# EDGAR Filing Document

**Accession Number:** 0001726548
**File Stem:** 0000950170-23-007057
**Filing Date:** 2023-3
**Character Count:** 606429
**Document Hash:** 2a63445a36ad4a5fa5d1368c8791a4f1
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000950170-23-007057.hdr.sgml**: 20230309

**ACCESSION NUMBER**: 0000950170-23-007057

**CONFORMED SUBMISSION TYPE**: 10-K

**PUBLIC DOCUMENT COUNT**: 24

**CONFORMED PERIOD OF REPORT**: 20221231

**FILED AS OF DATE**: 20230309

**DATE AS OF CHANGE**: 20230309

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** BC Partners Lending Corp
- **CENTRAL INDEX KEY:** 0001726548
- **IRS NUMBER:** 000000000
- **STATE OF INCORPORATION:** MD

**FILING VALUES:**
- **FORM TYPE:** 10-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 814-01269
- **FILM NUMBER:** 23720095

**BUSINESS ADDRESS:**
- **STREET 1:** 650 MADISON AVENUE
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10022
- **BUSINESS PHONE:** 212-891-2880

**MAIL ADDRESS:**
- **STREET 1:** 650 MADISON AVENUE
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10022

?xml version="1.0" encoding="ASCII"? 10-K

r

**UNITED STATES** 

**SECURITIES AND EXCHANGE COMMISSION** 

**Washington, D.C. 20549** 

**FORM** 10-K

**(Mark One)** 

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

**For the fiscal year ended** **December 31,** 2022

**OR** 

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

**Commission file number:** 814-01269

BC Partners Lending Corporation

(Exact Name of Registrant as Specified in its Charter)

---

| | |
|:---|:---|
| Maryland | &nbsp;&nbsp;82-4654271 |
| (State or Other Jurisdiction of<br>Incorporation or Organization) | &nbsp;&nbsp;(I.R.S. Employer<br>Identification No.) |
| 650 Madison Avenue<br>New York**,** New York | 10022 |
| (Address of Principal Executive Office) | &nbsp;&nbsp;(Zip Code) |

---

**(**212**)** 891-2880

(Registrant's Telephone Number, Including Area Code)

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

<u>Title of each class</u> <u>Trading Symbol(s).</u> <u>Name of each exchange on which registered</u> <br> None N/A N/A

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

**Common Stock, par value $0.001 per share**

(Title of class)

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

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

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

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

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

---

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

---

------

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

Indicate by check mark whether the registrant has filed a report on and attestation to to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive oﬃcers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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

As of December 31, 2022, there was no established public market for the registrant's common stock.

As of March 8, 2023, the registrant had 2,751,320 shares of common stock outstanding.

**Documents Incorporated by Reference**

Portions of the registrant's definitive Proxy Statement relating to the registrant's 2023 Annual Meeting of Stockholders, to be filed with the U.S. Securities and Exchange Commission within 120 days following the end of the registrant's fiscal year, are incorporated by reference in Part III of this Annual Report on Form 10-K as indicated herein.

------

**TABLE OF CONTENTS** 

---

| | | |
|:---|:---|:---|
|  |  | **Page** |
| [**<u>PART I</u>**](#part_i_) |  |  |
| Item 1. | [<u>Business</u>](#business_10k) | 5 |
| Item 1A. | [<u>Risk Factors</u>](#item_1a_risk_factor_10k) | 20 |
| Item 1B. | [<u>Unresolved Staff Comments</u>](#item_1b_10k) | 54 |
| Item 2. | [<u>Properties</u>](#item_1b_10k) | 54 |
| Item 3. | [<u>Legal Proceedings</u>](#item_1b_10k) | 54 |
| Item 4. | [<u>Mine Safety Disclosures</u>](#item_1b_10k) | 54 |
| [**<u>PART II</u>**](#part_ii_10k) |  |  |
| Item 5. | [<u>Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities</u>](#item_5_10k) | 55 |
| Item 6. | [<u>\[Reserved\]</u>](#item_5_10k) | 55 |
| Item 7. | [<u>Management's Discussion and Analysis of Financial Condition and Results of Operations</u>](#item_7_10k) | 56 |
| Item 7A. | [<u>Quantitative and Qualitative Disclosures About Market Risk</u>](#item_7a_10k) | 69 |
| Item 8. | [<u>Consolidated Financial Statements and Supplementary Data</u>](#item_8_10k) | F-1 |
| Item 9. | [<u>Changes in and Disagreements With Accountants on Accounting and Financial Disclosure</u>](#item_9_10k) | 61 |
| Item 9A. | [<u>Controls and Procedures</u>](#item_9_10k) | 61 |
| Item 9B. | <u>Other Information</u> | 61 |
| Item 9C. | [<u>Disclosure Regarding Foreign Jurisdictions that Prevent Inspection</u>](#item_9_10k) | 61 |
| [**<u>PART III</u>**](#part_iii_10k) |  |  |
| Item 10. | [<u>Directors, Executive Officers and Corporate Governance</u>](#part_iii_10k) | 62 |
| Item 11. | [<u>Executive Compensation</u>](#part_iii_10k) | 62 |
| Item 12. | [<u>Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters</u>](#part_iii_10k) | 62 |
| Item 13. | [<u>Certain Relationships and Related Transactions, and Director Independence</u>](#part_iii_10k) | 62 |
| Item 14. | [<u>Principal Accountant Fees and Services</u>](#part_iii_10k) | 62 |
| [**<u>PART IV</u>**](#part_iv_10k) |  |  |
| Item 15. | [<u>Exhibits and Consolidated Financial Statement Schedules</u>](#part_iv_10k) | 63 |
| Item 16. | [<u>Form 10–K Summary</u>](#part_iv_10k) | 63 |
| [<u>Signatures</u>](#signatures_10k) | [<u>Signatures</u>](#signatures_10k) | 63 |

---

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**CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS** 

This report on Form 10-K (the "Annual Report") contains forward-looking statements that involve substantial risks and uncertainties. Such statements involve known and unknown risks, uncertainties and other factors and undue reliance should not be placed thereon. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about BC Partners Lending Corporation (the "Company," "we," "us," or "our"), our current and prospective portfolio investments, our industry, our beliefs and opinions, and our assumptions. Words such as "anticipates," "expects," "intends," "plans," "will," "may," "continue," "believes," "seeks," "estimates," "would," "could," "should," "targets," "projects," "outlook," "potential," "predicts" and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including without limitation:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•an economic downturn could impair our portfolio companies' ability to continue to operate, which could lead to the loss of some or all of our investments in such portfolio companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•such an economic downturn could disproportionately impact the companies which we intend to target for investment, potentially causing us to experience a decrease in investment opportunities and diminished demand for capital from these companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•such an economic downturn could also impact availability and pricing of our financing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•economic and political stability in the United States and international markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•a contraction of available credit and/or an inability to access the equity markets could impair our lending and investment activities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•interest rate volatility could adversely affect our results, particularly if we elect to use leverage as part of our investment strategy;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•currency fluctuations could adversely affect the results of our investments in foreign companies, particularly to the extent that we receive payments denominated in foreign currency rather than U.S. dollars;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our future operating results;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our business prospects and the prospects of our portfolio companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our contractual arrangements and relationships with third parties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the ability of our portfolio companies to achieve their objectives;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•competition with other entities and our affiliates for investment opportunities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the speculative and illiquid nature of our investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the use of borrowed money to finance a portion of our investments as well as any estimates regarding potential use of leverage;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the adequacy of our financing sources and working capital;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the loss of key personnel;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the timing of cash flows, if any, from the operations of our portfolio companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the ability of BC Partners Advisors L.P. (the "Adviser") to locate suitable investments for us and to monitor and administer our investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the ability of the Adviser to attract and retain highly talented professionals;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•actual and potential conflicts of interest with the Adviser and its affiliates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our ability to qualify and maintain our qualification as a regulated investment company ("RIC") under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"), and as a business development company ("BDC");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the effect of legal, tax and regulatory changes on us and our portfolio companies; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•other risks, uncertainties and other factors we identify elsewhere in this Annual Report and under "Item 1A. Risk Factors".

Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions also could be inaccurate. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this annual report should not be regarded as a representation by us that our plans and objectives will be achieved. These risks and uncertainties include those described or identified in "Risk Factors" and elsewhere in our Annual Report on Form 10-K. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Annual Report on Form 10-K. We undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by law or U.S. Securities and Exchange Commission ("SEC") rule or regulation.

------

**Risk Factor Summary**

&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;&nbsp;&nbsp;&nbsp;&nbsp;The following is only a summary of the principal risks that may materially adversely affect our business, financial condition, results of operations and cash flows. The following should be read in conjunction with the more complete discussion of the risk factors we face, which are set forth in the section entitled "Risk Factors" in this report.

**Risks Related To Our Business And Structure**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We are a relatively new company and have a limited operating history.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Our Board may change our investment objective, operating policies and strategies without prior notice or stockholder approval, the effects of which may be adverse to our results of operations and financial condition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Price declines in the medium- and large-sized U.S. corporate debt market may adversely affect the fair value of our portfolio, reducing our net asset value through increased net unrealized depreciation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Capital markets may experience periods of disruption and instability. These market conditions could materially adversely affect the Company's business, financial condition and results of operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Major public health issues could have an adverse impact on our financial condition and results of operations and other aspects of our business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Our ability to achieve our investment objective depends on the ability of the Adviser to manage and support our investment process and to a significant extent upon relationships with private equity sponsors, investment banks and commercial banks.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We operate in a highly competitive market for investment opportunities, which could delay deployment of our capital, reduce returns and result in losses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We may have difficulty sourcing investment opportunities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•As required by the 1940 Act, a significant portion of our investment portfolio is and will be recorded at fair value as determined by the Adviser in its role as valuation designee, subject to the ultimate oversight of our Board and, as a result, there is and will be uncertainty as to the value of our portfolio investments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•There is a risk that investors in our equity securities may not receive distributions consistent with historical levels or at all, or that our distributions may not grow over time and a portion of our distributions may be a return of capital.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We have not established any limit on the amount of funds we may use from available sources, such as borrowings, if any, or proceeds from Private Offerings, to fund distributions (which may reduce the amount of capital we ultimately invest in assets).

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•As a public reporting company, we are subject to increasingly complex corporate governance, public disclosure and accounting requirements that are costly and could adversely affect our business and financial results.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, investors could lose confidence in our financial and other public reporting, which would harm our business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Any unrealized depreciation we experience on our portfolio may be an indication of future realized losses, which could reduce our income available for distribution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We are dependent on information systems, and systems failures, as well as operating or cybersecurity failures, could significantly disrupt our business.

**Risks Related to the Adviser and its Affiliates**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The Adviser has limited prior experience managing a BDC or a RIC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The Adviser and its affiliates, including our officers and some of our directors, face conflicts of interest caused by compensation arrangements with us and our affiliates, which could result in actions that are not in the best interests of our stockholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We may be obligated to pay the Adviser incentive compensation even if we incur a net loss due to a decline in the value of our portfolio, and the incentive fee may be calculated using income that has not yet been received.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We depend upon the Adviser's key personnel for our future success.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The Adviser's influence on conducting our operations gives it the ability to increase its fees, which may reduce the amount of cash flow available for distribution to our stockholders.

**Risks Related to Business Development Companies**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Failure to maintain our status as a BDC would reduce our operating flexibility.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Regulations governing our operation as a BDC affect our ability to raise additional capital and the way in which we do so. As a BDC, the necessity of raiding additional capital may expose us to risks, including the typical risks associated with leverage.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Our ability to enter into new transactions with our affiliates, and to restructure or exit our investments in portfolio companies that we are deemed to "control" under the 1940 Act, will be restricted by the 1940 Act, which may limit the scope of investment opportunities available to us.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We are uncertain of our sources for funding our future capital needs; if we cannot obtain debt or equity financing on acceptable terms, our ability to acquire investments and to expand our operations will be adversely affected.

**Risks Related to Our Investments**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Our investments in prospective portfolio companies may be risky and we could lose all or part of our investment.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Our investments in leveraged portfolio companies may be risky, and we could lose all or part of our investment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We may invest through joint ventures, partnerships or other special purpose vehicles and investments through these vehicles may entail greater risks, or risks that we otherwise would not incur, if we otherwise made such investments directly.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We will be exposed to risks associated with changes in interest rates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Second priority liens on collateral securing loans that we make to our portfolio companies may be subject to control by senior creditors with first priority liens. If there is a default, the value of the collateral may not be sufficient to repay in full both the first priority creditors and us.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•A covenant breach or other defaults by our portfolio companies may adversely affect our operating results.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We may not realize gains from our equity investments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•An investment strategy focused primarily on smaller privately held companies involves a high degree or risk and presents certain challenges, including the lack of available information about these companies, a dependence on the talents and efforts of only a few key portfolio company personnel and a greater vulnerability to economic downturns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The lack of liquidity in our investments may adversely affect our business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We may not have the funds or ability to make additional investments in our portfolio companies or to fund our unfunded debt commitments which may impair the value of our portfolio.

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

**Risks Related to Debt Financing**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We borrow money, which magnifies the potential for gain or loss on amounts invested and may increase the risk of investing in us. Borrowed money may also adversely affect the return on our assets, reduce cash available for distribution to our stockholders, and result in losses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We may default under our credit facilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Provisions in a credit facility may limit our investment discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Changes in interest rates will affect our cost of capital and net investment income.

**U.S. Federal Income Tax Risks**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We will be subject to corporate-level U.S. federal income tax if we are unable to qualify or maintain our RIC tax treatment under the Code.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•If we do not qualify as a "publicly offered regulated investment company," as defined in the Code, a non-corporate stockholder will be taxed as though it received a distribution of some of our expenses.

**Risks Relating to an Investment in Our Common Stock**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•An investment in our common stock will have limited liquidity and you may not receive a full return of your invested capital if you sell your shares. Until we complete a liquidity event, it is unlikely that you will be able to sell your shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We have broad discretion over the use of proceeds of any successful offering of securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•A stockholder's interest in us will be diluted if we issue additional shares of common stock, which could reduce the overall value of an investment in us.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The net asset value of our common stock may fluctuate significantly.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Certain large stockholders could influence, and may continue to exert influence, over our management and affairs and over most influence votes requiring stockholder approval.

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**PART I**

**Item 1.** **Business.**

**General development of Business.**

BC Partners Lending Corporation (the "Company," "BCPL," "we," "us" or "our") was formed on December 22, 2017 as a corporation under the laws of the State of Maryland and commenced operations on October 2, 2019. We invest primarily in the U.S. middle-market credit sector.

From September 26, 2019 (the "Initial Closing") through December 31, 2019, we conducted private offerings (the "Private Offering") of our common stock to investors in reliance on exemptions from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"). At the closing of each Private Offering, each investor made a capital commitment (a "Capital Commitment") to purchase shares of our common stock pursuant to a subscription agreement entered into with us. Investors are required to fund drawdowns to purchase shares of our common stock up to the amount of their respective Capital Commitments on an as-needed basis each time we deliver a notice to the investors. As of December 31, 2022, we had $47.4 million in total Capital Commitments from investors ($47.4 million has been drawn down), of which $17.2 million is from the Adviser and its affiliates, executives and employees of the Adviser, and directors of the Company. Following a drawdown in respect of Capital Commitments from the Initial Closing, shares were issued on October 16, 2019. See "Item 1. Description of Business – The Private Offering."

We have elected to be treated as a business development company ("BDC") under the Investment Company Act of 1940, as amended (the "1940 Act"), and elected to be treated as a regulated investment company ("RIC") for U.S. federal income tax purposes, and to qualify annually as a RIC under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). As a BDC and a RIC, we will be required to comply with certain regulatory requirements. See "Item 1. Description of Business—Regulation as a Business Development Company."

As a BDC, we are subject to certain regulatory restrictions in making our investments. For example, BDCs generally are not permitted to co-invest with certain affiliated entities in transactions originated by the BDC or its affiliates in the absence of an exemptive order from the Securities and Exchange Commission ("SEC"). However, BDCs are permitted to, and may, simultaneously co-invest in transactions where price is the only negotiated term. On October 23, 2018, the SEC issued an order granting the Company's application for exemptive relief to co-invest, subject to the satisfaction of certain conditions, in certain private placement transactions, with other funds managed by the Adviser or its affiliates, including BCP Special Opportunities Fund I LP, BCP Special Opportunities Fund II LP, BCP Special Opportunities Fund III LP, Portman Ridge Finance Corporation, Logan Ridge Finance Corporation, and any future funds that are advised by the Adviser or its affiliated investment advisers. Under the terms of the exemptive order, in order for the Company to participate in a co-investment transaction a "required majority" (as defined in Section 57(o) of the 1940 Act) of the Company's independent directors must conclude that (i) the terms of the proposed transaction, including the consideration to be paid, are reasonable and fair to the Company and its stockholders and do not involve overreaching with respect of the Company or its stockholders on the part of any person concerned, and (ii) the proposed transaction is consistent with the interests of the Company's stockholders and is consistent with the Company's investment objectives and strategies and certain criteria established by our board of directors (the "Board").

**Financial information about segments.**

Our operations comprise only a single reportable segment.

**Description of Business.**

**The Company—BC Partners Lending Corporation**

We primarily invest in the U.S. middle-market credit sector and our investment objective is to generate current income and, to a lesser extent, capital appreciation. We seek to achieve our investment objective primarily through the form of debt investments, which may include secured debt, unsecured debt, other debt and/or equity in private middle-market companies (we define "middle-market companies" as those with annual earnings before interest, taxes, depreciation and amortization ("EBITDA") between $10 million and $50 million). In addition, to a lesser extent, we may invest in the securities of public companies and in structured products. While our primary focus will be on investments within the United States, we may, on occasion, invest in securities of non-U.S. entities.

We have primarily invested in secured debt of private middle-market companies. As of December 31, 2022, our portfolio, based on fair value, consisted of 93.7% first-lien debt investments and 6.3% other investments. As of December 31, 2022, 92.5% of our debt investments bore interest at floating rates. As of December 31, 2022, we had investments in 42 portfolio companies and the average investment size in each of our portfolio companies was approximately $2.4 million, based on fair value. As of December 31, 2022, the largest investment in a single portfolio company based on fair value represented 5.2% of our total investment portfolio. As of December 31, 2022, none of our investments were on non-accrual status.

We generally intend to distribute, out of assets legally available for distribution, substantially all of our available earnings, on a quarterly basis, as determined by our Board in its discretion.

From time to time, we may be exposed to significant market risk. See "Item 1A. Risk Factors—Risks Related to our Business and Structure." We will be exposed to risks associated with changes in interest rates. Our investment portfolio may be concentrated. We are subject to certain investment restrictions with respect to leverage and type of investments. We or our affiliates may originate loans or engage in similar activities and receive structuring or similar fees.

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As a BDC, at least 70% of our assets must be assets of the type listed in Section 55(a) of the 1940 Act, as described below in "Item 1. Description of Business – Regulation as a Business Development Company – Qualifying Assets." As of December 31, 2022 and 2021, 96.0% and 96.0%, respectively of our investments were qualifying assets.

We are managed by BC Partners Advisors L.P. (the "Adviser") and supervised by the Board, a majority of whom are not "interested persons" of the Company as defined in the 1940 Act. On April 23, 2018, we entered into an Investment Advisory Agreement with the Adviser, which was amended on each of November 7, 2018 and July 9, 2019 (as amended, the "Investment Advisory Agreement"). On August 11, 2022, the Board unanimously approved the renewal of the Investment Advisory Agreement for a period of twelve months commencing on November 7, 2022. Under the Investment Advisory Agreement, we have agreed to pay the Adviser a base management fee based on average gross assets, excluding cash and cash equivalents but including assets purchased with borrowed amounts, at the end of the two most recently completed calendar quarters and an incentive fee based on our performance. On August 20, 2019, the Company entered into a letter agreement (the "Letter Agreement") with the Adviser pursuant to which, for the period ending December 31, 2019, the Adviser waived 50% of the base management fee paid by the Company under the Investment Advisory Agreement. The waiver is prorated for any partial month or quarter. Management fees waived are not subject to recoupment by the Adviser. On August 22, 2019, we entered into an Expense Support and Conditional Reimbursement Agreement (the "Expense Support Agreement") with the Adviser, the purpose of which is to ensure that no portion of distributions made to our stockholders will be paid from our offering proceeds or borrowings. We engaged BC Partners Management LLC (the "Administrator") to act as our administrator. On April 23, 2018, we entered into an Administrative Agreement (the "Administration Agreement") with the Administrator. Under the administration agreement, we have agreed to reimburse the Administrator for services performed to enable us to operate.

**The Adviser—BC Partners Advisors L.P.**

The Adviser, an affiliate of BC Partners LLP ("BC Partners"), serves as our investment adviser pursuant to the Investment Advisory Agreement between us and the Adviser. Subject to the overall supervision of the Board, the Adviser is responsible for managing our business and activities, including sourcing investment opportunities, conducting research, performing diligence on potential investments, structuring our investments, and monitoring our portfolio companies on an ongoing basis through a team of investment professionals. All investment decisions require the majority approval of the investment committee (the "Investment Committee").

The Adviser is a leading private equity firm with an over 30-year track record investing in the buyout space across North America and Europe. BC Partners' assets under management are based on actively managed commitments of its managed funds and relevant vehicles formed for the purpose of co-investing alongside such funds. BC Partners operates a private equity investment platform ("BCP PE"), a credit investment platform ("BCP Credit"), and a real estate investment platform ("BCP RE") as fully integrated businesses. The investment activity of BCPL takes place primarily within the BCP Credit platform. Integration with the broader BC Partners platform allows BCP Credit to leverage a team of investment professionals across its private equity platform including its operations team. The BCP Credit Investment Team (the "Investment Team") is led by Ted Goldthorpe who sits on the BCP Credit investment committee. The Adviser also manages other private funds in the BCP Credit platform along with several separate managed accounts focused on credit investments. In April 2019, an affiliate of the Adviser became the adviser to Portman Ridge Finance Corporation ("PTMN"), formerly known as KCAP Financial Inc., a publicly traded BDC.

**The Board of Directors**

The Board is ultimately responsible for our oversight. We have entered into the Investment Advisory Agreement with the Adviser, pursuant to which the Adviser will manage the Company on a day-to-day basis. The Board is responsible for overseeing the Adviser and other operational service providers in accordance with the provisions of the 1940 Act, applicable provisions of state and other laws and our amended and restated charter, which we refer to as our charter. The Board is currently composed of five members, three of whom are directors who are not "interested persons" of the Company as defined in the 1940 Act, referred to herein as "independent directors".

**Competitive Advantages**

The Company targets the lower end of the middle-market which we believe is a less competitive segment offering better structures, stronger covenant packages and greater management and due diligence access. We believe integration with the private equity platform provides BCP Credit and the Adviser with a strong competitive advantage and that this distinct advantage, combined with rigorous and deep due diligence and a focus on establishing downside protection and principal preservation, should generate attractive risk-adjusted returns. We believe that we represent an attractive investment opportunity for the following reasons:

**Integration with BC Partners Platform.** BCP Credit functions as an integrated business within the existing BC Partners organization, utilizing BC Partners' existing infrastructure, including investor relations, compliance and fund support. BC Partners believes the integrated model benefits the BCP PE, BCP Credit and BC RE platforms as BC Partners believes the credit platform is highly synergistic and complementary to the other businesses and enables BC Partners to leverage its deal flow and sector knowledge to invest across the capital structure, creating attractive new opportunities for the benefit of all its investors. BCP Credit's ability to leverage scale and enhance sourcing capabilities throughout the credit cycle is anticipated to be supported by the resources and expertise available to the team from integration with BCP PE.

**Experienced Investment Team.** The senior members of the Investment Team have successfully invested and managed assets together in liquid and illiquid credit across multiple credit cycles using the same strategies we employ and have developed portfolio monitoring processes over 15 years of investing in credit. We believe this positions the Adviser to effectively identify, assess and select quality investments, while also enabling it to monitor and provide managerial assistance to our portfolio companies.

**High Quality Underwriting.** We have a strong focus on balancing yield while mitigating the risk of principal impairment through financial and structural protection. The Adviser has experience with and the ability to complete innovative and complex transactions. The Adviser seeks to apply the same private equity style investment process employed for over 30 years at BC Partners.

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**Diversified Sources of Deal Flow.** The Adviser employs a proactive sourcing model not reliant on one individual source or type of source and develop proprietary unbiased viewpoints on credit performance. We anticipate that a substantial majority of our investments will not be intermediated and will be originated without the assistance of investment banks or other traditional Wall Street sources. We seek to develop an active pipeline of high quality opportunities using proprietary and non-proprietary sourcing and then filter appropriately to ensure the highest probability of successful execution. We seek to consider a wide range of transactions supported by the Adviser's origination and syndication capabilities. We do not intend to invest in loan participations as part of our principal investment strategy, and such products are not intended to be a material component of our portfolio.

**Flexible, Differentiated Strategy.** The Adviser seeks to optimize exposures as the opportunity set changes and will target smaller capital structures which are insufficiently compelling for large funds. This investment approach targets a stockholder friendly return and governance structure.

**Investment Selection and Due Diligence**

The Investment Team follows a robust and structured investment process from sourcing through execution, monitoring and exit, utilizing standardized diligence and investment memos to reinforce investment discipline and support repeatable investment processes. We apply rigorous and deep due diligence to the credit opportunities we assess. Priorities are expected to include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•assessing downside protection and principal preservation through financial and structural protections;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•seeking to generate attractive returns utilizing the skill and experience of the BCP Credit team; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•leveraging the BCP PE team's expertise and network.

Deep sector expertise across the entire BC Partners organization is expected to allow the BCP Credit team to focus on those opportunities where it can bring a differentiated angle or expertise to increase the potential for attractive risk-adjusted returns. Investment decisions will be made by the five-member cross functional Investment Committee comprising three members of BCP Credit and two members of BCP PE platforms.

**Deal Sourcing.** BCP Credit's sourcing capabilities are supported by longstanding and well-established relationships across both the credit and private equity platforms with intermediaries, advisers, corporations, funds, financial institutions, sponsors, and management teams. BCP Credit takes a proactive approach to sourcing, with the goal being to develop an active pipeline of high-quality opportunities utilizing proprietary and non-proprietary sourcing and then filtering appropriately to target the highest probability of successful execution. BCP Credit's access to proprietary deal flow is strengthened by its integration with the BCP PE platform and the flow of information from BCP PE to BCP Credit within the BC Partners group. BCP Credit seeks to position itself as a solution provider for financial institutions and businesses with the ability to provide expertise in both financial structuring and value creation.

