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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 March 31, 2014

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
|- | --------------------------------------------------------

| | SECURITIES EXCHANGE ACT OF 1934
| | -------------------------------

For the transition period to

Commission File No. 000-54899





CARLYLE GMS
FINANCE, INC.

(Exact name of Registrant as specified in its charter)







|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Maryland                                                       |  | 80-0789789                             
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification Number)

520 Madison Avenue, 38th Floor, New York, NY 10022

(Address of principal executive office) (Zip Code)

(212) 813-4900

(Registrants telephone number, including area code)





N/A

(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  x    No   ̈

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See definitions of large accelerated filer, accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):



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

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

Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date.



|                              |  |                           
|----------------------------- |  | --------------------------
|Class                         |  | Outstanding at May 9, 2014
|Common stock, $0.01 par value |  | 12,891,569                









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CARLYLE GMS FINANCE, INC.

INDEX



|         |  |                                                                                                             |  |  |    | 
|-------- |  | ----------------------------------------------------------------------------------------------------------- |  |  | -- | 
|Part I.  |  | Financial Information                                                                                       |  |  |    | 
|         |  |                                                                                                            
|Item 1.  |  | Financial Statements                                                                                        |  |  |    | 
|         |  |                                                                                                            
|         |  | Consolidated Statements of Assets and Liabilities as of March 31, 2014 (unaudited) and December 31,
2013    |  |  | 3  | 
|         |  |                                                                                                            
|         |  | Consolidated Statement of Operations for the three month period ended March 31, 2014 (unaudited)            |  |  | 4  | 
|         |  |                                                                                                            
|         |  | Consolidated Statement of Changes in Net Assets for the three month period ended March 31, 2014
(unaudited) |  |  | 5  | 
|         |  |                                                                                                            
|         |  | Consolidated Statement of Cash Flows for the three month period ended March 31, 2014 (unaudited)            |  |  | 6  | 
|         |  |                                                                                                            
|         |  | Consolidated Schedules of Investments as of March 31, 2014 (unaudited) and December 31, 2013                |  |  | 7  | 
|         |  |                                                                                                            
|         |  | Notes to Consolidated Financial Statements (unaudited)                                                      |  |  | 14 | 
|         |  |                                                                                                            
|Item 2.  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                       |  |  | 35 | 
|         |  |                                                                                                            
|Item 3.  |  | Quantitative and Qualitative Disclosures About Market Risk                                                  |  |  | 48 | 
|         |  |                                                                                                            
|Item 4.  |  | Controls and Procedures                                                                                     |  |  | 49 | 
|         |  |                                                                                                            
|Part II. |  | Other Information                                                                                           |  |  |    | 
|         |  |                                                                                                            
|Item 1.  |  | Legal Proceedings                                                                                           |  |  | 50 | 
|         |  |                                                                                                            
|Item 1A. |  | Risk Factors                                                                                                |  |  | 50 | 
|         |  |                                                                                                            
|Item 2.  |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                 |  |  | 50 | 
|         |  |                                                                                                            
|Item 3.  |  | Defaults Upon Senior Securities                                                                             |  |  | 50 | 
|         |  |                                                                                                            
|Item 4.  |  | Mine Safety Disclosures                                                                                     |  |  | 50 | 
|         |  |                                                                                                            
|Item 5.  |  | Other Information                                                                                           |  |  | 50 | 
|         |  |                                                                                                            
|Item 6.  |  | Exhibits                                                                                                    |  |  | 51 | 
|         |  |                                                                                                            
|         |  | Signatures                                                                                                  |  |  | 52 | 



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CARLYLE GMS FINANCE, INC.

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

(dollar amounts in thousands, except per share data)



|                                                                                                                                           |  |               |         |   |                  |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                                                                           |  | March 31,2014 |         |   | December 31,2013 |  
|                                                                                                                                           |  | (unaudited)   |         |   |                  |  
|ASSETS                                                                                                                                     |  |               |         |   |                  |   |         |  
|Investmentsnon-controlled/non-affiliated, at fair value (amortized cost of $317,735 and $213,128, respectively)                           |  | $             | 318,345 |   |                  | $ | 212,807 |  
|Cash                                                                                                                                       |  |               | 22,908  |   |                  |   | 42,010  |  
|Deferred financing costs                                                                                                                   |  |               | 5,957   |   |                  |   | 4,426   |  
|Interest receivable                                                                                                                        |  |               | 3,146   |   |                  |   | 1,684   |  
|Prepaid expenses and other assets                                                                                                          |  |               | 85      |   |                  |   | 40      |  
|                                                                                                                                           |  |               |         |   |                  |   |         |  
|Total assets                                                                                                                               |  | $             | 350,441 |   |                  | $ | 260,967 |  
|                                                                                                                                           |  |               |         |   |                  |   |         |  
|LIABILITIES                                                                                                                                |  |               |         |   |                  |   |         |  
|Payable for investments purchased                                                                                                          |  | $             | 13,402  |   |                  | $ | 6,153   |  
|Secured borrowings (Note 6)                                                                                                                |  |               | 75,922  |   |                  |   | 66,822  |  
|Due to Investment Adviser (Note 5)                                                                                                         |  |               | 2,257   |   |                  |   | 16      |  
|Interest and credit facility fees payable (Note 6)                                                                                         |  |               | 613     |   |                  |   | 549     |  
|Base management and incentive fees payable (Note 5)                                                                                        |  |               | 1,601   |   |                  |   | 625     |  
|Dividend payable                                                                                                                           |  |               | 2,449   |   |                  |   |        |  
|Administrative service fees payable (Note 5)                                                                                               |  |               | 388     |   |                  |   | 131     |  
|Other accrued expenses and liabilities                                                                                                     |  |               | 768     |   |                  |   | 669     |  
|                                                                                                                                           |  |               |         |   |                  |   |         |  
|Total liabilities                                                                                                                          |  |               | 97,400  |   |                  |   | 74,965  |  
|                                                                                                                                           |  |               |         |   |                  |   |         |  
|Commitments and contingencies (Notes 7 and 11)                                                                                             |  |               |         |   |                  |   |         |  
|NET ASSETS                                                                                                                                 |  |               |         |   |                  |   |         |  
|Common stock, $0.01 par value; 200,000,000 shares authorized; 12,891,421 shares and 9,575,990 shares, respectively, issued and
outstanding |  |               | 129     |   |                  |   | 96      |  
|Paid-in capital in excess of par value                                                                                                     |  |               | 252,404 |   |                  |   | 186,965 |  
|Offering costs                                                                                                                             |  |               | (74     | ) |                  |   | (74     | )
|Accumulated net investment income (loss), net of cumulative dividends of $2,449 and $0, respectively                                       |  |               | (74     | ) |                  |   | (664    | )
|Net accumulated realized gain (loss)                                                                                                       |  |               | 46      |   |                  |   |        |  
|Net change in unrealized appreciation (depreciation)                                                                                       |  |               | 610     |   |                  |   | (321    | )
|                                                                                                                                           |  |               |         |   |                  |   |         |  
|Total net assets                                                                                                                           |  | $             | 253,041 |   |                  | $ | 186,002 |  
|                                                                                                                                           |  |               |         |   |                  |   |         |  
|NET ASSETS PER SHARE                                                                                                                       |  | $             | 19.63   |   |                  | $ | 19.42   |  
|                                                                                                                                           |  |               |         |   |                  |   |         |  

The accompanying notes are an integral part of these consolidated financial statements.



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CARLYLE GMS FINANCE, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

(dollar amounts
in thousands, except per share data)

(unaudited)



|                                                                                                  |  |                                               |            | 
|------------------------------------------------------------------------------------------------- |  | --------------------------------------------- | ---------- | 
|                                                                                                  |  | For the three monthperiod endedMarch 31, 2014 |           
|Investment income:                                                                                |  |                                               |            | 
|Interest income from non-controlled/non-affiliated investments                                    |  | $                                             | 6,633      | 
|                                                                                                  |  |                                               |            | 
|Total investment income                                                                           |  |                                               | 6,633      | 
|                                                                                                  |  |                                               |            | 
|Expenses:                                                                                         |  |                                               |            | 
|Base management fees (Note 5)                                                                     |  |                                               | 991        | 
|Incentive fees (Note 5)                                                                           |  |                                               | 940        | 
|Professional fees                                                                                 |  |                                               | 597        | 
|Administrative service fees (Note 5)                                                              |  |                                               | 257        | 
|Interest expense (Note 6)                                                                         |  |                                               | 349        | 
|Credit facility fees (Note 6)                                                                     |  |                                               | 530        | 
|Directors fees and expenses                                                                      |  |                                               | 82         | 
|Transfer agency fees                                                                              |  |                                               | 26         | 
|Other general and administrative                                                                  |  |                                               | 152        | 
|                                                                                                  |  |                                               |            | 
|Total expenses                                                                                    |  |                                               | 3,924      | 
|Waiver of base management fees (Note 5)                                                           |  |                                               | 330        | 
|                                                                                                  |  |                                               |            | 
|Net expenses                                                                                      |  |                                               | 3,594      | 
|                                                                                                  |  |                                               |            | 
|Net investment income (loss)                                                                      |  |                                               | 3,039      | 
|Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments: |  |                                               |            | 
|Net realized gain (loss) on investmentsnon-controlled/non-affiliated                             |  |                                               | 46         | 
|Net change in unrealized appreciation (depreciation) on investmentsnon-controlled/non-affiliated |  |                                               | 931        | 
|                                                                                                  |  |                                               |            | 
|Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments  |  |                                               | 977        | 
|                                                                                                  |  |                                               |            | 
|Net increase (decrease) in net assets resulting from operations                                   |  | $                                             | 4,016      | 
|                                                                                                  |  |                                               |            | 
|Basic and diluted earnings per common share (Note 8)                                              |  | $                                             | 0.37       | 
|                                                                                                  |  |                                               |            | 
|Weighted-average shares of common stock outstandingBasic and Diluted (Note 8)                    |  |                                               | 10,735,373 | 
|                                                                                                  |  |                                               |            | 
|Dividends declared per common share                                                               |  | $                                             | 0.19       | 

The accompanying notes are an integral part of these consolidated financial statements.



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CARLYLE GMS FINANCE, INC.

CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS

(dollar amounts in thousands)

(unaudited)



|                                                                                                  |  |                                               |         |  
|------------------------------------------------------------------------------------------------- |  | --------------------------------------------- | ------- | -
|                                                                                                  |  | For the three monthperiod endedMarch 31, 2014 |        
|Increase (decrease) in net assets resulting from operations:                                      |  |                                               |         |  
|Net investment income (loss)                                                                      |  | $                                             | 3,039   |  
|Net realized gain (loss) on investmentsnon-controlled/non-affiliated                             |  |                                               | 46      |  
|Net change in unrealized appreciation (depreciation) on investmentsnon-controlled/non-affiliated |  |                                               | 931     |  
|                                                                                                  |  |                                               |         |  
|Net increase (decrease) in net assets resulting from operations                                   |  |                                               | 4,016   |  
|                                                                                                  |  |                                               |         |  
|Capital transactions:                                                                             |  |                                               |         |  
|Common stock issued                                                                               |  |                                               | 65,472  |  
|Dividends declared                                                                                |  |                                               | (2,449  | )
|                                                                                                  |  |                                               |         |  
|Total capital share transactions                                                                  |  |                                               | 63,023  |  
|                                                                                                  |  |                                               |         |  
|Net increase (decrease) in net assets                                                             |  |                                               | 67,039  |  
|                                                                                                  |  |                                               |         |  
|Net assets at beginning of period                                                                 |  |                                               | 186,002 |  
|                                                                                                  |  |                                               |         |  
|Net assets at end of period                                                                       |  | $                                             | 253,041 |  
|                                                                                                  |  |                                               |         |  

The accompanying notes are an integral part of these consolidated financial statements.



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CARLYLE GMS FINANCE, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

(dollar amounts
in thousands)

(unaudited)



|                                                                                                                                                 |  |                                               |          |  
|------------------------------------------------------------------------------------------------------------------------------------------------ |  | --------------------------------------------- | -------- | -
|                                                                                                                                                 |  | For the three monthperiod endedMarch 31, 2014 |         
|Cash flows from operating activities:                                                                                                            |  |                                               |          |  
|Net increase (decrease) in net assets resulting from operations                                                                                  |  | $                                             | 4,016    |  
|Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating
activities: |  |                                               |          |  
|Amortization of deferred financing costs                                                                                                         |  |                                               | 219      |  
|Net accretion of discount on securities                                                                                                          |  |                                               | (134     | )
|Net realized (gain) loss on investmentsnon-controlled/non-affiliated                                                                            |  |                                               | (46      | )
|Net change in unrealized (appreciation) depreciation on investmentsnon-controlled/non-affiliated                                                |  |                                               | (931     | )
|Cost of investments purchased                                                                                                                    |  |                                               | (110,927 | )
|Proceeds from sales and repayments of investments                                                                                                |  |                                               | 13,749   |  
|Changes in operating assets:                                                                                                                     |  |                                               |          |  
|Interest receivable                                                                                                                              |  |                                               | (1,462   | )
|Prepaid expenses and other assets                                                                                                                |  |                                               | (45      | )
|Changes in operating liabilities:                                                                                                                |  |                                               |          |  
|Due to Investment Adviser                                                                                                                        |  |                                               | 585      |  
|Interest and credit facility fees payable                                                                                                        |  |                                               | 64       |  
|Base management and incentive fees payable                                                                                                       |  |                                               | 976      |  
|Administrative service fees payable                                                                                                              |  |                                               | 257      |  
|Other accrued expenses and liabilities                                                                                                           |  |                                               | 99       |  
|                                                                                                                                                 |  |                                               |          |  
|Net cash provided by (used in) operating activities                                                                                              |  |                                               | (93,580  | )
|                                                                                                                                                 |  |                                               |          |  
|Cash flows from financing activities:                                                                                                            |  |                                               |          |  
|Proceeds from issuance of common stock                                                                                                           |  |                                               | 65,472   |  
|Borrowings on revolving credit facility                                                                                                          |  |                                               | 9,100    |  
|Debt issuance costs                                                                                                                              |  |                                               | (94      | )
|                                                                                                                                                 |  |                                               |          |  
|Net cash provided by (used in) financing activities                                                                                              |  |                                               | 74,478   |  
|                                                                                                                                                 |  |                                               |          |  
|Net increase (decrease) in cash                                                                                                                  |  |                                               | (19,102  | )
|Cash, beginning of period                                                                                                                        |  |                                               | 42,010   |  
|                                                                                                                                                 |  |                                               |          |  
|Cash, end of period                                                                                                                              |  | $                                             | 22,908   |  
|                                                                                                                                                 |  |                                               |          |  
|Supplemental disclosure:                                                                                                                         |  |                                               |          |  
|Interest paid during the period                                                                                                                  |  | $                                             | 285      |  
|Financing costs due to Investment Adviser                                                                                                        |  | $                                             | 1,656    |  
|Dividends declared during the period                                                                                                             |  | $                                             | 2,449    |  

The accompanying notes are an integral part of these consolidated financial statements.



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CARLYLE GMS FINANCE, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of
March 31, 2014

(dollar amounts in thousands)

(unaudited)



|                                                                                  |  |                                          |  |              |      |   |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |       |  
|--------------------------------------------------------------------------------- |  | ---------------------------------------- |  | ------------ | ---- | - | ------------ |  | ---------- | --------------- |  |  | ---------- |  |  | ----------------- | ------ |  | ------------- | - | ------- | ----------------------- |  | - | ------- |  |  |  | ----- | -
|Portfolio Company (1)                                                             |  | Industry                                 |  | InterestRate |      |   | MaturityDate |  |            | AcquisitionDate |  |  | ParAmount  |  |  | AmortizedCost (6) |        |  | FairValue (7) |   |         | Percentage ofNet Assets | 
|Investmentsnon-controlled/non-affiliated                                         |  |                                          |  |              |      |   |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |       |  
|First Lien Debt (70.35%)                                                          |  |                                          |  |              |      |   |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |       |  
|ACP Tower Merger Sub, Inc. (Telular
Corporation) (2) (3) (4)                      |  | Telecommunications                       |  |              | 5.50 | % |              |  | 6/24/2019  |                 |  |  | 6/24/2013  |  |  | $                 | 6,016  |  |               | $ | 5,996   |                         |  | $ | 5,925   |  |  |  | 2.34  | %
|Anaren, Inc.(2) (3) (4)                                                           |  | Telecommunications                       |  |              | 5.50 |   |              |  | 2/18/2021  |                 |  |  | 2/18/2014  |  |  |                   | 11,584 |  |               |   | 11,472  |                         |  |   | 11,345  |  |  |  | 4.48  |  
|Consolidated Aerospace Manufacturing, LLC (2) (3) (4)                             |  | Aerospace & Defense                      |  |              | 5.00 |   |              |  | 3/27/2020  |                 |  |  | 2/28/2014  |  |  |                   | 5,806  |  |               |   | 5,785   |                         |  |   | 5,853   |  |  |  | 2.31  |  
|Dialysis Newco, Inc., d/b/a DSI Renal(2) (3) (4)                                  |  | Healthcare & Pharmaceuticals             |  |              | 5.25 |   |              |  | 8/16/2020  |                 |  |  | 8/16/2013  |  |  |                   | 9,690  |  |               |   | 9,603   |                         |  |   | 9,690   |  |  |  | 3.83  |  
|Genex Services, Inc.(2) (3) (4)                                                   |  | Banking, Finance, Insurance &Real Estate |  |              | 5.25 |   |              |  | 7/26/2018  |                 |  |  | 7/25/2013  |  |  |                   | 7,914  |  |               |   | 7,880   |                         |  |   | 7,720   |  |  |  | 3.05  |  
|Landslide Holdings, Inc. (LANDesk Software) (2) (3) (5)                           |  | Software                                 |  |              | 5.00 |   |              |  | 2/25/2020  |                 |  |  | 2/25/2014  |  |  |                   | 9,950  |  |               |   | 9,953   |                         |  |   | 10,030  |  |  |  | 3.97  |  
|Meritas Schools Holdings, LLC (2) (3) (4)                                         |  | Consumer Services                        |  |              | 7.00 |   |              |  | 6/25/2019  |                 |  |  | 6/21/2013  |  |  |                   | 8,436  |  |               |   | 8,362   |                         |  |   | 8,322   |  |  |  | 3.29  |  
|Miller Heiman, Inc. (2) (3) (4)                                                   |  | Business Services                        |  |              | 6.75 |   |              |  | 9/30/2019  |                 |  |  | 10/1/2013  |  |  |                   | 12,422 |  |               |   | 12,308  |                         |  |   | 12,459  |  |  |  | 4.93  |  
|MRI Software LLC(2) (3) (5)                                                       |  | Software                                 |  |              | 5.25 |   |              |  | 2/4/2021   |                 |  |  | 1/31/2014  |  |  |                   | 15,000 |  |               |   | 14,929  |                         |  |   | 14,685  |  |  |  | 5.80  |  
|Nellson Nutraceutical, LLC (2) (3) (4)                                            |  | Beverage, Food & Tobacco                 |  |              | 5.75 |   |              |  | 8/26/2018  |                 |  |  | 8/26/2013  |  |  |                   | 5,985  |  |               |   | 5,955   |                         |  |   | 5,906   |  |  |  | 2.33  |  
|NES Global Talent Finance US LLC (United
Kingdom) (2) (3) (4) (8)                 |  | Energy: Oil & Gas                        |  |              | 6.50 |   |              |  | 10/3/2019  |                 |  |  | 10/2/2013  |  |  |                   | 12,422 |  |               |   | 12,193  |                         |  |   | 12,546  |  |  |  | 4.96  |  
|Packaging Coordinators, Inc.(2) (3) (4)                                           |  | Containers, Packaging & Glass            |  |              | 5.50 |   |              |  | 5/10/2020  |                 |  |  | 5/10/2013  |  |  |                   | 4,478  |  |               |   | 4,470   |                         |  |   | 4,522   |  |  |  | 1.79  |  
|Packaging Coordinators, Inc. (Delayed Draw) (2) (3) (4)                           |  | Containers, Packaging & Glass            |  |              | 5.50 |   |              |  | 5/10/2020  |                 |  |  | 12/20/2013 |  |  |                   | 3,000  |  |               |   | 2,998   |                         |  |   | 3,030   |  |  |  | 1.20  |  
|Prowler Acquisition Corp. (Pipeline Supply and Service, LLC)(2) (3)
(5)           |  | Wholesale                                |  |              | 5.50 |   |              |  | 1/28/2020  |                 |  |  | 1/24/2014  |  |  |                   | 10,407 |  |               |   | 10,308  |                         |  |   | 10,511  |  |  |  | 4.15  |  
|Seaton Acquisition Corp.(2) (3) (5)                                               |  | Business Services                        |  |              | 6.75 |   |              |  | 1/29/2019  |                 |  |  | 1/28/2014  |  |  |                   | 14,000 |  |               |   | 13,879  |                         |  |   | 13,987  |  |  |  | 5.53  |  
|Stafford Logistics, Inc. (Custom Ecology, Inc.)(2) (3) (4)                        |  | Environmental Industries                 |  |              | 6.75 |   |              |  | 6/26/2019  |                 |  |  | 7/1/2013   |  |  |                   | 9,925  |  |               |   | 9,838   |                         |  |   | 9,713   |  |  |  | 3.84  |  
|Synarc-Biocore Holdings, LLC(2) (3) (5)                                           |  | Healthcare & Pharmaceuticals             |  |              | 5.50 |   |              |  | 3/10/2021  |                 |  |  | 3/6/2014   |  |  |                   | 13,500 |  |               |   | 13,368  |                         |  |   | 13,574  |  |  |  | 5.37  |  
|Systems Maintenance Services Holding, Inc. (2) (3) (4)                            |  | High Tech Industries                     |  |              | 5.25 |   |              |  | 10/18/2019 |                 |  |  | 10/18/2013 |  |  |                   | 2,232  |  |               |   | 2,224   |                         |  |   | 2,183   |  |  |  | 0.86  |  
|Tectum Holdings, Inc.(2) (3) (4)                                                  |  | Automotive                               |  |              | 5.25 |   |              |  | 9/12/2018  |                 |  |  | 3/4/2014   |  |  |                   | 6,545  |  |               |   | 6,533   |                         |  |   | 6,545   |  |  |  | 2.59  |  
|The Topps Company, Inc. (2) (3) (4)                                               |  | Non-durable Consumer Goods               |  |              | 7.25 |   |              |  | 10/2/2018  |                 |  |  | 10/1/2013  |  |  |                   | 11,599 |  |               |   | 11,494  |                         |  |   | 11,504  |  |  |  | 4.55  |  
|TruckPro, LLC (2) (3) (4)                                                         |  | Automotive                               |  |              | 5.75 |   |              |  | 8/6/2018   |                 |  |  | 8/6/2013   |  |  |                   | 9,800  |  |               |   | 9,747   |                         |  |   | 9,650   |  |  |  | 3.81  |  
|Violin Finco S.A.R.L. (Alexander Mann Solutions) (United
Kingdom) (2) (3) (4) (8) |  | Business Services                        |  |              | 5.75 |   |              |  | 12/20/2019 |                 |  |  | 12/18/2013 |  |  |                   | 12,469 |  |               |   | 12,355  |                         |  |   | 12,264  |  |  |  | 4.85  |  
|Vitera Healthcare Solutions, LLC (2) (3) (4)                                      |  | Healthcare & Pharmaceuticals             |  |              | 6.00 |   |              |  | 11/4/2020  |                 |  |  | 11/1/2013  |  |  |                   | 9,606  |  |               |   | 9,516   |                         |  |   | 9,702   |  |  |  | 3.84  |  
|Zest Holdings, LLC (2) (3) (4)                                                    |  | Durable Consumer Goods                   |  |              | 6.50 |   |              |  | 8/16/2020  |                 |  |  | 8/14/2013  |  |  |                   | 12,438 |  |               |   | 12,208  |                         |  |   | 12,293  |  |  |  | 4.86  |  
|                                                                                  |  |                                          |  |              |      |   |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |       |  
|First Lien Debt Total                                                             |  |                                          |  |              |      |   |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   | 223,374 |                         |  |   | 223,959 |  |  |  | 88.53 |  
|                                                                                  |  |                                          |  |              |      |   |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |       |  
|Second Lien Debt (14.63%)                                                         |  |                                          |  |              |      |   |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |       |  
|Ascensus, Inc.(2) (3) (5)                                                         |  | Banking, Finance, Insurance &Real Estate |  |              | 9.00 |   |              |  | 12/2/2020  |                 |  |  | 12/2/2013  |  |  |                   | 8,000  |  |               |   | 7,886   |                         |  |   | 8,182   |  |  |  | 3.23  |  
|Drew Marine Group Inc. (2) (3) (5)                                                |  | Chemicals, Plastics & Rubber             |  |              | 8.00 |   |              |  | 5/19/2021  |                 |  |  | 11/19/2013 |  |  |                   | 12,500 |  |               |   | 12,473  |                         |  |   | 11,714  |  |  |  | 4.63  |  
|Genex Services, Inc. (2) (3) (4)                                                  |  | Banking, Finance, Insurance &Real Estate |  |              | 9.25 |   |              |  | 1/26/2019  |                 |  |  | 7/25/2013  |  |  |                   | 3,500  |  |               |   | 3,469   |                         |  |   | 3,415   |  |  |  | 1.35  |  
|Landslide Holdings, Inc. (LANDesk Software)(2) (3) (5)                            |  | Software                                 |  |              | 8.25 |   |              |  | 2/25/2021  |                 |  |  | 2/25/2014  |  |  |                   | 3,500  |  |               |   | 3,475   |                         |  |   | 3,570   |  |  |  | 1.41  |  



