENTS OF CASH FLOWSSIX MONTHS ENDED JUNE 30, 2016 AND 2015(UNAUDITED)



|                                                                                                                                     |  | 2016 |            |   | 2015 |  
|------------------------------------------------------------------------------------------------------------------------------------ |  | ---- | ---------- | - | ---- | -
|CASH FLOWS FROM OPERATING ACTIVITIES                                                                                                 |  |      |            |   |      |  
|Net increase in net assets resulting from operations                                                                                 |  | $    | 258,423    |   |      | $
|Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used by) operating activities |  |      |            |   |      |  
|Purchases of investments                                                                                                             |  |      | (1,743,500 | ) |      |  
|Proceeds from sales and repayments of investments                                                                                    |  |      | 149,789    |   |      |  
|Net realized gain from investments                                                                                                   |  |      | 1,167      |   |      |  
|Net increase in unrealized appreciation on investments                                                                               |  |      | (101,722   | ) |      |  
|Accretion of discount                                                                                                                |  |      | (7,315     | ) |      |  
|Net increase in paid-in-kind interest                                                                                                |  |      | (18,456    | ) |      |  
|Increases and decreases in assets and liabilities                                                                                    |  |      |            |   |      |  
|Principal and interest receivable                                                                                                    |  |      | (13,886    | ) |      |  
|Receivable for investments sold                                                                                                      |  |      | —          |   |      |  
|Prepaid expenses                                                                                                                     |  |      | 27,621     |   |      |  
|Reimbursement due from Adviser                                                                                                       |  |      | (26,993    | ) |      |  
|Payable for investments purchased                                                                                                    |  |      | 336,000    |   |      |  
|Accounts payable and accrued liabilities                                                                                             |  |      | 68,000     |   |      |  
|Due to related parties                                                                                                               |  |      | 8,136      |   |      |  
|NET CASH USED BY OPERATING ACTIVITIES                                                                                                |  |      | (1,062,736 | ) |      |  
|                                                                                                                                     |  |      |            |   |      |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                                                                                 |  |      |            |   |      |  
|Issuance of common stock                                                                                                             |  |      | 3,660,998  |   |      |  
|Stockholder distributions                                                                                                            |  |      | (86,087    | ) |      |  
|Increases in distributions payable                                                                                                   |  |      | 3,198      |   |      |  
|Offering costs                                                                                                                       |  |      | —          |   |      |  
|NET CASH PROVIDED BY FINANCING ACTIVITIES                                                                                            |  |      | 3,578,109  |   |      |  
|                                                                                                                                     |  |      |            |   |      |  
|NET INCREASE (DECREASE) IN CASH                                                                                                      |  |      | 2,515,373  |   |      |  
|                                                                                                                                     |  |      |            |   |      |  
|CASH - BEGINNING OF PERIOD                                                                                                           |  | $    | 1,812,341  |   |      | $
|                                                                                                                                     |  |      |            |   |      |  
|CASH - END OF PERIOD                                                                                                                 |  | $    | 4,327,714  |   |      | $



The accompanying notes are an integral part of these
statements.



6







TRITON PACIFIC INVESTMENT CORPORATION, INC.CONSOLIDATED SCHEDULE OF INVESTMENTSAS OF JUNE 30 2016 
(UNAUDITED)

|                                                     |  |                 |  |                                              |  |                       |  |       |  |            |           |                                  |         |   |                  |   |           |                   |           |   |            | 
|---------------------------------------------------- |  | --------------- |  | -------------------------------------------- |  | --------------------- |  | ----- |  | ---------- | --------- | -------------------------------- | ------- | - | ---------------- | - | --------- | ----------------- | --------- | - | ---------- | 
|Portfolio
    Company                                |  | Footnotes       |  | Industry                                     |  | Rate
    (b)          |  | Floor |  | Maturity   |           | PrincipalAmount/ Numberof Shares |         |   | AmortizedCost(f) |   |           | Fair
    Value(c) |          
|Senior Secured Loans—First Lien—36.18%               |  |                 |  |                                              |  |                       |  |       |  |            |           |                                  |         |   |                  |   |           |                   |           |  
|CareCentrix                                          |  |                 |  | Healthcare &
    Pharmaceuticals             |  | L+5.00%
    (6.00%)   |  | 1.0%  |  | 7/8/2021   |           | $                                | 198,500 |   |                  | $ | 194,210   |                   |           | $ | 193,165    | 
|Curo
    Health                                      |  |                 |  | Healthcare &
    Pharmaceuticals             |  | L+5.50%
    (6.50%)   |  | 1.0%  |  | 2/7/2022   |           |                                  | 123,438 |   |                  |   | 122,442   |                   |           |   | 123,026    | 
|FHC
    Health Systems, Inc.                         |  |                 |  | Healthcare &
    Pharmaceuticals             |  | L+4.00%
    (5.00%)   |  | 1.0%  |  | 12/23/2021 |           |                                  | 123,437 |   |                  |   | 122,504   |                   |           |   | 118,911    | 
|Flavors
    Holdings, Inc. Tranche B                 |  |                 |  | Beverage, Food &
    Tobacco                 |  | L+5.75%
    (6.75%)   |  | 1.0%  |  | 4/3/2020   |           |                                  | 114,063 |   |                  |   | 110,658   |                   |           |   | 102,086    | 
|GK
    Holdings, Inc.                                |  |                 |  | Business Services                            |  | L+5.50%
    (6.50%)   |  | 1.0%  |  | 1/20/2021  |           |                                  | 123,125 |   |                  |   | 122,380   |                   |           |   | 122,509    | 
|Global
    Healthcare Exchange                       |  |                 |  | Healthcare &
    Pharmaceuticals             |  | L+4.50%
    (5.50%)   |  | 1.0%  |  | 8/15/2022  |           |                                  | 148,877 |   |                  |   | 148,520   |                   |           |   | 148,877    | 
|GTCR
    Valor Companies, Inc.                       |  |                 |  | Business Services                            |  | L+5.75%
    (6.75%)   |  | 1.0%  |  | 6/16/2023  |           |                                  | 350,000 |   |                  |   | 336,000   |                   |           |   | 334,798    | 
|Imagine
    Print Solutions                          |  |                 |  | Business Services                            |  | L+6.00%
    (7.00%)   |  | 1.0%  |  | 3/30/2022  |           |                                  | 249,375 |   |                  |   | 245,810   |                   |           |   | 249,375    | 
|Jackson
    Hewitt                                   |  |                 |  | Business Services                            |  | L+7.00%
    (8.00%)   |  | 1.0%  |  | 7/30/2020  |           |                                  | 196,000 |   |                  |   | 192,655   |                   |           |   | 192,815    | 
|Jeld-Wen,
    Inc.                                   |  |                 |  | Wholesale Trade-Durable
    Goods            |  | L+4.25%
    (5.25%)   |  | 1.0%  |  | 10/15/2021 |           |                                  | 123,125 |   |                  |   | 122,194   |                   |           |   | 123,433    | 
|Mister
    Car Wash, Inc.                            |  |                 |  | Automotive Repair,
    Services, and Parking |  | L+4.00%
    (5.00%)   |  | 1.0%  |  | 8/20/2021  |           |                                  | 122,500 |   |                  |   | 121,569   |                   |           |   | 122,347    | 
|Natel
    Engineering                                |  |                 |  | High Tech Industries                         |  | L+5.75%
    (6.75%)   |  | 1.0%  |  | 4/10/2020  |           |                                  | 118,750 |   |                  |   | 117,724   |                   |           |   | 118,156    | 
|Paradigm
    Outcomes                                |  |                 |  | Healthcare &
    Pharmaceuticals             |  | L+5.00%
    (6.00%)   |  | 1.0%  |  | 6/2/2022   |           |                                  | 123,750 |   |                  |   | 122,070   |                   |           |   | 123,131    | 
|Ranpak
    Corp.                                     |  |                 |  | Paper and Allied
    Products                |  | L+3.25%
    (4.25%)   |  | 1.0%  |  | 10/1/2021  |           |                                  | 116,703 |   |                  |   | 116,472   |                   |           |   | 113,980    | 
|SCS
    Holdings I                                   |  |                 |  | High Tech Industries                         |  | L+5.00%
    (6.00%)   |  | 1.0%  |  | 10/31/2022 |           |                                  | 123,596 |   |                  |   | 121,568   |                   |           |   | 123,544    | 
|SITEL
    Worldwide                                  |  |                 |  | Business Services                            |  | L+5.50%
    (6.50%)   |  | 1.0%  |  | 9/20/2021  |           |                                  | 198,500 |   |                  |   | 197,123   |                   |           |   | 197,756    | 
|SiteOne
    Landscape LLC                            |  |                 |  | Business Services                            |  | L+5.50%
    (6.50%)   |  | 1.0%  |  | 9/20/2021  |           |                                  | 349,125 |   |                  |   | 345,787   |                   |           |   | 350,871    | 
|SolarWinds,
    Inc.                                 |  |                 |  | High Tech Industries                         |  | L+5.50%
    (6.50%)   |  | 1.0%  |  | 2/3/2023   |           |                                  | 250,000 |   |                  |   | 237,798   |                   |           |   | 249,531    | 
|TIBCO
    Software                                   |  |                 |  | High Tech Industries                         |  | L+5.50%
    (6.50%)   |  | 1.0%  |  | 12/4/2020  |           |                                  | 123,438 |   |                  |   | 121,510   |                   |           |   | 113,485    | 
|TruGreen
    Limited Partnership                     |  |                 |  | Consumer Services                            |  | L+5.50%
    (6.50%)   |  | 1.0%  |  | 4/13/2023  |           |                                  | 350,000 |   |                  |   | 344,917   |                   |           |   | 352,188    | 
|Verdesian
    Life Sciences LLC                      |  |                 |  | Wholesale Trade-Nondurable
    Goods         |  | L+5.00%
    (6.00%)   |  | 1.0%  |  | 7/1/2020   |           |                                  | 227,870 |   |                  |   | 226,155   |                   |           |   | 215,907    | 
|Vivid
    Seats Ltd.                                 |  |                 |  | Consumer Services                            |  | L+6.00%
    (7.00%)   |  | 1.0%  |  | 3/1/2022   |           |                                  | 250,000 |   |                  |   | 232,748   |                   |           |   | 247,500    | 
|Total Senior Secured Loans—First Lien                |  |                 |  |                                              |  |                       |  |       |  | $          | 4,104,172 |                                  |         | $ | 4,022,814        |   |           | $                 | 4,037,391 |  
|                                                     |  |                 |  |                                              |  |                       |  |       |  |            |           |                                  |         |   |                  |   |           |                   |           |   |            | 
|Senior Secured Loans—Second Lien—9.33%               |  |                 |  |                                              |  |                       |  |       |  |            |           |                                  |         |   |                  |   |           |                   |           |  
|Flavors
    Holdings, Inc.                           |  |                 |  | Beverage, Food &
    Tobacco                 |  | L+10.00%
    (11.00%) |  | 1.0%  |  | 10/7/2021  |           |                                  | 125,000 |   |                  |   | 121,254   |                   |           |   | 103,125    | 
|FullBeauty
    Brands Holding                        |  |                 |  | High Tech Industries                         |  | L+9.00%
    (10.00%)  |  | 1.0%  |  | 10/13/2023 |           |                                  | 250,000 |   |                  |   | 217,950   |                   |           |   | 205,000    | 
|GK
    Holdings, Inc.                                |  |                 |  | Business Services                            |  | L+9.50%
    (10.50%)  |  | 1.0%  |  | 1/21/2022  |           |                                  | 125,000 |   |                  |   | 123,015   |                   |           |   | 123,750    | 
|Hostess
    Brands                                   |  |                 |  | Beverage, Food &
    Tobacco                 |  | L+7.50%
    (8.50%)   |  | 1.0%  |  | 8/3/2023   |           |                                  | 250,000 |   |                  |   | 249,409   |                   |           |   | 248,750    | 
|Oxbow
    Carbon LLC                                 |  |                 |  | Metals & Mining                              |  | L+7.00%
    (8.00%)   |  | 1.0%  |  | 1/19/2020  |           |                                  | 250,000 |   |                  |   | 235,524   |                   |           |   | 237,813    | 
|SCS
    Holdings I                                   |  |                 |  | High Tech Industries                         |  | L+9.50%
    (10.50%)  |  | 1.0%  |  | 10/13/2023 |           |                                  | 125,000 |   |                  |   | 121,663   |                   |           |   | 123,125    | 
|Total Senior Secured Loans—Second Lien               |  |                 |  |                                              |  |                       |  |       |  | $          | 1,125,000 |                                  |         | $ | 1,068,815        |   |           | $                 | 1,041,563 |  
|                                                     |  |                 |  |                                              |  |                       |  |       |  |            |           |                                  |         |   |                  |   |           |                   |           |   |            | 
|Subordinated Convertible Debt—5.62%                  |  |                 |  |                                              |  |                       |  |       |  |            |           |                                  |         |   |                  |   |           |                   |           |  
|Javlin
    Capital LLC Subordinated Convertible Note |  | (a)
    (e)     |  | Specialty Finance                            |  | 6.00%                 |  |       |  | 3/31/2020  |           |                                  | 600,099 |   |                  |   | 627,675   |                   |           |   | 627,675    | 
|Total
    Subordinated Convertible Debt              |  |                 |  |                                              |  |                       |  |       |  |            |           | $                                | 600,099 |   |                  | $ | 627,675   |                   |           | $ | 627,675    | 
|                                                     |  |                 |  |                                              |  |                       |  |       |  |            |           |                                  |         |   |                  |   |           |                   |           |   |            | 
|Equity/Other—13.82%                                  |  |                 |  |                                              |  |                       |  |       |  |            |           |                                  |         |   |                  |   |           |                   |           |   |            | 
|ACON
    IWP Investors I, L.L.C.                     |  | (a)             |  | Healthcare &
    Pharmaceuticals             |  |                       |  |       |  |            |           |                                  | 500,000 |   |                  |   | 500,000   |                   |           |   | 792,145    | 
|Javlin
    Capital LLC Class C-2 Preferred Units     |  | (a)
    (d) (e) |  | Specialty Finance                            |  |                       |  |       |  |            |           |                                  | 266,667 |   |                  |   | 750,000   |                   |           |   | 750,000    | 
|Total Equity/Other                                   |  |                 |  |                                              |  |                       |  |       |  |            |           |                                  | 714,286 |   |                  | $ | 1,250,000 |                   |           | $ | 1,542,145  | 
|TOTAL
    INVESTMENTS—64.95%                         |  |                 |  |                                              |  |                       |  |       |  |            |           |                                  |         |   |                  | $ | 6,969,304 |                   |           | $ | 7,248,774  | 
|OTHER ASSETS IN EXCESS OF LIABILITIES—35.05%         |  |                 |  |                                              |  |                       |  |       |  |            |           |                                  |         |   |                  |   |           | $                 | 3,911,213 |  
|NET ASSETS - 100.0%                                  |  |                 |  |                                              |  |                       |  |       |  |            |           |                                  |         |   |                  |   |           |                   |           | $ | 11,159,987 | 