**Opportunity Review Process.** As soon as BCP Credit identifies an attractive and actionable investment opportunity, the Adviser initiates its standard review process which includes a high-level credit analysis and in-depth assessment of actionability and may also include a preliminary set of deal terms and proposed potential structure which, along with any findings from initial diligence, are presented to and discussed with the Investment Committee. If the assessment is positive, the BCP Credit team proceeds to a detailed fundamental credit analysis and an absolute and relative risk-reward assessment. A private equity style fundamental analysis of the opportunity is performed to allow the BCP Credit team to assess the target's intrinsic and future value. Depending on what type of opportunity is being reviewed, this stage of the process may include a more detailed assessment of the deal situation, management team, business fundamentals, legal documentation analysis and market positioning, along with updated valuations and return projections. Upon completion of the additional due diligence, a more formal analysis is presented to the Investment Committee, and upon approval, the BCP Credit team will proceed to execute the investment.

**Structure of Investments**

When structuring our investments, the Investment Team seeks to establish downside protection by securing our loans with direct liens on the portfolio company's assets or cash flows. On occasion our debt investments may be structured such that following our investment they may convert into equity or additional debt securities and/or allow for the deferment of interest payments. In some cases, we may collateralize our debt investments through the use of subordinated liens on the borrower's assets. We expect our loan maturities to be three to ten years. As of December 31, 2022, the weighted average loan maturity was approximately five years.

The Investment Team creates bespoke financial structuring solutions so that our investment terms are appropriate to each situation, in order to support and incentivize our portfolio companies' financial performance while also protecting our investments and managing our risk profile.

In order to establish downside protection, we generally:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•invest higher in the capital structure of our portfolio companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•negotiate strong covenants and access to information, which may include board representation, change of control provisions and default penalties as a result of covenant non-compliance, so as to protect our rights and preserve our capital while still providing our portfolio companies with the ability to manage their businesses in a profitable manner; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•possibly negotiate equity-like features such as warrants or options to purchase minority interests in order to participate in the out-performance at our portfolio companies, with the appropriate protections.

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Our intention is to hold our investments to maturity or repayment barring circumstances, such as liquidity events, that may provide an opportunity for an earlier exit to enhance our returns, or impairment of credit quality, where an earlier exit may limit negative impact on our returns.

**Engagement with Portfolio Companies**

**Monitoring.** Throughout the investment hold period, the BCP Credit team performs ongoing monitoring to ensure the investment remains on track to achieve its return target. Formalized monitoring processes ensure rigorous discipline around monitoring investments and include portfolio reviews by the Investment Committee on a quarterly basis, continuous assessments of fund-level risk-reward profiles and comprehensive scenario sensitivities. At the investment level, the Investment Team performs frequent assessments of both risk-reward and covenant package compliance as well as continuous stress testing scenarios and maintains an active dialogue with the portfolio company and/or industry participants as appropriate. The Investment Team remains engaged with BCP PE (when appropriate) and other industry experts throughout the life of the investment to remain informed about developments that may impact the investment. BCP Credit believes that active and engaged management of its investments facilitates early identification of potential problems, which could enable BCP Credit to structure constructive solutions.

**Managerial Assistance.** As appropriate, the BCP Credit team engages with portfolio company management on value-add initiatives, with the support of the BCP PE Operations Team and with access to the intellectual capital of the BC Partners' Operating Adviser and CEO networks. These initiatives could include helping businesses develop best practices, implementing volume buying or effecting other synergies with the broader BCP PE portfolio, improving management information systems/reporting or delivering agreed business improvements (such as working capital reductions or process changes). In a restructuring or default situation, BCP Credit will generally seek to drive or influence negotiations to maximize recovery.

**Competition**

Our primary competitors in providing financing to middle-market companies include public and private funds, other BDCs, commercial and investment banks, commercial finance companies and, to the extent they provide an alternative form of financing, private equity and hedge funds. Many of our competitors are substantially larger and have considerably greater financial, technical, and marketing resources than we do. Some competitors may have access to funding sources that are not available to us. In addition, some of our competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of investments and establish more relationships than us. Further, many of our competitors are not subject to the regulatory restrictions that the 1940 Act imposes on us as a business development company, or to the distribution and other requirements we must satisfy to maintain our RIC status.

**Term**

If the Board determines that there has been a significant adverse change in the regulatory or tax treatment of the Company or our stockholders that in its judgment makes it inadvisable for the Company to continue in its present form, then the Board will endeavor to restructure or change the form of the Company to preserve (insofar as possible) the overall benefits previously enjoyed by our stockholders as a whole or, if the Board determines it appropriate (and subject to any necessary stockholder approvals and applicable requirements of the 1940 Act), (i) cause the Company to change its form and/or jurisdiction of organization or (ii) wind down and/or liquidate and dissolve the Company.

In the event of our liquidation, dissolution or winding up, subject to any preferential rights of holders of our preferred stock, each share of common stock would be entitled to share ratably in all of our assets that are legally available for distribution after we have paid or otherwise provided for all debts and other liabilities, if any preferred stock is outstanding at such time. For the purposes of this paragraph, a merger or consolidation of the Company with or into any other corporation or other entity, or a sale or conveyance of all or any part of our property or assets will not be deemed to be a dissolution, liquidation or winding up, voluntary or involuntary.

**Emerging Growth Company**

We are an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"), and we will take advantage of certain specified reduced disclosure and other requirements that are otherwise generally applicable to public companies that are not "emerging growth companies" including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"). In addition, we will take advantage of the extended transition period provided in Section 7(a)(2)(B) of the 1933 Act for complying with new or revised accounting standards.

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**Human Capital Resources**

We do not currently have any employees and do not expect to have any employees in the future. Services necessary for our business are provided by individuals who are employees of the Adviser or its affiliates, pursuant to the terms of the Investment Advisory Agreement and the Administration Agreement. Each of our executive officers is employed by the Adviser or its affiliates. Our day-to-day investment operations are managed by the Adviser. The services necessary for the origination and administration of our investment portfolio will be provided by investment professionals employed by the Adviser or its affiliates. The Investment Team will focus on origination and transaction development and the ongoing monitoring of our investments. In addition, we will reimburse the Adviser (or its affiliates) for an allocable portion of the compensation paid by the Adviser (or its affiliates) to the Company's chief compliance officer and chief financial officer and their respective staffs (based on the percentage of time such individuals devote, on an estimated basis, to the business and affairs of the Company).

**Investment Advisory Agreement**

The Adviser provides management services to us pursuant to the Investment Advisory Agreement. Under the terms of the Investment Advisory Agreement, the Adviser is responsible for the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•managing our assets in accordance with our investment objective, policies and restrictions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•determining the composition of our portfolio, the nature and timing of the changes to our portfolio and the manner of implementing such changes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•identifying, evaluating and negotiating the structure of our investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•monitoring our investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•determining the securities and other assets we will purchase, retain or sell;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• assisting the Board with its valuation of our assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•directing investment professionals of the Adviser to provide managerial assistance to our portfolio companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•performing due diligence on prospective portfolio companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•exercising voting rights in respect of portfolio securities and other investments for us;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•serving on, and exercising observer rights for, boards of directors and similar committees of our portfolio companies; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•providing us with such other investment advisory, research and related services as we may, from time to time, reasonably require for the investment of capital.

The Adviser's services under the Investment Advisory Agreement are not exclusive, and it is free to furnish similar services to other entities so long as its services to us are not impaired.

**Term**

On April 23, 2018, the Company entered into the Investment Advisory Agreement with the Adviser, which was amended on November 7, 2018 and July 9, 2019. On August 11, 2022, the Board unanimously approved the renewal of the Investment Advisory Agreement for a period of twelve months commencing on November 7, 2022. Unless earlier terminated as described below, the Investment Advisory Agreement will remain in effect for a period of two years from the date it first became effective and will remain in effect from year-to-year thereafter if approved annually by a majority of the Board or by the holders of a majority of the Company's outstanding shares of common stock, and, in each case, a majority of the independent directors.

The Investment Advisory Agreement will automatically terminate within the meaning of the 1940 Act and related SEC guidance and interpretations in the event of its assignment. In accordance with the 1940 Act, without payment of any penalty, we may terminate the Investment Advisory Agreement with the Adviser upon 60 days' written notice. The decision to terminate the agreement may be made by a majority of the Board or the stockholders holding a majority of the outstanding shares of our common stock (a "Majority of the Outstanding Shares"). See "Investment Advisory Agreement—Removal of Adviser" below. In addition, without payment of any penalty, the Adviser may generally terminate the Investment Advisory Agreement upon 60 days' written notice and, in certain circumstances, upon 120 days' written notice.

**Removal of Adviser**

The Adviser may be removed by the Board or by the affirmative vote of a Majority of the Outstanding Shares. "Majority of the Outstanding Shares" means the lesser of (1) 67% or more of the outstanding shares of our common stock present at a meeting, if the holders of more than 50% of the outstanding shares of our common stock are present or represented by proxy or (2) a majority of outstanding shares of our common stock.

**Compensation of Adviser**

We pay the Adviser a fee for its services under the Investment Advisory Agreement consisting of two components: a base management fee and an incentive fee. The cost of both the base management fee and the incentive fee will ultimately be borne by the stockholders.

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The base management fee is payable quarterly in arrears at an annual rate of 1.00% (1.50% if an exchange listing occurs) of our average gross assets, excluding cash and cash equivalents but including assets purchased with borrowed amounts, at the end of the two most recently completed calendar quarters. The management fee for any partial month or quarter will be appropriately prorated and adjusted for any share issuances or repurchases during the relevant calendar month or quarter. For purposes of the Investment Advisory Agreement, gross assets means our total assets determined on a consolidated basis in accordance with generally accepted accounting principles in the United States, excluding cash and cash equivalents, but including assets purchased with borrowed amounts.

On August 20, 2019, the Company entered into a Letter Agreement with the Adviser pursuant to which, for the period ending December 31, 2019, the Adviser waived 50% of the base management fee paid by the Company under the Investment Advisory Agreement. The waiver was prorated for any partial month or quarter. Management fees waived are not subject to recoupment by the Adviser.

The incentive fee consists of two components that are independent of each other, with the result that one component may be payable even if the other is not. A portion of the incentive fee is based on our income, the income incentive fee, and a portion is based on our capital gains, the capital gains incentive fee, each as described below. The portion of the incentive fee based on income is determined and payable at the end of each quarter in arrears, and equals 100% of the pre-incentive fee net investment income in excess of a 1.50% quarterly preferred return but less than 1.76% (1.818% if an exchange listing occurs), the upper level breakpoint, and 15% (17.50% if an exchange listing occurs) of the amount of pre-incentive fee net investment income that exceeds 1.76% (1.818% if an exchange listing occurs) in any calendar quarter. On an annual basis, the incentive fee equals 15.00% (17.50% if an exchange listing occurs) of income in excess of a 6.00% hurdle rate.

Pre-incentive fee net investment income means distributions (including reinvested distributions), interest and fee income accrued by us during the calendar quarter, minus operating expenses for the quarter (including the management fee, expenses payable under the administration agreement, and any interest expense and distributions paid on any issued and outstanding preferred stock but excluding the incentive fee). Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with payment-in-kind ("PIK") interest and zero coupon securities), accrued income that we may not have received in cash. The Adviser is not obligated to return the incentive fee it receives on PIK interest that is later determined to be uncollectible in cash. See "Item 1A. Risk Factors— Risks Related to the Adviser and its Affiliates." Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.

To determine the income incentive fee, pre-incentive fee net investment income is expressed as a rate of return on the value of our net assets at the end of the immediately preceding calendar quarter. Because of the structure of the incentive fee, it is possible that we may pay an incentive fee in a calendar quarter in which we incur a loss. For example, if we receive pre-incentive fee net investment income in excess of the quarterly hurdle rate, we will pay the applicable incentive fee even if we have incurred a loss in that calendar quarter due to realized capital losses and unrealized capital depreciation. In addition, because the quarterly hurdle rate is calculated based on our net assets, decreases in our net assets due to realized capital losses or unrealized capital depreciation in any given calendar quarter may increase the likelihood that the hurdle rate is reached and therefore the likelihood of us paying an incentive fee for the subsequent quarter. Our net investment income used to calculate this component of the incentive fee is also included in the amount of our gross assets used to calculate the management fee because gross assets are total assets (including cash received) before deducting liabilities (such as declared distribution payments).

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

**Quarterly Subordinated Incentive Fee on**

**Pre-Incentive Fee Net Investment Income**

**(expressed as a percentage of the value of net assets)**

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| | | |
|:---|:---|:---|
| 0% | 1.50% | 1.76% (1.818% if an exchange listing occurs) |

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| | | |
|:---|:---|:---|
| ![img138194957_0.jpg](img138194957_0.jpg)0%![img138194957_1.jpg](img138194957_1.jpg) | ![img138194957_2.jpg](img138194957_2.jpg)100%![img138194957_3.jpg](img138194957_3.jpg) | ![img138194957_4.jpg](img138194957_4.jpg)15%![img138194957_5.jpg](img138194957_5.jpg) |
|  |  | (17.50% if an exchange listing occurs) |

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The second component of the incentive fee, the capital gains incentive fee, payable at the end of each calendar year in arrears, equals 15.00% of cumulative realized capital gains from inception through the end of such calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gains incentive fee for prior periods. We will accrue, but will not pay, a capital gains incentive fee with respect to unrealized appreciation because a capital gains incentive fee would be owed to the Adviser if we were to sell the relevant investment and realize a capital gain. In no event will the capital gains incentive fee payable pursuant to the Investment Advisory Agreement be in excess of the amount permitted by the Investment Advisers Act of 1940, as amended (the "Advisers Act") including Section 205 thereof.

The fees that are payable under the Investment Advisory Agreement for any partial period will be appropriately prorated.

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**Limitations of Liability and Indemnification**

Under the Investment Advisory Agreement, the Adviser, its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with the Adviser, including without limitation its managing member, will not be liable to us for acts or omissions performed in accordance with and pursuant to the Investment Advisory Agreement, except those resulting from acts constituting criminal conduct, gross negligence, willful misfeasance, bad faith or reckless disregard of the duties that the Adviser owes to us under the Investment Advisory Agreement. In addition, as part of the Investment Advisory Agreement, we have agreed to indemnify the Adviser and each of its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with the Adviser, including without limitation its general partner, and the Administrator from and against any damages, liabilities, costs and expenses, including reasonable legal fees and other expenses reasonably incurred, in or by reason of any pending, threatened or completed action, suit, investigation or other proceeding (including an action or suit by or in the right of the Company or its security holders) arising out of or otherwise based upon the performance of any of the Adviser's duties or obligations under this Agreement or otherwise as an investment adviser of the Company, except where attributable to criminal conduct, gross negligence, willful misfeasance, bad faith or reckless disregard of such person's duties under the Investment Advisory Agreement.

**Board Approval of the Investment Advisory Agreement**

On August 11, 2022, the Board held a meeting to consider and approve the continuation of the Investment Advisory Agreement and related matters for a one-year period commencing November 7, 2022. The Board was provided the information required to consider the Investment Advisory Agreement, including: (a) the nature, quality and extent of the advisory and other services to be provided to us by the Adviser; (b) comparative data with respect to advisory fees or similar expenses paid by other BDCs with similar investment objectives; (c) our projected operating expenses and expense ratio compared to BDCs with similar investment objectives; (d) any existing and potential sources of indirect income to the Adviser from its relationship with us and the profitability of that relationship; (e) information about the services to be performed and the personnel performing such services under the Investment Advisory Agreement; (f) the organizational capability and financial condition of the Adviser and its affiliates; (g) the Adviser's practices regarding the selection and compensation of brokers that may execute our portfolio transactions and the brokers' provision of brokerage and research services to the Adviser; and (h) the possibility of obtaining similar services from other third-party service providers or through an internally managed structure.

The Board, including a majority of independent directors, will oversee and monitor our investment performance and will annually review the compensation we pay to the Adviser.

**Administration Agreement**

Under the terms of the Administration Agreement between the Company and the Administrator, the Administrator performs, or oversees the performance of, required administrative services, which includes providing office space, equipment and office services, maintaining financial records, preparing reports to stockholders and reports filed with the SEC, and managing the payment of expenses and the performance of administrative and professional services rendered by others. We will reimburse the Administrator for services performed for us pursuant to the terms of the Administration Agreement. In addition, pursuant to the terms of the Administration Agreement, the Administrator may delegate its obligations under the Administration Agreement to an affiliate or to a third party and we will reimburse the Administrator for any services performed for us by such affiliate or third party.

Payments under the Administration Agreement are equal to an amount that reimburses the Administrator for its costs and expenses in performing its obligations under the Administration Agreement, including our allocable portion of the compensation paid to our chief compliance officer and chief financial officer and their respective staff who provide services to us. The Board, including the independent directors, will review the general nature of the services provided by the Administrator as well as the related cost to the Company for those services and consider whether the cost is reasonable in light of the services provided.

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On August 11, 2022, the Board approved the continuation of the Administration Agreement with the Administrator. Unless earlier terminated as described below, the Administration Agreement will remain in effect year-to-year if approved annually by a majority of the Board or by the holders of a Majority of the Outstanding Shares, and, in each case, a majority of the independent directors.

We may terminate the Administration Agreement, without payment of any penalty, upon 60 days' written notice. The decision to terminate the agreement may be made by a majority of the Board or the stockholders holding a Majority of the Outstanding Shares. In addition, the Adviser may terminate the Administration Agreement, without payment of any penalty, upon 60 days' written notice.

**Payment of Our Expenses under the Investment Advisory and Administration Agreements**

Except as specifically provided below, we anticipate that all investment professionals and staffs of the Adviser, when and to the extent engaged in providing investment advisory and management services to us, and the compensation and routine overhead expenses, of such personnel allocable to such services, will be provided and paid for by the Adviser. We will bear our allocable portion of the compensation paid by the Adviser (or its affiliates) to our chief compliance officer and chief financial officer and their respective staffs (based on a percentage of time such individuals devote, on an estimated basis, to our business affairs). We will also bear all other costs and expenses of our operations, administration and transactions, including, but not limited to (i) investment advisory fees, including management fees and incentive fees, to the Adviser, pursuant to the Investment Advisory Agreement; (ii) our allocable portion of overhead and other expenses incurred by the Adviser (or its affiliates) in performing its administrative obligations under the Investment Advisory Agreement, and (iii) all other expenses of our operations and transactions including, without limitation, those relating to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the cost of our organization and the offering, including reimbursing the Administrator for such costs incurred on our behalf;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the cost of calculating our net asset value, including the cost of any third-party valuation services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the cost of effecting any sales and repurchases of our common stock and other securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•fees and expenses payable under any dealer manager or placement agent agreements, if any;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•administration fees payable under the Administration Agreement and any sub-administration agreements, including related expenses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•debt service and other costs of borrowings or other financing arrangements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•costs of hedging;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•expenses, including travel expense, incurred by the Adviser, or members of the investment team, or payable to third parties, performing due diligence on prospective portfolio companies and, if necessary, enforcing our rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•transfer agent and custodial fees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•fees and expenses associated with marketing efforts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•federal and state registration fees, any stock exchange listing fees and fees payable to rating agencies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•federal, state and local taxes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•independent directors' fees and expenses including certain travel expenses;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the costs of any reports, proxy statements or other notices to stockholders (including printing and mailing costs), the costs of any stockholder or director meetings and the compensation of personnel responsible for the preparation of the foregoing and related matters;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•commissions and other compensation payable to brokers or dealers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•research and market data;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•fidelity bond, directors' and officers' errors and omissions liability insurance and other insurance premiums;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•direct costs and expenses of administration, including printing, mailing, long distance telephone and staff;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•fees and expenses associated with independent audits, outside legal and consulting costs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•costs of winding up our affairs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•costs incurred by either the Administrator or us in connection with administering our business, including payments under the Administration Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•extraordinary expenses (such as litigation or indemnification); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•costs associated with reporting and compliance obligations under the 1940 Act and applicable federal and state securities laws.

We are obligated to reimburse the Adviser for expense payments made by the Adviser to us in connection with the Expense Support Agreement following any calendar quarter in which we have available operating funds. The amount of the reimbursement payment for any calendar quarter will be equal to the lesser of (i) the excess operating funds in such calendar quarter, and (ii) the aggregate amount of all expense payments made by the Adviser to us within three years prior to the last business day of such calendar quarter that have not been previously reimbursed by us to the Adviser.

In addition, we and our Administrator have contracted with U.S. Bank N.A. to provide custodial and various accounting and administrative services, including but not limited to, preparing preliminary financial information for review by the Adviser, maintaining accounting and corporate books and records, processing trade information provided by us and performing testing in respect to RIC compliance.

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We expect that our general and administrative expenses will increase in dollar terms during periods of asset growth, but will decline as a percentage of total assets during such periods.

**The Private Offering**

We have entered into separate subscription agreements with a number of investors providing for the private placement of shares of our common stock pursuant to the Private Offering and may enter into additional subscription agreements from time to time. We completed our Initial Closing on September 26, 2019 and expect subsequent closings of the Private Offering will occur, from time to time, in the Adviser's sole discretion. Each investor will make a Capital Commitment to purchase shares of our common stock pursuant to the subscription agreement. Investors will be required to make capital contributions to purchase shares of our common stock each time we deliver a drawdown notice, which will be issued based on our anticipated investment activities and capital needs, in an aggregate amount not to exceed each investor's respective Capital Commitment. We will deliver drawdown requests at least 10 business days prior to the required funding date. All purchases of our common stock will generally be made pro rata in accordance with remaining Capital Commitments of all investors, at a per-share price equal to the net asset value per share of our common stock as of the close of the last quarter preceding the drawdown date, subject to adjustment in certain circumstances. Any adjustments would take into account a determination of changes to net asset value within 48 hours of the sale to assure compliance with Section 23(b) of the 1940 Act. At the earlier of (i) an exchange listing and (ii) the end of the Commitment Period (as defined below), stockholders will be released from any further obligation to fund drawdowns and purchase additional shares of our common stock, subject to certain conditions described in the subscription agreement. The "Commitment Period" will continue until the five year anniversary of the Initial Closing; provided, however, that the Commitment Period for any stockholder that makes its initial Capital Commitment after the two year anniversary of the Initial Closing will extend until the three year anniversary of such stockholder's initial Capital Commitment. In addition to Capital Commitments, we also may from time to time issue common stock in exchange for in-kind contributions of securities. No investor will be permitted to sell, assign, transfer or otherwise dispose of its shares or Capital Commitment unless the Adviser provides its prior written consent and the transfer is otherwise made in accordance with applicable law, prior to an exchange listing.

While we expect each subscription agreement to reflect the terms and conditions summarized in the preceding paragraph, we reserve the right to enter into subscription agreements that contain terms and conditions not found in the subscription agreements entered into with other investors, subject to applicable law.

**Regulation as a Business Development Company**

The following discussion is a general summary of the material prohibitions and descriptions governing BDCs generally. It does not purport to be a complete description of all of the laws and regulations affecting BDCs.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Securities purchased in transactions not involving any public offering from the issuer of such securities, which issuer (subject to certain limited exceptions) is an eligible portfolio company, or from any person who is, or has been during the preceding 13 months, an affiliated person of an eligible portfolio company, or from any other person, subject to such rules as may be prescribed by the SEC. An eligible portfolio company is defined in the 1940 Act as any issuer which:

&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;(a)is organized under the laws of, and has its principal place of business in, the United States;

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

&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;(c)satisfies any of the following:

&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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)does not have any class of securities that is traded on a national securities exchange;

&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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)has a class of securities listed on a national securities exchange, but has an aggregate market value of outstanding voting and non-voting common equity of less than $250 million;

&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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)is controlled by a business development company or a group of companies including a business development company and the business development company has an affiliated person who is a director of the eligible portfolio company; or

&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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)is a small and solvent company having total assets of not more than $4 million and capital and surplus of not less than $2 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Securities of any eligible portfolio company controlled by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Securities purchased in a private transaction from a U.S. issuer that is not an investment company or from an affiliated person of the issuer, or in transactions incident thereto, if the issuer is in bankruptcy and subject to reorganization or if the issuer, immediately prior to the purchase of its securities was unable to meet its obligations as they came due without material assistance other than conventional lending or financing arrangements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)Securities of an eligible portfolio company purchased from any person in a private transaction if there is no ready market for such securities and the Company already owns 60% of the outstanding equity of the eligible portfolio company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)Securities received in exchange for or distributed on or with respect to securities described in (1) through (4) above, or pursuant to the exercise of warrants or rights relating to such securities.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)Cash, cash equivalents, U.S. government securities or high-quality debt securities maturing in one year or less from the time of investment.

In addition, a BDC must be operated for the purpose of making investments in the types of securities described in (1), (2) or (3) above.

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

Temporary Investments. Pending investment in other types of qualifying assets, as described above, our investments can consist of cash, cash equivalents, U.S. government securities or high quality debt securities maturing in one year or less from the time of investment, which are referred to herein, collectively, as temporary investments, so that 70% of our assets would be qualifying assets.

Warrants. Under the 1940 Act, a BDC is subject to restrictions on the issuance, terms and amount of warrants, options or rights to purchase shares of capital stock that it may have outstanding at any time. In particular, the amount of capital stock that would result from the conversion or exercise of all outstanding warrants, options or rights to purchase capital stock cannot exceed 25% of the BDC's total outstanding voting shares of capital stock.

Senior Securities; Coverage Ratio. We are permitted, under specified conditions, to issue multiple classes of indebtedness and one class of stock senior to our common stock if our asset coverage, as defined in the 1940 Act, would be equal to at least 150% immediately after each such issuance. In addition, while any senior securities remain outstanding, we will be required to make provisions to prohibit any distributions to our stockholders or the repurchase of such securities or shares unless we meet the applicable asset coverage ratios at the time of the distribution or repurchase. We will also be permitted to borrow amounts up to 5% of the value of our total assets for temporary purposes, which borrowings would not be considered senior securities.

As of December 31, 2022, our asset coverage ratio was 184.1% See "Item 1. Description of Business—Capital Resources and Borrowings."

Code of Ethics. We and the Adviser have each adopted a code of ethics pursuant to Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act, respectively, that establishes procedures for personal investments and restricts certain personal securities transactions. Personnel subject to the code are permitted to invest in securities for their personal investment accounts, including securities that may be purchased or held by us, so long as such investments are made in accordance with the code's requirements.

We hereby undertake to provide a copy of the codes to any person, without charge, upon request. Requests for a copy of the codes may be made in writing addressed to BC Partners Lending Corporation, Attn: Chief Compliance Officer, 650 Madison Avenue, New York, New York 10022, or by contacting us at (212) 891-2880.