7



---

##### Table of Contents

CARLYLE GMS FINANCE, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of
March 31, 2014

(dollar amounts in thousands)

(unaudited)



|                                                                         |  |                                           |  |              |       |   |              |  |            |                 |  |  |            |  |  |                   |       |  |               |   |        |                         |  |   |        |  |  |  |       |  
|------------------------------------------------------------------------ |  | ----------------------------------------- |  | ------------ | ----- | - | ------------ |  | ---------- | --------------- |  |  | ---------- |  |  | ----------------- | ----- |  | ------------- | - | ------ | ----------------------- |  | - | ------ |  |  |  | ----- | -
|Portfolio Company (1)                                                    |  | Industry                                  |  | InterestRate |       |   | MaturityDate |  |            | AcquisitionDate |  |  | ParAmount  |  |  | AmortizedCost (6) |       |  | FairValue (7) |   |        | Percentage ofNet Assets | 
|Second Lien Debt (Continued)                                             |  |                                           |  |              |       |   |              |  |            |                 |  |  |            |  |  |                   |       |  |               |   |        |                         |  |   |        |  |  |  |       |  
|Nellson Nutraceutical, LLC (2) (3) (4)                                   |  | Beverage, Food & Tobacco                  |  |              | 10.50 | % |              |  | 2/26/2019  |                 |  |  | 8/26/2013  |  |  | $                 | 2,000 |  |               | $ | 1,985  |                         |  | $ | 2,024  |  |  |  | 0.80  | %
|Prowler Acquisition Corp. (Pipeline Supply and Service, LLC) (2) (3)
(5) |  | Wholesale                                 |  |              | 9.50  |   |              |  | 7/28/2020  |                 |  |  | 1/24/2014  |  |  |                   | 3,000 |  |               |   | 2,942  |                         |  |   | 3,083  |  |  |  | 1.22  |  
|Systems Maintenance Services Holding, Inc.(2) (3) (4)                    |  | High Tech Industries                      |  |              | 9.25  |   |              |  | 10/18/2020 |                 |  |  | 10/18/2013 |  |  |                   | 6,000 |  |               |   | 5,950  |                         |  |   | 5,816  |  |  |  | 2.30  |  
|Vitera Healthcare Solutions, LLC (2) (3) (5)                             |  | Healthcare & Pharmaceuticals              |  |              | 9.25  |   |              |  | 11/4/2021  |                 |  |  | 11/1/2013  |  |  |                   | 2,000 |  |               |   | 1,971  |                         |  |   | 2,040  |  |  |  | 0.81  |  
|Watchfire Enterprises, Inc.(2) (3) (5)                                   |  | Media: Advertising, Printing & Publishing |  |              | 9.00  |   |              |  | 10/2/2021  |                 |  |  | 10/2/2013  |  |  |                   | 7,000 |  |               |   | 6,909  |                         |  |   | 6,731  |  |  |  | 2.66  |  
|                                                                         |  |                                           |  |              |       |   |              |  |            |                 |  |  |            |  |  |                   |       |  |               |   |        |                         |  |   |        |  |  |  |       |  
|Second Lien Debt Total                                                   |  |                                           |  |              |       |   |              |  |            |                 |  |  |            |  |  |                   |       |  |               |   | 47,060 |                         |  |   | 46,575 |  |  |  | 18.41 |  
|                                                                         |  |                                           |  |              |       |   |              |  |            |                 |  |  |            |  |  |                   |       |  |               |   |        |                         |  |   |        |  |  |  |       |  



|                                                                        |  |                    |  |              |            |  |                 |  |            |           |  |  |                   |  |  |               |         |  |                         |   |         |  |  |  |        |  
|----------------------------------------------------------------------- |  | ------------------ |  | ------------ | ---------- |  | --------------- |  | ---------- | --------- |  |  | ----------------- |  |  | ------------- | ------- |  | ----------------------- | - | ------- |  |  |  | ------ | -
|Portfolio Company (1)                                                   |  | Industry           |  | MaturityDate |            |  | AcquisitionDate |  |            | ParAmount |  |  | AmortizedCost (6) |  |  | FairValue (7) |         |  | Percentage ofNet Assets |  
|Structured Finance Obligations (15.02%) (5) (8)                         |  |                    |  |              |            |  |                 |  |            |           |  |  |                   |  |  |               |         |  |                         |   |         |  |  |  |        |  
|Apidos CDO II, Subordinated Notes                                       |  | Structured Finance |  |              | 12/21/2018 |  |                 |  | 1/31/2014  |           |  |  | 4,820             |  |  |               | 1,850   |  |                         |   | 1,946   |  |  |  | 0.77   |  
|Ares XXVIII CLO Ltd., Subordinated Notes                                |  | Structured Finance |  |              | 10/17/2024 |  |                 |  | 10/10/2013 |           |  |  | 7,000             |  |  |               | 6,107   |  |                         |   | 6,104   |  |  |  | 2.41   |  
|Babson CLO Ltd. 2005-I, Subordinated Notes                              |  | Structured Finance |  |              | 4/15/2019  |  |                 |  | 7/16/2013  |           |  |  | 7,632             |  |  |               | 4,364   |  |                         |   | 4,236   |  |  |  | 1.68   |  
|Blackrock Senior Income Series V, Limited, Subordinated Notes (Ireland) |  | Structured Finance |  |              | 8/13/2019  |  |                 |  | 3/11/2014  |           |  |  | 4,600             |  |  |               | 3,197   |  |                         |   | 3,197   |  |  |  | 1.27   |  
|CIFC Funding 2006-II, Ltd., Preferred Shares                            |  | Structured Finance |  |              | 3/1/2021   |  |                 |  | 2/3/2014   |           |  |  | 9,093             |  |  |               | 4,330   |  |                         |   | 4,388   |  |  |  | 1.73   |  
|Clydesdale CLO 2005, Ltd., Subordinated Notes                           |  | Structured Finance |  |              | 12/6/2017  |  |                 |  | 7/15/2013  |           |  |  | 5,750             |  |  |               |        |  |                         |   | 29      |  |  |  | 0.01   |  
|Flagship VII Limited, Subordinated Notes                                |  | Structured Finance |  |              | 1/20/2026  |  |                 |  | 12/18/2013 |           |  |  | 7,000             |  |  |               | 6,160   |  |                         |   | 6,230   |  |  |  | 2.46   |  
|GoldenTree Loan Opportunities V, Limited, Subordinated Notes            |  | Structured Finance |  |              | 10/18/2021 |  |                 |  | 10/11/2013 |           |  |  | 5,000             |  |  |               | 3,430   |  |                         |   | 3,463   |  |  |  | 1.37   |  
|1776 CLO I, Ltd., Subordinated Notes                                    |  | Structured Finance |  |              | 5/8/2020   |  |                 |  | 2/27/2014  |           |  |  | 6,750             |  |  |               | 6,581   |  |                         |   | 6,581   |  |  |  | 2.60   |  
|Landmark VIII, CLO Ltd., Income Notes                                   |  | Structured Finance |  |              | 10/19/2020 |  |                 |  | 10/22/2013 |           |  |  | 8,600             |  |  |               | 4,097   |  |                         |   | 4,433   |  |  |  | 1.75   |  
|MSIM Peconic Bay, Ltd., Subordinated Notes                              |  | Structured Finance |  |              | 7/20/2019  |  |                 |  | 10/22/2013 |           |  |  | 4,500             |  |  |               | 1,454   |  |                         |   | 1,434   |  |  |  | 0.57   |  
|Nautique Funding Ltd., Income Notes                                     |  | Structured Finance |  |              | 4/15/2020  |  |                 |  | 2/24/2014  |           |  |  | 5,000             |  |  |               | 3,475   |  |                         |   | 3,500   |  |  |  | 1.38   |  
|Pacifica CDO V, Ltd., Subordinated Notes                                |  | Structured Finance |  |              | 1/26/2020  |  |                 |  | 3/28/2014  |           |  |  | 4,700             |  |  |               | 2,256   |  |                         |   | 2,270   |  |  |  | 0.90   |  
|                                                                        |  |                    |  |              |            |  |                 |  |            |           |  |  |                   |  |  |               |         |  |                         |   |         |  |  |  |        |  
|Structured Finance Obligations Total                                    |  |                    |  |              |            |  |                 |  |            |           |  |  |                   |  |  |               | 47,301  |  |                         |   | 47,811  |  |  |  | 18.90  |  
|                                                                        |  |                    |  |              |            |  |                 |  |            |           |  |  |                   |  |  |               |         |  |                         |   |         |  |  |  |        |  
|Total Investmentsnon-controlled/non-affiliated                         |  |                    |  |              |            |  |                 |  |            |           |  |  |                   |  |  | $             | 317,735 |  |                         | $ | 318,345 |  |  |  | 125.84 | %
|                                                                        |  |                    |  |              |            |  |                 |  |            |           |  |  |                   |  |  |               |         |  |                         |   |         |  |  |  |        |  



8



---

##### Table of Contents

CARLYLE GMS FINANCE, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of
March 31, 2014

(dollar amounts in thousands)

(unaudited)



|(1) | Unless otherwise indicated, debt investments of Carlyle GMS Finance, Inc. (GMS Finance or the Company) are domiciled in the United States and structured finance obligations are domiciled in the
Cayman Islands. Under the Investment Company Act of 1940, as amended (the Investment Company Act), the Company would be deemed to control a portfolio company if the Company owned more than 25% of its outstanding voting
securities and/or held the power to exercise control over the management or policies of the portfolio company. As of March 31, 2014, the Company does not control any of these portfolio companies. Under the Investment Company Act, the
Company would be deemed an affiliated person of a portfolio company if the Company owns 5% or more of the portfolio companys outstanding voting securities. As of March 31, 2014, the Company is not an affiliated person
of any portfolio company.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Variable rate loans to the portfolio companies bear interest at a rate that may be determined by reference to either LIBOR or an alternate base rate (commonly based on the Federal Funds Rate or the Prime Rate), which
generally reset quarterly. For each such loan, the Company has provided the interest rate in effect as of March 31, 2014.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Loan includes interest rate floor feature.
|--- | ------------------------------------------

|(4) | These assets are owned by the Companys wholly owned subsidiary, Carlyle GMS Finance SPV LLC (the Borrower Sub). The Borrower Sub has a revolving credit facility with various lenders (the
Revolving Credit Facility). The lenders of the Revolving Credit Facility have a first lien security interest in all of the assets of the Borrower Sub (see Note 6, Borrowings) and such assets are not generally available to creditors of
GMS Finance other than to satisfy obligations of the Borrower Sub under the Revolving Credit Facility.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | These assets are owned by the Company. The Company has a senior secured revolving credit facility with various lenders (the Facility). The lenders of the Facility have a perfected first-priority security
interest in substantially all of the portfolio investments held by the Company and certain future domestic subsidiaries of the Company and $100,000 of unfunded investor equity capital commitments (see Note 6, Borrowings).
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | Amortized cost represents original cost, including origination fees, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method. The cost of
equities, including the equity class of collateralized loan obligation (CLO) funds, which are referred to as structured finance obligations, is not amortized.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | Fair value is determined in good faith by or under the direction of the Board of Directors of the Company (Notes 2 and 4), pursuant to the Companys valuation policies.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) | The Company has determined the indicated investments are non-qualifying assets under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying
assets unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Companys total assets.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



9



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##### Table of Contents

CARLYLE GMS FINANCE, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of
March 31, 2014

(dollar amounts in thousands)

(unaudited)



The type and industrial composition of our investments as of March 31, 2014 were as
follows:



|                                          |  |               |         |  |            |   |         |                 |  |  |        |  
|----------------------------------------- |  | ------------- | ------- |  | ---------- | - | ------- | --------------- |  |  | ------ | -
|Type                                      |  | AmortizedCost |         |  | FairValue  |   |         | % of FairValue  | 
|First Lien Debt                           |  | $             | 223,374 |  |            | $ | 223,959 |                 |  |  | 70.35  | %
|Second Lien Debt                          |  |               | 47,060  |  |            |   | 46,575  |                 |  |  | 14.63  |  
|Structured Finance Obligations            |  |               | 47,301  |  |            |   | 47,811  |                 |  |  | 15.02  |  
|                                          |  |               |         |  |            |   |         |                 |  |  |        |  
|Total                                     |  | $             | 317,735 |  |            | $ | 318,345 |                 |  |  | 100.00 | %
|                                          |  |               |         |  |            |   |         |                 |  |  |        |  
|                                          |  |               |        
|Industry                                  |  | AmortizedCost |         |  | Fair Value |   |         | % of Fair Value | 
|Aerospace and Defense                     |  | $             | 5,785   |  |            | $ | 5,853   |                 |  |  | 1.84   | %
|Automotive                                |  |               | 16,280  |  |            |   | 16,195  |                 |  |  | 5.09   |  
|Banking, Finance, Insurance & Real Estate |  |               | 19,235  |  |            |   | 19,317  |                 |  |  | 6.07   |  
|Beverage, Food & Tobacco                  |  |               | 7,940   |  |            |   | 7,930   |                 |  |  | 2.49   |  
|Business Services                         |  |               | 38,542  |  |            |   | 38,710  |                 |  |  | 12.16  |  
|Chemicals, Plastics & Rubber              |  |               | 12,473  |  |            |   | 11,714  |                 |  |  | 3.68   |  
|Consumer Services                         |  |               | 8,362   |  |            |   | 8,322   |                 |  |  | 2.61   |  
|Containers, Packaging & Glass             |  |               | 7,468   |  |            |   | 7,552   |                 |  |  | 2.37   |  
|Durable Consumer Goods                    |  |               | 12,208  |  |            |   | 12,293  |                 |  |  | 3.86   |  
|Energy: Oil & Gas                         |  |               | 12,193  |  |            |   | 12,546  |                 |  |  | 3.94   |  
|Environmental Industries                  |  |               | 9,838   |  |            |   | 9,713   |                 |  |  | 3.05   |  
|Healthcare & Pharmaceuticals              |  |               | 34,458  |  |            |   | 35,006  |                 |  |  | 11.00  |  
|High Tech Industries                      |  |               | 8,174   |  |            |   | 7,999   |                 |  |  | 2.51   |  
|Media: Advertising, Printing & Publishing |  |               | 6,909   |  |            |   | 6,731   |                 |  |  | 2.11   |  
|Non-durable Consumer Goods                |  |               | 11,494  |  |            |   | 11,504  |                 |  |  | 3.61   |  
|Software                                  |  |               | 28,357  |  |            |   | 28,285  |                 |  |  | 8.89   |  
|Structured Finance                        |  |               | 47,301  |  |            |   | 47,811  |                 |  |  | 15.02  |  
|Telecommunications                        |  |               | 17,468  |  |            |   | 17,270  |                 |  |  | 5.43   |  
|Wholesale                                 |  |               | 13,250  |  |            |   | 13,594  |                 |  |  | 4.27   |  
|                                          |  |               |         |  |            |   |         |                 |  |  |        |  
|Total                                     |  | $             | 317,735 |  |            | $ | 318,345 |                 |  |  | 100.00 | %
|                                          |  |               |         |  |            |   |         |                 |  |  |        |  

The accompanying notes are an integral part of these consolidated financial statements.



10



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##### Table of Contents

CARLYLE GMS FINANCE, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of
December 31, 2013

(dollar amounts in thousands)



|                                                                                  |  |                                          |  |              |       |   |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |       |  
|--------------------------------------------------------------------------------- |  | ---------------------------------------- |  | ------------ | ----- | - | ------------ |  | ---------- | --------------- |  |  | ---------- |  |  | ----------------- | ------ |  | ------------- | - | ------- | ----------------------- |  | - | ------- |  |  |  | ----- | -
|Portfolio Company (1)                                                             |  | Industry                                 |  | InterestRate |       |   | MaturityDate |  |            | AcquisitionDate |  |  | ParAmount  |  |  | AmortizedCost (5) |        |  | FairValue (6) |   |         | Percentage ofNet Assets | 
|Investmentsnon-controlled/non-affiliated                                         |  |                                          |  |              |       |   |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |       |  
|First Lien Debt (66.57%)                                                          |  |                                          |  |              |       |   |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |       |  
|ACP Tower Merger Sub, Inc. (Telular
Corporation) (2) (3) (4)                      |  | Telecommunications                       |  |              | 5.50  | % |              |  | 6/24/2019  |                 |  |  | 6/24/2013  |  |  | $                 | 6,094  |  |               | $ | 6,073   |                         |  | $ | 5,968   |  |  |  | 3.21  | %
|Dialysis Newco, Inc., d/b/a DSI Renal(2) (3) (4)                                  |  | Healthcare & Pharmaceuticals             |  |              | 5.25  |   |              |  | 8/16/2020  |                 |  |  | 8/16/2013  |  |  |                   | 9,715  |  |               |   | 9,624   |                         |  |   | 9,743   |  |  |  | 5.24  |  
|Genex Services, Inc.(2) (3) (4)                                                   |  | Banking, Finance, Insurance &Real Estate |  |              | 5.25  |   |              |  | 7/26/2018  |                 |  |  | 7/25/2013  |  |  |                   | 7,934  |  |               |   | 7,898   |                         |  |   | 7,741   |  |  |  | 4.16  |  
|Landslide Holdings, Inc. (LANDesk Software)(2)(3)(4)                              |  | High Tech Industries                     |  |              | 5.25  |   |              |  | 8/9/2019   |                 |  |  | 8/7/2013   |  |  |                   | 6,922  |  |               |   | 6,859   |                         |  |   | 6,958   |  |  |  | 3.74  |  
|Meritas Schools Holdings, LLC (2) (3) (4)                                         |  | Consumer Services                        |  |              | 7.00  |   |              |  | 6/25/2019  |                 |  |  | 6/21/2013  |  |  |                   | 8,458  |  |               |   | 8,380   |                         |  |   | 8,331   |  |  |  | 4.48  |  
|Miller Heiman, Inc. (2) (3) (4)                                                   |  | Business Services                        |  |              | 6.75  |   |              |  | 9/30/2019  |                 |  |  | 10/1/2013  |  |  |                   | 12,500 |  |               |   | 12,381  |                         |  |   | 12,584  |  |  |  | 6.76  |  
|Nellson Nutraceutical, LLC (2) (3) (4)                                            |  | Beverage, Food & Tobacco                 |  |              | 6.75  |   |              |  | 8/26/2018  |                 |  |  | 8/26/2013  |  |  |                   | 5,985  |  |               |   | 5,954   |                         |  |   | 5,908   |  |  |  | 3.18  |  
|NES Global Talent Finance US LLC (United
Kingdom) (2) (3) (4) (7)                 |  | Energy: Oil & Gas                        |  |              | 6.50  |   |              |  | 10/3/2019  |                 |  |  | 10/2/2013  |  |  |                   | 12,500 |  |               |   | 12,262  |                         |  |   | 12,531  |  |  |  | 6.74  |  
|Packaging Coordinators, Inc. (2) (3) (4) (8)                                      |  | Containers, Packaging & Glass            |  |              | 5.50  |   |              |  | 5/10/2020  |                 |  |  | 5/10/2013  |  |  |                   | 4,489  |  |               |   | 4,479   |                         |  |   | 4,516   |  |  |  | 2.43  |  
|Systems Maintenance Services Holding, Inc. (2) (3) (4)                            |  | High Tech Industries                     |  |              | 5.25  |   |              |  | 10/18/2019 |                 |  |  | 10/18/2013 |  |  |                   | 2,237  |  |               |   | 2,229   |                         |  |   | 2,177   |  |  |  | 1.17  |  
|Stafford Logistics, Inc. (Custom Ecology,
Inc.) (2) (3) (4)                       |  | Environmental Industries                 |  |              | 6.75  |   |              |  | 6/26/2019  |                 |  |  | 7/1/2013   |  |  |                   | 9,950  |  |               |   | 9,859   |                         |  |   | 9,786   |  |  |  | 5.26  |  
|TruckPro, LLC (2) (3) (4)                                                         |  | Automotive                               |  |              | 5.75  |   |              |  | 8/6/2018   |                 |  |  | 8/6/2013   |  |  |                   | 9,900  |  |               |   | 9,844   |                         |  |   | 9,665   |  |  |  | 5.19  |  
|The Topps Company, Inc. (2) (3) (4)                                               |  | Non-durable Consumer Goods               |  |              | 7.25  |   |              |  | 10/2/2018  |                 |  |  | 10/1/2013  |  |  |                   | 11,628 |  |               |   | 11,518  |                         |  |   | 11,471  |  |  |  | 6.17  |  
|Violin Finco S.A.R.L. (Alexander Mann Solutions) (United
Kingdom) (2) (3) (4) (7) |  | Business Services                        |  |              | 5.75  |   |              |  | 12/20/2019 |                 |  |  | 12/18/2013 |  |  |                   | 12,500 |  |               |   | 12,382  |                         |  |   | 12,349  |  |  |  | 6.64  |  
|Vitera Healthcare Solutions, LLC (2) (3) (4)                                      |  | Healthcare & Pharmaceuticals             |  |              | 6.00  |   |              |  | 11/4/2020  |                 |  |  | 11/1/2013  |  |  |                   | 9,630  |  |               |   | 9,537   |                         |  |   | 9,649   |  |  |  | 5.19  |  
|Zest Holdings, LLC (2) (3) (4)                                                    |  | Durable Consumer Goods                   |  |              | 6.50  |   |              |  | 8/16/2020  |                 |  |  | 8/14/2013  |  |  |                   | 12,469 |  |               |   | 12,231  |                         |  |   | 12,299  |  |  |  | 6.61  |  
|                                                                                  |  |                                          |  |              |       |   |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |       |  
|First Lien Debt Total                                                             |  |                                          |  |              |       |   |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   | 141,510 |                         |  |   | 141,676 |  |  |  | 76.17 |  
|                                                                                  |  |                                          |  |              |       |   |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |       |  
|Second Lien Debt (18.69%)                                                         |  |                                          |  |              |       |   |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |       |  
|Ascensus, Inc.(2) (3)                                                             |  | Banking, Finance, Insurance &Real Estate |  |              | 9.00  |   |              |  | 12/2/2020  |                 |  |  | 12/2/2013  |  |  |                   | 8,000  |  |               |   | 7,883   |                         |  |   | 8,033   |  |  |  | 4.32  |  
|Drew Marine Group Inc. (2) (3)                                                    |  | Chemicals, Plastics & Rubber             |  |              | 8.00  |   |              |  | 5/19/2021  |                 |  |  | 11/19/2013 |  |  |                   | 12,500 |  |               |   | 12,473  |                         |  |   | 11,741  |  |  |  | 6.31  |  
|Genex Services, Inc. (2) (3) (4)                                                  |  | Banking, Finance, Insurance &Real Estate |  |              | 9.25  |   |              |  | 1/26/2019  |                 |  |  | 7/25/2013  |  |  |                   | 3,500  |  |               |   | 3,468   |                         |  |   | 3,442   |  |  |  | 1.85  |  
|Nellson Nutraceutical, LLC (2) (3) (4)                                            |  | Beverage, Food & Tobacco                 |  |              | 11.50 |   |              |  | 2/26/2019  |                 |  |  | 8/26/2013  |  |  |                   | 2,000  |  |               |   | 1,985   |                         |  |   | 2,025   |  |  |  | 1.09  |  
|Systems Maintenance Services Holding, Inc.(2) (3) (4)                             |  | High Tech Industries                     |  |              | 9.25  |   |              |  | 10/18/2020 |                 |  |  | 10/18/2013 |  |  |                   | 6,000  |  |               |   | 5,949   |                         |  |   | 5,818   |  |  |  | 3.13  |  
|Vitera Healthcare Solutions, LLC (2) (3)                                          |  | Healthcare & Pharmaceuticals             |  |              | 9.25  |   |              |  | 11/4/2021  |                 |  |  | 11/1/2013  |  |  |                   | 2,000  |  |               |   | 1,971   |                         |  |   | 2,003   |  |  |  | 1.08  |  
|Watchfire Enterprises, Inc.(2) (3)                                                |  | Media: Advertising, Printing& Publishing |  |              | 9.00  |   |              |  | 10/2/2021  |                 |  |  | 10/2/2013  |  |  |                   | 7,000  |  |               |   | 6,907   |                         |  |   | 6,705   |  |  |  | 3.60  |  
|                                                                                  |  |                                          |  |              |       |   |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |       |  
|Second Lien Debt Total                                                            |  |                                          |  |              |       |   |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   | 40,636  |                         |  |   | 39,767  |  |  |  | 21.38 |  
|                                                                                  |  |                                          |  |              |       |   |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |       |  



