# EDGAR Filing Document

**Accession Number:** 0001732078
**File Stem:** 0001213900-23-019140
**Filing Date:** 2023-3
**Character Count:** 187341
**Document Hash:** 8b574f8f6dc1a4eef0f25fd3418614bd
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-23-019140.hdr.sgml**: 20230310

**ACCESSION NUMBER**: 0001213900-23-019140

**CONFORMED SUBMISSION TYPE**: N-CSR

**PUBLIC DOCUMENT COUNT**: 23

**FILED AS OF DATE**: 20230310

**DATE AS OF CHANGE**: 20230310

**EFFECTIVENESS DATE**: 20230310

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Flat Rock Opportunity Fund
- **CENTRAL INDEX KEY:** 0001732078
- **IRS NUMBER:** 826905131
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** N-CSR
- **SEC ACT:** 1940 Act
- **SEC FILE NUMBER:** 811-23328
- **FILM NUMBER:** 23723209

**BUSINESS ADDRESS:**
- **STREET 1:** 680 S. CACHE STREET
- **STREET 2:** SUITE 100
- **CITY:** JACKSON
- **STATE:** WY
- **ZIP:** 83001
- **BUSINESS PHONE:** (307) 500-5200

**MAIL ADDRESS:**
- **STREET 1:** 680 S. CACHE STREET
- **STREET 2:** SUITE 100
- **CITY:** JACKSON
- **STATE:** WY
- **ZIP:** 83001

?xml version="1.0" encoding="ASCII"?

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

**FORM N-CSR**

**CERTIFIED SHAREHOLDER REPORT OF REGISTERED**

**MANAGEMENT INVESTMENT COMPANIES**

<u>Investment Company Act file number: 811-23328</u>

<u>FLAT ROCK OPPORTUNITY FUND</u>

(Exact name of registrant as specified in charter)

Robert K. Grunewald

Chief Executive Officer

680 S Cache Street, Suite 100

P.O. Box 7403

Jackson, WY 83001 (Address of principal executive offices) (Zip code)

(307) 500-5200

(Registrant's telephone number, including area code)

The Corporation Trust Company

Corporation Trust Center

1209 Orange Street

<u>Wilmington, DE 19801</u>

(Name and address of agent for service)

Copy to:

Owen J. Pinkerton, Esq.

Eversheds Sutherland (US) LLP

700 Sixth Street, NW, Suite 700

Washington, DC 20001

(202) 383-0262

Date of fiscal year end: <u>December 31</u> <br> <br> Date of reporting period: <u>December 31, 2022</u>

Item 1. **Reports to Stockholders.**

(a) ![](image_005.jpg)

**Table of Contents**

---

| | |
|:---|:---|
| [Shareholder Letter](#a_001) | 1 |
| [Portfolio Update](#a_002) | 5 |
| [Schedule of Investments](#a_003) | 8 |
| [Statement of Assets and Liabilities](#a_004) | 12 |
| [Statement of Operations](#a_005) | 13 |
| [Statements of Changes in Net Assets](#a_006) | 14 |
| [Statement of Cash Flows](#a_007) | 15 |
| [Financial Highlights](#a_008) | 17 |
| [Notes to Financial Statements](#a_009) | 21 |
| [Report of Independent Registered Public Accounting Firm](#a_010) | 36 |
| [Additional Information](#a_011) | 37 |
| [Trustees & Officers](#a_012) | 41 |

---

<u>Flat Rock Opportunity Fund</u> <u>Shareholder Letter</u> <br> *December 31, 2022 (Unaudited)*

March 1, 2023

Fellow FROPX Shareholders:

The Flat Rock Opportunity Fund ("FROPX" or the "Fund") finished the year down 2.11%, significantly outperforming the S&P 500 Index and the Bloomberg US High Yield Index. FROPX generated 15.62%<sup>1</sup> returns from the net earnings of the Fund in 2022, with unrealized depreciation on investments of 17.70%<sup>1</sup> offsetting the earnings yield. Since our Fund's inception over 4.5 years ago, our returns of 10.27% outpaced the S&P 500 Index with less than a third of the volatility. Additionally, we believe CLO equity can be a good diversifier, with only a 0.38<sup>2</sup> correlation to the S&P 500 Index and 0.50<sup>2</sup> correlation to the Bloomberg High US Yield Index.

The Fund's performance in 2022 was positively affected by the floating-rate nature of CLO equity and the value of exposure to first lien loans that typically begin their lives with a loan-to-value of approximately 50%. The negative return was primarily driven by unrealized depreciation on our CLO investments as the market's required rate of return for CLO securities increased during the year. While loan default rates rose during the year, the fundamental performance of the portfolio continues to be within our modeled ranges. At the end of the year, the default rate on the loans in our CLOs was 1.61%, which is below our base-case modeling assumption of 2.0%. At year-end, FROPX had $3.09<sup>3</sup> per share of unrealized depreciation on investments. In addition to the income generated by the Fund's CLO investments, a reversal of the unrealized depreciation could provide further return upside should the loan market continue to recover.

**Fund Performance (Net)**

---

| | | | | |
|:---|:---|:---|:---|:---|
| <br>**Fund Performance (Net)<sup>a</sup>** | <br>**2022**<br>**Full Year** | <br>**2021**<br>**Full Year** | **Annualized Return From**<br> **Inception on**<br> **7/2/2018** | **Standard Deviation From**<br> **Inception on**<br> **7/2/2018** |
| Flat Rock Opportunity Fund | -2.11% | 24.14% | 10.28% | 6.99% |
| S&P 500 Index | -18.11% | 28.71% | 9.81% | 22.40% |
| Bloomberg U.S. Corporate High Yield Bond Index | -11.19% | 5.28% | 2.38% | 6.38% |
| Morningstar Leveraged Loan Index | -0.60% | 5.20% | 3.33% | 4.05% |

---

*<sup>(a)</sup>* *Performance data is per Bloomberg as of 12/31/22, and includes the reinvestment of distributions*

*The performance data quoted here represents past performance. Current performance may be lower or higher than the performance quoted above. Investment return and principal value will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. Past performance is no guarantee of future results. A Fund's performance, especially for very short periods of time, should not be the sole factor in making your investment decisions.*

Annual Report \| December 31, 2022 1

<u>Flat Rock Opportunity Fund</u> <u>Shareholder Letter</u> <br> *December 31, 2022 (Unaudited)*

 

**We believe that today's economic environment creates three opportunities for CLO equity and FROPX:**

**I.** **The Benefit of Rising Interest Rates** 

While the potential for higher rates typically negatively impacts equities and fixed income securities, we expect CLO equity to benefit from higher interest rates due to the floating rate nature of the underlying loans in our CLOs.

**II.** **The Self-Healing Mechanism** 

At year end, 91% of our CLOs were in their reinvestment periods. A CLO loan prepays at par when the loan is refinanced, the company is acquired, or the company does a large acquisition. During the reinvestment period the CLO's collateral manager takes the proceeds from loan repayments and uses them to buy new loans. Investor concern over the war in Ukraine and the potential for an economic hard landing resulted in the Morningstar LSTA Leveraged Loan Index trading at discounted levels last year.

**Morningstar LSTA Leveraged Loan Index Price**

![](image_001.jpg)

Discounted loan levels gave our CLO managers the ability to reinvest into new loans at prices well below our original expectations, potentially benefitting CLO equity returns over time. This is what we refer to as the CLO's self-healing mechanism. In our typical CLO modeling, we assume new loans will be purchased at a price of 99. However, during 2022, the Morningstar Loan Index had an average price of approximately 95.

 

2 www.flatrockglobal.com

<u>Flat Rock Opportunity Fund</u> <u>Shareholder Letter </u> <br> *December 31, 2022 (Unaudited)*

 

**III.** **Debt Refinancing Opportunities** 

As the loan market slowly rebounds, we are seeing early signs of CLO debt costs falling. Early in 2023, the cost of AAA-rated CLO Notes, as measured by the JP Morgan CLOIE AAA Index, declined from LIBOR + 1.87 % to LIBOR + 1.62%. If CLO Note rates continue to decline, we expect to extend the reinvestment periods for a number of our CLO's and / or refinance certain CLO note tranches at lower rates. Both transactions are potentially accretive to equity returns as they decrease the CLO's cost of financing and/or keep the CLO fully invested for a longer period. Transactions of this nature are not included in our typical CLO modeling assumptions and represent potential NAV upside.

The Fund had over $293 million of assets at fair market value on December 31, 2022. We think Fund growth has primarily been driven by investors seeking exposure to first lien, secured loans in the CLO structure, where they can potentially achieve equity-like returns, but with lower volatility. However, we believe our investors also see merit in the interval fund structure. Our Fund offers investors a published daily Net Asset Value, SEC reporting, a minimum of 5% quarterly liquidity, and the ability to invest into the Fund using our ticker, FROPX.

As always, if you have any questions, feel free to reach out.

Sincerely,

![](image_002.jpg)

Robert Grunewald

Chief Executive Officer and Founder

*<sup>(1)</sup>* *Figures calculated based on average of net assets at beginning and end of year*

*<sup>(2)</sup>* *For period from inception on 7/2/18 through 12/31/22*

*<sup>(3)</sup>* *Based on share count as of 12/31/22*

Annual Report \| December 31, 2022 3

<u>Flat Rock Opportunity Fund</u> <u>Shareholder Letter </u> <br> *December 31, 2022 (Unaudited)*

*Glossary: Standard Deviation is measure that provides the dispersion around a mean. Correlation is a measurement of the interdependence between two variable quantities. The S&P 500 Index or the Standard & Poor's 500 Index is a market-capitalization-weighted index of the 500 largest U.S. publicly traded companies. The Morningstar LSTA Leveraged Loan Index is a market value weighted index designed to capture the performance of the U.S. leveraged loan market. The Bloomberg US Corporate High Yield Bond Index measures the USD-denominated, high yield, fixed-rate corporate bond market. Securities are classified as high yield if the middle rating of Moody's, Fitch and S&P is Ba1/BB+/BB+ or below. The index excludes bonds from emerging markets.*

 

*Consider the investment risks, charges, and expenses of the Fund carefully before investing. Other information about the Fund may be obtained at https://flatrockglobal.com/flat-rock-opportunity-fund/. This material must be preceded or accompanied by the prospectus. Please read it carefully.*

*The Fund is suitable for investors who can bear the risks associated with the Fund's limited liquidity and should be viewed as a long-term investment. Our shares have no history of public trading, nor is it intended that our shares will be listed on a national securities exchange at this time, if ever. No secondary market is expected to develop for our shares; liquidity for our shares will be provided only through quarterly repurchase offers for no less than 5% of and no more than 25% of our shares at net asset value, and there is no guarantee that an investor will be able to sell all the shares that the investor desires to sell in the repurchase offer. Due to these limited restrictions, an investor should consider an investment in the Fund to be of limited liquidity. Investing in our shares may be speculative and involves a high degree of risk, including the risks associated with leverage. Investing in the Fund involves risks, including the risk that shareholder may lose part or all of their investment. We intend to invest primarily in the equity and, to a lesser extent, in the junior debt tranches of CLOs that own a pool of senior secured loans. Our investments in the equity and junior debt tranches of CLOs are exposed to leveraged credit risk. Investments in the lowest tranches bear the highest level of risk. We may pay distributions in significant part from sources that may not be available in the future and that are unrelated to our performance, such as a returns of capital or borrowing. The amount of distributions that we may pay, if any, is uncertain. ALPS Distributors Inc. serves as our principal underwriter, within the meaning of the 1940 Act, and will act as the distributor of our shares on a best efforts' basis, subject to various conditions.*

4 www.flatrockglobal.com

<u>Flat Rock Opportunity Fund</u> <u>Portfolio Update</u> <br> *December 31, 2022 (Unaudited)*

**INVESTMENT OBJECTIVE**

Flat Rock Opportunity Fund's (the "Fund") investment objective is to generate current income and, as a secondary objective, long-term capital appreciation.

**PERFORMANCE** *as of December 31, 2022*

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | | **Average Annual Returns** | **Average Annual Returns** | **Average Annual Returns** |
|  | <br>**6 Month** | <br>**1 Year** | <br>**3 Year** | **Since<br> Inception<sup>(1)</sup>** |
| Flat Rock Opportunity Fund<sup>(2)(7)</sup> | 0.77% | -2.11% | 11.64% | 10.28% |
| S&P BDC Total Return Index<sup>(3)</sup> | 1.95% | -9.38% | 4.31% | 6.24% |
| S&P 500 Index<sup>(4)</sup> | 2.31% | -18.11% | 7.66% | 9.81% |
| Bloomberg U.S. Corporate High Yield Bond Index<sup>(5)</sup> | -0.62% | -11.19% | 0.05% | 2.38% |
| Morningstar LSTA U.S. Leveraged Loan Index<sup>(6)</sup> | 0.44% | -0.60% | 2.55% | 3.33% |

---

*<sup>(1)</sup>* *The Fund commenced operations on July 2, 2018.*

*<sup>(2)</sup>* *Performance returns are net of management fees and other Fund expenses.*

*<sup>(3)</sup>* *The S&P BDC Total Return Index is designed to track leading business development companies ("BDCs") that trade on major U.S. exchanges. The Fund no longer believes that the S&P BDC Total Return Index provides a meaningful performance comparison, and will remove this index from the Fund's performance table in the next annual report.*

*<sup>(4)</sup>* *The Standard & Poor's 500 Stock Index (S&P 500) is a capitalization-weighted index, representing the aggregate market value of the common equity of 500 large-capitalization stocks primarily traded on the New York Stock Exchange.*

*<sup>(5)</sup>* *The Bloomberg U.S. Corporate High Yield Bond Index measures the USD-denominated, high yield, fixed-rate corporate bond market.*

*<sup>(6)</sup>* *The Morningstar LSTA U.S. Leveraged Loan Index (formerly the S&P LSTA Leveraged Loan Index) is a market value weighted index designed to capture the performance of the U.S. leveraged loan market.*

*<sup>(7)</sup>* *The return shown is based on net asset value calculated for shareholder transactions and may differ from the return shown in the Financial Highlights, which reflects adjustments made to the net asset value in accordance with accounting principles generally accepted in the United States of America.*

 

***Performance data quoted represents past performance, which is not a guarantee of future results. Current performance may be lower or higher than the performance quoted. The principal value and investment return of an investment will fluctuate so that your shares, if repurchased, may be worth more or less than their original cost. Total return measures net investment income and capital gain or loss from portfolio investments. All performance shown assumes reinvestment of dividends and capital gains distributions. Investors cannot invest directly in an index.***

 ****

*Flat Rock Opportunity Fund is a continuously offered, non-diversified, closed-end management investment company that is operated as an interval fund. The Fund is suitable only for investors who can bear the risks associated with the Fund's limited liquidity and should be viewed as a long-term investment. The Fund's shares have no history of public trading, nor is it intended that its shares will be listed on a national securities exchange at this time, if ever. Investing in the Fund's shares may be speculative and involves a high degree of risk, including the risks associated with leverage. Investing in the Fund involves risk, including the risk that shareholders may receive little or no return on their investment or that shareholders may lose part or all of their investment. The Fund intends to invest primarily in the equity and, to a lesser extent, in the junior debt tranches of CLOs that own a pool of senior secured loans made to companies whose debt is rated below investment grade or, in limited circumstances, unrated. The Fund's investments in the equity and junior debt tranches of CLOs are exposed to leveraged credit risk. Investments in the lowest tranches bear the highest level of risk. The Fund may pay distributions in significant part from sources that may not be available in the future and that are unrelated to its performance, such as a return of capital or borrowings. The amount of distributions that the Fund may pay, if any, is uncertain.*

Annual Report \| December 31, 2022 5

<u>Flat Rock Opportunity Fund</u> <u>Portfolio Update</u> <br> *December 31, 2022 (Unaudited)*

 

**ASSET ALLOCATION** *as of December 31, 2022^*

![](image_003.jpg)

*^* *Holdings are subject to change.*

*Percentages are based on total assets of the Fund.*

 

**TOP TEN HOLDINGS\*** as of December 31, 2022

---

| | |
|:---|:---|
|  | <br>**% of Total Investments\*\*** |
| Brightwood CLO Warehouse | 8.21% |
| Churchill Middle Market CLO III, Ltd. | 6.99% |
| Woodmont 2022-10 Trust | 5.97% |
| Great Lakes CLO 2014-1, Ltd. | 5.19% |
| Lake Shore MM CLO V LLC | 4.06% |
| TCW CLO 2021-2, Ltd. | 3.31% |
| Monroe Capital MML CLO VII, Ltd. | 3.24% |
| Symphony XXX, Ltd. CLO | 3.12% |
| TCP Whitney CLO, Ltd. | 2.88% |
| New Mountain CLO 1, Ltd. | 2.81% |
|  | 45.78% |

---

*\** *Holdings are subject to change and exclude cash equivalents. Holdings are presented on an individual security basis and may not reflect the Fund's total holdings with respect to one issuer.*

*\*\** *Percentages are based on the fair value of total investments of the Fund.*

  <br> 6 www.flatrockglobal.com

<u>Flat Rock Opportunity Fund</u> <u>Portfolio Update</u> <br> *December 31, 2022 (Unaudited)*

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

The graph below illustrates the growth of a hypothetical $10,000 investment assuming the purchase of common shares at the NAV of $20.00 on July 2, 2018 (commencement of operations) and tracking its progress through December 31, 2022.

![](image_004.jpg)

The hypothetical $10,000 investment at inception includes changes due to share price and reinvestment of dividends and capital gains. The chart does not imply future performance. Indexes are unmanaged, do not incur fees, expenses or taxes, and cannot be invested in directly. Performance quoted does not include a deduction for taxes that a shareholder would pay on the redemption of fund shares.

