UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



FORM 10-K



(Mark One)



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



For the fiscal year ended December 31,
2019



OR



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



Commission file number: 814-01301



MONROE CAPITAL INCOME PLUS CORPORATION

(Exact Name of Registrant as Specified
in its Charter)



|Maryland                                                       | 83-0711022                          
|-------------------------------------------------------------- | ------------------------------------
|(State or Other Jurisdiction of
Incorporation or Organization) | (I.R.S. Employer
Identification No.)



|311 South Wacker Drive, Suite 6400
Chicago, Illinois | 60606     
|---------------------------------------------------- | ----------
|(Address of Principal Executive Office)              | (Zip Code)



(312) 258-8300

(Registrant’s Telephone Number,
Including Area Code)



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



|Title of Each Class |  | Trading Symbol(s) |  | Name of Each Exchange on Which Registered
|------------------- |  | ----------------- |  | -----------------------------------------
|None                |  | N/A               |  | N/A                                      



Securities registered pursuant
to Section 12(g) of the Act: Common Stock, par value $0.001 per share



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



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



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



Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). YesxNo
 ̈



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



|Large accelerated filer |  ̈ | Accelerated filer         |  ̈
|----------------------- | - | ------------------------- | -
|                        |   |                           |  
|Non-accelerated filer   | x | Smaller reporting company |  ̈
|                        |   |                           |  
|Emerging growth company | x |                           |  



If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ̈



Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).Yes ̈
Nox



As of December 31, 2019,
there was no established public market for the Registrant’s common stock.



As of March 9, 2020, the registrant had
8,911,373 shares of common stock, $0.001 par value, outstanding.



Documents Incorporated by Reference



Portions of the registrant’s definitive
proxy statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A relating to the registrant’s
2020 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission within 120 days following the end
of the Company’s fiscal year, are incorporated by reference in Part III of this Annual Report on Form 10-K as indicated herein.




















TABLE OF CONTENTS



|                                                                                                                         | Page
|------------------------------------------------------------------------------------------------------------------------ | ----
|PART I                                                                                                                   | 5   
|Item
    1. Business                                                                                                     | 5   
|Item
    1A. Risk Factors                                                                                                | 25  
|Item
    1B. Unresolved Staff Comments                                                                                   | 49  
|Item
    2. Properties                                                                                                   | 49  
|Item
    3. Legal Proceedings                                                                                            | 49  
|Item
    4. Mine Safety Disclosures                                                                                      | 49  
|PART II                                                                                                                  | 50  
|Item
    5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 50  
|Item
    6. Selected Consolidated Financial Data                                                                         | 50  
|Item
    7. Management’s Discussion and Analysis of Financial Condition and Results of Operations                        | 51  
|Item
    7A. Quantitative and Qualitative Disclosures About Market Risk                                                  | 61  
|Item
    8. Financial Statements and Supplementary Data                                                                  | 61  
|Item
    9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                         | 61  
|Item
    9A. Controls and Procedures                                                                                     | 62  
|Item
    9B. Other Information                                                                                           | 62  
|PART III                                                                                                                 | 63  
|Item
    10. Directors, Executive Officers and Corporate Governance                                                      | 63  
|Item
    11. Executive Compensation                                                                                      | 63  
|Item
    12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters              | 63  
|Item
    13. Certain Relationships and Related Transactions, and Director Independence                                   | 63  
|Item
    14. Principal Accountant Fees and Services                                                                      | 63  
|PART IV                                                                                                                  | 64  
|Item
    15. Exhibits and Financial Statement Schedules                                                                  | 64  
|Item
    16. Form 10-K Summary                                                                                           | 65  
|Signatures                                                                                                               | 66  





2







CERTAIN DEFINITIONS



Except as otherwise specified
in this Annual Report on Form 10-K (“Annual Report”), the terms:



| | • | “we,”
    “us,” “our” and the “Company” refer to Monroe Capital Income Plus Corporation, a Maryland
    corporation, and its consolidated subsidiaries;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | MC Advisors refers to Monroe Capital BDC Advisors, LLC, our investment adviser, a Delaware limited liability company and affiliate of Monroe Capital;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------



| | • | MC Management refers to Monroe Capital Management Advisors, LLC, our administrator, a Delaware limited liability company and affiliate of Monroe Capital;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Monroe Capital refers to Monroe Capital LLC, a Delaware limited liability company, and its subsidiaries and affiliates.
| | - | -----------------------------------------------------------------------------------------------------------------------





3







FORWARD-LOOKING STATEMENTS



This Annual Report contains
statements that constitute forward-looking statements which are subject to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Statements that are not historical are forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Some of the statements in this Annual
Report constitute forward-looking statements because they relate to future events or our future performance or future financial
condition. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and
projections about our company, our industry, our beliefs and our assumptions. The forward-looking statements contained in this
Annual Report involve risks and uncertainties, including statements as to:



| | • | our future operating results;
| | - | -----------------------------



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



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



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



| | • | the impact of increased competition;
| | - | ------------------------------------



| | • | the impact of fluctuations in interest rates on our business and our portfolio companies;
| | - | -----------------------------------------------------------------------------------------



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



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



| | • | actual and potential conflicts of interest with MC Advisors, MC Management and other affiliates of Monroe Capital;
| | - | ------------------------------------------------------------------------------------------------------------------



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



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



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



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



| | • | the ability of MC Advisors to locate suitable investments for us and to monitor and administer our investments;
| | - | ---------------------------------------------------------------------------------------------------------------



| | • | the ability of MC Advisors or its affiliates to attract and retain highly talented professionals;
| | - | -------------------------------------------------------------------------------------------------



| | • | our ability to qualify and maintain our qualification as a regulated investment company and as a business development company; and
| | - | ----------------------------------------------------------------------------------------------------------------------------------



| | • | the impact of future legislation and regulation on our business and our portfolio companies.
| | - | --------------------------------------------------------------------------------------------



We
use words such as “anticipates,” “believes,” “expects,” “intends,” “seeks,”
 “plans,” “estimates,” “targets” and similar expressions to identify forward-looking statements.
The forward-looking statements contained in this Annual Report involve risks and uncertainties. Our actual results could differ
materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in
 “Part I — Item 1A. Risk Factors” in this Annual Report.



Although we believe that
the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be
inaccurate, and as a result, the forward-looking statements based on those assumptions also could be inaccurate. Important assumptions
include our ability to originate new loans and investments, certain margins and levels of profitability and the availability of
additional capital. In light of these and other uncertainties, the inclusion of a projection or forward-looking statements in this
Annual Report should not be regarded as a representation by us that our plans and objectives will be achieved.



We have based the forward-looking
statements included in this Annual Report on information available to us on the date of this Annual Report, and we assume no obligation
to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements
in this Annual Report, whether as a result of new information, future events or otherwise, you are advised to consult any additional
disclosures that we may make directly to you or through reports that we may file in the future with the Securities and Exchange
Commission (the “SEC”), including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and current reports on
Form 8-K.





4







PART
I



ITEM 1. BUSINESS



FORMATION OF OUR COMPANY



We are a Maryland
corporation formed on May 30, 2018. We are an externally managed closed-end, non-diversified specialty finance company organized
to maximize the total return to our stockholders in the form of current income and capital appreciation through a variety of investments.
On January 14, 2019, we elected to be regulated as a business development company (“BDC”) under the Investment Company
Act of 1940, as amended (the “1940 Act”). After our election to be regulated as a BDC, we elected to be treated
as a regulated investment company (“RIC”) under the U.S. Internal Revenue Code of 1986, as amended (the “Code”),
commencing with our taxable year ended December 31, 2019.



We are an emerging growth
company as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) and we intend to take advantage
of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities
Act”), for complying with new or revised accounting standards.



We are conducting a best
efforts, continuous private offering of our common stock to “accredited investors” in reliance on an exemption from
the registration requirements of the Securities Act (a “Private Offering”). At each closing, an investor will purchase
shares of our common stock pursuant to a subscription agreement entered into with us. At each closing, investors will be required
to fund their full subscription to purchase shares of our common stock. We commenced our loan origination and investment activities
contemporaneously with the initial closing of the Private Offering on January 15, 2019 (the “Initial Closing Date”).



On June 27, 2018, we issued
and sold 100 shares of common stock, par value $0.001, at an aggregate purchase price of $1,000 ($10.00 per share) to MC Management,
an affiliate of MC Advisors, our investment adviser. The sale of our common stock was approved by the unanimous consent of our
Board of Directors (the “Board”) at the time.



The following table summarizes the issuance
of shares pursuant to the Private Offering during the year ended December 31, 2019:



|Date             |  | Shares Issued |           |  | NAV Per Share |   |       | Proceeds | 
|---------------- |  | ------------- | --------- |  | ------------- | - | ----- | -------- | 
|January 15, 2019 |  |               | 1,017,500 |  |               | $ | 10.00 |          | 
|April 2, 2019    |  |               | 1,596,600 |  |               | $ | 10.00 |          | 
|April 4, 2019    |  |               | 275,500   |  |               | $ | 10.00 |          | 
|April 8, 2019    |  |               | 21,000    |  |               | $ | 10.00 |          | 
|July 1, 2019     |  |               | 2,384,300 |  |               | $ | 10.00 |          | 
|October 1, 2019  |  |               | 1,527,500 |  |               | $ | 10.00 |          | 
|Total proceeds   |  |               |           |  |               |   |       |          | 



For the year ended December 31, 2019, we
also issued 52,032 shares with an aggregate value of $520,321 under our Dividend Reinvestment Plan (“DRIP”).



OVERVIEW OF OUR BUSINESS



We are a
specialty finance company that is focused on providing financing solutions primarily to lower middle-market companies in the
United States and Canada. Our investment objective is to provide stockholders with attractive risk-adjusted returns with the
downside protection associated with investing in asset-based and secured corporate private credit opportunities in a manner
that is decoupled from public markets’ volatility.We seek to provide attractive risk-adjusted returns and
downside protection by investing primarily in secured private credit transactions and assets, targeting investments that have
significant downside protection through a focus on asset coverage. We expect to invest primarily in: (i) senior secured and
junior secured and unsecured loans, notes, bonds, preferred equity (including preferred partnership equity), convertible debt
and other securities; (ii) unitranche secured loans (a combination of senior secured and junior
secured debt in the same facility in which we syndicate a “first out” portion of the loan to an investor and
retain a “last out” portion of the loan)and securities; (iii) asset-based loans and securities; (iv)
small business loans and leases; (v) structured debt and structured equity; (vi) syndicated loans; (vii) securitized debt and
subordinated notes of collateralized loan obligations (“CLO”) facilities, asset-backed securities and other
securitized products and warehouse loan facilities (“Securitized Products”); (viii) opportunities to acquire illiquid investments
from other third-party funds as a result of liquidity constraints resulting from investor redemptions and market
dislocations; and (ix) capital investments in the secondary markets.





We do not limit our investments
to any particular industry or geographic area when investing in qualifying assets (as defined in Section 55(a) of the 1940 Act),
which are expected to constitute at least 70% of total assets. Subject to that requirement, we may also invest in issuers in the
specialty finance, consumer finance, litigation finance, and commercial and residential real estate finance areas, as well as in
fund finance, secondary opportunities in pooled investment funds managed by a third-party investment adviser and private equity
or private debt fund-level financing backed by the residual value of third-party private equity or private debt fund portfolio
companies. We seek to take advantage of the supply and demand gap in multiple segments of the private credit markets throughout
an economic cycle.





We seek to
use Monroe Capital’s extensive leveraged finance origination infrastructure and broad expertise in sourcing loans to invest
in senior secured, unitranche secured and junior secured debt of middle-market companies.Our investment size will vary
proportionately with the size of our capital base. We believe that our focus on lending to lower middle-market
companies offers several advantages as compared to lending to larger companies, including more attractive economics, lower leverage,
more comprehensive and restrictive covenants, more expansive events of default, relatively small debt facilities that provide us
with enhanced influence over our borrowers, direct access to borrower management and improved information flow.





We expect that the companies in which we
invest may be leveraged, often as a result of leveraged buy-outs or other recapitalization transactions, and, in certain cases,
will not be rated by national ratings agencies. If such companies were rated, we believe that they would typically receive a rating
below investment grade (between BB and CCC under the Standard & Poor’s system) from the national rating agencies.









5









Since the commencement of operations,
we have grown the fair value of our portfolio of investments to approximately $100,806,983 at December 31, 2019. Our portfolio
at December 31, 2019 consists of 37 different portfolio companies and holdings include senior secured, unitranche secured debt
and equity investments. As of December 31, 2019, we have borrowed $31,200,000 under our revolving credit facility. As of December
31, 2019, our portfolio included approximately 98.5% senior secured debt, 1.0% unitranche secured debt and 0.5% equity securities.



OUR INVESTMENT ADVISOR



Our investment activities
are managed by our investment advisor, MC Advisors, pursuant to an investment advisory agreement (the “Investment Advisory
Agreement”). MC Advisors is responsible for sourcing potential investments, conducting research and due diligence on prospective
investments and their private equity sponsors, analyzing investment opportunities, structuring our investments and managing our
investments and portfolio companies on an ongoing basis. MC Advisors was organized in February 2011 and is a registered investment
adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”).



Under our Investment Advisory
Agreement with MC Advisors, we pay MC Advisors a base management fee and an incentive fee for its services. While not expected
to review or approve each investment, our independent directors periodically review MC Advisors’ services and fees as well
as its portfolio management decisions and portfolio performance. In connection with these reviews, our Board, including the independent
directors, consider whether our fees and expenses (including those related to leverage) remain appropriate.



MC Advisors seeks to capitalize
on the significant deal origination, credit underwriting, due diligence, investment structuring, execution, portfolio management
and monitoring experience of Monroe Capital’s investment professionals. The senior management team of Monroe Capital, including
Theodore L. Koenig and Aaron D. Peck, provides investment services to MC Advisors pursuant to a staffing agreement, or the Staffing
Agreement, between MC Management, an affiliate of Monroe Capital, and MC Advisors. Monroe Capital is a leading U.S.-based private
credit asset management firm with approximately $9.2 billion in assets under management as of January 1, 2020.



Our
investment committee is composed of Mr. Koenig, Mr. Peck and Michael J. Egan. The investment committee is also advised by
certain senior investment professionals of Monroe Capital from time to time.The investment committee has substantial
experience in lending and investing through multiple economic cycles and intends to utilize the established asset management
infrastructure and extensive direct lending relationships of MC Advisors to generate proprietary private credit deal flow.  Monroe
Capital’s core team of investment professionals has an established track record in sourcing, underwriting, executing
and monitoring transactions. From Monroe Capital’s formation in 2004 through December 31, 2019, Monroe Capital’s
investment professionals invested in over 1,300 loans and related investments in an aggregate amount of over $17.0
billion.



In addition to his role
with Monroe Capital and MC Advisors, Mr. Koenig serves as an interested director on our Board. Mr. Koenig has more than 35 years
of experience in structuring, negotiating and closing transactions on behalf of asset-backed lenders, commercial finance companies,
financial institutions and private equity investors at organizations including Monroe Capital, which Mr. Koenig founded in 2004,
and Hilco Capital LP, where he led investments in over 20 companies in the lower middle-market. Mr. Peck has more than 25 years
of public company management, leveraged finance and commercial lending experience at organizations including Deerfield Capital
Management LLC, Black Diamond Capital Management LLC and Salomon Smith Barney Inc. Mr. Egan is a senior investment professional
at Monroe Capital. Mr. Egan has more than 35 years of experience in commercial finance, credit administration and banking at organizations
including Hilco Capital, The CIT Group/Business Credit, Inc., The National Community Bank of New Jersey (The Bank of New York)
and KeyCorp.



ABOUT MONROE CAPITAL



Monroe Capital, a Delaware
limited liability company that was founded in 2004, is a leading lender to middle-market companies. As of January 1, 2020, Monroe
Capital had approximately $9.2 billion in assets under management. Over its sixteen-year history, Monroe Capital has developed
an established lending platform that we believe generates consistent deal flow from a network of proprietary relationships. Monroe
Capital’s assets under management are comprised of a diverse portfolio of over 500 current investments that were either originated
directly by Monroe Capital or sourced from Monroe Capital’s third-party relationships. From Monroe Capital’s formation
in 2004 through December 31, 2019, Monroe Capital’s investment professionals invested in over 1,300 loans and related investments
in an aggregate amount of over $17.0 billion. The senior investment team of Monroe Capital averages more than 30 years of experience
and has developed a proven investment and portfolio management process that has performed through multiple market cycles. In addition,
Monroe Capital’s investment professionals are supported by a robust infrastructure of administrative and back-office personnel
focused on compliance, operations, finance, treasury, legal, accounting and reporting, marketing, information technology and office
management.





6







INVESTMENT STRATEGY



Our investment objective is to provide
stockholders with attractive risk-adjusted returns with the downside protection associated with investing in asset-based and secured
corporate private credit opportunities in a manner that is decoupled from public markets’ volatility. We seek to provide
attractive risk-adjusted returns and downside protection by investing primarily in secured private credit transactions and assets,
targeting investments that have significant downside protection through a focus on asset coverage. We invest primarily in: (i)
senior secured and junior secured and unsecured loans, notes, bonds, preferred equity (including preferred partnership equity),
convertible debt and other securities; (ii) unitranche secured loans (a combination of senior secured and junior secured debt in
the same facility in which we syndicate a “first out” portion of the loan to an investor and retain a “last out”
portion of the loan) and securities; (iii) asset-based loans and securities; (iv) small business loans and leases; (v) structured
debt and structured equity; (vi) syndicated loans; (vii) securitized products; (viii) opportunities to acquire illiquid investments
from other third-party funds as a result of liquidity constraints resulting from investor redemptions and market dislocations;
and (ix) capital investments in the secondary markets. We do not target any specific industry, however, as of December 31, 2019,
our investments in the Banking, Finance, Insurance & Real Estate, Healthcare & Pharmaceuticals, and High Tech industries
represented approximately 19.4%, 15.3% and 13.1% respectively, of the fair value of our portfolio.



We will not limit ourselves to any
particular industry or geographic area when investing in qualifying assets (as defined in Section 55(a) of the 1940 Act
and discussed in “— Regulation” below) which generally must constitute at least 70% of our total
assets. Subject to that requirement, we may also invest in issuers in the specialty finance, consumer finance, litigation
finance, and commercial and residential real estate finance areas, as well as in secondary opportunities in pooled investment
funds managed by a third-party investment adviser and private equity fund-level financing backed by the residual value of
third-party private equity fund portfolio companies. We seek to take advantage of the supply and demand gap in multiple
segments of the private credit markets throughout an economic cycle.



We may pursue
out-of-favorsectors where we can acquire investments at a significant discount to the fundamental value of an issuer’s
underlying assets, such as situations where an issuer has liquidity issues, limited refinancing choices, is under time pressure,
or has a complicated or faulty capital structure; companies undergoing, or considered likely to undergo, reorganizations; and other
pooled investment funds that are dedicated to investing in certain or all of the foregoing.



We have a broad and
flexible investment program which allows for maximum flexibility to move quickly and efficiently on sectors and opportunities as
economic conditions warrant. This adaptability should facilitate our efforts to seek out inefficiencies and mispricings in markets
and in investment arenas in which there is a shortage of financing options. A key advantage is our ability to shift exposures as
markets change and the economic cycle fluctuates, and to capitalize on attractive opportunities and strategies wherever and whatever
they might be.



We employ a conviction-based approach when
allocating capital within our portfolio. Rather than equally weighting each investment, factors such as perceived organizational
risk, team risk, strategy risk and legal risk in comparison to the potential return and diversification benefits associated with
a particular investment or strategy will heavily influence commitment amounts to each underlying transaction. In the event of downturns
in the economic cycle, our investment strategy gives us the flexibility to shift investment allocations to areas with the highest
risk adjusted return potential.



Our investment strategy includes the following:



Protection
of Capital: Wefocus on the safety and protection of invested capital, which directly results from the underwriting
process. Depending on the type of transaction, the loan may have structural protection by being collateralized and will typically
have a lien on all of the borrower’s tangible and intangible assets, and a pledge of all company stock. Covenants will provide
the ability for early intervention in the event of deteriorating financial performance of an underlying borrower. Other types of
transactions will be protected by detailed analysis and on-going monitoring of collateral.



Conservative
Structure: Depending on the type of transaction, loans are expected to have low leverage ratios, conservative loan-to-value
and significant equity capital support. When applicable, loans will also have amortization and excess cash-flow recapture based
on a conservative estimate of the borrower’s projected free cash-flow. Each transaction will be executed to provide us with
the optimal structure for the specific industry.



Return
Enhancement: Certain corporate loan transactions will allow us additional yield generation through warrants,
equity co-investments, payment-in-kind (“PIK”) interest, success fees and prepayment fees.



Active
Investor and Operating Approach to Value Creation: MC Advisors has significant experience in sourcing, structuring,
closing, managing and exiting investments. Prior to making an investment on our behalf, MC Advisors  conducts a comprehensive
financial and operational underwriting process to determine the factors likely to impact ongoing performance by portfolio companies
or a proposed restructuring or recapitalization process. This analysis  includes the following:



| | · | Due Diligence – MC Advisorsutilizes well-defined credit and underwriting criteria and proprietary investment management tools developed through its extensive experience. Standard due diligence items include in-person meetings with senior management, company and asset owners, onsite corporate and asset visits, and detailed calls with key customers and suppliers. MC Advisors may also utilize third-party firms to conduct quality of earnings analyses, special purpose accounting reviews, asset and enterprise value appraisals, management background checks on senior company management, field audits and business plan reviews. As part of this detailed process, MC Advisors utilizes recognized and experienced vendors (such as external legal counsel, field examiners and asset appraisers) in order to promote consistency and efficiency.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





7







| | · | Strategic
    Planning – MC Advisors is actively involved in identification, development and execution of various strategies for
    portfolio companies.                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                         
| | · | Executive Development – MC Advisors  draws on its network of relationships to assist in the recruiting and developing the management of portfolio companies, as needed.                                 
| |   |                                                                                                                                                                                                         
| | · | Capital Formation – MC Advisors draws on its relationships in the banking, finance, private equity, investment banking and capital markets to assist portfolio companies in capital sourcing, as needed.



Predictability of
Returns. Beyond conservative structuring and protection of capital, we seek a predictable exit from our investments. We
seek to invest in situations where there are a number of potential exit options that can result in full repayment or a modest refinance
of our investment. We seek to structure the majority of our transactions as secured loans with a covenant package that provides
for full or partial repayment upon the completion of asset sales and restructurings. Because we seek to structure these transactions
to provide for contractually determined, periodic payments of principal and interest, we are less likely to depend on merger and
acquisition activity or public equity markets to exit our debt investments. As a result, we believe that we can achieve our target
returns even in a period when public markets are depressed.



BUSINESS STRATEGY



We believe that we represent
an attractive investment opportunity for the following reasons:



Deep, Experienced
Management Team. We are managed by MC Advisors, which has access through the Staffing Agreement to Monroe Capital’s
experienced team comprised of over 120 professionals, including seven senior partners that average more than 30 years of direct
lending experience. We are led by our Chairman and Chief Executive Officer, Theodore L. Koenig, and Aaron D. Peck, our Chief Financial
Officer and Chief Investment Officer. This extensive experience includes the management of investments with borrowers of varying
credit profiles and transactions completed in all phases of the credit cycle. Monroe Capital’s senior investment professionals
provide us with a difficult-to-replicate sourcing network and a broad range of transactional, financial, managerial and investment
skills. This expertise and experience is supported by administrative and back office personnel focused on operations, finance,
legal and compliance, accounting and reporting, marketing, information technology and office management. From Monroe Capital’s
formation in 2004 through December 31, 2019, Monroe Capital’s investment professionals invested in over 1,300 loans and related
investments in an aggregate amount of over $17.0 billion.



Differentiated Relationship-Based
Sourcing Network. We believe Monroe Capital’s senior investment professionals benefit from extensive relationships
with commercial banks, private equity firms, financial intermediaries, management teams and turn-around advisors. We believe that
this broad sourcing network differentiates us from our competitors and offers us a diversified origination approach that does not
rely on a single channel and offers us consistent deal flow throughout the economic cycle. We also believe that this broad network
allows us to originate a substantial number of non-private equity-sponsored investments.



Extensive Institutional
Platform for Originating Middle-Market Deal Flow. Monroe Capital’s broad network of relationships and significant
origination resources enable us to review numerous lending opportunities, permitting us to exercise a high degree of selectivity
in terms of loans to which we ultimately commit. Monroe Capital estimates that it reviewed approximately 2,000 investment opportunities
during 2019. Monroe Capital’s over 1,300 previously executed transactions, over 500 of which are with current borrowers,
offer us another source of deal flow, as these debt investments reach maturity or seek refinancing. We are also positioned to benefit
from Monroe Capital’s established brand name, strong track record in partnering with industry participants and reputation
for closing deals on time and as committed. Monroe Capital’s senior investment professionals are complemented by extensive
experience in capital markets transactions, risk management and portfolio monitoring.



Disciplined, “Credit-First”
Underwriting Process. Monroe Capital has developed a systematic underwriting process that applies a consistent approach
to credit review and approval, with a focus on evaluating credit first and then appropriately assessing the risk-reward profile
of each loan. MC Advisors’ assessment of credit outweighs pricing and other considerations, as we seek to minimize potential
credit losses through effective due diligence, structuring and covenant design. MC Advisors seeks to customize each transaction
structure and financial covenant to reflect risks identified through the underwriting and due diligence process. We also seek to
actively manage our origination and credit underwriting activities through personal visits and calls on all parties involved with
an investment, including the management team, private equity sponsors, if any, or other lenders.



Established Credit
Risk Management Framework. We seek to manage our credit risk through a well-defined portfolio strategy and credit policy.
In terms of credit monitoring, MC Advisors assigns each loan to a particular portfolio management professional and maintains an
internal credit rating analysis for all loans. MC Advisors then employs ongoing review and analysis, together with regular investment
committee meetings to review the status of certain complex and challenging loans and a comprehensive quarterly review of all loan
transactions. MC Advisors’ investment professionals also have significant turnaround and debt work-out experience, which
gives them perspective on the risks and possibilities throughout the entire credit cycle. We believe this careful approach to investment
and monitoring enables us to identify problems early and gives us an opportunity to assist borrowers before they face difficult
liquidity constraints. By anticipating possible negative contingencies and preparing for them, we believe that we diminish the
probability of underperforming assets and loan losses.





8







INVESTMENTS

Investment Structure



We structure our investments,
which typically have maturities of three to seven years, as follows:



Senior Secured Loans.
We structure senior secured loans to obtain security interests in the assets of the portfolio company borrowers that serve as collateral
in support of the repayment of such loans. This collateral may take the form of first-priority liens on the assets of the portfolio
company borrower. Our senior secured loans may provide for moderate loan amortization in the early years of the loan, with the
majority of the amortization deferred until loan maturity.



Unitranche Secured Loans.
We structure our unitranche secured loans as senior secured loans. We obtain security interests in the assets of these portfolio companies
that serve as collateral in support of the repayment of these loans. This collateral may take the form of first-priority liens
on the assets of a portfolio company. Generally, we syndicate a “first out” portion of the loan to an investor and
retain a “last out” portion of the loan, in which case the “first out” portion of the loan will generally
receive priority with respect to payments of principal, interest and any other amounts due thereunder. Unitranche structures combine
characteristics of traditional first lien senior secured as well as second lien and subordinated loans and our unitranche secured loans
will expose us to the risks associated with second lien and subordinated loans and may limit our recourse or ability to recover
collateral upon a portfolio company’s bankruptcy. Unitranche secured loans typically provide for moderate loan amortization in the
initial years of the facility, with the majority of the amortization deferred until loan maturity. Unitranche secured loans generally allow
the borrower to make a large lump sum payment of principal at the end of the loan term, and there is a risk of loss if the borrower
is unable to pay the lump sum or refinance the amount owed at maturity. In many cases we, together with our affiliates, are the
sole or majority lender of our unitranche secured loans, which can afford us additional influence with a borrower in terms of monitoring
and, if necessary, remediation in the event of underperformance.



Junior Secured Loans.We structure junior secured loans to obtain a security interest in the assets of these portfolio companies that serves as collateral
in support of the repayment of such loans. This collateral may take the form of second priority liens on the assets of a portfolio
company. These loans typically provide for moderate loan amortization in the initial years of the facility, with the majority of
the amortization deferred until loan maturity.



Preferred Equity.
We generally structure preferred equity investments to combine features of equity and debt. We may obtain a security interest in
the assets of these portfolio companies that serves as collateral in support of the repayment of such preferred equity, which takes
a priority to common stockholders. Preferred equity interests generally have a stated dividend rate and may not have a fixed maturity
date.



Warrants and Equity
Co-Investment Securities. In some cases, we may also receive nominally priced warrants or options to buy a minority equity
interest in the portfolio company in connection with a loan. As a result, as a portfolio company appreciates in value, we may achieve
additional investment return from this equity interest. We may structure such warrants to include provisions protecting our rights
as a minority-interest holder, as well as a “put,” or right to sell such securities back to the issuer, upon the occurrence
of specified events. In other cases, we may make a minority equity co-investment in the portfolio company in connection with a
loan. Additionally, we may receive equity in our distressed portfolio companies in conjunction with amendments or additional debt
fundings.



We tailor the terms of
each investment to the facts and circumstances of the transaction and the prospective portfolio company, negotiating a structure
that protects our rights and manages our risk while creating incentives for the portfolio company to achieve its business plan
and improve its operating results. We seek to limit the downside potential of our investments by:



| | • | selecting investments that we believe have a very low probability of loss;                                                                                                                                                                                                                                                                                                                                                                                           
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | • | requiring a total return on our investments, including both interest and potential equity appreciation, that we believe will compensate us appropriately for credit risk; and                                                                                                                                                                                                                                                                                        
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | • | negotiating covenants in connection with our investments that afford our portfolio companies as much flexibility in managing their businesses as possible, consistent with the preservation of our capital. Such restrictions may include affirmative and negative covenants, default penalties, lien protection, change of control provisions and board rights, including either observation or rights to a seat on the board of directors under some circumstances.



We expect to hold
most of our investments to maturity or repayment, but we may sell some of our investments earlier if a liquidity event
occurs, such as a sale, recapitalization or worsening of the credit quality of the portfolio company, or if an investment has
reached its return target.





9







Investments



We seek to create a
diverse portfolio that includes senior secured, unitranche secured and equity co-investment securities primarily in the
securities of middle-market companies. This investment size may vary proportionately with the size of our capital base. Set
forth below is a list of our ten largest portfolio company investments as of December 31, 2019, as well as the top ten
industries in which we were invested as of December 31, 2019, calculated as a percentage of our total investments at fair
value as of such date:



|Portfolio Company                        |  | Fair Value of
 Investments |            |  | Percentage of
 Total Investments | 
|---------------------------------------- |  | -------------------------- | ---------- |  | -------------------------------- | 
|Team RMS, LLC                            |  | $                          | 8,182,742  |  |                                  | 
|Huff Hispanic Food Holdings, LLC         |  |                            | 6,629,604  |  |                                  | 
|DataOnline Corp.                         |  |                            | 6,501,950  |  |                                  | 
|Acquia, Inc.                             |  |                            | 5,445,700  |  |                                  | 
|WebPT, Inc.                              |  |                            | 5,001,000  |  |                                  | 
|NTM Acquisition Corp.                    |  |                            | 4,927,885  |  |                                  | 
|QF Holdings, Inc.                        |  |                            | 4,536,350  |  |                                  | 
|HS4 Acquisitionco, Inc.                  |  |                            | 4,032,560  |  |                                  | 
|Recorded Future, Inc.                    |  |                            | 3,707,729  |  |                                  | 
|InsideRE Holdings, LLC and InsideRE, LLC |  |                            | 3,267,116  |  |                                  | 
|Total                                    |  | $                          | 52,232,636 |  |                                  | 



|Industry                                  |  | Fair Value of
 Investments |            |  | Percentage of 
Total Investments | 
|----------------------------------------- |  | -------------------------- | ---------- |  | -------------------------------- | 
|Banking, Finance, Insurance & Real Estate |  | $                          | 19,588,942 |  |                                  | 
|Healthcare & Pharmaceuticals              |  |                            | 15,453,542 |  |                                  | 
|High Tech Industries                      |  |                            | 13,179,390 |  |                                  | 
|Services: Business                        |  |                            | 9,199,733  |  |                                  | 
|Media: Advertising, Printing & Publishing |  |                            | 7,020,939  |  |                                  | 
|Beverage, Food & Tobacco                  |  |                            | 6,629,604  |  |                                  | 
|Telecommunications                        |  |                            | 6,501,950  |  |                                  | 
|Aerospace & Defense                       |  |                            | 4,745,386  |  |                                  | 
|Energy: Oil & Gas                         |  |                            | 4,051,335  |  |                                  | 
|Automotive                                |  |                            | 3,791,200  |  |                                  | 
|Total                                     |  | $                          | 90,162,021 |  |                                  | 



INVESTMENT PROCESS
OVERVIEW



We view our investment
process as consisting of the phases described below:



Origination.
MC Advisors seeks to develop investment opportunities through extensive relationships with regional banks, private equity firms,
financial intermediaries, management teams and other turn-around advisors. Monroe Capital has developed this network since its
formation in 2004. MC Advisors manages these leads through personal visits and calls by its senior deal professionals. It is these
professionals’ responsibility to identify specific opportunities, refine opportunities through due diligence regarding the
underlying facts and circumstances and utilize innovative thinking and flexible terms to solve the financing issues of prospective
clients. Monroe Capital’s origination professionals are broadly dispersed throughout North America, with six offices in the
United States. Certain of Monroe Capital’s originators are responsible for covering a specified target market based on geography
and others focus on specialized industry verticals. We believe Monroe Capital’s origination professionals’ experience
is vital to enable us to provide our borrowers with innovative financing solutions. We further believe that their strength and
breadth of relationships across a wide range of markets will generate numerous financing opportunities and enable us to be highly
selective in our lending activities. In sourcing new transactions, MC Advisors seeks opportunities to work with borrowers domiciled
in the United States and Canada and typically focuses on industries in which Monroe Capital has previous lending experience.



Due Diligence.
For each of our investments, MC Advisors prepares a comprehensive new business presentation, which summarizes the investment opportunity
and its due diligence and risk analysis, all from the perspective of strengths, weaknesses, opportunities and threats presented
by the opportunity. This presentation assesses the borrower and its management, including products and services offered, market
position, sales and marketing capabilities and distribution channels; key contracts, customers and suppliers, meetings with management
and facility tours; background checks on key executives; customer calls; and an evaluation of exit strategies. MC Advisors’
presentation typically evaluates historical financial performance of the borrower and includes projections, including operating
trends, an assessment of the quality of financial information, capitalization and liquidity measures and debt service capacity.
The financial analysis also includes sensitivity analysis against management projections and an analysis of potential downside
scenarios, particularly for cyclical businesses. MC Advisors seeks to also review the dynamics of the borrowers’ industry
and assess the maturity, market size, competition, technology and regulatory issues confronted by the industry. Finally, MC Advisors’
new business presentation includes all relevant third-party reports and assessments, including, as applicable, analyses of the
quality of earnings of the prospective borrower, a review of the business by industry experts and third-party valuations. MC Advisors
also includes in this due diligence, if relevant, field exams, collateral appraisals and environmental reviews, as well as a review
of comparable private and public transactions.





10







Underwriting.
MC Advisors uses the systematic, consistent approach to credit evaluation developed in house by Monroe Capital with a particular
focus on determining the value of a business in a downside scenario. In this process, the senior investment professionals at MC
Advisors bring to bear extensive lending experience with emphasis on lessons learned from the past two credit cycles. We believe
that the extensive credit and debt work-out experience of Monroe Capital’s senior management enables us to anticipate problems
and minimize risks. Monroe Capital’s underwriting professionals work closely with its origination professionals to identify
individual deal strengths, risks and any risk mitigants. MC Advisors preliminarily screens transactions based on cash flow, enterprise
value and asset-based characteristics, and each of these measures is developed on a proprietary basis using thorough credit analysis
focused on sustainability and predictability of cash flow to support enterprise value, barriers to entry, market position, competition,
customer and supplier relationships, management strength, private equity sponsor track record and industry dynamics. For asset-based
transactions, MC Advisors seeks to understand current and future collateral value, opening availability and ongoing liquidity.
MC Advisors documents this preliminary analysis which is thoroughly reviewed by at least one member of its investment committee
prior to proposing a formal term sheet. We believe this early involvement of the investment committee ensures that our resources
and those of third parties are deployed appropriately and efficiently during the investment process and lowers execution risk for
our clients. With respect to transactions reviewed by MC Advisors, we expect that only approximately 10% of our sourced deals will
reach the formal term sheet stage.



Credit Approval/Investment
Committee Review.MC Advisors employs a standardized, structured process developed by Monroe Capital when evaluating
and underwriting new investments for our portfolio. MC Advisors’ investment committee considers its comprehensive new business
presentation to approve or decline each investment. This committee includes Messrs. Koenig, Peck, and Egan. The committee is committed
to providing a prompt turnaround on investment decisions. Each meeting to approve an investment requires a quorum of at least two
members of the investment committee, and each investment must receive unanimous approval by such members of the investment committee.



The following chart illustrates
the stages of MC Advisors’ evaluation process:



Evaluation Process







Fund Investments



Execution.
We believe Monroe Capital has developed a strong reputation for closing deals as proposed, and we intend to continue this tradition.
Through MC Advisors’ consistent approach to credit evaluation and underwriting, we seek to close deals as fast or faster
than competitive financing providers while maintaining the discipline with respect to credit, pricing and structure necessary to
ensure the ultimate success of the financing.



Monitoring.
We benefit from the portfolio management system  in place at Monroe Capital. This monitoring includes regular meetings between
the responsible analyst and our portfolio company to discuss market activity and current events. MC Advisors’ portfolio management
staff closely monitors all credits, with senior portfolio managers covering agented and more complex investments. MC Advisors segregates
our capital markets investments by industry. MC Advisors’ monitoring process developed by Monroe Capital has daily, weekly,
monthly and quarterly components and related reports, each to evaluate performance against historical, budget and underwriting
expectations. MC Advisors’ analysts monitor performance using standard industry software tools to provide consistent disclosure
of performance. When necessary, MC Advisors updates our internal risk ratings, borrowing base criteria and covenant compliance
reports.





11







As part of the monitoring
process, MC Advisors regularly assesses the risk profile of each of our investments and rates each of them based on an internal
proprietary system that uses the categories listed below, which we refer to as MC Advisors’ investment performance rating.
For any investment rated in grades 3, 4 or 5, MC Advisors, through its internal Portfolio Management Group (“PMG”),
will increase its monitoring intensity and prepare regular updates for the investment committee, summarizing current operating
results and material impending events and suggesting recommended actions. The PMG is responsible for oversight and management of
any investments rated in grades 3, 4, or 5. MC Advisors monitors and, when appropriate, changes the investment ratings assigned
to each investment in our portfolio. In connection with our valuation process, MC Advisors reviews these investment ratings on
a quarterly basis. The investment performance rating system is described as follows:



|Investment
Performance
Risk Rating |  | Summary Description                                                                                                                                                                                                                                                                                                     
|---------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Grade 1                            |  | Includes investments exhibiting the least amount of risk in our portfolio. The issuer is performing above expectations or the issuer’s operating trends and risk factors are generally positive.                                                                                                                        
|                                   |  |                                                                                                                                                                                                                                                                                                                         
|Grade 2                            |  | Includes investments exhibiting an acceptable level of risk that is similar to the risk at the time of origination. The issuer is generally performing as expected or the risk factors are neutral to positive.                                                                                                         
|                                   |  |                                                                                                                                                                                                                                                                                                                         
|Grade 3                            |  | Includes investments performing below expectations and indicates that the investment’s risk has increased somewhat since origination. The issuer may be out of compliance with debt covenants; however, scheduled loan payments are generally not past due.                                                             
|                                   |  |                                                                                                                                                                                                                                                                                                                         
|Grade 4                            |  | Includes an issuer performing materially below expectations and indicates that the issuer’s risk has increased materially since origination. In addition to the issuer being generally out of compliance with debt covenants, scheduled loan payments may be past due (but generally not more than six months past due).
|                                   |  |                                                                                                                                                                                                                                                                                                                         
|Grade 5                            |  | Indicates that the issuer is performing substantially below expectations and the investment risk has substantially increased since origination. Most or all of the debt covenants are out of compliance or payments are substantially delinquent. Investments graded 5 are not anticipated to be repaid in full.        



Our
investment performance risk ratings do not constitute any rating of investments by a nationally recognized statistical rating organization
or reflect or represent any third-party assessment of any of our investments.



In the event of a delinquency
or a decision to rate an investment grade 4 or grade 5, the PMG, in consultation with the investment committee, will develop an
action plan. Such a plan may require a meeting with the borrower’s management or the lender group to discuss reasons for
the default and the steps management is undertaking to address the under-performance, as well as amendments and waivers that may
be required. In the event of a dramatic deterioration of a credit, MC Advisors and the PMG will form a team or engage outside advisors
to analyze, evaluate and take further steps to preserve our value in the credit. In this regard, we would expect to explore all
options, including in a private equity sponsored investment, assuming certain responsibilities for the private equity sponsor or
a formal sale of the business with oversight of the sale process by us. The PMG and the investment committee have extensive experience
in running debt work-out transactions and bankruptcies.



The following table shows the distribution
of our investments on the 1 to 5 investment performance risk rating scale as of December 31, 2019:



|Investment Performance Risk Rating |  | Investments at Fair Value |             |  | Percentage of Total Investments | 
|---------------------------------- |  | ------------------------- | ----------- |  | ------------------------------- | 
|1                                  |  | $                         | —           |  |                                 | 
|2                                  |  |                           | 98,727,830  |  |                                 | 
|3                                  |  |                           | 2,079,153   |  |                                 | 
|4                                  |  |                           | —           |  |                                 | 
|5                                  |  |                           | —           |  |                                 | 
|Total                              |  | $                         | 100,806,983 |  |                                 | 



MANAGEMENT AND OTHER
AGREEMENTS



MC Advisors is located
at 311 South Wacker Drive, Suite 6400, Chicago, Illinois 60606. MC Advisors is a registered investment adviser under the Advisers
Act. Subject to the overall supervision of our Board and in accordance with the 1940 Act, MC Advisors manages our day-to-day operations
and provides investment advisory services to us, pursuant to the Investment Advisory Agreement entered into on December 5, 2018.
Under the terms of the Investment Advisory Agreement, MC Advisors:



| | • | determines the composition of our portfolio, the nature and timing of the changes to our portfolio and the manner of implementing such changes;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------



| | • | assists us in determining what securities we purchase, retain or sell;
| | - | ----------------------------------------------------------------------





12







| | • | identifies, evaluates and negotiates the structure of the investments we make (including performing due diligence on our prospective portfolio companies); and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | executes, closes, services and monitors the investments we make.
| | - | ----------------------------------------------------------------



MC Advisors’ services
under the Investment Advisory Agreement are not exclusive, and it is free to furnish similar services to other entities so long
as its services to us are not impaired.



Management and Incentive
Fee



For providing us with investment
advisory services pursuant to the Investment Advisory Agreement, MC Advisors receives a fee from us, consisting of two components
 — a base management fee and an incentive fee.



Thebase
management fee is payable quarterly in arrears and commenced with the initial closing of the Private Offering. Prior to any future
quotation or listing of our securities on a national securities exchange (an “Exchange Listing”) or any future quotation
or listing of our securities on any other public trading market, the base management fee is calculated at an annual rate of 1.50%
of average total assets, which includes assets financed using leverage. Following an Exchange Listing, the base management fee
will be calculated at an annual rate of 1.75% of average invested assets (calculated as total assets excluding cash).



The incentive fee consists
of two parts. The first part is calculated and payable quarterly in arrears based on our pre-incentive fee net investment income
for the preceding quarter. Pre-incentive fee net investment income means interest income, dividend income and any other income
(including any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that we receive
from portfolio companies but excluding fees for providing managerial assistance) accrued during the calendar quarter, minus operating
expenses for the quarter (including the base management fee, any expenses payable under our administration agreement between us
and MC Management (the “Administration Agreement”) and any interest expense and dividends paid on any outstanding preferred
stock, but excluding the incentive fee). Pre-incentive fee net investment income includes, in the case of investments with a deferred
interest feature such as market discount, debt instruments with PIK interest, preferred stock with PIK dividends and zero-coupon
securities, accrued income that we have not yet received in cash. MC Advisors is not under any obligation to reimburse us for any
part of the incentive fee it received that was based on accrued interest that we never actually receive.



Pre-incentive fee net investment
income does not include any realized capital gains or losses or unrealized capital gains or losses. If any distributions from portfolio
companies are characterized as a return of capital, such returns of capital would affect the capital gains incentive fee to the
extent a gain or loss is realized. Because of the structure of the incentive fee, it is possible that we may pay an incentive fee
in a quarter where we incur a loss. For example, if we receive pre-incentive fee net investment income in excess of the hurdle
rate (as defined below) for a quarter, we will pay the applicable incentive fee even if we have incurred a loss in that quarter
due to realized and unrealized capital losses.



Pre-incentive fee net investment
income, expressed as a rate of return on the value of our net assets (defined as total assets less indebtedness and before taking
into account any incentive fees payable during the period) at the end of the immediately preceding calendar quarter, is compared
to a fixed “hurdle rate” of 1.50% per quarter (6% annually). If market interest rates rise, we may be able to invest
our funds in debt instruments that provide for a higher return, which would increase our pre-incentive fee net investment income
and make it easier for MC Advisors to surpass the fixed hurdle rate and receive an incentive fee based on such net investment income.



We pay MC Advisors an incentive
fee with respect to our pre-incentive fee net investment income in each calendar quarter as follows:



| | • | no incentive fee in any calendar quarter in which the pre-incentive fee net investment income does not exceed the hurdle rate of 1.50% (6% annually);
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------



| | • | 100% of our pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the hurdle rate but is less than 1.76% in any calendar quarterprior to an Exchange Listing or 1.88% in any calendar quarter following an Exchange Listing. We refer to this portion of our pre-incentive fee net investment income as the “catch-up” provision.Prior to an Exchange Listing, the catch-up is meant to provide MC Advisors with 15% of the pre-incentive fee net investment income as if a hurdle rate did not apply if this net investment income exceeds 1.76% in any calendar quarter, and following an Exchange Listing, the catch-up is meant to provide MC Advisors with 20% of the pre-incentive fee net investment income as if a hurdle rate did not apply if this net investment income exceeds 1.88% in any calendar quarter; and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | prior to an Exchange Listing, 15% of the amount of our pre-incentive fee net investment income, if any, that exceeds 1.76%in any calendar quarter, and following an Exchange Listing, 20% of the amount of our pre-incentive fee net investment income, if any, that exceeds 1.88% in any calendar quarter.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





13







The following is a graphical
representation of the calculation of the income-related portion of the incentive fee:



Pre-Incentive Fee Net
Investment Income (expressed as a percentage of the value of net assets)



Pre-Exchange Listing
Period







Post-Exchange Listing
Period







These calculations will
be appropriately prorated for any period of less than three months and adjusted for any share issuances or repurchases during the
current quarter.



The second
part of the incentive fee is a capital gains incentive fee that is determined and payable in arrears as of the end of each fiscal
year (or upon termination of the Investment Advisory Agreement, as of the termination date), and equals15% of our realized
capital gains as of the end of the fiscal year. In determining the capital gains incentive fee payable to MC Advisors, we calculate
the cumulative aggregate realized capital gains and cumulative aggregate realized capital losses since our inception, and the aggregate
unrealized capital depreciation as of the date of the calculation, as applicable, with respect to each of the investments in our
portfolio. For this purpose, cumulative aggregate realized capital gains, if any, equals the sum of the differences between the
net sales price of each investment, when sold, and the amortized cost of such investment. Cumulative aggregate realized capital
losses equals the sum of the amounts by which the net sales price of each investment, when sold, is less than the amortized cost
of such investment since our inception. Aggregate unrealized capital depreciation equals the sum of the difference, if negative,
between the valuation of each investment as of the applicable calculation date and the amortized cost of such investment. At the
end of the applicable year, the amount of capital gains that serves as the basis for our calculation of the capital gains incentive
fee equals the cumulative aggregate realized capital gains less cumulative aggregate realized capital losses, less aggregate unrealized
capital depreciation, with respect to our portfolio of investments. If this number is positive at the end of such year, then the
capital gains incentive fee for such year equals 15% of such amount, less the aggregate amount of
any capital gains incentive fees paid in respect of our portfolio in all prior years.



