UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549



FORM
10-K



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



For
the fiscal year ended December 31, 2016



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



Parkview
Capital Credit, Inc.

(Exact
Name of Registrant as Specified in Its Charter)



|Maryland                                                               |  | 47-2441958                              
|---------------------------------------------------------------------- |  | ----------------------------------------
|(State
    or Other Jurisdiction of Incorporation or Organization)     |  | (I.R.S.
    Employer Identification No.)
|                                                                       |  |                                         
|Two
    Post Oak Center, 1980 Post Oak Blvd, 15th Floor Houston, Texas |  | 77056                                   
|(Address
    of Principal Executive Offices)                           |  | (Zip
    Code)                          



(713)
622-5000

(Registrant’s
telephone number, including area code)



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

None



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

Common
Stock, par value $0.01 per share



Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes ☐     No  
☒



Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ☐    No  
☒



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



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



Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this
chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    ☒



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



|Large
    accelerated filer | ☐ | Accelerated
filer                      ☐ | 
|--------------------------- | - | ---------------------------------------- | 
|Non-accelerated
    filer   | ☒ | Smaller
reporting company      ☐         | 

(Do
not check if a smaller reporting company)



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



As
of June 30, 2016, there were approximately 3,800,010 shares of common stock of Parkview Capital Credit, Inc. outstanding
held by non-affiliates, for an aggregate market value of approximately $38,000,100, assuming a market value of $9.92 per share.



Indicate
the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: There were
3,800,010 issued and outstanding shares of the issuer’s common stock, $.01 par value per share, on March 17, 2017.


















TABLE
OF CONTENTS



|           |                                                                                                                  | Page
|---------- | ---------------------------------------------------------------------------------------------------------------- | ----
|PART I     |                                                                                                                 
|Item 1.    | Business                                                                                                         | 1   
|Item 1A.   | Risk
    Factors                                                                                                 | 19  
|Item 1B.   | Unresolved
    Staff Comments                                                                                    | 31  
|Item 2.    | Properties                                                                                                       | 31  
|Item 3.    | Legal
    Proceedings                                                                                            | 31  
|Item 4.    | Mine
    Safety Disclosures                                                                                      | 31  
|           |                                                                                                                  |     
|PART II    |                                                                                                                 
|Item 5.    | Market
    for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 32  
|Item 6.    | Selected
    Financial Data                                                                                      | 33  
|Item 7.    | Management’s
    Discussion and Analysis of Financial Condition and Results of Operations                        | 34  
|Item 7A.   | Quantitative
    and Qualitative Disclosures About Market Risk                                                   | 39  
|Item 8.    | Financial
    Statements and Supplementary Data                                                                  | 40  
|Item 9.    | Changes
    in and Disagreements With Accountants on Accounting and Financial Disclosure                         | 41  
|Item 9A.   | Controls
    and Procedures                                                                                      | 41  
|Item 9B.   | Other
    Information                                                                                            | 41  
|           |                                                                                                                  |     
|PART III   |                                                                                                                 
|Item 10.   | Directors,
    Executive Officers and Corporate Governance                                                       | 42  
|Item 11.   | Executive
    Compensation                                                                                       | 42  
|Item 12.   | Security
    Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters               | 42  
|Item 13.   | Certain
    Relationships and Related Transactions, and Director Independence                                    | 42  
|Item 14.   | Principal
    Accountant Fees and Services                                                                       | 42  
|           |                                                                                                                  |     
|PART IV    |                                                                                                                 
|Item 15.   | Exhibits
    and Financial Statement Schedules                                                                   | 43  
|Item 16.   | Form
    10-K Summary                                                                                            | 43  
|SIGNATURES | 44                                                                                                              













PART
I



Item
1. Business



Overview



We
are a specialty finance company. We operate as a non-diversified, closed-end management investment company that has elected to
be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940
Act”). In addition, we intend to elect for U.S. federal income tax purposes to be treated as a regulated investment company
(“RIC”), under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), beginning with
our tax year ending June 30, 2017. As a BDC and a RIC, we are required to comply with certain regulatory requirements.



We
provide customized debt and equity financing solutions to lower middle-market companies, which we define as companies having annual
earnings, before interest, taxes, depreciation and amortization, or EBITDA, of less than $25 million, and/or annual revenues of
between $20 million and $200 million, although we may opportunistically make investments in larger or smaller companies. We expect
that our investments will typically range in size from $3 million to $10 million, although investment amounts may be smaller or
larger than this range. In particular, we may make smaller investments in broadly syndicated loans in the early stages of our
development as we raise capital.



We
raise capital through a private offering of our shares of common stock in order to acquire a portfolio of debt and equity investments
consistent with our investment objective and our investment strategy. Parkview Advisors, LLC, a Delaware limited liability company
(our “Advisor”) serves as our investment adviser pursuant to an investment advisory agreement (the “Advisory
Agreement”). Under the Advisory Agreement our Advisor provides significant credit analysis, structuring capability and transactional
experience for us.



Our
investment objective is to generate both current income and capital appreciation primarily by making direct investments in lower
middle-market companies in the form of subordinated debt and, to a lesser extent, senior debt and minority equity investments.
The companies in which we invest will typically be highly leveraged, and, in most cases, our investments in such companies will
not be rated by any rating agency. If such investments were rated, we believe that they would likely receive a below-investment
grade rating, which is often referred to as “high-yield” or “junk.” While our primary investment focus
is to make loans to, and selected equity investments in, lower middle-market companies, we may also make opportunistic investments
in larger or smaller companies. We can offer no assurances that we will achieve our investment objective.



We
will seek to maximize the total return to our stockholders by:



|● | accessing
                                         the extensive origination channels that have been developed and established by the investment
                                         professionals of our Advisor, which includes long-standing relationships with private
                                         equity firms, commercial banks, investment banks and other financial services firms;
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|● | investing
                                         in what we believe to be companies with strong business fundamentals, generally within
                                         our lower middle-market company focus;
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|● | focusing
                                         on a variety of industry sectors;
|- | -----------------------------------------------------------------------------------

|● | directly
                                         originating loans to portfolio companies and participating in broadly syndicated financings;
|- | ----------------------------------------------------------------------------------------------------------------------------------------------

|● | applying
                                         a disciplined investment process and underwriting standards that our Advisor’s
                                         investment professionals have developed over their extensive investing careers;
                                         and
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|● | capitalizing
                                         upon the experience and resources of our Advisor’s investment professionals to
                                         monitor investments.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Because
we have elected to be regulated as a BDC and we intend to qualify as a RIC under the Code, our portfolio is subject to diversification
and other requirements. See “—Certain U.S. Federal Income Tax Consequences.”



We
may borrow money from time to time within the levels permitted by the 1940 Act (which generally allows us to incur leverage for
up to one-half of our assets). In determining whether to borrow money, we will analyze the maturity, covenant package and rate
structure of the proposed borrowings as well as the risks of such borrowings compared to our investment outlook. The use of borrowed
funds or the proceeds of preferred stock offerings to make investments would have its own specific set of benefits and risks,
and all of the costs of borrowing funds or issuing preferred stock would be borne by holders of our common stock. See “Item
1A. Risk Factors—Risks Relating to Our Business and Structure—We may borrow money, which may magnify the potential
for gain or loss and may increase the risk of investing in us.”





1









Our
investments may also include non-cash income features, including payment in kind interest or dividends (“PIK”) or
original issue discount (“OID”).



Our
Portfolio



As
of March 17, 2017, our investment portfolio principal (excluding our investment in U.S. Treasury Bills) totaled $34.8 million
and consisted of $14.9 million, or 42.7%, in first lien senior secured debt, $18.0 million, or 52.0%, in second lien senior secured
debt and $1.9 million, or 5.3%, in equity investments.



The
following is our investment portfolio as of March 17, 2017 (in thousands):





|Portfolio Company                                                              |  | Industry                      |  | Security Type                              |  | Principal |       
|------------------------------------------------------------------------------ |  | ----------------------------- |  | ------------------------------------------ |  | --------- | ------
|Action Resources                                                               |  | Transportation                |  | Second lien secured term loan              |  | $         | 5,592 
|American Bath Group, LLC                                                       |  | Manufacturing                 |  | Second lien secured term loan              |  |           | 2,000 
|Anchor Glass Container Corporation                                             |  | Manufacturing                 |  | Second lien secured term loan              |  |           | 500   
|Ebony Media Holdings, LLC                                                      |  | Media                         |  | First lien secured term loan and warrants  |  |           | 6,705 
|InfoGroup, Inc.                                                                |  | Market Analytics              |  | First lien secured term loan               |  |           | 3,467 
|J.D. Power & Associates                                                        |  | Marketing Information Service |  | Second lien secured term loan              |  |           | 1,000 
|Langham Creek LLC                                                              |  | Real Estate                   |  | Preferred and common units                 |  |           | 1,870 
|Medi-fare Drug & Pharmacetical Compounding, LLC                                |  | Healthcare                    |  | First lien secured term loan and warrants  |  |           | 3,689 
|Turning Point Brands, Inc. (formerly North Atlantic Trading Company,
    Inc.) |  | Tobacco                       |  | First and second lien secured term loans   |  |           | 2,000 
|Lionbridge Technologies, Inc.                                                  |  | Technology                    |  | Second lien secured term loan              |  |           | 2,000 
|Rocket Software, Inc.                                                          |  | Software                      |  | Second lien secured term loan              |  |           | 1,000 
|Transportation Demand Management, LLC                                          |  | Transportation                |  | Second lien secured term loan and warrants |  |           | 5,000 
|                                                                               |  |                               |  |                                            |  | $         | 34,823





Our
Advisor



Our
Advisor acts as our investment adviser. Our Advisor is registered as an investment adviser under the Investment Advisers Act of
1940, as amended (the “Advisers Act”). Our Advisor is owned by SKW Financial, LLC, an entity controlled by Keith W.
Smith, our President and Chief Executive Officer. As a result, Mr. Smith is the indirect owner of our Advisor and controls its
operations. Our Advisor sources and manages our portfolio through a team of investment professionals, led by Mr. Smith. Mr. Smith
has substantial experience in credit origination having previously served as Managing Director with Capital Point Partners where
he invested and/or realized more than $150 million in direct lending in first lien, second lien and mezzanine investments as well
as complementary minority equity investments. Prior to Capital Point, Mr. Smith worked for Rabobank International (“RI”),
as a Vice President and Portfolio Manager, where he was involved in direct lending and structured credit bank assets of more than
$2 billion for one of RI’s special investment vehicles.



Our
Advisor has its headquarters at Two Post Oak Center, 1980 Post Oak Boulevard, 15th Floor, Houston Texas 77056.



The
Board of Directors



Our
board of directors (the “Board”) has ultimate authority as to our investments, but it has delegated authority to our
Advisor to select and monitor our investments, subject to the supervision of the Board. Pursuant to our amended and restated articles
of incorporation (the “Charter”), the Board currently consists of five members, a majority of whom are not “interested
persons” of the Company, of our Advisor or of any of their respective affiliates, as defined in the 1940 Act (the “Independent
Directors”). In connection with the appointment of our independent directors, we amended our Charter to divide our board
of directors into three classes. At each annual meeting, directors will be elected for staggered terms of three years (other than
the initial terms, which extend for a period of one year, two years or three years, respective to each class of director), with
the term of office of only one of these three classes of directors expiring each year. Each director will hold office for the
term to which he or she is elected and until his or her successor is duly elected and qualifies. Any director may resign at any
time and our Charter provides that a director may be removed only for cause, as defined in our Charter, and then only by the affirmative
vote of at least two-thirds of the votes entitled to be cast in the election of directors.



2







Advisory
Agreement



On
March 11, 2015, we entered into the Advisory Agreement with our Advisor under which our Advisor:



|● | determines
                                         the composition of our portfolio, the nature and timing of the changes to our portfolio
                                         and the manner of implementing such changes;           
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|● | identifies,
                                         evaluates and negotiates the structure of the investments we make (including performing
                                         due diligence on our prospective portfolio companies);
|● | determines
                                         the assets we originate, purchase, retain or sell;                                                                                                                                      
|● | closes,
                                         monitors and administers the investments we make, including the exercise of any rights
                                         in our capacity as a lender; and                           
|● | provides
                                         us such other investment advice, research and related services as we may, from time to
                                         time, require.                                            



Our
Advisor’s services under the Advisory Agreement are not exclusive, and it is free to furnish similar or other services to
others so long as its services to us are not impaired.



Under
the terms of the Advisory Agreement, we pay our Advisor a base management fee (the “Management Fee”) and may also
pay to it incentive fees (each, an “Incentive Fee”).



The
Management Fee is calculated at an annual rate of 2.00% of the end-of-period gross assets payable monthly in arrears. For purposes
of calculating the Management Fee, the term “gross assets” includes any assets acquired with the proceeds of leverage.
As a result, the Advisor will benefit when we incur debt or use leverage. For each of the first two months of operations, the
Management Fee was calculated based on the value of our gross assets at the end of such month, and appropriately adjusted for
any share issuances during these months. Following our first two months of operations, the Advisory Agreement provides that the
Management Fee is calculated based on the average value of gross assets at the end of the two most recently completed months.
We have clarified our Management Fee calculation so that the Management Fee is calculated by averaging the value of our gross
assets at the end of the two most recently completed quarters, and appropriately adjusting for any share issuances occurring during
any month of the current quarter. Management Fees for any partial month are appropriately prorated.



The
Incentive Fee is divided into two parts: (i) an incentive fee on income and (ii) an incentive fee on capital gains. Each part
of the Incentive Fee is outlined below.



The
first part, which we refer to as the incentive fee on income, is calculated and payable quarterly in arrears based upon our “pre-incentive
fee net investment income” for the immediately preceding quarter. The incentive fee on income is subject to a hurdle rate,
measured quarterly and expressed as a rate of return on adjusted capital at the beginning of the most recently completed calendar
quarter, of 1.75% (7.0% annualized), subject to a “catch up” feature. For this purpose, “pre-incentive fee net
investment income” means interest income, dividend income and any other income (including any other fees, other than fees
for providing managerial assistance, such as commitment, origination, structuring, diligence and consulting fees or other fees
that we receive from portfolio companies) accrued during the calendar quarter, minus our operating expenses for the quarter (including
the Management Fee, expenses reimbursed to Parkview Administrator LLC (our “Administrator”) or Advisor under the Administration
Agreement or Advisory Agreement and any interest expense and dividends paid on any issued and outstanding preferred stock, but
excluding the Incentive Fee). Pre-incentive fee net investment income includes, in the case of investments with a deferred interest
feature (such as original issue discount, debt instruments with payment-in-kind interest and zero coupon securities), accrued
income that we have not yet received in cash. Pre-incentive fee net investment income does not include any realized capital gains,
realized capital losses or unrealized capital appreciation or depreciation. For purposes of this fee, adjusted capital means cumulative
gross proceeds generated from issuances of our common stock (including our distribution reinvestment plan, if established) reduced
for distributions to investors that represent a return of capital. The calculation of the incentive fee on income for each quarter
is as follows:



|● | No
                                         incentive fee on income is payable to our Advisor in any calendar quarter in which our
                                         pre-incentive fee net investment income does not exceed the hurdle rate of 1.75% (7.0%
                                         annualized) (the “hurdle rate”).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|● | 100%
                                         of our pre-incentive fee net investment income, if any, that exceeds the hurdle rate,
                                         but is less than or equal to 2.1875% in any calendar quarter (8.75% annualized) is payable
                                         to our Advisor. We refer to this portion of our pre-incentive fee net investment income
                                         as the “catch-up.” The “catch-up” provision is intended to provide
                                         our Advisor with an incentive fee of 20.0% on all of our pre-incentive fee net investment
                                         income when our pre-incentive fee net investment income reaches 2.1875% in any calendar
                                         quarter.
|● | 20.0%
                                         of the amount of our pre-incentive fee net investment income, if any, that exceeds 2.1875%
                                         in any calendar quarter (8.75% annualized) will be payable to our Advisor once the hurdle
                                         rate is reached and the catch-up is achieved (20.0% of all pre-incentive fee net investment
                                         income thereafter is allocated to our Advisor).                                                                                                                                                                                                                                                                                                                                



The
second part of the incentive fee, which we refer to as the incentive fee on capital gains, is an incentive fee on capital
gains and is determined and payable in arrears as of the end of each calendar year (or upon termination of the Advisory
Agreement). This fee will equal 20% of our realized capital gains on a cumulative basis from inception, calculated as of the
end of the applicable period, computed net of all realized capital losses and unrealized capital depreciation on a cumulative
basis, less the aggregate amount of any previously paid capital gain incentive fees.





3







Prior
to our election to be regulated as a BDC, the Advisory Agreement was re-approved by our Board, including by a majority of our
Independent Directors, at an in-person meeting of the Board called for that purpose. Unless earlier terminated as described below,
the Advisory Agreement will remain in effect for a period of two years from its effective date and will remain in effect from
year to year thereafter if approved annually by (i) the vote of our Board, or by the vote of a majority of our outstanding voting
securities, and (ii) the vote of a majority of our Independent Directors. The Advisory Agreement will automatically terminate
in the event of assignment and may be terminated by either party without penalty upon 60 days’ written notice to the other.



Our
Advisor will not assume any responsibility to us other than to render the services described in, and on the terms of, the Advisory
Agreement, and will not be responsible for any action of our Board in declining to follow the advice or recommendations of our
Advisor. Under the terms of the Advisory Agreement, and absent willful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of the reckless disregard of its duties and obligations, our Advisor (and its officers, managers, partners,
agents, employees, controlling persons and members, and any other person or entity affiliated with our Advisor) shall not be liable
to us for any action taken or omitted to be taken by our Advisor in connection with the performance of any of its duties or obligations
under the Advisory Agreement, or otherwise as an investment adviser of the Company (except to the extent specified in Section
36(b) of the 1940 Act concerning loss resulting from a breach of fiduciary duty (as the same is finally determined by judicial
proceedings) with respect to the receipt of compensation for services). We shall, to the fullest extent permitted by law, provide
indemnification and the right to the advancement of expenses, to each person who was or is made a party or is threatened to be
made a party to or is involved (including, without limitation, as a witness) in any actual or threatened action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact that he/she is or was a member, manager, officer,
employee, agent, controlling person of our Advisor or any other person or entity affiliated with our Advisor, on the same general
terms set forth in Article VII of our Charter.



Administration
Agreement



On
March 11, 2015, we entered into an Administration Agreement with Parkview Administrator, LLC, or the Administrator, which we refer
to as the “Administration Agreement,” under which the Administrator will provide administrative services to us. These
services may include providing office space to us, providing us with equipment and office services, maintaining our financial
records, preparing reports to our stockholders and reports filed with the SEC and managing the payment of our expenses and the
performance of administrative and professional services rendered to us by others. We will reimburse the Administrator for all
reasonable costs and expenses incurred by the Administrator in providing these services, facilities and personnel, as provided
by the Administration Agreement. We will also reimburse the Administrator for the allocable portion of the compensation paid by
the Administrator (or its affiliates) to our chief compliance officer and chief financial officer (based on the percentage of
time such individuals devote, on an estimated basis, to the business and affairs of the Company). See “—Fees and
Expenses.” In addition, the Administrator is permitted to delegate its duties under the Administration Agreement to
affiliates or third parties, and we will reimburse the expenses of these parties incurred and paid by the Administrator on our
behalf. During the years ended December 31, 2016 and 2015, the Administrator did not provide any administrative services to us
and was not reimbursed for any expenses made on our behalf.



Unless
earlier terminated as described below, the Administration Agreement will remain in effect for a period of two years from their
effective date and will remain in effect from year to year thereafter if approved annually by (i) the vote of our Board and (ii)
the vote of a majority of our Independent Directors. The Administration Agreement may be terminated by either party without penalty
upon 60 days’ written notice to the other.



License
Agreement



On
March 11, 2015, we entered into a license agreement (the “License Agreement”) with our Advisor, pursuant to which
we have been granted a non-exclusive license to use the name “Parkview.” Under the License Agreement, we have a right
to use the “Parkview” name and logo, for so long as our Advisor or one of its affiliates remains our investment adviser.
Other than with respect to this limited license, we will have no legal right to the “Parkview” name or logo.



Market
Opportunity



We
believe that the limited amount of capital available to lower middle-market companies, coupled with the desire of these
companies for flexible and partnership-oriented sources of capital, creates an attractive investment environment for us. We
believe the following factors will continue to provide us with opportunities to grow and deliver attractive returns to our
stockholders. However, there can be no assurances that we will be able to successfully implement our business strategy and,
as a result, meet our investment objective.





4







The
Lower Middle-market Represents a Large, Underserved Market. We believe that lower middle-market companies, most of which
are privately held, are relatively underserved by traditional capital providers such as commercial banks, finance companies, hedge
funds and collateralized loan obligation funds. Further, we believe that companies of this size generally are less leveraged relative
to their enterprise value, as compared to larger companies with a greater range of financing options.



Recent
Credit Market Dislocation for Lower Middle-market Companies has Created an Opportunityfor Attractive Risk-Adjusted Returns.
Beginning with the credit crisis that began in 2007, we believe that the
subsequent exit of traditional capital providers from lower middle-market lending has created a less competitive market and an
increased opportunity for alternative funding sources like us to generate attractive risk-adjusted returns. The remaining lenders
and investors in the current environment require lower levels of senior and total leverage, increased equity commitments and more
comprehensive covenant packages than were customary prior to the credit crisis. We believe that our ability to offer flexible
financing solutions positions us to take advantage of this dislocation.



Regulatory
Changes Have Decreased Competition among Lower Middle-market Lenders.In addition to the recent credit market dislocation,
we believe recent regulatory changes, including the adoption of the Dodd-Frank Act and the introduction of new international capital
and liquidity requirements under the Basel III Accords have caused banking institutions to curtail their lending to lower middle-market
companies. As a result, we believe that less competition will facilitate higher quality deal flow and allow for greater selectivity
for us throughout the investment process.



Large
Pools of Uninvested Private Equity Capital should Drive Future Transaction Velocity. According to industry sources, as
of December 31, 2016, there was approximately $124 billion of uninvested capital raised by private equity funds with under $500
million of assets under management. As a result, we expect that private equity firms will remain active investors in lower middle-market
companies. Private equity funds generally seek to leverage their investments by combining their equity capital with senior secured
loans and/or mezzanine debt, or subordinated debt that is not secured by collateral, provided by other sources. We believe that
our investment strategy positions us well to partner with such private equity investors, although there can be no assurance that
we will be successful in this regard. Although our interests may not always be aligned with the private equity sponsors of our
portfolio companies given their positions as the equity holders and our position as the debt holder in our portfolio companies,
we believe that private equity sponsors will provide significant benefits including incremental due diligence, additional monitoring
capabilities and a potential source of capital and operational expertise for our portfolio companies.



Specialized
Lending Requirements. Lending to small and lower middle-market companies requires in depth diligence, credit expertise,
restructuring experience and active portfolio management. We believe that several factors render many U.S. financial institutions
ill-suited to lend to small and lower middle-market companies. For example, based on the experience of our Advisor’s investment
professionals, lending to small and lower middle-market companies in the United States: (a) is generally more labor intensive
than lending to larger companies due to the smaller size of each investment and the fragmented nature of the information available
with respect to such companies; (b) requires specialized due diligence and underwriting capabilities; and (c) may also require
more extensive ongoing monitoring by the lender. We believe that, through our Advisor, we have the experience and expertise to
meet these specialized lending requirements.



Competitive
Advantages



Experienced
Management Team. The investment professionals of our Advisor have prior experience in investment and management positions
at investment banks, commercial banks and privately held companies, and the investment professionals of our Advisor have invested
and/or managed portfolios with debt and equity securities of primarily lower middle-market companies. We believe this experience
provides our Advisor with an in-depth understanding of the strategic, financial and operational challenges and opportunities of
lower middle-market companies. Further, we believe this positions our Advisor to effectively identify, assess, structure and monitor
our investments.



Strong
Transaction Sourcing Network. Our President and Chief Executive Officer, Keith W. Smith, has an extensive network of long-standing
relationships with private equity firms, middle-market senior lenders, junior-capital partners, financial intermediaries, law
firms, accountants and management teams of privately owned businesses. We believe that these relationships will continue to generate
new investment opportunities and proprietary deal flow.



Flexible
Financing Solutions. We offer a variety of financing structures to meet the custom needs of our portfolio companies,
including among investment types and investment terms. Our investments in our portfolio companies may take the form of first
and second lien senior secured debt, unsecured mezzanine debt, convertible debt or subordinated debt, often coupled with an
equity or equity-like component to increase the total investment return profile. We believe our ability to offer a variety of
financing arrangements makes us an attractive partner to lower middle-market companies and enables our Advisor to identify
attractive investment opportunities throughout economic cycles and across a company’s capital structure.





5







Rigorous
Underwriting Policies and Active Portfolio Management. Our Advisor has implemented rigorous underwriting policies that
it follows in each transaction. These policies include an extensive review and credit analysis of portfolio companies, historical
and projected financial performance, as well as an assessment of the portfolio company’s business model and forecasts that
are designed to assess investment prospects via a thorough analysis of each potential portfolio company’s competitive position,
financial performance, management team operating discipline, growth potential and industry attractiveness. In addition, we structure
our debt investments with protective financial covenants, designed to proactively address changes in a portfolio company’s
financial performance. Covenants are negotiated before an investment is completed and are based on the projected financial performance
of the portfolio company. These processes are designed to, among other things, provide us with an assessment of the ability of
the portfolio company to repay its debt at maturity. After investing in a portfolio company, we monitor the investment closely,
receiving financial statements on at least a quarterly basis as well as annual audited financial statements. We analyze and discuss
in detail the portfolio company’s financial performance with management in addition to attending regular board meetings.
We believe that our initial and ongoing portfolio review process will allow us to identify and maintain superior risk adjusted
return opportunities in our target portfolio companies.



Minimize
Portfolio Concentration. While we focus our investments in lower middle-market companies, we seek to diversify our portfolio
across various industries, geographic sectors and financial sponsors. We actively monitor our investment portfolio to ensure we
are not overly concentrated across industries, geographic sectors or private equity or other sponsors. By monitoring our investment
portfolio in this manner we seek to reduce the effects of economic downturns associated with any particular industry sector or
geographic region.



Investment
Guidelines for Evaluating Investment Opportunities



We
use the following guidelines in evaluating investment opportunities and constructing our portfolio. However, not all of these
guidelines will be met in connection with each of our investments.



Experienced
Management Teams With Meaningful Equity Ownership. We target portfolio companies that have management teams with significant
experience and/or relevant industry experience coupled with meaningful equity ownership. We believe management teams with these
attributes are more likely to manage the companies in a manner that protects our debt investment and enhances the value of our
equity investment.



Strong
Competitive Position. We seek to invest in companies that have developed strong positions within their respective markets
and are well positioned to capitalize on growth opportunities. We also seek to invest in companies that we believe exhibit a sustainable
competitive advantage vis-a-vis their competitors, 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 our investments.
We will seek to invest in portfolio companies that we believe have sufficient value beyond the layer of the capital structure
in which we invest.



Visible
Exit Strategy. We invest in companies that we believe will provide a steady stream of cash flow to repay our loans while
reinvesting in their respective businesses. In addition, we also seek to invest in companies whose business models and expected
future cash flows offer attractive exit possibilities for our equity investments. We seek to execute each investment with a visible
and articulated exit strategy determined by a variety of factors, including the company’s financial position, anticipated
growth dynamics and the prevailing mergers and acquisitions environment.



Monitoring



Portfolio
Monitoring



Our
Advisor monitors our portfolio with a focus toward anticipating negative credit events. To maintain portfolio company performance
and help to ensure a successful exit, our Advisor works closely with, as applicable, the lead equity sponsor, loan syndicator,
portfolio company management, consultants, advisers and other security holders to discuss financial position, compliance with
covenants, financial requirements and execution of the portfolio company’s business plan. In addition, depending on the
size, nature and performance of the transaction, we may occupy a seat or serve as an observer on a portfolio company’s board
of directors or similar governing body.





6







Typically,
our Advisor receives financial reports detailing operating performance, sales volumes, margins, cash flows, financial position
and other key operating metrics on a quarterly basis from our portfolio companies. Our Advisor uses this data, combined with due
diligence gained through contact with the company’s customers, suppliers, competitors, market research and other methods,
to conduct an ongoing, rigorous assessment of the portfolio company’s operating performance and prospects. Our Advisor may
rely on brokers or other financial services firms that may help identify potential investments from time to time for assistance
in monitoring these investments.



Portfolio
Asset Quality



In
addition to various risk management and monitoring tools, our Advisor uses an investment rating system to characterize and monitor
the expected level of returns on each investment in our portfolio. The Advisor uses an investment rating scale of 1 to 5. The
following is a description of the conditions associated with each investment rating:



|Investment
    Rating |  | Summary
    Description                                                                                                                                   
|--------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|                      | 
|1                     |  | Investment
    exceeding expectations and/or capital gain expected.                                                                                       
|2                     |  | Performing
    investment generally executing in accordance with the portfolio company’s business plan—full return of principal
    and interest expected.
|3                     |  | Performing
    investment requiring closer monitoring.                                                                                                    
|4                     |  | Underperforming
    investment—some loss of interest or dividend possible, but still expecting a positive return on investment.                           
|5                     |  | Underperforming
    investment with expected loss of interest and some principal.                                                                         



Our
Advisor monitors and, when appropriate, changes the investment ratings assigned to each investment in our portfolio. In connection
with valuing our assets, our board of directors reviews these investment ratings on a quarterly basis. In the event that the investment
professionals of our Advisor determine that an investment is underperforming, or circumstances suggest that the risk associated
with a particular investment has significantly increased, our Advisor will attempt to sell the asset in the secondary market,
if applicable, or to implement a plan to attempt to exit the investment or to correct the situation.



