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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2007ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number
    001-33130
 Triangle Capital
    Corporation
 (Exact name of registrant as
    specified in its charter)
  Maryland

06-1798488(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)3600 Glenwood Avenue, Suite 104
    Raleigh, North Carolina(Address and zip code of
    principal executive offices)

27612(Zip
    Code)   Registrants telephone number, including area code:
 (919) 719-4770
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, par value $0.001 per share

The NASDAQ Stock Market LLC   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
    Large accelerated filer
    o

Accelerated filer
    o

Non-accelerated
    filer þ
    (Do not check if a smaller reporting company)

Smaller reporting
    company o   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K,




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##### 





TRIANGLE
    CAPITAL CORPORATION
  TABLE OF
    CONTENTS
  ANNUAL REPORT ON
    FORM 10-K
 For the Fiscal Year Ended December 31, 2007
   
 PagePART IItem 1.


Business


3Item 1A.


Risk Factors


24Item 1B.


Unresolved Staff Comments


37Item 2.


Properties


37Item 3.


Legal Proceedings


37Item 4.


Submission of Matters to a Vote of Security
    Holders


37PART IIItem 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


37Item 6.


Selected Financial Data


41Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


43Item 7A.


Quantitative and Qualitative Disclosures about
    Market Risk


54Item 8.


Financial Statements and Supplementary Data


54Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


54Item 9A(T).


Controls and Procedures


54Item 9B.


Other Information


55PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


55Item 11.


Executive Compensation


55Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


56Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


56Item 14.


Principal Accountant Fees and Services


56PART IVItem 15.


Exhibits and Financial Statement Schedules


56Signatures


59ExhibitsExhibit 4.2Exhibit 10.7Exhibit 10.9Exhibit 10.11Exhibit 21.1Exhibit 23.1Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2   1




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FORWARD-LOOKING
    STATEMENTS
  This Annual Report contains forward-looking statements which
    are subject to the safe harbor provisions of the Private
    Securities Litigation Reform Act of 1995. Statements that are
    not historical are forward-looking statements within the meaning
    of Section 27A of the Securities Act of 1933 and
    Section 21E of the Securities Exchange Act of 1934. Some of
    the statements in this Annual Report constitute forward-looking
    statements because they relate to future events or our future
    performance or financial condition. Forward-looking statements
    may include, among other things, statements as to our future
    operating results, our business prospects and the prospects of
    our portfolio companies, the impact of the investments that we
    expect to make, the ability of our portfolio companies to
    achieve their objectives, our expected financings and
    investments, the adequacy of our cash resources and working
    capital, and the timing of cash flows, if any, from the
    operations of our portfolio companies. Words such as
    expect, anticipate, target,
    goals, project, intend,
    plan, believe, seek,
    estimate, continue,
    forecast, may, should,
    potential, variations of such words, and similar
    expressions indicate a forward-looking statement, although not
    all forward-looking statements include these words. Readers are
    cautioned that the forward-looking statements contained in this
    Annual Report are only predictions, are not guarantees of future
    performance, and are subject to risks, events, uncertainties and
    assumptions that are difficult to predict. Our actual results
    could differ materially from those implied or expressed in the
    forward-looking statements for any reason, including the factors
    discussed in Item 1A entitled Risk Factors in
    Part I of this Annual Report and elsewhere in this Annual
    Report. Other factors that could cause actual results to differ
    materially include changes in the economy, risks associated with
    possible disruption in our operations or the economy generally
    due to terrorism, and future changes in laws or regulations and
    conditions in our operating areas. These statements are based on
    our current expectations, estimates, forecasts, information and
    projections about the industry in which we operate and the
    beliefs and assumptions of our management as of the date of this
    Annual Report. We assume no obligation to update or revise any
    forward-looking statements, whether as a result of new
    information, future events or otherwise, unless we are required
    to do so by law. Although we undertake no obligation to revise
    or update any forward-looking statements, whether as a result of
    new information, future events or otherwise, you are advised to
    consult any additional disclosures that we may make directly to
    you or through reports that we in the future may file with the
    SEC, including annual reports on
    Form 10-K,
    quarterly reports on
    Form 10-Q
    and current reports on
    Form 8-K.
 2




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PART I  Item 1.
    Business.  Formation
    of Our Company
    
    We acquired 100% of the limited partnership interests in the
    Fund, which became our wholly owned subsidiary, retained its
    license by the United States Small Business Administration (the
    SBA) to operate as a small business investment
    company (an SBIC), continued to hold its existing
    investments and to make new investments with the net proceeds of
    the Offering.
    We acquired 100% of the equity interests in TML, the general
    partner of the Fund.      
    (1)
    
    Based on 6,686,760 shares of common stock outstanding
    immediately after the Offering and consummation of the Formation
    Transactions.  Form 10-K. Form 10-K, Form 10-Q, Form 8-K,
 3




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Overview
    of our Business
        Our
    Business Strategy
    
    Focusing on Underserved Markets.  We believe
    that broad-based consolidation in the financial services
    industry coupled with operating margin and growth pressures have
    caused financial institutions to de-emphasize services to lower
    middle market companies in favor of larger corporate clients and
    capital market transactions. We believe these dynamics have
    resulted in the financing market for lower middle market
    companies to be underserved, providing us with greater
    investment opportunities.
    Providing Customized Financing Solutions.  We
    offer a variety of financing structures and have the flexibility
    to structure our investments to meet the needs of our portfolio
    companies. Typically we invest in senior and subordinated debt
    securities, coupled with equity interests. We believe our
    ability to customize financing arrangements makes us an
    attractive partner to lower middle market companies.
    Leveraging the Experience of Our Management
    Team.  Our senior management team has more than
    100 years of combined experience advising, investing in,
    lending to and operating companies across changing market
    cycles. The members of our management team have diverse
    investment backgrounds, with prior experience at investment
    banks, specialty finance companies, commercial banks, and
    privately and publicly held companies in the capacity of
    executive officers. We believe this diverse experience provides
    us with an in depth understanding of the strategic, financial
    and operational challenges and opportunities of lower middle
    market companies. We believe this understanding allows us to
    select and structure better investments and to efficiently
    monitor and provide managerial assistance to our portfolio
    companies.
    Applying Rigorous Underwriting Policies and Active Portfolio
    Management.  Our senior management team has
    implemented rigorous underwriting policies that are followed in
    each transaction. These policies include a thorough analysis of
    each potential portfolio companys competitive position, 4




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financial performance, management team operating discipline,
    growth potential and industry attractiveness, allowing us to
    better assess the companys prospects. After investing in a
    company, we monitor the investment closely, typically receiving
    monthly, quarterly and annual financial statements. We analyze
    and discuss in detail the companys financial performance
    with management in addition to attending regular board of
    directors meetings. We believe that our initial and ongoing
    portfolio review process allows us to monitor effectively the
    performance and prospects of our portfolio companies.  
    Taking Advantage of Low Cost Debentures Guaranteed by the
    SBA.  Our license to do business as an SBIC allows
    us to issue fixed-rate, low interest debentures which are
    guaranteed by the SBA and sold in the capital markets,
    potentially allowing us to increase our net interest income
    beyond the levels achievable by other BDCs utilizing traditional
    leverage.
    Maintaining Portfolio Diversification.  While
    we focus our investments in lower middle market companies, we
    seek to diversify across various industries. We monitor our
    investment portfolio to ensure we have acceptable
    diversification, using industry and market metrics as key
    indicators. By monitoring our investment portfolio for
    diversification we seek to reduce the effects of economic
    downturns associated with any particular industry or market
    sector. However, we may from time to time hold securities of a
    single portfolio company that comprise more than 5.0% of our
    total assets
    and/or more
    than 10.0% of the outstanding voting securities of the portfolio
    company. For that reason, we are classified as a non-diversified
    management investment company under the 1940 Act.
    Utilizing Long-Standing Relationships to Source
    Deals.  Our senior management team maintains
    extensive relationships with entrepreneurs, financial sponsors,
    attorneys, accountants, investment bankers, commercial bankers
    and other non-bank providers of capital who refer prospective
    portfolio companies to us. These relationships historically have
    generated significant investment opportunities. We believe that
    our network of relationships will continue to produce attractive
    investment opportunities.  Investments
  Debt
    Investments
     5




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Equity
    Investments
    Investment
    Criteria
    
    Established Companies With Positive Cash
    Flow.  We seek to invest in established companies
    with a history of generating revenues and positive cash flows.
    We typically focus on companies with a history of profitability
    and minimum trailing twelve month EBITDA of $2.0 million.
    We do not invest in
    start-up
    companies, distressed situations, turn-around
    situations or companies that we believe have unproven business
    plans.
    Experienced Management Teams With Meaningful Equity
    Ownership.Based on our prior investment experience, we
    believe that a management team with significant experience with
    a portfolio company or relevant industry experience and
    meaningful equity ownership is more committed to a portfolio
    company. We believe a management team with these attributes is
    more likely to manage the portfolio company in a manner that
    enhances the value of our investment.
    Strong Competitive Position.  We seek to invest
    in companies that have developed strong positions within their
    respective markets, are well positioned to capitalize on growth
    opportunities and compete in industries with barriers to entry.
    We also seek to invest in companies that exhibit a competitive
    advantage, which may help to protect their market position and
    profitability.
    Diversified Customer and Supplier Base.  We
    prefer to invest in companies that have a diversified customer
    and supplier base. Companies with a diversified customer and
    supplier base are generally better able to endure economic
    downturns, industry consolidation and shifting customer
    preferences.
    Significant Invested Capital.  We believe the
    existence of significant underlying equity value provides
    important support to investments. We will look for portfolio
    companies that we believe have sufficient embedded equity or
    franchise value.  Investment
    Process
    
    Origination
    Due Diligence and Underwriting
    Approval
    Documentation and Closing
    Portfolio Management and Investment Monitoring 6




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Origination
      
    A comprehensive financial model that we prepare based on
    quantitative analysis of historical financial performance,
    financial projections and pro forma financial ratios assuming
    investment;
    Competitive landscape surrounding the potential investment;
    Strengths and weaknesses of the potential investments
    business strategy and industry;
    Results of a broad qualitative analysis of the companys
    products or services, market position, market dynamics and
    customers and suppliers; and
    Potential investment structures, certain financing ratios and
    investment pricing terms.    Due
    Diligence and Underwriting
  on-site
 7




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Approval
    Documentation
    and Closing
    Portfolio
    Management and Investment Monitoring
    
    Monthly and quarterly review of actual financial performance
    versus the corresponding period of the prior year and financial
    projections;
    Monthly and quarterly monitoring of all financial and other
    covenants;
    Review of senior lender loan compliance certificates, where
    applicable;
    Quarterly review of operating results, and general business
    performance, including the preparation of a portfolio monitoring
    report which is distributed to members of our investment
    committee;
    Periodic
    face-to-face
    meetings with management teams and financial sponsors of
    portfolio companies;
    Attendance at portfolio company board meetings through board
    seats or observation rights; and
    Application of our investment rating system to each investment. 8




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Investment
    Rating System
     9




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InvestmentRating

Description10

Investment is performing above original expectations and
    possibly 30.0% or more above original projections provided by
    the portfolio company. Investment has been positively influenced
    by an unforeseen external event. Full return of principal and
    interest is expected. Capital gain is expected.9