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



Payment of Our Expenses



All investment professionals
of MC Advisors and/or its affiliates, when and to the extent engaged in providing investment advisory and management services to
us, and the compensation and routine overhead expenses of personnel allocable to these services to us, are provided and paid for
by MC Advisors and not by us. We bear all other out-of-pocket costs and expenses of our operations and transactions, including,
without limitation:



| | • | organization and offering;
| | - | --------------------------



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



| | • | fees and expenses incurred by MC Advisors payable to third parties, including agents, consultants or other advisors, in monitoring financial and legal affairs for us and in conducting research and due diligence on prospective investments and equity sponsors, analyzing investment opportunities, structuring our investment and monitoring our investments and portfolio companies on an ongoing basis (although none of MC Advisors’ duties will be subcontracted to sub-advisors);
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | any and all fees, costs and expenses incurred in connection with our incurrence of leverage and indebtedness, including borrowings, dollar rolls, reverse purchase agreements, credit facilities, securitizations, margin financing and derivatives and swaps, and including any principal or interest on our borrowings and indebtedness (including, without limitation, any fees, costs, and expenses incurred in obtaining lines of credit, loan commitments, and letters of credit for the account of the fund and in making, carrying, funding and/or otherwise resolving investment guarantees);
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | offerings of our common stock and other securities;
| | - | ---------------------------------------------------



| | • | investment advisory fees;
| | - | -------------------------



| | • | administration fees and expenses, if any, payable under the Administration Agreement (including payments under the Administration Agreement between us and MC Management based upon our allocable portion of MC Management’s overhead in performing its obligations under the Administration Agreement, including rent and the allocable portion of the cost our chief financial officer and chief compliance officer, and their respective staffs);
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



14









| | • | transfer agent, dividend agent and custodial fees and expenses;
| | - | ---------------------------------------------------------------



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



| | • | all costs of registration and listing our shares on any securities exchange;
| | - | ----------------------------------------------------------------------------



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



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



| | • | costs of preparing and filing reports or other documents required by the SEC or other regulators;
| | - | -------------------------------------------------------------------------------------------------



| | • | costs of any reports, proxy statements or other notices to stockholders, including printing costs;
| | - | --------------------------------------------------------------------------------------------------



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



| | • | direct costs and expenses of administration, including printing, mailing, long distance telephone, copying, secretarial and other staff, independent auditors and outside legal costs;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | proxy voting expenses; and
| | - | --------------------------



| | • | all other expenses incurred by us or MC Management in connection with administering our business.
| | - | -------------------------------------------------------------------------------------------------



Duration and Termination



Unless
terminated earlier as described below, the Investment Advisory Agreement willremain in effect until December 5, 2020,
a period of two years from the date it first became effective, and will continue in effect from year-to-year thereafter if
approved annually by our Board or by the affirmative vote of the holders of a majority of our outstanding voting securities
and, in each case, a majority of our directors who are not “interested persons.” The
Investment Advisory Agreement automatically terminates in the event of its assignment, as defined in the 1940 Act, by MC
Advisors and may be terminated by either party without penalty upon not less than 60 days’ written notice to the other.
The holders of a majority of our outstanding voting securities may also terminate the Investment Advisory Agreement without
penalty. See “Risk Factors — Risks Relating to Our Business and Structure — We depend upon MC
Advisors’ senior management for our success, and upon its access to the investment professionals of Monroe Capital and
its affiliates” and “Risk Factors — Risks Relating to Our Business and Structure — MC Advisors can
resign on 60 days’ notice, and we may not be able to find a suitable replacement within that time, resulting in a
disruption in our operations that could adversely affect our financial condition, business and results of
operations.”



Indemnification



The Investment Advisory
Agreement provides that, absent willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason
of the reckless disregard of its duties and obligations, MC Advisors and its affiliates’ respective officers, directors,
members, managers, stockholders and employees are entitled to indemnification from us from and against any claims or liabilities,
including reasonable legal fees and other expenses reasonably incurred, arising out of or in connection with our business and operations
or any action taken or omitted on our behalf pursuant to authority granted by the Investment Advisory Agreement, except where attributable
to gross negligence, willful misconduct, bad faith or reckless disregard of such person’s duties under the Investment Advisory
Agreement.



Administration Agreement



On December 5, 2018, we
entered into the Administration Agreement with MC Management. Pursuant to the Administration Agreement, MC Management furnishes
us with office facilities and equipment and provides us clerical, bookkeeping and record keeping and other administrative services
at such facilities. Under the Administration Agreement, MC Management performs, or oversees the performance of, our required administrative
services, which include, among other things, being responsible for the financial records that we are required to maintain and preparing
reports to our stockholders and reports filed with the SEC. MC Management also assists us in determining and publishing our net
asset value, oversees the preparation and filing of our tax returns, prints and disseminates reports to our stockholders and generally
oversees the payment of our expenses and the performance of administrative and professional services rendered to us by others.
Under the Administration Agreement, MC Management also provides managerial assistance on our behalf to those portfolio companies
that have accepted our offer to provide such assistance.



Payments under the Administration
Agreement are equal to an amount based upon our allocable portion (subject to the review and approval of our Board) of MC Management’s
overhead in performing its obligations under the Administration Agreement, including rent and our allocable portion of the cost
of our officers, including our chief financial officer and chief compliance officer and their respective staffs. Unless terminated
earlier as described below, the Administration Agreement will continue in effect from year to year with the approval of our Board.
The Administration Agreement may be terminated by either party without penalty upon 60 days’ written notice to the other
party.





15







MC Management may retain
third parties to assist in providing administrative services to us. To the extent that MC Management outsources any of its functions,
we pay the fees associated with such functions on a direct basis without profit to MC Management. We reimburse MC Management for
the allocable portion (subject to the review and approval of our Board) of MC Management’s overhead and other expenses incurred
by it in performing its obligations under the Administration Agreement, including rent, the fees and expenses associated with performing
compliance functions, and our allocable portion of the cost of our chief financial officer and chief compliance officer and their
respective staffs. For the year ended December 31, 2019, we incurred $771,989, in administrative expenses (included within
Professional fees, Administrative service fees and General and administrative expenses on the consolidated statements of operations)
under the Administration Agreement, of which $232,943 was related to MC Management overhead and salary allocation and paid directly
to MC Management.



Indemnification



The Administration Agreement
provides that, absent willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of the reckless
disregard of its duties and obligations, MC Management and its affiliates’ respective officers, directors, members, managers,
stockholders and employees are entitled to indemnification from us from and against any claims or liabilities, including reasonable
legal fees and other expenses reasonably incurred, arising out of or in connection with our business and operations or any action
taken or omitted on our behalf pursuant to authority granted by the Administration Agreement, except where attributable to gross
negligence, willful misconduct, bad faith or reckless disregard of such person’s duties under the Administration Agreement.



License Agreement



On December 5, 2018 we
entered into a license agreement with Monroe Capital under which Monroe Capital has agreed to grant us a non-exclusive, royalty-free
license to use the name “Monroe Capital.” Under this agreement, we have a right to use the “Monroe Capital”
name for so long as MC Advisors or one of its affiliates remains our investment advisor. Other than with respect to this limited
license, we have no legal right to the “Monroe Capital” name. This license agreement will remain in effect for so long
as the Investment Advisory Agreement with MC Advisors is in effect.



Staffing Agreement



We do not have any internal employees.
We depend on the diligence, skill and network of business contacts of the senior investment professionals of MC Advisors to achieve
our investment objective. MC Advisors is an affiliate of Monroe Capital and depends upon access to the investment professionals
and other resources of Monroe Capital and Monroe Capital’s affiliates to fulfill its obligations to us under the Investment
Advisory and Management Agreement. MC Advisors also depends upon Monroe Capital to obtain access to deal flow generated by the
professionals of Monroe Capital and its affiliates. Under the Staffing Agreement, MC Management provides MC Advisors with the resources
necessary to fulfill these obligations. The Staffing Agreement provides that MC Management will make available to MC Advisors experienced
investment professionals and access to the senior investment personnel of Monroe Capital for purposes of evaluating, negotiating,
structuring, closing and monitoring our investments. The Staffing Agreement also includes a commitment that the members of MC Advisors’
investment committee serve in such capacity. The Staffing Agreement remains in effect until terminated and may be terminated by
either party without penalty upon 60 days’ written notice to the other party. Services under the Staffing Agreement are provided
to MC Advisors on a direct cost reimbursement basis, and such fees are not our obligation.



Board Approval of the Investment Advisory
Agreement



At a meeting of our Board
held on December 5, 2018, our Board, including directors who are not “interested persons” as defined in the 1940 Act,
voted unanimously to approve the Investment Advisory Agreement in accordance with the requirements of the 1940 Act. In reaching
a decision to approve the Investment Advisory Agreement, the Board reviewed a significant amount of information and considered,
among other things:



| | • | Nature,
    Quality and Extent of Services. Our Board reviewed information about the services to be performed and the personnel
    performing such services under the Investment Advisory Agreement. Our Board considered the nature, extent and quality of the
    investment selection process employed by MC Advisors and the experience of the members of the investment committee. Our Board
    concluded that the services to be provided under the Investment Advisory Agreement are consistent with those of comparable
    BDCs described in the available market data.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | The reasonableness of the fees paid to MC Advisors. Our Board considered comparative data based on publicly available information on other BDCs with respect to services rendered and the advisory fees (including the management fees and incentive fees) of other BDCs as well as our projected operating expenses and expense ratio compared to other BDCs. Our Board also considered the profitability of MC Advisors. Based upon its review, our Board concluded that the fees to be paid under the Investment Advisory Agreement are reasonable compared to other BDCs.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Investment Performance. Our Board reviewed the investment performance of individuals affiliated with us and MC Advisors, as well as comparative data with respect to the investment performance of other externally managed BDCs.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





16







Based on the information
reviewed and the discussions detailed above, our Board, including all of the directors who are not “interested persons”
as defined in the 1940 Act, concluded that the investment advisory fee rates and terms are fair and reasonable in relation to the
services provided and approved the investment advisory agreement as being in the best interests of our stockholders. MC Advisors
bears all expenses related to the services and personnel provided to us.



VALUATION PROCESS AND
DETERMINATION OF NET ASSET VALUE



The net asset value per
share of our outstanding shares of common stock is determined quarterly by dividing the value of total assets minus liabilities
by the total number of shares outstanding. We calculate the value of our total assets in accordance with the following procedures.



Investments for which market
quotations are readily available and within a recent date are valued at such market quotations. We may also obtain indicative prices
with respect to certain of our investments from pricing services or brokers or dealers in order to value such investments. We expect
that there will not be a readily available market value within a recent date for many of our investments; those debt and equity
securities that are not publicly traded or whose market prices are not readily available are valued at fair value as determined
in good faith by our Board using a documented valuation policy and a consistently applied valuation process.



Our Board is ultimately
and solely responsible for determining the fair value of the portfolio investments that are not publicly traded, whose market prices
are not readily available on a quarterly basis in good faith or any other situation where portfolio investments require a fair
value determination.



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



| | • | the quarterly valuation process begins with each portfolio company or investment being initially evaluated and rated by the investment professionals of MC Advisors responsible for the credit monitoring of the portfolio investment;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | our Board engages one or more independent valuation firm(s) to conduct independent appraisals of a selection of investments for which market quotations are not readily available. We will consult with independent valuation firm(s) relative to each portfolio company at least once in every calendar year, but the independent appraisals are generally received quarterly;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | to the extent an independent valuation firm is not engaged to conduct an investment appraisal on an investment for which market quotations are not readily available, the investment will be valued by the MC Advisors investment professional responsible for the credit monitoring;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | preliminary valuation conclusions are then documented and discussed with the investment committee;
| | - | --------------------------------------------------------------------------------------------------



| | • | the audit committee of our Board reviews the preliminary valuations of MC Advisors and of the independent valuation firm(s) and MC Advisors adjusts or further supplements the valuation recommendations to reflect any comments provided by the audit committee; and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | our Board discusses these valuations and determines the fair value of each investment in the portfolio in good faith, based on the input of MC Advisors, the independent valuation firm(s) and the audit committee.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The valuation technique
utilized in the determination of fair value is affected by a wide variety of factors including the type of investment, whether
the investment is new and not yet established in the marketplace, and other characteristics particular to the transaction. The
Board generally uses the income approach to determine fair value for loans where market quotations are not readily available, as
long as it is appropriate. If there is deterioration in credit quality or a debt investment is in workout status, we may consider
other factors in determining the fair value, including the value attributable to the debt investment from the enterprise value
of the portfolio company or the proceeds that would be received in a liquidation analysis. This liquidation analysis may also include
probability weighting of alternative outcomes. We generally consider our debt to be performing if the borrower is not in default,
the borrower is remitting payments in a timely manner, the loan is in covenant compliance or is otherwise not deemed to be impaired.
In determining the fair value of the performing debt, we consider fluctuations in current interest rates, the trends in yields
of debt instruments with similar credit ratings, financial condition of the borrower, economic conditions and other relevant factors,
both qualitative and quantitative. In the event that a debt instrument is not performing, as defined above, we will evaluate the
value of the collateral utilizing the same framework described above for a performing loan to determine the value of the debt instrument.
See Note 4 to the accompanying consolidated financial statements for additional information on the determination of fair value.



We report our
investments at fair value with changes in value reported through our consolidated statements of operations under the caption
 “unrealized gain (loss) on investments.” In determining fair value, we are required to assume that portfolio investments are
to be sold in the principal market to market participants, or in the absence of a principal market, the most advantageous
market, which may be a hypothetical market. Market participants are defined as buyers and sellers in the principal or most
advantageous market that are independent, knowledgeable, and willing and able to transact. The market in which we can exit
portfolio investments with the greatest volume and level activity is considered our principal market.





17







Determination of fair value
involves subjective judgments and estimates. Accordingly, the notes to our consolidated financial statements express the uncertainty
with respect to the possible effect of such valuations, and any change in such valuations, on our consolidated financial statements.



COMPETITION



We compete with a number
of specialty and commercial finance companies to make the types of investments that we make in middle-market companies, including
BDCs, traditional commercial banks, private investment funds, regional banking institutions, small business investment companies,
investment banks and insurance companies. Additionally, with increased competition for investment opportunities, alternative investment
vehicles such as hedge funds may invest in areas they have not traditionally invested in or from which they had withdrawn during
the recent economic downturn, including investing in middle-market companies. As a result, competition for investments in lower
middle-market companies has intensified, and we expect that trend to continue. Many of our existing and potential competitors are
substantially larger and have considerably greater financial, technical and marketing resources than we do. For example, some competitors
may have a lower cost of funds and access to funding sources that are not available to us. In addition, some of our competitors
may have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of investments
and establish more relationships than us.



We use the expertise of
the investment professionals of MC Advisors to assess investment risks and determine appropriate pricing and terms for investments
in our loan portfolio. In addition, we expect that the relationships of the senior professionals of MC Advisors will enable us
to learn about, and compete effectively for, investment opportunities with attractive middle-market companies, independently or
in conjunction with the private equity clients of MC Advisors. For additional information concerning the competitive risks we face,
see “Risk Factors — Risks Relating to Our Business and Structure — We operate in a highly competitive market
for investment opportunities, which could reduce returns and result in losses.”



LIQUIDITY OPTIONS



Commencing three
years after the Initial Closing Date on January 15, 2019, we may offer stockholders the opportunity to participate in a liquidity
event which could include, among other options: (i) quarterly and upon six months prior written notice, optional repurchase
of up to 5% of any outstanding shares of common stock; (ii) optional exchange of outstanding shares of common stock for
shares of Monroe Capital Corporation, a publicly traded BDC (“MRCC”) that is also externally managed by MC
Advisors; (iii) a merger or another transaction approved by the Board of Directors in which stockholders will receive cash or
shares of a listed company; (iv) a sale of all or substantially all of our assets either on a complete portfolio basis or
individually to an unaffiliated third party or an affiliate followed by a liquidation or (v) an orderly wind down and/or
liquidation.



We intend to use
commercially reasonable efforts to raise the cash needed to repurchase up to 5% of our outstanding shares of common stock on
a quarterly basis commencing three years after the Initial Closing Date on January 15, 2019. Any such repurchases are
subject to approval by the Board, in its discretion, and the availability of cash to fund such repurchases. We anticipate
that the majority of our assets will be private debt and as such, current liquidity with respect to such assets will be
driven by interest and amortization payments on such private debt rather than the sale of such assets. In addition, we are
required to reserve sufficient amounts to ensure that we do not default on any commitment under a loan. Consequently, there
can be no assurance that the Fund will have sufficient cash to repurchase shares on a quarterly basis or at all.



Certain of these
liquidity options, including the exchange of shares of our common stock for shares of MRCC, if any, will require exemptive
relief from the SEC. There can be no assurance that we will be able to obtain such exemptive relief from the SEC. If we are
unable to do so, then we will continue our operations in the manner otherwise set forth in this Annual Report and in our
offering memorandum.



INFORMATION TECHNOLOGY



We utilize a number of
industry standard practices and software packages to secure, protect, manage and back up all corporate data. We outsource portions
of our information technology function to efficiently monitor and maintain our systems. Also, we conduct a daily backup of our
systems to ensure the security and stability of the network.



ELECTION TO BE TAXED
AS A RIC



On January 14, 2019,
we elected to be regulated as a BDC. We have elected to be treated as a RIC under Subchapter M of the Code commencing with
our taxable year ended December 31, 2019. As a RIC, we generally do not have to pay corporate-level U.S. federal income taxes on
any ordinary income or capital gains that we timely distribute to our stockholders as dividends. To continue to qualify as a
RIC, we must, among other things, meet certain source-of-income and asset diversification requirements (as described below).
In addition, we must distribute to our stockholders, for each taxable year, at least 90% of our “investment company
taxable income,” which is generally our net ordinary income plus the excess of realized net short-term capital gains
over realized net long-term capital losses (the “Annual Distribution Requirement”). Generally, we would expect
these distributions to be taxable to our stockholders as ordinary income and not to be eligible for the reduced maximum tax
rates associated with qualified dividends.





18







TAXATION AS A RIC



If we continue to:



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



| | • | satisfy the Annual Distribution Requirement;
| | - | --------------------------------------------



then we will not be subject to U.S. federal
income tax on the portion of our investment company taxable income and net capital gains, defined as net long-term capital gains
in excess of net short-term capital losses we distribute to our stockholders.



We will be subject to U.S.
federal income tax at the regular corporate rates on any net income or net capital gain not distributed (or deemed distributed)
to our stockholders.



We will be subject to a
4% nondeductible federal excise tax on our undistributed income unless we distribute in a timely manner an amount at least equal
to the sum of (a) 98% of our ordinary income for each calendar year, (b) 98.2% of our capital gain net income (both long-term and
short-term) for the one-year period ending October 31 in that calendar year and (c) any income realized, but not distributed, in
the preceding years (the “Excise Tax Avoidance Requirement”). For this purpose, however, any ordinary income or capital
gain net income retained by us that is subject to corporate income tax for the tax year ending in that calendar year will be considered
to have been distributed by year end. For the year ended December 31, 2019, we recorded $20,000 on our consolidated statements of
operations for U.S. federal excise taxes.



In order to qualify as
a RIC for U.S. federal income tax purposes, we must, among other things:



| | • | meet the Annual Distribution Requirement;
| | - | -----------------------------------------



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



| | • | derive in each taxable year at least 90% of our gross income from dividends, interest, payments with respect to certain securities loans, gains from the sale of stock or other securities, or other income derived with respect to our business of investing in such stock or securities, and net income derived from interests in “qualified publicly traded partnerships” (partnerships that are traded on an established securities market or tradable on a secondary market, other than partnerships that derive 90% of their income from interest, dividends and other permitted RIC income) (the “90% Income Test”); and
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



| | • | at least 50% of the value of our assets consists of cash, cash equivalents, U.S. government securities, securities of other RICs, and other securities if such other securities of any one issuer do not represent more than 5% of the value of our assets or more than 10% of the outstanding voting securities of the issuer (which for these purposes includes the equity securities of a “qualified publicly traded partnership”); and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | no more than 25% of the value of our assets is invested in the securities, other than U.S. government securities or securities of other RICs, of one issuer or of two or more issuers that are controlled, as determined under applicable tax rules, by us and that are engaged in the same or similar or related trades or businesses or in the securities of one or more qualified publicly traded partnerships (the “Diversification Tests”).
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



In order to prevent
our receipt of income that would not satisfy the 90% Income Test, we may establish one or more special purpose corporations
to hold assets from which we do not anticipate earning dividend, interest or other qualifying income under the 90% Income
Test. Any investments held through a special purpose corporation would generally be subject to U.S. federal income taxes and
other taxes, and therefore would be expected to achieve a reduced after-tax yield.



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



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





19







Gain or loss realized from
warrants acquired by us as well as any loss attributable to the lapse of such warrants generally will be treated as capital gain
or loss. Such gain or loss generally will be long-term or short-term, depending on how long we held a particular warrant.



Our investments in non-U.S.
securities may be subject to non-U.S. income, withholding and other taxes. In that case, our yield on those securities would be
decreased. Stockholders will generally not be entitled to claim a credit or deduction with respect to non-U.S. taxes paid by us.



If we purchase shares
in a “passive foreign investment company” (a “PFIC”), we may be subject to U.S. federal income tax on
a portion of any “excess distribution” or gain from the disposition of such shares even if such income is
distributed as a taxable dividend by us to our stockholders. Additional charges in the nature of interest may be imposed on
us in respect of deferred taxes arising from such distributions or gains. If we invest in a PFIC and elect to treat the PFIC
as a “qualified electing fund” (a “QEF”), under the Code, in lieu of the foregoing requirements, we
will be required to include in income each year a portion of the ordinary earnings and net capital gain of the QEF, even if
such income is not distributed to us. Alternatively, we can elect to mark-to-market at the end of each taxable year our
shares in a PFIC; in that case, we will recognize as ordinary income any increase in the value of such shares and as ordinary
loss any decrease in such value to the extent it does not exceed prior increases included in income. Under either election,
we may be required to recognize in a year income in excess of our distributions from PFICs and our proceeds from dispositions
of PFIC stock during that year, and such income will be taken into account for purposes of the Annual Distribution
Requirement and the 4% federal excise tax.



Under Section 988 of the
Code, gain or loss attributable to fluctuations in exchange rates between the time we accrue income, expenses, or other liabilities
denominated in a foreign currency and the time we actually collect such income or pay such expenses or liabilities is generally
treated as ordinary income or loss. Similarly, gain or loss on foreign currency forward contracts and the disposition of debt denominated
in a foreign currency, to the extent attributable to fluctuations in exchange rates between the acquisition and disposition dates,
are also treated as ordinary income or loss.



Through our use of leverage,
we are subject to certain financial covenants that could limit our ability to make distributions to our stockholders. In addition,
under the 1940 Act, we are not permitted to make distributions to our stockholders while our debt obligations and other senior
securities are outstanding unless certain “asset coverage” tests are met. If we are unable to make sufficient distributions
to satisfy the Annual Distribution Requirement, we may fail to qualify as a RIC.



Although we do not
expect to do so, we will be authorized (subject to our financial covenants and 1940 Act asset coverage tests) to borrow funds
and to sell assets in order to satisfy the Annual Distribution Requirement and to eliminate or minimize our liability for
U.S. federal income tax and the 4% federal excise tax. However, our ability to dispose of assets to make distributions may be
limited by (1) the illiquid nature of our portfolio and/or (2) other requirements relating to our status as a RIC, including
the Diversification Tests. If we dispose of assets in order to meet the Annual Distribution Requirement or to avoid the 4%
federal excise tax, we may make such dispositions at times that, from an investment standpoint, are not advantageous.



If we fail to satisfy the
Annual Distribution Requirement or otherwise fail to qualify as a RIC in any taxable year, and certain relief provisions are not
available, we will be subject to tax in that year on all of our taxable income, regardless of whether we make any distributions
to our stockholders. In that case, all of such income will be subject to corporate-level
U.S. federal income tax, reducing the amount
available to be distributed to our stockholders. See “Failure to Qualify as a RIC” below for more information.



As a RIC, we are not allowed
to carry forward or carry back a net operating loss for purposes of computing our investment company taxable income in other taxable
years. We generally are permitted to carry forward for an indefinite period any capital losses not used to offset capital gains.
However, future transactions that we engage in may cause our ability to use any capital loss carry forwards, and unrealized losses
once realized, to be limited under Section 382 of the Code.



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



As described above,
to the extent that we invest in equity securities of entities that are treated as partnerships for
U.S. federal income tax
purposes, the effect of such investments for purposes of the 90% Income Test and the Diversification Tests will depend on
whether or not the partnership is a “qualified publicly traded partnership” (as defined in the Code). If the
partnership is a “qualified publicly traded partnership,” the net income derived from such investments will be
qualifying income for purposes of the 90% Income Test and will be “securities” for purposes of the
Diversification Tests. If the partnership, however, is not treated as a “qualified publicly traded partnership,”
then the consequences of an investment in the partnership will depend upon the amount and type of income and assets of the
partnership allocable to us. The income derived from such investments may not be qualifying income for purposes of the 90%
Income Test and, therefore, could adversely affect our qualification as a RIC. We intend to monitor our investments in equity
securities of entities that are treated as partnerships for U.S. federal income tax purposes to prevent our disqualification
as a RIC.





20







FAILURE TO QUALIFY AS
A RIC



If we
fail the 90% Income Test or the Diversification Tests for any taxable year or quarter of such taxable year, we may
nevertheless continue to qualify as a RIC for such year if certain relief provisions of the Code apply (which, among other
things may require us to pay certain corporate-level federal taxes or to dispose of certain assets). If we are unable to
qualify for treatment as a RIC and are unable to cure the failure, we would be subject to U.S. federal income tax on all of
our taxable income at regular corporate rates. We would not be able to deduct distributions to our stockholders, nor would
they be required to be made. In the event of such a failure to qualify, distributions, including distributions of net
long-term capital gain, would generally be taxable to our stockholders as ordinary dividend income to the extent of our
current and accumulated earnings and profits. Subject to certain limitations under the Code, our corporate stockholders would
be eligible to claim a dividend received deduction with respect to such dividend; our non-corporate stockholders would
generally be able to treat such dividends as “qualified dividend income,” which is subject to reduced rates of
U.S. federal income tax. Distributions in excess of our current and accumulated earnings and profits would be treated first
as a return of capital to the extent of the stockholder’s tax basis, and any remaining distributions would be treated
as a capital gain. In order to qualify as a RIC, in addition to the other requirements discussed above, we would be required
to distribute all of our previously undistributed earnings and profits attributable to any period prior to us becoming a RIC
by the end of the first year that we intend to qualify as a RIC. To the extent that we have any net built-in gains in our
assets (i.e., the excess of the aggregate gains, including items of income, over aggregate losses that would have been
realized with respect to such assets if we had been liquidated) as of the beginning of the first year that we qualify as a
RIC, we would be subject to a corporate-level U.S. federal income tax on such built-in gains if and when recognized over the
next ten years (or shorter applicable period). Alternatively, we may choose to recognize such built-in gains
immediately prior to our qualification as a RIC.



If we have
previously qualified as a RIC, but are subsequentlyunable to qualify for treatment as a RIC, and certain amelioration provisions
are not applicable, we would be subject to tax on all of our taxable income (including our net capital gains) at regular corporate
rates. We would not be able to deduct distributions to our stockholders, nor would they be required to be made. Distributions,
including distributions of net long-term capital gain, would generally be taxable to our stockholders as ordinary dividend income
to the extent of our current and accumulated earnings and profits. Subject to certain limitations under the Code, our corporate
stockholders would be eligible to claim a dividend received deduction with respect to such dividend; our non-corporate stockholders
would generally be able to treat such dividends as “qualified dividend income,” which is subject to reduced rates of
U.S. federal income tax. Distributions in excess of our current and accumulated earnings and profits would be treated first as
a return of capital to the extent of the stockholder’s tax basis, and any remaining distributions would be treated as a capital
gain. In order to requalify as a RIC, in addition to the other requirements discussed above, we would be required to distribute
all of our previously undistributed earnings attributable to the period we failed to qualify as a RIC by the end of the first year
that we intend to requalify as a RIC. If we fail to requalify as a RIC for a period greater than two taxable years, we may be subject
to regular corporate tax on any net built-in gains with respect to certain of our assets (i.e., the excess of the aggregate
gains, including items of income, over aggregate losses that would have been realized with respect to such assets if we had been
liquidated) that we elect to recognize on requalification or when recognized over the next five years.



REGULATION



We have elected to be
regulated as a BDC under the 1940 Act and have elected to be treated as a RIC under the Code. The 1940 Act contains
prohibitions and restrictions relating to transactions between BDCs and their affiliates (including any investment advisors),
principal underwriters and affiliates of those affiliates or underwriters and requires that a majority of the directors of a
BDC be persons other than “interested persons,” as that term is defined in the 1940 Act. In addition, the 1940
Act provides that we may not change the nature of our business so as to cease to be, or to withdraw our election as, a BDC
unless approved by a majority of our outstanding voting securities.



We may invest up to 100%
of our assets in securities acquired directly from issuers in privately negotiated transactions. With respect to such securities,
we may, for the purpose of public resale, be deemed an “underwriter” as that term is defined in the Securities Act.
Our intention is to not write (sell) or buy put or call options to manage risks associated with the publicly traded securities
of our portfolio companies, except that we may enter into hedging transactions to manage the risks associated with interest rate
fluctuations. However, we may purchase or otherwise receive warrants to purchase the common stock of our portfolio companies in
connection with acquisition financing or other investments. Similarly, in connection with an acquisition, we may acquire rights
to require the issuers of acquired securities or their affiliates to repurchase them under certain circumstances. We also do not
intend to acquire securities issued by any investment company that exceed the limits imposed by the 1940 Act. Under these limits,
we generally cannot acquire more than 3% of the total outstanding voting stock of any registered investment company, invest more
than 5% of the value of our total assets in the securities of one investment company or invest, in the aggregate, more than 10%
of the value of our total assets in the securities of more than one investment company. With regard to that portion of our portfolio
invested in securities issued by investment companies, it should be noted that such investments might subject our stockholders
to additional expenses. None of these policies are fundamental and may be changed to the extent permitted by law without stockholder
approval.





21







QUALIFYING ASSETS



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



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



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



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



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



| | ▪ | does not have any class of securities listed on a national securities exchange or has any class of securities listed on a national securities exchange subject to a $250 million market capitalization maximum; or
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



| | (b) | Securities of any eligible portfolio company which we control.
| | --- | --------------------------------------------------------------



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



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



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



| | (f) | Cash, cash equivalents, U.S. government securities or high-quality debt securities that mature in one year or less from the date of investment.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------



The regulations defining
qualifying assets may change over time. We may adjust our investment focus as needed to comply with and/or take advantage of any
regulatory, legislative, administrative or judicial actions in this area. Investments in the securities of companies domiciled
in or with their principal places of business outside of the United States, are not qualifying assets. In accordance with Section
55(a) of the 1940 Act, we cannot invest more than 30% of our assets in non-qualifying assets.



MANAGERIAL ASSISTANCE
TO PORTFOLIO COMPANIES



A BDC must
have been organized and have its principal place of business in the United States and must be operated for the purpose of making
investments in the types of securities described above. However, in order to count portfolio securities as qualifying assets for
the purpose of the 70% test, a BDC must either control the issuer of securities or must offer to make available to the issuer of
the securities significant managerial assistance. However, when a BDC purchases securities in conjunction with one or more other
persons acting together, one of the other persons in the group may make available such managerial assistance. Making available
managerial assistance means, among other things, any arrangement whereby the BDC, through its directors, officers, employees or
agents offers to provide, and, if accepted, does so provide, significant guidance and counsel concerning the management, operations
or business objectives and policies of a portfolio companythrough monitoring of portfolio company operations, selective
participation in board and management meetings, consulting with and advising a portfolio company’s officers or other organizational
or financial guidance. MC Advisors or its affiliates provide such managerial assistance on our behalf
to portfolio companies that request this assistance.



TEMPORARY INVESTMENTS



Pending investments in
other types of qualifying assets, as described above, our investments may consist of cash, cash equivalents, U.S. government securities
and high-quality debt investments that mature in one year or less from the date of investment, which we refer to, collectively,
as temporary investments, so that 70% of our assets are qualifying assets or temporary investments. We may invest in U.S. Treasury
bills or in repurchase agreements, so long as the agreements are fully collateralized by cash or securities issued by the U.S.
government or its agencies. A repurchase agreement involves the purchase by an investor, such as us, of a specified security and
the simultaneous agreement by the seller to repurchase it at an agreed-upon future date and at a price that is greater than the
purchase price by an amount that reflects an agreed-upon interest rate. There is no percentage restriction on the proportion of
our assets that may be invested in such repurchase agreements. However, if more than 25% of our total assets constitute repurchase
agreements from a single counterparty, we would not meet the Diversification Tests in order to qualify as a RIC for
U.S. federal income
tax purposes. Accordingly, we do not intend to enter into repurchase agreements with a single counterparty in excess of this limit.
MC Advisors monitors the creditworthiness of the counterparties with which we enter into repurchase agreement transactions.





22







SENIOR SECURITIES



We are generally permitted, under
specified conditions, to issue multiple classes of indebtedness and one class of stock senior to our common stock if our
asset coverage, as defined in the 1940 Act, is at least equal to 150% immediately after each such issuance. In addition,
while any senior securities remain outstanding, we must make provisions to prohibit any distribution to our stockholders or
the repurchase of such securities or shares unless we meet the applicable asset coverage ratios at the time of the
distribution or repurchase. We may also borrow amounts up to 5% of the value of our total assets for temporary or emergency
purposes without regard to asset coverage. We consolidate our financial results with all of our wholly-owned subsidiaries for
financial reporting purposes and measure our compliance with the leverage test applicable to BDCs under the 1940 Act on a
consolidated basis. This provides us with increased investment flexibility but also increases our risks related to leverage.
For a discussion of the risks associated with leverage, see “Risk Factors — Risks Relating to Our Business and
Structure — Regulations governing our operation as a BDC affect our ability to and the way in which we raise additional
capital” and “Risk Factors — Risks Relating to Our Business and Structure — We maintain a revolving
credit facility and use other borrowed funds to make investments or fund our business operations, which exposes us to risks
typically associated with leverage and increases the risk of investing in us.”



CODES OF ETHICS



We and MC Advisors have
each adopted a code of ethics pursuant to Rule 17j-1 under the 1940 Act that establishes procedures for personal investments and
restricts certain personal securities transactions. Personnel subject to each code 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’s requirements. You may obtain a copy of the code of ethics by contacting us in writing at 311 South Wacker
Drive, Suite 6400, Chicago, Illinois 60606, Attention: Investor Relations. In addition, each code of ethics is available on the
EDGAR Database on the SEC’s website at www.sec.gov. You may also obtain copies of each code of ethics, after paying
a duplicating fee, by electronic request at the following e-mail address: publicinfo@sec.gov.



PROXY VOTING POLICIES
AND PROCEDURES



We have delegated our proxy
voting responsibility to MC Advisors. The proxy voting policies and procedures of MC Advisors are set out below. The guidelines
are reviewed periodically by MC Advisors and our directors who are not “interested persons,” and, accordingly, are
subject to change. For purposes of these proxy voting policies and procedures described below, “we,” “our”
and “us” refer to MC Advisors.



Introduction



As an investment advisor registered under
the Advisers Act, we have a fiduciary duty to act solely in the best interests of our clients. As part of this duty, we recognize
that we must vote client securities in a timely manner free of conflicts of interest and in the best interests of our clients.



These policies and procedures for voting
proxies for our investment advisory clients are intended to comply with Section 206 of, and Rule 206(4)-6 under, the Advisers Act.



Proxy Policies



We vote proxies relating to our portfolio
securities in what we perceive to be the best interest of our clients’ stockholders. We review on a case-by-case basis each
proposal submitted to a stockholder vote to determine its effect on the portfolio securities held by our clients. In most cases
we will vote in favor of proposals that we believe are likely to increase the value of the portfolio securities held by our clients.
Although we will generally vote against proposals that may have a negative effect on our clients’ portfolio securities, we
may vote for such a proposal if there exist compelling long-term reasons to do so.



Our proxy voting decisions are made by
those senior officers who are responsible for monitoring each of our clients’ investments. To ensure that our vote is not
the product of a conflict of interest, we require that (a) anyone involved in the decision-making process disclose to our chief
compliance officer any potential conflict that he or she is aware of and any contact that he or she has had with any interested
party regarding a proxy vote and (b) employees involved in the decision making process or vote administration are prohibited from
revealing how we intend to vote on a proposal in order to reduce any attempted influence from interested parties. Where conflicts
of interest may be present, we will disclose such conflicts to our client, including those directors who are not interested persons
and we may request guidance from such persons on how to vote such proxies for their account.





23







Proxy Voting Records



You may obtain information
about how we voted proxies for Monroe Capital Income Plus Corporation by making a written request for proxy voting information
to: Monroe Capital Corporation, 311 South Wacker Drive, Suite 6400, Chicago, Illinois 60606, Attention: Chief Compliance Officer,
or by calling Monroe Capital Income Plus Corporation at (312) 258-8300. The SEC also maintains a website at www.sec.gov
that contains such information.



COMPLIANCE POLICIES AND
PROCEDURES



We and MC Advisors have
adopted and implemented written policies and procedures reasonably designed to prevent violation of federal securities laws and
are required to review these compliance policies and procedures annually for their adequacy and the effectiveness of their implementation.
Our chief compliance officer is responsible for administering these policies and procedures.



PRIVACY PRINCIPLES



We are committed to maintaining
the privacy of our stockholders and to safeguarding their nonpublic personal information. The following information is provided
to help you understand what personal information we collect, how we protect that information and why, in certain cases, we may
share information with select other parties.



We may collect
nonpublic personal informationregarding investors from sources such as subscription agreements, investor questionnaires
and other forms; individual investors’ account histories; and correspondence between us and individual investors. We may
share information that we collect regarding an investor with its affiliates and the employees of such affiliates for everyday business
purposes, for example, to service the investor’s accounts and, unless an investor opts out, provide the investor with information
about other products and services offered by us or our affiliates that may be of interest to the investor. In addition, we may
disclose information that we collect regarding investors to third parties who are not affiliated with us (i) as authorized by the
investors in investor subscription agreements or our organizational documents; (ii) as required by applicable law or in connection
with a properly authorized legal or regulatory investigation, subpoena or summons, or to respond to judicial process or government
regulatory authorities having property jurisdiction; (iii) as required to fulfill investor instructions; or (iv) as otherwise permitted
by applicable law to perform support services for investor accounts or process investor transactions with us or our affiliates.



Any party
not affiliated with usthat receives nonpublic personal information relating to investors from the Company is required to
adhere to confidentiality agreements and to maintain appropriate safeguards to protect investor information. Additionally, for
officers, employees and agents of ours and our affiliates, access to such information is restricted to those who need such access
to provide services to the Company and investors. We maintain physical, electronic and procedural safeguards to seek to guard investor
nonpublic personal information.



OTHER



We are required to provide
and maintain a bond issued by a reputable fidelity insurance company to protect us against larceny and embezzlement. Furthermore,
as a BDC, we are prohibited from protecting any director or officer against any liability to Monroe Capital Income Plus Corporation
or our stockholders arising from willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved
in the conduct of such person’s office.



We and MC Advisors are
each required to adopt and implement written policies and procedures reasonably designed to prevent violation of relevant federal
securities laws, obtain approval of the Board of these policies and procedures, review these policies and procedures annually for
their adequacy and the effectiveness of their implementation and designate a chief compliance officer to be responsible for administering
the policies and procedures.



We may also be prohibited
under the 1940 Act from knowingly participating in certain transactions with our affiliates without the prior approval of our Board
who are not interested persons and, in some cases, prior approval by the SEC. The SEC has interpreted the BDC prohibition on transactions
with affiliates to prohibit all “joint transactions” between entities that share a common investment advisor. The staff
of the SEC has granted no-action relief permitting purchases of a single class of privately placed securities provided that the
advisor negotiates no term other than price and certain other conditions are met. As a result, we only expect to co-invest on a
concurrent basis with other funds advised by MC Advisors when each of us will own the same securities of the issuer and when no
term is negotiated other than price. Any such investment would be made in compliance with existing regulatory guidance, applicable
regulations and our allocation procedures. If opportunities arise that would otherwise be appropriate for us and for another fund
advised by MC Advisors to invest in different securities of the same issuer, MC Advisors will need to decide which fund will proceed
with the investment. Moreover, except in certain circumstances, we are unable to invest in any issuer in which another fund advised
by MC Advisors has previously invested.



We co-invest on a concurrent
basis with other affiliates of MC Advisors, unless doing so is impermissible with existing regulatory guidance, applicable regulations,
the terms of any exemptive relief granted to us and our allocation procedures. On October 15, 2014, MC Advisors and certain other
funds and accounts sponsored or managed by MC Advisors and its affiliates, received exemptive relief from the SEC that permits
us greater flexibility to negotiate the terms of co-investments if our Board determines that it would be advantageous for us to
co-invest with other accounts sponsored or managed by MC Advisors or its affiliates in a manner consistent with our investment
objectives, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent factors. We
believe that co-investment by us and accounts sponsored or managed by MC Advisors and its affiliates may afford us additional investment
opportunities and the ability to achieve greater diversification.





24







POLICIES AND PROCEDURES
FOR MANAGING CONFLICTS



As of December
31,2019, affiliates of MC Advisors manage other assets in nine closed-end funds, two small business investment companies and
16 private funds that also have an investment strategy focused primarily on senior, unitranche and junior secured debt and to
a lesser extent, unsecured subordinated debt to lower middle-market companies. In addition, MC Advisors manages the
consolidated entities of a public BDC, MRCC, and it may manage other entities in the future with an investment focus similar
to ours. To the extent that we compete with entities managed by MC Advisors or any of its affiliates for a particular
investment opportunity, MC Advisors will allocate investment opportunities across the entities for which such opportunities
are appropriate, consistent with (a) its internal conflict of interest and allocation policies, (b) the requirements of the
Advisers Act and (c) certain restrictions under the 1940 Act and rules thereunder regarding co-investments with affiliates.
MC Advisors’ allocation policies are intended to ensure that we may generally share equitably with other investment
funds or other investment vehicles managed by MC Advisors or its affiliates in investment opportunities, particularly those
involving a security with limited supply or involving differing classes of securities of the same issuer which may be
suitable for us and such other investment funds or other investment vehicles.



MC Advisors and/or
its affiliates may in the future sponsor or manage investment funds, accounts, or other investment vehicles with similar or
overlapping investment strategies and have put in place a conflict-resolution policy that addresses the co-investment
restrictions set forth under the 1940 Act. MC Advisors will seek to ensure an equitable allocation of investment
opportunities when we are able to invest alongside other accounts managed by MC Advisors and its affiliates. The exemptive
relief received by MC Advisors and affiliates from the SEC on October 15, 2014 permits greater flexibility relating to
co-investments, subject to certain conditions. When we invest alongside such other accounts as permitted under the 1940 Act,
pursuant to SEC staff interpretation, and pursuant to our exemptive relief from the SEC that would permit greater flexibility
relating to co-investments, such investments will be made consistent with such relief and MC Advisors’ allocation
policy. Under this allocation policy, a fixed percentage of each opportunity, which may vary based on asset class and from
time to time, will be offered to us and similar eligible accounts, as periodically determined by MC Advisors and approved by
our Board, including a majority of our independent directors. The allocation policy provides that allocations among us and
other accounts will generally be made pro rata based on each account’s capital available for investment, as determined,
in our case, by our Board, including a majority of our independent directors. It is our policy to base our determinations as
to the amount of capital available for investment on such factors as the amount of cash on hand, existing commitments and
reserves, if any, the targeted leverage level, the targeted asset mix and diversification requirements and other investment
policies and restrictions set by our Board, or imposed by applicable laws, rules, regulations or interpretations. We expect
that these determinations will be made similarly for other accounts. In situations where co-investment with other entities
sponsored or managed by MC Advisors or its affiliates is not permitted or appropriate, such as when there is an opportunity
to invest in different securities of the same issuer, MC Advisors will need to decide whether we or such other entity or
entities will proceed with the investment. MC Advisors will make these determinations based on its policies and procedures
which will generally require that such opportunities be offered to eligible accounts on a basis that is fair and equitable
over time.



AVAILABLE INFORMATION



We intend to make this
Annual Report on Form 10-K, as well as our quarterly reports on Form 10-Q, our current reports on Form 8-K and, if applicable,
amendments to those reports filed or furnished pursuant to Section 13(a) of the Exchange Act, publicly available free of charge
as soon as reasonably possible following our filing of such reports with the SEC. You may also obtain such information by contacting
us in writing at 311 South Wacker Drive, Suite 6400, Chicago, Illinois 60606, Attention: Investor Relations. The SEC maintains
a website that contains reports, proxy and information statements and other information we file with the SEC at www.sec.gov.



ITEM 1A. RISK FACTORS



Investing
in our securities involves a number of significant risks. The risks set out below are not the only risks we face. Additional risks
and uncertainties not presently known to usor not presently deemed material by us may also impair our operations
and performance. If any of the following events occurs, our business, financial condition and results of operations could be materially
and adversely affected, and you may lose all or part of your investment. In addition, there will be occasions when MC Advisors
and its affiliates may encounter potential conflicts of interest in connection with the Company.



Risks Relating to Our
Business and Structure



We have a limited
operating history.



We were formed on May 30,
2018 and elected to be regulated as a BDC on January 14, 2019. As a result of our limited operating history, we have limited financial
information on which prospective investors can evaluate an investment in our common stock or our prior performance. We are subject
to the business risks and uncertainties associated with recently formed businesses, including the risk that we will not achieve
our investment objective and the value of a stockholder’s investment could decline substantially or become worthless.



We depend upon MC
Advisors’ senior management for our success, and upon its access to the investment professionals of Monroe Capital and its
affiliates.



We do not
have any internal management capacity or employees.We depend on the investment expertise, skill and network of business
contacts of the senior investment professionals of MC Advisors, who evaluate, negotiate, structure, execute, monitor and service
our investments in accordance with the terms of the Investment Advisory Agreement. Our success depends to a significant extent
on the continued service and coordination of the senior investment professionals of MC Advisors, particularly Messrs. Koenig, Peck,
and Egan who comprise the MC Advisors investment committee. These individuals may have other demands on their time now and in the
future, and we cannot assure you that they will continue to be actively involved in our management. Each of these individuals is
an employee of MC Management and is not subject to an employment contract. The departure of any of these individuals or competing
demands on their time in the future could have a material adverse effect on our ability to achieve our investment objective.





25







MC Advisorsevaluates, negotiates, structures, closes and monitors our investments in accordance with the terms of the Investment Advisory
Agreement. We can offer no assurance, however, that MC Advisors’ senior investment professionals will continue to provide
investment advice to us. If these individuals do not maintain their existing relationships with Monroe Capital and its affiliates
and do not develop new relationships with other sources of investment opportunities, we may not be able to grow our investment
portfolio or achieve our investment objective. In addition, individuals with whom Monroe Capital’s
senior investment professionals have relationships are not obligated to provide us with investment opportunities. Therefore, we
can offer no assurance that such relationships will generate investment opportunities for us.



MC Advisors, an affiliate
of Monroe Capital, provides us with access to Monroe Capital’s investment professionals. MC Advisors also depends upon Monroe
Capital to obtain access to deal flow generated by the investment professionals of Monroe Capital and its affiliates. The Staffing
Agreement provides that MC Management will make available to MC Advisors experienced investment professionals and access to the
senior investment personnel of Monroe Capital for purposes of evaluating, negotiating, structuring, closing and monitoring our
investments. We are not a party to this Staffing Agreement and cannot assure you that MC Management will continue to fulfill its
obligations under the agreement. Furthermore, the Staffing Agreement may be terminated by either party without penalty upon 60
days’ written notice to the other party. If MC Management fails to perform or terminates the agreement, we cannot assure
you that MC Advisors will enforce the Staffing Agreement or that such agreement will not be terminated by either party or that
we will continue to have access to the investment professionals of Monroe Capital and its affiliates or their information and deal
flow.