| | (a) | Affiliated investment as defined by the 1940 Act, whereby the Company owns between 5% and 25% of the portfolio company’s
outstanding voting securities and the investments are not classified as controlled investments. Affiliated funds that are managed
by an affiliate of Triton Pacific Adviser, LLC also hold investments in this security. The aggregate fair value of non-controlled,
affiliated investments at June 30, 2016 represented 19.44% of the Company’s net assets. Fair value as of June 30, 2016 along
with transactions during the period ended June 30, 2016 in affiliated investments were as follows):
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                             |  |                                     |           |                                    |                             |   |        |                               |  |   |                                 | 
|-------------------------------------------- |  | ----------------------------------- | --------- | ---------------------------------- | --------------------------- | - | ------ | ----------------------------- |  | - | ------------------------------- | 
|                                             |  |                                     |           | Six
    months ended June 30, 2016 |                             |   |        |                               | 
|Non-controlled,
    Affiliated Investments   |  | Fair
    Value at December 31, 2015 |           |                                    | Gross
    Additions (Cost)* |   |        | Gross
    Reductions (Cost)** |  |   | Fair
    Value at June 30, 2016 | 
|ACON IWP Investors I, L.L.C.                 |  | $                                   | 738,266   |                                    |                             |   |        |                               |  | $ | —                               | 
|Javlin Capital, LLC, Convertible Note        |  |                                     | 609,219   |                                    |                             |   | 18,456 |                               |  |   | —                               | 
|Javlin Capital, LLC, C-2 Preferred
    Units |  |                                     | 750,000   |                                    |                             |   | —      |                               |  |   | —                               | 
|Total                                        |  | $                                   | 2,097,485 |                                    |                             | $ | 18,456 |                               |  | $ | —                               | 



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

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



| | (b) | Certain variable rate securities in the Company’s portfolio bear interest at a rate determined
by a publicly disclosed base rate spread. As of June 30, 2016, the three-month London Interbank Offered Rate, or LIBOR, was 0.64610%.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

| | (e) | The investment is not a qualifying asset under the Investment Company Act of 1940, as amended.
A business development company may not acquire any asset other than a qualifying asset, unless, at the time the acquisition is
made, qualifying assets represent at least 70% of the business development company’s total assets. As of June 30, 2016, 88.4%
of the Company’s total assets represented qualifying assets.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (f) | See Note 5 for a discussion of the tax cost of the portfolio.
| | --- | -------------------------------------------------------------



The accompanying notes are an integral part of these
statements.



7







TRITON PACIFIC INVESTMENT CORPORATION, INC.CONSOLIDATED SCHEDULE OF INVESTMENTSAS OF DECEMBER 31, 2015

|                                                     |  |                 |  |                                              |  |                       |  |       |  |            |           |                                  |           |   |                  |   |           |                   |           |   |           | 
|---------------------------------------------------- |  | --------------- |  | -------------------------------------------- |  | --------------------- |  | ----- |  | ---------- | --------- | -------------------------------- | --------- | - | ---------------- | - | --------- | ----------------- | --------- | - | --------- | 
|Portfolio
    Company                                |  | Footnotes       |  | Industry                                     |  | Rate(b)               |  | Floor |  | Maturity   |           | PrincipalAmount/ Numberof Shares |           |   | AmortizedCost(f) |   |           | Fair
    Value(c) |          
|Senior
Secured Loans—First Lien—32.46%               |  |                 |  |                                              |  |                       |  |       |  |            |           |                                  |           |   |                  |   |           |                   |           |   |           | 
|CareCentrix, Inc.                                    |  |                 |  | Healthcare &
    Pharmaceuticals             |  | L+5.00%
    (6.00%)   |  | 1.0%  |  | 7/8/2021   |           | $                                | 199,500   |   |                  | $ | 194,849   |                   |           | $ | 194,346   | 
|Curo Health Services
    Holdings, Inc.              |  |                 |  | Healthcare &
    Pharmaceuticals             |  | L+5.50%
    (6.50%)   |  | 1.0%  |  | 2/7/2022   |           |                                  | 124,063   |   |                  |   | 122,977   |                   |           |   | 123,054   | 
|FHC Health Systems,
    Inc.                         |  |                 |  | Healthcare &
    Pharmaceuticals             |  | L+4.00%
    (5.00%)   |  | 1.0%  |  | 12/23/2021 |           |                                  | 124,062   |   |                  |   | 123,038   |                   |           |   | 118,479   | 
|Flavors Holdings,
    Inc. Tranche B                 |  |                 |  | Beverage, Food &
    Tobacco                 |  | L+5.75%
    (6.75%)   |  | 1.0%  |  | 4/7/2020   |           |                                  | 117,188   |   |                  |   | 113,324   |                   |           |   | 104,297   | 
|GK Holdings, Inc.                                    |  |                 |  | Business Services                            |  | L+5.50%
    (6.50%)   |  | 1.0%  |  | 1/20/2021  |           |                                  | 123,750   |   |                  |   | 122,667   |                   |           |   | 122,513   | 
|Global Healthcare
    Exchange                       |  |                 |  | Healthcare &
    Pharmaceuticals             |  | L+4.50%
    (5.50%)   |  | 1.0%  |  | 8/15/2022  |           |                                  | 149,625   |   |                  |   | 149,155   |                   |           |   | 148,784   | 
|Jackson Hewitt                                       |  |                 |  | Business Services                            |  | L+7.00%
    (8.00%)   |  | 1.0%  |  | 7/30/2020  |           |                                  | 200,000   |   |                  |   | 196,294   |                   |           |   | 192,500   | 
|Jeld-Wen, Inc.                                       |  |                 |  | Wholesale Trade-Durable
    Goods            |  | L+4.25%
    (5.25%)   |  | 1.0%  |  | 10/15/2021 |           |                                  | 123,750   |   |                  |   | 122,730   |                   |           |   | 122,874   | 
|Mister Car Wash,
    Inc.                            |  |                 |  | Automotive Repair,
    Services, and Parking |  | L+4.00%
    (5.00%)   |  | 1.0%  |  | 8/20/2021  |           |                                  | 123,125   |   |                  |   | 122,105   |                   |           |   | 122,458   | 
|Natel Engineering                                    |  |                 |  | High Tech Industries                         |  | L+5.75%
    (6.75%)   |  | 1.0%  |  | 4/10/2020  |           |                                  | 121,875   |   |                  |   | 120,758   |                   |           |   | 120,656   | 
|Omnitracs, LLC                                       |  |                 |  | Transportation: Cargo                        |  | L+3.75%
    (4.75%)   |  | 1.0%  |  | 11/25/2020 |           |                                  | 123,428   |   |                  |   | 122,688   |                   |           |   | 121,371   | 
|Paradigm Outcomes                                    |  |                 |  | Healthcare &
    Pharmaceuticals             |  | L+5.00%
    (6.00%)   |  | 1.0%  |  | 6/2/2022   |           |                                  | 124,375   |   |                  |   | 122,605   |                   |           |   | 122,095   | 
|Ranpak Corp.                                         |  |                 |  | Paper and Allied
    Products                |  | L+3.25%
    (4.25%)   |  | 1.0%  |  | 10/1/2021  |           |                                  | 119,972   |   |                  |   | 119,718   |                   |           |   | 118,972   | 
|SCS Holdings I                                       |  |                 |  | High Tech Industries                         |  | L+5.00%
    (6.00%)   |  | 1.0%  |  | 10/31/2022 |           |                                  | 123,596   |   |                  |   | 121,207   |                   |           |   | 121,896   | 
|SITEL Worldwide                                      |  |                 |  | Business Services                            |  | L+5.50%
    (6.50%)   |  | 1.0%  |  | 9/20/2021  |           |                                  | 199,500   |   |                  |   | 197,762   |                   |           |   | 196,034   | 
|TIBCO Software                                       |  |                 |  | High Tech Industries                         |  | L+5.50%
    (6.50%)   |  | 1.0%  |  | 12/4/2020  |           |                                  | 124,063   |   |                  |   | 121,954   |                   |           |   | 113,052   | 
|Verdesian Life Sciences
    LLC                      |  |                 |  | Wholesale Trade-Nondurable
    Goods         |  | L+5.00%
    (6.00%)   |  | 1.0%  |  | 7/1/2020   |           |                                  | 234,193   |   |                  |   | 232,258   |                   |           |   | 225,996   | 
|Total
    Senior Secured Loans—First Lien            |  |                 |  |                                              |  |                       |  |       |  |            |           | $                                | 2,456,065 |   |                  | $ | 2,426,089 |                   |           | $ | 2,389,377 | 
|                                                     |  |                 |  |                                              |  |                       |  |       |  |            |           |                                  |           |   |                  |   |           |                   |           |   |           | 
|Senior Secured Loans—Second Lien—14.15%              |  |                 |  |                                              |  |                       |  |       |  |            |           |                                  |           |   |                  |   |           |                   |           |  
|Flavors Holdings,
    Inc.                           |  |                 |  | Beverage, Food &
    Tobacco                 |  | L+10.00%
    (11.00%) |  | 1.0%  |  | 10/7/2021  |           |                                  | 125,000   |   |                  |   | 120,893   |                   |           |   | 118,125   | 
|FullBeauty Brands
    Holding                        |  |                 |  | High Tech Industries                         |  | L+9.00%
    (10.00%)  |  | 1.0%  |  | 10/13/2023 |           |                                  | 250,000   |   |                  |   | 217,634   |                   |           |   | 220,416   | 
|GK Holdings, Inc.                                    |  |                 |  | Business Services                            |  | L+9.50%
    (10.50%)  |  | 1.0%  |  | 1/21/2022  |           |                                  | 125,000   |   |                  |   | 122,834   |                   |           |   | 122,500   | 
|Hostess Brands                                       |  |                 |  | Beverage, Food &
    Tobacco                 |  | L+7.50%
    (8.50%)   |  | 1.0%  |  | 8/3/2023   |           |                                  | 250,000   |   |                  |   | 249,048   |                   |           |   | 248,438   | 
|Oxbow Carbon LLC                                     |  |                 |  | Metals & Mining                              |  | L+7.00
    (8.00%)    |  | 1.0%  |  | 1/19/2020  |           |                                  | 250,000   |   |                  |   | 233,925   |                   |           |   | 210,521   | 
|SCS Holdings I                                       |  |                 |  | High Tech Industries                         |  | L+9.50%
    (10.50%)  |  | 1.0%  |  | 10/13/2023 |           |                                  | 125,000   |   |                  |   | 121,347   |                   |           |   | 121,875   | 
|Total Senior Secured Loans—Second Lien               |  |                 |  |                                              |  |                       |  |       |  | $          | 1,125,000 |                                  |           | $ | 1,065,681        |   |           | $                 | 1,041,875 |  
|                                                     |  |                 |  |                                              |  |                       |  |       |  |            |           |                                  |           |   |                  |   |           |                   |           |   |           | 
|Subordinated
    Convertible Debt—8.27%              |  |                 |  |                                              |  |                       |  |       |  |            |           |                                  |           |   |                  |   |           |                   |           |   |           | 
|Javlin Capital LLC
    Subordinated Convertible Note |  | (a)
    (e)     |  | Specialty Finance                            |  | 6.00%                 |  |       |  | 3/31/2020  |           |                                  | 609,219   |   |                  |   | 609,219   |                   |           |   | 609,219   | 
|Total
    Subordinated Convertible Debt              |  |                 |  |                                              |  |                       |  |       |  |            |           | $                                | 609,219   |   |                  | $ | 609,219   |                   |           | $ | 609,219   | 
|                                                     |  |                 |  |                                              |  |                       |  |       |  |            |           |                                  |           |   |                  |   |           |                   |           |   |           | 
|Equity/Other—20.22%                                  |  |                 |  |                                              |  |                       |  |       |  |            |           |                                  |           |   |                  |   |           |                   |           |   |           | 
|ACON IWP Investors
    I, L.L.C.                     |  | (a)             |  | Healthcare &
    Pharmaceuticals             |  |                       |  |       |  |            |           |                                  | 500,000   |   |                  |   | 500,000   |                   |           |   | 738,266   | 
|Javlin Capital LLC
    Class C-2 Preferred Units     |  | (a)
    (d) (e) |  | Specialty Finance                            |  |                       |  |       |  |            |           |                                  | 214,286   |   |                  |   | 750,000   |                   |           |   | 750,000   | 
|Total Equity/Other                                   |  |                 |  |                                              |  |                       |  |       |  |            |           |                                  | 714,286   |   |                  | $ | 1,250,000 |                   |           | $ | 1,488,266 | 
|                                                     |  |                 |  |                                              |  |                       |  |       |  |            |           |                                  |           |   |                  |   |           |                   |           |   |           | 
|TOTAL
    INVESTMENTS—75.10%                         |  |                 |  |                                              |  |                       |  |       |  |            |           |                                  |           |   |                  | $ | 5,350,989 |                   |           | $ | 5,528,737 | 
|OTHER ASSETS IN EXCESS OF LIABILITIES—24.90%         |  |                 |  |                                              |  |                       |  |       |  |            |           |                                  |           |   |                  |   |           | $                 | 1,797,916 |  
|NET
    ASSETS - 100.00%                             |  |                 |  |                                              |  |                       |  |       |  |            |           |                                  |           |   |                  |   |           |                   |           | $ | 7,326,653 | 