Investment is performing above original expectations and
    possibly 30.0% or more above original projections provided by
    the portfolio company. Investment may have been or is soon to be
    positively influenced by an unforeseen external event. Full
    return of principal and interest is expected. Capital gain is
    expected.8

Investment is performing above original expectations and
    possibly 21.0% to 30.0% above original projections provided by
    the portfolio company. Full return of principal and interest is
    expected. Capital gain is expected.7

Investment is performing above original expectations and
    possibly 11.0% to 21.0% above original projections provided by
    the portfolio company. Full return of principal and interest is
    expected. Depending on age of transaction, potential for capital
    gain exists.6

Investment is performing above original expectations and
    possibly 5.0% to 11.0% above original projections provided by
    the portfolio company. Full return of principal and interest is
    expected. Depending on age of transaction, potential for capital
    gain exists.5

Investment is performing in line with expectations. Full return
    of principal and interest is expected. Depending on age of
    transaction, potential for nominal capital gain may be expected.4

Investment is performing below expectations, but no covenant
    defaults have occurred. Full return of principal and interest is
    expected. Little to no capital gain is expected.3

Investment is in default of transaction covenants but interest
    payments are current. No loss of principal is expected.2

Investment is in default of transaction covenants and interest
    payments are not current. A principal loss of between 1.0% and
    33.0% is expected.1

Investment is in default of transaction covenants and interest
    (and possibly principal) payments are not current. A principal
    loss of between 34.0% and 67.0% is expected.0

Investment is in default and a principal loss of between 68.0%
    and 100.0% is expected.   Valuation
    Process and Determination of Net Asset Value
       10




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Managerial
    Assistance
   11




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Competition
        Brokerage
    Allocation and Other Practices
    Dividend
    Reinvestment Plan
     12




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15252-8015, (866) 228-7201.
  15252-8015.
  Employees
    Election
    to be Regulated as a Business Development Company and Regulated
    Investment Company
   13




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
    We report our investments at market value or fair value with
    changes in value reported through our statement of
    operations.  Regulation S-X,
  
    We generally will be required to pay income taxes only on the
    portion of our taxable income we do not distribute to
    stockholders (actually or constructively).  source-of-income
    
    Our ability to use leverage as a means of financing our
    portfolio of investments will be limited.    
    We intend to distribute substantially all of our income to
    our stockholders.   14




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Exemptive
    Relief
      Regulation
    of Business Development Companies
        Qualifying
    Assets
         15




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Managerial
    Assistance to Portfolio Companies
    Temporary
    Investments
  agreed-upon agreed-upon
 16




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Senior
    Securities
    Code
    of Ethics
  Rule 17j-1
  Proxy
    Voting Policies and Procedures
  case-by-case
      Other
       17




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Small
    Business Administration Regulations
    and/or
           18




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Material
    U.S. Federal Income Tax Considerations
  Form 10-K
    
    A citizen or individual resident of the United States;
    A corporation or other entity treated as a corporation, for
    U.S. federal income tax purposes, created or organized in
    or under the laws of the United States or any political
    subdivision thereof;
    A trust if a court within the United States is asked to exercise
    primary supervision over the administration of the trust and one
    or more United States persons have the authority to control all
    substantive decisions of the trust; or
    A trust or an estate, the income of which is subject to
    U.S. federal income taxation regardless of its source.  Non-U.S. stockholder
 19




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Election
    to be Taxed as a RIC
  source-of-income
  Taxation
    as a RIC
        
    continue to qualify as a BDC under the 1940 Act at all times
    during each taxable year;
    derive in each taxable year at least 90.0% of our gross income
    from dividends, interest, payments with respect to certain
    securities, loans, gains from the sale of stock or other
    securities, or other income derived with respect to our business
    of investing in such stock or securities (the 90.0% Income
    Test); and
    diversify our holdings so that at the end of each quarter of the
    taxable year:  
    at least 50.0% of the value of our assets consists of cash, cash
    equivalents, U.S. Government securities, securities of
    other RICs, and other securities if such other securities of any
    one issuer do not represent more than 5.0% of the value of our
    assets or more than 10.0% of the outstanding voting securities
    of the issuer; and
    no more than 25.0% of the value of our assets is invested in the
    securities, other than U.S. government securities or
    securities of other RICs, of one issuer or of two or more
    issuers that are controlled, as determined under applicable
    Internal Revenue Code rules, by us and that are engaged in the
    same or similar or related trades or businesses (the
    Diversification Tests). 20




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and/or
    Taxation
    of U.S. Stockholders
     21




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22




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Taxation
    of Non-U.S.
    Stockholders
  Non-U.S. stockholder Non-U.S. stockholder Non-U.S. stockholders
  Non-U.S. stockholders Non-U.S. stockholders Non-U.S. stockholder, Non-U.S. stockholder Non-U.S. stockholder
  Non-U.S. stockholders
  Non-U.S. stockholder, Non-U.S. stockholder Non-U.S. stockholder Non-U.S. stockholder
  Non-U.S. stockholder Non-U.S. stockholder Non-U.S. stockholder Non-U.S. stockholder,
  Non-U.S. stockholder
 23




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Non-U.S. stockholder Form W-8BEN Non-U.S. stockholder
  Non-U.S. persons
  Failure
    to Qualify as a RIC
    Available
    Information
  Form 10-Q, Form 8-K
  1-800-SEC-0330.
  http://ir.tcap.com/governance.cfm
  Item 1A.
    Risk
    Factors.  As indicated above in this Annual Report under
    Forward-Looking Statements, those statements in this
    Annual Report that are not historical facts may be
    forward-looking statements within the meaning of the Private
    Securities Litigation Reform Act of 1995. Investing in our
    common stock involves a number of significant risks. The risks
    set out below are not the only risks we face. Additional risks
    and uncertainties not presently known to us or not presently
    deemed material by us might also impair our operations and
    performance. If any of the following events occur, our business,
    financial condition and results of operations could be
    materially and adversely affected. In such case, our net asset
    value and the trading price of our common stock could decline,
    and you may lose all or part of your investment.
 24




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Risks
    Relating to Our Business and Structure
  Our
    financial condition and results of operations will depend on our
    ability to manage and deploy capital effectively.
        There
    may be uncertainty as to the value of our portfolio
    investments.
     25




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We
    operate in a highly competitive market for investment
    opportunities.
  and/or
  We are
    dependent upon our key investment personnel for our future
    success.
      Our
    business model depends to a significant extent upon strong
    referral relationships, and our inability to maintain or develop
    these relationships, as well as the failure of these
    relationships to generate investment opportunities, could
    adversely affect our business.
   26




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We
    have limited operating history as a business development company
    or as a regulated investment company, which may impair your
    ability to assess our prospects.
    The
    Fund is licensed by the SBA, and therefore subject to SBA
    regulations.
    and/or
  Because
    we borrow money, the potential for gain or loss on amounts
    invested in us is magnified and may increase the risk of
    investing in us.
     27




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SBA
    regulations limit the outstanding dollar amount of
    SBA-guaranteed debentures that may be issued by an SBIC or group
    of SBICs under common control.
        We may
    experience fluctuations in our quarterly results.
    Our
    ability to enter into and exit investment transactions with our
    affiliates will be restricted.
   28




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We
    have filed two applications with the SEC requesting exemptive
    relief from certain provisions of the 1940 Act and the
    Securities and Exchange Act of 1934.
      Our
    board of directors may change our operating policies and
    strategies without prior notice or stockholder approval, the
    effects of which may be adverse.
    We
    will be subject to corporate-level income tax if we are unable
    to qualify as a RIC under Subchapter M of the Code, which will
    adversely affect our results of operations and financial
    condition.
       29




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
    at least 50.0% of the value of our assets consists of cash, cash
    equivalents, U.S. Government securities, securities of
    other RICs, and other securities if such other securities of any
    one issuer do not represent more than 5.0% of the value of our
    assets or more than 10.0% of the outstanding voting securities
    of the issuer; and
    no more than 25.0% of the value of our assets is invested in the
    securities, other than U.S. government securities or
    securities of other RICs, of one issuer or of two or more
    issuers that are controlled, as determined under applicable
    Internal Revenue Code rules, by us and that are engaged in the
    same or similar or related trades or businesses.    We may
    not be able to pay you dividends, and our dividends may not grow
    over time.
  year-to-year
  We may
    have difficulty paying our required distributions if we
    recognize income before or without receiving cash representing
    such income.
    and/or
  The
    Fund, as an SBIC, may be unable to make distributions to us that
    may harm our ability to meet registered investment company
    requirements, which could result in the imposition of an
    entity-level tax.
   30




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Because
    we intend to distribute substantially all of our income to our
    stockholders upon our election to be treated as a RIC, we will
    continue to need additional capital to finance our growth, and
    regulations governing our operation as a business development
    company will affect our ability to, and the way in which we,
    raise additional capital.
      Changes
    in laws or regulations governing our operations may adversely
    affect our business or cause us to alter our business
    strategy.
     31




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Efforts
    to comply with the Sarbanes-Oxley Act will involve significant
    expenditures, and non-compliance with the Sarbanes-Oxley Act may
    adversely affect us.
    Risks
    Related to Our Investments
  Our
    investments in portfolio companies may be risky, and we could
    lose all or part of our investment.
    
    may have limited financial resources and may be unable to meet
    their obligations under their debt instruments that we hold,
    which may be accompanied by a deterioration in the value of any
    collateral and a reduction in the likelihood of us realizing any
    guarantees from subsidiaries or affiliates of our portfolio
    companies that we may have obtained in connection with our
    investment;
    may have shorter operating histories, narrower product lines,
    smaller market shares
    and/or
    significant customer concentration than larger businesses, which
    tend to render them more vulnerable to competitors actions
    and market conditions, as well as general economic downturns;
    are more likely to depend on the management talents and efforts
    of a small group of persons; therefore, the death, disability,
    resignation or termination of one or more of these persons could
    have a material adverse impact on our portfolio company and, in
    turn, on us;
    generally have less predictable operating results, may from time
    to time be parties to litigation, may be engaged in rapidly
    changing businesses with products subject to a substantial risk
    of obsolescence, and may require substantial additional capital
    to support their operations, finance expansion or maintain their
    competitive position; and
    generally have less publicly available information about their
    businesses, operations and financial condition. If we are unable
    to uncover all material information about these companies, we
    may not make a fully informed investment decision, and may lose
    all or part of our investment.    The
    lack of liquidity in our investments may adversely affect our
    business.
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We may
    not have the funds to make additional investments in our
    portfolio companies.
    Our
    portfolio companies may incur debt that ranks equally with, or
    senior to, our investments in such companies.
    There
    may be circumstances where our debt investments could be
    subordinated to claims of other creditors or we could be subject
    to lender liability claims.
    Second
    priority liens on collateral securing loans that we make to our
    portfolio companies may be subject to control by senior
    creditors with first priority liens. If there is a default, the
    value of the collateral may not be sufficient to repay in full
    both the first priority creditors and us.
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We
    generally will not control our portfolio
    companies.
    Economic
    recessions or downturns could impair our portfolio companies and
    harm our operating results.
    Any
    unrealized losses we experience on our loan portfolio may be an
    indication of future realized losses, which could reduce our
    income available for distribution.
    Defaults
    by our portfolio companies will harm our operating
    results.
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Prepayments
    of our debt investments by our portfolio companies could
    adversely impact our results of operations and reduce our return
    on equity.
    Changes
    in interest rates may affect our cost of capital and net
    investment income.
    We may
    not realize gains from our equity investments.
    Risks
    Relating to Our Common Stock
  Shares
    of closed-end investment companies, including BDCs, may trade at
    a discount to their net asset value.
   35