The
following table shows the distribution of our investments on the 1 to 5 investment rating scale at fair value as of December 31,
2016 and 2015 (in thousands):





|                  |  | December 31, 
2016 |        |  | December 31, 
2015      | 
|----------------- |  | ------------------ | ------ |  | ----------------------- | 
|Investment Rating |  | Fair Value         |        |  | Percentage of Portfolio | 
|1                 |  | $                  | -      |  |                         | 
|2                 |  |                    | 38,095 |  |                         | 
|3                 |  |                    | -      |  |                         | 
|4                 |  |                    | 3,859  |  |                         | 
|5                 |  |                    | -      |  |                         | 
|Total             |  | $                  | 41,954 |  |                         | 



The
amount of the portfolio in each grading category may vary substantially from period to period resulting primarily from changes
in the composition of the portfolio as a result of new investment, repayment and exit activities. In addition, changes in the
grade of investments may be made to reflect our expectation of performance and changes in investment values.



Exit



While
we attempt to invest in securities that may be sold in a privately negotiated over-the-counter market, providing us a means by
which we may exit our positions, we expect that a large portion of our portfolio may not be sold on this secondary market. For
any investments that are not able to be sold within this market, we focus primarily on investing in companies whose business models
and growth prospects offer attractive exit possibilities, including repayment of our investments, an initial public offering of
equity securities, a merger, a sale or a recapitalization, in each case with the potential for capital gains.



Investment
Committee



Each
investment opportunity requires the unanimous approval of our Advisor’s Investment Committee, which is currently
comprised of Keith W. Smith, our President and Chief Executive Officer, Gavin E. Stewart, a Director of our Advisor and M.
Duyen Le, a Director of our Advisor. Our Advisor intends to hire additional employees as our operations expand and may add
personnel to its Investment Committee.





7







Competition



Our
primary competitors to provide financing to lower middle-market companies include public and private funds, including other BDCs,
commercial and investment banks, commercial financing companies, and, to the extent they provide an alternative form of financing,
private equity funds. Many of our competitors are substantially larger and have considerably greater financial, technical and
marketing resources than we do. For example, some competitors may have a lower cost of funds and access to funding sources that
are not available to us. In addition, some of our competitors may have higher risk tolerances or different risk assessments, which
could allow them to consider a wider variety of investments and establish more relationships than us. Furthermore, many of our
competitors are not subject to the regulatory restrictions that the 1940 Act imposes on us as a BDC and that the Code will impose
on us as a RIC.



Fees
and Expenses



We
anticipate that all investment professionals and staff of our Advisor, when and to the extent engaged in providing us investment
advisory and management services, and the base compensation, bonus and benefits, and the routine overhead expenses, of such personnel
allocable to such services, will be provided and paid for by our Advisor.



We,
either directly or through reimbursement to our Advisor, will bear all other costs and expenses of our operations, administration
and transactions, including, but not limited to, those relating to:



|● | organization
                                         expenses;                                                                                                                                                                                                                                                                                                                                                                                                                                         
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|● | calculating
                                         our net asset value (including the cost and expenses of any independent valuation firms);                                                                                                                                                                                                                                                                                                                                                          
|● | expenses,
                                         including travel expense, incurred by our Advisor, its investment professionals, or payable
                                         to third parties, performing due diligence on prospective portfolio companies;                                                                                                                                                                                                                                  
|● | the
                                         costs of the offerings of common shares and other securities, if any;                                                                                                                                                                                                                                                                                                                                                                                      
|● | the
                                         base management fee and any incentive fee;                                                                                                                                                                                                                                                                                                                                                                                                                 
|● | certain
                                         costs and expenses relating to distributions paid on our shares;                                                                                                                                                                                                                                                                                                                                                                                       
|● | administration
                                         reimbursements payable under the Advisory Agreement or Administration Agreement;                                                                                                                                                                                                                                                                                                                                                                
|● | debt
                                         service and other costs of borrowings or other financing arrangements;                                                                                                                                                                                                                                                                                                                                                                                    
|● | the
                                         allocated costs incurred by our Advisor or the Administrator in providing managerial
                                         assistance to those portfolio companies that request it;                                                                                                                                                                                                                                                                     
|● | amounts
                                         payable to third parties relating to, or associated with, making or holding investments;                                                                                                                                                                                                                                                                                                                                                               
|● | transfer
                                         agent and custodial fees;                                                                                                                                                                                                                                                                                                                                                                                                                             
|● | costs
                                         of hedging;                                                                                                                                                                                                                                                                                                                                                                                                                                              
|● | commissions
                                         and other compensation payable to brokers or dealers;                                                                                                                                                                                                                                                                                                                                                                                              
|● | federal,
                                         state and local taxes;                                                                                                                                                                                                                                                                                                                                                                                                                                
|● | independent
                                         director fees and expenses;                                                                                                                                                                                                                                                                                                                                                                                                                        
|● | costs
                                         of preparing financial statements and maintaining books and records and filing reports
                                         or other documents with the SEC (or other regulatory bodies) and other reporting and
                                         compliance costs, including registration and listing fees, and the compensation of professionals
                                         responsible for the preparation of the foregoing;



|● | the costs of any reports, proxy statements or other
notices to our stockholders (including printing and mailing costs), the costs of any stockholders’ meetings and the compensation
of investor relations personnel responsible for the preparation of the foregoing and related matters;
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|● | our fidelity bond;                                                                                                                                                                                                                                                                        
|● | directors and officers/errors and omissions liability
insurance, and any other insurance premiums;                                                                                                                                                                                        
|● | indemnification payments;                                                                                                                                                                                                                                                                 
|● | direct costs and expenses of administration, including
audit and legal costs; and                                                                                                                                                                                                         
|● | all other expenses reasonably incurred by us in connection
with making investments and administering our business.                                                                                                                                                                        





8







From
time to time, our Advisor may pay amounts owed by us to third-party providers of goods or services. We will subsequently reimburse
our Advisor for such amounts paid on our behalf. Other than with respect to our initial organization and operating costs, as described
above, there is no contractual cap on the reasonable costs and expenses for which our Advisor will be reimbursed. In addition,
we reimburse our Advisor for the allocable portion of the compensation paid by our Advisor to our chief compliance officer and
chief financial officer and their respective staffs (based on the percentage of time such individuals devote, on an estimated
basis, to the business and affairs of the Company). All of these expenses will ultimately be borne by our stockholders.



Employees



We
do not currently have any employees and do not expect to have any employees. Services necessary for our business will be provided
by individuals who are employees of our Advisor, the Administrator or their respective affiliates, pursuant to the terms of the
Advisory Agreement and the Administration Agreement. Except for Mr. Jacobson, our Chief Financial Officer and Treasurer, and Ms.
Hart, our Chief Compliance Officer, both of whom have been contracted by our Advisor to provide services on our behalf, each of
our executive officers is employed by our Advisor or its affiliates. Our day-to-day investment operations are managed by our Advisor.
The services necessary for the origination and administration of our investment portfolio are provided by investment professionals
employed by our Advisor or its affiliates.



Regulation
as a Public Business Development Company



We
have elected to be regulated as a BDC under the 1940 Act. The 1940 Act contains prohibitions and restrictions relating to transactions
between BDCs and their affiliates (including any investment advisers or sub-advisers), principal underwriters and affiliates of
those affiliates or underwriters. In addition, a BDC must be organized in the United States for the purpose of investing in or
lending to primarily private companies and making significant managerial assistance available to them. A BDC may use capital provided
by public stockholders and from other sources to make long-term, private investments in businesses.



As
with other companies regulated by the 1940 Act, a BDC must adhere to certain substantive regulatory requirements. A majority of
our directors must be persons who are not “interested persons,” as that term is defined in the 1940 Act. Additionally,
we are required to provide and maintain a bond issued by a reputable fidelity insurance company to protect us against larceny
and embezzlement. Furthermore, as a BDC, we are prohibited from protecting any director or officer against any liability to us
or our stockholders arising from willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved
in the conduct of such person’s office. As a BDC, we are also required to meet a coverage ratio of the value of total assets
to total senior securities, which include all of our borrowings and any preferred stock we may issue in the future, of at least
200%. This means that for every $100 of net assets we have, we are able to borrow or issue senior securities in the amount of
$100.



We
may not change the nature of our business so as to cease to be, or withdraw our election as, a BDC unless authorized by vote of
a majority of the outstanding voting securities, as required by the 1940 Act. A majority of the outstanding voting securities
of a company is defined under the 1940 Act as the lesser of: (a) 67% or more of such company’s voting securities present
at a meeting if more than 50% of the outstanding voting securities of such company are present or represented by proxy, or (b)
more than 50% of the outstanding voting securities of such company. We do not anticipate any substantial change in the nature
of our business.



We
may invest up to 100% of our assets in securities acquired directly from, or loans originated directly to, issuers in privately-negotiated
transactions. We do not intend to acquire securities issued by any investment company that exceed the limits imposed by the 1940
Act. Under these limits, except for registered money market funds, the Company generally cannot acquire more than 3% of the voting
stock of any investment company, invest more than 5% of the value of our total assets in the securities of one investment company
or invest more than 10% of the value of our total assets in the securities of investment companies in the aggregate. The portion
of our portfolio invested in securities issued by investment companies ordinarily will subject our stockholders to additional
expenses. Our investment portfolio will be subject to diversification requirements by virtue of our anticipated status as a RIC
for U.S. tax purposes; the related requirements are set forth below.



We
are generally not able to issue and sell our common stock at a price below net asset value per share. We may, however, issue and
sell our common stock, or warrants, options or rights to acquire our common stock, at a price below the then current net asset
value of our common stock if our Board determines that such sale is in our best interests and the best interests of our stockholders,
and our stockholders have approved our policy and practice of making such sales within the preceding 12 months. In any such case,
the price at which our securities are to be issued and sold may not be less than a price that, in the determination of our Board,
closely approximates the market value of such securities. In addition, we may generally issue new shares of our common stock at
a price below net asset value in rights offerings to existing stockholders, in payment of dividends and in certain other limited
circumstances.



We
may also be prohibited under the 1940 Act from knowingly participating in certain transactions with our affiliates without the
prior approval of the members of our Board who are not interested persons and, in some cases, prior approval by the SEC through
an exemptive order (other than in certain limited situations pursuant to current regulatory guidance). We will be subject to periodic
examination by the SEC for compliance with the 1940 Act.





9







Qualifying
Assets



Under
the 1940 Act, a BDC may not acquire any assets other than assets of the type listed in section 55(a) of the 1940 Act, which
are referred to as qualifying assets, unless, at the time the acquisition is made, qualifying assets represent at least 70%
of the company’s total assets. The principal categories of qualifying assets relevant to our business are the
following:



|● | Securities
                                         purchased in transactions not involving any public offering from the issuer of such securities,
                                         which issuer (subject to certain limited exceptions) is an eligible portfolio company,
                                         or from any person who is, or has been during the preceding 13 months, an affiliated
                                         person of an eligible portfolio company, or from any other person, subject to such rules
                                         as may be prescribed by the SEC. An eligible portfolio company is defined in the 1940
                                         Act as any issuer which:
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ● | is
                                         organized under the laws of, and has its principal place of business in, the United States;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------

| | ● | is
                                         not an investment company (other than a small business investment company wholly owned
                                         by the Company) or a company that would be an investment company but for certain exclusions
                                         under the 1940 Act; and
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ● | satisfies
                                         either of the following:
| | - | ---------------------------------------------------------------------------

| | ● | has
                                         a market capitalization of less than $250 million or does not have any class of securities
                                         listed on a national securities exchange; or
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ● | is
                                         controlled by a BDC or a group of companies including a BDC, the BDC actually exercises
                                         a controlling influence over the management or policies of the eligible portfolio company,
                                         and, as a result thereof, the BDC has an affiliated person who is a director of the eligible
                                         portfolio company.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|● | Securities
                                         of any eligible portfolio company that we control.
|- | ------------------------------------------------------------------------------------------------------

|● | Securities
                                         purchased in a private transaction from a U.S. issuer that is not an investment company
                                         or from an affiliated person of the issuer, or in transactions incident thereto, if the
                                         issuer is in bankruptcy and subject to reorganization or if the issuer, immediately prior
                                         to the purchase of its securities was unable to meet its obligations as they came due
                                         without material assistance other than conventional lending or financing arrangements.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|● | Securities
                                         of an eligible portfolio company purchased from any person in a private transaction if
                                         there is no ready market for such securities and we already own 60% of the outstanding
                                         equity of the eligible portfolio company.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|● | Securities
                                         received in exchange for or distributed on or with respect to securities described above,
                                         or pursuant to the exercise of warrants or rights relating to such securities.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|● | Cash,
                                         cash equivalents, U.S. Government securities or high-quality debt securities maturing
                                         in one year or less from the time of investment.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Limitations
on Leverage



As
a BDC, we generally must have 200% asset coverage for our debt after incurring any new indebtedness, meaning that the total value
of our assets must be at least twice the amount of the debt (i.e., 50% leverage).



Managerial
Assistance to Portfolio Companies



A
BDC must be operated for the purpose of making investments in the types of securities described under “—Regulation
as a Public Business Development Company—Qualifying Assets,” above. However, in order to count portfolio securities
as qualifying assets for the purpose of the 70% test, the BDC must either control the issuer of the securities or must offer to
make available to the issuer of the securities significant managerial assistance; except that, where the BDC purchases such
securities in conjunction with one or more other persons acting together, the BDC will satisfy this test if one of the other persons
in the group may make available such managerial assistance. Making available managerial assistance means, among other things,
any arrangement whereby the BDC, through its directors, officers or employees, offers to provide, and, if accepted, does in fact
provide, significant guidance and counsel concerning the management, operations or business objectives and policies of a portfolio
company.



Ongoing
Relationships with Portfolio Companies; Valuation



Our
Advisor monitors our portfolio companies on an ongoing basis. Our Advisor monitors the financial trends of each portfolio company
to determine if it is meeting its business plan and to assess the appropriate course of action for each company.



Our
Advisor has several methods of evaluating and monitoring the performance and fair value of our investments, which may include,
but are not limited to, the following:



|● | Assessment
                                         of success of the portfolio company in adhering to its business plan and compliance with
                                         covenants;
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|● | Periodic
                                         and regular contact with portfolio company management and, if appropriate, the financial
                                         or strategic sponsor, to discuss financial position, requirements and accomplishments;
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|● | Comparisons
                                         to other companies in the industry;
|- | ----------------------------------------------------------------------------------------

|● | Attendance
                                         at and participation in board meetings; and
|- | -----------------------------------------------------------------------------------------------

|● | Review
                                         of monthly and quarterly financial statements and financial projections for portfolio
                                         companies.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





10







Temporary
Investments





Pending
investment in other types of “qualifying assets,” as described above, our investments may consist of cash, cash equivalents,
U.S. Government securities or high-quality debt securities maturing in one year or less from the time of investment, which we
refer to, collectively, as temporary investments, such that at least 70% of our assets are qualifying assets. Our Advisor will
monitor the creditworthiness of the counterparties with which we enter into repurchase agreement transactions.



Senior
Securities



We
are permitted, under specified conditions, to issue multiple classes of indebtedness and one class of stock senior to our common
stock if our asset coverage, as defined in the 1940 Act, is at least equal to 200% immediately after each such issuance. In addition,
while any preferred stock or publicly traded debt securities are outstanding, we may be prohibited from making distributions to
our stockholders or the repurchasing of such securities or shares unless we meet the applicable asset coverage ratios at the time
of the distribution or repurchase. We may also borrow amounts up to 5% of the value of our total assets for temporary or emergency
purposes without regard to asset coverage. For a discussion of the risks associated with leverage, “Item 1A. Risk Factors
– Risks Relating to our Positions and Structure – We may borrow money, which may magnify the potential for gain or
loss and may increase the risk of investing in us.”



The
1940 Act imposes limitations on a BDC’s issuance of preferred shares, which are considered “senior securities”
and thus are subject to the 200% asset coverage requirement described above. In addition, (i) preferred shares must have the same
voting rights as the common stockholders (one share, one vote); and (ii) preferred stockholders must have the right, as a
class, to appoint directors to the Board.



Code
of Ethics



We
and our Advisor have adopted a joint code of ethics pursuant to Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers
Act, respectively, that establishes joint procedures for personal investments and restricts certain transactions by our personnel.
The code of ethics generally does not permit investments by our employees or employees of our Advisor in securities that may be
purchased or held by us. The code of ethics has been incorporated by reference to this annual report on Form 10-K. You may also
review our code of ethics at the SEC’s Public Reference Room in Washington, D.C. You may obtain information on the operation
of the Public Reference Room by calling the SEC at (202) 551-8090. You may also obtain copies of the codes of ethics, after paying
a duplicating fee, by electronic request at the following email address: publicinfo@sec.gov,
or by writing the SEC’s Public Reference Section, 100 F Street, N.E., Washington, D.C. 20549.



Compliance
Policies and Procedures



We
and our Advisor have adopted and implemented written policies and procedures reasonably designed to detect and prevent violation
of the federal securities laws and will be required to review these compliance policies and procedures annually for their adequacy
and the effectiveness of their implementation and designate a chief compliance officer to be responsible for administering the
policies and procedures.



Sarbanes-Oxley
Act of 2002



The
Sarbanes-Oxley Act of 2002 imposes a wide variety of regulatory requirements on certain publicly held companies and their insiders.
Assuming certain requirements are met, many of these requirements affect us. For example:



|● | pursuant
                                         to Rule 13a-14 of the Exchange Act, our chief executive officer and chief financial officer
                                         are required to certify the accuracy of the financial statements contained in our periodic
                                         reports;                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|● | pursuant
                                         to Item 307 of Regulation S-K, our periodic reports must disclose our conclusions about
                                         the effectiveness of our disclosure controls and procedures;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|● | pursuant
                                         to Rule 13a-15 of the Exchange Act, subject to certain assumptions, our management is
                                         required to prepare an annual report regarding its assessment of our internal control
                                         over financial reporting and (once we cease to be an emerging growth company under the
                                         JOBS Act or, if later, for the year following our first annual report required to be
                                         filed with the SEC), depending on our accelerated filer status, this report may be required
                                         to be audited by our independent registered public accounting firm; and
|● | pursuant
                                         to Item 308 of Regulation S-K and Rule 13a-15 of the Exchange Act, our periodic reports
                                         must disclose whether there were significant changes in our internal controls over financial
                                         reporting or in other factors that could significantly affect these controls subsequent
                                         to the date of their evaluation, including any corrective actions with regard to significant
                                         deficiencies and material weaknesses.                                                                                                                                                     





11







The
Sarbanes-Oxley Act requires us to review our current policies and procedures to determine whether we comply with the Sarbanes-Oxley
Act and the regulations promulgated thereunder. We will continue to monitor our compliance with all regulations that are adopted
under the Sarbanes-Oxley Act and will take actions necessary to ensure that we are in compliance therewith.



Proxy
Voting Policies and Procedures



We
have delegated our proxy voting responsibility to our Advisor. The Proxy Voting Policies and Procedures of our Advisor are set
forth below. The guidelines will be reviewed periodically by our Advisor and our Independent Directors, and, accordingly, are
subject to change.



An
investment adviser registered under the Advisers Act has a fiduciary duty to act solely in the best interests of its clients.
As part of this duty, our Advisor recognizes that it must vote client securities in a timely manner free of conflicts of interest
and in the best interests of its clients. These policies and procedures for voting proxies for our Advisor’s investment
advisory clients are intended to comply with Section 206 of, and Rule 206(4)-6 under, the Advisers Act.



Our
Advisor will vote all proxies based upon the guiding principle of seeking the maximization of the ultimate long term economic
value of our stockholders’ holdings, and ultimately all votes are cast on a case-by-case basis, taking into consideration
the contractual obligations under the relevant advisory agreements or comparable documents, and all other relevant facts and circumstances
at the time of the vote. All proxy voting decisions will require a mandatory conflicts of interest review by our Chief Compliance
Officer in accordance with these policies and procedures, which will include consideration of whether our Advisor or any investment
professional or other person recommending how to vote the proxy has an interest in how the proxy is voted that may present a conflict
of interest. It is our Advisor’s general policy to vote or give consent on all matters presented to security holders in
any proxy, and these policies and procedures have been designed with that in mind. However, our Advisor reserves the right to
abstain on any particular vote or otherwise withhold its vote or consent on any matter if, in the judgment of our Chief Compliance
Officer or the relevant investment professional(s) employed by our Advisor, the costs associated with voting such proxy outweigh
the benefits to our stockholders or if the circumstances make such an abstention or withholding otherwise advisable and in the
best interest of the relevant stockholder(s).



Privacy
Principles



We
are committed to maintaining the confidentiality, integrity and security of nonpublic personal information relating to investors.
The following information is provided to help you understand what personal information we collect, how we protect that information
and why, in certain cases, we may share information with select other parties.



We
may collect nonpublic personal information regarding investors from sources such as subscription agreements, investor questionnaires
and other forms; individual investors’ account histories; and correspondence between us and our investors. We
may share information that we collect regarding an investor with our affiliates and the employees of such affiliates for legitimate
business purposes, for example, in order to service the investor’s accounts or provide the investor with information about
other products and services offered by us or our affiliates that may be of interest to the investor. In addition, we may disclose
information that we collect regarding investors to third parties who are not affiliated with us: (i) as authorized by our investors
in investor subscription agreements or our organizational documents; (ii) as required by law or in connection with regulatory
or law enforcement inquiries; or (iii) as otherwise permitted by law to the extent necessary to effect, administer or enforce
investor or Company transactions.



Any
party that receives nonpublic personal information relating to investors from us is permitted to use the information only for
legitimate business purposes or as otherwise required or permitted by applicable law or regulation. In this regard, for our officers,
employees and agents, access to such information is restricted to those who need such access in order to provide services to us
and our investors. We maintain physical, electronic and procedural safeguards to seek to guard investor nonpublic personal information.



Reporting
Obligations



We
are a reporting company under the Exchange Act and are required to comply with all periodic reporting, proxy solicitation and
other applicable requirements under the Exchange Act.



We
maintain a website at www.parkviewcapitalcredit.com through which we
make all of our annual, quarterly and current reports, proxy statements and other publicly filed information available, free of
charge. You may also obtain such information by contacting us, in writing at: Parkview Capital Credit, Inc., Two Post Oak Center,
1980 Post Oak Boulevard, 15th Floor, Houston, Texas 77056, or by telephone at (713) 622-5000. The SEC maintains an Internet site
that contains reports, proxy and information statements and other information filed electronically by us with the SEC which are
available on the SEC’s Internet site at http://www.sec.gov. Copies of these reports, proxy
and information statements and other information may be obtained, after paying a duplicating fee, by electronic request at the
following e- mail address: publicinfo@sec.gov, or by writing the SEC’s Public Reference
Section, Washington, D.C. 20549-0102.





12







Certain U.S.
Federal Income Tax Considerations



The
following discussion is a general summary of the material U.S. federal income tax considerations applicable to us and to an investment
in our shares. This summary does not purport to be a complete description of the income tax considerations applicable to such
an investment. For example, we have not described tax consequences that may be relevant to certain types of holders subject to
special treatment under U.S. federal income tax laws, including stockholders subject to the alternative minimum tax, tax-exempt
organizations, insurance companies, dealers in securities, pension plans and trusts, financial institutions, partnerships and
other pass-through entities, U.S. stockholders (as defined below) whose functional currency is not the U.S. dollar, persons who
mark-to-market our shares and persons who hold our shares as part of a “straddle,” “hedge” or “conversion”
transaction. This summary assumes that investors hold our common stock as capital assets (within the meaning of the Code). The
discussion is based upon the Code, Treasury regulations, and administrative and judicial interpretations, each as of the date
hereof and all of which are subject to change, possibly retroactively, which could affect the continuing validity of this discussion.
We have not sought and will not seek any ruling from the Internal Revenue Service (the “IRS”) regarding any matter
discussed herein. Tax counsel has not rendered any legal opinion regarding any tax consequences relating to us or our stockholders.
This summary does not discuss any aspects of U.S. estate or gift tax or foreign, state or local tax. It does not discuss the special
treatment under U.S. federal income tax laws that could result if we invested in tax-exempt securities or certain other investment
assets.



For
purposes of this discussion, a “U.S. stockholder” generally is a beneficial owner of shares of our common stock who
is for U.S. federal income tax purposes:



|● | a
    citizen or individual resident of the United States;                                                                                                                                                                                                                                                                                                              
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|● | a
    corporation (or other entity taxable 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) a court in the United States has primary supervision over its administration and one or more U.S. persons have
    the authority to control all substantial decisions of the trust, or (b) the trust has a valid election in effect under applicable
    U.S. Treasury regulations to be treated as a U.S. person for federal income tax purposes; or
|● | an
    estate, the income of which is subject to U.S. federal income taxation regardless of its source.                                                                                                                                                                                                                                                                 



A
“Non-U.S. stockholder” generally is a beneficial owner of shares of our common stock that is not a U.S. stockholder.



If
a partnership (including an entity treated as a partnership for U.S. federal income tax purposes) holds shares of our common stock,
the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the
partnership. A prospective stockholder that is a partner in a partnership holding shares of our common stock should consult his,
her or its tax advisers with respect to the purchase, ownership and disposition of shares of our common stock.



Tax
matters are complicated and the tax consequences to an investor of an investment in our shares will depend on the facts of his,
her or its particular situation. We encourage investors to consult their own tax advisers regarding the specific consequences
of such an investment, including tax reporting requirements, the applicability of federal, state, local and foreign tax laws,
including the potential application of U.S. withholding taxes, eligibility for the benefits of any applicable tax treaty and the
effect of any possible changes in the tax laws.



Classification
of the Company as Corporation for Tax Purposes



We
were incorporated under the laws of the State of Maryland on November 25, 2014, and have been treated as a corporation under Subchapter
C of the Code.



Election
to be Taxed as a RIC



As
a BDC, we intend to elect, and intend to qualify annually, as a RIC under Subchapter M of the Code, beginning with our tax year
ending June 30, 2017. As a RIC, we generally will not have to pay corporate-level U.S. federal income taxes on any income that
we distribute to our stockholders from our earnings and profits. To qualify for and maintain our qualification as a RIC, we must,
among other things, meet certain source-of-income and asset diversification requirements (as described below). In addition, to
obtain RIC tax treatment, we must timely distribute to our stockholders, for each taxable year, at least 90% of our “investment
company taxable income,” which is generally our net ordinary income plus the excess, if any, of realized net short-term
capital gains over realized net long-term capital losses (the “Annual Distribution Requirement”.)





13







Taxation
as a RIC



If
we:



|● | qualify
    as a RIC; and
|- | -------------------------



|● | satisfy
    the Annual Distribution Requirement,
|- | ------------------------------------------------



then
we will not be subject to U.S. federal income tax on the portion of our investment company taxable income and net capital gain,
generally defined as net long-term capital gains in excess of net short-term capital losses, we distribute (or are deemed to distribute)
to stockholders. We will be subject to U.S. federal income tax at regular corporate rates on any net income or net capital gains
not distributed (or deemed distributed) to our stockholders.



We
will be subject to a nondeductible U.S. federal excise tax of 4% on certain undistributed income unless we distribute in a timely
manner an amount at least equal to the sum of (1) 98% of our net ordinary income for each calendar year, (2) 98.2% of our capital
gain net income for the one-year period ending October 31 of that calendar year and (3) any income realized, but not distributed,
in preceding years and on which we paid no federal income tax  (“Excise Tax Avoidance Requirement”).



To
qualify as a RIC for federal income tax purposes, we must, among other things:



|● | continue
    to qualify to be treated as a BDC under the 1940 Act at all times during each taxable year;
|- | --------------------------------------------------------------------------------------------------------



|● | derive
    in each taxable year at least 90% of our gross income from dividends, interest, payments with respect to certain securities,
    loans, gains from the sale of stock or other securities, net income from certain “qualified publicly-traded partnerships,”
    or other income derived with respect to our business of investing in such stock or securities the (“90% Income Test”);
    and
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|● | diversify
    our holdings so that at the end of each quarter of the taxable year:
|- | ----------------------------------------------------------------------------------



| | (i) | at
    least 50% 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% of the value of our assets or
    more than 10% of the outstanding voting securities of such issuer; and
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | no
    more than 25% 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, of two or more issuers that are controlled, as determined under applicable tax rules, by us
    and that are engaged in the same or similar or related trades or businesses or in the securities of one or more “qualified
    publicly-traded partnerships,” (the “Diversification Tests”).
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Prior
to 2016, we did not qualify as a RIC and were taxed as a Subchapter C corporation for both 2014 and 2015. Because we did not elect
to be regulated as a BDC until February 12, 2016, we will not qualify as a RIC for calendar year 2016. We changed our tax year
to June 30 and filed as a Subchapter C corporation for the six month period ended June 30, 2016. We intend to elect RIC status
for the tax year ended June 30, 2017 and thereafter.