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

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



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

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



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

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

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

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

| | (f) | See Note 5 for a discussion of the tax cost of the portfolio.
| | --- | -------------------------------------------------------------



The accompanying notes are an integral part of these statements.



8







Triton Pacific Investment Corporation, Inc.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



NOTE 1 – DESCRIPTION OF BUSINESS



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



The Company invests either alone or together
with other private equity sponsors. The Company is an externally managed, non-diversified closed-end investment company that has
elected to be treated as a business development company, or BDC, under the Investment Company Act of 1940, or the Company Act.
As a BDC, the Company is required to comply with certain regulatory requirements. The Company has elected to be treated for U.S.
federal income tax purposes, and intends to annually qualify as a regulated investment company, or RIC, under Subchapter M of the
Internal Revenue code of 1986, as amended, or the Code. As of June 30, 2016, the Company has one wholly-owned subsidiary through
which it holds interest in a non-controlled, affiliated portfolio company. The consolidated financial statements include both the
Company’s accounts and the accounts of its wholly-owned subsidiary as of June 30, 2016. All significant intercompany transactions
have been eliminated in consolidation. The Company’s consolidated subsidiary is subject to U.S. federal and state income
taxes. No taxes were accrued or paid by the wholly-owned subsidiary for the three and six months ended June 30, 2016.



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



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



NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



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





9







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



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



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

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

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



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



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



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



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

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



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





10







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



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



Paid-In-Kind Interest.The company has certain investments
in its portfolio that contain a payment-in-kind (“PIK”) interest provision, which represents contractual interest or
dividends that are added to the principal balance and recorded as income. For the three and six months ended June 30, 2016, interest
income included $9,296 and $18,454 of PIK interest, respectively. There was no PIK interest for the three and six months ended
June 30, 2015. The Company stops accruing PIK interest when it is determined that PIK interest is no longer collectible. To maintain
RIC tax treatment, and to avoid corporate tax, substantially all of this income must be paid out to the stockholders in the form
of distributions, even though the Company has not yet collected the cash.



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



Capital Gains Incentive Fees. The Company has entered
into an investment advisory agreement with the Adviser dated as of July 27, 2012. Pursuant to the terms of the investment advisory
agreement, the Incentive Fee shall be determined and payable in arrears as of the end of each quarter, upon liquidation of the
Company or upon termination of this Agreement, as of the termination date, and shall equal 20.0% of the Company’s realized
capital gains, if any, on a cumulative basis from inception through the end of each quarter, computed net of all realized capital
losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid Incentive Fees.
The fee for the three months ended June 30, 2016 was $14,910, of which $14,910 was for Incentive Fees calculated on unrealized
gains. The fee for the six months ended June 30, 2016 was $20,344, of which $20,344 was for Incentive Fees calculated on unrealized
gains.



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





11









Offering Costs.The Company will incur certain expenses
in connection with registering to sell shares of its common stock in connection with the Offering. These costs principally relate
to professional and filing fees. Upon recognition or repayment to the Adviser of these costs, they will be capitalized as deferred
offering expenses and then subsequently expensed over a 12-month period. The Adviser may reimburse the Company for all or part
of these amounts pursuant to the Expense Support and Conditional Reimbursement Agreement (“Expense Reimbursement Agreement”)
discussed below. As of June 30, 2016 and December 31, 2015, $2,373,765 and $1,854,993, respectively, of offering costs have been
reclassified and included as part of the Expense Reimbursement Agreement and accordingly included in Reimbursement due from the
Adviser.



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

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



GAAP requires management to evaluate tax positions taken by the
Company and recognize a tax liability if the Company has taken an uncertain position that more likely than not would not be sustained
upon examination by the Internal Revenue Service or other tax authorities. Management has analyzed the tax positions taken by the
Company, and has concluded that as of June 30, 2016 and June 30, 2015, there are no uncertain positions taken or expected to be
taken that would require recognition of a liability or disclosure in the financial statements. The Company is subject to routine
audits by the Internal Revenue Service or other tax authorities, generally for three years after the tax returns are filed; however,
there are currently no audits for any tax periods in progress.



NOTE 3 – SHARE TRANSACTIONS



Below is a summary of transactions with respect to shares of the
Company’s common stock during the six months ended June 30, 2016 and 2015:

|                                                |  |                               |            |  |        |   |           |        |  |  |            |  |  |   |           |  
|----------------------------------------------- |  | ----------------------------- | ---------- |  | ------ | - | --------- | ------ |  |  | ---------- |  |  | - | --------- | -
|                                                |  | Six
    months ended June 30, |           
|                                                |  | 2016                          |            |  | 2015  
|                                                |  | Shares                        |            |  | Amount |   |           | Shares |  |  | Amount    
|Gross proceeds from Offering                    |  |                               | 268,287.21 |  |        | $ | 3,995,038 |        |  |  | 103,106.35 |  |  | $ | 1,519,289 |  
|Reinvestment of Distributions                   |  |                               | 7,179.98   |  |        |   | 99,893    |        |  |  | 2,990.90   |  |  |   | 42,620    |  
|Commissions and Dealer Manager Fees             |  |                               | —          |  |        |   | (334,040  | )      |  |  | —          |  |  |   | (127,352  | )
|Net Proceeds to Company from Share Transactions |  |                               | 275,467.19 |  |        | $ | 3,760,891 |        |  |  | 106,097.25 |  |  | $ | 1,434,557 |  



12











Status of Continuous Public Offering



During the six months ended June 30, 2016 and 2015, the Company
sold 268,287.21 and 103,106.35 shares of common stock, respectively, for gross proceeds of approximately $3,995,038 and $1,519,289,
at an average price per share of $14.87 and $14.72, respectively. The increase in Capital in excess of par during the six months
ended June 30, 2016 and 2015 include reinvested stockholder distributions of $99,893 and $42,620, respectively, for which the Company
issued 7,179.98 and 2,990.90 shares of common stock, respectively.



The proceeds from the issuance of common stock as presented on the
accompanying statements of changes in net assets and statements of cash flows are presented net of selling commissions and dealer
manager fees of $334,040 and $127,352 for the six months ended June 30, 2016 and 2015, respectively.



Share Repurchase Program

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



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



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



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



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



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



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



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



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



On July 15, 2016, the Company repurchased 8,482.60 shares of common
stock (representing 100% of the shares of common stock tendered for repurchase) at $13.80 per share for aggregate consideration
totaling $117,060.