    <br> Annual Report \| December 31, 2022 7

<u>Flat Rock Opportunity Fund</u> <u>Schedule of Investments</u> <br> *December 31, 2022*

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Rate** | <br>**Maturity** | **Principal**<br> **Amount** | <br>**Value** |
| **COLLATERALIZED LOAN OBLIGATIONS EQUITY<sup>(a)(b)(d)(e)</sup>- 123.92%** | | | | |
| Allegro CLO XIV, Ltd., Subordinated Notes | 15.26 %<sup>(f)</sup> | 10/15/2034 | $9000000 | $5964480 |
| ALM 2020, Ltd., Subordinated Notes | 0.00 %<sup>(f)</sup> | 10/15/2029 | 8000000 | 3405599 |
| Ares LIX CLO, Ltd., Subordinated Notes | 13.59 %<sup>(f)</sup> | 04/25/2034 | 8000000 | 5991238 |
| Bain Capital Credit CLO 2021-3, Ltd., Subordinated Notes | 10.89 %<sup>(f)</sup> | <br>07/24/2034 | 8000000 | 5266224 |
| Barings Middle Market CLO Ltd 2021-I, Subordinated Notes | 17.72 %<sup>(f)</sup> | <br>07/20/2033 | 3240000 | 3224585 |
| Benefit Street Partners CLO XXV, Ltd., Subordinated Notes | 13.59 %<sup>(f)</sup> | <br>01/15/2035 | 9246257 | 6487972 |
| BlackRock Baker CLO 2021-1, Ltd., Class VDN | 23.24 %<sup>(f)</sup> | 01/15/2034 | 7347140 | 2918947 |
| BlackRock Elbert CLO V LLC, Subordinated Notes | 15.58 %<sup>(f)</sup> | <br>06/15/2034 | 6500000 | 5721737 |
| BlackRock Maroon Bells CLO XI LLC, Subordinated Notes | 22.56 %<sup>(f)</sup> | <br>10/15/2034 | 7643312 | 2962715 |
| Brightwood CLO Warehouse<sup>(g)</sup> | 11.00 %<sup>(f)</sup> | 12/31/2032 | 23125000 | 23125000 |
| Churchill Middle Market CLO III, Ltd., Subordinated Notes | 14.58 %<sup>(f)</sup> | <br>10/24/2033 | 21500000 | 19688868 |
| Churchill Middle Market CLO IV, Ltd., Subordinated Notes | 12.97 %<sup>(f)</sup> | <br>01/23/2032 | 7000000 | 4768036 |
| Dryden 33 Senior Loan Fund, Subordinated Notes | 0.00 %<sup>(f)</sup> | <br>04/15/2029 | 10000000 | 73000 |
| Dryden 76 CLO, Ltd., Subordinated Notes | 12.35 %<sup>(f)</sup> | 10/20/2034 | 11300000 | 7742535 |
| Dryden 92 CLO, Ltd., Subordinated Notes | 9.62 %<sup>(f)</sup> | 11/20/2034 | 10000000 | 7178420 |
| Great Lakes CLO 2014-1, Ltd., Subordinated Notes | 11.44 %<sup>(f)</sup> | <br>10/15/2029 | 26740000 | 14600040 |
| KKR CLO 31, Ltd., Subordinated Notes | 17.20 %<sup>(f)</sup> | 04/20/2034 | 6000000 | 4367482 |
| Lake Shore MM CLO V LLC, Subordinated Notes | 17.36 %<sup>(f)</sup> | <br>10/15/2034 | 22400000 | 11424000 |
| LCM 32, Ltd., Subordinated Notes | 12.21 %<sup>(f)</sup> | 07/20/2034 | 6000000 | 3727088 |
| LCM 34, Ltd., Income Notes | 12.60 %<sup>(f)</sup> | 10/20/2034 | 8696000 | 5177168 |
| LCM 34, Ltd., Subordinated Notes, Class SUB2 | 14.93 %<sup>(f)</sup> | <br>10/20/2034 | 659110 | 88129 |
| Maranon Loan Funding 2021-3, Ltd., Subordinated Notes | 22.12 %<sup>(f)</sup> | <br>01/15/2034 | 10000000 | 3447697 |
| Marble Point CLO XVIII, Ltd., Income Notes | 12.60 %<sup>(f)</sup> | 10/15/2034 | 5000000 | 2937637 |
| Marble Point CLO XX, Ltd., Income Notes | 10.81 %<sup>(f)</sup> | 04/23/2034 | 6000000 | 3249630 |

---

 

*See Notes to Financial Statements.*

8 www.flatrockglobal.com

 

<u>Flat Rock Opportunity Fund</u> <u>Schedule of Investments</u> <br> *December 31, 2022*

 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Rate** | **Maturity** | **Principal Amount** | **Value** |
| New Mountain CLO 1, Ltd., Subordinated Notes | 15.07 %<sup>(f)</sup> | 10/15/2034 | $10520364 | $7913784 |
| Oaktree CLO 2019-2, Ltd., Subordinated Notes | 20.75 %<sup>(f)</sup> | 04/15/2031 | 5000000 | 2070410 |
| Oaktree CLO 2019-4, Ltd., Subordinated Notes | 14.20 %<sup>(f)</sup> | 10/20/2032 | 9000000 | 5082879 |
| OCP CLO 2020-20, Ltd., Subordinated Notes | 16.65 %<sup>(f)</sup> | 10/09/2033 | 6000000 | 4269185 |
| Regatta Echo CLO Warehouse<sup>(g)(h)</sup> | 17.30 %<sup>(f)</sup> | 05/12/2024 | 5600000 | 5600000 |
| Sixth Street CLO XXI, Ltd., Subordinated Notes | 6.78 %<sup>(f)</sup> | 10/15/2035 | 2500000 | 2092765 |
| Symphony XXX, Ltd. CLO<sup>(g)(h)</sup> | 10.20 %<sup>(f)</sup> | 07/19/2024 | 8796732 | 8796732 |
| TCP Whitney CLO, Ltd., Subordinated Notes | 17.31 %<sup>(f)</sup> | 08/20/2033 | 11500000 | 8105998 |
| TCP Whitney CLO, Ltd., Subordinated Notes, Class SUB2 | 13.30 %<sup>(f)</sup> | 08/20/2033 | 3575762 | 2967208 |
| TCW CLO 2021-2, Ltd., Income Notes | 13.07 %<sup>(f)</sup> | 07/25/2034 | 7000000 | 4316181 |
| TCW CLO 2021-2, Ltd., Subordinated Notes | 13.01 %<sup>(f)</sup> | 07/25/2034 | 8125000 | 5010171 |
| Voya CLO 2021-1, Ltd., Income Notes | 12.91 %<sup>(f)</sup> | 07/15/2034 | 6960000 | 5197121 |
| Voya CLO 2022-1, Ltd., Subordinated Notes | 13.52 %<sup>(f)</sup> | 04/20/2035 | 8000000 | 6368441 |
| Woodmont 2022-10 Trust, Subordinated Notes | 17.73 %<sup>(f)</sup> | 04/25/2034 | 17155000 | 16819154 |
| TOTAL COLLATERALIZED LOAN OBLIGATIONS EQUITY<br> (Cost $264,274,941) |  |  |  | $238148256 |
| **COLLATERALIZED LOAN OBLIGATIONS DEBT<sup>(b)(c)(d)(e)</sup>- 21.52%**<br>|  |  |  |  |
| Brightwood Capital MM CLO 2020-1, Ltd., Class ER | 3M US SOFR + 8.72% | 01/15/2031 | 4500000 | 4230000 |
| Canyon Capital CLO 2017-1, Ltd., Class E | 3M US L + 6.25% | 07/15/2030 | 2000000 | 1671343 |
| Monroe Capital MML CLO 2017-1, Ltd., Class E | 3M US L + 7.35% | 04/22/2029 | 2490000 | 2322268 |
| Monroe Capital MML CLO IX, Ltd., Class E | 3M US L + 8.70% | 10/22/2031 | 1625000 | 1499614 |
| Monroe Capital MML CLO VII, Ltd., Class E | 3M US L + 7.25% | 11/22/2030 | 10000000 | 9115865 |
| Monroe Capital Mml Clo XII, Ltd., Class E | 3M US L + 7.85% | 09/14/2033 | 2000000 | 1691928 |

---

*See Notes to Financial Statements.* 

Annual Report \| December 31, 2022 9

 

<u>Flat Rock Opportunity Fund</u> <u>Schedule of Investments</u> <br> *December 31, 2022*

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Rate** | **Maturity** | **Principal**<br> **Amount** | **Value** |
| Monroe Capital MML CLO XIV LLC, Class E | 3M US SOFR + 10.02% | 10/24/2034 | $6000000 | $5587991 |
| Mount Logan Funding 2018-1 LP, Class ER | 3M US L + 8.46% | 01/22/2033 | 4250000 | 3836829 |
| Mountain View CLO X, Ltd., Class F | 3M US L + 6.35% | 10/13/2027 | 3652174 | 3168319 |
| NewStar Fairfield Fund CLO, Ltd., Class DN | 3M US L + 7.38% | 04/20/2030 | 3000000 | 2666457 |
| Sound Point CLO XVI, Ltd., Class E | 3M US L + 6.10% | 07/25/2030 | 5450000 | 4019651 |
| Voya CLO 2017-2, Class D | 3M US L + 6.02% | 06/07/2030 | 1925000 | 1554480 |
| TOTAL COLLATERALIZED LOAN OBLIGATIONS DEBT <br>(Cost $42,010,183) |  |  |  | $41364745 |
|  | **Rate** |  | **Shares** | **Value**<br>|
| **SHORT TERM INVESTMENTS<sup>(b)</sup> - 0.85%** |  |  |  |  |
| **Money Market Fund - 0.85%**<br>|  |  |  |  |
| First American Government Obligations Fund | (7 Day Yield 4.09%) |  | 1623630 | $1623630 |
| TOTAL SHORT TERM INVESTMENTS<br> (Cost $1,623,630) |  |  |  |  |
|  |  |  |  | $1623630 |
| **TOTAL INVESTMENTS - 146.29%<br> (Cost $307,908,754)** |  |  |  | $281136631 |
| **LIABILITIES IN EXCESS OF OTHER ASSETS - (46.29)%** |  |  |  | (88958353) |
| **NET ASSETS - 100.00%** |  |  |  | $192178278 |

---

 

*<sup>(a)</sup>* *Collateralized Loan Obligation ("CLO") equity positions are entitled to recurring distributions which are generally equal to the remaining cash flow of payments made by underlying securities less contractual payments to debt holders and expenses of the CLO. The effective yield is estimated based upon the current projection of the amount and timing of these recurring distributions in addition to the estimated amount of terminal principal payment. Effective yields for the CLO equity positions are updated generally once a quarter or on a transaction such as an add-on purchase, refinancing or reset. The estimated yield and investment cost may ultimately not be realized. Total fair value of the securities is $238,148,256, which represents 123.92% of net assets as of December 31, 2022.*

 

*See Notes to Financial Statements.* 

10 www.flatrockglobal.com

<u>Flat Rock Opportunity Fund</u> <u>Schedule of Investments</u> <br> *December 31, 2022*

 

*<sup>(b)</sup>* *All or a portion of the security has been pledged as collateral in connection with the credit facility with certain funds and accounts managed by Eagle Point Credit Management, LLC (the "Credit Facility"). At December 31, 2022, the value of securities pledged amounted to $281,136,631, which represents 146.29% of net assets.*

*<sup>(c)</sup>* *Variable rate investment. Interest rates reset periodically. Interest rate shown reflects the rate in effect at December 31, 2022. For securities based on a published reference rate and spread, the reference rate and spread are included in the description above.*

*<sup>(d)</sup>* *The level 3 assets were a result of unavailable quoted prices from an active market or the unavailability of other significant observable inputs.*

*<sup>(e)</sup>* *Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities are not restricted and may normally be sold to qualified institutional buyers in transactions exempt from registration. Total fair value of Rule 144A securities amounts to $279,513,001, which represents 145.44% of net assets as of December 31, 2022.*

*<sup>(f)</sup>* *Estimated yield.*

*<sup>(g)</sup>* *Positions represent investments in a warehouse facility, which is a financing structure intended to aggregate loans that may be used to form the basis of a CLO position.*

*<sup>(h)</sup>* *As of December 31, 2022 the Fund has commitments related to its investment in this CLO (See Note 12).*

 

**Investment Abbreviations:**

LIBOR - London Interbank Offered Rate

SOFR – Secured Overnight Financing Rate

**Reference Rates:**

3M US L - 3 Month LIBOR as of December 31, 2022 was 4.77%

3M US SOFR - 3 Month SOFR as of December 31, 2022 was 3.62%

*See Notes to Financial Statements.* 

Annual Report \| December 31, 2022 11

<u>Flat Rock Opportunity Fund</u> <u>Statement of Assets and Liabilities</u> <br> *December 31, 2022*

 

---

| | | |
|:---|:---|:---|
| ASSETS: | |  |
| Investments, at fair value (Cost: $307,908,754) | | $281136631 |
| Interest receivable | | 9898415 |
| Fee rebate | | 508574 |
| Prepaid loan commitment fees | | 418814 |
| Receivable for fund shares sold | | 215260 |
| Prepaid expenses and other assets | | 167687 |
| **Total Assets** | | 292345381 |
| LIABILITIES: | |  |
| Credit Facility, net (see Note 9) | | 49000000 |
| Mandatorily redeemable preferred stock (net of deferred financing costs of $782,113)<sup>(a)</sup> | | 44217887 |
| Payable for securities purchased | | 4230000 |
| Incentive fee payable | | 1009291 |
| Accrued interest expense | | 505667 |
| Payable for excise tax | | 356111 |
| Management fee payable | | 341046 |
| Payable to counter parties | | 159500 |
| Distributions payable on redeemable preferred stock | | 126083 |
| Payable for audit and tax service fees | | 79749 |
| Payable to transfer agent | | 54645 |
| Other accrued expenses | | 45523 |
| Payable for fund accounting and administration fees | | 36590 |
| Payable for custodian fees | | 5011 |
| **Total Liabilities** | | 100167103 |
| **Net Assets** | | $192178278 |
| NET ASSETS CONSIST OF: | |  |
| Paid-in capital | | $208468851 |
| Total distributable earnings/(accumulated deficit) | | (16290573) |
| **Net Assets** | | $192178278 |
| PRICING OF SHARES: | |  |
| Net Assets | | $192178278 |
| Shares of beneficial interest outstanding (Unlimited number of shares, at $0.001 par value per share) | | 10266482 |
| **Net Asset Value Per Share and Offering Price Per Share** | | $18.72 |

---

*<sup>(a)</sup>* *$10,000 liquidation value per share. 4,500 shares authorized, issued and outstanding.*

 

*See Notes to Financial Statements.* 

12 www.flatrockglobal.com

 

<u>Flat Rock Opportunity Fund</u> <u>Statement of Operations</u> <br> *For the Year Ended December 31, 2022*

---

| | |
|:---|:---|
| INVESTMENT INCOME: |  |
| Interest income | $44175416 |
| Dividend income | 94668 |
| Other income | 9415 |
| **Total Investment Income** | 44279499 |
| <br>EXPENSES: |  |
| Incentive fees | 4885020 |
| Management fees | 3798824 |
| Interest on credit facility | 2928149 |
| Distributions on redeemable preferred stock | 2585500 |
| Excise tax expenses | 602855 |
| Accounting and administration fees | 388757 |
| Transfer agent fees and expenses | 382186 |
| Loan issuance costs | 225861 |
| Amortization of deferred financing costs | 131305 |
| Legal fees | 106872 |
| Audit and tax service fees | 101000 |
| Printing expenses | 33273 |
| Registration expenses | 32663 |
| Custodian expenses | 30625 |
| Insurance expenses | 20040 |
| Trustee expenses | 19981 |
| Compliance expenses | 15000 |
| Miscellaneous expenses | 41005 |
| **Total Expenses** | 16328916 |
| **Net Investment Income** | 27950583 |
| <br>REALIZED AND UNREALIZED GAIN/LOSS: |  |
| Net realized loss on: |  |
| &nbsp;&nbsp;&nbsp; Investments | (246029) |
| Net change in unrealized appreciation/(depreciation) on:  |  |
| &nbsp;&nbsp;&nbsp;Investments | (31682221) |
| Net Realized and Unrealized Loss on Investments | (31928250) |
| **Net Decrease in Net Assets Resulting from Operations** | $(3977667) |

---

*See Notes to Financial Statements.* 

Annual Report \| December 31, 2022 13

 

 

<u>Flat Rock Opportunity Fund</u> <u>Statements of Changes in Net Assets</u>

---

| | | |
|:---|:---|:---|
|  | **For the<br> Year Ended**<br>**December 31, 2022** | **For the<br> Year Ended**<br>**December 31, 2021** |
| NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS: |  |  |
| Net investment income | $27950583 | $16180569 |
| Net realized gain/(loss) | (246029) | 4330817 |
| Net change in unrealized appreciation/(depreciation) | (31682221) | 1745564 |
| Net increase/(decrease) in net assets resulting from operations | (3977667) | 22256950 |
| DISTRIBUTIONS TO SHAREHOLDERS: |  |  |
| Distributions paid | (27263603) | (11698681) |
| Decrease in net assets from distributions to shareholders | (27263603) | (11698681) |
| CAPITAL SHARE TRANSACTIONS: |  |  |
| Proceeds from shares sold | 80306150 | 86693915 |
| Reinvestment of distributions | 8740818 | 3491481 |
| Cost of shares repurchased | (31341471) | (14204916) |
| Net increase in net assets from capital share transactions | 57705497 | 75980480 |
| **Net Increase in Net Assets** | 26464227 | 86538749 |
| NET ASSETS: |  |  |
| Beginning of period | 165714051 | 79175302 |
| End of period | $192178278 | $165714051 |
| OTHER INFORMATION: |  |  |
| **Share Transactions:** |  |  |
| <br> Shares sold | 3949182 | 3930278 |
| Shares issued in reinvestment of distributions | 429245 | 158927 |
| Shares repurchased | (1572224) | (648727) |
| Net increase in shares outstanding | 2806203 | 3440478 |

---

 

*See Notes to Financial Statements.* 

14 www.flatrockglobal.com

<u>Flat Rock Opportunity Fund</u> <u>Statement of Cash Flows</u> <br> *For the Year Ended December 31, 2022*

---

| | |
|:---|:---|
| CASH FLOWS RESULTING FROM OPERATING ACTIVITIES: |  |
| Net decrease in net assets resulting from operations | $(3977667) |
| Adjustments to reconcile net decrease in net assets resulting from operations to net cash used in operating activities: |  |
| &nbsp;&nbsp;&nbsp;Purchase of investment securities | (159669123) |
| &nbsp;&nbsp;&nbsp;Proceeds from sale of investment securities | 50830144 |
| &nbsp;&nbsp;&nbsp;Net purchase of short-term investment securities | 12375909 |
| &nbsp;&nbsp;&nbsp;Amortization of premium and accretion of discount on investments, net | 7514664 |
| Net realized loss on: |  |
| &nbsp;&nbsp;&nbsp;Investments | 246029 |
| Net change in unrealized (appreciation)/depreciation on: |  |
| &nbsp;&nbsp;&nbsp;Investments | 31682221 |
| (Increase)/Decrease in assets: |  |
| &nbsp;&nbsp;&nbsp;Interest receivable | (2573073) |
| &nbsp;&nbsp;&nbsp;Prepaid loan commitment fees | 185033 |
| &nbsp;&nbsp;&nbsp;Fee rebate | (398970) |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | (127435) |
| Increase/(Decrease) in liabilities: |  |
| &nbsp;&nbsp;&nbsp;Accrued interest expense | (481166) |
| &nbsp;&nbsp;&nbsp;Incentive fee payable | 178498 |
| &nbsp;&nbsp;&nbsp;Payable to counterparties | (121086) |
| &nbsp;&nbsp;&nbsp;Management fee payable | 89204 |
| &nbsp;&nbsp;&nbsp;Payable for fund accounting and administration fees | 20982 |
| &nbsp;&nbsp;&nbsp;Accrued commitment fees on credit facility | (43467) |
| &nbsp;&nbsp;&nbsp;Payable for custodian fees | 3536 |
| &nbsp;&nbsp;&nbsp;Payable for audit and tax service fees | 21249 |
| &nbsp;&nbsp;&nbsp;Payable to transfer agent | 44927 |
| &nbsp;&nbsp;&nbsp;Distributions payable on redeemable preferred stock | 63583 |
| &nbsp;&nbsp;&nbsp;Payable to trustees and officers | (25) |
| &nbsp;&nbsp;&nbsp;Payable for excise tax | (266031) |
| &nbsp;&nbsp;&nbsp;Other accrued expenses | 40882 |
| **Net cash used in operating activities** | (64361182) |
| CASH FLOWS FROM FINANCING ACTIVITIES: |  |
| Proceeds from shares sold | 82634633 |
| Proceeds from issuance mandatorily redeemable preferred stock (net of deferred financing costs of $782,113) | 19590805 |
| Cost of shares repurchased | (31341471) |
| Borrowing on credit facility | 22125000 |
| Payments on credit facility | (10125000) |
| Cash distributions paid | (18522785) |
| **Net cash provided by financing activities** | 64361182 |
| **Net increase in cash** | – |
| **Cash, beginning of period** | $– |
| **Cash, end of period** | $– |

