UNITED
STATESSECURITIES AND EXCHANGE
COMMISSIONWashington, D.C.
20549_____________________

FORM 10-K

|þ                                                            |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR
      15(d) OF THE SECURITIES EXCHANGE ACT OF 1934    
|------------------------------------------------------------ |  | ----------------------------------------------------------------------------------------------
|For the fiscal year ended
      November 30, 2011           
|OR                                                          
|o                                                            |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR
      15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|For the transition period
      from __________to __________

COMMISSION FILE NUMBER:
001-33292

TORTOISE CAPITAL RESOURCES
CORPORATION(Exact Name of Registrant as
Specified in its Charter)

|Maryland                                                             | 20-3431375                             
|-------------------------------------------------------------------- | ---------------------------------------
|(State or Other
      Jurisdiction of Incorporation or Organization) | (IRS Employer
      Identification No.)
|                                                                    
|11550 Ash Street, Suite 300                                          |                                        
|Leawood, Kansas                                                      | 66211                                  
|(Address of Principal
      Executive Offices)                       | (Zip
  Code)                           

Registrants Telephone Number,
Including Area Code: (913) 981-1020

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

Title of Each
      Class
    
    Name Of Each Exchange On Which
      RegisteredCommon Stock, par
      value
    
    New York Stock
      Exchange$0.001 per
    share


Securities registered pursuant to
Section 12(g) of the Act: None

Indicate by check mark if the
registrant is a well-known seasoned issuer, as defined in Rule 405 of the
Securities Act. Yes oNoþ

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 oNoþ

Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. YesþNo o

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 oNo o

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K 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. o

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. (Check one):

Large accelerated
      filer o
    
    Accelerated filerþ
    
    Non-accelerated filer
      o
    
    Smaller reporting
      company o(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 Act) Yes oNoþ

The aggregate market value of common
stock held by non-affiliates of the registrant on May 31, 2011 based on the
closing price on that date of $8.55 on the New York Stock Exchange was
$77,562,171. Common shares held by each executive officer and director and by
each person who owns 10% or more of the outstanding common shares (as determined
by information provided to the registrant) have been excluded in that such
persons may be deemed to be affiliates. This determination of affiliate status
is not necessarily a conclusive determination for other purposes.

As of December 31, 2011, the registrant
had 9,176,889 common shares outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrants Proxy
Statement for its 2012 Annual Meeting of Stockholders to be filed not later than
120 days after the end of the fiscal year covered by this Annual Report on Form
10-K are incorporated by reference into Part III of this Form 10-K.

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TORTOISE CAPITAL RESOURCES
CORPORATIONFORM 10-K

FOR THE FISCAL YEAR ENDED
NOVEMBER 30, 2011

|TABLE OF CONTENTS
|-----------------
|PART I           
|Item 1.          
|Item
    1A.     
|Item 1B.         
|Item
2.          
|Item 3.          
|Item
4.          
|                 
|PART
II          
|Item 5.          
|                 
|Item
6.          
|Item 7.          
|Item
    7A.     
|Item 8.          
|Item
9.          
|Item 9A.         
|Item
    9B.     
|                 
|PART
    III     
|Item 10.         
|Item
    11.     
|Item 12.         
|                 
|Item
    13.     
|Item 14.         
|                 
|PART
IV          
|Item 15.         
|Signatures       

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PART I

ITEM 1.
BUSINESSGeneral.

We were organized as a Maryland corporation on September 8, 2005 and commenced operations on December 8, 2005. We were originally regulated as a business development company (“BDC”) under the Investment Company Act of 1940 (the “1940 Act”). As authorized by our shareholders, on September 21, 2011, we withdrew our election to be regulated as a BDC and we are no longer subject to the regulatory provisions of the 1940 Act.

Our objective is to provide stockholders with an attractive risk-adjusted total return, with an emphasis on distributions and distribution growth. We invest primarily in the U.S. energy infrastructure sector. We historically were limited to investing in securities of privately-held companies operating in the U.S. energy infrastructure sector. We believe the U.S. energy infrastructure sector offers significant opportunities for investment in real property assets. We believe that we can acquire these assets while also satisfying the income requirements for qualification as a real estate investment trust (“REIT”). We believe that becoming qualified and electing REIT status is in the best interests of our stockholders because a REIT can provide tax-efficient exposure to the energy infrastructure sector.

If we qualify for and elect REIT status in the future, we generally will not pay federal income tax provided that at least 90 percent of our taxable income is distributed to our stockholders.

We do not plan to make additional investments in securities (other than short term, highly liquid investments to be held pending acquisition of real property assets) and intend to liquidate our securities portfolio in an orderly manner. As of November 30, 2011, the fair value of our securities portfolio (excluding short-term investments) totaled $68.9 million. The fair value of the securities remaining in our portfolio as of November 30, 2011, includes: (i) publicly-traded and liquid master limited partnership (“MLP”) equity securities of approximately $27.0 million and (ii) approximately $41.9 million of other illiquid securities issued by seven privately-held companies. The publicly traded securities can be liquidated more readily than the others.

Strategy

We seek to acquire real property assets from energy infrastructure companies and simultaneously lease these properties to the seller under long-term triple net leases, defined as a lease in which the lessee pays rent to the lessor, as well as all taxes, insurance, and maintenance expenses that arise from the use of the property. We expect our leases to be configured to include a base lease fee with additional provisions that enable us to participate in the revenue and/or value of the underlying energy infrastructure real property asset. These provisions would be considered a contingent rent or fair value repurchase option upon lease termination. These sale-leaseback transactions provide the lessee company with a source of financing that is an alternative to other financing sources such as corporate borrowing or equity offerings. Our sale-leaseback transactions may occur in conjunction with acquisitions, recapitalizations, growth projects or other corporate transactions involving the lessee company. We may act as one of several sources of financing for these transactions by purchasing real property from the seller and net leasing it back to the seller or its successor in interest (the lessee).

Market
Opportunity

We believe the environment for
acquiring energy infrastructure real property assets is attractive for the
following reasons:

- ***Energy infrastructure
provides essential services, and the stable supply and demand today is expected
to continue in the future.***We
believe energy infrastructure is the backbone of modern society. The energy
infrastructure sector includes the pipes, wires and storage facilities that
connect and deliver our most critical resources: water, electricity, oil and
gas. The demand for these resources is directly correlated with population
growth, and has a low correlation to market cycles. The U.S. is the largest
consumer of crude oil and natural gas products, the third largest producer of
crude oil and the largest producer of natural gas products in the world. It is
not anticipated that the services provided by infrastructure facilities will
diminish over time; in fact it is expected to grow. U.S. energy consumption is
forecasted to grow by 20% from 2009 to the year 2035 according to the U.S.
Energy Information Administration (EIA), Annual Energy Outlook April 2011. The
United States has an abundant supply of natural gas with enough natural gas to
last for approximately 80 to 100 years, according to various industry sources.
Natural gas provides a means of energy independence, as nearly 90% of the
natural gas consumed in the United States is produced domestically. Demand for
natural gas continues to increase as environmentally sensitive power generation
companies switch to low-cost cleaner burning fuels. Natural gas is viewed as a
reliable back-up energy source to alternative energy (e.g., wind and solar) as
it is not dependent on weather patterns. Natural gas is the cleanest fossil
fuel, with 50% and 30% fewer carbon dioxide emissions than coal and oil,
respectively, as well as lower emissions from sulfur dioxide and other
pollutants.

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- ***Investment is needed in U.S. energy
  infrastructure***. Due to aging
  infrastructure, renewable energy requirements and rapid technological advances
  in the methods used to extract oil and natural gas, we believe that
  substantial amounts of capital will be invested in energy infrastructure.
  Investments in the power transmission sector in 2008 were quadruple the
  average investment level throughout the 1990s. The National Energy
  Reliability Council (NERC) projects transmission additions will triple from
  approximately 1,000 miles/year in 2000-2008 to 3,100 miles/year in 2009-2018.
  These investment metrics align with NERCs projections that U.S. peak energy
  demand will grow at a rate of 1.3% per year. According to the Brattle Group,
  this growth translates into $10 billion of annual investments in electric
  transmission alone. In addition, a natural gas market study commissioned in
  2009 by the Interstate Natural Gas Association of America Foundation noted
  that to accommodate the geographical shift of natural gas production from
  mature basins to relatively new areas, it expects a range of investment from
  $133 to $210 billion of new midstream natural gas assets in the U.S. and
  Canada. We believe that the U.S. energy infrastructure sectors high level of
  projected capital expenditures and continuing acquisition and divestiture
  activity provide numerous attractive acquisition
  opportunities.
- We believe there are
  a number of attractive operating companies with capital
  needs.We believe that there are a
  number of operating companies in the midstream and downstream segments of the
  U.S. energy infrastructure sector with capital expansion plans in which the
  asset performance will provide stable cash flow characteristics similar to
  those demonstrated by MLPs. We believe that
  these operating companies have assets that represent attractive financing
  opportunities for us. The energy industry is monopolistic, and high barriers
  to entry put the responsibility of development and growth on existing
  operating companies. Decreased federal and state funding for infrastructure
  investment is pushing many operating companies to alternative financing
  options. In addition, we can offer financing for assets that do not qualify
  for inclusion in an MLP, such as renewables and electric power transmission.
- There is a large
  segment of assets in energy infrastructure that qualify for being held by a
  REIT.In 2007, 2009 and 2010 the IRS
  issued three separate private letter rulings that defined certain energy
  infrastructure assets as real estate assets for tax purposes. The qualifying
  real estate assets in the energy infrastructure sector are electric
  transmission and distribution systems, pipeline systems and storage and
  terminaling systems. The private letter rulings treat such assets as
  qualifying real estate assets if the income from these assets is derived from
  rents on real property. While private letter rulings provide insight into the
  current thinking of the IRS on tax issues, such rulings may only be relied
  upon by the taxpayer to whom theywere issued.

Investment
Outlook

If we find sufficient suitable
REIT-qualifying investments during 2012 and satisfy the REIT requirements
throughout 2012, we expect to make an election to be treated as a REIT for tax
purposes for 2012 by filing a Form 1120-REIT on or before March 15, 2013, or
such later date to which we have properly extended filing such income tax
return. The REIT requirements that we must meet are discussed in detail below,
but the principal challenge for us will be meeting the requirement that a
substantial percentage of our assets be REIT-qualifying investments that produce
REIT qualifying income. Our effort to meet that requirement will be accelerated
if: (i) we are able to readily identify appropriate opportunities to liquidate
our securities portfolio, or (ii) we are able to raise capital to fund new
acquisitions. In either event, we will need to have identified and be able to
consummate an adequate number of REIT-qualifying investments meeting our
investment criteria. Subject to certain limitations, we may be able to
accelerate satisfying the REIT requirements by holding non-REIT qualifying
investments, including certain private equity investments, through taxable REIT
subsidiaries. We do not currently have any agreements or binding letters of
intent for such investments. These opportunities are in a preliminary stage of
review, and consummation of any of these opportunities depends on a number of
factors beyond our control. There can be no assurance that any of these
acquisition opportunities will result in consummated transactions. Regardless of
our tax status, an investment in us will not result in Unrelated Business
Taxable Income (UBTI).

Our Investments

We pursue our investment objective by
investing principally in the energy infrastructure sector. The energy
infrastructure sector broadly includes midstream, downstream and upstream
assets. We intend to focus primarily on midstream and downstream assets as
described below.

- Midstream the gathering,
  processing, storing and transmission of energy resources and their byproducts
  in a form that is usable by wholesale power generation, utility,
  petrochemical, industrial and gasoline customers, including pipelines, gas
  processing plants, liquefied natural gas facilities and other energy
  infrastructure companies.
- Downstream
  the refining of energy sources, and the marketing and distribution of such
  refined products, such as customer-ready natural gas, natural gas liquids,
  propane and gasoline, to end-user customers, and the generation, transmission
  and distribution of electricity, including from coal, nuclear, natural gas,
  agricultural, thermal, solar, wind and biomass.

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Targeted Investment
Characteristics

We anticipate that our targeted real
property asset acquisitions will have the following characteristics:

- *Long-Life Assets with Stable Cash Flows and Limited Commodity Price
  Sensitivity.*We will seek real property
  assets having the potential to generate stable cash flows over long periods of
  time. We have historically invested in companies that own and operate assets
  with long useful lives and that generate cash flows by providing critical
  services primarily to the producers or end-users of energy. We have attempted
  to limit the direct exposure to energy commodity price risk in our portfolio.
  We have targeted companies that have a majority of their cash flows generated
  by contractual obligations. Our planned acquisitions of real property assets
  will continue to reflect these characteristics. Acquired real property assets
  will be long-lived. (In most cases, we expect the term of the lease will
  approximate the projected asset life.) We anticipate our real property assets
  will generate contracted cash flows with third party entities over the term of
  the investment, thus providing stable cash flows underlying our
  leases.
- Experienced Management
  Teams with Energy Infrastructure Focus.We
  have targeted assets operated by management teams that have a track record of
  success and that often have substantial knowledge and focus in particular
  segments of the energy infrastructure sector or with certain types of assets.
  We expect that our management teams extensive experience and network of
  business relationships in the energy infrastructure sector will allow us to
  identify and attract opportunities to acquire real property assets that meet
  these criteria.
- Fixed Asset-Intensive
  Investments.Most of our investments have
  been made in companies with a relatively significant base of fixed assets. As
  we directly acquire infrastructure real property assets, our portfolio will
  reflect the nature of fixed-asset investments. Fixed-asset investments
  characteristically display such attributes as long-term stability, low
  volatility, diversification via low correlation and relatively inelastic
  demand.
- Limited Technological
  Risk.We generally do not target
  acquisition opportunities involving the application of new technologies or
  significant geological, drilling or development risk.
- Growth
  Opportunities.We generally will seek to
  enter into leases that provide base rent and participating rent over the term
  of the lease. These increases are expected to be fixed or tied generally to
  increases in indices such as the Consumer Price Index (CPI). We may also
  attempt to obtain equity enhancements in connection with transactions. These
  equity enhancements may involve warrants exercisable at a future time to
  purchase stock of the tenant or borrower or their parent.

Investments, Assets and
Wholly-owned Subsidiary

Lightfoot Capital Partners, LP and Lightfoot Capital Partners GP LLC
(Lightfoot)

Lightfoot
owns controlling interest in Arc Terminals, a limited partnership that operates
11 refined product storage terminals located throughout the United States with a
combined working capacity of approximately 3.6 million barrels. Arc provides
storage and delivery services for petroleum, petrochemical and chemical products
to customers under long-term storage and throughput contracts. In October 2011,
Lightfoot acquired a minority interest in a liquefied natural gas regasification
facility located in Mississippi.

Eastern Interconnect Project (EIP)

The EIP
project is a 40 percent undivided interest in a 216 mile, 345-KV bulk power
transmission line (Line) and related equipment and substations including
towers, easement rights, converters and other grid support components. These
transmission assets move electric power across New Mexico between Albuquerque
and Clovis. The project is leased on a triple net basis through April 1, 2015 to
Public Service Company of New Mexico (PNM), at which time the lease can be
extended, or allowed to expire. PNM is an independent electric utility company
serving approximately 500,000 customers in New Mexico. PNM is a subsidiary of
PNM Resources. EIP is a critical, East-West link on the Public Service Company
of New Mexico transmission grid. Construction of the Line was completed in 1984
and is expected to have an additional twenty years of useful life. The Company
does not anticipate any material costs would be incurred should the lease tenant
be replaced.

VantaCore Partners LP (VantaCore)

VantaCore
was formed to acquire companies in the aggregate industry and currently owns a
quarry and asphalt plant in Clarksville, Tennessee, sand and gravel operations
located near Baton Rouge, Louisiana and a quarry in Todd County, Kentucky.
Aggregates consist of crushed stone, sand and gravel used in construction and
concrete. The company also controls several hundred acres of land adjacent to
its Clarksville location which recently received zoning approval for a port on
the Cumberland River.

High
Sierra Energy, LP and High Sierra Energy, GP (High Sierra)

High Sierra
is a Denver based private limited partnership that operates midstream businesses
in the energy industry. Its four business units include: transportation,
treatment, recycling and disposal of oil and gas waste-water; gathering,
transportation,

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logistics and marketing of crude oil; transportation logistics and marketing of natural gas liquids and asphalt; and leasing of well head compression equipment. The companys assets are located in nine of the most prolific oil and natural gas shale plays in the country and have sales in all lower 48 U.S. states and Canada.

Mowood, LLC (Mowood)  Wholly Owned Subsidiary

Mowood is
the holding company of Omega Pipeline, LLC (Omega). Omega is a natural gas
local distribution company located on the Fort Leonard Wood military
installation in south-central Missouri. Omega owns approximately 50 miles of
pipeline, has a long term contract with the Department of Defense and serves the
natural gas needs of Fort Leonard Wood in addition to marketing natural gas
services to several customers in the surrounding area. We hold 100 percent of
the equity interests in Mowood.

Investment Strategies and Due
Diligence

In analyzing potential real property
acquisitions, we intend to review all aspects of a transaction, including tenant
and asset fundamentals, to determine whether a potential acquisition and lease
can be structured to satisfy our investment criteria. In evaluating net lease
transactions, we generally consider, among other things, the following aspects
of each transaction:

- Tenant/Borrower Evaluation We evaluate
  each potential tenant or borrower for its creditworthiness, typically
  considering factors such as management experience, industry position and
  fundamentals, operating history, and capital structure, as well as other
  factors that may be relevant to a particular acquisition. We seek
  opportunities in which we believe the tenant may have a stable or improving
  credit profile or credit potential that has not been recognized by the market.
  In evaluating a possible investment, the creditworthiness of a tenant or
  borrower often will be a more significant factor than the value of the
  underlying real estate, particularly if the underlying property is
  specifically suited to the needs of the tenant; however, in certain
  circumstances where the real estate is attractively valued, the
  creditworthiness of the tenant may be a secondary consideration. Whether a
  prospective tenant or borrower is creditworthy will be determined by our
  investment department and reviewed by the investment committee, as described
  below. Creditworthy does not necessarily mean investment
  grade.
- Important to
  Tenant/Borrower Operations We generally
  will focus on properties that we believe are essential or important to the
  ongoing operations of the tenant. We believe that these properties provide
  better protection generally as well as in the event of a bankruptcy, since a
  tenant/borrower is less likely to risk the loss of a critically important
  lease or property in a bankruptcy proceeding or
  otherwise.
- Diversification We attempt to
  diversify our portfolio to avoid dependence on any one particular tenant,
  borrower, collateral type, and geographic location within the U.S. or
  tenant/borrower industry. By diversifying, we seek to reduce the adverse
  effect of a single under-performing investment or a downturn in any particular
  asset or geographic region within the U.S.
- Lease Terms Generally, the net leased properties we
  will acquire will be leased on a full recourse basis to the tenants or their
  affiliates. In addition, we generally will seek to include a clause in each
  lease that provides for increases in rent over the term of the lease. These
  increases are fixed or tied generally to increases in indices such as the CPI.
  The lease will also generally seek to provide for participation in gross
  revenues of the tenant at the property, thereby providing exposure to the
  commercial activity of the tenant, and providing the tenant some flexibility
  in lease terms. Alternatively, a lease may provide for mandated rental
  increases on specific dates, and we may adopt other methods in the
  future.
- Collateral
  Evaluation We review the physical
  condition of the property and assess the likelihood of replacing the rental
  stream if the tenant defaults. We also generally engage a third party to
  conduct, or require the seller to conduct a preliminary examination, or Phase
  1 assessment, of the site to determine the potential for contamination or
  similar environmental site assessments in an attempt to identify potential
  environmental liabilities associated with a property prior to its acquisition.
  If potential environmental liabilities are identified, we generally require
  that identified environmental issues be resolved by the seller prior to
  property acquisition or, where such issues cannot be resolved prior to
  acquisition, require tenants contractually to assume responsibility for
  resolving identified environmental issues post-closing and provide
  indemnification protections against any potential claims, losses or expenses
  arising from such matters. We generally rely on our own analysis to determine
  whether to make an acquisition. Our analysis may take into consideration,
  among other things, the terms and conditions of the particular lease
  transaction, the quality of the lessees credit and the conditions of the
  credit markets at the time the lease transaction is negotiated. The value may
  be greater than the construction cost or the replacement cost of a property,
  and the actual sale price of a property if sold may be greater or less than
  the acquisition cost. In cases of special purpose real estate which we expect
  to acquire, a property is examined in light of the prospects for the
  tenant/borrowers enterprise and the financial strength and the role of that
  asset in the context of the tenants overall viability. Operating results of
  properties and other collateral may be examined to determine whether or not
  projected income levels are likely to be met.
- Transaction Provisions
  to Enhance and Protect Value We attempt
  to include provisions in the leases that we believe may help protect a real
  property asset from changes in the operating and financial characteristics of
  a tenant that may affect its ability to satisfy its obligations or reduce the
  value of the real property asset. Such provisions include requiring our
  consent to specified tenant activity, requiring the tenant to provide
  indemnification protections, and requiring the tenant to satisfy specific
  operating tests. We may also seek to enhance the likelihood of a tenants
  lease obligations being satisfied through

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a guaranty of obligations from the tenants corporate parent or other entity or a letter of credit. This credit enhancement, if obtained, provides additional financial security. However, in markets where competition for net lease transactions is strong, some or all of these provisions may be replaced by other measures of credit quality such as tenant investment in leasehold improvements and commercial enterprise value of the tenant business conducted in the property.

In addition, in some circumstances,
tenants may retain the right to repurchase the leased property. The option
purchase price is generally the greater of the contract purchase price or the
fair market value of the property at the time the option is
exercised.

- Equity Enhancements We may attempt to obtain equity enhancements in connection with
  transactions. These equity enhancements may involve warrants exercisable at a
  future time to purchase stock of the tenant or borrower or their parent. If
  warrants are obtained, and become exercisable, and if the value of the stock
  subsequently exceeds the exercise price of the warrant, equity enhancements
  can help achieve the goal of increasing investor returns.
- Other Real Estate Related
  Assets As other opportunities arise, we
  may also seek to expand the portfolio to include other types of real
  estate-related investments, in all cases within the energy infrastructure
  sector, such as:

- equity investments in real properties that are not long-term net leased to a
  single-tenant and may include partially leased properties, multi-tenanted properties, vacant or undeveloped properties
  and properties subject to short-term net leases, among
others;
- mortgage loans secured by
  real properties;
- subordinated interests in
  first mortgage real estate loans, or B-notes;
- mezzanine loans related to
  real estate, which are senior to the borrowers equity position but
  subordinated to other third-party financing;
  and
- equity and debt securities
  (including preferred equity, limited partnership interests, trusts and other
  higher-yieldingstructured debt and equity investments)
  issued by companies that are engaged in real-estate-related businesses as
  defined by regulations promulgated under the Internal Revenue Code (the
  Code), including other REITs.

Real Property Asset
Management

We believe that effective management of
our assets is essential to maintain and enhance property values. Important
aspects of asset management include restructuring transactions to meet the
evolving needs of current tenants, re-leasing properties, refinancing debt,
selling properties and knowledge of the bankruptcy process.

We are externally managed by Corridor
InfraTrust Management, LLC (formerly Corridor Energy, LLC) (Corridor). The
Corridor team consists of energy asset professionals with experience across
several segments of the energy sector and is primarily responsible for
evaluating, negotiating and structuring potential real property asset
opportunities. Tortoise Capital Advisors, L.L.C., a registered investment
adviser (TCA), provides us certain securities focused investment services
necessary to evaluate, monitor and liquidate our remaining securities portfolio.
Before a real property asset is acquired by us, the transaction is reviewed and
approved by the managing directors of Corridor and TCA. The approval is subject
to final approval by our Board of Directors. Our Board of Directors is not
directly involved in originating or negotiating potential asset acquisitions but
instead functions as a separate and final step in the process.

We monitor, on an ongoing basis,
compliance by tenants with their lease obligations and other factors that could
affect the financial performance of any of our properties. Monitoring involves
receiving assurances that each tenant has paid real estate taxes, assessments
and other expenses relating to the properties it occupies and confirming that
appropriate insurance coverage is being maintained by the tenant. We review
financial statements of tenants and undertake regular physical inspections of
the condition and maintenance of properties. Additionally, we periodically
analyze each tenants financial condition, the industry in which each tenant
operates and each tenants relative strength in its industry.

Financing
Strategies

Consistent with our asset acquisition
policies, we use leverage when available on terms we believe are favorable. The
amount of leverage that we may employ will depend on our assessment of market
conditions and other factors at the time of any proposed borrowing. Although we
currently do not anticipate doing so, the amount of total leverage we employ may
exceed 50% of our total assets, which was the maximum amount of leverage we
could employ as a BDC. Substantially all of our mortgage loans are expected to
be non-recourse. A lender on non-recourse mortgage debt generally has recourse
only to the property collateralizing such debt and not to any of our other
assets, while full recourse financing would give a lender recourse to all of our
assets. The use of non-recourse debt, therefore, helps us to limit the exposure
of all of our assets to any one debt obligation. Lenders may, however, have
recourse to our other assets in limited circumstances not related to the
repayment of the indebtedness, such as under an environmental indemnity. We also
expect to have an unsecured line of credit that can be used in connection with
refinancing existing debt and making new acquisitions, as well as to meet other
working capital needs. We expect to incur debt which bears interest at fixed
rates, or is effectively converted to fixed rates through interest rate caps or
swap agreements.

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Competition

We compete with public and private
funds, commercial and investment banks and commercial financing companies to
make the types of investments that we plan to make in the U.S. energy
infrastructure sector. Many of our competitors are substantially larger and have
considerably greater financial, technical and marketing resources than us. For
example, some competitors may have a lower cost of funds and access to funding
sources than are available to us. In addition, some of our competitors may have
higher risk tolerances or different risk assessments, allowing them to consider
a wider variety of investments and establish more relationships than us. These
competitive conditions may adversely affect our ability to make investments in
the energy infrastructure sector and could adversely affect our distributions to
stockholders.