NOTE 4 – RELATED PARTY TRANSACTIONS AND ARRANGEMENTS



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



13







In connection with the Offering, the Company has incurred registration,
organization, operating and offering costs. Such costs have been advanced by the Adviser. As discussed below, the Company has entered
into an Expense Reimbursement Agreement with its Adviser. For the period from inception through June 30, 2016, certain registration,
organization, operating and offering costs have been accounted for under the Expense Reimbursement Agreement and accordingly included
in Reimbursement due from the Adviser on the statements of financial position.



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





|                                     |  | June 30, 2016 |            |   | December 31, 2015 |  
|------------------------------------ |  | ------------- | ---------- | - | ----------------- | -
|Operating Expenses                   |  | $             | 1,590,524  |   |                   | $
|Offering Costs                       |  |               | 2,373,765  |   |                   |  
|Due to related party offset          |  |               | (3,369,532 | ) |                   |  
|Reimbursements received from Adviser |  |               | (342,715   | ) |                   |  
|Other amounts due to affiliates      |  |               | 448        |   |                   |  
|Total Reimbursement due from Adviser |  | $             | 252,490    |   |                   | $







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



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



The Company compensates the Adviser for investment services per
an Investment Adviser Agreement (“Agreement”), approved by the Company’s directors, calculated as the sum of
(1) base management fee, calculated quarterly at 0.5% of the Company’s average gross assets payable quarterly in arrears,
and (2) an incentive fee upon capital gains determined and payable in arrears as of the end of each quarter or upon liquidation
of the Company or upon termination of Agreement at 20% of Company’s realized capital gains, as defined. The Agreement expires
July 2017 and may continue automatically for successive annual periods, as approved by the Company. All management fees earned
by the Adviser prior to January 1, 2014 were waived by the Adviser.



As a BDC, we will be subject to certain regulatory restrictions
in making our investments. For example, we generally will not be permitted to co-invest alongside our Adviser and its affiliates
unless we obtain an exemptive order from the SEC or the transaction is otherwise permitted under existing regulatory guidance,
such as syndicated transactions where price is the only negotiated term, and approval from our independent directors. As of June
30, 2016, the Company has two affiliate investments in ACON IWP Investors I, L.L.C and Javlin Capital, LLC (held by TPJ Holdings,
Inc., a wholly-owned subsidiary.)



The Company compensates TFA for administration services per an Administration
Agreement for costs and expenses incurred with the administration and operation of the Company. Such agreement expires July 2017
and may continue automatically for successive annual periods, as approved by the Company. These fees have been reimbursed from
the Adviser pursuant to the Expense Reimbursement Agreement discussed below.





14







The following table describes the fees and expenses accrued under
the investment advisory and administration agreement and the dealer manager agreement during the three and six months ended June
30, 2016 and 2015:

|                               |  |                              |  |                                     |  |                                 |        |  |                               |   |        |      |  |   |         | 
|------------------------------ |  | ---------------------------- |  | ----------------------------------- |  | ------------------------------- | ------ |  | ----------------------------- | - | ------ | ---- |  | - | ------- | 
|                               |  |                              |  |                                     |  | Three
    months ended June 30, |        |  | Six
    months ended June 30, |  
|Related Party                  |  | Source Agreement             |  | Description                         |  | 2016                            |        |  | 2015                          |   |        | 2016 |  |   | 2015    | 
|Triton Pacific Adviser, LLC    |  | Investment Adviser Agreement |  | Base Management Fees                |  | $                               | 53,179 |  |                               | $ | 20,933 |      |  | $ | 96,333  | 
|Triton Pacific Adviser, LLC    |  | Investment Adviser Agreement |  | Capital Gains Incentive
    Fees(1) |  | $                               | 14,910 |  |                               | $ | (521   | )    |  | $ | 20,344  | 
|TFA Associates, LLC            |  | Administration Agreement     |  | Administrative Services Expenses    |  | $                               | 81,170 |  |                               | $ | 62,085 |      |  | $ | 163,492 | 
|Triton Pacific Securities, LLC |  | Dealer Manager Agreement     |  | Dealer Manager
    Fees(2)          |  | $                               | 38,616 |  |                               | $ | 29,119 |      |  | $ | 86,457  | 










| | (1) | During the six months ended June 30, 2016 and 2015, the Company earned capital gains incentive fees of $20,344 and $5,443,
respectively, based on the performance of its portfolio, of which $20,344 and $3,979, respectively, was based on unrealized gains,
and $0 and $756, respectively, was based on realized gains. No capital gains incentive fees are actually payable by the Company
with respect to unrealized gains unless and until those gains are actually realized. See Note 2 for a discussion of the methodology
employed by the Company in calculating the capital gains incentive fees.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | During the six months ended June 30, 2016 and 2015, the Company paid the Dealer Manager $334,040 and $127,352, respectively,
in sales commissions and dealer fees. $86,457 and $33,359 were retained by TPS, respectively, and the remainder re-allowed to third
party participating broker dealers.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Director’s Fees



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





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



No Director’s fees were accrued for the three and six months
ended June 30, 2016 and 2015.



Expense Reimbursement Agreement



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



15







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

|Quarter
    Ended      |  | Amount
    of Expense Payment Obligation |  | Amount
    of Offering Cost Payment Obligation |  | Operating
    Expense 
Ratio as of the 
Date Expense 
Payment Obligation Incurred(1) |  | Annualized
    Distribution Rate as of the Date Expense Payment Obligation Incurred(2) |  | Eligible
    for Reimbursement Through
|---------------------- |  | ---------------------------------------- |  | ---------------------------------------------- |  | ------------------------------------------------------------------------------------ |  | -------------------------------------------------------------------------------------- |  | --------------------------------------
|September
    30, 2012 |  | $21,826                                  |  |                                                |  | 432.69%                                                                              |  | —                                                                                      |  | September
    30, 2015                
|December
    31, 2012  |  | $26,111                                  |  |                                                |  | 531.09%                                                                              |  | —                                                                                      |  | December
    31, 2015                 
|March
    31, 2013     |  | $30,819                                  |  |                                                |  | N/A                                                                                  |  | —                                                                                      |  | March
    31, 2016                    
|June
    30, 2013      |  | $59,062                                  |  |                                                |  | N/A                                                                                  |  | —                                                                                      |  | June
    30, 2016                     
|September
    30, 2013 |  | $65,161                                  |  |                                                |  | N/A                                                                                  |  | —                                                                                      |  | September
    30, 2016                
|December
    31, 2013  |  | $91,378                                  |  |                                                |  | 455.09%                                                                              |  | —                                                                                      |  | December
    31, 2016                 
|March
    31, 2014     |  | $68,293                                  |  |                                                |  | 148.96%                                                                              |  | —                                                                                      |  | March
    31, 2017                    
|June
    30, 2014      |  | $70,027                                  |  | $898,518                                       |  | 23.17%                                                                               |  | —                                                                                      |  | June
    30, 2017                     
|September
    30, 2014 |  | $92,143                                  |  | $71,060                                        |  | 20.39%                                                                               |  | —                                                                                      |  | September
    30, 2017                
|December
    31, 2014  |  | $115,777                                 |  | $90,860                                        |  | 11.15%                                                                               |  | —                                                                                      |  | December
    31, 2017                 
|March
    31, 2015     |  | $134,301                                 |  | $106,217                                       |  | 13.75%                                                                               |  | 2.01%                                                                                  |  | March
    31, 2018                    
|June
    30, 2015      |  | $166,549                                 |  | $167,113                                       |  | 14.10%                                                                               |  | 3.20%                                                                                  |  | June
    30, 2018                     
|September
    30, 2015 |  | $147,747                                 |  | $240,848                                       |  | 10.45%                                                                               |  | 3.20%                                                                                  |  | September
    30, 2018                
|December
    31, 2015  |  | $136,401                                 |  | $280,376                                       |  | 7.41%                                                                                |  | 3.60%                                                                                  |  | December
    31, 2018                 
|March
    31, 2016     |  | $157,996                                 |  | $232,895                                       |  | 6.00%                                                                                |  | 3.52%                                                                                  |  | March
    31, 2019                    
|June
    30, 2016      |  | $206,933                                 |  | $285,878                                       |  | 4.95%                                                                                |  | 3.52%                                                                                  |  | June
    30, 2019                     



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



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

16







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



The Expense Reimbursement Agreement is, by
its terms, effective retroactively to the Company’s inception date of April 29, 2011 for Operating Expenses and from the
break of escrow on June 25, 2014 for Offering Expenses. As of June 30, 2016, $3,964,289 has been recorded as Reimbursement due
from the Adviser pursuant to the Expense Reimbursement Agreement. Of this, $3,369,352, representing an amount due to the Adviser,
was netted against the Reimbursement due from Adviser and $342,715 was paid to the Company by the Adviser. Of these Operating Expenses
in the table above, $137,818 has exceeded the three year period for repayment and will not be repayable by the Company.



NOTE 5 – DISTRIBUTIONS



The following table reflects the cash distributions per share that
the Company declared and paid on its common stock during the six months ended June 30, 2016 and 2015:

|                                                                  |  |  |              |         |  |        |   |        | 
|----------------------------------------------------------------- |  |  | ------------ | ------- |  | ------ | - | ------ | 
|                                                                  |  |  | Distribution |        
|For
                                         the Six Months Ended |  |  | Per Share    |         |  | Amount |  
|Fiscal 2016                                                       |  |  |              |         |  |        |   |        | 
|Janary 22, 2016                                                   |  |  | $            | 0.045   |  |        | $ | 25,244 | 
|February 16, 2016                                                 |  |  | $            | 0.045   |  |        | $ | 26,477 | 
|March 23, 2016                                                    |  |  | $            | 0.045   |  |        | $ | 30,271 | 
|April 21, 2016                                                    |  |  | $            | 0.045   |  |        | $ | 32,832 | 
|May 19, 2016                                                      |  |  | $            | 0.045   |  |        | $ | 34,950 | 
|June 23, 2016                                                     |  |  | $            | 0.045   |  |        | $ | 36,206 | 
|Fiscal 2015                                                       |  |  |              |         |  |        |   |        | 
|January 20, 2015                                                  |  |  | $            | 0.07545 |  |        | $ | 17,314 | 
|April 13, 2015                                                    |  |  | $            | 0.11600 |  |        | $ | 28,334 | 
|April 29, 2015                                                    |  |  | $            | 0.04000 |  |        | $ | 9,880  | 
|May 29, 2015                                                      |  |  | $            | 0.04000 |  |        | $ | 12,634 | 
|June 29, 2015                                                     |  |  | $            | 0.04000 |  |        | $ | 13,295 | 





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



On July 20, 2016, the Company authorized and declared a cash distribution
of $0.04 per share for the month of July 2016, to the shareholders of record as of July 21, 2016. The timing and amount of any
future distributions to stockholders are subject to applicable legal restrictions and the sole discretion of the Company’s
board of directors.