The investment
committee that oversees our investment activities is provided by MC Advisors under the Investment Advisory Agreement.The
loss of any member of MC Advisors’ investment committee or of other Monroe Capital senior investment professionals would
limit our ability to achieve our investment objective and operate as we anticipate. This could have
a material adverse effect on our financial condition and results of operations.



Our business model
depends to a significant extent upon strong referral relationships with financial institutions, sponsors and investment professionals.
Any inability of MC Advisors to maintain or develop these relationships, or the failure of these relationships to generate investment
opportunities, could adversely affect our business.



We depend upon the senior investment professionals
of MC Advisors to maintain their relationships with financial institutions, sponsors and investment professionals, and we rely
to a significant extent upon these relationships to provide us with potential investment opportunities. If the senior investment
professionals of MC Advisors fail to maintain such relationships, or to develop new relationships with other sources of investment
opportunities, we will not be able to grow our investment portfolio. In addition, individuals with whom the senior investment professionals
of MC Advisors have relationships are not obligated to provide us with investment opportunities, and, therefore, we can offer no
assurance that these relationships will generate investment opportunities for us in the future.



Our financial condition
and results of operations depend on our ability to manage our business effectively.



Our ability to achieve
our investment objective and grow depends on our ability to manage our business. This depends, in turn, on MC Advisors’ ability
to identify, invest in and monitor companies that meet our investment criteria. The achievement of our investment objectives depends
upon MC Advisors’ execution of our investment process, its ability to provide competent, attentive and efficient services
to us and, to a lesser extent, our access to financing on acceptable terms. MC Advisors has substantial responsibilities under
the Investment Advisory Agreement. The senior origination professionals and other personnel of MC Advisors and its affiliates may
be called upon to provide managerial assistance to our portfolio companies. These activities may distract them or slow our rate
of investment. Any failure to manage our business and our future growth effectively could have a material adverse effect on our
business, financial condition, results of operations and prospects. Our results of operations depend on many factors, including
the availability of opportunities for investment, readily accessible short and long-term funding alternatives in the financial
markets and economic conditions. Furthermore, if we cannot successfully operate our business or implement our investment policies
and strategies, it could negatively impact our ability to pay dividends or other distributions and you may lose all or part of
your investment.



There is currently
no public market for our stock, and the liquidity of your investment is limited.



There is currently
no public market for our common stock,and a market for our common stock may never develop. Our common stock is not registered
under the Securities Act, or any state securities law and is restricted as to transfer by law and the terms of our charter. Our
stockholders generally may not sell, assign or transfer shares without prior written consent of MC Advisors, which MC Advisors
may grant or withhold in its sole discretion. Except in limited circumstances for legal or regulatory purposes, our stockholders
are not entitled to redeem their shares. Our stockholders must be prepared to bear the economic risk of an investment in our common
stock for an indefinite period of time. While we may engage in a liquidity event in the future, there can be no assurance that
a liquidity event will be consummated for stockholders. Certain of our liquidity options described
in this annual report may require exemptive relief from the SEC. There can be no assurance that we will be able to obtain such
exemptive relief from the SEC.





26







We intend to use commercially
reasonable efforts to raise the cash needed to repurchase up to 5% of outstanding shares of our common stock on a quarterly basis
commencing on the first quarter end date three years after the Initial Closing Date. Any such repurchases are subject to approval
by the Board, in its discretion, and the availability of cash to fund such repurchases. We anticipate that the majority of our
assets will be private debt and as such, current liquidity with respect to such assets will be driven by interest and amortization
payments on such private debt rather than the sale of such assets. In addition, we are required to reserve sufficient amounts to
ensure that we do not default on any commitment under a loan. Consequently, there can be no assurance that we will have sufficient
cash to repurchase shares of our common stock on a quarterly basis or at all. The timing and number of shares to be repurchased
will depend on a number of factors, including repayment of investments by our portfolio companies and our ability to incur leverage
to fund repurchases and no assurances can be given that any common stock, or any particular amount, will be repurchased.



Our stockholders
may experience dilution.



Ourstockholders
will not have preemptive rights to subscribe to or purchase any shares issued in the future. To the extent we issue additional
equity interests, including pursuant to our current private offering or future private or public offerings, a stockholder’s
percentage ownership interest will be diluted. In addition, depending upon the terms and pricing of any additional offerings and
the value of our investments, a stockholder may also experience dilution in the net asset value and fair value of our shares.



There may be conflicts
related to obligations that MC Advisors’ senior investment professionals and members of its investment committee have to
other clients.



The senior
investment professionals and members of the investment committee of MC Advisorsserve or may serve as officers, directors
or principals of entities that operate in the same or a related line of business as we do, or of investment funds, accounts or
other investment vehicles sponsored or managed by MC Advisors or its affiliates. In serving in these multiple capacities, they
may have obligations to other clients or investors in those entities, the fulfillment of which may not be in our best interests
or in the best interest of our stockholders. For example, Messrs. Koenig, Peck and Egan have and will continue to have management
responsibilities for other investment funds, accounts or other investment vehicles sponsored or managed by affiliates of MC Advisors.
In serving in these multiple capacities, they may have obligations to other clients or investors in those entities, the fulfillment
of which may not be in the best interests of us or our stockholders. MC Advisors seeks to allocate investment opportunities among
eligible accounts in a manner that is fair and equitable over time and consistent with its allocation policy.



As of
December 31, 2019, MC Advisors manages other assets inMRCC, and affiliates of MC Advisors manage other assets in nine
closed-end funds, two small business investment companies and 16 private funds that also have an investment strategy focused
primarily on senior, unitranche and junior secured debt and, to a lesser extent, unsecured subordinated debt to lower
middle-market companies. Except for MRCC, none of these funds are registered with the SEC. In addition, MC Advisors and/or
its affiliates may manage other entities in the future with an investment strategy that has the same or similar focus as
ours.





Monroe Capital and its affiliates seek to
allocate investment opportunities among the participating funds, including us, in proportion to the relative amounts of capital
available for new investments, taking into account such factors as Monroe Capital may determine appropriate, including investment
objectives, legal or regulatory restrictions, current holdings, availability of capital for investment, immediately available cash,
the size of investments generally, risk-return considerations, relative exposure to market trends, maintenance of targeted leverage
level, targeted asset mix, target investment return, diversification requirements, strategic objectives, specific liquidity requirements,
tax consequences, limitations and restrictions on a fund’s portfolio that are imposed by such fund’s governing board
or documents, other considerations or factors that Monroe Capital deems necessary or appropriate in light of the circumstances
at such time (collectively, the “Allocation Criteria”). We expect that Monroe Capital will follow the Allocation Criteria
with respect to all of its funds under management, including us.





In situations where co-investment with other
entities sponsored or managed by MC Advisors or its affiliates is not permitted or appropriate, such as when there is an opportunity
to invest in securities of the same issuer that have different priorities or liens, MC Advisors will need to decide whether we
or such other entity or entities will proceed with the investment. MC Advisors will make these determinations based on its policies
and procedures which require that such opportunities be offered to eligible accounts on a basis that is fair and equitable over
time. However, there can be no assurance that we will be able to participate in all investment opportunities that are suitable
to us.



MC Advisors or its
investment committee may, from time to time, possess material nonpublic information, limiting our investment discretion.



The managing members and
the senior origination professionals of MC Advisors and the senior professionals and members of MC Advisors’ investment committee
may serve as directors of, or in a similar capacity with, companies in which we invest, the securities of which are purchased or
sold on our behalf. In the event that material nonpublic information is obtained with respect to such companies, or we become subject
to trading restrictions under the internal trading policies of those companies or as a result of applicable law or regulations,
we could be prohibited for a period of time from purchasing or selling the securities of such companies, and this prohibition may
have a material adverse effect on us.



Our management and
incentive fee structure may create incentives for MC Advisors that are not fully aligned with the interests of our stockholders.



In the course
of our investing activities, we pay management and incentive fees to MC Advisors.Management fees are based on our total
assets (which include assets financed using leverage). As a result, investors in our common stock invest on a “gross”
basis and receive distributions on a “net” basis after expenses, resulting in a lower rate of return than one might
achieve through direct investments. Because these fees are based on our total assets, including assets financed using leverage,
MC Advisors benefits when we incur debt or otherwise use leverage. This fee structure may encourage MC Advisors to cause us to
borrow money to finance additional investments or to maintain leverage when it would otherwise be appropriate to pay off our indebtedness.
Under certain circumstances, the use of borrowed money may increase the likelihood of default, which would disfavor our stockholders.
Our Board is charged with protecting our interests by monitoring how MC Advisors addresses these and other conflicts of interest
associated with its management services and compensation. While our Board is not expected to review or approve each investment,
our independent directors periodically review MC Advisors’ services and fees as well as its portfolio management decisions
and portfolio performance. In connection with these reviews, our independent directors consider whether our fees and expenses (including
those related to leverage) remain appropriate. As a result of this arrangement, MC Advisors or its affiliates may from time to
time have interests that differ from those of our stockholders, giving rise to a conflict.





27







The part of
the incentive fee payable to MC Advisors thatrelates to our net investment income is computed and paid on income that may
include interest income that has been accrued but not yet received in cash. This fee structure may be considered to involve a conflict
of interest for MC Advisors to the extent that it may encourage MC Advisors to favor debt financings that provide for deferred
interest, rather than current cash payments of interest. MC Advisors may have an incentive to invest in PIK interest securities
in circumstances where it would not have done so but for the opportunity to continue to earn the incentive fee even when the issuers
of the deferred interest securities would not be able to make actual cash payments to us on such securities. This risk could be
increased because MC Advisors is not obligated to reimburse us for any incentive fees received even if we subsequently incur losses
or never receive in cash the deferred income that was previously accrued. In addition, the part of the incentive fee payable to
MC Advisors that relates to our net investment income generally does not include any realized capital gains or losses or unrealized
capital gains or losses. Any net investment income incentive fee would not be subject to repayment.



Our incentive fee
may induce MC Advisors to make certain investments, including speculative investments.



MC Advisors receives an
incentive fee based, in part, upon net capital gains realized on our investments. Unlike that portion of the incentive fee based
on income, there is no hurdle rate applicable to the portion of the incentive fee based on net capital gains. As a result, MC Advisors
may have a tendency to invest more capital in investments that are likely to result in capital gains as compared to income producing
securities. Such a practice could result in our investing in more speculative securities than would otherwise be the case, which
could result in higher investment losses, particularly during economic downturns.



The Investment Advisory
Agreement with MC Advisors and the Administration Agreement with MC Management were not negotiated on an arm’s length basis
and may not be as favorable to us as if they had been negotiated with an unaffiliated third-party.



We negotiated the Investment
Advisory Agreement and the Administration Agreement with related parties. Consequently, their terms, including fees payable to
MC Advisors, may not be as favorable to us as if they had been negotiated with an unaffiliated third-party. In addition, we may
choose not to enforce, or to enforce less vigorously, our rights and remedies under these agreements because of our desire to maintain
our ongoing relationship with MC Advisors and MC Management. Any such decision, however, would breach our fiduciary obligations
to our stockholders.



Our ability to enter
into transactions with our affiliates is restricted, which may limit the scope of investments available to us.



We areprohibited
under the 1940 Act from participating in certain transactions with our affiliates without the prior approval of our independent
directors and, in some cases, of the SEC. Any person that owns, directly or indirectly, five percent or more of our outstanding
voting securities is our affiliate for purposes of the 1940 Act, and we are generally prohibited from buying or selling any security
from or to such affiliate, absent the prior approval of our independent directors. The 1940 Act also prohibits certain “joint”
transactions with certain of our affiliates, which could include investments in the same portfolio company, without prior approval
of our independent directors and, in some cases, of the SEC. We are prohibited from buying or selling any security from or to any
person who owns more than 25% of our voting securities or certain of that person’s affiliates, or entering into prohibited
joint transactions with such persons, absent the prior approval of the SEC. As a result of these restrictions, we may be prohibited
from buying or selling any security (other than any security of which we are the issuer) from or to any portfolio company of a
private equity fund managed by MC Advisors or its affiliates without the prior approval of the SEC, which may limit the scope of
investment opportunities that would otherwise be available to us.



We may,
however, co-invest with MC Advisors and its affiliates’other clients in certain circumstances where doing so is
consistent with applicable law and SEC staff interpretations. For example, we may co-invest with such accounts consistent
with guidance promulgated by the SEC staff permitting us and such other accounts to purchase interests in a single class of
privately placed securities so long as certain conditions are met, including that MC Advisors, acting on our behalf and on
behalf of other clients, negotiates no term other than price. We may also co-invest with MC Advisors’ affiliates’
other clients as otherwise permissible under regulatory guidance, applicable regulations, exemptive relief granted to MC
Advisors and our affiliates by the SEC on October 15, 2014 and MC Advisors’ allocation policy, which the investment
committee of MC Advisors maintains in writing. The allocation policy further provides that allocations among us and these
other funds are generally made in proportion to the relative amounts of capital available for new investments taking into
account the Allocation Criteria. We expect that Monroe Capital will follow the Allocation Criteria with respect to all of its
funds under management, including us. However, we can offer no assurance that investment opportunities will be allocated to
us fairly or equitably in the short-term or over time.





28









In situations where co-investment with other
entities sponsored or managed by MC Advisors or its affiliates is not permitted or appropriate, such as when there is an opportunity
to invest in securities of the same issuer that have different priorities or liens, MC Advisors will need to decide whether we
or such other entity or entities will proceed with the investment. MC Advisors will make these determinations based on its policies
and procedures which require that such opportunities be offered to eligible accounts on a basis that is fair and equitable over
time. Moreover, except in certain circumstances, we are unable to invest in any issuer in which a fund managed by MC Advisors
or its affiliates has previously invested. Similar restrictions limit our ability to transact business with our officers or directors
or their affiliates.



We may also
be prohibited under the1940 Act from knowingly participating in certain transactions with our affiliates without the prior
approval of the majority of the members of our Board who are not interested persons and, in some cases, prior approval by the SEC.
The SEC has interpreted the BDC regulations governing transactions with affiliates to prohibit certain “joint transactions”
between entities that share a common investment adviser.



We operate in a highly
competitive market for investment opportunities, which could reduce returns and result in losses.



We compete
with anumber of specialty and commercial finance companies to make the types of investments that we make in middle-market
companies, including BDCs, traditional commercial banks, private investment funds, regional banking institutions, small business
investment companies, investment banks and insurance companies. Additionally, with increased competition for investment opportunities,
alternative investment vehicles such as hedge funds may seek to invest in areas they have not traditionally invested in or from
which they had withdrawn during the economic downturn, including investing in middle-market companies. As a result, competition
for investments in lower middle-market companies has intensified, and we expect that trend to continue. Many of our existing and
potential competitors are substantially larger and have considerably greater financial, technical and marketing resources than
we do. For example, some competitors may have a lower cost of funds and access to funding sources that are not available to us.
In addition, some of our competitors may have higher risk tolerances or different risk assessments, which could allow them to consider
a wider variety of investments and establish more relationships than us. These characteristics could allow our competitors to consider
a wider variety of investments, establish more relationships and offer better pricing and more flexible structuring than we offer.
We may lose investment opportunities if we do not match our competitors’ pricing, terms and structure. If we are forced to
match our competitors’ pricing, terms and structure, however, we may not be able to achieve acceptable returns on our investments
or may bear substantial risk of capital loss. A significant part of our competitive advantage stems from the fact that the lower
middle-market is underserved by traditional commercial and investment banks, and generally has less access to capital. A significant
increase in the number and/or the size of our competitors in this target market could force us to accept less attractive investment
terms.



Furthermore,
many of our competitors are notsubject to the regulatory restrictions that the 1940 Act imposes on us as a BDC or the source
of income, asset diversification and distribution requirements we must satisfy to obtain and maintain our RIC status. The competitive
pressures we face may have a material adverse effect on our business, financial condition and results of operations. As a result
of this competition, we may not be able to take advantage of attractive investment opportunities from time to time, and we may
not be able to identify and make investments that are consistent with our investment objective.



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



We have elected
tobe treated as a RIC under Subchapter M of the Code, have qualified and intend to continue to qualify to be treated as
a RIC annually; however, no assurance can be given that we will be able to continue to qualify for and maintain RIC status. To
receive RIC tax treatment under the Code and to be relieved of federal taxes on income and gains distributed to our stockholders,
we must meet certain requirements, including source-of-income, asset diversification and distribution requirements. The annual
distribution requirement applicable to RICs is satisfied if we distribute at least 90% of our net ordinary income and net short-term
capital gains in excess of net long-term capital losses, if any, to our stockholders on an annual basis. In addition, we will be
subject to a 4% nondeductible federal excise tax to the extent that we do not satisfy certain additional minimum distribution requirements
on a calendar year basis. To the extent we use debt financing, we will be subject to certain asset coverage ratio requirements
under the 1940 Act and may be subject to financial covenants under loan and credit agreements, each of which could, under certain
circumstances, restrict us from making annual distributions necessary to receive RIC tax treatment. If we are unable to obtain
cash from other sources, we may fail to be taxed as a RIC and, thus, may be subject to corporate-level U.S. federal income tax
on our entire taxable income without regard to any distributions made by us. In order to be taxed as a RIC, we must also meet certain
asset diversification requirements at the end of each calendar quarter. Failure to meet these tests may result in our having to
dispose of certain investments quickly in order to prevent the loss of RIC status. Because most of our investments are in private
or thinly traded public companies, any such dispositions could be made at disadvantageous prices and may result in substantial
losses. If we fail to be taxed as a RIC for any reason and become subject to corporate U.S. federal income tax, the resulting corporate
U.S. federal income taxes could substantially reduce our net assets, the amount of income available for distributions to stockholders
and the amount of our distributions and the amount of funds available for new investments. Such a failure would have a material
adverse effect on us and our stockholders.



An extended disruption
in the capital markets and the credit markets could negatively affect our business.



As aBDC,
it will be necessary for us to maintain our ability to raise additional capital for investment purposes. Without sufficient access
to the capital markets or credit markets, we may be forced to curtail our business operations or we may not be able to pursue new
business opportunities. The capital markets and the credit markets have experienced periods of extreme volatility and disruption
and, accordingly, there has been and may in the future be uncertainty in the financial markets in general. Ongoing disruptive conditions
in the financial industry and the impact of new legislation in response to those conditions could restrict our business operations
and could adversely impact our results of operations and financial condition.





29







We may need
additional capital to fund new investments and grow our portfolio of investments. As such, we may access the capital marketsperiodically
to issue debt or equity securities or borrow from financial institutions in order to obtain such additional capital. 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. A reduction in the availability of new capital could limit our ability to pursue new business opportunities
and grow our business. In addition, we are required to distribute at least 90% of our net ordinary income and net short-term capital
gains in excess of net long-term capital losses, if any, to our stockholders to qualify for the tax benefits available to RICs.
As a result, these earnings will not be available to fund new investments. An inability to access the capital markets successfully
could limit our ability to grow our business and execute our business strategy fully and could decrease our earnings, if any, which
may have an adverse effect on the value of our securities.While most of our investments are
not publicly traded, applicable accounting standards require us to assume as part of our valuation process that our investments
are sold in a principal market-to-market participants (even if we plan on holding an investment through its maturity). As a result,
volatility in the capital markets can adversely affect our investment valuations. Further, the illiquidity of our investments may
make it difficult for us to sell such investments if required and to value such investments. As a result, we may realize significantly
less than the value at which we will have recorded our investments.



We could raise capital
through other channels.



The Board
may determine to raise additional capital through other channelsincluding through private offerings, public offerings or
a liquidity event. Capital raised through other channels could subject us to additional regulatory requirements. These additional
provisions could, among other things, affect our stockholders and limit the ability of the Company and MC Advisors to take certain
actions. In addition, if capital is raised through other channels, we would have to use financial and other resources to file
any required registration statements and to comply with any additional regulatory requirements.



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



For U.S.federal
income tax purposes, we include in income certain amounts that we have not yet received in cash, such as original issue discount,
or through contracted PIK interest, which represents contractual interest added to the loan balance and due at the end of the loan
term. Original issue discount, which could be significant relative to our overall investment activities, or increases in loan balances
as a result of contracted PIK arrangements, are included in income before we receive the corresponding cash payments. We also may
be required to include in income certain other amounts that we do not receive in cash.



That part
of the incentivefee payable by us that relates to our net investment income is computed and paid on income that may include
interest that has been accrued but not yet received in cash, such as original issue discount and PIK interest. If we pay a net
investment income incentive fee on interest that has been accrued, but not yet received in cash, it will increase the basis of
our investment in that loan, which will reduce the capital gain incentive fee that we would otherwise pay in the future. Nevertheless,
if we pay a net investment income incentive fee on interest that has been accrued but not yet received, and if that portfolio company
defaults on such a loan, it is possible that accrued interest previously included in the calculation of the incentive fee will
become uncollectible.



Because we
may recognizeincome before or without receiving cash representing such income, we may have difficulty meeting the requirements
applicable to RICs. In such a case, we may have to sell some of our investments at times and/or at prices we would not consider
advantageous, raise additional debt or equity capital or reduce new investment originations and sourcings to meet these distribution
requirements. If we are not able to obtain such cash from other sources, we may fail to qualify for the tax benefits available
to RICs and thus be subject to corporate-level U.S. federal income tax.



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



We may issue debt securities
or preferred stock and/or borrow money from banks or other financial institutions, which we refer to collectively as “senior
securities,” up to the maximum amount permitted by the 1940 Act. Under the provisions of the 1940 Act, we are permitted as
a BDC to issue senior securities in amounts such that our asset coverage ratio, as defined in the 1940 Act, equals at least 150%
of total assets less all liabilities and indebtedness not represented by senior securities, immediately after each issuance of
senior securities. If the value of our assets declines, we may be unable to satisfy this test. If that happens, we may be required
to sell a portion of our investments and, depending on the nature of our leverage, repay a portion of our indebtedness at a time
when such sales may be disadvantageous. This could have a material adverse effect on our operations and we may not be able to make
distributions in an amount sufficient to be subject to taxation as a RIC, or at all. In addition, issuance of securities could
dilute the percentage ownership of our current stockholders in us.



No person or entity from
which we borrow money will have a veto power or a vote in approving or changing any of our fundamental policies. Holders of our
common stock will directly or indirectly bear all of the costs associated with offering and servicing any preferred stock that
we issue.



As a BDC, we generally
are not able to issue our common stock at a price below net asset value per share without first obtaining the approval of our stockholders
and our independent directors. If we raise additional funds by issuing more common stock or senior securities convertible into,
or exchangeable for, our common stock, then percentage ownership of our stockholders at that time would decrease, and stockholders
might experience dilution. We may seek stockholder approval to sell shares below net asset value in the future.





30







The 1940 Act allows
us to incur additional leverage, which could increase the risk of investing in us.



The 1940 Act generally
prohibits us from incurring indebtedness unless immediately after such borrowing we have an asset coverage for total borrowings
of at least 200% (i.e., the amount of debt may not exceed 50% of the value of our total assets). However, on March 23, 2018, the
1940 Act was amended to allow BDCs to decrease their asset coverage requirement from 200% to 150% (i.e. the amount of debt may
not exceed 66.7% of the value of our total assets), if certain requirements are met.



Our Board and MC Advisors, our initial
stockholder, approved a proposal to adopt an asset coverage ratio of 150% in connection with our organization. Incurring additional
indebtedness could increase the risk of investing in us.



Leverage is generally considered a speculative
investment technique and may increase the risk of investing in our securities. Leverage magnifies the potential for loss on investments
in our indebtedness and on invested equity capital. As we use leverage to partially finance our investments, you will experience
increased risks of investing in our securities. If the value of our assets increases, then leveraging would cause the net asset
value attributable to our common stock to increase more sharply than it would have had we not leveraged. Conversely, if the value
of our assets decreases, leveraging would cause net asset value to decline more sharply than it otherwise would have had we not
leveraged our business. Similarly, any increase in our income in excess of interest payable on the borrowed funds would cause our
net investment income to increase more than it would without the leverage, while any decrease in our income would cause net investment
income to decline more sharply than it would have had we not borrowed. Such a decline could negatively affect our ability to pay
distributions, scheduled debt payments or other payments related to our securities. The effects of leverage would cause any decrease
in net asset value for any losses to be greater than any increase in net asset value for any corresponding gains. If we incur additional
leverage, you will experience increased risks of investing in our common stock.



We maintain a revolving credit facility and may use other
borrowed funds to make investments or fund our business operations, which exposes us to risks typically associated with leverage
and increases the risk of investing in us.



We maintain a revolving
credit facility and may borrow money, which is generally considered a speculative investment technique. As a result:



| | · | our common stock is exposed to an increased risk of loss because a decrease in the value of our investments would have a greater negative impact on the value of our common stock than if we did not use leverage;                               
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                  
| | · | if we do not appropriately match the assets and liabilities of our business, adverse changes in interest rates could reduce or eliminate the incremental income we make with the proceeds of any leverage;                                       
| |   |                                                                                                                                                                                                                                                  
| | · | our ability to pay distributions on our common stock may be restricted if our asset coverage ratio, as provided in the 1940 Act, is not at least 150% and any amounts used to service indebtedness would not be available for such distributions;
| |   |                                                                                                                                                                                                                                                  
| | · | any credit facility is subject to periodic renewal by its lenders, whose continued participation cannot be guaranteed;                                                                                                                           
| |   |                                                                                                                                                                                                                                                  
| | · | our revolving credit facility with KeyBank National Association, as agent, is, and any other credit facility we may enter into would be, subject to various financial and operating covenants; and                                               
| |   |                                                                                                                                                                                                                                                  
| | · | we bear the cost of issuing and paying interest on the revolving credit facility, which costs are entirely borne by our common stockholders.                                                                                                     





The following table illustrates
the effect of leverage on returns from an investment in our common stock assuming various annual returns, net of expenses. The
calculations in the table below are hypothetical and actual returns may be higher or lower than those appearing in the table below.



|                                                  |  | Assumed Return on Our Portfolio (Net of Expenses) (1) |       
|------------------------------------------------- |  | ----------------------------------------------------- | ------
|                                                  |  | -10%                                                  |       
|Corresponding return to common stockholder (2)(3) |  |                                                       | -17.83










|(1) | The assumed return on our portfolio is required by regulation of the SEC to assist investors in understanding the effects of leverage and is not a prediction of, and does not represent, our projected or actual performance.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | Assumes $105.3 million in total assets, $36.6 million in debt outstanding, of which $31.2 million is senior securities outstanding, $68.7 million in net assets and an average cost of funds of 4.70%, which was the weighted average interest rate of borrowings on our revolving credit facility as of December 31, 2019. The interest rate on our revolving credit facility is a variable rate. Actual interest payments may be different.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) | In order for us to cover our annual interest payments on indebtedness, we must achieve annual returns on our December 31, 2019 total portfolio assets of at least 1.63%.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------





31







Provisions in our credit facility may
limit discretion.



At our discretion,
we utilize the leverage available under our credit facility for investment and operating purposes. Additionally, we may in the
future enter into additional credit facilities. To the extentwe continue to borrow money to make investments, such underlying
credit facility may be backed by all or a portion of our loans and securities on which the lenders will have a security interest.
We may pledge up to 100% of our assets and may grant a security interest in all of our assets under the terms of any debt instrument
we enter into with lenders. We expect that any security interests we grant will be set forth in a pledge and security agreement
and evidenced by the filing of financing statements by the agent for the lenders. In addition, we expect that the custodian for
our securities serving as collateral for such loan would include in its electronic systems notices indicating the existence of
such security interests and, following notice of occurrence of an event of default, if any, and during its continuance, will only
accept transfer instructions with respect to any such securities from the lender or its designee. If we were to default under the
terms of any debt instrument, the agent for the applicable lenders would be able to assume control of the timing of disposition
of any or all of our assets securing such debt, which would have a material adverse effect on our business, financial condition,
results of operations and cash flows.



In addition, any security interests and/or
negative covenants required by a credit facility may limit our ability to create liens on assets to secure additional debt and
may make it difficult for us to restructure or refinance indebtedness at or prior to maturity or obtain additional debt or equity
financing. In addition, if our borrowing base under a credit facility were to decrease, we may be required to secure additional
assets in an amount sufficient to cure any borrowing base deficiency. In the event that all of our assets are secured at the time
of such a borrowing base deficiency, we could be required to repay advances under a credit facility or make deposits to a collection
account, either of which could have a material adverse impact on our ability to fund future investments and to make distributions.



In addition, we may be subject to limitations
as to how borrowed funds may be used, which may include restrictions on geographic and industry concentrations, loan size, payment
frequency and status, average life, collateral interests and investment ratings, as well as regulatory restrictions on leverage
which may affect the amount of funding that may be obtained. There may also be certain requirements relating to portfolio performance,
including required minimum portfolio yield and limitations on delinquencies and charge-offs, a violation of which could limit further
advances and, in some cases, result in an event of default. An event of default under a credit facility could result in an accelerated
maturity date for all amounts outstanding thereunder, which could have a material adverse effect on our business and financial
condition. This could reduce our liquidity and cash flow and impair our ability to grow our business.



A substantial  amount of our assets are subject to
security interests under our revolving credit facility and if we default on our obligations under such facility, we may
suffer adverse consequences, including foreclosure on our assets.



As of December 31, 2019, all of our
assets held in the SPV (which represent a substantial amount of our assets) were pledged as
collateral under our revolving credit facility. If we default on our obligations under this facility, the lenders may have
the right to foreclose upon and sell, or otherwise transfer, the collateral subject to their security interests or their
superior claim. In such event, we may be forced to sell our investments to raise funds to repay our outstanding borrowings in
order to avoid foreclosure and these forced sales may be at times and at prices we would not consider advantageous. Moreover,
such deleveraging of our company could significantly impair our ability to effectively operate our business in the manner in
which we have historically operated. As a result, we could be forced to curtail or cease new investment activities and lower
or eliminate the distributions that we have historically paid to our stockholders.



In addition, if the lenders exercise their
right to sell the assets pledged under our revolving credit facility, such sales may be completed at distressed sale prices, thereby
diminishing or potentially eliminating the amount of cash available to us after repayment of the amounts outstanding under the
credit facilities.



To the extent we continue to use debt
to finance our investments, changes in interest rates will affect our cost of capital and net investment income.



To theextent
we borrow money to make investments, our net investment income depends, in part, upon the difference between the rate at
which we borrow funds and the rate at which we invest those funds. As a result, we can offer no assurance that a significant
change in market interest rates will not have a material adverse effect on our net investment income in the event we use debt
to finance our investments. In periods of rising interest rates, our cost of funds would increase, which could reduce our net
investment income. We expect that our long-term fixed-rate investments will be financed primarily with issuances of equity
and long-term debt securities. We may use interest rate risk management techniques in an effort to limit our exposure to
interest rate fluctuations. Such techniques may include various interest rate hedging activities to the extent permitted by
the 1940 Act.





32







You should also be aware that a rise in
the general level of interest rates typically leads to higher interest rates applicable to our debt investments. Accordingly, an
increase in interest rates may result in an increase of the amount of incentive fees payable to MC Advisors.



The interest rates of our revolving credit facility
and loans to our portfolio companies that extend beyond 2021 might be subject to change based on recent regulatory
changes.



LIBOR, the London Interbank Offered Rate,
is the basic rate of interest used in lending transactions between banks on the London interbank market and is widely used as a
reference for setting the interest rate on loans globally. We typically use LIBOR as a reference rate in term loans we extend to
portfolio companies such that the interest due to us pursuant to a term loan extended to a portfolio company is calculated using
LIBOR. The terms of our debt investments generally include minimum interest rate floors which are calculated based on LIBOR.



As a result of the transition away
from the widespread use of LIBOR to alternative rates, interest rates on financial instruments tied to LIBOR rates, as well as
the revenue and expenses associated with those financial instruments, may be adversely affected. The U.S. Federal Reserve, in conjunction
with the Alternative Reference Rates Committee, a steering committee comprised of large U.S. financial institutions, is considering
replacing U.S. dollar LIBOR with a new index calculated by short term repurchase agreements, backed by Treasury securities, called
the Secured Overnight Financing Rate (“SOFR”). The first publication of SOFR was released in April 2018. Whether or
not SOFR attains market traction as a LIBOR replacement remains a question, and the future of LIBOR at this time is uncertain.



In 2019, the Staff of the SEC’s Division
of Corporate Finance, Division of Investment Management, Division of Trading and Markets, and Office of the Chief Accountant has
issued statements and guidance surrounding the potentially significant effects on financial markets and market participants when
LIBOR is discontinued in 2021 and no longer available as a reference benchmark rate. The Staff has encouraged all market participants
to identify contracts that reference LIBOR and begin transitions to alternative rates, and has encouraged audit committees in particular
to understand management’s plans to identify and address the risks associated with the elimination of LIBOR, and specifically,
the impact on accounting and financial reporting and any related issues associated with financial products and contracts that reference
LIBOR.



The elimination of LIBOR or any other
changes or reforms to the determination or supervision of LIBOR could have an adverse impact on the market for or value of
any LIBOR-linked securities, loans, and other financial obligations or extensions of credit held by or due to us or on our
overall financial condition or results of operations. If LIBOR ceases to exist, we may need to renegotiate our revolving
credit facility and the credit agreements extending beyond 2021 with our portfolio companies that utilize LIBOR as a factor
in determining the interest rate to replace LIBOR with the new standard that is established. In addition, the cessation of
LIBOR could:



| | · | Adversely impact the pricing, liquidity, value of, return on and trading
for a broad array of financial products, including any LIBOR-linked securities and loans that are included in our assets and liabilities;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Require extensive changes to documentation that governs or references
LIBOR or LIBOR-based products, including, for example, pursuant to time-consuming renegotiations of existing documentation to modify
the terms of outstanding investment;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Result in inquiries or other actions from regulators in respect of
our preparation and readiness for the replacement of LIBOR with one or more alternative reference rates;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Result in disputes, litigation or other actions with portfolio companies,
or other counterparties, regarding the interpretation and enforceability of provisions in our LIBOR-based investments, such as
fallback language or other related provisions, including, in the case of fallbacks to the alternative reference rates, any economic,
legal, operational or other impact resulting from the fundamental differences between LIBOR and the various alternative reference
rates;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Require the transition and/or development of appropriate systems and
analytics to effectively transition our risk management processes from LIBOR-based products to those based on one or more alternative
reference rates, which may prove challenging given the limited history of the proposed alternative reference rates; and
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Cause us to incur additional costs in relation to any of the above
factors.
| | - | ---------------------------------------------------------------------------



We are exposed to
risks associated with changes in interest rates.



Interest rate fluctuations
may have a substantial negative impact on our investments, the value of our common stock and our rate of return on invested capital.
A reduction in the interest rates on new investments relative to interest rates on current investments could have an adverse impact
on our net investment income while an increase in interest rates could decrease the value of any investments we hold which earn
fixed interest rates and increase our interest expense, thereby decreasing our net income. An increase in interest rates available
to investors could also make investment in our common stock less attractive unless we are able to increase our dividend rate. In
addition, a significant increase in market interest rates could also result in an increase in our non-performing assets and a decrease
in the value of our portfolio because our floating-rate loan portfolio companies may be unable to meet higher payment obligations.





33







If we do not invest
a sufficient portion of our assets in qualifying assets, we could fail to qualify as a BDC, which would have a material adverse
effect on our business, financial condition and results of operations.



As a BDC, we may not acquire
any assets other than “qualifying assets” unless, at the time of and after giving effect to such acquisition, at least
70% of our total assets are qualifying assets, as defined in section 55(a) of the 1940 Act. See “Business — Qualifying
Assets.” We believe that most of the investments that we may acquire in the future will constitute qualifying assets. However,
we may be precluded from investing in what we believe are attractive investments if such investments are not qualifying assets
for purposes of the 1940 Act. If we do not invest a sufficient portion of our assets in qualifying assets, we could violate the
1940 Act provisions applicable to BDCs. As a result of such violation, specific rules under the 1940 Act could prevent us, for
example, from making follow-on investments in existing portfolio companies which could result in the dilution of our position or
could require us to dispose of investments at inappropriate times in order to come into compliance with the 1940 Act. If we need
to dispose of investments quickly, it could be difficult to dispose of such investments on favorable terms. We may not be able
to find a buyer for such investments and, even if we do find a buyer, we may have to sell the investments at a substantial loss.
Any such outcomes would have a material adverse effect on our business, financial condition, results of operations, and cash flows.



Many of our portfolio
investments are recorded at fair value as determined in good faith by our Board and, as a result, there may be uncertainty as to
the value of our portfolio investments.



Under the 1940 Act, we
are required to carry our portfolio investments at market value, or if there is no readily available market value, at fair value
as determined by our Board. Many of our portfolio investments may take the form of securities that are not publicly traded. The
fair value of securities and other investments that are not publicly traded may not be readily determinable, and we value these
securities at fair value as determined in good faith by our Board, including to reflect significant events affecting the value
of our securities. As part of the valuation process, we may take into account the following types of factors, if relevant, in determining
the fair value of our investments:



| | • | a comparison of the portfolio company’s securities to publicly traded securities;
| | - | ---------------------------------------------------------------------------------



| | • | the enterprise value of a portfolio company;
| | - | --------------------------------------------



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



| | • | the portfolio company’s ability to make payments and its earnings and discounted cash flow;
| | - | -------------------------------------------------------------------------------------------



| | • | the markets in which the portfolio company does business; and
| | - | -------------------------------------------------------------



| | • | changes in the interest rate environment and the credit markets generally that may affect the price at which similar investments may be made in the future and other relevant factors.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



We expect that most of
our investments (other than cash and cash equivalents) will be classified as Level 3 in the fair value hierarchy and require disclosures
about the level of disaggregation along with the inputs and valuation techniques we use to measure fair value. This means that
our portfolio valuations are based on unobservable inputs and our own assumptions about how market participants would price the
asset or liability in question. Inputs into the determination of fair value of our portfolio investments require significant management
judgment or estimation. Even if observable market data is available, such information may be the result of consensus pricing information
or broker quotes, which include a disclaimer that the broker would not be held to such a price in an actual transaction. The non-binding
nature of consensus pricing and/or quotes accompanied by disclaimers materially reduces the reliability of such information. We
employ the services of one or more independent service providers to conduct fair value appraisals of material investments for which
market quotations are not readily available. These fair value appraisals for material investments are received at least once every
calendar year for each portfolio company investment, but are generally received quarterly. The types of factors that the Board
may take into account in determining the fair value of our investments generally include, as appropriate, comparison to publicly
traded securities including such factors as yield, maturity and measures of credit quality, the enterprise value of a portfolio
company, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings
and discounted cash flow, the markets in which the portfolio company does business and other relevant factors. Because such valuations,
and particularly valuations of private securities and private companies, are inherently uncertain, may fluctuate over short periods
of time and may be based on estimates, our determinations of fair value may differ materially from the values that would have been
used if a ready market for these securities existed. Due to this uncertainty in the value of our portfolio investments, a fair
value determination may cause net asset value on a given date to materially understate or overstate the value that we may ultimately
realize upon one or more of our investments. As a result, investors purchasing shares of our common stock based on an overstated
net asset value would pay a higher price than the value of the investments might warrant. Conversely, investors redeeming shares
during a period in which the net asset value understates the value of investments will receive a lower price for their shares than
the value the investment portfolio might warrant.



We adjust quarterly
the valuation of our portfolio to reflect the determination of our Board of the fair value of each investment in our
portfolio. Any changes in fair value are recorded in our consolidated statements of operations as net change in unrealized
gain (loss) on investments.



We may experience
fluctuations in our quarterly operating results.



We could experience fluctuations
in our quarterly operating results due to a number of factors, including our ability or inability to make investments in companies
that meet our investment criteria, the interest rate payable to us on the debt securities we acquire, the default rate on such
securities, the level of our expenses, including the cost of our indebtedness, 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.





34









Changes in laws or
regulations governing our operations may adversely affect our business or cause us to alter our business strategy.



We and our portfolio companies
are subject to regulation at the local, state and federal level. These laws and regulations, as well as their interpretation, may
change from time to time, including as the result of interpretive guidance or other directives from the U.S. President and others
in the executive branch, and new laws, regulations and interpretations may also come into effect, including those governing the
types of investments we or our portfolio companies are permitted to make, any of which could have a material adverse effect on
our business. In particular, on July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank
Act, became law. The scope of the Dodd-Frank Act impacts many aspects of the financial services industry, and it requires the development
and adoption of many implementing regulations. The effects of Dodd-Frank on the financial services industry will depend, in large
part, upon the extent to which regulators exercise the authority granted to them and the approaches taken in implementing regulations.
President Trump and certain members of Congress have indicated that they will seek to amend or repeal portions of the Dodd-Frank
Act, among other federal laws, which may create regulatory uncertainty in the near term, and in May 2018, the Economic Growth,
Regulatory Relief, and Consumer Protection Act was enacted and eased financial regulations and reduced oversight for certain entities.
While the impact of the Dodd-Frank Act, and recently-enacted federal tax reform legislation on us and our portfolio companies may
not be known for an extended period of time, the Dodd-Frank Act and federal tax reform, including future rules implementing their
provisions and the interpretation of those rules, along with other legislative and regulatory proposals directed at the financial
services industry or affecting taxation that are proposed or pending in the U.S. Congress, may negatively impact the operations,
cash flows or financial condition of us or our portfolio companies, impose additional costs on us or our portfolio companies, intensify
the regulatory supervision of us or our portfolio companies or otherwise adversely affect our business or the business of our portfolio
companies. In addition, if we do not comply with applicable laws and regulations, we could lose any licenses that we then hold
for the conduct of our business and may be subject to civil fines and criminal penalties.



Additionally, changes to
the laws and regulations governing our operations, including those associated with RICs, may cause us to alter our investment strategy
in order to avail ourselves of new or different opportunities or result in the imposition of corporate-level taxes on us. Such
changes could result in material differences to the strategies and plans set forth herein and may shift our investment focus from
the areas of expertise of MC Advisors to other types of investments in which MC Advisors may have little or no expertise or experience.
Any such changes, if they occur, could have a material adverse effect on our results of operations and the value of your investment.



On May 24,
2018, President Trump signed into law the Economic Growth,Regulatory Relief, and Consumer Protection Act, which increased
from $50 billion to $250 billion the asset threshold for designation of "systemically important financial institutions"
or "SIFIs" subject to enhanced prudential standards set by the Federal Reserve Board, staggering application of this
change based on the size and risk of the covered bank holding company. On May 30, 2018, the Federal Reserve Board voted to
consider changes to the Volcker Rule that would loosen compliance requirements for all banks. The effect of this change and any
further rules or regulations are and could be complex and far-reaching, and the change and any future laws or regulations or changes
thereto could negatively impact our operations, cash flows or financial condition, impose additional costs on us, intensify the
regulatory supervision of us or otherwise adversely affect our business, financial condition and results of operations.



Over the last several years,
there also has been an increase in regulatory attention to the extension of credit outside of the traditional banking sector, raising
the possibility that some portion of the non-bank financial sector will be subject to new regulation. While it cannot be known
at this time whether any regulation will be implemented or what form it will take, increased regulation of non-bank credit extension
could negatively impact our operations, cash flows or financial condition, impose additional costs on us, intensify the regulatory
supervision of us or otherwise adversely affect our business, financial condition and results of operations.



Legislative or other
actions relating to taxes could have a negative effect on us.



The rules
dealing with U.S. federal income taxation are constantly under review by persons involved in the legislative process and by the
Internal Revenue Service (“IRS”) and the U.S. Treasury Department. Tax reform legislation was passed in late 2017 (the
 “2017 Tax Act”). The 2017 Tax Act makes significant changes to the U.S. income tax rules applicable to both individuals
and entities, including corporations. The 2017 Tax Act includes provisions that, among other things, reduce the U.S. corporate
tax rate from 35 percent to 21 percent, introduce a capital investment deduction, limit the interest deduction, limit the use
of net operating losses to offset future taxable income, repeal the corporate alternative minimum tax and make extensive changes
to the U.S. international tax system.The 2017 Tax Act is complex and far-reaching, and we cannot predict the impact its
enactment will have on us, our subsidiaries, our portfolio companies and the holders of our securities. While
we do not foresee that the 2017 Tax Act or any additional tax legislation will have any impact on our ability to qualify for tax
treatment as a RIC, we cannot predict with certainty how any changes in the tax laws, U.S. Treasury regulations, administrative
interpretations or court decisions interpreting such legislation might affect us, investors or our portfolio investments.



Uncertainty about
presidential administration initiatives could negatively impact our business, financial condition and results of operations.



The current U.S. presidential
administration has called for significant changes to U.S. trade, healthcare, immigration, foreign and government regulatory policy.
In this regard, there is significant uncertainty with respect to legislation, regulation and government policy at the federal level,
as well as the state and local levels. Recent events have created a climate of heightened uncertainty and introduced new and difficult-to-quantify
macroeconomic and political risks with potentially far-reaching implications. There has been a corresponding meaningful increase
in the uncertainty surrounding interest rates, inflation, foreign exchange rates, treaties, tariffs, trade volumes and fiscal and
monetary policy. To the extent the U.S. Congress or the current administration implements changes to U.S. policy, those changes
may impact, among other things, the U.S. and global economy, international trade and relations, unemployment, immigration, corporate
taxes, healthcare, the U.S. regulatory environment, inflation and other areas. Although we cannot predict the impact, if any, of
these changes to our business, they could adversely affect our business, financial condition, operating results and cash flows.
Until we know what policy changes are made and how those changes impact our business and the business of our competitors over the
long term, we will not know if, overall, we will benefit from them or be negatively affected by them.





35







Our Board may change
our investment objective, operating policies and strategies without prior notice or stockholder approval, the effects of which
may be adverse.



Our Board has the authority,
except as otherwise prohibited by the 1940 Act, to modify or waive certain of our operating policies and strategies without prior
notice and without stockholder approval. However, absent stockholder approval, we may not change the nature of our business so
as to cease to be, or withdraw our election as, a BDC. Under Maryland law, we also cannot be dissolved without prior stockholder
approval except by judicial action. We cannot predict the effect any changes to our current operating policies and strategies would
have on our business, operating results and the price value of our common stock. Nevertheless, any such changes could adversely
affect our business and impair our ability to make distributions.



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



MC Advisors has the right
to resign under the Investment Advisory Agreement without penalty at any time upon 60 days’ written notice to us, whether
we have found a replacement or not. If MC Advisors resigns, we may not be able to find a new investment advisor or hire internal
management with similar expertise and ability to provide the same or equivalent services on acceptable terms within 60 days, or
at all. If we are unable to do so quickly, our operations are likely to experience a disruption, our financial condition, business
and results of operations as well as our ability to pay distributions are likely to be adversely affected and the market price
of our shares may decline. In addition, the coordination of our internal management and investment activities is likely to suffer
if we are unable to identify and reach an agreement with a single institution or group of executives having the expertise possessed
by MC Advisors and its affiliates. Even if we were able to retain comparable management, whether internal or external, the integration
of such management and their lack of familiarity with our investment objective may result in additional costs and time delays that
may adversely affect our financial condition, business and results of operations.



MC Management can
resign on 60 days’ notice from its role as our administrator under the Administration Agreement, and we may not be able to
find a suitable replacement within that time, resulting in a disruption in our operations that could adversely affect our financial
condition, business and results of operations.



MC Management has the right
to resign under the Administration Agreement without penalty upon 60 days’ written notice to us, whether we have found a
replacement or not. If MC Management resigns, we may not be able to find a new administrator or hire internal management with similar
expertise and ability to provide the same or equivalent services on acceptable terms, or at all. If we are unable to do so quickly,
our operations are likely to experience a disruption, our financial condition, business and results of operations as well as our
ability to pay distributions are likely to be adversely affected and the market price of our shares may decline. In addition, the
coordination of our internal management and administrative activities is likely to suffer if we are unable to identify and reach
an agreement with a service provider or individuals with the expertise possessed by MC Management. Even if we were able to retain
a comparable service provider or individuals to perform such services, whether internal or external, their integration into our
business and lack of familiarity with our investment objective may result in additional costs and time delays that may adversely
affect our financial condition, business and results of operations.



There are significant financial and other
resources necessary to comply with the requirements of being a public reporting entity.