Affiliated Transactions. We may be prohibited under the 1940 Act from conducting certain transactions with our affiliates without the prior approval of our directors who are not interested persons and, in some cases, the prior approval of the SEC. On October 23, 2018, the SEC issued an order granting our application for exemptive relief to co-invest, subject to the satisfaction of certain conditions, in certain private placement transactions, with other funds managed by the Adviser or its affiliates, including BCP Special Opportunities Fund I LP, BCP Special Opportunities Fund II LP, Special Opportunities Fund III LP, Portman Ridge Finance Corporation, Logan Ridge Finance Corporation and any future funds that are advised by the Adviser or its affiliated investment advisers.

Exclusion from CFTC Regulation. Rule 4.5 of the Commodity Futures Trading Commission ("CFTC") permits investment advisers to BDCs to claim an exclusion from the definition of "commodity pool operator" under the Commodity Exchange Act (the "CEA") with respect to a fund, provided certain requirements are met. In order to permit our Adviser to claim this exclusion with respect to us, we must limit our transactions in certain futures, options on futures and swaps deemed "commodity interests" under CFTC rules (excluding transactions entered into for "bona fide hedging purposes," as defined under CFTC regulations) such that either: (i) the aggregate initial margin and premiums required to establish such futures, options on futures and swaps do not exceed 5% of the liquidation value of our portfolio, after taking into account unrealized profits and losses on such positions; or (ii) the aggregate net notional value of such futures, options on futures and swaps does not exceed 100% of the liquidation value of our portfolio, after taking into account unrealized profits and losses on such positions. In addition to meeting one of the foregoing trading limitations, we may not market our self as a commodity pool or otherwise as a vehicle for trading in the futures, options or swaps markets. Accordingly, we are not subject to regulation under the CEA or otherwise regulated by the CFTC. If the Adviser was unable to claim the exclusion with respect to us, the Adviser would become subject to registration and regulation as a commodity pool operator, which would subject the Adviser and us to additional registration and regulatory requirements and increased operating expenses.

Other. We will be periodically examined by the SEC for compliance with the 1940 Act and be subject to the periodic reporting and related requirements of the 1934 Act.

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

We are also required to designate a chief compliance officer and to adopt and implement written policies and procedures reasonably designed to prevent violation of the federal securities laws and to review these policies and procedures annually for their adequacy and the effectiveness of their implementation.

We are not permitted to change the nature of our business so as to cease to be, or to withdraw our election as, a BDC unless approved by a Majority of the Outstanding Shares.

**Proxy Voting Policies and Procedures**

We have delegated our proxy voting responsibility to the Adviser. The Proxy Voting Policies and Procedures of the Adviser are set forth below. The guidelines will be reviewed periodically by the Adviser and our non-interested directors, and, accordingly, are subject to change.

As an investment adviser registered under 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 Adviser's investment advisory clients are intended to comply with Section 206 of, and Rule 206(4)-6 under, the Advisers Act.

**Proxy Policies**

The Adviser will vote all proxies relating to our portfolio securities in the best interest of our stockholders. The Adviser reviews on a case-by-case basis each proposal submitted to a stockholder vote to determine its impact on the portfolio securities held by the Company. Although the Adviser will generally vote against proposals that may have a negative impact on our portfolio securities, the Adviser may vote for such a proposal if there exists compelling long-term reasons to do so. The Adviser will abstain from voting only in unusual circumstances and where there is a compelling reason to do so.

The Adviser's proxy voting decisions are made by members of the Investment Committee who are responsible for monitoring each of our investments. To ensure that the Adviser's 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 about how the Adviser voted proxies by making a written request for proxy voting information to BC Partners Lending Corporation, Attn: Chief Compliance Officer, 650 Madison Avenue, New York, New York 10022.

**Privacy Policy**

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

Generally, we do not collect any non-public personal information relating to our investors, other than name, address, and number of shares held by the investor. This information is used only so that we can service your account, send you annual reports, proxy statements, and other information required by law. With regard to this information, we maintain physical, electronic and procedural safeguards designed to protect the non-public personal information of our investors.

We may share information that we collect regarding an investor with certain of our service providers for legitimate business purposes, for example, in order to process trades or mail information to investors. In addition, we may disclose information that we collect regarding an investor as required by law or in connection with regulatory or law enforcement inquiries.

**Certain U.S. Federal Income Tax Considerations**

The following discussion is a general summary of certain U.S. federal income tax considerations applicable to the Company and the ownership of our common stock. This discussion does not purport to be complete or to deal with all aspects of U.S. federal income taxation that may be relevant to the Company or any particular investor. This discussion is based upon present provisions of the Code, the regulations promulgated thereunder, and judicial and administrative ruling authorities, all of which are subject to change, or differing interpretations (possibly with retroactive effect). Prospective investors should consult their tax advisers with regard to the U.S. federal tax consequences of the purchase, ownership, or disposition of our common stock, as well as the tax consequences arising under the laws of any state, foreign country or other taxing jurisdiction.

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**Taxation as a Regulated Investment Company**

We elected to be treated, and to qualify each taxable year, as a RIC under Subchapter M of the Code.

To qualify under Subchapter M for the favorable tax treatment accorded to RICs, the Company must, among other things: (1) have an election in effect to be treated as a BDC under the 1940 Act at all times during each taxable year; (2) derive in each taxable year at least 90% of its gross income from (a) distributions, interest, payments with respect to certain securities loans, gains from the sale or other disposition of stock, securities or foreign currencies, or other income (including but not limited to gain from options, futures and forward contracts) derived with respect to its business of investing in such stock, securities or foreign currencies and (b) net income derived from interests in certain publicly traded partnerships that are treated as partnerships for U.S. federal income tax purposes and that derive less than 90% of their gross income from the items described in (a) above (each, a "Qualified Publicly Traded Partnership"); and (3) diversify its holdings so that, at the end of each quarter of each taxable year of the Company (a) at least 50% of the value of the Company's total assets is represented by cash, cash items (including receivables), U.S. government securities, securities of other RICs, and other securities, with these other securities limited, with respect to any one issuer, to an amount not greater in value than 5% of the value of the Company's total assets, and to not more than 10% of the outstanding voting securities of such issuer, and (b) not more than 25% of the value of the Company's total assets is represented by the securities (other than U.S. government securities or securities of other RICs) of (i) any one issuer, (ii) any two or more issuers that the Company controls and that are determined to be engaged in the same or similar trades or businesses or related trades or businesses or (iii) any one or more Qualified Publicly Traded Partnerships.

As a RIC, the Company generally will not be subject to U.S. federal income tax on its investment company taxable income (as that term is defined in the Code, but determined without regard to the deduction for distributions paid) and net capital gain (the excess of net long-term capital gain over net short-term capital loss), if any, that it distributes in each taxable year to its stockholders, provided that it distributes at least 90% of the sum of its investment company taxable income and its net tax-exempt income for such taxable year. The Company intends to distribute to its stockholders, at least annually, substantially all of its investment company taxable income and net capital gain.

Amounts not distributed on a timely basis in accordance with a calendar year distribution requirement are subject to a nondeductible 4% U.S. federal excise tax. To prevent imposition of the excise tax, the Company must distribute during each calendar year an amount at least equal to the sum of (i) 98% of its ordinary income (not taking into account any capital gains or losses) for the calendar year, (ii) 98.2% of its capital gains in excess of its capital losses (adjusted for certain ordinary losses) for the one-year period ending October 31 of the calendar year, and (iii) any ordinary income and net capital gains for previous years that were not distributed during those years. For these purposes, the Company will be deemed to have distributed any income or gains on which it paid U.S. federal income tax.

A distribution will be treated as paid on December 31 of any calendar year if it is declared by the Company in October, November or December with a record date in such a month and paid by the Company during January of the following calendar year. Such distributions will be taxable to stockholders in the calendar year in which the distributions are declared, rather than the calendar year in which the distributions are received.

If the Company failed to qualify as a RIC or failed to satisfy the 90% distribution requirement in any taxable year, the Company would be subject to U.S. federal income tax at regular corporate rates on its taxable income (including distributions of net capital gain), even if such income were distributed to its stockholders, and all distributions out of earnings and profits would be taxed to stockholders as ordinary distribution income. Such distributions generally would be eligible (i) to be treated as "qualified distribution income" in the case of individual and other noncorporate stockholders and (ii) for the distributions received deduction in the case of corporate stockholders. In addition, the Company could be required to recognize unrealized appreciation, pay taxes and make distributions (which could be subject to interest charges) before requalifying for taxation as a RIC.

**Distributions**

Distributions to stockholders by us of ordinary income (including "market discount" realized by us on the sale of debt securities), and of net short-term capital gains, if any, realized by us will generally be taxable to stockholders as ordinary income to the extent such distributions are paid out of our current or accumulated earnings and profits. Distributions, if any, of net capital gains properly reported as "capital gain distribution" will be taxable as long-term capital gains, regardless of the length of time the stockholder has owned our common stock. A distribution of an amount in excess of our current and accumulated earnings and profits (as determined for U.S. federal income tax purposes) will be treated by a stockholder as a return of capital which will be applied against and reduce the stockholder's basis in his or her common stock. To the extent that the amount of any such distribution exceeds the stockholder's basis in his or her common stock, the excess will be treated by the stockholder as gain from a sale or exchange of our common stock. Distributions paid by us generally will not be eligible for the distributions received deduction allowed to corporations or for the reduced rates applicable to certain qualified distribution income received by non-corporate stockholders.

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Distributions will be treated in the manner described above regardless of whether such distributions are paid in cash or invested in additional common stock pursuant to the dividend reinvestment plan. Stockholders receiving distributions in the form of additional common stock will be treated as receiving a distribution in the amount of cash that they would have received if they had elected to receive the distribution in cash, unless we issue additional common stock with a fair market value equal to or greater than net asset value, in which case, such stockholders will be treated as receiving a distribution in the amount of the fair market value of the distributed common stock. The additional common stock received by a stockholder pursuant to the dividend reinvestment plan will have a new holding period commencing on the day following the day on which the shares of our common stock were credited to the stockholder's account.

We may elect to retain its net capital gain or a portion thereof for investment and be taxed at corporate rates on the amount retained. In such case, it may designate the retained amount as undistributed capital gains in a notice to its stockholders, who will be treated as if each received a distribution of his pro rata share of such gain, with the result that each stockholder will (i) be required to report its pro rata share of such gain on its tax return as long-term capital gain, (ii) receive a refundable tax credit for its pro rata share of tax paid by us on the gain and (iii) increase the tax basis for its common stock by an amount equal to the deemed distribution less the tax credit.

The Internal Revenue Service currently requires that a RIC that has two or more classes of stock allocate to each such class proportionate amounts of each type of its income (such as ordinary income and capital gains) based upon the percentage of total distributions paid to each class for the tax year. Accordingly, if we issue preferred stock, we intend to allocate capital gain distributions, if any, between its common stock and preferred stock in proportion to the total distributions paid to each class with respect to such tax year. Stockholders will be notified annually as to the U.S. federal tax status of distributions, and stockholders receiving distributions in the form of additional common stock will receive a report as to the net asset value of those shares of common stock.

A "publicly offered regulated investment company" or a "publicly offered RIC" is a RIC whose shares are either (i) continuously offered pursuant to a public offering within the meaning of Section 4 of the 1933 Act, (ii) regularly traded on an established securities market or (iii) held by at least 500 persons at all times during the taxable year. We believe that we currently do not qualify as a publicly offered RIC, although we may qualify as a publicly offered RIC for future years. If we are not a publicly offered RIC for any period, a non-corporate stockholder's allocable portion of our affected expenses, including our management fees, will be treated as an additional distribution to the stockholder and will be treated as miscellaneous itemized deductions that are deductible only to the extent permitted by applicable law. Under current law, such expenses will not be deductible by any such stockholder for tax years that begin prior to January 1, 2026.

**Dividend Reinvestment Plan**

We have adopted a dividend reinvestment plan, pursuant to which we will reinvest all cash distributions authorized by the Board on behalf of our stockholders who do not elect to receive their distributions in cash as provided below. As a result, if the Board authorizes, and we declare, a cash distribution or other distribution, then our stockholders who have not opted out of our dividend reinvestment plan will have their cash distributions automatically reinvested in additional shares of our common stock, including fractional shares as necessary and as described below, rather than receiving the cash distribution or other distribution.

The number of shares to be issued to a stockholder under the dividend reinvestment plan will be determined by dividing the total dollar amount of the distribution payable to such stockholder by the net asset value per share of our common stock, as of the last day of our calendar quarter immediately preceding the date such distribution was declared. We intend to use newly issued shares to implement the plan.

No action is required on the part of a registered stockholder to have his, her or its cash distribution or other distribution reinvested in shares of our common stock. A registered stockholder is able to elect to receive an entire cash distribution or other distribution in cash by notifying the Adviser in writing so that such notice is received by the Adviser no later than ten days prior to the record date for distributions to the stockholders.

There are no brokerage charges or other charges to stockholders who participate in the dividend reinvestment plan.

A stockholder who does not opt out of the distribution dividend plan will generally be subject to the same U.S. federal, state and local tax consequences as a stockholder who elects to receive its distributions in cash. Because a stockholder that participates in the dividend reinvestment plan will not actually receive any cash, such a stockholder will not have such cash available to pay any applicable taxes on the deemed distribution. A stockholder that participates in the dividend reinvestment plan and thus is treated as having invested in additional shares of our stock will have a basis in such additional shares of stock equal to the total dollar amount treated as a distribution for U.S. federal income tax purposes. The stockholder's holding period for such stock will commence on the day following the day on which the shares are credited to the stockholder's account. Stockholders that participate in the dividend reinvestment plan will receive tax information annually for their personal records and to help them prepare their federal income tax return.

The dividend reinvestment plan is terminable by us upon notice in writing mailed to each stockholder of record at least 30 days prior to the effectiveness of such termination.

**Investment Portfolio**

We seek to pursue a differentiated investment strategy focused on a segment of the middle-market and utilizing a "Core/Core-Plus" approach which BCP Credit believes will result in an opportunity set characterized by higher yields, stronger covenants and greater access for performing due-diligence. The Core/Core-Plus strategy can be described as follows:

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| | |
|:---|:---|
| **Core** | Traditional corporate asset and cash flow lending to sponsor-backed companies which provide a more predictable investment pace and where borrowers prioritize speed and certainty of execution. Opportunities will be sourced through private equity sponsors and sourcing relationships. |

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| | |
|:---|:---|
| **Core-Plus** | Includes lending to family and entrepreneur-owned businesses, asset-based lending, bridge financing and niche verticals as well as proprietary sponsor owned company financings. Opportunities will be sourced through the BC Partners platform, regional banks, industry contacts, and other avenues where BCPL can provide custom capital solutions and borrowers will value the BCP Platform, BCP Credit Team's experience and operational resources in addition to capital. |

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Our portfolio is expected to be split approximately 50/50 between the Core/Core-Plus strategies with a typical investment size of approximately 2% of commitments (once fully ramped) that includes primarily debt investments including secured loans and unsecured loans and, to a lesser extent, equity investments in private middle market companies. The average investment size will vary as the size of our capital base varies.

As of December 31, 2022, we had investments with an aggregate fair value of $100.4 million in 42 portfolio companies.

We may also invest in other strategies if we are presented with attractive opportunities. We may invest, to the extent permitted by law, in the securities and instruments of other investment companies and in private funds. We may also co-invest on a concurrent basis with affiliates of ours, subject to compliance with applicable regulations and our allocation procedures. Certain types of negotiated co-investments may be made only in accordance with the terms of the exemptive order we received from the SEC permitting us to do so, as described above. Under the terms of the exemptive order, in order for us to participate in a co-investment transaction a "required majority" (as defined in Section 57(o) of the 1940 Act) of our independent directors must conclude that (i) the terms of the proposed transaction, including the consideration to be paid, are reasonable and fair to us and our stockholders and do not involve overreaching with respect to us or our stockholders on the part of any person concerned, and (ii) the proposed transaction is consistent with the interests of our stockholders and is consistent with our investment objectives and strategies and certain criteria established by the Board.

Investments consisted of the following at December 31, 2022 and 2021 (dollar amounts in thousands):

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| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** |
|  | **Amortized<br>Cost** | **Fair<br>Value** | **Net Unrealized<br>Appreciation<br>(Depreciation)** |
| Senior Secured Loan | $101025 | $94047 | $(6978) |
| Structured Note | 4073 | 4053 | (20) |
| Subordinated Structured Note | 333 | 281 | (52) |
| Equity/Other | 725 | 2036 | 1311 |
| &nbsp;&nbsp;&nbsp;**Total** | $106156 | $100417 | $(5739) |

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| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
|  | **Amortized<br>Cost** | **Fair<br>Value** | **Net Unrealized<br>Appreciation<br>(Depreciation)** |
| Senior Secured Loan | $84454 | $84966 | $512 |
| Structured Note | 4073 | 4181 | 108 |
| Subordinated Structured Note | 333 | 297 | (36) |
| Equity/Other |  | 150 | 150 |
| &nbsp;&nbsp;&nbsp;**Total** | $88860 | $89594 | $734 |

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As of December 31, 2022 and 2021, the Company had outstanding unfunded commitments related to existing portfolio companies of $0.85 million and $2.91 million, respectively.

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The following tables summarize the industry and geographic composition of our investment portfolio based on fair value as of December 31, 2022 and 2021 (dollar amounts in thousands):

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** |
|  | **Amortized** | **Percentage of** | **Fair** | **Percentage of** |
|  | **Cost** | **Portfolio** | **Value** | **Portfolio** |
| Information Technology | $51202 | 48.2% | $46392 | 46.2% |
| Industrials | 8104 | 7.6% | 7850 | 7.8% |
| Financials | 11080 | 10.4% | 12165 | 12.1% |
| Healthcare | 11591 | 10.9% | 11455 | 11.4% |
| Consumer Staples | 6986 | 6.7% | 6972 | 6.9% |
| Consumer Discretionary | 3274 | 3.1% | 3270 | 3.3% |
| Collateralized Loan Obligation - Debt Class | 4073 | 3.8% | 4053 | 4.0% |
| Gaming | 3738 | 3.5% | 2239 | 2.3% |
| Communication Services | 3813 | 3.6% | 3787 | 3.8% |
| Transportation | 1962 | 1.8% | 1953 | 1.9% |
| Collateralized Loan Obligation - Equity Class | 333 | 0.4% | 281 | 0.3% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $106156 | 100.0% | $100417 | 100.0% |

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
|  | **Amortized** | **Percentage of** | **Fair** | **Percentage of** |
|  | **Cost** | **Portfolio** | **Value** | **Portfolio** |
| Information Technology | $38097 | 42.8% | $38154 | 42.6% |
| Industrials | 10531 | 11.9% | 10630 | 11.9% |
| Financials | 10091 | 11.4% | 10304 | 11.5% |
| Healthcare | 7624 | 8.6% | 7686 | 8.6% |
| Consumer Staples | 4873 | 5.5% | 5031 | 5.6% |
| Consumer Discretionary | 4593 | 5.2% | 4616 | 5.2% |
| Collateralized Loan Obligation - Debt Class | 4073 | 4.6% | 4181 | 4.6% |
| Media | 3937 | 4.4% | 3983 | 4.4% |
| Gaming | 3924 | 4.4% | 3918 | 4.4% |
| Communication Services | 784 | 0.9% | 794 | 0.9% |
| Collateralized Loan Obligation - Equity Class | 333 | 0.3% | 297 | 0.3% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $88860 | 100.0% | $89594 | 100.0% |

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** |
|  | **Amortized** | **Percentage of** | **Fair** | **Percentage of** |
|  | **Cost** | **Portfolio** | **Value** | **Portfolio** |
| United States | $101750 | 95.8% | $96083 | 95.7% |
| International | 4406 | 4.2% | 4334 | 4.3% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $106156 | 100.0% | $100417 | 100.0% |

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
|  | **Amortized** | **Percentage of** | **Fair** | **Percentage of** |
|  | **Cost** | **Portfolio** | **Value** | **Portfolio** |
| United States | $84454 | 95.0% | $85116 | 95.0% |
| International | 4406 | 5.0% | 4478 | 5.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $88860 | 100.0% | $89594 | 100.0% |

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**Capital Resources and Borrowings**

We expect to generate cash primarily from (i) the net proceeds of the Private Offering, (ii) cash flows from our operations, (iii) the financing arrangement we entered into and (iv) any future offerings of our equity or debt securities.

Our debt obligations consisted of the following at December 31, 2022 and 2021 (dollar amounts in thousands):

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** |
|  | **Total<br>Aggregate<br>Borrowing<br>Capacity** | **Total<br>Principal<br>Outstanding** | **Less<br>Deferred<br>Financing<br>Costs** | **Amount per<br>Consolidated<br>Statements of<br>Assets and<br>Liabilities** |
| Credit Facility | $75000 | $58000 | $(772) | $57228 |
| **Total Debt** | $75000 | $58000 | $(772) | $57228 |

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
|  | **Total<br>Aggregate<br>Borrowing<br>Capacity** | **Total<br>Principal<br>Outstanding** | **Less<br>Deferred<br>Financing<br>Costs** | **Amount per<br>Consolidated<br>Statements of<br>Assets and<br>Liabilities** |
| Credit Facility | $75000 | $55000 | $(882) | $54118 |
| **Total Debt** | $75000 | $55000 | $(882) | $54118 |

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For the periods ended December 31, 2022, 2021 and 2020 the components of interest expense were as follows (dollar amounts in thousands):

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| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2022** | **2021** | **2020** |
| Interest expense | $2503 | $1528 | $931 |
| Amortization of deferred financing and debt issuance costs | 110 | 104 | 82 |
| **Total Interest Expense** | $2613 | $1632 | $1013 |
| Average debt outstanding | 55148 | 53669 | 26357 |
| Weighted average interest rate | 4.7% | 2.8% | 3.5% |

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**Available information.**

We file with or submit to the SEC periodic and current reports, proxy statements and other information meeting the informational requirements of the 1934 Act. All such filings, as well as registration statements and related exhibits and schedules, are available to the public on the SEC's website at www.sec.gov.

We will also provide electronic or paper copies of our filings free of charge upon request.

**Item 1A. Risk Factors.**

Investing in our securities involves a number of significant risks. The risk factors described below are the principal risk factors associated with an investment in our securities as well as those factors generally associated with an investment company with investment objectives, investment policies, capital structure or trading markets similar to ours. You should carefully consider the risk factors described below, together with all of the other information included in this Annual Report, including our consolidated financial statements and the related notes thereto, before you decide whether to make an investment in our securities. The risks set out below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business, financial condition and/or operating results. If any of the following events occur, our business, financial condition and results of operations could be materially and adversely affected. In such case, the net asset value of our securities could decline, and you may lose all or part of your investment.

**Risks Related To Our Business And Structure**

**We are a relatively new company and have a limited operating history.**

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Although the investment professionals of BCP Credit and the Adviser have substantial credit-oriented investment experience generally (including, in certain instances, at their prior firm(s)), the Company and the Adviser have minimal operating history and we have no financial information on which a prospective investor can evaluate an investment in our common stock or our prior performance. The sponsoring of the Company and the BCP Credit platform represents a new business initiative for BC Partners LLP and there can be no assurance that it will be successful. Members of the Investment Team have not previously worked together at BC Partners LLP prior to the formation of the BCP Credit platform. As a result, we are subject to the business risks and uncertainties associated with recently formed businesses, including the risk that we will not achieve our investment objective and the value of a stockholder's investment could decline substantially or become worthless. While we believe that the past professional experiences, including investment and financial experience of the Investment Team will increase the likelihood that the Adviser will be able to manage the Company successfully, there can be no assurance that this will be the case.

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

Our Board has the authority to modify or waive our current investment objective, operating policies, investment criteria and strategies without prior notice and without stockholder approval. We cannot predict the effect any changes to our current operating policies, investment criteria and strategies would have on our business, net asset value, operating results and value of our securities. However, the effects might be adverse, which could negatively impact our ability to make distributions and cause you to lose all or part of your investment. Moreover, we have significant flexibility in investing our assets and may invest in ways investors may not agree with or in the future may invest in ways other than those previously disclosed or disclosed herein.

**Price declines in the medium- and large-sized U.S. corporate debt market may adversely affect the fair value of our portfolio, reducing our net asset value through increased net unrealized depreciation.**

Conditions in the medium- and large-sized U.S. corporate debt market may deteriorate, as seen during the global financial crisis from 2007-2009, and to a lesser extent in the recent years following the COVID-19 pandemic which may cause pricing levels to similarly decline or be volatile. During the financial crisis, many institutions were forced to raise cash by selling their interests in performing assets in order to satisfy margin requirements or the equivalent of margin requirements imposed by their lenders and/or, in the case of hedge funds and other investment vehicles, to satisfy widespread redemption requests. This resulted in a forced deleveraging cycle of price declines, compulsory sales, and further price declines, with falling underlying credit values, and other constraints resulting from the credit crisis generating further selling pressure. If similar events occurred in the medium- and large-sized U.S. corporate debt market, our net asset value could decline through an increase in unrealized depreciation and incurrence of realized losses in connection with the sale of our investments, which could have a material adverse impact on our business, financial condition and results of operations.

**Capital markets may experience periods of disruption and instability. These market conditions could materially adversely affect the Company's business, financial condition and results of operations.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a BDC, we have to maintain our ability to raise additional capital for investment purposes. Without sufficient access to the capital markets or credit markets, we may be forced to curtail our business operations, or we may not be able to pursue new business opportunities. The U.S. and global capital markets have in the past experienced and may in the future experience periods of volatility and disruption, including during portions of the past three fiscal years, and accordingly, there has been and may continue to be uncertainty in the financial markets in general.

For example, the 2010 sovereign debt financial crisis in Europe and the 2011 downgrade of the U.S. credit rating by Standard & Poor's had negative impacts on the global economy and may have adversely impacted the operations of BDCs such as the Company.

Additionally, the effect of the United Kingdom (the "UK") ending its membership in the European Union ("Brexit") may adversely affect European or worldwide economic or market conditions and could contribute to instability in global financial and real estate markets. In addition, Brexit could lead to legal uncertainty and potentially divergent national laws and regulations as the UK determines which EU laws to replace or replicate. Any of these effects of Brexit, and others we cannot anticipate, could adversely affect our business, business opportunities, results of operations, financial condition and cash flows. Likewise, similar actions taken by other European and other countries in which we operate could have a similar or even more profound impact.

Such periods of disruption may be accompanied by depressed levels of consumer and commercial spending, a lack of liquidity in debt capital markets, significant write-offs in the financial services sector and the re-pricing of credit risk. The Company and the portfolio companies in which it invests may be adversely affected by these deteriorations in the financial markets and economic conditions throughout the world.