---

*See Notes to Financial Statements.* 

Annual Report \| December 31, 2022 15

<u>Flat Rock Opportunity Fund</u> <u>Statement of Cash Flows</u> <br> *For the Year Ended December 31, 2022*

---

| | |
|:---|:---|
| **Non-cash financing activities not included herein consist of:**  |  |
| &nbsp;&nbsp;&nbsp;**Reinvestment of dividends and distributions:** | $8740818 |
| **Cash paid for interest on credit facility during the period was:** | $3409315 |
| **Cash paid for distributions to mandatorily redeemable preferred stock:** | $2521917 |

---

 

*See Notes to Financial Statements.* 

16 www.flatrockglobal.com

 

Flat Rock Opportunity Fund Financial Highlights <br> *For a share outstanding throughout the periods presented*

 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |<br>**For the**<br>**Year Ended**<br>**December 31,**<br> **2022** |<br>**For the**<br>**Year Ended**<br>**December 31,**<br>**2021** |<br>**For the**<br>**Year Ended**<br>**December 31,**<br> **2020** |<br>**For the**<br>**Year Ended**<br>**December 31,**<br> **2019** | **For the Period**<br>**July 2, 2018**<br>**(Commencement**<br>**of Operations) to**<br>**December 31,**<br>**2018** |
| Net asset value - beginning of period | $22.21 | $19.70 | $19.48 | $19.06 | $20.00 |
| **Income/(loss) from investment operations:** |  |  |  |  |  |
| Net investment income<sup>(a)</sup> | 3.05 | 3.03 | 2.16 | 2.16 | 0.99 |
| Net realized and unrealized gain/(loss) on investments<sup>(a)</sup> | (3.54) | 1.61 | 0.24 | 0.26 | (1.26) |
| Total income/(loss) from investment operations | (0.49) | 4.64 | 2.40 | 2.42 | (0.27) |
| **Less distributions:** |  |  |  |  |  |
| From net investment income | (2.92) | (2.12) | (2.18) | (2.00) | (0.67) |
| From net realized gain on investments | (0.08) | (0.01) | – | – | – |
| Total distributions | (3.00) | (2.13) | (2.18) | (2.00) | (0.67) |
| Net increase/(decrease) in net asset value | (3.49) | 2.51 | 0.22 | 0.42 | (0.94) |
| Net asset value - end of period | $18.72 | $22.21 | $19.70 | $19.48 | $19.06 |
| **Total Return<sup>(b)</sup>** | (2.49)% | 24.30% | 14.50% | 13.24% | (1.44)%<sup>(c)</sup> |
| **Ratios/Supplemental Data:** |  |  |  |  |  |
| Net assets, end of period (in thousands) | $192178 | $165714 | $79175 | $45007 | $16262 |
| **Ratios to Average Net Assets (including interest on credit facility and mandatorily redeemable preferred stock)<sup>(d)</sup>** |  |  |  |  |  |

---

*See Notes to Financial Statements.* 

Annual Report \| December 31, 2022 17

Flat Rock Opportunity Fund Financial Highlights <br> *For a share outstanding throughout the periods presented*

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the<br> Year Ended December 31, 2022** | **For the<br> Year Ended December 31, 2021** | **For the<br> Year Ended December 31, 2020** | **For the<br> Year Ended December 31, 2019** | **For the Period July 2, 2018 (Commencement of Operations) to December 31, 2018** |
| Ratio of expenses to average net assets including fee waivers and reimbursements | 8.73% | 7.62% | 5.23% | 3.67% | 0.89 %<sup>(e)</sup> |
| Ratio of expenses to average net assets excluding fee waivers and reimbursements | **8.73%** | **7.62%** | **5.37%** | **4.93%** | **7.51** **%<sup>(e)</sup>** |
| Ratio of net investment income to average net assets including fee waivers and reimbursements | **14.94%** | **13.92%** | **12.37%** | **11.02%** | **9.99** **%<sup>(e)</sup>** |
| Ratio of net investment income to average net assets excluding fee waivers and reimbursements | **14.94%** | **13.92%** | **12.23%** | **9.76%** | **3.36** **%<sup>(e)</sup>** |
| **Ratios to Average Net Assets (excluding interest on credit facility and distributions on mandatorily redeemable preferred stock)<sup>(d)</sup>** |  |  |  |  |  |
| Ratio of expenses to average net assets including fee waivers and reimbursements | 5.78% | 5.61% | 4.53% | N/A | N/A |
| Ratio of expenses to average net assets excluding fee waivers and reimbursements | 5.78% | 5.61% | 4.67% | N/A | N/A |

---

*See Notes to Financial Statements.* 

18 www.flatrockglobal.com

Flat Rock Opportunity Fund Financial Highlights <br> *For a share outstanding throughout the periods presented*

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the<br> Year Ended<br> December 31,<br> 2022** | **For the<br> Year Ended<br> December 31,<br> 2021** | **For the<br> Year Ended<br> December 31,<br> 2020** | **For the<br> Year Ended<br> December 31, <br> 2019** | **For the Period<br> July 2, 2018<br> (Commencement<br> of Operations)<br> to December 31,<br> 2018** |
| Ratio of net investment income to average net assets including fee waivers and reimbursements | 17.89% | 15.92% | 13.07% | N/A | N/A |
| Ratio of net investment income to average net excluding fee waivers and reimbursements | 17.89% | 15.92% | 12.93% | N/A | N/A |
| Portfolio turnover rate | 19% | 99% | 43% | 52% | 131 %<sup>(c)</sup> |
| **Credit Facility:** |  |  |  |  |  |
| Aggregate principal amount, end of period (000s): | 49000 | 37000 | 21890 |  |  |
| Asset coverage, end of period per $1,000:<sup>(f)</sup> | 4932 | 5505 | 4627 |  |  |
| **Redeemable Preferred Stock:** |  |  |  |  |  |
| Liquidation value, end of period (000s): | 45000 | 25000 |  |  |  |
| Asset coverage, end of period per $1,000:<sup>(g)</sup> | 3044 | 3690 |  |  |  |

---

*<sup>(a)</sup>* *Based on average shares outstanding during the period.*

*<sup>(b)</sup>* *Total return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund, assuming reinvestment of dividends.*

*<sup>(c)</sup>* *Not annualized.*

*<sup>(d)</sup>* *Interest expense relates to the Fund's Credit Facility (see Note 9) and includes amortization of debt issuance costs as well as distributions on mandatorily redeemable preferred stock (see Note 10).*

*<sup>(e)</sup>* *Annualized.*

*See Notes to Financial Statements.*

Annual Report \| December 31, 2022 19

Flat Rock Opportunity Fund Financial Highlights <br> *For a share outstanding throughout the periods presented*

*<sup>(f)</sup>* *Calculated by subtracting the Fund's total liabilities (excluding the Credit Facility and accumulated unpaid interest on Credit Facility) from the Fund's total assets and dividing by the outstanding Credit Facility balance.*

*<sup>(g)</sup>* *Calculated by subtracting the Fund's total liabilities (excluding the liquidation value of the Mandatorily Redeemable Preferred Stock including distributions payable on Mandatorily Redeemable Preferred Stock and the Credit Facility and accumulated unpaid interest on Credit Facility) from the Fund's total assets and dividing by the liquidation value of the Mandatorily Redeemable Preferred Stock and the outstanding Credit Facility balance.*

*See Notes to Financial Statements.* 

20 www.flatrockglobal.com

<u>Flat Rock Opportunity Fund</u> <u>Notes to Financial Statements</u> <br> *December 31, 2022*

1. ORGANIZATION

Flat Rock Opportunity Fund (the "Fund") is registered under the Investment Company Act of 1940, as amended, (the "1940 Act") as a non-diversified, closed-end management investment company. The shares of beneficial interest of the Fund (the "Shares") are continuously offered under Rule 415 under the Securities Act of 1933, as amended (the "Securities Act"). The Fund operates as an interval fund pursuant to Rule 23c-3 under the 1940 Act, and has adopted a fundamental policy to conduct quarterly repurchase offers at net asset value ("NAV").

The Fund's investment objective is to generate current income and, as a secondary objective, long-term capital appreciation.

The Fund was formed as a Delaware statutory trust on February 12, 2018 and operates pursuant to an Amended and Restated Agreement and Declaration of Trust governed by and interpreted in accordance with the laws of the State of Delaware. The Fund had no operations from that date to July 2, 2018, other than those related to organizational matters and the registration of its shares under applicable securities laws.

2. SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies followed by the Fund in preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The Fund is an investment company under U.S. GAAP and follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 946.

**Use of Estimates:** The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of increases and decreases in net assets from operations during the period. Actual results could differ from these estimates.

**Preferred Shares:** In accordance with ASC 480-10-25, the Fund's mandatorily redeemable preferred stock have been classified as debt on the Statement of Assets and Liabilities. Refer to "Note 10. Mandatorily Redeemable Preferred Stock" for further details.

**Security Valuation:** The Fund records its investments at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The valuation techniques used to determine fair value are further described below. The Fund determines the NAV of its shares daily as of the close of regular trading (normally, 4:00 p.m., Eastern time) on each day that the New York Stock Exchange ("NYSE") is open for business.

Equity securities for which market quotations are available are generally valued at the last sale price or official closing price on the primary market or exchange on which they trade.

Annual Report \| December 31, 2022 21

<u>Flat Rock Opportunity Fund</u> <u>Notes to Financial Statements</u> <br> *December 31, 2022*

Short-term debt securities having a remaining maturity of 60 days or less when purchased are valued at cost adjusted for amortization of premiums and accretion of discounts, which approximates fair value.

The Fund's Board of Trustees (the "Board") is responsible for the valuation of the Fund's portfolio investments for which market quotations are not readily available, as determined in good faith pursuant to the Fund's valuation policy and consistently applied valuation process. Rule 2a-5 under the 1940 Act sets forth the requirements for determining fair value in good faith. Determining fair value in good faith requires (i) assessment and management of risks, (ii) establishment of fair value methodologies, (iii) testing of fair value methodologies, and (iv) evaluation of pricing services. The Board is responsible for determining fair value in good faith, however, the day to day implementation of the Fund's fair valuation process is performed by Flat Rock Global, LLC (the "Adviser"), as the valuation designee under Rule 2a-5, with the oversight and supervision of the Board, as outlined in the Fund's valuation policies and procedures.

If market quotations are not readily available, securities or other assets will be valued at their fair market value as determined using the "fair value" procedures approved by the Board. In these cases, the Fund's NAV will reflect certain portfolio investment's fair value rather than their market price. Fair value pricing involves subjective judgments and it is possible that the fair value determined for an investment may be materially different than the value that could be realized upon the sale of that investment. The fair value prices can differ from market prices when they become available or when a price becomes available.

The Fund primarily invests in junior debt or equity tranches of collateralized loan obligations ("CLOs"). In valuing such investments, the Adviser considers the indicative prices provided by a recognized industry pricing service as a primary source for its CLO debt and equity positions, and the implied yield of such prices, supplemented by actual trades executed in the market at or around period-end, as well as the indicative prices provided by the broker who arranges transactions in such investment vehicles.

Additional factors include any available information on other relevant transactions, including firm bids and offers in the market and information resulting from bids-wanted-in-competition. In addition, the Adviser considers the operating metrics of the specific investment vehicle, including compliance with collateralization tests, defaulted and restructured securities, payment defaults, if any, and covenant cushions. In periods of illiquidity and volatility, the Adviser may rely more heavily on other qualities and metrics, including, but not limited to, the collateral manager, time left in the reinvestment period, and expected cash flows and overcollateralization ratios.

All available information, including non-binding indicative bids which may not be considered reliable, typically will be considered by the Adviser in making its fair value determinations. In some instances, there may be limited trading activity in a security even though the market for the security is considered not active. In such cases the Adviser will consider the number of trades, the size and timing of each trade, and other circumstances around such trades, to the extent such information is available. The Adviser expects to evaluate the impact of valuation reports from third-party valuation firms and factor them into its consideration of fair value.

22 www.flatrockglobal.com

<u>Flat Rock Opportunity Fund</u> <u>Notes to Financial Statements</u> <br> *December 31, 2022*

The Fund may also invest directly in Senior Loans (either in the primary or secondary markets). Certain of the Senior Loans held by the Fund will be broadly syndicated loans. Broadly syndicated loans will be valued by using readily available market quotations or another commercially reasonable method selected by an independent, third party pricing service or by using broker quotations.

For each Senior Loan where market quotations are not readily available, the Fund will obtain a valuation from a third-party valuation firm each quarter when it receives financial updates from portfolio companies. Valuations will be updated whenever material information is received from portfolio companies. As a proxy for discount rates and market comparables, the Adviser will look to the Morningstar LSTA U.S. Leveraged Loan 100 Index, formerly the S&P/LSTA U.S. Leveraged Loan 100 Index (the "LSTA Index") for significant price movements. The LSTA Index is a market value-weighted index designed to track the performance of the U.S. leveraged loan market based upon market weightings, spreads and interest payments. The LSTA Index is comprised of senior secured loans denominated in U.S. dollars that meet certain selection criteria. If the LSTA index cumulative change is greater than 1% or less than -1% from the completion date of the most recent valuation, then the Adviser will adjust the value of the Senior Loan by 20% of the LSTA Index change. For example, if the LSTA Index trades down or up by 5%, then the Adviser will adjust the value of the Senior Loans by 1% to mirror the LSTA Index. Furthermore, if the LSTA Index moves another 1% (over 2% cumulative change) in either direction, then the Adviser will further adjust the value based on the aforementioned methodology.

In addition, the values of the Fund's Senior Loans may be adjusted daily based on changes to the estimated total return that the asset will generate during the current quarter. The Adviser will monitor these estimates daily and update them as necessary if macro or individual changes warrant any adjustments. To the extent adjustments are necessary, the Senior Loans may be valued based on prices supplied by a pricing agent(s), based on broker or dealer supplied valuations, based on model pricing, or based on matrix pricing, which is a method of valuing securities or other assets by reference to the value of other securities or other assets with similar characteristics, such as rating, interest rate and maturity. Each quarter, each Senior Loan's value is adjusted based on the actual income and appreciation or depreciation realized by such loan after its most recent quarterly valuations and income are reported. The Fund's Senior Loans are valued without accrued interest, and accrued interest is reported as income in the Fund's Statement of Operations.

The fair value of securities may be difficult to determine and thus judgment plays a greater role in the valuation process. The fair valuation methodology may include or consider the following guidelines, as appropriate: (1) evaluation of all relevant factors, including but not limited to, pricing history, current market level and supply and demand of the respective security; (2) comparison to the values and current pricing of securities that have comparable characteristics; (3) knowledge of historical market information with respect to the security; and (4) other factors relevant to the security which would include, but not be limited to, duration, yield, fundamental analytical data, the

U.S. Treasury yield curve and credit quality.

**Federal Income Taxes:** The Fund has elected to be treated for U.S. federal income tax purposes as a regulated investment company ("RIC") under Subchapter M of the Internal Revenue Code of 1986, as amended. Accordingly, the Fund will generally not pay corporate-level U.S. federal income taxes on any net ordinary income or capital gains that are timely distributed to shareholders. To qualify as a RIC, the Fund must, among other things, meet certain source-of-income and asset diversification requirements and timely distribute at least 90% of its investment company taxable income each year to its shareholders.

Annual Report \| December 31, 2022 23

<u>Flat Rock Opportunity Fund</u> <u>Notes to Financial Statements</u> <br> *December 31, 2022*

As of and during the year ended December 31, 2022, the Fund did not have a liability for any unrecognized tax benefits. The Fund files U.S. federal, state, and local tax returns as required. The Fund's tax returns are subject to examination by the relevant tax authorities until expiration of the applicable statute of limitations which is generally three years after the filing of the tax return for federal purposes and four years for most state returns.

The Fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expenses on the Statement of Operations. During the year ended December 31, 2022, the Fund did not incur any interest or penalties.

**Securities Transactions and Investment Income:** Investment security transactions are accounted for on a trade date basis. Dividend income is recorded on the ex-dividend date. Discounts and premiums on securities purchased are amortized or accreted using the effective interest method. Realized gains and losses from securities transactions and unrealized appreciation and depreciation of securities are determined using the identified cost basis method for financial reporting purposes. Interest income from investments in the "equity" class of CLO funds will be recorded based upon an estimate of an effective yield to expected maturity utilizing assumed cash flows*.*

 

**Distributions to Shareholders:** The Fund normally pays dividends, if any, monthly, and distributes capital gains, if any, on an annual basis. Income dividend distributions are derived from dividends and interest income the Fund receives from its investments, including short term capital gains. Long term capital gain distributions are derived from gains realized when the Fund sells a security it has owned for more than one year.

**Cash and Cash Equivalents:** Cash and cash equivalents (e.g. U.S. Treasury bills) may include demand deposits and highly liquid investments with original maturities of three months or less. Cash and cash equivalents are carried at cost, which approximates fair value. The Fund deposits its cash and cash equivalents with highly-rated banking corporations and, at times, may exceed the insured limits under applicable law.

3. FAIR VALUE MEASUREMENTS

The Fund utilizes various inputs to measure the fair value of its investments. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability that are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability that are developed based on the best information available. These inputs are categorized in the following hierarchy under applicable financial accounting standards:

---

| | |
|:---|:---|
| **Level 1 -** | Unadjusted quoted prices in active markets for identical assets and liabilities that the Fund has the ability to access at the measurement date. |

---

24 www.flatrockglobal.com

<u>Flat Rock Opportunity Fund</u> <u>Notes to Financial Statements</u> <br> *December 31, 2022*

---

| | |
|:---|:---|
| **Level 2 -** | Significant observable inputs (including quoted prices for the identical instrument on an inactive market, quoted prices for similar instruments, interest rates, prepayment spreads, credit risk, yield curves, default rates and similar data). |
| **Level 3 -** | Significant unobservable inputs (including the Fund's own assumptions in determining the fair value of the investments) to the extent relevant observable inputs are not available, for the asset or liability at the measurement date. |

---

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.