We are subject
to the reporting requirementsof the Exchange Act and requirements of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley
Act”). These requirements may place a strain on our systems and resources. The Exchange Act requires that we file annual,
quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires that we maintain
effective disclosure controls and procedures and internal controls over financial reporting, which are discussed below. In order
to maintain and improve the effectiveness of our disclosure controls and procedures and internal controls, significant resources
and management oversight will be required. We have implemented procedures, processes, policies and practices for the purpose of
addressing the standards and requirements applicable to public reporting companies. These activities may divert management’s
attention from other business concerns, which could have a material adverse effect on our business, financial condition, results
of operations and cash flows. We expect to incur significant additional annual expenses related to these steps and, among other
things, directors’ and officers’ liability insurance, director fees, reporting requirements of the SEC, transfer agent
fees, additional administrative expenses payable to MC Advisors, as administrator, to compensate them for hiring additional accounting,
legal and administrative personnel, increased auditing and legal fees and similar expenses.



The systems and resources necessary to
comply with public company reporting requirements will increase further once we cease to be an “emerging growth company”
under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As long as we remain an emerging growth company,
we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public reporting
companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404
of the Sarbanes-Oxley Act. We will remain an emerging growth company for up to five years following an initial public offering
or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1.07 billion, (ii)
December 31 of the fiscal year that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange
Act which would occur if the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the last
business day of our most recently completed second fiscal quarter and we have been publicly reporting for at least 12 months or
(iii) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the preceding three-year
period.





36







Efforts to comply
with the Sarbanes-Oxley Act involve significant expenditures, and non-compliance with the Sarbanes-Oxley Act may adversely affect
us and the market price of our common stock.



As a public reporting company,
we incur legal, accounting and other expenses, including costs associated with the periodic reporting requirements applicable to
a company whose securities are registered under the Exchange Act, as well as additional corporate governance requirements, including
requirements under the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, and other rules implemented by the SEC.



We are subject to the Sarbanes-Oxley
Act, and the related rules and regulations promulgated by the SEC. Under current SEC rules, after being subject to the reporting
requirements of the Exchange Act for a specified period of time, our management will be required to report on its internal controls
over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act and rules and regulations of the SEC thereunder. We
are required to review on an annual basis our internal controls over financial reporting, and on a quarterly and annual basis to
evaluate and disclose changes in our internal controls over financial reporting. As a result, we expect to continue to incur associated
expenses, which may negatively impact our financial performance and our ability to make distributions. This process also will result
in a diversion of our management’s time and attention. We cannot be certain as to the timing of completion of our evaluation,
testing and remediation actions or the impact of the same on our operations and may not be able to ensure that the process is effective
or that the internal controls are or will be effective in a timely manner. There can be no assurance that our quarterly reviews
and annual audits will not identify additional material weaknesses. In the event that we are unable to maintain or achieve compliance
with the Sarbanes-Oxley Act and related rules, our value and results of operations may be adversely affected. As a result, we expect
to incur significant associated expenses, which may negatively impact our financial performance and our ability to make distributions.



Terrorist attacks, acts of war, global
health emergencies or natural disasters may affect any market for our common stock, impact the businesses in which we invest and
harm our business, operating results and financial condition.



Terrorist acts, acts
of war, global health emergencies or natural disasters may disrupt our operations, as well as the operations of the businesses
in which we invest. Such acts have created, and continue to create, economic and political uncertainties and have contributed to
global economic instability. Future terrorist activities, military or security operations, global health emergencies or natural
disasters could further weaken the domestic/global economies and create additional uncertainties, which may negatively impact the
businesses in which we invest directly or indirectly and, in turn, could have a material adverse impact on our business, operating
results and financial condition. Losses from terrorist attacks, global health emergencies and natural disasters are generally uninsurable.



The failure in cyber security systems,
as well as the occurrence of events unanticipated in our disaster recovery systems and management continuity planning, could impair
our ability to conduct business effectively.



The occurrence of a disaster
such as a cyber-attack, a natural catastrophe, an industrial accident, a terrorist attack or war, events unanticipated in our disaster
recovery systems, or a support failure from external providers, could have an adverse effect on our ability to conduct business
and on our results of operations and financial condition, particularly if those events affect our computer-based data processing,
transmission, storage, and retrieval systems or destroy data. If a significant number of Monroe Capital employees were unavailable
in the event of a disaster, our ability to effectively conduct our business could be severely compromised.



We depend heavily upon
computer systems to perform necessary business functions. Despite our implementation of a variety of security measures, our computer
systems could be subject to cyber-attacks and unauthorized access, such as physical and electronic break-ins or unauthorized tampering.
Like other companies, we may experience threats to our data and systems, including malware and computer virus attacks, unauthorized
access, system failures and disruptions. If one or more of these events occurs, it could potentially jeopardize the confidential,
proprietary and other information processed and stored in, and transmitted through, our computer systems and networks, or otherwise
cause interruptions or malfunctions in our operations, which could result in damage to our reputation, financial losses, litigation,
increased costs, regulatory penalties and/or customer dissatisfaction or loss.



A
disaster or a disruption in the infrastructure that supports our business, including a disruption involving electronic communications
or other services used by us or third parties with whom we conduct business, or directly affecting our headquarters, could have
a material adverse impact on our ability to continue to operate our business without interruption. Our disaster recovery programs
may not be sufficient to mitigate the harm that may result from such a disaster or disruption. In addition, insurance and other
safeguards might only partially reimburse us for our losses, if at all.



Third parties with which we do business
may also be sources of cybersecurity or other technological risk. We outsource certain functions and these relationships allow
for the storage and processing of our information, as well as client, counterparty, employee, and borrower information. While we
engage in actions to reduce our exposure resulting from outsourcing, ongoing threats may result in unauthorized access, loss, exposure,
destruction, or other cybersecurity incident that affects our data, resulting in increased costs and other consequences as described
above.





37







In addition, cybersecurity has become a
top priority for regulators around the world, and some jurisdictions have enacted laws requiring companies to notify individuals
of data security breaches involving certain types of personal data. If we fail to comply with the relevant laws and regulations,
we could suffer financial losses, a disruption of our businesses, liability to investors, regulatory intervention or reputational
damage.



We may incur lender
liability as a result of our lending activities.



In recent years, a number
of judicial decisions have upheld the right of borrowers and others to sue lending institutions on the basis of various evolving
legal theories, collectively termed “lender liability.” Generally, lender liability is founded on the premise that
a lender has either violated a duty, whether implied or contractual, of good faith and fair dealing owed to the borrower or has
assumed a degree of control over the borrower resulting in the creation of a fiduciary duty owed to the borrower or its other creditors
or stockholders. We may be subject to allegations of lender liability, which could be time-consuming and expensive to defend and
result in significant liability.



We may incur liability
as a result of providing managerial assistance to our portfolio companies.



In the course of providing
significant managerial assistance to certain portfolio companies, certain of our management and directors may serve as directors
on the boards of such companies. To the extent that litigation arises out of investments in these companies, our management and
directors may be named as defendants in such litigation, which could result in an expenditure of our funds, through our indemnification
of such officers and directors, and the diversion of management time and resources.



MC Advisors may not
be able to achieve the same or similar returns as those achieved by our senior management and investment teams while they were
employed at prior positions.



The track record and achievements
of the senior investment professionals of Monroe Capital are not necessarily indicative of future results that will be achieved
by MC Advisors. As a result, MC Advisors may not be able to achieve the same or similar returns as those achieved by the senior
investment professionals of Monroe Capital.



Risks Related to Our
Investments



Economic recessions
or downturns could impair our portfolio companies and harm our operating results.



Many of our portfolio companies
are susceptible to economic slowdowns or recessions and may be unable to repay our loans during these periods. These portfolio
companies may face intense competition, including competition from companies with greater financial resources, more extensive research
and development, manufacturing, marketing and service capabilities and greater number of qualified and experienced managerial and
technical personnel. They may need additional financing that they are unable to secure and that we are unable or unwilling to provide,
or they may be subject to adverse developments unrelated to the technologies they acquire.



Therefore, our non-performing
assets are likely to increase, and the value of our portfolio is likely to decrease during these periods. Adverse economic conditions
may decrease the value of collateral securing some of our loans and the value of our equity investments and could lead to financial
losses in our portfolio and a corresponding decrease in revenues, net income and assets.



Unfavorable economic conditions
also 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. These events could prevent us from increasing our investments and harm our operating results.



A portfolio company’s
failure to satisfy financial or operating covenants imposed by us or other lenders could lead to defaults and, potentially, acceleration
of its loans and foreclosure on its assets, which could trigger cross-defaults under other agreements and jeopardize our portfolio
company’s ability to meet its obligations under the debt securities that we hold. We may incur expenses to the extent necessary
to seek recovery upon default or to negotiate new terms with a defaulting portfolio company. It is possible that we could become
subject to a lender liability claim, including as a result of actions taken if we or MC Advisors render significant managerial
assistance to the borrower. Furthermore, if one of our portfolio companies were to file for bankruptcy protection, even though
we may have structured our investment as senior secured debt, depending on the facts and circumstances, including the extent to
which we or MC Advisors provided managerial assistance to that portfolio company or otherwise exercise control over it, a bankruptcy
court might re-characterize our debt as a form of equity and subordinate all or a portion of our claim to claims of other creditors.



Market conditions
have materially and adversely affected debt and equity capital markets in the United States and around the world.



In the past, the global
capital markets experienced periods of disruption resulting in increasing spreads between the yields realized on riskier debt securities
and those realized on securities perceived as being risk-free and a lack of liquidity in parts of the debt capital markets, significant
write-offs in the financial services sector relating to subprime mortgages and the re-pricing of credit risk in the broadly syndicated
market. These events, along with the deterioration of the housing market, illiquid market conditions, declining business and consumer
confidence and the failure of major financial institutions in the United States, led to a general decline in economic conditions.
This economic decline materially and adversely affected the broader financial and credit markets and reduced the availability of
debt and equity capital for the market as a whole and to financial firms in particular. If such a period of disruption were to
occur in the future, to the extent that we wish to use debt to fund our investments, the debt capital that will be available to
us, if at all, may be at a higher cost, and on terms and conditions that may be less favorable, than what we expect, which could
negatively affect our financial performance and results. A prolonged period of market illiquidity may cause us to reduce the volume
of loans we originate and/or fund below historical levels and adversely affect the value of our portfolio investments, which could
have a material and adverse effect on our business, financial condition, and results of operations. The spread between the yields
realized on riskier debt securities and those realized on securities perceived as being risk-free has remained narrow on a relative
basis recently. If these spreads were to widen or if there were deterioration of market conditions, these events could materially
and adversely affect our business.





38







Our investments in
leveraged portfolio companies may be risky, and you could lose all or part of your investment.



Investment in leveraged
companies involves a number of significant risks. Leveraged companies, including lower middle-market companies, in which we invest
may have limited financial resources and may be unable to meet their obligations under their debt securities that we hold. Such
developments may be accompanied by a deterioration in the value of any collateral and a reduction in the likelihood of our realizing
any guarantees that we may have obtained in connection with our investment. In addition, our junior secured loans are generally
subordinated to senior loans. As such, other creditors may rank senior to us in the event of an insolvency.



Our portfolio companies will
likely consist primarily of lower middle-market, privately owned companies, which may present a greater risk of loss than
loans to larger companies.



Our portfolio
consists, and will most likely continue to consist, primarily of loans to lower middle-market, privately owned companies.
Compared to larger, publicly traded firms, these companies generally have more limited access to capital and higher funding costs,
may be in a weaker financial position and may need more capital to expand, compete and operate their business. In addition, many
of these companies may be unable to obtain financing from public capital markets or from traditional sources, such as commercial
banks. Accordingly, loans made to these types of borrowers may entail higher risks than loans made to companies that have larger
businesses, greater financial resources or are otherwise able to access traditional credit sources on more attractive terms.



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



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



| | • | are more likely to depend on the management talents and efforts of a small group of persons; therefore, the death, disability, resignation or termination of one or more of these persons could have a material adverse impact on our portfolio company and, in turn, on us;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | typically have more limited access to the capital markets, which may hinder their ability to refinance borrowings;
| | - | ------------------------------------------------------------------------------------------------------------------



| | • | will be unable to refinance or repay at maturity the unamortized loan balance as we structure our loans such that a significant balance remains due at maturity;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | generally have less predictable operating results, may be particularly vulnerable to changes in customer preferences or market conditions, depend on one or a limited number of major customers;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | may from time to time be parties to litigation, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position; and
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | generally have less publicly available information about their businesses, operations and financial condition. If we are unable to uncover all material information about these companies, we may not make a fully informed investment decision, and may lose all or part of our investment.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Any of these factors or
changes thereto could impair a portfolio company’s financial condition, results of operation, cash flow or result in other
adverse events, such as bankruptcy, any of which could limit a portfolio company’s ability to make scheduled payments on
loans from us. This, in turn, may lead to their inability to make payments on outstanding borrowings, which could result in losses
in our loan portfolio and a decrease in our net interest income and book value.



We may be subject
to risks associated with our investments in senior loans.



Weinvest
in senior secured loans. Senior secured loans are usually rated below investment grade or may also be unrated. As a result, the
risks associated with senior secured loans may be considered by credit rating agencies to be similar to the risks of below investment
grade fixed income instruments, although senior secured loans are senior and secured in contrast to other below investment grade
fixed income instruments, which are often subordinated or unsecured. Investment in senior secured loans rated below investment
grade is considered speculative because of the credit risk of their issuers. Such companies are more likely than investment grade
issuers to default on their payments of interest and principal owed to us, and such defaults could have a material adverse effect
on our performance. An economic downturn would generally lead to a higher non-payment rate, and a senior secured loan may lose
significant market value before a default occurs. Moreover, any specific collateral used to secure a senior secured loan may decline
in value or become illiquid, which would adversely affect the senior secured loan’s value.





39







There may be less readily available and
reliable information about most senior secured loans than is the case for many other types of securities, including securities
issued in transactions registered under the Securities Act or registered under the Exchange Act. As a result, MC Advisors will
rely primarily on its own evaluation of a borrower’s credit quality rather than on any available independent sources. Therefore,
we will be particularly dependent on the analytical abilities of MC Advisors.



In general, the secondary trading market
for senior secured loans is not well developed. No active trading market may exist for certain senior secured loans, which may
make it difficult to value them. Illiquidity and adverse market conditions may mean that we may not be able to sell senior secured
loans quickly or at a fair price. To the extent that a secondary market does exist for certain senior secured loans, the market
for them may be subject to irregular trading activity, wide bid/ask spreads and extended trade settlement periods.



We may be subject
to risks associated with our investments in junior debt securities.



We mayinvest
in junior debt securities. Although certain junior debt securities are typically senior to common stock or other equity securities,
the equity and debt securities in which we will invest may be subordinated to substantial amounts of senior debt, all or a significant
portion of which may be secured. Such subordinated investments may be characterized by greater credit risks than those associated
with the senior obligations of the same issuer. These subordinated securities may not be protected by all of the financial covenants,
such as limitations upon additional indebtedness, typically protecting such senior debt. Holders of junior debt generally are not
entitled to receive full payments in bankruptcy or liquidation until senior creditors are paid in full. Holders of equity are not
entitled to payments until all creditors are paid in full. In addition, the remedies available to holders of junior debt are normally
limited by restrictions benefiting senior creditors. In the event any portfolio company cannot generate adequate cash flow to meet
senior debt service, we may suffer a partial or total loss of capital invested.



We may be subject
to risks associated with “covenant-lite” loans.



Certain loans in which
we invest may be “covenant-lite.” We use the term “covenant-lite” loans to refer generally to loans that
do not have a complete set of financial maintenance covenants. Generally, “covenant-lite” loans provide borrower companies
more freedom to negatively impact lenders because their covenants are incurrence-based, which means they are only tested and can
only be breached following an affirmative action of the borrower, rather than by a deterioration in the borrower’s financial
condition. Accordingly, to the extent we are exposed to “covenant-lite” loans, we may have a greater risk of loss on
such investments as compared to investments in or exposure to loans with financial maintenance covenants.



We may be subject
to risks associated with our investments in unitranche secured loans and securities.



We mayinvest
in unitranche secured loans, which are a combination of senior secured and junior secured debt in the same facility in which we
syndicate a “first out” portion of the loan to an investor and retain a “last out” portion of the loan.
Unitranche secured loans provide all of the debt needed to finance a leveraged buyout or other corporate transaction, both senior
and junior, but generally in a first lien position, while the borrower generally pays a blended, uniform interest rate rather than
different rates for different tranches. Unitranche secured debt generally requires payments of both principal and interest throughout
the life of the loan. Generally, we expect these securities to carry a blended yield that is between senior secured and junior
debt interest rates. Unitranche secured loans provide a number of advantages for borrowers, including the following: simplified
documentation, greater certainty of execution and reduced decision-making complexity throughout the life of the loan. In some cases,
a portion of the total interest may accrue or be paid in kind. Because unitranche secured loans combine characteristics of senior
and junior financing, unitranche secured loans have risks similar to the risks associated with senior secured and second lien loans
and junior debt in varying degrees according to the combination of loan characteristics of the unitranche secured loan.



We may be subject
to risks associated with our investments in bank loans.



We intend to invest in
bank loans and participations. These obligations are subject to unique risks, including:



| | • | the possible invalidation of an investment transaction as a fraudulent conveyance under relevant creditors’ rights laws,
| | - | ------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                         
| | • | so-called lender-liability claims by the issuer of the obligations,                                                     
| |   |                                                                                                                         
| | • | environmental liabilities that may arise with respect to collateral securing the obligations, and                       
| |   |                                                                                                                         
| | • | limitations on our ability to directly enforce its rights with respect to participations.                               



In analyzingeach bank loan or participation, MC Advisors compares the relative significance of the risks against the expected benefits
of the investment. Successful claims by third parties arising from these and other risks will be borne by us.



We may
be subject to risks associated with our investments in Securitized Products.



We may fromtime to time, as part of its opportunistic investment activities, invest, directly and indirectly, in Securitized Products,
including CLO facilities, asset-backed securities and warehouse loan facilities. Securitized Products may present risks similar
to those of the other types of investments in which we may invest and, in fact, such risks may be of greater significance in the
case of Securitized Products. Moreover, investing in Securitized Products may entail a variety of unique risks. Among other risks,
Securitized Products may be subject to prepayment risk. In addition, the performance of a Securitized Product will be affected
by a variety of factors, including its priority in the capital structure of the issuer thereof, the availability of any credit
enhancement, the level and timing of payments and recoveries on and the characteristics of the underlying receivables, loans or
other assets that are being securitized, remoteness of those assets from the originator or transferor, the adequacy of and ability
to realize upon any related collateral and the capability of the servicer of the securitized assets. In addition, we may face additional
risks related to specific Securities Products, including the following:





40







Asset-backed securities. We may
invest in asset-backed securities (“ABS”). ABS are subject to the risk of prepayment on the loans underlying such securities
(including voluntary prepayments by the obligors and liquidations due to default). Generally, prepayment rates increase when interest
rates fall and decrease when interest rates rise. Prepayment rates are also affected by other factors, including economic, demographic,
tax, social and legal factors. To the extent that prepayment rates are different than anticipated, the average yield of investments
in ABS may be adversely affected. The interest rate sensitivity of any particular pool of loans depends upon the allocation of
cash flow from the underlying receivables.



The market value of ABS will generally
vary inversely with changes in market interest rates, declining when interest rates rise and rising when interest rates decline.
However, ABS, while having comparable risk of decline during periods of rising rates, usually have less potential for capital appreciation
than other investments of comparable maturities due to the likelihood of increased prepayments as interest rates decline. In addition,
to the extent any ABS are purchased at a premium, losses due to default and liquidation and unscheduled principal prepayments generally
will result in some loss of the holders’ principal to the extent of the premium paid. ABS are subject to whole loan risk
and credit risk that the underlying receivables will not be paid by debtors or by credit insurers or guarantors of such instruments.



The underlying assets of ABS may include
receivables of any kind, including, without limitation, such items as motor vehicle installment sales or installment loan contracts,
leases of various types of real and personal property, and receivables from credit card agreements. The ability of an issuer of
asset-backed securities to enforce its security interest in the underlying assets may be limited.



The values of some other ABS are subject
to interest-rate risk and prepayment risk. A change in interest rates can affect the pace of payments on the underlying loans,
which in turn, affects total return on the securities. ABS also carry credit or default risk. If many borrowers on the underlying
loans default, losses could exceed the credit enhancement level and result in losses to investors in an ABS transaction. The value
of ABS may be substantially dependent on the servicing of the underlying asset pools and thus be subject to risks associated with
the negligence by, or defalcation of, their servicers. In addition, any fees related to outside loan origination and servicing
contracts could negatively affect returns. In certain circumstances, the mishandling of related documentation may also affect the
rights of security holders in and to the underlying collateral. The insolvency of entities that generate receivables or that utilize
the assets may result in added costs and delays in addition to losses associated with a decline in the value of underlying assets.
Furthermore, debtors may be entitled to the protection of a number of state and Federal consumer credit laws with respect to ABS,
which may give the debtor the right to avoid payment. ABS may be highly illiquid, and the market value of ABS may fluctuate widely.
If we are forced to liquidate our investments in ABS to satisfy withdrawals, it may be difficult or impossible to do so on favorable
terms and may result in losses.



Collateralized Loan Obligations.
We may invest, directly or indirectly, in CLOs and CLO warehouse facilities. A CLO is typically a bankruptcy-remote securitization
entity that owns senior secured, second lien or unsecured corporate loans. Typically, we are expected to invest, directly or indirectly,
in the unrated or most subordinated tranches of CLOs that own middle market or broadly syndicated loans, while other investors
may purchase more senior tranches of the CLO entity’s capital structure, thereby exposing themselves to different risks of
principal and interest repayment. CLOs make payments to investors as payments are received with respect to their underlying asset
pools. If proceeds of the underlying asset pools are not large enough to provide payments on all investors, securities held by
the more junior investors in the CLOs (like us) will likely suffer a principal loss. In an event of default, typically the most
senior tranche of debt may direct the CLO manager to liquidate the CLO. In the event of a liquidation, the unrated or most subordinated
tranches of a CLO will not receive any payment until all principal and interest on the senior debt is paid in full. As the holder
of the most subordinated tranche, we may be unable to exercise additional remedies under the CLO entity documentation. In addition,
the value of the underlying collateral in the asset pools may decrease in value. CLO securities are illiquid instruments, and we
may not be able to sell such securities at favorable prices, if at all.



Loans may become
nonperforming for a variety of reasons.



A loan or debt obligation may become non-performing
for a variety of reasons. Such non-performing loans may require substantial workout negotiations or restructuring that may entail,
among other things, a substantial reduction in the interest rate, a substantial write-down of the principal amount of the loan
and/or the deferral of payments. In addition, such negotiations or restructuring may be quite extensive and protracted over time,
and therefore may result in substantial uncertainty with respect to the ultimate recovery. We may also incur additional expenses
to the extent that it is required to seek recovery upon a default on a loan or participate in the restructuring of such obligation.
The liquidity for defaulted loans may be limited, and to the extent that defaulted loans are sold, it is highly unlikely that the
proceeds from such sale will be equal to the amount of unpaid principal and interest thereon. In connection with any such defaults,
workouts or restructuring, although  we exercise voting rights with respect to an individual loan, we may not be able to exercise
votes in respect of a sufficient percentage of voting rights with respect to such loan to determine the outcome of such vote.



The lack of liquidity
in our investments may adversely affect our business.



All of our assets may be
invested in illiquid securities, and a substantial portion of our investments in leveraged companies will be subject to legal and
other restrictions on resale or will otherwise be less liquid than more broadly traded public securities. The illiquidity of these
investments may make it difficult for us to sell such investments when desired. In addition, if we are required to liquidate all
or a portion of our portfolio quickly, we may realize significantly less than the value at which we have previously recorded these
investments. As a result, we do not expect to achieve liquidity in our investments in the near-term. However, to maintain the election
to be regulated as a BDC and qualify as a RIC, we may have to dispose of investments if we do not satisfy one or more of the applicable
criteria under the respective regulatory frameworks. We may also face other restrictions on our ability to liquidate an investment
in a portfolio company to the extent that we or MC Advisors have material nonpublic information regarding such portfolio company.





41







Price declines and
illiquidity in the corporate debt markets may adversely affect the fair value of our portfolio investments, reducing our net asset
value through increased net unrealized losses.



As a BDC, we are required
to carry our investments at market value or, if no market value is ascertainable, at fair value as determined in good faith by
our Board. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we use the
pricing indicated by the external event to corroborate our valuation. We record decreases in the market values or fair values of
our investments as unrealized losses. Declines in prices and liquidity in the corporate debt markets may result in significant
net unrealized losses on our portfolio. The effect of all of these factors on our portfolio may reduce our net asset value by increasing
net unrealized losses on our portfolio. Depending on market conditions, we could incur substantial realized losses and may suffer
additional unrealized losses in future periods, which could have a material adverse effect on our business, financial condition
and results of operations.



Our portfolio companies
may prepay loans, which prepayment may reduce stated yields if capital returned cannot be invested in transactions with equal or
greater expected yields.



The loans underlying our
portfolio may be callable at any time, and many of them can be repaid with no premium to par. It is generally not clear and highly
unpredictable when or if any loan might be called. Whether a loan is called will depend both on the continued positive performance
of the portfolio company and the existence of favorable financing market conditions that allow such company the ability to replace
existing financing with less expensive capital. As market conditions change frequently, it is unknown when, and if, this may be
possible for each portfolio company. Risks associated with owning loans include the fact that prepayments may occur at any time,
sometimes without premium or penalty, and that the exercise of prepayment rights during periods of declining spreads could cause
us to reinvest prepayment proceeds in lower-yielding instruments. In the case of some of these loans, having the loan called early
may reduce our achievable yield if the capital returned cannot be invested in transactions with equal or greater expected yields.



Our portfolio may
be exposed in part to one or more specific industries, which may subject us to a risk of significant loss in a particular investment
or investments if there is a downturn in that particular industry.



Our portfolio
may be exposed in part to one or more specific industries. A downturn in any particular industry in which we are invested could
significantly impact the aggregate returns we realize. If an industry in which we have significant investments suffers from adverse
business or economic conditions, as these industries have to varying degrees, a material portion of our investment portfolio could
be affected adversely, which, in turn, could adversely affect our financial position and results of operations.



As of December 31, 2019, our investments
in the Banking, Finance, Insurance & Real Estate, Healthcare & Pharmaceuticals, and High Tech industries represented approximately
19.4%, 15.3% and 13.1% respectively, of the fair value of our portfolio and are subject to certain risks particular to these industries.
The laws and rules governing the business of companies in these industries and interpretations of those laws and rules are subject
to frequent change and broad latitude is given to the agencies administering those regulations. Existing or future laws and rules
could force our portfolio companies operating in these industries to change how they do business, restrict revenue, increase costs,
change reserve levels and change business practices. Policy changes on the local, state and federal level, such as the expansion
of the government’s role in these industries and changes to tax laws affecting these industries or real estate in particular,
could fundamentally change the dynamics of these industries. In addition, various changes in real estate conditions, such as housing
supply and demand, credit availability, the attractiveness of real estate investments and zoning and tax considerations, among
other things, may impact our real estate related investments. We have invested and will continue investing in technology companies,
many of which may have narrow product lines and small market shares, which tend to render them more vulnerable to competitors’
actions and market conditions, as well as to general economic downturns. The revenues, income (or losses), and valuations of technology-related
companies can and often do fluctuate suddenly and dramatically. In addition, technology-related markets are generally characterized
by abrupt business cycles and intense competition, where the leading companies in any particular category may hold a highly concentrated
percentage of the overall market share. Any of these factors could materially adversely affect the operations of a portfolio company
in these industries and, in turn, impair our ability to timely collect principal and interest payments owed to us.



We may be subject
to risks associated with our real estate investments.



We may investin a variety of real estate and related transactions, either directly or indirectly through investment in other entities.
Such real estate investments may entail first mortgage financing for opportunistic or value-added commercial real estate transactions.
The value of real estate is subject to market conditions, and adverse changes in the local real estate market may lower the value
that may be derived from a liquidation. Other risks incident to the ownership and operation of commercial and residential real
estate include:



| | • | dependence on cash flow,
| | - | ------------------------



| | • | changes in supply of, or demand for, competing properties in an area (as a result of over- building),
| | - | -----------------------------------------------------------------------------------------------------





42







| |   |                                                                                                                            
| | - | ---------------------------------------------------------------------------------------------------------------------------
| | • | changes in the financial conditions of tenants, buyers and sellers of properties,                                          
| |   |                                                                                                                            
| | • | changes
    in the availability of debt financing,                                                                         
| |   |                                                                                                                            
| | • | energy
    and supply shortages,                                                                                           
| |   |                                                                                                                            
| | • | laws
    assigning liability to the owners of real estate properties for environmental hazards existing on such properties,
| |   |                                                                                                                            
| | • | changes
    in tax, real estate, environmental and zoning laws and regulations,                                            
| |   |                                                                                                                            
| | • | various
    uninsured or uninsurable risks,                                                                                
| |   |                                                                                                                            
| | • | natural
    disasters, and                                                                                                 
| |   |                                                                                                                            
| | • | challenges
    inherent in developing and managing real properties.                                                        



Adverse changesin real estate markets increase the probability of default on mortgage loans, as the incentive of the borrower to retain
equity in the property declines. Loans may become non-performing for a wide variety of reasons, including, without limitation,
because the mortgaged property is too highly leveraged and therefore unable to generate sufficient income to cover its debt service,
because of poor management or physical condition, or because local economic conditions adversely affect the potential of the property
to generate income. Non-performing mortgage loans often require workout negotiations and/or restructuring, which may entail, among
other things, a write-down of the principal of the loan and/or reduction of the interest rate. In addition, in the event that foreclosure
of a mortgage loan is required, the foreclosure process is often lengthy and expensive, sometimes taking several years. Furthermore,
the foreclosure process can itself disrupt the use of the property, thereby reducing the economic returns.



A number offactors may affect the value of commercial office properties, including, among other things, diversification of the tenant
base (i.e., reliance on one or only a few tenants versus a greater number of tenants or tenants in similar types of businesses
versus a greater diversity of businesses); and the location, appearance, amenities and other physical attributes of the properties;
and competition from other office properties. Office properties generally require their owners to expend significant amounts for
general capital improvements, tenant improvements and costs of re-letting space. In addition, office properties that are not equipped
to accommodate the needs of modern businesses may become functionally obsolete and thus non-competitive, or may require substantial
capital investment to upgrade facilities in order to be competitive. Office properties may also be adversely affected if there
is an economic decline in the businesses operated by their tenants. The risks of such an adverse effect are increased if the property
revenue is dependent on a single tenant or if there is a significant concentration of tenants in a particular business or industry.



We may be subject to risks associated with our investments
in the technology industry.



We invest portions of our portfolio in
the technology industry. There are risks in investing in companies that target technology-related markets, including rapid and
sometimes dramatic price erosion of products, the reliance on capital and debt markets to finance large capital outlays, including
fabrication facilities, the reliance on partners outside of the United States, particularly in Asia, and inherent cyclicality of
the technology market in general. As a result of multiple factors, access to capital may be difficult or impossible for companies
in our portfolio that are pursuing these markets. The revenue, income (or losses) and valuations of technology-related companies
can and often do fluctuate suddenly and dramatically. In addition, because of rapid technological change, the average selling prices
of products and some services provided by technology-related sectors have historically decreased over their productive lives. As
a result, the average selling prices of products and services offered by our portfolio companies that operate in technology-related
sectors may decrease over time, which could adversely affect their operating results and, correspondingly, the value of any securities
that we may hold. This could, in turn, materially adversely affect our business, financial condition and results of operations.



We may be subject to risks associated
with our investments in the healthcare industry.



Any of our portfolio companies operating
in the healthcare information and services industry are subject to extensive government regulation and certain other risks particular
to that industry. As part of our investment strategy, we plan to invest in companies in the healthcare information and services
industry. Such portfolio companies provide technology to companies that are subject to extensive regulation, including Medicare
and Medicaid payment rules and regulation, the False Claims Act and federal and state laws regarding the collection, use and disclosure
of patient health information and the storage handling and administration of pharmaceuticals. If any of our portfolio companies
or the companies to which they provide such technology fail to comply with applicable regulations, they could be subject to significant
penalties and claims that could materially and adversely affect their operations. Portfolio companies in the healthcare information
or services industry are also subject to the risk that changes in applicable regulations will render their technology obsolete
or less desirable in the marketplace.



Portfolio companies in the healthcare information
and services industry may also have a limited number of suppliers of necessary components or a limited number of manufacturers
for their products, and therefore face a risk of disruption to their manufacturing process if they are unable to find alternative
suppliers when needed. Any of these factors could materially and adversely affect the operations of a portfolio company in this
industry and, in turn, impair our ability to timely collect principal and interest payments owed to us.





43







We may be subject to risks associated
with our investments in the finance industry.



We may invest portions of our portfolio
in the finance industry. The regulatory environment in which the finance industry operates could have a material adverse effect
on business and operating results for our portfolio companies. Our portfolio companies are subject to a wide variety of laws and
regulations in the jurisdictions where they operate, including supervision and licensing by numerous governmental entities. These
laws and regulations can create significant constraints on operations and result in significant costs related to compliance. Failure
to comply with these laws and regulations could impair the ability of a portfolio company to continue operating and result in substantial
civil and criminal penalties, monetary damages, attorneys’ fees and costs, possible revocation of licenses, and damage to
reputation, brand and valued customer relationships. Any of these factors could in turn, materially adversely affect our business,
financial condition and results of operations.



We may be subject to risks
associated with our investments in the insurance industry.



We may invest portions of our portfolio
in the insurance industry. The insurance business has historically been a cyclical industry characterized by periods of intense
price competition due to excessive underwriting capacity, as well as periods when shortages of capacity permitted an increase in
pricing and, thus, more favorable underwriting profits. An increase in premium levels is often offset over time by an increasing
supply of insurance capacity in the form of capital provided by new entrants and existing insurers, which may cause prices to decrease.
Any of these factors could lead to a significant reduction in premium rates, less favorable policy terms and fewer opportunities
for our portfolio companies to underwrite insurance risks. Any of these factors could in turn, materially adversely affect our
business, financial condition and results of operations.



To the extent original
issue discount and payment-in-kind interest constitute a portion of our income, we will be exposed to typical risks associated
with such income being required to be included in taxable and accounting income prior to receipt of cash representing such income.



Our investments include original issue
discount, or OID, components and may include PIK interest components. For the year ended December 31, 2019, PIK interest comprised
approximately 1.2% of our investment income. To the extent original issue discount constitutes a portion
of our income, we are exposed to typical risks associated with such income being required to be included in taxable and accounting
income prior to receipt of cash, including the following:



| | • | We must include in income each year a portion of the OID that accrues over the life of the obligation, regardless of whether cash representing such income is received by us in the same taxable year. Because any OID or other amounts accrued will be included in investment company taxable income for the year of the accrual, we may be required to make a distribution to our stockholders in order to satisfy our annual distribution requirements, even though we will not have received any corresponding cash amount. As a result, we may have to sell some of our investments at times or at prices that would not be advantageous to us, raise additional debt or equity capital or forgo new investment opportunities.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



| | • | Even if the accounting conditions for income accrual are met, the borrower could still default when our actual collection is supposed to occur at the maturity of the obligation.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | OID instruments may have unreliable valuations because their continuing accruals require continuing judgments about the collectability of the deferred payments and the value of the collateral.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | OID instruments generally represent a significantly higher credit risk than coupon loans.
| | - | -----------------------------------------------------------------------------------------



| | • | OID income received by us may create uncertainty about the source of our cash distributions to stockholders. For accounting purposes, any cash distributions to stockholders representing OID or market discount income are not treated as coming from paid-in capital, even though the cash to pay them comes from the offering proceeds. Thus, although a distribution of OID or market discount interest comes from the cash invested by the stockholders, Section 19(a) of the 1940 Act does not require that stockholders be given notice of this fact by reporting it as a return of capital.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | The deferral of PIK interest has a negative impact on liquidity, as it represents non-cash income that may require distribution of cash dividends to stockholders in order to maintain our RIC status. In addition, the deferral of PIK interest also increases the loan-to-value (“LTV”) ratio at a compounding rate, thus, increasing the risk that we will absorb a loss in the event of foreclosure.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | OID and market discount instruments create the risk of non-refundable incentive fee payments to MC Advisors based on non-cash accruals that we may not ultimately realize.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------





44







We are a non-diversified
investment company within the meaning of the 1940 Act, and therefore we are not limited by the 1940 Act with respect to the proportion
of our assets that may be invested in securities of a single issuer.



We are classified as a
non-diversified investment company within the meaning of the 1940 Act, which means that we are not limited by the 1940 Act with
respect to the proportion of our assets that we may invest in securities of a single issuer. Our portfolio is and may in the future
be concentrated in a limited number of portfolio companies and industries. Beyond the asset diversification requirements associated
with our qualification as a RIC under the Code, we do not have fixed guidelines for diversification. To the extent that we assume
large positions in the securities of a small number of issuers, our net asset value may fluctuate to a greater extent than that
of a diversified investment company as a result of changes in the financial condition or the market’s assessment of the issuer.
We may also be more susceptible to any single economic or regulatory occurrence than a diversified investment company. As a result,
the aggregate returns we realize may be significantly adversely affected if a small number of investments perform poorly or if
we need to write down the value of any one investment. Additionally, while we are not targeting any specific industries, our investments
may be concentrated in relatively few industries. As a result, a downturn in any particular industry in which we are invested could
also significantly impact the aggregate returns we realize.



We may hold the debt
securities of leveraged companies that may, due to the significant volatility of such companies, enter into bankruptcy proceedings.



Leveraged companies may
experience bankruptcy or similar financial distress. The bankruptcy process has a number of significant inherent risks. Many events
in a bankruptcy proceeding are the product of contested matters and adversary proceedings and are beyond the control of the creditors.
A bankruptcy filing by a portfolio company may adversely and permanently affect the portfolio company. If the proceeding is converted
to a liquidation, the value of the issuer may not equal the liquidation value that was believed to exist at the time of the investment.
The duration of a bankruptcy proceeding is also difficult to predict, and a creditor’s return on investment can be adversely
affected by delays until the plan of reorganization or liquidation ultimately becomes effective. The administrative costs in connection
with a bankruptcy proceeding are frequently high and would be paid out of the debtor’s estate prior to any return to creditors.
Because the standards for classification of claims under bankruptcy law are vague, our influence with respect to the class of securities
or other obligations we own may be lost by increases in the number and amount of claims in the same class or by different classification
and treatment. In the early stages of the bankruptcy process, it is often difficult to estimate the extent of, or even to identify,
any contingent claims that might be made. In addition, certain claims that have priority by law (for example, claims for taxes)
may be substantial.



Our failure to make
follow-on investments in our portfolio companies could impair the value of our portfolio.



Following an initial investment
in a portfolio company, we may make additional investments in that portfolio company as “follow-on” investments, in
seeking to:



| | • | increase or maintain in whole or in part our position as a creditor or equity ownership percentage in a portfolio company;
| | - | --------------------------------------------------------------------------------------------------------------------------



| | • | exercise warrants, options or convertible securities that were acquired in the original or subsequent financing; or
| | - | -------------------------------------------------------------------------------------------------------------------



| | • | preserve or enhance the value of our investment.
| | - | ------------------------------------------------



We have discretion to make
follow-on investments, subject to the availability of capital resources and the provisions of the 1940 Act. Failure on our part
to make follow-on investments may, in some circumstances, jeopardize the continued viability of a portfolio company and our initial
investment, or may result in a missed opportunity for us to increase our participation in a successful operation. Even if we have
sufficient capital to make a desired follow-on investment, we may elect not to make a follow-on investment because we may not want
to increase our level of risk, because we prefer other opportunities or because we are inhibited by compliance with BDC requirements
or the desire to maintain our RIC status. Our ability to make follow-on investments may also be limited by MC Advisors’ allocation
policy.



Because we do not
hold controlling equity interests in the majority of our portfolio companies, we may not be able to exercise control over our portfolio
companies or to prevent decisions by management of our portfolio companies, which could decrease the value of our investments.



Although we may do so in
the future, we do not currently hold controlling equity positions in the majority of our portfolio companies. Our debt investments
may provide limited control features such as restrictions, for example, on the ability of a portfolio company to assume additional
debt, or to use the proceeds of our investment for other than certain specified purposes. “Control” under the 1940
Act is presumed at more than 25% equity ownership, and may also be present at lower ownership levels where we provide managerial
assistance. When we do not acquire a controlling equity position in a portfolio company, we may be subject to the risk that a portfolio
company may make business decisions with which we disagree, and that the management and/or stockholders of a portfolio company
may take risks or otherwise act in ways that are adverse to our interests. Due to the lack of liquidity of the debt and equity
investments that we typically hold in our portfolio companies, we may not be able to dispose of our investments in the event we
disagree with the actions of a portfolio company and may therefore suffer a decrease in the value of our investments.



Defaults by our portfolio
companies will harm our operating results.



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





45







In addition, many of our
investments will likely have a principal amount outstanding at maturity, which could result in a substantial loss to us if the
borrower is unable to refinance or repay.



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



We generally seek to invest
capital in senior, unitranche and junior secured loans and, to a lesser extent, unsecured subordinated debt and equity. The portfolio
companies in which we invest usually have, or may be permitted to incur, other debt that ranks equally with, or senior to, the
debt securities in which we invest. By their terms, such debt instruments may provide that the holders are entitled to receive
payment of interest or principal on or before the dates on which we are entitled to receive payments in respect of the debt securities
in which we invest. Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a portfolio company,
holders of debt instruments ranking senior to our investment in that portfolio company would typically be entitled to receive payment
in full before we receive any distribution in respect of our investment. After repaying senior creditors, the portfolio company
may not have any remaining assets to use for repaying its obligation to us. In the case of debt ranking equally with debt securities
in which we invest, we would have to share any distributions on an equal and ratable basis with other creditors holding such debt
in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant portfolio company.



Additionally,certain loans that we make to portfolio companies may be secured on a second-priority basis by the same collateral securing
senior secured debt of such companies. The first-priority liens on the collateral will secure the portfolio company’s obligations
under any outstanding senior debt and may secure certain other future debt that may be permitted to be incurred by the portfolio
company under the agreements governing the loans. The holders of obligations secured by first-priority liens on the collateral
will generally control the liquidation of, and be entitled to receive proceeds from, any realization of the collateral to repay
their obligations in full before us. In addition, the value of the collateral in the event of liquidation will depend on market
and economic conditions, the availability of buyers and other factors. There can be no assurance that the proceeds, if any, from
sales of all of the collateral would be sufficient to satisfy the loan obligations secured by the second-priority liens after payment
in full of all obligations secured by the first-priority liens on the collateral. If such proceeds were not sufficient to repay
amounts outstanding under the loan obligations secured by the second-priority liens, then, to the extent not repaid from the proceeds
of the sale of the collateral, we will only have an unsecured claim against the portfolio company’s remaining assets, if
any.



The rightswe may have with respect to the collateral securing the loans we make to our portfolio companies with senior debt outstanding
may also be limited pursuant to the terms of one or more intercreditor agreements that we enter into with the holders of such senior
debt, including in unitranche secured transactions. Under a typical intercreditor agreement, at any time that obligations that
have the benefit of the first-priority liens are outstanding, any of the following actions that may be taken in respect of the
collateral will be at the direction of the holders of the obligations secured by the first-priority liens:



| | • | the ability to cause the commencement of enforcement proceedings against the collateral;
| | - | ----------------------------------------------------------------------------------------



| | • | the ability to control the conduct of such proceedings;
| | - | -------------------------------------------------------



| | • | the approval of amendments to collateral documents;
| | - | ---------------------------------------------------



| | • | releases of liens on the collateral; and
| | - | ----------------------------------------



| | • | waivers of past defaults under collateral documents.
| | - | ----------------------------------------------------



We
may not have the ability to control or direct such actions, even if our rights are adversely affected. In addition, a bankruptcy
court may choose not to enforce an intercreditor agreement or other agreement with creditors.



We may also make unsecured
loans to portfolio companies, meaning that such loans will not benefit from any interest in collateral of such companies. Liens
on such portfolio companies’ collateral, if any, will secure the portfolio company’s obligations under its outstanding
secured debt and may secure certain future debt that is permitted to be incurred by the portfolio company under its secured loan
agreements. The holders of obligations secured by such liens will generally control the liquidation of, and be entitled to receive
proceeds from, any realization of such collateral to repay their obligations in full before us. In addition, the value of such
collateral in the event of liquidation will depend on market and economic conditions, the availability of buyers and other factors.
There can be no assurance that the proceeds, if any, from sales of such collateral would be sufficient to satisfy our unsecured
loan obligations after payment in full of all secured loan obligations. If such proceeds were not sufficient to repay the outstanding
secured loan obligations, then our unsecured claims would rank equally with the unpaid portion of such secured creditors’
claims against the portfolio company’s remaining assets, if any.



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





46







We may be subject
to risks associated with syndicated loans.



From time to time, our
investments may consist of syndicated loans. Under the documentation for such loans, a financial institution or other entity typically
is designated as the administrative agent and/or collateral agent. This agent is granted a lien on any collateral on behalf of
the other lenders and distributes payments on the indebtedness as they are received. The agent is the party responsible for administering
and enforcing the loan and generally may take actions only in accordance with the instructions of a majority or two-thirds in commitments
and/or principal amount of the associated indebtedness. In most cases, we do not expect to hold a sufficient amount of the indebtedness
to be able to compel any actions by the agent. Accordingly, we may be precluded from directing such actions unless we act together
with other holders of the indebtedness. If we are unable to direct such actions, we cannot assure you that the actions taken will
be in our best interests.



There is a risk that a
loan agent may become bankrupt or insolvent. Such an event would delay, and possibly impair, any enforcement actions undertaken
by holders of the associated indebtedness, including attempts to realize upon the collateral securing the associated indebtedness
and/or direct the agent to take actions against the related obligor or the collateral securing the associated indebtedness and
actions to realize on proceeds of payments made by obligors that are in the possession or control of any other financial institution.
In addition, we may be unable to remove the agent in circumstances in which removal would be in our best interests. Moreover, agented
loans typically allow for the agent to resign with certain advance notice.



We may be subject
to risks associated with our investments in special situation companies.



Wemay
make investments in companies involved in (or the target of) acquisition attempts or tender offers, or companies involved in spin-offs
and similar transactions. In any investment opportunity involving any such type of business enterprise, there exists the risk that
the transaction in which such business enterprise is involved will either be unsuccessful, take considerable time or result in
a distribution of cash or a new security, the value of which will be less than the purchase price to us of the security or other
financial instrument in respect of which such distribution is received. Similarly, if an anticipated transaction does not in fact
occur, we may be required to sell our investment at a loss. In connection with such transactions (or otherwise), we may purchase
securities on a when-issued basis, which means that delivery and payment take place sometime after the date of the commitment to
purchase and are often conditioned upon the occurrence of a subsequent event, such as approval and consummation of a merger, reorganization
or debt restructuring. The purchase price and/or interest rate receivable with respect to a when-issued security are fixed when
we enter into the commitment. Such securities are subject to changes in market value prior to their delivery.



The disposition of
our investments may result in contingent liabilities.



A significant portion of
our investments involve private securities. In connection with the disposition of an investment in private securities, we may be
required to make representations about the business and financial affairs of the portfolio company typical of those made in connection
with the sale of a business. We may also be required to indemnify the purchasers of such investment to the extent that any such
representations turn out to be inaccurate or with respect to potential liabilities. These arrangements may result in contingent
liabilities that ultimately result in funding obligations that we must satisfy through our return of distributions previously made
to us.



Investments in securities
of foreign companies, if any, may involve significant risks in addition to the risks inherent in U.S. investments.



We may make investments
in securities of foreign companies. Investing in foreign companies may expose us to additional risks not typically associated with
investing in U.S. companies, including changes in exchange control regulations, political and social instability, expropriation
and imposition of foreign taxes. In addition, any investments that we make that are denominated in a foreign currency will be subject
to the risk that the value of a particular currency will change in relation to one or more other currencies. Factors such as trade
balances, the level of short-term interest rates, differences in relative values of similar assets in different currencies, long-term
opportunities for investment and capital appreciation and political developments may affect currency values. We may employ hedging
techniques to minimize these risks, but we cannot assure you that we will, in fact, hedge currency risk, or, that if we do, such
strategies will be effective.



We may be subject
to additional risks if we engage in hedging transactions and/or invest in foreign securities.



The 1940 Act generally
requires that 70% of our investments be in issuers each of whom, in addition to other requirements, is organized under the laws
of, and has its principal place of business in, any state of the United States, the District of Columbia, Puerto Rico, the Virgin
Islands or any other possession of the United States. Our investment strategy does not contemplate a significant number of investments
in securities of non-U.S. companies. We expect that these investments would focus on the same investments that we make in U.S.
middle-market companies and, accordingly, would be complementary to our overall strategy and enhance the diversity of our holdings.