As
a result of converting from a Subchapter C corporation to a RIC, we are required to pay a corporate-level U.S. federal income
tax on the net amount of the net built-in gains, if any, in our assets (i.e., the amount by which the net fair market value
of our assets exceeds our net adjusted basis in our assets) as of the date of conversion to the extent that such gains are recognized
by us during the applicable recognition period, which is the five-year period beginning on the date of conversion.



Any
corporate-level built-in gain tax is payable at the time the built-in gains are recognized (which generally will be the years
in which the built-in gain assets are sold in a taxable transaction). The amount of this tax will vary depending on the assets
that are actually sold by us in the applicable period, the amount of realized gain (loss), the actual amount of net built-in gain
or loss present in those assets as of the date of conversion, and the effective tax rates at such times. The payment of any such
corporate-level U.S. federal income tax on built-in gain will be an expense that will reduce the amount available for distribution
to our stockholders.



To
the extent that we invest in entities treated as partnerships for U.S. federal income tax purposes (other than a
“qualified publicly traded partnership”), we generally must include the items of gross income derived by the
partnerships for purposes of the 90% Income Test, and the income that is derived from a partnership (other than a
“qualified publicly traded partnership”) will be treated as qualifying income for purposes of the 90% Income Test
only to the extent that such income is attributable to items of income of the partnership which would be qualifying income if
realized by us directly. In addition, we generally must take into account our proportionate share of the assets held by
partnerships (other than a “qualified publicly traded partnership”) in which we are a partner for purposes of the
Diversification Tests.





14







Certain
of our investment practices may be subject to special and complex U.S. federal income tax provisions that may, among other
things: (i) disallow, suspend or otherwise limit the allowance of certain losses or deductions; (ii) convert lower taxed
long-term capital gain into higher taxed short-term capital gain or ordinary income; (iii) convert an ordinary loss or a
deduction into a capital loss (the deductibility of which is more limited); (iv) cause us to recognize income or gain
without a corresponding receipt of cash; (v) adversely affect the time as to when a purchase or sale of securities is
deemed to occur; (vi) adversely alter the characterization of certain complex financial transactions; and (vii)
produce income that will not be qualifying income for purposes of the 90% Income Test. We will monitor our transactions and
may make certain tax elections in order to mitigate the potential adverse effect of these provisions



For
federal income tax purposes, we may be required to recognize taxable income in circumstances in which we do not receive a corresponding
payment in cash. For example, if we hold debt obligations that are treated under applicable tax rules as having original issue
discount (such as debt instruments with PIK interest or, in certain cases, increasing interest rates or debt instruments that
were issued with warrants), we must include in income each year a portion of the original issue discount that accrues over the
life of the obligation, regardless of whether cash representing such income is received by us in the same taxable year. We may
also have to include in income other amounts that we have not yet received in cash, such as deferred loan origination fees that
are paid after origination of the loan or are paid in non-cash compensation such as warrants or stock. We anticipate that a portion
of our income may constitute original issue discount or other income required to be included in taxable income prior to receipt
of cash. Further, we may elect to amortize market discounts and include such amounts in our taxable income in the current year,
instead of upon disposition, as an election not to do so would limit our ability to deduct interest expenses for tax purposes.



We
intend to invest a portion of our net assets in below investment grade instruments (rated lower than “Baa3” by Moody’s
Investors Service or lower than “BBB-” by Standard & Poor’s Corporation), which are often referred to as
“junk” bonds. Investments in these types of instruments may present special tax issues for us. U.S. federal
income tax rules are not entirely clear about issues such as when we may cease to accrue interest, original issue discount or
market discount, when and to what extent deductions may be taken for bad debts or worthless instruments, how payments received
on obligations in default should be allocated between principal and income and whether exchanges of debt obligations in a bankruptcy
or workout context are taxable. We will address these and other issues to the extent necessary to seek to ensure that we distribute
sufficient income so that we do not become subject to U.S. federal income or excise tax.



Because
any original issue discount or other amounts accrued will be included in our investment company taxable income for the year of
accrual, we may be required to make a distribution to our stockholders to satisfy the Annual Distribution Requirement, even though
we will not have received any corresponding cash amount. As a result, we may have difficulty meeting the Annual Distribution Requirement
necessary to qualify for and maintain RIC tax treatment under Subchapter M of the Code. We may have to sell some of our investments
at times and/or at prices we would not consider advantageous, raise additional debt or equity capital or forgo new investment
opportunities for this purpose. If we are not able to obtain cash from other sources, we may fail to qualify for RIC tax treatment
and thus become subject to corporate-level income tax.



Because
we may use debt financing, we will be subject to certain asset coverage ratio requirements under the 1940 Act and financial covenants
under loan and credit agreements that could, under certain circumstances, restrict us from making distributions necessary to satisfy
the Annual Distribution Requirement. Moreover, our ability to dispose of assets to meet our distribution requirements may be limited
by (1) the illiquid nature of our portfolio and/or (2) other requirements relating to our status as a RIC, including the Diversification
Tests. If we dispose of assets to meet the Annual Distribution Requirement or the Excise Tax Avoidance Requirement, we may make
such dispositions at times that, from an investment standpoint, are not advantageous.



In
the event we invest in non-U.S.securities, we may be subject to withholding and other non-U.S taxes with respect to those securities.
We do not expect to satisfy the conditions necessary to pass through to our stockholders their share of the non-U.S.taxes paid
by the Company.



Failure
to Qualify as a RIC



If
we were unable to qualify for treatment as a RIC, we would be subject to tax on all of our taxable income at regular corporate
rates, regardless of whether we make any distributions to our stockholders. Distributions would not be required, and any distributions
would be taxable to our stockholders as ordinary dividend income to the extent of our current and accumulated earnings and profits.
Subject to certain limitations in the Code, such distributions would be eligible for the preferential maximum rate applicable
to individual stockholders to the extent of our current and accumulated earnings and profits. Subject to certain limitations under
the Code, corporate distributees would be eligible for the dividends-received deduction. Distributions in excess of our current
and accumulated earnings and profits would be treated first as a return of capital to the extent of the stockholder’s tax
basis, and any remaining distributions would be treated as a capital gain.





15







To
requalify as a RIC in a subsequent taxable year, we would be required to satisfy the RIC qualification requirements for that
year and dispose of any earnings and profits from any year in which we failed to qualify as a RIC. Subject to a limited
exception applicable to RICs that qualified as such under the Code for at least one year prior to disqualification and that
requalify as a RIC no later than the second year following the nonqualifying year, we would be subject to tax on any
unrealized net built-in gains in the assets held by us during the period in which we failed to qualify as a RIC that are
recognized within the subsequent 5 years, unless we made a special election to pay corporate-level U.S. federal income tax on
such built-in gains at the time of our requalification as a RIC.



The
remainder of this discussion assumes that we qualify as a RIC and satisfy the Annual Distribution Requirement.



Taxation
of U.S. Stockholders



Distributions
by us generally are taxable to U.S. stockholders as ordinary income or capital gains. Distributions of our “investment company
taxable income” (which is, generally, our net ordinary income plus realized net short-term capital gains in excess of realized
net long-term capital losses) will be taxable as ordinary income to U.S. stockholders to the extent of our current or accumulated
earnings and profits, whether paid in cash or reinvested in additional common stock. To the extent such distributions paid by
us to non-corporate stockholders (including individuals) are attributable to dividends from U.S. corporations and certain qualified
foreign corporations, such distributions (“Qualifying Dividends”) may be eligible for a maximum tax rate of 20% provided
that we properly report such distribution as “qualifying dividend income” in a written statement furnished to our
stockholders and certain holding period and other requirements are satisfied. In this regard, it is not anticipated that a significant
portion of distributions paid by us will be attributable to qualifying dividends; therefore, our distributions generally will
not qualify for the preferential maximum rate applicable to Qualifying Dividends. Distributions of our net capital gains (which
is generally our realized net long-term capital gains in excess of realized net short-term capital losses) properly designated
by us as “capital gain dividends” will be taxable to a U.S. stockholder as long-term capital gains that are currently
generally taxable at a maximum rate of 20% in the case of individuals, trusts or estates, regardless of the U.S. stockholder’s
holding period for his, her or its common stock and regardless of whether paid in cash or reinvested in additional common stock.
Distributions in excess of our earnings and profits first will reduce a U.S. stockholder’s adjusted tax basis in such stockholder’s
common stock and, after the adjusted basis is reduced to zero, will constitute capital gains to such U.S. stockholder.



Although
we currently intend to distribute any long-term capital gain at least annually, we may in the future decide to retain some or
all of our long-term capital gain, but designate the retained amount as a “deemed distribution.” In that case, among
other consequences, we will pay tax on the retained amount, each U.S. stockholder will be required to include his, her or its
proportionate share of the deemed distribution in income as if it had been actually distributed to the U.S. stockholder, and the
U.S. stockholder will be entitled to claim a credit equal to his, her or its allocable share of the tax paid thereon by us. The
amount of the deemed distribution net of such tax will be added to the U.S. stockholder’s tax basis for his, her or its
common stock. Since we expect to pay tax on any retained capital gain at our regular corporate tax rate, and since that rate is
in excess of the maximum rate currently payable by individuals on net capital gain, the amount of tax that individual stockholders
will be treated as having paid and for which they will receive a credit will exceed the tax they owe on the retained net capital
gain. Such excess generally may be claimed as a credit against the U.S. stockholder’s other U.S. federal income tax obligations
or may be refunded to the extent it exceeds a stockholder’s liability for U.S. federal income tax. A stockholder that is
not subject to U.S. federal income tax or otherwise required to file a U.S. federal income tax return would be required to file
a U.S. federal income tax return on the appropriate form to claim a refund for the taxes we paid. To utilize the deemed distribution
approach, we must provide written notice to our stockholders prior to the expiration of 60 days after the close of the relevant
taxable year. We cannot treat any of our investment company taxable income as a “deemed distribution.”



For
purposes of determining (1) whether the Annual Distribution Requirement is satisfied for any year and (2) the amount of distributions
paid for that year, we may, under certain circumstances, elect to treat a distribution that is paid during the following taxable
year as if it had been paid during the taxable year in question. If we make such an election, the U.S. stockholder will still
be treated as receiving the distribution in the taxable year in which the distribution is made. However, any distribution declared
by us in October, November or December of any calendar year, payable to stockholders of record on a specified date in such a month
and actually paid during January of the following year, will be treated as if it had been received by our U.S. stockholders on
December 31 of the year in which the distribution was declared.



If
an investor purchases shares of our common stock shortly before the record date of a distribution, the price of the shares will
include the value of the distribution and the investor will be subject to tax on the distribution even though economically it
may represent a return of his, her or its investment.



A
stockholder generally will recognize taxable gain or loss if the stockholder sells or otherwise disposes of his, her or its
shares of our common stock. The amount of gain or loss will be measured by the difference between such stockholder’s
adjusted tax basis in the common stock sold and the amount of the proceeds received in exchange. Any gain arising from such
sale or disposition generally will be treated as long-term capital gain or loss if the stockholder has held his, her or its
shares for more than one year. Otherwise, it will be classified as short-term capital gain or loss. However, any capital loss
arising from the sale or disposition of shares of our common stock held for six months or less will be treated as long-term
capital loss to the extent of the amount of capital gain dividends received, or undistributed capital gain deemed received,
with respect to such shares. In addition, all or a portion of any loss recognized upon a disposition of shares of our common
stock may be disallowed if other shares of our common stock are purchased (whether through reinvestment of distributions or
otherwise) within 30 days before or after the disposition.





16







In
general, individual U.S. stockholders currently are generally subject to a maximum federal income tax rate of 20% on their net
capital gain (i.e., the excess of realized net long-term capital gains over realized net short-term capital losses), including
any long-term capital gain derived from an investment in our shares. Such rate is lower than the maximum rate on ordinary income
currently payable by individuals. In addition, an additional 3.8% Medicare tax will be imposed on certain net investment income
(including ordinary dividends and capital gain distributions received from us and net gains from redemptions or other taxable
dispositions of our common stock) of U.S. high-income individuals, and certain estates and trusts. Corporate U.S. stockholders
currently are subject to federal income tax on net capital gain at the maximum 35% rate also applied to ordinary income. Non-corporate
stockholders with net capital losses for a year (i.e., capital losses in excess of capital gains) generally may deduct up to $3,000
of such losses against their ordinary income each year; any net capital losses of a non-corporate stockholder in excess of $3,000
generally may be carried forward and used in subsequent years as provided in the Code. Corporate stockholders generally may not
deduct any net capital losses for a year, but may carry back such losses for three years or carry forward such losses for five
years.



We
(or if a U.S. stockholder holds shares through an intermediary, such intermediary) will send to each of our U.S. stockholders,
as promptly as possible after the end of each calendar year, a notice detailing, on a per share and per distribution basis, the
amounts includible in such U.S. stockholder’s taxable income for such year as ordinary income and as long-term capital gain.
In addition, the federal tax status of each year’s distributions generally will be reported to the IRS (including the amount
of distributions, if any, eligible for the preferential maximum rate). Distributions paid by us generally will not be eligible
for the dividends-received deduction. Distributions may also be subject to additional state, local and foreign taxes depending
on a U.S. stockholder’s particular situation.



Recent
legislation requires reporting of adjusted cost basis information for covered securities, which generally include shares of a
RIC acquired after January 1, 2012, to the IRS and to taxpayers. The tax regulations require that we elect a default tax identification
methodology to perform the required reporting. We have chosen the first-in-first-out (“FIFO”) method as the default
tax lot identification method for our stockholders. This is the method we will use to determine which specific shares are
deemed to be sold when a stockholder’s entire position is not sold in a single transaction and is the method in which “covered”
share sales will be reported on a stockholder’s Form 1099. However, at the time of purchase or upon the sale of “covered”
shares, stockholders may generally choose a different tax lot identification method. Stockholders should consult a tax advisor
with regard to their personal circumstances as the Company and its service providers do not provide tax advice. Stockholders should
contact their financial intermediaries with respect to reporting of cost basis and available elections for their accounts.



Limitation
on Deduction for Certain Expenses



If
our stock is not beneficially owned by at least 500 persons at all times during the taxable year, then a U.S. stockholder that
is an individual, estate or trust may be subject to limitations on miscellaneous itemized deductions in respect of its share of
expenses that we incur, to the extent that the expenses would have been subject to these limitations if the stockholder had incurred
them directly. We do not expect our stock to be beneficially owned by 500 or more persons.



If
we do not satisfy the 500-shareholder requirement, we would be required to report the relevant expenses, including the Management
Fee and Incentive Fee, on Form 1099-DIV, and affected stockholders will be required to take into account as income an amount equal
to their allocable share of such expenses.



U.S.
Taxation of Tax-Exempt U.S. Stockholders



A
U.S. stockholder that is a tax-exempt organization for U.S. federal income tax purposes and therefore generally exempt from U.S.
federal income taxation may nevertheless be subject to taxation to the extent that it is considered to derive unrelated business
taxable income (“UBTI”). The direct conduct by a tax-exempt U.S. stockholder of the activities we propose to conduct
could give rise to UBTI. However, a BDC is a corporation for U.S. federal income tax purposes and its business activities generally
will not be attributed to its stockholders for purposes of determining their treatment under current law.



Therefore,
a tax-exempt U.S. stockholder should not be subject to U.S. taxation solely as a result of the stockholder’s ownership of
our stock and receipt of dividends with respect to such stock. Moreover, under current law, if we incur indebtedness, such indebtedness
will not be attributed to a tax-exempt U.S. stockholder. Therefore, a tax-exempt U.S. stockholder should not be treated as earning
income from “debt-financed property” and dividends we pay should not be treated as “unrelated debt-financed
income” solely as a result of indebtedness that we incur. Proposals periodically are made to change the treatment of “blocker”
investment vehicles interposed between tax-exempt investors and non-qualifying investments. In the event that any such proposals
were to be adopted and applied to BDCs, the treatment of dividends payable to tax-exempt investors could be adversely affected.





17







Backup
Withholding



We
may be required to withhold federal income tax (“backup withholding”), currently at a rate of 28%, from all distributions
to any non-corporate U.S. stockholder (1) who fails to furnish us with a correct taxpayer identification number or a certificate
that such stockholder is exempt from backup withholding or (2) with respect to whom the IRS notifies us that such stockholder
has failed to properly report certain interest and dividend income to the IRS and to respond to notices to that effect. An individual’s
taxpayer identification number is his or her social security number. Any amount withheld under backup withholding is allowed as
a credit against the U.S. stockholder’s federal income tax liability, provided that proper information is provided to the
IRS.



Reportable
Transactions Reporting



If
a U.S. stockholder recognizes a loss with respect to shares of our common stock of $2 million or more for an individual stockholder
or $10 million or more for a corporate stockholder, the stockholder must file with the IRS a disclosure statement on Form 8886.
The fact that a loss is reportable under these regulations does not affect the legal determination of whether the taxpayer’s
treatment of the loss is proper. U.S. stockholders should consult their tax advisors to determine the applicability of these regulations
in light of their specific circumstances.



Taxation
of Non-U.S. Stockholders



The
following discussion applies only to Non-U.S. stockholders. Whether an investment in our shares is appropriate for a Non-U.S.
stockholder will depend upon that person’s particular circumstances. An investment in our shares by a Non-U.S. stockholder
may have adverse tax consequences. Non-U.S. stockholders should consult their tax advisers before investing in our common stock.



Distributions
of our investment company taxable income to Non-U.S. stockholders (including interest income and realized net short-term capital
gains in excess of realized long-term capital losses, which generally would be free of withholding if paid to Non-U.S. stockholders
directly) will be subject to withholding of federal tax at a 30% rate (or lower rate provided by an applicable treaty) to the
extent of our current and accumulated earnings and profits unless an applicable exception applies. If the distributions are effectively
connected with a U.S. trade or business of the Non-U.S. stockholder, we will not be required to withhold federal tax if the Non-U.S.
stockholder complies with applicable certification and disclosure requirements, although the distributions will be subject to
federal income tax at the rates applicable to U.S. persons. (Special certification requirements apply to a Non-U.S. stockholder
that is a foreign partnership or a foreign trust, and such entities are urged to consult their own tax advisers.)



In
addition, with respect to certain distributions made by RICs to Non-U.S. stockholders, no withholding will be required and the
distributions generally will not be subject to federal income tax if (i) the distributions are properly designated in a notice
timely delivered to our stockholders as “interest-related dividends” or “short-term capital gain dividends,”
(ii) the distributions are derived from sources specified in the Code for such dividends and (iii) certain other requirements
are satisfied. No assurance can be given as to whether any of our distributions will be reported as eligible for this exemption
from withholding tax.



Actual
or deemed distributions of our net capital gains to a Non-U.S. stockholder, and gains recognized by a Non-U.S. stockholder upon
the sale of our common stock, generally will not be subject to federal withholding tax and will not be subject to U.S. federal
income tax unless (i) the distributions or gains, as the case may be, are effectively connected with a U.S. trade or business
of the Non-U.S. stockholder and, if an income tax treaty applies, are attributable to a permanent establishment maintained by
the Non-U.S. stockholder in the United States, or such Non-U.S. stockholder in the United States or (ii) in the case of an individual
stockholder, the stockholder is present in the United States for a period or periods aggregating 183 days or more during the year
of the sale or the receipt of the distributions or gains and certain other conditions are met.



If
we distribute our net capital gains in the form of deemed rather than actual distributions, a Non-U.S. stockholder will be entitled
to a U.S. federal income tax credit or tax refund equal to the stockholder’s allocable share of the tax we pay on the capital
gains deemed to have been distributed. To obtain the refund, the Non-U.S. stockholder must obtain a U.S. taxpayer identification
number and file a U.S. federal income tax return even if the Non-U.S. stockholder would not otherwise be required to obtain a
U.S. taxpayer identification number or file a U.S. federal income tax return. For a corporate Non-U.S. stockholder, distributions
(both actual and deemed), and gains realized upon the sale of our common stock that are effectively connected to a U.S. trade
or business may, under certain circumstances, be subject to an additional “branch profits tax” at a 30% rate (or at
a lower rate if provided for by an applicable treaty). Accordingly, investment in the shares may not be appropriate for a Non-U.S.
stockholder.



Backup
Withholding.A Non-U.S. stockholder who is a non-resident alien individual, and who is otherwise subject to U.S. federal withholding
tax, may be subject to information reporting and backup withholding of federal income tax on dividends unless the Non-U.S. stockholder
provides us or the dividend paying agent with an IRS Form W-8BEN (or an acceptable substitute form) or otherwise meets documentary
evidence requirements for establishing that it is a Non-U.S. stockholder or otherwise establishes an exemption from backup withholding.



Non-U.S.
stockholders may also be subject to U.S. estate tax with respect to their investment in our common stock.





18







Foreign
Account Tax Compliance Act



Legislation
commonly referred to as the “Foreign Account Tax Compliance Act,” or “FATCA,” generally imposes a 30%
withholding tax on payments of certain types of income to foreign financial institutions (“FFIs”) unless such FFIs
either (i) enter into an agreement with the U.S. Treasury to report certain required information with respect to accounts held
by U.S. persons (or held by foreign entities that have U.S. persons as substantial owners) or (ii) reside in a jurisdiction that
has entered into an intergovernmental agreement (“IGA”) with the United States to collect and share such information
and are in compliance with the terms of such IGA and any enabling legislation or regulations. The types of income subject to the
tax include U.S. source interest and dividends, and the gross proceeds from the sale of any property that could produce U.S.-source
interest or dividends received after December 31, 2018. The information required to be reported includes the identity and taxpayer
identification number of each account holder that is a U.S. person and transaction activity within the holder’s account.
Depending on the status of a Non-U.S. stockholder and the status of the intermediaries through which they hold their shares, Non-U.S.
stockholders could be subject to this 30% withholding tax with respect to distributions on their shares and proceeds from the
sale of their shares. Stockholders may be requested to provide additional information to us to enable us to determine whether
withholding is required, such as W-8BEN, W-8BEN-E or other applicable series W-8.



Non-U.S.
persons should consult their own tax advisers with respect to the U.S. federal income tax and withholding tax, and state, local
and foreign tax consequences of an investment in the shares.



Item
1A. Risk Factors



An
investment in our securities involves certain risks relating to our structure and investment objective. The risks set forth below
are not the only risks we face, and we may face other risks that we have not yet identified, which we do not currently deem material
or which are not yet predictable. If any of the following risks occur, our business, financial condition and results of operations
could be materially adversely affected. In such case, our net asset value and the price of our common stock could decline, and
you may lose all or part of your investment.



Risks
Relating to Our Business and Structure



We
are a recently-formed company with limited operating history.



We
were formed in November 2014. As a result, we have limited financial information on which you can evaluate an investment in our
company or our prior performance. We are subject to all of the business risks and uncertainties associated with any new business,
including the risk that we will not achieve our investment objective and that the value of your investment could decline substantially
or your investment could become worthless. In addition, in order to comply with BDC and RIC requirements, we may invest in temporary
investments, such as cash, cash equivalents, U.S. government securities and other high-quality debt investments that mature in
one year or less, which we expect will earn yields substantially lower than the interest, dividend or other income that we anticipate
receiving in respect of suitable portfolio investments. We may not be able to pay any significant distributions during this period,
and any such distributions may be substantially lower than the distributions we expect to pay when our portfolio is fully invested.



Our
shares will not be listed on a national securities exchange for the foreseeable future, if ever. Therefore, our shares have limited
liquidity and you may not receive a full return of your invested capital if you sell your shares.



Our
shares are illiquid assets for which there is not expected to be any secondary market in the foreseeable future. We currently
have no target date in which to list our shares on a national securities exchange. There can be no assurance that even if we sought
a listing that we would be able to obtain a listing within any particular time frame.



If
our shares are listed, we cannot assure you a public trading market will develop. Since a portion of the proceeds we receive from
the sale of shares in our private offering will be used to pay expenses and fees incurred by us, the full amount of proceeds received
will not be used to acquire investments pursuant to our investment objective. As a result, even if we do list our shares on a
national securities exchange, you may not receive a full return of your invested capital if you sell your shares.





19







We
will be dependent upon management personnel of our Advisor for our future success.



We
depend on the experience, diligence, skill and network of business contacts of our Advisor and its investment professionals. The
investment professionals that our Advisor currently retains or may subsequently retain, will identify, evaluate, negotiate, structure,
close, monitor and manage our investments. Our future success will depend to a significant extent on the continued service and
coordination of our Advisor’s investment professionals. The departure of any of our Advisor’s key personnel, including
Mr. Smith, our President and Chief Executive Officer, could have a material adverse effect on our business, financial condition
or results of operations. In addition, we cannot assure you that our Advisor will remain our investment adviser or that we will
continue to have access to its investment professionals.



Our
Advisor has limited prior experience managing a BDC.



The
investment professionals of our Advisor have limited experience managing a BDC, and the investment philosophy and techniques used
by our Advisor to manage a public company may differ from the investment philosophy and techniques previously employed by our
Advisor’s investment professionals in identifying and managing past investments. Accordingly, we can offer no assurance
that we will replicate the historical performance of other businesses or companies with which our Advisor’s investment professionals
have been affiliated, and we caution you that our investment returns could be substantially lower than the returns achieved by
such other companies.



The
net asset value of our common stock may fluctuate significantly.



The
net asset value of our shares of common stock may be significantly affected by numerous factors, some of
which are beyond our control and may not be directly related to our operating performance. These factors include: (i) changes
in regulatory policies or tax guidelines, particularly with respect to RICs or BDCs; (ii) loss of RIC status (once obtained) or
BDC status; (iii) changes in earnings or variations in operating results; (iv) changes in the value of our portfolio of investments;
(v) changes in accounting guidelines governing valuation of our investments; (vi) any shortfall in revenue or net income or any
increase in losses from levels expected by investors; (vii) departure of our investment adviser or certain of its key personnel;
(viii) general economic trends and other external factors; and (ix) loss of a major funding source.



Regulations
governing our operation as a BDC affect our ability to, and the way in which, we raise additional capital.



The
1940 Act imposes numerous constraints on the operations of BDCs. See “Item 1.Business—Regulation as a Public Business
Development Company” for a discussion of BDC limitations. For example, BDCs are required to invest at least 70% of their
total assets in securities of nonpublic or thinly traded U.S. companies, cash, cash equivalents, U.S. government securities and
other high quality debt investments that mature in one year or less. These constraints may hinder our Advisor’s ability
to take advantage of attractive investment opportunities and to achieve our investment objective.



Regulations
governing our operation as a BDC affect our ability to raise additional capital, and the ways in which we can do so. Raising additional
capital may result in dilution to our current stockholders. The 1940 Act also limits our ability to issue debt and preferred stock
(“senior securities”) to amounts such that our asset coverage ratio is at least 200% of assets less liabilities and
other indebtedness. Consequently, if the value of our assets declines, we may be required to sell a portion of our investments
and, depending on the nature of our leverage, repay a portion of our indebtedness at a time when this may be disadvantageous.



We
are not generally able to issue and sell our common stock at a price below net asset value per share. We may, however, sell our
common stock, or warrants, options or rights to acquire our common stock, at a price below the then-current net asset value per
share of our common stock if our Board determines that a sale is in the best interests of us and our stockholders and our stockholders
approve it.



We
may borrow money, which may magnify the potential for gain or loss and may increase the risk of investing in us.



As
part of our business strategy, we may borrow from and issue senior debt securities to banks, insurance companies, and other lenders.
Holders of these senior securities will have fixed-dollar claims on our assets that are superior to the claims of our common stockholders.
If the value of our assets decreases, leveraging would cause our net asset value to decline more sharply than it otherwise would
have had we not leveraged. Similarly, any decrease in our income would cause net income to decline more sharply than it would
have had we not borrowed. Such a decline could negatively affect our ability to make distribution payments. Our ability to service
any debt that we incur will depend largely on our financial performance and will be subject to prevailing economic conditions
and competitive pressures. Moreover, the Management Fee we pay to our Advisor is payable based on our gross assets, including
those assets acquired through the use of leverage. See “— The advisory fee structure we have with our Advisor may
create incentives that are not fully aligned with the interests of our stockholders.”



Furthermore,
any debt facility into which we may enter may impose financial and operating covenants that restrict our business activities.
Lastly, we may be unable to obtain our desired leverage, which would, in turn, affect our return on capital.





20







If
we do not invest a sufficient portion of our assets in qualifying assets, we could fail to qualify as a BDC or be precluded from
investing according to our current business strategy.



As
a BDC, we may not acquire any assets other than “qualifying assets” unless, at the time of and after giving effect
to such acquisition, at least 70% of our total assets are qualifying assets. As of December 31, 2016, 96% of our total assets
are qualifying assets.



If
we do not invest a sufficient portion of our assets in qualifying assets, we could violate the 1940 Act provisions applicable
to BDCs. As a result of such violation, specific rules under the 1940 Act could prevent us, for example, from making follow-on
investments in existing portfolio companies (which could result in the dilution of our position) or could require us to dispose
of investments at inappropriate times in order to come into compliance with the 1940 Act. If we need to dispose of such investments
quickly, it could be difficult to dispose of such investments on favorable terms. We may not be able to find a buyer for such
investments and, even if we do find a buyer, we may have to sell the investments at a substantial loss. Any such outcomes would
have a material adverse effect on our business, financial condition, results of operations and cash flows. In addition, we may
be precluded from investing in what we believe to be attractive investments if such investments are not qualifying assets for
purposes of the 1940 Act if we do not have at least 70% of our total assets in qualifying assets.