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CARLYLE GMS FINANCE, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of
December 31, 2013

(dollar amounts in thousands)





|                                                             |  |                    |  |              |            |  |                 |  |            |           |  |  |                   |  |  |               |         |  |                         |   |         |  |  |  |        |  
|------------------------------------------------------------ |  | ------------------ |  | ------------ | ---------- |  | --------------- |  | ---------- | --------- |  |  | ----------------- |  |  | ------------- | ------- |  | ----------------------- | - | ------- |  |  |  | ------ | -
|Portfolio Company (1)                                        |  | Industry           |  | MaturityDate |            |  | AcquisitionDate |  |            | ParAmount |  |  | AmortizedCost (5) |  |  | FairValue (6) |         |  | Percentage ofNet Assets |  
|Structured Finance Obligations (14.74%) (7)                  |  |                    |  |              |            |  |                 |  |            |           |  |  |                   |  |  |               |         |  |                         |   |         |  |  |  |        |  
|Ares XXVIII CLO Ltd., Subordinated Notes                     |  | Structured Finance |  |              | 10/17/2024 |  |                 |  | 10/10/2013 |           |  |  | 7,000             |  |  |               | 6,107   |  |                         |   | 6,125   |  |  |  | 3.29   |  
|Babson CLO Ltd. 2005-I, Subordinated Notes                   |  | Structured Finance |  |              | 4/15/2019  |  |                 |  | 7/16/2013  |           |  |  | 7,632             |  |  |               | 4,364   |  |                         |   | 4,426   |  |  |  | 2.38   |  
|Clydesdale CLO 2005, Ltd., Subordinated Notes                |  | Structured Finance |  |              | 12/6/2017  |  |                 |  | 7/15/2013  |           |  |  | 5,750             |  |  |               | 3,019   |  |                         |   | 3,048   |  |  |  | 1.64   |  
|Flagship VII Limited, Subordinated Notes                     |  | Structured Finance |  |              | 1/20/2026  |  |                 |  | 12/18/2013 |           |  |  | 7,000             |  |  |               | 6,160   |  |                         |   | 6,160   |  |  |  | 3.31   |  
|GoldenTree Loan Opportunities V, Limited, Subordinated Notes |  | Structured Finance |  |              | 10/18/2021 |  |                 |  | 10/11/2013 |           |  |  | 5,000             |  |  |               | 3,430   |  |                         |   | 3,485   |  |  |  | 1.87   |  
|Kingsland III, Ltd., Subordinated Notes                      |  | Structured Finance |  |              | 8/24/2021  |  |                 |  | 11/22/2013 |           |  |  | 4,000             |  |  |               | 3,176   |  |                         |   | 3,180   |  |  |  | 1.71   |  
|Landmark VIII CLO Ltd., Income Notes                         |  | Structured Finance |  |              | 10/19/2020 |  |                 |  | 10/22/2013 |           |  |  | 7,000             |  |  |               | 3,272   |  |                         |   | 3,486   |  |  |  | 1.88   |  
|MSIM Peconic Bay, Ltd., Subordinated Notes                   |  | Structured Finance |  |              | 7/20/2019  |  |                 |  | 10/22/2013 |           |  |  | 4,500             |  |  |               | 1,454   |  |                         |   | 1,454   |  |  |  | 0.78   |  
|                                                             |  |                    |  |              |            |  |                 |  |            |           |  |  |                   |  |  |               |         |  |                         |   |         |  |  |  |        |  
|Structured Finance Obligations Total                         |  |                    |  |              |            |  |                 |  |            |           |  |  |                   |  |  |               | 30,982  |  |                         |   | 31,364  |  |  |  | 16.86  |  
|                                                             |  |                    |  |              |            |  |                 |  |            |           |  |  |                   |  |  |               |         |  |                         |   |         |  |  |  |        |  
|Total Investmentsnon-controlled/non-affiliated              |  |                    |  |              |            |  |                 |  |            |           |  |  |                   |  |  | $             | 213,128 |  |                         | $ | 212,807 |  |  |  | 114.41 | %
|                                                             |  |                    |  |              |            |  |                 |  |            |           |  |  |                   |  |  |               |         |  |                         |   |         |  |  |  |        |  



|(1) | Unless otherwise indicated, debt investments of GMS Finance are domiciled in the United States and structured finance obligations are domiciled in the Cayman Islands. Under the Investment Company Act, the Company would
be deemed to control a portfolio company if the Company owned more than 25% of its outstanding voting securities and/or held the power to exercise control over the management or policies of the portfolio company. As of December 31,
2013, the Company does not control any of these portfolio companies. Under the Investment Company Act, the Company would be deemed an affiliated person of a portfolio company if the Company owns 5% or more of the portfolio
companys outstanding voting securities. As of December 31, 2013, the Company is not an affiliated person of any portfolio company.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Variable rate loans to the portfolio companies bear interest at a rate that may be determined by reference to either LIBOR or an alternate base rate (commonly based on the Federal Funds Rate or the Prime Rate), which
generally reset quarterly. For each such loan, the Company has provided the interest rate in effect as of December 31, 2013.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Loan includes interest rate floor feature.
|--- | ------------------------------------------

|(4) | These assets are owned by the Borrower Sub. The Borrower Sub has the Revolving Credit Facility. The lenders of the Revolving Credit Facility have a first lien security interest in all of the assets of the Borrower Sub
(see Note 6, Borrowings) and such assets are not generally available to creditors of GMS Finance other than to satisfy obligations of the Borrower Sub under the Revolving Credit Facility.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Amortized cost represents original cost, including origination fees, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method. The cost of
equities, including the equity class of CLO funds, which are referred to as structured finance obligations, is not amortized.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | Fair value is determined in good faith by or under the direction of the Board of Directors of the Company (Notes 2 and 4), pursuant to the Companys valuation policies.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | The Company has determined the indicated investments are non-qualifying assets under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying
assets unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Companys total assets.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) | Packaging Coordinators, Inc. has an undrawn delayed draw term loan of $3,000 par value at LIBOR + 4.25%, 1.25% floor. An unused rate of 2.13% is charged on the principal while undrawn.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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CARLYLE GMS FINANCE, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of
December 31, 2013

(dollar amounts in thousands)



The type and industrial composition of our investments as of December 31, 2013 were as follows:



|                                          |  |               |         |  |            |   |         |                 |  |  |        |  
|----------------------------------------- |  | ------------- | ------- |  | ---------- | - | ------- | --------------- |  |  | ------ | -
|Type                                      |  | AmortizedCost |         |  | FairValue  |   |         | % of FairValue  | 
|First Lien Debt                           |  | $             | 141,510 |  |            | $ | 141,676 |                 |  |  | 66.57  | %
|Second Lien Debt                          |  |               | 40,636  |  |            |   | 39,767  |                 |  |  | 18.69  |  
|Structured Finance Obligations            |  |               | 30,982  |  |            |   | 31,364  |                 |  |  | 14.74  |  
|                                          |  |               |         |  |            |   |         |                 |  |  |        |  
|Total                                     |  | $             | 213,128 |  |            | $ | 212,807 |                 |  |  | 100.00 | %
|                                          |  |               |         |  |            |   |         |                 |  |  |        |  
|                                          |  |               |        
|Industry                                  |  | AmortizedCost |         |  | Fair Value |   |         | % of Fair Value | 
|Automotive                                |  | $             | 9,844   |  |            | $ | 9,665   |                 |  |  | 4.54   | %
|Banking, Finance, Insurance & Real Estate |  |               | 19,249  |  |            |   | 19,216  |                 |  |  | 9.03   |  
|Beverage, Food & Tobacco                  |  |               | 7,939   |  |            |   | 7,933   |                 |  |  | 3.73   |  
|Business Services                         |  |               | 24,763  |  |            |   | 24,933  |                 |  |  | 11.72  |  
|Chemicals, Plastics & Rubber              |  |               | 12,473  |  |            |   | 11,741  |                 |  |  | 5.52   |  
|Consumer Services                         |  |               | 8,380   |  |            |   | 8,331   |                 |  |  | 3.91   |  
|Containers, Packaging & Glass             |  |               | 4,479   |  |            |   | 4,516   |                 |  |  | 2.12   |  
|Durable Consumer Goods                    |  |               | 12,231  |  |            |   | 12,299  |                 |  |  | 5.78   |  
|Energy: Oil & Gas                         |  |               | 12,262  |  |            |   | 12,531  |                 |  |  | 5.89   |  
|Environmental Industries                  |  |               | 9,859   |  |            |   | 9,786   |                 |  |  | 4.60   |  
|Healthcare & Pharmaceuticals              |  |               | 21,132  |  |            |   | 21,395  |                 |  |  | 10.05  |  
|High Tech Industries                      |  |               | 15,037  |  |            |   | 14,953  |                 |  |  | 7.03   |  
|Media: Advertising, Printing & Publishing |  |               | 6,907   |  |            |   | 6,705   |                 |  |  | 3.15   |  
|Non-durable Consumer Goods                |  |               | 11,518  |  |            |   | 11,471  |                 |  |  | 5.39   |  
|Structured Finance                        |  |               | 30,982  |  |            |   | 31,364  |                 |  |  | 14.74  |  
|Telecommunications                        |  |               | 6,073   |  |            |   | 5,968   |                 |  |  | 2.80   |  
|                                          |  |               |         |  |            |   |         |                 |  |  |        |  
|Total                                     |  | $             | 213,128 |  |            | $ | 212,807 |                 |  |  | 100.00 | %
|                                          |  |               |         |  |            |   |         |                 |  |  |        |  

The accompanying notes are an integral part of these consolidated financial statements.



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CARLYLE GMS FINANCE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

March 31, 2014

(dollar amounts in thousands,
except per share data)

1. ORGANIZATION

Carlyle GMS Finance, Inc. (GMS Finance or the Company) is a Maryland corporation formed on February 8, 2012, and
structured as an externally managed, non-diversified closed-end investment company. On May 2, 2013, GMS Finance filed its election to be regulated as a business development company (BDC) under the Investment Company Act of 1940, as
amended (together with the rules and regulations promulgated thereunder, the Investment Company Act). GMS Finance intends to be treated, and intends to comply with the requirements to qualify annually, as a regulated investment company
(RIC) under Subchapter M of the Internal Revenue Code of 1986, as amended (the Code), commencing with its taxable year ended December 31, 2013.

GMS Finances investment objective is to generate current income and capital appreciation primarily through debt investments in U.S.
middle market companies with approximately $10 million to $100 million of earnings before interest, taxes, depreciation and amortization (EBITDA). GMS Finance seeks to achieve its investment objective by investing primarily in first lien
senior secured and unitranche loans to private U.S. middle market companies that are, in many cases, controlled by private equity investment firms (Middle Market Senior Loans). Depending on market conditions, GMS Finance expects that
between 70% and 80% of the value of its assets will be invested in Middle Market Senior Loans, with the balance invested in higher-yielding investments, which may include middle market junior loans such as corporate mezzanine loans, equity
co-investments, broadly syndicated first lien senior secured loans and second lien loans, high-yield bonds, structured finance obligations and/or other opportunistic investments.

GMS Finance was initially funded on March 30, 2012, with the purchase of 100 shares at a net asset value (NAV) of $20.00 per
share by Carlyle GMS Investment Management L.L.C. (the Investment Adviser). On May 2, 2013, GMS Finance completed its initial closing of capital commitments (the Initial Closing) and subsequently commenced substantial
investment operations. Prior to May 2, 2013, GMS Finance had not commenced operations and was a development stage company as defined by Accounting Standards Codification (ASC) 915, Development Stage Entity. During this time,
GMS Finance focused substantially all of its efforts on establishing its business. If GMS Finance has not consummated an initial public offering of its common stock that results in an unaffiliated public float of at least 15% of the aggregate
capital commitments received prior to the date of such initial public offering (a Qualified IPO) by May 2, 2018, then GMS Finance (subject to any necessary stockholder approvals and applicable requirements of the Investment Company
Act) will use its best efforts to wind down and/or liquidate and dissolve.

GMS Finance is an emerging growth company as
defined in the Jumpstart Our Business Startups Act of 2012. GMS Finance will remain an emerging growth company for up to five years following an initial public offering, although if the market value of the common stock that is held by non-affiliates
exceeds $700 million as of any June 30 before that time, GMS Finance would cease to be an emerging growth company as of the following December 31.

Carlyle GMS Finance SPV LLC (the Borrower Sub) is a Delaware limited liability company that was formed on January 3, 2013.
The Borrower Sub invests in first lien senior secured loans and second lien loans. The Borrower Sub is a wholly-owned subsidiary of the Company and is consolidated in these consolidated financial statements commencing from the date of its formation,
January 3, 2013.

GMS Finance is externally managed by its Investment Adviser, an investment adviser registered under the Investment
Advisers Act of 1940, as amended. Carlyle GMS Finance Administration L.L.C. (the Administrator) provides the administrative services necessary for GMS Finance to operate. Both the Investment Adviser and the Administrator are wholly-owned
subsidiaries of Carlyle Investment Management



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L.L.C., a subsidiary of The Carlyle Group L.P. (Carlyle), a global alternative asset manager publicly traded on NASDAQ Global Select Market under the symbol CG. Refer to
the sec.gov website for further information on The Carlyle Group L.P.

As a BDC, GMS Finance is required to comply with certain regulatory
requirements. As part of these requirements, the Company must not acquire any assets other than qualifying assets specified in the Investment Company Act unless, at the time the acquisition is made, at least 70% of its total assets are
qualifying assets (with certain limited exceptions).

GMS Finance intends to be treated, and intends to comply with the requirements to
qualify annually, as a RIC under the Code, and operates in a manner so as to qualify for the tax treatment applicable to RICs. To qualify as a RIC, GMS Finance must, among other things, meet certain source-of-income and asset diversification
requirements and timely distribute to its stockholders generally at least 90% of its investment company taxable income, as defined by the Code, for each year. Pursuant to this election, GMS Finance generally does not have to pay corporate level
taxes on any income that it distributes to stockholders, provided that GMS Finance satisfies those requirements.

2. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The
consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (US GAAP). The consolidated financial statements include the
accounts of GMS Finance and its wholly-owned subsidiary, the Borrower Sub. All significant intercompany balances and transactions have been eliminated. Management has determined that GMS Finance and the Borrower Sub are both investment companies for
the purposes of accounting and financial reporting in accordance with Accounting Standards Update (ASU) 2013-08, Financial ServicesInvestment Companies (ASU 2013-08): Amendments to the Scope, Measurement and
Disclosure Requirements and GMS Finance will consolidate the Borrower Sub. US GAAP for an investment company requires investments to be recorded at fair value. The carrying value for all other assets and liabilities approximates their fair
value.

The interim financial statements have been prepared in accordance with US GAAP for interim financial information and pursuant
to the requirements for reporting on Form 10-Q and Articles 6 and 10 of Regulation S-X. Accordingly, certain disclosures accompanying the annual consolidated financial statements prepared in accordance
with US GAAP are omitted. In the opinion of management, all adjustments considered necessary for the fair presentation of consolidated financial statements for the interim period presented have been included. These adjustments are of a normal,
recurring nature. This Form 10-Q should be read in conjunction with the Companys annual report on Form 10-K for the year ended December 31, 2013. The results of operations for the three months ended March 31, 2014 are not necessarily
indicative of the operating results to be expected for the full year.

Use of Estimates

The preparation of consolidated financial statements as of March 31, 2014 and December 31, 2013 in conformity with US GAAP
requires management to make assumptions and estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the statements and the reported amounts of revenues and expenses
during the reporting period. Managements estimates are based on historical experiences and other factors, including expectations of future events that management believes to be reasonable under the circumstances. It also requires management to
exercise judgment in the process of applying the Companys accounting policies. Assumptions and estimates regarding the valuation of investments and their resulting impact on base management and incentive fees involve a higher degree of
judgment and complexity and these assumptions and estimates may be significant to the consolidated financial statements as of March 31, 2014 and December 31, 2013. Actual results could differ from these estimates and such differences could
be material.



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##### Table of Contents

Investments

Investment transactions are recorded on the trade date. Realized gains or losses are measured 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, and includes investments charged off during the period, net of recoveries. Net change in unrealized
appreciation or depreciation on investments as presented in the accompanying Consolidated Statement of Operations reflects the net change in the fair value of investments, including the reversal of previously recorded unrealized appreciation or
depreciation when gains or losses are realized. See Note 4 for further information about fair value measurements.

Cash

Cash consists of demand deposits. The Companys cash is held with a large financial institution and cash held in such financial
institutions may, at times, exceed the Federal Deposit Insurance Corporation insured limit.

Revenue Recognition

Interest from Investments and Realized Gain/Loss on Investments

Interest income is recorded on an accrual basis and includes the accretion of discounts and amortization of premiums. Discounts from and
premiums to par value on debt securities purchased are accreted/amortized into interest income over the life of the respective security using the effective interest method. The amortized cost of investments represents the original cost, including
loan origination fees, adjusted for the accretion of discounts and amortization of premiums, if any. At time of exit, the realized gain or loss on an investment is the difference between the amortized cost at time of exit and the cash received at
exit using the specific identification method.

The Company may have loans in its portfolio that contain payment-in-kind (PIK)
provisions. PIK represents interest that is accrued and recorded as interest income at the contractual rates, increases the loan principal on the respective capitalization dates, and is generally due at maturity. As of March 31, 2014 and
December 31, 2013 and for the three month period ended March 31, 2014, no loans in the portfolio contain PIK provisions.

Interest income from investments in the equity class of collateralized loan obligation (CLO) funds, which are referred
to as structured finance obligations, is recorded based upon an estimation of the expected cash inflows from its CLO equity investments, including the expected residual payments. In estimating these cash flows, there are a number of
assumptions that are subject to uncertainties, including the amount and timing of principal payments which are impacted by prepayments, repurchases, defaults, delinquencies and liquidations of or within the CLO funds. These uncertainties are
difficult to predict and are subject to future events that may impact the Companys estimates and interest income. As a result, actual results may differ significantly from these estimates.

Other Income

Other income may include
income such as consent, waiver and amendment fees associated with the Companys investment activities as well as any fees for managerial assistance services rendered by the Company to portfolio companies. Such fees are recognized as income when
earned or the services are rendered. The Company may receive a fee for guaranteeing the outstanding debt of a portfolio company. Such fee will be amortized into other income over the life of the guarantee. The unamortized amount, if any, is included
in other assets in the accompanying Consolidated Statements of Assets and Liabilities. For the three month period ended March 31, 2014, there was no other income.

Non-Accrual Income

Loans are generally
placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid



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interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon
managements judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest are paid current and, in managements judgment, are likely to remain current. Management may not place a
loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection. As of March 31, 2014 and December 31, 2013, no loans in the portfolio were on non-accrual status.

Revolving Credit Facility, Facility, Related Costs, Expenses and Deferred Financing Costs (See Note 6, Borrowings)

Interest expense and commitment fees on the Revolving Credit Facility and Facility (as defined in Note 6) are recorded on an accrual basis.
Commitment fees are included in credit facility fees in the accompanying Consolidated Statement of Operations. Interest expense of $349 has been incurred by the Company for the three month period ended March 31, 2014.

The Revolving Credit Facility and Facility are recorded at carrying value, which approximates fair value.

Deferred financing costs consist of capitalized expenses related to the origination of the Revolving Credit Facility and Facility.
Amortization of deferred financing costs for each credit facility is computed on the straight-line basis over the respective term of each credit facility. The amortization of such costs is included in credit facility fees in the accompanying
Consolidated Statement of Operations.