If the fair value of our assets declines substantially, we may fail to maintain the asset coverage ratios imposed upon us by the 1940 Act. Any such failure would affect our ability to issue senior securities, including borrowings, and pay dividends, which could materially impair our business operations. Our liquidity could be impaired further by an inability to access the capital markets or to consummate new borrowing facilities to provide capital for normal operations, including new originations. In recent years, reflecting concern about the stability of the financial markets, many lenders and institutional investors have reduced or ceased providing funding to borrowers.

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If we are unable to repay amounts outstanding under any debt facilities we may obtain and are declared in default or are unable to renew or refinance these facilities, we may not be able to operate our business in the normal course. These situations may arise due to circumstances that we may be unable to control, such as lack of access to the credit markets, a severe decline in the value of the U.S. dollar, another economic downturn or an operational problem that affects third parties or us and could materially damage our business.

**Adverse developments in the credit markets may impair our ability to secure debt financing.** 

In past economic downturns, such as the financial crisis in the United States that began in mid-2007 and during other times of extreme market volatility, many commercial banks and other financial institutions stopped lending or significantly curtailed their lending activity. In addition, in an effort to stem losses and reduce their exposure to segments of the economy deemed to be high risk, some financial institutions limited routine refinancing and loan modification transactions and even reviewed the terms of existing facilities to identify bases for accelerating the maturity of existing lending facilities. If these conditions recur, it may be difficult for us to obtain desired financing to finance the growth of our investments on acceptable economic terms, or at all.

The commencement, continuation, or cessation of government and central bank policies and economic stimulus programs in response to adverse economic developments, including changes in monetary policy involving interest rate adjustments or governmental policies, may contribute to the development of or result in an increase in market volatility, illiquidity and other adverse effects that could negatively impact the credit markets and the Company.

If we are unable to consummate credit facilities on commercially reasonable terms, our liquidity may be reduced significantly. If we are unable to repay amounts outstanding under any debt facilities we may obtain and are declared in default or are unable to renew or refinance any such facility, it would limit our ability to initiate significant originations or to operate our business in the normal course. These situations may arise due to circumstances that we may be unable to control, such as inaccessibility of the credit markets, a severe decline in the value of the U.S. dollar, a further economic downturn or an operational problem that affects third parties or us, and could materially damage our business. Moreover, we are unable to predict when economic and market conditions may become more favorable. Even if such conditions improve broadly and significantly over the long term, adverse conditions in particular sectors of the financial markets could adversely impact our business.

**Further downgrades of the U.S. credit rating, impending automatic spending cuts, another government shutdown or a failure to raise the statutory debt limit of the United States could negatively impact our liquidity, financial condition and earnings.** 

The U.S. debt ceiling and budget deficit concerns have increased the possibility of additional credit-rating downgrades and economic slowdowns, or a recession in the United States. Although U.S. lawmakers passed legislation to raise the federal debt ceiling on multiple occasions, including recent suspensions of the federal debt ceiling and an increase in the debt ceiling signed into law by President Biden in December 2021, ratings agencies have lowered or threatened to lower the long-term sovereign credit rating on the United States.

The impact of this or any further downgrades to the U.S. government's sovereign credit rating or its perceived credit worthiness could adversely affect the U.S. and global financial markets and economic conditions. Absent further quantitative easing by the Federal Reserve, these developments could cause interest rates and borrowing costs to rise, which may negatively impact our ability to access the debt markets on favorable terms. In addition, disagreement over the federal budget has caused the U.S. federal government to shut down for periods of time. Continued adverse political and economic conditions could have a material adverse effect on our business, financial condition and results of operations.

**If we cannot obtain additional capital because of either regulatory or market price constraints, we could be forced to curtail or cease our new lending and investment activities, our net asset value could decrease and our level of distributions and liquidity could be affected adversely.** 

Our ability to secure additional financing and satisfy our financial obligations under indebtedness outstanding from time to time will depend upon our future operating performance, which is subject to the prevailing general economic and credit market conditions, including interest rate levels and the availability of credit generally, and financial, business and other factors, many of which are beyond our control. The prolonged continuation or worsening of current economic and capital market conditions could have a material adverse effect on our ability to secure financing on favorable terms, if at all.

If we are unable to obtain additional debt capital, then our equity investors will not benefit from the potential for increased returns on equity resulting from leverage to the extent that our investment strategy is successful, and we may be limited in our ability to make new commitments or fundings to our portfolio companies.

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

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

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In addition, the current U.S. political environment and the resulting uncertainties regarding actual and potential shifts in U.S. foreign investment, trade, taxation, economic, environmental and other policies under the current Administration, as well as the impact of geopolitical tension, such as a deterioration in the bilateral relationship between the U.S. and China or the conflict between Russia and Ukraine, could lead to disruption, instability and volatility in the global markets. Unfavorable economic conditions also would be expected to increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us. These events may limit our investment originations, and limit our ability to grow and could have a material negative impact on our operating results, financial condition, results of operations and cash flows and the fair values of our debt and equity investments.

**The Russian invasion of Ukraine may have a material adverse impact on us and our portfolio companies.**

In February 2022, Russian President Vladimir Putin commenced a military invasion of Ukraine, which has continued into 2023, and which has had, and may continue to have, <u>a</u> negative impact on the economy and business activity globally (including in the countries in which the Company invests), and therefore could adversely affect the performance of the Company's investments. Furthermore, the conflict between the two nations remains ongoing and the varying involvement of the United States and other NATO countries has had, and may continue to have, an unpredictable impact on global economic and market conditions, and, as a result, presents material uncertainty and risk with respect to the Company and the performance of its investments or operations, and the ability of the Company to achieve its investment objectives. Additionally, to the extent that third parties, investors, or related customer bases have material operations or assets in Russia or Ukraine, they may have adverse consequences related to the ongoing conflict.

**Economic sanction laws in the United States and other jurisdictions may prohibit us and our affiliates from transacting with certain countries, individuals and companies.** 

In the United States, the U.S. Department of the Treasury's Office of Foreign Assets Control administers and enforces laws, executive orders and regulations establishing U.S. economic and trade sanctions, which prohibit, among other things, transactions with, and the provision of services to, certain non-U.S. countries, territories, entities and individuals. These types of sanctions may significantly restrict or completely prohibit investment activities in certain jurisdictions, and if we, our portfolio companies or other issuers in which we invest were to violate any such laws or regulations, we may face significant legal and monetary penalties.

The Foreign Corrupt Practices Act, or FCPA, and other anti-corruption laws and regulations, as well as anti-boycott regulations, may also apply to and restrict our activities, our portfolio companies and other issuers of our investments. If an issuer or we were to violate any such laws or regulations, such issuer or we may face significant legal and monetary penalties. The U.S. government has indicated that it is particularly focused on FCPA enforcement, which may increase the risk that an issuer or us becomes the subject of such actual or threatened enforcement. In addition, certain commentators have suggested that private investment firms and the funds that they manage may face increased scrutiny and/or liability with respect to the activities of their underlying portfolio companies. As such, a violation of the FCPA or other applicable regulations by us or an issuer of our portfolio investments could have a material adverse effect on us. We are committed to complying with the FCPA and other anti-corruption laws and regulations, as well as anti-boycott regulations, to which it is subject. As a result, we may be adversely affected because of our unwillingness to enter into transactions that violate any such laws or regulations.

**Major public health issues could have an adverse impact on our financial condition and results of operations and other aspects of our business**.

Major public health issues have impacted and, in the future, may impact our business, financial condition, results of operations, liquidity or prospects and those of our portfolio companies in a number of ways. For instance, our investment portfolio (and, specifically, the valuations of investment assets we hold), was adversely affected as a result of market developments from the COVID-19 pandemic; including disruptions to the businesses of our portfolio companies, global supply chain disruptions, and increased inflationary pressures nationally and globally.

Moreover, changes in interest rates, reduced liquidity or a continued slowdown in U.S. or global economic conditions has, and may continue to, adversely affect our business, financial condition, results of operations, liquidity and/or prospects and those of our portfolio companies. Further, extreme market volatility may leave us and our portfolio companies unable to react to market events in a prudent manner consistent with our historical practices in dealing with more orderly markets.

We will also continue to be negatively affected if our operations and effectiveness or the operations and effectiveness of a portfolio company (or any of the key personnel or service providers of the foregoing) is compromised or if necessary or beneficial systems and processes are disrupted.

Any public health emergency, including the COVID-19 pandemic or any outbreak of other existing or new epidemic diseases, or the threat thereof, and the resulting financial and economic market uncertainty could have a significant adverse impact on us and the fair value of our investments. Our valuations, and particularly valuations of private investments and private companies, are inherently uncertain, may fluctuate over short periods of time and are often based on estimates, comparisons and qualitative evaluations of private information that may not show the complete impact of the public health emergency and the resulting measures taken in response thereto. These potential impacts, while uncertain, could adversely affect our and our portfolio companies' operating results.

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Even after any major public health issue subsides, the U.S. economy and most other major global economies may experience a recession, and we anticipate our business and operations could be materially adversely affected by a prolonged recession in the United States and other major markets.

**We are currently operating in a period of capital markets disruption and economic uncertainty.**

The U.S. capital markets have experienced extreme volatility and disruption over the past several years.

Disruptions in the capital markets caused by inflation and rising interest rates, the war in Ukraine and Russia, health epidemics and pandemics and other globally significant trends and events have increased the spread between the yields realized on risk-free and higher risk securities, resulting in illiquidity in parts of the capital markets. These and future market disruptions and/or illiquidity would be expected to have an adverse effect on our business, financial condition, results of operations and cash flows. Unfavorable economic conditions also would be expected to increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us. These events have limited and could continue to limit our investment originations, limit our ability to grow and have a material negative impact on our operating results and the fair values of our debt and equity investments.

Further, current market conditions may make it difficult for us to obtain debt capital on favorable terms and any failure to do so could have a material adverse effect on our business. The debt capital that will be available to us in the future, if at all, may be at a higher cost and on less favorable terms and conditions than what we would otherwise expect, including being at a higher cost in rising rate environments. If we are unable to raise debt, then our equity investors may not benefit from the potential for increased returns on equity resulting from leverage and we may be limited in our ability to make or fund commitments to portfolio companies. An inability to obtain indebtedness could have a material adverse effect on our business, financial condition or results of operations.

**Our ability to achieve our investment objective depends on the ability of the Adviser to manage and support our investment process. If the Adviser were to lose any members of their respective senior management teams, our ability to achieve our investment objective could be significantly harmed.**

Since we have no employees, we depend on the investment expertise, skill and network of business contacts of the broader networks of the Adviser and its affiliates. The Adviser evaluates, negotiates, structures, executes, monitors and services our investments. Our future success depends to a significant extent on the continued service and coordination of the Adviser and its senior management team. The departure of any members of the Adviser's senior management team could have a material adverse effect on our ability to achieve our investment objective.

Our ability to achieve our investment objective depends on the Adviser's ability to identify and analyze, and to invest in, finance and monitor companies that meet our investment criteria. In addition to monitoring the performance of our existing investments, our Adviser's investment team may also be called upon, from time to time, to provide managerial assistance to some of our portfolio companies as well as other funds that they manage. These demands on their time may distract them or slow our rate of investment. See also "—Risks Related to the Adviser and its Affiliates —There are significant potential conflicts of interest that could negatively affect our investment returns." Even if we are able to grow and build upon our investment operations, any failure to manage our growth effectively could have a material adverse effect on our business, financial condition, results of operations and prospects. The results of our operations depend on many factors, including the availability of opportunities for investment, readily accessible short and long-term funding alternatives in the financial markets, and economic conditions. Furthermore, if we cannot successfully operate our business or implement our investment policies and strategies, it could negatively impact our ability to make distributions.

The Adviser's capabilities in structuring the investment process, providing competent, attentive and efficient services to us, and facilitating access to financing on acceptable terms depend on the employment of investment professionals in an adequate number and of adequate sophistication to match the corresponding flow of transactions. To achieve our investment objective, the Adviser may need to hire, train, supervise and manage new investment professionals to participate in our investment selection and monitoring process. The Adviser may not be able to find investment professionals in a timely manner or at all. Failure to support our investment process could have a material adverse effect on our business, financial condition and results of operations.

The Investment Advisory Agreement between the Adviser and us has been approved pursuant to Section 15 of the 1940 Act. In addition, the Investment Advisory Agreement has termination provisions that allow the parties to terminate the agreement. The Investment Advisory Agreement may be terminated at any time, without penalty, by us or by the Adviser, upon 60 days' notice. If the agreement is terminated, we may not be able to find a new external investment adviser or hire internal management with similar expertise and ability to provide the same or equivalent services on acceptable terms within 60 days, or at all. If we are unable to do so quickly, our operations are likely to experience a disruption, our financial condition, business and results of operations as well as our ability to pay distributions are likely to be adversely affected.

**Any inability of the Adviser to maintain or develop strong referral relationships, or the failure of these relationships to generate investment opportunities, could adversely affect our business.**

We depend on the Adviser to maintain its relationships with private equity firms, placement agents, investment banks, management groups and other financial institutions and commercial banks, and we expect to rely to a significant extent upon these relationships to provide us with potential investment opportunities. If the Adviser fails to maintain such relationships, or to develop new relationships with other sources of investment opportunities, we will not be able to grow our investment portfolio. In addition, individuals with whom the Adviser has relationships are not obligated to provide us with investment opportunities, and we can offer no assurance that these relationships will generate investment opportunities for us in the future.

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**We operate in a highly competitive market for investment opportunities, which could delay deployment of our capital, reduce returns and result in losses.**

We compete for investments with other BDCs and investment funds (including private equity funds, venture lending funds, finance companies with venture lending units, banks focused on venture lending, mezzanine funds and funds that invest in CLOs, structured notes, derivatives and other types of collateralized securities and structured products), as well as traditional financial services companies such as commercial banks and other sources of funding. Moreover, alternative investment vehicles, such as hedge funds, have begun to invest in areas in which they have not traditionally invested, including making investments in small to mid-sized private U.S. companies. As a result of these new entrants, competition for investment opportunities in small and middle-market private U.S. companies may intensify. Many of our potential competitors are substantially larger and have considerably greater financial, technical and marketing resources than we have. For example, some competitors may have a lower cost of capital and access to funding sources that are not available to us. In addition, some of our competitors have higher risk tolerances or different risk assessments than we have. These characteristics might allow our competitors to consider a wider variety of investments, establish more relationships or offer better pricing and more flexible structuring than we are able to offer. We may lose investment opportunities if we do not match our competitors' pricing, terms or structure. If we are forced to match our competitors' pricing, terms or structure, we may not be able to achieve acceptable returns on our investments or may bear substantial risk of capital loss. We believe a significant part of our competitive advantage stems from the fact that the market for investments in lower and traditional middle-market companies is underserved by traditional commercial banks and other financing sources. A significant increase in the number and/or the size of our competitors in this target market could force us to accept less attractive investment terms. Furthermore, many of our potential competitors have greater experience operating under, or will not subject to, the regulatory restrictions that the 1940 Act imposes on us as a BDC.

**We may have difficulty sourcing investment opportunities.**

We cannot assure investors that we will be able to locate a sufficient number of suitable investment opportunities to allow us to deploy all Capital Commitments successfully. In addition, privately-negotiated investments in loans and illiquid securities of private middle market companies require substantial due diligence and structuring, and we cannot assure investors that we will achieve our anticipated investment pace. As a result, investors will be unable to evaluate any future portfolio company investments prior to purchasing shares of our common stock. Additionally, our Adviser will select our investments, and our stockholders will have no input with respect to such investment decisions. These factors increase the uncertainty, and thus the risk, of investing in shares of our common stock. To the extent we are unable to deploy all Capital Commitments, our investment income and, in turn, our results of operations, will likely be materially adversely affected. There is no assurance that we will be able to consummate investment transactions or that such transactions will be successful. BC Partners, the Company and their affiliates may also face certain conflicts of interests in connection with any transaction, including any warehousing transaction involving an affiliate.

We generally expect to call capital for investment purposes only at the time we identify an investment opportunity, but we may call capital even if we do not have investments identified. Until such time we invest the proceeds of such capital calls in portfolio companies, we may invest these amounts in cash, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or less from the date of investment. We expect these temporary investments to earn yields substantially lower than the income that we expect to receive in respect of investments in secured debt (including senior secured, unitranche and second lien debt) and unsecured debt (including senior unsecured and subordinated debt), as well as related equity securities.

**As required by the 1940 Act, a significant portion of our investment portfolio is and will be recorded at fair value as determined by the Adviser in its role as valuation designee, subject to the ultimate oversight of our Board and, as a result, there is and will be uncertainty as to the value of our portfolio investments.**

Under the 1940 Act, we are required to carry our portfolio investments at market value or, if there is no readily available market value, at fair value as determined by the Adviser in its role as valuation designee, subject to the ultimate oversight of our Board. Typically, there will not be a public market for the securities of the privately held companies in which we invest. As a result, we value these securities quarterly at fair value as determined in good faith by the Adviser, based on, among other things, input of third-party independent valuation firm(s).

Certain factors that may be considered in determining the fair value of our investments include external events, such as private mergers, sales and acquisitions involving comparable companies. As a result, our determinations of fair value may differ materially from the values that would have been used if a ready market for these non-traded securities existed. Due to this uncertainty, our fair value determinations may cause our net asset value on a given date to materially differ from the value that we may ultimately realize upon the sale of one or more of our investments. As a result, investors purchasing our common stock based on an overstated net asset value would pay a higher price than the value of our investments might warrant. Conversely, investors selling shares during a period in which the net asset value understates the value of our investments would receive a lower price for their shares than the value of our investments might warrant. In addition, we may not be able to realize the values on our investments needed to pay interest on our borrowings.

**The involvement of our interested directors in the valuation process may create conflicts of interest.** 

We make many of our portfolio investments in the form of loans and securities that are not publicly traded and for which no market-based price quotation is available. As a result, our Adviser determines the fair value of these loans and securities subject to the Board's oversight, as described in the section titled "Investments" in Note 2to our consolidated financial statements. In connection with that determination, investment professionals from the Adviser may provide our Board with valuations based upon the most recent portfolio company financial statements available and projected financial results of each portfolio company. While the valuation for certain portfolio investments is reviewed by an independent valuation firm quarterly, the Board remains ultimately responsibility for fair value determinations, including our interested directors, and not by such third-party valuation firm. The participation of the Adviser's investment professionals in our valuation process could

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result in conflicts of interest as the Adviser's management fee is based, in part, on the value of our gross assets, and its incentive fees will be based, in part, on realized and unrealized gains and depreciation.

**There is a risk that investors in our equity securities may not receive distributions consistent with historical levels or at all, or that our distributions may not grow over time and a portion of our distributions may be a return of capital.**

We cannot assure you that we will achieve investment results that will allow us to make a specified level of cash distributions. Our ability to pay distributions might be adversely affected by the impact of one or more of the risk factors described in this annual report or incorporated herein by reference, including recent macro-economic trends and events, such as geo-political conflicts and high levels of inflation. If we declare a distribution and if more stockholders opt to receive cash distributions rather than participate in our dividend reinvestment plan, we may be forced to sell some of our investments in order to make cash distribution payments. To the extent we make distributions to stockholders that include a return of capital, such portion of the distribution essentially constitutes a return of the stockholder's investment. Although such return of capital may not be taxable, such distributions would generally decrease a stockholder's basis in our common stock and may therefore increase such stockholder's tax liability for capital gains upon the future sale of such stock. A return of capital distribution may cause a stockholder to recognize a capital gain from the sale of our common stock even if the stockholder sells its shares for less than the original purchase price.

As a RIC, if we do not distribute a certain percentage of our income annually, we may suffer adverse tax consequences, including possibly losing the U.S. federal income tax benefits allowable to RICs. We cannot assure you that you will receive distributions at a particular level or at all.

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

**We have not established any limit on the amount of funds we may use from available sources, such as borrowings, if any, or proceeds from our Private Offering, to fund distributions (which may reduce the amount of capital we ultimately invest in assets).**

Stockholders should understand that any distributions made from sources other than cash flow from operations or that are relying on fee or expense reimbursement waivers from the Adviser or the Administrator are not based on our investment performance, and can only be sustained if we achieve positive investment performance in future periods and/or the Adviser or the Administrator continues to make such expense reimbursements. Stockholders should also understand that our future repayments to the Adviser will reduce the distributions that they would otherwise receive. There can be no assurance that we will achieve such performance in order to sustain these distributions, or be able to pay distributions at all. The Adviser and the Administrator have no obligation to waive fees or receipt of expense reimbursements.

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

We and our portfolio companies are subject to regulation at the local, state and federal level. New legislation may be enacted, or new interpretations, rulings or regulations could be adopted, including those governing the types of investments we are permitted to make, any of which could harm us and our stockholders, potentially with retroactive effect.

Additionally, any changes to the laws and regulations governing our operations relating to permitted investments may cause us to alter our investment strategy to avail ourselves of new or different opportunities. Such changes could result in material differences to our strategies and plans and may result in our investment focus shifting from the areas of expertise of the Adviser to other types of investments in which the Adviser may have less expertise or little or no experience. Thus, any such changes, if they occur, could have a material adverse effect on our financial condition and results of operations and the value of your investment.

**Changes to U.S. tariff and import/export regulations may have a negative effect on our portfolio companies and, in turn, harm us.**

There has been ongoing discussion and commentary regarding further potential significant changes to U.S. trade policies, treaties and tariffs. Since 2018, the U.S. has imposed various tariffs on Chinese goods, and China has retaliated by placing tariffs on various U.S. goods. Both countries signed a phase one trade agreement in January 2020 halting further tariffs and increasing sales of U.S. goods to China. The agreement left in place most tariffs, which remained in place as of the end of 2022. It is unclear what the final outcome of the negotiations and agreements will result in. These prior tariffs have resulted in, and may continue to trigger, retaliatory actions by affected countries, including the imposition of tariffs on the U.S. by other countries. These events have created significant uncertainty about the future relationship between the United States and other countries with respect to trade policies, treaties and tariffs.

These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the United States. Any of these factors could depress economic activity restrict our portfolio companies' access to suppliers or customers, increase costs, decrease margins, reduce the competitiveness of products and services offered by current or future portfolio companies and have a material adverse effect on their business, financial condition and results of operations, which in turn would negatively impact us.

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**As a public reporting company, we are subject to increasingly complex corporate governance, public disclosure and accounting requirements that are costly and could adversely affect our business and financial results.**

We incur legal, accounting and other expenses, including costs associated with the periodic reporting requirements applicable to a company whose securities are registered under the 1934 Act, as well as additional corporate governance requirements, including requirements under the Sarbanes-Oxley Act. These requirements may place a strain on our systems and resources. The 1934 Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal control over financial reporting, which requires significant resources and management oversight. These activities may divert management's attention from other business concerns, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. As discussed below, the systems and resources necessary to comply with public company reporting requirements will increase further once we cease to be an "emerging growth company" under the JOBS Act. We have incurred, and expect to incur in the future, significant additional annual expenses related to these steps, director fees, reporting requirements of the SEC, increased auditing and legal fees and similar expenses associated with being a public reporting company.

**If we fail to maintain an effective system of internal control over financial reporting<u>,</u> we may not be able to accurately report our financial results or prevent fraud. As a result, investors could lose confidence in our financial and other public reporting, which would harm our business.**

Effective internal controls over financial reporting are necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations. As a public reporting company, we are subject to the Sarbanes-Oxley Act, and the related rules and regulations promulgated by the SEC. We are required to maintain internal controls over financial reporting and to report any material weaknesses in such internal controls pursuant to Section 404 of the Sarbanes-Oxley Act and other rules implemented by the SEC. We are required to furnish a report by management on the effectiveness of our internal control over financial reporting, pursuant to Section 404 of the Sarbanes-Oxley Act. However, as an emerging growth company, our independent registered public accounting firm will not be required to express an opinion as to the effectiveness of our internal control over financial reporting pursuant to Section 404 until the later of the year following our first annual report on Form 10-K or the date we are no longer an emerging growth company. At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or operating. As a relatively new company, developing and maintaining an effective system of internal controls may require significant expenditures, which may negatively impact our financial performance and our ability to make distributions. This process also will result in a diversion of our management's time and attention. If we identify material weaknesses in our internal control over financial reporting, if we are unable to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner or to assert that our internal control over financial reporting is effective or if our independent registered public accounting firm, when required, is unable to express an opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock (if an exchange listing occurs) could be negatively affected, and we could become subject to investigations by the stock exchange on which our securities are listed, the SEC or other regulatory authorities.

**There is uncertainty surrounding potential legal, regulatory and policy changes by new presidential administrations in the United States that may directly affect financial institutions and the global economy.** 

Changes in federal policy, including tax policies, and at regulatory agencies may occur over time through policy and personnel changes, which may lead to changes involving the level of oversight and focus on the financial services industry or the tax rates paid by corporate entities. The nature, timing and economic and political effects of potential changes to the current legal and regulatory framework affecting financial institutions remain highly uncertain. Uncertainty surrounding future changes may adversely affect our operating environment and therefore our business, financial condition, results of operations and growth prospects.

**The impact of financial reform legislation on us is uncertain.**

The Company and the portfolio companies in which it invests are subject to laws and regulations at the U.S. federal, state and local levels and, in some cases, foreign levels. These laws and regulations, as well as their interpretation, may change from time to time, and new laws, regulations and interpretations may come into effect. Accordingly, any change in law and regulations, changes in administration or control of U.S. Congress, changes in interpretations, or newly enacted laws or regulations could have a material adverse effect on the Company's business or the business of the portfolio companies in which the Company invests.

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Over the past several years, there also has been increasing regulatory attention to the extension of credit outside of the traditional banking sector, raising the possibility that some portion of the non-bank financial sector may be subject to new regulation. While it cannot be known at this time whether any regulation will be implemented or what form it will take, increased regulation of non-bank lending could be materially adverse to the Company's business, financial conditions and results of operation. We may experience fluctuations in our quarterly results.

**We may experience fluctuations in our quarterly and annual results.**

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

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

We will be and we will remain an "emerging growth company" as defined in the JOBS Act until the earlier of (a) the last day of the fiscal year (i) in which we have total annual gross revenue of at least $1.07 billion, or (ii) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the date of our most recently completed second fiscal quarter, and (b) the date on which we have issued more than $1 billion in non-convertible debt during the prior three-year period. While we remain an "emerging growth company," (1) we are not required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, (2) we are exempt from any rules that may be adopted by the PCAOB requiring mandatory audit firm rotations or a supplement to the auditor's report on financial statements, (3) we are subject to reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and (4) we are not required to hold nonbinding advisory votes on executive compensation or stockholder approval of any golden parachute payments not previously approved.

In addition, Section 107 of the JOBS Act also provides that an "emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the 1933 Act for complying with new or revised accounting standards. In other words, an "emerging growth company" can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We will take advantage of the extended transition period for complying with new or revised accounting standards, which may make it more difficult for investors and securities analysts to evaluate us since our consolidated financial statements may not be comparable to companies that comply with public company effective dates and may result in less investor confidence.