If
we do not maintain our status as a BDC, we would be subject to regulation as a registered closed-end investment company under
the 1940 Act. As a registered closed-end investment company, we would be subject to substantially more regulatory restrictions
under the 1940 Act which would significantly decrease our operating flexibility.



As
a BDC, we are a non-diversified investment company within the meaning of the 1940 Act, and therefore, we are limited with respect
to the proportion of our assets that may be invested in securities of a single issuer.



We
are classified as a non-diversified investment company within the meaning of the 1940 Act, which means that we are limited by
the 1940 Act with respect to the proportion of our assets that we may invest in the securities of a single issuer. To the extent
that we assume large positions in the securities of a small number of issuers, our net asset value may fluctuate to a greater
extent than that of a diversified investment company as a result of changes in the financial condition or the market's assessment
of any of our portfolio companies. We may also be more susceptible to any single economic or regulatory occurrence than a diversified
investment company. Beyond our income tax diversification requirements under Subchapter M of the Code, we will not have fixed
guidelines for diversification, and our investments could be concentrated in relatively few portfolio companies.



We
operate in a highly competitive market for investment opportunities.



Other
entities, including commercial banks, commercial financing companies, other BDCs and insurance companies compete with us to make
the types of investments that we plan to make in lower middle-market companies. Certain of these competitors may be substantially
larger, have considerably greater financial, technical and marketing resources than we have and offer a wider array of financial
services. For example, some competitors may have a lower cost of funds and access to funding sources that are not available to
us. Many competitors are not subject to the regulatory restrictions that the 1940 Act imposes on us as a BDC or the restrictions
that the Code imposes on us as a RIC. As a result, it may be difficult for us to locate attractive investment opportunities.



We
may be obligated to pay our Advisor incentive compensation even if we incur a net loss due to a decline in the value of our portfolio.



Our
Advisory Agreement entitles our Advisor to receive an incentive fee based on our net investment income regardless of any capital
losses. In such case, we may be required to pay our Advisor an incentive fee for a fiscal quarter even if there is a decline in
the value of our portfolio or if we incur a net loss for that quarter.



Any
incentive fee payable by us that relates to our net investment income may be computed and paid on income that may include interest
that has been accrued but not yet received. If a portfolio company defaults on a loan that is structured to provide accrued interest,
it is possible that accrued interest previously included in the calculation of the incentive fee will become uncollectible. Our
Advisor is not obligated to reimburse us for any part of the incentive fee it received that was based on accrued income that we
never received as a result of a subsequent default, and such circumstances would result in our paying an incentive fee on income
we never receive.



For
federal income tax purposes, we are required to recognize taxable income in some circumstances in which we do not receive a corresponding
payment in cash (such as PIK interest or deferred interest that is accrued as original issue discount) and to make distributions
with respect to such income to qualify as a RIC after we achieve such status. Under such circumstances, we may have difficulty
meeting the annual distribution requirement necessary to obtain and maintain RIC tax treatment under the Code. This difficulty
in making the required distribution may be amplified to the extent that we are required to pay an incentive fee with respect to
such accrued income. As a result, we may have to sell some of our investments at times and/or at prices we would not consider
advantageous, raise additional debt or equity capital, or forgo new investment opportunities for this purpose. If we are not able
to obtain cash from other sources, we may fail to qualify for RIC tax treatment and thus become subject to corporate-level income
tax.





21







We
will be subject to corporate-level income tax if we are unable to qualify as a RIC under Subchapter M of the Code.



We
will incur corporate-level income tax costs if we are unable to qualify as a RIC for U.S. tax purposes or if we are not able to
distribute substantially all of our investment company taxable income in a timely fashion. To obtain and maintain RIC tax treatment
under the Code, we must meet the following annual distribution, income source and asset diversification requirements:



|● | We
                                         must distribute to our stockholders on an annual basis at least 90% of our investment
                                         company taxable income, which consists of net ordinary income and realized net short-term
                                         capital gains in excess of realized net long-term capital losses, if any. In the event
                                         we use debt financing, we will be subject to certain asset coverage ratio requirements
                                         under the 1940 Act and financial covenants under loan and credit agreements that could,
                                         under certain circumstances, restrict us from making distributions necessary to satisfy
                                         the distribution requirement. In addition, our income for tax purposes may exceed our
                                         available cash flow. If we are unable to obtain cash from other sources, we could fail
                                         to qualify for RIC tax treatment and thus become subject to corporate-level income tax.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|● | We
                                      must derive at least 90% of our gross income for each year from dividends, interest, gains
                                      from the sale of stock or securities or similar sources.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|● | We
                                      must meet specified asset diversification requirements at the end of each quarter of our
                                      taxable year. The need to satisfy these requirements in order to prevent the loss of RIC
                                      status may result in our having to dispose of certain investments quickly on unfavorable
                                      terms. Because most of our investments will be relatively illiquid, any such dispositions
                                      could be made at disadvantageous prices and could result in substantial losses.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



If
we fail to qualify for RIC tax treatment for any reason, the resulting federal income tax liability could substantially reduce
our net assets, the amount of income available for distribution, and the amount of our distributions.



There
is a risk that you may not receive distributions or that our distributions may not grow over time.



We
cannot assure you that we will achieve investment results or maintain a tax status that will allow or require any specified level
of cash distributions or year-to-year increases in cash distributions. Although a portion of our expected earnings and distributions
will be attributable to net investment income, we do not expect to generate capital gains from the sale of our portfolio investments
on a level or uniform basis from quarter to quarter. This may result in substantial fluctuations in our quarterly dividend payments.



In
certain cases, we may recognize income before or without receiving cash representing the income. Depending on the amount of noncash
income, this could result in difficulty satisfying the annual distribution requirement applicable to RICs. Accordingly, we may
delay distributions during a year until we generate cash or we may have to sell some of our investments at times we would not
consider advantageous, raise additional debt or equity capital or reduce new investments to meet these distribution requirements.



We
may not generate significant, if any, capital gains during our initial years of operation and thus we are likely to pay distributions
in those years principally from interest we receive from our initial and follow-on investments prior to the sale or refinancing
of loans we make. Moreover, our ability to pay distributions in our initial years of operation will be based on our ability to
invest our capital in suitable portfolio companies in a timely manner.



In
addition, the lower middle-market companies in which we invest are generally more susceptible to economic downturns than larger
operating companies, and therefore may be more likely to default on their payment obligations to us during recessionary periods.
Any such defaults could substantially reduce our net investment income available for distribution to our stockholders.



To
the extent OID and PIK constitute a portion of our income, we will be exposed to typical risks associated with such income being
required to be included in taxable and accounting income prior to receipt of cash representing such income.



Our
investments may include OID instruments and PIK arrangements. To the extent OID or PIK constitute a portion of our income, we
will be exposed to typical risks associated with such income being required to be included in taxable and accounting income prior
to receipt of cash, including the following:





|● | OID
                                         instruments and PIK securities may have unreliable valuations because the accretion of
                                         OID as interest income and the continuing accruals of PIK securities require judgments
                                         about their collectability and the collectability of deferred payments and the value
                                         of any associated collateral.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|● | OID
                                         instruments may create heightened credit risks because the inducement to the borrower
                                         to accept higher interest rates in exchange for the deferral of cash payments typically
                                         represents, to some extent, speculation on the part of the borrower.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|● | For
                                         accounting purposes, cash distributions to shareholders that include a component of accreted
                                         OID income do not come from paid-in capital, although they may be paid from the offering
                                         proceeds. Thus, although a distribution of accreted OID income may come from the cash
                                         invested by stockholders, the 1940 Act does not require that shareholders be given notice
                                         of this fact.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|● | Higher
                                         interest and dividend rates on PIK securities reflects the payment deferral and increased
                                         credit risk associated with such instruments and PIK securities generally represent a
                                         significantly higher credit risk than coupon loans.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|● | The
                                         presence of accreted OID income and PIK income would create the risk of non-refundable
                                         cash payments to the Advisor in the form of incentive fees on income based on non-cash
                                         accreted OID income and PIK income accruals that may never be realized.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|● | Even
                                         if accounting conditions are met, borrowers on such securities could still default when
                                         our actual collection is expected to occur at the maturity of the obligation.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|● | PIK
                                         has the effect of generating investment income and increasing the incentive fees payable
                                         at a compounding rate. In addition, the deferral of PIK also reduces the loan-to-value
                                         ratio at a compounding rate.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





22







We
may have difficulty paying our required distributions if we recognize income before or without receiving cash representing such
income.



For
U.S. federal income tax purposes, we may be required to recognize taxable income in circumstances in which we do not receive a
corresponding payment in cash. For example, if we hold debt instruments that are
treated under applicable tax rules as having original issue discount (such as debt instruments with PIK interest or, in certain
cases, increasing interest rates or debt instruments that were issued with warrants), we must include in income each tax year
a portion of the original issue discount that accrues over the life of the obligation, regardless of whether cash representing
such income is received by us in the same tax year. We may also have to include in income other amounts that we have not yet received
in cash, such as deferred loan origination fees that are paid after origination of the loan or are paid in non-cash compensation
such as warrants or stock. We anticipate that a portion of our income may constitute original issue discount or other income required
to be included in taxable income prior to receipt of cash. Further, we may elect to amortize market discount and include such
amounts in our taxable income in the current tax year, instead of upon disposition, as an election not to do so would limit our
ability to deduct interest expenses for tax purposes.



For
the year ended December 31, 2016, 23% of our total investment income consisted of PIK interest. Because PIK interest and any original
issue discount or other amounts accrued will be included in our investment company taxable income for the tax year of the accrual,
we may be required to make a distribution to our stockholders in order to satisfy the annual distribution requirement, even though
we will not have received any corresponding cash amount. As a result, we may have difficulty meeting the annual distribution requirement
necessary to qualify for and maintain RIC tax treatment under Subchapter M of the Code. We may have to sell some of our investments
at times and/or at prices we would not consider advantageous, raise additional debt or equity capital or forgo new investment
opportunities for this purpose. If we are not able to obtain cash from other sources, we may fail to qualify for or maintain RIC
tax treatment and thus become subject to corporate-level income tax.



Furthermore,
we may invest in the equity securities of non-U.S. corporations (or other non-U.S. entities classified as corporations for U.S.
federal income tax purposes) that could be treated under the Code and U.S. Treasury regulations as “passive foreign investment
companies” and/or “controlled foreign corporations.” The rules relating to investment in these types of non-U.S.
entities are designed to ensure that U.S. taxpayers are either, in effect, taxed currently (or on an accelerated basis with respect
to corporate level events) or taxed at increased tax rates at distribution or disposition. In certain circumstances, these rules
also could require us to recognize taxable income or gains where we do not receive a corresponding payment in cash.



PIK
interest payments we receive increases our assets under management and, as a result, increases the amount of base management fees
and incentive fees payable by us to our Advisor.



For
the year ended December 31, 2016, 23% of our total investment income consisted of PIK interest. Because PIK interest results in
an increase in the size of the loan balance of the underlying loan, the receipt by us of PIK interest has the effect of increasing
our assets under management. As a result, because the base management fee that we pay to our Advisor is based on the value of
our gross assets, the receipt by us of PIK interest results in an increase in the amount of the base management fee payable by
us. In addition, any such increase in a loan balance due to the receipt of PIK interest causes such loan to accrue interest on
the higher loan balance, which will result in an increase in our pre-incentive fee net investment income and, as a result, an
increase in incentive fees that are payable by us to our Advisor.



As
of the date hereof, we are controlled bya small number of stockholders, each of whom have
the ability to control or significantly influence our operations.



As
of February 2, 2017, GrayCo Alternative Partners II, LP, a private fund managed by Consequent Capital Management, LLC, owns approximately
65.8% of our issued and outstanding common stock. In addition, a second investor, District 1199J New Jersey Healthcare Employers
Pension Fund, owns approximately 34.2% of our issued and outstanding common stock. While we are engaged in a private offering
of shares and anticipate accepting subscriptions from additional investors, there can be no assurances that additional subscriptions
will be received and accepted. Unless and until we raise significantly more capital in our private offering, GrayCo Alternative
Partners II, LP will maintain a controlling interest in our operations and District 1199J New Jersey Healthcare Employers Pension
Fund will have the ability to significantly influence our operations.





23







You
may be subject to filing requirements under the Exchange Act as a result of your investment in the Company.



Because
our common stock is registered under the Exchange Act, ownership information for any person who beneficially owns 5% or more of
our common stock will have to be disclosed in a Schedule 13G or other filings with the SEC. Beneficial ownership for these purposes
is determined in accordance with the rules of the SEC, and includes having voting or investment power over the securities. In
some circumstances, investors who choose to reinvest their dividends may see their percentage stake in us increase to more than
5%, thus triggering this filing requirement. Although we will provide in our quarterly statements the amount of outstanding stock
and the amount of the investor’s stock, the responsibility for determining the filing obligation and preparing the filing
remains with the investor.



You
may be subject to the short-swing profits rules under the Exchange Act as a result of your investment in the Company.



Persons
with the right to appoint a director or who hold more than 10% of a class of our shares may be subject to Section 16(b) of the
Exchange Act, which recaptures for the benefit of the Company profits from the purchase and sale of registered stock within a
six-month period.



Our
Board may change our investment objective, operating policies and strategies without prior notice or stockholder approval.



Our
Board has the authority to modify or waive certain of our operating policies and strategies without prior notice (except as required
by the 1940 Act) and without stockholder approval. However, absent stockholder approval, we may not change the nature of our business
so as to cease to be, or withdraw our election as, a BDC. We cannot predict the effect any changes to our current operating policies
and strategies would have on our business, operating results and value of our stock. Nevertheless, the effects may adversely affect
our business and impact our ability to make distributions.



Changes
in laws or regulations governing our operations may adversely affect our business.



Changes
to the laws and regulations governing our operations may cause us to alter our investment strategy in order to avail ourselves
of new or different opportunities. These changes could result in material differences to the strategies and plans described herein
and may result in our investment focus shifting.



Price
declines in the large corporate leveraged loan market may adversely affect the fair value of our syndicated loan portfolio, reducing
our net asset value through increased net unrealized depreciation.



Prior
to the onset of the financial crisis that began in 2007, securitized investment vehicles, hedge funds and other highly leveraged
non-bank financial institutions comprised the majority of the market for purchasing and holding senior and subordinated debt.
As the trading price of the loans underlying these portfolios began to deteriorate beginning in the first quarter of 2007, we
believe that many institutions were forced to raise cash by selling their interests in performing assets in order to satisfy margin
requirements or the equivalent of margin requirements imposed by their lenders. This resulted in a forced deleveraging cycle of
price declines, compulsory sales, and further price declines, with falling underlying credit values, widespread redemption requests,
and other constraints resulting from the credit crisis generating further selling pressure.



Conditions
in the medium- and large-sized U.S. corporate debt market may experience similar or worse disruption or deterioration in the future,
which may cause pricing levels to similarly decline or be volatile. As a result, our net asset value could decline through an
increase in unrealized depreciation and incurrence of realized losses in connection with the sale of our investments, which could
have a material adverse impact on our business, financial condition and results of operations.



Difficult
market and political conditions may adversely affect our business in many ways, including by reducing the value or hampering the
performance of the investments made by us, each of which could materially and adversely affect our business, results of operations
and financial condition.



Our
business is materially affected by conditions in the global financial markets and economic and political conditions throughout
the world, such as interest rates, availability and cost of credit, inflation rates, economic uncertainty, changes in laws (including
laws relating to our taxation, taxation of our investors, the possibility of changes to tax laws in either the United States or
any non-U.S. jurisdiction and regulations on asset managers), trade barriers, commodity prices, currency exchange rates and controls
and national and international political circumstances (including wars, terrorist acts and security operations). These factors
are outside of our control and may affect the level and volatility of asset prices and the liquidity and value of investments,
and we may not be able to or may choose not to manage our exposure to these conditions. Ongoing developments in the U.S. and global
financial markets following the unprecedented turmoil in the global capital markets and
the financial services industry in late 2008 and early 2009 continue to illustrate that the current environment
is still one of uncertainty and instability for investment management businesses. These and other conditions in the global financial
markets and the global economy may result in adverse consequences for us and the companies we invest in, which could restrict
our investment activities and impede our ability to effectively achieve their investment objectives.



The
downgrade of the U.S. credit rating and the economic crisis in Europe could negatively impact our liquidity, financial condition
and earnings.





24







U.S.
debt ceiling and budget deficit concerns together with signs of deteriorating sovereign debt conditions in Europe continue to
present the possibility of a credit-rating downgrade, economic slowdowns, or a recession for the United States. The impact of
any further downgrades to the U.S. government’s sovereign credit rating or downgraded sovereign credit ratings of European
countries or the Russian Federation, or their perceived creditworthiness could adversely affect the U.S. and global financial
markets and economic conditions. These developments, along with any further European sovereign debt issues, could cause interest
rates and borrowing costs to rise, which may negatively impact our ability to access the debt markets on favorable terms. Continued
adverse economic conditions could have a material adverse effect on our business, financial condition and results of operations.



In
October 2014, the U.S. Federal Reserve announced that it has terminated its bond-buying program, or quantitative easing, which
was designed to stimulate the economy and expand the Federal Reserve’s holdings of long-term securities until key economic
indicators, such as the unemployment rate, showed signs of improvement. It is unclear what effect, if any, the Federal Reserve’s
termination of quantitative easing will have on the value of our investments. However, it is possible that without quantitative
easing by the Federal Reserve, these developments, along with the European sovereign debt crisis, could cause interest rates and
borrowing costs to rise, which may negatively impact our ability to access the debt markets on favorable terms. The Federal Open Market Committee of the Federal Reserve has indicated its belief that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate,
and that the federal funds rate will likely remain, for some time, below levels that are expected to prevail in the longer run.



A
failure or the perceived risk of a failure to raise the statutory debt limit of the United States could have a material adverse
effect on our business, financial condition and results of operations.



In
the future, the U.S. government may not be able to meet its debt payments unless the federal debt ceiling is raised. The federal
debt limit has been suspended since November 2, 2015, but the law is set to be reinstated on March 15, 2017. If legislation increasing
the debt ceiling is not enacted, as needed, and the debt ceiling is reached, the federal government may stop or delay making payments
on its obligations. A failure by Congress to raise the debt limit to the extent necessary would increase the risk of default by
the United States on its obligations, as well as the risk of other economic dislocations. If the U.S. government fails to complete
its budget process or to provide for a continuing resolution before the expiration of the current continuing resolution, another
federal government shutdown may result. Such a failure or the perceived risk of such a failure, consequently, could have a material
adverse effect on the financial markets and economic conditions in the United States and throughout the world. It could also limit
our ability and the ability of our portfolio companies to obtain financing, and it could have a material adverse effect on the
valuation of our portfolio companies. Consequently, the continued uncertainty in the general economic environment and potential
debt ceiling implications, as well in specific economies of several individual geographic markets in which our portfolio companies
operate, could adversely affect our business, financial condition and results of operations.



The
impact on us of recent financial reform legislation, including the Dodd-Frank Act, is uncertain.



In
light of recent conditions in the U.S. and global financial markets and the U.S. and global economy, legislators, the presidential
administration and regulators have increased their focus on the regulation of the financial services industry. In particular,
the Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended, or the Dodd-Frank Act, institutes a wide range of reforms
that will have an impact on all financial institutions. Many of the requirements called for in the Dodd-Frank Act will be implemented
over time, most of which will be subject to implementing regulations over the course of several years. Given the uncertainty associated
with the manner in which the provisions of the Dodd-Frank Act will be implemented by the various regulatory agencies and through
regulations, including any changes mandated by the new presidential administration, the full impact such requirements will have
on our business, results of operations or financial condition is unclear. The changes resulting from the Dodd-Frank Act may require
us to invest significant management attention and resources to evaluate and make necessary changes in order to comply with new
statutory and regulatory requirements. Failure to comply with any such laws, regulations or principles, or changes thereto, may
negatively impact our business, results of operations and financial condition. While we cannot predict what effect any changes
in the laws or regulations or their interpretations would have on us as a result of recent financial reform legislation, these
changes could be materially adverse to us and our stockholders.



Future
legislation may allow us to incur additional leverage.



As
a BDC, we are generally not permitted to incur indebtedness unless immediately after such borrowing we have an asset coverage
for total borrowings of at least 200% (i.e., the amount of debt may not exceed 50% of the value of our assets). Legislation was
previously introduced in the U.S. House of Representatives that proposed a modification of this section of the 1940 Act to permit
an increase in the amount of debt that BDCs could incur by modifying the percentage from 200% to 150%. Similar legislation may
be reintroduced and may pass that permits us to incur additional leverage under the 1940 Act. As a result, we may be able to incur
additional indebtedness in the future, and, therefore, the risk of an investment in us may increase.



We
may experience fluctuations in our quarterly results.



We
could experience fluctuations in our quarterly operating results due to a number of factors, including our ability or inability
to make investments in companies that meet our investment criteria, the interest rate payable on the debt securities we acquire,
the level of our expenses, variations in and the timing of the recognition of realized and unrealized gains or losses, the degree
to which we encounter competition in our markets and general economic conditions. As a result of these factors, results for any
previous period should not be relied upon as being indicative of performance in future periods.





25







Our
Advisor can resign on 60 days’ notice. We may not be able to find a suitable replacement within that timeframe, resulting
in a disruption in our operations that could adversely affect our financial condition, business and results of operations.



Our
Advisor has the right, under the Advisory Agreement, to resign at any time upon not less than 60 days’ written notice, regardless
of whether we have found a replacement. If our Advisor resigns, we may not be able to find a new investment adviser or hire internal
management with similar expertise and ability to provide the same or equivalent services on acceptable terms within 60 days, or
at all. If we are unable to do so quickly, our operations are likely to experience a disruption, and our financial condition,
business and results of operations as well as our ability to pay distributions are likely to be adversely affected.



The
advisory fee structure we have with our Advisor may create incentives that are not fully aligned with the interests of our stockholders.



We
have entered into the Advisory Agreement with our Advisor that provides that Management Fees are based on the value of our gross
assets. As a result, investors in our common stock will invest on a “gross” basis and receive distributions on a “net”
basis after expenses, resulting in a lower rate of return than one might achieve through direct investments. Because Management
Fees are based on the value of our gross assets, our Advisor will benefit when we incur debt or use leverage. This fee structure
may encourage our Advisor to cause us to borrow money to finance additional investments. Under certain circumstances, the use
of borrowed money may increase the likelihood of default, which would disfavor our stockholders.



Our
incentive fee may induce our Advisor to make speculative investments.



Our
Advisor will receive an incentive fee based, in part, upon net realized gains on our investments. Unlike the portion of the incentive
fee based on income, there is no hurdle rate applicable to the portion of the incentive fee based on net realized gains. Additionally,
under the incentive fee structure, our Advisor may benefit when capital gains are recognized and, because our Advisor will determine
when to sell a holding, our Advisor will control the timing of the recognition of such capital gains. As a result, our Advisor
may have a tendency to invest more capital in investments that are likely to result in capital gains as compared to income producing
securities. Such a practice could result in our investing in more speculative securities than would otherwise be the case, which
could result in higher investment losses, particularly during economic downturns.



To
the extent that we do not realize income or choose not to retain after-tax realized capital gains, we will have a greater need
for additional capital to fund our investments and operating expenses.



As
a RIC, we must annually distribute at least 90% of our investment company taxable income as a dividend and may either distribute
or retain our realized net capital gains from investments. Earnings that we are required to distribute to stockholders will generally
not be available to fund future investments. Accordingly, we may have insufficient funds to make new and follow-on investments,
which could have a material adverse effect on our financial condition and results of operations.



The
Advisory Agreement was not negotiated on an arm’s length basis and may not be as favorable to us as if it had been negotiated
with an unaffiliated third party.



The
Advisory Agreement was negotiated between related parties. Consequently, its terms, including fees payable to our Advisor, may
not be as favorable to us as if they had been negotiated with an unaffiliated third party. In addition, we may choose not to enforce,
or to enforce less vigorously, our rights and remedies under this agreement because of our desire to maintain our ongoing relationship
with our Advisor. Any such decision, however, would breach our fiduciary obligations to our stockholders.



Risks
Related to Our Portfolio Company Investments



Our
target investments are risky and highly speculative, and the lower middle-market companies we target may have difficulty accessing
the capital markets to meet their future capital needs, which may limit their ability to grow or to repay their outstanding indebtedness
upon maturity.



Investing
in lower middle-market companies involves a number of significant risks, including:



|● | these companies
                                    may have limited financial resources and may be unable to meet their obligations under their
                                    debt securities 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 we may have
                                    obtained in connection with our investment;
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|● | they typically
                                    have shorter operating histories, narrower product lines and smaller market shares than larger
                                    businesses, which tend to render them more vulnerable to competitors’ actions and market
                                    conditions, as well as general economic downturns;
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|● | they 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;
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





26









|● | they 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;
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|● | they may have
                                    difficulty accessing the capital markets to meet future capital needs, which may limit their
                                    ability to grow or to repay their outstanding indebtedness upon maturity; and
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|● | some
                                         of our portfolio companies will conduct business in regulated industries that are susceptible
                                         to regulatory changes.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



A
portion of our debt securities may be rated below investment grade, or of comparative quality, and may be considered speculative.



Typically,
the debt in which we invest will not be rated by any rating agency; however, we
believe that if such investments were rated, they would be below investment grade The lower grade investments
in which we invest may be rated below investment grade by one or more nationally recognized statistical rating agencies at the
time of investment or may be unrated but determined by our Advisor to be of comparable quality. Loans or debt securities rated
below investment grade are considered speculative with respect to the issuer’s capacity to pay interest and repay principal.



If
we make subordinated investments, the obligors or the portfolio companies may not generate sufficient cash flow to service their
debt obligations to us.



We
may make subordinated investments that rank below other obligations of our portfolio companies in right of payment. Subordinated
investments are subject to greater risk of default than senior obligations as a result of adverse changes in the financial condition
of the obligor or economic conditions in general. If we make a subordinated investment in a portfolio company, the portfolio company
may be highly leveraged, and its relatively high debt-to-equity ratio may create increased risks that its operations might not
generate sufficient cash flow to service all of its debt obligations.



The
value of our portfolio securities may not have a readily available market price and, in such a case, we will value these securities
at fair value as determined in good faith by our Board, which valuation is inherently subjective and may not reflect what we may
actually realize for the sale of the investment.



Our
investments will be valued at the end of each fiscal quarter. Substantially all of our investments are expected to be in loans
that do not have readily ascertainable market prices. The fair value of assets that are not publicly traded or whose market prices
are not readily available will be determined in good faith by our Board with assistance from our Advisor. The Board has retained
an independent valuation provider to assist it by performing certain limited third-party valuation services for directly originated
loans in our portfolio. In connection with that determination, investment professionals from our Advisor will prepare portfolio
company valuations using sources and/or proprietary models depending on the availability of information on our assets and the
type of asset being valued, all in accordance with our valuation policy. The participation of our Advisor in our valuation process
could result in a conflict of interest, since the Management Fee is based in part on our gross assets.



Because
fair valuations, and particularly fair valuations of private securities and private companies, are inherently uncertain, may fluctuate
over short periods of time and are often based to a large extent on estimates, comparisons and qualitative evaluations of private
information, our determinations of fair value may differ materially from the values that would have been determined if a ready
market for these securities existed. This could make it more difficult for investors to accurately value our portfolio investments
and could lead to undervaluation or overvaluation of our shares of common stock. In addition, the valuation of these types of
securities may result in substantial write-downs and earnings volatility.



Our
portfolio securities may be thinly traded and, as a result, the lack of liquidity in our investments may adversely affect our
business.



We
will generally make loans to private companies. The illiquidity of these investments may make it difficult for us to sell positions
if the need arises. In addition, if we are required to liquidate all or a portion of our portfolio quickly, we may realize significantly
less than the value at which we had previously recorded such investments. In addition, we may face other restrictions on our ability
to liquidate an investment in a portfolio company to the extent that we hold a significant portion of a company’s equity
or if we have material non-public information regarding that company.



Our
portfolio may be focused in a limited number of portfolio companies, which will subject us to a risk of significant loss if any
of these companies defaults on its obligations under any of its debt instruments or if there is a downturn in a particular industry.



Until
we raise significant amounts of capital, our portfolio may be concentrated in a limited number of portfolio companies and
industries. Beyond the asset diversification requirements associated with our qualification as a RIC for U.S. tax purposes,
we do not have fixed guidelines for diversification, and while we are not targeting any specific industries, our investments
may be concentrated in relatively few industries. As a result, the aggregate returns we realize may be significantly and
adversely affected if a small number of investments perform poorly or if we need to write down the value of any one
investment. Additionally, a downturn in any particular industry in which we are invested could significantly affect our
aggregate returns.





27







Our
portfolio companies may incur debt that ranks equally with, or senior to, our investments in such companies.



Our
portfolio companies may have, or may be permitted to incur, other debt that ranks equally with, or senior to, the debt in which
we invest. By their terms, such debt instruments may entitle the holders to receive payment of interest or principal on or before
the dates on which we are entitled to receive payments with respect to the debt instruments in which we invest. Also, in the event
of insolvency, liquidation, dissolution, reorganization or bankruptcy of a portfolio company, holders of debt instruments ranking
senior to our investment in that portfolio company would typically be entitled to receive payment in full before we receive any
proceeds. After repaying such senior creditors, such portfolio company may not have any remaining assets to use for repaying its
obligation to us. In the case of debt ranking equally with debt instruments in which we invest, we would have to share on an equal
basis any distributions with other creditors holding such debt in the event of an insolvency, liquidation, dissolution, reorganization
or bankruptcy of the relevant portfolio company.