Organization and Offering Costs

The Company agreed to reimburse the Investment Adviser for initial organization and offering costs incurred on behalf of GMS Finance up to
$1,500. As of March 31, 2014 and December 31, 2013, $1,500 of organization and offering costs had been incurred by GMS Finance and $57 of excess organization and offering costs had been incurred by the Investment Adviser. The $1,500 of
incurred organization and offering costs are allocated to all stockholders based on their respective capital commitment and are re-allocated amongst all stockholders at the time of each capital drawdown subsequent to the Initial Closing. The
Companys organization costs incurred are expensed and the offering costs are charged against equity when incurred.

Income Taxes

For federal income tax purposes, GMS Finance intends to be treated as a RIC under the Code, and intends to make the required distributions to
its stockholders as specified therein. In order to qualify as a RIC, GMS Finance must meet certain minimum distribution, source-of-income and asset diversification requirements. If such requirements are met, then GMS Finance is generally required to
pay income taxes only on the portion of its taxable income and gains it does not distribute.

The minimum distribution requirements
applicable to RICs require GMS Finance to distribute to its stockholders at least 90% of its investment company taxable income (ICTI), as defined by the Code, each year. Depending on the level of ICTI earned in a tax year, GMS Finance
may choose to carry forward ICTI in excess of current year distributions into the next tax year. Any such carryover ICTI must be distributed before the end of that next tax year through a dividend declared prior to filing the final tax return
related to the year which generated such ICTI.

In addition, based on the excise distribution requirements, GMS Finance is subject to a 4%
nondeductible federal excise tax on undistributed income unless GMS Finance distributes in a timely manner an amount at least equal to the sum of (1) 98% of its ordinary income for each calendar year, (2) 98.2% of capital gain net income
(both long-term and short-term) for the one-year period ending October 31 in that calendar year and (3) any income realized, but not distributed, in the preceding year. For this purpose, however, any ordinary income or



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capital gain net income retained by GMS Finance that is subject to corporate income tax is considered to have been distributed. GMS Finance intends to make sufficient distributions each taxable
year to satisfy the excise distribution requirements.

The Company evaluates tax positions taken or expected to be taken in the course of
preparing its consolidated financial statements to determine whether the tax positions are more-likely than not to be sustained by the applicable tax authority. All penalties and interest associated with income taxes, if any, are
included in income tax expense.

The Borrower Sub is a disregarded entity for tax purposes and is consolidated with the return of GMS
Finance.

Capital Calls and Dividends and Distributions to Common Stockholders

The Company records the shares issued in connection with capital calls as of the effective date, or due date, of the capital call, which is the
date shares are issued. To the extent that the Company has taxable income available, the Company intends to make quarterly distributions to its common stockholders. Dividends and distributions to common stockholders are recorded on the
record/ex-dividend date. The amount to be distributed is determined by the Board of Directors each quarter and is generally based upon the taxable earnings estimated by management and available cash. Net realized capital gains, if any, is generally
distributed at least annually, although the Company may decide to retain such capital gains for investment.

The Company has adopted a
dividend reinvestment plan that provides for reinvestment of any distributions on behalf of its stockholders, for those who have elected to participate in the plan. As a result of adopting such a plan, if the Board of Directors authorizes, and GMS
Finance declares a cash dividend or distribution, the stockholders who have elected to participate in the dividend reinvestment plan would have their cash dividends or distributions automatically reinvested in additional shares of the Companys
common stock, rather than receiving cash. Prior to a Qualified IPO, the Company intends to use primarily newly issued shares of its common stock to implement the plan issued at net asset value per share determined as of the valuation date fixed by
the Board of Directors for such dividend or distribution. After a Qualified IPO, the Company intends to use primarily newly issued shares to implement the plan so long as the market value per share is equal to or greater than the net asset value per
share on the relevant valuation date. If the market value per share is less than the net asset value per share on the relevant valuation date, the plan administrator would purchase the common stock on behalf of participants in the open market,
unless the Company instructs the plan administrator otherwise.

Functional Currency

The functional currency of the Company is the U.S. Dollar.

Recent Accounting Standards Updates

On June 7, 2013, the FASB issued ASU 2013-08. The final standard updates the criteria used in defining an investment company under
US GAAP and also sets forth certain measurement and disclosure requirements. This ASU is effective for fiscal periods (including interim periods) beginning after December 15, 2013. The impact of this update did not have a material effect
on the consolidated financial statements as of and for the three month period ended March 31, 2014.



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3. INVESTMENTS

As of March 31, 2014 and December 31, 2013, investmentsnon-controlled/non-affiliated at fair value consisted of the following:



|                               |  |                |         |  |           |   |         |                |  |  |        |  
|------------------------------ |  | -------------- | ------- |  | --------- | - | ------- | -------------- |  |  | ------ | -
|                               |  | March 31, 2014 |        
|Type                           |  | AmortizedCost  |         |  | FairValue |   |         | % of FairValue | 
|First Lien Debt                |  | $              | 223,374 |  |           | $ | 223,959 |                |  |  | 70.35  | %
|Second Lien Debt               |  |                | 47,060  |  |           |   | 46,575  |                |  |  | 14.63  |  
|Structured Finance Obligations |  |                | 47,301  |  |           |   | 47,811  |                |  |  | 15.02  |  
|                               |  |                |         |  |           |   |         |                |  |  |        |  
|Total                          |  | $              | 317,735 |  |           | $ | 318,345 |                |  |  | 100.00 | %
|                               |  |                |         |  |           |   |         |                |  |  |        |  



|                               |  |                   |         |  |           |   |         |                |  |  |        |  
|------------------------------ |  | ----------------- | ------- |  | --------- | - | ------- | -------------- |  |  | ------ | -
|                               |  | December 31, 2013 |        
|Type                           |  | AmortizedCost     |         |  | FairValue |   |         | % of FairValue | 
|First Lien Debt                |  | $                 | 141,510 |  |           | $ | 141,676 |                |  |  | 66.57  | %
|Second Lien Debt               |  |                   | 40,636  |  |           |   | 39,767  |                |  |  | 18.69  |  
|Structured Finance Obligations |  |                   | 30,982  |  |           |   | 31,364  |                |  |  | 14.74  |  
|                               |  |                   |         |  |           |   |         |                |  |  |        |  
|Total                          |  | $                 | 213,128 |  |           | $ | 212,807 |                |  |  | 100.00 | %
|                               |  |                   |         |  |           |   |         |                |  |  |        |  

The geographical composition of investments  non-controlled/non-affiliated at fair value as of
March 31, 2014 and December 31, 2013 was as follows:



|               |  |                |         |  |           |   |         |                |  |  |        |  
|-------------- |  | -------------- | ------- |  | --------- | - | ------- | -------------- |  |  | ------ | -
|               |  | March 31, 2014 |        
|Geography      |  | AmortizedCost  |         |  | FairValue |   |         | % of FairValue | 
|Cayman Islands |  | $              | 44,104  |  |           | $ | 44,614  |                |  |  | 14.02  | %
|Ireland        |  |                | 3,197   |  |           |   | 3,197   |                |  |  | 1.00   |  
|United Kingdom |  |                | 24,548  |  |           |   | 24,810  |                |  |  | 7.79   |  
|United States  |  |                | 245,886 |  |           |   | 245,724 |                |  |  | 77.19  |  
|               |  |                |         |  |           |   |         |                |  |  |        |  
|Total          |  | $              | 317,735 |  |           | $ | 318,345 |                |  |  | 100.00 | %
|               |  |                |         |  |           |   |         |                |  |  |        |  



|               |  |                   |         |  |           |   |         |                |  |  |        |  
|-------------- |  | ----------------- | ------- |  | --------- | - | ------- | -------------- |  |  | ------ | -
|               |  | December 31, 2013 |        
|Geography      |  | AmortizedCost     |         |  | FairValue |   |         | % of FairValue | 
|Cayman Islands |  | $                 | 30,982  |  |           | $ | 31,364  |                |  |  | 14.74  | %
|United Kingdom |  |                   | 24,644  |  |           |   | 24,880  |                |  |  | 11.69  |  
|United States  |  |                   | 157,502 |  |           |   | 156,563 |                |  |  | 73.57  |  
|               |  |                   |         |  |           |   |         |                |  |  |        |  
|Total          |  | $                 | 213,128 |  |           | $ | 212,807 |                |  |  | 100.00 | %
|               |  |                   |         |  |           |   |         |                |  |  |        |  



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The industrial composition of investmentsnon-controlled/non-affiliated at fair value as of
March 31, 2014 and December 31, 2013 was as follows:



|                                          |  |                |         |  |           |   |         |                 |  |  |        |  
|----------------------------------------- |  | -------------- | ------- |  | --------- | - | ------- | --------------- |  |  | ------ | -
|                                          |  | March 31, 2014 |        
|Industry                                  |  | AmortizedCost  |         |  | FairValue |   |         | % of Fair Value | 
|Aerospace and Defense                     |  | $              | 5,785   |  |           | $ | 5,853   |                 |  |  | 1.84   | %
|Automotive                                |  |                | 16,280  |  |           |   | 16,195  |                 |  |  | 5.09   |  
|Banking, Finance, Insurance & Real Estate |  |                | 19,235  |  |           |   | 19,317  |                 |  |  | 6.07   |  
|Beverage, Food & Tobacco                  |  |                | 7,940   |  |           |   | 7,930   |                 |  |  | 2.49   |  
|Business Services                         |  |                | 38,542  |  |           |   | 38,710  |                 |  |  | 12.16  |  
|Chemicals, Plastics & Rubber              |  |                | 12,473  |  |           |   | 11,714  |                 |  |  | 3.68   |  
|Consumer Services                         |  |                | 8,362   |  |           |   | 8,322   |                 |  |  | 2.61   |  
|Containers, Packaging & Glass             |  |                | 7,468   |  |           |   | 7,552   |                 |  |  | 2.37   |  
|Durable Consumer Goods                    |  |                | 12,208  |  |           |   | 12,293  |                 |  |  | 3.86   |  
|Energy: Oil & Gas                         |  |                | 12,193  |  |           |   | 12,546  |                 |  |  | 3.94   |  
|Environmental Industries                  |  |                | 9,838   |  |           |   | 9,713   |                 |  |  | 3.05   |  
|Healthcare & Pharmaceuticals              |  |                | 34,458  |  |           |   | 35,006  |                 |  |  | 11.00  |  
|High Tech Industries                      |  |                | 8,174   |  |           |   | 7,999   |                 |  |  | 2.51   |  
|Media: Advertising, Printing & Publishing |  |                | 6,909   |  |           |   | 6,731   |                 |  |  | 2.11   |  
|Non-durable Consumer Goods                |  |                | 11,494  |  |           |   | 11,504  |                 |  |  | 3.61   |  
|Software                                  |  |                | 28,357  |  |           |   | 28,285  |                 |  |  | 8.89   |  
|Structured Finance                        |  |                | 47,301  |  |           |   | 47,811  |                 |  |  | 15.02  |  
|Telecommunications                        |  |                | 17,468  |  |           |   | 17,270  |                 |  |  | 5.43   |  
|Wholesale                                 |  |                | 13,250  |  |           |   | 13,594  |                 |  |  | 4.27   |  
|                                          |  |                |         |  |           |   |         |                 |  |  |        |  
|Total                                     |  | $              | 317,735 |  |           | $ | 318,345 |                 |  |  | 100.00 | %
|                                          |  |                |         |  |           |   |         |                 |  |  |        |  



|                                          |  |                   |         |  |           |   |         |                 |  |  |        |  
|----------------------------------------- |  | ----------------- | ------- |  | --------- | - | ------- | --------------- |  |  | ------ | -
|                                          |  | December 31, 2013 |        
|Industry                                  |  | AmortizedCost     |         |  | FairValue |   |         | % of Fair Value | 
|Automotive                                |  | $                 | 9,844   |  |           | $ | 9,665   |                 |  |  | 4.54   | %
|Banking, Finance, Insurance & Real Estate |  |                   | 19,249  |  |           |   | 19,216  |                 |  |  | 9.03   |  
|Beverage, Food & Tobacco                  |  |                   | 7,939   |  |           |   | 7,933   |                 |  |  | 3.73   |  
|Business Services                         |  |                   | 24,763  |  |           |   | 24,933  |                 |  |  | 11.72  |  
|Chemicals, Plastics & Rubber              |  |                   | 12,473  |  |           |   | 11,741  |                 |  |  | 5.52   |  
|Consumer Services                         |  |                   | 8,380   |  |           |   | 8,331   |                 |  |  | 3.91   |  
|Containers, Packaging & Glass             |  |                   | 4,479   |  |           |   | 4,516   |                 |  |  | 2.12   |  
|Durable Consumer Goods                    |  |                   | 12,231  |  |           |   | 12,299  |                 |  |  | 5.78   |  
|Energy: Oil & Gas                         |  |                   | 12,262  |  |           |   | 12,531  |                 |  |  | 5.89   |  
|Environmental Industries                  |  |                   | 9,859   |  |           |   | 9,786   |                 |  |  | 4.60   |  
|Healthcare & Pharmaceuticals              |  |                   | 21,132  |  |           |   | 21,395  |                 |  |  | 10.05  |  
|High Tech Industries                      |  |                   | 15,037  |  |           |   | 14,953  |                 |  |  | 7.03   |  
|Media: Advertising, Printing & Publishing |  |                   | 6,907   |  |           |   | 6,705   |                 |  |  | 3.15   |  
|Non-durable Consumer Goods                |  |                   | 11,518  |  |           |   | 11,471  |                 |  |  | 5.39   |  
|Structured Finance                        |  |                   | 30,982  |  |           |   | 31,364  |                 |  |  | 14.74  |  
|Telecommunications                        |  |                   | 6,073   |  |           |   | 5,968   |                 |  |  | 2.80   |  
|                                          |  |                   |         |  |           |   |         |                 |  |  |        |  
|Total                                     |  | $                 | 213,128 |  |           | $ | 212,807 |                 |  |  | 100.00 | %
|                                          |  |                   |         |  |           |   |         |                 |  |  |        |  

4. FAIR VALUE MEASUREMENTS

The Company applies fair value accounting in accordance with the terms of Financial Accounting Standards Board ASC Topic 820, Fair Value
Measurement and Disclosures (ASC 820). ASC 820 defines fair value as



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the amount that would be exchanged to sell an asset or transfer a liability in an orderly transfer between market participants at the measurement date. The Company values securities/instruments
traded in active markets on the measurement date by multiplying the closing price of such traded securities/instruments by the quantity of shares or amount of the instrument held. The Company may also obtain quotes with respect to certain of its
investments, such as its securities/instruments traded in active markets and its liquid securities/instruments that are not traded in active markets, from pricing services, brokers, or counterparties (i.e. consensus pricing). When doing
so, the Company determines whether the quote obtained is sufficient according to US GAAP to determine the fair value of the security. The Company may use the quote obtained or alternative pricing sources may be utilized including valuation
techniques typically utilized for illiquid securities/instruments.

Securities/instruments that are illiquid or for which the pricing
source does not provide a valuation or methodology or provides a valuation or methodology that, in the judgment of the Investment Adviser or GMS Finances Board of Directors, does not represent fair value shall each be valued as of the
measurement date using all techniques appropriate under the circumstances and for which sufficient data is available. These valuation techniques may vary by investment and include comparable public market valuations, comparable precedent transaction
valuations and/or discounted cash flow analyses. The process generally used to determine the applicable value is as follows: (i) the value of each portfolio company or investment is initially reviewed by the investment professionals responsible
for such portfolio company or investment and, for non-traded investments, a standardized template designed to approximate fair market value based on observable market inputs, updated credit statistics and unobservable inputs is used to determine a
preliminary value; (ii) preliminary valuation conclusions are documented and reviewed by a valuation committee comprised of members of senior management; (iii) the Board of Directors engages one or more third-party valuation firms to
provide positive assurance on portions of the portfolio each quarter (such that each non-traded investment is reviewed by a third-party valuation firm at least once annually) including a review of managements preliminary valuation and
conclusion on fair value; (iv) the Audit Committee of the Board of Directors (the Audit Committee) reviews the assessments of the Investment Adviser and, where appropriate, the respective third-party valuation firms and provides the
Board of Directors with any recommendations with respect to changes to the fair value of each investment in the portfolio; and (v) the Board of Directors discusses the valuation recommendations of the Audit Committee and determines the fair
value of each investment in the portfolio in good faith based on the input of the Investment Adviser and, where applicable, the respective third-party valuation firms.

All factors that might materially impact the value of an investment are considered, including, but not limited to the assessment of the
following factors, as relevant:



| |  |  | the nature and realizable value of any collateral;
| | - |  | --------------------------------------------------



| |  |  | call features, put features and other relevant terms of debt;
| | - |  | -------------------------------------------------------------



| |  |  | the portfolio companys leverage and ability to make payments;
| | - |  | --------------------------------------------------------------



| |  |  | the portfolio companys public or private credit rating;
| | - |  | --------------------------------------------------------



| |  |  | the portfolio companys actual and expected earnings and discounted cash flow;
| | - |  | ------------------------------------------------------------------------------



| |  |  | prevailing interest rates and spreads for similar securities and expected volatility in future interest rates;
| | - |  | --------------------------------------------------------------------------------------------------------------



| |  |  | the markets in which the portfolio company does business and recent economic and/or market events; and
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | comparisons to comparable transactions and publicly traded securities.
| | - |  | ----------------------------------------------------------------------

Investment performance
data utilized are the most recently available financial statements and compliance certificate received from the portfolio companies as of the measurement date which in many cases may reflect a lag in information.

Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value
of the Companys investments may fluctuate from period to period.



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Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been reported had a ready market for the investments existed, and
it is reasonably possible that the difference could be material.

In addition, changes in the market environment and other events that may
occur over the life of the investments may cause the realized gains or losses on investments to be different than the net change in unrealized appreciation or depreciation currently reflected in the consolidated financial statements as of
March 31, 2014.

US GAAP establishes a hierarchal disclosure framework which ranks the level of observability of market price
inputs used in measuring investments at fair value. The observability of inputs is impacted by a number of factors, including the type of investment and the characteristics specific to the investment and state of the marketplace, including the
existence and transparency of transactions between market participants. Investments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets generally have a higher degree of market price
observability and a lesser degree of judgment applied in determining fair value.

Investments measured and reported at fair value are
classified and disclosed based on the observability of inputs used in determination of fair values, as follows:



| |  |  | Level Iinputs to the valuation methodology are quoted prices available in active markets for identical investments as of the reporting date. The types of financial instruments included in Level I include
unrestricted securities, including equities and derivatives, listed in active markets. The Company does not adjust the quoted price for these investments, even in situations where the Company holds a large position and a sale could reasonably impact
the quoted price.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Level IIinputs to the valuation methodology are either directly or indirectly observable as of the reporting date and are those other than quoted prices in active markets. The type of financial instruments in this
category includes less liquid and restricted securities listed in active markets, securities traded in other than active markets, government and agency securities, and certain over-the-counter derivatives where the fair value is based on observable
inputs.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Level IIIinputs to the valuation methodology are unobservable and significant to overall fair value measurement. The inputs into the determination of fair value require significant management judgment or
estimation. Financial instruments that are included in this category include investments in privately-held entities, collateralized loan obligations, and certain over-the-counter derivatives where the fair value is based on unobservable inputs.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such
cases, an investments level within the fair value hierarchy is based on the lowest level of input that is significant to the overall fair value measurement. The Investment Advisers assessment of the significance of a particular input to
the fair value measurement in its entirety requires judgment, and considers factors specific to the investment.

Transfer between levels,
if any, are recognized at the beginning of the quarter in which the transfers occur. For the three month period ended March 31, 2014, there were no transfers between levels.



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The following table summarizes the Companys investments measured at fair value on a
recurring basis by the above fair value hierarchy levels as of March 31, 2014 and December 31, 2013:



|                               |  |                   |   |  |          |  |   |           |  |   |         |  |  |   |         | 
|------------------------------ |  | ----------------- | - |  | -------- |  | - | --------- |  | - | ------- |  |  | - | ------- | 
|                               |  | March 31, 2014    |  
|                               |  | Level I           |   |  | Level II |  |   | Level III |  |   | Total   | 
|Assets                         |  |                   |   |  |          |  |   |           |  |   |         |  |  |   |         | 
|First Lien Debt                |  |                   |  |  |          |  |  |           |  | $ | 223,959 |  |  | $ | 223,959 | 
|Second Lien Debt               |  |                   |  |  |          |  |  |           |  |   | 46,575  |  |  |   | 46,575  | 
|Structured Finance Obligations |  |                   |  |  |          |  |  |           |  |   | 47,811  |  |  |   | 47,811  | 
|                               |  |                   |   |  |          |  |   |           |  |   |         |  |  |   |         | 
|Total                          |  |                   |  |  |          |  |  |           |  | $ | 318,345 |  |  | $ | 318,345 | 
|                               |  |                   |   |  |          |  |   |           |  |   |         |  |  |   |         | 
|                               | 
|                               |  | December 31, 2013 |  
|                               |  | Level I           |   |  | Level II |  |   | Level III |  |   | Total   | 
|Assets                         |  |                   |   |  |          |  |   |           |  |   |         |  |  |   |         | 
|First Lien Debt                |  |                   |  |  |          |  |  |           |  | $ | 141,676 |  |  | $ | 141,676 | 
|Second Lien Debt               |  |                   |  |  |          |  |  |           |  |   | 39,767  |  |  |   | 39,767  | 
|Structured Finance Obligations |  |                   |  |  |          |  |  |           |  |   | 31,364  |  |  |   | 31,364  | 
|                               |  |                   |   |  |          |  |   |           |  |   |         |  |  |   |         | 
|Total                          |  |                   |  |  |          |  |  |           |  | $ | 212,807 |  |  | $ | 212,807 | 
|                               |  |                   |   |  |          |  |   |           |  |   |         |  |  |   |         | 

The changes in the Companys investments at fair value for which the Company has used Level III inputs to
determine fair value and net change in unrealized appreciation (depreciation) included in earnings for Level III investments still held are as follows:



|                                                                                                                                                                                                                                                                                           |  |                                                                 |         |   |                 |   |        |                              |  |   |        |   |  |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | --------------------------------------------------------------- | ------- | - | --------------- | - | ------ | ---------------------------- |  | - | ------ | - |  | - | ------- | -
|                                                                                                                                                                                                                                                                                           |  | Financial AssetsFor the three month period ended March 31, 2014 |        
|                                                                                                                                                                                                                                                                                           |  | First LienDebt                                                  |         |   | SecondLien Debt |   |        | StructuredFinanceObligations |  |   | Total  |  
|Balance, beginning of period                                                                                                                                                                                                                                                               |  | $                                                               | 141,676 |   |                 | $ | 39,767 |                              |  | $ | 31,364 |   |  | $ | 212,807 |  
|Purchases                                                                                                                                                                                                                                                                                  |  |                                                                 | 89,248  |   |                 |   | 6,414  |                              |  |   | 22,514 |   |  |   | 118,176 |  
|Sales                                                                                                                                                                                                                                                                                      |  |                                                                 |        |   |                 |   |       |                              |  |   | (3,125 | ) |  |   | (3,125  | )
|Paydowns                                                                                                                                                                                                                                                                                   |  |                                                                 | (7,508  | ) |                 |   |       |                              |  |   | (3,116 | ) |  |   | (10,624 | )
|Accretion of discount                                                                                                                                                                                                                                                                      |  |                                                                 | 124     |   |                 |   | 10     |                              |  |   |       |   |  |   | 134     |  
|Realized gain (loss)                                                                                                                                                                                                                                                                       |  |                                                                 |        |   |                 |   |       |                              |  |   | 46     |   |  |   | 46      |  
|Net change in unrealized appreciation (depreciation)                                                                                                                                                                                                                                       |  |                                                                 | 419     |   |                 |   | 384    |                              |  |   | 128    |   |  |   | 931     |  
|                                                                                                                                                                                                                                                                                           |  |                                                                 |         |   |                 |   |        |                              |  |   |        |   |  |   |         |  
|Balance, end of period                                                                                                                                                                                                                                                                     |  | $                                                               | 223,959 |   |                 | $ | 46,575 |                              |  | $ | 47,811 |   |  | $ | 318,345 |  
|                                                                                                                                                                                                                                                                                           |  |                                                                 |         |   |                 |   |        |                              |  |   |        |   |  |   |         |  
|Net change in unrealized appreciation (depreciation) included in earnings related to investments still held as of March 31, 2014
included in net change in unrealized appreciation (depreciation) on investments non-controlled/non-affiliated on the Consolidated Statement of Operations |  | $                                                               | 518     |   |                 | $ | 384    |                              |  | $ | 132    |   |  | $ | 1,034   |  
|                                                                                                                                                                                                                                                                                           |  |                                                                 |         |   |                 |   |        |                              |  |   |        |   |  |   |         |  

The Company generally uses the following framework when determining the fair value of investments that are
categorized as Level III:

Investments in debt securities are initially evaluated to determine whether the enterprise value of the
portfolio company is greater than the applicable debt. The enterprise value of the portfolio company is estimated using a market approach and an income approach. The market approach utilizes market value (EBITDA) multiples of publicly traded
comparable companies and available precedent sales transactions of comparable companies. The Company carefully considers numerous factors when selecting the appropriate companies whose



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multiples are used to value its portfolio companies. These factors include, but are not limited to, the type of organization, similarity to the business being valued, relevant risk factors, as
well as size, profitability and growth expectations. The income approach typically uses a discounted cash flow analysis of the portfolio company.