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##### Table of Contents



Investing
    in our common stock may involve an above average degree of
    risk.
    The
    market price of our common stock may be volatile and fluctuate
    significantly.
    
    significant volatility in the market price and trading volume of
    securities of BDCs or other companies in our sector, which are
    not necessarily related to the operating performance of these
    companies;
    changes in regulatory policies or tax guidelines, particularly
    with respect to RICs, BDCs or SBICs;
    loss of RIC status or the Funds status as an SBIC;
    changes in earnings or variations in operating results;
    changes in the value of our portfolio of investments;
    any shortfall in revenue or net income or any increase in losses
    from levels expected by investors or securities analysts;
    fluctuations in interest rates;
    the operating performance of companies comparable to us;
    departure of our key personnel;
    global or national credit market changes; and
    general economic trends and other external factors.  Provisions
    of the Maryland General Corporation Law and our articles of
    incorporation and bylaws could deter takeover attempts and have
    an adverse impact on the price of our common
    stock.
      Terrorist
    attacks, acts of war or national disasters may affect any market
    for our common stock, impact the businesses in which we invest
    and harm our business, operating results and financial
    condition.
   36




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##### Table of Contents



We
    could face losses and potential liability if intrusion, viruses
    or similar disruptions to our technology jeopardize our
    confidential information or that of users of our
    technology.
    Item 1B.
    Unresolved
    Staff Comments.    Item 2.
    Properties.    Item 3.
    Legal
    Proceedings.    Item 4.
    Submission
    of Matters to a Vote of Security Holders.   PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities.  Common
    Stock and Holders
    High


LowFebruary 15, 2007 to March 31, 2007

$
16.00


$
13.45Second Quarter of 2007


15.79



13.58Third Quarter of 2007


14.99



11.95Fourth Quarter of 2007


14.50



10.75    37




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##### Table of Contents



Dividends
    Declared
      Record

PaymentDate Declared

Date

Date

AmountMay 9, 2007

May 31, 2007

June 28, 2007

$
0.15August 8, 2007

August 30, 2007

September 27, 2007


0.26November 7, 2007

November 29, 2007

December 27, 2007


0.27December 14, 2007

December 31, 2007

January 28, 2008


0.30   Form 1099-DIV and/or paid-in-capital
    Ordinary income

$
0.89



90.4
%Return of capital


0.09



9.6
%Total reported on tax
    Form 1099-DIV

$
0.98



100.0
%     (a)
    
    Ordinary income is reported on
    Form 1099-DIV
    as either qualified or non-qualified and capital gains are
    reported on
    Form 1099-DIV
    in various subcategories which have differing tax treatments to
    shareholders. Those subcategories are not presented herein.(b)
    
    Return of capital refers to those amounts reported as nontaxable
    distributions on
    Form 1099-DIV.  Dividend
    Policy
     38




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##### Table of Contents



15252-8015, (866) 228-7201.
  15252-8015.
    Equity
    Compensation Plans
  Form 10-K
 39




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##### Table of Contents



Performance
    Graph
    Comparison
    of Ten Month Cumulative Total Return(1)
    among Triangle Capital Corporation, the Triangle Capital
    Corporation Peer
    Group Index, and the Nasdaq Composite Index
  
  2/15/07


3/31/07


6/30/07


9/30/07


12/31/07Triangle Capital Corporation



100.00




91.00




95.43




93.44




89.40Triangle Capital Corporation Peer Group Index(2)



100.00




96.03




97.44




96.63




76.06Nasdaq Composite Index



100.00




100.27




107.82




111.83




109.88   (1)
    
    From February 15, 2007, the date our common stock began to
    trade on the Nasdaq Global Market in connection with our initial
    public offering to December 31, 2007.(2)
    
    The Triangle Capital Corporation Peer Group consists of the
    following internally-managed closed-end investment companies
    that have elected to be regulated as BDCs under the 1940 Act:
    Allied Capital Corporation, American Capital Strategies Ltd.,
    Harris & Harris Group, Inc., Hercules Technology
    Growth Capital, Inc., Kohlberg Capital Corporation, MCG Capital
    Corporation and Patriot Capital Funding, Inc.  Sales of
    Unregistered Securities
     40




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##### Table of Contents



Issuer
    Purchases of Equity Securities
    Use of
    Proceeds from Registered Securities
  Form N-2 No. 333-138418)
          Item 6.
    Selected
    Financial Data.  Form 10-K,
 41




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##### Table of Contents



Business Combinations
  Year Ended December 31,2003


2004


2005


2006


2007(Dollars in thousands)Income statement data:Investment income:Total interest, fee and dividend income

$
26


$
1,969


$
5,855


$
6,443


$
10,912Interest income from cash and cash equivalent investments


15



18



108



280



1,824Total investment income


41



1,987



5,963



6,723



12,736Expenses:Interest expense






339



1,543



1,834



2,073Amortization of deferred financing fees






38



90



100



113Management fees


1,048



1,564



1,574



1,589



233General and administrative expenses


165



83



58



115



3,894Total expenses


1,213



2,024



3,265



3,638



6,313Net investment income (loss)


(1,172
)


(37
)


2,698



3,085



6,423Net realized gain (loss) on investments 
    non-control/non-affiliate










(3,500
)


6,027



(760
)Net realized gain (loss) on investments  affiliate


















141Net unrealized appreciation (depreciation) of investments






(1,225
)


3,975



(415
)


3,061Total net gain (loss) on investments






(1,225
)


475



5,612



2,442Provision for income taxes


















(52
)Net increase (decrease) in net assets resulting from operations

$
(1,172
)

$
(1,262
)

$
3,173


$
8,697


$
8,813Net investment income per share  basic and diluted


N/A



N/A



N/A



N/A


$
0.95Net increase in net assets resulting from operations per
    share  basic and diluted


N/A



N/A



N/A



N/A


$
1.31Net asset value per common share


N/A



N/A



N/A



N/A


$
13.74Dividends declared per common share


N/A



N/A



N/A



N/A


$
0.98   42




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##### Table of Contents



Year Ended December 31,2003


2004


2005


2006


2007(Dollars in thousands)Balance sheet data:Assets:Investments at fair value

$



$
19,701


$
37,144


$
54,996


$
114,374Deferred loan origination revenue


(35
)


(537
)


(602
)


(774
)


(1,368
)Cash and cash equivalents


2,973



2,849



6,067



2,556



21,788Interest and fees receivable






98



50



135



305Prepaid expenses and other current assets


















47Deferred offering costs














1,021



Property and equipment, net


















34Deferred financing fees






823



1,085



985



999Total assets

$
2,938


$
22,934


$
43,744


$
58,919


$
136,179Liabilities and partners capital:Accounts payable and accrued liabilities

$
10


$



$
13


$
825


$
1,144Interest payable






230



566



606



699Distribution/dividends payable














532



2,041Income taxes payable


















52Deferred income taxes


















1,760SBA-guaranteed debentures payable






17,700



31,800



31,800



37,010Total liabilities


10



17,930



32,379



33,763



42,706Total partners capital/shareholders equity


2,928



5,004



11,365



25,156



93,473Total liabilities and partners capital

$
2,938


$
22,934


$
43,744


$
58,919


$
136,179Other data:Weighted average yield on investments






15.5
%


14.2
%


13.3
%


12.6
%Number of portfolio companies






6



12



19



26Expense ratios (as percentage of average net assets):Operating expenses


107.4
%


32.2
%


21.3
%


8.3
%


4.4
%Interest expense and deferred financing fees






7.4



21.4



9.5



2.4Total expenses


107.4
%


39.6
%


42.7
%


17.8
%


6.8
%   Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  The information in this section contains forward-looking
    statements that involve risks and uncertainties. Please see
    Risk Factors and Special Note Regarding
    Forward-Looking Statements for a discussion of the
    uncertainties, risks and assumptions associated with these
    statements. You should read the following discussion in
    conjunction with the combined financial statements and related
    notes and other financial information appearing elsewhere in
    this Annual Report.
   43




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##### Table of Contents



Business
    Combinations Form 10-K.
  Overview
    of our Business
           44




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##### Table of Contents



Portfolio
    Composition
      Percentage of





Percentage ofCost


Total Portfolio


Fair Value


Total PortfolioDecember 31, 2007:Subordinated debt and
    2nd
    lien notes

$
82,171,781



76
%

$
82,171,781



72
%Senior debt


14,798,137



14



14,798,137



13Equity shares


9,699,689



9



15,335,900



13Equity warrants


548,172



1



1,870,500



2Royalty rights










197,900



$
107,217,779



100
%

$
114,374,218



100
%December 31, 2006:Subordinated debt and
    2nd
    lien notes

$
48,788,108



93
%

$
47,323,885



86
%Equity shares


2,714,833



5



5,633,283



10Equity warrants


1,158,411



2



1,789,260



3Royalty rights










250,000



1$
52,661,352



100
%

$
54,996,428



100
%   Investment
    Activity
   45




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##### Table of Contents



Year EndedDecember 31, 2007Fair value of portfolio, January 1, 2007

$
54,996,428New investments


64,159,172Proceeds from sale of investment


(2,227,124
)Principal repayments and payment in kind interest payments
    received


(8,483,843
)Payment in kind interest earned


1,521,114Accretion/writeoff of loan discounts


205,725Net realized gain (loss) on investments


(618,620
)Net unrealized gain on investments


4,821,366Fair value of portfolio, December 31, 2007

$
114,374,218Weighted average yield on debt investments as of
    December 31, 2007


13.9
%Weighted average yield on total investments as of
    December 31, 2007


12.6
%   Results
    of Operations
  Comparison
    of years ended December 31, 2007 and December 31,
    2006
  Investment
    Income
    Expenses
    Net
    Investment Income
   46




---



##### Table of Contents



Net
    Increase (Decrease) in Net Assets Resulting From
    Operations
          Comparison
    of years ended December 31, 2006 and December 31,
    2005
  Investment
    Income
    Expenses
    Net
    Investment Income
    Net
    Increase (Decrease) in Net Assets Resulting From
    Operations
   47




---



##### Table of Contents



Liquidity
    and Capital Resources
    Cash
    Flows
        Financing
    Transactions
   48




---



##### Table of Contents



Current
    Market Conditions
      Critical
    Accounting Policies and Use of Estimates
    Investment
    Valuation
     49