Our
portfolio companies may be highly leveraged.



Some
of our portfolio companies may be highly leveraged, which may have adverse consequences to these companies and to us as an investor.
These companies may be subject to restrictive financial and operating covenants and the leverage may impair these companies’
ability to finance their future operations and capital needs. As a result, these companies’ flexibility to respond to changing
business and economic conditions and to take advantage of business opportunities may be limited. Further, a leveraged company’s
income and net assets will tend to increase or decrease at a greater rate than if borrowed money were not used.



Our
stockholders will not have input into the investment decisions made by our Advisor’s Investment Committee.



Our
investments are selected by our Advisor’s investment professionals, subject to the approval of its Investment Committee,
and our stockholders will not have input into our investment decisions. These factors increase the uncertainty, and possibly also
the risk, of investing in our common stock as compared with an established portfolio and operating history. Depending on the size
of a subscription received in our private offering, we anticipate that it may take three to six months to deploy substantially
all of such proceeds in accordance with our investment objective and pursuant to our investment strategies. Pending these investments,
we intend to temporarily invest the net proceeds from our private offering in cash, cash equivalents, U.S. government securities,
repurchase agreements and high quality debt instruments maturing in one year or less from the time of investment. We expect these
temporary investments to earn yields substantially lower than the income we expect to receive from our targeted investments in
lower middle-market companies.



Prepayments
of our debt investments by our portfolio companies could adversely impact our results of operations and reduce our return on equity.



We
are subject to the risk that the investments we make in our portfolio companies may be repaid prior to maturity. When this occurs,
we will generally reinvest these proceeds in temporary investments, pending their future investment in new portfolio companies.
These temporary investments will typically have substantially lower yields than the debt being prepaid and we could experience
significant delays in reinvesting these amounts. Any future investment in a new portfolio company may also be at lower yields
than the debt that was repaid. As a result, our results of operations could be materially adversely affected if one or more of
our portfolio companies elect to prepay amounts owed to us. Additionally, prepayments, net of prepayment fees, could negatively
impact our return on equity.



Because
we likely will not hold controlling interests in our portfolio companies, we may not be in a position to exercise control over
such portfolio companies or to prevent decisions by management of such portfolio companies that could decrease the value of our
investments.



We
are a lender, and loans (and any equity investments we make) to our portfolio companies will be non-controlling investments, meaning
we will not be in a position to control the management, operation and strategic decision-making of the companies we invest in.
As a result, we will be subject to the risk that a portfolio company we do not control, or in which we do not have a majority
ownership position, may make business decisions with which we disagree, and the equity holders and management of such portfolio
company may take risks or otherwise act in ways that are adverse to our interests. Due to the lack of liquidity for the debt and
equity investments that we will typically hold in our portfolio companies, we may not be able to dispose of our investments in
the event that we disagree with the actions of a portfolio company, and may therefore suffer a decrease in the value of our investments.



We
will be exposed to risks associated with changes in interest rates.



As
of December 31, 2016, approximately 34% of our portfolio consisted of debt investments based on floating rates, such as
LIBOR, EURIBOR, the Federal Funds Rate or the Prime Rate. General interest rate fluctuations may have a substantial negative
impact on our investments, the value of our common stock and our rate of return on invested capital. A reduction in the
interest rates on new investments relative to interest rates on current investments could also have an adverse impact on our
net interest income. An increase in interest rates could decrease the value of any investments we hold which earn fixed
interest rates, including subordinated loans, senior and junior secured and unsecured debt securities and loans and high
yield bonds, and also could increase our interest expense, thereby decreasing our net income. Also, an increase in interest
rates available to investors could make investment in our common stock less attractive if we are not able to increase our
dividend rate, which could reduce the value of our common stock.





28







A
covenant breach by our portfolio companies may harm our operating results.



A
portfolio company’s failure to satisfy financial or operating covenants imposed by us or other lenders could lead to defaults
and, potentially, termination of its loans and foreclosure on its secured assets, which could trigger cross-defaults under other
agreements and jeopardize a portfolio company’s ability to meet its obligations under the debt or equity securities that
we hold. We may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms, which may include
the waiver of certain financial covenants, with a defaulting portfolio company.



We
may not realize gains from our equity investments.



Certain
investments that we may make may include warrants or other equity-linked securities. In addition, we may make direct equity investments
in portfolio companies. The equity interests we receive may not appreciate in value and, in fact, may decline in value. Accordingly,
we may not be able to realize gains from our equity interests, and any gains that we do realize on the disposition of any equity
interests may not be sufficient to offset any other losses we experience. We also may be unable to realize any value if a portfolio
company does not have a liquidity event, such as a sale of the business, recapitalization or public offering, which would allow
us to sell the underlying equity interests. We may be unable to exercise any put rights we acquire, which grant us the right to
sell our equity securities back to the portfolio company, for the consideration provided in our investment documents if the issuer
is in financial distress.



By
originating loans to companies that are experiencing significant financial or business difficulties, we may be exposed to distressed
lending risks.



As
part of our lending activities, we may originate loans to companies that are experiencing significant financial or business difficulties,
including companies involved in bankruptcy or other reorganization and liquidation proceedings. Although the terms of such financing
may result in significant financial returns to us, they involve a substantial degree of risk. The level of analytical sophistication,
both financial and legal, necessary for successful financing to companies experiencing significant business and financial difficulties
is unusually high. There is no assurance that we will correctly evaluate the value of the assets collateralizing our loans or
the prospects for a successful reorganization or similar action. In any reorganization or liquidation proceeding relating to a
company that we fund, we may lose all or part of the amounts advanced to the borrower or may be required to accept collateral
with a value less than the amount of the loan advanced by us to the borrower.



Cybersecurity
risks and cyber incidents may adversely affect our business by causing a disruption to our operations, a compromise or corruption
of our confidential information, and/or damage to our business relationships, all of which could negatively impact our financial
results.



A
cyber incident is considered to be any adverse event that threatens the confidentiality, integrity or availability of our information
resources. These incidents may be an intentional attack or an unintentional event and could involve gaining unauthorized access
to our information systems for purposes of misappropriating assets, stealing confidential information, corrupting data or causing
operational disruption. The result of these incidents may include disrupted operations, misstated or unreliable financial data,
liability for stolen assets or information, increased cybersecurity protection and insurance costs, litigation and damage to our
relationships with portfolio companies. As our reliance on technology has increased, so have the risks posed to our information
systems, both internal and those we have outsourced. There is no guarantee that any processes, procedures and internal controls
we have implemented or will implement will prevent cyber intrusions which could have a negative impact on our financial results,
operations, business relationships or confidential information.



We
are an “emerging growth company” under the JOBS Act, and we cannot be certain if the reduced disclosure requirements
applicable to emerging growth companies will make our common stock less attractive to investors.



We
are and we will remain an “emerging growth company” as defined in the JOBS Act until the earlier of: (a) the last
day of the fiscal year: (i) in which we have total annual gross revenue of at least $1.0 billion; or (ii) in which we are deemed
to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700
million as of the prior June 30th; and (b) the date on which we have issued more than $1.0 billion in non-convertible
debt during the prior three-year period. For so long as we remain an “emerging growth company” we may take advantage
of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging
growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements
of Section 404 of the Sarbanes-Oxley Act. We cannot predict if investors will find our common stock less attractive because we
will rely on some or all of these exemptions. If some investors find our common stock less attractive as a result, there may be
a less active trading market for our common stock and our stock price may be more volatile.



29







Our
status as an “emerging growth company” under the JOBS Act may make it more difficult to raise capital as and when
we need it.



Because
of the exemptions from various reporting requirements provided to us as an “emerging growth company,” we may be less
attractive to investors and it may be difficult for us to raise additional capital as and when we need it. Investors may be unable
to compare our business with other companies in our industry if they believe that our financial accounting is not as transparent
as other companies in our industry. If we are unable to raise additional capital as and when we need it, our financial condition
and results of operations may be materially and adversely affected.



Federal
Income Tax Risks



We
will be subject to corporate-level income tax if we are unable to qualify as a RIC under Subchapter M of the Code or to satisfy
RIC distribution requirements.



In
order for us to qualify for and maintain RIC tax treatment under Subchapter M of the Code, we must meet the following annual distribution,
income source and asset diversification requirements.



|● | The
    Annual Distribution Requirement for RIC tax treatment will be satisfied if we distribute to our stockholders, for each tax
    year, dividends of an amount at least equal to the sum of 90% of our investment company taxable income, which is generally
    the sum of our ordinary net income and realized net short-term capital gains in excess of realized net long-term capital losses,
    without regard to any deduction for dividends paid. Because we may use debt financing, we are subject to an asset coverage
    ratio requirement under the 1940 Act and may in the future become subject to certain financial covenants under loan and credit
    agreements that could, under certain circumstances, restrict us from making distributions necessary to satisfy the Annual
    Distribution Requirement. If we are unable to obtain cash from other sources, we could fail to qualify for RIC tax treatment
    and thus become subject to corporate-level income tax.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|● | The
    90% Income Test will be satisfied if we obtain at least 90% of our gross income for each tax year from dividends, interest,
    gains from the sale of securities or similar sources.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|● | The
    Diversification Tests requirement will be satisfied if we meet certain asset diversification requirements at the end of each
    quarter of our tax year. To satisfy these requirements, at least 50% of the value of our assets must consist of cash, cash
    equivalents, U.S. government securities, securities of other RICs, and other securities if such securities of any one issuer
    do not represent more than 5% of the value of our assets or more than 10% of the outstanding voting securities of such issuer;
    and no more than 25% of the value of our assets can be invested in the securities, other than U.S. government securities or
    securities of other RICs, of one issuer, of two or more issuers that are controlled, as determined under applicable Code rules,
    by us and that are engaged in the same or similar or related trades or businesses or of certain “qualified publicly-traded
    partnerships.” Failure to meet these requirements may result in our having to dispose of certain investments quickly
    in order to prevent the loss of RIC status. Because most of our investments will be in private companies, and therefore will
    be relatively illiquid, any such dispositions could be made at disadvantageous prices and could result in substantial losses.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



We
must satisfy these tests on an ongoing basis in order to maintain RIC tax treatment, and may be required to make distributions
to stockholders at times when it would be more advantageous to invest cash in our existing or other investments, or when we do
not have funds readily available for distribution. Compliance with the RIC tax requirements may hinder our ability to operate
solely on the basis of maximizing profits and the value of our stockholders’ investments. If we fail to qualify for or maintain
RIC tax treatment for any reason and are subject to corporate income tax, the resulting corporate taxes could substantially reduce
our net assets, the amount of income available for distribution and the amount of our distributions.



Legislative
or regulatory tax changes could adversely affect investors.



At
any time, the federal income tax laws governing RICs or the administrative interpretations of those laws or regulations may be
amended. Any of those new laws, regulations or interpretations may take effect retroactively and could adversely affect the taxation
of us or our stockholders. Therefore, changes in tax laws, regulations or administrative interpretations or any amendments thereto
could diminish the value of an investment in our shares or the value or the resale potential of our investments.





30







ITEM
1B. UNRESOLVED STAFF COMMENTS



None.



ITEM
2. PROPERTIES



We
maintain our principal executive offices at Two Post Oak Center, 1980 Post Oak Boulevard, 15th Floor, Houston, Texas
77056. We do not own any real estate or other physical properties materially important to our operations. We believe that our
present facilities are adequate to meet our current needs. If new or additional space is required, we believe that adequate facilities
are available at competitive prices in the same area.



ITEM
3. LEGAL PROCEEDINGS



We
are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened
against us. From time to time, we may be a party to certain legal proceedings in the ordinary course of business, including proceedings
relating to the enforcement of our rights under loans to or other contracts with our portfolio companies. While the outcome of
these legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material effect
upon our financial condition or results of operations.



ITEM
4. MINE SAFETY DISCLOSURES



None.



31







PART II



ITEM
5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES



Market
Information



There
is currently no public market for our common stock, nor can we give any assurance that one will develop. As of the date hereof,
none of our shares of common stock are subject to outstanding options or warrants, nor do we have any outstanding equity that
is convertible into shares of our common stock. In addition, as of the date hereof, we have not granted any registration rights
to any of our stockholders. No stock has been authorized for issuance under any equity compensation plans.



Holders



Set
forth below is a chart describing the classes of our securities outstanding as of March 17, 2017:





|(1)            |  |  | (2)              |  |  |  | (3)                                   |  |  |  | (4)                                                   | 
|-------------- |  |  | ---------------- |  |  |  | ------------------------------------- |  |  |  | ----------------------------------------------------- | 
|Title
of Class |  |  | AmountAuthorized |  |  |  | Amount Held by 
Us  orfor Our Account |  |  |  | Amount OutstandingExclusive of AmountUnder Column (3) | 
|Common Stock   |  |  | 50,000,000       |  |  |  | —                                     |  |  |  | 3,800,010                                             | 



As
of March 17, 2017, we had 3 record holders of our common stock.



Distributions



We
generally intend to distribute, out of assets legally available for distribution, substantially all of our available earnings,
on a quarterly basis, as determined by our Board in its discretion. On December 19, 2016, our board of directors authorized the
declaration of a cash distribution of approximately $1.1 million for the fiscal year ending December 31, 2016 (the “Distribution”),
an amount equal to $0.28 per share of common stock, to be paid to the Company’s stockholders of record as of the close of
business on December 20, 2016, which was paid on December 21, 2016. There were no distributions paid during the years ended December
31, 2015 and 2014.



Valuation
of Portfolio Securities



We
will determine the net asset value per share of our common stock quarterly. The net asset value per share is equal to the value
of our total assets minus liabilities and any preferred stock outstanding divided by the total number of shares of common stock
outstanding. At present, we do not have any preferred stock outstanding.



Our
investments will be valued at the end of each fiscal quarter. Substantially all of our investments are expected to be in loans
that do not have readily ascertainable market prices. The fair value of assets that are not publicly traded or whose market prices
are not readily available will be determined in good faith by our Board with the assistance of our Advisor and a third party valuation
firm. In connection with that determination, investment professionals from our Advisor will prepare portfolio company valuations
using sources and/or proprietary models depending on the availability of information on our assets and the type of asset being
valued, all in accordance with our valuation policy. The Board may retain an independent valuation provider to assist it by performing
certain limited third-party valuation services. The participation of our Advisor in our valuation process could result in a conflict
of interest, since the Management Fee is based in part on our gross assets.



Because
fair valuations, and particularly fair valuations of private securities and private companies, are inherently uncertain, may fluctuate
over short periods of time and are often based to a large extent on estimates, comparisons and qualitative evaluations of private
information, our determinations of fair value may differ materially from the values that would have been determined if a ready
market for these securities existed. This could make it more difficult for investors to value accurately our portfolio investments
and could lead to undervaluation or overvaluation of our common shares. In addition, the valuation of these types of securities
may result in substantial write-downs and earnings volatility.



Recent
Sales of Unregistered Securities



None





32







ITEM
6. SELECTED FINANCIAL DATA



The
following selected consolidated financial data for the years ended December 31, 2016 and 2015, and for the period from November
25, 2014 (date of inception) to December 31, 2014, is derived from our consolidated financial statements which have been audited
by Mazars USA LLP, our independent registered public accounting firm. The data should be read in conjunction with our consolidated
financial statements and related notes thereto and “Item 7. Management’s Discussion and Analysis of Financial Condition
and Results of Operations” included elsewhere in this annual report on Form 10-K.





|                                                         |  | Year Ended December 31, |        |   | Year Ended December 31, |   |        | For the Period From November 25, 2014 (date of inception) to December 31, | 
|-------------------------------------------------------- |  | ----------------------- | ------ | - | ----------------------- | - | ------ | ------------------------------------------------------------------------- | 
|                                                         |  | 2016                    |        |   | 2015                    |   |        | 2014                                                                      | 
|                                                         |  |                         |        |   |                         |   |        |                                                                           | 
|Investment income                                        |  | $                       | 3,592  |   |                         | $ | 863    |                                                                           | 
|Operating expenses                                       |  |                         |        |   |                         |   |        |                                                                           | 
|Total expenses                                           |  |                         | 2,436  |   |                         |   | 1,118  |                                                                           | 
|Less: Waiver of management fees                          |  |                         | (142   | ) |                         |   | -      |                                                                           | 
|Net expenses                                             |  |                         | 2,294  |   |                         |   | 1,118  |                                                                           | 
|Net investment income (loss)                             |  |                         | 1,298  |   |                         |   | (255   | )                                                                         | 
|Total net realized and unrealized loss                   |  |                         | (1,870 | ) |                         |   | (264   | )                                                                         | 
|Net decrease in net assets resulting from operations     |  | $                       | (572   | ) |                         | $ | (519   | )                                                                         | 
|Per share information - basic and diluted                |  |                         |        |   |                         |   |        |                                                                           | 
|Net investment income (loss) (a)                         |  | $                       | 0.34   |   |                         | $ | (0.11  | )                                                                         | 
|Net decrease in net assets resulting from operations (a) |  | $                       | (0.15  | ) |                         | $ | (0.23  | )                                                                         | 
|Distributions declared (b)                               |  | $                       | 0.28   |   |                         | $ | -      |                                                                           | 
|Balance sheet data:                                      |  |                         |        |   |                         |   |        |                                                                           | 
|Total assets                                             |  | $                       | 48,125 |   |                         | $ | 39,106 |                                                                           | 
|Total net assets                                         |  | $                       | 35,765 |   |                         | $ | 37,414 |                                                                           | 
|Other data:                                              |  |                         |        |   |                         |   |        |                                                                           | 
|Total return based on net asset value (c)                |  |                         | -1.56  | % |                         |   | -1.37  | %                                                                         | 
|Number of portfolio company investments at period end    |  |                         | 11     |   |                         |   | 8      |                                                                           | 
|Total portfolio investments for the period               |  | $                       | 29,955 |   |                         | $ | 25,500 |                                                                           | 
|Proceeds from sales and prepayments of investments       |  | $                       | 37,108 |   |                         | $ | 1,098  |                                                                           | 







|(a) | For
                                         2016, the per share data was derived by using the weighted average shares outstanding
                                         during the period. Per share information for 2015 was calculated using weighted average
                                         shares outstanding from commencement of operations on April 24, 2015 through December
                                         31, 2015.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | The
    per share data for distributions reflects the actual amount of distributions declared and paid per share during the applicable
    period.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | The
                                         total return for the year ended December 31, 2016 was calculated by taking the net income
                                         of the Company for the period divided by the average net assets during the period. The
                                         total return for the year ended December 31, 2015 was calculated by taking the net loss
                                         of the Company for the period divided by the common stock issued during the period.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) | Information
                                         was not calculated for the period from November 25, 2014 (date of inception) to December
                                         31, 2014 as Parkview Capital Credit, Inc. had not yet commenced principal operations.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





33









ITEM
7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Forward
Looking Statements



This
report contains forward looking statements that involve substantial risks and uncertainties. These forward looking
statements are not historical facts, but rather are based on current expectations, estimates and projections about us, our
prospective portfolio investments, our industry, our beliefs, and our assumptions. Words such as “anticipates,”
“expects,” “intends,” “plans,” “believes,” “seeks,”
“estimates,” “would,” “should,” “targets,” “projects,” and
variations of these words and similar expressions are intended to identify forward looking statements. These statements are
not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our
control and are difficult to predict, that could cause actual results to differ materially from those expressed or forecasted
in the forward looking statements including, without limitation:



|● | The
                                         effect of an economic downturn on our portfolio companies’ ability to continue
                                         to operate, which could lead to the loss of some or all of our investments in such portfolio
                                         companies;
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|● | a
                                         contraction of available credit, which could impair our lending and investment activities;
|- | -------------------------------------------------------------------------------------------------------------------------------------

|● | interest
                                         rate volatility, which could adversely affect our results, particularly if we elect to
                                         use leverage as part of our investment strategy;
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|● | our
                                         future operating results;
|- | ----------------------------------------------------------------------

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

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

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

|● | competition
                                         with other entities for investment opportunities;
|- | ------------------------------------------------------------------------------------------------------

|● | the
                                         speculative and illiquid nature of our investments;
|- | ------------------------------------------------------------------------------------------------

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

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

|● | the
                                         costs associated with being a public entity;
|- | -----------------------------------------------------------------------------------------

|● | the
                                         loss of key personnel;
|- | -------------------------------------------------------------------

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

|● | the
                                         ability of our Advisor to locate suitable investments for us and to monitor and administer
                                         our investments;
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|● | our
                                         ability to attract and retain highly talented professionals that can provide services
                                         to our Advisor and Administrator;
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|● | our
                                         ability to qualify and maintain our qualification as a RIC under Subchapter M of the
                                         Code and as a BDC; and
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|● | the
                                         effect of legal, tax and regulatory changes.
|- | -----------------------------------------------------------------------------------------



Although
we believe that the assumptions on which these forward looking statements are based are reasonable, some of those assumptions
are based on the work of third parties and any of those assumptions could prove to be inaccurate; as a result, the forward
looking statements based on those assumptions also could prove to be inaccurate. In light of these and other uncertainties, the
inclusion of a projection or forward looking statement in this report should not be regarded as a representation by us that our
plans and objectives will be achieved. You should not place undue reliance on these forward looking statements, which apply only
as of the date of this report. We do not undertake any obligation to update or revise any forward looking statements, or any other
information contained herein, except as required by applicable law. The safe harbor provisions of Section 21E of the Securities
Exchange Act of 1934, or the Exchange Act, which preclude civil liability for certain forward looking statements are not applicable
to us since we are a BDC regulated under the Investment Company Act of 1940 (the “1940 Act”).



Overview



We
were incorporated under the laws of the State of Maryland on November 25, 2014. We filed an election to be regulated as a BDC
under the 1940 Act, and intend to elect to be treated as a RIC, for federal income tax purposes beginning with our tax year ending
June 30, 2017. As such, we are required to comply with various regulatory requirements, such as the requirement to invest at least
70% of our assets in “qualifying assets,” source of income limitations, asset diversification requirements, and the
requirement to distribute annually at least 90% of our taxable income and tax-exempt interest.



All
amounts presented are in thousands, except share and per share data.





34







Revenues



We
generate revenues in the form of interest income from the debt securities we hold and dividends and capital appreciation on
either direct equity investments or equity interests obtained in connection with originating loans, such as options, warrants
or conversion rights. We expect most of the debt securities we will hold will be floating rate in nature. The debt we invest
in will typically not be rated by any rating agency, but if it were, it is likely that such debt would be below investment
grade. We intend to structure our debt investments with interest payable quarterly, semi-annually or annually, but we may
structure certain investments with terms to provide for longer interest payment periods or to allow interest to be paid by
adding amounts due to the principal balance of the loan, resulting in deferred cash receipts. In addition, we may also
generate revenue in the form of commitment, loan origination, structuring or diligence fees, fees for providing managerial
assistance to our portfolio companies, and possibly consulting fees. Certain of these fees may be capitalized and amortized
as additional interest income over the life of the related loan.



Expenses



We
anticipate that all investment professionals and staff of our Advisor, when and to the extent engaged in providing us investment
advisory and management services, and the base compensation, bonus and benefits, and the routine overhead expenses, of such personnel
allocable to such services, will be provided and paid for by our Advisor.



We
bear all other costs and expenses of our operations, administration and transactions, including, but not limited to, those relating
to:



|● | organization
                                         expenses;
|- | ---------------------------------------------------------------

|● | calculating
                                         our net asset value (including the cost and expenses of any independent valuation firms);
|- | ----------------------------------------------------------------------------------------------------------------------------------------------

|● | expenses,
                                         including travel expense, incurred by our Advisor, its investment professionals, or payable
                                         to third parties, performing due diligence on prospective portfolio companies;
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|● | the
                                         costs of the offerings of common shares and other securities, if any;
|- | ------------------------------------------------------------------------------------------------------------------

|● | the
                                         base management fee and any incentive fee;
|- | ---------------------------------------------------------------------------------------

|● | certain
                                         costs and expenses relating to distributions paid on our shares;
|- | -----------------------------------------------------------------------------------------------------------------

|● | administration
                                         reimbursements payable under our Advisory Agreement or Administration Agreement;
|- | ----------------------------------------------------------------------------------------------------------------------------------------

|● | debt
                                         service and other costs of borrowings or other financing arrangements;
|- | --------------------------------------------------------------------------------------------------------------------

|● | the
                                         allocated costs incurred by our Advisor or the Administrator in providing managerial
                                         assistance to those portfolio companies that request it;
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|● | amounts
                                         payable to third parties relating to, or associated with, making or holding investments;
|- | -----------------------------------------------------------------------------------------------------------------------------------------

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

|● | costs
                                         of hedging;
|- | ----------------------------------------------------------

|● | commissions
                                         and other compensation payable to brokers or dealers;
|- | ----------------------------------------------------------------------------------------------------------

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

|● | independent
                                         director fees and expenses;
|- | --------------------------------------------------------------------------------

|● | costs
                                         of preparing financial statements and maintaining books and records and filing reports
                                         or other documents with the SEC (or other regulatory bodies) and other reporting and
                                         compliance costs, including registration and listing fees, and the compensation of professionals
                                         responsible for the preparation of the foregoing;
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|● | the
                                         costs of any reports, proxy statements or other notices to our stockholders (including
                                         printing and mailing costs), the costs of any stockholders’ meetings and the compensation
                                         of investor relations personnel responsible for the preparation of the foregoing and
                                         related matters;
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|● | our
                                         fidelity bond;
|- | -----------------------------------------------------------

|● | directors
                                         and officers/errors and omissions liability insurance, and any other insurance premiums;
|- | -------------------------------------------------------------------------------------------------------------------------------------------

|● | indemnification
                                         payments;
|- | ------------------------------------------------------------------

|● | direct
                                         costs and expenses of administration, including audit and legal costs; and
|- | --------------------------------------------------------------------------------------------------------------------------

|● | all
                                         other expenses reasonably incurred by us in connection with making investments and administering
                                         our business.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





35







From
time to time, our Advisor may pay amounts owed by us to third-party providers of goods or services. We will subsequently reimburse
our Advisor for such amounts paid on our behalf. Other than with respect to our initial organization and operating costs, as described
above, there is no contractual cap on the reasonable costs and expenses for which our Advisor will be reimbursed. In addition,
we reimburse the Advisor for the allocable portion of the compensation paid by the Advisor (or its affiliates) to our chief compliance
officer and chief financial officer (based on the percentage of time such individuals devote, on an estimated basis, to the business
and affairs of the Company). All of these expenses will ultimately be borne by our stockholders.



Portfolio
and Investment Activity



We
commenced operations on April 24, 2015 and made our first investment on April 30, 2015. The fair value of our investments was
approximately $29,955 (excluding $11,999 held in U.S. Treasury Bills) and $25,500 in 11 and 8 portfolio companies as of December
31, 2016 and 2015, respectively. Our investment activity for the years ended December 31, 2016 and 2015 is as follows (information
presented herein is at amortized cost unless otherwise indicated):





|                                                  |  | 2016 |         |   | 2015 |  
|------------------------------------------------- |  | ---- | ------- | - | ---- | -
|Amortized cost of investments, beginning          |  | $    | 25,746  |   |      | $
|Cost of investments purchased                     |  |      | 54,563  |   |      |  
|Paid-in-kind interest                             |  |      | 821     |   |      |  
|Proceeds from sales and repayments of investments |  |      | (37,108 | ) |      |  
|Net amortization of premium on investments        |  |      | 48      |   |      |  
|Realized loss on sold/ repaid investments         |  |      | (34     | ) |      |  
|Amortized cost of investments, ending             |  | $    | 44,036  |   |      | $





Refer
to “Part II. Financial Information, Item 8. Financial Statements and Supplementary Data – Note F” of
this annual report on Form 10-K for a summary of the composition of our portfolio at amortized cost and fair value as of December
31, 2016 and 2015.



As
of December 31, 2016 and 2015, the investments in our portfolio were purchased at a weighted average price of 99.6% and 100.1%
of par value, respectively. The weighted average yields, based on the amortized cost and fair value of our portfolio as of December
31, 2016, were 11.6% and 11.3%, respectively and as of December 31, 2015, were 10.3% and 10.3%, respectively.