Investments in debt securities that do not have sufficient coverage through the enterprise value analysis are valued based on an expected
probability of default and discount recovery analysis.

Investments in debt securities with sufficient coverage through the enterprise
value analysis are generally valued using a discounted cash flow analysis of the underlying security. Projected cash flows in the discounted cash flow typically represent the relevant securitys contractual interest, fees and principal payments
plus the assumption of full principal recovery at the investments expected maturity date. The discount rate to be used is determined using an average of two market-based methodologies.

Investments in structured finance obligations are generally valued using a discounted cash flow and/or consensus pricing.

The following table summarizes the quantitative information related to the significant unobservable inputs for Level III instruments which are
carried at fair value as of March 31, 2014 and December 31, 2013:



|                                     |  |                               |         |  |                      |                      |                    |                   |       |  |       |      |  |  |                 |   |  |  |       |  
|------------------------------------ |  | ----------------------------- | ------- |  | -------------------- | -------------------- | ------------------ | ----------------- | ----- |  | ----- | ---- |  |  | --------------- | - |  |  | ----- | -
|                                     |  |                               |         |  |                      |                      |                    |                   | Range |  |       |      | 
|                                     |  | Fair Value asof March 31,2014 |         |  | Valuation Techniques |                      | UnobservableInputs |                   | Low   |  |       | High |  |  | WeightedAverage |  
|Investments in First and Second Lien |  | $                             | 270,534 |  |                      | Discounted Cash Flow |                    | Discount Rate     |       |  | 4.50  | %    |  |  | 10.33           | % |  |  | 6.53  | %
|Debt Securities                      |  |                               |         |  |                      |                      |                    |                   |       |  |       |      |  |  |                 |   |  |  |       |  
|                                     |  |                               |         |  |                      |                      |                    |                   |       |  |       |      |  |  |                 |   |  |  |       |  
|Total Debt                           |  |                               | 270,534 |  |                      |                      |                    |                   |       |  |       |      |  |  |                 |   |  |  |       |  
|                                     |  |                               |         |  |                      |                      |                    |                   |       |  |       |      |  |  |                 |   |  |  |       |  
|Investments in Structured Products   |  |                               | 41,552  |  |                      | Discounted Cash Flow |                    | Discount Rate     |       |  | 9.50  | %    |  |  | 12.00           | % |  |  | 11.45 | %
|                                     |  |                               |         |  |                      |                      |                    | Default Rate      |       |  | 0.65  |      |  |  | 1.48            |   |  |  | 1.00  |  
|                                     |  |                               |         |  |                      |                      |                    | Prepayment Rate   |       |  | 22.41 |      |  |  | 45.00           |   |  |  | 35.71 |  
|                                     |  |                               |         |  |                      |                      |                    | Recovery Rate     |       |  | 66.34 |      |  |  | 75.00           |   |  |  | 72.90 |  
|                                     |  |                               | 6,259   |  |                      | Consensus Pricing    |                    | Indicative Quotes |       |  | 0.50  |      |  |  | 88.00           |   |  |  | 87.60 |  
|                                     |  |                               |         |  |                      |                      |                    |                   |       |  |       |      |  |  |                 |   |  |  |       |  
|Total Structured Products            |  |                               | 47,811  |  |                      |                      |                    |                   |       |  |       |      |  |  |                 |   |  |  |       |  
|                                     |  |                               |         |  |                      |                      |                    |                   |       |  |       |      |  |  |                 |   |  |  |       |  
|Total Level III Investments          |  | $                             | 318,345 |  |                      |                      |                    |                   |       |  |       |      |  |  |                 |   |  |  |       |  
|                                     |  |                               |         |  |                      |                      |                    |                   |       |  |       |      |  |  |                 |   |  |  |       |  



|                                     |  |                                  |         |  |                      |                      |                    |                   |       |  |       |      |  |  |                 |   |  |  |       |  
|------------------------------------ |  | -------------------------------- | ------- |  | -------------------- | -------------------- | ------------------ | ----------------- | ----- |  | ----- | ---- |  |  | --------------- | - |  |  | ----- | -
|                                     |  |                                  |         |  |                      |                      |                    |                   | Range |  |       |      | 
|                                     |  | Fair Value asof December 31,2013 |         |  | Valuation Techniques |                      | UnobservableInputs |                   | Low   |  |       | High |  |  | WeightedAverage |  
|Investments in First and Second Lien |  | $                                | 181,443 |  |                      | Discounted Cash Flow |                    | Discount Rate     |       |  | 5.17  | %    |  |  | 10.14           | % |  |  | 7.04  | %
|Debt Securities                      |  |                                  |         |  |                      |                      |                    |                   |       |  |       |      |  |  |                 |   |  |  |       |  
|                                     |  |                                  |         |  |                      |                      |                    |                   |       |  |       |      |  |  |                 |   |  |  |       |  
|Total Debt                           |  |                                  | 181,443 |  |                      |                      |                    |                   |       |  |       |      |  |  |                 |   |  |  |       |  
|                                     |  |                                  |         |  |                      |                      |                    |                   |       |  |       |      |  |  |                 |   |  |  |       |  
|Investments in Structured Products   |  |                                  | 16,031  |  |                      | Discounted Cash Flow |                    | Discount Rate     |       |  | 12.00 | %    |  |  | 14.00           | % |  |  | 12.39 | %
|                                     |  |                                  |         |  |                      |                      |                    | Default Rate      |       |  | 0.50  |      |  |  | 1.12            |   |  |  | 0.74  |  
|                                     |  |                                  |         |  |                      |                      |                    | Prepayment Rate   |       |  | 28.63 |      |  |  | 34.71           |   |  |  | 30.61 |  
|                                     |  |                                  |         |  |                      |                      |                    | Recovery Rate     |       |  | 70.24 |      |  |  | 75.00           |   |  |  | 73.52 |  
|                                     |  |                                  | 15,333  |  |                      | Consensus Pricing    |                    | Indicative Quotes |       |  | 53.00 |      |  |  | 88.00           |   |  |  | 80.84 |  
|                                     |  |                                  |         |  |                      |                      |                    |                   |       |  |       |      |  |  |                 |   |  |  |       |  
|Total Structured Products            |  |                                  | 31,364  |  |                      |                      |                    |                   |       |  |       |      |  |  |                 |   |  |  |       |  
|                                     |  |                                  |         |  |                      |                      |                    |                   |       |  |       |      |  |  |                 |   |  |  |       |  
|Total Level III Investments          |  | $                                | 212,807 |  |                      |                      |                    |                   |       |  |       |      |  |  |                 |   |  |  |       |  
|                                     |  |                                  |         |  |                      |                      |                    |                   |       |  |       |      |  |  |                 |   |  |  |       |  



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The significant unobservable inputs used in the fair value measurement of the Companys
investments in first and second lien debt securities are discount rates. Significant increases in discount rates would result in a significantly lower fair value measurement.

The significant unobservable inputs used in the fair value measurement of the Companys investments in structured finance obligations are
discount rates, default rates, prepayment rates, recovery rates and indicative quotes. Significant increases in discount rates, default rates or prepayment rates in isolation would result in a significantly lower fair value measurement, while a
significant increase in recovery rates in isolation would result in a significantly higher fair value. Significant decreases in indicative quotes in isolation may result in a significantly lower fair value measurement.

Financial instruments disclosed but not carried at fair value:

The following table presents the carrying value and fair value of the Companys secured borrowings disclosed but not carried at fair
value.



|                   |  |                |        |  |                   |   |        |                |  |   |            |  |  |   |        | 
|------------------ |  | -------------- | ------ |  | ----------------- | - | ------ | -------------- |  | - | ---------- |  |  | - | ------ | 
|                   |  | March 31, 2014 |        |  | December 31, 2013 |  
|                   |  | Carrying Value |        |  | Fair Value        |   |        | Carrying Value |  |   | Fair Value | 
|Secured borrowings |  | $              | 75,922 |  |                   | $ | 75,922 |                |  | $ | 66,822     |  |  | $ | 66,822 | 
|                   |  |                |        |  |                   |   |        |                |  |   |            |  |  |   |        | 
|Total              |  | $              | 75,922 |  |                   | $ | 75,922 |                |  | $ | 66,822     |  |  | $ | 66,822 | 
|                   |  |                |        |  |                   |   |        |                |  |   |            |  |  |   |        | 

The fair value of the secured borrowings approximates its carrying value and is categorized as Level III
within the hierarchy. Secured borrowings are valued generally using discounted cash flows analysis. The significant unobservable inputs used in the fair value measurement of the Companys secured borrowings are discount rates. Significant
increases in discount rates would result in a significantly lower fair value measurement.

The fair value of other financial assets and
liabilities approximates their carrying value based on the short term nature of these items.

5. RELATED PARTY TRANSACTIONS

Investment Advisory Agreement

On
April 3, 2013, the Companys Board of Directors, including a majority of the directors who are not interested persons as defined in the Investment Company Act, approved an investment advisory and management agreement (the Investment
Advisory Agreement) between the Company and the Investment Adviser in accordance with, and on the basis of an evaluation satisfactory to such directors as required by, Section 15(c) of the Investment Company Act. Subject to the overall
supervision of the Board of Directors, the Investment Adviser provides investment advisory services to the Company. For providing these services, the Investment Adviser receives a fee from the Company consisting of two componentsa base
management fee and an incentive fee.

Prior to a Qualified IPO, the base management fee is calculated and payable quarterly in arrears at
an annual rate of 1.50% of the average daily gross assets of the Company for the period adjusted for share issuances or repurchases, excluding any cash and cash equivalents and including assets acquired with leverage from use of the Revolving Credit
Facility and Facility (see Note 6, Borrowings). For purposes of this calculation, cash and cash equivalents include any temporary investments in cash-equivalents, U.S. government securities and other high quality investment grade debt investments
that mature in 12 months or less from the date of investment. Base management fees for any partial quarter are prorated. The Investment Adviser contractually waived one-third (0.50%) of the base management fee prior to a Qualified IPO. The fee
waiver will terminate if and when a Qualified IPO has been consummated.



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The incentive fee has two parts. The first part is calculated and payable quarterly in arrears
based on the pre-incentive fee net investment income for the immediately preceding calendar quarter. The second part is determined and payable in arrears based on capital gains as of the end of each calendar year.

Pre-incentive fee net investment income means interest income, dividend income and any other income (including any other fees (other than fees
for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies) accrued during the calendar quarter, minus the operating expenses
accrued for the quarter (including the base management fee, expenses payable under the administration agreement, and any interest expense or fees on any credit facilities or outstanding debt and dividends paid on any issued and outstanding preferred
stock, but excluding the incentive fee). Pre-incentive fee net investment income does not include, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with pay-in-kind interest and zero
coupon securities), accrued income that the Company has not yet received in cash. Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.

Prior to any Qualified IPO of the Companys common stock, pre-incentive fee net investment income, expressed as a rate of return on the
average daily Hurdle Calculation Value (as defined below) throughout the immediately preceding calendar quarter, is compared to a hurdle rate of 1.50% per quarter (6% annualized). Hurdle Calculation Value means, on any
given day, the sum of (x) the value of net assets as of the end of the calendar quarter immediately preceding such day plus (y) the aggregate amount of capital drawn from investors (or reinvested in the Company pursuant to a dividend
reinvestment plan) from the beginning of the current quarter to such day minus (z) the aggregate amount of distributions (including share repurchases) made by the Company from the beginning of the current quarter to such day but only to the
extent such distributions were not declared and accounted for on the books and records in a previous quarter.

GMS Finance pays its
Investment Adviser an incentive fee with respect to its pre-incentive fee net investment income in each calendar quarter as follows:



| |  |  | no incentive fee based on pre-incentive fee net investment income in any calendar quarter in which its pre-incentive fee net investment income does not exceed the hurdle of 1.50%;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 100% of pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the hurdle but is less than 1.875% in any calendar quarter (7.50%
annualized). The Company refers to this portion of the pre-incentive fee net investment income (which exceeds the hurdle but is less than 1.875%) as the catch-up. The catch-up is meant to provide the Investment Adviser with
approximately 20% of the Companys pre-incentive fee net investment income as if a hurdle did not apply if this net investment income exceeds 1.875% in any calendar quarter; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 20% of the amount of pre-incentive fee net investment income, if any, that exceeds 1.875% in any calendar quarter (7.50% annualized) will be payable to the Investment Adviser. This reflects that once the hurdle is
reached and the catch-up is achieved, 20% of all pre-incentive fee investment income thereafter is allocated to the Investment Adviser.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The second part of the incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the
Investment Advisory Agreement, as of the termination date), and equals 20% of realized capital gains, if any, on a cumulative basis from inception through the date of determination, computed net of all realized capital losses on a cumulative basis
and unrealized capital depreciation, less the aggregate amount of any previously paid capital gain incentive fees, provided that, the incentive fee determined at the end of the first calendar year of operations may be calculated for a period of
shorter than twelve calendar months to take into account any realized capital gains computed net of all realized capital losses on a cumulative basis and unrealized capital depreciation.



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The Company will defer payment of any incentive fee otherwise earned by the Investment Adviser
if, during the most recent four full calendar quarter periods (or, if less, the number of full calendar quarters completed since the initial drawdown of capital from the stockholders, Initial Drawdown) ending on or prior to the date such
payment is to be made, the sum of (a) the aggregate distributions to stockholders and (b) the change in net assets (defined as gross assets less indebtedness and before taking into account any incentive fees payable during the period) is
less than 6.0% of net assets (defined as gross assets less indebtedness) at the beginning of such period, provided, that such percentage will be appropriately prorated during the four full calendar quarters immediately following the Initial
Drawdown. These calculations are adjusted for any share issuances or repurchases. Any deferred incentive fees are carried over for payment in subsequent calculation periods. The Investment Adviser may earn an incentive fee under the Investment
Advisory Agreement on the Companys repurchase of debt issued by the Company at a gain.

Prior to a Qualified IPO and subject to the
receipt of any necessary regulatory approvals, the Companys Investment Adviser intends to make (or require individual employees or entities in which employees own an interest to make) capital commitments to purchase shares of the
Companys common stock in an amount equal to approximately 25% of each installment of the net after tax incentive fee that the Investment Adviser receives from the Company. For the three month period ended March 31, 2014, there was no
incentive fee paid on pre-incentive fee net investment income or realized capital gains, therefore, no commitments were made and no shares were issued to the Investment Adviser related to the after tax incentive.

For the three month period ended March 31, 2014, base management fees were $661 (net of waiver of $330), incentive fees related to
pre-incentive fee net investment income were $796, and there were no incentive fees related to realized capital gains. Incentive fees of $796 were deferred for the three month period ended March 31, 2014 and will be carried over for payment in
subsequent calculation periods to the extent that the 6.0% hurdle is achieved for the most recent four calendar quarters prior to payment. For the three month period ended March 31, 2014, the Company recorded an accrued capital gains incentive
fee of $144 based upon the cumulative net realized and unrealized appreciation/(depreciation) as of March 31, 2014. The accrual for any capital gains incentive fee under US GAAP in a given period may result in an additional expense if such
cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual.

As of March 31, 2014 and December 31, 2013, $1,601 and $625, respectively, was included in base management and incentive fees
payable in the accompanying Consolidated Statements of Assets and Liabilities.

On April 3, 2013, the Investment Adviser entered into
a personnel agreement with The Carlyle Group Employee Co., L.L.C. (Carlyle Employee Co.), an affiliate of the Investment Adviser, pursuant to which Carlyle Employee Co. provides the Investment Adviser with access to investment
professionals. As of March 31, 2014 and December 31, 2013, the Investment Adviser, members of senior management, and certain employees, partners, and affiliates of the Investment Adviser committed $42,967 to the Company.

Administration Agreement

On
April 3, 2013, the Companys Board of Directors approved an administration agreement (the Administration Agreement) between the Company and the Administrator. Pursuant to the Administration Agreement, the Administrator provides
services and receives reimbursements equal to an amount that reimburses the Administrator for its costs and expenses and the Companys allocable portion of overhead incurred by the Administrator in performing its obligations under the
Administration Agreement, including the Companys allocable portion of the compensation paid to or compensatory distributions received by the Companys officers (including the Chief Compliance Officer and Chief Financial Officer) and
respective staff who provide services to the Company, operations staff who provide services to the Company, and any internal audit staff, to the extent internal audit performs a role in the Sarbanes-Oxley internal control assessment. Reimbursement
under the Administration Agreement occurs quarterly in arrears.



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For the three month period ended March 31, 2014, GMS Finance incurred $257 in fees under the
Administrative Agreement, which are included in administrative service fees in the accompanying Consolidated Statement of Operations. As of March 31, 2014 and December 31, 2013, $388 and $131, respectively, was unpaid and included in
administrative service fees payable in the accompanying Consolidated Statements of Assets and Liabilities.

Sub-Administration Agreements

On April 3, 2013, the Administrator entered into sub-administration agreements with Carlyle Employee Co. and CELF Advisors
LLP. Pursuant to the agreements, Carlyle Employee Co. and CELF Advisors LLP provide the Administrator access to personnel.

On
April 3, 2013, the Administrator entered into a sub-administration agreement with State Street Bank and Trust Company. For the three month period ended March 31, 2014, fees incurred in connection with the sub-administration agreement,
which amounted to $30 is included in other general and administrative in the accompanying Consolidated Statement of Operations. As of March 31, 2014 and December 31, 2013, $80 and $50, respectively, was unpaid and included in other accrued
expenses and liabilities in the accompanying Consolidated Statements of Assets and Liabilities.

Placement Fees

On April 3, 2013, the Company entered into a placement fee arrangement with TCG Securities, L.L.C. (TCG), a licensed
broker-dealer and an affiliate of the Investment Adviser, which may require stockholders to pay a placement fee to TCG in addition to their capital commitments for TCGs services.

For the three month period ended March 31, 2014, TCG did not earn or receive any placement fees from GMS Finance stockholders in
connection with the issuance or sale of the Companys common stock.

Board of Directors

GMS Finances Board of Directors currently consists of seven members, four of whom are not interested persons of GMS Finance
as defined in Section 2(a)(19) of the Investment Company Act (Independent Directors). On April 3, 2013, the Board of Directors also established an Audit Committee consisting of its Independent Directors, and may establish
additional committees in the future. For the three month period ended March 31, 2014, GMS Finance incurred $82 in fees and expenses associated with its Independent Directors and Audit Committee. As of March 31, 2014 and December 31,
2013, $5 and $28, respectively, was unpaid and included in other accrued expenses and liabilities in the accompanying Consolidated Statements of Assets and Liabilities. As of March 31, 2014 and December 31, 2013, certain directors had
committed $1,750 in capital commitments to the Company.

6. BORROWINGS

In accordance with the Investment Company Act, the Company is only allowed to borrow amounts such that its asset coverage, as defined in the
Investment Company Act, is at least 200% after such borrowing. As of March 31, 2014 and December 31, 2013, asset coverage was 433.29% and 378.35%, respectively. During the three month period ended March 31, 2014, there were secured
borrowings of $9,100 under the Revolving Credit Facility and none under the Facility. As of March 31, 2014 and December 31, 2013, there was $75,922 and $66,822, respectively, in secured borrowings outstanding.

Revolving Credit Facility

The
Borrower Sub closed on May 24, 2013 (the Effective Date) on a senior secured revolving credit facility with various lenders (the Revolving Credit Facility). The Revolving Credit Facility became available to the Company
for borrowing once the Borrower Sub had at least $30,000 of minimum equity in its assets held.



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The Revolving Credit Facility provides for secured borrowings up to the lesser of $500,000 or the amount of capital commitments the Company has received with an accordion feature that can,
subject to certain conditions, increase the aggregate maximum credit commitment up to an amount not to exceed $750,000, subject to restrictions imposed on borrowings under the Investment Company Act and adequate collateral to support such
borrowings. The Revolving Credit Facility has a three-year revolving period (with two one-year extension options, subject to the Borrower Subs and the lenders consent) and a maturity date six years from the Effective Date of the facility
(extendable in connection with an extension of the revolving period). Base rate borrowings under the Revolving Credit Facility bear interest initially at the applicable commercial paper rate (if the lender is a conduit lender) or LIBOR plus
1.75% per year during the revolving period, with pre-determined future interest rate increases of 1.00%-2.00% over the three years following the end of the revolving period. The Borrower Sub is also required to pay a commitment fee of between
0.25% and 1.00% per year depending on the usage of the Revolving Credit Facility. Payments under the Revolving Credit Facility are made quarterly. The lenders have a first lien security interest on all of the assets of the Borrower Sub.

As part of the Revolving Credit Facility, the Borrower Sub is subject to limitations as to how borrowed funds may be used including, but not
limited to, restrictions on sector and geographic concentrations, loan size, payment frequency, tenor and investment ratings (or estimated ratings). In addition, borrowed funds are intended to be used primarily to purchase first lien loan
assets, and the Borrower Sub is limited in its ability to purchase certain other assets (including, but not limited to, second lien loans, revolving and delayed draw loans and discount loans) and other assets are not permitted to be purchased
(including, but not limited to covenant-lite loans, paid-in-kind loans and structured finance obligations). The Revolving Credit Facility has certain requirements relating to interest coverage and portfolio performance, including limitations on
delinquencies and charge offs, violation of which could result in the immediate acceleration of the amounts due under the Revolving Credit Facility. The Revolving Credit Facility is also subject to a borrowing base that applies different advance
rates to assets held by the Borrower Sub based generally on the fair market value of such assets. Under certain circumstances, GMS Finance could be obliged to repurchase loans from the Borrower Sub.