Competitive
Advantages

We believe that we are well positioned
to meet the financing needs of companies within the U.S. energy infrastructure
sector for the following reasons:

- Attractive Strategic Partner for Energy and Power Infrastructure Companies.We believe that we are a desirable partner for energy and power infrastructure companies because we have specialized knowledge of the economic, regulatory, and stakeholder considerations faced by them. We do not intend to compete with the operations of our lessees and are willing to enter into long-term lease and financing arrangements that suit the requirements and achieve the goals of energy and power infrastructure companies.
- Broad Energy and Power Infrastructure Scope.We intend to focus on assets, among others, that transmit commodities or serve customers which are not permissible assets to be owned by other specialized energy companies such as MLPs.  For example the Eastern Interconnect Project and Mowood's Omega pipeline are not MLP qualified assets.
- Efficient Capital Provider.If we are able to qualify as a REIT, our shareholders will not receive UBTI or Effectively Connected Income.  This offers us access to investors which desire the risk adjusted return profile but which may have limitations on investing in other specialized infrastructure vehicles such as direct investment in infrastructure, private equity funds, or MLPs.  As a REIT, TTO is expected to have a lower overall cost of capital when compared to certain other energy and power infrastructure acquirors, which should enhance our future cash flows and provide for increased value growth opportunities.
- *Disciplined Investment Philosophy.***As we focus on acquiring real property assets, our investment approach emphasizes overall asset operational and financial performance with the potential for enhanced returns through incremental asset growth, capital appreciation, and minimization of downside risk. Our process involves an assessment of the overall attractiveness of the specific subsector of the energy infrastructure sector in which a prospective operating company is involved; such company’s specific competitive position within that subsector; operational asset engineering due diligence; potential commodity price, supply and demand and regulatory concerns; the stability and potential growth of the prospective real property asset’s cash flows; the prospective operating company's management track record and our ability to structure an attractive investment.
- *Experienced Management Team.***The principals of Corridor have an average of over 24 years of experience in energy operations of multi-national electric and gas utilities, national energy marketing and trading businesses and in optimizing portfolios for real energy asset investments. Based on their real property asset operational experience and strong industry relationships we believe the principals of Corridor provide the expertise and knowledge necessary to acquire real property assets with strong performance standards. The members of TCA’s investment committee have an average of over 24 years of financial investment experience. TCA’s investment professionals are responsible for evaluating, monitoring and liquidating our remaining securities portfolio.
- Flexible Transaction
  Structuring.We are not subject to many of
  the regulatory limitations that govern traditional lending institutions such
  as commercial banks. As a result, we can be flexible in structuring asset
  acquisition transactions. This structuring flexibility enables our leases and
  debt instruments to fit the cash flow characteristics of the assets that we
  acquire. TCAs and Corridors professionals have substantial experience in
  structuring investments that balance the needs of an energy infrastructure
  operating company with appropriate risk control.

While we believe we are well positioned
to meet the financing needs of companies within the U.S. energy infrastructure
sector, an investment in our securities involves certain risks that may preclude
us from achieving our investment objective. For example, we may be unable to
identify and complete acquisitions of real property assets or sell real property
assets at timesor at prices that we desire. In addition, if we elect to be taxed as a
REIT, the loss of our REIT status would have significant adverse consequences.

Employees

We do not currently have or expect to
have any employees. Pursuant to a Management Agreement and Administration
Agreement, Corridor has agreed to use its reasonable best efforts to present us
with suitable acquisition opportunities consistent with our investment
objectives and policies and is generally responsible, subject to the supervision
and review of our Board of Directors, for the day to day operations.

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Management
Agreement

Pursuant to the Management Agreement,
we pay Corridor quarterly a base management fee equal to 0.25% (1.00%
annualized) of our average monthly Managed Assets for such quarter, calculated
and paid in arrears within 30 days of the end of each fiscal quarter. The term
Managed Assets as used in the calculation of the management fee means all of
our securities and real property assets (including any securities or real
property assets purchased with or attributable to borrowed funds) minus accrued
liabilities other than (1) deferred taxes and (2) debt entered into for the
purpose of leverage. Accrued liabilities are expenses incurred in the normal
course of our operations. For purposes of the definition of Managed Assets,
securities includes our securities portfolio,
valued at then current market value. For purposes of the definition of Managed
Assets, real property assets includes our assets invested, directly or
indirectly, in equity interests in or loans secured by real estate and personal
property owned in connection with such real estate (including acquisition
related costs and acquisition costs that may be allocated to intangibles or are
unallocated), valued at the aggregate historical cost, before reserves for
depreciation, amortization, impairment charges or bad debts or other similar
noncash reserves. The base management fee for any partial quarter will be
appropriately prorated.

We also pay Corridor quarterly an
incentive fee of 10% of the increase in distributions paid over a threshold
distribution equal to $0.125 per share per quarter, calculated and paid in
arrears within 30 days of the end of each fiscal quarter. No incentive fee shall
be paid on (i) any dividend paid after the Board of Directors has determined to
liquidate us, or (ii) all or any portion of any dividend expected by the Board
of Directors not to be sustainable in subsequent quarters. The incentive fee for
any partial quarter will be appropriately prorated. At least half of any
incentive fee paid to Corridor must be reinvested by Corridor in our common
stock.

Administrative
Services

Pursuant to the Management Agreement,
Corridor furnishes us with office facilities and clerical and administrative
services necessary for our operation (other than services provided by our
custodian, accounting agent, administrator, dividend and interest paying agent
and other service providers). Corridor is authorized to enter into agreements
with third parties to provide such services. To the extent we request, Corridor
will (i) oversee the performance and payment of the fees of our service
providers and make such reports and recommendations to the Board of Directors
concerning such matters as the parties deem desirable, (ii) respond to inquiries
and otherwise assist such service providers in the preparation and filing of
regulatory reports, proxy statements, and stockholder communications, and the
preparation of materials and reports for the Board of Directors; (iii) establish
and oversee the implementation of borrowing facilities or other forms of
leverage authorized by the Board of Directors and (iv) supervise any other
aspect of our administration as may be agreed upon by us and Corridor. We have
agreed, pursuant to the Agreement, to reimburse Corridor for all out-of-pocket
expenses incurred in providing the foregoing.

We bear all expenses not specifically
assumed by Corridor and incurred in our operations. The compensation and
allocable routine overhead expenses of all investment professionals of Corridor
and its staff, when and to the extent engaged in providing us investment
advisory management services, is provided and paid for by Corridor and not
us.

Duration and
Termination

The Management Agreement was initially
reviewed and approved by our Board of Directors. It will remain in effect until
December 31, 2012 and is renewable annually thereafter by us. The Management
Agreement may be terminated by us, by vote of the Board of Directors, without
penalty upon not more than 60 days written notice to Corridor. The Management
Agreement may also be terminated by Corridor without penalty upon not less than
60 days written notice to us.

Our Manager

We are externally managed by Corridor
InfraTrust Management, LLC (formerly Corridor Energy, LLC) (Corridor).
Corridor is an asset manager specializing in financing the acquisition or
development of infrastructure real property assets. Corridor assists us in
identifying infrastructure real property asset investments that can be leased to
businesses that make goods, provide services or own assets other than
securities, which business we refer to herein as operating companies and is
generally responsible for our day-to-day operations. Tortoise Capital Advisors,
L.L.C., a registered investment adviser (TCA), provides us certain securities
focused investment services necessary to evaluate, monitor and liquidate our
remaining securities portfolio and also provides us with certain operational
(i.e. non-investment) services. Corridor compensates TCA for the
securitiesfocused investments and services TCA provides to us.

Corridor currently has four investment
professionals who are primarily responsible for the origination, structuring and
managing of our real property asset investments. This team provides investors
and operator partners with the industry expertise of energy operations, energy
portfolio management and capital markets. Corridor is located at 4200 W. 115th
Street, Suite 210, Leawood, Kansas 66211. Corridor is an affiliate of TCA.

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Richard C. (Rick)
Green


Mr. Green serves as our Chairman and is
a co-founder and Managing Director of Corridor. He has spent more than 30 years
in the energy industry serving as a CEO for more than 20 years. During his
tenure, Mr. Green demonstrated leadership and perseverance in pioneering the
strategy and successful execution of a significant business expansion of Aquila
Inc., formerly UtiliCorp United, to a Fortune 30 company. Aquila Inc. was an
international electric and gas utility business and national energy marketing
and trading business. Mr. Green has also been credited with leading a successful
wind down of the merchant trading operations of Aquila Inc. to provide
shareholder focus on the companys utility market strategy during the 2002
energy market crisis. From 2006-2008, Mr. Green successfully directed the
complicated separation and ultimate sale of Aquilas multi-state utility
operations. Mr. Green then founded The Calvin Group LLC, a consulting firm that
leveraged the management and operational experience of the partners to catalyze the management teams of energy companies. Mr. Green is currently on the board, and was previously a chairman of, the Midwest Research Institute, and has also served on the board for the National Renewable Energy Laboratories in Golden, Colorado.


David J. Schulte, CFA,
CPAMr. Schulte is a co-founder and
Managing Director of both Corridor and TCA, where he serves on the investment
committee, and is also our Chief Executive Officer. In addition, Mr. Schulte
serves as Senior Vice President of Tortoise Energy Infrastructure Corporation
(NYSE: TYG), Tortoise Energy Capital Corporation (NYSE: TYY), Tortoise North
American Energy Corporation (NYSE: TYN), Tortoise Power and Energy
Infrastructure Fund Inc. (NYSE: TPZ), Tortoise MLP Fund, Inc. (NYSE: NTG) and
Tortoise Pipeline & Energy Fund, Inc. (NYSE: TPZ). From 1993-2002, Mr.
Schulte was a Managing Director at Kansas City Equity Partners, L.C. (KCEP).
While a partner at KCEP, Mr. Schulte led private financing for two growth MLPs
in the energy infrastructure sector, Inergy, L.P., where he served as a
director, and MarkWest Energy Partners, L.P., where he was a board observer.
Prior to joining KCEP, Mr. Schulte had over five years of experience completing
acquisition and publicequity financings as an investment banker at the predecessor
of Oppenheimer & Co., Inc. In 2011, Mr. Schulte and his partners at TCA were
awarded the Ernst & Young Entrepreneur of the Year® award for financial
services companies in the Central Midwest region.

David W.
HaleyMr. Haley is a Director of
Corridor and our Senior Vice President. He has over 20 years of experience in
the energy industry. Prior to joining Corridor, Mr. Haley was a Vice President
at the consulting firm, The Calvin Group. From 2002-2008 he was Managing
Director of EnFocus, a consulting firm focused on risk management and
structuring transactions for clients in the energy and financial services
industries. Mr. Haley was previously Vice President of Cross Commodity Trading
for Aquila Merchant Services, where he directed a group engaged in market
marking, risk management and proprietary trading of crude oil, natural gas,
residual and heating oil, electricity, coal and financial transmission
rights/transmission congestion credits. He was also responsible for managing the
risks and optimizing a portfolio of asset investments including power plants,
electric transmission, natural gas transportation and natural gas storage.
Before joining Aquila, he was Vice President of Cinergy Corp. where he directed
structuring, valuation analysis and transaction pricing for mergers &
acquisitions and leveraged buyouts/ financial restructurings of independent
power projects.

Rebecca M.
SandringMs. Sandring is Principal of
Corridor and our Treasurer. She has over 20 years of experience in the energy
industry. As a Vice President with The Calvin Group, she created strategic
business plans resulting in third party investments and provided financial
leadership to a wind development company, which resulted in planned project cost
reductions. From 1993-2008 Ms. Sandring had various roles at Aquila Inc,
formerly UtiliCorp United, a regulated gas and electric utility serving a
multi-state region with international operations including transmission,
distribution and generation. Ms. Sandrings roles at UtiliCorp and then Aquila
Inc. were in operational finance, and included business valuations, project and
corporate finance, process efficiency, implementation of complex GAAP accounting
policies and internal accounting and risk system designs. As Director of Finance
at Aquila, Inc. she was responsible for leading the internal finance team, which
worked with external advisors regarding the strategic alternatives for Aquila,
Inc. In her role as Director of Finance for the unregulated power generation
division, which had over 4,000 megawatts of generation capacity, she was
responsible for building the accounting, strategic planning and forecasting team
and process.

Tortoise Capital Advisors,
L.L.C.

Tortoise Capital Advisors, L.L.C.,
a registered investment adviser, provides us certain securities focused
investment services necessary to evaluate, monitor and liquidate our remaining
securities portfolio and also provides us with certain operational (i.e.
non-investment) services. We have also entered into an Administration Agreement
with TCA pursuant to which TCA acts as our administrator and performs (or
oversees or arranges for the performance of) the administrative services
necessary for our operation, including without limitation providing us with
equipment, clerical, bookkeeping and record keeping services. For these services
we pay TCA a fee equal to 0.04% of our aggregate average daily Managed Assets,
with a minimum annual fee of $30,000.

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The investment committee of TCA
consists of H. Kevin Birzer, Zachary A. Hamel, Kenneth P. Malvey, Terry C.
Matlack and David J. Schulte, all of whom are Managing Directors of TCA. TCA is
located at 11550 Ash Street, Suite 300, Leawood, Kansas 66211. TCA specializes
in listed energy infrastructure investments. As of January 31, 2012, TCA had
approximately $7.8 billion of assets under management in NYSE listed closed-end
investment companies, an open-end fund and other accounts. Corridor compensates
TCA for the services TCA provides to us, other than the services provided to us
pursuant to the Administration Agreement to which we and TCA are a
party.

Consultant
Arrangement

Corridor has retained Kenmont Capital
Partners L.P. as a consultant. Kenmont assists Corridor in identifying potential
real property asset acquisition opportunities for us. Corridor compensates
Kenmont for the services it provides to us.

Available
Information

Our principal executive offices are
located at 11550 Ash Street, Suite 300, Leawood, Kansas 66211. Our telephone
number is (913) 981-1020, or toll-free 1-866-362-9331, and our Web site is
www.tortoiseadvisors.com/tto.cfm. We are required to file reports, proxy
statements and other information with the SEC. We will make available free of
charge our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current
Reports on Form 8-K and any amendments to those reports on or through our Web
site at www.tortoiseadvisors.com/tto.cfm as soon as reasonably practicable after
such material is electronically filed with, or furnished to, the SEC. This
information may also be obtained, without charge, upon request by calling us at
(913) 981-1020 or toll-free at (866) 362-9331. This information will also be
available at the SECs Public Reference Room at 100 F Street, NE, Washington, DC
20549. You may obtain information on the operation of the Public Reference Room
by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that
contains reports, proxy and information statements and other information filed
by us with the SEC which is available on the SECs internet site at www.sec.gov.
Please note that any internet addresses provided in this Form 10-K are for
informational purposes only and are not intended to be hyperlinks. Accordingly,
no information found and/or provided at such internet address is intended or
deemed to be included by reference herein.

ITEM 1A. RISK
FACTORSThere are many risks and
uncertainties that can affect our future business, financial performance or
share price. Many of these are beyond our control. A description follows of some
of the important factors that could have a material negative impact on our
future business, operating results, financial condition or share price. This
discussion includes a number of forward-looking statements. You should refer to
the description of the qualifications and limitations on forward-looking
statements in the first paragraph under Item 7 Managements Discussion and
Analysis of Financial Condition and Results of Operations of this Form 10-K.

Risks Related to Our
Operations

Investors are no longer protected
by the regulatory provisions of the 1940 Act.On September 21, 2011, we withdrew our election to be regulated as a BDC
under the 1940 Act. Thus, we are no longer regulated as a BDC and are no longer
subject to the regulatory provisions of the 1940 Act. The 1940 Act is designed
to protect the interests of investors in investment companies, with requirements
relating to insurance, custody, and capital structure, composition of the Board
of Directors, affiliated transactions, leverage limitations and compensation
arrangements.

We intend in the future to
elect to be taxed as a REIT, but may not be able to qualify as a
REIT.We intend to elect to be a REIT
for federal income tax purposes. In order to qualify as a REIT, a substantial
percentage of our income must be derived from, and our assets consist of, real
estate assets, and, in certain cases, other investment property. We intend to
acquire and manage investments to satisfy the REIT tests. Whether a particular
investment is considered a real estate asset for such purposes depends upon the
facts and circumstances of the investment. Due to the factual nature of the
determination, at this time we do not know whether any particular investment
will qualify as a real estate asset or satisfy the REIT income tests. In
determining whether an investment is a real property asset, we will look at the
Code and the IRSs interpretation of the Code in regulations, published rulings,
private letter rulings and other guidance. In the case of a private letter
ruling issued to another taxpayer, we would not be able to bind the IRS to the
holding of such ruling. If we fail to qualify as a REIT we may not be able to
achieve our objectives and the value of our stock may decline.

If we elect to be taxed as a
REIT, we would be subject to a corporate level tax on certain built in gains if
certain assets were sold during the 10 year period following such
election.We are currently taxed as a
C corporation, which subjects our income to double level taxation. Generally, a
REIT is treated as a flow-through entity for federal income tax purposes, as a
REITs income is generally subject to a single level of federal taxation.

If we find sufficient REIT qualifying
investments during 2012 and satisfy the REIT requirements throughout 2012, we
may make an election to be treated as a REIT throughout 2012 by filing a Form
1120 REIT on or before March 15, 2013, or such later date to which we have
properly extended filing such return.

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A REIT generally operates without
incurring any corporate level federal income tax, which is accomplished by the
REIT annually distributing at least ninety percent of its REIT taxable income.
If it satisfies the minimum distribution requirement, the REIT generally is
entitled to a deduction for dividends paid. The REIT stockholders are then
required to report the REIT dividend as ordinary income. A REIT stockholders
receipt of dividends generally will not qualify as qualified dividend income or
for the dividends received deduction discussed above. Thus, if we are able to
qualify as a REIT, we will be more favorably treated for federal income tax
purposes than our current taxation.

In order to qualify as a REIT, we would
be required to satisfy gross income and asset tests. Generally, such tests
require that a substantial percentage of the REITs income be derived from, and
assets consist of, real estate assets, and, in certain cases, other investment
property. This will be a factual determination that we generally will have to
make annually with respect to the income tests and quarterly with respect to the
asset tests.

If we elect to be taxed as a
REIT, loss of our status as a REIT would have significant adverse
consequences.If we fail to qualify as
a REIT in any taxable year, then we would be subject to federal income tax
(including any applicable minimum tax) on our taxable income computed in the
usual manner for corporate taxpayers without any deduction for distributions to
our stockholders. Unless entitled to relief under specific statutory provisions,
we would be disqualified from treatment as a REIT for the four taxable years
following the year of losing our REIT status, assuming we had previously been
treated as a REIT. To renew our REIT qualification at the end of such a
four-year period, we would be required to distribute all of our current and
accumulated earnings and profits before the end of the period and the funds
available for satisfying our obligations and for distribution to our
stockholders could be significantly reduced.

If we elect to be taxed as a
REIT, re-characterization of sale-leaseback transactions may cause us to lose
our REIT status.We intend to purchase
properties and simultaneously lease the same property back to the seller of such
properties. While we will use our best efforts to structure any such
sale-leaseback transaction so that the lease will be characterized as a “true
lease,” thereby allowing us to be treated as the owner of the property for U.S.
federal income tax purposes, the IRS could challenge such characterization. In
the event that any sale-leaseback transaction is re-characterized as a financing
transaction or loan for U.S. federal income tax purposes, deductions for
depreciation and cost recovery relating to such property would be disallowed. If
a sale-leaseback transaction were so re-characterized, we might fail to satisfy
the REIT qualification “asset tests” or the “income tests” and,
consequently, lose our REIT status effective with the year of
re-characterization. Alternatively, the amount of our REIT taxable income could
be recalculated which might also cause us to fail to meet the distribution
requirement for a taxable year.

We may be unable to identify
and complete acquisitions of real property assets.Our ability to identify and complete acquisitions of real
property assets on favorable terms and conditions are subject to the following
risks:

- we may be unable to acquire a desired asset because
  of competition from other investors with significant capital, includingpublicly traded REITs and institutional
  investment funds;
- competition from other investors may significantly
  increase the purchase price of a desired real property asset or result in lessfavorable terms;
- we may not complete the acquisition of a desired real
  property asset even if we have signed an agreement to acquire such realproperty asset because such agreements are
  subject to customary conditions to closing, including completion of due
  diligence investigations to our satisfaction;
- we may be unable to finance acquisitions of real
  property assets on favorable terms or at all.

Net leases may not result in
fair market lease rates over time.We
expect a large portion of our future income to come from net leases. Net leases
typically have longer lease terms and, thus, there is an increased risk that if
market rental rates increase in future years, the rates under our net leases
will be less than fair market rental rates during those years. As a result, our
income and distributions could be lower than they would otherwise be if we did
not engage in net leases. We generally will seek to include a clause in each
lease that provides increases in rent over the term of the lease, but there can
be no assurance we will be successful in obtaining such a clause.

Some losses related to our
real property assets may not be covered by insurance and would adversely impact
distributions to stockholders.Our
leases will generally require the tenant company to carry comprehensive
liability and casualty insurance on our properties comparable in amounts and
against risks customarily insured against by other companies engaged in similar
businesses in the same geographic region as our tenant company. We believe the
required coverage will be of the type, and amount, customarily obtained by an
owner of similar properties. However, there are some types of losses, such as
catastrophic acts of nature, acts of war or riots, for which we or our tenants
cannot obtain insurance at an acceptable cost. If there is an uninsured loss or
a loss in

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excess of insurance limits, we could lose both the revenues generated
by the affected property and the capital we have invested in the property if our tenant company fails to pay us the casualty value
in excess of such insurance limit, if any, or to indemnify us for such loss. This would in turn reduce the amount of income available
for distributions. We would, however, remain obligated to repay any secured indebtedness or other obligations related to the property.
Since September 11, 2001, the cost of insurance protection against terrorist acts has risen dramatically. The cost of coverage
for acts of terrorism is currently mitigated by the Terrorism Risk Insurance Act (TRIA). If TRIA is not extended beyond
its current expiration date of December 31, 2014, our tenants may incur higher insurance costs and greater difficulty in obtaining
insurance that covers terrorist-related damages. There can be no assurance our tenant companies will be able to obtain terrorism
insurance coverage, or that any coverage they do obtain will adequately protect our properties against loss from terrorist attack.

If a sale-leaseback
transaction is re-characterized in a lessee companys bankruptcy proceeding, our
financial condition could be adversely affected.We intend to enter into sale-leaseback transactions, whereby
we purchase a property and then simultaneously lease the same property back to
the seller. In the event of the bankruptcy of a lessee company, a transaction
structured as a sale-leaseback may be re-characterized as either a financing or
a joint venture, either of which outcomes could adversely affect our business.
If the sale-leaseback were re-characterized as a financing, we might not be
considered the owner of the property, and as a result would have the status of a
creditor in relation to the lessee company. In that event, we would no longer
have the right to sell or encumber our ownership interest in the property.
Instead, we would have a claim against the lessee company for the amounts owed
under the lease, with the claim arguably secured by the property. The lessee
company/debtor might have the ability to restructure the terms, interest rate
and amortization schedule of its outstanding balance. If confirmed by the
bankruptcy court, we could be bound by the new terms, and prevented from
foreclosing our lien on the property. If the sale-leaseback were
re-characterized as a joint venture, we and the lessee company could be treated
as co-ventures with regard to the property. As a result, we could be held
liable, under some circumstances, for debts incurred by the lessee company
relating to the property. Either of these outcomes could adversely affect our
cash flow and the amount available for distribution.

We may not be able to sell
our real property asset investments when we desire.Investments in real property assets are relatively illiquid
compared to other investments. Accordingly, we may not be able to sell real
property asset investments when we desire or at prices acceptable to us in
response to changes in economic or other conditions. This could substantially
reduce the funds available for satisfying our obligations and for distribution
to our stockholders.

Costs of complying with
governmental laws and regulations, including those relating to environmental
matters, may adversely affect our income and the cash available for
distribution.We have invested, and
expect to continue to invest, in real property assets, which are subject to laws
and regulations relating to the protection of the environment and human health
and safety. These laws and regulations generally govern wastewater discharges,
air emissions, the operation and removal of underground and aboveground storage
tanks, the use, storage, treatment, transportation and disposal of solid and
hazardous materials, and the remediation of contamination associated with
disposals. Environmental laws and regulations may impose joint and several
liabilities on tenants, owners or operators for the costs to investigate or
remediate contaminated properties, regardless of fault or whether the acts
causing the contamination were legal. This liability could be substantial. In
addition, the presence of hazardous substances, or the failure to properly
remediate these substances, may adversely affect our ability to sell, rent or
pledge such property as collateral for future borrowings.

Some of these laws and regulations have
been amended so as to require compliance with new or more stringent standards as
of future dates. Compliance with new or more stringent laws or regulations or
stricter interpretation of existing laws may require material expenditures by
us. Future laws, ordinances or regulations may impose material environmental
liability. Additionally, our tenant companies operations, the existing
condition of land when we buy it, operations in the vicinity of our properties,
such as the presence of underground storage tanks, or activities of unrelated
third parties may affect our properties. In addition, there are various local,
state and federal fire, health, life-safety and similar regulations with which
we may be required to comply, and that may subject us to liability in the form
of fines or damages for noncompliance. Any material expenditures, fines, or
damages we must pay will reduce our ability to make distributions.

State and federal laws in this area are
constantly evolving, and we intend to monitor these laws and take commercially
reasonable steps to protect ourselves from the impact of these laws, including
where deemed necessary, obtaining environmental assessments of properties that
we acquire; however, we will not obtain an independent third-party environmental
assessment for every property we acquire. In addition, any such assessment that
we do obtain may not reveal all environmental liabilities or whether a prior
owner of a property created a material environmental condition not known to us.
The cost of defending against claims of liability, of compliance with
environmental regulatory requirements, of remediating any contaminated property,
or of paying personal injury claims would materially adversely affect our
business, assets or results of operations and, consequently, amounts available
for distribution.