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

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



17







The following table reflects the sources of the cash distributions
on a tax basis that the Company paid on its common stock during the six months ended June 30, 2016 and 2015:



|                                                          |  |                           |         |  |            |  |     |                      |  |   |            |  |  |  |     |  
|--------------------------------------------------------- |  | ------------------------- | ------- |  | ---------- |  | --- | -------------------- |  | - | ---------- |  |  |  | --- | -
|                                                          |  | Six months ended June 30, |        
|                                                          |  | 2016                      |         |  | 2015       | 
|Source of Distribution                                    |  | Distribution 
Amount      |         |  | Percentage |  |     | Distribution 
Amount |  |   | Percentage | 
|Offering proceeds                                         |  | $                         | —       |  |            |  | —   |                      |  | $ | —          |  |  |  | —   |  
|Borrowings                                                |  |                           | —       |  |            |  | —   |                      |  |   | —          |  |  |  | —   |  
|Net investment income(1)                                  |  |                           | —       |  |            |  | —   |                      |  |   | —          |  |  |  | —   |  
|Short-term capital gains proceeds from the sale of assets |  |                           | —       |  |            |  | —   |                      |  |   | 4,119      |  |  |  | 6   | %
|Long-term capital gains proceeds from the sale of assets  |  |                           | —       |  |            |  | —   |                      |  |   | —          |  |  |  | —   |  
|Expense reimbursement from sponsor                        |  |                           | 185,980 |  |            |  | 100 | %                    |  |   | 77,338     |  |  |  | 94  | %
|Total                                                     |  | $                         | 185,980 |  |            |  | 100 | %                    |  | $ | 81,457     |  |  |  | 100 | %












| | (1) | During the six months ended June 30, 2016 and 2015, 85.4%
and 96.6%, respectively, of the Company’s gross investment income was attributable to cash income earned, and 14.6% and
3.4%, resepctively was attributable to non-cash accretion of discount.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





The Company’s net investment income on a tax basis for the
six months ended June 30, 2016 and 2015 was $178,212 and $65,107, respectively. As of June 30, 2016 and 2015, the Company had $1,415
and $1,025, respectively, of undistributed net investment income and realized gains on a tax basis.



The primary difference between the Company’s GAAP-basis net
investment income and its tax-basis net investment income is due to the reversal of the required accrual for GAAP purposes of incentive
fees on unrealized gains even though no such incentive fees on unrealized gains are payable by the Company for the six months ended
June 30, 2016 and 2015.

The following table sets forth reconciliation between GAAP basis
net investment income and tax basis net investment income for the six months ended June 30, 2016 and 2015:





|                                                          |  |                               |         |  |      |   |        | 
|--------------------------------------------------------- |  | ----------------------------- | ------- |  | ---- | - | ------ | 
|                                                          |  | Six
    months ended June 30, |        
|                                                          |  | 2016                          |         |  | 2015 |  
|GAAP basis net investment
    income                      |  | $                             | 157,868 |  |      | $ | 61,128 | 
|Reversal of incentive
    fee accrual on unrealized gains |  |                               | 20,344  |  |      |   | 3,979  | 
|Other book-tax differences                                |  |                               | —       |  |      |   | —      | 
|Tax-basis net investment
    income                       |  | $                             | 178,212 |  |      | $ | 65,107 | 



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

As of June 30, 2016 and 2015, the components of accumulated
earnings on a tax basis were as follows:

|                                                                        |  |                           |         |  |      |   |        | 
|----------------------------------------------------------------------- |  | ------------------------- | ------- |  | ---- | - | ------ | 
|                                                                        |  | Six months ended
June 30, |        
|                                                                        |  | 2016                      |         |  | 2015 |  
|Distributable ordinary income (income and short-term
    capital gains) |  | $                         | 1,416   |  |      | $ | 5,080  | 
|Distributable realized gains (long-term capital gains)                  |  |                           | 1,025   |  |      |   | —      | 
|Net unrealized appreciation (depreciation) on investments               |  |                           | 282,608 |  |      |   | 20,685 | 
|                                                                        |  | $                         | 285,049 |  |      | $ | 25,765 | 



18







The $282,608 of net appreciation as of June 30, 2016 includes gross appreciation over amortized tax cost
of $348,950 and gross depreciation under amortized tax cost of $66,342. The $25,765 of net appreciation as of June 30, 2015 is
entirely due to gross appreciation over amortized tax cost.



The aggregate cost of the Company’s
investments for U.S. federal income tax purposes totaled $6,966,166 and $3,079,851 as of June 30, 2016 and 2015, respectively.
The aggregate net unrealized appreciation on investments on a tax basis was $282,608 and $20,685 as of June 30, 2016 and 2015,
respectively.

NOTE 6 – INVESTMENT PORTFOLIO

The following table summarizes the composition of the Company’s
investment portfolio at amortized cost and fair value as of June 30, 2016 and December 31, 2015:

|                                 |  |                                                |                                                                         |  |                                  |   |                                                                   |  |  |  |                                                                                 |   |  |   |                                                                         |  |  |  
|-------------------------------- |  | ---------------------------------------------- | ----------------------------------------------------------------------- |  | -------------------------------- | - | ----------------------------------------------------------------- |  |  |  | ------------------------------------------------------------------------------- | - |  | - | ----------------------------------------------------------------------- |  |  | -
|                                 |  | Six
    months ended June 30, 2016 (Unaudited) |                                                                         |  | Year
    Ended December 31, 2015 |  
|                                 |  |                                                | Investments
                                         atAmortizedCost(1) |  |                                  |   | Investments
                                         atFair Value |  |  |  | Fair
                                         ValuePercentage ofTotal Portfolio |   |  |   | Investments
                                         atAmortizedCost(1) |  |  |  
|Senior Secured Loans—First Lien  |  | $                                              | 4,022,814                                                               |  |                                  | $ | 4,037,391                                                         |  |  |  | 56                                                                              | % |  | $ | 2,426,089                                                               |  |  | $
|Senior Secured Loans—Second Lien |  |                                                | 1,068,815                                                               |  |                                  |   | 1,041,563                                                         |  |  |  | 14                                                                              | % |  |   | 1,065,681                                                               |  |  |  
|Subordinated Debt                |  |                                                | 627,675                                                                 |  |                                  |   | 627,675                                                           |  |  |  | 9                                                                               | % |  |   | 609,219                                                                 |  |  |  
|Equity/Other                     |  |                                                | 1,250,000                                                               |  |                                  |   | 1,542,145                                                         |  |  |  | 21                                                                              | % |  |   | 1,250,000                                                               |  |  |  
|Total                            |  | $                                              | 6,969,304                                                               |  |                                  | $ | 7,248,774                                                         |  |  |  | 100                                                                             | % |  | $ | 5,350,989                                                               |  |  | $
|                                 |  |                                                |                                                                         |  |                                  |   |                                                                   |  |  |  |                                                                                 |   |  |   |                                                                         |  |  |  



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



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 June 30, 2016 and December
31, 2015:

|                                         |  |                               |           |  |                              |  |       |                 |  |   |                              | 
|---------------------------------------- |  | ----------------------------- | --------- |  | ---------------------------- |  | ----- | --------------- |  | - | ---------------------------- | 
|                                         |  | June
    30, 2016 (Unaudited) |           |  | December
    31, 2015        | 
|Industry Classification                  |  | Fair
     Value               |           |  | Percentage of
     Portfolio |  |       | Fair
     Value |  |   | Percentage of
     Portfolio | 
|Automotive Repair, Services, and Parking |  | $                             | 122,347   |  |                              |  | 1.7   | %               |  | $ | 122,458                      | 
|Beverage, Food & Tobacco                 |  |                               | 453,961   |  |                              |  | 6.3   | %               |  |   | 470,860                      | 
|Business Services                        |  |                               | 1,571,874 |  |                              |  | 21.5  | %               |  |   | 633,547                      | 
|Consumer Services                        |  |                               | 599,688   |  |                              |  | 8.3   | %               |  |   | —                            | 
|Healthcare & Pharmaceuticals             |  |                               | 1,499,255 |  |                              |  | 20.7  | %               |  |   | 1,445,024                    | 
|High Tech Industries                     |  |                               | 932,841   |  |                              |  | 12.9  | %               |  |   | 697,895                      | 
|Metals & Mining                          |  |                               | 237,813   |  |                              |  | 3.3   | %               |  |   | 210,521                      | 
|Paper and Allied Products                |  |                               | 113,980   |  |                              |  | 1.6   | %               |  |   | 118,972                      | 
|Specialty Finance                        |  |                               | 1,377,675 |  |                              |  | 19.0  | %               |  |   | 1,359,219                    | 
|Transportation: Cargo                    |  |                               | —         |  |                              |  | 0.0   | %               |  |   | 121,371                      | 
|Wholesale Trade-Durable Goods            |  |                               | 123,433   |  |                              |  | 1.7   | %               |  |   | 122,874                      | 
|Wholesale Trade-Nondurable Goods         |  |                               | 215,907   |  |                              |  | 3.0   | %               |  |   | 225,996                      | 
|                                         |  |                               |           |  |                              |  |       |                 |  |   |                              | 
|Total                                    |  | $                             | 7,248,774 |  |                              |  | 100.0 | %               |  | $ | 5,528,737                    | 





NOTE 7 – FAIR VALUE OF FINANCIAL INSTRUMENTS



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





19









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



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

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

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

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

As of June 30, 2016 and December 31, 2015, the Company’s
investments were categorized as follows in the fair value hierarchy):

|                                            |  |                          |           |  |                  |   |           | 
|------------------------------------------- |  | ------------------------ | --------- |  | ---------------- | - | --------- | 
|Valuation Inputs                            |  | June 30, 2016(Unaudited) |           |  | December 31,2015 |  
|Level 1—Price quotations in active markets  |  | $                        | —         |  |                  | $ | —         | 
|Level 2—Significant other observable inputs |  |                          | —         |  |                  |   | —         | 
|Level 3—Significant unobservable inputs     |  |                          | 7,248,774 |  |                  |   | 5,528,737 | 
|Total                                       |  | $                        | 7,248,774 |  |                  | $ | 5,528,737 | 



The Company’s investments as of June 30, 2016 consisted of
debt securities that are traded on a private over-the-counter market for institutional investors, a subordinated convertible note
and two equity investments. The Company valued its debt investments by using the midpoint of the prevailing bid and ask prices
from dealers on the date of the relevant period end, which were provided by independent third-party pricing services and screened
for validity by such services. The determination of fair market value for the equity positions were determined by considering,
among other factors, various income scenarios and multiples of earnings before interest, taxes, depreciation and amortization,
or EBITDA, cash flows, net income, revenues, waterfall and liquidation priority and market comparables, book value multiples,
economic profits and portfolio multiples.

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



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





20









The following is a reconciliation for the six months ended June
30, 2016 and year ended December 31, 2015 of investments for which significant unobservable inputs (Level 3) were used in determining
fair value:





|                                                                                                                                                                                                       |  |                                        |           |   |                                  |   |           |                             |  |   |              |  |  |       |           |  |  |   |           |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------------------------------- | --------- | - | -------------------------------- | - | --------- | --------------------------- |  | - | ------------ |  |  | ----- | --------- |  |  | - | --------- | -
|                                                                                                                                                                                                       |  | For the six months ended June 30, 2016 |          
|                                                                                                                                                                                                       |  | Senior SecuredLoans - First Lien       |           |   | Senior SecuredLoans - SecondLien |   |           | SubordinatedConvertibleDebt |  |   | Equity/Other |  |  | Total |          
|Fair value at beginning of period                                                                                                                                                                      |  | $                                      | 2,389,377 |   |                                  | $ | 1,041,875 |                             |  | $ | 609,219      |  |  | $     | 1,488,266 |  |  | $ | 5,528,737 |  
|Accretion of discount (amortization of premium)                                                                                                                                                        |  |                                        | 4,181     |   |                                  |   | 3,134     |                             |  |   | —            |  |  |       | —         |  |  |   | 7,315     |  
|Net realized gain (loss)                                                                                                                                                                               |  |                                        | (1,167    | ) |                                  |   | —         |                             |  |   | —            |  |  |       | —         |  |  |   | (1,167    | )
|Net change in unrealized appreciation (depreciation)                                                                                                                                                   |  |                                        | 51,289    |   |                                  |   | (3,446    | )                           |  |   | —            |  |  |       | 53,879    |  |  |   | 101,722   |  
|Purchases                                                                                                                                                                                              |  |                                        | 1,743,500 |   |                                  |   | —         |                             |  |   | —            |  |  |       | —         |  |  |   | 1,743,500 |  
|Paid-in-kind interest                                                                                                                                                                                  |  |                                        | —         |   |                                  |   | —         |                             |  |   | 18,456       |  |  |       | —         |  |  |   | 18,456    |  
|Sales and redemptions                                                                                                                                                                                  |  |                                        | (149,789  | ) |                                  |   | —         |                             |  |   | —            |  |  |       | —         |  |  |   | (149,789  | )
|Net transfers in or out of Level 3                                                                                                                                                                     |  |                                        | —         |   |                                  |   | —         |                             |  |   | —            |  |  |       | —         |  |  |   | —         |  
|Fair value at end of period                                                                                                                                                                            |  | $                                      | 4,037,391 |   |                                  | $ | 1,041,563 |                             |  | $ | 627,675      |  |  | $     | 1,542,145 |  |  | $ | 7,248,774 |  
|                                                                                                                                                                                                       |  |                                        |           |   |                                  |   |           |                             |  |   |              |  |  |       |           |  |  |   |           |  
|The amount of total gains or losses for the period included in changes in net assets attributable to the change in unrealized gains or losses relating to investments still held at the reporting date |  | $                                      | 51,289    |   |                                  | $ | (3,446    | )                           |  | $ | —            |  |  | $     | 53,879    |  |  | $ | 101,722   |  