To the extent that these
investments are denominated in a foreign currency, we may engage in hedging transactions. Engaging in either hedging transactions
or investing in foreign securities would entail additional risks to our stockholders. We may, for example, use instruments such
as interest rate swaps, caps, collars and floors, forward contracts or currency options or borrow under a revolving credit facility
in foreign currencies to minimize our foreign currency exposure. In each such case, we generally would seek to hedge against fluctuations
of the relative values of our portfolio positions from changes in market interest rates or currency exchange rates. Hedging against
a decline in the values of our portfolio positions would not eliminate the possibility of fluctuations in the values of such positions
or prevent losses if the values of the positions declined. However, such hedging could establish other positions designed to gain
from those same developments, thereby offsetting the decline in the value of such portfolio positions. Such hedging transactions
could also limit the opportunity for gain if the values of the underlying portfolio positions increased. Moreover, it might not
be possible to hedge against an exchange rate or interest rate fluctuation that was so generally anticipated that we would not
be able to enter into a hedging transaction at an acceptable price. Our ability to engage in hedging transactions may also be adversely
affected by recent rules adopted by the U.S. Commodity Futures Trading Commission.





47







While we may enter into
such transactions to seek to reduce currency exchange rate and interest rate risks, unanticipated changes in currency exchange
rates or interest rates could result in poorer overall investment performance than if we had not engaged in any such hedging transactions.
In addition, the degree of correlation between price movements of the instruments used in a hedging strategy and price movements
in the portfolio positions being hedged could vary. Moreover, for a variety of reasons, we might not seek to establish a perfect
correlation between the hedging instruments and the portfolio holdings being hedged. Any such imperfect correlation could prevent
us from achieving the intended hedge and expose us to risk of loss. In addition, it might not be possible to hedge fully or perfectly
against currency fluctuations affecting the value of securities denominated in non-U.S. currencies because the value of those securities
would likely fluctuate as a result of factors not related to currency fluctuations.



We may not realize
gains from our equity investments.



We currently
hold, and wemay in the future make investments that include warrants or other equity or equity-related securities. In addition,
we may from time to time make non-control, equity co-investments in companies in conjunction with private equity sponsors. Our
goal is ultimately to realize gains upon our disposition of such equity interests. However, the equity interests we receive may
not appreciate in value and, in fact, may decline in value. Accordingly, we may not be able to realize gains from our equity interests,
and any gains that we do realize on the disposition of any equity interests may not be sufficient to offset any other losses we
experience. We also may be unable to realize any value if a portfolio company does not have a liquidity event, such as a sale of
the business, recapitalization or public offering, which would allow us to sell the underlying equity interests. We often seek
puts or similar rights to give us the right to sell our equity securities back to the portfolio company issuer. We may be unable
to exercise these put rights for the consideration provided in our investment documents if the issuer is in financial distress.



Risks Relating to Our
Common Stock



We may not be able
to pay distributions, our distributions may not grow over time and/or a portion of our distributions may be a return of capital.



We have paid and intend
to continue to pay distributions to our stockholders out of assets legally available for distribution. We cannot assure you that
we will achieve investment results that will allow us to sustain a specified level of cash distributions or make periodic increases
in cash distributions. Our ability to pay distributions might be adversely affected by, among other things, the impact of one or
more of the risk factors described herein. In addition, the inability to satisfy the asset coverage test applicable to us as a
BDC could limit our ability to pay distributions. All distributions will be paid at the discretion of our Board and will depend
on our earnings, our financial condition, maintenance of our RIC status, compliance with applicable BDC regulations and such other
factors as our Board may deem relevant from time to time. We cannot assure you that we will continue to pay distributions to our
stockholders.



When we make distributions,
we will be required to determine the extent to which such distributions are paid out of current or accumulated earnings and profits.
Distributions in excess of current and accumulated earnings and profits will be treated as a non-taxable return of capital to the
extent of an investor’s basis in our stock and, assuming that an investor holds our stock as a capital asset, thereafter
as a capital gain.



We may choose to
pay a portion of our dividends in our own stock, in which case you may be required to pay tax in excess of the cash you receive.



We have adopted a
dividend reinvestment plan that provides for reinvestment of our dividends and other distributions on behalf of our
stockholders that elect to participate in such plan. We may distribute taxable dividends that are payable in part in our
stock. Taxable stockholders receiving such dividends will be required to include the full amount of the dividend as ordinary
income (or as long-term capital gain or qualified dividend income to the extent such distribution is properly reported as
such) to the extent of our current and accumulated earnings and profits for U.S. federal income tax purposes. The tax rate
for ordinary income will vary depending on a stockholder’s particular characteristics. For individuals, the top
marginal federal ordinary income tax rate is 37%. To the extent distributions paid by us to non-corporate stockholders
(including individuals) are attributable to dividends from U.S. corporations and certain qualified foreign corporations, such
distributions generally will be eligible for a maximum qualified dividend federal tax rate of 20%. However, in this regard,
it is anticipated that distributions paid by us will generally not be attributable to such dividends and, therefore,
generally will not qualify for the preferential federal tax rate. Distributions of our net capital gains (which is generally
our realized net long-term capital gains in excess of realized net short-term capital losses) properly reported by us as
 “capital gain dividends” will be taxable to a U.S. stockholder as long-term capital gains currently at a maximum
federal tax rate of 20%.



As a result of receiving
dividends in the form of our common stock, a U.S. stockholder may be required to pay tax with respect to such dividends in excess
of any cash received. If a U.S. stockholder sells the stock it receives as a dividend in order to pay this tax, the sales proceeds
may be less than the amount included in income with respect to the dividend, depending on the market price of our stock at the
time of the sale. Furthermore, with respect to non-U.S. stockholders, we may be required to withhold federal tax with respect to
such dividends, including in respect of all or a portion of such dividend that is payable in shares of our common stock. In addition,
if a significant number of our stockholders determine to sell shares of our stock in order to pay taxes owed on dividends, it may
put downward pressure on the trading price of shares of our common stock.



In addition, as discussed
above, our loans may contain a PIK interest provision. The PIK interest, computed at the contractual rate specified in each loan
agreement, is added to the principal balance of the loan and recorded as interest income. To avoid the imposition of corporate-level
tax, we will need to make sufficient distributions, a portion of which may be paid in shares of our common stock, regardless of
whether our recognition of income is accompanied by a corresponding receipt of cash.





For any period that we do not qualify
as a “publicly offered regulated investment company,” as defined in the Code, stockholders will be taxed as though
they received a distribution of some of our expenses.



A “publicly offered regulated investment
company” is a RIC whose shares are either (i) continuously offered pursuant to a public offering, (ii) regularly
traded on an established securities market or (iii) held by at least 500 persons at all times during the taxable year. We
currently do not qualify as a publicly offered RIC; we may qualify as a publicly offered RIC for future taxable years. For any
period that we are not a publicly offered RIC, a non-corporate stockholder’s allocable portion of our affected expenses is
treated as an additional distribution to the stockholder and is deductible by such stockholder only to the extent permitted under
the limitations described below. For non-corporate stockholders, including individuals, trusts, and estates, significant limitations
may apply to the deductibility of certain expenses of a non-publicly offered RIC. In particular, these expenses, referred to as
miscellaneous itemized deductions, are deductible to an individual only to the extent they exceed 2% of such a stockholder’s
adjusted gross income, and are not deductible for alternative minimum tax purposes.







48







Investing in our
common stock may involve an above-average degree of risk.



The investments we make
in accordance with our investment objective may result in a higher amount of risk than alternative investment options and a higher
risk of volatility or loss of principal. Our investments in portfolio companies may be highly speculative and aggressive and, therefore,
an investment in our common stock may not be suitable for someone with lower risk tolerance.



Provisions of the
Maryland General Corporation Law and our charter and bylaws could deter takeover attempts and have an adverse effect on the price
of our common stock.



The Maryland General Corporation
Law and our charter and bylaws contain provisions that may discourage, delay or make more difficult a change in control of us or
the removal of our directors. We are subject to the Maryland Business Combination Act, subject to any applicable requirements of
the 1940 Act. Our Board has adopted a resolution exempting from the Maryland Business Combination Act any business combination
between us and any other person, subject to prior approval of such business combination by our Board, including approval by a majority
of our independent directors. If the resolution exempting business combinations is repealed or our Board does not approve a business
combination, the Maryland Business Combination Act may discourage third parties from trying to acquire control of us and increase
the difficulty of consummating such an offer. The SEC staff has taken the position that, under the 1940 Act, an investment company
may not avail itself of the Maryland Control Share Acquisition Act. As a result, we will amend our bylaws to be subject to the
Maryland Control Share Acquisition Act, only if the Board determines that it would be in our best interests and, after notification,
the SEC staff does not object to our determination that our being subject to the Maryland Control Share Acquisition Act does not
conflict with the 1940 Act. If such conditions are met, and 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 for a third party to obtain control
of us and increase the difficulty of consummating such a transaction.



We have adopted certain
measures that may make it difficult for a third-party to obtain control of us, including provisions of our charter classifying
our Board in three staggered terms and authorizing our Board to classify or reclassify shares of our capital stock in one or more
classes or series and to cause the issuance of additional shares of our stock. These provisions, as well as other provisions of
our charter and bylaws, may delay, defer or prevent a transaction or a change in control that might otherwise be in the best interests
of our stockholders.



ITEM 1B. UNRESOLVED
STAFF COMMENTS



None.



ITEM 2. PROPERTIES



We do not own any real
estate or other physical properties materially important to our operation. The principal executive offices of Monroe Capital are
located at 311 South Wacker Drive, Suite 6400, Chicago, Illinois 60606. Monroe Capital and its affiliates currently have additional
offices, and/or company representatives in New York, New York; Los Angeles, California; San Francisco, California; Atlanta, Georgia;
and Boston, Massachusetts. Our administrator furnishes us office space, and we reimburse it for such costs on an allocated basis.



ITEM 3. LEGAL PROCEEDINGS



Neither we nor our investment
adviser is currently subject to any material legal proceedings.



ITEM 4. MINE SAFETY
DISCLOSURES



Not applicable.





49







PART II



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



COMMON
STOCK



Our common stock will be offered and
sold in transactions exempt from registration under the Securities Act under Section 4(a)(2) and Regulation D, as well as
under Regulation S under the Securities Act. There is no established public trading market for our common stock currently. As
of March 9, 2020, there were  456 holders of record of our common stock.



DISTRIBUTIONS



We currently intend to make distributions
to our stockholders on a quarterly basis out of assets legally available for distribution. We may also make additional distributions
to our stockholders from time to time. Our quarterly and additional distributions, if any, will be determined by our board of directors.



Our revolving credit facility, as
amended, imposes certain conditions that may limit the amount of cash available for distributions to stockholders.
Distributions payable in our common stock under our dividend reinvestment plan are not limited by the revolving credit
facility.



We have adopted an “opt
in” dividend reinvestment plan for our common stockholders. When we declare a distribution, our stockholders’
cash distributions will only be reinvested in additional shares of our common stock if a stockholder specifically “opts in”
to our dividend reinvestment plan. Otherwise, a stockholder will automatically receive cash distributions.



ITEM 6. SELECTED CONSOLIDATED
FINANCIAL DATA



The
following selected consolidated financial data of the Company are derived from our consolidated financial statements that have
been audited by RSM US LLP (“RSM”), our independent registered public accounting firm. This consolidated financial
data should be read in conjunction with our consolidated financial statements and related notes thereto included elsewhere in this
Annual Report on Form 10-K and with Management’s Discussion and Analysis of Financial Condition and Results of Operations
which follows:



|                                                                        |  | As
                                         of and for
                                                                                                                              the
                                         year ended
                                                                                                                              December
                                         31, 2019 |             |   | As
                                         of and for
                                                                                                                              the
                                         period
                                                                                                                              May
                                         30, 2018
                                                                                                                              (date
                                         of inception)
                                                                                                                              to
                                                                                                                              December
                                         31, 2018 |  
|----------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -
|Consolidated statements of
    operations data:                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                       |             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  
|Total investment income                                                 |  | $                                                                                                                                                                                                                                                                                                                                                                                                                                     | 3,887,760   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | $
|Base
    management fees, net of base management fee waiver (1)         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                       | 301,925     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  
|Incentive
    fees, net of incentive fee waiver (2)                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                       | 132,125     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  
|All other operating expenses                                            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                       | 1,715,898   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  
|Less: Expense reimbursement                                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                       | (544,084    | ) |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  
|Net expenses                                                            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                       | 1,605,864   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  
|Net investment income                                                   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                       | 2,281,896   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  
|Net realized gain (loss) on investments                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                       | 5,169       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  
|Net change in unrealized gain
    (loss) on investments                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                       | 875,663     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  
|Net
    increase (decrease) in net assets resulting from operations     |  | $                                                                                                                                                                                                                                                                                                                                                                                                                                     | 3,162,728   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | $
|Per share data (basic and diluted):                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                       |             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  
|Net asset value                                                         |  | $                                                                                                                                                                                                                                                                                                                                                                                                                                     | 10.00       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | $
|Net investment income                                                   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                       | 0.57        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  
|Net gain (loss)                                                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                       | 0.22        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  
|Net
    increase (decrease) in net assets resulting from operations     |  | $                                                                                                                                                                                                                                                                                                                                                                                                                                     | 0.79        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | $
|Per share distributions declared:                                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                       |             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  
|From net investment income                                              |  | $                                                                                                                                                                                                                                                                                                                                                                                                                                     | 0.77        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | $
|Total per share distributions
    declared                              |  | $                                                                                                                                                                                                                                                                                                                                                                                                                                     | 0.77        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | $
|Dollar amount of distributions declared:(3)                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                       |             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  
|From distributable earnings                                             |  | $                                                                                                                                                                                                                                                                                                                                                                                                                                     | 1,776,190   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | $
|Distributions declared and payable                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                       | 1,386,538   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  
|Total dollar amount of distributions
    declared                       |  | $                                                                                                                                                                                                                                                                                                                                                                                                                                     | 3,162,728   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | $
|Consolidated
    statements of assets and liabilities data at year end: |  |                                                                                                                                                                                                                                                                                                                                                                                                                                       |             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  
|Investments, at fair value                                              |  | $                                                                                                                                                                                                                                                                                                                                                                                                                                     | 100,806,983 |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | $
|Cash and cash equivalents                                               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                       | 2,222,887   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  
|Restricted cash                                                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                       | 1,840,821   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  
|Other assets                                                            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                       | 434,954     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  
|Total assets                                                            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                       | 105,305,645 |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  
|Total debt, less unamortized deferred financing costs                   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                       | 31,116,532  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  
|Other liabilities                                                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                       | 5,443,792   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  
|Total liabilities                                                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                       | 36,560,324  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  
|Total net assets                                                        |  | $                                                                                                                                                                                                                                                                                                                                                                                                                                     | 68,745,321  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | $
|Other data:                                                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                       |             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  
|Total
    return based on average net asset value (4)                   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                       | 9.8         | % |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  
|Weighted
    average annualized effective yield at year end (5)         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                       | 8.0         | % |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  
|Number of portfolio company investments at year end                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                       | 37          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  
|Purchases of
    investments for the year                               |  | $                                                                                                                                                                                                                                                                                                                                                                                                                                     | 104,418,184 |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | $
|Principal payments and sales of investments for the
    year            |  | $                                                                                                                                                                                                                                                                                                                                                                                                                                     | 4,638,209   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | $










|(1) | During the year
    ended December 31, 2019, MC Advisors voluntarily waived base management fees of $432,993.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | During
    the year ended December 31, 2019, MC Advisors voluntarily waived part one incentive fees (based on net investment income) of
    $118,610.                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(3) | The per share data and dollar amount for distributions declared reflect the amount of distributions paid or payable with
    a record date during the applicable period.                                                                                                                                                                                                                                                                                                                                                                                                                           
|(4) | Total return based on average net asset value
    is calculated by dividing the net increase (decrease) in net assets resulting from operations by the average net asset
    value.                                                                                                                                                                                                                                                                                                                                                                                                                
|(5) | The weighted
    average annualized effective yield on portfolio investments at year end is computed by dividing (a) interest income on debt
    investments at the period end effective rate for each investment
    by (b) the par value of our debt investments. The weighted average annualized effective yield on
    portfolio investments is a metric on the investment portfolio alone and does not represent a return to stockholders. This
    metric is not inclusive of our fees and expenses, the impact of leverage on the portfolio or sales load that may be paid by
    investors.







50









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



The following discussion should be read in
conjunction with our audited consolidated financial statements and related notes and other financial information appearing elsewhere
in this Annual Report on Form 10-K. In addition to historical information, the following discussion and other parts of this Annual
Report on Form 10-K contain forward-looking information that involves risks and uncertainties.



Please see “Risk Factors” and
 “Special Note Regarding Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated
with these statements.



Overview



Monroe Capital Income Plus Corporation
is an externally managed, closed-end, non-diversified management investment company incorporated under the Maryland General
Corporation Law on May 30, 2018. On January 14, 2019, we elected to be regulated as a business development company
(“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, for U.S.
federal income tax purposes we have elected to be treated as a regulated investment company (“RIC”) under the
U.S. Internal Revenue Code of 1986, as amended (the “Code”), commencing with our taxable year ended December 31,
2019 and intend to qualify annually thereafter as a RIC.



As an emerging growth company, we intend
to take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the
 “Securities Act”) for complying with new or revised accounting standards.



We are conducting a best efforts, continuous
private offering of our common stock to “accredited investors” in reliance on an exemption from the registration requirements
of the Securities Act (a “Private Offering”). At each closing an investor will purchase shares of our common stock
pursuant to a subscription agreement entered into with us. At each closing, investors will be required to fund their full subscription
to purchase shares of our common stock. We commenced our loan origination and investment activities contemporaneously with the
initial closing of the Private Offering on January 15, 2019.



On June 27, 2018, we issued and sold 100
shares of common stock, par value $0.001, at an aggregate purchase price of $1,000 ($10.00 per share) to MC Management, an affiliate
of MC Advisors, our investment adviser. The sale of our common stock was approved by the unanimous consent of our Board of Directors
(the “Board”) at the time.



The following table summarizes the issuance
of shares pursuant to the Private Offering during the year ended December 31, 2019:



|Date             |  | Shares Issued |           |  | NAV Per Share |   |       | Proceeds | 
|---------------- |  | ------------- | --------- |  | ------------- | - | ----- | -------- | 
|January 15, 2019 |  |               | 1,017,500 |  |               | $ | 10.00 |          | 
|April 2, 2019    |  |               | 1,596,600 |  |               | $ | 10.00 |          | 
|April 4, 2019    |  |               | 275,500   |  |               | $ | 10.00 |          | 
|April 8, 2019    |  |               | 21,000    |  |               | $ | 10.00 |          | 
|July 1, 2019     |  |               | 2,384,300 |  |               | $ | 10.00 |          | 
|October 1, 2019  |  |               | 1,527,500 |  |               | $ | 10.00 |          | 
|Total proceeds   |  |               |           |  |               |   |       |          | 



For the year ended December 31, 2019,
we also issued 52,032 shares with an aggregate value of $520,321 under our Dividend Reinvestment Plan
(“DRIP”).



We are a specialty finance company that
is focused on providing financing solutions primarily to lower middle-market companies in the United States and Canada. We seek
to provide investors with attractive risk-adjusted returns and downside protection associated with investing in asset based and
secured corporate private credit opportunities in a manner that is decoupled from public markets’ volatility. We seek to
provide attractive risk-adjusted returns and downside protection by investing primarily in secured private credit transactions
and assets, targeting investments that have significant downside protection through a focus on asset coverage. We expect to invest
primarily in: (i) senior secured and junior secured and unsecured loans, notes, bonds, preferred equity (including preferred partnership
equity), convertible debt and other securities; (ii) unitranche secured loans (a combination of senior secured and junior secured
debt in the same facility in which we syndicate a “first out” portion of the loan to an investor and retain a “last
out” portion of the loan) and securities; (iii) asset-based loans and securities; (iv) small business loans and leases; (v)
structured debt and structured equity; (vi) syndicated loans; (vii) securitized debt and subordinated notes of collateralized loan
obligations (“CLO”) facilities, asset-backed securities and other securitized products and warehouse loan facilities;
(viii) opportunities to acquire illiquid investments from other third-party funds as a result of liquidity constraints resulting
from investor redemptions and market dislocations; and (ix) capital investments in the secondary markets. As of December 31, 2019,
our portfolio included approximately 98.5% senior secured debt, 1.0% unitranche secured debt and 0.5% equity securities. We expect
that the companies in which we invest may be leveraged, often as a result of leveraged buy-outs or other recapitalization transactions,
and, in certain cases, will not be rated by national ratings agencies. If such companies were rated, we believe that they would
typically receive a rating below investment grade (between BB and CCC under the Standard & Poor’s system) from the national
rating agencies.



We seek to use Monroe Capital’s extensive
leveraged finance origination infrastructure and broad expertise in sourcing loans to invest in senior secured, unitranche secured
and junior secured debt of middle-market companies. Our investment size will vary proportionately with the size of our capital
base. We believe that our focus on lending to lower middle-market companies offers several advantages as compared to lending to
larger companies, including more attractive economics, lower leverage, more comprehensive and restrictive covenants, more expansive
events of default, relatively small debt facilities that provide us with enhanced influence over our borrowers, direct access to
borrower management and improved information flow.





51







Investment income



We generate interest income on the debt
investments in portfolio company investments that we originate or acquire. Our debt investments, whether in the form of senior
secured, unitranche secured or junior secured debt, typically have an initial term of three to seven years and bear interest at
a fixed or floating rate. In some instances, we receive payments on our debt investment based on scheduled amortization of the
outstanding balances. In addition, we receive repayments of some of our debt investments prior to their scheduled maturity date.
In some cases, our investments provide for deferred interest of payment-in-kind (“PIK”) interest. In addition, we may
generate revenue in the form of commitment, origination, amendment, structuring or due diligence fees, fees for providing managerial
assistance and consulting fees. Loan origination fees, original issue discount and market discount or premium are capitalized,
and we accrete or amortize such amounts as interest income. We record prepayment premiums and prepayment gains (losses) on loans
as interest income. As the frequency or volume of the repayments which trigger these prepayment premiums and prepayment gains (losses)
may fluctuate significantly from period to period, the associated interest income recorded may also fluctuate significantly from
period to period. Interest and fee income is recorded on the accrual basis to the extent we expect to collect such amounts. Interest
income is accrued based upon the outstanding principal amount and contractual terms of debt and preferred equity investments. Interest
is accrued on a daily basis. We record fees on loans based on the determination of whether the fee is considered a yield enhancement
or payment for a service. If the fee is considered a yield enhancement associated with a funding of cash on a loan, the fee is
generally deferred and recognized into interest income using the effective interest method if captured in the cost basis or using
the straight-line method if the loan is unfunded and therefore there is no cost basis. If the fee is not considered a yield enhancement
because a service was provided, and the fee is payment for that service, the fee is deemed earned and recognized as fee income
in the period the service has been completed.



Dividend income on preferred equity securities
is recorded as dividend income on an accrual basis to the extent that such amounts are payable by the portfolio company and are
expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies.
Each distribution received from limited liability company (“LLC”) and limited partnership (“LP”) investments
is evaluated to determine if the distribution should be recorded as dividend income or a return of capital. Generally, we will
not record distributions from equity investments in LLCs and LPs as dividend income unless there are sufficient accumulated tax-basis
earnings and profits in the LLC or LP prior to the distribution. Distributions that are classified as a return of capital are recorded
as a reduction in the cost basis of the investment. The frequency and volume of the distributions on common equity securities and
LLC and LP investments may fluctuate significantly from period to period.



Expenses



Our primary operating expenses include
the payment of base management and incentive fees to MC Advisors under the investment advisory agreement entered into on December
5, 2018 (the “Investment Advisory Agreement”), the payment of fees to MC Management for our allocable portion of overhead
and other expenses under the administration agreement entered into on December 5, 2018 (the “Administration Agreement”)
and other operating costs. See Note 5 to our consolidated financial statements and “Related Party Transactions” below
for additional information on our Investment Advisory Agreement and Administration Agreement. Our expenses also include interest
expense on indebtedness. We bear all other out-of-pocket costs and expenses of our operations and transactions.



Net gain (loss)



We recognize realized gains or losses on
investments based on the difference between the net proceeds from the disposition and the cost basis of the investment without
regard to unrealized gains or losses previously recognized. We record current period changes in fair value of investments within
net change in unrealized gain (loss) on investments on the consolidated statements of operations.



Portfolio and Investment Activity



During the year ended December 31, 2019,
we invested $104,418,184 in 39 new portfolio companies and had $4,638,209 in aggregate amount of sales and principal repayments,
resulting in net investments of $99,779,975 for the year.



The following table shows portfolio yield
by security type:



|                         |  | December 31, 2019                                        |    
|------------------------ |  | -------------------------------------------------------- | ---
|                         |  | Weighted Average Annualized Contractual Coupon Yield (1) |    
|Senior secured loans     |  |                                                          | 8.0
|Unitranche secured loans |  |                                                          | 6.4
|Total                    |  |                                                          | 8.0










|(1) | The weighted average annualized contractual coupon yield at period end is computed by dividing (a) the interest income on debt investments at the period end contractual coupon rate for each investment by (b) the par value of our debt investments.                                                                                                                                                                                                                                                                                                                       
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | The weighted average annualized effective yield on portfolio investments at period end is computed by dividing (a) interest income on debt investments at the period end effective rate for each investment by (b) the par value of our debt investments. The weighted average annualized effective yield on portfolio investments is a metric on the investment portfolio alone and does not represent a return to stockholders. This metric is not inclusive of our fees and expenses, the impact of leverage on the portfolio or sales load that may be paid by investors.





52









The following table shows the composition
of our investment portfolio:



|                         |  | December 31, 2019 |            
|------------------------ |  | ----------------- | -----------
|Fair Value:              |  |                   |            
|Senior secured loans     |  | $                 | 99,334,463 
|Unitranche secured loans |  |                   | 1,000,500  
|Equity securities        |  |                   | 472,020    
|Total                    |  | $                 | 100,806,983



The following table shows our portfolio
composition by industry:



|                                          |  | December 31, 2019 |            
|----------------------------------------- |  | ----------------- | -----------
|Fair Value:                               |  |                   |            
|Aerospace & Defense                       |  | $                 | 4,745,386  
|Automotive                                |  |                   | 3,791,200  
|Banking, Finance, Insurance & Real Estate |  |                   | 19,588,942 
|Beverage, Food & Tobacco                  |  |                   | 6,629,604  
|Consumer Goods: Non-Durable               |  |                   | 1,237,500  
|Containers, Packaging & Glass             |  |                   | 1,985,000  
|Energy: Oil & Gas                         |  |                   | 4,051,335  
|Healthcare & Pharmaceuticals              |  |                   | 15,453,542 
|High Tech Industries                      |  |                   | 13,179,390 
|Media: Advertising, Printing & Publishing |  |                   | 7,020,939  
|Media: Broadcasting & Subscription        |  |                   | 1,118,311  
|Media: Diversified & Production           |  |                   | 2,995,690  
|Services: Business                        |  |                   | 9,199,733  
|Services: Consumer                        |  |                   | 3,308,461  
|Telecommunications                        |  |                   | 6,501,950  
|Total                                     |  | $                 | 100,806,983



There were no investments outstanding as
of December 31, 2018.



Portfolio Asset Quality



MC Advisors’ portfolio management
staff closely monitors all credits, with senior portfolio managers covering agented and more complex investments. MC Advisors segregates
our capital markets investments by industry. The MC Advisors’ monitoring process and projections developed by Monroe Capital
both have daily, weekly, monthly and quarterly components and related reports, each to evaluate performance against historical,
budget and underwriting expectations. MC Advisors’ analysts will monitor performance using standard industry software tools
to provide consistent disclosure of performance. When necessary, MC Advisors will update our internal risk ratings, borrowing base
criteria and covenant compliance reports.



As part of the monitoring process, MC Advisors
regularly assesses the risk profile of each of our investments and rates each of them based on an internal proprietary system that
uses the categories listed below, which we refer to as MC Advisors’ investment performance rating. For any investment rated
in grades 3, 4 or 5, MC Advisors, through its internal Portfolio Management Group (“PMG”), will increase its monitoring
intensity and prepare regular updates for the investment committee, summarizing current operating results and material impending
events and suggesting recommended actions. The PMG is responsible for oversight and management of any investments rated in grades
3, 4, or 5. MC Advisors monitors and, when appropriate, changes the investment ratings assigned to each investment in our portfolio.
In connection with our valuation process, MC Advisors reviews these investment ratings on a quarterly basis. The
investment performance rating system is described as follows:





53







|Investment
Performance
Risk Rating |  | Summary Description                                                                                                                                                                                                                                                                                                     
|---------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Grade 1                            |  | Includes investments exhibiting the least amount of risk in our portfolio. The issuer is performing above expectations or the issuer’s operating trends and risk factors are generally positive.                                                                                                                        
|                                   |  |                                                                                                                                                                                                                                                                                                                         
|Grade 2                            |  | Includes investments exhibiting an acceptable level of risk that is similar to the risk at the time of origination. The issuer is generally performing as expected or the risk factors are neutral to positive.                                                                                                         
|                                   |  |                                                                                                                                                                                                                                                                                                                         
|Grade 3                            |  | Includes investments performing below expectations and indicates that the investment’s risk has increased somewhat since origination. The issuer may be out of compliance with debt covenants; however, scheduled loan payments are generally not past due.                                                             
|                                   |  |                                                                                                                                                                                                                                                                                                                         
|Grade 4                            |  | Includes an issuer performing materially below expectations and indicates that the issuer’s risk has increased materially since origination. In addition to the issuer being generally out of compliance with debt covenants, scheduled loan payments may be past due (but generally not more than six months past due).
|                                   |  |                                                                                                                                                                                                                                                                                                                         
|Grade 5                            |  | Indicates that the issuer is performing substantially below expectations and the investment risk has substantially increased since origination. Most or all of the debt covenants are out of compliance or payments are substantially delinquent. Investments graded 5 are not anticipated to be repaid in full.        



Our investment performance risk ratings
do not constitute any rating of investments by a nationally recognized statistical rating organization or reflect or represent
any third-party assessment of any of our investments.



In the event of a delinquency or a decision
to rate an investment grade 4 or grade 5, the PMG, in consultation with the investment committee, will develop an action plan.
Such a plan may require a meeting with the borrower’s management or the lender group to discuss reasons for the default and
the steps management is undertaking to address the under-performance, as well as amendments and waivers that may be required. In
the event of a dramatic deterioration of a credit, MC Advisors and the PMG will form a team or engage outside advisors to analyze,
evaluate and take further steps to preserve our value in the credit. In this regard, we would expect to explore all options, including
in a private equity sponsored investment, assuming certain responsibilities for the private equity sponsor or a formal sale of
the business with oversight of the sale process by us. The PMG and the investment committee have extensive experience in running
debt work-out transactions and bankruptcies.



The following table shows the distribution
of our investments on the 1 to 5 investment performance risk rating scale as of December 31, 2019:



|Investment Performance Risk Rating |  | Investments at Fair Value |             |  | Percentage of Total Investments | 
|---------------------------------- |  | ------------------------- | ----------- |  | ------------------------------- | 
|1                                  |  | $                         | —           |  |                                 | 
|2                                  |  |                           | 98,727,830  |  |                                 | 
|3                                  |  |                           | 2,079,153   |  |                                 | 
|4                                  |  |                           | —           |  |                                 | 
|5                                  |  |                           | —           |  |                                 | 
|Total                              |  | $                         | 100,806,983 |  |                                 | 



Results of Operations



We are a newly-formed entity that commenced
our principal operations on January 15, 2019. Since we commenced principal operations on January 15, 2019, we therefore have no
prior periods with which to compare our operating results.



Operating results were as follows:



|                                                                |  | For the year ended
 December 31, 2019 |          
|--------------------------------------------------------------- |  | ------------------------------------- | ---------
|Total investment income                                         |  | $                                     | 3,887,760
|Total expenses, net of fee waivers and expense reimbursement    |  |                                       | 1,605,864
|Net investment income                                           |  |                                       | 2,281,896
|Net realized gain (loss) on investments                         |  |                                       | 5,169    
|Net change in unrealized gain (loss) on investments             |  |                                       | 875,663  
|Net gain (loss)                                                 |  |                                       | 880,832  
|Net increase (decrease) in net assets resulting from operations |  | $                                     | 3,162,728





54







Investment Income



The composition of our investment income
was as follows:



|                                                   |  | For the year ended
 December 31, 2019 |          
|-------------------------------------------------- |  | ------------------------------------- | ---------
|Interest income                                    |  | $                                     | 3,631,711
|PIK interest income                                |  |                                       | 48,291   
|Fee income                                         |  |                                       | 64,322   
|Prepayment gain (loss)                             |  |                                       | 45,551   
|Accretion of discounts and amortization of premium |  |                                       | 97,885   
|Total investment income                            |  | $                                     | 3,887,760



Operating Expenses



The composition of our operating expenses
was as follows:



|                                                             |  | For the year ended
 December 31, 2019 |          
|------------------------------------------------------------ |  | ------------------------------------- | ---------
|Interest and other debt financing expenses                   |  | $                                     | 858,909  
|Base management fees, net of base management fee waiver      |  |                                       | 301,925  
|Incentive fees, net of incentive fee waiver                  |  |                                       | 132,125  
|Professional fees                                            |  |                                       | 314,288  
|Administrative service fees                                  |  |                                       | 232,943  
|General and administrative expenses                          |  |                                       | 224,758  
|Directors’ fees                                              |  |                                       | 65,000   
|Excise taxes                                                 |  |                                       | 20,000   
|Expenses before expense reimbursement, net of fee waivers    |  |                                       | 2,149,948
|Expense reimbursement                                        |  |                                       | (544,084 
|Total expenses, net of fee waivers and expense reimbursement |  | $                                     | 1,605,864



Base management fees for the year
ended December 31, 2019 were $734,918, and MC Advisors elected to voluntarily waive $432,993 of these base management fees.
Incentive fees for the year ended December 31, 2019 were $250,735, and MC Advisors elected to voluntarily waive the part one
incentive fees of $118,610 for the year. See Note 5 to our consolidated financial statements and “Capital Gains
Incentive Fee” below for additional information.



MC Management agreed to reimburse us
for administrative expenses (not to include management fees or leverage facility expenses) incurred by us of $544,084 for the
year ended December 31, 2019. Accordingly, we have recorded a receivable for the remaining reimbursement from MC
Management for $14,448 on the consolidated statements of
assets and liabilities within due from affiliates and a contra expense for $544,084 on the consolidated statements of
operations for the year ended December 31, 2019.



The composition of our interest and other
debt financing expenses and average outstanding balance was as follows:



|                                                 |  | For the year ended
 December 31, 2019 |          
|------------------------------------------------ |  | ------------------------------------- | ---------
|Interest expense                                 |  | $                                     | 370,957  
|Unused commitment fees                           |  |                                       | 169,031  
|Amortization of deferred financing costs         |  |                                       | 318,921  
|Total interest and other debt financing expenses |  | $                                     | 858,909  
|Average debt outstanding                         |  | $                                     | 7,556,410



We have elected to be treated as a RIC
under Subchapter M of the Code and operate in a manner so as to qualify for the tax treatment available to RICs. To maintain qualification
as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements and distribute to stockholders,
for each taxable year, at least 90% of our “investment company taxable income”, which is generally our net ordinary
income plus the excess, if any, of realized net short-term capital gains over realized net long-term capital losses.



Depending on the level of taxable income
earned in a tax year, we may choose to carry forward such taxable income in excess of current year dividend distributions from
such current year taxable income into the next year and pay a 4% excise tax on such income, as required. To the extent that we
determine that our estimated current year annual taxable income may exceed estimated current year dividend distributions, we accrue
excise tax, if any, on estimated excess taxable income as such taxable income is earned. For the year ended December 31, 2019,
we recorded a net expense on the consolidated statements of operations of $20,000 for U.S. federal excise tax.







55







One of our consolidated subsidiaries
is subject to U.S. federal and state corporate-level income taxes. For the year ended December 31, 2019, we recorded a net
tax expense on the consolidated statements of operations of zero for this subsidiary.



Net Realized Gain (Loss)



During the year ended December 31, 2019,
we had sales of investments of $357,521, resulting in $5,169 of net realized gain (loss) on investments.



Net Change in Unrealized Gain (Loss)



For the year ended December 31, 2019, our
investments had $875,663 of net change in unrealized gain (loss). The net change in unrealized gain (loss) may include both unrealized
gain on investments in our portfolio with mark-to-market gains during the year and unrealized loss on investments in our portfolio
with mark-to-market losses during the year.



Net Increase (Decrease) in Net Assets Resulting from Operations



For the year ended December 31, 2019,
the net increase (decrease) in net assets resulting from operations was $3,162,728 primarily as a result of net investment
income earned on our investments and net mark-to-market gains on our investments. Based on the weighted average shares of common stock
outstanding for the year ended December 31, 2019, our per share net increase (decrease) in net assets resulting from
operations was $0.79.



Liquidity and Capital Resources



We generate cash primarily from (i) the
net proceeds of private offerings, (ii) cash flows from our operations, and (iii) borrowings under our existing credit
facility and any financing arrangements we may enter into in the future. These financings may come in the form of borrowings from
banks and issuances of senior securities. Our primary uses of cash are for (i) investments in portfolio companies and other
investments to comply with certain portfolio diversification requirements, (ii) the cost of operations (including paying MC
Advisors and reimbursements to MC Management), (iii) debt service of any borrowings and (iv) cash distributions to our
stockholders.



As of December 31, 2019, we had
$2,222,887 in cash, $1,840,821 in restricted cash at the SPV, and $31,200,000 debt outstanding on our revolving credit
facility. We had $43,800,000 available for additional borrowings on our revolving credit facility. See
 “Borrowings” below for additional information.



Cash Flows



For the year ended December 31, 2019,
we experienced a net increase in cash, cash equivalents and restricted cash of $4,062,708. For the year ended December 31,
2019, operating activities used $93,703,034, primarily as a result of net purchases of portfolio investments. During the same
period we generated $97,765,742 from financing activities, primarily as a result of proceeds from the issuance of common
stock and proceeds from net borrowings on our revolving credit facility.



For the year ended December 31, 2018, we
experienced a net increase in cash, cash equivalents and restricted cash of $1,000, primarily as a result of proceeds from the issuance of common stock.



Capital Resources



As a BDC, we distribute substantially all
of our net income to our stockholders and have an ongoing need to raise additional capital for investment purposes. We intend to
generate additional cash primarily from future offerings of securities, including our current Private Offering, future borrowings
and cash flows from operations, including income earned from investments in our portfolio companies. On both a short-term and long-term
basis, our primary use of funds will be to invest in portfolio companies and make cash distributions to our stockholders.



As a BDC, we are generally not permitted
to issue and sell our common stock at a price below net asset value (“NAV”) per share. We may, however, sell our common
stock, or warrants, options or rights to acquire our common stock, at a price below the then-current NAV per share of our common
stock if our Board, including independent directors, determines that such sale is in the best interests of us and our stockholders,
and if our stockholders have approved such sales. As of December 31, 2019, we had 6,874,532 shares outstanding.



In connection with our organization, the
Board and MC Management, our initial stockholder, approved the application of the reduced asset coverage requirements in Section
61(a)(2) of the 1940 Act. As a result of this approval, we are permitted to borrow amounts such that our asset coverage ratio,
as defined in the 1940 Act, is at least 150% after such borrowing. As of December 31, 2019 and December 31, 2018, our asset coverage
ratio based on aggregate borrowings outstanding was 320% and 0%, respectively.



Borrowings



On March 12, 2019, we entered into a
senior secured revolving credit facility (the “Credit Facility”) with KeyBank National Association through our
wholly owned subsidiary, the SPV. On June 7, 2019, we entered into an amendment (the “Credit Facility
Amendment”) to the Revolving Credit and Security Agreement (the “Revolving Security Agreement”). The Credit Facility Amendment amended the Revolving Security Agreement to increase the size of the current revolver commitments
under the Credit Facility to $50,000,000 from $25,000,000 pursuant to the accordion feature and to expand the definition of
 “eligible loans” to include covenant lite loans. On December 6, 2019, we increased the size of the current revolver commitments under the Credit Facility
to $75,000,000 from $50,000,000. Borrowing under the Credit Facility remains subject to the leverage restrictions contained
in the 1940 Act, as amended.





56







Our ability to borrow under the Credit
Facility is subject to certain financial and restrictive covenants as well as availability under the borrowing base, which permits
us to borrow up to 60% of the principal balance of our portfolio company investments depending on how many portfolio companies
are pledged as collateral in the SPV. Under the terms of the Credit Facility, the SPV is permitted to reinvest available cash and
make new borrowings under the Credit Facility through March 12, 2020. The maturity date of the Credit Facility is March 12, 2021.
Distributions from the SPV to us are limited by the terms of the Credit Facility, which generally allows for the distribution of
net interest income pursuant to a waterfall quarterly during the reinvestment period. As of December 31, 2019, the fair value of
our investments held in the SPV as collateral for the Credit Facility was $91,439,632 and these investments are identified on the
accompanying consolidated schedule of investments. As of December 31, 2019, we had outstanding borrowings under the Credit Facility
of $31,200,000.



Borrowings under the Credit Facility bear
interest at an annual rate of LIBOR (one or three month, at the SPV’s option) plus 3.00% until March 12, 2020 and LIBOR plus
3.25% thereafter. In addition to the stated interest rate on borrowings, the SPV was required to pay an unused commitment fee of
0.35% from the closing date until June 11, 2019, and thereafter (i) 0.75% per annum on any unused portion of the Credit Facility
when the outstanding borrowings are less than or equal to 30% of the facility amount, (ii) 0.55% per annum on any unused portion
of the Credit Facility when the outstanding borrowings are greater than 30% of the facility amount but less than or equal to 50%
of the facility amount, and (iii) 0.35% per annum on any unused portion of the Credit Facility when the outstanding borrowings
are greater than 50% of the facility amount. As of December 31, 2019, the outstanding borrowings were accruing at a weighted average
interest rate of 4.7%.



During the year ended December 31,
2019, we incurred financing costs of $402,389 in conjunction with the Credit Facility, which have been capitalized within
unamortized deferred financing costs and are amortized into interest and other debt financing expenses over the estimated
average life of the borrowings.





See “Recent Developments”
for information on the March 6, 2020 amendment of our Credit Facility.



Distributions



Distributions to common stockholders are
recorded on the record date. The amount, if any, to be distributed is determined by our Board each quarter and is generally based
upon the earnings estimated by management. Net realized capital gains, if any, are generally distributed at least annually.



The determination of the tax
attributes for our distributions is made annually, based upon our taxable income for the full year and distributions paid for
the full year. Ordinary dividend distributions from a RIC do not qualify for the preferential tax rate on qualified dividend
income from domestic corporations and qualified foreign corporations, except to the extent that the RIC received the income
in the form of qualifying dividends from domestic corporations and qualified foreign corporations. The tax attributes for
distributions will generally include both ordinary income and capital gains, but may also include qualified dividends or
return of capital. Distributions declared to stockholders for the year ended December 31, 2019 totaled $3,162,728 ($0.77 per
share). None of the $1,776,190 in distributions paid to stockholders for the year ended December 31, 2019 represented a
return of capital. The tax character of such distributions is determined at the end of the fiscal year.



We have adopted a DRIP that provides for
the reinvestment of dividends and other distributions on behalf of its stockholders that elect to participate in such plan. As
a result, if we declare a dividend or distribution, our stockholders’ cash distributions will only be reinvested in additional
shares of our common stock if a stockholder specifically “opts in” to the DRIP at least ten (10) days prior to the
record date fixed by the Board. Shares issued under the DRIP will be issued at a price per share equal to the most recent NAV per
share as determined by the Board.



Related Party Transactions



We have a number of business relationships
with affiliated or related parties, including the following:



| | · | We have an Investment Advisory Agreement with MC Advisors, an investment advisor registered with the SEC, to manage our day-to-day operating and investing activities. We pay MC Advisors a fee for its services under the Investment Advisory Agreement consisting of two components — a base management fee and an incentive fee. See Note 5 to our consolidated financial statements and “Significant Accounting Estimates and Critical Accounting Policies – Capital Gains Incentive Fee” for additional information.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | We have an Administration Agreement with MC Management to provide us with the office facilities and administrative services necessary to conduct our day-to-day operations. See Note 5 to our consolidated financial statements for additional information.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Theodore L. Koenig, our Chief Executive Officer and Chairman of our Board is also a manager of MC Advisors and the President and Chief Executive Officer of MC Management. Aaron D. Peck, our Chief Financial Officer and Chief Investment Officer, is also a managing director of MC Management.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | We have a license agreement with Monroe Capital LLC, under which Monroe Capital LLC has agreed to grant us a non-exclusive, royalty-free license to use the name “Monroe Capital” for specified purposes in our business.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



In addition, we have adopted a formal code
of ethics that governs the conduct of MC Advisors’ officers, directors and employees. Our officers and directors also remain
subject to the duties imposed by both the 1940 Act and Maryland General Corporation Law.





57







Contractual Obligations and Off-Balance Sheet
Arrangements



Contractual Obligations



The following table shows our significant
contractual payment obligations for repayment as of December 31, 2019:



|                              |  | Total |            |  | Less than 1 year |   |            | 1 – 3 years |  |   | 3 – 5 years |  |  | More than 5 years |  
|----------------------------- |  | ----- | ---------- |  | ---------------- | - | ---------- | ----------- |  | - | ----------- |  |  | ----------------- | -
|Revolving credit facility     |  | $     | 31,200,000 |  |                  | $ | —          |             |  | $ | 31,200,000  |  |  | $                 | —
|Unfunded commitments (1)      |  |       | 14,323,532 |  |                  |   | 14,323,532 |             |  |   | —           |  |  |                   | —
|Total contractual obligations |  | $     | 45,523,532 |  |                  | $ | 14,323,532 |             |  | $ | 31,200,000  |  |  | $                 | —



|(1) | Unfunded commitments represent all amounts unfunded as of December 31, 2019. These amounts may or may not be funded to the borrowing party now or in the future. The unfunded commitments relate to loans with various maturity dates, but we are showing this amount in the less than one year category as this entire amount was eligible for funding to the borrowers as of December 31, 2019.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



We may become a party to financial instruments
with off-balance sheet risk in the normal course of our business to meet the financial needs of our portfolio companies. These
instruments may include commitments to extend credit and involve, to varying degrees, elements of liquidity and credit risk in
excess of the amount recognized on the consolidated statements of assets and liabilities. As of December 31, 2019, we had outstanding
commitments to fund investments under undrawn revolvers, capital expenditure loans, delayed draw commitments and subscription agreements
totaling $14,323,532. We believe that our available cash balances and/or ability to draw on the Credit Facility provide sufficient
funds to cover our unfunded commitments as of December 31, 2019. Additionally, we have entered into certain contracts with other
parties that contain a variety of indemnifications. Our maximum exposure under these arrangements is unknown. However, we have
not experienced claims or losses pursuant to these contracts and believe the risk of loss related to such indemnifications to be
remote.



Off-Balance Sheet Arrangements



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



Market Trends



We have identified the following trends
that may affect our business:



Target
Market: We believe that small and middle-market companies in the United States with annual revenues between $10.0 million
and $2.5 billion represent a significant growth segment of the U.S. economy and often require substantial capital investments to
grow. Middle-market companies have generated a significant number of investment opportunities for investment funds managed or advised
by Monroe Capital, and we believe that this market segment will continue to produce significant investment opportunities for us.



Specialized
Lending Requirements:We believe that several factors render many U.S. financial institutions ill-suited to lend to
U.S. middle-market companies. For example, based on the experience of our management team, lending to U.S. middle-market companies
(1) is generally more labor intensive than lending to larger companies due to the smaller size of each investment and the fragmented
nature of information for such companies, (2) requires due diligence and underwriting practices consistent with the demands and
economic limitations of the middle-market and (3) may also require more extensive ongoing monitoring by the lender.



Demand
for Debt Capital: We believe there is a large pool of uninvested private equity capital for middle-market companies.
We expect private equity firms will seek to leverage their investments by combining equity capital with senior secured loans and
mezzanine debt from other sources, such as us.