Direct
Origination



We
intend to leverage our Advisor’s industry relationships to directly source investment opportunities. Such investments are
originated or structured for us or made by us and are not generally available to the broader market. These investments may include
both debt and equity components. We believe directly originated investments may offer higher returns and more favorable protections
than broadly syndicated transactions. The following tables present certain selected information regarding our direct originations
for the year ended December 31, 2016:









|                                                   |  | December 31, |       
|-------------------------------------------------- |  | ------------ | ------
|New Direct Originations                            |  | 2016         |       
|Total Commitments (including unfunded commitments) |  | $            | 14,150
|Paid in Kind Interest                              |  |              | 155   
|Investment Paydowns                                |  |              | -     
|Net Direct Origination                             |  |              | 14,305





|                                       |  | December 31, 
2016 |        |  | December 31, 
2015 | 
|-------------------------------------- |  | ------------------ | ------ |  | ------------------ | 
|                                       |  | Commitment         |        |  |                    | 
|New Direct Originations by Asset Class |  | Amount             |        |  | Percentage         | 
|Senior Secured Loans - First Lien      |  | $                  | 9,150  |  |                    | 
|Senior Secured Loans - Second Lien     |  |                    | 5,000  |  |                    | 
|Equity Investments                     |  |                    | -      |  |                    | 
|                                       |  |                    | 14,150 |  |                    | 





|                                                                                                |  | 2016 |            |   | 2015 |  
|----------------------------------------------------------------------------------------------- |  | ---- | ---------- | - | ---- | -
|Average New Direct Origination Commitment Amount                                                |  | $    | 3,538      |   |      | $
|Weighted Average Maturity for New Direct Originations                                           |  |      | 3.16 years |   |      |  
|Gross Portfolio Yield (based on amortized cost) of New Direct Originations Funded during Period |  |      | 14.0       | % |      |  







36









|                                                                                                               |  | December 31, |      
|-------------------------------------------------------------------------------------------------------------- |  | ------------ | -----
|Characteristics of All Direct Originations held in Portfolio                                                   |  | 2016         |      
|Number of Portfolio Companies                                                                                  |  |              | 5    
|Average Annual EBITDA of Portfolio Companies                                                                   |  | $            | 5,800
|Average Leverage Through Tranche of Portfolio Companies - Excluding Equity/Other and Collateralized Securities |  |              | 6.53 
|Gross Portfolio Yield (based on amortized cost) of Funded Direct Originations                                  |  |              | 14.5 



Portfolio
Composition by Strategy and Industry



The
table below summarizes the composition of our investment portfolio by strategy and enumerates the percentage, by fair value, of
the total portfolio assets in such strategies as of December 31, 2016 and 2015:





|                                  |  | December 31, 
2016 |        |  | December 31, 
2015      | 
|--------------------------------- |  | ------------------ | ------ |  | ----------------------- | 
|Portfolio Composition by Strategy |  | Fair Value         |        |  | Percentage of Portfolio | 
|Direct Origination                |  | $                  | 19,688 |  |                         | 
|Broadly Syndicated                |  |                    | 10,267 |  |                         | 
|U.S. Government Securities        |  |                    | 11,999 |  |                         | 
|                                  |  | $                  | 41,954 |  |                         | 





Refer
to “Part II. Item 8. Financial Statements and Supplementary Data – Note F” of this annual report on Form
10-K for a description of investments by industry classification and the percentage, by fair value, of the total portfolio assets
in such industries.



Recent
Accounting Pronouncements



Refer
to “Part II. Item 8. Financial Statements and Supplementary Data- Note B” of this annual report on Form 10-K
for a description of recent accounting pronouncements.



Results
of Operations



We
commenced our principal operations on April 24, 2015, commensurate with the raising of $20,000 through a sale of 2,000,000 shares
of common stock. Prior to April 24, 2015, we solely incurred expenses associated with organizational activities. Since we commenced
principal operations on April 24, 2015, we have no periods prior to 2015 with which to compare our operating results.



Years
Ended December 31, 2016 and 2015



Investment
Income



For
the years ended December 31, 2016 and 2015, total investment income totaled $3,592 and $863, respectively, of which $2,397 and
$831, respectively, was attributable to portfolio interest (excluding PIK interest) earned on our first and second lien senior
secured loans, $268 and $20, respectively, was attributable to dividend income earned and $106 and $10, respectively, was attributable
to amortization of loan origination fees received. The increase in investment income was due to the increase in the size of our
portfolio.



For
the years ended December 31, 2016 and 2015, $821 and $2 of our total investment income constituted PIK interest. As of December
31, 2016, five of our investments paid all or a portion of their interest payments in the form of PIK interest, including our
position in Action Resources, which was restructured so that the entire position is payable in PIK interest. As of December 31,
2015, one of our investments paid a portion of its interest payment in the form of PIK interest.



Operating
Expenses



Total
operating expenses were $2,294 for the year ended December 31, 2016, and consisted of base management fees of $922 (less a fee
waiver of $142), professional fees of $773, other general and administrative expenses of $710 and provision for taxes of $31.
Total operating expenses were $1,118 for the year ended December 31, 2015, and consisted of base management fees of $307, professional
fees of $471, other general and administrative expenses of $277 and organizational costs incurred before commencing principal
operations of $63. We did not incur any incentive fees for the years ended December 31, 2016 and 2015. Our operating expenses
were 6.27% and 5.99% of our average net assets for the years ended December 31, 2016 and 2015, respectively. As we continue to
execute our strategy, we expect our operating expenses as a percentage of our average net assets to decrease.





37







In
order to meet the diversification tests required to qualify as a RIC, we acquired $12,000, $10,000 and $12,500 in face value of
short-term U.S. Treasury Bills on December 29, 2016, June 28, 2016 and March 31, 2016, respectively. These transactions had the
effect of increasing management fees payable to the Advisor in an amount of $142, all of which was waived by the Advisor. There
were no such transactions for the year ended December 31, 2015. Professional fees include legal, audit, compliance, valuation,
technology and other professional fees incurred related to our management. Other general and administrative expenses include custody,
printer fees, research, subscriptions and other costs.



Net
Investment Income (Loss)



Our
net investment income totaled $1,298, which is equal to $0.34 per share calculated using weighted average shares outstanding
for the year ended December 31, 2016. Our net investment loss totaled $255 for the year ended December 31, 2015, which is
equal to ($0.11) per share calculated using weighted average shares outstanding from commencement of our operations on April
24, 2015 through December 31, 2015.



Net
Realized Loss on Investments



For
the years ended December 31, 2016 and 2015, we had net realized losses of $34 and $18, respectively resulting from the sale of
investments in our portfolio.



Net
Unrealized Depreciation on Investments



Net
unrealized depreciation on investments reflects the net change in the fair value of our investment portfolio. For the years ended
December 31, 2016 and 2015 we had net unrealized depreciation of $1,836 and $246, respectively. The majority of the unrealized
depreciation stems from our investment in Action Resources, which was marked at 69% of par value during the quarter ended December
31, 2016.



Changes
in Net Assets from Operations



For
the year ended December 31, 2016, we recorded a net decrease in net assets resulting from operations of $572, which is equal to
($0.15) per share calculated using weighted average shares outstanding. For the year ended December 31, 2015, we recorded a net
decrease in net assets resulting from operations of $519, which is equal to ($0.23) per share calculated using weighted average
shares outstanding from commencement of operations on April 24, 2015 through December 31, 2015.



Hedging



We
may, but are not required to, enter into interest rate, foreign exchange or other derivative agreements to hedge interest rate,
currency, credit or other risks, but we do not generally intend to enter into any such derivative agreements for speculative purposes.
Such hedging activities, which will be in compliance with applicable legal and regulatory requirements, may include the use of
futures, options and forward contracts. We will bear the costs incurred in connection with entering into, administering and settling
any such derivative contracts. There can be no assurance any hedging strategy we employ will be successful.



Financial
Condition, Liquidity and Capital Resources



As
of December 31, 2016 and 2015, we had cash and cash equivalents of approximately $5,491 and $12,358, respectively. We
raise capital through a private offering of our shares in order to acquire a portfolio of debt and equity investments
consistent with our investment objective and our investment strategy. We generate cash flows from fees, interest and
dividends earned from our investments as well as principal repayments and proceeds from sales of our investments. The
decrease in cash of $6,867 during the year ended December 31, 2016 was primarily driven by our investments in Ebony Media
Holdings, LLC and Medi-fare Drug & Pharmaceutical Compounding, LLC in May 2016, JD Power and Associates in September 2016,
and investments in American Bath Group, LLC, and Rocket Software in October 2016, Ebony Media Holdings, LLC in November 2016
and Anchor Glass Container Corporation in December 2016, offset by a pay down by Turning  Point Brands, Inc. (formerly North
Atlantic Trading Company, Inc.) and the repayments of WBL SPE I, LLC, Maxim Crane Works, LP, Generation Brands and
Offisol.



Prior
to deploying the capital we raise in our private offering of shares, we intend to invest in cash equivalents, U.S. government
securities, repurchase agreements and high quality debt instruments maturing in one year or less from the time of investment,
consistent with our BDC election and our intent to be taxed as a RIC.



We
may borrow funds to make investments, to the extent we determine that additional capital would allow us to take advantage of additional
investment opportunities, if the market for debt financing presents attractively priced debt financing opportunities, or if our
board of directors determines that leveraging our portfolio would be in our best interests.





38







Critical
Accounting Policies



Our
financial statements are prepared in conformity with accounting principles generally accepted in the United States of
America (GAAP), which requires us to make estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
periods. Critical accounting policies are those that require the application of management’s most difficult,
subjective, or complex judgments, often because of the need to make estimates about the effect of matters that are inherently
uncertain and that may change in subsequent periods. In preparing the financial statements, management has made estimates and
assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the
reported amounts of revenues and expenses during the reporting periods. In preparing the financial statements, management has
utilized available information, including our past history, industry standards and the current economic environment, among
other factors, in forming its estimates and judgments, giving due consideration to materiality. Actual results may differ
from these estimates. In addition, other companies may utilize different estimates, which may impact the comparability of our
results of operations to those of companies in similar businesses. Refer to “Part II. Item 8. Financial
Statements and Supplementary Data- Note B” of this annual report on Form 10-K for a description of the summary
of significant accounting policies.



Contractual
Obligations



We
have entered into an agreement with our Advisor to provide us with investment advisory services and with the Administrator to
provide us with administrative services.



Off-Balance
Sheet Arrangements



We
currently have no off balance sheet arrangements, including risk management of commodity pricing or other hedging practices.



ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



We
are subject to financial market risks, including changes in interest rates. As of December 31, 2016, our portfolio primarily consisted
of investments paying variable rates and fixed rates of interest. In addition, in the future we may seek to borrow funds in order
to make additional investments. If we borrow funds to make additional investments, our net investment income will depend, in part,
upon the difference between the rate at which we borrow funds and the rate at which we invest those funds. As a result, we would
be subject to risks relating to changes in market interest rates. In periods of rising interest rates when we have debt outstanding,
our cost of funds would increase, which could reduce our net investment income, especially to the extent we hold fixed rate investments.
If deemed prudent, we may use interest rate risk management techniques in an effort to minimize our exposure to interest rate
fluctuations. These techniques may include various interest rate hedging activities to the extent permitted by the 1940 Act. Adverse
developments resulting from changes in interest rates or hedging transactions could have a materially adverse effect on our business,
financial condition and results of operations.



A
rise in the general level of interest rates can be expected to lead to higher interest rates applicable to a portion of our debt
investments, especially to the extent that we hold variable rate investments. However, currently 34% of our portfolio pays variable
rates of interest. An increase in interest rates for these variable rate investments could make it easier for us to meet or exceed
our incentive fee return, as defined in our Advisory Agreement, and may result in a substantial increase in our net investment
income, and also to the amount of incentive fees payable to our Advisor with respect to our increasing pre-incentive fee net investment
income.



39







ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA



Index
to Financial Statements



|                                                                                                                                                                              | Page
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----
|                                                                                                                                                                              |     
|Report of Independent Registered Public Accounting Firm                                                                                                                       | F-1 
|Statements of Financial Condition as of December 31, 2016 and 2015                                                                                                            | F-2 
|Statements
    of Operations for the years ended December 31, 2016 and 2015 and for the period from November 25, 2014 (date of inception)
    to December 31, 2014            | F-3 
|Statements
    of Changes in Net Assets for the years ended December 31, 2016 and 2015 and for the period from November 25, 2014 (date of
    inception) to December 31, 2014 | F-4 
|Statements
    of Cash Flows for the years ended December 31, 2016 and 2015 and for the period from November 25, 2014 (date of inception)
    to December 31, 2014            | F-5 
|Schedule
    of Investments as of December 31, 2016                                                                                                                           | F-6 
|Schedule
    of Investments as of December 31, 2015                                                                                                                           | F-7 
|Notes
    to Financial Statements                                                                                                                                             | F-8 







40







REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To
the Shareholders and Board of Directors of Parkview Capital Credit, Inc.



We
have audited the accompanying statements of financial condition of Parkview Capital Credit, Inc. (the “Company”),
including the schedule of investments, as of December 31, 2016 and 2015, and the related statements of operations, changes in
net assets, and cash flows for the years ended December 31, 2016 and 2015, and for the period from November 25, 2014 (date
of inception) to December 31, 2014, and the financial highlights for each of the two years in the two-year period ended December
31, 2016. These financial statements and financial highlights are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial statements and financial highlights based on our audits.



We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an
audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting
as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such
opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of investments owned as of December 31, 2016 and 2015, by correspondence with custodians,
portfolio companies, and debt agents, as applicable, or by other appropriate auditing procedures where replies were not received.
An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.



In
our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the
financial position of Parkview Capital Credit, Inc. as of December 31, 2016 and 2015, the results of its operations, changes in
net assets and its cash flows for the year ended December 31, 2016 and 2015, and for the period from November 25, 2014 (date
of inception) to December 31, 2014, and the financial highlights for the years ended December 31, 2016 and 2015, in conformity
with accounting principles generally accepted in the United States of America.



/s/
Mazars USA LLP
New York, New York

March
17, 2017







F-1







PARKVIEW
CAPITAL CREDIT, INC.

STATEMENTS
OF FINANCIAL CONDITION

(in
thousands, except share information)



|                                                                                                                                             |  | December 31, |        |   | December 31, |  
|-------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ------ | - | ------------ | -
|                                                                                                                                             |  | 2016         |        |   | 2015         |  
|                                                                                                                                             |  |              |        |   |              |  
|Assets                                                                                                                                       |  |              |        |   |              |  
|Investments at fair value (amortized cost $44,036 and $25,746, respectively)                                                                 |  | $            | 41,954 |   |              | $
|Cash and cash equivalents                                                                                                                    |  |              | 5,491  |   |              |  
|Accounts receivable                                                                                                                          |  |              | -      |   |              |  
|Interest receivable                                                                                                                          |  |              | 338    |   |              |  
|Dividend receivable                                                                                                                          |  |              | 177    |   |              |  
|Receivable for investments sold and repaid                                                                                                   |  |              | 9      |   |              |  
|Prepaid expenses and other assets                                                                                                            |  |              | 156    |   |              |  
|Total assets                                                                                                                                 |  | $            | 48,125 |   |              | $
|Liabilities and stockholders' equity                                                                                                         |  |              |        |   |              |  
|Liabilities                                                                                                                                  |  |              |        |   |              |  
|Payable for investments purchased                                                                                                            |  | $            | 11,999 |   |              | $
|Accounts payable and accrued expenses                                                                                                        |  |              | 70     |   |              |  
|Loan origination fees, net                                                                                                                   |  |              | 215    |   |              |  
|Management fees payable                                                                                                                      |  |              | 76     |   |              |  
|Total liabilities                                                                                                                            |  |              | 12,360 |   |              |  
|                                                                                                                                             |  |              |        |   |              |  
|Commitments and contingencies (see note H)                                                                                                   |  |              |        |   |              |  
|                                                                                                                                             |  |              |        |   |              |  
|Stockholders' equity                                                                                                                         |  |              |        |   |              |  
|Preferred stock, par value $0.01 per share, 10,000,000 shares authorized, no shares issued and outstanding at December 31, 2016 and 2015     |  |              | -      |   |              |  
|Common stock, par value $0.01 per share, 50,000,000 shares authorized, 3,800,010 shares issued and outstanding at December 31, 2016 and 2015 |  |              | 38     |   |              |  
|Additional paid-in capital                                                                                                                   |  |              | 37,930 |   |              |  
|Accumulated undistributed net realized loss on investments                                                                                   |  |              | (25    | ) |              |  
|Accumulated undistributed net investment loss                                                                                                |  |              | (96    | ) |              |  
|Net unrealized depreciation on investments                                                                                                   |  |              | (2,082 | ) |              |  
|Total stockholders' equity                                                                                                                   |  |              | 35,765 |   |              |  
|Total liabilities and stockholders' equity                                                                                                   |  | $            | 48,125 |   |              | $
|                                                                                                                                             |  |              |        |   |              |  
|Net asset value per share                                                                                                                    |  | $            | 9.41   |   |              | $



See
Notes to Financial Statements





F-2







PARKVIEW
CAPITAL CREDIT, INC.

STATEMENTS
OF OPERATIONS

(in
thousands, except share information)



|                                                                        |  |                                  |           |   |                            |   |           | For the      | 
|----------------------------------------------------------------------- |  | -------------------------------- | --------- | - | -------------------------- | - | --------- | ------------ | 
|                                                                        |  |                                  |           |   |                            |   |           | Period From  | 
|                                                                        |  |                                  |           |   |                            |   |           | November 25, | 
|                                                                        |  |                                  |           |   |                            |   |           | 2014         | 
|                                                                        |  |                                  |           |   |                            |   |           | (date of     | 
|                                                                        |  | For the Years Ended
December 31, |           |   | inception) to
December 31, |  
|                                                                        |  | 2016                             |           |   | 2015                       |   |           | 2014         | 
|                                                                        |  |                                  |           |   |                            |   |           |              | 
|Investment income                                                       |  |                                  |           |   |                            |   |           |              | 
|Net interest income                                                     |  | $                                | 2,503     |   |                            | $ | 841       |              | 
|Paid-in-kind interest                                                   |  |                                  | 821       |   |                            |   | 2         |              | 
|Dividend income                                                         |  |                                  | 268       |   |                            |   | 20        |              | 
|Total investment income                                                 |  |                                  | 3,592     |   |                            |   | 863       |              | 
|Operating expenses                                                      |  |                                  |           |   |                            |   |           |              | 
|Organizational expenses                                                 |  |                                  | -         |   |                            |   | 63        |              | 
|Management fees                                                         |  |                                  | 922       |   |                            |   | 307       |              | 
|Professional fees                                                       |  |                                  | 773       |   |                            |   | 471       |              | 
|General and administrative expenses                                     |  |                                  | 710       |   |                            |   | 277       |              | 
|Total expenses before expense waiver and provision for taxes            |  |                                  | 2,405     |   |                            |   | 1,118     |              | 
|Waiver of management fees                                               |  |                                  | (142      | ) |                            |   | -         |              | 
|Provision for taxes                                                     |  |                                  | 31        |   |                            |   | -         |              | 
|Total operating expenses                                                |  |                                  | 2,294     |   |                            |   | 1,118     |              | 
|Net investment income (loss)                                            |  |                                  | 1,298     |   |                            |   | (255      | )            | 
|                                                                        |  |                                  |           |   |                            |   |           |              | 
|Realized and unrealized loss                                            |  |                                  |           |   |                            |   |           |              | 
|Net realized loss on investments                                        |  |                                  | (34       | ) |                            |   | (18       | )            | 
|Net change in unrealized depreciation on investments                    |  |                                  | (1,836    | ) |                            |   | (246      | )            | 
|Total net realized and unrealized loss on investments                   |  |                                  | (1,870    | ) |                            |   | (264      | )            | 
|Net decrease in net assets resulting from operations                    |  | $                                | (572      | ) |                            | $ | (519      | )            | 
|                                                                        |  |                                  |           |   |                            |   |           |              | 
|Per share information - basic and diluted (a)                           |  |                                  |           |   |                            |   |           |              | 
|Weighted average - net decrease in net assets resulting from operations |  | $                                | (0.15     | ) |                            | $ | (0.23     | )            | 
|Weighted average shares outstanding                                     |  |                                  | 3,800,010 |   |                            |   | 2,257,978 |              | 



Parkview
Capital Credit, Inc. commenced principal operations on April 24, 2015. As such, there is limited activity for the period from
November 25, 2014 (date of inception) to December 31, 2014.



|(a) | Per
                                         share information for 2015 was calculated using weighted average shares outstanding from
                                         commencement of operations on April 24, 2015 through December 31, 2015.                                                                         
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | Per
                                         share information was not calculated for the period from November 25, 2014 (date of inception)
                                         to December 31, 2014 as Parkview Capital Credit, Inc. had not yet commenced principal
                                         operations.



See
Notes to Financial Statements





F-3







PARKVIEW
CAPITAL CREDIT, INC.

STATEMENTS
OF CHANGES IN NET ASSETS

(in
thousands, except share information)



|                                                           |  |                                  |           |   |                            |   |           | For the      | 
|---------------------------------------------------------- |  | -------------------------------- | --------- | - | -------------------------- | - | --------- | ------------ | 
|                                                           |  |                                  |           |   |                            |   |           | Period From  | 
|                                                           |  |                                  |           |   |                            |   |           | November 25, | 
|                                                           |  |                                  |           |   |                            |   |           | 2014         | 
|                                                           |  |                                  |           |   |                            |   |           | (date of     | 
|                                                           |  | For the Years Ended
December 31, |           |   | inception) to
December 31, |  
|                                                           |  | 2016                             |           |   | 2015                       |   |           | 2014         | 
|                                                           |  |                                  |           |   |                            |   |           |              | 
|Decrease from operations                                   |  |                                  |           |   |                            |   |           |              | 
|Net investment income (loss)                               |  | $                                | 1,298     |   |                            | $ | (255      | )            | 
|Net realized loss on investments                           |  |                                  | (34       | ) |                            |   | (18       | )            | 
|Net change in unrealized depreciation on investments       |  |                                  | (1,836    | ) |                            |   | (246      | )            | 
|Net decrease in net assets resulting from operations       |  |                                  | (572      | ) |                            |   | (519      | )            | 
|Stockholder distributions                                  |  |                                  |           |   |                            |   |           |              | 
|Distributions from net investment income                   |  |                                  | (1,077    | ) |                            |   | -         |              | 
|Net decrease in net assets from stockholder distributions  |  |                                  | (1,077    | ) |                            |   | -         |              | 
|Capital Share Transactions                                 |  |                                  |           |   |                            |   |           |              | 
|Issuance of common stock                                   |  |                                  | -         |   |                            |   | 38,000    |              | 
|Net increase in net assets from capital share transactions |  |                                  | -         |   |                            |   | 38,000    |              | 
|                                                           |  |                                  |           |   |                            |   |           |              | 
|Total (decrease) increase in net assets                    |  |                                  | (1,649    | ) |                            |   | 37,481    |              | 
|Net assets at beginning of period                          |  |                                  | 37,414    |   |                            |   | (67       | )            | 
|Net assets at end of period                                |  | $                                | 35,765    |   |                            | $ | 37,414    |              | 
|                                                           |  |                                  |           |   |                            |   |           |              | 
|Net asset value per common share (a)                       |  | $                                | 9.41      |   |                            | $ | 9.85      |              | 
|Common shares outstanding, end of period                   |  |                                  | 3,800,010 |   |                            |   | 3,800,010 |              | 



Parkview
Capital Credit, Inc. commenced principal operations on April 24, 2015. As such, there is limited activity for the period from
November 25, 2014 (date of inception) to December 31, 2014.



|(a) | Per
                                         share information for 2015 was calculated using weighted average shares outstanding from
                                         commencement of operations on April 24, 2015 through December 31, 2015.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



See
Notes to Financial Statements





F-4







PARKVIEW
CAPITAL CREDIT, INC.

STATEMENTS
OF CASH FLOWS

(in
thousands)



|                                                                                                             |  |                                  |         |   |                            |   |         | For the      | 
|------------------------------------------------------------------------------------------------------------ |  | -------------------------------- | ------- | - | -------------------------- | - | ------- | ------------ | 
|                                                                                                             |  |                                  |         |   |                            |   |         | Period From  | 
|                                                                                                             |  |                                  |         |   |                            |   |         | November 25, | 
|                                                                                                             |  |                                  |         |   |                            |   |         | 2014         | 
|                                                                                                             |  |                                  |         |   |                            |   |         | (date of     | 
|                                                                                                             |  | For the Years Ended
December 31, |         |   | inception) to December 31, |  
|                                                                                                             |  | 2016                             |         |   | 2015                       |   |         | 2014         | 
|                                                                                                             |  |                                  |         |   |                            |   |         |              | 
|Cash flows from operating activities                                                                         |  |                                  |         |   |                            |   |         |              | 
|Net decrease in net assets resulting from operations                                                         |  | $                                | (572    | ) |                            | $ | (519    | )            | 
|Adjustments to reconcile net decrease in net assets from operations to net cash used in operating activities |  |                                  |         |   |                            |   |         |              | 
|Purchases of investments                                                                                     |  |                                  | (54,563 | ) |                            |   | (26,863 | )            | 
|Paid-in-kind interest                                                                                        |  |                                  | (821    | ) |                            |   | (2      | )            | 
|Paydowns of investments                                                                                      |  |                                  | 586     |   |                            |   | 159     |              | 
|Sales of investments                                                                                         |  |                                  | 36,522  |   |                            |   | 939     |              | 
|Loan origination fee amortization                                                                            |  |                                  | (106    | ) |                            |   | (10     | )            | 
|Net unrealized depreciation on investments                                                                   |  |                                  | 1,836   |   |                            |   | 246     |              | 
|Net amortization of premiums on investments                                                                  |  |                                  | (48     | ) |                            |   | 3       |              | 
|Realized loss on sold/repaid investments                                                                     |  |                                  | 34      |   |                            |   | 18      |              | 
|Decrease (increase) in operating assets:                                                                     |  |                                  |         |   |                            |   |         |              | 
|Accounts receivable                                                                                          |  |                                  | 26      |   |                            |   | (26     | )            | 
|Interest receivable                                                                                          |  |                                  | (215    | ) |                            |   | (123    | )            | 
|Dividend receivable                                                                                          |  |                                  | (157    | ) |                            |   | (20     | )            | 
|Receivable for investments sold and repaid                                                                   |  |                                  | 949     |   |                            |   | (958    | )            | 
|Prepaid expenses and other assets                                                                            |  |                                  | (35     | ) |                            |   | (121    | )            | 
|Increase (decrease) in operating liabilities:                                                                |  |                                  |         |   |                            |   |         |              | 
|Payable for investments purchased                                                                            |  |                                  | 10,527  |   |                            |   | 1,472   |              | 
|Accounts payable and accrued expenses                                                                        |  |                                  | 44      |   |                            |   | (41     | )            | 
|Loan origination fees                                                                                        |  |                                  | 191     |   |                            |   | 140     |              | 
|Management fees payable                                                                                      |  |                                  | 12      |   |                            |   | 64      |              | 
|Net cash used in operating activities                                                                        |  |                                  | (5,790  | ) |                            |   | (25,642 | )            | 
|                                                                                                             |  |                                  |         |   |                            |   |         |              | 
|Cash flows from financing activities                                                                         |  |                                  |         |   |                            |   |         |              | 
|Issuance of common stock                                                                                     |  |                                  | -       |   |                            |   | 38,000  |              | 
|Stockholder distributions                                                                                    |  |                                  | (1,077  | ) |                            |   | -       |              | 
|Net cash (used in) provided by financing activities                                                          |  |                                  | (1,077  | ) |                            |   | 38,000  |              | 
|                                                                                                             |  |                                  |         |   |                            |   |         |              | 
|Total (decrease) increase in cash                                                                            |  |                                  | (6,867  | ) |                            |   | 12,358  |              | 
|Cash at beginning of period                                                                                  |  |                                  | 12,358  |   |                            |   | -       |              | 
|Cash at end of period                                                                                        |  | $                                | 5,491   |   |                            | $ | 12,358  |              | 
|                                                                                                             |  |                                  |         |   |                            |   |         |              | 
|Supplemental disclosures of cash flow information                                                            |  |                                  |         |   |                            |   |         |              | 
|Cash paid during the year for income taxes                                                                   |  | $                                | 84      |   |                            |   | -       |              | 



Parkview
Capital Credit, Inc. commenced principal operations on April 24, 2015. As such, there is limited activity for the period from
November 25, 2014 (date of inception) to December 31, 2014.



See
Notes to Financial Statements





F-5







PARKVIEW
CAPITAL CREDIT, INC.