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



The valuation techniques and significant
unobservable inputs used in recurring Level 3 fair value measurements of assets as of June 30, 2016 were as follows:



|                                |  |            |           |  |                             |                                                |                     |                          |       |                |  |                 |       | 
|------------------------------- |  | ---------- | --------- |  | --------------------------- | ---------------------------------------------- | ------------------- | ------------------------ | ----- | -------------- |  | --------------- | ----- | 
|Asset Category                  |  | Fair Value |           |  | Primary Valuation Technique |                                                | Unobservable Inputs |                          | Range |                |  | WeightedAverage |      
|Senior Secured First Lien Debt  |  | $          | 4,037,391 |  |                             | Market quotes                                  |                     | Indicative dealer quotes |       | 88.00 - 101.00 |  |                 | 98.44 | 
|Senior Secured Second Lien Debt |  |            | 1,041,563 |  |                             | Market quotes                                  |                     | Indicative dealer quotes |       | 80.00 - 100.00 |  |                 | 93.20 | 
|Subordinated Debt               |  |            | 627,675   |  |                             | Market comparables                             |                     | Book value multiples (x) |       | 1.1x - 2.8x    |  |                 | 1.8x  | 
|Equity/Other                    |  |            | 750,000   |  |                             | Distribution waterfall/ liquidation priorities |                     | Book value multiples (x) |       | 1.1x - 2.8x    |  |                 | 1.8x  | 
|Equity/Other                    |  |            | 792,145   |  |                             | Market comparables                             |                     | EBITDA multiples (x)     |       | 8.15x          |  |                 | 8.15x | 
|Total                           |  | $          | 7,248,774 |  |                             |                                                |                     |                          |       |                |  |                 |       | 



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





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





21









NOTE 8 – FINANCIAL HIGHLIGHTS



The following is a schedule of financial highlights of the Company
for the six months ended June 30, 2016 and the year ended December 31, 2015:





|                                                                                |  | Six
    Months Ended June 30, 2016 (Unaudited) |            |   | Year
    Ended December 31, 2015 |  
|------------------------------------------------------------------------------- |  | ---------------------------------------------- | ---------- | - | -------------------------------- | -
|Per Share Data:                                                                 |  |                                                |            |   |                                  |  
|Net asset value, beginning of period                                            |  | $                                              | 13.75      |   |                                  | $
|Results of operations(1)                                                        |  |                                                |            |   |                                  |  
|Net investment income (loss)                                                    |  |                                                | 0.23       |   |                                  |  
|Net realized and unrealized appreciation (depreciation) on investments(2)       |  |                                                | 0.12       |   |                                  |  
|Net increase (decrease) in net assets resulting from operations                 |  |                                                | 0.35       |   |                                  |  
|Stockholder distributions(3)                                                    |  |                                                |            |   |                                  |  
|Distributions from net investment income                                        |  |                                                | (0.27      | ) |                                  |  
|Distributions from net realized gain on investments                             |  |                                                | —          |   |                                  |  
|Net decrease in net assets resulting from stockholder distributions             |  |                                                | (0.27      | ) |                                  |  
|Capital share transactions                                                      |  |                                                |            |   |                                  |  
|Issuance of common stock(4)                                                     |  |                                                | (0.03      | ) |                                  |  
|Offering costs(1)                                                               |  |                                                | —          |   |                                  |  
|Net increase (decrease) in net assets resulting from capital share transactions |  |                                                | (0.03      | ) |                                  |  
|Net asset value, end of period                                                  |  | $                                              | 13.80      |   |                                  | $
|Shares outstanding, end of period                                               |  |                                                | 808,445    |   |                                  |  
|Total return(5)                                                                 |  |                                                | 2.3        | % |                                  |  
|Ratio/Supplemental Data:                                                        |  |                                                |            |   |                                  |  
|Net assets, end of period                                                       |  | $                                              | 11,159,986 |   |                                  | $
|Ratio of net investment income to average net assets                            |  |                                                | 1.7        | % |                                  |  
|Ratio of total operating expenses to average net assets                         |  |                                                | 4.2        | % |                                  |  
|Ratio of expenses reimbursed by sponsor to average net assets                   |  |                                                | 3.9        | % |                                  |  
|Ratio of expense recoupment payable to sponsor to average net assets            |  |                                                | 0.0        | % |                                  |  
|Ratio of capital gain incentive fee to average net assets                       |  |                                                | 0.22       | % |                                  |  
|Ratio of net operating expenses to average net assets                           |  |                                                | 0.2        | % |                                  |  
|Portfolio turnover(6)                                                           |  |                                                | 1.6        | % |                                  |  





|(1) | The per share data was derived by using the weighted average shares outstanding for the six months ended June 30, 2016 and the year ended December 31, 2015.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | The amount shown for a share outstanding throughout the year may not agree with the change in the aggregate gains and losses in portfolio securities for the year because of the timing of sales of the Company’s shares in relation to fluctuating market values for the portfolio.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|(3) | The per share data for distributions reflects the actual amount of distributions paid per share during the applicable period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(4) | The issuance of common stock on a per share basis reflects the incremental net asset value changes as a result of the issuance of shares of common stock in the Company’s continuous public offering and pursuant to the Company’s distribution reinvestment plan. The issuance of common stock at an offering price, net of sales commissions and dealer manager fees, that is greater or less than the net asset value per share results in an increase or decrease in net asset value per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|(5) | The total return for each period presented was calculated by taking the net asset value per share as of the end of the applicable period, adding the cash distributions per share which were declared during the applicable calendar year and dividing the total by the net asset value per share at the beginning of the applicable year. The total return does not consider the effect of the sales load from the sale of the Company’s common stock. The total return includes the effect of the issuance of shares at a net offering price that is greater than net asset value per share, which causes an increase in net asset value per share. The historical calculation of total return in the table should not be considered a representation of the Company’s future total return, which may be greater or less than the return shown in the table due to a number of factors, including the Company’s ability or inability to make investments in companies that meet its investment criteria, the interest rate payable on the debt securities the Company acquires, the level of the Company’s expenses, variations in and the timing of the recognition of realized and unrealized gains or losses, the degree to which the Company encounters competition in its markets and general economic conditions. As a result of these factors, results for any previous period should not be relied upon as being indicative of performance in future periods. The total return calculations set forth above represent the total return on the Company’s investment portfolio during the applicable period and are calculated in accordance with GAAP. These return figures do not represent an actual return to stockholders.
|(6) | Portfolio turnover for the six months ended June 30, 2016 is not annualized.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           





22











NOTE 9 – COMMITMENTS AND CONTINGENCIES



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



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



NOTE 10 – SUBSEQUENT EVENTS



Management has evaluated all known subsequent events through the
date the accompanying financial statements were available to be issued on August 15, 2016, and notes the following:





On July 15, 2016, the Company repurchased 8,482.60 shares of common
stock (representing 100% of the shares of common stock tendered for repurchase) at $13.80 per share for aggregate consideration
totaling $117,060.





For the period beginning July 1, 2016 and ending August 15, 2016,
the Company sold 23,931.19 shares of its common stock for total gross proceeds of $363,000, and issued amounts pursuant to its distribution
reinvestment plan in the amount of $18,043.



23







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

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

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

Forward-Looking Statements

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



| | · | our future operating results;
| | - | -----------------------------



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



| | · | changes in the economy;
| | - | -----------------------



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



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



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



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



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



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



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



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



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



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



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



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



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

Such forward-looking statements may include
statements preceded by, followed by or that otherwise include the words “trend,” “opportunity,” “pipeline,”
“believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,”
“estimate,” “position,” “assume,” “potential,” “outlook,” “continue,”
“remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions,
or future or conditional verbs such as “will,” “would,” “should,” “could,” “may,”
or similar expressions. The forward looking statements contained in this annual report involve risks and uncertainties. Our actual
results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the
factors set forth as “Risk Factors” in this report and in our last effective registration statement filed on form N-2
dated May 11, 2016, filed with the Securities and Exchange Commission (the “SEC”) on the same day.

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



24







Overview



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



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



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



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





We are offering for sale a maximum of
$300,000,000 of our common stock. We commenced our initial continuous public offering of
shares through our initial registration statement (File No. 333-174873) that was declared effective by the SEC on September 4,
2012. Rule 415 promulgated under the Securities Act requires that a registration statement not be used for more than three years
from its effective date, subject to a 180-day grace period. On September 2, 2015, we filed a registration statement with the SEC
(File No. 333-206730) in order to continue our continuous public offering of shares for an additional three years or until all
of the shares registered herein are sold. The registration statement for our follow-on offering was declared effective by the
SEC on March 17, 2016 and our most-recent post-effective amendment to our registration was declared effective by the SEC on May
11, 2016.As of August 15, 2016, we have sold a total of  833,683.64 shares of common stock for gross proceeds of approximately
$12,320,951, including shares issued pursuant to our distribution reinvestment plan in the amount of $214,692, and 14,815 shares of common
stock sold to Triton Pacific Adviser in exchange for gross proceeds of $200,003.

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

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



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





25









-Employing disciplined underwriting policies and rigorous
portfolio management;



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



-Maintaining a well balanced portfolio.



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

-Investment opportunities

-Market conditions

-Perceived Risk

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

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

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

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

26







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

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

Revenues

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

Expenses

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

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



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



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



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



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



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



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



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



27









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



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



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



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



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



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



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



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



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



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



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



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



Reimbursement of TFA Associates, LLC for Administrative Services



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

Portfolio and Investment Activity

During the six months ended June 30,
2016, we made investments in portfolio companies totaling $1,743,500. During the same period, we sold investments and received
principal repayments of $149,789. As of June 30, 2016, our investment portfolio, with a total fair value of $7,248,774, consisted
of interests in 27 portfolio companies (55.6% in first lien senior secured loans, 14.4% in second lien senior secured loans, 8.7%
in subordinated convertible debt and 21.3% in equity). The portfolio companies that comprised our portfolio as of such date had
an average annual EBITDA of approximately $175.9 million. As of June 30, 2016, the investments in our debt portfolio were purchased
at a weighted average price of 97.5% of par or stated value, and the weighted average credit rating of the investments in our
portfolio that were rated (constituting 70.0% of our portfolio based on the fair value of our investments) was B2 based upon the
Moody’s scale. Our estimated gross annual portfolio yield was 5.7% based upon the amortized cost of our investments and
was 6.9% on the debt portfolio alone. Our gross annual portfolio yield represents the expected yield to be generated by us on
our investment portfolio based on the composition of our portfolio as of June 30, 2016. The portfolio yield does not represent
an actual investment return to stockholders.