---



##### Table of Contents




    financial standing of the issuer of the security;
    comparison of the business and financial plan of the issuer with
    actual results;
    the size of the security held as it relates to the liquidity of
    the market for such security;
    pending public offering of common stock by the issuer of the
    security;
    pending reorganization activity affecting the issuer, such as
    merger or debt restructuring;
    ability of the issuer to obtain needed financing;
    changes in the economy affecting the issuer;
    financial statements and reports from portfolio company senior
    management and ownership;
    the type of security, the securitys cost at the date of
    purchase and any contractual restrictions on the disposition of
    the security;
    discount from market value of unrestricted securities of the
    same class at the time of purchase;
    special reports prepared by analysts;
    information as to any transactions or offers with respect to the
    security
    and/or sales
    to third parties of similar securities;
    the issuers ability to make payments and the type of
    collateral;
    the current and forecasted earnings of the issuer;
    statistical ratios compared to lending standards and to other
    similar securities; and
    other pertinent factors.   50




---



##### Table of Contents



Revenue
    Recognition
  Interest
    and Dividend Income
    Fee
    Income
    Payment
    in Kind Interest (PIK)
   51




---



##### Table of Contents



Recently
    Issued Accounting Standards
  Accounting for Certain Hybrid Financial Instruments,
  Accounting for Uncertainty in Income Taxes
  Fair Value Measurements
  The Fair Value Option for
    Financial Assets and Financial Liabilities  Including
    an amendment of FASB Statement No. 115
  Off-Balance
    Sheet Arrangements
    Quantitative
    and Qualitative Disclosure About Market Risk
   52




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##### Table of Contents



Related
    Party Transactions
      Contractual
    Obligations
    2009 to


2011 to


2013 andTotal


2008


2010


2012


ThereafterSBA guaranteed debentures payable

$
37,010,000


$



$



$



$
37,010,000Interest due on SBA guaranteed debentures payable


16,919,314



2,140,599



4,314,379



4,320,289



6,144,047Unused commitments to extend credit(1)


2,139,200



2,139,200











Operating lease payments(2)


114,672



114,672











Total

$
56,183,186


$
4,394,471


$
4,314,379


$
4,320,289


$
43,154,047     (1)
    
    We have a commitment to extend credit, in the form of loans, to
    one of our portfolio companies which is undrawn as of
    December 31, 2007. Since this commitment may expire without
    being drawn upon, the total commitment amount does not
    necessarily represent future cash requirements, however we have
    chosen to present the amount of this unused commitment as an
    obligation in this table.(2)
    
    We lease our corporate office facility under an operating lease
    that terminates on December 31, 2008. We believe that our
    existing facilities will be adequate to meet our needs at least
    through 2008, and that we will be able to obtain additional
    space when, where and as needed on acceptable terms.  Recent
    Developments
  SBA
    Guaranteed Debentures Payable
   53




---



##### Table of Contents



New
    Portfolio Company Investments
      Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk.    Item 8.
    Financial
    Statements and Supplementary Data.    Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure.    Item 9A(T).
    Controls
    and Procedures.  Evaluation
    of Disclosure Controls and Procedures
    Managements
    Annual Report on Internal Control over Financial
    Reporting
  Rules 13a-15(f) 15d-15(f)
 54




---



##### Table of Contents



Internal
    Control  Integrated Framework
    Changes
    in Internal Control Over Financial Reporting
    Item 9B.
    Other
    Information   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance.    http://ir.tcap.com/governance.cfm
    Item 11.
    Executive
    Compensation.   55




---



##### Table of Contents



Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters.    Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence.    Item 14.
    Principal
    Accountant Fees and Services   PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules  (a)  The
    following documents are filed as part of this Report:
  (1) Financial Statements
  Triangle Capital Corporation Financial Statements:
   
 PageReport of Independent Registered Public Accounting Firm


F-1Consolidated Balance Sheet as of December 31, 2007 and
    Combined Balance Sheet as of December 31, 2006


F-2Consolidated Statement of Operations for the year ended
    December 31, 2007 and Combined Statements of Operations for
    the years ended December 31, 2006 and 2005


F-3Consolidated Statement of Changes in Net Assets for the year
    ended December 31, 2007 and Combined Statements of Changes
    in Net Assets for the years ended December 31, 2006 and 2005


F-4Consolidated Statement of Cash Flows for the year ended
    December 31, 2007 and Combined Statements of Cash Flows for
    the years ended December 31, 2006 and 2005


F-5Consolidated Schedule of Investments as of December 31, 2007


F-6Combined Schedule of Investments as of December 31, 2006


F-10Notes to Financial Statements


F-13  56




---



##### Table of Contents



(2) Financial Statement Schedules
      (3) List of Exhibits
  Regulation S-K,
  Number

Exhibit2
.1

Agreement and Plan of Merger, dated as of November 2, 2006,
    by and among Triangle Capital Corporation, New Triangle GP, LLC,
    and Triangle Mezzanine LLC (Filed as Exhibit (k)(7) to the
    Registrants Registration Statement on
    Form N-2/N-5
    (File
    No. 333-138418)
    filed with the Securities and Exchange Commission on
    November 3, 2006 and incorporated herein by reference).2
.2

Agreement and Plan of Merger, dated as of November 2, 2006,
    by and among Triangle Capital Corporation, TCC Merger Sub, LLC
    and Triangle Mezzanine Fund LLLP (Filed as Exhibit (k)(8)
    to the Registrants Registration Statement on
    Form N-2/N-5
    (File
    No. 333-138418)
    filed with the Securities and Exchange Commission on
    November 3, 2006 and incorporated herein by reference).3
.1

Articles of Amendment and Restatement of the Registrant (Filed
    as Exhibit (a)(3) to the Registrants Registration
    Statement on
    Form N-2/N-5
    (File
    No. 333-138418)
    filed with the Securities and Exchange Commission on
    December 29, 2006 and incorporated herein by reference).3
.2

Certificate of Limited Partnership of Triangle Mezzanine
    Fund LLLP (Filed as Exhibit (a)(4) to the Registrants
    Registration Statement on
    Form N-2/N-5
    (File
    No. 333-138418)
    filed with the Securities and Exchange Commission on
    February 13, 2007 and incorporated herein by reference).3
.3

Second Amended and Restated Agreement of Limited Partnership of
    Triangle Mezzanine Fund LLLP (Filed as Exhibit 3.4 to
    the Registrants Quarterly Report on
    form 10-Q
    filed with the Securities and Exchange Commission on
    November 11, 2007 and incorporated herein by reference).3
.4

Amended and Restated Bylaws of the Registrant (Filed as Exhibit
    (b) to the Registrants Registration Statement on
    Form N-2/N-5
    (File
    No. 333-138418)
    filed with the Securities and Exchange Commission on
    December 29, 2006 and incorporated herein by reference).4
.1

Form of Common Stock Certificate (Filed as Exhibit (d) to
    the Registrants post -effective amendment to the
    Registration Statement on
    Form N-2/N-5
    (File
    No. 333-138418)
    filed with the Securities and Exchange Commission on
    February 15, 2007 and incorporated herein by reference).4
.2

Triangle Capital Corporation Dividend Reinvestment Plan.10
.1

Employment Agreement between Triangle Capital Corporation and
    Garland S. Tucker, III dated February 21, 2007 (Filed
    as Exhibit 10.1 to the Registrants Annual Report on
    Form 10-K
    (File
    No. 001-33130)
    for the year ended December 31, 2006 filed with the
    Securities and Exchange Commission on March 29, 2007 and
    incorporated herein by reference).10
.2

Employment Agreement between Triangle Capital Corporation and
    Brent P.W. Burgess dated February 21, 2007 (Filed as
    Exhibit 10.2 to the Registrants Annual Report on
    Form 10-K
    (File
    No. 001-33130)
    for the year ended December 31, 2006 filed with the
    Securities and Exchange Commission on March 29, 2007 and
    incorporated herein by reference).10
.3

Employment Agreement between Triangle Capital Corporation and
    Steven C. Lilly dated February 21, 2007 (Filed as
    Exhibit 10.3 to the Registrants Annual Report on
    Form 10-K
    (File
    No. 001-33130)
    for the year ended December 31, 2006 filed with the
    Securities and Exchange Commission on March 29, 2007 and
    incorporated herein by reference).10
.4

Employment Agreement between Triangle Capital Corporation and
    Tarlton H. Long dated February 21, 2007 (Filed as
    Exhibit 10.4 to the Registrants Annual Report on
    Form 10-K
    (File
    No. 001-33130)
    for the year ended December 31, 2006 filed with the
    Securities and Exchange Commission on March 29, 2007 and
    incorporated herein by reference). 57




---



##### Table of Contents



Number

Exhibit10
.5

Employment Agreement between Triangle Capital Corporation and
    David F. Parker dated February 21, 2007 (Filed as
    Exhibit 10.5 to the Registrants Annual Report on
    Form 10-K
    (File
    No. 001-33130)
    for the year ended December 31, 2006 filed with the
    Securities and Exchange Commission on March 29, 2007 and
    incorporated herein by reference).10
.6

Triangle Capital Corporation 2007 Equity Incentive Plan (Filed
    as Exhibit (i) to the Registrants pre-effective
    amendment to the Registration Statement on
    Form N-2/N-5
    (File
    No. 333-138418)
    filed with the Securities and Exchange Commission on
    February 13, 2007 and incorporated herein by reference).10
.7

Form of Triangle Capital Corporation Amended and Restated 2007
    Equity Incentive Plan.10
.8

Custodian Agreement with U.S. Bank National Association (Filed
    as Exhibit 10.7 to the Registrants Annual Report on
    Form 10-K
    (File
    No. 001-33130)
    for the year ended December 31, 2006 filed with the
    Securities and Exchange Commission on March 29, 2007 and
    incorporated herein by reference).10
.9

Amendment to Custody Agreement between the Registrant and U.S.
    Bank National Association dated February 5, 2008.10
.10

Sublease Assignment and Assumption of Assignors Interest
    dated January 17, 2007 (Filed as Exhibit 10.8 to the
    Registrants Annual Report on
    Form 10-K
    (File
    No. 001-33130)
    for the year ended December 31, 2006 filed with the
    Securities and Exchange Commission on March 29, 2007 and
    incorporated herein by reference).10
.11

Stock Transfer Agency Agreement between Triangle Capital
    Corporation and The Bank of New York.14
.1

Code of Conduct (Filed as Exhibit 14.1 to the
    Registrants Annual Report on
    Form 10-K
    (File
    No. 001-33130)
    for the year ended December 31, 2006 filed with the
    Securities and Exchange Commission on March 29, 2007 and
    incorporated herein by reference).21
.1

List of Subsidiaries.23
.1

Consent of Ernst & Young LLP.31
.1

Chief Executive Officer Certification Pursuant to
    Rule 13a-14
    of the Securities Exchange Act of 1934, as adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.31
.2

Chief Financial Officer Certification Pursuant to
    Rule 13a-14
    of the Securities Exchange Act of 1934, as adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.32
.1

Chief Executive Officer Certification pursuant to
    Section 1350, Chapter 63 of Title 18, United
    States Code, as adopted pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002.32
.2

Chief Financial Officer Certification pursuant to
    Section 1350, Chapter 63 of Title 18, United
    States Code, as adopted pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002.     
    