Because of the exemptions from various reporting requirements provided to us as an "emerging growth company" and because we will have an extended transition period for complying with new or revised financial accounting standards, we may be less attractive to investors and it may be difficult for us to raise capital. Investors may be unable to compare our business with other companies in our industry if they believe that our financial accounting is not as transparent as other companies in our industry. If we are unable to raise capital, our financial condition and results of operations may be materially and adversely affected.

**Any unrealized depreciation we experience on our portfolio may be an indication of future realized losses, which could reduce our income available for distribution.**

As a BDC, we are required to carry our investments at market value or, if no market value is ascertainable, at the fair value as determined in good faith by our Adviser, in its role as valuation designee. Decreases in the market value or fair values of our investments will be recorded as unrealized depreciation. Any unrealized depreciation in our portfolio could be an indication of a portfolio company's inability to meet its repayment obligations to us with respect to the affected loans. This could result in realized losses in the future and ultimately in reductions of our income available for distribution in future periods. In addition, decreases in the market value or fair value of our investments will reduce our net asset value.

**Recent legislation permits the Company to incur additional leverage.**

Prior to the Small Business Credit Availability Act being signed into law, a BDC generally was not permitted to incur indebtedness unless immediately after such borrowing it had an asset coverage for total borrowings of at least 200% (i.e., a 1:1 leverage-to-equity ratio). The Small Business Credit Availability Act, signed into law on March 23, 2018, contains a provision that grants a BDC the option, subject to certain conditions and disclosure obligations, to increase the leverage of its portfolio to a maximum of 2:1. Our initial stockholder has approved our ability to utilize the increased leverage limit, which requires asset coverage of at least 150%. As a result, we are permitted to incur additional indebtedness, and, therefore, the risk of an investment in our common stock may increase.

**We are highly dependent on information systems and systems failures could significantly disrupt our business, which may, in turn, negatively affect our liquidity, financial condition, results of operations, or our ability to make distributions to our stockholders.**

Our business is highly dependent on the communications and information systems of the Adviser. Certain of those systems are provided to the Adviser by third-party service providers. Any failure or interruption of such systems, including as a result of the termination of an agreement with any such third-party service provider, sudden electrical or telecommunication outages, natural disasters such as earthquakes, tornadoes, and hurricanes, events arising from local or larger scale political or social matters, including terrorist attacks, and cyber-attacks could

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cause delays or other problems in our activities. Any of the above, in turn, could have a material adverse effect on our operating results and negatively affect the market price of our securities and our ability to make distributions to our stockholders.

**We, the Adviser and our portfolio companies are subject to cybersecurity risks and cyber incidents which may adversely affect our business, financial condition and operating results.**

Cyber security incidents and cyber-attacks have been occurring globally at a more frequent and severe level and will likely continue to increase in frequency in the future. Despite careful security and controls design, implementation and updating, ours and our portfolio companies' information technology systems could become subject to cyber-attacks. Cyber-attacks include, but are not limited to, gaining unauthorized access to digital systems (e.g., through "hacking", malicious software coding, social engineering or "phishing" attempts) for purposes of misappropriating assets or sensitive information, corrupting data, or causing operational disruption. Cyber-attacks may also be carried out in a manner that does not require gaining unauthorized access, such as causing denial-of service attacks on websites (i.e., efforts to make network services unavailable to intended users).

The Adviser, our and each of their and our affiliates and portfolio companies' and service providers' information and technology systems may be vulnerable to damage or interruption from cyber security breaches, computer viruses or other malicious code, network failures, computer and telecommunication failures, infiltration by unauthorized persons and other security breaches, or usage errors by their respective professionals or service providers. If unauthorized parties gain access to such information and technology systems, they may be able to steal, publish, delete or modify private and sensitive information, including non-public personal information related to stockholders (and their beneficial owners) and material non-public information.

In addition, we may be required to expend significant additional resources to modify our protective measures and to investigate and remediate vulnerabilities or other exposures arising from operational and security risks related to cyber-attacks.

The Adviser's employees have been and expect to continue to be the target of fraudulent calls, emails and other forms of activities. The result of these incidents may include disrupted operations, misstated or unreliable financial data, liability for stolen information, misappropriation of assets, increased cybersecurity protection and insurance costs, litigation and damage to our business relationships, regulatory fines or penalties, or other adverse effects on our business, financial condition or results of operations.

The Adviser's and other service providers' increased use of mobile and cloud technologies could heighten the risk of a cyber-attack as well as other operational risks, as certain aspects of the security of such technologies may be complex, unpredictable or beyond their control. The Adviser's and other service providers' reliance on mobile or cloud technology or any failure by mobile technology and cloud service providers to adequately safeguard their systems and prevent cyber-attacks could disrupt their operations and result in misappropriation, corruption or loss of personal, confidential or proprietary information. In addition, there is a risk that encryption and other protective measures against cyber-attacks may be circumvented, particularly to the extent that new computing technologies increase the speed and computing power available.

Additionally, remote working environments may be less secure and more susceptible to cyber-attacks, including phishing and social engineering attempts. Accordingly, the risks associated with cyber-attacks are heightened under current conditions.

Although the Adviser implemented, and portfolio companies and service providers may implement, various measures to manage risks relating to these types of events, such systems could prove to be inadequate and, if compromised, could become inoperable for extended periods of time, cease to function properly or fail to adequately secure private information. The Adviser does not control the cyber security plans and systems put in place by third-party service providers, and such third-party service providers may have limited indemnification obligations to the Adviser, their affiliates, the Company, the stockholders and/or a portfolio company, each of which could be negatively impacted as a result. Breaches, such as those involving covertly introduced malware, impersonation of authorized users, "phishing" attacks and industrial or other espionage may not be identified even with sophisticated prevention and detection systems, potentially resulting in further harm and preventing them from being addressed appropriately. The failure of these systems and/or of disaster recovery plans for any reason could cause significant interruptions in the Adviser, its affiliates', the Company's and/or a portfolio company's operations and result in a failure to maintain the security, confidentiality or privacy of sensitive data, including personal information relating to stockholders (and their beneficial owners), material non-public information and the intellectual property and trade secrets and other sensitive information of the Adviser, us and/or portfolio companies. The Adviser, the Company and/or a portfolio company could be required to make significant investments to remedy the effects of any such failures, harm to their reputations, legal claims that they and their respective affiliates may be subjected to, regulatory action or enforcement arising out of applicable privacy and other laws, adverse publicity, and other events that may affect their business and financial performance.

**Internal and external cyber threats, as well as other disasters, could impair our ability to conduct business effectively.** 

The occurrence of a disaster, such as a cyber-attack against us or against a third-party that has access to our data or networks, a natural catastrophe, an industrial accident, failure of our disaster recovery systems, or consequential employee error, could have an adverse effect on our ability to communicate or conduct business, negatively impacting our operations and financial condition. This adverse effect can become particularly acute if those events affect our electronic data processing, transmission, storage, and retrieval systems, or impact the availability, integrity, or confidentiality of our data.

We depend heavily upon computer systems to perform necessary business functions. Despite our implementation of a variety of security measures, our computer systems, networks, and data, like those of other companies, could be subject to cyber-attacks and unauthorized access, use, alteration, or destruction, such as from physical and electronic break-ins or unauthorized tampering. If one or more of these events occurs, it could potentially jeopardize the confidential, proprietary, and other information processed, stored in, and transmitted through our computer systems and networks. Such an attack could cause interruptions or malfunctions in our operations, which could result in financial losses, litigation, regulatory penalties, client dissatisfaction or loss, reputational damage, and increased costs associated with mitigation of damages and remediation. If unauthorized parties gain access to such information and technology systems, they may be able to steal, publish, delete or modify private and sensitive information, including non-public personal information related to stockholders (and their beneficial owners) and material non-public information. The systems we have implemented to manage risks relating to these types of events could prove to be inadequate and, if

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compromised, could become inoperable for extended periods of time, cease to function properly or fail to adequately secure private information. Breaches such as those involving covertly introduced malware, impersonation of authorized users and industrial or other espionage may not be identified even with sophisticated prevention and detection systems, potentially resulting in further harm and preventing them from being addressed appropriately. The failure of these systems or of disaster recovery plans for any reason could cause significant interruptions in our and our Adviser's operations and result in a failure to maintain the security, confidentiality or privacy of sensitive data, including personal information relating to stockholders, material non-public information and other sensitive information in our possession.

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

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

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

**Inflation may adversely affect our business and operations and those of our portfolio companies.**

Economic activity has continued to accelerate across sectors and regions. Nevertheless, due to global supply chain issues, a rise in energy prices and strong consumer demand as economies continue to reopen, inflation has accelerated significantly in recent months in the U.S. and globally, and the U.S. Federal Reserve has responded by tightening monetary policy. Inflation is likely to continue in the near to medium-term, particularly in the U.S., with the possibility that monetary policy may further tighten in response. Certain of our portfolio companies may be impacted by inflation and persistent inflationary pressures could negatively affect our portfolio companies' profit margins. Inflation could become a serious problem in the future and have an adverse impact on the Company's returns.

**Certain historical data regarding our business, results of operations, financial condition and liquidity does not reflect the impact of the COVID-19 pandemic and related containment measures and therefore does not purport to be representative of our future performance.** 

The information included in this Annual Report on Form 10-K and our other reports filed with the SEC includes information regarding our business, results of operations, financial condition and liquidity as of dates and for periods before and during the impact of the COVID-19 pandemic and related containment measures (including quarantines and governmental orders requiring the closure of certain businesses, limiting travel, requiring that individuals stay at home or shelter in place and closing borders). Therefore, certain historical information does not reflect the adverse impacts of the COVID-19 pandemic and the related containment measures. Accordingly, investors are cautioned not to unduly rely on such historical information regarding our business, results of operations, financial condition or liquidity, as that data does not reflect the adverse impact of the COVID-19 pandemic and therefore does not purport to be representative of the future results of operations, financial condition, liquidity or other financial or operating results of us, or our business.

**Risks Related to the Adviser and its Affiliates**

**The Adviser has limited prior experience managing a BDC or a RIC.**

The Adviser has limited experience managing a BDC or a RIC and may not be able to successfully operate our business or achieve our investment objective. As a result, an investment in our shares of common stock may entail more risk than the shares of common stock of a comparable company with a substantial operating history.

The 1940 Act and the Code impose numerous constraints on the operations of BDCs and RICs that do not apply to the other types of investment vehicles previously managed by the Adviser's management team. For example, under the 1940 Act, BDCs are required to invest at least 70% of their total assets primarily in securities of qualifying U.S. private or thinly-traded public companies. Moreover, qualification for RIC tax treatment under Subchapter M of the Code requires, among other things, satisfaction of source-of-income and other requirements. The failure to comply with these provisions in a timely manner could prevent us from qualifying as a BDC or RIC or could force us to pay unexpected taxes and penalties, which could be material. The Adviser's limited experience in managing a portfolio of assets under such constraints may hinder its ability to take advantage of attractive investment opportunities and, as a result, achieve our investment objective.

**The Adviser and its affiliates, including our officers and some of our directors, face conflicts of interest caused by compensation arrangements with us and our affiliates, which could result in actions that are not in the best interests of our stockholders.**

The Adviser and its affiliates will receive substantial fees from us in return for their services, including certain incentive fees based on the performance of our investments. These fees could influence the advice provided to us. Generally, the more equity we sell in private offerings and the greater the risk assumed by us with respect to our investments, the greater the potential for growth in our assets and profits, and, correlatively, the fees payable by us to our Adviser. These compensation arrangements could affect our Adviser's or its affiliates' judgment with respect to private offerings of equity and investments made by us, which allow our Adviser to earn increased asset management fees.

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Additionally, we pay to the Adviser an incentive fee that is based on the performance of our portfolio and an annual base management fee that is based on the average value of our gross assets, excluding cash and cash equivalents but including assets purchased with borrowed amounts, at the end of the two most recently completed calendar quarters. Because the incentive fee is based on the performance of our portfolio, the Adviser may be incentivized to make investments on our behalf that are riskier or more speculative than would be the case in the absence of such compensation arrangement. The way in which the incentive fee is determined may also encourage the Adviser to use leverage to increase the return on our investments. In addition, because the base management fee is based on the average value of our gross assets at the end of the two most recently completed calendar quarters, which includes any borrowings for investment purposes, the Adviser may be incentivized to recommend the use of leverage or the issuance of additional equity to make additional investments and increase the average value of our gross assets at the end of the two most recently completed calendar quarters. Under certain circumstances, the use of leverage may increase the likelihood of default, which could disfavor our stockholders. Our compensation arrangements could therefore result in our making riskier or more speculative investments, or relying more on leverage to make investments, than would otherwise be the case. This could result in higher investment losses, particularly during cyclical economic downturns.

**There are significant potential conflicts of interest that could negatively affect our investment returns.** 

The members of the Adviser's investment team also monitor and service other affiliated investment funds. In addition, our executive officers and directors, as well as the current and future members of our Adviser's investment team, may serve as officers, directors or principals of other entities that operate in the same or a related line of business as we do. Accordingly, they may have obligations to investors in those entities, the fulfillment of which obligations may not be in the best interests of us or our stockholders.

In the course of our investing activities, we pay management and incentive fees to the Adviser and reimburse the Adviser for certain expenses it incurs. As a result, investors in our common stock invest on a "gross" basis and receive distributions on a "net" basis after expenses, resulting in a lower rate of return than an investor might achieve through direct investments. Accordingly, there may be times when the management team of the Adviser will have interests that differ from those of our stockholders, giving rise to a conflict. The Adviser will not be reimbursed for any performance-related compensation for its employees. We pay our Administrator our allocable portion of overhead and other expenses incurred by our Administrator in performing its obligations under the Administration Agreement, including rent, the fees and expenses associated with performing compliance functions, and our allocable portion of the compensation of our chief financial officer, chief compliance officer and their respective administrative support staff. These arrangements create conflicts of interest that our Board must monitor.

The Adviser and its affiliates may also manage other funds in the future that may have investment mandates that are similar, in whole or in part to ours. To the extent permitted by the 1940 Act and interpretation of the SEC staff, the Adviser and its affiliates may determine that an investment is appropriate for us and for one or more of those other funds. In such event, depending on the availability of such investment and other appropriate factors, the Adviser or its affiliates may determine that we should invest side-by-side with one or more other funds. Any such investments will be made only to the extent permitted by applicable law and interpretive positions of the SEC and its staff, and consistent with the Adviser's allocation procedures.

As a BDC, we are substantially limited in our ability to co-invest in privately negotiated transactions with affiliated funds unless we obtain an exemptive order from the SEC. On October 23, 2018, the SEC issued an order granting the Company's application for exemptive relief to co-invest, subject to the satisfaction of certain conditions, in certain private placement transactions, with other funds managed by the Adviser or its affiliates and any future funds that are advised by the Adviser or its affiliated investment advisers. Under the terms of the exemptive order, in order for the Company to participate in a co-investment transaction, a "required majority" (as defined in Section 57(o) of the 1940 Act) of the Company's independent directors must conclude that (i) the terms of the proposed transaction, including the consideration to be paid, are reasonable and fair to the Company and its stockholders and do not involve overreaching with respect of the Company or its stockholders on the part of any person concerned, and (ii) the proposed transaction is consistent with the interests of the Company's stockholders and is consistent with the Company's investment objectives and strategies and certain criteria established by the Board. We believe this relief may not only enhance our ability to further our investment objectives and strategies, but may also increase favorable investment opportunities for us, in part by allowing us to participate in larger investments, together with our co-investment affiliates, than would be available to us in the absence of such relief.

In the ordinary course of business, we may enter into transactions with portfolio companies that may be considered related party transactions. In order to ensure that we do not engage in any prohibited transactions with any persons affiliated with us, we have implemented certain written policies and procedures whereby our executive officers screen each of our transactions for any possible affiliations between the proposed portfolio investment and us, companies controlled by us or our executive officers and directors. We will not enter into any agreements unless and until we are satisfied that doing so will not raise concerns under the 1940 Act or, if such concerns exist, we have taken appropriate actions to seek review and approval by our Board or exemptive relief for such transaction. Our Board will review these procedures on an annual basis.

**We may be obligated to pay the Adviser incentive compensation even if we incur a net loss due to a decline in the value of our portfolio, and the incentive fee may be calculated using income that has not yet been received.**

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

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Any incentive fee payable by us that relates to our net investment income may be computed and paid on income that may include interest that has been accrued, but not yet received, including original issue discount, which may arise if we receive fees in connection with the origination of a loan or possibly in other circumstances, or contractual "payment-in-kind," or PIK, interest, which represents contractual interest added to the loan balance and due at the end of the loan term. To the extent we do not distribute accrued PIK interest, the deferral of PIK interest has the simultaneous effects of increasing the assets under management and increasing the base management fee at a compounding rate, while generating investment income and increasing the incentive fee at a compounding rate. In addition, the deferral of PIK interest would also increase the loan-to-value ratio at a compounding rate if the issuer's assets do not increase in value, and investments with a deferred interest feature, such as PIK interest, may represent a higher credit risk than loans on which interest must be paid in full in cash on a regular basis.

For example, if a portfolio company defaults on a loan that is structured to provide accrued interest, it is possible that accrued interest previously included in the calculation of the incentive fee will become uncollectible. The Adviser is not under any obligation to reimburse us for any part of the incentive fee it received that was based on accrued income that we never received as a result of a default by an entity on the obligation that resulted in the accrual of such income, and such circumstances would result in our paying an incentive fee on income we never received.

**The Adviser is not obligated to reimburse us for any part of the incentive fee it receives that is based on accrued income that we never receive.** 

Part of the incentive fee payable by us to our Adviser that relates to our net investment income is computed and paid on income that may include interest that has been accrued but not yet received in cash, such as market discount, debt instruments with PIK interest, preferred stock with PIK dividends and zero coupon securities. If a portfolio company defaults on a loan that is structured to provide accrued interest, it is possible that accrued interest previously used in the calculation of the incentive fee will become uncollectible. Our Adviser will not be under any obligation to reimburse us for any part of the incentive fees it received that was based on accrued income that we never receive as a result of a default by an entity on the obligation that resulted in the accrual of such income.

**There may be conflicts of interest related to obligations that the Adviser's senior management and Investment Team has to other clients.**

The members of the senior management and Investment Team of the Adviser serve or may serve as officers, directors or principals of entities that operate in the same or a related line of business as we do, or of investment funds managed by the same personnel. In serving in these multiple capacities, they may have obligations to other clients or investors in those entities, the fulfilment of which may not be in our best interests or in the best interest of our stockholders. Our investment objective may overlap with the investment objectives of such investment funds, accounts or other investment vehicles. In particular, we rely on the Adviser to manage our day-to-day activities and to implement our investment strategy. The Adviser and certain of its affiliates are presently, and plan in the future to continue to be, involved with activities that are unrelated to us. As a result of these activities, the Adviser, its officers and employees and certain of its affiliates will have conflicts of interest in allocating their time between us and other activities in which they are or may become involved, including the management of its affiliated funds. The Adviser and its officers and employees will devote only as much of its or their time to our business as the Adviser and its officers and employees, in their judgment, determine is reasonably required, which may be substantially less than their full time.

We rely, in part, on the Adviser to assist with identifying and executing upon investment opportunities and on the Board to review and approve the terms of our participation in co-investment transactions with the Adviser and its affiliates. The Adviser and its affiliates are not restricted from forming additional investment funds, entering into other investment advisory relationships or engaging in other business activities. These activities could be viewed as creating a conflict of interest in that the time and effort of the members of the Adviser, its affiliates and their officers and employees will not be devoted exclusively to our business but will be allocated between us and such other business activities of the Adviser and its affiliates in a manner that the Adviser deems necessary and appropriate.

In April 2019, an affiliate of the Adviser became the external manager of PTMN pursuant to a stock purchase and transaction agreement and stockholder approval by PTMN. Certain of our executive officers and directors, and certain members of our Adviser, serve or may serve as officers, directors or principals of entities that operate in the same or a related line of business as we do or of investment funds managed by our affiliates. PTMN invests in debt and equity of privately-held middle market companies, similar to those we target for investment. Therefore, there may be certain investment opportunities that satisfy the investment criteria for PTMN and us. PTMN operates as a distinct and separate company and any investment in our common stock will not be an investment in PTMN. In addition, all of our executive officers currently serve in substantially similar capacities for PTMN and three of our independent directors serve as independent directors of PTMN.

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**The time and resources that individuals employed by the Adviser devote to us may be diverted and we may face additional competition due to the fact that individuals employed by the Adviser are not prohibited from raising money for or managing other entities that make the same types of investments that we target.**

Neither the Adviser nor individuals employed by the Adviser are generally prohibited from raising capital for and managing other investment entities that make the same types of investments as those we target. As a result, the time and resources that these individuals may devote to us may be diverted. In addition, we may compete with any such investment entity for the same investors and investment opportunities. On October 23, 2018, the SEC issued an order granting the Company's application for exemptive relief to co-invest, subject to the satisfaction of certain conditions, in certain private placement transactions, with other funds managed by the Adviser or its affiliates, including BCP Special Opportunities Fund I LP, BCP Special Opportunities Fund II LP, BCP Special Opportunities Fund III LP, Portman Ridge Finance Corporation, Logan Ridge Finance Corporation and any future funds that are advised by the Adviser or its affiliated investment advisers. Affiliates of the Adviser, whose primary business includes the origination of investments, engage in investment advisory business with accounts that compete with us.

**Our base management and incentive fees may induce the Adviser to make speculative investments or to incur leverage.**

The incentive fee payable by us to the Adviser may create an incentive for our Adviser to make investments on our behalf that are risky or more speculative than would be the case in the absence of such compensation arrangement. The way in which the incentive fee payable to the Adviser is determined may encourage our Adviser to use leverage to increase the leveraged return on our investment portfolio. The part of the management and incentive fees payable to the Adviser that relates to our net investment income is computed and paid on income that may include interest income that has been accrued but not yet received in cash, such as market discount, debt instruments with PIK interest, preferred stock with PIK dividends and zero coupon securities. This fee structure may be considered to involve a conflict of interest for the Adviser to the extent that it may encourage the Adviser to favor debt financings that provide for deferred interest, rather than current cash payments of interest.

In addition, the fact that our base management fee is payable based upon our gross assets, which would include any borrowings for investment purposes, may encourage the Adviser to use leverage to make additional investments. Under certain circumstances, the use of leverage may increase the likelihood of defaulting on our borrowings, which would disfavor holders of our common stock. Such a practice could result in our investing in more speculative securities than would otherwise be in our best interests, which could result in higher investment losses, particularly during cyclical economic downturns.

**Shares of our common stock may be purchased by the Adviser or its affiliates.**

The Adviser and its affiliates may purchase shares of our common stock for any reason deemed appropriate. The Adviser and its affiliates will not acquire any shares of our common stock with the intention to resell or re-distribute such shares. The purchase of common stock by the Adviser and its affiliates could create certain risks, including, but not limited to, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the Adviser and its affiliates may have an interest in disposing of our assets at an earlier date so as to recover their investment in our common stock; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•substantial purchases of shares by the Adviser and its affiliates may limit the Adviser's ability to fulfill any financial obligations that it may have to us or incurred on our behalf.

**We depend upon the Adviser's key personnel for our future success**

We depend on the diligence, skill and network of business contacts of members of the senior management and Investment Team of the Adviser. Our success depends on the continued service of these individuals. We cannot assure you that unforeseen business, medical, personal or other circumstances would not lead any of these individuals to terminate his relationship with us. Additionally, we cannot assure you that a reduction in revenue to the Adviser, including as a result of fee waivers or a decrease in our assets, would not lead to a loss of investment professionals in the future. Such loss of members of the Adviser's investment committee and other investment professionals could have a material adverse effect on our ability to achieve our investment objective as well as on our financial condition and results of operations. In addition, we can offer no assurance that the Adviser will continue indefinitely as our investment adviser. The members of the Adviser's investment team are and may in the future become affiliated with entities engaged in business activities similar to those intended to be conducted by us and may have conflicts of interest in allocating their time.

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**The Adviser may retain additional consultants, advisers and/or operating partners to provide services to the Company, and such additional personnel will perform similar functions and duties for other organizations which may give rise to conflicts of interest.**

The Adviser may work with or alongside one or more consultants, advisers (including senior advisers and CEOs) and/or operating partners who are retained by The Adviser on a consultancy or retainer or other basis, to provide services to the Company and other entities sponsored by The Adviser including the sourcing of investments and other investment-related and support services. The functions undertaken by such persons with respect to the Company and any of its investments will not be exclusive and such persons may perform similar functions and duties for other organizations which may give rise to conflicts of interest. Such persons may also be appointed to the board of directors of companies and have other business interests which give rise to conflicts of interest with the interests of the Company or a portfolio entity of the Company. Stockholders should note that such persons may retain compensation that will not offset the base management fee payable to the Adviser, including that: (i) such persons are permitted to retain all directors' fees, monitoring fees and other compensation received by them in respect of acting as a director or officer of, or providing other services to, a portfolio entity and such amounts shall not be credited against the base management fee; and (ii) certain of such persons may be paid a deal fee, a consultancy fee or other compensation where they are involved in a specific project relating to the Company, which fee will be paid either by the Company or, if applicable, the relevant portfolio entity.

**The terms of the Investment Advisory Agreement and the Administration Agreement were determined without independent assessment on our behalf, and these terms may be less advantageous to us than if such terms had been the subject of arm's-length negotiations.**

The Investment Advisory Agreement and the Administration Agreement were negotiated between related parties. Consequently, their terms, including fees payable to the Adviser and the Administrator, may not be as favorable to us as if they had been negotiated with an unaffiliated third-party.

**The Adviser's influence on conducting our operations gives it the ability to increase its fees, which may reduce the amount of cash flow available for distribution to our stockholders.**

The Adviser is paid a base management fee calculated as a percentage of our gross assets and unrelated to net income or any other performance base or measure. The Adviser may advise us to consummate transactions or conduct our operations in a manner that, in the Adviser's reasonable discretion, is in the best interests of our stockholders. These transactions, however, may increase the amount of fees paid to the Adviser. The Adviser's ability to influence the base management fee paid to it by us could reduce the amount of cash flow available for distribution to our stockholders.