Competition
from Other Lenders: We believe that many traditional bank lenders, in recent years, de-emphasized their service and
product offerings to middle-market businesses in favor of lending to large corporate clients and managing capital market transactions.
In addition, many commercial banks face significant balance sheet constraints as they seek to build capital and meet future regulatory
capital requirements. These factors may result in opportunities for alternative funding sources to middle-market companies and
therefore drive increased new investment opportunities for us. Conversely, there has been a significant amount of capital raised
over the past several years dedicated to middle market lending which has increased competitive pressure in the BDC and investment
company marketplace for senior and subordinated debt which could result in lower yields and weaker financial covenants for new
assets.



Pricing
and Deal Structures: We believe that the volatility in global markets over the last several years and current macroeconomic
issues including changes in bank regulations for middle-market banks has reduced access to, and availability of, debt capital to
middle-market companies, causing a reduction in competition and generally more favorable capital structures and deal terms. Recent
capital raises in the BDC and investment company marketplace have created increased competition; however, we believe that current
market conditions may continue to create favorable opportunities to invest at attractive risk-adjusted returns.



Recent Developments



We have evaluated subsequent events through
March 10, 2020, the date on which the consolidated financial statements were issued.



On January 2, 2020, we issued 2,036,841
shares of common stock at $10.00 per share for proceeds of $20,368,410 pursuant to the Private Offering.





On March 6, 2020, we entered into an
amendment to the Revolving and Security Agreement to extend the reinvestment period of our Credit Facility through April 10,
2020 as we negotiate a larger amendment to our Credit Facility.









58







Significant Accounting Estimates and Critical Accounting
Policies



Revenue Recognition



We record interest and fee income on an
accrual basis to the extent that we expect to collect such amounts. For loans and debt securities with contractual PIK interest,
we do not accrue PIK interest if the portfolio company valuation indicates that such PIK interest is not collectible. We do not
accrue as a receivable interest on loans and debt securities if we have reason to doubt our ability to collect such interest. Loan
origination fees, original issue discount and market discount or premium are capitalized, and then we amortize such amounts using
the effective interest method as interest income over the life of the investment. Upon the prepayment of a loan or debt security,
any unamortized premium or discount or loan origination fees are recorded as interest income. We record prepayment premiums on
loans and debt securities as interest income when we receive such amounts. Interest income is accrued based upon the outstanding
principal amount and contractual terms of debt and preferred equity investments. Interest is accrued on a daily basis. We record
fees on loans based on the determination of whether the fee is considered a yield enhancement or payment for a service. If the
fee is considered a yield enhancement associated with a funding of cash on a loan, the fee is generally deferred and recognized
into interest income using the effective interest method if captured in the cost basis or using the straight-line method if the
loan is unfunded and therefore there is no cost basis. If the fee is not considered a yield enhancement because a service was provided,
and the fee is payment for that service, the fee is deemed earned and recognized as fee income in the period the service has been
completed.



Dividend income on preferred equity securities
is recorded as dividend income on an accrual basis to the extent that such amounts are payable by the portfolio company and are
expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies.
Each distribution received from LLC and LP investments is evaluated to determine if the distribution should be recorded as dividend
income or a return of capital. Generally, we will not record distributions from equity investments in LLCs and LPs as dividend
income unless there are sufficient accumulated tax-basis earnings and profits in the LLC or LP prior to the distribution. Distributions
that are classified as a return of capital are recorded as a reduction in the cost basis of the investment.



Valuation of Portfolio Investments



As a BDC, we generally invest in illiquid
securities including debt and, to a lesser extent, equity securities of middle-market companies. Under procedures established by
our Board, we value investments for which market quotations are readily available and within a recent date at such market quotations.
When doing so, we determine whether the quote obtained is sufficient in accordance with generally accepted accounting principles
in the United States of America to determine the fair value of the security. Debt and equity securities that are not publicly traded
or whose market prices are not readily available or whose market prices are not regularly updated are valued at fair value as determined
in good faith by our Board. Such determination of fair values may involve subjective judgments and estimates. Investments purchased
within 60 days of maturity are valued at cost plus accreted discount, or minus amortized premium, which approximates fair value.



Our Board is ultimately and solely responsible
for determining the fair value of the portfolio investments that are not publicly traded, whose market prices are not readily available
on a quarterly basis in good faith or any other situation where portfolio investments require a fair value determination. Because
we expect that there will not be a readily available market for many of the investments in our portfolio, we expect to value many
of our portfolio investments at fair value as determined in good faith by our Board using a documented valuation policy and a consistently
applied valuation process. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily
available market value, the fair value of our investments may differ significantly from the values that would have been used had
a readily available market value existed for such investments, and the differences could be material.



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



| | · | the quarterly valuation process begins with each portfolio company or investment being initially evaluated and rated by the investment professionals of MC Advisors responsible for the credit monitoring of the portfolio investment;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | our Board engages one or more independent valuation firm(s) to conduct independent appraisals of a selection of investments for which market quotations are not readily available. We will consult with independent valuation firm(s) relative to each portfolio company at least once in every calendar year, but the independent appraisals are generally received quarterly;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | to the extent an independent valuation firm is not engaged to conduct an investment appraisal on an investment for which market quotations are not readily available, the investment will be valued by the MC Advisors investment professional responsible for the credit monitoring;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | preliminary valuation conclusions are then documented and discussed with the investment committee;
| | - | --------------------------------------------------------------------------------------------------



| | · | the audit committee of our Board reviews the preliminary valuations of MC Advisors and of the independent valuation firm(s) and MC Advisors adjusts or further supplements the valuation recommendations to reflect any comments provided by the audit committee; and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | our Board discusses these valuations and determines the fair value of each investment in the portfolio in good faith, based on the input of MC Advisors, the independent valuation firm(s) and the audit committee.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



We generally use the income approach
to determine fair value for loans where market quotations are not readily available, as long as it is appropriate. If there is
deterioration in credit quality or a debt investment is in workout status, we may consider other factors in determining the fair
value, including the value attributable to the debt investment from the enterprise value of the portfolio company or the proceeds
that would be received in a liquidation analysis. This liquidation analysis may also include probability weighting of alternative
outcomes. We generally consider our debt to be performing if the borrower is not in default, the borrower is remitting
payments in a timely manner, the loan is in covenant compliance and is otherwise not deemed to be impaired. In determining the
fair value of the performing debt, we consider fluctuations in current interest rates, the trends in yields of debt instruments
with similar credit ratings, financial condition of the borrower, economic conditions and other relevant factors, both qualitative
and quantitative. In the event that a debt instrument is not performing, as defined above, we will evaluate the value of
the collateral utilizing the same framework described above for a performing loan to determine the value of the debt instrument.





59







Under the income approach, discounted
cash flow models are utilized to determine the present value of the future cash flow streams of our debt investments, based
on future interest and principal payments as set forth in the associated loan agreements. In determining fair value under the
income approach, we also consider the following factors: applicable market yields and leverage levels, credit quality,
prepayment penalties, the nature and realizable value of any collateral, the portfolio company’s ability to make
payments, and changes in the interest rate environment and the credit markets that generally may affect the price at which
similar investments may be made.



Under the market approach, the
enterprise value methodology is typically utilized to determine the fair value of an investment. There is no one methodology
to estimate enterprise value and, in fact, for any one portfolio company, enterprise value is generally best expressed as a
range of values, from which we derive a single estimate of enterprise value. In estimating the enterprise value of a
portfolio company, we analyze various factors consistent with industry practice, including but not limited to original
transaction multiples, the portfolio company’s historical and projected financial results, applicable market trading
and transaction comparables, applicable market yields and leverage levels, the nature and realizable value of any collateral,
the markets in which the portfolio company does business, and comparisons of financial ratios of peer companies that are
public. Typically, the enterprise values of private companies are based on multiples of earnings before interest, income
taxes, depreciation and amortization, cash flows, net income, revenues, or in limited cases, book value.



In addition, for certain debt investments,
we may base our valuation on indicative bid and ask prices provided by an independent third-party pricing service. Bid prices reflect
the highest price that we and others may be willing to pay. Ask prices represent the lowest price that we and others may be willing
to accept. We generally use the midpoint of the bid/ask range as our best estimate of fair value of such investment.



Net Realized Gain or Loss and Net Change in Unrealized
Gain or Loss



We measure realized gain or loss by
the difference between the net proceeds from the sale and the amortized cost basis of the investment, without regard to
unrealized gain or loss previously recognized. Net change in unrealized gain or loss reflects the change in portfolio
investment values during the reporting period, including any reversal of previously recorded unrealized gain or loss, when
gain or loss is realized. All fluctuations in fair value are included in net change in unrealized gain (loss) on investments
on our consolidated statements of operations.



Capital Gains Incentive Fee



Pursuant to the terms of the Investment
Advisory with MC Advisors, the incentive fee on capital gains earned on liquidated investments of our portfolio is determined and
payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory and Administrative Agreement).
This fee equals 15% of our incentive fee capital gains (i.e., our realized capital gains on a cumulative basis from inception,
calculated as of the end of the applicable period, net of all realized capital losses and unrealized capital depreciation on a
cumulative basis), less the aggregate amount of any previously paid capital gains incentive fees. On a quarterly basis, we accrue
for the capital gains incentive fee by calculating such fee as if it were due and payable as of the end of such period.



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



During the year ended December 31, 2019,
we accrued capital gains incentive fees of $132,125 based on the performance of our portfolio, $775 of which was payable to MC
Advisors as a result of realized gains. The remaining $131,350 was based on unrealized appreciation, none of which was payable
to MC Advisors under the Investment Advisory Agreement.



Organization
and Offering Costs and Expenses



Organization costs refer to the cost of
organizing as a Maryland corporation, including, among other things, the cost of legal services, directors’ fees and other
fees, including travel-related expenses, pertaining to our organization. Offering costs include, among other things, legal fees
and other costs pertaining to the preparation of our private placement memorandum and other offering documents.



As of December 31, 2019, MC Management
has incurred organization and offering costs of approximately $418,925 on our behalf. MC Management has agreed to absorb and pay
on our behalf up to $425,000 for organization and offering costs. If the expenses incurred by us are greater than $425,000, we
will reimburse MC Management for organization and offering costs incurred on our behalf in excess of $425,000. As these costs have
not exceeded the amount to be reimbursed by MC Management as of December 31, 2019, we have not recorded any such costs.





60







New Accounting Pronouncements



In August 2018, the FASB issued ASU 2018-13,
Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement(“ASU 2018-13”). The primary objective of ASU 2018-13 is to improve the effectiveness of the disclosure requirements
for fair value measurements in the notes to the financial statements. ASU 2018-13 is effective for interim and annual reporting
periods beginning after December 15, 2019, although early adoption is permitted. We are currently evaluating the impact these changes
will have on our consolidated financial statements and disclosures.



In March 2019, the Securities and
Exchange Commission (the “SEC”) adopted the final rule under SEC Release No. 33-10618, Fast Act Modernization
and Simplification of Regulation S-K, amending certain disclosure requirements. The amendments are intended to simplify
certain disclosure requirements and to provide for a consistent set of rules to govern incorporating information by reference
and hyperlinking, improve readability and navigability of disclosure documents, and discourage repetition and disclosure of
immaterial information. We have adopted the final rule, as applicable, and determined the effect was limited to the
modification and removal of certain disclosures.



ITEM 7A. QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



We are subject to financial market risks,
including changes in interest rates. The majority of the loans in our portfolio have floating interest rates and we expect that
our loans in the future may also have floating interest rates. These loans are usually based on a floating LIBOR and typically
have interest rate re-set provisions that adjust applicable interest rates under such loans to current market rates on a monthly
or quarterly basis. The majority of the loans in our current portfolio have interest rate floors which will effectively convert
the loans to fixed rate loans in the event interest rates decrease. In addition, our Credit Facility has a floating interest rate
provision and other credit facilities into which we may enter in the future may also have floating interest rate provisions.



The United Kingdom's Financial Conduct
Authority, which regulates LIBOR, has announced that it intends to phase out LIBOR by the end of 2021. It is unclear if at that
time whether LIBOR will cease to exist or if new methods of calculating LIBOR will be established such that it continues to exist
after 2021. At this time, it is not possible to predict the effect of any such changes, any establishment of alternative reference
rates or any other reforms to LIBOR that may be enacted. The elimination of LIBOR or any other changes or reforms to the determination
or supervision of LIBOR could have an adverse impact on the market for or value of any LIBOR-linked securities, loans, and other
financial obligations or extensions of credit held by or due to us or on our overall financial condition or results of operations.
In addition, if LIBOR ceases to exist, we may need to renegotiate agreements extending beyond 2021 with our portfolio companies
that utilize LIBOR as a factor in determining the interest rate, in order to replace LIBOR with the new standard that is established,
which may have an adverse effect on our overall financial condition or results of operations. Following the replacement of LIBOR,
some or all of these agreements may bear interest a lower interest rate, which could have an adverse impact on our results of operations.
Moreover, if LIBOR ceases to exist, we may need to renegotiate certain terms of our credit facilities. If we are unable to do so,
amounts drawn under our credit facilities may bear interest at a higher rate, which would increase the cost of our borrowings and,
in turn, affect our results of operations.



Assuming that the consolidated statement
of assets and liabilities as of December 31, 2019 was to remain constant and that we took no actions to alter our existing interest
rate sensitivity, the following table shows the annualized impact of hypothetical base rate changes in interest rates:



|Change in Interest Rates |  | Increase (decrease) in interest income |           |   | Increase (decrease) in interest expense |   |         | Net increase (decrease) in investment income | 
|------------------------ |  | -------------------------------------- | --------- | - | --------------------------------------- | - | ------- | -------------------------------------------- | 
|Down 25 basis points     |  | $                                      | (243,478  | ) |                                         | $ | (78,000 | )                                            | 
|Up 100 basis points      |  |                                        | 943,238   |   |                                         |   | 312,000 |                                              | 
|Up 200 basis points      |  |                                        | 1,954,474 |   |                                         |   | 624,000 |                                              | 
|Up 300 basis points      |  |                                        | 2,965,710 |   |                                         |   | 936,000 |                                              | 



Although we believe that this analysis
is indicative of our existing sensitivity to interest rate changes, it does not adjust for changes in the credit market, credit
quality, the size and composition of the assets in our portfolio and other business developments, including borrowing under the
Credit Facility or other borrowings that could affect net increase in net assets resulting from operations, or net income. Accordingly,
we can offer no assurances that actual results would not differ materially from the analysis above.



We may in the future hedge against interest
rate fluctuations by using standard hedging instruments such as futures, options and forward contracts to the extent permitted
under the 1940 Act and applicable commodities laws. While hedging activities may insulate us against adverse changes in interest
rates, they may also limit our ability to participate in the benefits of lower interest rates with respect to the investments in
our portfolio with fixed interest rates or interest rate floors.



ITEM 8. FINANCIAL STATEMENTS
AND SUPPLEMENTARY DATA



Our consolidated financial
statements are annexed to this Annual Report beginning on page F-1.



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



None.





61







ITEM 9A. CONTROLS AND
PROCEDURES



Disclosure Controls
and Procedures



In accordance with Rules
13a-15(b) and 15d-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we, under the supervision
and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness
of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based on that
evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that, at the end of the
period covered by our Annual Report on Form 10-K, our disclosure controls and procedures were effective and provided reasonable
assurance that information required to be disclosed in our periodic SEC filings is recorded, processed, summarized and reported
within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated
to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure. Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide
only reasonable, not absolute, assurance that it will detect or uncover failures within the Company to disclose material information
otherwise required to be set forth in the Company’s periodic reports.



Management’s Annual Report on Internal Control Over
Financial Reporting



This annual report
does not include a report of management's assessment regarding internal control over financial reporting or an attestation
report of the company's registered public accounting firm due to a transition period established by rules of the SEC for new
public reporting companies.



Changes in Internal Control Over Financial Reporting



No change occurred in our internal control
over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the quarter ended December 31,
2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



ITEM 9B. OTHER INFORMATION



None.





62







PART III



We will file a definitive Proxy Statement
for our 2020 Annual Meeting of Stockholders with the Securities and Exchange Commission (the “SEC”), pursuant to Regulation
14A, not later than 120 days after the end of our fiscal year. Accordingly, certain information required by Part III has been omitted
under General Instruction G(3) to Form 10-K. Only those sections of our definitive Proxy Statement that specifically address the
items set forth herein are incorporated by reference.



ITEM 10. DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE



The information required by Item 10 is
hereby incorporated by reference from our definitive Proxy Statement relating to our 2020 Annual Meeting of Stockholders, to be
filed with the SEC within 120 days following the end of our fiscal year.



ITEM 11. EXECUTIVE COMPENSATION



The information required by Item 11 is
hereby incorporated by reference from our definitive Proxy Statement relating to our 2020 Annual Meeting of Stockholders, to be
filed with the SEC within 120 days following the end of our fiscal year.



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



The information required by Item 12 is
hereby incorporated by reference from our definitive Proxy Statement relating to our 2020 Annual Meeting of Stockholders, to be
filed with the SEC within 120 days following the end of our fiscal year.



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



The information required by Item 13 is
hereby incorporated by reference from our definitive Proxy Statement relating to our 2020 Annual Meeting of Stockholders, to be
filed with the SEC within 120 days following the end of our fiscal year.



ITEM 14. PRINCIPAL ACCOUNTANT
FEES AND SERVICES



The information required by Item 14 is
hereby incorporated by reference from our definitive Proxy Statement relating to our 2020 Annual Meeting of Stockholders, to be
filed with the SEC within 120 days following the end of our fiscal year.





63







PART IV



ITEM 15. EXHIBITS AND
FINANCIAL STATEMENT SCHEDULES



The following exhibits
are included, or incorporated by reference, in this Annual Report on Form 10-K for the year ended December 31, 2019 (and are numbered
in accordance with Item 601 of Regulation S-K).



(a) (1) and (2) Consolidated Financial
Statements and Schedules



See the Index to Consolidated
Financial Statements at page F-1 of this report.





64









INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



|                                                                                                                                                                             | Page
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----
|Report
    of Independent Registered Public Accounting Firm                                                                                                                  | F-2 
|Consolidated
    Financial Statements:                                                                                                                                       |     
|Consolidated
    Statements of Assets and Liabilities as of December 31, 2019 and 2018                                                                                       | F-3 
|Consolidated
    Statements of Operations for the year ended December 31, 2019 and for the period from May 30, 2018 (date of inception) to
    December 31, 2018             | F-4 
|Consolidated
    Statements of Changes in Net Assets for the year ended December 31, 2019  and for the period from May 30, 2018 (date of inception) to
    December 31, 2018 | F-5 
|Consolidated
    Statements of Cash Flows for the year ended December 31, 2019  and for the period from May 30, 2018 (date of inception) to
    December 31, 2018            | F-6 
|Consolidated
    Schedule of Investments as of December 31, 2019                                                                                                             | F-7 
|Notes
    to Consolidated Financial Statements                                                                                                                               | F-11





F-1







REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM







To the Stockholders and the Board of Directors of Monroe Capital
Income Plus Corporation



Opinion on the Financial Statements

We have audited the accompanying consolidated statements of
assets and liabilities as of December 31, 2019 and 2018, including the consolidated schedule of investments as of December 31,
2019, of Monroe Capital Income Plus Corporation and Subsidiaries (the Company), and the related consolidated statements of operations,
changes in net assets and cash flows for the year ended December 31, 2019 and for the period from May 30, 2018 (date of inception)
to December 31, 2018, and the related notes to the consolidated financial statements (collectively, the financial statements).
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of
December 31, 2019 and 2018, and the results of their operations and their cash flows for the year and period then ended, in
conformity with accounting principles generally accepted in the United States of America.



Basis for Opinion

These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are
a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required
to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations
of the Securities and Exchange Commission and the PCAOB.



We conducted our audits in accordance with the auditing standards
of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding
of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting. Accordingly, we express no such opinion.



Our audits included performing procedures to assess the risks
of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to
those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as
well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of investments owned
as of December 31, 2019, by correspondence with the custodians and issuers of equity securities and other appropriate procedures
where replies from issuers of equity securities were not received. We believe that our audits provide a reasonable basis for our
opinion.



/s/ RSM US LLP



We have served as the auditor of one or more investment companies
managed by Monroe Capital BDC Advisors, LLC (the Investment Advisor) or its affiliates since 2011.



Chicago, Illinois

March 10, 2020







F-2







|MONROE CAPITAL INCOME PLUS CORPORATION           
|-------------------------------------------------
|                                                 
|CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
|                                                 



|                                                                                                                                 |  | December 31, 2019 |             |   | December 31, 2018 |  
|-------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ----------- | - | ----------------- | -
|ASSETS                                                                                                                           |  |                   |             |   |                   |  
|Investments at fair value (amortized cost of $99,931,320 and $0, respectively)                                                   |  | $                 | 100,806,983 |   |                   | $
|Cash and cash equivalents                                                                                                        |  |                   | 2,222,887   |   |                   |  
|Restricted cash                                                                                                                  |  |                   | 1,840,821   |   |                   |  
|Interest receivable                                                                                                              |  |                   | 414,135     |   |                   |  
|Due from affiliates                                                                                                              |  |                   | 14,448      |   |                   |  
|Other assets                                                                                                                     |  |                   | 6,371       |   |                   |  
|Total assets                                                                                                                     |  |                   | 105,305,645 |   |                   |  
|                                                                                                                                 |  |                   |             |   |                   |  
|LIABILITIES                                                                                                                      |  |                   |             |   |                   |  
|Debt:                                                                                                                            |  |                   |             |   |                   |  
|Revolving credit facility                                                                                                        |  |                   | 31,200,000  |   |                   |  
|Less: Unamortized deferred financing costs                                                                                       |  |                   | (83,468     | ) |                   |  
|Total debt, less unamortized deferred financing costs                                                                            |  |                   | 31,116,532  |   |                   |  
|Interest payable                                                                                                                 |  |                   | 296,871     |   |                   |  
|Payable for unsettled trades                                                                                                     |  |                   | 2,795,893   |   |                   |  
|Management fees payable                                                                                                          |  |                   | 301,925     |   |                   |  
|Incentive fees payable                                                                                                           |  |                   | 132,125     |   |                   |  
|Distributions payable                                                                                                            |  |                   | 1,386,538   |   |                   |  
|Excise tax payable                                                                                                               |  |                   | 20,000      |   |                   |  
|Accounts payable and accrued expenses                                                                                            |  |                   | 510,440     |   |                   |  
|Total liabilities                                                                                                                |  |                   | 36,560,324  |   |                   |  
|Net assets                                                                                                                       |  | $                 | 68,745,321  |   |                   | $
|                                                                                                                                 |  |                   |             |   |                   |  
|Commitments and contingencies (See Note 10)                                                                                      |  |                   |             |   |                   |  
|                                                                                                                                 |  |                   |             |   |                   |  
|ANALYSIS OF NET ASSETS                                                                                                           |  |                   |             |   |                   |  
|Common stock, $0.001 par value, 100,000,000 shares
    authorized, 6,874,532 and 100 shares issued and outstanding, respectively |  | $                 | 6,874       |   |                   | $
|Capital in excess of par value                                                                                                   |  |                   | 68,718,447  |   |                   |  
|Accumulated undistributed (overdistributed) earnings                                                                             |  |                   | 20,000      |   |                   |  
|Total net assets                                                                                                                 |  | $                 | 68,745,321  |   |                   | $
|                                                                                                                                 |  |                   |             |   |                   |  
|Net asset value per share                                                                                                        |  | $                 | 10.00       |   |                   | $





See
Notes to Consolidated Financial Statements.





F-3







|MONROE CAPITAL INCOME PLUS CORPORATION
|--------------------------------------
|                                      
|CONSOLIDATED STATEMENTS OF OPERATIONS 



|                                                                                              |  | Year ended December 31, 2019 |           |   | For the period  from May 30, 2018  (date of inception) to December 31, 2018 |  
|--------------------------------------------------------------------------------------------- |  | ---------------------------- | --------- | - | --------------------------------------------------------------------------- | -
|Investment income:                                                                            |  |                              |           |   |                                                                             |  
|Interest income                                                                               |  | $                            | 3,887,760 |   |                                                                             | $
|Total investment income                                                                       |  |                              | 3,887,760 |   |                                                                             |  
|                                                                                              |  |                              |           |   |                                                                             |  
|Operating expenses:                                                                           |  |                              |           |   |                                                                             |  
|Interest and other debt financing expenses                                                    |  |                              | 858,909   |   |                                                                             |  
|Base management fees                                                                          |  |                              | 734,918   |   |                                                                             |  
|Incentive fees                                                                                |  |                              | 250,735   |   |                                                                             |  
|Professional fees                                                                             |  |                              | 314,288   |   |                                                                             |  
|Administrative service fees                                                                   |  |                              | 232,943   |   |                                                                             |  
|General and administrative expenses                                                           |  |                              | 224,758   |   |                                                                             |  
|Directors' fees                                                                               |  |                              | 65,000    |   |                                                                             |  
|Excise taxes                                                                                  |  |                              | 20,000    |   |                                                                             |  
|Expenses before fee waivers and expense reimbursement                                         |  |                              | 2,701,551 |   |                                                                             |  
|Base management fee waiver                                                                    |  |                              | (432,993  | ) |                                                                             |  
|Incentive fee waiver                                                                          |  |                              | (118,610  | ) |                                                                             |  
|Expense reimbursement                                                                         |  |                              | (544,084  | ) |                                                                             |  
|Total expenses, net of fee waivers and expense reimbursement                                  |  |                              | 1,605,864 |   |                                                                             |  
|Net investment income                                                                         |  |                              | 2,281,896 |   |                                                                             |  
|                                                                                              |  |                              |           |   |                                                                             |  
|Net gain (loss):                                                                              |  |                              |           |   |                                                                             |  
|Net realized gain (loss) on investments                                                       |  |                              | 5,169     |   |                                                                             |  
|Net change in unrealized gain (loss) on investments                                           |  |                              | 875,663   |   |                                                                             |  
|Net gain (loss)                                                                               |  |                              | 880,832   |   |                                                                             |  
|                                                                                              |  |                              |           |   |                                                                             |  
|Net increase (decrease) in net assets resulting from operations                               |  | $                            | 3,162,728 |   |                                                                             | $
|                                                                                              |  |                              |           |   |                                                                             |  
|Per common share data:                                                                        |  |                              |           |   |                                                                             |  
|Net investment income per share - basic and diluted                                           |  | $                            | 0.57      |   |                                                                             | $
|Net increase (decrease) in net assets resulting from operations per share - basic and diluted |  | $                            | 0.79      |   |                                                                             | $
|Weighted average common shares outstanding - basic and diluted                                |  |                              | 3,979,849 |   |                                                                             |  







See Notes to Consolidated Financial Statements.





F-4







|MONROE CAPITAL INCOME PLUS CORPORATION          
|------------------------------------------------
|                                                
|CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS



|                                                                                                                                                                                        
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                        
|                                                                                                                                                                                        
|Balances at May 30, 2018 (date of inception)                                                                                                                                            
|Net investment income                                                                                                                                                                   
|Net realized gain (loss) on investments                                                                                                                                                 
|Net change in unrealized gain (loss)  on investments                                                                                                                                    
|Issuance of common stock                                                                                                                                                                
|Distributions declared and payable to stockholders                                                                                                                                      
|Stock issued in connection with dividend reinvestment plan                                                                                                                              
|Tax reclassification of stockholders’ equity in accordance with generally
                                                                                accepted accounting principles
|Balances at December 31, 2018                                                                                                                                                           
|                                                                                                                                                                                        
|Net investment income                                                                                                                                                                   
|Net realized gain (loss)  on investments                                                                                                                                                
|Net change in unrealized gain (loss)  on investments                                                                                                                                    
|Issuance of common stock                                                                                                                                                                
|Distributions declared and payable to stockholders                                                                                                                                      
|Stock issued in connection with dividend reinvestment plan                                                                                                                              
|Tax reclassification of stockholders’ equity in accordance with generally
                                                                                accepted accounting principles
|Balances at December 31, 2019                                                                                                                                                           







See Notes to Consolidated Financial Statements.



F-5







| | MONROE CAPITAL INCOME PLUS CORPORATION | 
| | -------------------------------------- | 
| |                                        | 
| | CONSOLIDATED STATEMENTS OF CASH FLOWS  | 



|                                                                                                                          |  | Year ended
                                                                                December 31, |              |   | For the period  from May 30,
    2018 (date of inception) to December 31, |  
|------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------- | ------------ | - | ------------------------------------------------------------------------- | -
|                                                                                                                          |  | 2019                                                                                                    |              |   | 2018                                                                      |  
|Cash flows from operating activities:                                                                                     |  |                                                                                                         |              |   |                                                                           |  
|Net increase (decrease) in net assets resulting from operations                                                           |  | $                                                                                                       | 3,162,728    |   |                                                                           | $
|Adjustments to reconcile net increase (decrease) in net assets resulting from                                             |  |                                                                                                         |              |   |                                                                           |  
|operations to net cash provided by (used in) operating activities:                                                        |  |                                                                                                         |              |   |                                                                           |  
|Net realized (gain) loss on investments                                                                                   |  |                                                                                                         | (5,169       | ) |                                                                           |  
|Net change in unrealized (gain) loss on investments                                                                       |  |                                                                                                         | (875,663     | ) |                                                                           |  
|Payment-in-kind interest income                                                                                           |  |                                                                                                         | (48,291      | ) |                                                                           |  
|Net accretion of discounts and amortization of premiums                                                                   |  |                                                                                                         | (97,885      | ) |                                                                           |  
|Purchases of investments                                                                                                  |  |                                                                                                         | (104,418,184 | ) |                                                                           |  
|Proceeds from principal payments and sale of investments                                                                  |  |                                                                                                         | 4,638,209    |   |                                                                           |  
|Amortization of deferred financing costs                                                                                  |  |                                                                                                         | 318,921      |   |                                                                           |  
|Changes in operating assets and liabilities:                                                                              |  |                                                                                                         |              |   |                                                                           |  
|Interest receivable                                                                                                       |  |                                                                                                         | (414,135     | ) |                                                                           |  
|Due from affiliates                                                                                                       |  |                                                                                                         | (14,448      | ) |                                                                           |  
|Other assets                                                                                                              |  |                                                                                                         | (6,371       | ) |                                                                           |  
|Interest payable                                                                                                          |  |                                                                                                         | 296,871      |   |                                                                           |  
|Payable for unsettled trades                                                                                              |  |                                                                                                         | 2,795,893    |   |                                                                           |  
|Management fees payable                                                                                                   |  |                                                                                                         | 301,925      |   |                                                                           |  
|Incentive fees payable                                                                                                    |  |                                                                                                         | 132,125      |   |                                                                           |  
|Excise tax payable                                                                                                        |  |                                                                                                         | 20,000       |   |                                                                           |  
|Accounts payable and accrued expenses                                                                                     |  |                                                                                                         | 510,440      |   |                                                                           |  
|Net cash provided by (used in) operating activities                                                                       |  |                                                                                                         | (93,703,034  | ) |                                                                           |  
|                                                                                                                          |  |                                                                                                         |              |   |                                                                           |  
|Cash flows from financing activities:                                                                                     |  |                                                                                                         |              |   |                                                                           |  
|Borrowings on revolving credit facility                                                                                   |  |                                                                                                         | 69,100,000   |   |                                                                           |  
|Repayments of revolving credit facility                                                                                   |  |                                                                                                         | (37,900,000  | ) |                                                                           |  
|Payments of deferred financing costs                                                                                      |  |                                                                                                         | (402,389     | ) |                                                                           |  
|Proceeds from issuance of common shares                                                                                   |  |                                                                                                         | 68,224,000   |   |                                                                           |  
|Stockholder distributions paid, net of stock issued under the dividend reinvestment plan of $520,321 and $0, respectively |  |                                                                                                         | (1,255,869   | ) |                                                                           |  
|Net cash provided by (used in) financing activities                                                                       |  |                                                                                                         | 97,765,742   |   |                                                                           |  
|                                                                                                                          |  |                                                                                                         |              |   |                                                                           |  
|Net increase (decrease) in Cash and cash equivalents and Restricted cash                                                  |  |                                                                                                         | 4,062,708    |   |                                                                           |  
|Cash, Cash equivalents and Restricted cash, beginning of period                                                           |  |                                                                                                         | 1,000        |   |                                                                           |  
|Cash, Cash equivalents and Restricted cash, end of year                                                                   |  | $                                                                                                       | 4,063,708    |   |                                                                           | $
|                                                                                                                          |  |                                                                                                         |              |   |                                                                           |  
|Supplemental disclosure of cash flow information:                                                                         |  |                                                                                                         |              |   |                                                                           |  
|Cash interest paid during the year                                                                                        |  | $                                                                                                       | 243,117      |   |                                                                           | $










The
following table provides a reconciliation of cash, cash equivalents and restricted cash reported on the Consolidated Statements
of Assets and Liabilities that sum to the total of the same such amounts on the Consolidated Statements of Cash Flows:



|                                                                                                    |  | December 31,
 2019 |           |  | December 31,
 2018 |  
|--------------------------------------------------------------------------------------------------- |  | ------------------ | --------- |  | ------------------ | -
|Cash and cash equivalents                                                                           |  | $                  | 2,222,887 |  |                    | $
|Restricted cash                                                                                     |  |                    | 1,840,821 |  |                    |  
|Total cash, cash equivalents and restricted cash shown on the Consolidated Statements of Cash Flows |  | $                  | 4,063,708 |  |                    | $





See
Notes to Consolidated Financial Statements.





F-6







MONROE CAPITAL INCOME PLUS CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, 2019





|Portfolio
    Company (a) (b)                                       |  | Spread
    Above  Index (c) |  | Interest
                                                                                Rate |   |  | Acquisition
                                                                                Date
                                         (d) |  | Maturity   |  | Principal |            |  | Amortized
                                                                                Cost |   |            | Fair
                                                                                Value
                                         (e) |  |   | %
                                         of Net
                                                                                Assets
                                         (f) | 
|------------------------------------------------------------------- |  | --------------------------- |  | --------------------------------------------------------------------------------------------- | - |  | --------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------- |  | --------- | ---------- |  | ---------------------------------------------------------------------------------------------- | - | ---------- | --------------------------------------------------------------------------------------------------------------------------------------- |  | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|Investments:                                                        |  |                             |  |                                                                                               |   |  |                                                                                                                                               |  |            |  |           |            |  |                                                                                                |   |            |                                                                                                                                         |  |   |                                                                                                                                                                                       | 
|Senior
    Secured Loans                                            |  |                             |  |                                                                                               |   |  |                                                                                                                                               |  |            |  |           |            |  |                                                                                                |   |            |                                                                                                                                         |  |   |                                                                                                                                                                                       | 
|Aerospace
    & Defense                                             |  |                             |  |                                                                                               |   |  |                                                                                                                                               |  |            |  |           |            |  |                                                                                                |   |            |                                                                                                                                         |  |   |                                                                                                                                                                                       | 
|API
    Holdings III Corp. (g)                                      |  | L+4.25%                     |  | 6.05                                                                                          | % |  | 5/2/2019                                                                                                                                      |  | 5/8/2026   |  |           | 1,691,500  |  |                                                                                                | $ | 1,683,530  |                                                                                                                                         |  | $ | 1,632,297                                                                                                                                                                             | 
|SI
    Holdings, Inc. (Integrated Polymer Solutions) (g)            |  | L+6.00%                     |  | 7.94                                                                                          | % |  | 12/24/2019                                                                                                                                    |  | 7/25/2025  |  |           | 1,041,315  |  |                                                                                                |   | 1,020,526  |                                                                                                                                         |  |   | 1,040,534                                                                                                                                                                             | 
|SI
    Holdings, Inc. (Integrated Polymer Solutions) (g)            |  | L+6.00%                     |  | 7.94                                                                                          | % |  | 7/25/2019                                                                                                                                     |  | 7/25/2025  |  |           | 1,995,000  |  |                                                                                                |   | 1,956,067  |                                                                                                                                         |  |   | 1,993,504                                                                                                                                                                             | 
|SI
    Holdings, Inc. (Integrated Polymer Solutions) (Revolver) (h) |  | L+6.00%                     |  | 7.94                                                                                          | % |  | 7/25/2019                                                                                                                                     |  | 7/25/2024  |  |           | 316,206    |  |                                                                                                |   | 79,051     |                                                                                                                                         |  |   | 79,051                                                                                                                                                                                | 
|                                                                    |  |                             |  |                                                                                               |   |  |                                                                                                                                               |  |            |  |           | 5,044,021  |  |                                                                                                |   | 4,739,174  |                                                                                                                                         |  |   | 4,745,386                                                                                                                                                                             | 
|Automotive                                                          |  |                             |  |                                                                                               |   |  |                                                                                                                                               |  |            |  |           |            |  |                                                                                                |   |            |                                                                                                                                         |  |   |                                                                                                                                                                                       | 
|Rough
    Country, LLC (g)                                          |  | L+3.50%                     |  | 5.30                                                                                          | % |  | 4/17/2019                                                                                                                                     |  | 5/25/2023  |  |           | 1,345,693  |  |                                                                                                |   | 1,341,713  |                                                                                                                                         |  |   | 1,338,964                                                                                                                                                                             | 
|Wheel
    Pros, LLC (g)                                             |  | L+4.75%                     |  | 6.55                                                                                          | % |  | 5/13/2019                                                                                                                                     |  | 4/4/2025   |  |           | 2,481,192  |  |                                                                                                |   | 2,457,729  |                                                                                                                                         |  |   | 2,452,236                                                                                                                                                                             | 
|                                                                    |  |                             |  |                                                                                               |   |  |                                                                                                                                               |  |            |  |           | 3,826,885  |  |                                                                                                |   | 3,799,442  |                                                                                                                                         |  |   | 3,791,200                                                                                                                                                                             | 
|Banking,
    Finance, Insurance & Real Estate                       |  |                             |  |                                                                                               |   |  |                                                                                                                                               |  |            |  |           |            |  |                                                                                                |   |            |                                                                                                                                         |  |   |                                                                                                                                                                                       | 
|777
    SPV I LLC (Delayed Draw) (i) (j)                            |  | L+8.50%                     |  | 10.30                                                                                         | % |  | 4/15/2019                                                                                                                                     |  | 4/14/2023  |  |           | 1,774,854  |  |                                                                                                |   | 1,755,625  |                                                                                                                                         |  |   | 1,780,178                                                                                                                                                                             | 
|Avison
    Young (USA), Inc. (g) (j) (k)                            |  | L+5.00%                     |  | 6.94                                                                                          | % |  | 4/26/2019                                                                                                                                     |  | 1/30/2026  |  |           | 1,984,962  |  |                                                                                                |   | 1,966,215  |                                                                                                                                         |  |   | 1,954,364                                                                                                                                                                             | 
|InsideRE
    Holdings, LLC and InsideRE, LLC (g)                    |  | L+6.50%                     |  | 8.46                                                                                          | % |  | 9/9/2019                                                                                                                                      |  | 9/9/2024   |  |           | 2,992,500  |  |                                                                                                |   | 2,935,825  |                                                                                                                                         |  |   | 3,006,116                                                                                                                                                                             | 
|InsideRE
    Holdings, LLC and InsideRE, LLC (Revolver) (h)         |  | L+6.50%                     |  | 8.46                                                                                          | % |  | 9/9/2019                                                                                                                                      |  | 9/9/2024   |  |           | 428,571    |  |                                                                                                |   | —          |                                                                                                                                         |  |   | —                                                                                                                                                                                     | 
|Kudu
    Investment Holdings, LLC (j)                               |  | L+6.25%                     |  | 8.18                                                                                          | % |  | 12/23/2019                                                                                                                                    |  | 12/23/2025 |  |           | 2,750,000  |  |                                                                                                |   | 2,702,044  |                                                                                                                                         |  |   | 2,701,875                                                                                                                                                                             | 
|Kudu
    Investment Holdings, LLC (Delayed Draw) (h) (i) (j)        |  | L+6.25%                     |  | 8.18                                                                                          | % |  | 12/23/2019                                                                                                                                    |  | 12/23/2025 |  |           | 1,833,333  |  |                                                                                                |   | —          |                                                                                                                                         |  |   | —                                                                                                                                                                                     | 
|Kudu
    Investment Holdings, LLC (Revolver) (h) (j)                |  | L+6.25%                     |  | 8.18                                                                                          | % |  | 12/23/2019                                                                                                                                    |  | 12/23/2025 |  |           | 241,228    |  |                                                                                                |   | —          |                                                                                                                                         |  |   | —                                                                                                                                                                                     | 
|TCP-NG
    (U.S.), LLC (j)                                          |  | L+7.25%                     |  | 9.21                                                                                          | % |  | 8/23/2019                                                                                                                                     |  | 8/22/2024  |  |           | 1,706,250  |  |                                                                                                |   | 1,679,897  |                                                                                                                                         |  |   | 1,702,667                                                                                                                                                                             | 
|TCP-NG
    (U.S.), LLC (Revolver) (h) (j)                           |  | L+7.25%                     |  | 9.21                                                                                          | % |  | 8/23/2019                                                                                                                                     |  | 8/22/2024  |  |           | 105,000    |  |                                                                                                |   | —          |                                                                                                                                         |  |   | —                                                                                                                                                                                     | 
|Team
    RMS, LLC (g)                                               |  | L+6.00%                     |  | 7.80                                                                                          | % |  | 9/20/2019                                                                                                                                     |  | 9/20/2024  |  |           | 7,980,000  |  |                                                                                                |   | 7,848,619  |                                                                                                                                         |  |   | 7,994,763                                                                                                                                                                             | 
|Team
    RMS, LLC (Delayed Draw) (h) (i)                            |  | L+6.00%                     |  | 7.80                                                                                          | % |  | 9/20/2019                                                                                                                                     |  | 9/20/2024  |  |           | 366,789    |  |                                                                                                |   | 73,211     |                                                                                                                                         |  |   | 73,346                                                                                                                                                                                | 
|Team
    RMS, LLC (Revolver) (h)                                    |  | L+6.00%                     |  | 7.80                                                                                          | % |  | 9/20/2019                                                                                                                                     |  | 9/20/2024  |  |           | 642,802    |  |                                                                                                |   | 114,633    |                                                                                                                                         |  |   | 114,633                                                                                                                                                                               | 
|                                                                    |  |                             |  |                                                                                               |   |  |                                                                                                                                               |  |            |  |           | 22,806,289 |  |                                                                                                |   | 19,076,069 |                                                                                                                                         |  |   | 19,327,942                                                                                                                                                                            | 
|Beverage,
    Food & Tobacco                                        |  |                             |  |                                                                                               |   |  |                                                                                                                                               |  |            |  |           |            |  |                                                                                                |   |            |                                                                                                                                         |  |   |                                                                                                                                                                                       | 
|Huff
    Hispanic Food Holdings, LLC (g)                            |  | L+5.50%                     |  | 7.30                                                                                          | % |  | 10/18/2019                                                                                                                                    |  | 10/18/2024 |  |           | 5,983,333  |  |                                                                                                |   | 5,867,875  |                                                                                                                                         |  |   | 5,989,317                                                                                                                                                                             | 
|Huff
    Hispanic Food Holdings, LLC (Delayed Draw) (h) (i)         |  | L+5.50%                     |  | 7.30                                                                                          | % |  | 10/18/2019                                                                                                                                    |  | 10/18/2024 |  |           | 333,333    |  |                                                                                                |   | —          |                                                                                                                                         |  |   | —                                                                                                                                                                                     | 
|Huff
    Hispanic Food Holdings, LLC (Revolver) (h)                 |  | L+5.50%                     |  | 7.30                                                                                          | % |  | 10/18/2019                                                                                                                                    |  | 10/18/2024 |  |           | 1,285,714  |  |                                                                                                |   | 471,429    |                                                                                                                                         |  |   | 471,429                                                                                                                                                                               | 
|                                                                    |  |                             |  |                                                                                               |   |  |                                                                                                                                               |  |            |  |           | 7,602,380  |  |                                                                                                |   | 6,339,304  |                                                                                                                                         |  |   | 6,460,746                                                                                                                                                                             | 
|Consumer
    Goods: Non-Durable                                     |  |                             |  |                                                                                               |   |  |                                                                                                                                               |  |            |  |           |            |  |                                                                                                |   |            |                                                                                                                                         |  |   |                                                                                                                                                                                       | 
|Quirch
    Foods Holdings, LLC (g)                                  |  | L+6.00%                     |  | 7.79                                                                                          | % |  | 2/14/2019                                                                                                                                     |  | 12/19/2025 |  |           | 1,237,500  |  |                                                                                                |   | 1,226,047  |                                                                                                                                         |  |   | 1,237,500                                                                                                                                                                             | 
|                                                                    |  |                             |  |                                                                                               |   |  |                                                                                                                                               |  |            |  |           | 1,237,500  |  |                                                                                                |   | 1,226,047  |                                                                                                                                         |  |   | 1,237,500                                                                                                                                                                             | 
|Containers,
    Packaging & Glass                                   |  |                             |  |                                                                                               |   |  |                                                                                                                                               |  |            |  |           |            |  |                                                                                                |   |            |                                                                                                                                         |  |   |                                                                                                                                                                                       | 
|Polychem
    Acquisition, LLC (g)                                   |  | L+5.00%                     |  | 6.95                                                                                          | % |  | 4/8/2019                                                                                                                                      |  | 3/17/2025  |  |           | 1,985,000  |  |                                                                                                |   | 1,975,482  |                                                                                                                                         |  |   | 1,985,000                                                                                                                                                                             | 
|                                                                    |  |                             |  |                                                                                               |   |  |                                                                                                                                               |  |            |  |           | 1,985,000  |  |                                                                                                |   | 1,975,482  |                                                                                                                                         |  |   | 1,985,000                                                                                                                                                                             | 
|Energy:
    Oil & Gas                                               |  |                             |  |                                                                                               |   |  |                                                                                                                                               |  |            |  |           |            |  |                                                                                                |   |            |                                                                                                                                         |  |   |                                                                                                                                                                                       | 
|BJ
    Services, LLC (g)                                            |  | L+7.00%                     |  | 8.91                                                                                          | % |  | 1/28/2019                                                                                                                                     |  | 1/3/2023   |  |           | 1,925,000  |  |                                                                                                |   | 1,909,471  |                                                                                                                                         |  |   | 1,913,835                                                                                                                                                                             | 
|BW
    Gas & Convenience Holdings, LLC (g) (l)                      |  | L+6.25%                     |  | 8.05                                                                                          | % |  | 11/15/2019                                                                                                                                    |  | 11/18/2024 |  |           | 2,142,857  |  |                                                                                                |   | 2,057,143  |                                                                                                                                         |  |   | 2,137,500                                                                                                                                                                             | 
|                                                                    |  |                             |  |                                                                                               |   |  |                                                                                                                                               |  |            |  |           | 4,067,857  |  |                                                                                                |   | 3,966,614  |                                                                                                                                         |  |   | 4,051,335                                                                                                                                                                             | 
|Healthcare
    & Pharmaceuticals                                    |  |                             |  |                                                                                               |   |  |                                                                                                                                               |  |            |  |           |            |  |                                                                                                |   |            |                                                                                                                                         |  |   |                                                                                                                                                                                       | 
|Apotheco,
    LLC (g)                                               |  | L+5.50%                     |  | 7.30                                                                                          | % |  | 4/8/2019                                                                                                                                      |  | 4/8/2024   |  |           | 1,741,250  |  |                                                                                                |   | 1,710,240  |                                                                                                                                         |  |   | 1,741,250                                                                                                                                                                             | 
|Apotheco,
    LLC (Delayed Draw) (h) (i)                            |  | L+5.50%                     |  | 7.30                                                                                          | % |  | 4/8/2019                                                                                                                                      |  | 4/8/2024   |  |           | 823,529    |  |                                                                                                |   | —          |                                                                                                                                         |  |   | —                                                                                                                                                                                     | 
|Apotheco,
    LLC (Revolver) (h)                                    |  | L+5.50%                     |  | 7.30                                                                                          | % |  | 4/8/2019                                                                                                                                      |  | 4/8/2024   |  |           | 454,545    |  |                                                                                                |   | 170,454    |                                                                                                                                         |  |   | 170,454                                                                                                                                                                               | 
|ERC
    Finance, LLC (g)                                            |  | L+4.50%                     |  | 6.30                                                                                          | % |  | 4/23/2019                                                                                                                                     |  | 9/20/2024  |  |           | 1,984,882  |  |                                                                                                |   | 1,953,266  |                                                                                                                                         |  |   | 1,925,335                                                                                                                                                                             | 
|nThrive,
    Inc. (g)                                               |  | L+4.50%                     |  | 6.30                                                                                          | % |  | 5/3/2019                                                                                                                                      |  | 10/20/2022 |  |           | 2,480,720  |  |                                                                                                |   | 2,430,010  |                                                                                                                                         |  |   | 2,079,153                                                                                                                                                                             | 
|QF
    Holdings, Inc. (g)                                           |  | L+7.00%                     |  | 8.90                                                                                          | % |  | 9/19/2019                                                                                                                                     |  | 9/19/2024  |  |           | 4,550,000  |  |                                                                                                |   | 4,463,820  |                                                                                                                                         |  |   | 4,536,350                                                                                                                                                                             | 
|QF
    Holdings, Inc. (Delayed Draw) (h) (i)                        |  | L+7.00%                     |  | 8.90                                                                                          | % |  | 9/19/2019                                                                                                                                     |  | 9/19/2024  |  |           | 910,000    |  |                                                                                                |   | —          |                                                                                                                                         |  |   | —                                                                                                                                                                                     | 
|QF
    Holdings, Inc. (Revolver) (h)                                |  | L+7.00%                     |  | 8.90                                                                                          | % |  | 9/19/2019                                                                                                                                     |  | 9/19/2024  |  |           | 546,000    |  |                                                                                                |   | —          |                                                                                                                                         |  |   | —                                                                                                                                                                                     | 
|WebPT,
    Inc. (g)                                                 |  | L+6.75%                     |  | 8.66                                                                                          | % |  | 8/28/2019                                                                                                                                     |  | 8/28/2024  |  |           | 5,000,000  |  |                                                                                                |   | 4,904,363  |                                                                                                                                         |  |   | 5,001,000                                                                                                                                                                             | 
|WebPT,
    Inc. (Delayed Draw) (h) (i)                              |  | L+6.75%                     |  | 8.66                                                                                          | % |  | 8/28/2019                                                                                                                                     |  | 8/28/2024  |  |           | 625,000    |  |                                                                                                |   | —          |                                                                                                                                         |  |   | —                                                                                                                                                                                     | 
|WebPT,
    Inc. (Revolver) (h)                                      |  | L+6.75%                     |  | 8.66                                                                                          | % |  | 8/28/2019                                                                                                                                     |  | 8/28/2024  |  |           | 520,833    |  |                                                                                                |   | —          |                                                                                                                                         |  |   | —                                                                                                                                                                                     | 
|                                                                    |  |                             |  |                                                                                               |   |  |                                                                                                                                               |  |            |  |           | 19,636,759 |  |                                                                                                |   | 15,632,153 |                                                                                                                                         |  |   | 15,453,542                                                                                                                                                                            | 
|High
    Tech Industries                                            |  |                             |  |                                                                                               |   |  |                                                                                                                                               |  |            |  |           |            |  |                                                                                                |   |            |                                                                                                                                         |  |   |                                                                                                                                                                                       | 
|Acquia,
    Inc. (g)                                                |  | L+7.00%                     |  | 8.91                                                                                          | % |  | 11/1/2019                                                                                                                                     |  | 10/31/2025 |  |           | 5,429,412  |  |                                                                                                |   | 5,323,530  |                                                                                                                                         |  |   | 5,445,700                                                                                                                                                                             | 
|Acquia,
    Inc. (Revolver) (h)                                     |  | L+7.00%                     |  | 8.91                                                                                          | % |  | 11/1/2019                                                                                                                                     |  | 10/31/2025 |  |           | 588,235    |  |                                                                                                |   | —          |                                                                                                                                         |  |   | —                                                                                                                                                                                     | 
|Gigamon,
    Inc. (g)                                               |  | L+4.25%                     |  | 6.04                                                                                          | % |  | 4/26/2019                                                                                                                                     |  | 12/27/2024 |  |           | 1,488,607  |  |                                                                                                |   | 1,438,075  |                                                                                                                                         |  |   | 1,475,582                                                                                                                                                                             | 
|Mindbody,
    Inc. (g)                                              |  | L+7.00%                     |  | 8.79                                                                                          | % |  | 2/15/2019                                                                                                                                     |  | 2/14/2025  |  |           | 1,809,524  |  |                                                                                                |   | 1,776,787  |                                                                                                                                         |  |   | 1,803,191                                                                                                                                                                             | 
|Mindbody,
    Inc. (Revolver) (h)                                   |  | L+7.00%                     |  | 8.79                                                                                          | % |  | 2/15/2019                                                                                                                                     |  | 2/14/2025  |  |           | 190,476    |  |                                                                                                |   | —          |                                                                                                                                         |  |   | —                                                                                                                                                                                     | 
|Recorded
    Future, Inc. (g)                                       |  | L+6.75%                     |  | 8.55                                                                                          | % |  | 7/3/2019                                                                                                                                      |  | 7/3/2025   |  |           | 3,666,667  |  |                                                                                                |   | 3,596,502  |                                                                                                                                         |  |   | 3,665,567                                                                                                                                                                             | 
|Recorded
    Future, Inc. (Delayed Draw) (h) (i)                    |  | L+6.75%                     |  | 8.55                                                                                          | % |  | 7/3/2019                                                                                                                                      |  | 7/3/2025   |  |           | 293,333    |  |                                                                                                |   | —          |                                                                                                                                         |  |   | —                                                                                                                                                                                     | 
|Recorded
    Future, Inc. (Revolver) (h)                            |  | L+6.75%                     |  | 8.55                                                                                          | % |  | 7/3/2019                                                                                                                                      |  | 7/3/2025   |  |           | 440,000    |  |                                                                                                |   | —          |                                                                                                                                         |  |   | —                                                                                                                                                                                     | 
|Transact
    Holdings, Inc. (g) (l)                                 |  | L+4.75%                     |  | 6.55                                                                                          | % |  | 4/18/2019                                                                                                                                     |  | 4/30/2026  |  |           | 750,000    |  |                                                                                                |   | 738,750    |                                                                                                                                         |  |   | 747,188                                                                                                                                                                               | 
|                                                                    |  |                             |  |                                                                                               |   |  |                                                                                                                                               |  |            |  |           | 14,656,254 |  |                                                                                                |   | 12,873,644 |                                                                                                                                         |  |   | 13,137,228                                                                                                                                                                            | 