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If we elect to be treated as
a REIT, we will be required to make distributions, other than capital gain
distributions, to our stockholders each year in the amount of at least 90% of
our REIT taxable income As a result; we will continue to need additional capital
to make new investments. If additional funds are unavailable or not available on
favorable terms, our ability to make new investments will be
impaired.If we elect to be treated as
a REIT, we will be required to distribute at least 90% of our REIT taxable
income, and as such we may require additional capital to make new investments or
carry existing investments. We may acquire additional capital from the issuance
of securities senior to our common shares, including additional borrowings or
other indebtedness or the issuance of additional securities. We may also acquire
additional capital through the issuance of additional equity. However, we may
not be able to raise additional capital in the future on favorable terms or at
all. Unfavorable economic conditions could increase our funding costs, limit our
access to the capital markets or result in a decision by lenders not to extend
credit to us. We may issue debt securities, other instruments of indebtedness or
preferred stock, and we borrow money from banks or other financial institutions,
which we refer to collectively as senior securities. As a result of issuing
senior securities, we will also be exposed to typical risks associated with
leverage, including increased risk of loss. If we issue preferred securities
which will rank senior to our common shares in our capital structure, the
holders of such preferred securities may have separate voting rights and other
rights, preferences or privileges more favorable than those of our common
shares, and the issuance of such preferred securities could have the effect of
delaying, deferring or preventing a transaction or a change of control that
might involve a premium price for security holders or otherwise be in our best
interest.

To the extent our ability to issue debt
or other senior securities is constrained, we will depend on issuances of
additional common shares to finance new investments. If we raise additional
funds by issuing more of our common shares or senior securities convertible
into, or exchangeable for, our common shares, the percentage ownership of our
stockholders at that time would decrease, and you may experience
dilution.

Corridor may serve as a
manager to other entities, which may create conflicts of interest not in the
best interest of us or our stockholders.Corridors services under the Management Agreement are not exclusive,
and, while it currently does not have any contractual arrangement to do so, it
is free to furnish the same or similar services to other entities, including
businesses that may directly or indirectly compete with us so long as its
services to us are not impaired by the provision of such services to others.
Corridor and its members may have obligations to other entities, the fulfillment
of which might not be in the best interests of us or our
stockholders.

We will be dependent upon
key personnel of Corridor for our future success.We have entered into a management agreement with Corridor to
provide full management services to us for real property asset investments. We
will be dependent on the diligence, expertise and business relationships of the
management of Corridor to implement our strategy of acquiring real property
assets. The departure of one or more investment professionals of Corridor could
have a material adverse effect on our ability to implement this strategy and on
the value of our common shares. There can be no assurance that we will be
successful in implementing our strategy.

We are dependent upon TCAs
key personnel to effectuate an orderly liquidation of our remaining securities
portfolio.TCAs investment
professionals and management will evaluate, monitor and liquidate our remaining
securities portfolio. The departure of one or more investment professionals of
TCA could have a material adverse effect on our ability to achieve an orderly
liquidation of our remaining securities portfolio. We will rely on employees of
TCA who will be devoting significant amounts of their time to non-Company
related activities of TCA. To the extent TCAs investment professionals and
management are unable to, or do not, devote sufficient amounts of their time and
energy to our affairs, our performance may suffer.

Our remaining securities
investments in privately-held companies present certain challenges, including
availability of information about these companies and illiquidity that may
impact our ability to liquidate investments in a timely and/ or advantageous
manner.We currently have securities
investments remaining in privately-held companies. Generally, little public
information exists about these companies, and we are required to rely on the
ability of TCA to obtain adequate information to evaluate the potential risks
and returns involved with these companies. If TCA is unable to obtain all
material information about these companies, including with respect to
operational, regulatory, environmental, litigation and managerial risks, TCA may
not make a fully-informed investment decision, and we may lose some or all of
the money invested in these companies. Substantially all of these securities are
subject to legal and other restrictions on resale or are otherwise less liquid
than publicly traded securities. The illiquidity of these investments may make
it difficult for us to sell such investments at advantageous times and prices or
in a timely manner. In addition, if we are required to liquidate all or a
portion of our remaining securities portfolio quickly, we may realize
significantly less than the value at which we previously have recorded our
investments. We also may face other restrictions on our ability to liquidate an
investment in the securities of a portfolio company to the extent that we or one
of our affiliates have material non-public information regarding such portfolio
company.

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All of our remaining
securities investments are, and will continue to be, recorded at fair value.
Because such valuations are inherently uncertain, our determinations of fair
value may differ materially from the values that would have been used if a ready
market for these securities existed.We continue to hold investments that are in the form of securities or
loans that are not publicly traded. The fair value of these investments may not
be readily determinable. For securities investments that are reported at fair
value, we will value these investments quarterly at fair value. We have retained
Lincoln Partners Advisors, LLC (an independent valuation firm) to provide third
party valuation consulting services. The Board of Directors is ultimately
responsible for determining the fair value of the investments in good faith. The
types of factors that may be considered in fair value pricing of an investment
include the nature and realizable value of any collateral, the portfolio
companys earnings and ability to make payments, the markets in which the
portfolio company does business, comparison to publicly traded companies,
discounted cash flow and other relevant factors. Because such valuations are
inherently uncertain, our determinations of fair value may differ materially
from the values that would have been used if a ready market for these securities
existed. As a result, we may not be able to dispose of our holdings at a price
equal to or greater than the determined fair value, which could have a negative
impact on our equity and earnings.

The lack of liquidity in our
securities investments may make it difficult to liquidate our securities
portfolio at favorable prices and, as a result, we may suffer
losses.We have historically invested
in the equity of companies whose securities are not publicly traded, and whose
securities may be subject to legal and other restrictions on resale or otherwise
be less liquid than publicly-traded securities. As of November 30, 2011,
approximately 61% of our investments were invested in illiquid securities. The
illiquidity of these investments may make it difficult for us to sell these
investments when desired. In addition, we may realize significantly less than
the value at which we had previously recorded these investments when we
liquidate our securities portfolio. The illiquidity of most of our securities
investments may make it difficult for us to dispose of them at favorable prices,
and, as a result, we may suffer losses.

If our acquisitions do not
meet our performance expectations, you may not receive
distributions.We intend to make
distributions on a quarterly basis to our stockholders out of assets legally
available for distribution. We may not be able to achieve operating results that
will allow us to make distributions at a specific level or to increase the
amount of these distributions from time to time. Also, restrictions and
provisions in any credit facilities we enter into or debt securities we issue
may limit our ability to make distributions. We cannot assure you that you will
receive distributions at a particular level or at all.

If we were deemed an
investment company under the Investment Company Act of 1940, applicable
restrictions could make it impractical for us to continue our business as
contemplated and could have a material adverse effect on our business and the
price of our securities.We do not
believe that we are an investment company under the 1940 Act. If during the
period in which we are liquidating our securities portfolio we make an
investment in securities, or one of our infrastructure real property asset
acquisitions were characterized as an investment in securities, we could be
deemed as an investment company for purposes of the 1940 Act. If we were to be
deemed an investment company, however, restrictions imposed by the 1940 Act,
including limitations on our capital structure, could make it impractical for us
to continue our business as contemplated and would have a material adverse
effect on our operations and the price of our common shares.

Changes in laws or
regulations or in the interpretations of laws or regulations could significantly
affect our operations and cost of doing business.We are subject to federal, state and local laws and
regulations and are subject to judicial and administrative decisions that affect
our operations, including loan originations, maximum interest rates, fees and
other charges, disclosures to portfolio companies, the terms of secured
transactions, collection and foreclosure procedures and other trade practices.
If these laws, regulations or decisions change, we may have to incur significant
expenses in order to comply, or we may have to restrict our operations. In
addition, if we do not comply with applicable laws, regulations and decisions,
or fail to obtain licenses that may become necessary for the conduct of our
business; we may be subject to civil fines and criminal penalties, any of which
could have a material adverse effect upon our business, results of operations or
financial condition.

Provisions of the Maryland
General Corporation Law and our charter and bylaws could deter takeover attempts
and have an adverse impact on the price of our common
shares.The Maryland General
Corporation Law and our charter and bylaws contain provisions that may have the
effect of discouraging, delaying or making difficult a change in control of our
company or the removal of our incumbent directors.

We are subject to the Business
Combination Act of the Maryland General Corporation Law which prohibits certain
business combinations between a Maryland corporation and an interested
stockholder or their affiliate. As permitted by law, however, our Board of
Directors has adopted a resolution exempting us from the Maryland Business
Combination Act for any business combination between us and any person to the
extent that such business combination receives the prior approval of our
Board.

The Maryland Control Share Acquisition
Act generally provides that a holder of control shares of a Maryland corporation
acquired in a control share acquisition has no voting rights except to the
extent approved by a vote of two-thirds of the votes entitled to be cast on the
matter. Shares owned by a person who makes a proposal to make a control share
acquisition and by

15

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officers or by directors who are employees of the corporation
are excluded from shares entitled to vote on the matter. Our Bylaws exempt from
the Maryland Control Share Acquisition Act acquisitions of stock by any person.
If we amend our Bylaws to repeal the exemption from the Maryland Control Share
Acquisition Act, the Maryland Control Share Acquisition Act also may make it
more difficult to obtain control of the Company.

Under our charter, our Board of
Directors is divided into three classes serving staggered terms, which will make
it more difficult for a hostile bidder to acquire control of us. In addition,
our Board of Directors may, without stockholder action, authorize the issuance
of shares of stock in one or more classes or series, including preferred stock.
Our Board of Directors may, without stockholder action, amend our charter to
increase the number of shares of stock of any class or series that we have
authority to issue. The existence of these provisions, among others, may have a
negative impact on the price of our common shares and may discourage third party
bids for ownership of our Company. These provisions may prevent any premiums
being offered to you for our common shares.

Risks Related to an Investment
in the U.S. Energy Infrastructure Sector

Our focus on the energy
infrastructure sector will subject us to more risks than if we were broadly
diversified.Because we specifically
focus on the energy infrastructure sector, investments in our common shares may
present more risks than if we were broadly diversified over numerous sectors of
the economy. Therefore, a downturn in the U.S. energy infrastructure sector
would have a larger impact on us than on a company that does not concentrate in
one sector of the economy. The energy infrastructure sector can be significantly
affected by the supply of and demand for specific products and services; the
supply and demand for crude oil, natural gas, and other energy commodities; the
price of crude oil, natural gas, and other energy commodities; exploration,
production and other capital expenditures; government regulation; world and
regional events and economic conditions.

Energy infrastructure
companies are subject to variations in the supply and demand of various energy
commodities.A decrease in the
production of natural gas, natural gas liquids, crude oil, coal, refined
petroleum products or other such commodities, or a decrease in the volume of
such commodities available for transportation, mining, processing, storage or
distribution, may adversely impact the financial performance of companies in the
energy infrastructure sector. Production declines and volume decreases could be
caused by various factors, including catastrophic events affecting production,
depletion of resources, labor difficulties, political events, OPEC actions,
environmental proceedings, increased regulations, equipment failures and
unexpected maintenance problems, failure to obtain necessary permits,
unscheduled outages, unanticipated expenses, inability to successfully carry out
new construction or acquisitions, import supply disruption, increased
competition from alternative energy sources or related commodity prices.
Alternatively, a sustained decline in demand for such commodities could also
adversely affect the financial performance of companies in the energy
infrastructure sector. Factors that could lead to a decline in demand include
economic recession or other adverse economic conditions, higher fuel taxes or
governmental regulations, increases in fuel economy, consumer shifts to the use
of alternative fuel sources, changes in commodity prices or weather. Factors
that could lead to a decrease in market demand include a recession or other
adverse economic conditions, an increase in the market price of the underlying
commodity, higher taxes or other regulatory actions that increase costs, or a
shift in consumer demand for such products. Demand may also be adversely
impacted by consumer sentiment with respect to global warming and/or by any
state or federal legislation intended to promote the use of alternative energy
sources such as bio-fuels, solar and wind. Should energy infrastructure
companies experience variations in supply and demand as described above, the
resulting decline in operating or financial performance could impact the value
or quality of our assets.

Many companies in the energy
infrastructure sector are subject to the risk that they, or their customers,
will be unable to replace depleted reserves of energy
commodities.Many companies in the
energy infrastructure sector are either (i) engaged in the production of natural
gas liquids, refined petroleum products, or aggregates such as crushed stone,
sand and gravel, or (ii) are engaged in transporting, storing, distributing and
processing these items on behalf of producers. To maintain or grow their
revenues, many customers of these companies need to maintain or expand their
reserves through exploration of new sources of supply, through the development
of existing sources, through acquisitions, or through long-term contracts to
acquire reserves. The financial performance of companies in the energy
infrastructure sector may be adversely affected if the companies to which they
provide service are unable to cost-effectively acquire additional reserves
sufficient to replace the natural decline.

Energy infrastructure
companies are and will be subject to extensive regulation because of their
participation in the energy infrastructure sector.Companies in the energy infrastructure sector are subject to
significant federal, state and local government regulation in virtually every
aspect of their operations, including how facilities are constructed, maintained
and operated, environmental and safety controls, and the prices they may charge
for the products and services they provide. Various governmental authorities
have the power to enforce compliance with these regulations and the permits
issued under them, and violators are subject to administrative, civil and
criminal penalties, including civil fines, injunctions or both. Stricter laws,
regulations or enforcement policies could be enacted in the future that likely
would increase compliance costs and may adversely affect the financial
performance of companies in the energy infrastructure sector.

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Energy infrastructure
companies are and will be subject to the risk of fluctuations in commodity
prices.The operations and financial
performance of companies in the energy infrastructure sector may be directly
affected by energy commodity prices, especially those companies in the energy
infrastructure sector owning the underlying energy commodity. Commodity prices
fluctuate for several reasons, including changes in market and economic
conditions, the impact of weather on demand or supply, levels of domestic
production and imported commodities, energy conservation, domestic and foreign
governmental regulation and taxation and the availability of local, intrastate
and interstate transportation systems. Volatility of commodity prices, which may
lead to a reduction in production or supply, may also negatively impact the
performance of companies in the energy infrastructure sector that are solely
involved in the transportation, processing, storing, distribution or marketing
of commodities. Volatility of commodity prices may also make it more difficult
for companies in the energy infrastructure sector to raise capital to the extent
the market perceives that their performance may be tied directly or indirectly
to commodity prices. Historically, energy commodity prices have been cyclical
and exhibited significant volatility. Should energy infrastructure companies
experience variations in supply and demand as described above, the resulting
decline in operating or financial performance could impact the value or quality
of our assets.

Energy infrastructure
companies are and will be subject to the risk of extreme weather
patterns.Extreme weather patterns,
such as prolonged or abnormal seasons, or specific events, such as hurricanes,
could result in significant volatility in the supply of energy and power. This
volatility may create fluctuations in commodity prices and earnings of companies
in the energy infrastructure sector. Moreover, any extreme weather events, such
as hurricanes, could adversely impact the assets and valuation of our real
property assets or investment securities.

Additional Risks to Common
Stockholders

Our use of leverage
increases the risk of investing in our securities and will increase the costs
borne by common stockholders.Our use
of leverage through the issuance of any preferred stock or debt securities, and
any additional borrowings or other transactions involving indebtedness (other
than for temporary or emergency purposes) are or would be considered senior
securities and create risks. Leverage is a speculative technique that may
adversely affect common stockholders. If the return on securities acquired with
borrowed funds or other leverage proceeds does not exceed the cost of the
leverage, the use of leverage could cause us to lose money.

Our issuance of senior securities
involves offering expenses and other costs, including interest payments, which
are borne indirectly by our common stockholders. Fluctuations in interest rates
could increase interest or dividend payments on our senior securities, and could
reduce cash available for distribution on common stock. Increased operating
costs, including the financing cost associated with any leverage, may reduce our
total return to common stockholders.

Rating agency guidelines applicable to
any senior securities may impose asset coverage requirements, dividend
limitations, voting right requirements (in the case of the senior equity
securities), and restrictions on our portfolio composition and our use of
certain investment techniques and strategies. The terms of any senior securities
or other borrowings may impose additional requirements, restrictions and
limitations that are more stringent than those required by a rating agency that
rates outstanding senior securities. These requirements may have an adverse
effect on us and may affect our ability to pay distributions on common stock and
preferred stock. To the extent necessary, we may redeem our senior securities to
maintain the required asset coverage. Doing so may require that we liquidate
investments at a time when it would not otherwise be desirable to do
so.

In addition, lenders from whom we may
borrow money or holders of our debt securities may have fixed dollar claims on
our assets that are superior to the claims of our stockholders, and we have
granted, and may in the future grant, a security interest in our assets in
connection with our debt. In the case of a liquidation event, those lenders or
note holders would receive proceeds before our stockholders. If the value of our
assets increases, then leveraging would cause the net asset value attributable
to our common shares to increase more than it otherwise would have had we not
leveraged. Conversely, if the value of our assets decreases, leveraging would
cause the net asset value attributable to our common shares to decline more than
it otherwise would have had we not leveraged. Similarly, any increase in our
revenue in excess of interest expense on our borrowed funds would cause our net
income to increase more than it would without the leverage. Any decrease in our
revenue would cause our net income to decline more than it would have had we not
borrowed funds and could negatively affect our ability to make distributions on
our common shares. Our ability to service any debt that we incur will depend
largely on our financial performance and the performance of our portfolio
companies and will be subject to prevailing economic conditions and competitive
pressures.

Sales of our common stock
may put pressure on our stock price.The sale of our common stock (or the perception that such sales may
occur) may have an adverse effect on prices in the secondary market for our
common stock. An increase in the number of common shares available may put
downward pressure on the market price for our common stock and make it more
difficult for stockholders to sell their shares. These sales also might make it
more difficult for us to sell additional equity securities in the future at a
time and price we deem appropriate.

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Additional Risks to Senior
Security Holders

Generally, an investment in our senior
securities is subject to the following risks:

We will be subject to
interest rate risk.Distributions and
interest payable on our senior securities are subject to interest rate risk. To
the extent that distributions or interest on such securities are based on
short-term rates, our leverage costs may rise so that the amount of dividends or
interest due to holders of senior securities would exceed available cash flow.
To the extent that any of our leverage costs are fixed, our leverage costs may
increase when our senior securities mature. This might require us to sell
investments at a time when we would otherwise not do so, which may affect
adversely our future ability to generate cash flow.

Preferred stock will be
junior to any outstanding notes or other borrowings.Preferred stock will be junior in liquidation and with respect
to distribution rights to debt securities and any other borrowings.

Senior securities representing
indebtedness may constitute a substantial lien and burden on preferred stock by
reason of their prior claim against our income and against our net assets in
liquidation. We may not be permitted to declare dividends or other distributions
with respect to any series of preferred stock unless at such time we meet
applicable asset coverage requirements and the payment of principal or interest
is not in default with respect to any notes or other borrowings.

Our debt securities, upon issuance, are
expected to be unsecured obligations and, upon our liquidation, dissolution or
winding up, will rank: (1) senior to all of our outstanding common stock and any
outstanding preferred stock; (2) on a parity with any of our unsecured creditors
and any unsecured senior securities representing our indebtedness; and (3)
junior to any of our secured creditors. Secured creditors of ours may include,
without limitation, parties entering into interest rate swap, floor or cap
transactions, or other similar transactions with us that create liens, pledges,
charges, security interests, security agreements or other encumbrances on our
assets.

We may be subject to ratings
and asset coverage risk.To the extent
that senior securities are rated, a rating does not eliminate or necessarily
mitigate the risks of investing in our senior securities, and a rating may not
fully or accurately reflect all of the credit and market risks associated with a
security. A rating agency could downgrade the rating of our shares of preferred
stock or debt securities, which may make such securities less liquid at an
auction or in the secondary market, though probably with higher resulting
interest rates. If a rating agency downgrades, or indicates a potential
downgrade to, the rating assigned to a senior security, we may alter our
portfolio or redeem a portion of our senior securities. We may voluntarily
redeem a senior security under certain circumstances to the extent permitted by
its governing documents.

Inflation may negatively
impact our senior securities.Inflation is the reduction in the purchasing power of money resulting
from an increase in the price of goods and services. Inflation risk is the risk
that the inflation adjusted or real value of an investment in preferred stock
or debt securities or the income from that investment will be worth less in the
future. As inflation occurs, the real value of the preferred stock or debt
securities and the dividend payable to holders of preferred stock or interest
payable to holders of debt securities declines.

Additional Risks Related to
Warrants and Subscription Rights

An active public market for
our warrants or subscription rights may not develop.Currently, no public market exists for our warrants or for
subscription rights we may issue. We cannot assure you that one will develop. We
do not currently intend to apply to list the warrants, and may not list any
subscription rights, on any national securities exchange or automated quotation
system.

There may be dilution of the
value of our common shares when our warrants or subscription rights are
exercised or if we issue common shares below book value.The issuance of additional common shares upon the exercise of
any warrants or subscription rights, if the warrants or subscription rights are
exercised at a time when the exercise price is less than the book value per
share of our common shares will have a dilutive effect on the value of our
common shares.

The warrants or subscription
rights may have no value in bankruptcy.In the event a bankruptcy or reorganization is commenced by or against
us, a bankruptcy court may hold that unexercised warrants or subscription rights
are executory contracts subject to rejection by us with approval of the
bankruptcy court. As a result, holders of warrants or subscription rights may,
even if sufficient funds are available, not be entitled to receive any
consideration or may receive an amount less than they would be entitled to if
they had exercised their warrants or subscription rights prior to the
commencement of any such bankruptcy or reorganization.

As a holder of warrants or
subscription rights, you will not receive distributions on our common
stock.Holders of warrants or
subscription rights will not have the right to receive any distributions and
will not have any voting rights so long as their warrants or subscription rights
are unexercised.

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ITEM 1B. UNRESOLVED STAFF
COMMENTSOn September 21, 2011, we filed
with the SEC a universal shelf registration statement on Form S-3. We received
comments from the SEC staff on the filing on October 17, 2011. Some of those
comments related to our Form 10-K for the fiscal yearended November 30, 2010 (the 10-K)
and our Form 10-Q for the quarterly period ended May 31, 2011 (the 10-Q). On
November 18, 2011, we filed Pre-Effective Amendment No. 1 to the shelf
registration statement and responded to those comments. On December 12, 2011, we
received comments from the SEC staff on Pre-Effective Amendment No. 1, some of
which related to the previously issued comments on our 10-K and 10-Q. On January
25, 2012, we filed Pre-Effective Amendment No. 2. to the shelf registration
statement and responded to all open comments. As of the date of this annual
report the shelf registration statement has not yet been declared effective and
a few of the comments relating to the 10-K and 10-Q remain unresolved. We do not
believe the comments are material and expect them to be resolved soon. However, there can be no assurance on the timing of resolution of such comments.

ITEM 2.
PROPERTIESWe own 100 percent of a 40
percent undivided interest in the Eastern Interconnect Project (EIP). The EIP
transmission assets move electricity across New Mexico between Albuquerque and
Clovis. The physical assets include 216 miles of 345 kilovolts transmission
lines, towers, easement rights, converters and other grid support
components.

We hold 100 percent of the equity
interests in Mowood. Mowood is the holding company of Omega Pipeline, LLC
(Omega). Omega is a natural gas local distribution company located on the Fort
Leonard Wood military installation in south-central Missouri. Omega owns
approximately 50 miles of pipeline, has a long term contract with the Department
of Defense and serves the natural gas needs of Fort Leonard Wood in addition to
marketing natural gas services to several customers in the surrounding
area.

Our principal executive office is
located at 4200 W. 115th Street, Suite 210, Leawood, Kansas 66211.

ITEM 3. LEGAL
PROCEEDINGSWe are not currently subject to any
material legal proceedings, nor, to our knowledge, is any material legal
proceeding threatened against us.

ITEM 4. [REMOVED AND
RESERVED]

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PART II

ITEM 5. MARKET FOR REGISTRANTS
COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIESPrice Range of Common
Stock

Our common shares began trading on the
NYSE under the symbol TTO on February 2, 2007 at a price of $15.00 per share.
Prior to our initial public offering, there was no public market for our common
shares.

The following table sets forth the
range of high and low sales prices of our common shares and the distributions
declared by us for each fiscal quarter for our two most recent fiscal years:

NAV/
    
    **Price
      Range**
    
    Cash Distribution2010
    
    Book
      Value(1)
    
    High
    
    Low
    
    per
      Share(2)First quarter
    
    
    $
    9.60
    
    
    $
    7.58
    
    $
    6.00
    
    
    $
    0.1300Second
      quarter
    
    
    $
    8.69
    
    
    $
    7.93
    
    $
    5.27
    
    
    $
    0.1000Third quarter
    
    
    $
    9.74
    
    
    $
    6.44
    
    $
    5.10
    
    
    $
    0.1000Fourth
      quarter
    
    
    $
    10.44
    
    
    $
    7.42
    
    $
    5.40
    
    
    $
    0.10002011First quarter
    
    
    $
    10.46
    
    
    $
    8.55
    
    $
    6.79
    
    
    $
    0.1000Second
      quarter
    
    
    $
    10.66
    
    
    $
    9.27
    
    $
    8.17
    
    
    $
    0.1000Third quarter
    
    
    $
    10.62
    
    
    $
    9.02
    
    $
    7.41
    
    
    $
    0.1000Fourth
      quarter(1)
    
    
    $
    9.85
    
    
    $
    8.38
    
    $
    6.59
    
    
    $
    0.1100


|(1) | By withdrawing our
      election to be regulated as a BDC, we are no longer regulated by the 1940
      Act. Our prospective reporting will conform to other commonly used
      processes of REITs. The primary visibility of this reporting will be the
      decreased emphasis on fair value based NAV to traditional historical cost
      based accounting of book value. This reporting does not change the
      strategy of holding our private investments until an attractive liquidity
      opportunity is presented. In line with our intent and the change in our
      business during the fourth quarter 2011, book value per share is shown in
      place of NAV, and reflects the impact of consolidating the operations of
      Mowood as opposed to reporting it at fair value as in the prior periods
      presented. Net asset value and book value per share is generally
      determined as of the last day in the relevant period and therefore may not
      reflect the net asset value or book value per share on the date of the
      high and low sales prices. The net asset values and book value shown are
      based on outstanding shares at the end of each
period.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Represents the
      distribution declared in the specified
period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

The last reported price for our common
stock as of December 31, 2011 was $8.06 per share. As of December 31, 2011, we
had 27 stockholders of record.