**Our Adviser's liability is limited under the Investment Advisory Agreement, and we have agreed to indemnify the Adviser against certain liabilities, which may lead the Adviser to act in a riskier manner on our behalf than it would when acting for its own account.** 

Under the Investment Advisory Agreement, the Adviser has not assumed any responsibility to us other than to render the services called for under that agreement. It is not responsible for any action of our Board in following or declining to follow the Adviser's advice or recommendations. Under the Investment Advisory Agreement, the Adviser, its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with the Adviser, including without limitation its managing member, will not be liable to us for acts or omissions performed in accordance with and pursuant to the Investment Advisory Agreement, except those resulting from acts constituting criminal conduct, gross negligence, willful misfeasance, bad faith or reckless disregard of the duties that the Adviser owes to us under the Investment Advisory Agreement. In addition, as part of the Investment Advisory Agreement, we have agreed to indemnify the Adviser and each of its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with the Adviser, including without limitation its general partner, and the Administrator from and against any damages, liabilities, costs and expenses, including reasonable legal fees and other expenses reasonably incurred, in or by reason of any pending, threatened or completed action, suit, investigation or other proceeding (including an action or suit by or in the right of the Company or its security holders) arising out of or otherwise based upon the performance of any of the Adviser's duties or obligations under this Agreement or otherwise as an investment adviser of the Company, except where attributable to criminal conduct, gross negligence, willful misfeasance, bad faith or reckless disregard of such person's duties under the Investment Advisory Agreement. These protections may lead the Adviser to act in a riskier manner when acting on our behalf than it would when acting for its own account.

**Our Adviser has the right to resign on 60 days' notice, and we may not be able to find a suitable replacement within such time, resulting in a disruption in our operations that could adversely affect our financial condition, business and results of operations.** 

Our Adviser has the right, under the Investment Advisory Agreement, to resign at any time on 60 days' written notice, whether we have found a replacement or not. If our Adviser resigns, we may not be able to find a new investment adviser or hire internal management with similar expertise and ability to provide the same or equivalent services on acceptable terms within 60 days, or at all. If we are unable to do so quickly, our operations are likely to experience a disruption, our financial condition, business and results of operations as well as our ability to pay distributions are likely to be adversely affected and the market price of our shares may decline. In addition, the coordination of our internal management and investment activities is likely to suffer if we are unable to identify and reach an agreement with a single institution or group of executives having the expertise possessed by our Adviser and its affiliates. Even if we are able to retain comparable management, whether internal or external, the integration of such management and their lack of familiarity with our investment objective may result in additional costs and time delays that may adversely affect our financial condition, business and results of operations.

**The investment committee and other investment professionals of the Adviser may, from time to time, possess material non-public information about or related to our portfolio companies, limiting our investment discretion.** 

Members of our Adviser's investment committee and other investment professionals of the Adviser may serve as directors of, or in a similar capacity to, portfolio companies in which we invest. In the event that material non-public information is obtained with respect to such

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companies, or we become subject to trading restrictions under the internal trading policies of those companies or as a result of applicable law or regulations, we could be prohibited for a period of time from purchasing or selling the securities of such companies, and this prohibition may have an adverse effect on us.

**Risks Related to Business Development Companies**

**The requirement that we invest a sufficient portion of our assets in qualifying assets could preclude us from investing in accordance with our current business strategy; conversely, the failure to invest a sufficient portion of our assets in qualifying assets could result in our failure to maintain our status as a BDC.**

As a BDC, we may not acquire any assets other than "qualifying assets" unless, at the time of and after giving effect to such acquisition, at least 70% of our total assets are qualifying assets. Therefore, we may be precluded from investing in what we believe are attractive investments if such investments are not qualifying assets. Conversely, if we fail to invest a sufficient portion of our assets in qualifying assets, we could lose our status as a BDC, which would have a material adverse effect on our business, financial condition and results of operations. Similarly, these rules could prevent us from making additional investments in existing portfolio companies, which could result in the dilution of our position, or could require us to dispose of investments at an inopportune time to comply with the 1940 Act. If we were forced to sell non-qualifying investments in the portfolio for compliance purposes, the proceeds from such sale could be significantly less than the current value of such investments.

**Failure to maintain our status as a BDC would reduce our operating flexibility.**

If we do not remain a BDC, we might be regulated as a registered closed-end investment company under the 1940 Act, which would subject us to substantially more regulatory restrictions under the 1940 Act and correspondingly decrease our operating flexibility.

**Regulations governing our operation as a BDC affect our ability to raise additional capital and the way in which we do so. As a BDC, the necessity of raising additional capital may expose us to risks, including the typical risks associated with leverage.**

We may issue debt securities or preferred stock and/or borrow money from banks or other financial institutions, which we refer to collectively as "senior securities," up to the maximum amount permitted by the 1940 Act. Under the provisions of the 1940 Act, we are permitted, as a BDC, to issue senior securities in amounts such that our asset coverage ratio, as defined in the 1940 Act, equals at least 150%, if certain conditions are met, of gross assets less all liabilities and indebtedness not represented by senior securities, after each issuance of senior securities. If the value of our assets declines, we may be unable to satisfy this test. If that happens, we may be required to sell a portion of our investments and, depending on the nature of our leverage, repay a portion of our indebtedness at a time when such sales may be disadvantageous. Also, any amounts that we use to service our indebtedness would not be available for distributions to our common stockholders. Furthermore, as a result of issuing senior securities, we would also be exposed to typical risks associated with leverage, including an increased risk of loss.

If we issue preferred stock, the preferred stock would rank "senior" to common stock in our capital structure, preferred stockholders would have separate voting rights on certain matters and might have other rights, preferences, or privileges more favorable than those of our common stockholders, and the issuance of preferred stock could have the effect of delaying, deferring or preventing a transaction or a change of control that might involve a premium price for holders of our common stock or otherwise be in your best interests.

We generally may not issue and sell our common stock at a price below net asset value per share. We may, however, sell our common stock, or warrants, options or rights to acquire our common stock, at a price below the then-current net asset value per share of our common stock if our Board determines that such sale is in our best interests and in the best interests of our stockholders, and our stockholders approve such sale. In any such case, the price at which our securities are to be issued and sold may not be less than a price that, in the determination of our Board, closely approximates the market value of such securities (less any commission or discount). If we raise additional funds by issuing more common stock or senior securities convertible into, or exchangeable for, our common stock, then the percentage ownership of our stockholders at that time will decrease, and you may experience dilution.

In certain limited circumstances, pursuant to an SEC staff interpretation, we may also issue shares at a price below net asset value in connection with a transferable rights offering so long as: (1) the offer does not discriminate among stockholders; (2) we use our best efforts to ensure an adequate trading market exists for the rights; and (3) the ratio of the offering does not exceed one new share for each three rights held. If we raise additional funds by issuing more common stock or senior securities convertible into, or exchangeable for, our common stock, the percentage ownership of our stockholders at that time would decrease and they may experience dilution. Moreover, we can offer no assurance that we will be able to issue and sell additional equity securities in the future, on favorable terms or at all.

**Our ability to enter into new transactions with our affiliates, and to restructure or exit our investments in portfolio companies that we are deemed to "control" under the 1940 Act, will be restricted by the 1940 Act, which may limit the scope of investment opportunities available to us.** 

We are prohibited under the 1940 Act from participating in certain transactions with our affiliates without the prior approval of our independent directors and, in some cases, the SEC. Any person that owns, directly or indirectly, 5% or more of our outstanding voting securities will be our affiliate for purposes of the 1940 Act and we are generally prohibited from buying or selling any security from or to such affiliate without the prior approval of our independent directors.

The 1940 Act also prohibits certain "joint" transactions with certain of our affiliates, which could include concurrent investments in the same company, without prior approval of our independent directors and, in some cases, the SEC. We are prohibited from buying or selling any security from or to any person that controls us or who owns more than 25% of our voting securities or certain of that person's affiliates, or entering into prohibited joint transactions with such persons, absent the prior approval of the SEC. Similar restrictions limit our ability to transact business with our officers, directors, investment advisers, sub-advisers or their affiliates. As a result of these restrictions, we may be prohibited

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from buying or selling any security (other than any security of which we are the issuer) from or to any company that is advised or managed by our Adviser or its affiliates without the prior approval of the SEC, which may limit the scope of investment opportunities that would otherwise be available to us.

In the future, we may co-invest with investment funds, accounts and vehicles managed by our Adviser or its affiliates when doing so is consistent with our investment strategy as well as applicable law and SEC staff interpretations. We generally will only be permitted to co-invest with such investment funds, accounts and vehicles where the only term that is negotiated is price. On October 23, 2018, the SEC issued an order granting the Company's application for exemptive relief to co-invest, subject to the satisfaction of certain conditions, in certain private placement transactions, with other funds managed by the Adviser or its affiliates, including BCP Special Opportunities Fund I LP, BCP Special Opportunities Fund II LP, BCP Special Opportunities Fund III LP, Portman Ridge Finance Corporation, Logan Ridge Finance Corporation, and any future funds that are advised by the Adviser or its affiliated investment advisers. Under the terms of the exemptive order, in order for the Company to participate in a co-investment transaction, a "required majority" (as defined in Section 57(o) of the 1940 Act) of the Company's independent directors must conclude that (i) the terms of the proposed transaction, including the consideration to be paid, are reasonable and fair to the Company and its stockholders and do not involve overreaching with respect of the Company or its stockholders on the part of any person concerned, and (ii) the proposed transaction is consistent with the interests of the Company's stockholders and is consistent with the Company's investment objectives and strategies and certain criteria established by the Board. We believe this relief may not only enhance our ability to further our investment objectives and strategies, but may also increase favorable investment opportunities for us, in part by allowing us to participate in larger investments, together with our co-investment affiliates, than would be available to us in the absence of such relief.

In addition, within our portfolio there are investments that may be deemed to be "controlled" investments under the 1940 Act. To the extent that our investments in such portfolio companies need to be restructured or that we choose to exit these investments in the future, our ability to do so may be limited if such restructuring or exit also involves the affiliates of our Adviser because such a transaction could be considered a joint transaction prohibited by the 1940 Act in the absence of our receipt of relief from the SEC in connection with such transaction. For example, if an affiliate of our Adviser were required to approve a restructuring of an investment in the portfolio and the affiliate of our Adviser was deemed to be our affiliate, such a restructuring transaction may constitute a prohibited joint transaction under the 1940 Act.

**We are uncertain of our sources for funding our future capital needs; if we cannot obtain debt or equity financing on acceptable terms, our ability to acquire investments and to expand our operations will be adversely affected.**

The net proceeds from the sale of common stock or other securities will be used for our investment opportunities, operating expenses and for payment of various fees and expenses such as base management fees, incentive fees and other expenses. Any working capital reserves we maintain may not be sufficient for investment purposes, and we may require debt or equity financing to operate. Accordingly, in the event that we develop a need for additional capital in the future for investments or for any other reason, these sources of funding may not be available to us. Consequently, if we cannot obtain debt or equity financing on acceptable terms, our ability to acquire investments and to expand our operations will be adversely affected. As a result, we would be less able to create and maintain a broad portfolio of investments and achieve our investment objective, which may negatively impact our results of operations and reduce our ability to make distributions to our stockholders.

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

We are classified as a non-diversified investment company within the meaning of the 1940 Act, which means that we are not limited by the 1940 Act with respect to the proportion of our assets that we may invest in securities of a single issuer. Beyond the asset diversification requirements associated with our RIC tax treatment under the Code, we do not have fixed guidelines for diversification. To the extent that we assume large positions in the securities of a small number of issuers or our investments are concentrated in relatively few industries, our net asset value may fluctuate to a greater extent than that of a diversified investment company as a result of changes in the financial condition or the market's assessment of the issuer. For the same reason, we may be more susceptible to failure if a single loan fails. The disposition or liquidity of a significant investment may also adversely impact our net asset value and our results of operations. Similarly, the aggregate returns we realize may be significantly adversely affected if a small number of investments perform poorly or if we need to write down the value of any one investment.

**Our portfolio may be concentrated in a limited number of industries, which may subject us to a risk of significant loss if there is a downturn in a particular industry in which a number of our investments are concentrated.** 

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

**If our portfolio companies are unable to protect their proprietary, technological and other intellectual property rights, our business and prospects could be harmed, and if portfolio companies are required to devote significant resources to protecting their intellectual property rights, the value of our investment could be reduced.** 

Our future success and competitive position will depend in part upon the ability of our portfolio companies to obtain, maintain and protect proprietary technology used in their products and services. The intellectual property held by our portfolio companies often represents a substantial portion of the collateral securing our investments and/or constitutes a significant portion of the portfolio companies' value that may be available in a downside scenario to repay our loans. Our portfolio companies will rely, in part, on patent, trade secret and trademark law to protect that technology, but competitors may misappropriate their intellectual property, and disputes as to ownership of intellectual property may arise. Portfolio companies may, from time to time, be required to institute litigation to enforce their patents, copyrights or other intellectual property rights, protect their trade secrets, determine the validity and scope of the proprietary rights of others or defend against claims of

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infringement. Such litigation could result in substantial costs and diversion of resources. Similarly, if a portfolio company is found to infringe or misappropriate a third-party's patent or other proprietary rights, it could be required to pay damages to the third-party, alter its products or processes, obtain a license from the third-party and/or cease activities utilizing the proprietary rights, including making or selling products utilizing the proprietary rights. Any of the foregoing events could negatively affect both the portfolio company's ability to service our debt investment and the value of any related debt and equity securities that we own, as well as any collateral securing our investment.

**The effect of global climate change may impact the operations of our portfolio companies.** 

There may be evidence of global climate change. Climate change creates physical and financial risk and some of our portfolio companies may be adversely affected by climate change. For example, the needs of customers of energy companies vary with weather conditions, primarily temperature and humidity. To the extent weather conditions are affected by climate change, energy use could increase or decrease depending on the duration and magnitude of any changes. Increases in the cost of energy could adversely affect the cost of operations of our portfolio companies if the use of energy products or services is material to their business. A decrease in energy use due to weather changes may affect some of our portfolio companies' financial condition, through decreased revenues. Extreme weather conditions in general require more system backup, adding to costs, and can contribute to increased system stresses, including service interruptions. Energy companies could also be affected by the potential for lawsuits against or taxes or other regulatory costs imposed on greenhouse gas emitters, based on links drawn between greenhouse gas emissions and climate change.

In December 2015 the United Nations, of which the U.S. is a member, adopted a climate accord (the "Paris Agreement") with the long-term goal of limiting global warming and the short-term goal of significantly reducing greenhouse gas emissions. On November 4, 2016, the past administration announced that the U.S. would cease participation in the Paris Agreement with the withdrawal taking effect on November 4, 2020. However, on January 20, 2021, President Biden signed an executive order to rejoin the Paris Agreement. As a result, some of our portfolio companies may become subject to new or strengthened regulations or legislation, which could increase their operating costs and/or decrease their revenues.

**Risks Related to Our Investments**

**Our investments in prospective portfolio companies may be risky, and we could lose all or part of our investment.**

Our strategy focuses primarily on originating and making loans to, and making debt and equity investments in, U.S. middle market companies, with a focus on originated transactions sourced through the networks of our Adviser.

First Lien Loans and Second Lien Loans. When we invest in senior secured term debt, including first lien loans and second lien loans, we generally take a security interest in the available assets of these portfolio companies, including the equity interests of their subsidiaries. We expect this security interest to help mitigate the risk that we will not be repaid. However, there is a risk that the collateral securing our loans may decrease in value over time or lose its entire value, may be difficult to sell in a timely manner, may be difficult to appraise and may fluctuate in value based upon the success of the business and market conditions, including as a result of the inability of the portfolio company to raise additional capital. Also, in some circumstances, our security interest could be subordinated to claims of other creditors. In addition, deterioration in a portfolio company's financial condition and prospects, including its inability to raise additional capital, may be accompanied by deterioration in the value of the collateral for the loan. Consequently, the fact that a loan is secured does not guarantee that we will receive principal and interest payments according to the loan's terms, or at all, or that we will be able to collect on the loan should we be forced to enforce our remedies. Further, in connection with any "last out" first-lien loans in which we may invest, we enter into agreements among lenders. Under these agreements, our interest in the collateral of the first-lien loans may rank junior to those of other lenders in the loan under certain circumstances. This may result in greater risk and loss of principal on these loans.

Unitranche Loans. We also invest in unitranche loans, which are loans that combine both senior and subordinated financing, generally in a first-lien position. Unitranche loans provide all of the debt needed to finance a leveraged buyout or other corporate transaction, both senior and subordinated, but generally in a first lien position, while the borrower generally pays a blended, uniform interest rate rather than different rates for different tranches. Unitranche debt generally requires payments of both principal and interest throughout the life of the loan. Unitranche debt generally has contractual maturities of five to six years and interest is typically paid quarterly. Generally, we expect these securities to carry a blended yield that is between senior secured and subordinated debt interest rates. Unitranche loans provide a number of advantages for borrowers, including the following: simplified documentation, greater certainty of execution and reduced decision-making complexity throughout the life of the loan. In addition, we may receive additional returns from any warrants we may receive in connection with these investments. In some cases, a portion of the total interest may accrue or be paid in kind. Because unitranche loans combine characteristics of senior and subordinated financing, unitranche loans have risks similar to the risks associated with senior secured debt, including first lien loans and second lien loans, and subordinated debt in varying degrees according to the combination of loan characteristics of the unitranche loan.

Unsecured Debt. Our unsecured debt, including corporate bonds and subordinated, or mezzanine, investments generally rank junior in priority of payment to senior debt. This may result in a heightened level of risk and volatility or a loss of principal, which could lead to the loss of the entire investment. These investments may involve additional risks that could adversely affect our investment returns. To the extent interest payments associated with such debt are deferred, such debt may be subject to greater fluctuations in valuations, and such debt could subject us and our stockholders to non-cash income, including PIK interest and original issue discount. Loans structured with these features may represent a higher level of credit risk than loans that require interest to be paid in cash at regular intervals during the term of the loan. Since we generally will not receive any principal repayments prior to the maturity of some of our unsecured debt investments, such investments will have greater risk and may result in loss of principal.

Equity Investments. To a limited extent, we make selected equity investments. In addition, when we invest in senior secured debt, including first lien loans and second lien loans, or unsecured debt, we may acquire warrants to purchase equity securities. Our goal is ultimately

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to dispose of these equity interests and realize gains upon our disposition of such interests. However, the equity interests we receive may not appreciate in value and, in fact, may decline in value. Accordingly, we may not be able to realize gains from our equity interests, and any gains that we do realize on the disposition of any equity interests may not be sufficient to offset any other losses we experience.

Collateralized Securities, Structured Products and Other. To a limited extent, we invest in collateralized securities, structured products and other similar securities, which may include CDOs, CBOs, CLOs, structured notes and credit-linked notes. Investments in such securities and products involve risks, including, without limitation, credit risk and market risk. Certain of these securities and products may be thinly traded or have a limited trading market. Where our investments in collateralized securities, structured products and other similar securities are based upon the movement of one or more factors, including currency exchange rates, interest rates, reference bonds (or loans) and stock indices, depending on the factor used and the use of multipliers or deflators, changes in interest rates and movement of any factor may cause significant price fluctuations. Additionally, changes in the reference instrument or security may cause the interest rate on such a security or product to be reduced to zero, and any further changes in the reference instrument may then reduce the principal amount payable on maturity of the security or product. Collateralized securities, structured products and other similar securities may be less liquid than other types of securities and more volatile than the reference instrument or security underlying the product.

Non-U.S. Securities. We may invest in non-U.S. securities, which may include securities denominated in U.S. dollars or in non-U.S. currencies, to the extent permitted by the 1940 Act. Because evidence of ownership of such securities usually are held outside the United States, we would be subject to additional risks if we invested in non-U.S. securities, which include possible adverse political and economic developments, seizure or nationalization of foreign deposits and adoption of governmental restrictions which might adversely affect or restrict the payment of principal and interest on the non-U.S. securities to investors located outside the country of the issuer, whether from currency blockage or otherwise. Since non-U.S. securities may be purchased with and payable in foreign currencies, the value of these assets as measured in U.S. dollars may be affected unfavorably by changes in current rates and exchange control regulations.

In addition, we invest in debt securities that are rated below investment grade by rating agencies or that would be rated below investment grade if they were rated. Debt securities rated below investment grade quality are generally regarded as having predominantly speculative characteristics and may carry a greater risk with respect to a borrower's capacity to pay interest and repay principal. They may also be difficult to value and illiquid.

Further, investing in lower middle-market and traditional middle-market companies involves a number of significant risks. See also "Investment in private and middle market companies involves a number of significant risks."

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

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

**If the assets securing the loans that we make decrease in value, then we may lack sufficient collateral to cover losses.**

To attempt to mitigate credit risks, we will typically take a security interest in the available assets of our portfolio companies. There is no assurance that we will obtain or properly perfect our liens.

There is a risk that the collateral securing our loans may decrease in value over time, may be difficult to sell in a timely manner, may be difficult to appraise and may fluctuate in value based upon the success of the business and market conditions, including as a result of the inability of a portfolio company to raise additional capital. In some circumstances, our lien could be subordinated to claims of other creditors. Consequently, the fact that a loan is secured does not guarantee that we will receive principal and interest payments according to the loan's terms, or that we will be able to collect on the loan should we be forced to enforce our remedies.

In addition, because we may invest in technology-related companies, a substantial portion of the assets securing our investment may be in the form of intellectual property, if any, inventory and equipment and, to a lesser extent, cash and accounts receivable. Intellectual property, if any, that is securing our loan could lose value if, among other things, the company's rights to the intellectual property are challenged or if the company's license to the intellectual property is revoked or expires, the technology fails to achieve its intended results or a new technology makes the intellectual property functionally obsolete. Inventory may not be adequate to secure our loan if our valuation of the inventory at the time that we made the loan was not accurate or if there is a reduction in the demand for the inventory.

Similarly, any equipment securing our loan may not provide us with the anticipated security if there are changes in technology or advances in new equipment that render the particular equipment obsolete or of limited value, or if the company fails to adequately maintain or repair the equipment. Any one or more of the preceding factors could materially impair our ability to recover principal in a foreclosure.

**Our investments in securities rated below investment grade are speculative in nature and are subject to additional risk factors such as increased possibility of default, illiquidity of the security, and changes in value based on changes in interest rates.** 

The securities that we invest in are typically rated below investment grade. Securities rated below investment grade are often referred to as "leveraged loans," "high yield" or "junk" securities and may be considered "high risk" compared to debt instruments that are rated investment grade. High yield securities are regarded as having predominantly speculative characteristics with respect to the issuer's capacity to

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pay interest and repay principal in accordance with the terms of the obligations and involve major risk exposure to adverse conditions. In addition, high yield securities generally offer a higher current yield than that available from higher grade issues, but typically involve greater risk. These securities are especially sensitive to adverse changes in general economic conditions, to changes in the financial condition of their issuers and to price fluctuation in response to changes in interest rates. During periods of economic downturn or rising interest rates, issuers of below investment grade instruments may experience financial stress that could adversely affect their ability to make payments of principal and interest and increase the possibility of default.

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

Our investments may include original issue discount instruments and contractual PIK interest, which represents contractual interest added to a loan balance and due at the end of such loan's term. To the extent original issue discount or PIK interest constitute a portion of our income, we are exposed to typical risks associated with such income being required to be included in taxable and accounting income prior to receipt of cash, including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the higher interest rates on PIK instruments reflect the payment deferral and increased credit risk associated with these instruments, and PIK instruments generally represent a significantly higher credit risk than coupon loans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•original issue discount and PIK instruments may have unreliable valuations because the accruals require judgments about collectability of the deferred payments and the value of any associated collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•an election to defer PIK interest payments by adding them to the principal on such instruments increases our future investment income which increases our gross assets and, as such, increases the Adviser's future base management fees which, thus, increases the Adviser's future income incentive fees at a compounding rate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•market prices of PIK instruments and other zero coupon instruments are affected to a greater extent by interest rate changes, and may be more volatile than instruments that pay interest periodically in cash. While PIK instruments are usually less volatile than zero coupon debt instruments, PIK instruments are generally more volatile than cash pay securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the deferral of PIK interest on an instrument increases the loan-to-value ratio, which is a measure of the riskiness of a loan, with respect to such instrument;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•even if the conditions for income accrual under U.S. GAAP are satisfied, a borrower could still default when actual payment is due upon the maturity of such loan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•for accounting purposes, cash distributions to investors representing original issue discount income do not come from paid-in capital, although they may be paid from the offering proceeds. Thus, although a distribution of original issue discount income may come from the cash invested by investors, the 1940 Act does not require that investors be given notice of this fact;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the required recognition of original issue discount or PIK interest for U.S. federal income tax purposes may have a negative impact on liquidity, as it represents a non-cash component of our investment company taxable income that may require cash distributions to shareholders in order to maintain our ability to be subject to tax as a RIC; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•original issue discount may create a risk of non-refundable cash payments to the Adviser based on non-cash accruals that may never be realized.

**Our investments in leveraged portfolio companies may be risky, and we could lose all or part of our investment.**

Investment in leveraged companies involves a number of significant risks. Leveraged companies in which we invest may have limited financial resources and may be unable to meet their obligations under their loans and debt securities that we hold. Such developments may be accompanied by a deterioration in the value of any collateral and a reduction in the likelihood of our realizing any guarantees that we may have obtained in connection with our investment. Smaller leveraged companies also may have less predictable operating results and may require substantial additional capital to support their operations, finance their expansion or maintain their competitive position.

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

Our portfolio companies may have, or may be permitted to incur, other debt that ranks equally with, or in some cases senior to, the debt in which we invest. By their terms, such debt instruments may entitle the holders to receive payment of interest or principal on or before the dates on which we are entitled to receive payments with respect to the debt instruments in which we invest.

Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a portfolio company, holders of debt instruments ranking senior to our investment in that portfolio company would typically be entitled to receive payment in full before we receive any distribution. After repaying such senior creditors, such portfolio company may not have sufficient remaining assets to repay its obligation to us. In the case of debt ranking equally with debt instruments in which we invest, we would have to share on an equal basis any distributions with other creditors holding such debt in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant portfolio company.

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**Investment in private and middle market companies involves a number of significant risks.**

Investment in private and middle market companies involves a number of significant risks including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•such companies may have limited financial resources and may be unable to meet their obligations under their debt securities that we hold, which may be accompanied by a deterioration in the value of any collateral and a reduction in the likelihood of us realizing any guarantees we may have obtained in connection with its investment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•such companies typically have shorter operating histories, narrower product lines and smaller market shares than larger businesses, which tend to render them more vulnerable to competitors' actions and market conditions, as well as to general economic downturns;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•such companies generally have less predictable operating results, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•debt investments in such companies generally may have a significant portion of principal due at the maturity of the investment, which would result in a substantial loss to us if such borrowers are unable to refinance or repay their debt at maturity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our executive officers, directors and the Adviser may, in the ordinary course of business, be named as defendants in litigation arising from our investments in such companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•such companies generally have less publicly available information about their businesses, operations and financial condition and, if we are unable to uncover all material information about these companies, we may not make a fully informed investment decision; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•such companies may have difficulty accessing the capital markets to meet future capital needs, which may limit their ability to grow or to repay their outstanding indebtedness upon maturity.