The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The inputs used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following table summarizes the inputs used to value the Fund's investments under the fair value hierarchy levels as of December 31, 2022:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Valuation Inputs** | **Valuation Inputs** | **Valuation Inputs** | |
| <br>**Investments in Securities at Value** | **Level 1** | **Level 2** | **Level 3** |<br>**Total** |
| Collateralized Loan Obligations Equity | $&nbsp;&nbsp;&nbsp;&nbsp;– | $&nbsp;&nbsp;&nbsp;&nbsp; – | $238148256 | $238148256 |
| Collateralized Loan Obligations Debt |  |  | 41364745 | 41364745 |
| Short Term Investments | 1623630 | – | – | 1623630 |
| Total | $1623630 | $– | $279513001 | $281136631 |

---

Annual Report \| December 31, 2022 25

<u>Flat Rock Opportunity Fund</u> <u>Notes to Financial Statements</u> <br> *December 31, 2022*

The following is a reconciliation of the fair value of investments for which the Fund has used Level 3 unobservable inputs in determining fair value as of December 31, 2022:

---

| | | | |
|:---|:---|:---|:---|
|  | **Collateralized Loan<br> Obligations Equity** | **Collateralized Loan**<br> **Obligations Debt** | **Total** |
| Balance as of December 31, 2021 | $192608658 | $13278278 | $205886936 |
| &nbsp;&nbsp;&nbsp;Accrued discount/premium | (8268703) | 621696 | (7647007) |
| &nbsp;&nbsp;&nbsp;Realized gain/(loss) |  | (454559) | (454559) |
| &nbsp;&nbsp;&nbsp;Change in unrealized appreciation/(depreciation) | (30952450**)** | (729770**)** | (31682220**)** |
| &nbsp;&nbsp;&nbsp;Purchases | 125888576 | 38618046 | 164506622 |
| &nbsp;&nbsp;&nbsp;Sales proceeds | (41127825) | (9968946) | (51096771) |
| &nbsp;&nbsp;&nbsp;Transfer into Level 3 |  |  |  |
| &nbsp;&nbsp;&nbsp;Transfer out of Level 3 | – | – | – |
| Balance as of December 31, 2022 | $238148256 | $41364745 | $279513001 |
| Net change in unrealized appreciation/(depreciation) included in Statements of Operations attributable to Level 3 investments held at December 31, 2022 | $(30952450**)** | $(729770**)** | $(31682220**)** |

---

The following table summarizes the valuation techniques and significant unobservable inputs used for the Fund's investments that are categorized in Level 3 of the fair value hierarchy as of December 31, 2022:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Asset Class** | **Fair Value** | **Valuation Technique(s)** | **Unobservable<br> Input(s)<sup>(a)</sup>** | **Input<br> Value(s)** |
| Collateralized Loan Obligations Equity | $168942992 | Third-party vendor pricing service\* | Broker Quotes | N/A |
|  | $51126626 | Recent transaction | Acquisition Cost | N/A |
|  | $3405599 | Yield Analysis | Internal Rate of Return | 18% |
|  | $14673039 | Liquidation Net Asset Value | Broker quotes | 0.73% -54.6 |
| Collateralized Loan Obligations Debt | $31546754 | Third-party vendor pricing service\* | Broker Quotes | N/A |
|  | $9817991 | Recent transaction | Acquisition Cost | N/A |

---

*\** *The Fund generally uses prices provided by an independent pricing service on the valuation date as the primary basis for the fair value determinations for CLO debt and equity investments. These prices are non-binding, indicative, and may not be determinative of fair value. Each price is evaluated by the Board in conjunction with additional information compiled by the Adviser, including performance and covenant compliance.*

26 www.flatrockglobal.com

<u>Flat Rock Opportunity Fund</u> <u>Notes to Financial Statements</u> <br> *December 31, 2022*

*<sup>(a)</sup>* *A change to the unobservable input may result in a significant change to the value of the investment as follows:*

 

---

| | | |
|:---|:---|:---|
| **Unobservable Input** | &nbsp;&nbsp;&nbsp;&nbsp;**Impact to Value if Input Increases** | &nbsp;&nbsp;**Impact to Value if Input Decreases** |
| Broker Quotes | &nbsp;&nbsp;&nbsp;&nbsp;Increase | &nbsp;&nbsp;Decrease |
| Acquisition Cost | &nbsp;&nbsp;&nbsp;&nbsp;Increase | &nbsp;&nbsp;Decrease |
| Internal Rate of Return | &nbsp;&nbsp;&nbsp;&nbsp;Decrease | &nbsp;&nbsp;Increase |

---

 

4. INVESTMENT ADVISORY SERVICES AND OTHER AGREEMENTS

Flat Rock Global, LLC serves as the investment adviser to the Fund pursuant to the terms of an investment advisory agreement (the "Advisory Agreement"). Under the terms of the Advisory Agreement, the Adviser provides the Fund such investment advice as it deems advisable and furnishes a continuous investment program for the Fund consistent with the Fund's investment objective and strategies. As compensation for its management services, the Fund pays the Adviser a management fee of 1.375% (as a percentage of the average daily value of total assets), paid monthly in arrears, calculated based on the average daily value of total assets during such period.

In addition to the management fee, the Adviser in entitled to an incentive fee. The incentive fee is calculated and payable quarterly in arrears in an amount equal to 15.0% of the Fund's "pre-incentive fee net investment income" for the immediately preceding quarter, and is subject to a hurdle rate, expressed as a rate of return on the Fund's "adjusted capital," equal to 2.00% per quarter (or an annualized hurdle rate of 8.00%), subject to a "catch-up" feature, which allows the Adviser to recover foregone incentive fees that were previously limited by the hurdle rate. For this purpose, "pre-incentive fee net investment income" means interest income, dividend income and any other income accrued during the calendar quarter, minus the Fund's operating expenses for the quarter (including the management fee, expenses reimbursed to the Adviser for any administrative services provided by the Adviser and any interest expense and distributions paid on any issued and outstanding preferred shares, but excluding the incentive fee). "Adjusted capital" means the cumulative gross proceeds received by the Fund from the sale of shares (including pursuant to the Fund's distribution reinvestment plan), reduced by amounts paid in connection with purchases of the Fund's shares pursuant to the Fund's Repurchase Program.

The calculation of the incentive fee on pre-incentive fee net investment income for each quarter is as follows:

● No incentive fee is payable in any calendar quarter in which the Fund's pre-incentive fee net investment income does not exceed the hurdle rate of 2.00% per quarter (or an annualized rate of 8.00%);

● 100% of the Fund's pre-incentive fee net investment income, if any, that exceeds the hurdle rate but is less than or equal to 2.352%. This portion of the Fund's pre-incentive fee net investment income (which exceeds the hurdle rate but is less than or equal to 2.352%) is referred to as the "catch-up." The "catch-up" provision is intended to provide the Adviser with an incentive fee of 15.0% on all of the Fund's pre-incentive fee net investment income when its pre-incentive fee net investment income reaches 2.352% in any calendar quarter; and

Annual Report \| December 31, 2022 27

<u>Flat Rock Opportunity Fund</u> <u>Notes to Financial Statements</u> <br> *December 31, 2022*

● 15.0% of the amount of the Fund's pre-incentive fee net investment income, if any, that exceeds 2.352% in any calendar quarter is payable to the Adviser once the hurdle rate is reached and the catch-up is achieved (15.0% of all pre-incentive fee net investment income thereafter will be allocated to the Adviser).

ALPS Fund Services, Inc. ("ALPS") serves as the Fund's Administrator and Accounting Agent and receives customary fees from the Fund for such services.

DST Systems Inc., an affiliate of ALPS, serves as transfer, dividend paying and shareholder servicing agent for the Fund.

U.S. Bank N.A. serves as the Fund's custodian.

The Fund has entered into a Distribution Agreement with ALPS Distributors, Inc. (the "Distributor"), an affiliate of ALPS, to provide distribution services to the Fund. The Distributor serves as principal underwriter/distributor of shares of the Fund.

ALPS, DST Systems Inc., U.S. Bank N.A., and the Distributor are not considered affiliates, as defined under the 1940 Act, of the Fund.

5. REPURCHASE OFFERS

The Fund conducts quarterly repurchase offers of 5% of the Fund's outstanding shares. Repurchase offers in excess of 5% are made solely at the discretion of the Board and investors should not rely on any expectation of repurchase offers in excess of 5%. In the event that a repurchase offer is oversubscribed, shareholders may only be able to have a portion of their shares repurchased.

Quarterly repurchases occur in the months of March, June, September and December. A Repurchase Offer Notice will be sent to shareholders at least 21 calendar days before the Repurchase Request Deadline, which is ordinarily on the third Friday of the month in which the repurchase occurs. The repurchase price will be the Fund's NAV determined on the repurchase pricing date, which is ordinarily expected to be the Repurchase Request Deadline. Payment for all shares repurchased pursuant to these offers will be made not later than seven calendar days after the repurchase pricing date.

28 www.flatrockglobal.com

<u>Flat Rock Opportunity Fund</u> <u>Notes to Financial Statements</u> <br> *December 31, 2022*

During the year ended December 31, 2022, the Fund completed four quarterly repurchase offers. In these offers, the Fund offered to repurchase 5% of the number of its outstanding shares as of the Repurchase Pricing Dates. The result of the repurchase offers were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Repurchase <br> Offer #1** | **Repurchase <br> Offer #2** | **Repurchase <br> Offer #3** | **Repurchase <br> Offer #4** |
| Commencement Date | February 11, 2022 | May 19, 2022 | August 18, 2022 | November 16, 2022 |
| Repurchase Request Deadline | March 17, 2022 | June 23, 2022 | September 22, 2022 | December 20, 2022 |
| Repurchase Pricing Date | March 17, 2022 | June 23, 2022 | September 22, 2022 | December 20, 2022 |
| Amount Repurchased | $7245403 | $9711530 | $4409116 | $9975422 |
| Shares Repurchased | 327525 | 482440 | 226810 | 535449 |

---

6. PORTFOLIO INFORMATION

Purchases and sales of securities for the year ended December 31, 2022, excluding short-term securities, were as follows:

---

| | |
|:---|:---|
| **Purchases of Securities** | **Proceeds from Sales of Securities** |
| $164506623 | $50830144 |

---

7. TAXES

**Classification of Distributions** 

Distributions are determined in accordance with U.S. federal income tax regulations, which differ from U.S. GAAP, and therefore, may differ significantly in amount or character from net investment income and realized gains for financial statement purposes. Financial reporting records are adjusted for permanent book/tax differences to reflect tax character but are not adjusted for temporary differences.

The tax character of distributions paid by the Fund during the fiscal year ended December 31, 2022, was as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| <br>**Ordinary**<br>**Income** |<br>**Tax-Exempt**<br>**Income** | **Distributions**<br>**paid from**<br>**Long-Term**<br>**Capital Gain** |<br>**Return of**<br>**Capital** |<br><br>**Total** |
| $26473418 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; – | $790185 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; – | $27263603 |

---

Annual Report \| December 31, 2022 29

<u>Flat Rock Opportunity Fund</u> <u>Notes to Financial Statements</u> <br> *December 31, 2022*

The tax character of distributions paid by the Fund during the fiscal year ended December 31, 2021, was as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| <br>**Ordinary**<br>**Income** |<br>**Tax-Exempt**<br>**Income** | **Distributions**<br>**paid from**<br>**Long-Term**<br>**Capital Gain** |<br>**Return of**<br>**Capital** |<br><br>**Total** |
| $11698681 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; – | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; – | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; – | $11698681 |

---

**Components of Distributable Earnings on a Tax Basis**

The tax components of distributable earnings are determined in accordance with income tax regulations which may differ from the composition of net assets reported under U.S. GAAP. The amount reclassified did not affect net assets. The reclassification related to non-deductible excise taxes paid and non-deductible partnership expenses was as follows:

---

| | |
|:---|:---|
| **Paid-in Capital** | **Total Distributable Earnings** |
| $(390033) | $390033 |

---

At December 31, 2022, the components of distributable earnings/(accumulated deficit) on a tax basis for the Fund were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|<br>**Undistributed**<br>**Ordinary Income** |<br>**Accumulated Capital**<br>**Gains/(Losses)** | **Net Unrealized**<br>**Appreciation/**<br>**(Depreciation)** | **Other Cumulative**<br>**Effect of Timing**<br>**Differences** |<br>**Total** |
| $23710658 | $(481375) | $(39519856) | $– | $(16290573) |

---

**Tax Basis of Investments**

Net unrealized appreciation/(depreciation) of investments based on federal tax cost as of December 31, 2022, with differences related to passive foreign investment companies and partnership interests, was as follows:

---

| | | | |
|:---|:---|:---|:---|
| **Gross Appreciation<br> (excess of value over tax)** | **Gross Depreciation<br> (excess of tax cost over<br> value)** | **Net Unrealized<br> Appreciation/<br> (Depreciation)** | **Cost of Investments for<br> Income Tax Purposes** |
| $1973699 | $(41493555) | $(39519856) | $320656487 |

---

---

| | |
|:---|:---|
| **Non-Expiring Short-Term** | **Non-Expiring Long-Term** |
| $465601 | $15774 |

---

30 www.flatrockglobal.com

<u>Flat Rock Opportunity Fund</u> <u>Notes to Financial Statements</u> <br> *December 31, 2022*

8. RISK FACTORS

In the normal course of business, the Fund invests in financial instruments and enters into financial transactions where risk of potential loss exists due to such things as changes in the market (market risk) or failure or inability of the other party to a transaction to perform (credit and counterparty risk). See below for a detailed description of select principal risks. The following list is not intended to be a comprehensive listing of all of the potential risks associated with the Fund. The Fund's prospectus provides a detailed discussion of the Fund's risks.

**CLO Risk:** Investments in CLOs carry additional risks, including, but not limited to (i) the possibility that distributions from collateral securities will not be adequate to make interest or other payments; (ii) the quality of the collateral may decline in value or default; (iii) the possibility that the investments in CLOs are subordinate to other classes or tranches thereof; and (iv) the complex structure of the security may not be fully understood at the time of investment and may produce disputes with the issuer or unexpected investment results. In addition, at the time of issuance, the CLO may not be fully invested. Until the CLO is fully invested, the debt service of the CLO may exceed the amount of interest earned from the CLO's portfolio. Though not exclusively, the Fund will typically be in a first loss or subordinated position with respect to realized losses on the assets of the CLOs in which it is invested. The Fund may recognize phantom taxable income from its investments in the subordinated tranches of CLOs and structured notes.

Between the closing date and the effective date of a CLO, the CLO collateral manager will generally expect to purchase additional collateral obligations for the CLO. During this period, the price and availability of these collateral obligations may be adversely affected by a number of market factors, including price volatility and availability of investments suitable for the CLO, which could hamper the ability of the collateral manager to acquire a portfolio of collateral obligations that will satisfy specified concentration limitations and allow the CLO to reach the initial par amount of collateral prior to the effective date. An inability or delay in reaching the target initial par amount of collateral may adversely affect the timing and amount of interest or principal payments received by the holders of the CLO debt securities and distributions of the CLO on equity securities and could result in early redemptions which may cause CLO debt and equity investors to receive less than the face value of their investment.

The failure by a CLO in which the Fund invests to satisfy financial covenants, including with respect to adequate collateralization and/or interest coverage tests, could lead to a reduction in the CLO's payments to the Fund. In the event that a CLO fails certain tests, holders of CLO senior debt may be entitled to additional payments that would, in turn, reduce the payments the Fund would otherwise be entitled to receive. Separately, the Fund 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 CLO or any other investment the Fund may make. If any of these occur, it could adversely affect the Fund's operating results and cash flows.

The Fund's CLO investments are exposed to leveraged credit risk. If certain minimum collateral value ratios and/or interest coverage ratios are not met by a CLO, primarily due to senior secured loan defaults, then cash flow that otherwise would have been available to pay distributions to the Fund on its CLO investments may instead be used to redeem any senior notes or to purchase additional senior secured loans, until the ratios again exceed the minimum required levels or any senior notes are repaid in full. The Fund's CLO investments and/or the underlying senior secured loans may prepay more quickly than expected, which could have an adverse impact on the Fund's net assets.

Annual Report \| December 31, 2022 31

<u>Flat Rock Opportunity Fund</u> <u>Notes to Financial Statements</u> <br> *December 31, 2022*

**Liquidity Risk:** The securities issued by CLOs generally offer less liquidity than below investment grade or high-yield corporate debt, and are subject to certain transfer restrictions imposed on certain financial and other eligibility requirements on prospective transferees. Other investments the Fund may purchase through privately negotiated transactions may also be illiquid or subject to legal restrictions on their transfer. As a result of this illiquidity, the Fund's ability to sell certain investments quickly, or at all, in response to changes in economic and other conditions and to receive a fair price when selling such investments may be limited, which could prevent the Fund from making sales to mitigate losses on such investments. In addition, CLOs are subject to the possibility of liquidation upon an event of default, which could result in full loss of value to the CLO equity and junior debt investors. CLO equity tranches are the most likely tranche to suffer a loss of all of their value in these circumstances.

**LIBOR Risk:** Many financial instruments use or may use a floating rate based upon the London Interbank Offered Rate ("LIBOR"). The United Kingdom's Financial Conduct Authority (the "FCA"), which regulates LIBOR, intends to cease making LIBOR available as a reference rate over a phase-out period that began in early 2022. However, subsequent announcements by the FCA, the LIBOR administrators, and other regulators indicate that it is possible that the most widely used LIBOR rates may continue until mid-2023. While some instruments tied to LIBOR may include a replacement rate, not all instruments have such fallback provisions and the effectiveness of such replacement rates remains uncertain. The unavailability or replacement of LIBOR may affect the value, liquidity or return on certain Fund investments and may result in costs incurred in connection with closing out positions and entering into new trades. In the United States, it is anticipated that in many instances the Secured Overnight Financing Rate ("SOFR") will replace LIBOR as the reference rate for many floating rate instruments. On March 15, 2022, the Consolidated Appropriations Act of 2022, which includes the Adjustable Interest Rate (LIBOR) Act, was signed into law in the U.S. This legislation establishes a uniform benchmark replacement process for financial contracts that mature after December 31, 2023 that do not contain clearly defined or practicable fallback provisions. The legislation also creates a safe harbor that shields lenders from litigation if they choose to utilize a replacement rate recommended by the Board of Governors of the Federal Reserve. There is, however, no assurance that the composition or characteristics of SOFR, or any alternative reference rate, will be similar to or produce the same value or economic equivalence as LIBOR or that instruments using an alternative rate will have the same volume or liquidity. As a result, the transition process might lead to increased volatility and reduced liquidity in markets that currently rely on LIBOR to determine interest rates; a reduction in the value of some LIBOR-based investments; increased difficulty in borrowing or refinancing and diminished effectiveness of any applicable hedging strategies against instruments whose terms currently include LIBOR; and/ or costs incurred in connection with temporary borrowings and closing out positions and entering into new agreements. Any potential effects of the transition away from LIBOR on the Fund or on certain instruments in which the Fund invests can be difficult to ascertain, and they may vary depending on a variety of factors. Any such effects on the transition away from LIBOR, as well as other unforeseen effects, could result in losses to the Fund.