As of March 31, 2014 and December 31, 2013, the Borrower Sub was in compliance with all covenants and other requirements of the
Revolving Credit Facility.

Facility

The Company closed on March 21, 2014 on a senior secured revolving credit facility with various lenders (the Facility). The
maximum principal amount of the Facility is $150,000, subject to availability under the Facility, which is based on the value of the Companys portfolio investments net of certain other indebtedness that the Company may incur in the future in
accordance with the terms of the Facility. Proceeds of the Facility may be used for general corporate purposes, including the funding of portfolio investments. Maximum capacity under the Facility may be increased to $225,000 through the exercise by
the Company of an uncommitted accordion feature through which existing and new lenders may, at their option, agree to provide additional financing. The Facility includes a $20,000 limit for swingline loans and a $5,000 limit for letters of credit.
The Company may borrow amounts in U.S. dollars or certain other permitted currencies. Amounts drawn under the Facility, including amounts drawn in respect of letters of credit, will bear interest at either LIBOR plus an applicable spread of 2.25%,
or an alternative base rate (which is the highest of a prime rate, the federal funds effective rate plus 0.50%, or one month LIBOR plus 1.00%) plus an applicable spread of 1.25%. The Company may elect either the LIBOR or the
alternative base rate at the time of drawdown, and loans may be converted from one rate to another at any time, subject to certain conditions. The Company also pays a fee of 0.375% on undrawn amounts under the Facility and, in respect of
each undrawn letter of credit, a fee and interest rate equal to the then-applicable margin under the Facility while the letter of credit is outstanding. The availability period under the Facility will terminate on March 21, 2018 (the
Commitment Termination Date) and the Facility will mature on March 21, 2019 (the Maturity Date). During the period from the Commitment Termination Date to the Maturity Date, the Company will be obligated to make
mandatory prepayments under the Facility out of the proceeds of certain asset sales, other recovery events and equity and debt issuances.



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Subject to certain exceptions, including, without limitation, the Companys ownership
interests in its special purpose non-guarantor subsidiaries, such as the Borrower Sub, the Facility is secured by a perfected first-priority security interest in substantially all of the portfolio investments held by the Company and certain future
domestic subsidiaries of the Company (collectively, the Guarantors) and $100,000 of unfunded investor equity capital commitments. The Company is required to cause the Guarantors to guaranty the Facility. The $100,000 pledge of unfunded
investor equity capital commitments shall be released once $100,000 of incremental capital has been called and received by the Company subsequent to the March 21, 2014 closing date. The Facility includes customary covenants, including certain
financial covenants related to asset coverage, shareholders equity and liquidity, certain limitations on the incurrence of additional indebtedness and liens, and other maintenance covenants, as well as usual and customary events of default for
senior secured revolving credit facilities of this nature.

As of March 31, 2014, the Company was in compliance with all covenants
and other requirements of the Facility.

Summary of Facilities

The facilities of the Company and the Borrower Sub consisted of the following as of March 31, 2014 and December 31, 2013:



|                          |  |                   |         |  |                       |   |        |                    |  |   |                     |  |  |   |        | 
|------------------------- |  | ----------------- | ------- |  | --------------------- | - | ------ | ------------------ |  | - | ------------------- |  |  | - | ------ | 
|                          |  | March 31, 2014    |        
|                          |  | Total Facility    |         |  | BorrowingsOutstanding |   |        | Unused Portion (1) |  |   | AmountAvailable (2) | 
|Revolving Credit Facility |  | $                 | 500,000 |  |                       | $ | 75,922 |                    |  | $ | 424,078             |  |  | $ | 343    | 
|Facility                  |  |                   | 150,000 |  |                       |   |       |                    |  |   | 150,000             |  |  |   | 84,602 | 
|                          |  |                   |         |  |                       |   |        |                    |  |   |                     |  |  |   |        | 
|Total                     |  | $                 | 650,000 |  |                       | $ | 75,922 |                    |  | $ | 574,078             |  |  | $ | 84,945 | 
|                          |  |                   |         |  |                       |   |        |                    |  |   |                     |  |  |   |        | 
|                          | 
|                          |  | December 31, 2013 |        
|                          |  | Total Facility    |         |  | BorrowingsOutstanding |   |        | Unused Portion(1)  |  |   | AmountAvailable(2)  | 
|Revolving Credit Facility |  | $                 | 500,000 |  |                       | $ | 66,822 |                    |  | $ | 433,178             |  |  | $ | 18,616 | 
|                          |  |                   |         |  |                       |   |        |                    |  |   |                     |  |  |   |        | 
|Total                     |  | $                 | 500,000 |  |                       | $ | 66,822 |                    |  | $ | 433,178             |  |  | $ | 18,616 | 
|                          |  |                   |         |  |                       |   |        |                    |  |   |                     |  |  |   |        | 



|(1) | The unused portion upon which commitment fees are based.
|--- | --------------------------------------------------------

|(2) | Available for borrowing based on the computation of collateral to support the borrowings.
|--- | -----------------------------------------------------------------------------------------

As
of March 31, 2014 and December 31, 2013, $324 and $259, respectively, of interest expense and $265 and $266, respectively, of commitment fees were included in interest and credit facility fees payable. For the three month period ended
March 31, 2014, the average stated interest rate was 1.99% and average principal debt outstanding was $70,343. As of March 31, 2014 and December 31, 2013, the interest rate was 1.98% and 1.97%, respectively, based on floating LIBOR
rates.

For the three month period ended March 31, 2014, the components of interest expense and credit facility fees were as follows:



|                                                |  |                                               |     | 
|----------------------------------------------- |  | --------------------------------------------- | --- | 
|                                                |  | For the three monthperiod endedMarch 31, 2014 |    
|Interest expense                                |  | $                                             | 349 | 
|Facility unused commitment fee                  |  |                                               | 286 | 
|Amortization of deferred financing costs        |  |                                               | 219 | 
|Other fees                                      |  |                                               | 25  | 
|                                                |  |                                               |     | 
|Total interest expense and credit facility fees |  | $                                             | 879 | 
|                                                |  |                                               |     | 
|Cash paid for interest expense                  |  | $                                             | 285 | 



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7. COMMITMENTS AND CONTINGENCIES

A summary of significant contractual payment obligations was as follows as of March 31, 2014 and December 31, 2013:



|                   |  |                      |        |  |                 |  |   |           |  |  |           |  |  |                  |   |  |  |  |        | 
|------------------ |  | -------------------- | ------ |  | --------------- |  | - | --------- |  |  | --------- |  |  | ---------------- | - |  |  |  | ------ | 
|March 31, 2014     |  | Payment Due byPeriod |        |  |                 |  |   |           |  |  |           | 
|                   |  | Total                |        |  | Less than1 Year |  |   | 1-3 Years |  |  | 3-5 Years |  |  | More Than5 Years |  
|Secured Borrowings |  |                      | 75,922 |  |                 |  |  |           |  |  |          |  |  |                  |  |  |  |  | 75,922 | 



|                   |  |                      |        |  |                 |  |   |           |  |  |           |  |  |                  |   |  |  |  |        | 
|------------------ |  | -------------------- | ------ |  | --------------- |  | - | --------- |  |  | --------- |  |  | ---------------- | - |  |  |  | ------ | 
|December 31, 2013  |  | Payment Due byPeriod |        |  |                 |  |   |           |  |  |           | 
|                   |  | Total                |        |  | Less than1 Year |  |   | 1-3 Years |  |  | 3-5 Years |  |  | More Than5 Years |  
|Secured Borrowings |  |                      | 66,822 |  |                 |  |  |           |  |  |          |  |  |                  |  |  |  |  | 66,822 | 

In the ordinary course of its business, the Company enters into contracts or agreements that contain
indemnifications or warranties. Future events could occur that lead to the execution of these provisions against the Company. The Company believes that the likelihood of such an event is remote; however, the maximum potential exposure is unknown. No
accrual has been made in the consolidated financial statements as of March 31, 2014 and December 31, 2013 for any such exposure.

As of March 31, 2014 and December 31, 2013, the Company had $1,069,037 and $877,408, respectively, in total capital commitments from
stockholders, of which $815,562 and $689,405, respectively, was unfunded. Included in the commitments as of March 31, 2014 and December 31, 2013 were $42,967 of capital commitments of the Investment Adviser, members of senior management,
and certain employees, partners, and affiliates of the Investment Adviser. As of March 31, 2014 and December 31, 2013, certain directors had committed $1,750 in capital commitments to the Company.

As of March 31, 2014, there was a $100,000 pledge of unfunded investor equity capital commitments to the lenders of the Facility, which
shall be released once $100,000 of incremental capital has been called and received by the Company subsequent to the March 21, 2014 closing date of the Facility.

The Company had the following commitments to fund delayed draw senior secured loans, none of which were funded:



|                                        |  |                 |   |  |                   |   |       | 
|--------------------------------------- |  | --------------- | - |  | ----------------- | - | ----- | 
|                                        |  | Par Value as of |  
|                                        |  | March 31, 2014  |   |  | December 31, 2013 |  
|Total unfunded delayed draw commitments |  | $               |  |  |                   | $ | 3,000 | 
|                                        |  |                 |   |  |                   |   |       | 



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8. NET ASSETS

In connection with its formation, the Company has the authority to issue 200,000,000 shares of common stock, $0.01 per share par value.

During the three month period ended March 31, 2014, the Company issued 3,315,431 shares for $65,472. The following table summarizes
capital activity during the three month period ended March 31, 2014:



|                                                                                                  |              |  |            |        |                             |   |     |                  |  |   |                                        |  |  |                                      |     |   |                                                                 |   |        |                |  |   |    |  |  |   |      |   |  |   |         |  
|------------------------------------------------------------------------------------------------- | ------------ |  | ---------- | ------ | --------------------------- | - | --- | ---------------- |  | - | -------------------------------------- |  |  | ------------------------------------ | --- | - | --------------------------------------------------------------- | - | ------ | -------------- |  | - | -- |  |  | - | ---- | - |  | - | ------- | -
|                                                                                                  |              |  |            |        | CapitalIn ExcessOf ParValue |   |     | OfferingExpenses |  |   | AccumulatedNet InvestmentIncome (Loss) |  |  | Net RealizedGain (Loss)OnInvestments |     |   | Net Change inUnrealizedAppreciation(Depreciation) onInvestments |   |        | TotalNetAssets | 
|                                                                                                  | Common Stock |  |            |        |                             |   |     |                 
|                                                                                                  | Shares       |  |            | Amount |                             |   |     |                  |  |   |                                       
|Balance, beginning of period                                                                      |              |  | 9,575,990  |        |                             | $ | 96  |                  |  | $ | 186,965                                |  |  | $                                    | (74 | ) |                                                                 | $ | (664   | )              |  | $ |   |  |  | $ | (321 | ) |  | $ | 186,002 |  
|Common stock issued                                                                               |              |  | 3,315,431  |        |                             |   | 33  |                  |  |   | 65,439                                 |  |  |                                      |    |   |                                                                 |   |       |                |  |   |   |  |  |   |     |   |  |   | 65,472  |  
|Net investment income (loss)                                                                      |              |  |           |        |                             |   |    |                  |  |   |                                       |  |  |                                      |    |   |                                                                 |   | 3,039  |                |  |   |   |  |  |   |     |   |  |   | 3,039   |  
|Net realized gain (loss) on investments-non-controlled/non-affiliated                             |              |  |           |        |                             |   |    |                  |  |   |                                       |  |  |                                      |    |   |                                                                 |   |       |                |  |   | 46 |  |  |   |     |   |  |   | 46      |  
|Net change in unrealized appreciation (depreciation) on investmentsnon-controlled/non-affiliated |              |  |           |        |                             |   |    |                  |  |   |                                       |  |  |                                      |    |   |                                                                 |   |       |                |  |   |   |  |  |   | 931  |   |  |   | 931     |  
|Dividends declared                                                                                |              |  |           |        |                             |   |    |                  |  |   |                                       |  |  |                                      |    |   |                                                                 |   | (2,449 | )              |  |   |   |  |  |   |     |   |  |   | (2,449  | )
|                                                                                                  |              |  |            |        |                             |   |     |                  |  |   |                                        |  |  |                                      |     |   |                                                                 |   |        |                |  |   |    |  |  |   |      |   |  |   |         |  
|Balance, end of period                                                                            |              |  | 12,891,421 |        |                             | $ | 129 |                  |  | $ | 252,404                                |  |  | $                                    | (74 | ) |                                                                 | $ | (74    | )              |  | $ | 46 |  |  | $ | 610  |   |  | $ | 253,041 |  
|                                                                                                  |              |  |            |        |                             |   |     |                  |  |   |                                        |  |  |                                      |     |   |                                                                 |   |        |                |  |   |    |  |  |   |      |   |  |   |         |  

The following table summarizes total shares issued and proceeds received related to capital drawdowns
delivered pursuant to subscriptions for the Companys common stock during the three month period ended March 31, 2014:



|                  |  |               |           |  |                   |   |        | 
|----------------- |  | ------------- | --------- |  | ----------------- | - | ------ | 
|                  |  | Shares Issued |           |  | Proceeds Received |  
|January 27, 2014  |  |               | 1,020,810 |  |                   |   | 19,998 | 
|February 21, 2014 |  |               | 491,849   |  |                   |   | 9,689  | 
|March 21, 2014    |  |               | 1,802,772 |  |                   |   | 35,785 | 
|                  |  |               |           |  |                   |   |        | 
|Total             |  |               | 3,315,431 |  |                   | $ | 65,472 | 
|                  |  |               |           |  |                   |   |        | 

Subscribed but unissued shares are presented in equity with a deduction of subscriptions receivable until cash
is received for a subscription. There were no subscribed but unissued shares as of March 31, 2014 and December 31, 2013.

Subscription transactions during the three month period ended March 31, 2014 were executed at an offering price at a premium to NAV in
order to effect a reallocation of organizational costs to subsequent investors. Such subscription transactions increased NAV by $0.04 per share for the three month period ended March 31, 2014.

The Company computes earnings per common share in accordance with ASC 260, Earnings Per Share.Basic earnings per common share were
calculated by dividing net increase (decrease) in net assets resulting from operations attributable to the Company by the weighted-average number of common shares outstanding for the period.

Basic and diluted earnings per common share were as follows:



|                                                     |  |                                               |            | 
|---------------------------------------------------- |  | --------------------------------------------- | ---------- | 
|                                                     |  | For the three monthperiod endedMarch 31, 2014 |           
|Net increase in net assets resulting from operations |  | $                                             | 4,016      | 
|Weighted-average common shares outstanding           |  |                                               | 10,735,373 | 
|                                                     |  |                                               |            | 
|Basic and diluted earnings per common share          |  | $                                             | 0.37       | 
|                                                     |  |                                               |            | 



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On March 13, 2014, the Company declared its first dividend of $0.19 per share for the
quarter ended March 31, 2014, which was paid on April 14, 2014 to holders of record of common stock at the close of business on March 31, 2014. As of December 31, 2013, no dividends or distributions had been declared or paid by
the Company.

9. CONSOLIDATED FINANCIAL HIGHLIGHTS

The following is a schedule of consolidated financial highlights for the three month period ended March 31, 2014:



|                                                                                          |  |   |            |  
|----------------------------------------------------------------------------------------- |  | - | ---------- | -
|Per Share Data:                                                                           |  |   |            |  
|Net asset value per share, beginning of period                                            |  | $ | 19.42      |  
|Net investment income (1)                                                                 |  |   | 0.28       |  
|Net realized gain and net change in unrealized appreciation (depreciation) on investments |  |   | 0.08       |  
|                                                                                          |  |   |            |  
|Net increase in net assets resulting from operations                                      |  |   | 0.36       |  
|                                                                                          |  |   |            |  
|Dividends declared                                                                        |  |   | (0.19      | )
|Effect of subscription offering price (2)                                                 |  |   | 0.04       |  
|                                                                                          |  |   |            |  
|Net asset value per share, end of period                                                  |  | $ | 19.63      |  
|                                                                                          |  |   |            |  
|Number of shares outstanding, end of period                                               |  |   | 12,891,421 |  
|Total return (3)                                                                          |  |   | 2.06       | %
|Net assets, end of period                                                                 |  | $ | 253,041    |  
|Ratio to average net assets:                                                              |  |   |            |  
|Expenses net of waiver, before incentive fees                                             |  |   | 1.17       | %
|Expenses net of waiver, after incentive fees                                              |  |   | 1.59       | %
|Expenses gross of waiver, after incentive fees                                            |  |   | 1.74       | %
|Net investment income (4)                                                                 |  |   | 1.34       | %
|Interest expense and credit facility expenses                                             |  |   | 0.39       | %
|Ratios/Supplemental Data:                                                                 |  |   |            |  
|Asset coverage                                                                            |  |   | 433.29     | %
|Portfolio turnover                                                                        |  |   | 5.10       | %
|Total committed capital as of March 31, 2014                                              |  | $ | 1,069,037  |  
|Ratio of total contributed capital to total committed capital as of March 31, 2014        |  |   | 23.71      | %
|Weighted-average shares outstanding                                                       |  |   | 10,735,373 |  



|(1) | Net investment income per share is calculated as net investment income for the period divided by the weighted average number of shares outstanding for the period.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Increase is due to offering price of subscriptions during the period (Refer to Note 8).
|--- | ---------------------------------------------------------------------------------------

|(3) | Total return based on net asset value equals the change in net asset value during the period plus the declared dividends for the three month period ended March 31, 2014, divided by the beginning net asset value for
the period. This calculation is adjusted for additional shares issued related to dividends paid, thereby assuming reinvestment of dividends distributed in connection with the dividend reinvestment plan. Total return based on net asset value is not
annualized. Total return does not reflect taxes paid on distributions or placement fees paid on capital drawdowns, if any. The Companys performance changes over time and currently may be different than that shown. Past performance is no
guarantee of future results. Total return is inclusive of $0.04 per share increase in NAV for the period related to the offering price of subscriptions. Excluding the effects of the higher offering price of subscriptions, total return would have
been 1.85% (Refer to Note 8).
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | The net investment income ratio is net of the waiver of base management fees.
|--- | -----------------------------------------------------------------------------



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10. LITIGATION

The Company may become party to certain lawsuits in the ordinary course of business. The Company does not believe that the outcome of current
matters, if any, will materially impact the Company or its consolidated financial statements. As of March 31, 2014 and December 31, 2013, the Company was not subject to any material legal proceedings, nor, to our knowledge, is any material
legal proceeding threatened against the Company.

In addition, portfolio investments of the Company could be the subject of litigation or
regulatory investigations in the ordinary course of business. The Company does not believe that the outcome of any current contingent liabilities of its portfolio investments, if any, will materially affect the Company or these consolidated
financial statements.

11. TAX

The
Company has not recorded a liability for any uncertain tax positions pursuant to the provisions of ASC 740, Income Taxes, as of March 31, 2014 and December 31, 2013.

In the normal course of business, the Company is subject to examination by federal and certain state, local and foreign tax regulators. As of
March 31, 2014 and December 31, 2013, the Company has yet to file any tax returns and therefore is not yet subject to examination.

The companys taxable income for each period is an estimate and will not be finally determined until the company files its tax return for
each year. Therefore, the final taxable income, and the taxable income earned in each period and carried forward for distribution in the following period, may be different than this estimate. The estimated tax character of dividends declared for the
three month period ended March 31, 2014 was as follows:



|                      |  |   |       | 
|--------------------- |  | - | ----- | 
|Ordinary Income       |  | $ | 2,449 | 
|Tax return of capital |  | $ |      | 

12. SUBSEQUENT EVENTS

Subsequent events have been evaluated through the date the consolidated financial statements were issued. There have been no subsequent events
that require recognition or disclosure through the date the consolidated financial statements were issued, except as disclosed below.

On
April 4, 2014, the Company borrowed $5,000 from the Revolving Credit Facility to fund investment acquisitions. On April 29, 2014, April 30, 2014, May 8, 2014 and May 9, 2014, the Company borrowed $8,000, $5,000, $15,000 and
$24,000, respectively, from the Facility to fund investment acquisitions. On May 8, 2014, the Company voluntarily repaid $9,769 to the Revolving Credit Facility utilizing proceeds from loan repayments, including Dialysis Newco, Inc., d/b/a DSI
Renal which repaid the Company in full on April 24, 2014.



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Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations.

(dollar amounts in thousands, except per share data)

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

We have included or incorporated by reference in this Form 10-Q, and from time to time our management may make, forward-looking
statements. These forward-looking statements are not historical facts, but instead relate to future events or the future performance or financial condition of Carlyle GMS Finance, Inc. (we, us, our,
GMS Finance, or the Company). These statements are based on current expectations, estimates and projections about us, our current or prospective portfolio investments, our industry, our beliefs, and our assumptions. The
forward-looking statements contained in this Form 10-Q and the documents incorporated by reference herein involve a number of risks and uncertainties, including statements concerning:



| |  |  | our, or our portfolio companies, future business, operations, operating results or prospects;
| | - |  | ----------------------------------------------------------------------------------------------



| |  |  | the return or impact of current and future investments;
| | - |  | -------------------------------------------------------



| |  |  | the impact of a protracted decline in the liquidity of credit markets on our business;
| | - |  | --------------------------------------------------------------------------------------



| |  |  | the impact of fluctuations in interest rates on our business;
| | - |  | -------------------------------------------------------------



| |  |  | the impact of changes in laws or regulations (including the interpretation thereof) governing our operations or the operations of our portfolio companies;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the valuation of our investments in portfolio companies, particularly those having no liquid trading market;
| | - |  | ------------------------------------------------------------------------------------------------------------



| |  |  | our ability to recover unrealized losses;
| | - |  | -----------------------------------------



| |  |  | market conditions and our ability to access alternative debt markets and additional debt and equity capital;
| | - |  | ------------------------------------------------------------------------------------------------------------



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



| |  |  | the general economy and its impact on the industries in which we invest;
| | - |  | ------------------------------------------------------------------------



| |  |  | the financial condition of and ability of our current and prospective portfolio companies to achieve their objectives;
| | - |  | ----------------------------------------------------------------------------------------------------------------------



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



| |  |  | our ability to successfully integrate any acquisitions;
| | - |  | -------------------------------------------------------



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



| |  |  | the timing, form and amount of any dividend distributions;
| | - |  | ----------------------------------------------------------



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



| |  |  | the ability of our investment adviser to locate suitable investments for us and to monitor and administer our investments; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------



| |  |  | our intent to satisfy the requirements of a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------

We use words such as anticipates, believes, expects, intends, will,
should, may and similar expressions to identify forward-looking statements, although not all forward-looking statements include these words. Our actual results and condition could differ materially from those implied or
expressed in the forward-looking statements for any reason, including the factors set forth in Risk Factors in Part II, Item 1A of and elsewhere in this Form 10-Q.