Dividend Policy

Our investments in securities and real
property assets generate cash flow to us from which we expect to pay
distributions to stockholders. The Board of Directors will determine the amount
of any distribution we expect to pay our stockholders. A REIT is generally
required to distribute during the taxable year an amount equal to at least 90%
of the REIT taxable income (determined under IRC section 857(b)(2), without
regard to the deduction for dividends paid). We intend to adhere to this
requirement in order to qualify as a REIT.

Taxation of our
Distributions

If we elect to be treated as a REIT, we
will be required to make distributions, other than capital gain distributions,
to our stockholders each year in the amount of at least 90% of our REIT taxable
income. We have historically paid, and intend to continue to pay, subject to
adjustment at the discretion of our Board of Directors, quarterly distributions
to our stockholders. Our Board of Directors will determine the amount of each
distribution. Because of the effect of other items, including depreciation and
amortization associated with real estate investments, distributions, in whole or
in part, in any period may constitute a return of capital for federal tax
purposes. On February 6, 2012, our Board of Directors declared a $0.11 per share
distribution to be paid on March 1, 2012 to stockholders of record on February
22, 2012. There is no assurance that we will continue to make regular
distributions.

Taxation

Currently, as a corporation, we are
obligated to pay federal and state income tax on our taxable income. Our tax
expense or benefit is included in our Consolidated Statements of Operations.
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Based on current
information, we believe we have sufficient net operating losses or other tax
attributes to offset any potential tax expense in 2011. If we find sufficient
suitable REIT-qualifying investments during 2012 and satisfy the REIT
requirements throughout 2012, we expect to make an election to be treated as a
REIT throughout 2012 by filing a Form 1120-REIT on or before March 15, 2013, or
such later date to which we have properly extended filing such return. If we
elect REIT status in the future, we will be taxed as a REIT rather than a C
corporation and generally will not pay federal

20

---



income tax on taxable income that is
distributed to our stockholders. Currently, our distributions from earnings and
profits are treated as qualified dividend income (QDI) and return of capital,
with dividends received by corporate shareholders generally qualifying for the
dividends received deduction (DRD). If we elect REIT status, our distributions
from earnings and profits will be treated as ordinary income and generally will
not qualify as QDI and will not be qualifying for purposes of the DRD. As a
REIT, certain dividends related to long term capital gains may be taxed as
capital gains dividends. If we make a REIT election, we will be subject to a
corporate level tax on certain built-in gains on certain assets if such assets
are sold during the 10 year period following conversion. Built-in gain assets
are assets whose fair market value exceeds the REITs adjusted tax basis at the
time of conversion. In addition, a REIT may not have any earnings and profits
accumulated in a non-REIT year. Thus, upon conversion to a REIT, the putative
REIT is generally required to distribute to its stockholders all accumulated
earnings and profits, if any. Such distribution would be taxable to the
stockholders as dividend income, and, as discussed above, may qualify as
qualified dividend income for non-corporate stockholders and for the dividends
received deduction for corporate stockholders.

Recent Sales of Unregistered
Securities

We did not sell any securities during
the year ended November 30, 2011 that were not registered under the Securities
Act of 1933.

Issuer Purchases of Equity
Securities

We did not repurchase any shares of our
common stock during the year ended November 30, 2011.

Performance
Graphs

The following graph compares the return
on our common stock (TTO) with that of the Wachovia MLP Total Return Index
(WMLPT) and a BDC Peer Group (BDC Peers), for the period February 2, 2007 to
November 30, 2011. The graph assumes that, on February 2, 2007, a $100
investment was made in each of our common stock, WMLPT and the BDC Peers, and
assumes the reinvestment of all cash dividends. The comparisons in the graph
below are based on historical data and are not intended to forecast future
performance of our common stock.



|(1) | Our shares
      began trading on the NYSE on February 2, 2007.                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | The BDC Peer
      Group consists of the following closed-end investment companies that have
      elected to be regulated as business development companies under the 1940
      Act:

| | American Capital Strategies   | Firsthand Technology Value   | Keating Capital Inc.      | PennantPark Floating Rate  
| | ----------------------------- | ---------------------------- | ------------------------- | ---------------------------
| | Ameritrans Capital Corp.      | Full Circle Capital Corp.    | Kohlberg Capital Corp.    | PennantPark Investment Corp
| | Apollo Investment Corp.       | Gladstone Capital Corp.      | Main Street Capital Corp. | Prospect Capital Corp.     
| | Ares Capital Corporation      | Gladstone Investment Corp.   | MCG Capital Corp.         | Saratoga Investment Corp.  
| | Blackrock Kelso Capital Corp. | Golub Capital BDC Inc.       | Medallion Financial Corp. | Solar Capital Ltd.         
| | Capital Southwest Corp.       | GSV Capital Corp.            | Medley Capital Corp.      | Solar Senior Capital Ltd.  
| | Equus Total Return            | Harris & Harris Group Inc.   | MVC Capital               | THL Credit Inc.            
| | Fidus Investment Group        | Hercules Tech Growth Capital | NGP Capital Resources Co. | TICC Capital               
| | Fifth Street Finance Corp.    | Horizon Technology Finance   | Oxford Lane Capital Corp. | Triangle Capital Corp.     

As a result of the Companys withdrawal
of its election to be regulated as a BDC and the anticipated liquidation of the
securities portfolio, the performance comparable group has also been revised
from that shown above to reflect a more appropriate set of benchmarks. As the
Company intends to be treated as a REIT in the future, and is changing its focus
to the acquisition of real property energy infrastructure assets that are leased
backed to operating companies such as utilities or other energy operators, it
was determined that the FTSE NAREIT Equity REIT Index (FTSE NAREIT), the Dow
Jones Utilities Average Index (DJ UTIL), and the S&P 500 (SPX) are a
more relevant set of indices. The graph assumes that, on February 2, 2007, a
$100 investment was made in each of our common stock, FTSE NAREIT and the SPX,
and assumes the reinvestment of all cash dividends. The comparisons in the graph
below are based on historical data and are not intended to forecast future
performance of our common stock.

21

---





|(1) | Our shares
      began trading on the NYSE on February 2,
2007.
|--- | ---------------------------------------------------------------

ITEM 6. SELECTED FINANCIAL
DATAThe selected financial data set forth
below should be read in conjunction with Managements Discussion and Analysis
of Financial Condition and Results of Operations, and the financial statements
and related notes included in this Annual Report on Form 10-K. The Companys
consolidated financial statements include the accounts of the Company and its
wholly-owned subsidiary, Mowood, LLC (Mowood). See Note 2B in the Notes to
Consolidated Financial Statements for further disclosure. Financial information
presented below for the years ended November 30, 2011, November 30, 2010,
November 30, 2009, November 30, 2008 and November 30, 2007 has been derived from
our financial statements audited by Ernst & Young LLP, our independent
registered public accounting firm. The historical data is not necessarily
indicative of results to be expected for any future period.

Results of operations for the year
ended November 30, 2011 and the financial position at November 30, 2011 reflect
the consolidation of the Companys wholly-owned subsidiary, Mowood, LLC,
effective September 21, 2011.

|                                                         |  | Year
      Ended   |            | Year
      Ended   |  | Year
      Ended   |            | Year
      Ended   |  | Year
      Ended  
|-------------------------------------------------------- |  | ------------------ | ---------- | ------------------ |  | ------------------ | ---------- | ------------------ |  | ------------------
|                                                         |  | November
      30, |            | November
      30, |  | November
      30, |            | November
      30, |  | November
      30,
|                                                         |  | 2011               |            | 2010               |  | 2009               |            | 2008               |  | 2007              
|Income
      statement data:                             |  |                    |            |                    |  |                    |            |                    |  |                   
|Sales revenue                                            |  | $                  | 2,161,723  |                    |  | $                  |           |                    |  | $                 
|Lease
      income                                       |  |                    | 1,063,740  |                    |  |                    |           |                    |  |                   
|Total revenue                                            |  |                    | 3,225,463  |                    |  |                    |           |                    |  |                   
|Cost of
      sales                                      |  |                    | 1,689,374  |                    |  |                    |           |                    |  |                   
|Management fees, net of expense
      reimbursements(1)  |  |                    | 968,163    |                    |  |                    | 925,820    |                    |  |                   
|All other
      expenses(2)                              |  |                    | 2,038,347  |                    |  |                    | 972,556    |                    |  |                   
|Total
expenses                                           |  |                    | 4,695,884  |                    |  |                    | 1,898,376  |                    |  |                   
|Income (loss)
      from operations, before income taxes |  |                    | (1,470,421 | )                  |  |                    | (1,898,376 | )                  |  |                   
|Deferred tax benefit (expense),
      net                |  |                    | 557,017    |                    |  |                    | 708,217    |                    |  |                   
|Income (loss)
      from operations                      |  |                    | (913,404   | )                  |  |                    | (1,190,159 | )                  |  |                   
|Realized and unrealized gain
      (loss) on securities  |  |                    |            |                    |  |                    |            |                    |  |                   
|transactions, before
      income taxes                  |  |                    | 4,583,748  |                    |  |                    | 19,446,071 |                    |  |                   
|Distributions and
      income from investments, net     |  |                    | 651,673    |                    |  |                    | 1,853,247  |                    |  |                   
|Other income                                             |  |                    | 40,000     |                    |  |                    | 38,580     |                    |  |                   
|Total other income (loss), before income taxes           |  |                    | 5,275,421  |                    |  |                    | 21,337,898 |                    |  |                   
|Current and deferred tax benefit
      (expense), net    |  |                    | (1,439,874 | )                  |  |                    | (5,480,865 | )                  |  |                   
|Total other
      income                                 |  |                    | 3,835,547  |                    |  |                    | 15,857,033 |                    |  |                   
|Net income
    (loss)                                    |  | $                  | 2,922,143  |                    |  | $                  | 14,666,874 |                    |  | $                 
|Per common
      share data:                             |  |                    |            |                    |  |                    |            |                    |  |                   
|Distributions to common
      stockholders(4)            |  | $                  | 0.41       |                    |  | $                  | 0.43       |                    |  | $                 
|Earnings per common share:                               |  |                    |            |                    |  |                    |            |                    |  |                   
|Basic and
    diluted                                    |  | $                  | 0.32       |                    |  | $                  | 1.61       |                    |  | $                 

22

---



|                                                 |  | November 30, |            | November 30, |   | November 30, |  | November 30, |            | November 30,
|------------------------------------------------ |  | ------------ | ---------- | ------------ | - | ------------ |  | ------------ | ---------- | ------------
|                                                 |  | 2011         |            | 2010         |   | 2009         |  | 2008         |            | 2007        
|Balance sheet data:                              |  |              |            |              |   |              |  |              |            |             
|Securities investments                           |  | $            | 68,894,372 |              | $ | 93,736,230   |  | $            | 82,483,094 |             
|Leased property,
      net                       |  |              | 13,832,540 |              |   |             |  |              |           |             
|Property and equipment,
      net                |  |              | 3,842,675  |              |   |             |  |              |           |             
|Other
      assets                               |  |              | 7,717,809  |              |   | 2,305,163    |  |              | 6,994,959  |             
|Total assets                                     |  | $            | 94,287,396 |              | $ | 96,041,393   |  | $            | 89,478,053 |             
|                                                
|Long-term
      debt                             |  |              | 2,279,883  |              |   |             |  |              |           |             
|Other liabilities                                |  |              | 1,581,200  |              |   | 562,220      |  |              | 5,181,468  |             
|Total
      liabilities                          |  |              | 3,861,083  |              |   | 562,220      |  |              | 5,181,468  |             
|Total stockholders
    equity                   |  | $            | 90,426,313 |              | $ | 95,479,173   |  | $            | 84,296,585 |             
|Total
      liabilities and stockholders equity |  | $            | 94,287,396 |              | $ | 96,041,393   |  | $            | 89,478,053 |             
|                                                 |  |              |            |              |   |              |  |              |            |             

|(1) | Management fee
      analysis for the years ending:
|--- | ---------------------------------------------------

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | **Nov 30, 2011** |           | **Nov 30, 2010** |  | **Nov 30, 2009** |           | **Nov 30, 2008** |  | **Nov 30, 2007**
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------- | --------- | ---------------- |  | ---------------- | --------- | ---------------- |  | ----------------
| | Gross Management
      Fees                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  | $                | 1,452,245 |                  |  | $                | 1,233,823 |                  |  | $               
| | Capital Gain Incentive Fees
      Payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |                  |          |                  |  |                  |          |                  |  |                 
| | Expense
      Reimbursements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                  | (484,092  | )                |  |                  | (308,003  | )                |  |                 
| | Net Management Fees                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | $                | 968,163   |                  |  | $                | 925,820   |                  |  | $               
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | *The payable for capital gain
      incentive fees is a result of the increase or decrease in the fair value
      of investments and realized gains or losses from investments. Pursuant to
      the Investment Advisory Agreement, the capital gain incentive fee is paid
      annually only if there are realization events and only if the calculation
      defined in the agreement results in an amount due. No capital gain
      incentive fees have been due or payable since the commencement of
      operations.*

|(2) | Other expense
      analysis for the years ending:
|--- | --------------------------------------------------

| |                                             | **Nov 30, 2011** |           | **Nov 30, 2010** |   | **Nov 30,
    2009** |  | **Nov 30, 2008** |           | **Nov 30, 2007**
| | ------------------------------------------- | ---------------- | --------- | ---------------- | - | -------------------- |  | ---------------- | --------- | ----------------
| | Operating
      Expenses                    | $                | 1,363,654 |                  | $ | 926,937              |  | $                | 911,779   |                 
| | Asset Acquisition
    Expenses              |                  | 638,185   |                  |   |                     |  |                  |          |                 
| | Interest
      Expense                      |                  | 36,508    |                  |   | 45,619               |  |                  | 627,707   |                 
| | Loss on Redemption of Preferred
      Stock |                  |          |                  |   |                     |  |                  |          |                 
| | Preferred Stock
      Distributions         |                  |          |                  |   |                     |  |                  |          |                 
| | Total Other
      Expenses                  | $                | 2,038,347 |                  | $ | 972,556              |  | $                | 1,539,486 |                 
| |                                             |                  |           |                  |   |                      |  |                  |           |                 

|    | The Series A
      Redeemable Preferred Stock issuance in December 2006 was utilized as
      bridge financing to fund portfolio investments and was fully redeemed upon
      completion of our initial public offering in February 2007. Other expenses
      do not include current and deferred income taxes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | For the year
      ended November 30, 2007, the Company had unrealized appreciation of
      $10,561,888 (before deferred taxes) and realized gains of $260,290 (before
      deferred taxes). The unrealized appreciation was primarily attributable to
      increases in fair value of the Companys private portfolio companies and
      the realized gains were attributable to a sale of a small percent of the
      Companys interest in High Sierra Energy GP, LLC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | For the year
      ended November 30, 2008, the Company had unrealized depreciation of
      $41,581,120 (before deferred taxes) and realized gains of $8,716,197
      (before deferred taxes). The unrealized depreciation was triggered by
      write-downs of the Companys public and private portfolio holdings;
      generally resulting from the broad, global economic recession, major
      institution failures and bailouts and the accompanying collapse of most
      major asset class valuations in the latter part of the year. The realized
      gains were attributable to the LONESTAR and Millennium realization events
      and VantaCore debt redemption.                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | For the year
      ended November 30, 2009, the Company had unrealized appreciation of
      $24,247,380 (before deferred taxes) and realized losses of $23,120,748
      (before deferred taxes). The unrealized appreciation was driven by
      increased fair values of portfolio holdings resulting from a significant
      rebound in the MLP sector from the downturn in late 2008. During the
      credit crisis of 2008 and 2009, access to credit through the bank market
      became more restrictive and expensive. During that time, the Company was
      not able to renew its credit facility and liquidated a portion of its
      portfolio holdings in order to pay off the credit facility, resulting in
      the recognition of realized losses.                                                                                                                                                                                                                                                                                                                                                                                
|    | For the year
      ended November 30, 2010, the Company had unrealized appreciation of
      $30,564,590 (before deferred taxes) and realized losses of $11,118,519
      (before deferred taxes). The unrealized appreciation was driven by
      primarily by an increase in the fair value of its private holdings, most
      notably Internal Resource Partners which increased approximately $18
      million during the year. Quest Midstream Partners completed its
      transformation into a publicly traded C-corp, PostRock Energy Corp.
      (NASDAQ: PSTR) in March 2010. PSTR was a new corporation formed for the
      purpose of wholly owning all three Quest entities. Upon closing of the
      merger, the Company received nearly half a million freely tradable common
      units of PSTR in exchange for its common units of Quest Midstream.
      Subsequently, the stock price declined significantly and the Company sold
      its units in an orderly liquidation, resulting in the recognition of
      realized losses.                                                                                             
|(4) | The character
      of distributions made during the year may differ from the ultimate
      characterization for federal income tax purposes. For the year ended
      November 30, 2011, the Companys distributions for tax purposes were
      comprised of 100 percent investment income and the source of the
      distributions for book purposes was 100 percent return of capital. For the
      year ended November 30, 2010, the Companys distributions, for book and
      tax purposes, were comprised of 100 percent return of capital. For the
      year ended November 30, 2009, the Companys distributions, for book and
      tax purposes, were comprised of 100 percent return of
    capital. For the year
      ended November 30, 2008, the Companys distributions, for book purposes,
      were comprised of 100 percent return of capital, and for tax purposes were
      comprised of 3.2 percent investment income and 96.8 percent return of
      capital. For the year ended November 30, 2007, the Companys
      distributions, for book and tax purposes, were comprised of 100 percent
      return of capital.

23

---



ITEM 7. MANAGEMENTS DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONSAll statements contained
herein, other than historical facts, constitute forward-looking statements.
These statements may relate to, among other things, future events or our future
performance or financial condition. In some cases, you can identify
forward-looking statements by terminology such as may, might, believe,
will, provided, anticipate, future, could, growth, plan, intend,
expect, should, would, if, seek, possible, potential, likely or
the negative of such terms or comparable. These forward-looking statements
involve known and unknown risks, uncertainties and other factors that may cause
our actual results, levels of activity, performance or achievements to be
materially different from any anticipated results, levels of activity,
performance or achievements expressed or implied by such forward-looking
statements. For a discussion of factors that could cause our actual results to
differ from forward-looking statements contained herein, please see the
discussion under the heading Risk Factors in Part I, Item 1A. of this
report.

We may experience fluctuations in
our operating results due to a number of factors, including the return on our
equity investments, the interest rates payable on our debt investments, the
default rates on such investments, 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 period should not be
relied upon as being indicative of performance in future
periods.

Performance Review

Our stock price increased approximately
7.1 percent this year, closing at $7.80 on November 30, 2011 compared to $7.28
on November 30, 2010. This contributed to a total investment return based on
market value and assuming reinvestment of distributions of approximately 12.6
percent for the year ended November 30, 2011. The fair value of our investment
securities, excluding cash equivalents, was approximately $68.9 million at
November 30, 2011, with approximately $41.9 million in private securities and
approximately $27.0 million in publicly-traded securities.

Results of
Operations

Comparison of the Years
Ended November 30, 2011, November 30, 2010 and November 30,
2009

Revenue:Revenue for
the year  ended November 30, 2011 was $3,225,463. This represents sales revenue from our  wholly owned subsidiary, Mowood,
for the period from September 21, 2011 through  November 30, 2011 as well as lease income from our Public Service Company of
New  Mexico investment during the year. Our Public Service Company of New Mexico  investment was made in June 2011 and the
results of  Mowoods operations were consolidated for the period from September 21, 2011  through November 30, 2011 and,
thus, there are no comparable revenues for the  years ended November 30, 2010 and November 30, 2009. Amounts related to our
investment securities previously reported as revenue in prior periods are now reflected below Income (Loss) from Operations.
Investment income as presented in our 2010 10-K is now reflected in the line items Distributions and income from
investments, net and other income. As we do not plan to make additional investments in securities (other
than short term, highly liquid investments to be held pending acquisition of real property assets) and intend to liquidate
our securities portfolio in an orderly manner, investments are no longer considered part of our operations, consistent with
our intentions to invest in real property assets which can be leased.

Other
Income:Other income represents our
earnings on our portfolio of trading securities and other equity securities that
are reported at fair value under the fair value option. Other income for the
year ended November 30, 2011 totaled $3,835,547. This represents a decrease of
$12,021,486 as compared to total other income of $15,857,033 for the year ended
November 30, 2010. The decrease is due to lower realized and unrealized gains on
our securities portfolio and lower securities distributions and dividends
received. Other income for the year ended November 30, 2010 reflected an
increase of $13,493,250 as compared to total other income of $2,363,783 for the
year ended November 30, 2009. The increase was primarily due to higher realized
and unrealized gains on our securities portfolio.

The following table shows the gross
income received from our investment securities on a cash basis, less the amounts
that were comprised of return of capital:

|                                                      |  | Year Ended   |            | Year Ended   |  | Year        
|----------------------------------------------------- |  | ------------ | ---------- | ------------ |  | ------------
|                                                      |  | November 30, |            | November 30, |  | November 30,
|                                                      |  | 2011         |            | 2010         |  | 2009        
|Income received
      from investment securities      |  | $            | 3,568,128  |              |  | $           
|Less return of capital on
      distributions         |  |              | (2,916,455 | )            |  |             
|Income received from investment
      securities, net |  | $            | 651,673    |              |  | $           
|                                                      |  |              |            |              |  |             

24

---



|Expenses:              
|-----------------------
|Year Ended             
|November 30,
      2011
|November 30, 2010      
|Variance               
|                       

The increase in expenses from 2010 to
2011 was primarily related to cost of sales and other operating expenses of
ourconsolidated wholly
owned subsidiary, Mowood, reflected for the period from September 21, 2011
through November 30, 2011 and costs pertaining to our asset acquisition in June
2011 and related depreciation expense that was recognized during the year ended
November 30, 2011. The decrease in expenses from the year ended November 30, 2009 to the year ended November 30, 2010 is primarily attributed to lower base management fees due to a decrease in the fair value of our securities portfolio, an increase in the expense reimbursement by the Adviser, and significantly lower leverage costs.

Net Income:Net income for the year ended November 30, 2011 was
$2,922,143, compared to $14,666,874 and $10,994 for the years ended November 30,
2010 and 2009, respectively. The variance in net income is related to the
changes in revenue and expenses as described above.

Distributions:The following table sets forth distributions for the three
years ended November 30, 2011, November 30, 2010 and November 30, 2009.

Period
    
    Amount
    
    Period
    
    Amount
    
    Period
    
    Amount2011
    
    
    
    
    2010
    
    
    
    
    2009Fourth Quarter
    
    $
    0.1100
    
    Fourth Quarter
    
    $
    0.1000
    
    Fourth Quarter
    
    $
    0.1300Third
      Quarter
    
    $
    0.1000
    
    Third
      Quarter
    
    $
    0.1000
    
    Third
      Quarter
    
    $
    0.1300Second Quarter
    
    $
    0.1000
    
    Second Quarter
    
    $
    0.1000
    
    Second Quarter
    
    $
    0.1300First
      Quarter
    
    $
    0.1000
    
    First
      Quarter
    
    $
    0.1300
    
    First
      Quarter
    
    $
    0.2300


Private Company
Update

High Sierra Energy, LP and
High Sierra Energy, GP (High Sierra)High Sierras fair value increased approximately $4.2 million since
November 30, 2010. In March 2011, High Sierra closed on a new $215 million,
3-year committed senior secured credit facility led by BNP Paribas. The new
facility financed the buyout of High Sierras minority partners at Anticline
Disposal, resulting in High Sierra owning 100 percent of the membership
interests of that business. In June 2011, High Sierra completed the sale of its
70 percent owned subsidiary, Monroe Gas Storage Company, LLC (Monroe), which
operates a natural gas storage facility in northeastern Mississippi, to Cardinal
Gas Storage Partners LLC. High Sierra also acquired the assets of Marcum
Midstream 1995-2 Business Trust and Marcum Midstream 1995-EC Holdings, LLC
(collectively Marcum). The company continues to divest of its non-core assets
and during the fourth quarter completed the sale of Asgard Energy. High Sierra
did not make cash distributions to its LP and GP unit holders during our first
two fiscal quarters of the year. In the third quarter, High Sierra returned to
paying cash distributions at $0.15 per unit and increased the per unit payout to
$0.30 in our fourth quarter. In the coming year we expect High Sierra to
maintain its current level of cash distributions with modest room for
growth.

Lightfoot Capital Partners
LP and Lightfoot Capital Partners GP LLC (Lightfoot)In June 2011, we purchased an 8.2 percent ownership interest
in Magnetar MLP Investment, LP (Magnetar MLP) for net consideration of $9.9
million. The Magnetar MLP investment represented an indirect investment into
Lightfoot Capital Partners, LP (Lightfoot), which owned 83.5 percent of the
outstanding limited partner units of Arc Terminals LP (Arc) and 100 percent of
Arc Terminals GP, which also included a 2.0 percent limited partnership
interest. At the time of investment, Lightfoot also held approximately $60
million in cash available for new investments. Arc provides storage and delivery
services for petroleum, petrochemical and chemical products to customers under
long-term storage and throughput contracts. In October 2011, Magnetar MLP sold a
substantial portion of its interest in Lightfoot Capital Partners LP and
Lightfoot Capital Partners GP to provide liquidity to certain original investors in the
fund. As part of this transaction we elected to receive direct ownership
interests in Lightfoot Capital Partners, LP (6.72%) and Lightfoot Capital
Partners GP LLC (1.52%). Immediately following this transaction LCP invested
its remaining cash in a minority interest in a Liquefied Natural Gas facility
located in Mississippi. The decrease in value since August 31, 2011
(approximately $500,000) was due in large part to the anticipated expenses of
potential acquisitions and capital market events in the coming year. The
addition of the LNG facility and LCPs existing refined product storage assets
should provide for growing distributions in the future.