28







Total Portfolio Activity



The following tables present certain selected information regarding
our portfolio investment activity for the six months ended June 30, 2016 and year ended December 31, 2015:



The following table presents the composition of the total purchases
for the three and six months ended June 30, 2016.





|Net Investment Activity |  | Six
    months endedJune
    30, 2016 |           |   | Year ended
December 31, 2015 |  
|----------------------- |  | ------------------------------------- | --------- | - | ---------------------------- | -
|Purchases               |  | $                                     | 1,743,500 |   |                              | $
|Sales and Redemptions   |  |                                       | (149,789  | ) |                              |  
|Net Portfolio Activity  |  | $                                     | 1,593,711 |   |                              | $





The following tables summarize the composition of our investment
portfolio at amortized cost and fair value as of June 30, 2016 and December 31, 2015:





|                                 |  | Six
    months ended June 30, 2016
    (Unaudited) |           |  | Year
    Ended December 31, 2015 |  
|-------------------------------- |  | -------------------------------------------------- | --------- |  | -------------------------------- | -
|                                 |  | Investments
    at Amortized Cost(1)               |           |  | Investments
    at Fair Value    |  
|Senior Secured Loans—First Lien  |  | $                                                  | 4,022,814 |  |                                  | $
|Senior Secured Loans—Second Lien |  |                                                    | 1,068,815 |  |                                  |  
|Subordinated Debt                |  |                                                    | 627,675   |  |                                  |  
|Equity/Other                     |  |                                                    | 1,250,000 |  |                                  |  
|Total                            |  | $                                                  | 6,969,304 |  |                                  | $





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





|                                                                         |  | June 30, 2016 |  | December 31, 2015
|------------------------------------------------------------------------ |  | ------------- |  | -----------------
|Number of Portfolio Companies                                            |  | 27            |  | 22               
|% Variable Rate (based on fair value)                                    |  | 70.0%         |  | 62.1%            
|% Fixed Rate (based on fair value)                                       |  | 8.7%          |  | 11.0%            
|% Non-Income Producing Equity or Other Investments (based on fair value) |  | 21.3%         |  | 26.9%            
|Average Annual EBITDA of Portfolio Companies                             |  | 175.9MM       |  | 101.6MM          
|Weighted Average Credit Rating of Investments that were Rated            |  | B2            |  | B2               
|% of Investments on Non-Accrual                                          |  | —             |  | —                
|Gross Portfolio Yield Prior to Leverage (based on amortized cost)        |  | 5.7%          |  | 5.4%             





29






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 June 30, 2016 and December
31, 2015:





|                                         |  |                               |           |  |                             |  |       |                |  |   |                             |  |  |  |       |  
|---------------------------------------- |  | ----------------------------- | --------- |  | --------------------------- |  | ----- | -------------- |  | - | --------------------------- |  |  |  | ----- | -
|                                         |  | June 30, 2016
    (Unaudited) |           |  | December 31, 2015           | 
|Industry Classification                  |  | Fair
    Value                |           |  | Percentage of
    Portfolio |  |       | Fair
    Value |  |   | Percentage of
    Portfolio | 
|Automotive Repair, Services, and Parking |  | $                             | 122,347   |  |                             |  | 1.7   | %              |  | $ | 122,458                     |  |  |  | 2.2   | %
|Beverage, Food & Tobacco                 |  |                               | 453,961   |  |                             |  | 6.3   | %              |  |   | 470,860                     |  |  |  | 8.5   | %
|Business Services                        |  |                               | 1,571,874 |  |                             |  | 21.5  | %              |  |   | 633,547                     |  |  |  | 11.5  | %
|Consumer Services                        |  |                               | 599,688   |  |                             |  | 8.3   | %              |  |   | —                           |  |  |  | 0.0   | %
|Healthcare & Pharmaceuticals             |  |                               | 1,499,255 |  |                             |  | 20.7  | %              |  |   | 1,445,024                   |  |  |  | 26.1  | %
|High Tech Industries                     |  |                               | 932,841   |  |                             |  | 12.9  | %              |  |   | 697,895                     |  |  |  | 12.6  | %
|Metals & Mining                          |  |                               | 237,813   |  |                             |  | 3.3   | %              |  |   | 210,521                     |  |  |  | 3.8   | %
|Paper and Allied Products                |  |                               | 113,980   |  |                             |  | 1.6   | %              |  |   | 118,972                     |  |  |  | 2.2   | %
|Specialty Finance                        |  |                               | 1,377,675 |  |                             |  | 19.0  | %              |  |   | 1,359,219                   |  |  |  | 24.6  | %
|Transportation: Cargo                    |  |                               | —         |  |                             |  | 0.0   | %              |  |   | 121,371                     |  |  |  | 2.2   | %
|Wholesale Trade-Durable Goods            |  |                               | 123,433   |  |                             |  | 1.7   | %              |  |   | 122,874                     |  |  |  | 2.2   | %
|Wholesale Trade-Nondurable Goods         |  |                               | 215,907   |  |                             |  | 3.0   | %              |  |   | 225,996                     |  |  |  | 4.1   | %
|Total                                    |  | $                             | 7,248,774 |  |                             |  | 100.0 | %              |  | $ | 5,528,737                   |  |  |  | 100.0 | %





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



Portfolio Asset Quality



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



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

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

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

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

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

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

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

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





30








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



The following table shows the distribution of our
investments on the 1 to 8 scale at fair value as of June 30, 2016 and December 31, 2015:





|                  |  | June
    30, 2016 |           |  | December 31,
    2015 | 
|----------------- |  | ----------------- | --------- |  | --------------------- | 
|Investment Rating |  | Fair
    Value    |           |  | Percentage            | 
|1                 |  | $                 | —         |  |                       | 
|2                 |  |                   | 123,433   |  |                       | 
|3                 |  |                   | 1,031,689 |  |                       | 
|4                 |  |                   | 2,161,958 |  |                       | 
|5                 |  |                   | 1,761,874 |  |                       | 
|6                 |  |                   | —         |  |                       | 
|7                 |  |                   | —         |  |                       | 
|8                 |  |                   | —         |  |                       | 
|                  |  | $                 | 5,078,954 |  |                       | 





Results of Operations



Investment Income



For the three months ended June 30, 2016
and 2015, we generated $97,382 and $32,598, respectively, in investment income in the form of interest and fees earned on senior
secured loans. Such revenues represent $83,963 of cash income and $13,419 in non-cash portions related to the accretion of discounts
and paid-in-kind interest for the three months ended June 30, 2016. We expect the dollar amount of interest that we earn to continue
to increase as the size of our investment portfolio increases.



For the six months ended June 30, 2016 and
2015, we generated $178,212 and $61,128, respectively, in investment income in the form of interest and fees earned on senior secured
loans. Such revenues represent $152,185 of cash income and $26,027 in non-cash portions related to the accretion of discounts for
the six months ended June 30, 2016.



Operating Expenses



Total operating expenses before reimbursement
from the sponsor and management fee waiver totaled $221,843 and $166,549 for the three months ended June 30, 2016 and 2015, respectively,
and consisted of base management fees, adviser and administrator reimbursements, professional fees, insurance expense, directors’
fees and other general and administrative fees. The base management fees for the quarters were $53,179 and $20,933, respectively,
and the incentive fees for the quarters were $14,910 and $(521), respectively. Pursuant to the Expense Reimbursement Agreement
(discussed below), the sponsor reimbursed the Company $206,933 and $166,549 for the three months ended June 30, 2016 and 2015.



Total operating expenses before reimbursement
from the sponsor and management fee waiver totaled $385,272 and $300,850 for the six months ended June 30, 2016 and 2015, respectively,
and consisted of base management fees, adviser and administrator reimbursements, professional fees, insurance expense, directors’
fees and other general and administrative fees. The base management fees for the periods were $96,333 and $39,341, respectively,
and the incentive fees for the quarters were $20,344 and $5,443, respectively. Pursuant to the Expense Reimbursement Agreement
(discussed below), the sponsor reimbursed the Company $364,928 and $300,850 for the six months ended June 30, 2016 and 2015.

31








Our other general and administrative expenses
totaled $4,208 and $4,154 for the three months ended June 30, 2016 and 2015, respectively, and $5,916 and $6,504 for the six months
ended June 30, 2016 and 2015, respectively, and consisted of the following:





|                     |  |                                         |       |  |                                         |   |       |                                       |  |   |                                       | 
|-------------------- |  | --------------------------------------- | ----- |  | --------------------------------------- | - | ----- | ------------------------------------- |  | - | ------------------------------------- | 
|                     |  | Three
    months endedJune
    30, 2016 |       |  | Three
    months endedJune
    30, 2015 |   |       | Six
    months endedJune
    30, 2016 |  |   | Six
    months endedJune
    30, 2015 | 
|Licenses and permits |  | $                                       | —     |  |                                         | $ | —     |                                       |  | $ | —                                     | 
|Printing fees        |  |                                         | 3,823 |  |                                         |   | 1,670 |                                       |  |   | 4,187                                 | 
|Travel expenses      |  |                                         | —     |  |                                         |   | 2,042 |                                       |  |   | —                                     | 
|Other                |  |                                         | 385   |  |                                         |   | 442   |                                       |  |   | 1,729                                 | 
|Total                |  | $                                       | 4,208 |  |                                         | $ | 4,154 |                                       |  | $ | 5,916                                 | 







Net Investment Income



Our net investment income totaled $82,472
($0.13 per share based on weighted average shares outstanding) for the three months ended June 30, 2016 and $32,598 ($0.11 per
share based on weighted average shares outstanding) for the three months ended June 30, 2015.



Our net investment income totaled $157,868
($0.23 per share based on weighted average shares outstanding) for the six months ended June 30, 2016 and $61,128 ($0.23 per share
based on weighted average shares outstanding) for the six months ended June 30, 2015.



Net Realized Gains/Losses from Investments



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



For the three and six months ended June
30, 2016, we sold investments and received principal payments of $136,653 and $149,789, from which we realized a net loss of $1,167
and $1,167, respectively. For the three and six months ended June 30, 2015, we sold investments and received principal payments
of $275,106 and $390,832, from which we realized a net gain of $3,779 and $7,321, respectively.



Net Unrealized Appreciation/Depreciation on Investments



Net change in unrealized appreciation on
investments reflects the net change in the fair value of our investment portfolio. For the three and six months ended June 30,
2016, net changes in unrealized appreciation were $74,549 and $101,722, respectively. For the three and six months ended June 30,
2015, net changes in unrealized appreciation were $(6,384) and $20,685, respectively.



Changes in Net Assets from Operations



For the three and six months ended June
30, 2016, we recorded a net income of $155,854 and $258,423, respectively versus net income of $29,993 and $89,134, respectively,
for the three and six months ended June 30, 2015.



Based on 763,860 and 685,847 weighted average
common shares outstanding for the three and six months ended June 30, 2016, basic and diluted, our per share net increase in net
assets resulting from operations was $0.20 and $0.38.



For the three and six months ended June
30, 2015, we recorded a net income of $29,993 and $89,134, respectively, versus net income of $0 for the three and six months ended
June 30, 2014.



Based on 289,359 and 262,770 weighted average
common shares outstanding for the three and six months ended June 30, 2015, basic and diluted, our per share net increase in net
assets resulting from operations was $0.10 and $0.34.