32 www.flatrockglobal.com

<u>Flat Rock Opportunity Fund</u> <u>Notes to Financial Statements</u> <br> *December 31, 2022*

**Global Markets Risk:** The increasing interconnectivity between global economies and financial markets increases the likelihood that events or conditions in one region or financial market may adversely impact issuers in a different country, region or financial market. Securities in the Fund's portfolio may underperform due to inflation (or expectations for inflation), interest rates, global demand for particular products or resources, natural disasters, pandemics, epidemics, terrorism, regulatory events and governmental or quasi-governmental actions. The occurrence of global events similar to those in recent years may result in market volatility and may have long term effects on both the U.S. and global financial markets. For example, the COVID-19 pandemic and restrictive measures taken to contain or mitigate its spread have caused, and are continuing to cause, business shutdowns, or the re-introduction of business shutdowns, cancellations of events and restrictions on travel, significant reductions in demand for certain goods and services, reductions in business activity and financial transactions, supply chain interruptions, labor shortages and overall economic and financial market instability both globally and in the United States. In addition, Russia's recent military interventions in Ukraine have led to, and may lead to additional sanctions being levied by the United States, European Union and other countries against Russia. Russia's military incursion and the resulting sanctions could adversely affect global energy and financial markets and thus could affect the value of the Fund's investments, even beyond any direct exposure the Fund may have to Russian issuers or the adjoining geographic regions. The extent and duration of the military action, sanctions and resulting market disruptions are impossible to predict, but could be substantial. Any such disruptions caused by Russian military action or resulting sanctions may magnify the impact of other risks described in this report. It is not known how long such impacts, or any future impacts of other significant events described above, will or would last, but there could be a prolonged period of global economic slowdown, which may impact your Fund investment.

9. BORROWINGS

On September 18, 2020, the Fund entered into the Credit Agreement with certain funds and accounts managed by Eagle Point Credit Management, LLC, pursuant to which the Lenders agreed to provide the Fund with a term loan of $20,000,000 and a revolver of $2,500,000. On January 5, 2021, the term loan was increased to $25,000,000 and the revolver was increased to $3,125,000. On August 16, 2021, the term loan was increased to $37,000,000 and the revolver was increased to $4,625,000. On May 31, 2022, the term loan was increased to $49,000,000 and the revolver was increased to $6,125,000. The current Credit Agreement expires on September 18, 2024.

As of December 31, 2022, the Fund had drawn down $49,000,000 from the term loan and $0 from the revolver. The maximum amount outstanding during the year was $55,125,000. The Fund is charged an interest rate of 6.90% on the initial $28,125,000 tranche and 6.00% on the second $27,000,000 tranche, provided that the Fund maintains an investment grade credit rating from a nationally recognized statistical ratings organization, which was the case for each day for the year ended December 31, 2022. The Fund is charged a fee on the average daily unused balance of the Credit Facility of 0.75%. The average balance outstanding and weighted average interest rate for the year ended December 31, 2022 was $44,542,973 and 6.57%, respectively.

 

Annual Report \| December 31, 2022 33

 

 

<u>Flat Rock Opportunity Fund</u> <u>Notes to Financial Statements</u> <br> *December 31, 2022*

10. MANDATORILY REDEEMABLE PREFERRED STOCK

At December 31, 2022, the Fund had issued and outstanding 2,500 shares of Series A Term Preferred Shares, and 2,000 shares of Series B Term Preferred Shares. Both the Series A and Series B Term Preferred shares have a liquidation preference of $10,000 per share plus accrued and unpaid dividends (whether or not declared). The Fund issued 2,000 and 500 shares of Series A Term Preferred Shares on October 27, 2021 and December 3, 2021, respectively. The Fund issued 2,000 shares of Series B Term Preferred Shares on January 28, 2022. The Series A Term Preferred Shares are entitled to a dividend at a rate of 6.00% per year based on the $10,000 liquidation preference before the common stock is entitled to receive any dividends. The Series B Term Preferred Shares are entitled to a dividend at a rate of 5.85% per year based on the $10,000 liquidation preference before the common stock is entitled to receive any dividends. The Series A Term Preferred Shares are redeemable at $10,000 per share plus accrued and unpaid dividends (whether or not declared) exclusively at the Fund's option commencing on October 27, 2021 for the initial 2,000 shares issued, and December 3, 2021 for the add-on 500 shares issued. The Series B Term Preferred Shares are redeemable at $10,000 per share plus accrued and unpaid dividends (whether or not declared) exclusively at the Fund's option commencing on January 28, 2022. Debt issuance costs related to Series A Preferred Shares of $380,131 are deferred and amortized over the period the Series A Term Preferred Shares are outstanding. Debt issuance costs related to Series B Preferred Shares of $510,000 are deferred and amortized over the period the Series B Term Preferred Shares are outstanding.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Series** | **Mandatory<br> Redemption Date** | **Annual<br> Dividend <br> Rate** | **Shares<br> Outstanding** | **Aggregate<br> Liquidation<br> Preference** | **Estimated<br> Fair Value** |
| Series A | December 15, 2029 | 6.00% | 2500 | $25000000 | $25000000 |
| Series B | March 15, 2029 | 5.85% | 2000 | $20000000 | $20000000 |

---

11. DISTRIBUTION REINVESTMENT PLAN

The Board approved the establishment of a distribution reinvestment plan (the "DRIP"). The DRIP was effective as of July 2, 2018, and was first applied to the reinvestment of cash distributions paid on or after, October 26, 2018.

Under the DRIP, cash distributions paid to participating stockholders are reinvested in shares at a price equal to the net asset value per share of the shares as of such date.

34 www.flatrockglobal.com

<u>Flat Rock Opportunity Fund</u> <u>Notes to Financial Statements</u> <br> *December 31, 2022*

12. COMMITMENTS

In the normal course of business, the Fund enters into contracts that may contain a variety of representations that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. However, the Fund expects the risk of loss to be remote.

The following table represents the Fund's unfunded commitments on CLO's held by the Fund as of December 31, 2022:

---

| | | |
|:---|:---|:---|
|  | **Redemption<br> Frequency/ <br> Expiration Date** | **As of December 31, 2022** |
| Regatta Echo CLO, Ltd. | 5/12/2024 | $4400000 |
| Symphony CLO XXX, Ltd. | 7/19/2024 | 1203268 |
|  |  | $5603268 |

---

13. RECENT ACCOUNTING PRONOUNCEMENTS

In March 2020, the FASB issued Accounting Standards Update ("ASU") No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments provide optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The standard is effective upon issuance and can be applied through December 31, 2022. Management is currently evaluating the impact of the optional guidance on the Fund's financial statements and disclosures.

14. SUBSEQUENT EVENTS

The Fund has evaluated events and transactions through the date the financial statements were issued and has identified the following events for disclosure in the financial statements:

Subsequent to December 31, 2022, the Fund paid the following distributions:

---

| | | | |
|:---|:---|:---|:---|
| **Ex-Date** | **Record Date** | **Payable Date** | **Rate (per share)** |
| January 9, 2023 | January 6, 2023 | January 10, 2023 | $0.221 |
| February 9, 2023 | February 8, 2023 | February 10, 2023 | $0.221 |

---

Annual Report \| December 31, 2022 35

Report of Independent Registered <br> <u>Flat Rock Opportunity Fund</u> <u>Public Accounting Firm</u>

To the Shareholders and Board of Trustees of

Flat Rock Opportunity Fund

**Opinion on the Financial Statements**

We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Flat Rock Opportunity Fund (the "Fund") as of December 31, 2022, the related statements of operations and cash flows for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the related notes, and the financial highlights for each of the four years in the period then ended and for the period July 2, 2018 (commencement of operations) to December 31, 2018 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of December 31, 2022, the results of its operations and its cash flows for the year then ended, the changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America.

**Basis for Opinion**

These financial statements are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund'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 Fund in accordance with the 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 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.

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 procedures included confirmation of securities owned as of December 31, 2022, by correspondence with the custodian, brokers, and administrative agents; when replies were not received from brokers, we performed other auditing procedures. 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. We believe that our audits provide a reasonable basis for our opinion.

We have served as the auditor of one or more investment companies advised by Flat Rock Global, LLC since 2018.

![](image_006.jpg)

COHEN & COMPANY, LTD.

Cleveland, Ohio

March 1, 2023

36 www.flatrockglobal.com

<u>Flat Rock Opportunity Fund</u> <u>Additional Information</u> <br> *December 31, 2022 (Unaudited)*

PROXY VOTING

A description of the Fund's proxy voting policies and procedures is available without charge, upon request by calling 1-307-500-5200, or on the SEC's website at http://www.sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the twelve-month period ended June 30th is available on the SEC's website at http://www.sec.gov.

PORTFOLIO HOLDINGS

The Fund files a monthly portfolio investments report with the U.S. Securities and Exchange Commission ("SEC") on Form N-PORT within 60 days after the end of the Fund's first and third quarters. Copies of the Fund's Form N-PORT (and its predecessor, Form N-Q) are available without charge, upon request, by contacting the Fund at 1-307-500-5200, or on the SEC's website at http://www.sec.gov.

PRIVACY NOTICE (Rev. Feb. 2022)

---

| | | |
|:---|:---|:---|
| **FACTS** | **WHAT DOES FLAT ROCK OPPORTUNITY FUND<br>DO WITH YOUR PERSONAL INFORMATION?** | **WHAT DOES FLAT ROCK OPPORTUNITY FUND<br>DO WITH YOUR PERSONAL INFORMATION?** |
| **Why?** | Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. | Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. |
| &nbsp;&nbsp;**What?** | The types of personal information we collect and share depend on the product or service you have with us. This information can include: | The types of personal information we collect and share depend on the product or service you have with us. This information can include: |
|  | Social Security number | Purchase History |
|  | Assets | Account Balances |
|  | Retirement Assets | Account Transactions |
|  | Transaction History | Wire Transfer Instructions |
|  | Checking Account Information |  |

---

---

| | |
|:---|:---|
|  | When you are *no longer* our customer, we continue to share your information as described in this notice. |
| &nbsp;&nbsp;**How?** | All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons Flat Rock Core Income Fund chooses to share; and whether you can limit this sharing. |

---

Annual Report \| December 31, 2022 37

<u>Flat Rock Opportunity Fund</u> <u>Additional Information</u> <br> *December 31, 2022 (Unaudited)*

---

| | | | |
|:---|:---|:---|:---|
| **REASONS WE CAN SHARE YOUR <br> PERSONAL INFORMATION** | **REASONS WE CAN SHARE YOUR <br> PERSONAL INFORMATION** | **Does Flat Rock<br> Opportunity<br> Fund share?** | **Can you limit<br> this sharing?** |
| **For our everyday business purposes** — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus | **For our everyday business purposes** — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus | Yes | No |
| **For our marketing purposes** — to offer our products and services to you | **For our marketing purposes** — to offer our products and services to you | No | We don't share |
| **For joint marketing with other financial companies** | **For joint marketing with other financial companies** | No | We don't share |
| **For our affiliates' everyday business purposes** — information about your transactions and experiences | **For our affiliates' everyday business purposes** — information about your transactions and experiences | No | We don't share |
| **For our affiliates' everyday business purposes** — information about your creditworthiness | **For our affiliates' everyday business purposes** — information about your creditworthiness | No | We don't share |
| **For nonaffiliates to market to you** | **For nonaffiliates to market to you** | No | We don't share |
| **QUESTIONS?** | Call (307) 500-5200 |  |  |

---

38 www.flatrockglobal.com

<u>Flat Rock Opportunity Fund</u> <u>Additional Information</u> <br> *December 31, 2022 (Unaudited)*

---

| | |
|:---|:---|
| **WHO WE ARE** | |
| **Who is providing this notice?** | Flat Rock Opportunity Fund |
| **WHAT WE DO** | |
| **How does Flat Rock Opportunity Fund protect my personal information?** | To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. |
|  | Our service providers are held accountable for adhering to strict policies and procedures to prevent any misuse of your nonpublic personal information. |
| **How does Flat Rock Opportunity Fund collect <br> my personal information?** | We collect your personal information, for example, when you |

---

● Open
 an account

● Provide
 account information

● Give
 us your contact information

● Make
 deposits or withdrawals from your account

● Make
 a wire transfer

● Tell
 us where to send the money

● Tells
 us who receives the money

● Show
 your government-issued ID

● Show
 your driver's license

  <u>We also collect your personal information from other companies.</u>

---

| | |
|:---|:---|
| **Why can't I limit all sharing?** | Federal law gives you the right to limit only |

---

● Sharing
 for affiliates' everyday business purposes – information about your creditworthiness

● Affiliates
 from using your information to market to you

● Sharing
 for nonaffiliates to market to you

State laws and individual companies may give you additional rights to limit sharing. <br>    

Annual Report \| December 31, 2022 39

<u>Flat Rock Opportunity Fund</u> <u>Additional Information</u> <br> *December 31, 2022 (Unaudited)*

---

| | |
|:---|:---|
| **DEFINITIONS** | |
| **Affiliates** | Companies related by common ownership or control. They can be financial and nonfinancial companies. |

---

● *Flat Rock Opportunity Fund does not share with our affiliates for marketing purposes.* 

---

| | |
|:---|:---|
| **Nonaffiliates** | Companies not related by common ownership or control. They can be financial and nonfinancial companies. |

---

● *Flat Rock Opportunity Fund does not share with nonaffiliates so they can market to you.* 

---

| | |
|:---|:---|
| **Joint marketing** | A formal agreement between nonaffiliated financial companies that together market financial products or services to you. |

---

● *Flat Rock Opportunity Fund doesn't jointly market.* 

40 www.flatrockglobal.com

 

<u>Flat Rock Opportunity Fund</u> <u>Trustees & Officers</u> <br> *December 31, 2022 (Unaudited)*

 

The business and affairs of the Fund are managed under the direction of the Board. The Board approves all significant agreements between the Fund and the persons or companies that furnish services to the Fund, including agreements with its distributor, investment adviser, administrator, custodian and transfer agent.

The name, age and principal occupations for the past five years of the Trustees and officers of the Fund are listed below, along with the number of portfolios in the fund complex overseen by and the other directorships held by each Trustee. The business address for each Trustee and officer of the Fund is c/o Flat Rock Opportunity Fund, 680 S. Cache Street, Suite 100, P.O. Box 7403, Jackson, WY 83001, unless otherwise noted. The Fund's statement of additional information includes additional information about the Fund's Trustees and officers and is available without charge, upon request, by calling (212) 596-3413 or by visiting www.flatrockglobal.com.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| TRUSTEES |  |  |  |  |  |
| **Name and** | **Position with** | **Term of <br> Office and<br> Length of<br> Time** | **Principal Occupation(s)** | **Number of<br> Portfolios in <br> Fund Complex<br> Overseen by**  | **Other<br> Directorships** |
| **Year of Birth** | **the Trust** | **Served<sup>(1)</sup>** | **During Past 5 Years** | **Trustee<sup>(2)</sup>** | **Held by Trustee** |
| Robert K. | Interested | Since | President and Chief Executive | 3 | Flat Rock |
| Grunewald | Trustee and | February | Officer of Flat Rock Core |  | Core Income |
| (1962)\* | Chief Executive | 2018 | Income Fund (since 2020); |  | Fund; Flat Rock |
|  | Officer |  | President and Chief Executive |  | Enhanced |
|  |  |  | Officer of Flat Rock Enhanced |  | Income Fund |
|  |  |  | Income Fund since 2022; |  |  |
|  |  |  | President and Chief Executive |  |  |
|  |  |  | Officer of Flat Rock Capital |  |  |
|  |  |  | Corp. (2017 to November |  |  |
|  |  |  | 2020); Chief Executive Officer |  |  |
|  |  |  | of Flat Rock Global (since |  |  |
|  |  |  | 2016); President and Chief |  |  |
|  |  |  | Investment Officer of Business |  |  |
|  |  |  | Development Corp. of America |  |  |
|  |  |  | (BDCA) (2011 – 2015). |  |  |
| Marshall H. | Independent | Since | Managing Director of | 3 | Flat Rock |
| Durston | Trustee | August | Spaulding & Slye Investments, |  | Core Income |
| (1959) |  | 2020 | a wholly owned subsidiary |  | Fund; Flat Rock |
|  |  |  | of Jones Lang LaSalle |  | Enhanced |
|  |  |  | (Since 2010). |  | Income Fund |
| R. Scott | Independent | Since | Partner at Human Capital | 3 | Flat Rock |
| Coolidge | Trustee | May 2018 | Advisors (since 2015); |  | Core Income |
| (1955) |  |  | Senior Vice President and |  | Fund; Flat Rock |
|  |  |  | Vice President, Freddie Mac |  | Enhanced |
|  |  |  | (2003 – 2015). |  | Income Fund |

---

*\** *Mr. Grunewald is an interested person of the Trust (as defined in the 1940 Act) (an "Interested Trustee") because of his position with Flat Rock Global.*

*<sup>(1)</sup>* *Each Trustee serves during the continued lifetime of the Fund and will not be subject to a term limit.*

*<sup>(2)</sup>* *The term "Fund Complex" includes the Fund, Flat Rock Opportunity Fund, and Flat Rock Enhanced Income Fund.*

Annual Report \| December 31, 2022 41

<u>Flat Rock Opportunity Fund</u> <u>Trustees & Officers</u> <br> *December 31, 2022 (Unaudited)*

 

---

| | | | |
|:---|:---|:---|:---|
| OFFICERS |  |  |  |
| **Name and<br> Year of Birth** | **Position with the Trust** | **Term of Office <br> and Length of<br> Time Served<sup>(1)</sup>** | **Principal Occupation(s)<br> During Past 5 Years** |
| Ryan Ripp | Chief Financial Officer and | Since | Chief Financial Officer of Flat Rock |
| (1987) | Secretary | January 2021 | Enhanced Income Fund (2022 to |
|  |  |  | present); Chief Financial Officer of |
|  |  |  | Flat Rock Global, LLC and Flat Rock |
|  |  |  | Core Income Fund (2021 to present); |
|  |  |  | Chief Compliance Officer of Flat Rock |
|  |  |  | Global, LLC and Flat Rock Core |
|  |  |  | Income Fund (2021 to 2022); |
|  |  |  | Consultant, Boston Consulting Group |
|  |  |  | (2020 to 2021); Associate, McKinsey |
|  |  |  | & Company (2017 to 2020); Senior |
|  |  |  | Associate, Equity Research, Citi |
|  |  |  | Group (2014 to 2016). |
| Shiloh Bates | Chief Investment Officer | Since | Managing Director of Flat Rock |
| (1974) |  | May 2018 | Global (since 2018); Managing |
|  |  |  | Director, Benefit Street Partners |
|  |  |  | (2016 – 2018); Managing Director, |
|  |  |  | BDCA Adviser (2012 – 2016). |
| Andy Chicha | Chief Compliance officer | Since | Chief Compliance Officer of Flat Rock |
| (1975)<sup>(2)</sup> |  | May 2022 | Core Income Fund, Flat Rock |
|  |  |  | Enhanced Income Fund and Flat Rock |
|  |  |  | Global LLC (2022 to present); |
|  |  |  | Principal, NexTier Solutions (2022 to |
|  |  |  | present); Chief Compliance Officer |
|  |  |  | and Compliance Director, Cipperman |
|  |  |  | Compliance Services, LLC (2019 to |
|  |  |  | 2022); Chief Compliance Officer, |
|  |  |  | Hatteras Funds (2007 to 2019). |

---

 

*<sup>(1)</sup>* *Officers are typically elected every year, unless an officer earlier retires, resigns or is removed from office.*

*<sup>(2)</sup>* *The address for Andy Chica is P.O. Box 847 Morrisville, NC 27560.*

42 www.flatrockglobal.com

 

 

 

 

 

 

 

*Intentionally Left Blank*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

![](image_007.jpg)

 

Must be accompanied or preceded by a Prospectus.