25

---



VantaCore Partners LP  (VantaCore)VantaCores
fair value  decreased approximately $7.2 million since November 30, 2010. VantaCore was  unable to meet its minimum
quarterly cash distribution (MQD) throughout this  past year. Common and preferred unitholders elected to receive
a small percentage of the MQD in cash with the remainder paid in newly issued preferred  units. VantaCore reported
year-to-date EBITDA below budget, with the Southern  Aggregates property in Louisiana continuing to fall short. In August
2011,  VantaCore completed its acquisition of Cherry Grove Quarry in Todd County,  Kentucky and a milling machine. We
invested an additional $1.2 million in  VantaCore in August 2011 in exchange for newly issued Preferred B units to  provide a
portion of the funding needed for the acquisition. Although VantaCore  has done a better job of meeting expectations, we
continue to lower our EBITDA  expectations for 2012 due to the economic outlook in our territories which  contributed to the
reduction in fair value for VantaCore, particularly in the  fourth quarter. We do believe that the fair value of VantaCore
will ultimately increase as the construction and housing markets improve, although the timing and extent of such improvement
in unknown. Until that time,  VantaCore continues to look for small acquisitions and operationalimprovements
at its existing facilities.

Mowood, LLC (Mowood)   Wholly Owned
SubsidiaryAs a result of  our withdrawal to be regulated as a BDC, we
no longer prepare our financials as  an investment company but rather as a general corporate entity and therefore began
consolidating the operations of Mowood in the fourth quarter 2011. Lincoln Partners Advisors, LLC (an independent valuation
firm) prepared a positive assurance valuation of our Mowood equity investment as of November 30, 2011 even though the
valuation is unaudited and not used as the carrying value in the consolidated financial statements. The resulting
valuation increased slightly from that which was reported last quarter. In 2012 we expect Mowood to meet and  slightly exceed
2011 EBITDA.

Below is a summary of the fair values
of the other equity securities that we held at November 30, 2011 as they compare
to the fair values at November 30, 2010.

|                  |  | Fair Value at           |            | Fair Value at          
|----------------- |  | ----------------------- | ---------- | -----------------------
|Portfolio Company |  | November 30,
      2011 |            | November 30,
      2010
|High
      Sierra |  | $                       | 25,512,814 |                        
|Lightfoot         |  |                         | 9,536,390  |                        
|VantaCore         |  |                         | 6,750,526  |                        
|Lonestar          |  |                         | 57,000     |                        

Basis of
Presentation

The consolidated
financial statements include Tortoise Capital Resources Corporation and its
wholly-owned portfolio company, Mowood, LLC (Mowood). All significant
intercompany accounts and transactions are eliminated upon
consolidation.

Critical Accounting PoliciesThe financial statements
included in this report are based on the selection and application of critical
accounting policies, which require management to make significant estimates and
assumptions. Critical accounting policies are those that are both important to
the presentation of our financial condition and results of operations and
require managements most difficult, complex or subjective judgments. The
preparation of the consolidated financial statements in conformity with U.S.
generally accepted accounting principles (GAAP) requires management to make
estimates and assumptions that affect the reported amount of assets and
liabilities, recognition of distribution income and disclosure of contingent
assets and liabilities at the date of the consolidated financial statements.
Actual results could differ from those estimates. Note 2 to the Consolidated
Financial Statements, included in this report, further details information
related to our significant accounting policies.

Investment
SecuritiesOur investments in securities are
classified as either trading or other equity securities:

- Trading securities  our publicly traded equity securities
  are classified as trading securities and are reported at fair value because we
  intend to sell these securities in order to acquire real asset
  investments.
- Other equity securities represent interests in private
  companies for which we have elected to report these at fair value under 
  the fair value option.

Securities transactions are accounted for on the
date the securities are purchased or sold (trade date). Realized gains and
losses are reported on an identified cost basis.

Our investment securities are primarily in
illiquid securities of privately-held companies that are generally subject to
restrictions on resale, have no established trading market and are fair valued
on a quarterly basis. Because of the inherent uncertainty of valuation, the fair
values of such securities, which are determined in accordance with procedures
approved by our Board of Directors, may differ materially from the values that
would have been used had a ready market existed for the investments.

26

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Long-Lived Assets and
IntangiblesProperty and equipment are
stated at cost less accumulated depreciation. Depreciation is computed using the
straight-line method over the estimated useful lives of the assets ranging from
five to twenty years. Expenditures for repairs and maintenance are charged to
operations as incurred, and improvements, which extend the useful lives of
assets, are capitalized and depreciated over the remaining estimated useful life
of the asset.

We initially record long-lived assets
at their acquisition cost, unless the transaction is accounted for as a business
combination. If the transaction is accounted for as a business combination, we
allocate the purchase price to the acquired tangible and intangible assets and
liabilities based on their estimated fair values. We determine the fair values
of assets and liabilities based on discounted cash flow models using current
market assumptions, appraisals, recent transactions involving similar assets or
liabilities and/or other objective evidence, and depreciates the asset values
over the estimated remaining useful lives.

In connection with these transactions,
we may acquire long-lived assets that are subject to an existing lease contract
with the seller or other lessee party and we may assume outstanding debt of the
seller as part of the consideration paid. If, at the time of acquisition, the existing lease or debt contract is not at current market
terms, we will record an asset or liability at the time of acquisition
representing the amount by which the fair value of the lease or debt contract
differs from its contractual value. Such amount is then amortized over the
remaining contract term as an adjustment to the related lease revenue or
interest expense.

Revenue
RecognitionSpecific policies for our
revenue and other income items are as follows:

- *Sales Revenue* Omega, acting as a principal, provides for transportation services and natural gas supply for its customers on a
firm basis. In addition, Omega is paid fees for the operation and maintenance of its pipeline, including
expansion of the pipeline. Omega is responsible for the coordination, supervision and quality of the expansions
while actual construction is generally performed by third party contractors. Revenues related to natural gas
distribution are recognized upon delivery of natural gas and upon the substantial performance of management
and supervision services related to the expansion of the natural gas distribution system.
- *Dividends and distributions from investments* Dividends and distributions from
  investments are recorded on their ex-dates and are reflected as other income
  within the accompanying Consolidated Statements of Income. Distributions
  received from our investments generally are comprised of ordinary income,
  capital gains and return of capital. We record investment income, capital
  gains and return of capital based on estimates made at the time such
  distributions are received. Such estimates are based on information available
  from each company and/or other industry sources. These estimates may
  subsequently be revised based on information received from the entities after
  their tax reporting periods are concluded, as the actual character of these
  distributions is not known until after our fiscal year end.
- *Realized and unrealized gains (losses) on trading securities and other
  equity securities*
  Changes in the fair values of the Companys securities during the period
  reported and the gains or losses realized upon sale of securities during the
  period are reflected as other income within the accompanying Consolidated
  Statements of Income.
- *Lease Income* Income related to our leased property is recognized on a
  straight-line basis over the term of the lease when collectability is
  reasonably assumed. Rental payments on the leased property are typically
  received on a semi-annual basis and are included as lease income within the
  accompanying Consolidated Statements of Income.

Cost of
SalesIncluded in our cost of sales
are the amounts paid for gas and propane that are delivered to customers as well
as the cost of material and labor related to the expansion of the natural gas
distribution system.

Federal and State Income
TaxationCurrently, as a corporation,
we are obligated to pay federal and state income tax on our taxable income. Our
tax expense or benefit is included in the Consolidated Statements of Operations.
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Based on current
information, we believe we have sufficient net operating losses or other tax
attributes to offset any potential significant tax expense in 2011.

If we elect REIT status in the future,
we will be taxed as a REIT rather than a C corporation and generally will not
pay federal income tax on taxable income that is distributed to our
stockholders. Before withdrawal of the BDC election, our distributions from
earnings and profits were treated as qualified dividend income (QDI) and
return of capital. Following the withdrawal, and assuming we subsequently elect
REIT status, our distributions from earnings and profits will be treated as
ordinary income and generally will not qualify as QDI. If we do not elect or do
not qualify as a REIT, with respect to years prior to 2013, our distributions
would continue to be treated as QDI and return of capital. Thereafter, under
existing law, our distributions would be treated as ordinary income and return
of capital.

27

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Liquidity and Capital
ResourcesWe entered into a
180-day rolling evergreen margin loan facility with Bank of America, N.A. on
November 30, 2011. The terms of the agreement provide for a $10,000,000 facility
that is secured by certain of our assets. Outstanding balances generally will
accrue interest at a variable rate equal to one-month LIBOR plus 0.75 percent
and unused portions of the facility will accrue a fee equal to an annual rate of
0.25 percent.

On October 29, 2011, Mowood entered
into a revolving note payable with a financial institution with a maximum
borrowing base of $1,250,000. Borrowings on the note are secured by all of
Mowoods assets. Interest accrues at LIBOR, plus a 400 percent margin (4.25
percent at November 30, 2011), is payable monthly, with all outstanding
principal and accrued interest payable on October 29, 2012. There are no
outstanding borrowings under this agreement at November 30, 2011. The agreement
contains various restrictive covenants, with the most significant relating to
minimum consolidated fixed charge ratio, the incidence of additional
indebtedness, member distributions, extension of guaranties, future investments
in other subsidiaries and change in ownership.

On January 25, 2012, we filed an
amendment to our shelf registration statement on Form S-3 with the Securities
and Exchange Commission. When effective, the universal shelf registration will
allow us to prudently raise additional capital. While we have had the ability to
utilize various forms of leverage  including a credit facility, senior notes
and other borrowings, as well as preferred stock  historically, we have only
been able to access leverage at attractive costs through a credit facility.
During the credit crisis of late 2008 and 2009, access to credit through the
bank market became more restrictive and expensive. During that time, we were not able to renew our credit facility and we
liquidated a portion of our portfolio holdings in order to repay the credit
facility in full. We believe lenders are more reluctant to lend against equity
investments in private companies than to entities that invest in real assets.
Consistent with our initial investment strategy, we intend to utilize leverage
to enhance the total returns of our portfolio.

We expect to have greater flexibility
in issuing securities with common equity participation features (such as
warrants and convertible notes) and/or additional classes of stock (such as
convertible preferred) in order to facilitate capital formation now that we are
no longer subject to the restrictions of the 1940 Act. We also hold publicly
listed MLPs which can be liquidated in order to fund future acquisitions. We
expect to hold our private investments until a natural liquidity event is
presented to each company.

Contractual
ObligationsThe following table
summarizes our significant contractual payment obligations as of November 30,
2011.

Payments due
      by period****
    
    More
      thanTotal
    
    Less than 1 year
    
    1-3 years
    
    3-5 years
    
    5 yearsLong-term
      Debt(1)
    
    $
    2,188,000
    
    $
    2,188,000
    
    $
    
    
    $
    
    
    $
    Operating Lease
    Obligations
    
    
    107,550
    
    
    79,908
    
    
    27,642
    
    
    
    
    
    $
    2,295,550
    
    $
    2,267,908
    
    $
    27,642
    
    $
    
    
    $
    


|(1) | At November
      30, 2011, the principal balance outstanding on the debt assumed in the
      Eastern Interconnect Project was $2,188,000. Principal payments will be
      made on a semi-annual basis through the maturity date of October 1,
      2012.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Eastern Interconnect Project
Investment (EIP)The Companys
investment in EIP is leased under net operating leases with various terms. As of
November 30, 2011, approximately 100 percent of the Companys leased property,
based on the gross book value of real estate investments, was leased to Public
Service Company of New Mexico (PNM). PNM is referred to as the Major Tenant.
Approximately 33 percent of the Companys total revenue for the year ended
November 30, 2011 was derived from the Major Tenant.

In view of the fact that the Major
Tenant leases a substantial portion of the Companys net leased property which
is a significant source of revenues and operating income, its financial
condition and ability and willingness to satisfy its obligations under its lease
with the Company, have a considerable impact on the results of operation and the
Companys ability to service its indebtedness.

The Major Tenant is currently subject
to the reporting requirements of the Securities Exchange Act of 1934, as
amended, and is required to file with the SEC annual reports containing audited
financial statements and quarterly reports containing unaudited financial
statements. The audited financial statements and unaudited financial statements
of the Major Tenant can be found on the SECs website at www.sec.gov. The
Company makes no representation as to the accuracy or completeness of the
audited and unaudited financial statements of the Major Tenant but has no reason
not to believe the accuracy or completeness of such information. In addition,
the Major Tenant has no duty, contractual or otherwise, to advise the Company of
any events that might have occurred subsequent to the date of such financial
statements which could affect the significance or accuracy of such information.
None of the information in the public reports of the Major Tenant that are filed
with the SEC is incorporated by reference into, or in any way form part of this
filing.

28

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Off-Balance Sheet
ArrangementsWe do not have any
off-balance sheet arrangements that have or are reasonably likely to have a
current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures, or capital resources.

StrategyIn 2007, 2009
and 2010 the IRS issued three separate private letter rulings that defined
certain energy infrastructure assets as real estate assets for tax purposes. The
potential qualifying real estate assets in the energy infrastructure sector are
electric transmission and distribution systems, pipeline systems and storage
systems and systems used to transfer substances between modes of transportation,
also known as terminaling systems. We refer to such REIT-qualifying assets
herein as real property assets. While private letter rulings provide insight
into the current thinking of the IRS on tax issues, such rulings may only be
relied upon by the taxpayer to whom they were issued.

We do not plan to make additional
investments in securities (other than short-term, highly liquid investments to
be held pending acquisition of real property assets) and intend to liquidate our
securities portfolio in an orderly manner. If we find sufficient suitable
REIT-qualifying investments during 2012 and satisfy the REIT requirements
throughout 2012, we expect to make an election to be treated as a REIT for tax
purposes for 2012 by filing a Form 1120-REIT on or before March 15, 2013,or such
later date to which we have properly extended filing such income tax return. The
REIT requirements that we must meet are discussed in
detail below, but the principal challenge for us will be meeting the requirement
that a substantial percentage of our assets be REIT-qualifying investments that
produce REIT qualifying income. Our effort to meet that requirement will be
accelerated if: (i) we are able to readily identify appropriate opportunities to
liquidate our securities portfolio, or (ii) we are able to raise capital to fund
new acquisitions. In either event, we will need to have identified and be able
to consummate an adequate number of REIT-qualifying investments meeting our
investment criteria. Subject to certain limitations, we may be able to
accelerate satisfying the REIT requirements by holding non-REIT qualifying
investments, including certain private equity investments, through taxable REIT
subsidiaries. We do not currently have any agreements or binding letters of
intent for such investments. These opportunities are in a preliminary stage of
review, and consummation of any of these opportunities depends on a number of
factors beyond our control. There can be no assurance that any of these
acquisition opportunities will result in consummated transactions. Regardless of
our tax status, an investment in us will not result in Unrelated Business
Taxable Income (UBTI).

Performance
Measurement

In the past, we have provided investors
with a measure of cash flow from operations, labeled distributable cash flow.
Prospectively we intend to provide standard performance measures utilized by
REITs including Funds from Operations (FFO) and Adjusted Funds from Operations
(AFFO).

As defined by the National Association
of Real Estate Investment Trusts (NAREIT), FFO represents net income, plus
depreciation and amortization, and after adjustments for unconsolidated
partnerships and joint ventures. It was intended to be a standard supplemental
measure of REIT operating performance that excluded historical cost depreciation
from  or added it back to  GAAP net income. Since introduction of the
definition, the term has come to be widely used by REITs.

AFFO is another non-GAAP metric which
makes adjustments for certain non-operating and non-cash items included in the
calculation of FFO such as impairment charges, acquisition fees and mark to
market adjustments. We believe that AFFO allows securities analysts, investors
and other interested parties to evaluate current period results to results prior
to acquisitions.

Our objective is to maximize long-term
value for shareholders. To achieve this goal, we target annualized total returns
of 8 to 10 percent from our current operations and assets that we acquire over
the long term. There is no assurance that our targets will be met in any
particular period.

ITEM 7A. QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISKOur business activities contain elements of market risk. We consider
fluctuations in the value of our securities portfolio to be our principal market
risk. There were no material changes to our market risk exposure at November 30,
2011 as compared to November 30, 2010.

Our equity and debt securities are
reported at fair value in the current period, as determined by our Board of
Directors. The fair value of securities is determined using readily available
market quotations from the principal market if available. The fair value of
securities that are not publicly traded or whose market price is not readily
available is determined in good faith by our Board of Directors. Because there
are no readily available market quotations for many of the securities in our
portfolio, we value a large portion of our securities at fair value as
determined in good faith by our Board of Directors under a valuation policy and
a consistently applied valuation process. Due to the inherent uncertainty of
determining the fair value of securities that do not have readily available
market quotations, the fair value of our securities may differ significantly
from the fair values that would have been used had a ready market quotation
existed for such securities, and these differences could be material.

29

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As of November 30, 2011, the fair value
of our securities portfolio (excluding short-term investments) totaled
$68,894,372. We estimate that the impact of a 10 percent increase or decrease in
the fair value of these securities, net of related deferred taxes, would
increase or decrease net assets applicable to common stockholders by
approximately $4,297,631.

Debt securities in our portfolio may be
based on floating or fixed rates. As of November 30, 2011, we had no floating
ratedebt
outstanding.

We consider the management of risk
essential to conducting our businesses. Accordingly, our risk management systems
and procedures are designed to identify and analyze our risks, to set
appropriate policies and limits and to continually monitor these risks and
limits by means of reliable administrative and information systems and other
policies and programs.

ITEM 8. FINANCIAL STATEMENTS
AND SUPPLEMENTARY DATAOur financial
statements and financial statement schedules are set forth beginning on page F-1
in this Annual Report and are incorporated herein by reference.

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

ITEM 9A. CONTROLS AND
PROCEDURESOur management is responsible
for the preparation, consistency, integrity, and fair presentation of the
financial statements. The financial statements have been prepared in accordance
with U.S. generally accepted accounting principles applied on a consistent basis
and, in managements opinion, are fairly presented. The financial statements
include amounts that are based on managements informed judgments and best
estimates.

Our management is responsible for
establishing and maintaining adequate internal control over financial reporting
for the Company. Our management has established and maintains comprehensive
systems of internal control that provide reasonable assurance as to the
consistency, integrity, and reliability of the preparation and presentation of
financial statements and the safeguarding of assets. The concept of reasonable
assurance is based upon the recognition that the cost of the controls should not
exceed the benefit derived. Our management monitors the systems of internal
control and maintains an internal auditing program that assesses the
effectiveness of internal control. Our management assessed our disclosure
controls and procedures and our systems of internal control over financial
reporting for financial presentations in conformity with U.S. generally accepted
accounting principles. This assessment was based on criteria for effective
internal control established in Internal ControlIntegrated Framework issued by
the Committee of Sponsoring Organizations of the Treadway Commission (the COSO
Report).

Based on this assessment, our
management believes we maintained effective systems of internal control that
provided reasonable assurance as to adequate design and effective operation of
the Companys disclosure controls and that the Companys systems of internal
control over financial reporting for financial presentations in conformity with
U.S. generally accepted accounting principles as of November 30,
2011.

The Board of Directors exercises its
oversight role with respect to the systems of internal control primarily through
its Audit and Valuation Committee, which is comprised solely of independent
outside directors. The Committee oversees systems of internal control and
financial reporting to assess whether their quality, integrity, and objectivity
are sufficient to protect shareholders investments.

Ernst & Young has issued an audit
report on the Companys internal control over financial reporting. This report
begins on the next page.

30

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REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and
ShareholdersTortoise Capital Resources Corporation

We have audited Tortoise Capital
Resources Corporation internal control over financial reporting as of November
30, 2011, based on criteria established in Internal ControlIntegrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission
(the COSO criteria). Tortoise Capital Resources Corporations management is
responsible for maintaining effective internal control over financial reporting,
and for its assessment of the effectiveness of internal control over financial
reporting included in the accompanying Managements Annual Report on Internal
Control over Financial Reporting. Our responsibility is to express an opinion on
the companys internal control over financial reporting based on our
audit.

We conducted our audit 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 effective internal control over financial
reporting was maintained in all material respects. Our audit included obtaining
an understanding of internal control over financial reporting, assessing the
risk that a material weakness exists, testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk, and
performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our
opinion.

A companys internal control over
financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles. A companys internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of the companys
assets that could have a material effect on the financial statements.

Because of its inherent limitations,
internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.

In our opinion, Tortoise Capital
Resources Corporation maintained, in all material respects, effective internal
control over financial reporting as of November 30, 2011, based on the COSO
criteria.

We also have audited, in accordance
with the standards of the Public Company Accounting Oversight Board (United
States), the consolidated balance sheets of Tortoise Capital Resources
Corporation (the Company) as of November 30, 2011 and 2010, and the related
consolidated statements of income, equity, and cash flows for each of the three
years in the period ended November 30, 2011 and our report dated February 13,
2012, expressed an unqualified opinion thereon.

/s/Ernst &
      Young LLP


Kansas City, MissouriFebruary 13,
2012

31

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Oversight and
Monitoring

As part of our internal control
processes; we monitor, on an ongoing basis, compliance by tenants with their
lease obligations and other factors that could affect the financial performance
of any of our properties. Monitoring involves receiving assurances that each
tenant has paid real estate taxes, assessments and other expenses relating to
the properties it occupies and confirming that appropriate insurance coverage is
being maintained by the tenant. We review financial statements of tenants and
undertake regular physical inspections of the condition and maintenance of
properties. Additionally, we periodically analyze each tenants financial
condition, the industry in which each tenant operates and each tenants relative
strength in its industry. In addition, monitoring may be accomplished by
attendance at Board of Directors meetings, the review of periodic operating and
financial reports, an analysis of capital expenditure plans as they relate to
the owned assets, and periodic consultations with engineers, geologists and
other experts. The performance of each asset will be periodically compared to
performance of similarly sized companies with comparable assets and businesses
to assess performance relative to peers. Other monitoring activities are
expected to provide the necessary access to monitor compliance with existing
covenants, enhance ability to make qualified valuation decisions, and assist in
the evaluation of the nature of the risks involved in the various components of
the portfolio.

ITEM 9B. OTHER
INFORMATIONNone.

32

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PART III

ITEM 10. DIRECTORS, EXECUTIVE
OFFICERS AND CORPORATE GOVERNANCECodes of Ethics

We have adopted a code of ethics which
applies to our principal executive officer and principal financial officer. We
have also adopted a code of ethics that establishes procedures for personal
investments and restricts certain personal securities transactions. Personnel
subject to the code of ethics may invest in securities for their personal
investment accounts, including securities that may be purchased or held by us,
so long as such investments are made in accordance with the code of ethics. This
information may be obtained, without charge, upon request by calling us at (913)
981-1020 or toll-free at (866) 362-9331 and on our Web site at
www.tortoiseadvisors.com/tto.cfm.

You may also read and copy the codes of
ethics at the Securities and Exchange Commissions Public Reference Room in
Washington, D.C. You may obtain information on the operation of the Public
Reference Room by calling the Securities and Exchange Commission at (800)
SEC-0330. In addition, the codes of ethics are available on the EDGAR Database
on the Securities and Exchange Commissions Internet site at http://www.sec.gov.
You may 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 Securities and Exchange Commissions Public Reference Section,
Washington, D.C. 20549.

Sarbanes-Oxley Act of
2002

The Sarbanes-Oxley Act of 2002 (the
Sarbanes-Oxley Act) imposes a wide variety of regulatory requirements on
publicly-held companies and their insiders. The Sarbanes-Oxley Act requires us
to review our 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 future regulations that are adopted under the
Sarbanes-Oxley Act and will take actions necessary to ensure that we are in
compliance therewith.

As of November 30, 2011, we are an
accelerated filer. As an accelerated filer for the fiscal year ended November
30, 2011, we are required to prepare and include in our annual report to
stockholders for such period a report regarding managements assessment of our
internal control over financial reporting under the Securities Exchange Act of
1934 (the 1934 Act) and have included this report in Item 9A of this Annual
Report on Form 10-K.

Additional information incorporated by
reference to our proxy statement for our 2012 Annual Stockholder Meeting to be
filed with the Securities and Exchange Commission within 120 days after the end
of the fiscal year covered by this Annual Report.

ITEM 11. EXECUTIVE
COMPENSATIONIncorporated by reference to
our proxy statement for our 2012 Annual Stockholder Meeting to be filed with the
Securities and Exchange Commission within 120 days after the end of the fiscal
year covered by this Annual Report.

ITEM 12. SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERSIncorporated by reference to our
proxy statement for our 2012 Annual Stockholder Meeting to be filed with the
Securities and Exchange Commission within 120 days after the end of the fiscal
year covered by this Annual Report.

ITEM 13. CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEIncorporated by reference to our proxy statement for our 2012
Annual Stockholder Meeting to be filed with the Securities and Exchange
Commission within 120 days after the end of the fiscal year covered by this
Annual Report.

ITEM 14. PRINCIPAL ACCOUNTING
FEES AND SERVICESIncorporated by
reference to our proxy statement for our 2012 Annual Stockholder Meeting to be
filed with the Securities and Exchange Commission within 120 days after the end
of the fiscal year covered by this Annual Report.