32








Financial Condition, Liquidity and Capital Resources



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



The offering of our common stock represents
a continuous offering of our shares. The initial offering of our common stock commenced on September 4, 2012 and terminated on
March 1, 2016. On March 17, 2016, we commenced the follow-on offering of our common stock, which follow-on offering is currently
ongoing. We intend to file post-effective amendments to our registration statement to allow us to continue our offering for three
years. Our most recent post-effective amendment was filed with the SEC on May 11, 2016 and declared effective the same day. The
Dealer Manager is not required to sell any specific number or dollar amount of shares but will use its best efforts to sell the
shares offered. The minimum investment in shares of our common stock is $5,000.



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



During the six months ended June 30, 2016,
we sold 275,467.19 shares of our common stock for gross proceeds of $4,094.929 at an average price per share of $14.87. The increase
in Capital in excess of par during the six months ended June 30, 2016 include reinvested stockholder distributions of $99,893 for
which we issued 7,179.98 shares of common stock. The sales commissions and dealer manager fees related to the sale of our common
stock were $334,040 for the six months ended June 30, 2016. These sales commissions and fees include $86,457 retained by the dealer
manager, Triton Pacific Securities, LLC, which is an affiliate of ours.Our offering expenses
are capitalized as deferred offering expenses and then subsequently expensed over a 12-month period.



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



Contractual Obligations



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



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





33








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



Off-Balance Sheet Arrangements



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



Distributions



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



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



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



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





34








The following table reflects the cash distributions per share
that we have declared and paid on our common stock through June 30, 2016:





|                             |  |  | Distribution  |        
|---------------------------- |  |  | ------------- | -------
|For the Six
    Months Ended |  |  | Per
    Share |        
|Fiscal 2016                  |  |  |               |        
|Janary 22, 2016              |  |  | $             | 0.045  
|February 16, 2016            |  |  | $             | 0.045  
|March 23, 2016               |  |  | $             | 0.045  
|April 21, 2016               |  |  | $             | 0.045  
|May 19, 2016                 |  |  | $             | 0.045  
|June 23, 2016                |  |  | $             | 0.045  
|Fiscal 2015                  |  |  |               |        
|January 20, 2015             |  |  | $             | 0.07545
|April 13, 2015               |  |  | $             | 0.11600
|April 29, 2015               |  |  | $             | 0.04000
|May 29, 2015                 |  |  | $             | 0.04000
|June 29, 2015                |  |  | $             | 0.04000
|July 30, 2015                |  |  | $             | 0.04000
|August 28, 2015              |  |  | $             | 0.04000
|September 29, 2015           |  |  | $             | 0.04000
|October 22.2015              |  |  | $             | 0.04500
|November 25, 2015            |  |  | $             | 0.04500
|December 24, 2015            |  |  | $             | 0.04500





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



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



The following table reflects the sources
of the cash distributions on a tax basis that the Company paid on its common stock during the six months ended June 30, 2016 and
June 30, 2015:





|                                                          |  | Six months ended June 30, |        
|--------------------------------------------------------- |  | ------------------------- | -------
|                                                          |  | 2016                      |        
|Source
    of Distribution                                |  | Distribution 
    Amount  |        
|Offering proceeds                                         |  | $                         | —      
|Borrowings                                                |  |                           | —      
|Net investment income(1)                                  |  |                           | —      
|Short-term capital gains proceeds from the sale of assets |  |                           | —      
|Long-term capital gains proceeds from the sale of assets  |  |                           | —      
|Expense reimbursement from sponsor                        |  |                           | 185,980
|Total                                                     |  | $                         | 185,980












| | (1) | During the six months ended June 30, 2016 and 2015, 85.4%
and 96.6%, respectively, of the Company’s gross investment income was attributable
to cash income earned, and 14.6% and 3.4%, resepctively was attributable to non-cash accretion of discount.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------







35






Related Party Transactions



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



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



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



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



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



Management Fee



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



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



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





36






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



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



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



Expense Reimbursement Agreement



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





37








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



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



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



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



The Expense Reimbursement
Agreement is, by its terms, effective retroactively to our inception date of April 29, 2011. As a result, our Adviser has agreed
to reimburse a total of $3,964,289 as of June 30, 2016, which amounts have consisted of offsets against amounts owed by us to our
Adviser since our inception.



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





38










|Quarter Ended      |  | Amount of Expense
    Payment Obligation |  | Amount of Offering
    Cost Payment Obligation |  | Operating
    Expense Ratio as of the Date Expense Payment Obligation Incurred(1) |  | Annualized
    Distribution Rate as of the Date Expense Payment Obligation Incurred(2) |  | Eligible for
    Reimbursement Through
|------------------ |  | ---------------------------------------- |  | ---------------------------------------------- |  | --------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------- |  | --------------------------------------
|September 30, 2012 |  | $21,826                                  |  |                                                |  | 432.69%                                                                           |  | —                                                                                      |  | September 30, 2015                    
|December 31, 2012  |  | $26,111                                  |  |                                                |  | 531.09%                                                                           |  | —                                                                                      |  | December 31, 2015                     
|March 31, 2013     |  | $30,819                                  |  |                                                |  | N/A                                                                               |  | —                                                                                      |  | March 31, 2016                        
|June 30, 2013      |  | $59,062                                  |  |                                                |  | N/A                                                                               |  | —                                                                                      |  | June 30, 2016                         
|September 30, 2013 |  | $65,161                                  |  |                                                |  | N/A                                                                               |  | —                                                                                      |  | September 30, 2016                    
|December 31, 2013  |  | $91,378                                  |  |                                                |  | 455.09%                                                                           |  | —                                                                                      |  | December 31, 2016                     
|March 31, 2014     |  | $68,293                                  |  |                                                |  | 148.96%                                                                           |  | —                                                                                      |  | March 31, 2017                        
|June 30, 2014      |  | $70,027                                  |  | $898,518                                       |  | 23.17%                                                                            |  | —                                                                                      |  | June 30, 2017                         
|September 30, 2014 |  | $92,143                                  |  | $71,060                                        |  | 20.39%                                                                            |  | —                                                                                      |  | September 30, 2017                    
|December 31, 2014  |  | $115,777                                 |  | $90,860                                        |  | 11.15%                                                                            |  | —                                                                                      |  | December 31, 2017                     
|March 31, 2015     |  | $134,301                                 |  | $106,217                                       |  | 13.75%                                                                            |  | 2.01%                                                                                  |  | March 31, 2018                        
|June 30, 2015      |  | $166,549                                 |  | $167,113                                       |  | 14.10%                                                                            |  | 3.20%                                                                                  |  | June 30, 2018                         
|September 30, 2015 |  | $147,747                                 |  | $240,848                                       |  | 10.45%                                                                            |  | 3.20%                                                                                  |  | September 30, 2018                    
|December 31, 2015  |  | $136,401                                 |  | $280,376                                       |  | 7.41%                                                                             |  | 3.60%                                                                                  |  | December 31, 2018                     
|March 31, 2016     |  | $157,996                                 |  | $232,895                                       |  | 6.00%                                                                             |  | 3.52%                                                                                  |  | March 31, 2019                        
|June 30, 2016      |  | $205,333                                 |  | $253,119                                       |  | 4.94%                                                                             |  | 3.52%                                                                                  |  | June 30, 2019                         





| | (1) | “Operating
Expense Ratio” includes all expenses borne by us, except for organizational and offering expenses, base management and incentive
fees owed to our Adviser, financing fees and costs, interest expense, brokerage commissions
and extraordinary expenses.  The Company did not achieve its minimum offering amount until June 25, 2014 and
as a result, did not invest the proceeds from the offering and realize any income from investments prior to the end of its fiscal
quarter.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | “Annualized
Distribution Rate” equals the annualized rate of distributions paid to stockholders based on the amount of the regular cash
distribution paid immediately prior to the date the expense support payment obligation was incurred by our Adviser. “Annualized
Distribution Rate” does not include special cash or stock distributions paid to stockholders. The Company did not achieve
its minimum offering amount until June 25, 2014 and as a result, did not have an opportunity to invest the proceeds from the offering
and realize any income from investments or pay any distributions to stockholders prior to the end of its fiscal quarter.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Of
these Operating Expenses, $137,818 has exceeded the three-year period for repayment and will not be repayable by the Company.



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





|                                     |  |                |            |   |                   |   |            |  
|------------------------------------ |  | -------------- | ---------- | - | ----------------- | - | ---------- | -
|                                     |  | June 30,  2016 |            |   | December 31, 2015 |  
|Operating Expenses                   |  | $              | 1,588,924  |   |                   | $ | 1,225,595  |  
|Offering Costs                       |  |                | 2,341,006  |   |                   |   | 1,854,993  |  
|Due to related party offset          |  |                | (3,335,173 | ) |                   |   | (2,512,824 | )
|Reimbursements received from Adviser |  |                | (342,715   | ) |                   |   | (342,715   | )
|Other amounts due to affiliates      |  |                | 448        |   |                   |   | 448        |  
|Total Reimbursement due from Adviser |  | $              | 252,490    |   |                   | $ | 225,497    |  





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



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





39








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



Critical Accounting Policies



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



Valuation of Investments



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



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





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



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



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



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



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





40








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



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



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



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



Level 3: Unobservable inputs for the asset
or liability.



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



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



Revenue Recognition



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



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



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





41






Payment-in-Kind Interest



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



Organization and Offering Expenses



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



Federal Income Taxes



We elected to be treated, beginning with
our fiscal year ending December 31, 2012, and intend to qualify annually thereafter, as a RIC under Subchapter M of the Code. As
a RIC, we generally will not have to pay corporate-level federal income taxes on any ordinary income or capital gains that we distribute
to our stockholders from our tax earnings and profits. To maintain our RIC tax treatment, we must, among other things, meet specified
source-of-income and asset diversification requirements and distribute annually at least 90% of our ordinary income and realized
net short-term capital gains in excess of realized net long-term capital losses, if any.



|Item 3: | Quantitative and Qualitative
                                         Disclosures About Market Risk.
|------- | ----------------------------------------------------------------------------------------------------



We are subject to financial market risks,
including changes in interest rates. As of June 30, 2016, 70.0% (based on fair value) of our investments paid variable interest
rates, 8.7% paid fixed rates, and 21.3% were non-income producing equity. A rise in the general level of interest rates can be
expected to lead to higher interest rates applicable to certain variable rate investments we hold and to declines in the value
of any fixed rate investments we may hold in the future.



The following table shows the effect over
a twelve-month period of changes in interest rates on our interest income, interest expense and net interest income, assuming no
changes in our investment portfolio and borrowing arrangements in effect as of June 30, 2016:





|LIBOR Basis Point Change |  | PercentageChange in NetInterest Income
|------------------------ |  | --------------------------------------
|Down 25 basis points     |  |                                       
|Current LIBOR            |  |                                       
|Up 100 basis points      |  |                                       
|Up 200 basis points      |  |                                       
|Up 300 basis points      |  |                                       





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.





42








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



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



Disclosure Controls



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



Change in Internal Control Over Financial Reporting



No change occurred in our internal control
over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act) during the three months ended June 30,
2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



Part II—Other Information



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



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



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



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



|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.





43






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



EXHIBIT INDEX



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





44






SIGNATURES



Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



|                       |                                             |                                                                                                                          
|---------------------- | ------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------
|Dated: August 15, 2016 | Triton Pacific Investment Corporation, Inc.
|                       |                                             |                                                                                                                          
|                       | By                                          | /s/ Craig J. Faggen                                                                                                      
|                       |                                             | Craig J. Faggen
        
        Chief Executive Officer
        
        (Principal Executive Officer)                  
|                       |                                             |                                                                                                                          
|Dated: August 15, 2016 | By                                          | /s/ Michael L. Carroll                                                                                                   
|                       |                                             | Michael L. Carroll
        
        Chief Financial Officer
        
        (Principal Accounting and Financial Officer)





45