**Our investments may be in portfolio companies which may have limited operating histories and financial resources.** 

We expect that our portfolio will continue to consist of investments that may have relatively limited operating histories. These companies may be particularly vulnerable to U.S. and foreign economic downturns such as the U.S. recession that began in mid-2007, the European financial crisis, and the COVID-19 related economic downturn, may have more limited access to capital and higher funding costs, may have a weaker financial position and may need more capital to expand or compete. These businesses also may experience substantial variations in operating results. They may face intense competition, including from companies with greater financial, technical and marketing resources. Furthermore, some of these companies do business in regulated industries and could be affected by changes in government regulation. Accordingly, these factors could impair their cash flow or result in other events, such as bankruptcy, which could limit their ability to repay their obligations to us, and may adversely affect the return on, or the recovery of, our investment in these companies. We cannot assure you that any of our investments in our portfolio companies will be successful. Our portfolio companies compete with larger, more established companies with greater access to, and resources for, further development in these new technologies. We may lose our entire investment in any or all of our portfolio companies.

**There may be circumstances where our debt investments could be subordinated to claims of other creditors or we could be subject to lender liability claims.**

If one of our portfolio companies were to file for bankruptcy, depending on the facts and circumstances, including the extent to which we actually provided managerial assistance to that portfolio company, a bankruptcy court might recharacterize our debt investment and subordinate all or a portion of our claim to that of other creditors. We may also be subject to lender liability claims for actions taken by us with respect to a borrower's business or instances where we exercise control over the borrower.

**We generally will not control our portfolio companies.**

We do not expect to control most of our portfolio companies, even though we may have board representation or board observation rights, and our debt agreements with such portfolio companies may contain certain restrictive covenants. As a result, we are subject to the risk that a portfolio company in which we invest may make business decisions with which we disagree and the management of such company, as representatives of the holders of the company's common equity, may take risks or otherwise act in ways that do not serve our interests. Due to the lack of liquidity for our investments in non-traded companies, we may not be able to dispose of our interests in our portfolio companies as readily as we would like or at an appropriate valuation in the event we disagree with the actions of a portfolio company. As a result, a portfolio company may make decisions that could decrease the value of our portfolio holdings.

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**We may invest through joint ventures, partnerships or other special purpose vehicles and investments through these vehicles may entail greater risks, or risks that we otherwise would not incur, if we otherwise made such investments directly.**

We may co-invest with third parties through funds, joint ventures or other entities. Such investments may involve risks not present in investments where a third party is not involved, including the possibility that our co-venturer or partner may at any time have other business interests and investments other than the joint venture with us, or may have different economic or business goals. In addition, we may be liable for actions of our co-venturers or partners. Our ability to exercise control or significant influence over management in these cooperative efforts will depend upon the nature of the joint venture arrangement. In addition, such arrangements are likely to involve restrictions on the resale of our interest in the company.

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

We are subject to financial market risks, including changes in interest rates. General interest rate fluctuations may have a substantial negative impact on our investments and investment opportunities and, accordingly, have a material adverse effect on our ability to achieve our investment objective and our target rate of return on invested capital. In addition, an increase in interest rates would make it more expensive to use debt for our financing needs, if any. See also "—To the extent we borrow money to finance our investments, changes in interest rates will affect our cost of capital and net investment income."

In 2022, the U.S. Federal Reserve tightened monetary policy by increasing interest rates aggressively to combat inflation.

**The interest rates of some of our floating-rate loans to our portfolio companies may be priced using a spread over LIBOR, which is being phased out.**

We historically used LIBOR as a reference for setting the interest rates on our loans, including floating rate loans that we extend to portfolio companies. Certain LIBOR rates were generally phased out by the end of 2021, and some regulated entities have ceased to enter into new LIBOR-based contracts beginning January 1, 2022. However, it is expected that the most widely used tenors of USD LIBOR may continue to be provided on a representative basis until mid-2023. As such, the potential effect of a transition away from LIBOR on the Company or the LIBOR-based instruments in which the Company invests cannot yet be determined. The transition process away from LIBOR may involve, among other things, increased volatility or illiquidity in markets for instruments that currently rely on LIBOR. The transition process may also result in a reduction in the value of certain instruments held by the Company or reduce the effectiveness of related Company transactions, such as hedges. Any potential effects of the transition away from LIBOR on the Company or on financial instruments in which the Company invests, as well as other unforeseen effects, could result in losses to the Company. Since the usefulness of LIBOR as a benchmark or reference rate could deteriorate during the transition period, these effects could occur prior to and/or subsequent to mid-2023.

On July 27, 2017, the U.K Financial Conduct Authority ("FCA") announced that it would phase out LIBOR as a benchmark by the end of 2021. As of December 31, 2021, all non-U.S. dollar LIBOR publications have been phased out. The phase out of a majority of the U.S. dollar publications is delayed until June 30, 2023. The Alternative Reference Rates Committee ("ARRC") of the Federal Reserve Bank of New York previously confirm that this constitutes a "benchmark transition event" and established "benchmark replacement dates" in ARRC standard LIBOR transition provisions that exist in many U.S. law contracts using LIBOR.

The publication of all EUR and CHF LIBOR settings, the Spot Next/Overnight, 1 week, 2 month and 12 month JPY and GBP LIBOR settings, and the 1 week and 2 months USD LIBOR settings has ceased. The publication of the overnight, 1 month, 3 month, 6 month, and 12 months USD LIBOR settings will cease after June 30, 2023. The FCA plans to consult the market on creating "synthetic" 1 month, 3 month and 6 month rates for GBP and JPY LIBOR, to be published for a limited time. The New York State legislation was signed into law to aid "tough legacy" LIBOR contracts. Other legislative solutions are being pursued at the Federal level, in the U.K. and in Europe. The U.S. Federal banking agencies have also issued guidance encouraging banking and global organizations to cease reference to USD LIBOR as soon as practicable and, in any event, by December 31, 2021. The E.U. Benchmarks Regulation imposed conditions under which only compliant benchmarks may be used in new contracts after 2021.

The ARRC has identified the Secured Overnight Financing Rate ("SOFR") as its preferred alternative rate for LIBOR. SOFR is a measure of the cost of borrowing cash overnight, collateralized by the U.S. Treasury securities, and is based on directly observable U.S. Treasury-backed repurchase transactions. Although SOFR appears to be the preferred replacement rate for U.S. dollar LIBOR, it is not possible at this time to predict the effect of any such changes, any establishment of alternative reference rates, whether the COVID-19 pandemic will have further effect on LIBOR transition timelines or plans, or other reforms to LIBOR that may be enacted in the United States, United Kingdom or elsewhere.

The discontinuation of LIBOR could have a significant impact on our business. We anticipate significant operational challenges for the transition away from LIBOR, including, but not limited to, amending existing loan agreements with borrowers on investments that may have not been modified with fallback language and adding effective fallback language to new agreements in the event that LIBOR is discontinued before maturity. Beyond these challenges, we anticipate there may be additional risks to our current processes and information systems that we will need to identify and evaluate. Due to the uncertainty of the replacement for LIBOR, the potential effect of any such event on our cost of capital and net investment income cannot yet be determined. In addition, any further changes or reforms to the determination or supervision of LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR, which could have an adverse impact on the market value of any LIBOR-linked securities, loans and other financial obligations or extensions of credit held by or due to us and could have a material adverse effect on our business, financial condition and results of operations.

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**The health and performance of our portfolio companies could be adversely affected by political and economic conditions in the countries in which they conduct business.** 

Some of the products of our portfolio companies are developed, manufactured, assembled, tested or marketed outside the U.S. Any conflict or uncertainty in these countries, including due to natural disasters, public health concerns (including the COVID-19 pandemic or a similar infectious disease outbreak), political unrest or safety concerns, could harm their business, financial condition and results of operations. In addition, if the government of any country in which their products are developed, manufactured or sold sets technical or regulatory standards for products developed or manufactured in or imported into their country that are not widely shared, it may lead some of their customers to suspend imports of their products into that country, require manufacturers or developers in that country to manufacture or develop products with different technical or regulatory standards and disrupt cross-border manufacturing, marketing or business relationships which, in each case, could harm their businesses.

**We may expose ourselves to risks if we engage in hedging transactions.**

We may seek to hedge against interest rate and currency exchange rate fluctuations and credit risk by using financial instruments such as futures, options, swaps, forward contracts, caps, collars and floors, subject to the requirements of the 1940 Act. These financial instruments may be purchased on exchanges or may be individually negotiated and traded in over-the-counter markets. Use of such financial instruments for hedging purposes may present significant risks, including the risk of loss of the amounts invested. Defaults by the other party to a hedging transaction can result in losses in the hedging transaction.

Hedging activities also involve the risk of an imperfect correlation between the hedging instrument and the asset being hedged, which could result in losses both on the hedging transaction and on the instrument being hedged. Hedging against a decline in the values of our portfolio positions does not eliminate the possibility of fluctuations in the values of such positions or prevent losses if the values of such positions decline. However, such hedging can establish other positions designed to gain from those same developments, thereby offsetting the decline in the value of such portfolio positions. Such hedging transactions may also limit the opportunity for gain if the values of the underlying portfolio positions increase. It may not be possible to hedge against an exchange rate or interest rate fluctuation that is so generally anticipated that we are not able to enter into a hedging transaction at an acceptable price. Moreover, for a variety of reasons, we may not seek to establish a perfect correlation between such hedging instruments and the portfolio holdings being hedged. Any such imperfect correlation may prevent us from achieving the intended hedge and expose us to risk of loss. In addition, it may not be possible to hedge fully or perfectly against currency fluctuations affecting the value of securities denominated in non-U.S. currencies because the value of those securities is likely to fluctuate as a result of factors not related to currency fluctuations.

Further, hedging transactions may reduce cash available to pay distributions to our shareholders.

A derivative transaction is also subject to the risk that a counterparty will default on its payment obligations thereunder or that we will not be able to meet our obligations to the counterparty. In some cases, we may post collateral to secure our obligations to the counterparty, and we may be required to post additional collateral upon the occurrence of certain events such as a decrease in the value of the reference security or other asset. In some cases, the counterparty may not collateralize any of its obligations to us. Derivative investments effectively add leverage to a portfolio by providing investment exposure to a security or market without owning or taking physical custody of such security or investing directly in such market. In addition to the risks described above, such arrangements are subject to risks similar to those associated with the use of leverage. See "Risk Factors — Risks Related to Debt Financing."

**Our ability to enter into transactions involving derivatives and financial commitment transactions may be limited.** 

Through comprehensive new global regulatory regimes impacting derivatives (e.g., the Dodd-Frank Act, European Market Infrastructure Regulation ("EMIR"), Markets in Financial Investments Regulation ("MIFIR")/Markets in Financial Instruments Directive ("MIFID II")), certain over-the-counter derivatives transactions in which we may engage are either now or will soon be subject to various requirements, such as mandatory central clearing of transactions which include additional margin requirements and in certain cases trading on electronic platforms, pre-and post-trade transparency reporting requirements and mandatory bi-lateral exchange of initial margin for non-cleared swaps. The Dodd-Frank Act also created new categories of regulated market participants, such as "swap dealers," "security-based swap dealers," "major swap participants," and "major security-based swap participants" who are subject to significant new capital, registration, recordkeeping, reporting, disclosure, business conduct and other regulatory requirements. The EU and some other jurisdictions are implementing similar requirements. Because these requirements are new and evolving (and some of the rules are not yet final), their ultimate impact remains unclear. However, even if the Company itself is not located in a particular jurisdiction or directly subject to the jurisdiction's derivatives regulations, we may still be impacted to the extent we enter into a derivatives transaction with a regulated market participant or counterparty that is organized in that jurisdiction or otherwise subject to that jurisdiction's derivatives regulations.

Based on information available as of the date of this annual report on Form 10-K, the effect of such requirements will be likely to (directly or indirectly) increase our overall costs of entering into derivatives transactions. In particular, new margin requirements, position limits and significantly higher capital charges resulting from new global capital regulations, even if not directly applicable to us, may cause an increase in the pricing of derivatives transactions entered into by market participants to whom such requirements apply or affect our overall ability to enter into derivatives transactions with certain counterparties. Such new global capital regulations and the need to satisfy the various requirements by counterparties are resulting in increased funding costs, increased overall transaction costs, and significantly affecting balance sheets, thereby resulting in changes to financing terms and potentially impacting our ability to obtain financing. Administrative costs, due to new requirements

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such as registration, recordkeeping, reporting, and compliance, even if not directly applicable to us, may also be reflected in our derivatives transactions. New requirements to trade certain derivatives transactions on electronic trading platforms and trade reporting requirements may lead to (among other things) fragmentation of the markets, higher transaction costs or reduced availability of derivatives, and/or a reduced ability to hedge, all of which could adversely affect the performance of certain of our trading strategies. In addition, changes to derivatives regulations may impact the tax and/or accounting treatment of certain derivatives, which could adversely impact us.

In August 2022, new Rule 18f-4 under the 1940 Act became effective. This rule relates to the ability of a BDC (or a registered investment company) to use derivatives and other transactions that create future payment or delivery obligations. Under the new rule, BDCs that make significant use of derivatives are required to operate subject to a value-at-risk leverage limit, adopt a derivatives risk management program and appoint a derivatives risk manager, and comply with various testing and board reporting requirements. These new requirements apply unless the BDC qualifies as a "limited derivatives user," as defined in the rule. Under an exemption included in the rule, a BDC may enter into an unfunded commitment agreement, such as an agreement to provide financing to a portfolio company, without treating the transaction as an derivatives transaction, provided that the BDC has, among other things, a reasonable belief, at the time it enters into such an agreement, that it will have sufficient cash and cash equivalents to meet its obligations with respect to all of its unfunded commitment agreements, in each case as the obligation becomes due. We currently operate and intend to continue to operate as a "limited derivatives user," which may limit our ability to use derivatives and/or enter into certain other financial contracts. The Company intends to limit its engagement in derivative transactions such that it will qualify as a "limited derivatives user" for purposes of Rule 18f-4 such that the Company will be subject to substantially fewer substantive requirements under that rule than would be the case if it did not so qualify. However, there is no guarantee that the Company will meet or continue to meet such qualifications, and, as a result, there is a risk that the Company may become subject to more onerous requirements under Rule 18f-4 than currently intended.

**Second priority liens on collateral securing loans that we make to our portfolio companies may be subject to control by senior creditors with first priority liens. If there is a default, the value of the collateral may not be sufficient to repay in full both the first priority creditors and us.** 

Certain loans that we make are secured by a second priority security interest in the same collateral pledged by a portfolio company to secure senior debt owed by the portfolio company to commercial banks or other traditional lenders. Often the senior lender has procured covenants from the portfolio company prohibiting the incurrence of additional secured debt without the senior lender's consent. Prior to and as a condition of permitting the portfolio company to borrow money from us secured by the same collateral pledged to the senior lender, the senior lender may require assurances that it will control the disposition of any collateral in the event of bankruptcy or other default. In many such cases, the senior lender requires us to enter into an "intercreditor agreement" prior to permitting the portfolio company to borrow from us. Typically the intercreditor agreements we are requested to execute expressly subordinate our debt instruments to those held by the senior lender and further provide that the senior lender shall control: (i) the commencement of foreclosure or other proceedings to liquidate and collect on the collateral; (ii) the nature, timing and conduct of foreclosure or other collection proceedings; (iii) the amendment of any collateral document; (iv) the release of the security interests in respect of any collateral; and (v) the waiver of defaults under any security agreement. Because of the control we may cede to senior lenders under intercreditor agreements we may enter, we may be unable to realize the proceeds of any collateral securing some of our loans.

**Many of our loans are not fully amortizing and if a borrower cannot repay or refinance such loans at maturity, our results will suffer.** 

Some of the loans in which we invest may not be structured to fully amortize during their lifetime. In order to create liquidity to pay the final principal payment, borrowers typically must raise additional capital. If they are unable to raise sufficient funds to repay us or we have not elected to enter into a new loan agreement providing for an extended maturity, the loan will go into default, which will require us to foreclose on the borrower's assets, even if the loan was otherwise performing prior to maturity. This will deprive the Company from immediately obtaining full recovery on the loan and prevent or delay the reinvestment of the loan proceeds in other, more profitable investments.

**International investments create additional risks.**

We expect to make investments in portfolio companies that are domiciled outside of the United States. We anticipate that up to 30% of our investments may be in assets located in jurisdictions outside the United States. Our investments in foreign portfolio companies are deemed "non-qualifying assets," which means, as required by the 1940 Act, they may not constitute more than 30% of our total assets at the time of our acquisition of any asset, after giving effect to the acquisition. Notwithstanding that limitation on our ownership of foreign portfolio companies, those investments subject us to many of the same risks as our domestic investments, as well as certain additional risks including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•foreign governmental laws, rules and policies, including those restricting the ownership of assets in the foreign country or the repatriation of profits from the foreign country to the United States;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•foreign currency devaluations that reduce the value of and returns on our foreign investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•adverse changes in the availability, cost and terms of investments due to the varying economic policies of a foreign country in which we invest;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•adverse changes in tax rates, the tax treatment of transaction structures and other changes in operating expenses of a particular foreign country in which we invest;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the assessment of foreign-country taxes (including withholding taxes, transfer taxes and value added taxes, any or all of which could be significant) on income or gains from our investments in the foreign country;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•adverse changes in foreign-country laws, including those relating to taxation, bankruptcy and ownership of assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•changes that adversely affect the social, political and/or economic stability of a foreign country in which we invest;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•high inflation in the foreign countries in which we invest, which could increase the costs to us of investing in those countries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•deflationary periods in the foreign countries in which we invest, which could reduce demand for our assets in those countries and diminish the value of such investments and the related investment returns to us; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•legal and logistical barriers in the foreign countries in which we invest that materially and adversely limit our ability to enforce our contractual rights with respect to those investments.

In addition, we may make investments in countries whose governments or economies may prove unstable. Certain of the countries in which we may invest may have political, economic and legal systems that are unpredictable, unreliable or otherwise inadequate with respect to the implementation, interpretation and enforcement of laws protecting asset ownership and economic interests. In some of the countries in which we may invest, there may be a risk of nationalization, expropriation or confiscatory taxation, which may have an adverse effect on our portfolio companies in those countries and the rates of return we are able to achieve on such investments. We may also lose the total value of any investment which is nationalized, expropriated or confiscated. The financial results and investment opportunities available to us, particularly in developing countries and emerging markets, may be materially and adversely affected by any or all of these political, economic and legal risks.

**A covenant breach or other defaults by our portfolio companies may adversely affect our operating results.**

A portfolio company's failure to satisfy financial or operating covenants imposed by us or other lenders could lead to defaults and, potentially, termination of its loans and foreclosure on its secured assets, which could trigger cross-defaults under other agreements and jeopardize the portfolio company's ability to meet its obligations under the debt securities that we hold. We may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms, which may include the waiver of certain financial covenants, with a defaulting portfolio company. See also "—We may choose to waive or defer enforcement of covenants in the debt securities held in our portfolio, which may cause us to lose all or part of our investment in these companies."

Any extension or restructuring of our loans could adversely affect our cash flows. In addition, if one of our portfolio companies were to go bankrupt, even though we may have structured our interest as senior debt, depending on the facts and circumstances, including the extent to which we actually provided managerial assistance to that portfolio company, a bankruptcy court might recharacterize our debt holding and subordinate all or a portion of our claim to that of other creditors. If any of these occur, it could materially and adversely affect our operating results and cash flows.

**We may choose to waive or defer enforcement of covenants in the debt securities held in our portfolio, which may cause us to lose all or part of our investment in these companies.** 

We structure the debt investments in our portfolio companies to include business and financial covenants placing affirmative and negative obligations on the operation of the company's business and its financial condition. However, from time to time we may elect to waive breaches of these covenants, including our right to payment, or waive or defer enforcement of remedies, such as acceleration of obligations or foreclosure on collateral, depending upon the financial condition and prospects of the particular portfolio company. These actions may reduce the likelihood of the Company receiving the full amount of future payments of interest or principal and be accompanied by a deterioration in the value of the underlying collateral as many of these companies may have limited financial resources, may be unable to meet future obligations and may go bankrupt. This could negatively impact our ability to pay dividends, could adversely affect our results of operations and financial condition and cause the loss of all or part of your investment.

**We may not realize gains from our equity investments.**

Certain investments that we may make could include warrants or other equity securities. In addition, we may from time to time make non-control, equity investments in portfolio companies. Investments in equity securities involve a number of significant risks, including the risk of further dilution as a result of additional issuances, inability to access additional capital and failure to pay current distributions. Investments in preferred securities involve special risks, such as the risk of deferred distributions, credit risk, illiquidity and limited voting rights. Our goal is ultimately to realize gains upon our disposition of such equity interests. However, the equity interests we receive may not appreciate in value and, in fact, may decline in value. Accordingly, we may not be able to realize gains from our equity interests, and any gains that we do realize on the disposition of any equity interests may not be sufficient to offset any other losses we experience. We also may be unable to realize any value if a portfolio company does not have a liquidity event, such as a sale of the business, recapitalization or public offering, which would allow us to sell the underlying equity interests. We will often seek puts or similar rights to give us the right to sell our equity securities back to the portfolio company issuer. We may be unable to exercise these put rights for the consideration provided in our investment documents if the issuer is in financial distress.

**An investment strategy focused primarily on smaller privately held companies involves a high degree of risk and presents certain challenges, including the lack of available information about these companies, a dependence on the talents and efforts of only a few key portfolio company personnel and a greater vulnerability to economic downturns.**

We intend to invest primarily in privately held companies. Investments in private companies pose significantly greater risks than investments in public companies. These companies often face intense competition from larger companies with greater financial, technical and

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marketing resources. Privately held companies also frequently have less diverse product lines and smaller market presence than larger competitors. Private companies have reduced access to the capital markets, resulting in diminished capital resources and the ability to withstand financial distress. The depth and breadth of experience of management in private companies tend to be less than that at public companies, which makes such companies more likely to depend on the management talents and efforts of a smaller group of persons and/or persons with less depth and breadth of experience. Therefore, the decisions made by such management teams and/or the death, disability, resignation or termination of one or more of these persons could have a material adverse impact on our investments and, in turn, on us. Also, the investments themselves tend to be less liquid. As such, we may have difficulty exiting an investment promptly or at a desired price prior to maturity or outside of a normal amortization schedule. As a result, the relative lack of liquidity and the potential diminished capital resources of our target portfolio companies may affect our investment returns. Further, some of these companies conduct business in regulated industries that are susceptible to regulatory changes. These factors could impair the cash flow of our portfolio companies and result in other events, such as bankruptcy. These events could limit a portfolio company's ability to repay its obligations to us, which may have an adverse effect on the return on, or the recovery of, our investment in these businesses. Deterioration in a borrower's financial condition and prospects may be accompanied by deterioration in the value of the loan's collateral. Additionally, little public information generally exists about private companies. Further, these companies may not have third-party debt ratings or audited financial statements. We must therefore rely on the ability of the Adviser to obtain adequate information through due diligence to evaluate the creditworthiness and potential returns from investing in these companies. These companies and their financial information will generally not be subject to the Sarbanes-Oxley Act and other rules that govern public companies. If we are unable to uncover all material information about these companies, we may not make a fully informed investment decision, and we may lose money on our investments. These factors could adversely affect our investment returns as compared to companies investing primarily in the securities of public companies.

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

We generally invest in companies whose securities are not publicly traded or actively traded on the secondary market, and whose securities will be subject to legal and other restrictions on resale or will otherwise be less liquid than publicly-traded securities. There is no established trading market for the securities in which we invest. The illiquidity of certain of these investments may make it difficult for us to sell these investments when desired. In addition, if we are required to liquidate all or a portion of our portfolio quickly, we may realize significantly less than the value at which we had previously recorded these investments. As a result, we do not expect to achieve liquidity in our investments in the near-term. Further, we may face other restrictions on our ability to liquidate an investment in a portfolio company to the extent that we have material non-public information regarding such portfolio company.

**We may not have the funds or ability to make additional investments in our portfolio companies or to fund our unfunded debt commitments which may impair the value of our portfolio.**

After our initial investment in a portfolio company, we may be called upon from time to time to provide additional funds to such company or have the opportunity to increase our investment through the exercise of a warrant to purchase common stock. We may make additional investments in that portfolio company as "follow-on" investments, in order to: (i) increase or maintain in whole or in part our equity ownership percentage; (ii) exercise warrants, options or convertible securities that were acquired in the original or a subsequent financing; or (iii) attempt to preserve or enhance the value of our investment. There is no assurance that we will make, or will have sufficient funds to make, follow-on investments. Any decisions not to make a follow-on investment or any inability on our part to make such an investment may have a negative impact on a portfolio company in need of such an investment, may result in a missed opportunity for us to increase our participation in a successful operation or may reduce the expected return on the investment.

Even if we have sufficient capital to make a desired follow-on investment, we may elect not to make a follow-on investment because we do not want to increase our concentration of risk, we prefer other opportunities, we are subject to BDC requirements that would prevent such follow-on investments, or the follow-on investment would affect our qualification as a RIC. For example, we may be prohibited under the 1940 Act from making follow-on investments in our portfolio companies that we may be deemed to "control" or in which affiliates of our Adviser are also invested.

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

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

**The disposition of our investments may result in contingent liabilities.** 

Substantially all of our investments involve loans and private securities. In connection with the disposition of an investment in loans and private securities, we may be required to make representations about the business and financial affairs of the portfolio company typical of those made in connection with the sale of a business. We may also be required to indemnify the purchasers of such investment to the extent that

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any such representations turn out to be inaccurate or with respect to potential liabilities. These arrangements may result in contingent liabilities that ultimately result in funding obligations that we must satisfy through our return of distributions previously made to us.

**Disruptions to the global supply chain may have adverse impact on our portfolio companies and, in turn, harm us.** 

Recent supply chain disruptions, including the global microchip shortage, may have an adverse impact on the business of our portfolio companies. Potential adverse impacts to certain of our portfolio companies may include, among others, increased costs, inventory shortages, shipping and project completion delays, and inability to meet customer demand.

**Risks Related to Debt Financing**

**We borrow money, which magnifies the potential for gain or loss on amounts invested and may increase the risk of investing in us. Borrowed money may also adversely affect the return on our assets, reduce cash available for distribution to our stockholders, and result in losses.**

Leverage is generally considered a speculative investment technique. Our ability to service any debt that we incur will depend largely on our financial performance and will be subject to prevailing economic conditions and competitive pressures.