ALPS Distributors, Inc. is the Distributor for the Flat Rock Opportunity Fund.

(b) Not Applicable.

Item 2. **Code of Ethics.**

The Registrant, as of the end of the period covered by this report on Form N-CSR, has adopted a code of ethics that applies to the Registrant's principal executive officer, principal financial officer, principal accounting officer or controller or any persons performing similar functions on behalf of the Registrant. During the period covered by this report, no amendments were made to the provisions of the code of ethics and no implicit or explicit waivers to the provisions of the code of ethics were granted. On February 25, 2020, the Fund's Board of Trustees adopted a revised code of ethics, which is attached as an exhibit to this report.

Item 3. **Audit Committee Financial Expert.**

The Board of Trustees of the Registrant has determined that the Registrant has at least one audit committee financial expert serving on its audit committee. The Board of Trustees has designated Mr. Marshall H. Durston as the Fund's "audit committee financial expert," as defined in the instructions to Item 3(a) of Form N-CSR, based on the Board's review of his qualifications. Mr. Durston is "independent" as defined in paragraph (a)(2) of Item 3 to Form N-CSR.

Item 4. **Principal Accountant Fees and Services.**

(a) <u>Audit Fees</u>: For the Registrant's fiscal years ended December 31, 2021 and December
31, 2022, the aggregate fees billed for professional services rendered by the principal accountant for the audit of the Registrant's
annual financial statements were $50,000 and $100,000, respectively.

(b) <u>Audit-Related Fees</u>: For the Registrant's fiscal years ended December 31, 2021 and December
31, 2022, the aggregate fees billed for assurance and related services by the principal accountant that are reasonably related to the
performance of the audit of the Registrant's annual financial statements and are not reported under paragraph (a) of this Item were
$0 and $0, respectively.

(c) <u>Tax Fees</u>: For the Registrant's fiscal years ended December 31, 2021 and December 31,
2022, the aggregate fees billed for professional services rendered by the principal accountant for tax compliance, tax advice, and tax
planning were $8,500 and $11,500. The tax fees for fiscal years 2021 and 2022 are related to dividend calculation, excise tax preparation
and tax return preparation.

(d) <u>All Other Fees</u>: For the Registrant's fiscal years ended December 31, 2021 and December
31, 2022, the aggregate fees billed by the principal accountant for services other than the services reported in paragraphs (a) through
(c) of this item were $0 and $0, respectively.

(e)(1) <u>Audit Committee Pre-Approval Policies and Procedures</u>: All services to be performed by the Registrant's principal accountant must be pre-approved by the Registrant's audit committee.

(e)(2) No services described in paragraphs (b) through (d) were approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f) Not applicable.

(g) The aggregate non-audit fees billed by the Registrant's principal accountant for services rendered
to the Fund and the Fund's investment adviser for the fiscal year ended December 31, 2021 and December 31, 2022 were $0 and $0,
respectively.

(h) Not applicable.

(i) Not applicable.

(j) Not applicable.

Item 5. **Audit Committee of Listed Registrants.** 

(a) Not applicable.

(b) Not applicable.

Item 6. **Investments.**

(a) The Schedule of Investments is included as part of the Report
to Shareholders filed under Item 1 of this report.

(b) Not applicable.

Item 7. **Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.**

**Flat Rock Opportunity Fund**

**Proxy Voting Policies and Procedures**

Flat Rock Opportunity Fund, a Delaware statutory trust (the "***Fund***"), has delegated its proxy voting responsibility to its investment adviser, Flat Rock Global, LLC (the "***Adviser***"). The Proxy Voting Policies and Procedures of the Adviser are set forth below. (The guidelines are reviewed periodically by the Adviser and the Fund's non-interested trustees and, accordingly, are subject to change.

**Introduction**

As an investment adviser registered under the Investment Advisers Act of 1940, as amended (the "***Advisers Act***"), the Adviser has a fiduciary duty to act solely in the best interests of its clients. As part of this duty, the Adviser recognizes that it must vote client securities in a timely manner free of conflicts of interest and in the best interests of its clients.

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

**Proxy Policies**

The Adviser will vote proxies relating to the Fund's portfolio securities in the best interest of its clients' shareholders. The Adviser will review on a case-by-case basis each proposal submitted for a shareholder vote to determine its impact on the portfolio securities held by each of its clients. Although the Adviser will generally vote against proposals that may have a negative impact on its clients' portfolio securities, it may vote for such a proposal if there exists compelling long-term reasons to do so.

The proxy voting decisions of the Adviser are made by the senior officers who are responsible for monitoring each of its clients' investments. To ensure that its vote is not the product of a conflict of interest, the Adviser requires that: (i) anyone involved in the decision-making process disclose to the Adviser's 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 (ii) employees involved in the decision-making process or vote administration are prohibited from revealing how the Adviser intends to vote on a proposal in order to reduce any attempted influence from interested parties.

**Proxy Voting Records**

You may obtain information, without charge, regarding how the Adviser voted proxies with respect to the Fund's portfolio securities by making a written request for proxy voting information to: Chief Compliance Officer, Flat Rock Opportunity Fund,

680 S Cache Street, Suite 100, P.O. Box 7403, Jackson, WY 83001.

Item 8. **Portfolio Managers of Closed-End Management Investment Companies.**

(a)(1) Registrant's Portfolio Managers as of December 31, 2022 are:

---

| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;**Name** | &nbsp;&nbsp;**Title** | &nbsp;&nbsp;**Length of Service** | &nbsp;&nbsp;**Business Experience 5 Years** |
| &nbsp;&nbsp; Robert K. Grunewald<br>| &nbsp;&nbsp;Portfolio Manager | &nbsp;&nbsp;Since February 2018 | &nbsp;&nbsp;President and Chief Executive Officer of Flat Rock Enhanced Income Fund (since 2022); President and Chief Executive Officer of Flat Rock Core Income Fund (since 2020); President and Chief Executive Officer of Flat Rock Opportunity Fund (since 2018); President and Chief Executive Officer of Flat Rock Capital Corp. (2017 to 2020); Chief Executive Officer of Flat Rock Global (since 2016); President and Chief Investment Officer of Business Development Corp. of America (BDCA) (2011 to 2015). |
| &nbsp;&nbsp; Shiloh Bates<br>| &nbsp;&nbsp;Portfolio Manager | &nbsp;&nbsp;Since May 2018 | &nbsp;&nbsp;Chief Investment Officer of Flat Rock Enhanced Income Fund (since 2022); Managing Director of Flat Rock Global (since 2018); Chief Investment Officer of Flat Rock Opportunity Fund (since 2018); Managing Director, Benefit Street Partners (2016 to 2018); Managing Director, BDCA Adviser (2012 to 2016). |

---

(a)(2) Other accounts managed by the Registrant's Portfolio Managers as of December 31, 2022:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  | &nbsp;&nbsp;Other Accounts Managed | &nbsp;&nbsp;Other Accounts Managed | &nbsp;&nbsp;Other Accounts for which <br> Advisory Fee is Based on<br> Performance | &nbsp;&nbsp;Other Accounts for which <br> Advisory Fee is Based on<br> Performance |
| &nbsp;&nbsp;Name | &nbsp;&nbsp;Account Type | &nbsp;&nbsp;Number of<br> Accounts | &nbsp;&nbsp;Total Assets | &nbsp;&nbsp;Number of<br> Accounts | &nbsp;&nbsp;Total Assets |
| &nbsp;&nbsp;Robert K. Grunewald | &nbsp;&nbsp;Registered Investment Companies | &nbsp;&nbsp;2 | &nbsp;&nbsp;$259.7M | &nbsp;&nbsp;0 | &nbsp;&nbsp;$0 |
|  | &nbsp;&nbsp;Other Pooled Investment Vehicles | &nbsp;&nbsp;1 | &nbsp;&nbsp;$0.8M | &nbsp;&nbsp;1 | &nbsp;&nbsp;$0.8M |
|  | &nbsp;&nbsp;Other Accounts | &nbsp;&nbsp;0 | &nbsp;&nbsp;$0 | &nbsp;&nbsp;0 | &nbsp;&nbsp;$0 |
| &nbsp;&nbsp;Shiloh Bates | &nbsp;&nbsp;Registered Investment Companies | &nbsp;&nbsp;2 | &nbsp;&nbsp; $259.7M<br>| &nbsp;&nbsp;0 | &nbsp;&nbsp;$0 |
|  | &nbsp;&nbsp;Other Pooled Investment Vehicles | &nbsp;&nbsp;1 | &nbsp;&nbsp; $0.8M<br>| &nbsp;&nbsp;1 | &nbsp;&nbsp; $0.8M<br>|
|  | &nbsp;&nbsp;Other Accounts | &nbsp;&nbsp;0 | &nbsp;&nbsp;$0 | &nbsp;&nbsp;0 | &nbsp;&nbsp;$0 |

---

We have entered into an Investment Advisory Agreement with Flat Rock Global. Certain of the executive officers, directors/trustees and finance professionals of Flat Rock Global who perform services for us on behalf of Flat Rock Global may also serve as officers, directors/trustees, managers, and/or key professionals of affiliates of Flat Rock Global, including Flat Rock Core Income and Flat Rock Enhanced Income Fund. Further, Flat Rock Global and certain of its affiliates are currently, and plan in the future to continue to be, involved with activities which are unrelated to us. As a result of these activities, Flat Rock Global, its personnel and certain of its affiliates will have conflicts of interest in allocating management time, investment opportunities, services and functions among us and any other business ventures in which they or any of their key personnel, as applicable, are or may become involved. This could result in actions that are more favorable to other affiliated entities than to us.

However, Flat Rock Global has policies and procedures in place designed to manage the conflicts of interest between Flat Rock Global's fiduciary obligations to us and its similar obligations to other clients. Such policies and procedures are designed to ensure that investment opportunities are allocated on an alternating basis that is fair and equitable among us and Flat Rock Global's other clients.

(a)(3) Portfolio Manager compensation as of December 31, 2022:

Mr. Shiloh Bates is a Portfolio Manager of the Fund. Mr. Bates holds an equity ownership interest in the Adviser and his compensation is determined by the Adviser's Compensation Committee. His compensation includes a fixed salary in an amount subject to periodic review; an annual variable discretionary bonus based on the profitability of the Adviser and the performance of the Fund, including consideration of portfolio performance relative to any benchmark, fee waiver, total assets under management and revenues.

Mr. Grunewald is a Portfolio Manager of the Fund and comprises the Adviser Investment Committee. Mr. Grunewald holds an equity ownership interest in the Adviser and his compensation is determined by the Adviser's Compensation Committee. His compensation includes a fixed salary in an amount subject to periodic review; an annual variable discretionary bonus based on the profitability of the Adviser and the performance of the Fund, including consideration of portfolio performance relative to any benchmark, fee waiver, total assets under management and revenues.

(a)(4) Dollar range of securities owned by the Registrant's Portfolio Managers as of December 31, 2022:

---

| | |
|:---|:---|
| &nbsp;&nbsp;**Name of Portfolio Manager** | &nbsp;&nbsp;**Dollar Range of Equity Securities in the Fund<sup>(1)(2)(3)</sup>** |
| &nbsp;&nbsp;Robert K. Grunewald | &nbsp;&nbsp;Over $1,000,000 |
| &nbsp;&nbsp;Shiloh Bates | &nbsp;&nbsp;100001 - $500000 |

---

(1) Dollar ranges are as follows: None, $1 - $10,000, $10,001 - $50,000, $50,001 - $100,000, $100,001 - $500,000, $500,001 - $1,000,000 or over $1,000,000

(2) Beneficial ownership has been determined in accordance with Rule 15a-1(a)(2) under the Exchange Act (17 CFR 240.16a-1(a)(2)).

(3) The dollar range of equity beneficially owned is based on the closing price of $18.72 per share on December 31, 2022.

Item 9. **Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.**

None.

Item 10. **Submission of Matters to a Vote of Security Holders.**

There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant's Board of Trustees.

Item 11. **Controls and Procedures.**

(a) The Registrant's principal executive and principal financial officers, or persons performing similar
functions, have concluded that the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment
Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the
filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures
required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act
of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)).

(b) No changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d)
under the 1940 Act (17 CFR 270.30a-3(d)) occurred during the period covered by this report that have materially affected, or are reasonably
likely to materially affect, the Registrant's internal control over financial reporting.

Item 12. **Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.** 

(a) Not applicable.

(b) Not applicable.

Item 13. **Exhibits.**

(a)(1) [The code of ethics that applies to the registrant's principal executive officer and principal financial offer is attached hereto as Exhibit 13(a)(1).](ea150855_ex99codeeth.htm)

(a)(2) [The certifications required by Rule 30a-2(a) under the 1940 Act, as amended, are attached hereto as Ex99.Cert.](ea150855_ex99cert.htm)

(a)(3) None.

(a)(4) Not applicable.

(b) [The certifications by the Registrant's principal executive officer and principal financial officer, as required by Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto as Ex99.906Cert.](ea150855_ex99-906cert.htm)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

FLAT ROCK OPPORTUNITY FUND

---

| | |
|:---|:---|
| By: | /s/ Robert K. Grunewald |
|  | Robert K. Grunewald |
|  | President and Chief Executive Officer (Principal Executive Officer) |
| Date: | March 10, 2023 |

---

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

---

| | |
|:---|:---|
| By: | /s/ Robert K. Grunewald |
|  | Robert K. Grunewald |
|  | President and Chief Executive Officer (Principal Executive Officer) |
| Date: | March 10, 2023 |

---

---

| | |
|:---|:---|
| By: | /s/ Ryan Ripp |
|  | Ryan Ripp |
|  | Chief Financial Officer<br> (Principal Financial and Accounting Officer) |
| Date: | March 10, 2023 |

---

## Ex-99.Code

**Ex.99.Code Eth**

**FLAT ROCK OPPORTUNITY FUND**

**CODE OF BUSINESS CONDUCT AND ETHICS**

**February 25, 2020**

i

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
|  | <u>Page</u> |
| **INTRODUCTION** | **1** |
| **PURPOSE OF THIS CODE** | **1** |
| **CODE OF ETHICS** | **2** |
| **Scope of this Code of Ethics** | **2** |
| **Definitions** | **2** |
| **Standards of conduct** | **4** |
| **Prohibited transactions** | **4** |
| **STATEMENT ON THE PROHIBITION OF INSIDER TRADING** | **5** |
| **Penalties for Insider Trading** | **9** |
| **Controlling the Flow of Sensitive Information** | **9** |
| **Procedures to Implement this Code of Ethics** | **10** |
| **Reporting Requirements** | **11** |
| **Pre-Clearance Reports** | **11** |
| **Initial Holdings Reports** | **11** |
| **Quarterly Transaction Reports** | **11** |
| **Annual Holdings Reports** | **12** |
| **Annual Certification of Compliance** | **12** |
| **ADMINISTRATION OF THIS CODE OF ETHICS** | **13** |
| **SANCTIONS FOR CODE VIOLATIONS** | **13** |
| **APPLICATION/WAIVERS** | **13** |
| **RECORDS** | **13** |
| **REVISIONS AND AMENDMENTS** | **14** |

---

ii

---

| | |
|:---|:---|
| **Appedix A - ACKNOWLEDGMENT REGARDING** | **A-1** |
| **Appedix B - PRE-CLEARANCE FORM** | **B-1** |
| **Appedix C - INITIAL HOLDINGS REPORT** | **C-1** |
| **Appedix D - QUARTERLY TRANSACTION REPORT** | **D-1** |
| **Appedix E - ANNUAL HOLDINGS REPORT** | **E-1** |

---

iii

**CODE OF BUSINESS CONDUCT AND ETHICS** 

**INTRODUCTION**

Ethics are important to Flat Rock Opportunity Fund (the "***Fund***") and to its management. The Fund is committed to the highest ethical standards and to conducting its business with the highest level of integrity.

All officers, trustees and other personnel of the Fund and the Fund's investment adviser, Flat Rock Global, LLC (the "***Adviser***" or "***Flat Rock Global***"), are responsible for maintaining this level of integrity and for complying with the policies contained in this Code of Business Conduct and Ethics and the Statement on the Prohibition of Insider Trading (this "***Code***"). If you have a question or concern about what is proper conduct for you or anyone else, please contact the Fund's Chief Compliance Officer or any member of the Fund's management, or follow the procedures outlined in applicable sections of this Code.

The Fund is a newly organized Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the "***1940 Act***"), as a continuously offered, non-diversified, closed-end management investment company that is operated as an interval fund.

This Code has been adopted by the board of trustees of the Fund (the "***Board***") in accordance with Rule 17j-l(c) under the 1940 Act, Item 406 of Regulation S-K promulgated under the Securities Exchange Act of 1934, as amended (the "***Exchange Act***") and the May 9, 1994 Report of the Advisory Group on Personal Investing by the Investment Company Institute (the "***Report***"). Rule 17j-l generally describes fraudulent or manipulative practices with respect to purchases or sales of securities held or to be acquired by closed-end investment companies if effected by access persons of such a company.

**PURPOSE OF THis CODE**

This Code is intended to:

&nbsp;&nbsp;&nbsp;&nbsp;• help you recognize ethical issues and take the appropriate steps to resolve these issues;

&nbsp;&nbsp;&nbsp;&nbsp;• deter ethical violations to avoid any abuse of position of trust and responsibility;

&nbsp;&nbsp;&nbsp;&nbsp;• maintain confidentiality of the Fund's business activities;

&nbsp;&nbsp;&nbsp;&nbsp;• assist you in complying with applicable securities laws;

&nbsp;&nbsp;&nbsp;&nbsp;• assist you in reporting any unethical or illegal conduct; and

&nbsp;&nbsp;&nbsp;&nbsp;• reaffirm and promote the Fund's commitment to a corporate culture that values honesty, integrity
and accountability.

Further, it is the policy of the Fund that no affiliated person of the Fund shall, in connection with the purchase or sale, directly or indirectly, by such person of any security held or to be acquired by the Fund:

&nbsp;&nbsp;&nbsp;&nbsp;• employ any device, scheme or artifice to defraud the Fund;

&nbsp;&nbsp;&nbsp;&nbsp;• make any untrue statement of a material fact or omit to state to the Fund a material fact in order to
make the statement made, in light of the circumstances under which it is made, not misleading;

&nbsp;&nbsp;&nbsp;&nbsp;• engage in any act, practice, or course of business which operates or would operate as a fraud or deceit
upon the Fund; or

&nbsp;&nbsp;&nbsp;&nbsp;• engage
 in any manipulative practices with respect to the Fund's business activities.

All employees, as a condition of employment or continued employment, will acknowledge annually, in writing, that they have received a copy of this Code, read it, and understand that this Code contains the Fund's expectations regarding their conduct.

**CODE OF ETHICS**

The persons specified in the following discussion will be subject to the provisions of this Code of Ethics (this "***Code of Ethics***").

<u>Scope of this Code of Ethics</u>

In order to prevent the Fund's Access Persons (as defined below) from engaging in any of these prohibited acts, practices or courses of business, the Board has adopted this Code of Ethics.