33

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PART IV

ITEM 15. EXHIBITS AND FINANCIAL
STATEMENT SCHEDULESThe following
documents are filed as part of this Annual Report on Form 10-K:

| | 1. |  | The Financial Statements listed
      in the Index to Financial Statements on Page F-1.
| | -- |  | ---------------------------------------------------------------------------------------
| |    |  |                                                                                        
| | 2. |  | The Exhibits listed in the
      Exhibit Index below.                                  

|ExhibitNo. |  | Description of Document                                                                                                                                                                                        
|---------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1        |  | Articles of
      Incorporation(1)                                                                                                                                                                             
|           |  |                                                                                                                                                                                                                
|3.2        |  | Bylaws(2)                                                                                                                                                                                                      
|           |  |                                                                                                                                                                                                                
|4.1        |  | Form of Stock
      Certificate(3)                                                                                                                                                                             
|           |  |                                                                                                                                                                                                                
|4.2        |  | Form of Warrant dated December
      2006(3)                                                                                                                                                                   
|           |  |                                                                                                                                                                                                                
|*4.3*      |  | Registration Rights Agreements with
      Merrill Lynch & Co; Merrill Lynch, Pierce, Fenner & Smith
      Incorporated, and Stifel, Nicolaus & Company, Incorporated dated
      January 9, 2006(1)            
|           |  |                                                                                                                                                                                                                
|4.4        |  | Registration Rights Agreement dated
      April 2007(4)                                                                                                                                                        
|           |  |                                                                                                                                                                                                                
|10.1       |  | Dividend Reinvestment
      Plan(5)                                                                                                                                                                            
|           |  |                                                                                                                                                                                                                
|10.2       |  | Management Agreement dated December
      1, 2011(6)                                                                                                                                                           
|           |  |                                                                                                                                                                                                                
|10.3       |  | Advisory Agreement dated December 1,
      2011(6)                                                                                                                                                             
|           |  |                                                                                                                                                                                                                
|10.4       |  | Custody Agreement with U.S. Bank
      National Association dated September 13, 2005(1)                                                                                                                        
|           |  |                                                                                                                                                                                                                
|10.5       |  | First Amendment to the Custody
      Agreement with U.S. Bank National Association dated May 24, 2010  filed
      herewith                                                                                   
|           |  |                                                                                                                                                                                                                
|10.6       |  | Stock Transfer Agency Agreement with
      Computershare Investor Services, LLC dated September 13,
      2005(1)                                                                                              
|           |  |                                                                                                                                                                                                                
|10.7       |  | Second Amended Administration
      Agreement dated December 1, 2011(6)                                                                                                                                        
|           |  |                                                                                                                                                                                                                
|10.8       |  | Warrant Agreement with Computershare
      Investor Services, LLC as Warrant Agent dated December 8,
      2005(1)                                                                                             
|           |  |                                                                                                                                                                                                                
|14.1       |  | Code of Ethics for Principal
      Executive Officer and Principal Financial Officerfiled
      herewith.                                                                                                     
|           |  |                                                                                                                                                                                                                
|24         |  | Power of Attorney (included on the
      signature page)                                                                                                                                                       
|           |  |                                                                                                                                                                                                                
|*31.1*     |  | Certification by Chief Executive
      Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to
      Section 302 of the Sarbanes-Oxley Act of 2002filed
  herewith.                           
|           |  |                                                                                                                                                                                                                
|*31.2*     |  | Certification by Chief Financial
      Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to
      Section 302 of the Sarbanes-Oxley Act of 2002filed
  herewith.                           
|           |  |                                                                                                                                                                                                                
|*32.1*     |  | Certification by Chief Executive
      Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002filed
      herewith.

|(1) | Incorporated by reference
      to the Registrants Registration Statement on Form N-2, filed August 28,
      2006 (File No. 333-136923).                                       
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Incorporated by reference
      to the Registrants current report on Form 8-K, filed January 21,
      2009.                                                                    
|(3) | Incorporated by reference
      to Pre-Effective Amendment No. 2 to the Registrants Registration
      Statement on Form N-2, filed January 9, 2007 (File No.
      333-136923).
|(4) | Incorporated by reference
      to Pre-Effective Amendment No. 1 to the Registrants Registration
      Statement on Form N-2, filed July 3, 2007 (File No.
    333-142859).     
|(5) | Incorporated by reference
      to the Registrants Quarterly Report on Form 10-Q for the quarter ended
      August 31, 2007 and filed on October 12, 2007.                     
|(6) | Incorporated by reference
      to the Registrants current report on Form 8-K, filed December 1,
      2011.                                                                    

All other exhibits for which provision
is made in the applicable regulations of the Securities and Exchange Commission
are not required under the related instruction or are inapplicable and therefore
have been omitted.

34

---



|INDEX TO FINANCIAL
      STATEMENTS
|-----------------------------------

|                                                                                               |  | Page
|---------------------------------------------------------------------------------------------- |  | ----
|                                                                                               |  |     
|Report of Independent Registered Public Accounting Firm                                        |  | F-2 
|Consolidated Balance Sheets for the years ended November 30, 2011, November 30, 2010           |  |     
|and November 30, 2009                                                                          |  | F-3 
|Consolidated Statements of Income as of November 30, 2011 and November 30, 2010                |  | F-4 
|Consolidated Statements of Equity for the years ended November 30, 2011, November 30, 2010     |  |     
|and November 30, 2009                                                                          |  | F-5 
|Consolidated Statements of Cash Flows for the years ended November 30, 2011, November 30, 2010 |  |     
|and November 30, 2009                                                                          |  | F-6 
|Notes to Consolidated Financial Statements                                                     |  | F-7 
|Additional Information (Unaudited)                                                             |  | F-20
|EXHIBIT 14.1                                                                                   |  |     
|EXHIBIT 31.1                                                                                   |  |     
|EXHIBIT 31.2                                                                                   |  |     
|EXHIBIT 32.1                                                                                   |  |     

F-1

---



REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and
ShareholdersTortoise Capital Resources Corporation

We have audited the accompanying
consolidated balance sheets of Tortoise Capital Resources Corporation (the
Company) as of November 30, 2011 and 2010, and the related consolidated
statements of income, equity, and cash flows for each of the three years in the
period ended November 30, 2011. These financial statements are the
responsibility of the Companys management. Our responsibility is to express an
opinion on these financial statements 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 are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. 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 referred to above present fairly, in all material respects, the
consolidated financial position of Tortoise Capital Resources Corporation at
November 30, 2011 and 2010, and the consolidated results of its operations and
its cash flows for each of the three years in the period ended November 30,
2011, in conformity with U.S. generally accepted accounting
principles.

We also have audited, in accordance
with the standards of the Public Company Accounting Oversight Board (United
States), Tortoise Capital Resources Corporations internal control over
financial reporting as of November 30, 2011, based on criteria established in
Internal Control-Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission and our report dated February 13, 2012,
expressed an unqualified opinion thereon.

/s/Ernst &
      Young LLP


Kansas City, MissouriFebruary 13,
2012

F-2

---



| | Tortoise Capital Resources
      Corporation
| | --------------------------------------------

CONSOLIDATED BALANCE
SHEETS

|                                                                                                     |  | **November 30, 2011** |            | **November 30, 2010**
|---------------------------------------------------------------------------------------------------- |  | --------------------- | ---------- | ---------------------
|Assets                                                                                               |  |                       |            |                      
|Trading securities, at fair
      value                                                              |  | $                     | 27,037,642 |                      
|Other equity securities, at fair
      value                                                         |  |                       | 41,856,730 |                      
|Leased property, net of accumulated
      depreciation of $294,309                                   |  |                       | 13,832,540 |                      
|Cash and cash equivalents                                                                            |  |                       | 2,793,326  |                      
|Property and equipment, net of
      accumulated depreciation of $1,483,616                          |  |                       | 3,842,675  |                      
|Escrow receivable                                                                                    |  |                       | 1,677,052  |                      
|Accounts receivable                                                                                  |  |                       | 1,402,955  |                      
|Intangible lease asset, net of
      accumulated amortization of $121,641                            |  |                       | 973,130    |                      
|Lease receivable                                                                                     |  |                       | 474,152    |                      
|Prepaid expenses                                                                                     |  |                       | 140,017    |                      
|Receivable for Adviser expense
      reimbursement                                                   |  |                       | 121,962    |                      
|Interest receivable                                                                                  |  |                       |           |                      
|Deferred tax asset                                                                                   |  |                       | 27,536     |                      
|Other assets                                                                                         |  |                       | 107,679    |                      
|**Total
    Assets**                                                                                 |  |                       | 94,287,396 |                      
|                                                                                                    
|Liabilities and Stockholders Equity                                                                 |  |                       |            |                      
|Liabilities                                                                                          |  |                       |            |                      
|Management fees payable to
      Adviser                                                             |  |                       | 365,885    |                      
|Accounts payable                                                                                     |  |                       | 597,157    |                      
|Long-term debt                                                                                       |  |                       | 2,279,883  |                      
|Lease obligation                                                                                     |  |                       | 107,550    |                      
|Accrued expenses and other
      liabilities                                                         |  |                       | 510,608    |                      
|Total
      Liabilities                                                                              |  |                       | 3,861,083  |                      
|                                                                                                    
|Stockholders Equity                                                                                 |  |                       |            |                      
|Warrants, no par value; 945,594
      issued and outstanding                                         |  |                       |            |                      
|at
      November 30, 2011 and November 30, 2010                                                     |  |                       |            |                      
|(5,000,000
      authorized)                                                                         |  | $                     | 1,370,700  |                      
|Capital stock, non-convertible,
      $0.001 par value; 9,176,889 shares issued                      |  |                       |            |                      
|and
      outstanding at November 30, 2011 and 9,146,506 shares issued                               |  |                       |            |                      
|and
      outstanding at November 30, 2010 (100,000,000 shares authorized)                           |  |                       | 9,177      |                      
|Additional paid-in capital                                                                           |  |                       | 95,682,738 |                      
|Accumulated deficit                                                                                  |  |                       | (6,636,302 | )                    
|**Total Stockholders
      Equity**                                                                 |  | $                     | 90,426,313 |                      
|**Total Liabilities and
      Stockholders Equity**                                                 |  | $                     | 94,287,396 |                      
|                                                                                                    
|**Book value per share (total
      stockholders equity divided by 
          shares outstanding)** |  | $                     | 9.85       |                      

See accompanying Notes to
Consolidated Financial Statements.

F-3

---



| | Tortoise Capital Resources
      Corporation
| | --------------------------------------------

CONSOLIDATED STATEMENTS OF
INCOME

|                                                                    | **Year
      EndedNovember 30, 2011** |            | **Year
      EndedNovember 30, 2010** |  | **Year
      EndedNovember 30, 2009**
|------------------------------------------------------------------- | ------------------------------------- | ---------- | ------------------------------------- |  | -------------------------------------
|Revenue                                                             |                                       |            |                                       |  |                                      
|Sales Revenue                                                       | $                                     | 2,161,723  |                                       |  | $                                    
|Lease income                                                        |                                       | 1,063,740  |                                       |  |                                      
|**Total
      Revenue**                                             |                                       | 3,225,463  |                                       |  |                                      
|                                                                   
|Expenses                                                            |                                       |            |                                       |  |                                      
|Cost of sales                                                       |                                       | 1,689,374  |                                       |  |                                      
|Management fees, net of expense
      reimbursements                |                                       | 968,163    |                                       |  |                                      
|Asset acquisition expense                                           |                                       | 638,185    |                                       |  |                                      
|Professional fees                                                   |                                       | 548,759    |                                       |  |                                      
|Depreciation expense                                                |                                       | 364,254    |                                       |  |                                      
|Operating expenses                                                  |                                       | 196,775    |                                       |  |                                      
|Directors fees                                                     |                                       | 70,192     |                                       |  |                                      
|Interest expense                                                    |                                       | 36,508     |                                       |  |                                      
|Other expenses                                                      |                                       | 183,674    |                                       |  |                                      
|**Total
      Expenses**                                            |                                       | 4,695,884  |                                       |  |                                      
|                                                                   
|Loss from Operations, before Income Taxes                           |                                       | (1,470,421 | )                                     |  |                                      
|Deferred tax benefit                                                |                                       | 557,017    |                                       |  |                                      
|Loss from Operations                                                |                                       | (913,404   | )                                     |  |                                      
|                                                                   
|Other Income                                                        |                                       |            |                                       |  |                                      
|Net realized and unrealized gain
      (loss) on trading securities |                                       | 2,299,975  |                                       |  |                                      
|Net realized and unrealized gain on
      other equity securities   |                                       | 2,283,773  |                                       |  |                                      
|Distributions and dividend income,
      net                        |                                       | 651,673    |                                       |  |                                      
|Other income                                                        |                                       | 40,000     |                                       |  |                                      
|Total Other
      Income, before Income Taxes                       |                                       | 5,275,421  |                                       |  |                                      
|Current tax expense                                                 |                                       | (253,650   | )                                     |  |                                      
|Deferred tax expense                                                |                                       | (1,186,224 | )                                     |  |                                      
|Income
      tax expense, net                                       |                                       | (1,439,874 | )                                     |  |                                      
|Total Other
      Income                                            |                                       | 3,835,547  |                                       |  |                                      
|                                                                   
|Net Income                                                          | $                                     | 2,922,143  |                                       |  | $                                    
|                                                                   
|Earnings Per Common Share:                                          |                                       |            |                                       |  |                                      
|Basic and Diluted                                                   | $                                     | 0.32       |                                       |  | $                                    
|                                                                   
|Weighted Average Shares of Common Stock Outstanding:                |                                       |            |                                       |  |                                      
|Basic and Diluted                                                   |                                       | 9,159,809  |                                       |  |                                      

See accompanying Notes to
Consolidated Financial Statements.

F-4

---



| | Tortoise Capital Resources
      Corporation
| | --------------------------------------------

CONSOLIDATED STATEMENTS OF
EQUITY

|                                      |  | ****                    |  |            |       | **Additional** |   | **Retained Earnings** |  |             
|------------------------------------- |  | ----------------------- |  | ---------- | ----- | -------------- | - | --------------------- |  | ------------
|                                      |  | **Capital
      Stock** |  |            |       | **Paid-in**    |   | **(Accumulated**      |  |             
|                                      |  | **Shares**              |  | **Amount** |       | **Warrants**   |   | **Capital**           |  | **Deficit)**
|Balance at December 1, 2008           |  | 8,962,147               |  | $          | 8,962 |                | $ | 1,370,700             |  | $           
|Net
      Income                      |  |                         |  |            |       |                |   |                       |  |             
|Distributions to stockholders sourced |  |                         |  |            |       |                |   |                       |  |             
|as return of capital                  |  |                         |  |            |       |                |   |                       |  |             
|Reinvestment of distributions         |  |                         |  |            |       |                |   |                       |  |             
|to stockholders                       |  | 115,943                 |  |            | 116   |                |   |                       |  |             
|Balance at November 30, 2009          |  | 9,078,090               |  |            | 9,078 |                |   | 1,370,700             |  |             
|Net
      Income                      |  |                         |  |            |       |                |   |                       |  |             
|Distributions to stockholders sourced |  |                         |  |            |       |                |   |                       |  |             
|as return of capital                  |  |                         |  |            |       |                |   |                       |  |             
|Reinvestment of distributions         |  |                         |  |            |       |                |   |                       |  |             
|to stockholders                       |  | 68,416                  |  |            | 69    |                |   |                       |  |             
|Balance at November 30, 2010          |  | 9,146,506               |  |            | 9,147 |                |   | 1,370,700             |  |             
|Net
      Income                      |  |                         |  |            |       |                |   |                       |  |             
|Distributions to stockholders sourced |  |                         |  |            |       |                |   |                       |  |             
|as return of capital                  |  |                         |  |            |       |                |   |                       |  |             
|Reinvestment of distributions         |  |                         |  |            |       |                |   |                       |  |             
|to stockholders                       |  | 30,383                  |  |            | 30    |                |   |                       |  |             
|Consolidation of wholly-owned         |  |                         |  |            |       |                |   |                       |  |             
|subsidiary                            |  |                         |  |            |       |                |   |                       |  |             
|Balance at
      November 30, 2011    |  | 9,176,889               |  | $          | 9,177 |                | $ | 1,370,700             |  | $           

See accompanying Notes to
Consolidated Financial Statements.

F-5

---



| | Tortoise Capital Resources
      Corporation
| | --------------------------------------------

CONSOLIDATED STATEMENTS OF CASH
FLOWS

|                                                                                                      |  | **Year
      EndedNovember 30, 2011** |             | **Year
      EndedNovember 30, 2010** |  | **Year
      EndedNovember 30, 2009**
|----------------------------------------------------------------------------------------------------- |  | ------------------------------------- | ----------- | ------------------------------------- |  | -------------------------------------
|Operating Activities                                                                                  |  |                                       |             |                                       |  |                                      
|Net Income                                                                                            |  | $                                     | 2,922,143   |                                       |  | $                                    
|Adjustments:                                                                                          |  |                                       |             |                                       |  |                                      
|Return
      of capital on distributions received                                                     |  |                                       | 2,845,434   |                                       |  |                                      
|Deferred
      income tax expense, net                                                                |  |                                       | 629,207     |                                       |  |                                      
|Depreciation
      expense                                                                            |  |                                       | 364,254     |                                       |  |                                      
|Amortization
      of intangible lease asset                                                          |  |                                       | 121,641     |                                       |  |                                      
|Amortization
      of assumed debt premium                                                            |  |                                       | (94,611     | )                                     |  |                                      
|Realized
      and unrealized (gain) loss on trading securities                                       |  |                                       | (2,299,975  | )                                     |  |                                      
|Realized
      and unrealized (gain) loss on other 
                    equity securities             |  |                                       | (2,283,773  | )                                     |  |                                      
|Changes
      in assets and liabilities:                                                              |  |                                       |             |                                       |  |                                      
|(Increase)
      decrease in interest, dividend and 
                         distribution receivable |  |                                       | 42,778      |                                       |  |                                      
|Decrease
      in lease receivable                                                                    |  |                                       | 237,077     |                                       |  |                                      
|Increase
      in accounts receivable                                                                 |  |                                       | (92,473     | )                                     |  |                                      
|Decrease
      in income tax receivable                                                               |  |                                       |            |                                       |  |                                      
|Decrease
      (increase) in prepaid expenses 
                         and other assets              |  |                                       | 70,109      |                                       |  |                                      
|Increase
      (decrease) in management fees 
                         payable to Adviser, net of     |  |                                       |             |                                       |  |                                      
|expense reimbursement                                                                                 |  |                                       | 25,632      |                                       |  |                                      
|Increase
      in accounts payable                                                                    |  |                                       | 236,579     |                                       |  |                                      
|Increase
      (decrease) in accrued expenses 
                         and other liabilities         |  |                                       | 38,424      |                                       |  |                                      
|Net
      cash provided by operating activities                                                       |  | $                                     | 1,576,222   |                                       |  | $                                    
|                                                                                                     
|Investing Activities                                                                                  |  |                                       |             |                                       |  |                                      
|Purchases
      of long-term investments                                                              |  |                                       | (38,060,281 | )                                     |  |                                      
|Proceeds
      from sales of long-term investments                                                    |  |                                       | 53,950,583  |                                       |  |                                      
|Cash
      paid in business combination                                                               |  |                                       | (12,250,000 | )                                     |  |                                      
|Purchases
      of property and equipment                                                             |  |                                       | (1,045      | )                                     |  |                                      
|Net cash provided by investing
      activities                                                       |  | $                                     | 3,639,257   |                                       |  | $                                    
|                                                                                                     
|Financing Activities                                                                                  |  |                                       |             |                                       |  |                                      
|Payments
      on long-term debt                                                                      |  |                                       | (1,221,000  | )                                     |  |                                      
|Payments
      on lease obligation                                                                    |  |                                       | (44,816     | )                                     |  |                                      
|Advances
      from revolving line of credit                                                          |  |                                       |            |                                       |  |                                      
|Repayments
      on revolving line of credit                                                          |  |                                       | (400,000    | )                                     |  |                                      
|Distributions
      paid to common stockholders                                                       |  |                                       | (3,503,365  | )                                     |  |                                      
|Net cash used in financing
      activities                                                           |  | $                                     | (5,169,181  | )                                     |  | $                                    
|                                                                                                     
|Net Change in Cash and Cash Equivalents                                                               |  | $                                     | 1,232,522   |                                       |  | $                                    
|Consolidation of wholly-owned subsidiary                                                              |  |                                       | 94,611      |                                       |  |                                      
|Cash and Cash Equivalents at beginning of year                                                        |  |                                       | 1,466,193   |                                       |  |                                      
|Cash and
      Cash Equivalents at end of year                                                        |  | $                                     | 2,793,326   |                                       |  | $                                    
|                                                                                                     
|Supplemental Disclosure of Cash Flow Information                                                      |  |                                       |             |                                       |  |                                      
|Interest paid                                                                                         |  | $                                     | 176,595     |                                       |  | $                                    
|Income taxes paid                                                                                     |  | $                                     | 253,650     |                                       |  | $                                    
|Non-Cash
      Financing Activities                                                                   |  |                                       |             |                                       |  |                                      
|Reinvestment of distributions by
      common stockholders                                            |  |                                       |             |                                       |  |                                      
|in
      additional common shares                                                                     |  | $                                     | 252,242     |                                       |  | $                                    

See accompanying Notes to
Consolidated Financial Statements.

F-6

---



| | Tortoise Capital Resources
      Corporation
| | --------------------------------------------

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTSNovember 30,
2011

1. Organization

Tortoise Capital Resources Corporation
(the Company) was organized as a Maryland corporation on September 8, 2005.
The Company completed its initial public offering in February 2007 as a
non-diversified closed-end management investment company regulated as a business
development company (BDC) under the Investment Company Act of 1940, as amended
(the 1940 Act). The Company withdrew its election to be treated as a BDC on
September 21, 2011 in order to pursue qualification as a real estate investment
trust (REIT). Historically as a BDC, the Company invested primarily in
privately held companies operating in the U.S. energy infrastructure sector. The
Companys shares are listed on the New York Stock Exchange under the symbol
TTO.

2. Significant Accounting
Policies

A. Use of Estimates  The preparation of
the consolidated financial statements in conformity with U.S. generally accepted
accounting principles (GAAP) requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities,
recognition of distribution income and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements. Actual results
could differ from those estimates.

B. Basis of Presentation  The Companys
consolidated financial statements include the accounts of the Company and its
wholly-owned subsidiary, Mowood, LLC (Mowood). Mowood is the holding company
for Omega Pipeline Company (Omega). Omega is a natural gas local distribution
company that owns and operates a natural gas distribution system in Fort Leonard
Wood, Missouri. Omega is responsible for purchasing and coordinating delivery of
natural gas to Fort Leonard Wood as well as performing maintenance and expansion
of the pipeline. In addition, Omega provides gas marketing services to local
commercial end users. All significant inter-company balances and transactions
have been eliminated in consolidation.

Consolidation of Mowood was triggered at
the time the Company withdrew its election to be treated as a BDC (September 21,
2011) and began reporting its financial results in accordance with general
corporate reporting guidelines instead of under the AICPA Investment Company
Audit Guide (the Guide). The accompanying consolidated financial statements
reflect the results of the Companys operations for the years ended November 30,
2009 and 2010 and the period from December 1, 2010 to September 21, 2011, during
which time the Company reported under the Guide, and therefore reported and
accounted for Mowood as an investment carried at fair value. Subsequent to
September 21, 2011, the Company ceased reporting under the Guide. The results of
operations for Mowood for the period from September 21, 2011 to November 30,
2011 and related balances at November 30, 2011 are included in the Companys
consolidated financial statements as of and for the year ended November 30,
2011. Certain prior year balances have been reclassified to conform to the
presentation required for general corporate entities and to provide
comparability of financial results across reporting periods. The
reclassification of account balances for prior years, which are summarized below,
did not impact the Companys financial position or reported net results of
operations:

- Investments at fair value, including
securities of control, affiliated and non-affiliated companies, at November 30,
2010 have been reclassified as either trading or other equity
securities.
- Components of Stockholders Equity on
the Consolidated Balance Sheets as of November 30, 2010 have been combined.
Accumulated net investment loss, net of income taxes of $(3,308,522),
accumulated realized loss, net of income taxes of $(18,532,648), and net
unrealized appreciation of investments, net of income taxes of $17,495,544 have
been combined into Accumulated Deficit.
- Items on the Consolidated Statements of
Income for the years ended November 30, 2010 and 2009 have been reclassified and
aggregated to conform to the presentation of the results of operations for the
year ended November 30, 2011. However, there was no impact to net income or
earnings per share. Income from investment securities are no longer considered to be part of the Companys operations and therefore have been classified as Other Income.
- Components of cash flows for the years
ended November 30, 2010 and 2009 have been reclassified and aggregated to
conform to the presentation of cash flows for the year ended November 30,
2011.

C.Investment Securities The Companys
investments in securities are classified as either trading or other equity
securities:

- Trading securities  the Companys publicly traded equity securities are
  classified as trading securities and are reported at fair value because the Company intends to sell these securities in
  order to acquire real asset investments.
- Other equity securities 
  the Companys other equity securities represent interests in private companies
  for which theCompany has elected to report
  these at fair value under the fair value option.

D.Security Transactions and Fair Value
Security transactions are accounted for on the date the securities are purchased
or sold (trade date). Realized gains and losses are reported on an identified
cost basis.

F-7

---



For equity securities that are freely
tradable and listed on a securities exchange or over-the-counter market, the
Company fair values those securities at their last sale price on that exchange
or over-the-counter market on the valuation date. If the security is listed on
more than one exchange, the Company will use the price from the exchange that it
considers to be the principal exchange on which the security is traded.
Securities listed on the NASDAQ will be valued at the NASDAQ Official Closing
Price, which may not necessarily represent the last sale price. If there has
been no sale on such exchange or over-the-counter market on such day, the
security will be valued at the mean between the last bid price and last ask
price on such day.

An equity security of a publicly traded
company acquired in a private placement transaction without registration is
subject to restrictions on resale that can affect the securitys liquidity and
fair value. Such securities that are convertible into or otherwise will become
freely tradable will be valued based on the market value of the freely tradable
security less an applicable discount. Generally, the discount will initially be
equal to the discount at which the Company purchased the securities. To the
extent that such securities are convertible or otherwise become freely tradable
within a time frame that may be reasonably determined, an amortization schedule
may be used to determine the discount.

The Company holds investments in
illiquid securities including debt and equity securities of privately-held
companies. These investments generally are subject to restrictions on resale,
have no established trading market and are fair valued on a quarterly basis.
Because of the inherent uncertainty of valuation, the fair values of such
investments, which are determined in accordance with procedures approved by the
Companys Board of Directors, may differ materially from the values that would
have been used had a ready market existed for the investments. The Companys
Board of Directors may consider other methods of valuing investments as
appropriate and in conformity with GAAP.