F-7







MONROE
CAPITAL INCOME PLUS CORPORATION

CONSOLIDATED
SCHEDULE OF INVESTMENTS  – (continued)

December 31, 2019



|Portfolio
    Company (a) (b)                                               |  | Spread
    Above  Index (c) |  | Interest
                                                                                Rate |     |           | Acquisition
                                                                                Date
                                         (d) |           | Maturity   |  | Principal |             |  | Amortized
                                                                                Cost |           |            | Fair
                                                                                Value
                                         (e) |  |           | %
                                         of
                                                                                                                                                   Net
                                                                                Assets
                                         (f) | 
|--------------------------------------------------------------------------- |  | --------------------------- |  | --------------------------------------------------------------------------------------------- | --- | --------- | --------------------------------------------------------------------------------------------------------------------------------------------- | --------- | ---------- |  | --------- | ----------- |  | ---------------------------------------------------------------------------------------------- | --------- | ---------- | --------------------------------------------------------------------------------------------------------------------------------------- |  | --------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|Media:
    Advertising, Printing & Publishing                               |  |                             |  |                                                                                               |     |           |                                                                                                                                               |           |            |  |           |             |  |                                                                                                |           |            |                                                                                                                                         |  |           |                                                                                                                                                                                                                                                                                                                                          | 
|Digital
    Room Holdings, Inc. (g)                                         |  | L+5.00%                     |  | 6.80                                                                                          | %   |           | 5/9/2019                                                                                                                                      |           | 5/21/2026  |  |           | 2,203,214   |  |                                                                                                | $         | 2,173,141  |                                                                                                                                         |  | $         | 2,093,054                                                                                                                                                                                                                                                                                                                                | 
|NTM
    Acquisition Corp. (g)                                               |  | L+6.25%                     |  | 8.05                                                                                          | %   |           | 4/18/2019                                                                                                                                     |           | 6/7/2022   |  |           | 4,927,885   |  |                                                                                                |           | 4,904,995  |                                                                                                                                         |  |           | 4,927,885                                                                                                                                                                                                                                                                                                                                | 
|                                                                            |  |                             |  |                                                                                               |     |           |                                                                                                                                               |           |            |  |           | 7,131,099   |  |                                                                                                |           | 7,078,136  |                                                                                                                                         |  |           | 7,020,939                                                                                                                                                                                                                                                                                                                                | 
|Media:
    Broadcasting & Subscription                                      |  |                             |  |                                                                                               |     |           |                                                                                                                                               |           |            |  |           |             |  |                                                                                                |           |            |                                                                                                                                         |  |           |                                                                                                                                                                                                                                                                                                                                          | 
|Vice
    Group Holding, Inc.                                                |  | L+12.00%                    |  | 5.92% Cash/ 8.00% PIK                                                                         |     | 11/4/2019 |                                                                                                                                               | 11/2/2022 |            |  | 180,000   |             |  |                                                                                                | 180,000   |            |                                                                                                                                         |  | 180,117   |                                                                                                                                                                                                                                                                                                                                          | 
|Vice
    Group Holding, Inc.                                                |  | L+12.00%                    |  | 5.92% Cash/ 8.00% PIK                                                                         |     | 5/2/2019  |                                                                                                                                               | 11/2/2022 |            |  | 937,584   |             |  |                                                                                                | 929,919   |            |                                                                                                                                         |  | 938,194   |                                                                                                                                                                                                                                                                                                                                          | 
|Vice
    Group Holding, Inc. (Delayed Draw) (h) (i)                         |  | L+12.00%                    |  | 13.92                                                                                         | %   |           | 5/2/2019                                                                                                                                      |           | 11/2/2022  |  |           | 300,000     |  |                                                                                                |           | —          |                                                                                                                                         |  |           | —                                                                                                                                                                                                                                                                                                                                        | 
|Vice
    Group Holding, Inc. (Delayed Draw) (h) (i)                         |  | L+12.00%                    |  | 13.92                                                                                         | %   |           | 5/2/2019                                                                                                                                      |           | 11/2/2022  |  |           | 120,000     |  |                                                                                                |           | —          |                                                                                                                                         |  |           | —                                                                                                                                                                                                                                                                                                                                        | 
|                                                                            |  |                             |  |                                                                                               |     |           |                                                                                                                                               |           |            |  |           | 1,537,584   |  |                                                                                                |           | 1,109,919  |                                                                                                                                         |  |           | 1,118,311                                                                                                                                                                                                                                                                                                                                | 
|Media:
    Diversified & Production                                         |  |                             |  |                                                                                               |     |           |                                                                                                                                               |           |            |  |           |             |  |                                                                                                |           |            |                                                                                                                                         |  |           |                                                                                                                                                                                                                                                                                                                                          | 
|Crownpeak
    Technology, Inc. (g)                                          |  | L+6.25%                     |  | 7.94                                                                                          | %   |           | 2/28/2019                                                                                                                                     |           | 2/28/2024  |  |           | 1,000,000   |  |                                                                                                |           | 982,848    |                                                                                                                                         |  |           | 1,002,650                                                                                                                                                                                                                                                                                                                                | 
|Crownpeak
    Technology, Inc. (Delayed Draw) (h) (i)                       |  | L+6.25%                     |  | 7.94                                                                                          | %   |           | 2/28/2019                                                                                                                                     |           | 2/28/2024  |  |           | 83,333      |  |                                                                                                |           | 15,000     |                                                                                                                                         |  |           | 15,040                                                                                                                                                                                                                                                                                                                                   | 
|Crownpeak
    Technology, Inc. (Revolver) (h)                               |  | L+6.25%                     |  | 7.94                                                                                          | %   |           | 2/28/2019                                                                                                                                     |           | 2/28/2024  |  |           | 41,667      |  |                                                                                                |           | —          |                                                                                                                                         |  |           | —                                                                                                                                                                                                                                                                                                                                        | 
|Picture
    Heads Midco LLC (g)                                             |  | L+6.75%                     |  | 8.55                                                                                          | %   |           | 8/26/2019                                                                                                                                     |           | 8/31/2023  |  |           | 2,000,000   |  |                                                                                                |           | 1,966,622  |                                                                                                                                         |  |           | 1,978,000                                                                                                                                                                                                                                                                                                                                | 
|                                                                            |  |                             |  |                                                                                               |     |           |                                                                                                                                               |           |            |  |           | 3,125,000   |  |                                                                                                |           | 2,964,470  |                                                                                                                                         |  |           | 2,995,690                                                                                                                                                                                                                                                                                                                                | 
|Services:
    Business                                                      |  |                             |  |                                                                                               |     |           |                                                                                                                                               |           |            |  |           |             |  |                                                                                                |           |            |                                                                                                                                         |  |           |                                                                                                                                                                                                                                                                                                                                          | 
|Arcserve
    (USA), LLC (g)                                                 |  | L+6.00%                     |  | 7.91                                                                                          | %   |           | 5/1/2019                                                                                                                                      |           | 5/1/2024   |  |           | 1,426,389   |  |                                                                                                |           | 1,400,448  |                                                                                                                                         |  |           | 1,435,446                                                                                                                                                                                                                                                                                                                                | 
|Certify,
    Inc. (g)                                                       |  | L+5.75%                     |  | 7.55                                                                                          | %   |           | 2/28/2019                                                                                                                                     |           | 2/28/2024  |  |           | 1,000,000   |  |                                                                                                |           | 986,733    |                                                                                                                                         |  |           | 993,100                                                                                                                                                                                                                                                                                                                                  | 
|Certify,
    Inc. (Delayed Draw) (h) (i)                                    |  | L+5.75%                     |  | 7.55                                                                                          | %   |           | 2/28/2019                                                                                                                                     |           | 2/28/2024  |  |           | 136,364     |  |                                                                                                |           | 68,182     |                                                                                                                                         |  |           | 67,711                                                                                                                                                                                                                                                                                                                                   | 
|Certify,
    Inc. (Revolver) (h)                                            |  | L+5.75%                     |  | 7.55                                                                                          | %   |           | 2/28/2019                                                                                                                                     |           | 2/28/2024  |  |           | 45,455      |  |                                                                                                |           | 6,818      |                                                                                                                                         |  |           | 6,818                                                                                                                                                                                                                                                                                                                                    | 
|HS4
    Acquistionco, Inc. (g)                                              |  | L+6.75%                     |  | 8.71                                                                                          | %   |           | 7/9/2019                                                                                                                                      |           | 7/9/2025   |  |           | 4,000,000   |  |                                                                                                |           | 3,924,135  |                                                                                                                                         |  |           | 3,984,000                                                                                                                                                                                                                                                                                                                                | 
|HS4
    Acquistionco, Inc. (Revolver) (h)                                   |  | L+6.75%                     |  | 8.54                                                                                          | %   |           | 7/9/2019                                                                                                                                      |           | 7/9/2025   |  |           | 325,196     |  |                                                                                                |           | 48,779     |                                                                                                                                         |  |           | 48,560                                                                                                                                                                                                                                                                                                                                   | 
|Kaseya
    Traverse, Inc. (g)                                               |  | L+6.50%                     |  | 7.72% Cash/ 1.00% PIK                                                                         |     | 5/3/2019  |                                                                                                                                               | 5/2/2025  |            |  | 2,510,638 |             |  |                                                                                                | 2,463,928 |            |                                                                                                                                         |  | 2,504,487 |                                                                                                                                                                                                                                                                                                                                          | 
|Kaseya
    Traverse, Inc. (Delayed Draw) (h) (i)                            |  | L+6.50%                     |  | 7.69% Cash/ 1.00% PIK                                                                         |     | 5/3/2019  |                                                                                                                                               | 5/2/2025  |            |  | 301,205   |             |  |                                                                                                | 39,225    |            |                                                                                                                                         |  | 39,129    |                                                                                                                                                                                                                                                                                                                                          | 
|Kaseya
    Traverse, Inc. (Revolver) (h)                                    |  | L+6.50%                     |  | 8.30                                                                                          | %   |           | 5/3/2019                                                                                                                                      |           | 5/2/2025   |  |           | 210,843     |  |                                                                                                |           | 120,482    |                                                                                                                                         |  |           | 120,482                                                                                                                                                                                                                                                                                                                                  | 
|                                                                            |  |                             |  |                                                                                               |     |           |                                                                                                                                               |           |            |  |           | 9,956,090   |  |                                                                                                |           | 9,058,730  |                                                                                                                                         |  |           | 9,199,733                                                                                                                                                                                                                                                                                                                                | 
|Services:
    Consumer                                                      |  |                             |  |                                                                                               |     |           |                                                                                                                                               |           |            |  |           |             |  |                                                                                                |           |            |                                                                                                                                         |  |           |                                                                                                                                                                                                                                                                                                                                          | 
|Light
    Wave Dental Management, LLC (g)                                   |  | L+6.00%                     |  | 8.00                                                                                          | %   |           | 8/1/2019                                                                                                                                      |           | 1/2/2024   |  |           | 1,242,188   |  |                                                                                                |           | 1,214,589  |                                                                                                                                         |  |           | 1,239,703                                                                                                                                                                                                                                                                                                                                | 
|Light
    Wave Dental Management, LLC (g)                                   |  | L+6.00%                     |  | 8.00                                                                                          | %   |           | 12/1/2019                                                                                                                                     |           | 1/2/2024   |  |           | 235,739     |  |                                                                                                |           | 235,739    |                                                                                                                                         |  |           | 235,076                                                                                                                                                                                                                                                                                                                                  | 
|Light
    Wave Dental Management, LLC (g)                                   |  | L+6.00%                     |  | 8.00                                                                                          | %   |           | 12/1/2019                                                                                                                                     |           | 1/2/2024   |  |           | 448,677     |  |                                                                                                |           | 448,677    |                                                                                                                                         |  |           | 447,535                                                                                                                                                                                                                                                                                                                                  | 
|Light
    Wave Dental Management, LLC                                       |  | L+6.00%                     |  | 8.00                                                                                          | %   |           | 12/6/2019                                                                                                                                     |           | 1/2/2024   |  |           | 365,152     |  |                                                                                                |           | 359,724    |                                                                                                                                         |  |           | 364,421                                                                                                                                                                                                                                                                                                                                  | 
|Light
    Wave Dental Management, LLC (Delayed Draw) (h) (i)                |  | L+6.00%                     |  | 8.00                                                                                          | %   |           | 8/1/2019                                                                                                                                      |           | 1/2/2024   |  |           | 640,617     |  |                                                                                                |           | 21,268     |                                                                                                                                         |  |           | 21,226                                                                                                                                                                                                                                                                                                                                   | 
|Light
    Wave Dental Management, LLC (Delayed Draw) (h) (i)                |  | L+6.00%                     |  | 8.00                                                                                          | %   |           | 12/6/2019                                                                                                                                     |           | 1/2/2024   |  |           | 121,717     |  |                                                                                                |           | —          |                                                                                                                                         |  |           | —                                                                                                                                                                                                                                                                                                                                        | 
|Light
    Wave Dental Management, LLC (Delayed Draw) (h) (i)                |  | L+6.00%                     |  | 8.00                                                                                          | %   |           | 12/6/2019                                                                                                                                     |           | 1/2/2024   |  |           | 1,300,452   |  |                                                                                                |           | —          |                                                                                                                                         |  |           | —                                                                                                                                                                                                                                                                                                                                        | 
|Light
    Wave Dental Management, LLC (Revolver) (h)                        |  | L+6.00%                     |  | 8.00                                                                                          | %   |           | 8/1/2019                                                                                                                                      |           | 1/2/2024   |  |           | 128,123     |  |                                                                                                |           | —          |                                                                                                                                         |  |           | —                                                                                                                                                                                                                                                                                                                                        | 
|                                                                            |  |                             |  |                                                                                               |     |           |                                                                                                                                               |           |            |  |           | 4,482,665   |  |                                                                                                |           | 2,279,997  |                                                                                                                                         |  |           | 2,307,961                                                                                                                                                                                                                                                                                                                                | 
|Telecommunications                                                          |  |                             |  |                                                                                               |     |           |                                                                                                                                               |           |            |  |           |             |  |                                                                                                |           |            |                                                                                                                                         |  |           |                                                                                                                                                                                                                                                                                                                                          | 
|DataOnline
    Corp. (g)                                                    |  | L+5.50%                     |  | 7.40                                                                                          | %   |           | 11/13/2019                                                                                                                                    |           | 11/13/2025 |  |           | 6,500,000   |  |                                                                                                |           | 6,359,256  |                                                                                                                                         |  |           | 6,501,950                                                                                                                                                                                                                                                                                                                                | 
|DataOnline
    Corp. (Revolver) (h)                                         |  | L+5.50%                     |  | 7.40                                                                                          | %   |           | 11/13/2019                                                                                                                                    |           | 11/13/2025 |  |           | 844,156     |  |                                                                                                |           | —          |                                                                                                                                         |  |           | —                                                                                                                                                                                                                                                                                                                                        | 
|                                                                            |  |                             |  |                                                                                               |     |           |                                                                                                                                               |           |            |  |           | 7,344,156   |  |                                                                                                |           | 6,359,256  |                                                                                                                                         |  |           | 6,501,950                                                                                                                                                                                                                                                                                                                                | 
|Total Senior Secured
    Loans                                              |  |                             |  |                                                                                               |     |           |                                                                                                                                               |           |            |  |           | 114,439,539 |  |                                                                                                |           | 98,478,437 |                                                                                                                                         |  |           | 99,334,463                                                                                                                                                                                                                                                                                                                               | 
|                                                                            |  |                             |  |                                                                                               |     |           |                                                                                                                                               |           |            |  |           |             |  |                                                                                                |           |            |                                                                                                                                         |  |           |                                                                                                                                                                                                                                                                                                                                          | 
|Unitranche
    Secured Loans (m)                                            |  |                             |  |                                                                                               |     |           |                                                                                                                                               |           |            |  |           |             |  |                                                                                                |           |            |                                                                                                                                         |  |           |                                                                                                                                                                                                                                                                                                                                          | 
|Services: Consumer                                                          |  |                             |  |                                                                                               |     |           |                                                                                                                                               |           |            |  |           |             |  |                                                                                                |           |            |                                                                                                                                         |  |           |                                                                                                                                                                                                                                                                                                                                          | 
|QuoteLab,
    LLC (g)                                                       |  | L+4.60%                     |  | 6.40                                                                                          | %   |           | 2/26/2019                                                                                                                                     |           | 2/26/2025  |  |           | 1,000,000   |  |                                                                                                |           | 984,271    |                                                                                                                                         |  |           | 1,000,500                                                                                                                                                                                                                                                                                                                                | 
|                                                                            |  |                             |  |                                                                                               |     |           |                                                                                                                                               |           |            |  |           | 1,000,000   |  |                                                                                                |           | 984,271    |                                                                                                                                         |  |           | 1,000,500                                                                                                                                                                                                                                                                                                                                | 
|Total Unitranche
    Secured Loans                                          |  |                             |  |                                                                                               |     |           |                                                                                                                                               |           |            |  |           | 1,000,000   |  |                                                                                                |           | 984,271    |                                                                                                                                         |  |           | 1,000,500                                                                                                                                                                                                                                                                                                                                | 
|                                                                            |  |                             |  |                                                                                               |     |           |                                                                                                                                               |           |            |  |           |             |  |                                                                                                |           |            |                                                                                                                                         |  |           |                                                                                                                                                                                                                                                                                                                                          | 
|Equity
    Securities (n) (o)                                               |  |                             |  |                                                                                               |     |           |                                                                                                                                               |           |            |  |           |             |  |                                                                                                |           |            |                                                                                                                                         |  |           |                                                                                                                                                                                                                                                                                                                                          | 
|Banking,
    Finance, Insurance & Real Estate                               |  |                             |  |                                                                                               |     |           |                                                                                                                                               |           |            |  |           |             |  |                                                                                                |           |            |                                                                                                                                         |  |           |                                                                                                                                                                                                                                                                                                                                          | 
|InsideRE
    Holdings, LLC and InsideRE, LLC (257,143 class A common units) |  | —                           |  | —                                                                                             | (p) |           | 9/9/2019                                                                                                                                      |           | —          |  |           | —           |  |                                                                                                |           | 257,143    |                                                                                                                                         |  |           | 261,000                                                                                                                                                                                                                                                                                                                                  | 
|                                                                            |  |                             |  |                                                                                               |     |           |                                                                                                                                               |           |            |  |           |             |  |                                                                                                |           | 257,143    |                                                                                                                                         |  |           | 261,000                                                                                                                                                                                                                                                                                                                                  | 
|Beverage,
    Food & Tobacco                                                |  |                             |  |                                                                                               |     |           |                                                                                                                                               |           |            |  |           |             |  |                                                                                                |           |            |                                                                                                                                         |  |           |                                                                                                                                                                                                                                                                                                                                          | 
|Huff
    Hispanic Food Holdings, LLC (171,429 class A interests)            |  | —                           |  | —                                                                                             | (p) |           | 10/18/2019                                                                                                                                    |           | —          |  |           | —           |  |                                                                                                |           | 171,429    |                                                                                                                                         |  |           | 168,858                                                                                                                                                                                                                                                                                                                                  | 
|                                                                            |  |                             |  |                                                                                               |     |           |                                                                                                                                               |           |            |  |           |             |  |                                                                                                |           | 171,429    |                                                                                                                                         |  |           | 168,858                                                                                                                                                                                                                                                                                                                                  | 
|High
    Tech Industries                                                    |  |                             |  |                                                                                               |     |           |                                                                                                                                               |           |            |  |           |             |  |                                                                                                |           |            |                                                                                                                                         |  |           |                                                                                                                                                                                                                                                                                                                                          | 
|Recorded
    Future, Inc. (40,040 class A units) (q)                        |  | —                           |  | —                                                                                             | (p) |           | 7/3/2019                                                                                                                                      |           | —          |  |           | —           |  |                                                                                                |           | 40,040     |                                                                                                                                         |  |           | 42,162                                                                                                                                                                                                                                                                                                                                   | 
|                                                                            |  |                             |  |                                                                                               |     |           |                                                                                                                                               |           |            |  |           |             |  |                                                                                                |           | 40,040     |                                                                                                                                         |  |           | 42,162                                                                                                                                                                                                                                                                                                                                   | 
|Total Equity Securities                                                     |  |                             |  |                                                                                               |     |           |                                                                                                                                               |           |            |  |           |             |  |                                                                                                |           | 468,612    |                                                                                                                                         |  |           | 472,020                                                                                                                                                                                                                                                                                                                                  | 
|                                                                            |  |                             |  |                                                                                               |     |           |                                                                                                                                               |           |            |  |           |             |  |                                                                                                |           |            |                                                                                                                                         |  |           |                                                                                                                                                                                                                                                                                                                                          | 
|TOTAL INVESTMENTS                                                           |  |                             |  |                                                                                               |     |           |                                                                                                                                               |           |            |  |           |             |  |                                                                                                | $         | 99,931,320 |                                                                                                                                         |  | $         | 100,806,983                                                                                                                                                                                                                                                                                                                              | 







F-8









MONROE
CAPITAL INCOME PLUS CORPORATION

CONSOLIDATED
SCHEDULE OF INVESTMENTS  – (continued)

December 31, 2019












(a) All of the Company's investments are issued by eligible portfolio companies, as defined in the Investment Company Act of 1940 (the “1940 Act”), unless otherwise noted. All of the Company's investments are issued by U.S. portfolio companies unless otherwise noted.

(b) All investments are non-controlled/non-affiliated investments as defined by the 1940 Act. The provisions of the 1940 Act classify investments based on the level of control that we maintain in a particular portfolio company.

(c) The majority of the investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate (“LIBOR” or “L”) which resets daily, monthly, quarterly, or semiannually. For each such investment, the Company has provided the spread over LIBOR and the current contractual interest rate in effect at December 31, 2019. Certain investments are subject to a LIBOR interest rate floor, or rate cap.

(d) Except as otherwise noted, all of the Company’s portfolio company investments, which as of December 31, 2019 represented 146.6% of the Company’s net assets or 95.7% of the Company’s total assets, are subject to legal restrictions on sales.

(e) Because there
is no readily available market value for these investments, the fair value of these investments is determined in good faith
using significant unobservable inputs by the Company's board of directors as required by the 1940 Act. (See Note 4 in the
accompanying notes to the consolidated financial statements.)

(f) Percentages are based on net assets of $68,745,321 as of December 31, 2019.

(g) This security
was held in MC Income Plus Financing SPV LLC (the “SPV”) as collateral for the secured revolving credit facility
(the “Credit Facility”) with KeyBank National Association. (See Note 6 in the accompanying notes to the
consolidated financial statements).

(h) All or a portion of this commitment was unfunded at December 31, 2019. As such, interest is earned only on the funded portion of this commitment.

(i) This delayed draw loan requires that certain financial covenants be met by the portfolio company prior to any fundings.

(j) This investment is treated as a non-qualifying investment under Section 55(a) of the 1940 Act. Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company’s total assets. As of December 31, 2019, non-qualifying assets totaled 7.7% of the Company’s total assets.

(k) This is an international company.

(l) Investment position or portion thereof unsettled as of December 31, 2019.

(m) The Company structures its unitranche secured loans as senior secured loans. The Company obtains security interests in the assets of these portfolio companies that serve as collateral in support of the repayment of these loans. This collateral may take the form of first-priority liens on the assets of a portfolio company. Generally, the Company syndicates a “first out” portion of the loan to an investor and retains a “last out” portion of the loan, in which case the “first out” portion of the loan will generally receive priority with respect to payments of principal, interest and any other amounts due thereunder. Unitranche structures combine characteristics of traditional first lien senior secured as well as second lien and subordinated loans and the Company’s unitranche secured loans will expose the Company to the risks associated with second lien and subordinated loans and may limit the Company’s recourse or ability to recover collateral upon a portfolio company’s bankruptcy. Unitranche secured loans typically provide for moderate loan amortization in the initial years of the facility, with the majority of the amortization deferred until loan maturity. Unitranche secured loans generally allow the borrower to make a large lump sum payment of principal at the end of the loan term, and there is a risk of loss if the borrower is unable to pay the lump sum or refinance the amount owed at maturity. In many cases the Company, together with its affiliates, are the sole or majority lender of these unitranche secured loans, which can afford the Company additional influence with a borrower in terms of monitoring and, if necessary, remediation in the event of underperformance.



(n) Represents less than 5% ownership of the portfolio company's voting securities.

(o) Ownership of certain equity investments may occur through a holding company or partnership.

(p) Represents a non-income producing security.

(q) As of December 31, 2019, the Company was party to a subscription agreement with a commitment to fund an additional equity investment of $8,008.

n/a - not applicable















See
Notes to Consolidated Financial Statements.



F-9











MONROE CAPITAL INCOME PLUS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 1. Organization and Principal Business



Monroe Capital Income Plus Corporation
(together with its subsidiaries, the “Company”) is a Maryland corporation formed on May 30, 2018 to act as an externally
managed, closed-end, non-diversified investment company. The Company is conducting a best efforts, continuous private offering
(the “Private Offering”) of its common stock to accredited investors in reliance on an exemption from the registration
requirements of the Securities Act of 1933, as amended (the “Securities Act”). At each closing, an investor will purchase
shares of the Company’s common stock pursuant to a subscription agreement entered into with the Company. The Company had
no substantive operating activities prior to January 15, 2019, the date of the initial closing of its Private Offering. The Company
commenced its loan origination and investment activities contemporaneously with the initial closing of the Private Offering. The
Company is a specialty finance company organized to maximize the total return to the Company’s stockholders in the form of
current income and capital appreciation through a variety of investments. On January 14, 2019, the Company elected to be regulated
as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”).
In addition, for U.S. federal income tax purposes, the Company has elected to be treated as a regulated investment company (“RIC”)
under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with our taxable year
ended December 31, 2019.



On June 27, 2018, the Company issued and
sold 100 shares of common stock, par value $0.001, at an aggregate purchase price of $1,000 ($10.00 per share) to Monroe Capital
Management Advisors, LLC (“MC Management”), an affiliate of Monroe Capital BDC Advisors, LLC (“MC Advisors”),
the Company’s investment adviser. The sale of the Company’s common stock was approved by the unanimous consent of the
Company’s Board of Directors (the “Board”) at the time. On January 15, 2019, the Company completed the initial
closing of its Private Offering and commenced principal operations. See Note 9 for additional information on the Company’s
share activity.



On March 12, 2019, the Company created
a wholly owned subsidiary, MC Income Plus Financing SPV LLC (the “SPV”), for purposes of entering into a senior secured
revolving credit facility (the “Credit Facility”) with KeyBank National Association. See Note 6 for additional information.



Note 2. Summary of Significant Accounting Policies



Basis of Presentation



The accompanying consolidated financial
statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States
of America (“GAAP”). The accompanying consolidated financial statements of the Company and related financial information
have been prepared pursuant to the requirements for reporting on Form 10-K and Articles 6 and 10 of Regulation S-X. The Company
has determined it meets the definition of an investment company and follows the accounting and reporting guidance in the Financial
Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946 — Financial
Services — Investment Companies (“ASC Topic 946”). Certain prior period amounts have been reclassified
to conform to the current period presentations.



As an emerging growth company, the Company
intends to take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying
with new or revised accounting standards.



Use of Estimates



The preparation of the consolidated financial
statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements
and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.



Consolidation



As permitted under ASC Topic 946, the Company
will generally not consolidate its investment in a portfolio company other than an investment company subsidiary or a controlled
operating company whose business consists of providing services to the Company. Accordingly, the Company consolidated the results
of its wholly-owned subsidiaries, the SPV and MCIP Holding Company I, LLC, in its consolidated financial statements. All intercompany
balances and transactions have been eliminated.



Fair Value of Financial Instruments



The Company applies fair value to substantially
all of its financial instruments in accordance with ASC Topic 820 — Fair Value Measurements and Disclosures(“ASC Topic 820”). ASC Topic 820 defines fair value, establishes a framework used to measure fair value, and requires
disclosures for fair value measurements, including the categorization of financial instruments into a three-level hierarchy based
on the transparency of valuation inputs. See Note 4 for further discussion regarding the fair value measurements and hierarchy.



F-10









ASC Topic 820 requires disclosure of the
fair value of financial instruments for which it is practical to estimate such value. The Company believes that the carrying amounts
of its other financial instruments such as cash and cash equivalents, receivables and payables approximate the fair value of such
items due to the short maturity of such instruments.



Revenue Recognition



The Company’s revenue recognition
policies are as follows:



Investments
and related investment income:Interest and dividend income is recorded on the accrual basis to the extent that the
Company expects to collect such amounts. Interest income is accrued based upon the outstanding principal amount and contractual
terms of debt and preferred equity investments. Interest is accrued on a daily basis. The Company records fees on loans based on
the determination of whether the fee is considered a yield enhancement or payment for a service. If the fee is considered a yield
enhancement associated with a funding of cash on a loan, the fee is generally deferred and recognized into interest income using
the effective interest method if captured in the cost basis or using the straight-line method if the loan is unfunded and therefore
there is no cost basis. If the fee is not considered a yield enhancement because a service was provided, and the fee is payment
for that service, the fee is deemed earned and recognized as fee income in the period the service has been completed.



Dividend income on preferred equity securities
is recorded as dividend income on an accrual basis to the extent that such amounts are payable by the portfolio company and are
expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies.
Each distribution received from limited liability company (“LLC”) and limited partnership (“LP”) investments
is evaluated to determine if the distribution should be recorded as dividend income or a return of capital. Generally, the Company
will not record distributions from equity investments in LLCs and LPs as dividend income unless there are sufficient accumulated
tax-basis earnings and profits in the LLC or LP prior to the distribution. Distributions that are classified as a return of capital
are recorded as a reduction in the cost basis of the investment. The Company did not record dividend income during the year ended
December 31, 2019.



The Company has certain investments in
its portfolio that contain a payment-in-kind (“PIK”) provision, which represents contractual interest or dividends
that are added to the principal balance and recorded as income. The Company stops accruing PIK interest or PIK dividends when it
is determined that PIK interest or PIK dividends are no longer collectible. To maintain RIC tax treatment, and to avoid corporate
tax, substantially all of this income must be paid out to stockholders in the form of distributions, even though the Company has
not yet collected the cash.



Loan origination fees, original issue
discount and market discount or premiums are capitalized, and the Company then amortizes such amounts using the effective interest
method as interest income over the life of the investment. Unamortized discounts and loan origination fees totaled $1,661,308 and
zero as of December 31, 2019 and December 31, 2018, respectively. Upfront loan origination and closing fees received for the year
ended December 31, 2019 totaled $1,973,975. Upon the prepayment of a loan or debt security, any unamortized premium or discount
or loan origination fees are recorded as interest income.



The components of the Company’s investment
income were as follows:





|                                                   |  | December
    31, 2019 |          
|-------------------------------------------------- |  | --------------------- | ---------
|Interest income                                    |  | $                     | 3,631,711
|PIK interest income                                |  |                       | 48,291   
|Fee income                                         |  |                       | 64,322   
|Prepayment gain (loss)                             |  |                       | 45,551   
|Accretion of discounts and amortization of premium |  |                       | 97,885   
|Total investment income                            |  | $                     | 3,887,760



Investment transactions are recorded
on a trade-date basis. Realized gains or losses on portfolio investments are calculated based upon the difference between the
net proceeds from the disposition and the amortized cost basis of the investment, without regard to unrealized gains or
losses previously recognized. Realized gains and losses are recorded within net realized gain (loss) on investments on the
consolidated statements of operations. Changes in the fair value of investments from the prior period, as determined by the
Company’s Board through the application of the Company’s valuation policy, are included within net change in
unrealized gain (loss) on investments on the consolidated statements of operations.



Non-accrual:
Loans or preferred equity securities are placed on non-accrual status when principal, interest or dividend payments become materially
past due, or when there is reasonable doubt that principal, interest or dividends will be collected. Additionally, any original
issue discount and market discount are no longer accreted to interest income as of the date the loan is placed on non-accrual status.
Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s
judgment. Non-accrual loans are restored to accrual status when past due principal, interest, or dividends are paid, and, in management’s
judgment are likely to remain current. The Company had no investments on non-accrual status at December 31, 2019.



F-11









Distributions



Distributions to common stockholders are
recorded on the record date. The amount, if any, to be distributed is determined by the Board each quarter and is generally based
upon the earnings estimated by management. Net realized capital gains, if any, are generally distributed at least annually.



The determination of the tax attributes
for the Company’s distributions is made annually, based upon its taxable income for the full year and distributions paid
for the full year. Ordinary dividend distributions from a RIC do not qualify for the preferential tax rate on qualified dividend
income from domestic corporations and qualified foreign corporations, except to the extent that the RIC received the income in
the form of qualifying dividends from domestic corporations and qualified foreign corporations. The tax attributes for distributions
will generally include both ordinary income and capital gains, but may also include qualified dividends or return of capital.



The Company has adopted a dividend reinvestment
plan (“DRIP”) that provides for the reinvestment of dividends and other distributions on behalf of its stockholders
that elect to participate in such plan. When the Company declares a dividend or distribution, the Company’s stockholders’
cash distributions will only be reinvested in additional shares of the Company’s common stock if a stockholder specifically
 “opts in” to the DRIP at least ten (10) days prior to the record date fixed by the Board. Shares issued under the DRIP
will be issued at a price per share equal to the most recent net asset value (“NAV”) per share as determined by the
Board. See Note 8 for additional information on the Company’s distributions.



Earnings per Share



In accordance with the provisions of ASC
Topic 260 — Earnings per Share (“ASC Topic 260”), basic earnings per share is computed by dividing earnings
available to common stockholders by the weighted average number of shares outstanding during the period. The weighted average shares
outstanding utilized in the calculation of earnings per share take into account share issues on the issuance date and the Company’s
repurchases of its common stock on the repurchase date. See Note 9 for additional information on the Company’s share activity.
For the periods presented in these consolidated financial statements, there were no potentially dilutive common shares issued.



Segments



In accordance with ASC Topic 280 — Segment
Reporting, the Company has determined that it has a single reporting segment and operating unit structure.



Cash



The Company deposits its cash in a financial
institution and, at times, such balances may be in excess of the Federal Deposit Insurance Corporation insurance limits.



Cash Equivalents



Cash equivalents are highly liquid investments
with a current maturity of three months or less at the date of acquisition, which may include temporary investments in U.S. Treasury
Bills (of varying maturities) or money market funds. At the end of each fiscal quarter, the Company may take proactive steps to
preserve investment flexibility for the next quarter by investing in cash equivalents, which is dependent upon the composition
of its total assets at quarter end. The Company may accomplish this in several ways, including purchasing U.S. Treasury Bills and
closing out its positions on a net cash basis after quarter-end, temporarily drawing down on the Credit Facility or other balance
sheet transactions as are deemed appropriate for this purpose. There were no cash equivalents outstanding on the consolidated statements
of assets and liabilities as of December 31, 2019 and 2018.



Restricted Cash



Restricted cash includes amounts held within
the SPV. Cash held within the SPV is generally restricted to the originations of new investments, the repayment of outstanding
debt under the Credit Facility and the related payment of interest expense and the quarterly release of earnings to the Company.



Unamortized Deferred Financing Costs



Deferred financing costs represent fees
and other direct incremental costs incurred in connection with the Company’s borrowings. As of December 31, 2019 and December
31, 2018, the Company had unamortized deferred financing costs of $83,468 and zero, respectively, presented as a direct reduction
of the carrying amount of debt on the consolidated statements of assets and liabilities. These amounts are amortized and included in interest
and other debt financing expenses on the consolidated statements of operations over the estimated average life of the borrowings.
Amortization of deferred financing costs for the year ended December 31, 2019 was $318,921.



Organization and Offering Costs



Organization costs include, among other
things, the cost of organizing as a Maryland corporation, including the cost of legal services, directors’ fees and other
fees, including travel-related expenses, pertaining to the Company’s organization. Offering costs include, among other things,
legal fees and other costs pertaining to the preparation of the Company’s private placement memorandum and other offering
documents.



F-12









As of December 31, 2019, MC Management
has incurred organizational and offering costs of approximately $418,925 on behalf of the Company. MC Management has agreed to
absorb and pay, on the Company’s behalf, up to $425,000 for organization and offering costs. If the expenses incurred are
greater than $425,000, the Company will reimburse MC Management for organization and offering costs incurred on behalf of the Company
in excess of $425,000. As these costs have not exceeded the amount to be reimbursed by MC Management as of December 31, 2019, no
such costs have been recorded by the Company.



Income Taxes



On January 14, 2019, the Company elected
to be regulated as a BDC under the 1940 Act. The Company also elected to be treated as a RIC under Subchapter M of the Code, for
the taxable year ending December 31, 2019 and intends to qualify annually as a RIC. As long as the Company maintains its status
as a RIC, it generally will not pay corporate-level U.S. federal income taxes on any ordinary income or capital gains that it distributes
at least annually to its stockholders. Rather, any tax liability related to income earned by the Company represents obligations
of the Company’s investors and will not be reflected in the consolidated financial statements of the Company.



To qualify as a RIC under Subchapter M
of the Code, the Company must, among other things, meet certain source-of-income and asset diversification requirements. In addition,
to qualify for RIC tax treatment, the Company must distribute to its stockholders, for each taxable year, at least 90% of its “investment
company taxable income” for that year, which is generally its ordinary income plus the excess of its realized net short-term
capital gains over its realized net long-term capital losses. In order for the Company not to be subject to U.S. federal excise
taxes, it must distribute annually an amount at least equal to the sum of (i) 98% of its net ordinary income (taking into
account certain deferrals and elections) for the calendar year, (ii) 98.2% of its capital gains in excess of capital losses
for the calendar year and (iii) any net ordinary income and capital gains in excess of capital losses for preceding years
that were not distributed during such years. The Company, at its discretion, may carry forward taxable income in excess of calendar
year dividends and pay a 4% nondeductible U.S. federal excise tax on this income. The Company recorded an accrual for excise taxes
of $20,000 for the year ended December 31, 2019.



One of the Company’s consolidated
subsidiaries is subject to U.S. federal and state corporate-level income taxes. For the year ended December 31, 2019, the Company
recorded a net tax expense on the consolidated statements of operations of zero for this subsidiary.



The Company accounts for income taxes in
conformity with ASC Topic 740 — Income Taxes (“ASC Topic 740”). ASC Topic 740 provides guidelines for
how uncertain tax positions should be recognized, measured, presented and disclosed in the consolidated financial statements. ASC
Topic 740 requires the evaluation of tax positions taken in the course of preparing the Company’s tax returns to determine
whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax benefits
of positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax expense in the current year. It is
the Company’s policy to recognize accrued interest and penalties related to uncertain tax benefits in income tax expense.
There were no material uncertain income tax positions through December 31, 2019. The 2018 through 2019 tax years remain subject
to examination by U.S. federal and state tax authorities.



Subsequent Events



The Company has evaluated the need for
disclosures and/or adjustments resulting from subsequent events through the date the consolidated financial statements were issued.
There have been no subsequent events that occurred during such period that would require disclosure in this Form 10-K or would
be required to be recognized in the consolidated financial statements as of and for the year ended December 31, 2019, except as
disclosed in Note 12.



Recent Accounting Pronouncements



In August 2018, the FASB issued ASU
2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value
Measurement(“ASU 2018-13”). The primary objective of ASU 2018-13 is to improve the effectiveness of the disclosure
requirements for fair value measurements in the notes to the financial statements. ASU 2018-13 is effective for interim and annual
reporting periods beginning after December 15, 2019, although early adoption is permitted. Management is currently evaluating the
impact these changes will have on the Company’s consolidated financial statements and disclosures.



In March 2019, the Securities and
Exchange Commission (the “SEC”) adopted the final rule under SEC Release No. 33-10618, Fast Act Modernization and
Simplification of Regulation S-K, amending certain disclosure requirements. The amendments are intended to simplify certain
disclosure requirements and to provide for a consistent set of rules to govern incorporating information by reference and
hyperlinking, improve readability and navigability of disclosure documents, and discourage repetition and disclosure of
immaterial information. The Company has adopted the final rule, as applicable, and determined the effect was limited to the
modification and removal of certain disclosures.