    Management contract or compensatory plan or arrangement.  (b)
    Exhibits    (c)
    Financial
    Statement Schedules   58




---



##### Table of Contents



SIGNATURES    TRIANGLE CAPITAL CORPORATION
  By:
    /s/  Garland
    S. Tucker, III   Title:
    President, Chief Executive Officer and Chairman of the Board of
    Directors      Signature

Title

Date/s/  Garland
    S. Tucker, IIIGarland
    S. Tucker, III

President, Chief Executive Officer and Chairman of the Board
    (Principal Executive Officer)

March 12, 2008/s/  Steven
    C. LillySteven
    C. Lilly

Chief Financial Officer, Treasurer, Secretary and Director
    (Principal Financial Officer)

March 12, 2008/s/  C.
    Robert Knox, Jr.C.
    Robert Knox, Jr.

Controller (Principal Accounting Officer)

March 12, 2008/s/  Brent
    P. W. BurgessBrent
    P. W. Burgess

Chief Investment Officer and Director

March 12, 2008/s/  W.
    McComb DunwoodyW.
    McComb Dunwoody

Director

March 12, 2008/s/  Thomas
    M. Garrott, IIIThomas
    M. Garrott, III

Director

March 12, 2008/s/  Benjamin
    S. GoldsteinBenjamin
    S. Goldstein

Director

March 12, 2008/s/  Simon
    B. Rich, Jr.Simon
    B. Rich, Jr.

Director

March 12, 2008/s/  Sherwood
    H. Smith, Jr.Sherwood
    H. Smith, Jr.

Director

March 12, 2008  59




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##### Table of Contents



Triangle
    Capital Corporation
  Index to
    Financial Statements
  PageReport of Independent Registered Public
    Accounting Firm


F-1Consolidated Balance Sheet as of
    December 31, 2007 and Combined Balance Sheet as of
    December 31, 2006


F-2Consolidated Statement of Operations for the year
    ended December 31, 2007 and Combined Statements of
    Operations for the years ended December 31, 2006 and
    2005


F-3Consolidated Statement of Changes in Net Assets
    for the year ended December 31, 2007 and Combined
    Statements of Changes in Net Assets for the years ended
    December 31, 2006 and 2005


F-4Consolidated Statement of Cash Flows for the year
    ended December 31, 2007 and Combined Statements of Cash
    Flows for the years ended December 31, 2006 and 2005


F-5Consolidated Schedule of Investments as of
    December 31, 2007


F-6Combined Schedule of Investments as of
    December 31, 2006


F-10Notes to Financial Statements


F-13




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm           
    F-1




---



##### Table of Contents



Triangle
    Capital Corporation
  Balance Sheets
  December 31,2007


2006(Consolidated)


(Combined)ASSETSInvestments at fair value:Non - Control / Non - Affiliate investments (cost of
    $66,819,386 and $40,592,972 at December 31, 2007 and 2006,
    respectively)

$
69,078,281


$
42,370,348Affiliate investments (cost of $24,487,895 and $9,453,445 at
    December 31, 2007 and 2006, respectively)


25,041,093



10,011,145Control investments (cost of $15,910,498 and $2,614,935 at
    December 31, 2007 and 2006, respectively)


20,254,844



2,614,935Total investments at fair value


114,374,218



54,996,428Deferred loan origination revenue


(1,368,603
)


(774,216
)Cash and cash equivalents


21,787,750



2,556,502Interest and fees receivable


305,159



134,819Prepaid expenses and other current assets


47,477



Deferred offering costs






1,020,646Deferred financing fees


999,159



985,477Property and equipment, net


34,166



Total assets

$
136,179,326


$
58,919,656LIABILITIES AND NET ASSETSAccounts payable and accrued liabilities

$
1,144,222


$
794,983Interest payable


698,735



606,296Partners distribution payable






531,566Dividends payable


2,041,159



Income taxes payable


52,598



Deferred income taxes


1,760,259



Payable to Triangle Capital Partners, LLC






30,000SBA guaranteed debentures payable


37,010,000



31,800,000Total liabilities


42,706,973



33,762,845Net assets:General partners capital






100Limited partners capital






21,250,000Common stock, $0.001 par value per share
    (150,000,000 shares authorized, 6,803,863 and
    100 shares issued and outstanding as of December 31,
    2007 and 2006, respectively)


6,804



Additional
    paid-in-capital


86,949,189



1,500Investment income in excess of distributions


1,738,797



1,570,135Accumulated realized losses on investments


(618,620
)


Net unrealized appreciation of investments


5,396,183



2,335,076Total net assets


93,472,353



25,156,811Total liabilities and net assets

$
136,179,326


$
58,919,656Net asset value per share

$
13.74



N/A    F-2




---



##### Table of Contents



Triangle
    Capital Corporation
  Statements of Operations
  Years Ended December 31,2007


2006


2005(Consolidated)


(Combined)


(Combined)Investment income:Loan interest, fee and dividend income:Non - Control/Non - Affiliate investments

$
6,258,670


$
4,488,831


$
4,125,584Affiliate investments


1,808,664



638,318



459,810Control investments


1,323,876



293,532



39,850Total loan interest, fee and dividend income


9,391,210



5,420,681



4,625,244Paid - in - kind interest income:Non - Control/Non - Affiliate investments


871,184



815,408



962,121Affiliate investments


225,622



40,208



243,663Control investments


424,308



166,690



23,642Total paid - in - kind interest income


1,521,114



1,022,306



1,229,426Interest income from cash and cash equivalent investments


1,823,519



279,817



108,493Total investment income


12,735,843



6,722,804



5,963,163Expenses:Interest expense


2,073,311



1,833,458



1,543,378Amortization of deferred financing fees


112,660



99,920



89,970Management fees


232,423



1,589,070



1,573,602General and administrative expenses


3,894,240



115,040



57,991Total expenses


6,312,634



3,637,488



3,264,941Net investment income


6,423,209



3,085,316



2,698,222Net realized gain (loss) on investments  Non
    Control/Non - Affiliate


(759,634
)


6,026,948



(3,500,000
)Net realized gain on investment  Affiliate


141,014







Net unrealized appreciation (depreciation) of investments


3,061,107



(414,924
)


3,975,000Total net gain on investments before income taxes


2,442,487



5,612,024



475,000Income tax expense


52,598







Net increase in net assets resulting from operations

$
8,813,098


$
8,697,340


$
3,173,222Net investment income per share  basic and diluted

$
0.95



N/A



N/ANet increase in net assets resulting from operations per
    share  basic and diluted

$
1.31



N/A



N/ADividends declared per common share

$
0.98



N/A



N/AWeighted average number of shares outstanding  basic
    and diluted


6,728,733



N/A



N/AAllocation of net increase (decrease) in net assets resulting
    from operations to:General partner


N/A


$
1,739,386


$
634,644Limited partners


N/A


$
6,957,954


$
2,538,578    F-3




---



##### Table of Contents





Triangle
    Capital Corporation
  Statements of Changes in Net Assets
  Investment


Accumulated


NetCapital











Income in


Realized


UnrealizedGeneral


Limited


Contribution


Common Stock


Additional


Excess of


Gains


Appreciation


TotalPartners


Partners


Commitment


Number of


Par


Paid in


(Less Than)


(Losses) on


(Depreciation) of


NetCapital


Capital


Receivable


Shares


Value


Capital


Distributions


Investments


Investments


AssetsBalance, January 1, 2005

$
100


$
21,250,000


$
(13,812,500
)





$



$



$
(1,208,775
)

$



$
(1,225,000
)

$
5,003,825Partners capital contributions










3,187,500



























3,187,500Net investment income


























2,698,222











2,698,222Realized loss on investments






























(3,500,000
)






(3,500,000
)Net unrealized gains on investments


































3,975,000



3,975,000Balance, December 31, 2005

$
100


$
21,250,000


$
(10,625,000
)





$



$



$
1,489,447


$
(3,500,000
)

$
2,750,000


$
11,364,547Partners capital contributions










10,625,000



























10,625,000Net investment income


























3,085,316











3,085,316Realized gains on investments






























6,026,948







6,026,948Net unrealized losses on investments


































(414,924
)


(414,924
)Distributions to partners


























(3,004,628
)


(2,526,948
)






(5,531,576
)Issuance of common stock














100







1,500















1,500Balance, December 31, 2006

$
100


$
21,250,000


$




100


$



$
1,500


$
1,570,135


$



$
2,335,076


$
25,156,811Public offering of common stock














4,770,000



4,770



64,723,267















64,728,037Formation transactions


(100
)


(21,250,000
)






1,916,660



1,917



21,248,183















Net investment income


























6,423,209











6,423,209Realized gain (loss) on investments






























(618,620
)


1,111,306



492,686Net unrealized gains on investments


































1,949,801



1,949,801Provision for income taxes


























(52,598
)










(52,598
)Return of capital and other tax related adjustments






















(649,856
)


649,856











Dividends declared














117,103



117



1,626,095



(6,631,758
)










(5,005,546
)Tax distribution to partners


























(220,047
)










(220,047
)Balance, December 31, 2007

$



$



$




6,803,863


$
6,804


$
86,949,189


$
1,738,797


$
(618,620
)

$
5,396,183


$
93,472,353    F-4




---



##### Table of Contents





Triangle
    Capital Corporation
  Statements of Cash Flows
  Years Ended December 31,2007


2006


2005(Consolidated)


(Combined)


(Combined)Cash flows from operating activities:Net increase in net assets resulting from operations

$
8,813,098


$
8,697,340


$
3,173,222Adjustments to reconcile net increase in net assets resulting
    from operations to net cash used in operating activities:Purchases of portfolio investments


(64,159,172
)


(21,458,478
)


(29,125,000
)Repayments received/sales of portfolio investments


10,470,803



9,965,446



12,202,510Loan origination and other fees received


1,272,002



607,794



1,083,600Net realized (gain) loss on investments


618,620



(6,026,948
)


3,500,000Net unrealized (appreciation) depreciation on investments


(4,821,366
)


414,923



(3,975,000
)Deferred income taxes


1,760,259







Paid - in - kind interest accrued, net of payments
    received


(1,280,950
)


(578,724
)


47,748Amortization of deferred financing fees


112,660



99,920



89,970Recognition of loan origination and other fees


(677,615
)


(435,492
)


(1,018,965
)Accretion of loan discounts


(205,725
)


(169,036
)


(93,272
)Depreciation


7,814







Changes in operating assets and liabilities:Interest and fees receivable


(170,340
)


(85,236
)


48,859Prepaid expenses and other current assets


(47,477
)






Accounts payable and accrued liabilities


349,239



781,757



13,226Interest payable


92,439



40,228



335,696Income taxes payable


52,598







Payable to Triangle Capital Partners, LLC


(30,000
)


30,000



Net cash used in operating activities


(47,843,113
)


(8,116,506
)


(13,717,406
)Cash flows from investing activities:Purchases of property and equipment


(41,980
)






Net cash used in investing activities


(41,980
)






Cash flows from financing activities:Borrowings under SBA guaranteed debentures payable


5,210,000







14,100,000Financing fees paid


(126,342
)






(352,500
)Issuance of common stock






1,500



Proceeds from initial public offering, net of expenses


64,728,037







Change in deferred offering costs


1,020,646



(1,020,646
)


Partners capital contributions






10,625,000



3,187,500Cash dividends paid


(2,964,387
)