The Company determines fair value to be
the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the
measurement date. The Company has determined the principal market, or the market
in which the Company exits its private portfolio investments with the greatest
volume and level of activity, to be the private secondary market. Typically,
private companies are bought and sold based on multiples of EBITDA, cash flows,
net income, revenues, or in limited cases, book value.

For private company investments, value
is often realized through a liquidity event of the entire company. Therefore,
the value of the company as a whole (enterprise value) at the reporting date
often provides the best evidence of the value of the investment and is the
initial step for valuing the Companys privately issued securities. For any one
company, enterprise value may best be expressed as a range of fair values, from
which a single estimate of fair value will be derived. In determining the
enterprise value of a portfolio company, an analysis is prepared consisting of
traditional valuation methodologies including market and income approaches. The
Company considers some or all of the traditional valuation methods based on the
individual circumstances of the portfolio company in order to derive its
estimate of enterprise value.

The fair value of investments in
private portfolio companies is determined based on various factors, including
enterprise value, observable market transactions, such as recent offers to
purchase a company, recent transactions involving the purchase or sale of the
equity securities of the company, or other liquidation events. The determined
equity values may be discounted when the Company has a minority position, is
subject to restrictions on resale, has specific concerns about the receptivity
of the capital markets to a specific company at a certain time, or other
comparable factors exist.

The Board of Directors undertakes a
multi-step valuation process each quarter in connection with determining the
fair value of private investments. An independent valuation firm has been
engaged by the Board of Directors to provide independent, third-party valuation
consulting services based on procedures that the Board of Directors has
identified and may ask them to perform from time to time on all or a selection
of private investments as determined by the Board of Directors. The multi-step
valuation process is specific to the level of assurance that the Board of
Directors requests from the independent valuation firm. For positive assurance,
the process is as follows:

- The independent valuation firm prepares the preliminary valuations and the
  supporting analysis. At November 30, 2011, the
  independent valuation firm performed positive assurance valuation procedures
  on five portfolio companies comprising approximately 99.9 percent of the total
  fair value of other equity securities;
- The investment professionals of the Adviser review
  the preliminary valuations and supporting analyses, and consider andassess, as appropriate, any changes that may be
  required to the preliminary valuations;
- The Investment Committee of the Adviser reviews the preliminary valuations
  and supporting analyses, and considers and assesses, as appropriate, any
  changes that may be required to the preliminary valuations;
- The Board of Directors assesses the final
  valuations and ultimately determines the fair value of each investment in theCompanys portfolio in good
faith.

The following section describes the valuation methodologies used by the
Company for estimating fair value for financial instruments not recorded at fair value as required under disclosure
guidance

F-8

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related to the fair value of financial instruments.

Cash and Cash
Equivalents The carrying value of cash, amounts due from banks, federal
funds sold and securities purchased under resale agreements approximates fair value.

Escrow Receivable The fair value of the escrow receivable due the Company, which relates to the sale of International Resource Partners, LP, will be released upon satisfaction of certain post closing obligations and/or the expiration of certain time periods (the shortest of which is 14 months from the April 2011 closing date of the sale).

Long-term Debt The fair value of the Company’s long-term debt is calculated, for disclosure purposes, by discounting future cash flows by a rate equal to the Company’s current expected rate for an equivalent transaction.

The estimated fair values of the Company’s financial instruments are shown in the table below:

|                          | **2011**                  |           |                      | **2010**
|------------------------- | ------------------------- | --------- | -------------------- | --------
|                          | **Carrying
      Amount** |           | **Fair
      value** |         
|**Financial assets**      |                           |           |                      |         
|Cash and cash equivalents | $                         | 2,793,326 |                      | $       
|Escrow Receivable         |                           | 1,677,052 |                      |         
|**Financial Liabilities** |                           |           |                      |         
|Long-term debt            |                           | 2,279,883 |                      |         

E.Cash and Cash Equivalents The Company maintains cash balances at
financial institutions in amounts that regularly exceed FDIC insured limits. The
Companys cash equivalents are comprised of short-term, liquid money market
instruments.

F.Accounts Receivable Accounts receivable are presented at face value
net of an allowance for doubtful accounts. Accounts are considered past due
based on the terms of sale with the customers. The Company reviews accounts for
collectability based on an analysis of specific outstanding receivables, current
economic conditions and past collection experience. Management determined that
an allowance for doubtful accounts was not necessary at November 30,
2011.

G.Revenue and Other Income Recognition
Specific policies for the Companys revenue and other income items are as follows:

- *Sales Revenue* Omega, acting as a principal, provides for transportation services and natural gas supply for its customers on a
firm basis. In addition, Omega is paid fees for the operation and maintenance of its pipeline, including
expansion of the pipeline. Omega is responsible for the coordination, supervision and quality of the expansions
while actual construction is generally performed by third party contractors. Revenues related to natural gas
distribution are recognized upon delivery of natural gas and upon the substantial performance of management
and supervision services related to the expansion of the natural gas distribution system.
- Dividends and distributions from
  investments Dividends and distributions
  from investments are recorded on their ex-dates and are reflected as other
  income within the accompanying Consolidated Statements of Income.
  Distributions received from the Companys investments generally are comprised
  of ordinary income, capital gains and return of capital. The Company records
  investment income, capital gains and return of capital based on estimates made
  at the time such distributions are received. Such estimates are based on
  information available from each company and/or other industry sources. These
  estimates may subsequently be revised based on information received from the
  entities after their tax reporting periods are concluded, as the actual
  character of these distributions is not known until after the fiscal year end
  of the Company. 
During the year ended November 30, 2011, the Company
  reallocated the amount of 2010 income and return of capital it recognized for
  the period from December 1, 2009 through November 30, 2010 based on the 2010
  tax reporting information received from the individual portfolio companies.
  This reclassification amounted to a decrease in pre-tax net income of
  approximately $422,000 or $0.046 per share ($263,000 or $0.029 per share, net
  of deferred tax benefit); an increase in net realized and unrealized gains on
  trading securities of approximately $47,000 or $0.005 per share ($29,000 or
  $0.003 per share, net of deferred tax expense) and a increase in net realized
  and unrealized gains on other equity securities of approximately $375,000 or
  $0.041 per share ($234,000 or $0.026 per share, net of deferred tax expense)
  for the year ended November 30, 2011.
- Realized and unrealized gains (losses) on
  trading securities and other equity securities Changes in the fair values of the Companys securities during the
  period reported and the gains or losses realized upon sale of securities
  during the period are reflected as other income within the accompanying
  Consolidated Statements of Income.
- Lease Income Income related to the Companys leased property is recognized on a
  straight-line basis over the term of the lease when collectability is
  reasonably assumed. Rental payments on the leased property are typically
  received on a semi-annual basis and are included as lease income within the
  accompanying Consolidated Statements of Income.

F-9

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H.Cost of Sales Included in the
Companys cost of sales are the amounts paid for gas and propane that are
delivered to customers as well as the cost of material and labor related to the
expansion of the natural gas distribution system.

I.Distributions to Stockholders The
amount of any quarterly distributions to stockholders will be determined by the
Board of Directors. Distributions to stockholders are recorded on the
ex-dividend date. The character of distributions made during the year may differ
from their ultimate characterization for federal income tax purposes. For the
years ended November 30, 2011, November 30, 2010 and November 30, 2009, the
source of the Companys distributions for book purposes was 100 percent return
of capital. For the year ended November 30, 2011, the Companys distributions
for tax purposes were comprised of 100 percent qualified dividend income. For
the years ended November 30, 2010 and November 30, 2009, the Companys
distributions for tax purposes were comprised of 100 percent return of
capital.

J.Federal and State Income Taxation
The Company, as a corporation, is obligated to pay federal and state income tax
on its taxable income. Currently, the highest regular marginal federal income
tax rate for a corporation is 35 percent. The Company may be subject to a 20
percent federal alternative minimum tax on its federal alternative minimum
taxable income to the extent that its alternative minimum tax exceeds its
regular federal income tax.

The Companys trading securities and
other equity securities are limited partnerships or limited liability companies
which are treated as partnerships for federal and state income tax purposes. As
a limited partner, the Company reports its allocable share of taxable income in
computing its own taxable income. The Companys tax expense or benefit is
included in the Consolidated Statements of Income. Deferred income taxes reflect
the net tax effects of temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used for
income tax purposes. A valuation allowance is recognized if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized.

K.Leases The Company includes assets
subject to lease arrangements within Leased property, net of accumulated
depreciation in the Consolidated Balance Sheet. Lease payments received are
reflected in lease income on the Consolidated Statements of Income, net of
amortization of any off market adjustments.

L.Long-Lived Assets and Intangibles
Property and equipment are stated at cost less accumulated depreciation.
Depreciation is computed using the straight-line method over the estimated
useful lives of the assets ranging from five to twenty years. Expenditures for
repairs and maintenance are charged to operations as incurred, and improvements,
which extend the useful lives of assets, are capitalized and depreciated over
the remaining estimated useful life of the asset.

The Company initially records
long-lived assets at their acquisition cost, unless the transaction is accounted
for as a business combination. If the transaction is accounted for as a business
combination, the Company allocates the purchase price to the acquired tangible
and intangible assets and liabilities based on their estimated fair values. The
Company determines the fair values of assets and liabilities based on discounted
cash flow models using current market assumptions, appraisals, recent
transactions involving similar assets or liabilities and/or other objective
evidence, and depreciates the asset values over the estimated remaining useful
lives.

In connection with these transactions,
the Company may acquire long-lived assets that are subject to an existing lease
contract with the seller or other lessee party and the Company may assume
outstanding debt of the seller as part of the consideration paid. If, at the
time of acquisition, the existing lease or debt contract is not at current
market terms, the Company will record an asset or liability at the time of
acquisition representing the amount by which the fair value of the lease or debt
contract differs from its contractual value. Such amount is then amortized over
the remaining contract term as an adjustment to the related lease revenue or
interest expense.

M.Offering Costs Offering costs
related to the issuance of common stock are charged to additional paid-in
capital when the stock is issued.

N.Recent Accounting Pronouncement In
May 2011, the FASB issued ASU No. 2011-04 Amendments to Achieve Common Fair
Value Measurement and Disclosure Requirements in GAAP and the International
Financial Reporting Standards (IFRSs). ASU No. 2011-04 amends FASB ASC Topic
820, Fair Value Measurements and Disclosures, to establish common requirements
for measuring fair value and for disclosing information about fair value
measurements in accordance with GAAP and IFRSs. ASU No. 2011-04 is effective for
fiscal years beginning after December 15, 2011 and for interim periods within
those fiscal years. Management is currently evaluating the impact of these
amendments and does not believe they will have a material impact on the
Companys consolidated financial statements.

3.
Concentrations

The Company has historically invested
in securities of privately-held and publicly-traded companies in the midstream
and downstream segments of the U.S. energy infrastructure sector. As of November
30, 2011, investments in securities of energy infrastructure companies
represented approximately 73 percent of the Companys total assets. The Company
is now focused on identifying and acquiring real property assets in the U.S.
energy infrastructure sector that are REIT qualified.

F-10

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The Companys leased property at
November 30, 2011 is leased to a single entity, Public Service Company of New
Mexico, as further described in Note 7 below. Public Service Company of New
Mexicos financial condition and ability and willingness to satisfy its
obligations under its leases with the Company have a considerable impact on the
Companys results of operations and ability to service its
indebtedness.

Mowood, the Companys wholly owned
subsidiary, has a ten-year contract expiring in 2015 to supply natural gas to
the Department of Defense (DOD). Revenue related to the DOD contract accounted
for 88 percent of sales revenues for the period from September 21, 2011 through
November 30, 2011. Mowood, through its wholly owned subsidiary Omega, performs
management and supervision services related to the expansion of the natural gas
distribution system used by the DOD. Revenues related to these services
accounted for 16 percent of sales revenues for the period from September 21,
2011 through November 30, 2011. Amounts due from the DOD account for 85 percent
of the consolidated accounts receivable balance at November 30, 2011.

Mowoods
contracts for its supply of natural gas are concentrated among select providers.
Payments to the top supplier of natural gas accounted for 60 percent of cost of
sales for the period from September 21, 2011 through November 30,
2011.

4. Agreements

The Company entered into a new
management agreement after its fiscal year end as more fully described in Note
15. From the Companys inception through November 30, 2011, it had an Investment
Advisory Agreement with Tortoise Capital Advisors, L.L.C. Under the terms of the
Investment Advisory Agreement, the Adviser is paid a fee consisting of a base
management fee and an incentive fee. The base management fee is 0.375 percent
(1.5 percent annualized) of the Companys average monthly Managed Assets, calculated and paid
quarterly in arrears within thirty days of the end of each fiscal quarter. The
term Managed Assets as used in the calculation of the management fee means
total assets (including any assets purchased with or attributable to borrowed
funds but excluding any net deferred tax asset) minus accrued liabilities other
than (1) net deferred tax liabilities, (2) debt entered into for the purpose of
leverage and (3) the aggregate liquidation preference of any outstanding
preferred shares. The base management fee for any partial quarter is
appropriately prorated.

The Adviser reimbursed the Company for
certain expenses in an amount equal to an annual rate of 0.25 percent of the
Companys average monthly Managed Assets during the period from December 1, 2008
through May 31, 2010 and in an amount equal to an annual rate of 0.50 percent of
the Companys average monthly Managed Assets from June 1, 2010 through November
30, 2011. During the years ended November 30, 2011, November 30, 2010 and
November 30, 2009, the Adviser reimbursed the Company $484,082, $308,003 and
$225,266, respectively, which are included in management fees, net of expense
reimbursement in the Consolidated Statements of Income. If the Adviser had not
reimbursed the Company for these fees, management fees would have been
higher.

The incentive fee consists of two
parts. The first part, the investment income fee, is equal to 15 percent of the
excess, if any, of the Companys Net Investment Income for the fiscal quarter
over a quarterly hurdle rate equal to 2 percent (8 percent annualized), and
multiplied, in either case, by the Companys average monthly Net Assets for the
quarter. Net Assets means the Managed Assets less deferred taxes, debt entered
into for the purposes of leverage and the aggregate liquidation preference of
any outstanding preferred shares. Net Investment Income means interest income
(including accrued interest that we have not yet received in cash), dividend and
distribution income from equity investments (but excluding that portion of cash
distributions that are treated as a return of capital), and any other income
(including any fees such as commitment, origination, syndication, structuring,
diligence, monitoring, and consulting fees or other fees that the Company is
entitled to receive from portfolio companies) accrued during the fiscal quarter,
minus the Companys operating expenses for such quarter (including the base
management fee, expense reimbursements payable pursuant to the Investment
Advisory Agreement, any interest expense, any accrued income taxes related to
net investment income, and distributions paid on issued and outstanding
preferred stock, if any, but excluding the incentive fee payable). Net
Investment Income also includes, in the case of investments with a deferred
interest or income feature (such as original issue discount, debt or equity
instruments with a payment-in-kind feature, and zero coupon securities), accrued
income that the Company has not yet received in cash. Net Investment Income does
not include any realized capital gains, realized capital losses, or unrealized
capital appreciation or depreciation. The investment income fee is calculated
and payable quarterly in arrears within thirty (30) days of the end of each
fiscal quarter. The investment income fee calculation is adjusted appropriately
on the basis of the number of calendar days in the first fiscal quarter the fee
accrues or the fiscal quarter during which the Agreement is in effect in the
event of termination of the Agreement during any fiscal quarter. During the
years ended November 30, 2011, November 30, 2010 and November 30, 2009, the
Company accrued no investment income fees.

The second part of the incentive fee
payable to the Adviser, the capital gain incentive fee, is equal to: (A) 15
percent of (i) the Companys net realized capital gains (realized capital gains
less realized capital losses) on a cumulative basis from inception to the end of
each fiscal year, less (ii) any unrealized capital depreciation at the end of
such fiscal year, less (B) the aggregate amount of all capital gain fees paid to
the Adviser in prior fiscal years. The capital gain incentive fee is calculated
and payable annually within thirty (30) days of the end of each fiscal year. In
the event the Investment Advisory Agreement is terminated, the capital gain
incentive fee calculation shall be undertaken as of, and any resulting capital
gain incentive fee shall be paid

F-11

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within thirty (30) days of the date of
termination. The Adviser may, from time to time, waive or defer all or any part
of the compensation described in the Investment Advisory Agreement.

The calculation of the capital gain
incentive fee does not include any capital gains that result from that portion
of any scheduled periodic distributions made possible by the normally recurring
cash flow from the operations of portfolio companies (Expected Distributions)
that are characterized by the Company as return of capital for U.S. generally
accepted accounting principles purposes. In that regard, any such return of
capital will not be treated as a decrease in the cost basis of an investment for
purposes of calculating the capital gain incentive fee. This does not apply to
any portion of any distribution from a portfolio company that is not an Expected
Distribution. Realized capital gains on a security will be calculated as the
excess of the net amount realized from the sale or other disposition of such
security over the adjusted cost basis for the security. Realized capital losses
on a security will be calculated as the amount by which the net amount realized
from the sale or other disposition of such security is less than the adjusted
cost basis of such security. Unrealized capital depreciation on a security will
be calculated as the amount by which the Companys adjusted cost basis of such
security exceeds the fair value of such security at the end of a fiscal
year.

The payable for capital gain incentive
fees is a result of the increase or decrease in the fair value of investments
and realized gains or losses from investments. For the years ended November 30,
2011, November 30, 2010 and November 30, 2009, the Company accrued no capital
gain incentive fees. Pursuant to the Investment Advisory Agreement, the capital
gain incentive fee is paid annually only if there are realization events and
only if the calculation defined in the agreement results in an amount due. No
capital gain incentive fees have been paid since the commencement of
operations.

U.S. Bancorp Fund Services, LLC serves
as the Companys fund accounting services provider. The Company pays the
provider a monthly fee computed at an annual rate of $24,000 on the first
$50,000,000 of the Companys Net Assets, 0.0125 percent on the next $200,000,000
of Net Assets, 0.0075 percent on the next $250,000,000 of Net Assets and 0.0025
percent on the balance of the Companys Net Assets.

The Adviser serves as the Companys
administrator. The Company paid the administrator a fee equal to an annual rate
of 0.07 percent of aggregate average daily Managed Assets up to and including
$150,000,000, 0.06 percent of aggregate average daily Managed Assets on the next
$100,000,000, 0.05 percent of aggregate average daily Managed Assets on the next
$250,000,000, and 0.02 percent on the balance thru November 30, 2010. On
December 1, 2010, the Company entered into an Amended Administration Agreement
with the administrator that decreased the fee to an amount equal to an annual
rate of 0.04 percent of aggregate average daily Managed Assets, with a minimum
annual fee of $30,000. This fee is calculated and accrued daily and paid
quarterly in arrears.

5. Income Taxes

Deferred income taxes reflect the net
tax effect of temporary differences between the carrying amount of assets and
liabilities for financial reporting and tax purposes. Components of the
Companys deferred tax assets and liabilities as of November 30, 2011 and
November 30, 2010 are as follows:

|                                                    |  | November 30, 2011 |            | November 30, 2010
|--------------------------------------------------- |  | ----------------- | ---------- | -----------------
|Deferred tax
      assets:                          |  |                   |            |                  
|Organization costs                                  |  | $                 | (20,068    | )                
|Capital loss
      carryforwards                    |  |                   |           |                  
|Net
      operating loss carryforwards              |  |                   | (2,624,525 | )                
|Cost recovery of leased
      assets                |  |                   | (119,970   | )                
|AMT and
      State of Kansas credit                |  |                   | (205,039   | )                
|Valuation
    allowance                             |  |                   |           |                  
|                                                    |  |                   | (2,969,602 | )                
|Deferred tax
      liabilities:                     |  |                   |            |                  
|Basis
      reduction of investment in partnerships |  |                   | 2,244,914  |                  
|Net unrealized gain on
      investment securities  |  |                   | 697,152    |                  
|                                                    |  |                   | 2,942,066  |                  
|Total net
      deferred tax asset                  |  | $                 | (27,536    | )                
|                                                    |  |                   |            |                  

At November 30, 2011, a valuation
allowance on deferred tax assets was not deemed necessary because the Company
believes it is more likely than not that there is an ability to realize its
deferred tax assets through future taxable income. Any adjustments to the
Companys estimates of future taxable income will be made in the period such
determination is made. The Companys policy is to record interest and penalties
on uncertain tax positions as part of tax expense. As of November 30, 2011, the
Company had no uncertain tax positions and no penalties and interest were
accrued. The Company does not expect any change to its unrecognized tax
positions in the twelve months subsequent to November 30, 2011. Tax years
subsequent to the year ending November 30, 2006 remain open to examination by
federal and state tax authorities.

F-12

---



Total income tax expense differs from
the amount computed by applying the federal statutory income tax rates of 35
percent for the year ended November 30, 2011 and 34 percent for the years ended
November 30, 2010 and 2009 to net investment loss and net realized and
unrealized gains (losses) on investments for the years presented, as
follows:

|                                                                         | For
      the year ended |           | For
      the year ended |  | For
      the year ended
|------------------------------------------------------------------------ | ------------------------ | --------- | ------------------------ |  | ------------------------
|                                                                         | November 30, 2011        |           | November 30, 2010        |  | November 30, 2009       
|Application of
      statutory income tax rate                           | $                        | 1,331,750 |                          |  | $                       
|State income taxes, net of
      federal tax benefit                     |                          | 133,158   |                          |  |                         
|Dividends
      received deduction                                       |                          | (86       | )                        |  |                         
|Change in deferred tax liability
      due to change in overall tax rate |                          | (23,432   | )                        |  |                         
|Change in
      deferred tax valuation allowance                         |                          | (558,533  | )                        |  |                         
|Total income tax
    expense                                             | $                        | 882,857   |                          |  | $                       
|                                                                         |                          |           |                          |  |                         

Total income taxes are computed by
applying the federal statutory rate plus a blended state income tax rate. During
the year, the Company re-evaluated its overall federal and state income tax
rate, increasing it from 35.82 percent to 37.62 percent, due to (1) an
anticipated 35 percent federal rate, and (2) anticipated state apportionment of
income and gains.

The components of income tax expense
include the following for the years presented:

|                                                                     |  | For the year ended      |         | For the year ended      |   | For the year ended     
|-------------------------------------------------------------------- |  | ----------------------- | ------- | ----------------------- | - | -----------------------
|                                                                     |  | November 30,
      2011 |         | November 30,
      2010 |   | November 30,
      2009
|Current tax expense                                                  |  |                         |         |                         |   |                        
|State (reflects a federal tax benefit in
      deferred tax expense) |  | $                       | 53,650  |                         | $ |                       
|AMT                                                                  |  |                         | 200,000 |                         |   |                       
|Total current
      tax expense                                      |  |                         | 253,650 |                         |   |                       
|Deferred tax expense                                                 |  |                         |         |                         |   |                        
|Federal                                                              |  |                         | 585,386 |                         |   | 4,530,152              
|State (net of federal tax
    benefit)                               |  |                         | 43,821  |                         |   | 242,496                
|Total deferred
      tax expense                                     |  |                         | 629,207 |                         |   | 4,772,648              
|Total income tax expense                                             |  | $                       | 882,857 |                         | $ | 4,772,648              
|                                                                     |  |                         |         |                         |   |                        

The deferred income tax expense for the
years ended November 30, 2011, 2010 and 2009 includes the impact of the change
in valuation allowance for such respective years.

As of November 30, 2011, the Company
had a net operating loss for federal income tax purposes of approximately
$7,236,000. The net operating loss may be carried forward for 20 years. If not
utilized, this net operating loss will expire as follows: $3,883,000 and
$3,353,000 in the years ending November 30, 2029 and 2030, respectively. As of
November 30, 2011, the Company utilized its capital loss carryforward of
approximately $12,000,000. The capital gains for the year ended November 30,
2011 have been estimated based on information currently available. Such estimate
is subject to revision upon receipt of the 2011 tax reporting information from
the individual partnerships. For corporations, capital losses can only be used
to offset capital gains and cannot be used to offset ordinary income. As of
November 30, 2011, an alternative minimum tax credit of $203,109 was available,
which may be credited in the future against regular income tax. This credit may
be carried forward indefinitely.

The aggregate cost of securities for federal
income tax purposes and securities with unrealized appreciation and
depreciation, were as follows:

|                                                     |  | November 30,
      2011 |            | November 30,
      2010
|---------------------------------------------------- |  | ----------------------- | ---------- | -----------------------
|Aggregate cost
      for federal income tax purposes |  | $                       | 68,264,534 |                        
|Gross unrealized
      appreciation                  |  |                         | 8,307,122  |                        
|Gross unrealized
      depreciation                  |  |                         | (4,883,958 | )                      
|Net unrealized
      appreciation                    |  | $                       | 3,423,164  |                        
|                                                     |  |                         |            |                        

6. Fair Value of Financial
Instruments

Various inputs are used in determining
the fair value of the Companys assets and liabilities. These inputs are
summarized in the three broad levels listed below:

- Level 1  quoted prices in active markets for identical
  investments
- Level 2  other significant observable inputs
  (including quoted prices for similar investments, market corroborated inputs,etc.)
- Level 3  significant unobservable inputs
  (including the Companys own assumptions in determining the fair value ofinvestments)

F-13

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Valuation
TechniquesIn general, and where
applicable, the Company uses readily available market quotations based upon the
last updated sales price from the principal market to determine fair value. This
pricing methodology applies to the Companys Level 1 trading
securities.

The Companys other equity securities
are classified as Level 3. See discussion of the valuation technique and
assumptions in Note 2.