SCHEDULE
OF INVESTMENTS

AS
OF DECEMBER 31, 2016

(in
thousands, except share information)



|Portfolio Company (a)                                                          |  | Industry                      |  | Spread Above
    Index (b) |  | Interest
    Rate |                                                           |   | Maturity |  |            | Principal |  |  | Amortized
    Cost |  |  | Fair

    Value (c) |                                                         |  | %
    of Net Assets |  
|------------------------------------------------------------------------------ |  | ----------------------------- |  | -------------------------- |  | ----------------- | --------------------------------------------------------- | - | -------- |  | ---------- | --------- |  |  | ------------------ |  |  | ------------------- | ------------------------------------------------------- |  | ------------------- | -
|Senior Secured Loans - First Lien                                              |  |                               |  |                            |  |                   |                                                           |   |          |  |            |           |  |  |                    |  |  |                     |                                                         |  |                     |  
|InfoGroup, Inc.                                                                |  | Market Analytics              |  | L + 6.00%                  |  |                   | 7.50                                                      | % |          |  | 5/26/2018  |           |  |  | 3,467              |  |  |                     | 3,443                                                   |  |                     |  
|Turning Point Brands, Inc.
    (formerly North Atlantic Trading Company, Inc.) |  | Tobacco                       |  | L + 6.50%                  |  |                   | 7.75                                                      | % |          |  | 1/13/2020  |           |  |  | 877                |  |  |                     | 878                                                     |  |                     |  
|Ebony Media Holdings, LLC (d)                                                  |  | Media                         |  | N/A                        |  |                   | 12%, 2% PIK                                               |   |          |  | (f)        |           |  |  | 5,605              |  |  |                     | 5,505                                                   |  |                     |  
|Medi-fare Drug & Pharmacetical Compounding,
    LLC (d)                        |  | Healthcare                    |  | N/A                        |  |                   | 10%,
                                         4% PIK      |   |          |  | 5/25/2018  |           |  |  | 3,689              |  |  |                     | 3,648                                                   |  |                     |  
|Total Senior Secured Loans
    - First Lien                                    |  |                               |  |                            |  |                   |                                                           |   |          |  |            |           |  |  |                    |  |  |                     | 13,474                                                  |  |                     |  
|                                                                               |  |                               |  |                            |  |                   |                                                           |   |          |  |            |           |  |  |                    |  |  |                     |                                                         |  |                     |  
|Senior Secured Loans - Second Lien                                             |  |                               |  |                            |  |                   |                                                           |   |          |  |            |           |  |  |                    |  |  |                     |                                                         |  |                     |  
|Turning Point Brands, Inc.
    (formerly North Atlantic Trading Company, Inc.) |  | Tobacco                       |  | L + 10.25%                 |  |                   | 11.50                                                     | % |          |  | 7/31/2020  |           |  |  | 1,500              |  |  |                     | 1,530                                                   |  |                     |  
|Action Resources (d)                                                           |  | Transportation                |  | L + 15.00% PIK             |  |                   | 16.00%
                                         PIK       |   |          |  | 4/30/2020  |           |  |  | 5,592              |  |  |                     | 5,592                                                   |  |                     |  
|Transportation Demand Management, LLC (d)                                      |  | Transportation                |  | N/A                        |  |                   | 12%,
                                         2% PIK      |   |          |  | 10/1/2021  |           |  |  | 5,011              |  |  |                     | 5,011                                                   |  |                     |  
|J.D. Power & Associates                                                        |  | Marketing Information Service |  | L + 8.50%                  |  |                   | 9.50                                                      | % |          |  | 9/7/2024   |           |  |  | 1,000              |  |  |                     | 986                                                     |  |                     |  
|American Bath Group, LLC                                                       |  | Manufacturing                 |  | L + 9.75%                  |  |                   | 10.75                                                     | % |          |  | 9/30/2024  |           |  |  | 2,000              |  |  |                     | 1,922                                                   |  |                     |  
|Rocket Software, Inc.                                                          |  | Software                      |  | L + 9.50%                  |  |                   | 10.50                                                     | % |          |  | 10/14/2024 |           |  |  | 1,000              |  |  |                     | 980                                                     |  |                     |  
|Anchor Glass Container Corporation                                             |  | Manufacturing                 |  | L + 7.75%                  |  |                   | 8.75                                                      | % |          |  | 12/7/2024  |           |  |  | 500                |  |  |                     | 495                                                     |  |                     |  
|Total Senior Secured Loans
    - Second Lien                                   |  |                               |  |                            |  |                   |                                                           |   |          |  |            |           |  |  |                    |  |  |                     | 16,516                                                  |  |                     |  
|                                                                               |  |                               |  |                            |  |                   |                                                           |   |          |  |            |           |  |  |                    |  |  |                     |                                                         |  |                     |  
|Portfolio Company
    (a)                                                      |  | Industry                      |  | Dividend
    Rate          |  |                   | Number
                                         of Shares |   |          |  |            |           |  |  |                    |  |  |                     | Amortized
                                         Cost |  |                     |  
|Equity Investments                                                             |  |                               |  |                            |  |                   |                                                           |   |          |  |            |           |  |  |                    |  |  |                     |                                                         |  |                     |  
|Langham Creek LLC; Preferred Units (d)                                         |  | Real Estate                   |  | 14.00%                     |  |                   | 1,868,600                                                 |   |          |  |            |           |  |  |                    |  |  |                     | 1,869                                                   |  |                     |  
|Langham Creek LLC; Common Units (d)                                            |  | Real Estate                   |  | N/A                        |  |                   | 1,000                                                     |   |          |  |            |           |  |  |                    |  |  |                     | 1                                                       |  |                     |  
|Ebony Media Holdings, LLC; Warrants (d)                                        |  | Media                         |  | N/A                        |  |                   | 50,000                                                    |   |          |  |            |           |  |  |                    |  |  |                     | 119                                                     |  |                     |  
|Medi-fare Drug & Pharmacetical Compounding, LLC; Warrants (d)                  |  | Healthcare                    |  | N/A                        |  |                   | 5                                                         |   |          |  |            |           |  |  |                    |  |  |                     | 58                                                      |  |                     |  
|Transportation Demand Management; Warrants
    (d)                             |  | Transportation                |  | N/A                        |  |                   | 34,000                                                    |   |          |  |            |           |  |  |                    |  |  |                     | -                                                       |  |                     |  
|Total Equity Investments                                                       |  |                               |  |                            |  |                   |                                                           |   |          |  |            |           |  |  |                    |  |  |                     | 2,047                                                   |  |                     |  
|                                                                               |  |                               |  |                            |  |                   |                                                           |   |          |  |            |           |  |  |                    |  |  |                     |                                                         |  |                     |  
|Portfolio Company
    (a)                                                      |  | Yield to
    Maturity         |  | Maturity
    Date          |  |                   | Number
                                         of Shares |   |          |  |            |           |  |  | Principal          |  |  |                     | Amortized
                                         Cost |  |                     |  
|U.S Government Securities                                                      |  |                               |  |                            |  |                   |                                                           |   |          |  |            |           |  |  |                    |  |  |                     |                                                         |  |                     |  
|U.S. Treasury Bill (e)                                                         |  | 0.324%                        |  | 1/12/2017                  |  |                   | 12,000,000                                                |   |          |  |            |           |  |  | 11,999             |  |  |                     | 11,999                                                  |  |                     |  
|Total U.S Government Securities                                                |  |                               |  |                            |  |                   |                                                           |   |          |  |            |           |  |  |                    |  |  |                     | 11,999                                                  |  |                     |  
|                                                                               |  |                               |  |                            |  |                   |                                                           |   |          |  |            |           |  |  |                    |  |  |                     |                                                         |  |                     |  
|Total Investments                                                              |  |                               |  |                            |  |                   |                                                           |   |          |  |            |           |  |  |                    |  |  | $                   | 44,036                                                  |  |                     | $
|Liabilities in excess
    of other assets                                      |  |                               |  |                            |  |                   |                                                           |   |          |  |            |           |  |  |                    |  |  |                     |                                                         |  |                     |  
|Net assets                                                                     |  |                               |  |                            |  |                   |                                                           |   |          |  |            |           |  |  |                    |  |  |                     |                                                         |  |                     | $



|(a) | With
                                         the exception of the Company’s investment in Langham Creek LLC, all of the Company’s
                                         investments are issued by eligible U.S. portfolio companies, as defined in the Investment
                                         Company Act of 1940 (the “1940 Act”). Under the 1940 Act, the Company would
                                         be deemed to “control” a portfolio company if the Company owned more than
                                         25% of its outstanding voting securities and/or held the power to exercise control over
                                         the management or policies of the portfolio company. The Company would be deemed an “affiliated
                                         person” of a portfolio company if the Company owned 5% or more of the portfolio
                                         company’s outstanding voting securities. As of December 31, 2016, the Company does
                                         not "control" any of its portfolio companies. The Company is an “affiliated
                                         person” of Langham Creek LLC by virtue of its ownership of voting securities
                                         of Langham Creek LLC.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | The
                                         majority of the investments bear interest at a rate that may be determined by reference
                                         to London Interbank Offered Rate (“LIBOR” or “L”) or Prime (“P”)
                                         which generally reset monthly, quarterly, or semiannually. For each, the Company has
                                         provided the spread over LIBOR and the current contractual interest rate in effect at
                                         December 31, 2016. Certain investments are subject to a LIBOR interest rate floor.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(c) | The
                                         fair value of the Company’s investments was determined in good faith by or under
                                         the guidance of the Company’s board of directors pursuant to the Company's valuation
                                         policies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(d) | Direct
                                         origination.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(e) | Position
                                         or portion thereof unsettled as of December 31, 2016.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(f) | The
                                         maturity date for the Ebony Media’s $3,800 and $1,805 principal loans are 5/5/2020
                                         and 11/11/2018, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                



See
Notes to Financial Statements



F-6







PARKVIEW
CAPITAL CREDIT, INC.

SCHEDULE
OF INVESTMENTS

AS
OF DECEMBER 31, 2015

(in
thousands, except share information)



|Portfolio Company (a)                        |  | Industry           |  | Spread Above
    Index (b) |  | Interest
    Rate |                                                           |   | Maturity |  |            | Principal |  |   | Amortized
    Cost |  |  | Fair

    Value (c) |                                                         |  | %
    of Net Assets |  
|-------------------------------------------- |  | ------------------ |  | -------------------------- |  | ----------------- | --------------------------------------------------------- | - | -------- |  | ---------- | --------- |  | - | ------------------ |  |  | ------------------- | ------------------------------------------------------- |  | ------------------- | -
|Senior Secured Loans - First Lien            |  |                    |  |                            |  |                   |                                                           |   |          |  |            |           |  |   |                    |  |  |                     |                                                         |  |                     |  
|InfoGroup, Inc.                              |  | Market Analytics   |  | L + 6.00%                  |  |                   | 7.50                                                      | % |          |  | 5/26/2018  |           |  | $ | 3,504              |  |  | $                   | 3,463                                                   |  |                     | $
|North Atlantic Trading Company, Inc.         |  | Tobacco            |  | L + 6.50%                  |  |                   | 7.75                                                      | % |          |  | 1/13/2020  |           |  |   | 903                |  |  |                     | 905                                                     |  |                     |  
|Generation Brands                            |  | Home Furnishings   |  | L + 6.50%                  |  |                   | 7.75                                                      | % |          |  | 12/13/2018 |           |  |   | 1,492              |  |  |                     | 1,508                                                   |  |                     |  
|Offisol (d)                                  |  | Staffing           |  | N/A                        |  |                   | 12%, 2% PIK                                               |   |          |  | 12/14/2017 |           |  |   | 3,502              |  |  |                     | 3,502                                                   |  |                     |  
|WBL SPE I, LLC (d)                           |  | Financial Services |  | N/A                        |  |                   | 13.00                                                     | % |          |  | 2/28/2017  |           |  |   | 3,000              |  |  |                     | 3,000                                                   |  |                     |  
|Total Senior Secured Loans
    - First Lien  |  |                    |  |                            |  |                   |                                                           |   |          |  |            |           |  |   |                    |  |  |                     | 12,378                                                  |  |                     |  
|                                             |  |                    |  |                            |  |                   |                                                           |   |          |  |            |           |  |   |                    |  |  |                     |                                                         |  |                     |  
|Senior Secured Loans - Second Lien           |  |                    |  |                            |  |                   |                                                           |   |          |  |            |           |  |   |                    |  |  |                     |                                                         |  |                     |  
|Maxim Crane Works, LP (e)                    |  | Heavy Construction |  | L + 9.25%                  |  |                   | 10.25                                                     | % |          |  | 11/26/2018 |           |  |   | 4,500              |  |  |                     | 4,484                                                   |  |                     |  
|North Atlantic Trading Company, Inc.         |  | Tobacco            |  | L + 10.25%                 |  |                   | 11.50                                                     | % |          |  | 7/31/2020  |           |  |   | 2,000              |  |  |                     | 2,051                                                   |  |                     |  
|Action Resources (d)                         |  | Transportation     |  | L + 9.00%                  |  |                   | 10.00                                                     | % |          |  | 4/30/2020  |           |  |   | 4,963              |  |  |                     | 4,963                                                   |  |                     |  
|Total Senior Secured Loans
    - Second Lien |  |                    |  |                            |  |                   |                                                           |   |          |  |            |           |  |   |                    |  |  |                     | 11,498                                                  |  |                     |  
|                                             |  |                    |  |                            |  |                   |                                                           |   |          |  |            |           |  |   |                    |  |  |                     |                                                         |  |                     |  
|Portfolio Company (a)                        |  | Industry           |  | Dividend Rate              |  |                   | Number
                                         of Shares |   |          |  |            |           |  |   | Principal          |  |  |                     | Amortized
                                         Cost |  |                     |  
|Equity Investments                           |  |                    |  |                            |  |                   |                                                           |   |          |  |            |           |  |   |                    |  |  |                     |                                                         |  |                     |  
|Langham Creek LLC; Preferred Units (d)       |  | Real Estate        |  | 14.00%                     |  |                   | 1,868,600                                                 |   |          |  |            |           |  |   | 1,869              |  |  |                     | 1,869                                                   |  |                     |  
|Langham Creek LLC; Common Units (d)          |  | Real Estate        |  | N/A                        |  |                   | 1,000                                                     |   |          |  |            |           |  |   | 1                  |  |  |                     | 1                                                       |  |                     |  
|Offisol; Warrants (d)                        |  | Staffing           |  | N/A                        |  |                   | 7                                                         |   |          |  |            |           |  |   | -                  |  |  |                     | -                                                       |  |                     |  
|Total Equity Investments                     |  |                    |  |                            |  |                   |                                                           |   |          |  |            |           |  |   |                    |  |  |                     | 1,870                                                   |  |                     |  
|                                             |  |                    |  |                            |  |                   |                                                           |   |          |  |            |           |  |   |                    |  |  |                     |                                                         |  |                     |  
|Total Investments                            |  |                    |  |                            |  |                   |                                                           |   |          |  |            |           |  |   |                    |  |  | $                   | 25,746                                                  |  |                     |  
|Other assets in excess
    of liabilities    |  |                    |  |                            |  |                   |                                                           |   |          |  |            |           |  |   |                    |  |  |                     |                                                         |  |                     |  
|Net assets                                   |  |                    |  |                            |  |                   |                                                           |   |          |  |            |           |  |   |                    |  |  |                     |                                                         |  |                     | $



|(a) | With
                                         the exception of the Company’s investment in Langham Creek LLC, all of the Company’s
                                         investments are issued by eligible U.S. portfolio companies, as defined in the Investment
                                         Company Act of 1940 (the “1940 Act”). Under the 1940 Act, the Company would
                                         be deemed to “control” a portfolio company if the Company owned more than
                                         25% of its outstanding voting securities and/or held the power to exercise control over
                                         the management or policies of the portfolio company. The Company would be deemed an “affiliated
                                         person” of a portfolio company if the Company owned 5% or more of the portfolio
                                         company’s outstanding voting securities. As of December 31, 2015, the Company does
                                         not "control" any of its portfolio companies. The Company is an “affiliated
                                         person” of Langham Creek LLC by virtue of its ownership of voting securities
                                         of Langham Creek LLC.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | The
                                         majority of the investments bear interest at a rate that may be determined by reference
                                         to London Interbank Offered Rate (“LIBOR” or “L”) or Prime (“P”)
                                         which generally reset monthly, quarterly, or semiannually. For each, the Company has
                                         provided the spread over LIBOR and the current contractual interest rate in effect at
                                         December 31, 2015. Certain investments are subject to a LIBOR interest rate floor.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(c) | The
                                         fair value of the Company’s investments was determined in good faith by or under
                                         the guidance of the Company’s board of directors pursuant to the Company's valuation
                                         policies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(d) | Direct
                                         origination.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(e) | Position
                                         or portion thereof unsettled as of December 31, 2015.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               



See
Notes to Financial Statements





F-7







PARKVIEW
CAPITAL CREDIT, INC.

NOTES
TO FINANCIAL STATEMENTS

(in
thousands, except share information)



NOTE
A – ORGANIZATION AND BASIS OF PRESENTATION



Parkview
Capital Credit, Inc. (the “Company”), was legally formed on November 25, 2014 (“Inception”) as a Maryland
corporation and commenced its principal operations on April 24, 2015, commensurate with the raising of $20,000 through the sale
of 2,000,000 shares of its common stock. The Company is an externally managed, nondiversified, closed-end management investment
company that elected to be regulated as a business development company (“BDC”) under the Investment Company Act of
1940, as amended (the “1940 Act”) on February 12, 2016, and intends to elect to be treated for federal income tax
purposes as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended
(the “Code”).



The
Company is an investment company that follows the specialized accounting and reporting guidance of Financial Accounting Standards
Board (“FASB”) Accounting Standard Codification Topic 946 “Financial Services Investment Companies.”



The
accompanying financial statements have been prepared on the accrual basis of accounting in conformity with U.S. generally accepted
accounting principles (“GAAP”).



NOTE
B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



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



Cash
and Cash Equivalents: The Company considers all highly liquid financial instruments with a maturity of three months or less
at the date of purchase to be cash equivalents. All cash balances are maintained with high
credit quality financial institutions, which are members of the Federal Deposit Insurance Corporation.



Organizational
Expenses: Fees associated with the organization of the Company have been expensed as incurred. These fees consist primarily
of legal fees.



Income
Taxes: The Company has elected to be regulated as a BDC under the 1940 Act. As a BDC, the Company also intends to elect to
be treated as a RIC under Subchapter M of the Code. As a RIC, the Company generally will not be required to pay corporate level
federal income taxes on any ordinary income or capital gains that it distributes to its stockholders as dividends. To qualify
as a RIC, the Company must, among other things, meet certain source-of-income and asset diversification requirements. In addition,
to qualify for RIC tax treatment, the Company must distribute to its stockholders, for each taxable year, at least 90% of its
“investment company taxable income” for that year, which is generally its ordinary income plus the excess of its realized
net short-term capital gains over its realized net long-term capital losses. As a result, any tax liability related to income
earned and distributed by the Company represents obligations of the Company’s common stockholders and will not be reflected
in the financial statements of the Company for the years in which it qualifies as a RIC.



Prior
to 2016, the Company did not qualify as a RIC and was taxed as a C corporation (“C-Corp”) for both 2014 and
2015. Because the Company did not elect to be regulated as a BDC until February 12, 2016, the Company would not qualify as a
RIC for calendar year 2016. Therefore, the Company changed its tax year to June 30 and has filed as a C-Corp for the
six-month period ended June 30, 2016. The Company intends to elect RIC status for the tax year ending June 30, 2017 and
thereafter.



Although
the Company may not be subject to federal income taxes as a RIC, it may choose to retain a portion of its calendar year income.
If so, the Company may be subject to a 4% excise tax on the amount retained. No excise taxes were accrued for the years ended
December 31, 2016 and 2015 and for the period from November 25, 2014 (date of inception) to December 31, 2014.







F-8









The
Company evaluates tax positions taken or expected to be taken in the course of preparing its financial statements to determine
whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax positions
not deemed to meet the “more-likely-than-not” threshold are reversed and recorded as a tax benefit or expense in the
current year. All penalties and interest associated with income taxes are included in income tax expense. Conclusions regarding
tax positions are subject to review and may be adjusted at a later date based on factors including, but not limited to, on-going
analyses of tax laws, regulations and interpretations thereof. All tax years are open for examination.



Revenue
Recognition: Interest income, adjusted for amortization of premiums and accretion of discounts, is recorded on an accrual
basis. Discounts or premiums are accreted or amortized, respectively, using the effective interest method as interest income.
Dividend income is recognized on an accrual basis to the extent that the Company expects to collect such amount. Loan origination
fees, original issue discount and market discount are capitalized and amortized as interest income over the respective term of
the loan. The Company records prepayment premiums on loans and securities as fee income
when it receives such amounts.



The
Company has loans and preferred securities in its portfolio that contain payment-in-kind (“PIK”) provisions. PIK represents
interest or dividends that are accrued and recorded as interest or dividend income at the contractual rates, increases the loan
or preferred equity principal on the respective capitalization dates, and is generally due at maturity. For the years ended December
31, 2016 and 2015, the Company recognized PIK income of $821 and $2, respectively.



Realized
gains or losses on investments are measured by the difference between the net proceeds from the disposition and the amortized
cost basis of investment, without regard to unrealized gains or losses previously recognized. The Company reports changes in fair
value of investments that are measured at fair value as a component of the net change in unrealized appreciation (depreciation)
on investments in the statements of operations.



Earnings
per Share: Basic earnings per share is computed by dividing earnings available to common stockholders by the weighted average
number of shares outstanding during the period. Other potentially dilutive common shares, and the related impact to earnings,
are considered when calculating earnings per share on a diluted basis. For the year ended December 31, 2015, the Company calculated
basic and diluted per share information using shares outstanding from commencement of operations on April 24, 2015 through December
31, 2015.



Investments:
Investment transactions are accounted for on a trade-date basis. The Company considers trade date for investments not traded on
a recognizable exchange, or traded in the over-the-counter markets, to be the date on which the Company receives legal or contractual
title to the asset and bears the risk of loss.



Investments
in certain senior loans generate a fixed spread over floating base rates such as LIBOR or the U.S. Prime Rate. These floating
base rates generally reset monthly, quarterly or semi-annually.



Valuation
of Portfolio Securities: The Company determines the net asset value per share of its common stock quarterly. The net asset
value per share equals the value of the Company’s total assets minus liabilities and any preferred stock outstanding divided
by the total number of shares of common stock outstanding. The Company’s investments are valued at the end of each fiscal
quarter.



Substantially
all of the Company’s investments are expected to be in loans that do not have readily ascertainable market prices. Investments
for which market quotations are readily available are valued at such market quotations, which are generally obtained from an independent
pricing service or multiple broker-dealers or market makers. In order to assist the Company’s board of directors (the “Board”)
in determining the fair value of assets that are not publicly traded or whose market prices are not readily available, Parkview
Advisors, LLC (the “Advisor”) provides the Board with portfolio company valuations, which are based on relevant inputs,
which may include but are not limited to, indicative dealer quotes, values of like securities, recent portfolio company financial
statements and forecasts, and valuations prepared by third party valuation services. The Board has retained an independent valuation
firm to assist it by performing certain limited third-party valuation services. In connection with each valuation determination,
investment professionals from the Advisor prepare portfolio company valuations using sources and/or proprietary models depending
on the availability of information on the Company’s assets and the type of asset being valued, all in accordance with the
Company’s valuation policy. The participation of the Advisor in the valuation process could result in a conflict of interest,
since the base management fee is based on the Company’s gross assets.





F-9







Valuation
of fixed income investments, such as loans and debt securities, depends upon a number of factors, including prevailing interest
rates for like securities, expected volatility in future interest rates, call features, put features and other relevant terms
of the debt. For investments without readily available market prices, the Company may incorporate these factors into discounted
cash flow models to arrive at fair value. Other factors that may be considered include the borrower’s ability to adequately
service its debt, the fair market value of the borrower in relation to the face amount of its outstanding debt and the quality
of collateral securing its debt investments.



The
Company’s equity interests in portfolio companies for which there is no liquid public market are valued at fair value. The
Board, in its determination of fair value, may consider various factors, such as multiples of EBITDA, cash flows, net income,
revenues or, in limited instances, book value or liquidation value. All of these factors may be subject to adjustments based upon
the particular circumstances of a portfolio company or the actual investment position. For example, adjustments to EBITDA may
take into account compensation to previous owners or acquisition, recapitalization, restructuring or other related items.



The
Advisor’s management team, any approved independent third-party valuation firm and the Board may also consider private merger
and acquisition statistics, public trading multiples discounted for illiquidity and other factors, valuations implied by third-party
investments in the portfolio companies or industry practices in determining fair value. The Advisor’s management team, any
approved independent third-party valuation firm and the Board may also consider the size and scope of a portfolio company and
its specific strengths and weaknesses, and may apply discounts or premiums, where and as appropriate, due to the higher (or lower)
financial risk and/or the smaller size of portfolio companies relative to comparable firms, as well as such other factors as the
Board, in consultation with the Advisor’s management team and any approved independent third-party valuation firm may consider
relevant in assessing fair value. Generally, the value of the equity interests in public companies for which market quotations
are readily available will be based upon the most recent closing public market price. Portfolio securities that carry certain
restrictions on sale are typically valued at a discount from the public market value of the security.



When
the Company receives warrants or other equity securities at nominal or no additional cost in connection with an investment in
a debt security, the cost basis in the investment will be allocated between the debt securities and any such warrants or other
equity securities received at the time of origination. The Board subsequently values these warrants or other equity securities
received at their fair value.



The
Company periodically benchmarks the bid and ask prices received from the third-party pricing services and/or dealers, as applicable,
against the actual prices at which it purchases and sells investments. Based on the results of the benchmark analysis and the
experience of management in purchasing and selling these investments, the Company believes that these prices are reliable indicators
of fair value. However, because of the private nature of this marketplace (meaning actual transactions are not publicly reported),
the Company believes that these valuation inputs are classified as Level 3 within the fair value hierarchy. The Company also uses
an independent valuation firm to assist the Board in determining fair value for securities for which it cannot obtain prevailing
bid and ask prices through third-party pricing services or independent dealers, or where the Board otherwise determines that the
use of such other methods is appropriate. The Company periodically benchmarks the valuations provided by the independent valuation
firm against the actual prices at which the Company purchases and sells investments. The audit committee and Board review and
approve the valuation determinations made with respect to these investments in a manner consistent with the Company’s valuation
policy.



Due
to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the
fair value of the investment portfolio may differ from the values that would have been used had a readily available market value
existed for such investments, and the differences could be material.



Fair
Value of Financial Instruments: The carrying amounts of certain of our financial instruments, including cash, receivables,
accounts payable and accrued expenses, approximate fair value due to their short-term nature.



Recent
Accounting Pronouncements: In January 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-01,
“Financial Instruments - Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities,”
which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01
will be effective for annual periods and interim periods within those annual periods beginning after December 15, 2017, and early
adoption is not permitted. The Company does not expect the adoption of the standard to have a material impact on its financial
statements.





F-10







In
August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts
and Cash Payments,” which clarifies how certain cash receipts and cash payments are presented and classified in the statement
of cash flows. ASU 2016-15 will be effective for public business entities for fiscal years beginning after December 15, 2017,
and interim periods within those fiscal years, with early adoption permitted. The Company does not expect the adoption of this
standard to have a material impact on its financial statements.



Distributions:
Distributions to the Company’s stockholders are recorded as of the record date. The Company intends to distribute net
realized capital gains, if any, at least annually.



The
determination of the tax attributes of the distributions is made at the end of the tax year based upon the taxable income for
the full tax year and the distributions paid during the full tax year. The Company may fund its cash distributions to stockholders
from any sources of funds legally available to it, including proceeds from the sale of shares of the Company’s common stock,
borrowings, net investment income from operations, capital gains proceeds from the sale of assets, non-capital gains proceeds
from the sale of assets, and dividends or other distributions paid to the Company on account of preferred and common equity investments
in portfolio companies. The Company has not established limits on the amount of funds it may use from available sources to make
distributions. During certain periods, the Company’s distributions may exceed its earnings. As a result, it is possible
that a portion of the distributions the Company makes may represent a return of capital. A return of capital generally is a return
of a stockholder’s investment rather than a return of earnings or gains derived from the Company’s investment activities.
Each year a statement on Form 1099-DIV identifying the sources of the distributions (i.e., paid from ordinary income, paid from
net capital gains on the sale of securities, and/or a return of capital, which is a nontaxable distribution) will be mailed to
the Company’s stockholders. There can be no assurance that the Company will be able to pay distributions at a specific rate
or at all.



Reclassifications:
Prior period financial statement amounts have been reclassified to conform to the current period presentation.



NOTE
C – COMMON STOCK



On
March 11, 2015, the Company filed Amended and Restated Articles of Incorporation with the State Department of Assessments and
Taxation for the State of Maryland (the “Amended Charter”). The Amended Charter, among other things, increased the
number of authorized shares of the Company’s common stock from 100,000 to 50,000,000.



On
March 31, 2015, the Company accepted a subscription agreement from GrayCo Alternative Partners II, LP for a capital contribution
of $25,000. In connection with the receipt of $20,000 of the $25,000 subscription on April 24, 2015, the Company issued a total
of 2,000,000 shares of common stock at a price per share of $10.00. In connection with the receipt of $3,500 from GrayCo Alternative
Partners II, LP on August 11, 2015, the Company issued a total of 350,000 additional shares of common stock at a purchase price
per share of $10.00. In connection with the receipt of $1,500 from GrayCo Alternative Partners II, LP on October 5, 2015, the
Company issued a total of 150,000 additional shares of common stock at a purchase price per share of $10.00, which represented
the final commitment related to the $25,000 subscription. GrayCo Alternative Partners II, LP was a private fund managed by Gray
& Company, a registered investment adviser founded by the Company’s former Chairman, Laurence O. Gray. On February 2,
2017, Gray & Company was acquired by Consequent Capital Management, LLC (“Consequent”). In connection with the
transaction, the general partner of GrayCo Alternative Partners II, LP is now 100% owned by Consequent Capital Investments, LLC,
an entity managed by Consequent. As a result, GrayCo Alternative Partners II, LP is no longer managed by Mr. Gray or Gray &
Company.



On
December 2, 2015, the Company accepted a subscription agreement from District 1199J New Jersey Healthcare Employers Pension Fund
for a capital contribution of $13,000 where the Company issued a total of 1,300,000 shares of common stock. The Company received
$7,000 and $6,000, respectively, on December 29, and December 31, 2015 for which the Company issued 700,000 and 600,000 shares,
respectively, of common stock at a purchase price per share of $10.00.