Distribution to partners


(751,613
)


(5,000,010
)


Net cash provided by financing activities


67,116,341



4,605,844



16,935,000Net increase (decrease) in cash and cash equivalents


19,231,248



(3,510,662
)


3,217,594Cash and cash equivalents, beginning of year


2,556,502



6,067,164



2,849,570Cash and cash equivalents, end of year

$
21,787,750


$
2,556,502


$
6,067,164Supplemental Disclosure of cash flow information:Cash paid for interest

$
1,980,872


$
1,793,230


$
1,208,000Summary of non-cash financing transactions:Dividends declared but not paid

$
2,041,159


$



$
Accrued distribution to partners

$



$
531,566


$
    F-5




---



##### Table of Contents



TRIANGLE
    CAPITAL CORPORATION
  Consolidated Schedule of Investments
 December 31, 2007
  Type of

Principal





FairPortfolio Company

Industry

Investment(1)(2)

Amount


Cost


Value(3)Non - Control/Non - Affiliate Investments:Ambient Air Corporation (6%)*

Specialty Trade
    Contractors

Subordinated Note
    (12%, Due 03/11)

$
3,144,654


$
3,042,889


$
3,042,889Subordinated Note
    (14%, Due 03/11)


1,872,075



1,872,075



1,872,075Common Stock
    Warrants (455 shares)






142,361



929,7005,016,729



5,057,325



5,844,664APO Newco, LLC (5%)*

Commercial and
    Consumer
    Marketing Products

Subordinated Note
    (14%, Due 03/13)


4,315,262



4,292,325



4,292,325Unit purchase warrant
    (87,302 Class C units)






25,200



199,0004,315,262



4,317,525



4,491,325Art Headquarters, LLC (3%)*

Retail, Wholesale
    and Distribution

Subordinated Note
    (14%, Due 01/10)


2,441,824



2,422,091



2,422,091Membership unit
    warrants (15% of units
    (150 units))






40,800



9,8002,441,824



2,462,891



2,431,891Assurance Operations Corporation (4%)*

Auto Components/
    Metal Fabrication

Subordinated Note
    (17%, Due 03/12)


3,828,527



3,828,527



3,828,527Common Stock
    (200 shares)






200,000



3,828,527



4,028,527



3,828,527Bruce Plastics, Inc. (2%)*

Plastic Component
    Manufacturing

Subordinated Note
    (14%, Due 10/11)


1,500,000



1,412,046



1,412,046Common Stock
    Warrants (12% of
    common stock)






108,534



1,500,000



1,520,580



1,412,046CV Holdings, LLC (6%)*

Specialty Healthcare
    Products Manufacturer

Subordinated Note
    (16%, Due 03/10)


4,976,360



4,976,360



4,976,360Royalty rights










197,9004,976,360



4,976,360



5,174,260Cyrus Networks, LLC (6%)*

Data Center
    Services Provider

Senior Note
    (9%, Due 07/13)


4,382,257



4,382,257



4,382,2572nd Lien Note
    (12%, Due 01/14)


907,663



907,663



907,663Revolving Line of
    Credit (9)%


70,880



70,880



70,8805,360,800



5,360,800



5,360,800DataPath, Inc. (1%)*

Satellite
    Communication
    Manufacturer

Common Stock
    (210,263 shares)






101,500



576,400101,500



576,400 F-6




---



##### Table of Contents



TRIANGLE
    CAPITAL CORPORATION
  Consolidated Schedule of Investments 
    (Continued)
  Type of

Principal





FairPortfolio Company

Industry

Investment(1)(2)

Amount


Cost


Value(3)Eastern Shore Ambulance, Inc. (1%)*

Specialty Health
    Care Services

Subordinated Note
    (13%, Due 03/11)

$
1,000,000


$
958,715


$
958,715Common Stock
    Warrants (6% of
    common stock)






55,268



7,400Common Stock
    (30 shares)






30,000



1,9001,000,000



1,043,983



968,015Energy Hardware Holdings, LLC (4%)*

Machined Parts
    Distribution

Subordinated Note
    (14.5%, Due 10/12)


3,265,142



3,265,142



3,265,142Junior Subordinated
    Note (8%, Due 10/12)


207,667



207,667



207,6673,472,809



3,472,809



3,472,809FCL Graphics, Inc. (8%)*

Commercial Printing
    Services

Senior Note
    (9%, Due 10/12)


1,920,000



1,920,000



1,920,000Senior Note
    (13%, Due 10/13)


2,000,000



2,000,000



2,000,0002nd Lien Note
    (18%, Due 4/14)


3,145,481



3,145,481



3,145,4817,065,481



7,065,481



7,065,481Fire Sprinkler Systems, Inc. (3%)*

Specialty Trade
    Contractors

Subordinated Notes
    (13%  17.5%, Due 04/11)


2,517,986



2,517,986



2,517,986Common Stock
    (250 shares)






250,000



41,7002,517,986



2,767,986



2,559,686Flint Acquisition Corporation (5%)*

Specialty Chemical
    Manufacturer

Subordinated Note
    (12.5%, Due 09/09)


3,750,000



3,750,000



3,750,000Preferred Stock
    (9,875 shares)






308,333



1,074,1003,750,000



4,058,333



4,824,100Garden Fresh Restaurant Corp. (4%)*

Restaurant

2nd Lien Note
    (13%, Due 12/11)


3,000,000



3,000,000



3,000,000Membership Units
    (5,000 units)






500,000



446,6003,000,000



3,500,000



3,446,600Gerli & Company (3%)*

Specialty Woven
    Fabrics
    Manufacturer

Subordinated Note
    (14%, Due 08/11)


3,114,063



3,057,349



3,057,349Common Stock
    Warrants (56,559 shares)






83,414



84,5003,114,063



3,140,763



3,141,849Library Systems & Services, LLC (3%)*

Municipal Business
    Services

Subordinated Note
    (12%, Due 03/11)


2,000,000



1,960,528



1,960,528Common Stock
    Warrants (112 shares)






58,995



594,3002,000,000



2,019,523



2,554,828Syrgis Holdings, Inc. (6%)*

Specialty Chemical
    Manufacturer

Senior Note
    (9%, Due 08/12-02/14)


4,932,500



4,932,500



4,932,500Common Units
    (2,114 units)






1,000,000



1,000,0004,932,500



5,932,500



5,932,500 F-7




---



##### Table of Contents



TRIANGLE
    CAPITAL CORPORATION
  Consolidated Schedule of Investments 
    (Continued)
  Type of

Principal





FairPortfolio Company

Industry

Investment(1)(2)

Amount


Cost


Value(3)Twin-Star International, Inc. (6%)*

Consumer Home
    Furnishings
    Manufacturer

Subordinated Note
    (13%, Due 04/14)

$
4,500,000


$
4,500,000


$
4,500,000Senior Note
    (8%, Due 04/13)


1,492,500



1,492,500



1,492,5005,992,500



5,992,500



5,992,500Subtotal Non - Control/Non - Affiliate Investments




64,284,841



66,819,386



69,078,281Affiliate Investments:Axxiom Manufacturing, Inc. (3%)*

Industrial
    Equipment
    Manufacturer

Subordinated Note
    (14%, Due 01/11)


2,081,321



2,081,321



2,081,321Common Stock
    (34,100 shares)






200,000



543,600Common Stock
    Warrant
    (1,000 shares)










12,2002,081,321



2,281,321



2,637,121Brantley Transportation, LLC
    (Brantley Transportation) and Pine
    Street Holdings, LLC (Pine Street)(4) (4%)*

Oil and Gas
    Services

Subordinated Note  
    Brantley Transportation
    (14%, Due 12/12)


3,800,000



3,770,482



3,770,482Common Unit
    Warrants  Brantley
    Transportation (4,560
    common units)






33,600



33,600Preferred Units  Pine
    Street (200 units)






200,000



200,000Common Unit
    Warrants  Pine Street
    (2,220 units)










3,800,000



4,004,082



4,004,082Dyson Corporation (12%)*

Custom Forging
    and Fastener
    Supplies

Subordinated Note
    (15%, Due 12/13)


10,009,167



10,009,167



10,009,167Class A Units
    (1,000,000 units)






1,000,000



1,000,00010,009,167



11,009,167



11,009,167Equisales, LLC (7%)*

Energy Products
    and Services

Subordinated Note
    (15%, Due 04/12)


6,129,723



6,129,723



6,129,723Class A Units
    (500,000 units)






500,000



500,0006,129,723



6,629,723



6,629,723 F-8




---



##### Table of Contents



TRIANGLE
    CAPITAL CORPORATION
  Consolidated Schedule of Investments 
    (Continued)
  Type of

Principal





FairPortfolio Company

Industry

Investment(1)(2)

Amount


Cost


Value(3)Genapure Corporation (Genapure) andGenpref, LLC (Genpref)(5) (1%)*

Lab Testing
    Services

Genapure Common
    Stock (4,286 shares)

$



$
500,000


$
675,122Genpref Preferred
    Stock (455 shares)






63,602



85,878563,602



761,000Subtotal Affiliate Investments






22,020,211



24,487,895



25,041,093Control Investments:ARC Industries, LLC (3%)*

Remediation
    Services

Subordinated Note
    (19%, Due 11/10)


2,403,521



2,403,521



2,403,521Membership Units
    (3,000 units)






175,000



118,7002,403,521



2,578,521



2,522,221Fischbein, LLC (14%)*

Packaging and
    Materials Handling

Subordinated Note
    (16.5%, Due 05/13)


8,660,723



8,660,723



8,660,723Equipment
    Manufacturer

Membership Units
    (4,200,000 units)






4,200,000



4,200,0008,660,723



12,860,723



12,860,723Porters Group, LLC (5%)*

Metal Fabrication

Membership Units
    (4,730 units)






471,254



4,871,900471,254



4,871,900Subtotal Control Investments






11,064,244



15,910,498



20,254,844Total Investments, December 31, 2007 (122%)*





$
97,369,296


$
107,217,779


$
114,374,218     *
    
    Value as a percent of net assets(1)
    
    All debt investments are income producing. Common stock,
    preferred stock and all warrants are non  income
    producing.(2)
    
    Interest rates on subordinated debt include cash interest rate
    and paid - in - kind interest rate.(3)
    
    All investments are restricted as to resale and were valued at
    fair value as determined in good faith by the Board of Directors.(4)
    
    Pine Street Holdings, LLC is the majority owner of Brantley
    Transportation, LLC and its sole business purpose is its
    ownership of Brantley Transportation, LLC.(5)
    
    Genpref is the sole owner of Genapures preferred stock and
    its sole business purpose is its ownership of Genapures
    preferred stock.   F-9




---



##### Table of Contents



TRIANGLE
    CAPITAL CORPORATION
  Combined Schedule of Investments
 December 31, 2006
  Type of

Principal





FairPortfolio Company

Industry

Investment(1)(2)

Amount


Cost


Value(3)Non - Control/Non - Affiliate Investments:AirServ Corporation (18%)*

Airline Services

Subordinated Note
    (12%, Due 06/09)

$
4,226,813


$
4,010,000


$
4,010,000Common Stock
    Warrants
    (1,238,843 shares)