F-13







Note 3. Investments



The following tables show the composition
of the investment portfolio, at amortized cost and fair value (with corresponding percentage of total portfolio investments):



|                         |  | December 31, 2019 |           
|------------------------ |  | ----------------- | ----------
|Amortized Cost:          |  |                   |           
|Senior secured loans     |  | $                 | 98,478,437
|Unitranche secured loans |  |                   | 984,271   
|Equity securities        |  |                   | 468,612   
|Total                    |  | $                 | 99,931,320



|                         |  | December 31, 2019 |            
|------------------------ |  | ----------------- | -----------
|Fair Value:              |  |                   |            
|Senior secured loans     |  | $                 | 99,334,463 
|Unitranche secured loans |  |                   | 1,000,500  
|Equity securities        |  |                   | 472,020    
|Total                    |  | $                 | 100,806,983





The following tables show the composition
of the investment portfolio by geographic region, at amortized cost and fair value (with corresponding percentage of total portfolio
investments). The geographic composition is determined by the location of the corporate headquarters of the portfolio company,
which may not be indicative of the primary source of the portfolio company’s business:



|                |  | December 31, 2019 |           
|--------------- |  | ----------------- | ----------
|Amortized Cost: |  |                   |           
|International   |  | $                 | 1,966,215 
|Midwest         |  |                   | 11,943,806
|Northeast       |  |                   | 29,400,993
|Southeast       |  |                   | 16,120,847
|Southwest       |  |                   | 10,786,748
|West            |  |                   | 29,712,711
|Total           |  | $                 | 99,931,320



|              |  | December 31, 2019 |            
|------------- |  | ----------------- | -----------
|Fair Value:   |  |                   |            
|International |  | $                 | 1,954,364  
|Midwest       |  |                   | 12,187,550 
|Northeast     |  |                   | 29,762,268 
|Southeast     |  |                   | 15,944,204 
|Southwest     |  |                   | 10,947,395 
|West          |  |                   | 30,011,202 
|Total         |  | $                 | 100,806,983



The following tables show the composition
of the investment portfolio by industry, at amortized cost and fair value (with corresponding percentage of total portfolio investments):



|                                          |  | December 31, 2019 |           
|----------------------------------------- |  | ----------------- | ----------
|Amortized Cost:                           |  |                   |           
|Aerospace & Defense                       |  | $                 | 4,739,174 
|Automotive                                |  |                   | 3,799,442 
|Banking, Finance, Insurance & Real Estate |  |                   | 19,333,212
|Beverage, Food & Tobacco                  |  |                   | 6,510,733 
|Consumer Goods: Non-Durable               |  |                   | 1,226,047 
|Containers, Packaging & Glass             |  |                   | 1,975,482 
|Energy: Oil & Gas                         |  |                   | 3,966,614 
|Healthcare & Pharmaceuticals              |  |                   | 15,632,153
|High Tech Industries                      |  |                   | 12,913,684
|Media: Advertising, Printing & Publishing |  |                   | 7,078,136 
|Media: Broadcasting & Subscription        |  |                   | 1,109,919 
|Media: Diversified & Production           |  |                   | 2,964,470 
|Services: Business                        |  |                   | 9,058,730 
|Services: Consumer                        |  |                   | 3,264,268 
|Telecommunications                        |  |                   | 6,359,256 
|Total                                     |  | $                 | 99,931,320



F-14









|                                          |  | December 31, 2019 |            
|----------------------------------------- |  | ----------------- | -----------
|Fair Value:                               |  |                   |            
|Aerospace & Defense                       |  | $                 | 4,745,386  
|Automotive                                |  |                   | 3,791,200  
|Banking, Finance, Insurance & Real Estate |  |                   | 19,588,942 
|Beverage, Food & Tobacco                  |  |                   | 6,629,604  
|Consumer Goods: Non-Durable               |  |                   | 1,237,500  
|Containers, Packaging & Glass             |  |                   | 1,985,000  
|Energy: Oil & Gas                         |  |                   | 4,051,335  
|Healthcare & Pharmaceuticals              |  |                   | 15,453,542 
|High Tech Industries                      |  |                   | 13,179,390 
|Media: Advertising, Printing & Publishing |  |                   | 7,020,939  
|Media: Broadcasting & Subscription        |  |                   | 1,118,311  
|Media: Diversified & Production           |  |                   | 2,995,690  
|Services: Business                        |  |                   | 9,199,733  
|Services: Consumer                        |  |                   | 3,308,461  
|Telecommunications                        |  |                   | 6,501,950  
|Total                                     |  | $                 | 100,806,983



There were no investments outstanding as
of December 31, 2018.



Note 4. Fair Value Measurements



Investments



The Company values all investments in accordance
with ASC Topic 820. ASC Topic 820 requires enhanced disclosures about assets and liabilities that are measured and reported at
fair value. As defined in ASC Topic 820, fair value is 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. Where available, fair value is based on
observable market prices or parameters, or derived from such prices or parameters. Where observable prices or inputs are not available,
valuation models are applied. These valuation models involve some level of management estimation and judgment, the degree of which
is dependent on the price transparency for the assets or liabilities or market and the assets’ or liabilities’ complexity.



ASC Topic 820 establishes a hierarchal
disclosure framework which prioritizes and ranks the level of market price observability of inputs used in measuring investments
at fair value. Market price observability is affected by a number of factors, including the type of investment and the characteristics
specific to the investment. Investments with readily available active quoted prices or for which fair value can be measured from
actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in
measuring fair value.



Based on the observability of the inputs
used in the valuation techniques, the Company is required to provide disclosures on fair value measurements according to the fair
value hierarchy. The fair value hierarchy ranks the observability of the inputs used to determine fair values. Investments carried
at fair value are classified and disclosed in one of the following three categories:



| | · | Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date.                                                                                                                                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                      
| | · | Level 2 — Valuations based on inputs other than quoted prices in active markets, including quoted prices for similar assets or liabilities, which are either directly or indirectly observable.                                                                                                                                                                                      
| |   |                                                                                                                                                                                                                                                                                                                                                                                      
| | · | Level 3 — Valuations based on inputs that are unobservable and significant to the overall fair value measurement. This includes situations where there is little, if any, market activity for the assets or liabilities. The inputs into the determination of fair value are based upon the best information available and may require significant management judgment or estimation.



In certain cases, the inputs used to measure
fair value may fall into different levels of the fair value hierarchy. In such cases, an asset’s or liability’s categorization
within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s
assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers
factors specific to the asset or liability. All investments as of December 31, 2019 were categorized as Level 3 investments.



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



| | · | the quarterly valuation process begins with each portfolio company or investment being initially evaluated and rated by the investment professionals of MC Advisors responsible for the credit monitoring of the portfolio investment;                                                                                                                                                  
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                         
| | · | the Board engages one or more independent valuation firm(s) to conduct independent appraisals of a selection of investments for which market quotations are not readily available. The Company will consult with independent valuation firm(s) relative to each portfolio company at least once in every calendar year, but the independent appraisals are generally received quarterly;





F-15









| |   |                                                                                                                                                                                                                                                                                      
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | · | to the extent an independent valuation firm is not engaged to conduct an investment appraisal on an investment for which market quotations are not readily available, the investment will be valued by the MC Advisors investment professional responsible for the credit monitoring;
| |   |                                                                                                                                                                                                                                                                                      
| | · | preliminary valuation conclusions are then documented and discussed with the investment committee of the Company;                                                                                                                                                                    
| |   |                                                                                                                                                                                                                                                                                      
| | · | the audit committee of the Board reviews the preliminary valuations of MC Advisors and of the independent valuation firm(s) and MC Advisors adjusts or further supplements the valuation recommendations to reflect any comments provided by the audit committee; and                
| |   |                                                                                                                                                                                                                                                                                      
| | · | the Board discusses these valuations and determines the fair value of each investment in the portfolio in good faith, based on the input of MC Advisors, the independent valuation firm(s) and the audit committee.                                                                  



The accompanying consolidated
schedule of investments held by the Company consists primarily of private debt instruments (“Level 3 debt”). The
Company generally uses the income approach to determine fair value for Level 3 debt where market quotations are not readily
available, as long as it is appropriate. If there is deterioration in credit quality or a debt investment is in workout
status, the Company may consider other factors in determining the fair value, including the value attributable to the debt
investment from the enterprise value of the portfolio company or the proceeds that would be received in a liquidation
analysis. This liquidation analysis may include probability weighting of alternative outcomes. The Company generally
considers its Level 3 debt to be performing if the borrower is not in default, the borrower is remitting payments in a timely
manner; the loan is in covenant compliance or is otherwise not deemed to be impaired. In determining the fair value of the
performing Level 3 debt, the Company considers fluctuations in current interest rates, the trends in yields of debt
instruments with similar credit ratings, financial condition of the borrower, economic conditions and other relevant factors,
both qualitative and quantitative. In the event that a Level 3 debt instrument is not performing, as defined above, the
Company will evaluate the value of the collateral utilizing the same framework described above for a performing loan to
determine the value of the Level 3 debt instrument.



Under the income approach, discounted
cash flow models are utilized to determine the present value of the future cash flow streams of its debt investments, based
on future interest and principal payments as set forth in the associated loan agreements. In determining fair value under the
income approach, the Company also considers the following factors: applicable market yields and leverage levels, credit
quality, prepayment penalties, the nature and realizable value of any collateral, the portfolio company’s ability to
make payments, and changes in the interest rate environment and the credit markets that generally may affect the price at
which similar investments may be made.



Under the market approach, the
enterprise value methodology is typically utilized to determine the fair value of an investment. There is no one methodology
to estimate enterprise value and, in fact, for any one portfolio company, enterprise value is generally best expressed as a
range of values, from which the Company derives a single estimate of enterprise value. In estimating the enterprise value of
a portfolio company, the Company analyzes various factors consistent with industry practice, including but not limited to
original transaction multiples, the portfolio company’s historical and projected financial results, applicable market
trading and transaction comparables, applicable market yields and leverage levels, the nature and realizable value of any
collateral, the markets in which the portfolio company does business, and comparisons of financial ratios of peer companies
that are public. Typically, the enterprise values of private companies are based on multiples of earnings before interest,
income taxes, depreciation and amortization (“EBITDA”), cash flows, net income, revenues, or in limited cases,
book value.



In addition, for certain debt investments,
the Company may base its valuation on indicative bid and ask prices provided by an independent third-party pricing service. Bid
prices reflect the highest price that the Company and others may be willing to pay. Ask prices represent the lowest price that
the Company and others may be willing to accept. The Company generally uses the midpoint of the bid/ask range as its best estimate
of fair value of such investment.



Fair Value Disclosures



The following table presents fair value
measurements of investments, by major class, as of December 31, 2019, according to the fair value hierarchy:



|                         |  | Fair Value Measurements |  
|------------------------ |  | ----------------------- | -
|                         |  | Level 1                 |  
|Investments:             |  |                         |  
|Senior secured loans     |  | $                       | —
|Unitranche secured loans |  |                         | —
|Equity securities        |  |                         | —
|Total investments        |  | $                       | —



There were no investments outstanding as
of December 31, 2018.



Senior secured and unitranche secured loans
are collateralized by tangible and intangible assets of the borrowers. These investments include loans to entities that have some
level of challenge in obtaining financing from other, more conventional institutions, such as a bank. Interest rates on these loans
are either fixed or floating and are based on current market conditions and credit ratings of the borrower. The contractual interest
rates on the loans ranged from 5.30% to 13.92% at December 31, 2019. The maturity dates on the loans outstanding at December 31,
2019 range between June 2022 and May 2026.



F-16









The following tables provide a reconciliation
of the beginning and ending balances for investments at fair value that use Level 3 inputs for the year ended December 31, 2019:







|                                                              |  | Investments          |            
|------------------------------------------------------------- |  | -------------------- | -----------
|                                                              |  | Senior secured loans |            
|Balance as of December 31, 2018                               |  | $                    | —          
|Net realized gain (loss) on investments                       |  |                      | 5,169      
|Net change in unrealized gain (loss) on investments           |  |                      | 872,870    
|Purchases of investments and other adjustments to cost (1)    |  |                      | 104,092,906
|Proceeds from principal payments and sales of investments (2) |  |                      | (3,653,903 
|Reclassifications (3)                                         |  |                      | (1,982,579 
|Balance as of December 31, 2019                               |  | $                    | 99,334,463 














|(1) | Includes purchases of new investments, effects of refinancing and restructurings, premium and discount accretion and amortization and PIK interest.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Represents net proceeds from investments sold and principal paydowns received.                                                                     



|(3) | Represents
    non-cash reclassification of investment type due to the  restructuring of the investment in portfolio companies.
|--- | -------------------------------------------------------------------------------------------------------------------------------



The total net change in unrealized
gain (loss) on investments included on the consolidated statements of operations for the year ended December 31, 2019,
attributable to Level 3 investments still held at December 31, 2019, was $875,663. Reclassifications impacting Level 3 of the
fair value hierarchy are reported as transfers in or out of Level 3 as of the beginning of the period which the
reclassifications occur. There were no transfers among Levels 1, 2 and 3 during the year ended December 31, 2019.



Significant Unobservable Inputs



ASC Topic 820 requires disclosure of quantitative
information about the significant unobservable inputs used in the valuation of assets and liabilities classified as Level 3 within
the fair value hierarchy. Disclosure of this information is not required in circumstances where a valuation (unadjusted) is obtained
from a third-party pricing service and the information regarding the unobservable inputs is not reasonably available to the Company
and as such, the disclosures provided below exclude those investments valued in that manner. The table below is not intended
to be all-inclusive, but rather to provide information on significant unobservable inputs and valuation techniques used by the
Company.



The valuation techniques and significant
unobservable inputs used in recurring Level 3 fair value measurements of assets and liabilities as of December 31, 2019 were as
follows:



|                         |  |            |            |  |                     |                      | Unobservable |                   | Weighted
                                                                                Average |  |      | Range   | 
|------------------------ |  | ---------- | ---------- |  | ------------------- | -------------------- | ------------ | ----------------- | ------------------------------------------------------------------------------------------------ |  | ---- | ------- | 
|                         |  | Fair Value |            |  | Valuation Technique |                      | Input        |                   | Mean                                                                                             |  |      | Minimum | 
|Assets:                  |  |            |            |  |                     |                      |              |                   |                                                                                                  |  |      |         | 
|Senior secured loans     |  | $          | 30,352,095 |  |                     | Discounted cash flow |              | Revenue multiples |                                                                                                  |  | 6.8  | x       | 
|                         |  |            |            |  |                     |                      |              | Market yields     |                                                                                                  |  | 8.9  | %       | 
|Senior secured loans     |  |            | 44,981,310 |  |                     | Discounted cash flow |              | EBITDA multiples  |                                                                                                  |  | 10.8 | x       | 
|                         |  |            |            |  |                     |                      |              | Market yields     |                                                                                                  |  | 8.0  | %       | 
|Unitranche secured loans |  |            | 1,000,500  |  |                     | Discounted cash flow |              | Revenue multiples |                                                                                                  |  | 1.4  | x       | 
|                         |  |            |            |  |                     |                      |              | Market yields     |                                                                                                  |  | 7.0  | %       | 
|Equity securities        |  |            | 429,858    |  |                     | Enterprise Value     |              | EBITDA multiples  |                                                                                                  |  | 16.3 | x       | 
|Equity securities        |  |            | 42,162     |  |                     | Enterprise Value     |              | Revenue multiples |                                                                                                  |  | 11.8 | x       | 
|Total Level 3 Assets (1) |  | $          | 76,805,925 |  |                     |                      |              |                   |                                                                                                  |  |      |         | 












| | (1) | Excludes
loans of $24,001,058 at fair value where valuation (unadjusted) is obtained from a third-party pricing service for which such
disclosure is not required.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------





The significant unobservable inputs used
in the income approach of fair value measurement of the Company’s investments is the discount rate used to discount the estimated
future cash flows expected to be received from the underlying investment, which include both future principal and interest payments.
Increases (decreases) in the discount rate would result in a decrease (increase) in the fair value estimate of the investment.
Included in the consideration and selection of discount rates are the following factors: risk of default, rating of the investment
and comparable investments, and call provisions.



The significant unobservable inputs used
in the market approach of fair value measurement of the Company’s investments are the market multiples of EBITDA or revenue
of the comparable guideline public companies. The Company selects a population of public companies for each investment with similar
operations and attributes of the portfolio company. Using these guideline public companies’ data, a range of multiples of
enterprise value to EBITDA or revenue is calculated. The Company selects percentages from the range of multiples for purposes of
determining the portfolio company’s estimated enterprise value based on said multiple and generally the latest twelve months
EBITDA or revenue of the portfolio company (or other meaningful measure). Increases (decreases) in the multiple will result in
an increase (decrease) in enterprise value, resulting in an increase (decrease) in the fair value estimate of the investment.



F-17









Other Financial Assets and Liabilities



ASC Topic 820 requires disclosure of the
fair value of financial instruments for which it is practical to estimate such value. The Company believes that the carrying amounts
of its other financial instruments such as cash and cash equivalents, receivables and payables approximate the fair value of such
items due to the short maturity of such instruments. Fair value of the Company’s Credit Facility is estimated by discounting
remaining payments using applicable market rates or market quotes for similar instruments at the measurement date, if applicable.
At December 31, 2019, the Company believes that the carrying value of its Credit Facility approximates fair value.



Note 5. Transactions with Related Parties



The Company has entered into an investment
advisory agreement with MC Advisors (the “Investment Advisory Agreement”), under which MC Advisors, subject to the
overall supervision of the Board, provides investment advisory services to the Company. The Company pays MC Advisors a fee for
its services under the Investment Advisory Agreement consisting of two components – a base management fee and an incentive
fee. The cost of both the base management fee and the incentive fee are borne by the Company’s stockholders, unless such
fees are waived by MC Advisors.



The base management fee is payable quarterly
in arrears and commenced with the initial closing of the Private Offering. Prior to any future quotation or listing of the Company’s
securities on a national securities exchange (an “Exchange Listing”) or any future quotation or listing of its securities
on any other public trading market, the base management fee is calculated at an annual rate of 1.50% of average total assets, which
includes assets financed using leverage. Following an Exchange Listing, the base management fee will be calculated at an annual
rate of 1.75% of average invested assets (calculated as total assets excluding cash). Base management fees for the year ended December
31, 2019 were $734,918, and MC Advisors elected to voluntarily waive $432,993 of base management fees.



The incentive fee consists of two parts.
The first part is calculated and payable quarterly in arrears based on the Company’s pre-incentive fee net investment income
for the preceding quarter. Pre-incentive fee net investment income means interest income, dividend income and any other income
(including any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company
receives from portfolio companies but excluding fees for providing managerial assistance) accrued during the calendar quarter,
minus operating expenses for the quarter (including the base management fee), any expenses payable under the administration agreement
between the Company and MC Management (the “Administration Agreement”) and any interest expense and dividends paid
on any outstanding preferred stock, but excluding the incentive fee. Pre-incentive fee net investment income will include, in the
case of investments with a deferred interest feature such as market discount, debt instruments with PIK interest, preferred stock
with PIK dividends and zero-coupon securities, accrued income that the Company has not yet received in cash. MC Advisors is not
under any obligation to reimburse the Company for any part of the incentive fee it receives that was based on accrued interest
that the Company never actually receives.



Pre-incentive fee net investment income
does not include any realized capital gains or losses or unrealized capital gains or losses. If any distributions from portfolio
companies are characterized as a return of capital, such returns of capital would affect the capital gains incentive fee to the
extent a gain or loss is realized. Because of the structure of the incentive fee, it is possible that the Company may pay an incentive
fee in a quarter where it incurs a loss. For example, if the Company receives pre-incentive fee net investment income in excess
of the hurdle rate (as defined below) for a quarter, the Company will pay the applicable incentive fee even if it has incurred
a loss in that quarter due to realized and unrealized capital losses.



Pre-incentive fee net investment income,
expressed as a rate of return on the value of the Company’s net assets (defined as total assets less indebtedness and before
taking into account any incentive fees payable during the period) at the end of the immediately preceding calendar quarter, is
compared to a fixed “hurdle rate” of 1.50% per quarter (6% annually).



The Company pays MC Advisors an incentive
fee with respect to its pre-incentive fee net investment income in each calendar quarter as follows:



| | · | no incentive fee in any calendar quarter in which the pre-incentive fee net investment income does not exceed the hurdle rate of 1.50% (6% annually);
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------



| | · | 100% of the Company’s pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the hurdle rate but is less than 1.76% in any calendar quarter prior to an Exchange Listing or 1.88% in any calendar quarter following an Exchange Listing. The Company refers to this portion of the Company’s pre-incentive fee net investment income as the “catch-up” provision. Prior to an Exchange Listing, the catch-up is meant to provide MC Advisors with 15% of the pre-incentive fee net investment income as if a hurdle rate did not apply if this net investment income exceeds 1.76% in any calendar quarter, and following an Exchange Listing, the catch-up is meant to provide MC Advisors with 20% of the pre-incentive fee net investment income as if a hurdle rate did not apply if this net investment income exceeds 1.88% in any calendar quarter; and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | prior to an Exchange Listing, 15% of the amount of the Company’s pre-incentive fee net investment income, if any, that exceeds 1.76% in any calendar quarter, and following an Exchange Listing, 20% of the amount of the Company’s pre-incentive fee net investment income, if any, that exceeds 1.88% in any calendar quarter.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-18









These calculations are appropriately prorated
for any period of less than three months and adjusted for any share issuances or repurchases during the current quarter.



The second part of the incentive fee is
a capital gains incentive fee that is determined and payable in arrears as of the end of each fiscal year (or upon termination
of the Investment Advisory Agreement, as of the termination date), and equals 15% of the Company’s realized capital gains
as of the end of the fiscal year. In determining the capital gains incentive fee payable to MC Advisors, the Company calculates
the cumulative aggregate realized capital gains and cumulative aggregate realized capital losses since the Company’s inception,
and the aggregate unrealized capital depreciation as of the date of the calculation, as applicable, with respect to each of the
investments in the Company’s portfolio. For this purpose, cumulative aggregate realized capital gains, if any, equals the
sum of the differences between the net sales price of each investment, when sold, and the amortized cost of such investment. Cumulative
aggregate realized capital losses equals the sum of the amounts by which the net sales price of each investment, when sold, is
less than the amortized cost of such investment since the Company’s inception. Aggregate unrealized capital depreciation
equals the sum of the difference, if negative, between the valuation of each investment as of the applicable calculation date and
the amortized cost of such investment. At the end of the applicable year, the amount of capital gains that will serve as the basis
for the calculation of the capital gains incentive fee equals the cumulative aggregate realized capital gains less cumulative aggregate
realized capital losses, less aggregate unrealized capital depreciation, with respect to the Company’s portfolio of investments.
If this number is positive at the end of such year, then the capital gains incentive fee for such year equals 15% of such amount,
less the aggregate amount of any capital gains incentive fees paid in respect of the Company’s portfolio in all prior years.



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



The composition of the Company’s
incentive fees was as follows:



|                                                                 |  | For the year ended
                                                                                December 31, 2019 |         
|---------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------- | --------
|Part one incentive fees (1)                                      |  | $                                                                                                                    | 118,610 
|Part two incentive fees (2)                                      |  |                                                                                                                      | 132,125 
|Incentive fees, excluding the impact of the incentive fee waiver |  |                                                                                                                      | 250,735 
|Incentive fee waiver (3)                                         |  |                                                                                                                      | (118,610
|Total incentive fees, net of incentive fee waiver                |  | $                                                                                                                    | 132,125 












| | (1) | Based
on pre-incentive fee net investment income.
| | --- | -------------------------------------------------

| | (2) | Based
upon net realized and unrealized gains and losses, or capital gains. The Company accrues, but does not pay, a capital gains incentive
fee in connection with any unrealized capital appreciation, as appropriate. If, on a cumulative basis, the sum of net realized
gain (loss) plus net unrealized gain (loss) decreases during a period, the Company will reverse any excess capital gains incentive
fee previously accrued such that the amount of capital gains incentive fee accrued is no more than 15% of the sum of net realized
gain (loss) plus net unrealized gain (loss). During the year ended December 31, 2019, we accrued capital gains incentive fees
of $132,125 based on the performance of our portfolio, $775 of which were payable to MC Advisors as a result of realized gains.
The remaining $131,350 was based on unrealized appreciation, none of which was payable to MC Advisors under the Investment Advisory
Agreement.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Represents
part one incentive fees voluntarily waived by MC Advisors.
| | --- | ---------------------------------------------------------------------







The Company has entered into the Administration
Agreement with MC Management, under which the Company reimburses MC Management, subject to the review and approval of the Board,
for its allocable portion of overhead and other expenses, including the costs of furnishing the Company with office facilities
and equipment and providing clerical, bookkeeping, record-keeping and other administrative services at such facilities, and the
Company’s allocable portion of the cost of the chief financial officer and chief compliance officer and their respective
staffs. To the extent that MC Management outsources any of its functions, the Company will pay the fees associated with such functions
on a direct basis, without incremental profit, to MC Management. For the year ended December 31, 2019, the Company incurred $771,989,
in administrative expenses (included within Professional fees, Administrative service fees and General and administrative expenses
on the consolidated statements of operations) under the Administration Agreement, of which $232,943 was related to MC Management
overhead and salary allocation and paid directly to MC Management. As of December 31, 2019 and December 31, 2018, $70,338 and zero,
respectively, of expenses were due to MC Management under this agreement and are included in accounts payable and accrued expenses
on the consolidated statements of assets and liabilities.



MC Management agreed to reimburse the Company
for administrative expenses (not to include management fees or leverage facility expenses) incurred by the Company of $544,084
for the year ended December 31, 2019. Accordingly, the Company has recorded a receivable for the remaining reimbursement from MC
Management for $14,448 within due from affiliates on the consolidated statements of assets and liabilities and a contra expense
for $544,084 on the consolidated statements of operations for the year ended December 31, 2019.



The Company has entered into a license
agreement on December 5, 2018 with Monroe Capital LLC under which Monroe Capital LLC has agreed to grant the Company a non-exclusive,
royalty-free license to use the name “Monroe Capital” for specified purposes in its business. Under this agreement,
the Company has the right to use the “Monroe Capital” name at no cost, subject to certain conditions, for so long as
MC Advisors or one of its affiliates remains its investment adviser. Other than with respect to this limited license, the Company
has no legal right to the “Monroe Capital” name or logo.



F-19









Note 6. Borrowings



In connection with the Company’s
organization, the Board and MC Management, the Company’s initial stockholder, approved the application of the modified asset
coverage requirements set forth in Section 61(a)(2) of the 1940 Act to the Company. As a result of this approval, the Company
is permitted to borrow amounts such that its asset coverage ratio, as defined in the 1940 Act, is at least 150% after such borrowing.
As of December 31, 2019 and December 31, 2018, the Company’s asset coverage ratio based on aggregate borrowings outstanding
was 320% and 0%, respectively.



On March 12, 2019, the Company
entered into the Credit Facility with KeyBank National Association through the Company’s wholly-owned subsidiary, the
SPV. On June 7, 2019, the Company entered into an amendment (the “Credit Facility Amendment”) to the
Revolving Credit and Security Agreement (the “Revolving Security Agreement”). The  Credit Facility Amendment
amended the Revolving Security Agreement to increase the size of the current revolver commitments under the Credit Facility
to $50,000,000 from $25,000,000 pursuant to the accordion feature and to expand the definition of “eligible
loans” to include covenant lite loans. On December 6, 2019, the Company increased the size of the current revolver commitments under the Credit Facility to
$75,000,000 from $50,000,000.



The Company’s ability to borrow
under the Credit Facility is subject to certain financial and restrictive covenants as well as availability under the borrowing
base, which permits the Company to borrow up to 60% of the principal balance of its portfolio company investments depending on
how many portfolio companies are pledged as collateral in the SPV. Under the terms of the Credit Facility, the SPV is allowed to
reinvest available cash and make new borrowings under the Credit Facility through March 12, 2020. The maturity date of the Credit
Facility is March 12, 2021. Distributions from the SPV to the Company are limited by the terms of the Credit Facility, which generally
allows for the distribution of net interest income pursuant to a waterfall quarterly during the reinvestment period. As of December
31, 2019, the fair value of investments of the Company that were held in the SPV as collateral for the Credit Facility was $91,439,632
and these investments are identified on the consolidated schedule of investments. As of December 31, 2019, the Company had outstanding
borrowings under the Credit Facility of $31,200,000.



Borrowings under the Credit Facility bear
interest at an annual rate of LIBOR (one or three month, at the SPV’s option) plus 3.00% until March 12, 2020 and LIBOR plus
3.25% thereafter. In addition to the stated interest rate on borrowings, the SPV was required to pay an unused commitment fee of
0.35% from the closing date until June 11, 2019, and thereafter (i) 0.75% per annum on any unused portion of the Credit Facility
when the outstanding borrowings are less than or equal to 30% of the facility amount, (ii) 0.55% per annum on any unused portion
of the Credit Facility when the outstanding borrowings are greater than 30% of the facility amount but less than or equal to 50%
of the facility amount, and (iii) 0.35% per annum on any unused portion of the Credit Facility when the outstanding borrowings
are greater than 50% of the facility amount. As of December 31, 2019, the outstanding borrowings were accruing at a weighted average
interest rate of 4.7%.



During the year ended December 31,
2019, the Company incurred financing costs of $402,389 in conjunction with the Credit Facility, which have been capitalized
within unamortized deferred financing costs and are amortized into interest and other debt financing expenses over the
estimated average life of the borrowings.



The composition of the Company’s
interest and other debt financing expenses and average outstanding balance was as follows:



|                                                 |  | For the year ended 
December 31, 2019 |          
|------------------------------------------------ |  | ------------------------------------- | ---------
|Interest expense                                 |  | $                                     | 370,957  
|Unused commitment fees                           |  |                                       | 169,031  
|Amortization of deferred financing costs         |  |                                       | 318,921  
|Total interest and other debt financing expenses |  | $                                     | 858,909  
|Average debt outstanding                         |  | $                                     | 7,556,410



See Note 12 for information on the
March 6, 2020 amendment of the Credit Facility.





Note 7. Income Taxes



The Company has elected to be treated
as a RIC under Subchapter M of the Code for the year ended December 31, 2019. As a RIC, the Company is not taxed on any
investment company taxable income or capital gains which it distributes to stockholders. The Company intends to distribute
all of its investment company taxable income and capital gains annually. Accordingly, no provision for U.S. federal income
tax has been made in the consolidated financial statements.



Dividends from net investment income and
distributions from net realized capital gains are determined in accordance with U.S. federal tax regulations, which may differ
from amounts in accordance with  GAAP and those differences could be material. These book-to-tax differences are either temporary
or permanent in nature. Reclassifications due to permanent book-to-tax differences have no impact on net assets.



F-20





The following permanent differences were
reclassified for tax purposes:



|                                                                            |  |   | For the year ended
                                                                                December 31, 2019 |  
|--------------------------------------------------------------------------- |  | - | -------------------------------------------------------------------------------------------------------------------- | -
|Increase (decrease) in capital in excess of par value                       |  | $ | (20,000                                                                                                              | )
|Increase (decrease) in accumulated undistributed (overdistributed) earnings |  |   | 20,000                                                                                                               |  



Taxable income generally differs from net
increase (decrease) in net assets resulting from operations for financial reporting purposes due to temporary and permanent differences
in the recognition of income and expenses and generally excludes unrealized gain (loss) on investments as investment gains and
losses are not included in taxable income until they are realized.



Capital losses in excess of capital
gains earned in a tax year may generally be carried forward and used to offset capital gains, subject to certain limitations.
Under the Regulated Investment Company Modernization Act of 2010, capital losses incurred after September 30, 2011 are not
subject to expiration and retain their character as either short-term or long-term capital losses. As of December 31, 2019,
the Company had short-term capital loss carryforwards of zero. As of December 31, 2019, the Company had zero long-term
capital loss carryforwards.



The following table reconciles net increase
in net assets resulting from operations to taxable income:



|                                                          |  | For the year ended
 December 31, 2019 |          
|--------------------------------------------------------- |  | ------------------------------------- | ---------
|Net increase in net assets resulting from operations      |  | $                                     | 3,162,728
|Net change in unrealized (gain) loss                      |  |                                       | (875,663 
|Other deductions for book in excess of deductions for tax |  |                                       | 132,125  
|Expenses not currently deductible                         |  |                                       | 20,000   
|Total taxable income                                      |  | $                                     | 2,439,190



For income tax purposes, distributions
paid to stockholders are reported as ordinary income, return of capital, long term capital gains or a combination thereof. The
following table provides the tax character of distributions paid:



|                        |  |   | For the year ended
 December 31, 2019 | 
|----------------------- |  | - | ------------------------------------- | 
|Ordinary income         |  | $ | 1,776,190                             | 
|Long-term capital gains |  |   | —                                     | 
|Total                   |  | $ | 1,776,190                             | 



One of the Company’s
consolidated subsidiaries is subject to U.S. federal and state income taxes. For the year ended December 31, 2019, the
Company recorded a net tax expense of zero.



As of December 31, 2019, the
estimated cost basis of investments for U.S. federal income tax purposes was $99,931,320, resulting in estimated net
unrealized gain of $875,663, comprised of estimated gross unrealized gains and losses of $1,409,431 and $533,768,
respectively. As of December 31, 2018, the estimated cost basis of investments for U.S. federal income tax purposes was
zero.



Note 8. Distributions



The Company’s distributions are recorded
on the record date. The following table summarizes distributions declared during the year ended December 31, 2019:





|Date Declared                 |  | Record Date        |  | Payment Date      |  |   | Amount Per Share (2) |  |  |   | Distribution Declared |  |  |   | Cash Distribution |  |  |  | DRIP Shares Issued (1) |  |  |   | DRIP Shares Value (1) | 
|----------------------------- |  | ------------------ |  | ----------------- |  | - | -------------------- |  |  | - | --------------------- |  |  | - | ----------------- |  |  |  | ---------------------- |  |  | - | --------------------- | 
|Year ended December 31, 2019: |  |                    |  |                   |  |   |                      |  |  |   |                       |  |  |   |                   |  |  |  |                        |  |  |   |                       | 
|March 19, 2019                |  | March 22, 2019     |  | May 15, 2019      |  | $ | 0.20                 |  |  | $ | 208,536               |  |  | $ | 123,234           |  |  |  | 8,530                  |  |  | $ | 85,302                | 
|June 20, 2019                 |  | June 21, 2019      |  | August 20, 2019   |  |   | 0.17                 |  |  |   | 500,412               |  |  |   | 362,439           |  |  |  | 13,797                 |  |  |   | 137,973               | 
|September 18, 2019            |  | September 20, 2019 |  | November 20, 2019 |  |   | 0.20                 |  |  |   | 1,067,242             |  |  |   | 770,196           |  |  |  | 29,705                 |  |  |   | 297,046               | 
|December 13, 2019             |  | December 20, 2019  |  | March 17, 2020    |  |   | 0.20                 |  |  |   | 1,386,538             |  |  |   | —                 |  |  |  | —                      |  |  |   | —                     | 
|Total distributions declared  |  |                    |  |                   |  | $ | 0.77                 |  |  | $ | 3,162,728             |  |  | $ | 1,255,869         |  |  |  | 52,032                 |  |  | $ | 520,321               | 








|(1) | The
    portion of the Company’s distribution that is to be reinvested pursuant to the DRIP is issued to the Company’s
    stockholders on the payment date.                         
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | The payment amount approved by the Board was equal to the net increase in net assets resulting from operations per share earned by the Company as determined in accordance with GAAP.



Note 9. Stock Issuances



As of December 31, 2019, the total
number of shares of all classes of capital stock that the Company has the authority to issue was 100,000,000 shares of common
stock, par value $0.001 per share. Prior to electing to be regulated as a BDC, the Company issued 100 shares to MC Management
on June 27, 2018 at $10.00 per share for proceeds of $1,000.

F-21









The following table summarizes the issuance
of shares pursuant to the Private Offering during the year ended December 31, 2019:



|Date             |  |  | Shares Issued |  |  |   | NAV Per Share |  |  |   | Proceeds   | 
|---------------- |  |  | ------------- |  |  | - | ------------- |  |  | - | ---------- | 
|January 15, 2019 |  |  | 1,017,500     |  |  | $ | 10.00         |  |  | $ | 10,175,000 | 
|April 2, 2019    |  |  | 1,596,600     |  |  | $ | 10.00         |  |  |   | 15,966,000 | 
|April 4, 2019    |  |  | 275,500       |  |  | $ | 10.00         |  |  |   | 2,755,000  | 
|April 8, 2019    |  |  | 21,000        |  |  | $ | 10.00         |  |  |   | 210,000    | 
|July 1, 2019     |  |  | 2,384,300     |  |  | $ | 10.00         |  |  |   | 23,843,000 | 
|October 1, 2019  |  |  | 1,527,500     |  |  | $ | 10.00         |  |  |   | 15,275,000 | 
|Total proceeds   |  |  |               |  |  |   |               |  |  | $ | 68,224,000 | 



During the year ended December 31, 2019,
the Company also issued 52,032 shares with an aggregate value of $520,321 under the DRIP as disclosed in Note 8.



Note 10. Commitments and Contingencies



As of December 31, 2019, MC Management
had incurred organization and offering costs of approximately $418,925 on behalf of the Company. MC Management has agreed to absorb
and pay on the Company’s behalf up to $425,000 for organization and offering costs. If the expenses incurred are greater
than $425,000, the Company will reimburse MC Management for organization and offering costs incurred on behalf of the Company in
excess of $425,000. As these costs have not exceeded the amount to be reimbursed by MC Management as of December 31, 2019, no such
costs have been recorded by the Company.



Commitments:
As of December 31, 2019 and December 31, 2018, the Company had $14,323,532 and zero, respectively, in outstanding commitments to
fund investments under undrawn revolvers, capital expenditure loans, delayed draw commitments and subscription agreements. Management
believes that the Company’s available cash balances and/or ability to draw on the Credit Facility provide sufficient funds
to cover its unfunded commitments as of December 31, 2019.



Indemnifications:
In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and
warranties that provide general indemnifications. The Company’s maximum exposure under these agreements is unknown, as these
involve future claims that may be made against the Company but that have not occurred. The Company expects the risk of any future
obligations under these indemnifications to be remote.



Concentration
of credit and counterparty risk: Credit risk arises primarily from the potential inability of counterparties to perform
in accordance with the terms of the contract. In the event that the counterparties do not fulfill their obligations, the Company
may be exposed to risk. The risk of default depends on the creditworthiness of the counterparties or issuers of the instruments.
It is the Company’s policy to review, as necessary, the credit standing of each counterparty.



Market
risk: The Company’s investments and borrowings are subject to market risk. Market risk is the potential for changes
in the value due to market changes. Market risk is directly impacted by the volatility and liquidity in the markets in which the
investments and borrowings are traded.



Legal
proceedings: In the normal course of business, the Company may be subject to legal and regulatory proceedings that are
generally incidental to its ongoing operations. While there can be no assurance of the ultimate disposition of any such proceedings,
the Company is not currently aware of any such proceedings or disposition that would have a material adverse effect on the Company’s
consolidated financial statements.



F-22









Note 11. Financial Highlights



The following is a schedule of financial
highlights for the  period January 15, 2019 (commencement of operations) to December 31, 2019:



|                                                                                                               |  |   | For the period
                                                                                January 15, 2019
                                                                                (commencement of
                                                                                operations) to December 31, 2019 |  
|-------------------------------------------------------------------------------------------------------------- |  | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -
|Per share data:                                                                                                |  |   |                                                                                                                                                                                                                                                                                                                                   |  
|Net asset value at beginning of year                                                                           |  | $ | 10.00                                                                                                                                                                                                                                                                                                                             |  
|Net investment income (loss) (1)                                                                               |  |   | 0.57                                                                                                                                                                                                                                                                                                                              |  
|Net gain (loss) (1)                                                                                            |  |   | 0.22                                                                                                                                                                                                                                                                                                                              |  
|Net
    increase (decrease) in net assets resulting from operations (1)                                        |  |   | 0.79                                                                                                                                                                                                                                                                                                                              |  
|Stockholder distributions declared (2)                                                                         |  |   | (0.77                                                                                                                                                                                                                                                                                                                             | )
|Other (3)                                                                                                      |  |   | (0.02                                                                                                                                                                                                                                                                                                                             | )
|Net asset value at end of year                                                                                 |  | $ | 10.00                                                                                                                                                                                                                                                                                                                             |  
|Net assets at end of year                                                                                      |  | $ | 68,745,321                                                                                                                                                                                                                                                                                                                        |  
|Shares outstanding at end of year                                                                              |  |   | 6,874,532                                                                                                                                                                                                                                                                                                                         |  
|Total return based on average net asset value (4)                                                              |  |   | 9.80                                                                                                                                                                                                                                                                                                                              | %
|Ratio/Supplemental data:                                                                                       |  |   |                                                                                                                                                                                                                                                                                                                                   |  
|Ratio of expenses to average net assets without waivers
    and expense reimbursement (5)                      |  |   | 8.68                                                                                                                                                                                                                                                                                                                              | %
|Ratio
    of expenses to average net assets with waivers and expense reimbursement (5) (6)                     |  |   | 5.16                                                                                                                                                                                                                                                                                                                              | %
|Ratio of net investment income (loss) to average net
    assets without waivers and expense reimbursement (5)  |  |   | 3.85                                                                                                                                                                                                                                                                                                                              | %
|Ratio
    of net investment income (loss) to average net assets with waivers and expense reimbursement (5) (6) |  |   | 7.37                                                                                                                                                                                                                                                                                                                              | %
|Portfolio turnover (7)                                                                                         |  |   | 10.43                                                                                                                                                                                                                                                                                                                             | %










|(1) | The per share data was derived by using the weighted average shares outstanding during the year ended December 31, 2019.                                                                                                                                                                           
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | The per share data for distributions reflects the actual amount of distributions declared during the year.                                                                                                                                                                                         
|(3) | Represents the impact of different share amounts used in calculating per share data as a result of calculating certain per share data based on weighted average shares outstanding during the period and certain per share data based on shares outstanding as of a period end or transaction date.
|(4) | Total return based on average net asset value
    is calculated by dividing the net increase in net assets resulting from operations by the average net asset value.                                                                                                                               
|(5) | Ratios are annualized. Incentive fees included within the ratio are not annualized.                                                                                                                                                                                                                
|(6) | Includes interest expense and part two incentive fees which are not subject to reimbursement.                                                                                                                                                                                                      
|(7) | Ratio  is not annualized.                                                                                                                                                                                                                                                                          



Note 12. Subsequent Events



The Company has evaluated subsequent events
through March 10, 2020, the date on which the consolidated financial statements were issued.



On January 2, 2020, the Company issued 2,036,841
shares of common stock at $10.00 per share for proceeds of $20,368,410 pursuant to the Private Offering.





On March 6, 2020, the Company entered
into an amendment to the Revolving and Security Agreement to extend the reinvestment period of the Credit Facility through April
10, 2020 as the Company negotiates a larger amendment to the Credit Facility.



Note 13. Selected Quarterly Financial Data (unaudited)



|                                                                                              |  | For the quarter ended |                  
|--------------------------------------------------------------------------------------------- |  | --------------------- | -----------------
|                                                                                              |  |                       | December 31, 2019
|Total investment income                                                                       |  | $                     | 1,876,387        
|Net investment income                                                                         |  | $                     | 884,139          
|Net gain (loss)                                                                               |  | $                     | 502,399          
|Net increase (decrease) in net assets resulting from operations                               |  | $                     | 1,386,538        
|Net investment income per share – basic and diluted                                           |  | $                     | 0.13             
|Net increase (decrease) in net assets resulting from operations per share – basic and diluted |  | $                     | 0.20             
|Net asset value per share at period end                                                       |  | $                     | 10.00            





F-23









Exhibits



|Exhibit |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |  | Description
    of Document                                                                                                                                                                                                                                                                                                                                                                                          
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|3.1     |  | Articles
    of Incorporation (1)                                                                                                                                                                                                                                                                                                                                                                                    
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|3.2     |  | Articles
    of Amendment and Restatement (2)                                                                                                                                                                                                                                                                                                                                                                        
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|3.3     |  | Bylaws
    (1)                                                                                                                                                                                                                                                                                                                                                                                                       
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|4.1     |  | Description of Securities*                                                                                                                                                                                                                                                                                                                                                                                           
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|10.1    |  | Expense Agreement between the Company and MC
    Management (1)                                                                                                                                                                                                                                                                                                                                                      
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|10.2    |  | Investment
    Advisory Agreement between the Company and MC Advisors (6)                                                                                                                                                                                                                                                                                                                                            
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|10.3    |  | Administration Agreement between the Company
    and MC Management (2)                                                                                                                                                                                                                                                                                                                                               
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|10.4    |  | License Agreement between the Company and Monroe
    Capital, LLC (2)                                                                                                                                                                                                                                                                                                                                                
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|10.5    |  | Form of Indemnification Agreement (2)                                                                                                                                                                                                                                                                                                                                                                                
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|10.6    |  | Dividend Reinvestment Plan (2)                                                                                                                                                                                                                                                                                                                                                                                       
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|10.7    |  | Custody Agreement between the Company and U.S.
    Bank National Association, as custodian (3)                                                                                                                                                                                                                                                                                                                       
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|10.8    |  | Transfer Agent agreement between the Company
    and U.S. Bank National Association, as transfer agent (3)                                                                                                                                                                                                                                                                                                           
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|10.9    |  | Revolving
    Credit and Security Agreement among MC Income Plus Financing SPV LLC, as borrower; the Company, as collateral manager; the
    lenders from time to time parties thereto; KeyBank National Association, as administrative agent and lead arranger; and U.S.
    Bank National Association as collateral agent, collateral administrator and document custodian (6)                                     
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|10.10   |  | Purchase
    and Contribution Agreement between MC Income Plus Financing SPV LLC, as buyer, and the Company, as seller (6)                                                                                                                                                                                                                                                                                           
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|10.11   |  | Account
    Control Agreement among MC Income Plus Financing SPV LLC, as pledgor; the Company, as collateral manager; U.S. Bank National
    Association, in its capacity as collateral agent, as secured party and securities intermediary (6)                                                                                                                                                                      
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|10.12   |  | Amendment No. 1 to the Revolving Credit and Security Agreement
among MC Income Plus Financing SPV LLC, as borrower; the Company, as collateral manager; the lenders from time to time parties
thereto; KeyBank National Association, as administrative agent and lead arranger; and U.S. Bank National Association as collateral
agent, collateral administrator and document custodian. (4)                         
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|10.13   |  | Facility
    Amount Increase to the Revolving Credit and Security Agreement among MC Income Plus Financing SPV LLC, as borrower; the
    Company, as collateral manager; the lenders from time to time parties thereto; KeyBank National Association, as
    administrative agent and lead arranger; and U.S. Bank National Association as collateral agent, collateral administrator and
    document custodian. (5)
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|10.14   |  | Amendment No. 2 to the Revolving Credit and Security Agreement
among MC Income Plus Financing SPV LLC, as borrower; the Company, as collateral manager; the lenders from time to time parties
thereto; KeyBank National Association, as administrative agent and lead arranger; and U.S. Bank National Association as collateral
agent, collateral administrator and document custodian.*                            
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|21.1    |  | List of Subsidiaries*                                                                                                                                                                                                                                                                                                                                                                                                
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|31.1    |  | Certification
of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302
of the Sarbanes-Oxley Act of 2002*                                                                                                                                                                                                                                       
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|31.2    |  | Certification
of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302
of the Sarbanes-Oxley Act of 2002*                                                                                                                                                                                                                                       
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|32.1    |  | Certification pursuant to 18 U.S.C. Section
    1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*                                                                                                                                                                                                                                                                                          
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|*       |  | Filed herewith                                                                                                                                                                                                                                                                                                                                                                                                       
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|(1)     |  | Previously filed as an exhibit to amendment
    no. 1 to the registration Statement on Form 10 (File No. 000-55941) filed with the SEC on July 30, 2018                                                                                                                                                                                                                                                              
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|(2)     |  | Previously filed as an exhibit to the current
    report on Form 8-K filed with the SEC on December 7, 2018                                                                                                                                                                                                                                                                                                          
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|(3)     |  | Previously filed as an exhibit to the current
    report on Form 8-K filed with the SEC on December 14, 2018                                                                                                                                                                                                                                                                                                         
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|(4)     |  | Previously filed as an exhibit to the current
    report on Form 8-K filed with the SEC on June 10, 2019                                                                                                                                                                                                                                                                                                             
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|(5)     |  | Previously filed as an exhibit to the current
    report on Form 8-K filed with the SEC on December 9, 2019                                                                                                                                                                                                                                                                                                          
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|(6)     |  | Previously filed as an exhibit to the annual report on Form 10-K filed with the SEC on March 13, 2019                                                                                                                                                                                                                                                                                                                



ITEM 16. FORM 10-K SUMMARY



None.





65











SIGNATURES



Pursuant to the requirements of Section
13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed
on its behalf by the undersigned, thereunto duly authorized.



Date: March 10, 2020



Monroe Capital Income Plus Corporation (Registrant)



|By | /s/ Theodore L. Koenig                               | 
|-- | ---------------------------------------------------- | 
|   | Theodore L. Koenig                                  
|   | Chairman, Chief Executive Officer and Director      
|   | (Principal Executive Officer)                       
|   |                                                     
|By | /s/ Aaron D. Peck                                    | 
|   | Aaron D. Peck                                       
|   | Chief Financial Officer and Chief Investment Officer
|   | (Principal Financial and Accounting Officer)        



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 registrant and in the capacities
and on the dates indicated.



|Signature              |  | Title                                                |  | Date          
|---------------------- |  | ---------------------------------------------------- |  | --------------
|                       |  |                                                      |  |               
|/s/ Theodore L. Koenig |  | Chairman, Chief Executive Officer and Director       |  | March 10, 2020
|Theodore L. Koenig     |  | (Principal Executive Officer)                        |  |               
|                       |  |                                                      |  |               
|/s/ Aaron D. Peck      |  | Chief Financial Officer and Chief Investment Officer |  | March 10, 2020
|Aaron D. Peck          |  | (Principal Financial and Accounting Officer)         |  |               
|                       |  |                                                      |  |               
|/s/ David Eaton        |  | Director                                             |  | March 10, 2020
|David Eaton            |  |                                                      |  |               
|                       |  |                                                      |  |               
|/s/ Roger Schoenfeld   |  | Director                                             |  | March 10, 2020
|Roger Schoenfeld       |  |                                                      |  |               







66