We have based the forward-looking statements included in this Form 10-Q on information available to us on the date of this Form 10-Q, and we
assume no obligation to update any such forward-looking statements. Although



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##### Table of Contents

we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional
disclosures that we may make directly to you or through reports that we have filed or in the future may file with the Securities and Exchange Commission (the SEC), including our registration statement on Form 10, annual reports on Form
10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

OVERVIEW

Managements Discussion and Analysis should be read in conjunction with Part I, Item 1 of this Form 10-Q Financial
Statements. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to those described in Part II, Item 1A of this Form 10-Q Risk Factors. Actual results
may differ materially from those contained in any forward-looking statements.

GMS Finance is a Maryland corporation formed on
February 8, 2012, and structured as an externally managed, non-diversified closed-end investment company. On May 2, 2013, GMS Finance filed its election to be regulated as a business development company (BDC) under the
Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the Investment Company Act). GMS Finance intends to be treated, and intends to comply with the requirements to qualify annually,
as a regulated investment company (RIC) under Subchapter M of the Internal Revenue Code of 1986, as amended (the Code), commencing with its taxable year ended December 31, 2013.

GMS Finances investment objective is to generate current income and capital appreciation primarily through debt investments in U.S.
middle market companies with approximately $10 million to $100 million of earnings before interest, taxes, depreciation and amortization (EBITDA). GMS Finance seeks to achieve its investment objective by investing primarily in first lien
senior secured and unitranche loans to private U.S. middle market companies that are, in many cases, controlled by private equity investment firms (Middle Market Senior Loans). Depending on market conditions, GMS Finance expects that
between 70% and 80% of the value of its assets, including the amount of any borrowings for investment purposes, will be invested in Middle Market Senior Loans, with the balance invested in higher-yielding investments, which may include middle market
junior loans such as corporate mezzanine loans, equity co-investments, broadly syndicated first lien senior secured loans and second lien loans, high-yield bonds, structured finance obligations and/or other opportunistic investments.



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PORTFOLIO AND INVESTMENT ACTIVITY

The fair value of our investments was approximately $318,345 and $212,807, respectively in 39 and 27 portfolio companies/structured finance
obligations as of March 31, 2014 and December 31, 2013, respectively.

The Companys investment activity for the three
month period ended March 31, 2014, is presented below (information presented herein is at amortized cost unless otherwise indicated).



|                                                                      |  |                                                |         |  
|--------------------------------------------------------------------- |  | ---------------------------------------------- | ------- | -
|                                                                      |  | For the three monthperiod ended March 31, 2014 |        
|Investmentsnon-controlled/non-affiliated:                            |  |                                                |         |  
|Total Investmentsnon-controlled/non-affiliated as of January 1, 2014 |  | $                                              | 213,128 |  
|New investments                                                       |  |                                                | 118,176 |  
|Net accretion of discount on securities                               |  |                                                | 134     |  
|Realized gains                                                        |  |                                                | 46      |  
|Investments sold or repaid                                            |  |                                                | (13,749 | )
|                                                                      |  |                                                |         |  
|Total Investmentsnon-controlled/non-affiliated as of March 31, 2014  |  | $                                              | 317,735 |  
|                                                                      |  |                                                |         |  
|Principal amount of investments purchased:                            |  |                                                |         |  
|First Lien Debt                                                       |  | $                                              | 89,822  |  
|Second Lien Debt                                                      |  |                                                | 6,500   |  
|Structured Finance Obligations                                        |  |                                                | 36,563  |  
|                                                                      |  |                                                |         |  
|Total                                                                 |  | $                                              | 132,885 |  
|                                                                      |  |                                                |         |  
|Principal amount of investments sold or repaid:                       |  |                                                |         |  
|First Lien Debt                                                       |  | $                                              | (7,508  | )
|Structured Finance Obligations                                        |  |                                                | (4,000  | )
|                                                                      |  |                                                |         |  
|Total                                                                 |  | $                                              | (11,508 | )
|                                                                      |  |                                                |         |  
|Number of new funded investments                                      |  |                                                | 18      |  
|Average new funded investment amount                                  |  |                                                | 6,565   |  
|Percentage of new funded investments at floating rates                |  |                                                | 100     | %

As of March 31, 2014 and December 31, 2013, investmentsnon-controlled/non-affiliated consisted
of the following:



|                               |  |                |         |  |                   |   |         |               |  |   |            |  |  |   |         | 
|------------------------------ |  | -------------- | ------- |  | ----------------- | - | ------- | ------------- |  | - | ---------- |  |  | - | ------- | 
|                               |  | March 31, 2014 |         |  | December 31, 2013 |  
|                               |  | AmortizedCost  |         |  | Fair Value        |   |         | AmortizedCost |  |   | Fair Value | 
|First Lien Debt                |  | $              | 223,374 |  |                   | $ | 223,959 |               |  | $ | 141,510    |  |  | $ | 141,676 | 
|Second Lien Debt               |  |                | 47,060  |  |                   |   | 46,575  |               |  |   | 40,636     |  |  |   | 39,767  | 
|Structured Finance Obligations |  |                | 47,301  |  |                   |   | 47,811  |               |  |   | 30,982     |  |  |   | 31,364  | 
|                               |  |                |         |  |                   |   |         |               |  |   |            |  |  |   |         | 
|Total                          |  | $              | 317,735 |  |                   | $ | 318,345 |               |  | $ | 213,128    |  |  | $ | 212,807 | 
|                               |  |                |         |  |                   |   |         |               |  |   |            |  |  |   |         | 

The weighted average yields(1) of our portfolio,
based on the amortized cost and fair value as of March 31, 2014 and December 31, 2013, were as follows:



|                               |  |                |      |   |                   |  |      |               |  |  |            |   |  |  |      |  
|------------------------------ |  | -------------- | ---- | - | ----------------- |  | ---- | ------------- |  |  | ---------- | - |  |  | ---- | -
|                               |  | March 31, 2014 |      |   | December 31, 2013 | 
|                               |  | AmortizedCost  |      |   | Fair Value        |  |      | AmortizedCost |  |  | Fair Value |  
|First Lien Debt                |  |                | 4.20 | % |                   |  | 4.20 | %             |  |  | 4.14       | % |  |  | 4.15 | %
|Second Lien Debt               |  |                | 1.32 |   |                   |  | 1.32 |               |  |  | 1.71       |   |  |  | 1.71 |  
|Structured Finance Obligations |  |                | 4.43 |   |                   |  | 4.42 |               |  |  | 2.73       |   |  |  | 2.73 |  
|                               |  |                |      |   |                   |  |      |               |  |  |            |   |  |  |      |  
|Total                          |  |                | 9.95 | % |                   |  | 9.94 | %             |  |  | 8.58       | % |  |  | 8.59 | %
|                               |  |                |      |   |                   |  |      |               |  |  |            |   |  |  |      |  



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The weighted average yields(1) for
each investment type, based on the amortized cost and fair value as of March 31, 2014 and December 31, 2013, were as follows:



|                               |  |                |       |   |                   |  |       |               |  |  |            |   |  |  |       |  
|------------------------------ |  | -------------- | ----- | - | ----------------- |  | ----- | ------------- |  |  | ---------- | - |  |  | ----- | -
|                               |  | March 31, 2014 |       |   | December 31, 2013 | 
|                               |  | AmortizedCost  |       |   | Fair Value        |  |       | AmortizedCost |  |  | Fair Value |  
|First Lien Debt                |  |                | 5.98  | % |                   |  | 5.96  | %             |  |  | 6.24       | % |  |  | 6.23  | %
|Second Lien Debt               |  |                | 8.92  |   |                   |  | 9.01  |               |  |  | 8.97       |   |  |  | 9.16  |  
|Structured Finance Obligations |  |                | 29.75 |   |                   |  | 29.43 |               |  |  | 18.75      |   |  |  | 18.53 |  



|(1) | Yields do not include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of March 31, 2014.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------

RESULTS OF OPERATIONS

For the three month period
ended March 31, 2014

The net increase or decrease in net assets from operations may vary substantially from period to period
as a result of various factors, including the recognition of realized gains and losses and net change in unrealized appreciation and depreciation. As a result, quarterly comparison may not be meaningful.

Net investment income for the three month period ended March 31, 2014 was as follows:



|                                                                       |  |                                               |       | 
|---------------------------------------------------------------------- |  | --------------------------------------------- | ----- | 
|                                                                       |  | For the three monthperiod endedMarch 31, 2014 |      
|Total investment income from non-controlled/non-affiliated investments |  | $                                             | 6,633 | 
|Net expenses                                                           |  |                                               | 3,594 | 
|                                                                       |  |                                               |       | 
|Net investment income                                                  |  | $                                             | 3,039 | 
|                                                                       |  |                                               |       | 

Investment Income



|                                                                |  |                                               |       | 
|--------------------------------------------------------------- |  | --------------------------------------------- | ----- | 
|                                                                |  | For the three monthperiod endedMarch 31, 2014 |      
|Interest income from non- controlled/non-affiliated investments |  | $                                             | 6,633 | 
|                                                                |  |                                               |       | 
|Total investment income                                         |  | $                                             | 6,633 | 
|                                                                |  |                                               |       | 

The interest income for the three month period ended March 31, 2014 is driven by our deployment of
capital and increasing invested balance. As of March 31, 2014 and December 31, 2013, the size of our portfolio was $317,735 and $213,128, respectively, at amortized cost, with total par outstanding of $353,169 and $231,793, respectively.
As of March 31, 2014 and December 31, 2013, our portfolio had a weighted average yield of 9.95% and 8.58%, respectively, on amortized cost.



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Expenses



|                                 |  |                                        |       |  
|-------------------------------- |  | -------------------------------------- | ----- | -
|                                 |  | For the three monthended March 31,2014 |      
|Base management fees             |  | $                                      | 991   |  
|Incentive fees                   |  |                                        | 940   |  
|Professional fees                |  |                                        | 597   |  
|Administrative service fees      |  |                                        | 257   |  
|Interest expense                 |  |                                        | 349   |  
|Credit facility fees             |  |                                        | 530   |  
|Directors fees and expenses     |  |                                        | 82    |  
|Transfer agency fees             |  |                                        | 26    |  
|Other general and administrative |  |                                        | 152   |  
|Waiver of base management fees   |  |                                        | (330  | )
|                                 |  |                                        |       |  
|Total net expenses               |  | $                                      | 3,594 |  
|                                 |  |                                        |       |  

Interest and credit facility fees for the three month period ended March 31, 2014 were comprised of the
following:



|                                                |  |                                               |     | 
|----------------------------------------------- |  | --------------------------------------------- | --- | 
|                                                |  | For the three monthperiod endedMarch 31, 2014 |    
|Interest expense                                |  | $                                             | 349 | 
|Facility unused commitment fee                  |  |                                               | 286 | 
|Amortization of deferred financing costs        |  |                                               | 219 | 
|Other fees                                      |  |                                               | 25  | 
|                                                |  |                                               |     | 
|Total interest expense and credit facility fees |  | $                                             | 879 | 
|                                                |  |                                               |     | 
|Cash paid for interest expense                  |  | $                                             | 285 | 

For the three month period ended March 31, 2014, the average stated interest rate was 1.99% and average
principal debt outstanding was $70,343.

Base management fees and incentive fees related to pre-incentive fee net investment income for
the three month period ended March 31, 2014 were driven by our deployment of capital and increasing invested balance. For the three month period ended March 31, 2014, we recorded an accrued capital gains incentive fee of $144 based upon
our cumulative net realized and unrealized appreciation/(depreciation) as of March 31, 2014. The accrual for any capital gains incentive fee under accounting principles generally accepted in the United States (US GAAP) in a given
period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative,
then there is no accrual. There can be no assurance that such unrealized capital appreciation will be realized in the future. For the three month period ended March 31, 2014, we earned pre-incentive fee net investment income incentive fee of
$796 and did not incur a realized capital gains incentive fee under the investment advisory and management agreement and therefore there is $796 currently due under the agreement. Incentive fees of $796 were deferred for the three month period ended
March 31, 2014 and will be carried over for payment in subsequent calculation periods to the extent that the 6.0% hurdle is achieved for the most recent four calendar quarters prior to payment. See Note 5 to the consolidated financial
statements included in Part I, Item 1 of this Form 10-Q for more information on the incentive and base management fees.

Professional fees include legal, rating agencies, audit, tax, valuation, technology and other professional fees incurred related to the
management of the Company. Administrative service fees represent fees paid to the



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Administrator for our allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the administration agreement, including our allocable
portion of the cost of certain of our executive officers and their respective staff. Other general and administrative expenses include insurance, filing, research, subscriptions and other costs.

Net Realized Gain (Loss) and Net Change in Unrealized Appreciation/(Depreciation) on Investments

During the three month period ended March 31, 2014, the Company had a change in unrealized appreciation on 27 investments totaling
approximately $1,925 which was offset by a change in unrealized depreciation on 18 investments totaling approximately $994.



|                                                                                   |  |                                               |     | 
|---------------------------------------------------------------------------------- |  | --------------------------------------------- | --- | 
|                                                                                   |  | For the three monthperiod endedMarch 31, 2014 |    
|Net realized gain on investmentsnon-controlled/non-affiliated                     |  | $                                             | 46  | 
|Net change in unrealized appreciation on investmentsnon-controlled/non-affiliated |  |                                               | 931 | 
|                                                                                   |  |                                               |     | 
|Net realized gain and net change in unrealized appreciation on investments         |  | $                                             | 977 | 
|                                                                                   |  |                                               |     | 

Net realized gain (loss) and net change in unrealized appreciation (depreciation) for the three month period
ended March 31, 2014 was as follows:



|                               |  |                                                |    |  |                                                   |   |     | 
|------------------------------ |  | ---------------------------------------------- | -- |  | ------------------------------------------------- | - | --- | 
|                               |  | For the three month periodended March 31, 2014 |   
|Type                           |  | Net realizedgain (loss)                        |    |  | Net change inunrealizedappreciation(depreciation) |  
|First Lien Debt                |  | $                                              |   |  |                                                   | $ | 419 | 
|Second Lien Debt               |  |                                                |   |  |                                                   |   | 384 | 
|Structured Finance Obligations |  |                                                | 46 |  |                                                   |   | 128 | 
|                               |  |                                                |    |  |                                                   |   |     | 
|Total                          |  | $                                              | 46 |  |                                                   | $ | 931 | 
|                               |  |                                                |    |  |                                                   |   |     | 

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

The Company generates cash from the net proceeds of offerings of our common stock and through cash flows from operations, including investment
sales and repayments as well as income earned on investments and cash equivalents. We may also fund a portion of our investments through borrowings under the Borrower Subs Revolving Credit Facility (as defined below) and/or the Companys
Facility (as defined below). The Borrower Sub closed on May 24, 2013 on a senior secured revolving credit facility with various lenders (the Revolving Credit Facility). The Revolving Credit Facility provides for secured borrowings
up to the lesser of $500,000 or the amount of capital commitments the Company has received with an accordion feature that can, subject to certain conditions, increase the aggregate maximum credit commitment up to an amount not to exceed $750,000,
subject to restrictions imposed on borrowings under the Investment Company Act and adequate collateral to support such borrowings. The Company closed on March 21, 2014 on a senior secured revolving credit facility with various lenders (the
Facility). The maximum principal amount of the Facility is $150,000, subject to availability under the Facility, which is based on the value of the Companys portfolio investments net of certain other indebtedness that the Company
may incur in the future in accordance with the terms of the Facility. Proceeds of the Facility may be used for general corporate purposes, including the funding of portfolio investments. Maximum capacity under the Facility may be increased to
$225,000 through the exercise by the Company of an uncommitted accordion feature through which existing and new lenders may, at their option,



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agree to provide additional financing. The Facility includes a $20,000 limit for swingline loans and a $5,000 limit for letters of credit. For more information on the Revolving Credit Facility
and Facility, see Note 6 to the consolidated financial statements in Part I, Item 1 of this Form 10-Q.

The primary use of existing
funds and any funds raised in the future is expected to be for investments in portfolio companies, repayment of indebtedness, cash distributions to our stockholders, and for other general corporate purposes.

As of March 31, 2014 and December 31, 2013, the Company had $22,908 and $42,010, respectively, in cash. The facilities of the
Company and the Borrower Sub consisted of the following as of March 31, 2014 and December 31, 2013:



|                          |  |                   |         |  |                       |   |        |                   |  |   |                     |  |  |   |        | 
|------------------------- |  | ----------------- | ------- |  | --------------------- | - | ------ | ----------------- |  | - | ------------------- |  |  | - | ------ | 
|                          |  | March 31, 2014    |        
|                          |  | TotalFacility     |         |  | BorrowingsOutstanding |   |        | UnusedPortion (1) |  |   | AmountAvailable (2) | 
|Revolving Credit Facility |  | $                 | 500,000 |  |                       | $ | 75,922 |                   |  | $ | 424,078             |  |  | $ | 343    | 
|Facility                  |  |                   | 150,000 |  |                       |   |       |                   |  |   | 150,000             |  |  |   | 84,602 | 
|                          |  |                   |         |  |                       |   |        |                   |  |   |                     |  |  |   |        | 
|Total                     |  | $                 | 650,000 |  |                       | $ | 75,922 |                   |  | $ | 574,078             |  |  | $ | 84,945 | 
|                          |  |                   |         |  |                       |   |        |                   |  |   |                     |  |  |   |        | 
|                          | 
|                          |  | December 31, 2013 |        
|                          |  | TotalFacility     |         |  | BorrowingsOutstanding |   |        | UnusedPortion (1) |  |   | AmountAvailable (2) | 
|Revolving Credit Facility |  | $                 | 500,000 |  |                       | $ | 66,822 |                   |  | $ | 433,178             |  |  | $ | 18,616 | 
|                          |  |                   |         |  |                       |   |        |                   |  |   |                     |  |  |   |        | 
|Total                     |  | $                 | 500,000 |  |                       | $ | 66,822 |                   |  | $ | 433,178             |  |  | $ | 18,616 | 
|                          |  |                   |         |  |                       |   |        |                   |  |   |                     |  |  |   |        | 



|(1) | The unused portion upon which commitment fees are based.
|--- | --------------------------------------------------------

|(2) | Available for borrowing based on the computation of collateral to support the borrowings.
|--- | -----------------------------------------------------------------------------------------

Equity
Activity

There were $191,629 of investor equity capital commitments made to the Company during the three month period ended
March 31, 2014. Total investor equity capital commitments to the Company were $1,069,037 and $877,408 as of March 31, 2014 and December 31, 2013, respectively.

As of March 31, 2014 and December 31, 2013, $815,562 and $689,405, respectively, of total investor equity capital commitments were
unfunded. As of March 31, 2014 and December 31, 2013, $42,967 of total investor equity capital commitments were made by the Investment Adviser, members of senior management, and certain employees, partners, and affiliates of the Investment
Adviser. As of March 31, 2014 and December 31, 2013, certain directors had committed $1,750 in capital commitments to the Company.

Shares issued as of March 31, 2014 and December 31, 2013 were 12,891,421 and 9,575,990, respectively.

The following table summarizes activity in the number of shares of our common stock outstanding during the three month period ended
March 31, 2014:



|                                        |  |                               |            | 
|--------------------------------------- |  | ----------------------------- | ---------- | 
|                                        |  | Common stocksharesoutstanding |           
|Shares outstanding, beginning of period |  |                               | 9,575,990  | 
|Common stock issued                     |  |                               | 3,315,431  | 
|                                        |  |                               |            | 
|Shares outstanding, end of period       |  |                               | 12,891,421 | 
|                                        |  |                               |            | 



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Contractual Obligations

A summary of significant contractual payment obligations was as follows as of March 31, 2014 and December 31, 2013:



|                   |  |                      |        |  |                 |  |   |           |  |  |           |  |  |                  |   |  |  |  |        | 
|------------------ |  | -------------------- | ------ |  | --------------- |  | - | --------- |  |  | --------- |  |  | ---------------- | - |  |  |  | ------ | 
|March 31, 2014     |  | Payment Due byPeriod |        |  |                 |  |   |           |  |  |           | 
|                   |  | Total                |        |  | Less than1 Year |  |   | 1-3 Years |  |  | 3-5 Years |  |  | More Than5 Years |  
|Secured Borrowings |  |                      | 75,922 |  |                 |  |  |           |  |  |          |  |  |                  |  |  |  |  | 75,922 | 



|                   |  |                      |        |  |                 |  |   |           |  |  |           |  |  |                  |   |  |  |  |        | 
|------------------ |  | -------------------- | ------ |  | --------------- |  | - | --------- |  |  | --------- |  |  | ---------------- | - |  |  |  | ------ | 
|December 31, 2013  |  | Payment Due byPeriod |        |  |                 |  |   |           |  |  |           | 
|                   |  | Total                |        |  | Less than1 Year |  |   | 1-3 Years |  |  | 3-5 Years |  |  | More Than5 Years |  
|Secured Borrowings |  |                      | 66,822 |  |                 |  |  |           |  |  |          |  |  |                  |  |  |  |  | 66,822 | 

For more information on the Revolving Credit Facility and Facility, see Note 6 to the consolidated financial
statements in Part I, Item 1 of this Form 10-Q.

For the three month period ended March 31, 2014, there were secured borrowings
of $9,100 under the Revolving Credit Facility and none under the Facility. As of March 31, 2014 and December 31, 2013, $75,922 and $66,822, respectively, of secured borrowings were outstanding. For the period ended March 31, 2014, we
incurred $349 interest expense and $286 of commitment fees.

OFF BALANCE SHEET ARRANGEMENTS

In the ordinary course of its business, the Company enters into contracts or agreements that contain indemnifications or warranties. Future
events could occur that lead to the execution of these provisions against the Company. The Company believes that the likelihood of such an event is remote; however, the maximum potential exposure is unknown. No accrual has been made in these
consolidated financial statements as of March 31, 2014 and December 31, 2013 included in Part I, Item 1 of this Form 10-Q, for any such exposure.

We may also enter into future funding commitments such as revolving credit facilities, bridge financing commitments, or delayed draw
commitments.

As of March 31, 2014, there was a $100,000 pledge of unfunded investor equity capital commitments to the lenders of the
Facility, which shall be released once $100,000 of incremental capital has been called and received by the Company subsequent to the March 21, 2014 closing date of the Facility.

The Company had the following commitments to fund delayed draw senior secured loans, none of which were funded:



|                                        |  |                 |   |  |                   |   |       | 
|--------------------------------------- |  | --------------- | - |  | ----------------- | - | ----- | 
|                                        |  | Par Value as of |  
|                                        |  | March 31, 2014  |   |  | December 31, 2013 |  
|Total unfunded delayed draw commitments |  | $               |  |  |                   | $ | 3,000 | 
|                                        |  |                 |   |  |                   |   |       | 

DIVIDENDS AND DISTRIBUTIONS TO COMMON STOCKHOLDERS

The Company has adopted a dividend reinvestment plan that provides for reinvestment of any distributions on behalf of its stockholders, for
those who have elected to participate in the plan. As a result of adopting such a plan, if the Board of Directors authorizes, and GMS Finance declares a cash dividend or distribution, the stockholders who have elected to participate in the dividend
reinvestment plan would have their cash dividends or distributions automatically reinvested in additional shares of the Companys common stock, rather than



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receiving cash. Prior to a Qualified IPO, the Company intends to use primarily newly issued shares of its common stock to implement the plan issued at net asset value per share determined as of
the valuation date fixed by the Board of Directors for such dividend or distribution. After a Qualified IPO, the Company intends to use primarily newly issued shares to implement the plan so long as the market value per share is equal to or greater
than the net asset value per share on the relevant valuation date. If the market value per share is less than the net asset value per share on the relevant valuation date, the plan administrator would purchase the common stock on behalf of
participants in the open market, unless the Company instructs the plan administrator otherwise.