The inputs or methodology used for
valuing securities are not necessarily an indication of the risk associated with
investing in those securities. The following tables provide the fair value
measurements of applicable Company assets and liabilities by level within the
fair value hierarchy as of November 30, 2011 and November 30, 2010. These assets
and liabilities are measured on a recurring basis.

|November 30,
      2011 |  |                         |            |         |   |            |  |         |   |  |  
|----------------------- |  | ----------------------- | ---------- | ------- | - | ---------- |  | ------- | - |  | -
|                        |  |                         |            |         |   |            |  |         |   |  |  
|                        |  | Fair Value at           |            |         |   |            |  |         |   |  |  
|Description             |  | November 30,
      2011 |            | Level 1 |   | Level 2    |  | Level 3
|Assets:                 |  |                         |            |         |   |            |  |         |   |  |  
|Trading Securities      |  | $                       | 27,037,642 |         | $ | 27,037,642 |  | $       |  |  | $
|Other Equity Securities |  |                         | 41,856,730 |         |   |           |  |         |  |  |  
|Total
      Assets      |  | $                       | 68,894,372 |         | $ | 27,037,642 |  | $       |  |  | $
|                        |  |                         |            |         |   |            |  |         |   |  |  
|November 30,
      2010 |  |                         |            |         |   |            |  |         |   |  |  
|                        |  |                         |            |         |   |            |  |         |   |  |  
|                        |  | Fair Value at           |            |         |   |            |  |         |   |  |  
|Description             |  | November 30,
      2010 |            | Level 1 |   | Level 2    |  | Level 3
|Assets:                 |  |                         |            |         |   |            |  |         |   |  |  
|Trading Securities      |  | $                       | 20,806,821 |         | $ | 20,806,821 |  | $       |  |  | $
|Other Equity Securities |  |                         | 72,929,409 |         |   |           |  |         |  |  |  
|Total
      Assets      |  | $                       | 93,736,230 |         | $ | 20,806,821 |  | $       |  |  | $
|                        |  |                         |            |         |   |            |  |         |   |  |  

The changes for all Level 3 assets
measured at fair value on a recurring basis using significant unobservable
inputs for the years ended November 30, 2011 and November 30, 2010, are as
follows:

|                                                                                 |  | Year ended              |             | Year ended             
|-------------------------------------------------------------------------------- |  | ----------------------- | ----------- | -----------------------
|                                                                                 |  | November 30,
      2011 |             | November 30,
      2010
|Fair value
      beginning balance                                               |  | $                       | 72,929,409  |                        
|Total realized and unrealized
      gains included in net income                 |  |                         | 1,026,134   |                        
|Purchases                                                                        |  |                         | 20,987,605  |                        
|Sales                                                                            |  |                         | (42,275,886 | )                      
|Return of
      capital adjustments impacting cost basis of securities           |  |                         | (1,518,285  | )                      
|Transfers out                                                                    |  |                         | (9,292,247  | )                      
|Fair value
      ending balance                                                  |  | $                       | 41,856,730  |                        
|                                                                                
|The amount of
      total gains (losses) for the period included in net income   |  |                         |             |                        
|attributable to the change in
      unrealized gains (losses) relating to assets |  |                         |             |                        
|still held at the reporting
      date                                           |  | $                       | (3,287,478  | )                      

The Company utilizes the beginning of
reporting period method for determining transfers between levels. For the year
ended November 30, 2011, there were transfers out of Level 3 assets in the
amount of $9,292,247, which represents the values of the Companys equity
interest in Mowood and subordinated debt issued to Mowood at the beginning of
the year that were eliminated upon consolidation. There were no transfers
between Level 1 and Level 2 for the years ended November 30, 2011 and November
30, 2010, respectively.

Certain condensed financial information
of the unconsolidated affiliates follows. The information is the most recently
available financial information for these companies, which is the last twelve
months ended September 30, 2011 for High Sierra Energy, LP and VantaCore
Partners, LP, and the last twelve months ended October 31, 2011 for Lightfoot
Capital Partners LP. Adjusted EBITDA is earnings before interest, taxes,
depreciation and amortization, adjusted for extraordinary or non-recurring items
as reported by the portfolio companies.

|Revenues           | $ | 2,867,168,000 |  | Total Assets      | $ | 927,171,000
|------------------ | - | ------------- |  | ----------------- | - | -----------
|Costs and Expenses |   | 2,810,625,000 |  | Total Liabilities |   | 528,174,000
|Adjusted EBITDA    | $ | 56,543,000    |  | Partners Equity  | $ | 398,997,000
|                   |   |               |  |                   |   |            

F-14

---



7. Acquisition of Eastern
Interconnect Project

On June 30, 2011, the Company purchased
100 percent ownership of a 40 percent undivided interest in the Eastern
Interconnect Project (EIP) for approximately $15.6 million, including the
assumption of $3.4 million of debt. The acquisition of the EIP was accounted for
as a business combination, in accordance with ASC 805. The Company incurred
costs of approximately $0.6 million in connection with the acquisition which
were expensed during the year ended November 30, 2011. The transaction resulted
in the acquisition of assets and liabilities as follows:

Physical
      assets
    $
    14,126,849Lease receivable
    
    711,229Intangible lease
      asset
    
    1,094,771Debt
    
    (3,409,000
    )Fair value
      premium on debt
    
    (186,493
    )Interest payable
    
    (87,356
    )Net cash consideration
paid
    $
    12,250,000


Physical
Assets:The EIP transmission assets move
electricity across New Mexico between Albuquerque and Clovis. The physical
assets include 216 miles of 345 kilovolts transmission lines, towers, easement
rights, converters and other grid support components. The assets are depreciated
for book purposes over an estimated useful life of 20 years. The amount of
depreciation of leased property reflected during the year ended November 30,
2011 was $294,309.

Lease:The project is leased on a triple net basis through April 1,
2015 to Public Service Company of New Mexico, an independent electric utility
company serving approximately 500,000 customers in New Mexico. Public Service
Company of New Mexico is a subsidiary of PNM Resources (NYSE: PNM). At the time
of expiration of the lease, the Company may choose to renew the lease with the
lessee, the lessee may offer to repurchase the EIP, or the lease can be allowed
to expire and the Company will find another lessee. Under the terms of the
lease, the Company will receive semi-annual lease payments. At the time of
acquisition, the rate of the lease was determined to be above market rates for
similar leased assets and the Company recorded an intangible asset of $1,094,771
for this premium which is being amortized as contra-lease income over the
remaining lease term.

DebtThe Company assumed a note with an outstanding principal
balance of $3.4 million. The debt is collateralized by the EIP transmission
assets. The note matures on October 1, 2012 and accrues interest at an annual
rate of 10.25 percent, with principal and interest payments due on a semi-annual
basis. At the time of acquisition, the interest rate on the assumed debt was
determined to be above market rates for similar debt and the Company recorded an
intangible of $186,493 for this premium which is being amortized as a
contra-interest expense over the remaining debt term.

8. Property and
Equipment

Property and equipment consists of the
following:

November 30,
      2011Natural gas
      pipeline
    
    $
    5,215,424Vehicles
    
    
    98,717Computers
    
    
    12,1505,326,291Less accumulated
      depreciation
    
    
    (1,483,616
    )$
    3,842,675


The amount of depreciation of property
and equipment recognized for the period from September 21, 2011 through November
30, 2011 was $69,945.

F-15

---



9. Leases

The Companys investment in EIP is
leased under net operating leases with various terms to Public Service Company
of New Mexico (PNM). PNM is referred to as the Major Tenant.

The future contracted minimum rental
receipts for all net leases as of November 30, 2011 are as follows:

Year Ending November 30,
    Amount2012
    $
    2,844,9142013
    
    2,844,9142014
    
    2,844,9142015
    
    1,422,457Thereafter
    
    Total
    $
    9,957,199


In view of the fact that the Major
Tenant leases a substantial portion of the Companys net leased property which
is a significant source of revenues and operating income, its financial
condition and ability and willingness to satisfy its obligations under its lease
with the Company, have a considerable impact on the results of operation and the
Companys ability to service its indebtedness.

The Major Tenant is currently subject
to the reporting requirements of the Securities Exchange Act of 1934, as
amended, and is required to file with the SEC annual reports containing audited
financial statements and quarterly reports containing unaudited financial
statements. The audited financial statements and unaudited financial statements
of the Major Tenant can be found on the SECs website at www.sec.gov. The
Company makes no representation as to the accuracy or completeness of the
audited and unaudited financial statements of the Major Tenant but has no reason
not to believe the accuracy or completeness of such information. In addition,
the Major Tenant has no duty, contractual or otherwise, to advise the Company of
any events that might have occurred subsequent to the date of such financial
statements which could affect the significance or accuracy of such information.
None of the information in the public reports of the Major Tenant that are filed
with the SEC is incorporated by reference into, or in any way form part of this
filing.

On December 31, 2009, Mowood sold one
of its wholly owned subsidiaries to an unrelated third party. As part of that
agreement, Mowood assumed a lease obligation, including insurance and other
maintenance costs, for office space to be used by the sold subsidiary through
April 2013. The fair value of the future minimum lease payments and estimated
costs were recorded as a liability upon the sale of the subsidiary.

|Years Ending November 30, |  | Lease Obligation |         | Interest Portion |   | Estimated Expenses |   | Total Obligation
|------------------------- |  | ---------------- | ------- | ---------------- | - | ------------------ | - | ----------------
|2012                      |  | $                | 80,453  |                  | $ | (2,948             | ) |                 
|2013                      |  |                  | 27,079  |                  |   | (238               | ) |                 
|                          |  | $                | 107,532 |                  | $ | (3,186             | ) |                 
|                          |  |                  |         |                  |   |                    |   |                 

10. Intangibles

The Company has recorded an intangible
lease asset for the fair value of the amount by which the remaining contractual
lease payments exceed market lease rates at the time of acquisition. The
intangible lease asset is being amortized on a straight-line basis over the life
of the lease term, which expires on April 1, 2015. Amortization of the
intangible lease asset is reflected in the accompanying Consolidated Statements
of Income as a reduction to lease income.

Intangible lease assetBalance at June
      30, 2011
    $
    1,094,771Less accumulated
      depreciation
    
    (121,641
    )Balance at
      November 30, 2011
    $
    973,130


Estimated amortization expense for the
five years succeeding November 30, 2011 are as follows:

Year Ending November 30,
    Amount2012
    $
    291,9392013
    
    291,9392014
    
    291,9392015
    
    97,3132016
    
    Total
    $
    973,130


F-16

---



11. Credit
Facilities

On November 30, 2011, the Company
entered into a 180-day rolling evergreen margin loan facility with Bank of
America, N.A. The terms of the agreement provide for a $10,000,000 facility that
is secured by certain of the Companys assets. Outstanding balances generally
will accrue interest at a variable rate equal to one-month LIBOR plus 0.75
percent and unused portions of the facility will accrue a fee equal to an annual
rate of 0.25 percent. The Company did not have any borrowings outstanding as of
November 30, 2011. As of November 30, 2011, the Company had segregated trading
securities with an aggregate value of $1,245,350 to serve as collateral for
potential borrowings under the loan facility.

On October 29, 2011, Mowood entered
into a revolving note payable with a financial institution with a maximum
borrowing base of $1,250,000. Borrowings on the note are secured by all of
Mowoods assets. Interest accrues at LIBOR, plus a 400 percent margin (4.25
percent at November 30, 2011), is payable monthly, with all outstanding
principal and accrued interest payable on October 29, 2012. There are no
outstanding borrowings under this agreement at November 30, 2011. The agreement
contains various restrictive covenants, with the most significant relating to
minimum consolidated fixed charge ratio, the incidence of additional
indebtedness, member distributions, extension of guaranties, future investments
in other subsidiaries and change in ownership.

12. Warrants

At November 30, 2011 and November 30,
2010, the Company had 945,594 warrants issued and outstanding. The warrants were
issued to stockholders that invested in the Companys initial private placements
and became exercisable on February 7, 2007 (the closing date of the Companys
initial public offering of common shares), subject to a lock-up period with
respect to the underlying common shares. Each warrant entitled the holder to
purchase one common share at the exercise price of $15.00 per common share.
Warrants were issued as separate instruments from the common shares and are
permitted to be transferred independently from the common shares. The warrants
have no voting rights and the common shares underlying the unexercised warrants
have no voting rights until such common shares are received upon exercise of the
warrants.

On April 8, 2011, a proposal was
approved by the Companys stockholders which allowed the Company to amend the
exercise price of its outstanding warrants from $15.00 per common share to an
amount equal to the greater of the market price of the Companys common shares
on the New York Stock Exchange or NAV, each as determined at the end of the
fiscal quarter immediately following approval of the
proposal, plus 7.0 percent, and to extend the expiration date of such warrants
by one year. Based on these guidelines, the exercise price of the warrants was
changed to $11.41 per common share as of May 31, 2011. All warrants expire on
February 6, 2014. This modification was not material to the financial
statements.

13. Earnings Per
Share

The following table sets forth the
computation of basic and diluted earnings per share:

|                                                   |  | For
      the year ended |           | For
      the year ended |   | For
      the year ended
|-------------------------------------------------- |  | ------------------------ | --------- | ------------------------ | - | ------------------------
|                                                   |  | November 30,
      2011  |           | November 30,
      2010  |   | November 30,
      2009 
|Net
    income                                     |  | $                        | 2,922,143 |                          | $ | 14,666,874              
|Basic and diluted weighted
      average shares(1) |  |                          | 9,159,809 |                          |   | 9,107,070               
|Basic and
      diluted earnings per share         |  | $                        | 0.32      |                          | $ | 1.61                    

|(1) | Warrants to purchase
      shares of common stock were outstanding during the periods reflected in
      the table above, but were not included in the computation of diluted
      earnings per share because the warrants exercise price was greater than
      the average market value of the common shares and, therefore, the effect
      would be anti-dilutive.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-17

---



14. Quarterly Financial Data
(Unaudited)

Summarized unaudited quarterly
financial data:

|                                                         |  |                         |           | **For the Fiscal Quarter Ended** |  |                    
|-------------------------------------------------------- |  | ----------------------- | --------- | -------------------------------- |  | -------------------
|                                                         |  | February 28,
      2011 |           | May 31, 2011                     |  | August 31,
    2011
|Sales revenue                                            |  | $                       |          |                                  |  | $                  
|Lease
      income                                       |  |                         |          |                                  |  |                    
|Total revenue                                            |  |                         |          |                                  |  |                    
|Cost of
      sales                                      |  |                         |          |                                  |  |                    
|Management fees, net of expense reimbursements           |  |                         | 234,680   |                                  |  |                    
|All other
      expenses                                 |  |                         | 153,843   |                                  |  |                    
|Total expenses                                           |  |                         | 388,523   |                                  |  |                    
|Income (loss)
      from operations, before income taxes |  |                         | (388,523  | )                                |  |                    
|Deferred tax benefit (expense), net                      |  |                         | 135,261   |                                  |  |                    
|Income (loss)
      from operations                      |  |                         | (253,262  | )                                |  |                    
|Realized and unrealized gain (loss) on securities        |  |                         |           |                                  |  |                    
|transactions, before income
taxes                        |  |                         | 677,745   |                                  |  |                    
|Distributions
      and income from investments, net     |  |                         | 561,786   |                                  |  |                    
|Other income                                             |  |                         |          |                                  |  |                    
|Total other income (loss), before income
      taxes     |  |                         | 1,239,531 |                                  |  |                    
|Current and deferred tax benefit (expense), net          |  |                         | 127,001   |                                  |  |                    
|Total other
      income (loss)                          |  |                         | 1,366,532 |                                  |  |                    
|Net income (loss)                                        |  | $                       | 1,113,270 |                                  |  | $                  
|Basic and diluted earnings per share                     |  | $                       | 0.12      |                                  |  | $                  
|                                                         |  |                         |           |                                  |  |                    

|(1) | Results of operations for
      the fiscal quarter ended November 30, 2011 reflect the consolidation of
      the Companys wholly owned subsidiary, Mowood, LLC, effective September
      21, 2011.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                         |  |                   |           |              |  |                 | For
      the Fiscal Quarter Ended |                   |  |   |            |  
|-------------------------------------------------------- |  | ----------------- | --------- | ------------ |  | --------------- | ---------------------------------- | ----------------- |  | - | ---------- | -
|                                                         |  | February 28, 2010 |           | May 31, 2010 |  | August 31, 2010 |                                    | November 30, 2010
|Total
      revenue                                      |  | $                 |          |              |  | $               |                                   |                   |  | $ |           |  
|Management fees, net of expense
      reimbursements     |  |                   | 258,268   |              |  |                 | 258,087                            |                   |  |   | 191,174    |  
|All other
      expenses                                 |  |                   | 220,187   |              |  |                 | 255,058                            |                   |  |   | 370,734    |  
|Total expenses                                           |  |                   | 478,455   |              |  |                 | 513,145                            |                   |  |   | 561,908    |  
|Income (loss)
      from operations, before income taxes |  |                   | (478,455  | )            |  |                 | (513,145                           | )                 |  |   | (561,908   | )
|Deferred tax benefit (expense),
      net                |  |                   | 73,198    |              |  |                 | 298,752                            |                   |  |   | 210,771    |  
|Income (loss)
      from operations                      |  |                   | (405,257  | )            |  |                 | (214,393                           | )                 |  |   | (351,137   | )
|Realized and unrealized gain
      (loss) on securities  |  |                   |           |              |  |                 |                                    |                   |  |   |            |  
|transactions, before income
      taxes                  |  |                   | 4,529,473 |              |  |                 | (6,711,026                         | )                 |  |   | 11,649,852 |  
|Distributions
      and income from investments, net     |  |                   | 681,764   |              |  |                 | 380,495                            |                   |  |   | 14,865     |  
|Other income                                             |  |                   | 10,392    |              |  |                 | 8,688                              |                   |  |   | 8,000      |  
|Total other
      income (loss), before income taxes     |  |                   | 5,221,629 |              |  |                 | (6,321,843                         | )                 |  |   | 11,672,717 |  
|Current and deferred tax benefit
      (expense), net    |  |                   | (798,849  | )            |  |                 | (744,134                           | )                 |  |   | (778,389   | )
|Total other
      income (loss)                          |  |                   | 4,422,780 |              |  |                 | (7,065,977                         | )                 |  |   | 10,894,328 |  
|Net income (loss)                                        |  | $                 | 4,017,523 |              |  | $               | (7,280,370                         | )                 |  | $ | 10,543,191 |  
|Basic and diluted earnings per share                     |  | $                 | 0.44      |              |  | $               | (0.80                              | )                 |  | $ | 1.16       |  
|                                                         |  |                   |           |              |  |                 |                                    |                   |  |   |            |  

F-18

---



15. Subsequent
Events

On December 1, 2011, the Company
terminated its Investment Advisory Agreement with the Adviser and executed a
Management Agreement with Corridor InfraTrust Management, LLC (Corridor). The
terms of the new Management Agreement include a quarterly management fee equal
to 0.25 percent (1.00 percent annualized) of the value of the Companys average
monthly managed assets for such quarter. Managed assets means all of the
securities of the Company and all of the real property assets of the Company
(including any securities or real property assets purchased with or attributable
to any borrowed funds) minus all of the accrued liabilities other than (1)
deferred taxes and (2) debt entered into for the purpose of leverage. The
Management Agreement also includes a quarterly incentive fee of 10 percent of
the increase in distributions paid over a threshold distribution equal to $0.125
per share per quarter. The Management Agreement also requires at least half of
any incentive fees to be reinvested in the Companys common stock. In addition,
the Company entered into a new Advisory Agreement by and among the Company,
Tortoise Capital Advisors, L.L.C. and Corridor under which Tortoise Capital
Advisors, L.L.C. will provide certain securities focused investment services
necessary to evaluate, monitor and liquidate the Companys remaining securities
portfolio and also provide the Company with certain operational (i.e.
non-investment) services. Corridor will compensate Tortoise Capital Advisors,
L.L.C. for such services provided to the Company.

On January 25, 2012, the Company filed
an amended shelf registration statement with the Securities and Exchange
Commission for the purposes of raising additional capital.

On February 6, 2012, the Company
declared a $0.11 per share distribution to be paid on March 1, 2012 to
stockholders of record on February 22, 2012.

The Company performed an evaluation of
subsequent events through the date the financial statements were issued and
determined that no additional items require recognition or
disclosure.

F-19

---



ADDITIONAL INFORMATION(Unaudited)

Officers and Directors as of
December 1, 2011

Name
    TTO PositionConrad S.
      Ciccotello
    DirectorJohn R. Graham
    DirectorCharles E.
      Heath
    DirectorRichard C. Green
    Director and Chairman of the
      BoardDavid J.
      Schulte
    Director and
      Chief Executive OfficerTerry C. Matlack
    Chief Financial
  OfficerEdward
      Russell
    PresidentDavid Haley
    Senior Vice
  PresidentRebecca M.
      Sandring
    TreasurerP. Bradley Adams
    Assistant TreasurerConnie J.
      Savage
    SecretaryDiane M. Bono
    Assistant
  Secretary


Director and Officer
Compensation

The Company does not compensate any of
its directors who are interested persons (as defined in Section 2 (a) (19) of
the 1940 Act) or any of its officers. For the year ended November 30, 2011, the
aggregate compensation paid by the Company to the independent directors was
$69,000. The Company did not pay any special compensation to any of its
directors or officers.

Forward-Looking
Statements

This report contains forward-looking
statements. By their nature, all forward-looking statements involve risk and
uncertainties, and actual results could differ materially from those
contemplated by the forward-looking statements.

Certifications

The Companys Chief Executive Officer
submitted to the New York Stock Exchange the annual CEO certification as
required by Section 303A.12(a) of the NYSE Listed Company Manual.

The Company has filed with the SEC the
certification of its Chief Executive Officer and Chief Financial Officer
required by Section 302 of the Sarbanes-Oxley Act.

Proxy Voting
Policies

A description of the policies and
procedures that the Company uses to determine how to vote proxies relating to
portfolio securities owned by the Company is available to stockholders (i)
without charge, upon request by calling the Company at (913) 981-1020 or
toll-free at (866) 362-9331 and on the Companys Web site at
www.tortoiseadvisors.com/tto.cfm; and (ii) on the SECs Web site at
www.sec.gov.

Privacy Policy

The Company is committed to maintaining
the privacy of its stockholders and safeguarding their non-public personal
information. The following information is provided to help you understand what
personal information the Company collects, how the Company protects that
information and why, in certain cases, the Company may share information with
select other parties.

Generally, the Company does not receive
any non-public personal information relating to its stockholders, although
certain non-public personal information of its stockholders may become available
to the Company. The Company does not disclose any non-public personal
information about its stockholders or a former stockholder to anyone, except as
required by law or as is necessary in order to service stockholder accounts (for
example, to a transfer agent).

The Company restricts access to
non-public personal information about its stockholders to employees of its
Adviser with a legitimate business need for the information. The Company
maintains physical, electronic and procedural safeguards designed to protect the
non-public personal information of its stockholders.

Automatic Dividend Reinvestment
Plan

If a stockholders shares of common
stock (common shares) of the Company are registered directly with the Company
or with a brokerage firm that participates in the Automatic Dividend
Reinvestment Plan (the Plan) through the facilities of the Depository Trust
Company and such stockholders account is coded dividend reinvestment by such
brokerage firm, all distributions are automatically reinvested for stockholders
by the Plan Agent, Computershare Trust Company, Inc. (the Agent) in additional
common shares (unless a stockholder is ineligible or elects
otherwise).

The Company will use primarily
newly-issued shares of the Companys common stock to implement the Plan, whether
its shares are trading at a premium or discount to net asset value (NAV).
However, the Company reserves the right to instruct the Agent to purchase shares
in the open market in connection with the Companys obligations under the Plan.
The number of

F-20

---



newly issued shares will be determined by
dividing the total dollar amount of the distribution payable to the participant
by the closing price per share of the Companys common stock on the distribution
payment date, or the average of the reported bid and asked prices if no sale is
reported for that day. If distributions are reinvested in shares purchased on
the open market, then the number of shares received by a stockholder shall be
determined by dividing the total dollar amount of the distribution payable to
such stockholder by the weighted average price per share (including brokerage
commissions and other related costs) for all shares purchased by the Agent on
the open-market in connection with such distribution. Such open-market purchases
will be made by the Agent as soon as practicable, but in no event more than 30
days after the distribution payment date.

There will be no brokerage charges with
respect to shares issued directly by us as a result of distributions payable
either in shares or in cash. However, each participant will pay a pro rata share
of brokerage commissions incurred with respect to the Plan Agents open-market
purchases in connection with the reinvestment of distributions. If a participant
elects to have the Plan Agent sell part or all of his or her common shares and
remit the proceeds, such participant will be charged his or her pro rata share
of brokerage commissions on the shares sold plus a $15.00 transaction fee. The
automatic reinvestment of distributions will not relieve participants of any
federal, state or local income tax that may be payable (or required to be
withheld) on such distributions.

Participation in the Plan is completely
voluntary and may be terminated at any time without penalty by giving notice in
writing to the Agent at the address set forth below, or by contacting the Agent
as set forth below; such termination will be effective with respect to a
particular distribution if notice is received prior to the record date for such
distribution.

Additional information about the Plan
may be obtained by writing to Computershare Trust Company, N.A., P.O. Box 43078,
Providence, Rhode Island 02940-3078, by contacting them by phone at (800)
426-5523, or by visiting their Web site atwww.computershare.com.

F-21

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Tortoise Capital Resources
      Corporation


SIGNATURES

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

TORTOISE CAPITAL RESOURCES
      CORPORATION(Registrant)By:
    /s/David J.
      SchulteDavid J.
    SchulteDirector and Chief Executive
      Officer


February
13, 2012


POWER OF ATTORNEY

Know all people by these presents, that
each person whose signature appears below constitutes and appoints David J.
Schulte and Terry C. Matlack, and each of them, his or her true and lawful
attorneys-in-fact and agents, with full power of substitution and substitution,
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any amendments to this Annual Report on Form 10-K, and to
file the same, with all exhibits thereto, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully and to
all intents and purposes as he or she might or could do in person, herby
confirming all that said attorneys-in-fact and agents or either of them, or his
or their substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

Pursuant to the requirements of the
Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the company and in the capacities indicated on
February 13, 2012.



Signature
    
    Capacity/s/Terry C.Matlack
    
    
    Chief Financial
    Officer(Principal Financial and
      Accounting Officer)/s/David J.Schulte
    
    
    Director and Chief Executive
    Officer(Principal Executive
      Officer)/s/Conrad S.Ciccotello
    
    
    Director/s/John R.Graham
    
    
    Director/s/Charles E.Heath
    
    
    Director/s/Richard C.
      Green
    
    
    Director


F-22

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