<u>Definitions</u>

In addition to terms expressly defined elsewhere herein, the following words shall have the following meanings as used in this Code of Ethics:

**Access Person**. "Access Person" means any trustee, director, officer, partner, employee or Advisory Person (as defined below) of the Fund or Flat Rock Global; provided, however, that the term "Access Person" will not include an Independent Trustee (as defined below) or any person who is subject to a separate code of ethics, provided that such code of ethics is compliant with Rule 17j-1.

**Advisory Person**. "Advisory Person" means: (i) any trustee, director, officer or employee of the Fund or Flat Rock Global or of any company in a control relationship to the Fund or Flat Rock Global, who, in connection with his or her regular duties, makes, participates in or obtains information regarding the purchase or sale of a Covered Security (as defined below) by the Fund or Flat Rock Global, or whose functions relate to the making of any recommendations with respect to such purchases or sales; and (ii) any natural person in a control relationship to the Fund or Flat Rock Global who obtains information concerning recommendations made to the Fund with regard to the purchase or sale of a Covered Security. An Advisory Person shall not include an Independent Trustee.

**Automatic Investment Plan**. "Automatic Investment Plan" refers to any program in which regular periodic purchases (or withdrawals) are made automatically in (or from) investment accounts in accordance with a predetermined schedule and allocation, including a distribution reinvestment plan.

**Beneficial Interest**. "Beneficial Interest" includes any entity, person, trust or account with respect to which an Access Person exercises investment discretion or provides investment advice. A beneficial interest shall be presumed to include all accounts in the name of or for the benefit of the Access Person, his or her spouse, dependent children or any person living with him or her or to whom he or she contributed economic support.

**Beneficial Ownership**. "Beneficial Ownership" shall be determined in accordance with Rule 16a-1(a)(2) under the Exchange Act, except that the determination of direct or indirect Beneficial Ownership shall apply to all securities, and not just equity securities, that an Access Person has or acquires. Rule 16a-1(a)(2) provides that the term "beneficial owner" means any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares a direct or indirect pecuniary interest in any equity security. Therefore, an Access Person may be deemed to have Beneficial Ownership of securities held by members of his or her immediate family sharing the same household, or by certain partnerships, trusts, corporations or other arrangements.

**Blackout Period.** "Blackout Period" means that timeframe in which the Fund or Flat Rock Global or an Access Person, or Independent Trustee with knowledge of the Fund's or Flat Rock Global's trading activity, may not engage in trading in an issue, or its related securities, appearing on the Fund's or Flat Rock Global's Restricted List as described below.

**Control**. "Control" shall have the same meaning as that set forth in Section 2(a)(9) of the 1940 Act.

**Covered Security**. "Covered Security" means a security as defined in Section 2(a)(36) of the 1940 Act and that it is eligible for purchase by the Fund or Flat Rock Global under its investment objectives, policies and restrictions. A security that is otherwise a "Covered Security" under this definition is excluded therefrom, however, if it falls into one of the following categories: (i) direct obligations of the government of the United States; (ii) bankers' acceptances, bank certificates of deposit, commercial paper and high quality short-term debt instruments including repurchase agreements; and (iii) shares issued by registered open-end investment companies (i.e., mutual funds or exchange traded funds).

**Independent Trustee**. "Independent Trustee" means a trustee of the Fund or director of Flat Rock Global who is not an "interested person" of the Fund within the meaning of Section 2(a)(19) of the 1940 Act.

**Initial Public Offering**. "Initial Public Offering" means an offering of securities registered under the Securities Act of 1933, as amended (the "**Securities Act**"), the issuer of which, immediately before the registration, was not subject to the reporting requirements of Sections 13 or 15(d) of the Exchange Act.

**Limited Offering**. "Limited Offering" means an offering that is exempt from registration under the Securities Act pursuant to Section 4(a)(2) or Section 4(6) or pursuant to Rule 504, Rule 505 or Rule 506 of the Securities Act.

**Purchase or Sale of a Covered Security**. "Purchase or Sale of a Covered Security" is broad and includes, among other things, the writing of an option to purchase or sell a Covered Security, or the use of a derivative product to take a position in a Covered Security.

**Restricted List.** "Restricted List" means the list that identifies those securities which the Fund, Flat Rock Global or their Access Persons may not trade due to some restriction under the securities laws whereby the Fund, Flat Rock Global or their Access Persons may be deemed to possess material nonpublic information (as it is described within the Insider Trading Policy Statement) about the issuer of such securities.

**Supervised Person**. A "Supervised Person" means any partner, officer, trustee, director (or other person occupying a similar status or performing similar functions) or employee of any entity that provides investment advice on behalf of the Fund or Flat Rock Global and is subject to the supervision and control of the Fund or Flat Rock Global; provided, however, that Supervised Person shall not include Independent Trustees.

<u>Standards of conduct</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. No Access Person, Supervised Person or Independent Trustee shall engage, directly or indirectly, in any business transaction or arrangement for personal profit that is not in the best interests of the Fund or its stockholders or Flat Rock Global; nor shall he or she make use of any confidential information gained by reason of his or her employment by or affiliation with the Fund, Flat Rock Global, or any of their affiliates, in order to derive a personal profit for himself or herself or for any Beneficial Interest, in violation of the fiduciary duty owed to the Fund and its stockholders and to Flat Rock Global.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Any Access Person recommending or authorizing the purchase or sale of a Covered Security by the Fund or Flat Rock Global shall, at the time of such recommendation or authorization, disclose any Beneficial Interest in, or Beneficial Ownership of, such Covered Security or the issuer thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. No Access Person, Supervised Person or Independent Trustee shall dispense any information concerning securities holdings or securities transactions of the Fund or Flat Rock Global to anyone outside the Fund or Flat Rock Global without obtaining prior written approval from the Chief Compliance Officer, or such person or persons as these individuals may designate to act on their behalf. Notwithstanding the preceding sentence, such Access Person may dispense such information without obtaining prior written approval:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• when there is a public report containing the same information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• when such information is dispensed in accordance with compliance
procedures established to prevent conflicts of interest between the Fund, Flat Rock Global and their affiliates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• when such information is reported to trustees of the Fund
or Flat Rock Global; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• in the ordinary course of his or her duties on behalf of the
Fund or Flat Rock Global.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. All personal securities transactions should be conducted consistent with this Code of Ethics and the Insider Trading Policy Statement and in such manner as to avoid actual or potential conflicts of interest, the appearance of a conflict of interest, or any abuse of an individual's position of trust and responsibility within the Fund and Flat Rock Global.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Flat Rock Global owes the Fund a duty of undivided loyalty. As an investment adviser, Flat Rock Global has a fiduciary responsibility to the Fund. The Fund's interests must always be placed first.

<u>prohibited transactions</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **General Prohibition**. No Access Person shall execute a personal securities transaction (directly or indirectly) in any Covered Security (including any security issued by the issuer of such Covered Security) unless such Access Person shall have obtained prior written approval for such transaction from the Fund's Chief Compliance Officer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **Securities Appearing on the Portfolio and Pipeline Reports and Restricted List**. The holdings of the Fund are detailed in a portfolio report (the "***Portfolio Report***") that will be distributed weekly, if not more frequently, to all Access Persons. Access Persons will also receive, as frequently as necessary, the names of those entities that are being considered for investment by the Fund in a pipeline report (the "***Pipeline Report***"). Access Persons are required to review these reports shortly after their distribution and review the Restricted List on a periodic basis. These reports will indicate if there are publicly available securities associated with each holding. Transactions in such publicly available securities are subject to the pre-approval requirements noted above in Section 1. An Access Person who becomes aware that the Fund is considering the purchase or sale of any Covered Security, via a Pipeline Report or otherwise, must immediately notify the Chief Compliance Officer of any interest that such Access Person may have in any outstanding Covered Security (including any security issued by the issuer of such Covered Security). An Access Person shall similarly notify the Fund's Chief Compliance Officer of any other interest or connection that such Access Person might have in or with such issuer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. **Securities Associated with Affiliated and Related Party Transactions**. Access Persons will be advised of portfolio holdings as well as situations where the Fund may engage in other transactions creating affiliated or relationships with other parties. Typically, securities issued by such affiliated or otherwise related parties will be included on the Fund's Restricted List. However, should an Access Person have a question about investing in any security that might have a tangential relationship to the Fund or its Portfolio, the Access person should seek the guidance of the Chief Compliance Officer prior to engaging in a securities transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. **Initial Public Offerings and Limited Offerings**. Access Persons of the Fund must obtain approval from the Fund's Chief Compliance Officer before directly or indirectly acquiring Beneficial Ownership in any securities in an Initial Public Offering or in a Limited Offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. **Fund Acquisition of Shares in Companies that Access Persons Hold Through Limited Offerings**. Access Persons who have been authorized to acquire securities in a Limited Offering must disclose that investment to the Fund's Chief Compliance Officer when they are involved in the Fund's subsequent consideration of an investment in the issuer, and the Fund's decision to purchase such securities must be independently reviewed by investment personnel with no personal interest in that issuer.

**<u>Management of the Restricted List</u>**

The Fund's Chief Compliance Officer will manage placing and removing names from the Restricted List. Should an Access Person learn of material non-public information concerning the issuer of any security that information must be provided to the Fund's Chief Compliance Officer so that the issuer can be included on the Restricted List. The Fund's Chief Compliance Officer will note the nature of the information learned, the time the information was learned and the other persons in possession of this information. The Fund's Chief Compliance Officer will maintain this information in a log. Upon the receipt of such information, the Chief Compliance Officer will revise and circulate the Restricted List to all Access Persons. Flat Rock Global is directed to advise the Fund when it has obtained information causing Flat Rock Global to be restricted from trading in the securities of any entities being considered for investment in the Fund's portfolio. The contents of the Restricted List are highly confidential and must not be disclosed to any person or entity outside of the Fund absent approval of the Fund's Chief Compliance Officer.

**<u>STATEMENT ON THE PROHIBITION OF INSIDER TRADING</u>**

Failure by you to recognize the importance of safeguarding information and using information appropriately is greatly detrimental both to your and to the Fund's future. The information provided below should provide a useful guide about what constitutes insider trading and material inside information.

**<u>Summary of the Fund's Business Activities</u>**

The Fund is a newly organized Delaware statutory trust registered under the 1940 Act as a continuously offered, non-diversified, closed-end management investment company that is operated as an interval fund. The Fund expects to invest primarily in the equity and, to a lesser extent, in the junior debt tranches of collateralized loan obligations ("***CLOs***") that own a pool of senior secured loans made to companies whose debt is rated below investment grade or, in limited circumstances, unrated ("***Senior Secured Loans***"). The Fund may, to a lesser extent, invest in (i) debt and equity securities issued by business development companies, (ii) Senior Secured Loans directly, (iii) fixed income securities and (iv) investment funds that provide exposure to Senior Secured Loans and fixed income securities.

In the course of its business activities, the Fund may receive access to information that is not already in the public domain. For example, certain data sources may make information available to the Fund that has not been fully disseminated in the marketplace. If this situation arises and the Fund has an opportunity to opt to receive the information, the Access Person that encounters this situation will raise the situation with his or her supervisors and the Fund's Chief Compliance Officer to decide whether to opt to receive the information or decline to receive the information. If the decision is made to receive the information, the Fund's Chief Compliance Officer will update the Restricted List as it is discussed in this Code of Ethics.

In the unlikely event that you come into possession of information that is not publicly available, either through your work with the Fund or outside of the workplace, you will be required to adhere to this Statement on the Prohibition of Insider Trading (this "***Statement***") as described in the following pages. You will also be subject to certain reporting requirements in connection with complying with this Code of Ethics beginning with the requirement to notify the Fund's Chief Compliance Officer.

**<u>Background</u>**

The securities laws and the rules and regulations of the self-regulatory organizations are designed to ensure that the securities markets are fair and honest, that material information regarding a company is publicly available, and that a security's price and volume are determined by the free interplay of economic forces. The anti-fraud rules of the federal securities laws prohibit, in connection with the purchase or sale of a security:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· making an untrue statement of a material fact;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· omitting to state a material fact necessary to make the statements made not misleading; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· engaging in acts, practices or courses of business which would be fraudulent or deceptive.

Violation of these provisions is a crime that may result in imprisonment and can have other very serious repercussions for both the Fund and the employee. Violators may be censured by the government or self-regulatory organizations, suspended, barred from the securities business or fined. In addition, violations may result in liability under the federal securities laws, including the Insider Trading Sanctions Act of 1984 and the Insider Trading and Securities Fraud Enforcement Act of 1988. The Fund's actions with respect to any violations will be swift and forceful, since it is the victim of any such abuse.

A violation of the Fund's policies and procedures regarding confidential information or the use thereof and disclosure may result in dismissal, suspension without pay, loss of pay or bonus, loss of severance benefits, demotion or other sanctions, whether or not the violation of the Fund's policy or procedure also constituted a violation of law. Trading while in possession of or tipping on the basis of non-public information could also result in civil or criminal liability which could lead to imprisonment, fines and/or a requirement of disgorgement of any profits realized and, as a result of the violation, to an injunction prohibiting the violator from being employed in the securities industry. The Fund may initiate or cooperate in proceedings resulting in such penalties.

**<u>Policy</u>**

No person to whom this Statement applies, including officers, trustee, directors or employees of the Fund and Flat Rock Global, may trade, either personally or on behalf of others, while in possession of material non-public information, nor may any officer, trustee, director or employee communicate material non-public information to others in violation of the law. This conduct is referred to as "insider trading." Any questions regarding this policy and procedure should be directed to the Fund's Chief Compliance Officer.

While the law concerning insider trading is not rigid, it generally is understood to prohibit:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· trading by an insider while in possession of material non-public information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· trading by a non-insider while in possession of material non-public information where the information
either was disclosed to the non-insider in violation of an insider's duty to keep it confidential or was misappropriated; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· communicating material non-public information to others.

The elements of a claim for insider trading and the penalties for unlawful conduct are described below.

**<u>Who is an Insider?</u>**

The concept of an "insider" is broad and includes officers, trustees and employees of a fund. In addition, a person can be a "temporary insider" if he or she enters into a special confidential relationship in the conduct of a fund's affairs and, as a result, is given access to information solely for the fund's purposes. A temporary insider can include, by way of example, attorneys, accountants, consultants, bank lending officers and employees of such organizations. According to the U.S. Supreme Court, a fund must expect the outsider to keep the disclosed non-public information confidential and the relationship must at least imply such a duty before the outsider will be considered an insider.

**<u>What is Material Information?</u>**

Trading on non-public information is not a basis for liability unless the non-public information is material. Information generally is considered "material" if (i) there is a substantial likelihood that a reasonable investor would consider the non-public information important in making an investment decision, or (ii) the non-public information is reasonably certain to have a substantial effect on the price of a fund's securities. Non-public information that should be considered material includes, but is not limited to: dividend changes; earnings estimates not previously disseminated; material changes in previously released earnings estimates; significant merger or acquisition proposals or agreements; major litigation; liquidation problems; and extraordinary management developments.

Material information does not have to relate to a fund's business. For example, in <u>Carpenter v. United States</u> 108 S. Ct. 316 (1987), the U.S. Supreme Court considered as material certain information about the contents of a forthcoming newspaper column that was expected to affect the market price of a security. In that case, a Wall Street Journal reporter was found criminally liable for disclosing to others the dates that reports on various companies would appear in the Wall Street Journal and whether or not those reports would be favorable.

Any questions that you may have as to whether information is material must be addressed with the Fund's Chief Compliance Officer before acting in any way on such information.

**<u>What is Non-public Information?</u>**

Information is non-public until it has been effectively communicated to the marketplace. One must be able to point to some fact to show that the information is public. For example, information found in a report filed with the SEC, or appearing in Reuters, Bloomberg or a Dow Jones publication or in any other publication of general circulation would generally be considered "public." In certain instances, information disseminated to certain segments of the investment community may be deemed "public" (e.g., research communicated through institutional information dissemination services such as First Call). The fact that information has been disclosed to a few members of the public does not make it public for insider trading purposes. To be "public," the information must have been disseminated in a manner designed to reach investors generally, and the investors must be given the opportunity to absorb the information. Even after public disclosure of information, you must wait until the close of business on the second trading day after the information was publicly disclosed before you can treat the information as public.

**<u>Basis for Liability</u>**

Described below are circumstances under which a person or entity may be deemed to have traded on inside information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Fiduciary Duty Theory</u>. In 1980, the U.S. Supreme Court found that there is no general duty to disclose before trading on material non-public information, but that such a duty arises where there is a fiduciary relationship between the parties to the transaction. In such case, one party has a right to expect that the other party will not disclose any material non-public information and will refrain from trading. <u>Chiarella v. U.S.</u>, 445 U.S. 22 (1980).

Insiders such as employees of an issuer are ordinarily considered to have a fiduciary duty to the issuer and its shareholders. In <u>Dirks v. SEC</u>, 463 U.S. 646 (1983), the U.S. Supreme Court stated alternative theories by which such fiduciary duties are imposed on non-insiders: (1) they can enter into a confidential relationship with the fund (e.g. attorneys and accountants, etc.) ("temporary insiders"); or (2) they can acquire a fiduciary duty to the fund's shareholders as "tippees" if they are aware or should have been aware that they have been given confidential information by an insider or temporary insider who has violated his or her fiduciary duty to the fund's shareholders.

In the "tippee" situation, a breach of duty occurs only if the insider or temporary insider personally benefits, directly or indirectly, from the disclosure. The benefit does not have to be of a financial nature, but can be a gift, a reputational benefit that will translate into future earnings, or even evidence of a relationship that suggests a quid pro quo.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Misappropriation Theory</u>. Another basis for insider trading liability is the "misappropriation" theory, where liability is established when trading occurs on material non-public information that was stolen or misappropriated from another person. In <u>Carpenter v. United States</u>, the U.S. Supreme Court found that a columnist defrauded The Wall Street Journal by communicating information prior to its publication to another person who used the information to trade in the securities markets. It should be noted that the misappropriation theory can be used to reach a variety of individuals not previously thought to be encompassed under the fiduciary duty theory.

**<u>Penalties for Insider Trading</u>**

Penalties for trading on or communicating material non-public information are severe, both for individuals involved in such conduct and their employers. A person can be subject to some or all of the penalties below even if he or she does not personally benefit from the violation. Penalties include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· jail sentences;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· civil injunction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· treble damages;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· disgorgement of profits;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· fines for the person who committed the violation of up to three times the profit gained or loss avoided,
whether or not the person actually benefited; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· fines for the employer or other controlling person of up to the greater of $1,000,000 or three times the
amount of the profit gained or loss avoided.