NOTE
D – RELATED PARTY TRANSACTIONS



Advisory
Agreement



On
March 11, 2015, the Company entered into an investment advisory agreement with the Advisor for management services (the “Investment
Advisory Agreement”). The Investment Advisory Agreement was approved by the Board, including a majority of the directors
who are not “interested persons” of the Company and the Advisor as defined in Section 2(a)(19) of the 1940 Act, at
an in person meeting of the Board held in August 2015. The Advisor is owned by SKW Financial, LLC, an entity controlled by the
Company’s Chief Executive Officer. Pursuant to the Investment Advisory Agreement, the Advisor provides credit analysis,
structuring capability and transactional experience. The fees associated with the Investment Advisory Agreement consist of a base
management fee and incentive fees.





F-11







The
management fee is calculated at an annual rate of 2.00% of the end-of-period gross assets payable monthly in arrears. For purposes
of calculating the management fee, the term “gross assets” includes any assets acquired with the proceeds of leverage.
As a result, the Advisor will benefit when the Company incurs debt or uses leverage. For each of the first two months of operations,
the management fee was calculated based on the value of the Company’s gross assets at the end of such month, and appropriately
adjusted for any share issuances during these months. Following the Company’s first two months of operations, the Investment
Advisory Agreement provides that the management fee is calculated based on the average value of gross assets at the end of the
two most recently completed months. The Company has clarified its management fee calculation so that the management fee is calculated
by averaging the value of the Company’s gross assets at the end of the two most recently completed quarters, and appropriately
adjusting for any share issuances occurring during any month of the current quarter. Management fees for any partial month are
appropriately prorated. In order to meet the diversification tests required to qualify as a RIC, the Company, on December 29,
2016, June 28, 2016 and March 31, 2016, acquired $12,000, $10,000 and $12,500, respectively, in face value of short-term U.S.
Treasury Bills. There were no U.S. Treasury Bills acquired during the year ended December 31, 2015. These transactions had the
effect of increasing management fees payable to the Advisor, all of which were waived by the Advisor. For the years ended December
31, 2016 and 2015, the Company incurred management fees of $922 and $307, respectively, gross of the fee waiver of $142 and $0,
respectively.



The
incentive fee is divided into two parts: (i) an incentive fee on income and (ii) an incentive fee on capital gains.



The
incentive fee on income, is calculated and payable quarterly in arrears based upon the Company’s “pre-incentive fee
net investment income” for the immediately preceding quarter. The incentive fee on income will be subject to a hurdle rate,
measured quarterly and expressed as a rate of return on adjusted capital at the beginning of the most recently completed calendar
quarter, of 1.75% (7.0% annualized), subject to a “catch up” feature. For the years ended December 31, 2016 and 2015,
the Company did not incur  any incentive fees on income.



The
incentive fee on capital gains is determined and payable in arrears as of the end of each calendar year (or upon termination of
the Advisory Agreement). This fee will equal 20% of realized capital gains on a cumulative basis from inception, calculated as
of the end of the applicable period, computed net of all realized capital losses and unrealized capital depreciation on a cumulative
basis, less the aggregate amount of any previously paid capital gains incentive fees. For the years ended December 31, 2016 and
2015, the Company did not accrue any incentive fees on capital gains.



During
the years ended December 31, 2016 and 2015, the Company reimbursed the Advisor $112 and $85, respectively, for administrative
services performed on its behalf and reimbursements for company-related travel which are reflected in general and administrative
expenses on the statements of operations.



Administration
Agreement



On
March 11, 2015, the Company entered into an Administration Agreement with Parkview Administrator, LLC (the “Administrator”),
under which the Administrator will provide administrative services to the Company. These services will include providing office
space, providing equipment and office services, maintaining financial records, preparing reports to the Company’s stockholders
and reports filed with the SEC and managing the payment of the Company’s expenses and the performance of administrative
and professional services rendered by others. The Company will reimburse the Administrator for all reasonable costs and expenses
incurred by the Administrator in providing these services, facilities and personnel, as provided by the Administration Agreement.
During the years ended December 31, 2016 and 2015, the Administrator did not provide any administrative services to the Company
and was not reimbursed for any expenses made on behalf of the Company.



License
Agreement



On
March 11, 2015, the Company entered into a license agreement (the “License Agreement”) with the Advisor, pursuant
to which the Company was granted a nonexclusive license to use the name “Parkview.” Under the License Agreement, the
Company has a right to use the “Parkview” name and logo, as long as the Advisor or one of its affiliates remains the
Company’s investment adviser. Other than with respect to this limited license, the Company has no legal right to the “Parkview”
name or logo.





F-12







NOTE
E – INVESTMENT PORTFOLIO



The
table below describes investments by industry classification and enumerates the percentage, by fair value, of the total portfolio
assets in such industries as of December 31, 2016 and 2015:



|                              |  | December 31, 2016 |        |  | December 31, 2015       | 
|----------------------------- |  | ----------------- | ------ |  | ----------------------- | 
|                              |  | Fair Value        |        |  | Percentage of Portfolio | 
|Financial Services            |  | $                 | -      |  |                         | 
|Healthcare                    |  |                   | 3,700  |  |                         | 
|Heavy Construction            |  |                   | -      |  |                         | 
|Home Furnishings              |  |                   | -      |  |                         | 
|Manufacturing                 |  |                   | 2,441  |  |                         | 
|Market Analytics              |  |                   | 3,432  |  |                         | 
|Marketing Information Service |  |                   | 1,005  |  |                         | 
|Media                         |  |                   | 5,361  |  |                         | 
|Real Estate                   |  |                   | 1,757  |  |                         | 
|Software                      |  |                   | 1,017  |  |                         | 
|Staffing                      |  |                   | -      |  |                         | 
|Tobacco                       |  |                   | 2,372  |  |                         | 
|Transportation                |  |                   | 8,870  |  |                         | 
|U.S. Government Securities    |  |                   | 11,999 |  |                         | 
|                              |  | $                 | 41,954 |  |                         | 



The
following table summarizes the amortized cost and fair value of the investment portfolio as of December 31, 2016 and 2015:



|December 31, 2016                  |  | Amortized Cost(a) |        |  | Percentage of Portfolio |  |     | Fair Value |  |   | Percentage of Portfolio | 
|---------------------------------- |  | ----------------- | ------ |  | ----------------------- |  | --- | ---------- |  | - | ----------------------- | 
|Senior Secured Loans - First Lien  |  | $                 | 13,474 |  |                         |  | 31  | %          |  | $ | 13,317                  | 
|Senior Secured Loans - Second Lien |  |                   | 16,516 |  |                         |  | 37  | %          |  |   | 14,833                  | 
|Equity Investments                 |  |                   | 2,047  |  |                         |  | 5   | %          |  |   | 1,805                   | 
|U.S. Government Securities         |  |                   | 11,999 |  |                         |  | 27  | %          |  |   | 11,999                  | 
|Total                              |  | $                 | 44,036 |  |                         |  | 100 | %          |  | $ | 41,954                  | 
|                                   |  |                   |        |  |                         |  |     |            |  |   |                         | 
|December 31, 2015                  |  |                   |        |  |                         |  |     |            |  |   |                         | 
|Senior Secured Loans - First Lien  |  | $                 | 12,378 |  |                         |  | 48  | %          |  | $ | 12,217                  | 
|Senior Secured Loans - Second Lien |  |                   | 11,498 |  |                         |  | 45  | %          |  |   | 11,413                  | 
|Equity Investments                 |  |                   | 1,870  |  |                         |  | 7   | %          |  |   | 1,870                   | 
|Total                              |  | $                 | 25,746 |  |                         |  | 100 | %          |  | $ | 25,500                  | 



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



NOTE
F – FAIR VALUE OF FINANCIAL INSTRUMENTS



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



Level
1 — Valuations based on quoted prices in active markets for identical assets or liabilities at the measurement date.





F-13







Level
2 — Valuations based on inputs other than quoted prices in active markets included in Level 1, which are either directly
or indirectly observable at the measurement date. This category includes quoted prices for similar assets or liabilities in active
markets, quoted prices for identical or similar assets or liabilities in non-active markets including actionable bids from third
parties for privately held assets or liabilities, and observable inputs other than quoted prices such as yield curves and forward
currency rates that are entered directly into valuation models to determine the value of derivatives or other assets or liabilities.



Level
3 — Valuations based on inputs that are unobservable and where there is little, if any, market activity at the measurement
date.



The
inputs for the determination of fair value may require significant management judgment or estimation and are based upon management’s
assessment of the assumptions that market participants would use in pricing the assets or liabilities. These investments include
debt and equity investments in private companies or assets valued using the market or income approach and may involve pricing
models whose inputs require significant judgment or estimation because of the absence of any meaningful current market data for
identical or similar investments. The inputs in these valuations may include, but are not limited to, capitalization and discount
rates, beta and EBITDA multiples. The information may also include pricing information or broker quotes, which include a disclaimer
that the broker would not be held to such a price in an actual transaction. The non-binding nature of consensus pricing and/or
quotes accompanied by disclaimer would result in classification as Level 3 information, assuming no additional corroborating evidence.



Pricing
inputs and weightings applied to determine value require subjective determination. Accordingly, valuations do not necessarily
represent the amounts that may eventually be realized from sales or other dispositions of investments.



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



The
following table presents the fair value measurements of the investment portfolio, by major class according to the fair value hierarchy,
as of December 31, 2016:



|                                   |  | Level 1 |        |  | Level 2 |   |   | Level 3 |  |   | Total  | 
|---------------------------------- |  | ------- | ------ |  | ------- | - | - | ------- |  | - | ------ | 
|Senior Secured Loans - First Lien  |  | $       | -      |  |         | $ | - |         |  | $ | 13,317 | 
|Senior Secured Loans - Second Lien |  |         | -      |  |         |   | - |         |  |   | 14,833 | 
|Equity Investments                 |  |         | -      |  |         |   | - |         |  |   | 1,805  | 
|U.S. Government Securities         |  |         | 11,999 |  |         |   | - |         |  |   | -      | 
|                                   |  | $       | 11,999 |  |         | $ | - |         |  | $ | 29,955 | 



The
following table presents the fair value measurements of the investment portfolio, by major class according to the fair value hierarchy,
as of December 31, 2015:



|                                   |  | Level 1 |   |  | Level 2 |   |   | Level 3 |  |   | Total  | 
|---------------------------------- |  | ------- | - |  | ------- | - | - | ------- |  | - | ------ | 
|Senior Secured Loans - First Lien  |  | $       | - |  |         | $ | - |         |  | $ | 12,217 | 
|Senior Secured Loans - Second Lien |  |         | - |  |         |   | - |         |  |   | 11,413 | 
|Equity Investments                 |  |         | - |  |         |   | - |         |  |   | 1,870  | 
|                                   |  | $       | - |  |         | $ | - |         |  | $ | 25,500 | 



F-14







The
following table provides a reconciliation of the beginning and ending balances for total investments for the years ended December 31,
2016 and 2015 for which significant unobservable inputs (Level 3) were used in determining fair value:



|                                                                                                                                                                                                       |  | For the Year Ended December 31, 2016 |       
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------------ | ------
|                                                                                                                                                                                                       |  | Senior Secured Loans First Lien      |       
|Fair value beginning of period                                                                                                                                                                         |  | $                                    | 12,217
|Purchases                                                                                                                                                                                              |  |                                      | 8,973 
|Net realized gain (loss)                                                                                                                                                                               |  |                                      | (14   
|Amortization of discount (premium)                                                                                                                                                                     |  |                                      | 53    
|Paid in kind interest                                                                                                                                                                                  |  |                                      | 161   
|Sales                                                                                                                                                                                                  |  |                                      | (8,008
|Paydowns                                                                                                                                                                                               |  |                                      | (67   
|Net change in unrealized appreciation (depreciation)                                                                                                                                                   |  |                                      | 2     
|Fair value end of period                                                                                                                                                                               |  | $                                    | 13,317
|                                                                                                                                                                                                       |  |                                      |       
|The amount of total gains or losses for the period included in changes in net assets attributable to the change in unrealized gains or losses relating to investments still held at the reporting date |  | $                                    | (19   



|                                                                                                                                                                                                       |  | For the Year Ended December 31, 2015 |       
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------------ | ------
|                                                                                                                                                                                                       |  | Senior Secured Loans First Lien      |       
|Fair value beginning of period                                                                                                                                                                         |  | $                                    | -     
|Purchases                                                                                                                                                                                              |  |                                      | 13,448
|Net realized loss                                                                                                                                                                                      |  |                                      | (18   
|Amortization of discount (premium)                                                                                                                                                                     |  |                                      | 6     
|Paid in kind interest                                                                                                                                                                                  |  |                                      | 2     
|Sales                                                                                                                                                                                                  |  |                                      | (939  
|Paydowns                                                                                                                                                                                               |  |                                      | (121  
|Net change in unrealized depreciation                                                                                                                                                                  |  |                                      | (161  
|Fair value end of period                                                                                                                                                                               |  | $                                    | 12,217
|                                                                                                                                                                                                       |  |                                      |       
|The amount of total gains or losses for the period included in changes in net assets attributable to the change in unrealized gains or losses relating to investments still held at the reporting date |  | $                                    | (161  



During
the years ended December 31, 2016 and 2015, the Company did not have any transfers between levels.





F-15







The
following table presents the quantitative information about Level 3 fair value measurements of the investment portfolio, as of
December 31, 2016 and 2015:





|                                   |  | December 31, 2016 |      
|---------------------------------- |  | ----------------- | -----
|                                   |  | Fair Value        |      
|Senior Secured Loans - First Lien  |  | $                 | 4,304
|Senior Secured Loans - First Lien  |  | $                 | 9,013
|                                   |  |                   |      
|Senior Secured Loans - Second Lien |  | $                 | 5,963
|Senior Secured Loans - Second Lien |  | $                 | 8,870
|                                   |  |                   |      
|Equity Investments                 |  | $                 | 1,805
|                                   |  |                   |      





|                                   |  | December 31, 2015 |      
|---------------------------------- |  | ----------------- | -----
|                                   |  | Fair Value        |      
|Senior Secured Loans - First Lien  |  | $                 | 5,715
|Senior Secured Loans - First Lien  |  | $                 | 3,502
|Senior Secured Loans - First Lien  |  | $                 | 3,000
|Senior Secured Loans - Second Lien |  | $                 | 6,450
|Senior Secured Loans - Second Lien |  | $                 | 4,963
|                                   |  |                   |      
|Equity Investments                 |  | $                 | 1,870





F-16







NOTE
G – FINANCIAL HIGHLIGHTS



The
following is a schedule of financial highlights of the Company for the years ended December 31, 2016 and 2015:



|                                                                |  | Year Ended December 31, |          
|--------------------------------------------------------------- |  | ----------------------- | ---------
|                                                                |  | 2016                    |          
|Per share data                                                  |  |                         |          
|Net assest value, begining of period (a)                        |  | $                       | 9.85     
|Results of operations (a)                                       |  |                         |          
|Net investment income (loss)                                    |  |                         | 0.34     
|Net realized loss on investments                                |  |                         | (0.01    
|Net change in unrealized depreciation on investments            |  |                         | (0.49    
|Net decrease in net assets resulting from operations            |  |                         | (0.16    
|Stockholder distributions                                       |  |                         |          
|Distributions from net investment income                        |  |                         | (0.28    
|Capital share transactions                                      |  |                         |          
|Issuance of common stock                                        |  |                         | -        
|Total (decrease) increase in net assets                         |  |                         | (0.44    
|Net asset value, end of period                                  |  | $                       | 9.41     
|                                                                |  |                         |          
|Shares outstanding at end of period                             |  |                         | 3,800,010
|Total return (b)                                                |  |                         | -1.56    
|                                                                |  |                         |          
|Ratio/Supplemental data (c)                                     |  |                         |          
|Net assets, end of period                                       |  |                         | 35,765   
|Ratio of operating expenses to average net assets (d)(e)        |  |                         | 6.27     
|Ratio of net investment income (loss) to average net assets (e) |  |                         | 3.55     
|Portfolio turnover (f)                                          |  |                         | 51.91    



|(a) | Per
    share information was calculated using common stock outstanding at December 31, 2016 and 2015, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | The
    total return for the year ended December 31, 2016 was calculated by taking the net loss of the Company for the period divided
    by the average net assets during the period.  The total return for the year ended December 31, 2015 was calculated by
    taking the net loss of the Company for the period divided by the value of common stock issued during the period.                                                                                                                                                                            
|(c) | The
    financial information for 2015 has not been annualized in computing ratios and may not be indicative of full year results.                                                                                                                                                                                                                                                                                                                                                                                                                              
|(d) | In
    order to meet the diversification tests required to qualify as a RIC, the Company, on December 29, 2016, June 28, 2016 and
    March 31, 2016, acquired $12,000, $10,000 and $12,500, respectively, in face value of short-term U.S. Treasury Bills. These
    transactions had the effect of increasing management fees payable to the Advisor, all of which were waived by the Advisor.
    The effect of the management fee waiver is 0.39% for the year ended December 31, 2016. There was no fee waiver during the
    year ended December 31, 2015.
|(e) | In
    computing ratios for the year ended December 31, 2015, the Company utilized its net assets as of April 24, 2015, the date
    on which it commenced principal operations, for its beginning of period assets.                                                                                                                                                                                                                                                                                                                                            
|(f) | Portfolio
    turnover rate for the year ended December 31, 2015 was calculated from the commencement of principal operations on April 24,
    2015.                                                                                                                                                                                                                                                                                                                                                                                                            



Financial
highlights are not  shown for the period from November 25, 2014 (date of inception) to December 31, 2014 due to the fact that
the Company did not commence operations until April 24, 2015.





F-17







NOTE
H – COMMITMENTS AND CONTINGENCIES



Legal
Proceedings



The
Company is not currently involved in any legal proceedings.



NOTE
I – INCOME TAXES



As
of December 31, 2016, 2015, and 2014 the Company had $1,027, ($204), and $0 of net investment income (loss) on a tax
basis. Prior to 2016, the Company did not qualify as a RIC  and  was taxed as a C corporation (“C-Corp”) for both
2014 and 2015. Because  the Company did not elect to be regulated as a BDC until February 12, 2016,  the company will not
qualify as a RIC for calendar year 2016.  the Company changed its  tax year to June 30 and filed as a C-Corp for the six
month period ended June 30, 2016.  The Company intends to elect RIC status for the tax year ended June 30, 2017 and
thereafter.



The
Company has recorded a current federal tax provision of $31 for the year ended December 31, 2016 related to the taxable income
earned for the six month period ended June 30, 2016. The recording of the provision for income taxes reduced the Company’s
net asset value (“NAV”) per share by $0.01. The Company did not record a tax provision for the year ended December
31, 2015 or for the period from November 25, 2014 (date of inception) to December 31, 2014 due to losses incurred.



There
was no evidence to record a deferred tax asset at December 31, 2015 and 2014 on a more likely than not basis due to the limited
operating history of the Company.



The difference between the Company’s GAAP-basis net investment income (loss)
and its tax-basis income (loss) is as follows:



|                                                                |  | December 31, |      
|--------------------------------------------------------------- |  | ------------ | -----
|                                                                |  | 2016         |      
|GAAP- basis net investment income (loss)                        |  | $            | 1,298
|Tax- basis deferral and amortization of organizational costs    |  |              | (8   
|Federal tax expense                                             |  |              | 31   
|Paydown reclassifications                                       |  |              | (26  
|Book/tax timing differences for income earned from partnerships |  |              | (268 
|Tax-basis net investment income (loss)                          |  | $            | 1,027



The
Company may make certain adjustments to the classification of stockholders' equity as a result of permanent book-to-tax differences.
The following adjustment was made for the year ended December 31, 2016:



|Accumulated undistributed net investment loss              |  | $ | 4   |  
|---------------------------------------------------------- |  | - | --- | -
|Accumulated undistributed net realized loss on investments |  | $ | 27  |  
|Additional paid-in capital                                 |  | $ | (31 | )



As
of December 31 2016 and 2015, the components of accumulated earnings on a tax basis were as follows:



|                                                                    |  | December 31, |       
|------------------------------------------------------------------- |  | ------------ | ------
|                                                                    |  | 2016         |       
|Distributable ordinary income (income and short-term capital gains) |  | $            | (96   
|Temporary differences                                               |  |              | (49   
|Accumulated capital and other losses                                |  |              | (25   
|Net unrealized depreciation on investments                          |  |              | (1,969
|Total                                                               |  | $            | (2,139



As
of December 31, 2016 and 2015, the Company’s aggregate investment unrealized depreciation based on cost was as follows:



|                                                      |  | December 31, |       
|----------------------------------------------------- |  | ------------ | ------
|                                                      |  | 2016         |       
|Tax cost                                              |  | $            | 43,923
|Gross unrealized depreciation                         |  |              | (2,053
|Gross unrealized appreciation                         |  |              | 84    
|Net unrealized investment depreciation on investments |  |              | (1,969





F-18







The
Company had a net operating loss (“NOL”) carryforward of $204 as of December 31, 2015. The Company utilized this NOL
carryforward to reduce its accumulated earnings and profits for the tax year ended June 30, 2016.



In
order to qualify as a RIC, the Company must distribute before the end of its first qualifying tax year all earnings and
profits accumulated in prior non-RIC tax years. There were no earnings and profits prior to 2016. The Company has
approximately $121 of accumulated earnings and profits through the period ended June 30, 2016. Built-in gains by a C-Corp
electing to be a RIC may be subject to tax if realized during the first five years of RIC status.



During
the year ended December 31, 2016, the Company  declared a cash distribution of $1,077, or $0.28 per share, on its common stock.
The distribution was paid on December 21, 2016 for the stockholders of record as of the close of business on December 20, 2016.



NOTE
J – SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)



The
following is the quarterly results of operations for the years ended December 31, 2016 and 2015. The following information
reflects all normal recurring adjustments necessary for a fair presentation of the information for the periods presented. The
operating results for any quarter are not necessarily indicative of results for any future period.



|                                                                |  | Quarter Ended     |          
|--------------------------------------------------------------- |  | ----------------- | ---------
|                                                                |  | December 31, 2016 |          
|Investment income                                               |  | $                 | 937      
|Operating expenses                                              |  |                   |          
|Net expenses                                                    |  |                   | 492      
|Net investment income                                           |  |                   | 445      
|Realized and unrealized gain (loss)                             |  |                   | (1,976   
|Net increase (decrease) in net assets resulting from operations |  | $                 | (1,531   
|Per share information - basic and diluted                       |  |                   |          
|Net investment income                                           |  | $                 | 0.12     
|Net increase (decrease) in net assets resulting from operations |  | $                 | (0.40    
|Weighted average shares outstanding                             |  |                   | 3,800,010



|                                                     |  | Quarter Ended     |          
|---------------------------------------------------- |  | ----------------- | ---------
|                                                     |  | December 31, 2015 |          
|Investment income                                    |  | $                 | 522      
|Operating expenses                                   |  |                   |          
|Net expenses                                         |  |                   | 495      
|Net investment income (loss)                         |  |                   | 27       
|Realized and unrealized loss                         |  |                   | (105     
|Net decrease in net assets resulting from operations |  | $                 | (78      
|Per share information - basic and diluted            |  |                   |          
|Net investment income (loss)                         |  | $                 | 0.01     
|Net decrease in net assets resulting from operations |  | $                 | (0.03    
|Weighted average shares outstanding                  |  |                   | 2,257,978



|(a) | Per
                                         share information was not calculated for the three months ended March 31, 2015 as Parkview
                                         Capital Credit, Inc had not yet commenced principal operations.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
sum of quarterly per share amounts does not necessarily equal per share amounts reported for the years ended December 31, 2016
and 2015. This is due to changes in the number of weighted-average shares outstanding and the effects of rounding for each period.



NOTE
K – SUBSEQUENT EVENTS



Management
performed an evaluation of the Company’s activity through the date the financial statements were issued and has determined
that there have been no events that have occurred that would require adjustments to the Company’s disclosures in the financial
statements.



F-19







ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE



None.



ITEM
9A. CONTROLS AND PROCEDURES



Evaluation
of Disclosure Controls and Procedures



Our
management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of
our disclosure controls and procedures as of December 31, 2016, the end of the period covered by this Annual Report on Form 10-K.



The
term "disclosure controls and procedures," as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), means controls and other procedures of a company that are designed to
ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls
and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed
by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company's management,
including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required
disclosure.



Based
on our evaluation, we believe that our disclosure controls and procedures as of the date of our Annual Report on Form 10-K
have been designed and are effective to provide reasonable assurance that the information required to be disclosed by us in reports
filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s
rules and forms. We believe that a controls system, no matter how well designed and operated, cannot provide absolute assurance
that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control
issues and instances of fraud, if any, within a company have been detected.



Internal
Control Over Financial Reporting



Our
management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is
defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act.



In
connection with the preparation of this annual report, our management, including our Chief Executive Officer and Chief Financial
Officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2016. In making that assessment,
our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal
Control-Integrated Framework (2013 framework).



Changes
in Internal Control over Financial Reporting



There
have been no changes in our internal control over financial reporting during our fiscal quarter ended December 31, 2016 that have
materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



ITEM
9B. OTHER INFORMATION



None.



41







PART III



ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE



The
information required by this Item 10 is incorporated by reference to the information contained in our definitive proxy or
information statement, to be filed with the SEC within 120 days following the end of our fiscal year.



ITEM
11. EXECUTIVE COMPENSATION



The
information required by this Item 11 is incorporated by reference to the information contained in our definitive proxy or
information statement, to be filed with the SEC within 120 days following the end of our fiscal year.



ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS



The
information required by this Item 12 is incorporated by reference to the information contained in our definitive proxy or
information statement, to be filed with the SEC within 120 days following the end of our fiscal year.



ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE



The
information required by this Item 13 is incorporated by reference to the information contained in our definitive proxy or
information statement, to be filed with the SEC within 120 days following the end of our fiscal year.



ITEM
14. PRINCIPAL ACCOUNTANT FEES AND SERVICES



The
information required by this Item 14 is incorporated by reference to the information contained in our definitive proxy or
information statement, to be filed with the SEC within 120 days following the end of our fiscal year.



42







PART IV



ITEM
15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES



(a)       DOCUMENTS
FILED AS PART OF THIS REPORT



The
following is a list of our financial statements included in this Annual Report on Form 10-K under Item 8 of Part II
hereof:



1.       FINANCIAL
STATEMENTS AND SUPPLEMENTAL DATA



Report
of Independent Registered Public Accounting Firm



Statements
of Financial Condition as of December 31, 2016 and 2015



Statements
of Operations for the years ended December 31, 2016 and 2015 and for the period from November 25, 2014 (date of inception) to
December 31, 2014



Statements
of Changes in Net Assets for the years ended December 31, 2016 and 2015 and for the period from November 25, 2014 (date of inception)
to December 31, 2014



Statements
of Cash Flows for the years ended December 31, 2016 and 2015 and for the period from November 25, 2014 (date of inception) to
December 31, 2014



Schedule
of Investments as of December 31, 2016



Schedule
of Investments as of December 31, 2015



Notes
to Financial Statements



(b)       EXHIBITS



|3.1   |  | Second Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to Amendment No. 1 to the Registration Statement on Form 10 filed on August 11, 2015)      
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |  |                                                                                                                                                                                            
|3.2   |  | Bylaws (incorporated by reference to Exhibit 3.2 to the Registration Statement on Form 10 filed on March 31, 2015)                                                                         
|      |  |                                                                                                                                                                                            
|10.1  |  | Investment Advisory Agreement (incorporated by reference to Exhibit 10.1 to the Registration Statement on Form 10 filed on March 31, 2015)                                                 
|      |  |                                                                                                                                                                                            
|10.2  |  | Administration Agreement (incorporated by reference to Exhibit 10.2 to the Registration Statement on Form 10 filed on March 31, 2015)                                                      
|      |  |                                                                                                                                                                                            
|10.3  |  | License Agreement (incorporated by reference to Exhibit 10.3 to the Registration Statement on Form 10 filed on March 31, 2015)                                                             
|      |  |                                                                                                                                                                                            
|10.4  |  | Custody Agreement with Millennium Trust Company (Incorporated by reference to Exhibit 10.1 to the current Report on Form 8-K filed on December 7, 2015)                                    
|      |  |                                                                                                                                                                                            
|14.1  |  | Code of Business Conduct and Ethics of the Registrant and Parkview Advisors, LLC (incorporated by reference to the information contained in our definitive proxy or information statement).
|      |  |                                                                                                                                                                                            
|31.1* |  | Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 and Section 302 of the Sarbanes-Oxley Act of 2002                        
|      |  |                                                                                                                                                                                            
|31.2* |  | Certification of Principal Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 and Section 302 of the Sarbanes-Oxley Act of 2002                        
|      |  |                                                                                                                                                                                            
|32.1* |  | Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)                                    



*Filed
herewith



ITEM
16.  FORM 10-K SUMMARY



The
Company has elected not to provide summary information.



43







SIGNATURES



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



|                          | PARKVIEW
    CAPITAL CREDIT, INC.
|------------------------- | ---------------------------------
|                          |                                  
|Dated: March 17, 2017     | By:                              
|                          |                                  
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|                          |                                  
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|Dated:
    March 17, 2017 | By:                              
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|                          |                                  
|Dated: March 17, 2017     | By:                              
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|Dated: March 17, 2017     | By:                              
|                          |                                  
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|                          |                                  
|Dated: March 17, 2017     | By:                              
|                          |                                  
|                          |                                  





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