414,285



551,3854,226,813



4,424,285



4,561,385Ambient Air Corporation (16%)*

Specialty Trade
    Contractors

Subordinated Notes
    (12%  13%, Due
    03/09  3/11)


4,000,000



3,874,015



3,874,015Common Stock
    Warrants
    (455 shares)






142,361



142,3614,000,000



4,016,376



4,016,376Art Headquarters, LLC (11%)*

Retail, Wholesale
    and Distribution

Subordinated Note
    (14%, Due 01/10)


2,680,155



2,652,414



2,652,414Membership unit
    warrants (15% of units
    (150 units))






40,800



40,8002,680,155



2,693,214



2,693,214Assurance Operations Corporation (15%)*

Auto Components/
    Metal Fabrication

Subordinated Note
    (17%, Due 03/12)


3,640,439



3,640,439



3,640,439Common Stock
    (200 shares)






200,000



200,0003,640,439



3,840,439



3,840,439Bruce Plastics, Inc. (6%)*

Plastic Component
    Manufacturing

Subordinated Note
    (14%, Due 10/11


1,500,000



1,395,305



1,395,305Common Stock
    Warrants (12% of
    common stock)






108,534



108,5341,500,000



1,503,839



1,503,839CV Holdings, LLC (20%)*

Specialty Healthcare
    Products
    Manufacturer

Subordinated Note
    (16%, Due 03/10)


4,683,376



4,683,376



4,683,376Royalty rights










250,0004,683,376



4,683,376



4,933,376DataPath, Inc. (8%)*

Satellite
    Communication
    Manufacturer

Common Stock
    (210,263 shares)






101,500



2,070,000101,500



2,070,000Eastern Shore Ambulance, Inc. (4%)*

Specialty Health
    Care Services

Subordinated Note
    (13%, Due 03/11)


1,000,000



949,099



949,099Common Stock
    Warrants (6% of
    common stock)






55,268



94,267Common Stock
    (30 shares)






30,000



51,1001,000,000



1,034,367



1,094,466 F-10




---



##### Table of Contents



TRIANGLE
    CAPITAL CORPORATION
  Combined Schedule of Investments  (Continued)
  Type of

Principal





FairPortfolio Company

Industry

Investment(1)(2)

Amount


Cost


Value(3)Fire Sprinkler Systems, Inc. (12%)*

Specialty Trade
    Contractors

Subordinated Notes
    (13%  17.5%,
    Due 04/11)

$
2,713,460


$
2,713,460


$
2,713,460Common Stock
    (250 shares)






250,000



250,0002,713,460



2,963,460



2,963,460Flint Acquisition Corporation (18%)*

Specialty Chemical
    Manufacturer

Subordinated Note
    (12.5%, Due 09/09)


3,750,000



3,750,000



3,750,000Preferred Stock
    (9,875 shares)






308,333



829,6333,750,000



4,058,333



4,579,633Garden Fresh Restaurant Corp. (15%)*

Restaurant

Subordinated Note
    (12.8%, Due 12/11)


3,000,000



3,000,000



3,000,000Membership Units
    (5,000 units)






500,000



673,7003,000,000



3,500,000



3,673,700Gerli & Company (12%)*

Specialty Woven
    Fabrics
    Manufacturer

Subordinated Note
    (14%, Due 08/11)


3,052,167



2,981,184



2,981,184Common Stock
    Warrants
    (56,559 shares)






83,414



83,4143,052,167



3,064,598



3,064,598Library Systems & Services, LLC (9%)*

Municipal Business
    Services

Subordinated Note
    (12%, Due 03/11)


2,000,000



1,950,190



1,950,190Common Stock
    Warrants
    (112 shares)






58,995



189,8952,000,000



2,009,185



2,140,085Numo Manufacturing, Inc. (5%)*

Consumer Products
    Manufacturer

Subordinated Note
    (13%, Due 12/10)


2,700,000



2,700,000



1,235,777Common Stock
    Warrants
    (238 shares)










2,700,000



2,700,000



1,235,777Subtotal Non - Control/Non - Affiliate Investments






38,946,410



40,592,972



42,370,348Affiliate Investments:Axxiom Manufacturing, Inc. (4) (10%)*

Industrial Equipment
    Manufacturer

Subordinated Note
    (14%, Due 01/11)


2,039,575



2,039,575



2,039,575Common Stock
    (34,100 shares)






200,000



541,7002,039,575



2,239,575



2,581,275 F-11




---



##### Table of Contents



TRIANGLE
    CAPITAL CORPORATION
  Combined Schedule of Investments  (Continued)
  Type of

Principal





FairPortfolio Company

Industry

Investment(1)(2)

Amount


Cost


Value(3)Brantley Transportation, LLC(Brantley Transportation) and PineStreet Holdings, LLC (Pine Street) (5) (16%)*

Oil and Gas
    Services

Subordinated Note  
    Brantley Transportation
    (14%, Due 12/12)

$
3,800,633


$
3,767,033


$
3,767,033Common Unit
    Warrants  Brantley
    Transportation (4,560
    common units)






33,600



33,600Preferred Units  
    Pine Street
    (200 units)






200,000



200,000Common Unit
    Warrants  Pine
    Street (2,220 units)










3,800,633



4,000,633



4,000,633Genapure Corporation (2%)*

Lab Testing Services

Common Stock
    (4,286 shares)






500,000



500,000500,000



500,000Porters Group, LLC (12%)*

Metal Fabrication

Subordinated Note
    (12%, Due 06/10)


2,410,000



2,242,083



2,242,083Membership Units
    (980 units)






250,000



142,150Membership
    Warrants 
    (3,750  Units)






221,154



545,0042,410,000



2,713,237



2,929,237Subtotal Affiliate Investments






8,250,208



9,453,445



10,011,145Control Investments:ARC Industries, LLC (10%)*

Remediation Services

Subordinated Note
    (19%, Due 11/10)


2,439,935



2,439,935



2,439,935Membership Units
    (3,000 units)






175,000



175,0002,439,935



2,614,935



2,614,935Subtotal Control Investments






2,439,935



2,614,935



2,614,935Total Investments, December 31, 2006 (219%)*





$
49,636,553


$
52,661,352


$
54,996,428     *
    
    Value as a percent of net assets(1)
    
    All debt and preferred stock investments are income producing.
    Common stock and all warrants are non - income producing.(2)
    
    Interest rates on Subordinated debt include cash interest rate
    and paid - in - kind interest rate.(3)
    
    All investments are restricted as to resale and were valued at
    fair value as determined in good faith by the Board of Directors.(4)
    
    Does not include a warrant to purchase 1,000 shares of
    Axxiom Manufacturing, Inc.s common stock which was held by
    the Fund upon completion of the formation transactions described
    in Note 1.(5)
    
    Pine Street Holdings, LLC is the majority owner of Brantley
    Transportation, LLC and its sole business purpose is its
    ownership of Brantley Transportation, LLC.   F-12




---



##### Table of Contents



Triangle
    Capital Corporation
  Notes
    to Financial Statements
  1.
    Organization,
    Basis of Presentation and Summary of Significant Accounting
    Policies  Organization
        
    The Company acquired 100% of the limited partnership interests
    in the Fund in exchange for approximately 1.9 million
    shares of the Companys common stock. The Fund became a
    wholly owned subsidiary of the Company, retained its license
    under the authority of the United States Small Business
    Administrations (SBA) to operate as a Small Business
    Investment Company (SBIC) and continues to hold its
    existing investments and make new investments with the proceeds
    of the Offering; and
    The Company acquired 100% of the equity interests in TML, and
    the management agreement between the Fund and Triangle Capital
    Partners, LLC was terminated.        Basis of
    Presentation
     F-13




---



##### Table of Contents



Triangle
    Capital Corporation
  Notes to
    Financial Statements  (Continued)
  Business Combinations
  Significant
    Accounting Policies
  Use of
    Estimates
    Valuation
    of Investments
       F-14




---



##### Table of Contents



Triangle
    Capital Corporation
  Notes to
    Financial Statements  (Continued)
        Realized
    Gain or Loss and Unrealized Appreciation or Depreciation of
    Portfolio Investments
    Investment
    Classification
   F-15




---



##### Table of Contents



Triangle
    Capital Corporation
  Notes to
    Financial Statements  (Continued)
    Cash
    and Cash Equivalents
    Deferred
    Offering Costs
    Deferred
    Financing Fees
    Depreciation
    Investment
    Income
    Fee
    Income
    Payment
    in Kind Interest
    Management
    Fee
   F-16




---



##### Table of Contents



Triangle
    Capital Corporation
  Notes to
    Financial Statements  (Continued)
    Income
    Taxes
        Segments
    Concentration
    of Credit Risk
   F-17




---



##### Table of Contents



Triangle
    Capital Corporation
  Notes to
    Financial Statements  (Continued)
      Dividends
              Allocations
    and Distributions of the Fund
     F-18




---



##### Table of Contents



Triangle
    Capital Corporation
  Notes to
    Financial Statements  (Continued)
      Per
    Share Amounts
    Recently
    Issued Accounting Standards
  Accounting for Certain Hybrid Financial Instruments
  Accounting for Uncertainty in Income Taxes
  Fair Value Measurements
  The Fair Value Option for
    Financial Assets and Financial Liabilities - Including an
    amendment of FASB Statement No. 115
 F-19




---



##### Table of Contents



Triangle
    Capital Corporation
  Notes to
    Financial Statements  (Continued)
    2.
    Investments    Percentage of





Percentage ofCost


Total Portfolio


Fair Value


Total PortfolioDecember 31, 2007:Subordinated debt and
    2nd
    lien notes

$
82,171,781



76
%

$
82,171,781



72
%Senior debt


14,798,137



14



14,798,137



13Equity shares


9,699,689



9



15,335,900



13Equity warrants


548,172



1



1,870,500



2Royalty rights










197,900



$
107,217,779



100
%

$
114,374,218



100
%December 31, 2006:Subordinated debt and
    2nd
    lien notes

$
48,788,108



93
%

$
47,323,885



86
%Equity shares


2,714,833



5



5,633,283



10Equity warrants


1,158,411



2



1,789,260



3Royalty rights










250,000



1$
52,661,352



100
%

$
54,996,428



100
%     3.
    Long -
    Term Debt    Prioritized


December 31,


December 31,Issuance Date

Maturity Date

Return Rate


2007


2006September 22, 2004

September 1, 2014


5.539
%

$
8,700,000


$
8,700,000March 23, 2005

March 1, 2015


5.893
%


13,600,000



13,600,000September 28, 2005

September 1, 2015


5.796
%


9,500,000



9,500,000February 1, 2007

March 1, 2017


6.231
%


4,000,000



December 20, 2007

March 1, 2018


6.031
%


1,210,000



$
37,010,000


$
31,800,000    F-20




---



##### Table of Contents



Triangle
    Capital Corporation
  Notes to
    Financial Statements  (Continued)
    4.
    Income
    Taxes        Investment income in excess of distributions

$
649,856Additional paid-in capital

$
(649,856
)  F-21




---



##### Table of Contents



Triangle
    Capital Corporation
  Notes to
    Financial Statements  (Continued)
    Ordinary income(a)

$
5,993,469Return of capital


638,289Distributions on a Tax Basis

$
6,631,758     (a)
    