**<u>Controlling the Flow of Sensitive Information</u>**

The following procedures have been established to assist the officers, trustees and employees of the Fund in controlling the flow of sensitive information so as to avoid the possibility of trading on material non-public information either on behalf of the Fund or for themselves and to assist the Fund and its supervisory personnel in surveilling for, and otherwise preventing and detecting, insider trading. Every officer, trustee and employee of the Fund must follow these procedures or risk serious sanctions by one or more regulatory authorities and/or the Fund, including dismissal, substantial personal liability and criminal penalties. If you have any questions about these procedures you should consult the Fund's Chief Compliance Officer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Identifying Inside Information</u>. Before trading for yourself or others in the securities of a fund about which you have what you believe to be inside information, ask yourself the following questions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Is the information non-public? To whom has this information been provided? Has the information been effectively
communicated to the marketplace? To what extent, for how long, and by what means has the information been disseminated? If information
is non-public, it normally may not be used in connection with effecting securities transactions; however, if you have any doubts whatsoever
as to whether the information is non-public, you must ask the Fund's Chief Compliance Officer prior to trading on, or communicating
(except in accordance with the procedures and requirements herein) such information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Is the information material? Is this information that an investor would consider important in making his
or her investment decision? Is this information that would substantially affect the market price of the securities if generally disclosed?

If, after consideration of the above, you believe that the information may be material and non-public, or if you have questions in that regard, you should take the following steps:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Report
 the matter immediately to the Fund's Chief Compliance Officer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Do not purchase or sell the securities on behalf of yourself or others.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Do not communicate the information inside or outside of the Fund, other than to the Fund's Chief
Compliance Officer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· After the Fund's Chief Compliance Officer has reviewed the issue, you will be instructed to continue
the prohibitions against trading and communication, or you will be allowed to communicate the information and then trade.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Restricting Access to Material Non-public Information</u>. Information in your possession that you identify as material and non-public may not be communicated to anyone, except as provided in paragraph 1 above. In addition, care should be taken so that such information is secure. For example, files containing material non-public information should be sealed and access to computer files containing material non-public information should be restricted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Personal Security Trading</u>. All officers, trustees and employees must trade in accordance with the provisions of this Code of Ethics as well as this Statement in order to assist the Fund with monitoring for violations of the law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Restricted List</u>. As defined in this Code of Ethics, the Fund's Chief Compliance Officer will maintain a Restricted List. Disclosure outside of the Fund as to what issuers and/or securities are on the Restricted List could therefore constitute tipping and is strictly prohibited.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Supervision/Investigation</u>. Should the Fund's Chief Compliance Officer learn that a violation of this Statement is suspected, the Fund's Chief Compliance Officer shall alert the Chief Executive Officer of the Fund. Together, these parties will determine who should conduct further investigation, if they determine an investigation is necessary.

**Procedures to Implement this Code of Ethics**

The following reporting procedures have been established to assist Access Persons in avoiding a violation of this Code of Ethics, and to assist the Fund in preventing, detecting and imposing sanctions for violations of this Code of Ethics. Every Access Person must follow these procedures. Questions regarding these procedures should be directed to the Fund's Chief Compliance Officer.

All Access Persons are subject to the reporting requirements set forth in the next section, except as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• with respect to transactions effected
for, and Covered Securities (including any security issued by the issuer of such Covered Security) held in, any account over which the
Access Person has no direct or indirect influence or control; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• those transactions effected
pursuant to an Automatic Investment Plan.

**<u>Reporting Requirements</u>**

The Chief Compliance Officer shall furnish each employee with a copy of this Code of Ethics along with any amendments, upon commencement of employment and annually thereafter.

Each Supervised Person is required to certify, through a written acknowledgment, within 10 days of commencement of employment, that he or she has received, read and understands all aspects of this Code of Ethics and recognizes that he or she is subject to the provisions and principles detailed herein. In addition, the Fund's Chief Compliance Officer shall notify each Access Person of his or her obligation to file an initial holdings report, quarterly transaction reports, and annual holdings reports, as described below.

**<u>Pre-Clearance Reports</u>**

Access Persons of the Fund must obtain approval from the Fund's Chief Compliance Officer prior to entering into a transaction in any Covered Securities, as well as Initial Public Offerings and Limited Offerings. The pre-clearance form shall include the name of the Access Person, the date, the name of the broker who will execute the transaction, the name of the security, quantity, whether the transaction is a purchase or sale, total anticipated dollar value and any pertinent instructions (for example, good until cancelled, limit, etc.). There will also be a line for approval or disapproval along with space for comments and the date.

**<u>Initial Holdings Reports</u>**

Each Access Person must, no later than 10 days after the person becomes an Access Person, submit to the Fund's Chief Compliance Officer or other designated person a report of the Access Person's current securities holdings. The information provided must be current as of a date no more than 45 days prior to the date the person becomes an Access Person. The report must include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the title and type of the security
and, as applicable, the exchange ticker symbol or CUSIP number, the number of shares held for each security, and the principal amount;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the name of any broker, dealer
or bank with which the Access Person maintains an account in which any securities are held for the Access Person's direct or indirect
benefit; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the date the Access Person submits
the report.

**<u>Quarterly Transaction Reports</u>**

Each Access Person must, no later than 30 days after the end of each calendar quarter, submit to the Fund's Chief Compliance Officer or other designated person a report of the Access Person's transactions involving a Covered Security (including any security issued by the issuer of such Covered Security) in which the Access Person had, or as a result of the transaction acquired, any direct or indirect Beneficial Ownership. The report must cover all transactions occurring during the calendar quarter most recently ending. Independent Trustees must file such a report if such trustee knew or, in the ordinary course of fulfilling his or her official duties as a trustee of the Fund, should have known that during the 15-day period immediately preceding or after the date of the transaction in a Covered Security by the trustee such Covered Security is or was purchased or sold by the Fund or Flat Rock Global considered purchasing or selling such Covered Security. The report must contain the following information:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the date of the transaction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the title and, as applicable,
the exchange ticker symbol or CUSIP number, of each reportable security involved, the interest rate and maturity date of each reportable
security involved, the number of shares of each reportable security involved, and the principal amount of each reportable security involved;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the nature of the transaction
(i.e., purchase, sale or other type of acquisition or disposition);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the price of the security at which
the transaction was effected;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the name of the broker, dealer
or bank with or through which the transaction was effected, and the date the account(s) were established; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the date the Access Person submits
the report.

**<u>Annual Holdings Reports</u>**

Each Access Person must submit, to the Fund's Chief Compliance Officer or other designated person, an annual holdings report reflecting holdings as of a date no more than 45 days before the report is submitted. The annual holdings report must be submitted at least once every 12 months, on a date to be designated by the Fund. The Fund's Chief Compliance Officer will notify every Access Person of the date. Each report must include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the title and, as applicable, the exchange ticker symbol or CUSIP number, of each reportable security involved, the interest rate and maturity date of each reportable security involved, the number of shares of each reportable security involved, and the principal amount of each reportable security involved;

• the name of any broker, dealer or bank with which the Access Person maintains an account in which any securities are held for the Access Person's direct or indirect benefit; and

• the date the Access Person submits the report.

**<u>Annual Certification of Compliance</u>**

All Access Persons must annually certify, through a written acknowledgment, to the Fund's Chief Compliance Officer that: (1) they have read, understood and agree to abide by this Code of Ethics; (2) they have complied with all applicable requirements of this Code of Ethics; and (3) they have reported all transactions and holdings that they are required to report under this Code of Ethics.

**ADMINISTRATION** **OF THIS CODE OF ETHICS**

The Fund's Chief Compliance Officer has overall responsibility for administering this Code of Ethics and reporting on the administration of and compliance with this Code of Ethics and related matters to the Board and the Audit Committee of the Board (the "***Audit Committee***").

The Fund's Chief Compliance Officer shall review all reports to determine whether any transactions recorded therein constitute violations of this Code of Ethics. Before making any determination that a violation has been committed by a person subject to this Code of Ethics, such person shall be given an opportunity to supply additional explanatory material. The Fund's Chief Compliance Officer shall maintain copies of the reports as required by Rule 17j-1(f) under the 1940 Act.

No less frequently than annually the Fund's Chief Compliance Officer must furnish to the Board and Audit Committee, and the Board and/or Audit Committee must consider, a written report that describes any issues arising under this Code of Ethics or its procedures since the last report to the Board, including but not limited to, information about material violations of this Code of Ethics or its procedures and any sanctions imposed in response to material violations. This report should also certify that the Fund has adopted procedures reasonably designed to prevent persons subject to this Code of Ethics from violating this Code of Ethics.

**<u>SANCTIONS FOR CODE VIOLATIONS</u>**

All violations of this Code of Ethics will result in appropriate corrective action, up to and including dismissal. If the violation involves potentially criminal activity, the individual or individuals in question will be reported, as warranted, to the appropriate authorities.

**<u>APPLICATION</u><u>/WAIVERS</u>**

All the trustees, officers and employees of the Fund and Flat Rock Global are subject to this Code of Ethics.

Insofar as other policies or procedures of the Fund or Flat Rock Global govern or purport to govern the behavior or activities of all persons who are subject to this Code of Ethics, they are superseded by this Code of Ethics to the extent that they overlap or conflict with the provisions of this Code of Ethics.

Any amendment or waiver of this Code of Ethics for an executive officer or member of the Board must be made by the Board and disclosed on Form N-CSR filed with the Securities and Exchange Commission.

**<u>RECORDS</u>**

The Fund shall maintain records with respect to this Code of Ethics in the manner and to the extent set forth below, which records may be maintained on microfilm or electronic storage media under the conditions described in Rule 31a-2(f) under the 1940 Act and shall be available for examination by representatives of the SEC:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. A copy of this Code of Ethics and any other code of ethics of the Fund that is, or at any time within the past five years has been, in effect shall be maintained in an easily accessible place;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. A record of any violation of this Code of Ethics and of any action taken as a result of such violation shall be maintained in an easily accessible place for a period of not less than five years following the end of the fiscal year in which the violation occurs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. A copy of each report made by an Access Person or duplicate account statement received pursuant to this Code of Ethics, shall be maintained for a period of not less than five years from the end of the fiscal year in which it is made or the information is provided, the first two years in an easily accessible place;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. A record of all persons who are, or within the past five years have been, required to make reports pursuant to this Code of Ethics, or who are or were responsible for reviewing these reports, shall be maintained in an easily accessible place;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. A copy of each report made to the Board shall be maintained for at least five years after the end of the fiscal year in which it is made, the first two years in an easily accessible place; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. A record of any decision, and the reasons supporting the decision, to approve the direct or indirect acquisition by an Access Person of Beneficial Ownership in any securities in an Initial Public Offering or a Limited Offering shall be maintained for at least five years after the end of the fiscal year in which the approval is granted.

**<u>REVISIONS AND AMENDMENTS</u>**

This Code of Ethics may be revised, changed or amended at any time by the Board. Following any material revisions or updates, an updated version of this Code of Ethics will be distributed to you, and will supersede the prior version of this Code of Ethics effective upon distribution. The Fund may ask you to sign an acknowledgement confirming that you have read and understood any revised version of this Code of Ethics, and that you agree to comply with the provisions thereof.

**APPENDIX A** 

**Flat Rock Opportunity Fund (the "Fund")**

**Acknowledgment Regarding**

**Code of Business Conduct and Ethics**

&nbsp;&nbsp; *This acknowledgment is to be signed and returned to the Fund's Chief Compliance Officer and will be retained as part of your permanent personnel file.* <br>

I have received a copy of the Fund's Code of Business Conduct and Ethics, including the Statement on the Prohibition of Insider Trading (the "***Code***"), read it, and understand that the Code contains the expectations of the Fund regarding employee conduct, ethical behavior and the prohibition of trading on insider information. I agree to observe the policies and procedures contained in the Code and have been advised that, if I have any questions or concerns relating to such policies or procedures, I understand that I have an obligation to report to the Audit Committee, the Chief Compliance Officer or other such designated officer, any suspected violations of the Code of which I am aware. I also understand that the Code is issued for informational purposes and that it is not intended to create, nor does it represent, a contract of employment.

---

| |
|:---|
| Name (please print) |
| Signature |
| Date |

---

&nbsp;&nbsp; *The failure to read and/or sign this acknowledgment in no way relieves you of your responsibility to comply with the Fund's Code of Business Conduct and Ethics.*<br>

**APPENDIX B**

**Flat Rock Opportunity Fund (the "Fund")**

**PRE-CLEARANCE FORM**

Use this form to request pre-clearance of a transaction to purchase a Limited Offering, Initial Public Offering or to purchase or sell any Covered Security. Please submit this form, together with a copy of the Limited Offering documentation, or other applicable documentation, to the Fund's Chief Compliance Officer at least 5 business days before the planned investment.

---

| | |
|:---|:---|
| **Employee Name:** | **Date:** |

---

**Issuer/Investment Name:** 

**Terms of Purchase (price, purchaser – individual, joint, entity, etc.):** 

**Proposed Transaction Date:** 

**How did you learn about this opportunity?** 

**Related to a Portfolio or Pipeline security?** 

---

| | |
|:---|:---|
| **Approved:** | **Date:** |
| **Not Approved:** | **Date:** |
| **Comments:** |  |

---

**APPENDIX C**

**Flat Rock Opportunity Fund (the "Fund")**

**INITIAL HOLDINGS REPORT**

**As of _______, 20__**

To: Chief Compliance Officer

A. <u>Securities Holdings</u>. I have listed below (or attached hereto a listing) all of my securities holdings held by me or Beneficial Owners as defined in the Fund's Code of Business Conduct and Ethics.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| Title of<br> Security | CUSIP<br> Number | Interest<br> Rate and<br> Maturity<br> Date (If<br> Applicable) | Date of<br> Transaction | Number <br> of Shares <br> or<br> Principal<br> Amount | Dollar<br> Amount of<br> Transaction | Nature of<br> Transaction<br> (Purchase,<br> Sale, Other) | Price | Broker/<br> Dealer or<br> Bank<br> Through<br> Whom<br> Effected |

---

B. <u>Brokerage Accounts</u>. I, or a Beneficial Owner, have established the following accounts in which securities are held for my direct or indirect benefit:

<u>Name of Broker, Dealer or Bank:</u>

Date:   Signature:  

Name (please print):  

**APPENDIX D**

**Flat Rock Opportunity Fund (the "Fund")**

**QUARTERLY TRANSACTION REPORT**

For the Calendar Quarter Ended: **________, 20**__

To: Chief Compliance Officer

A. <u>Securities Transactions</u>. During the quarter referred to above, the following transactions were effected in securities of which I had, or by reason of such transactions acquired, direct or indirect beneficial ownership, and which are required to be reported pursuant to the Fund's Code of Business Conduct and Ethics:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| Title of<br> Security | CUSIP<br> Number | Interest<br> Rate and<br> Maturity<br> Date (If<br> Applicable) | Date of<br> Transaction | Number <br> of Shares <br> or<br> Principal<br> Amount | Dollar<br> Amount of<br> Transaction | Nature of<br> Transaction<br> (Purchase,<br> Sale, Other) | Price | Broker/<br> Dealer or<br> Bank<br> Through<br> Whom<br> Effected |

---

B. <u>New Brokerage Accounts</u>. During the quarter referred to above, I established the following accounts in which securities were held during the quarter for my direct or indirect benefit:

---

| | |
|:---|:---|
| <u>Name of Broker, Dealer or Bank</u> | <u>Date Account Was Established</u> |

---

C. <u>Other Matters</u>. This report (i) excludes transactions with respect to which I had no direct or indirect influence or control, (ii) excludes other transactions not required to be reported and (iii) is not an admission that I have or had any direct or indirect beneficial ownership in the securities listed above.

Date:   Signature:  

Name (please print):  

**APPENDIX E**

**Flat Rock Opportunity Fund (the "Fund")**

**ANNUAL HOLDINGS REPORT**

**As of December 31, 20___**

To: Chief Compliance Officer

As of December 31, 20__, I had direct or beneficial ownership interest in the securities listed below which are required to be reported pursuant to Rule 17j-l under the Investment Company Act of 1940:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. <u>Securities Holdings</u>. I have listed below (or attached hereto a listing) all of my securities holdings held by me or Beneficial Owners as defined by the Fund's Code of Business Conduct and Ethics.

---

| | | |
|:---|:---|:---|
| Title of Security | CUSIP<br> Number | Number of Shares or<br> Principal Amount |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Brokerage Accounts</u>. As of December 31, 20__, I, or a Beneficial Owner, maintained accounts with brokers, dealers, and banks listed below in which securities were held for my direct or indirect benefit:

---

| | |
|:---|:---|
| <u>Name of Broker, Dealer or Bank</u> | <u>Date Account Was Established\*</u> |

---

This report (i) excludes securities and accounts over which I had no direct or indirect influence or control, (ii) excludes securities not required to be reported (for example, direct obligations of the U.S. Government, shares of registered investment companies etc.) and (iii) is not an admission that I have or had any direct or indirect beneficial ownership in the securities accounts listed above.

Date:   Signature:  

Name (please print):  

\* Note: If account was established before 20__, you can state that it was established before 20__.

## Ex-99.Cert

**Ex99.Cert**

I, Robert K. Grunewald, President and Chief Executive Officer certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this report on Form N-CSR of Flat Rock Opportunity Fund;

&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the
financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this
report;

&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of
the registrant's board of trustees (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | |
|:---|:---|
| By: | /s/ Robert K. Grunewald |
|  | Robert K. Grunewald |
|  | President and Chief Executive Officer (Principal Executive Officer) |
| Date: | March 10, 2023 |

---

I, Ryan Ripp, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this report on Form N-CSR of Flat Rock Opportunity Fund;

&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the
financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this
report;

&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of
the registrant's board of trustees (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | |
|:---|:---|
| By: | /s/ Ryan Ripp |
|  | Ryan Ripp |
|  | Chief Financial Officer<br> (Principal Financial and Accounting Officer) |
| Date: | March 10, 2023 |

---

## Exhibit 99.906

**Ex99.906 Cert**

This certification is furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1350, and accompanies the report on Form N-CSR for the period ended December 31, 2022 of Flat Rock Opportunity Fund (the "Fund").

I, Robert K. Grunewald, President and Principal Executive Officer of the Fund, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;(i) Form N-CSR fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the
Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

&nbsp;&nbsp;&nbsp;&nbsp;(ii) the information contained in Form N-CSR fairly presents, in all material respects, the financial condition
and results of operations of the Fund.

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic form of this written statement required by Section 906, has been provided to the Fund and will be retained by the Fund and furnished to the Securities and Exchange Commission or its staff upon request.

Dated: March 10, 2023

---

| | |
|:---|:---|
| By: | /s/ Robert K. Grunewald |
|  | Robert K. Grunewald |
|  | President and Chief Executive Officer (Principal Executive Officer) |

---

This certification is furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1350, and accompanies the report on Form N-CSR for the period ended December 31, 2022 of Flat Rock Opportunity Fund (the "Fund").

I, Ryan Ripp, Principal Financial Officer of the Fund, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;(i) Form N-CSR fully complies with the requirements of Section 13(a) or Section 15(d), as applicable of the
Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

&nbsp;&nbsp;&nbsp;&nbsp;(ii) the information contained in Form N-CSR fairly presents, in all material respects, the financial condition
and results of operations of the Fund.

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic form of this written statement required by Section 906, has been provided to the Fund and will be retained by the Fund and furnished to the Securities and Exchange Commission or its staff upon request.

Dated: March 10, 2023

---

| | |
|:---|:---|
| By: | /s/ Ryan Ripp |
|  | Ryan Ripp |
|  | Chief Financial Officer<br> (Principal Financial and Accounting Officer) |

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