On March 13, 2014, the Company
declared its first dividend of $0.19 per share for the quarter ended March 31, 2014, which is payable on April 14, 2014 to holders of record of common stock at the close of business on March 31, 2014. As of December 31, 2013, no
dividends or distributions had been declared or paid by the Company.

CRITICAL ACCOUNTING POLICIES

The preparation of our consolidated financial statements requires us 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. Our critical accounting policies, including those
relating to the valuation of our investment portfolio, are described below. The critical accounting policies should be read in connection with our Risk Factors in Part II, Item 1A of this Form 10-Q.

Fair Value Measurements

The
Company applies fair value accounting in accordance with the terms of Financial Accounting Standards Board ASC Topic 820, Fair Value Measurement and Disclosures (ASC 820). ASC 820 defines fair value as the amount that would be
exchanged to sell an asset or transfer a liability in an orderly transfer between market participants at the measurement date. The Company values securities/instruments traded in active markets on the measurement date by multiplying the closing
price of such traded securities/instruments by the quantity of shares or amount of the instrument held. The Company may also obtain quotes with respect to certain of its investments, such as its securities/instruments traded in active markets and
its liquid securities/instruments that are not traded in active markets, from pricing services, brokers, or counterparties (i.e. consensus pricing). When doing so, the Company determines and documents whether the quote obtained is
sufficient according to US GAAP to determine the fair value of the security. The Company may use the quote obtained or alternative pricing sources may be utilized including valuation techniques typically utilized for illiquid
securities/instruments.

Securities/instruments that are illiquid or for which the pricing source does not provide a valuation or
methodology or provides a valuation or methodology that, in the judgment of the Investment Adviser or the Board of Directors, does not represent fair value shall each be valued as of the measurement date using all techniques appropriate under the
circumstances and for which sufficient data is available. These valuation techniques may vary by investment and include comparable public market valuations, comparable precedent transaction valuations and/or discounted cash flow analyses. The
process generally used to determine the applicable value is as follows: (i) the value of each portfolio company or investment is initially reviewed by the investment professionals responsible for such portfolio company or investment and, for
non-traded investments, a standardized template designed to approximate fair market value based on observable market inputs, updated credit statistics and unobservable inputs is used to determine a preliminary value; (ii) preliminary valuation
conclusions are documented and reviewed by a valuation committee comprised of members of senior management; (iii) the Board of Directors engages one or more third-party valuation firms to provide positive assurance on portions of the portfolio
each quarter (such that each non-traded investment is reviewed by a third-party valuation firm at least once annually) including a review of managements preliminary valuation and conclusion on fair value; (iv) the Audit Committee of the
Board of Directors (the Audit Committee) reviews the assessments of the Investment Adviser and, where appropriate, the respective third-party valuation firms and



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provides the Board of Directors with any recommendations with respect to changes to the fair value of each investment in the portfolio; and (v) the Board of Directors discusses the valuation
recommendations of the Audit Committee and determines the fair value of each investment in the portfolio in good faith based on the input of the Investment Adviser and, where applicable, the respective third-party valuation firms.

All factors that might materially impact the value of an investment are considered, including, but not limited to the assessment of the
following factors, as relevant:



| |  |  | the nature and realizable value of any collateral;
| | - |  | --------------------------------------------------



| |  |  | call features, put features and other relevant terms of debt;
| | - |  | -------------------------------------------------------------



| |  |  | the portfolio companys leverage and ability to make payments;
| | - |  | --------------------------------------------------------------



| |  |  | the portfolio companys public or private credit rating;
| | - |  | --------------------------------------------------------



| |  |  | the portfolio companys actual and expected earnings and discounted cash flow;
| | - |  | ------------------------------------------------------------------------------



| |  |  | prevailing interest rates and spreads for similar securities and expected volatility in future interest rates;
| | - |  | --------------------------------------------------------------------------------------------------------------



| |  |  | the markets in which the portfolio company does business and recent economic and/or market events; and
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | comparisons to comparable transactions and publicly traded securities.
| | - |  | ----------------------------------------------------------------------

Investment performance
data utilized are the most recently available financial statements and compliance certificate received from the portfolio companies as of the measurement date which in many cases may reflect a lag in information.

Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value
of the Companys investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been reported had a ready market for the
investments existed, and it is reasonably possible that the difference could be material.

In addition, changes in the market environment
and other events that may occur over the life of the investments may cause the realized gains or losses on investments to be different than the net change in unrealized appreciation or depreciation currently reflected in the consolidated financial
statements as of March 31, 2014.

US GAAP establishes a hierarchal disclosure framework which ranks the level of observability
of market price inputs used in measuring investments at fair value. The observability of inputs is impacted by a number of factors, including the type of investment and the characteristics specific to the investment and state of the marketplace,
including the existence and transparency of transactions between market participants. Investments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets generally have a higher degree of
market price observability and a lesser degree of judgment applied in determining fair value.

Investments measured and reported at fair
value are classified and disclosed based on the observability of inputs used in determination of fair values, as follows:



| |  |  | Level Iinputs to the valuation methodology are quoted prices available in active markets for identical investments as of the reporting date. The types of financial instruments included in Level I include
unrestricted securities, including equities and derivatives, listed in active markets. The Company does not adjust the quoted price for these investments, even in situations where the Company holds a large position and a sale could reasonably impact
the quoted price.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | Level IIinputs to the valuation methodology are either directly or indirectly observable as of the reporting date and are those other than quoted prices in active markets. The type of financial instruments in this
category includes less liquid and restricted securities listed in active markets, securities traded in other than active markets, government and agency securities, and certain over-the-counter derivatives where the fair value is based on observable
inputs.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Level IIIinputs to the valuation methodology are unobservable and significant to overall fair value measurement. The inputs into the determination of fair value require significant management judgment or
estimation. Financial instruments that are included in this category include investments in privately-held entities, collateralized loan obligations, and certain over-the-counter derivatives where the fair value is based on unobservable inputs.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such
cases, an investments level within the fair value hierarchy is based on the lowest level of input that is significant to the overall fair value measurement. The Investment Advisers assessment of the significance of a particular input to
the fair value measurement in its entirety requires judgment, and considers factors specific to the investment.

Transfer between levels,
if any, are recognized at the beginning of the quarter in which the transfers occur.

The Company generally uses the following framework
when determining the fair value of investments that are categorized as Level III:

Investments in debt securities are initially evaluated
to determine whether the enterprise value of the portfolio company is greater than the applicable debt. The enterprise value of the portfolio company is estimated using a market approach and an income approach. The market approach utilizes market
value (EBITDA) multiples of publicly traded comparable companies and available precedent sales transactions of comparable companies. The Company carefully considers numerous factors when selecting the appropriate companies whose multiples are used
to value its portfolio companies. These factors include, but are not limited to, the type of organization, similarity to the business being valued, relevant risk factors, as well as size, profitability and growth expectations. The income approach
typically uses a discounted cash flow analysis of the portfolio company.

Investments in debt securities that do not have sufficient
coverage through the enterprise value analysis are valued based on an expected probability of default and discount recovery analysis.

Investments in debt securities with sufficient coverage through the enterprise value analysis are generally valued using a discounted cash
flow analysis of the underlying security. Projected cash flows in the discounted cash flow typically represent the relevant securitys contractual interest, fees and principal payments plus the assumption of full principal recovery at the
investments expected maturity date. The discount rate to be used is determined using an average of two market-based methodologies.

Investments in structured finance obligations are generally valued using a discounted cash flow and/or consensus pricing.

The significant unobservable inputs used in the fair value measurement of the Companys investments in first and second lien debt
securities are discount rates. Significant increases in discount rates would result in a significantly lower fair value measurement.

The
significant unobservable inputs used in the fair value measurement of the Companys investments in structured finance obligations are discount rates, default rates, prepayment rates, recovery rates and indicative quotes. Significant increases
in discount rates, default rates or prepayment rates in isolation would result in a significantly lower fair value measurement, while a significant increase in recovery rates in isolation would result in a significantly higher fair value.
Significant decreases in indicative quotes in isolation may result in a significantly lower fair value measurement.



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The fair value of the secured borrowings approximates its carrying value and is categorized as
Level III within the hierarchy. Secured borrowings are valued generally using discounted cash flow analysis. The significant unobservable inputs used in the fair value measurement of the Companys secured borrowings are discount rates.
Significant increases in discount rates would result in a significantly lower fair value measurement.

The fair value of other financial
assets and liabilities approximates their carrying value based on the short term nature of these items.

See Note 4 to the consolidated
financial statements in Part I, Item 1 of this Form 10-Q for further information on fair value measurements.

Use of Estimates

The preparation of consolidated financial statements as of March 31, 2014 and December 31, 2013, included in Part I, Item 1 of
this Form 10-Q in conformity with US GAAP requires management to make assumptions and estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the statements and the
reported amounts of revenues and expenses during the reporting period. Managements estimates are based on historical experiences and other factors, including expectations of future events that management believes to be reasonable under the
circumstances. It also requires management to exercise judgment in the process of applying the Companys accounting policies. Assumptions and estimates regarding the valuation of investments and their resulting impact on base management and
incentive fees involve a higher degree of judgment and complexity and these assumptions and estimates may be significant to the consolidated financial statements as of March 31, 2014 and December 31, 2013 included in Part I, Item 1 of
this Form 10-Q. Actual results could differ from these estimates and such differences could be material.

Investments

Investment transactions are recorded on the trade date. Realized gains or losses are measured 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, and includes investments charged off during the period, net of recoveries. Net change in unrealized
appreciation or depreciation on investments as presented in the Consolidated Statement of Operations included in Part I, Item 1 of this Form 10-Q reflects the net change in the fair value of investments, including the reversal of previously
recorded unrealized appreciation or depreciation when gains or losses are realized.

Revenue Recognition

Interest from Investments and Realized Gain/Loss on Investments

Interest income is recorded on an accrual basis and includes the accretion of discounts and amortization of premiums. Discounts from and
premiums to par value on debt securities purchased are accreted/amortized into interest income over the life of the respective security using the effective interest method. The amortized cost of investments represents the original cost, including
loan origination fees, adjusted for the accretion of discounts and amortization of premiums, if any. At time of exit, the realized gain or loss on an investment is the difference between the amortized cost at time of exit and the cash received at
exit using the specific identification method.

The Company may have loans in its portfolio that contain payment-in-kind (PIK)
provisions. PIK represents interest that is accrued and recorded as interest income at the contractual rates, increases the loan principal on the respective capitalization dates, and is generally due at maturity.

Interest income from investments in the equity class of collateralized loan obligation (CLO) funds, which we refer to
as structured finance obligations, is recorded based upon an estimation of the expected cash



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inflows from our CLO equity investments, including the expected residual payments. In estimating these cash flows, there are a number of assumptions that are subject to uncertainties, including
the amount and timing of principal payments which are impacted by prepayments, repurchases, defaults, delinquencies and liquidations of or within the CLO funds. These uncertainties are difficult to predict and are subject to future events that may
impact our estimates and interest income. As a result, actual results may differ significantly from these estimates.

Other Income

Other income may include income such as consent, waiver and amendment fees associated with the Companys investment activities as well as
any fees for managerial assistance services rendered by the Company to portfolio companies. Such fees are recognized as income when earned or the services are rendered. The Company may receive a fee for guaranteeing the outstanding debt of a
portfolio company. Such fee will be amortized into other income over the life of the guarantee. The unamortized amount, if any, is included in other assets in the Consolidated Statements of Assets and Liabilities included in Part I, Item 1 of
this Form 10-Q.

Non-Accrual Income

Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable
doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to
principal depending upon managements judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest are paid current and, in managements judgment, are likely to remain current.
Management may not place a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection.

Income Taxes

For federal income tax purposes, GMS Finance intends to be treated as a RIC under the Code, and intends to make the required distributions to
its stockholders as specified therein. In order to qualify as a RIC, GMS Finance must meet certain minimum distribution, source-of-income and asset diversification requirements. If such requirements are met, then GMS Finance is generally required to
pay income taxes only on the portion of its taxable income and gains it does not distribute.

The minimum distribution requirements
applicable to RICs require GMS Finance to distribute to its stockholders at least 90% of its investment company taxable income (ICTI), as defined by the Code, each year. Depending on the level of ICTI earned in a tax year, GMS Finance
may choose to carry forward ICTI in excess of current year distributions into the next tax year. Any such carryover ICTI must be distributed before the end of that next tax year through a dividend declared prior to filing the final tax return
related to the year which generated such ICTI.

In addition, based on the excise distribution requirements, GMS Finance is subject to a 4%
nondeductible federal excise tax on undistributed income unless GMS Finance distributes in a timely manner an amount at least equal to the sum of (1) 98% of its ordinary income for each calendar year, (2) 98.2% of capital gain net income
(both long-term and short-term) for the one-year period ending October 31 in that calendar year and (3) any income realized, but not distributed, in the preceding year. For this purpose, however, any ordinary income or capital gain net
income retained by GMS Finance that is subject to corporate income tax is considered to have been distributed. GMS Finance intends to make sufficient distributions each taxable year to satisfy the excise distribution requirements.

The Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to
determine whether the tax positions are more-likely than not to be sustained by the applicable tax authority. All penalties and interest associated with income taxes, if any, are included in income tax expense.

The Borrower Sub is a disregarded entity for tax purposes and is consolidated with the return of GMS Finance.



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Capital Calls and Dividends and Distributions to Common Stockholders

The Company records the shares issued in connection with capital calls as of the effective date, or due date, of the capital call, which is the
date shares are issued. To the extent that the Company has taxable income available, the Company intends to make quarterly distributions to its common stockholders. Dividends and distributions to common stockholders are recorded on the
record/ex-dividend date. The amount to be distributed is determined by the Board of Directors each quarter and is generally based upon the taxable earnings estimated by management and available cash. Net realized capital gains, if any, is generally
distributed at least annually, although the Company may decide to retain such capital gains for investment.

The Company has adopted a
dividend reinvestment plan that provides for reinvestment of any distributions on behalf of its stockholders, for those who have elected to participate in the plan. As a result of adopting such a plan, if the Board of Directors authorizes, and GMS
Finance declares a cash dividend or distribution, the stockholders who have elected to participate in the dividend reinvestment plan would have their cash dividends or distributions automatically reinvested in additional shares of the Companys
common stock, rather than receiving cash. Prior to a Qualified IPO, the Company intends to use primarily newly issued shares of its common stock to implement the plan issued at net asset value per share determined as of the valuation date fixed by
the Board of Directors for such dividend or distribution. After a Qualified IPO, the Company intends to use primarily newly issued shares to implement the plan so long as the market value per share is equal to or greater than the net asset value per
share on the relevant valuation date. If the market value per share is less than the net asset value per share on the relevant valuation date, the plan administrator would purchase the common stock on behalf of participants in the open market,
unless the Company instructs the plan administrator otherwise.

Item 3. Quantitative and Qualitative Disclosures About
Market Risk.

We are subject to financial market risks, including changes in the valuations of our investment portfolio and interest
rates.

Valuation Risk

Our
investments may not have a readily available market price, and we value these investments at fair value as determined in good faith by our Board of Directors in accordance with our valuation policy. There is no single standard for determining fair
value in good faith. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we
make. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Companys investments may fluctuate from period to period. Because of the inherent
uncertainty of valuation, these estimated values may differ significantly from the values that would have been reported had a ready market for the investments existed, and it is possible that the difference could be material.

Interest Rate Risk

During the
three month period ended March 31, 2014, substantially all of the debt investments held in the Companys portfolio had floating interest rates. Interest rates on the investments held within the Companys portfolio of investments are
typically based on floating LIBOR, with many of these investments also having a LIBOR floor. Additionally, the Companys credit facilities are also subject to floating interest rates and are currently paid based on floating LIBOR rates.

Interest rate sensitivity refers to the change in earnings that may result from changes in the level of interest rates. There can be no
assurance that a significant change in market interest rates will not have a material adverse effect on our income in the future.



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The following table estimates the potential changes in net cash flow generated from interest
income, should interest rates increase or decrease by 100, 200 or 300 basis points. Interest income is calculated as revenue from interest generated from the Companys settled portfolio of investments held as of March 31, 2014, excluding
structured finance obligations. These hypothetical calculations are based on a model of the settled investments in our portfolio, excluding structured finance obligations, held as of March 31, 2014, and are only adjusted for assumed changes in
the underlying base interest rates and the impact of that change on interest income. Interest expense is calculated based on outstanding secured borrowings as of March 31, 2014 and based on the respective terms of the each of the Companys
credit facilities. Interest expense on the Companys credit facilities is calculated using the interest rate as of March 31, 2014, adjusted for the hypothetical changes in rates, as shown below. We intend to continue to finance a portion
of our investments with borrowings and the interest rates paid on our borrowings may impact significantly our net interest income.

The
Company regularly measures exposure to interest rate risk. The Company assesses interest rate risk and manages interest rate exposure on an ongoing basis by comparing our interest rate sensitive assets to our interest rate sensitive liabilities.
Based on that review, we determine whether or not any hedging transactions are necessary to mitigate exposure to changes in interest rates.

Based on our Consolidated Statement of Assets and Liabilities as of March 31, 2014, the following table shows the annual impact on net
investment income of base rate changes in interest rates for our settled investments (considering interest rate floors for variable rate instruments), excluding structured finance obligations, and outstanding secured borrowings assuming no changes
in our investment and borrowing structure:



|                      |  |                |       |  |                 |   |        |                     |  |   |       |  
|--------------------- |  | -------------- | ----- |  | --------------- | - | ------ | ------------------- |  | - | ----- | -
|Basis Point Change    |  | InterestIncome |       |  | InterestExpense |   |        | NetInvestmentIncome | 
|Up 300 basis points   |  | $              | 5,955 |  |                 | $ | (2,278 | )                   |  | $ | 3,677 |  
|Up 200 basis points   |  | $              | 3,228 |  |                 | $ | (1,518 | )                   |  | $ | 1,710 |  
|Up 100 basis points   |  | $              | 510   |  |                 | $ | (759   | )                   |  | $ | (249  | )
|Down 100 basis points |  | $              |      |  |                 | $ | 175    |                     |  | $ | 175   |  
|Down 200 basis points |  | $              |      |  |                 | $ | 175    |                     |  | $ | 175   |  
|Down 300 basis points |  | $              |      |  |                 | $ | 175    |                     |  | $ | 175   |  

Item 4. Controls and Procedures.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our
management, including our President (Principal Executive Officer) and our Chief Financial Officer and Treasurer (Principal Financial Officer), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in
Rule 13a-15 of the Securities Exchange Act of 1934). Based on that evaluation, our President and our Chief Financial Officer and Treasurer have concluded that our current disclosure controls and procedures are effective in timely alerting them of
material information relating to the Company that is required to be disclosed by us in the reports we file or submit under the Securities Exchange Act of 1934, as amended.

There have been no changes in our internal control over financial reporting periods during the three month period ended March 31, 2014
that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



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PART IIOTHER INFORMATION

Item 1. Legal Proceedings.

The Company may become party to certain lawsuits in the ordinary course of business. The Company is not currently subject to any material legal
proceedings, nor, to our knowledge, is any material legal proceeding threatened against the Company. See also Note 10 to the consolidated financial statements in Part I, Item 1 of this Form 10-Q.

Item 1A. Risk Factors.

Except as set forth below, there have been no material changes to the risk factors previously disclosed in our annual report on Form 10-K for
the year ended December 31, 2013. For a discussion of our potential risks and uncertainties, see the information under the heading Risk Factors in Part I, Item 1A of our annual report on Form 10-K for the year ended
December 31, 2013 filed with the SEC on March 14, 2014, which is accessible on the SECs website at sec.gov.

Valuation Risk

Management of the Company seeks investment opportunities that offer the possibility of attaining substantial capital appreciation.
Certain events particular to each industry in which the Companys investments conduct their operations, as well as general economic and political conditions, may have a significant negative impact on the investees operations and
profitability. In addition, the Company is subject to changing regulatory and tax environments. Such events are beyond the Companys control, and the likelihood that they may occur and the effect on the Company cannot be predicted. Furthermore,
most of the Companys investments are made in private companies whose shares do not trade on established exchanges. While it is expected that these companies may pursue initial public offerings, trade sales, or other liquidation events, there
are generally no public markets for these securities at the current time. The Companys ability to liquidate its private company investments and realize value is subject to significant limitations and uncertainties, including currency
fluctuations.

The Companys ability to liquidate its publicly traded investments may be subject to limitations, including discounts
that may be required to be taken on quoted prices due to the number of shares being sold.

Item 2. Unregistered Sales of
Equity Securities and Use of Proceeds.

Except as previously reported by the Company on Form 8-K, we did not sell any equity securities
during the period covered in this report that were not registered under the Securities Act of 1933.

Item 3. Defaults
Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

On May 6, 2014, Kenneth J. Kencel informed the Company that he was resigning as President of the Company effective May 5, 2014.

On May 8, 2014, the Companys Board of Directors appointed Michael J. Petrick, the Companys Chairman and a Director of the Company,
as the Companys President, effective May 5, 2014.



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On May 8, 2014, the Companys Board of Directors appointed Mr. Kencel as Vice Chairman of
the Board until not later than June 30 2015, effective as of July 10, 2014. Mr. Kencel also confirmed to the Company that he would remain on the Board as a Director of the Company until not later than June 30, 2015. In addition, Mr. Kencel has
agreed with the parent company of Carlyle GMS Investment Management L.L.C., the Companys investment adviser (CGMSIM), to serve as Senior Advisor effective as of July 10, 2014. As a result of this arrangement, Mr. Kencel will
continue as a member of CGMSIMs investment committee with respect to the Company through not later than June 30, 2015.

On May 8,
2014, Ian J. Sandler tendered his resignation as the Chief Operating Officer of the Company. Concurrent with Mr. Sandlers resignation, our Board of Directors appointed Orit Mizrachi as our Chief Operating Officer.

Item 6. Exhibits.



|     |  |                                                                                                                                                                                  
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | 
|10.1 |  | Senior Secured Revolving Credit Agreement, dated as of March 21, 2014.*                                                                                                          
|     | 
|31.1 |  | Certification of President (Principal Executive Officer) Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.*                                         
|     | 
|31.2 |  | Certification of Chief Financial Officer (Principal Financial Officer) Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.*                              
|     | 
|32.1 |  | Certification of President (Principal Executive Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*              
|     | 
|32.2 |  | Certification of Chief Financial Officer (Principal Financial Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*



|* | Filed herewith
|- | --------------



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SIGNATURES

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



|                   |  |  |  |                           |  |                                      
|------------------ |  |  |  | ------------------------- |  | -------------------------------------
|                   |  |  |  | CARLYLE GMS FINANCE, INC.
|                   |  |  | 
|Dated: May 9, 2014 |  |  |  | By                        |  | /s/ Michael J. Petrick               
|                   |  |  |  |                           |  | Michael J. Petrick President         
|                   |  |  | 
|Dated: May 9, 2014 |  |  |  | By                        |  | /s/ Karen Vejseli                    
|                   |  |  |  |                           |  | Karen Vejseli
Chief Financial Officer



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