    Ordinary income is reported on
    form 1099-DIV
    as non-qualified.      Accumulated Capital Losses

$
(618,620
)Other permanent differences relating to the Companys
    Formation


1,834,692Other temporary differences


34,166Unrealized Appreciation


5,266,122Components of Distributable Earnings at December, 31, 2007

$
6,516,360     5.
    Equity
    Compensation Plan    6.
    Commitments
    and Contingencies     F-22




---



##### Table of Contents



Triangle
    Capital Corporation
  Notes to
    Financial Statements  (Continued)
  7.
    Financial
    Highlights  Year Ended December 31,2007


2006(1)


2005(1)


2004(1)


2003(1)(Consolidated)


(Combined)


(Combined)


(Combined)


(Combined)Per share data:Net asset value at beginning of period(2)

$
13.44



N/A



N/A



N/A



N/ANet investment income(3)


0.96



N/A



N/A



N/A



N/ANet realized loss on investments(3)


(0.09
)


N/A



N/A



N/A



N/ANet unrealized appreciation on investments(3)


0.45



N/A



N/A



N/A



N/ATotal increase from investment operations(3)


1.32



N/A



N/A



N/A



N/ADividends declared


(0.98
)


N/A



N/A



N/A



N/AShares issued pursuant to Dividend Reinvestment Plan


0.24



N/A



N/A



N/A



N/ADistribution to partners(3)


(0.03
)


N/A



N/A



N/A



N/AIncome tax provision(3)


(0.01
)


N/A



N/A



N/A



N/AOther(4)


(0.24
)


N/A



N/A



N/A



N/ANet asset value at end of period

$
13.74



N/A



N/A



N/A



N/AMarket value at end of period(5)

$
12.40



N/A



N/A



N/A



N/AShares outstanding at end of period


6,803,863



N/A



N/A



N/A



N/ANet assets at end of period

$
93,472,353


$
25,156,811


$
11,364,547


$
5,003,825


$
2,928,045Average net assets(2)

$
92,765,399


$
20,447,456


$
7,654,010


$
5,104,796


$
1,129,026Ratio of operating expenses to average net assets


7
%


18
%


43
%


40
%


107
%Ratio of net investment income to average net assets


7
%


15
%


35
%


(1
)%


(104
)%Ratio of total capital called to total capital commitments


N/A



100
%


50
%


35
%


20
%Portfolio turnover ratio


13
%


7
%


39
%


0
%


0
%Total return(6)


(11
)%


18
%


4
%


(29
)%


57
%     (1)
    
    Per share data for the years ended December 31, 2006, 2005,
    2004 and 2003 is not presented as there were no shares of
    Triangle Capital Corporation outstanding during the period.(2)
    
    Net asset value as of January 1, 2007 and average net
    assets for the year ended December 31, 2007 are presented
    as if the Offering and Formation Transactions had occurred on
    January 1, 2007. See Note 1 for a further description
    of the basis of presentation of the Companys financial
    statements.(3)
    
    Weighted average basic per share data.(4)
    
    Represents the impact of the different share amounts used in
    calculating per share data as a result of calculating certain
    per share data based upon the weighted average basic shares
    outstanding during the period and certain per share data based
    on the shares outstanding as of a period end or transaction date.(5)
    
    Represents the closing price of the Companys common stock
    on the last day of the period.(6)
    
    The total return for the year ended December 31, 2007
    equals the change in the ending market value of the
    Companys common stock from the Offering price of $15.00
    per share plus dividends declared per share during the period,
    divided by the Offering price. Total return is not annualized. F-23




---



##### Table of Contents



Triangle
    Capital Corporation
  Notes to
    Financial Statements  (Continued)
   8.
    Selected
    Quarterly Financial Data (Unaudited)    Quarter EndedMarch 31,


June 30,


September 30,


December 31,2007


2007


2007


2007Total investment income

$
2,112,116


$
3,287,224


$
3,594,287


$
3,742,216Net investment income


804,730



1,643,998



1,992,001



1,982,480Net increase in net assets resulting from operations


1,065,835



2,230,084



3,366,681



2,150,498Net investment income per share

$
0.12


$
0.25


$
0.30


$
0.29   Quarter EndedMarch 31,


June 30,


September 30,


December 31,2006


2006


2006


2006Total investment income

$
1,401,965


$
1,898,543


$
1,713,483


$
1,708,813Net investment income


505,638



994,711



830,057



754,910Net increase in net assets resulting from operations


505,638



4,190,320



1,058,757



2,942,626   9.
    Subsequent
    Events  SBA
    Guaranteed Debentures Payable
    New
    Portfolio Company Investments
     F-24




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##### Table of Contents



EXHIBIT INDEX
  ExhibitNumber

Exhibit2
.1

Agreement and Plan of Merger, dated as of November 2, 2006, by
    and among Triangle Capital Corporation, New Triangle GP, LLC,
    and Triangle Mezzanine LLC (Filed as Exhibit (k)(7) to the
    Registrants Registration Statement on Form N-2/N-5 (File
    No. 333-138418) filed with the Securities and Exchange
    Commission on November 3, 2006 and incorporated herein by
    reference).2
.2

Agreement and Plan of Merger, dated as of November 2, 2006, by
    and among Triangle Capital Corporation, TCC Merger Sub, LLC and
    Triangle Mezzanine Fund LLLP (Filed as Exhibit (k)(8) to the
    Registrants Registration Statement on Form N-2/N-5 (File
    No. 333-138418) filed with the Securities and Exchange
    Commission on November 3, 2006 and incorporated herein by
    reference).3
.1

Articles of Amendment and Restatement of the Registrant (Filed
    as Exhibit (a)(3) to the Registrants Registration
    Statement on Form N-2/N-5 (File No. 333-138418) filed with the
    Securities and Exchange Commission on December 29, 2006 and
    incorporated herein by reference).3
.2

Certificate of Limited Partnership of Triangle Mezzanine Fund
    LLLP (Filed as Exhibit (a)(4) to the Registrants
    Registration Statement on Form N-2/N-5 (File No. 333-138418)
    filed with the Securities and Exchange Commission on February
    13, 2007 and incorporated herein by reference).3
.3

Second Amended and Restated Agreement of Limited Partnership of
    Triangle Mezzanine Fund LLLP (Filed as Exhibit 3.4 to the
    Registrants Quarterly Report on Form 10-Q filed with the
    Securities and Exchange Commission on November 11, 2007 and
    incorporated herein by reference).3
.4

Amended and Restated Bylaws of the Registrant (Filed as Exhibit
    (b) to the Registrants Registration Statement on Form
    N-2/N-5 (File No. 333-138418) filed with the Securities and
    Exchange Commission on December 29, 2006 and incorporated herein
    by reference).4
.1

Form of Common Stock Certificate (Filed as Exhibit (d) to the
    Registrants post -effective amendment to the Registration
    Statement on Form N-2/N-5 (File No. 333-138418) filed with the
    Securities and Exchange Commission on February 15, 2007 and
    incorporated herein by reference).4
.2

Triangle Capital Corporation Dividend Reinvestment Plan.10
.1

Employment Agreement between Triangle Capital Corporation and
    Garland S. Tucker, III dated February 21, 2007 (Filed as
    Exhibit 10.1 to the Registrants Annual Report on Form 10-K
    (File No. 001-33130) for the year ended December 31, 2006 filed
    with the Securities and Exchange Commission on March 29, 2007
    and incorporated herein by reference).10
.2

Employment Agreement between Triangle Capital Corporation and
    Brent P.W. Burgess dated February 21, 2007 (Filed as Exhibit
    10.2 to the Registrants Annual Report on Form 10-K (File
    No. 001-33130) for the year ended December 31, 2006 filed with
    the Securities and Exchange Commission on March 29, 2007 and
    incorporated herein by reference).10
.3

Employment Agreement between Triangle Capital Corporation and
    Steven C. Lilly dated February 21, 2007 (Filed as Exhibit
    10.3 to the Registrants Annual Report on Form 10-K (File
    No. 001-33130) for the year ended December 31, 2006 filed with
    the Securities and Exchange Commission on March 29, 2007 and
    incorporated herein by reference).10
.4

Employment Agreement between Triangle Capital Corporation and
    Tarlton H. Long dated February 21, 2007 (Filed as Exhibit
    10.4 to the Registrants Annual Report on Form 10-K (File
    No. 001-33130) for the year ended December 31, 2006 filed with
    the Securities and Exchange Commission on March 29, 2007 and
    incorporated herein by reference).10
.5

Employment Agreement between Triangle Capital Corporation and
    David F. Parker dated February 21, 2007 (Filed as Exhibit 10.5
    to the Registrants Annual Report on Form 10-K (File No.
    001-33130)
    for the year ended December 31, 2006 filed with the Securities
    and Exchange Commission on March 29, 2007 and incorporated
    herein by reference).10
.6

Triangle Capital Corporation 2007 Equity Incentive Plan (Filed
    as Exhibit (i) to the Registrants pre-effective amendment
    to the Registration Statement on Form N-2/N-5 (File No.
    333-138418) filed with the Securities and Exchange Commission on
    February 13, 2007 and incorporated herein by reference).10
.7

Form of Triangle Capital Corporation Amended and Restated 2007
    Equity Incentive Plan.10
.8

Custodian Agreement with U.S. Bank National Association (Filed
    as Exhibit 10.7 to the Registrants Annual Report on Form
    10-K (File No. 001-33130) for the year ended December 31, 2006
    filed with the Securities and Exchange Commission on March 29,
    2007 and incorporated herein by reference).




---



##### Table of Contents



ExhibitNumber

Exhibit10
.9

Amendment to Custody Agreement between the Registrant and U.S.
    Bank National Association dated February 5, 2008.10
.10

Sublease Assignment and Assumption of Assignors Interest
    dated January 17, 2007 (Filed as Exhibit 10.8 to the
    Registrants Annual Report on Form 10-K (File No.
    001-33130) for the year ended December 31, 2006 filed with the
    Securities and Exchange Commission on March 29, 2007 and
    incorporated herein by reference).10
.11

Stock Transfer Agency Agreement between Triangle Capital
    Corporation and The Bank of New York.14
.1

Code of Conduct (Filed as Exhibit 14.1 to the Registrants
    Annual Report on Form 10-K (File No. 001-33130) for the year
    ended December 31, 2006 filed with the Securities and Exchange
    Commission on March 29, 2007 and incorporated herein by
    reference).21
.1

List of Subsidiaries.23
.1

Consent of Ernst & Young LLP.31
.1

Chief Executive Officer Certification Pursuant to Rule 13a-14 of
    the Securities Exchange Act of 1934, as adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.31
.2

Chief Financial Officer Certification Pursuant to Rule 13a-14 of
    the Securities Exchange Act of 1934, as adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.32
.1

Chief Executive Officer Certification pursuant to Section 1350,
    Chapter 63 of Title 18, United States Code, as adopted pursuant
    to Section 906 of the Sarbanes-Oxley Act of 2002.32
.2

Chief Financial Officer Certification pursuant to Section 1350,
    Chapter 63 of Title 18, United States Code, as adopted pursuant
    to Section 906 of the Sarbanes-Oxley Act of 2002.