The use of leverage magnifies the potential for gain or loss on amounts invested and, therefore, increases the risks associated with investing in our securities. If the value of our assets decreases, leveraging would cause net asset value to decline more sharply than it otherwise would have had we not leveraged. Similarly, any decrease in our income would cause net income to decline more sharply than it would have had we not borrowed. Such a decline could negatively affect our ability to make distributions to our stockholders. In addition, our stockholders will bear the burden of any increase in our expenses as a result of our use of leverage, including interest expenses and any increase in the management or incentive fees payable to the Adviser. See also "—Our base management and incentive fees may induce the Adviser to make speculative investments or to incur leverage."

We may use leverage to finance our investments. The amount of leverage that we employ will depend on the Adviser's and our Board's assessment of market and other factors at the time of any proposed borrowing. There can be no assurance that leveraged financing will be available to us on favorable terms or at all. However, to the extent that we use leverage to finance our assets, our financing costs will reduce cash available for distributions to stockholders. Moreover, we may not be able to meet our financing obligations and, to the extent that we cannot, we risk the loss of some or all of our assets to liquidation or sale to satisfy the obligations. In such an event, we may be forced to sell assets at significantly depressed prices due to market conditions or otherwise, which may result in losses.

**We may default under our credit facilities.**

In the event we default under our credit facilities or other borrowings, our business could be adversely affected as we may be forced to sell a portion of our investments quickly and prematurely at what may be disadvantageous prices to us in order to meet our outstanding payment obligations and/or support working capital requirements under such borrowing facility, any of which would have a material adverse effect on our business, financial condition, results of operations and cash flows. In addition, following any such default, the agent for the lenders under such borrowing facility could assume control of the disposition of any or all of our assets, including the selection of such assets to be disposed and the timing of such disposition, which would have a material adverse effect on our business, financial condition, results of operations and cash flows.

**Provisions in a credit facility may limit our investment discretion.**

A credit facility may be backed by all or a portion of our loans and securities on which the lenders will have a security interest. We may pledge up to 100% of our assets and may grant a security interest in all of our assets under the terms of any debt instrument we enter into with lenders. We expect that any security interests we grant will be set forth in a pledge and security agreement and evidenced by the filing of financing statements by the agent for the lenders. In addition, we expect that the custodian for our securities serving as collateral for such loan would include in its electronic systems notices indicating the existence of such security interests and, following notice of occurrence of an event of default, if any, and during its continuance, will only accept transfer instructions with respect to any such securities from the lender or its designee. If we were to default under the terms of any debt instrument, the agent for the applicable lenders would be able to assume control of the timing of disposition of any or all of our assets securing such debt, which would have a material adverse effect on our business, financial condition, results of operations and cash flows. In connection with one or more credit facilities entered into by the Company, distributions to stockholders may be subordinated to payments required in connection with any indebtedness contemplated thereby.

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

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

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**To the extent we borrow money to finance our investments, changes in interest rates will affect our cost of capital and net investment income.**

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

**A general increase in interest rates will likely have the effect of making it easier for our Adviser to receive incentive fees, without necessarily resulting in an increase in our net earnings.** 

Under the structure of our Investment Advisory Agreement with our Adviser, any general increase in interest rates will likely have the effect of making it easier for our Adviser to meet the quarterly hurdle rate for payment of income incentive fees under the Investment Advisory Agreement without any additional increase in relative performance on the part of our Adviser. In addition, in view of the catch-up provision applicable to income incentive fees under the Investment Advisory Agreement, our Adviser could potentially receive a significant portion of the increase in our investment income attributable to such a general increase in interest rates. If that were to occur, our increase in net earnings, if any, would likely be significantly smaller than the relative increase in our Adviser's income incentive fee resulting from such a general increase in interest rates.

**Our common stockholders will bear the expenses associated with our borrowings, and the holders of our debt securities will have certain rights** senior to our common stockholders.

All of the costs of offering and servicing our debt securities, including interest thereon, is borne by our common stockholders. The interests of the holders of any debt we may issue will not necessarily be aligned with the interests of our common stockholders. In particular, the rights of holders of our debt to receive interest or principal repayment will be senior to those of our common stockholders. In addition, we may grant a lender a security interest in a significant portion or all of our assets, even if the total amount we may borrow from such lender is less than the amount of such lender's security interest in our assets. **U.S. Federal Income Tax Risks**

**We will be subject to corporate-level U.S. federal income tax if we are unable to qualify or maintain our RIC tax treatment under the Code.**

Although we have elected to be treated as a RIC, no assurance can be given that we will be able to continue to qualify for and maintain our RIC tax treatment under the Code. To continue to maintain our RIC tax treatment under the Code, we must meet the following source-of-asset diversification, and distribution requirements.

The income source requirement will be satisfied if we obtain at least 90% of our income for each year from dividends, interest, gains from the sale or other disposition of stock or securities or similar sources. The asset diversification requirement will be satisfied if we meet certain asset diversification requirements at the end of each quarter of our taxable year. Failure to meet those requirements may result in our having to dispose of certain investments quickly in order to prevent the loss of our RIC tax treatment under the Code. Because most of our investments will be in private companies, and therefore will be relatively illiquid, any such dispositions could be made at disadvantageous prices and could result in substantial losses.

The annual distribution requirement for a RIC will be satisfied if we distribute to our stockholders on an annual basis at least 90% of our ordinary income and net short-term capital gains in excess of our net long-term capital losses, if any. Because we may use debt financing, we are subject to certain asset coverage ratio requirements under the 1940 Act, as well as future financial covenants under loan and credit agreements that could, under certain circumstances, restrict us from making distributions necessary to satisfy the distribution requirement. If we are unable to obtain cash from other sources, we could fail to qualify for tax treatment as a RIC under the Code.

If we fail to qualify for tax treatment as a RIC under the Code for any reason and remain or become subject to corporate-level U.S. federal income tax on all of our income, the resulting corporate taxes could substantially reduce our net assets, the amount of income available for distribution or reinvestment and the amount of our distributions.

**Due to potential disruptions in the economy, we may not be able to increase our dividends and may reduce or defer our dividends and choose to incur U.S. federal excise tax in order to preserve cash and maintain flexibility.** 

As a BDC, we are not required to make any distributions to shareholders other than in connection with our election to be taxed as a RIC under subchapter M of the Code. In order to maintain our tax treatment as a RIC, we must distribute to shareholders for each taxable year at least 90.0% of our investment company taxable income (i.e., ordinary income plus realized net short-term capital gains in excess of realized net long-term capital losses). If we qualify for taxation as a RIC, we generally will not be subject to corporate-level U.S. federal income tax on our investment company taxable income and net capital gains (i.e., realized net long-term capital gains in excess of realized net short-term capital losses) that we timely distribute to shareholders. We will be subject to a non-deductible 4.0% U.S. federal excise tax on undistributed earnings of a RIC unless we distribute each calendar year at least the sum of (i) 98.0% of our ordinary income for the calendar year, (ii) 98.2% of our capital gains in excess of capital losses for the one-year period ending on October 31 of the calendar year, and (iii) any ordinary income and

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capital gain net income that we recognized for preceding years, but were not distributed during such years, and on which we paid no U.S. federal income tax.

Under the Code, we may satisfy certain of our RIC distributions with dividends paid after the end of the current year. In particular, if we pay a distribution in January of the following year that was declared in October, November, or December of the current year and is payable to shareholders of record in the current year, the dividend will be treated for all U.S. federal income tax purposes as if it were paid on December 31 of the current year. In addition, under the Code, we may pay dividends, referred to as "spillover dividends," that are paid during the following taxable year that will allow us to maintain our qualification for taxation as a RIC and eliminate our liability for corporate-level U.S. federal income tax. Under these spillover dividend procedures, we may defer distribution of income earned during the current year until December of the following year. For example, we may defer distributions of income earned during 2022 until as late as December 31, 2023. If we choose to pay a spillover dividend, we will incur the 4.0% U.S. federal excise tax on some or all of the distribution.

Due to disruptions in the economy, we may take certain actions with respect to the timing and amounts of our distributions in order to preserve cash and maintain flexibility. For example, the COVID-19 pandemic had an impact on our ability to declare distributions. In addition, we may reduce our dividends and/or defer our dividends to the following taxable year. If we defer our dividends, we may choose to utilize the spillover dividend rules discussed above and incur the 4.0% U.S. federal excise tax on such amounts. To further preserve cash, we may combine these reductions or deferrals of dividends with one or more distributions that are payable partially in our common stock as discussed below under "We may in the future choose to pay dividends in our own common stock, in which case you may be required to pay tax in excess of the cash you receive."

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

For federal income tax purposes, we may be required to recognize taxable income in circumstances in which we do not receive a corresponding payment in cash. For example, if we hold debt obligations that are treated under applicable tax rules as having original issue discount (such as debt instruments with PIK interest or, in certain cases, increasing interest rates or debt instruments that were issued with warrants), we must include in income each year a portion of the original issue discount that accrues over the life of the obligation, regardless of whether cash representing such income is received by us in the same taxable year. We may also have to include in income other amounts that we have not yet received in cash, such as deferred loan origination fees that are paid after origination of the loan or are paid in non-cash compensation such as warrants or stock. Furthermore, we may invest in non-U.S. corporations (or other non-U.S. entities treated as corporations for U.S. federal income tax purposes) that could be treated under the Code and U.S. Treasury regulations as "passive foreign investment companies" and/or "controlled foreign corporations." The rules relating to investment in these types of non-U.S. entities are designed to ensure that U.S. taxpayers are either, in effect, taxed currently (or on an accelerated basis with respect to corporate-level events) or taxed at increased tax rates at distribution or disposition. In certain circumstances this could require us to recognize income where we do not receive a corresponding payment in cash.

Unrealized appreciation on derivatives, such as foreign currency forward contracts, may be included in taxable income while the receipt of cash may occur in a subsequent period when the related contract expires. Any unrealized depreciation on investments that the foreign currency forward contracts are designed to hedge are not currently deductible for tax purposes. This can result in increased taxable income whereby we may not have sufficient cash to pay distributions or we may opt to retain such taxable income and pay a 4% excise tax. In such cases we could still rely upon the "spillback provisions" to maintain RIC tax treatment.

We anticipate that a portion of our income may constitute original issue discount or other income required to be included in taxable income prior to receipt of cash. Further, we may elect to accrue market discount with respect to debt securities acquired in the secondary market and include such amounts in our taxable income in the current year, instead of upon disposition, as an election not to do so would limit our ability to deduct interest expenses for tax purposes. Because any original issue discount or other amounts accrued will be included in our investment company taxable income for the year of the accrual, we may be required to make a distribution to our stockholders in order to satisfy the annual distribution requirement, even though we will not have received any corresponding cash amount. As a result, we may have difficulty meeting the annual distribution requirement necessary to qualify for and maintain RIC tax treatment under the Code. We may have to sell some of our investments at times and/or at prices we would not consider advantageous, raise additional debt or equity capital or forgo new investment opportunities for this purpose. If we are not able to obtain cash from other sources, we may fail to qualify for or maintain RIC tax treatment and thus become subject to corporate-level income tax.

**If we do not qualify as a "publicly offered regulated investment company," as defined in the Code, a non-corporate stockholder will be taxed as though it received a distribution of some of our expenses.**

A "publicly offered regulated investment company" or "publicly offered RIC" is a RIC whose shares are either (i) continuously offered pursuant to a public offering within the meaning of Section 4 of the 1933 Act, (ii) regularly traded on an established securities market or (iii) held by at least 500 persons at all times during the taxable year. We believe that we currently do not qualify as a publicly offered RIC immediately after the Private Offering, although we may qualify as a publicly offered RIC for future years. If we are not a publicly offered RIC for any period, a non-corporate stockholder's allocable portion of our affected expenses, including our management fees, will be treated as an additional distribution to the stockholder and will be treated as miscellaneous itemized deductions that are deductible only to the extent permitted by applicable law. Under current law, such expenses will not be deductible by any such stockholder for tax years that begin prior to January 1, 2026.

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

We may distribute taxable dividends that are payable in part in our common stock. In accordance with certain applicable U.S. Department of Treasury regulations and published guidance issued by the Internal Revenue Service, a publicly offered RIC may treat a distribution of its own stock as fulfilling the RIC distribution requirements if each shareholder may elect to receive his or her entire distribution in either cash or stock of the RIC, subject to a limitation that the aggregate amount of cash to be distributed to all shareholders must be at least 20.0% of the aggregate declared distribution. If too many shareholders elect to receive cash, the cash available for distribution must be allocated among the shareholders electing to receive cash (with the balance of the distribution paid in stock). In no event will any shareholder, electing to receive cash, receive less than 20.0% of its entire distribution in cash. If these and certain other requirements are met, for U.S. federal income tax purposes, the amount of the dividend paid in stock will be equal to the amount of cash that could have been received instead of stock. Taxable shareholders receiving such dividends will be required to include the amount of the dividends as ordinary income (or as long-term capital gain to the extent such distribution is properly reported as a capital gain dividend) to the extent of our current or accumulated earnings and profits for U.S. federal income tax purposes. As a result, a U.S. shareholder may be required to pay tax with respect to such dividends in excess of any cash received. If a U.S. shareholder sells the stock it receives as a dividend in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the dividend, depending on the market price of our common stock at the time of the sale. Furthermore, with respect to non-U.S. shareholders, we may be required to withhold U.S. tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in common stock. In addition, if a significant number of our shareholders determine to sell shares of our common stock in order to pay taxes owed on dividends, it may put downward pressure on the trading price of our common stock.

**Non-U.S. stockholders may be subject to withholding of U.S. federal income tax on distributions we pay.**

Distributions of our "investment company taxable income" to a non-U.S. stockholder that are not effectively connected with the non-U.S. stockholder's conduct of a trade or business within the United States will generally be subject to withholding of U.S. federal income tax at a 30% rate (or lower rate provided by an applicable income tax treaty) to the extent of our current or accumulated earnings and profits.

Certain properly reported distributions are generally exempt from withholding of U.S. federal income tax where they are paid in respect of our (i) "qualified net interest income" (generally, our U.S.-source interest income, other than certain contingent interest and interest from obligations of a corporation or partnership in which we or the non-U.S. stockholder are at least a 10% stockholder, reduced by expenses that are allocable to such income) or (ii) "qualified short-term gains" (generally, the excess of our net short-term capital gain over our net long-term capital loss for such taxable year), and certain other requirements are satisfied.

**NO ASSURANCE CAN BE GIVEN AS TO WHETHER ANY OF OUR DISTRIBUTIONS WILL BE ELIGIBLE FOR THIS EXEMPTION FROM WITHHOLDING OF U.S. FEDERAL INCOME TAX OR, IF ELIGIBLE, WILL BE REPORTED AS SUCH BY US. IN PARTICULAR, THIS EXEMPTION WILL NOT APPLY TO OUR DISTRIBUTIONS PAID IN RESPECT OF OUR NON-U.S. SOURCE INTEREST INCOME OR OUR DISTRIBUTION INCOME (OR ANY OTHER TYPE OF INCOME OTHER THAN GENERALLY OUR NON-CONTINGENT U.S. SOURCE INTEREST INCOME RECEIVED FROM UNRELATED OBLIGORS AND OUR QUALIFIED SHORT-TERM CAPITAL GAINS). IN THE CASE OF OUR COMMON STOCK HELD THROUGH AN INTERMEDIARY, THE INTERMEDIARY MAY WITHHOLD U.S. FEDERAL INCOME TAX EVEN IF WE REPORT THE PAYMENT AS QUALIFIED NET INTEREST INCOME OR QUALIFIED SHORT-TERM CAPITAL GAIN.**

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

The rules dealing with U.S. federal income taxation are constantly under review by persons involved in the legislative process and by the IRS and the U.S. Treasury Department. New legislation and any U.S. Treasury regulations, administrative interpretations or court decisions interpreting such legislation could significantly and negatively affect our ability to qualify for tax treatment as a RIC or the U.S. federal income tax consequences to us and our investors of such qualification or could have other adverse consequences. Investors are urged to consult with their tax adviser regarding tax legislative, regulatory or administrative developments and proposals and their potential effect on an investment in our securities.

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**Risks Relating to an Investment in Our Common Stock**

**An investment in our common stock will have limited liquidity and you may not receive a full return of your invested capital if you sell your shares. Until we complete a liquidity event, it is unlikely that you will be able to sell your shares.**

Our common stock is an illiquid asset for which and there is not expected to be any secondary market, nor is it expected that any will develop in the foreseeable future.

We intend to seek exemptive relief from the SEC to permit us, subject to applicable law, to initiate one or more reorganizations, pursuant to which an investor would have the option to exchange their shares of common stock and any remaining commitment, or a portion of their shares of common stock and any remaining commitment, in us for an interest in a liquidating company that would generally seek to liquidate and distribute the proceeds of its investments, as they are received, to its equity holders over time, such that it would likely substantially complete its liquidation within a reasonable period of time following the date of the reorganization. While no assurances can be provided, the Board expects that a liquidating company will be treated as a BDC. It is anticipated that, if initiated, the first reorganization would occur as soon as reasonably practicable following the end of the fiscal year during which the third anniversary of our Private Offering's initial closing occurred.

We may not propose a reorganization, even if we receive exemptive relief from the SEC, unless we have been advised by counsel or other advisers that effecting the reorganization will not have material adverse tax or other regulatory consequences for us. We also may not pursue a reorganization if such reorganization would result in our assets or the assets of a liquidating vehicle being deemed "plan assets" under Title I of the Employee Retirement Income Security Act of 1974, as amended. Even if we do receive exemptive relief to pursue a reorganization, we may determine not to proceed with a reorganization if we are not able to meet the conditions of the exemptive relief, the Board determines that it would not be in the best interest of stockholders or there is insufficient stockholder interest in participating in a reorganization. Additionally, there can be no assurance that we will be able to obtain any required exemptive and/or no-action relief from the SEC or that the Board will authorize the Reorganization. If we do not obtain any required exemptive and/or no-action relief, or if we receive the required relief but the Board determines not to proceed with a reorganization, then we will wind down our operations within ten years after the initial closing date unless the Board and/or stockholders determine to take different action, including listing our common stock on a national securities exchange or periodic repurchases or tender offers.

Until we complete a liquidity event, it is unlikely that you will be able to sell your shares. If our common stock is listed, we cannot assure you that a public trading market will develop. Further, even if we complete a liquidity event, you may not receive a return of all of your invested capital.

**We will have broad discretion over the use of proceeds of any successful offering of securities.** 

We will have significant flexibility in applying the proceeds of any successful offering of our securities. We will also pay operating expenses and may pay other expenses such as due diligence expenses of potential new investments, from net proceeds. Our ability to achieve our investment objective may be limited to the extent that the net proceeds of any offering, pending full investment, are used to pay operating expenses.

In addition, we can provide you no assurance that any offering will be successful, or that by increasing the size of our available equity capital, our aggregate expenses, and correspondingly, our expense ratio, will be lowered.

Delays in investing the net proceeds raised in an offering of our securities may impair our performance. We cannot assure you that we will be able to identify any investments that meet our investment objective or that any investment that we make will produce a positive return. We may be unable to invest the net proceeds of any offering on acceptable terms within the time period that we anticipate or at all, which could adversely affect our financial condition and operating results.

In addition, even if we are able to raise significant proceeds, we will not be permitted to use such proceeds to co-invest with certain entities affiliated with the Adviser in transactions originated by the Adviser or their respective affiliates except pursuant to the exemptive order granted by the SEC or co-invest alongside the Adviser or its respective affiliates in accordance with existing regulatory guidance. However, we will be permitted to and may co-invest in syndicated deals and secondary loan market transactions where price is the only negotiated point. Before making investments, we will invest the net proceeds of this offering primarily in cash, cash equivalents, U.S. government securities, repurchase agreements and high-quality debt instruments maturing in one year or less from the time of investment, which may produce returns that are significantly lower than the returns that we expect to achieve when our portfolio is fully invested in securities meeting our investment objective. As a result, any distributions that we pay while our portfolio is not fully invested in securities meeting our investment objective may be lower than the distributions that we may be able to pay when our portfolio is fully invested in securities meeting our investment objective.

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**A stockholder's interest in us will be diluted if we issue additional shares of common stock, which could reduce the overall value of an investment in us.**

Potential investors will not have preemptive rights to purchase any common stock we issue in the future. Our charter authorizes us to issue 1,000,000,000 shares of common stock. Pursuant to our charter, a majority of our entire Board may amend our charter to increase or decrease the number of authorized shares of common stock without stockholder approval. We intend to sell additional shares of common stock from time to time. To the extent that we issue additional shares of common stock at or below net asset value after an investor purchases shares of our common stock, an investor's percentage ownership interest in us will be diluted. In addition, depending upon the terms and pricing of any additional offerings and the value of our investments, an investor may also experience dilution in the book value and fair value of his or her shares of common stock.

We have adopted a dividend reinvestment plan pursuant to which we reinvest all cash distributions declared by the Board on behalf of investors who do not elect to receive their distributions in cash. As a result, if the Board declares a cash distribution, then our stockholders who have not opted out of our dividend reinvestment plan will have their cash distributions automatically reinvested in additional shares of our common stock, rather than receiving the cash distribution. As a result, our stockholders that do not participate in our dividend reinvestment plan will experience dilution in their ownership percentage of our common stock over time.

**Our Board is authorized to reclassify any unissued shares of common stock into one or more classes of preferred stock, which could convey special rights and privileges to its owners.**

Under Maryland General Corporation Law (the "MGCL") and our charter, our Board is authorized to classify and reclassify any authorized but unissued shares of stock into one or more classes of stock, including preferred stock. Prior to the issuance of shares of each class or series, our Board will be required by Maryland law and our charter to set the terms, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms or conditions of redemption for each class or series. Thus, our Board could authorize the issuance of shares of preferred stock with terms and conditions that could have the effect of delaying, deferring or preventing a transaction or a change in control that might involve premium prices for holders of our common stock or otherwise be in their best interest. The cost of any such reclassification would be borne by our common stockholders. Certain matters under the 1940 Act require the separate vote of the holders of any issued and outstanding preferred stock. For example, holders of preferred stock would vote as a separate class from the holders of common stock on a proposal to cease operations as a BDC. In addition, the 1940 Act provides that holders of preferred stock are entitled to vote separately from holders of common stock to elect two preferred stock directors. The issuance of preferred shares convertible into shares of common stock may also reduce the net income and net asset value per share of our common stock upon conversion, provided, that we will only be permitted to issue such convertible preferred stock to the extent we comply with the requirements of Section 61 of the 1940 Act, including obtaining common stockholder approval. These effects, among others, could have an adverse effect on your investment in our common stock.

**If we issue preferred stock, the net asset value of our common stock will likely become more volatile.** 

We cannot assure you that the issuance of preferred stock would result in a higher yield or return to the holders of our common stock. The issuance of preferred stock would likely cause the net asset value of the common stock to become more volatile. If the dividend rate on the preferred stock were to approach the net rate of return on our investment portfolio, the benefit of leverage to the holders of the common stock would be reduced. If the dividend rate on the preferred stock were to exceed the net rate of return on our portfolio, the leverage would result in a lower rate of return to the holders of common stock than if we had not issued preferred stock. Any decline in the net asset value of our investments would be borne entirely by the holders of common stock. Therefore, if the market value of our portfolio were to decline, the leverage would result in a greater decrease in net asset value to the holders of common stock than if we were not leveraged through the issuance of preferred stock. We might be in danger of failing to maintain the required asset coverage of the preferred stock or of losing our ratings, if any, on the preferred stock or, in an extreme case, our current investment income might not be sufficient to meet the dividend requirements on the preferred stock. In order to counteract such an event, we might need to liquidate investments in order to fund a redemption of some or all of the preferred stock. In addition, we would pay (and the holders of common stock would bear) all costs and expenses relating to the issuance and ongoing maintenance of the preferred stock, including higher advisory fees if our total return exceeds the dividend rate on the preferred stock. Holders of preferred stock may have different interests than holders of common stock and may at times have disproportionate influence over our affairs.

**Holders of any preferred stock we might issue would have the right to elect members of our Board and class voting rights on certain matters.** 

Holders of any preferred stock we might issue, voting separately as a single class, would have the right to elect two members of our Board at all times and in the event dividends become two full years in arrears would have the right to elect a majority of the directors until such arrearage is completely eliminated. In addition, preferred stockholders have class voting rights on certain matters, including changes in fundamental investment restrictions and conversion to open-end status, and accordingly can veto any such changes. Restrictions imposed on the declarations and payment of dividends or other distributions to the holders of our common stock and preferred stock, both by the 1940 Act and by requirements imposed by rating agencies, if any, or the terms of our credit facilities, if any, might impair our ability to maintain our RIC tax treatment under the Code for U.S. federal income tax purposes. While we would intend to redeem our preferred stock to the extent necessary to

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enable us to distribute our income as required to maintain our qualification as a RIC, there can be no assurance that such actions could be effected in time to meet the tax requirements.

**Provisions of the MGCL and our organizational documents could deter takeover attempts and have an adverse impact on the prices of our common stock.**

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

We have also adopted measures that may make it difficult for a third-party to obtain control of us, including provisions of our charter classifying our Board in three classes serving staggered three-year terms, and authorizing our Board to classify or reclassify shares of our stock in one or more classes or series, to cause the issuance of additional shares of our stock, to amend our charter without stockholder approval and to increase or decrease the number of shares of stock that we have authority to issue. These provisions, as well as other provisions of our charter and bylaws, may delay, defer or prevent a transaction or a change in control that might otherwise be in the best interests of our stockholders.

The foregoing provisions are expected to discourage certain coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to negotiate first with our Board. However, these provisions may deprive a stockholder of the opportunity to sell such stockholder's shares at a premium to a potential acquirer. We believe that the benefits of these provisions outweigh the potential disadvantages of discouraging any such acquisition proposals because, among other things, the negotiation of such proposals may improve their terms. Our Board has considered both the positive and negative effects of the foregoing provisions and determined that they are in the best interest of our stockholders.

**Investing in our common stock involves a high degree of risk.**

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

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

The net asset value and liquidity, if any, of the market for shares of our common stock may be significantly affected by numerous factors, some of which are beyond our control and may not be directly related to our operating performance. These factors include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•changes in regulatory policies or tax guidelines, particularly with respect to RICs or BDCs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•loss of RIC or BDC status;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•changes in earnings or variations in operating results;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•changes in the value of our portfolio of investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•changes in accounting guidelines governing valuation of our investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•any shortfall in revenue or net income or any increase in losses from levels expected by investors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•departure of either of our adviser or certain of its respective key personnel;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•general economic trends and other external factors; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•loss of a major funding source.

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**Certain large stockholders could influence, and may continue to exert influence, over our management and affairs and over most influence votes requiring stockholder approval.**

We have holders that own a significant portion of our common stock. As of December 31, 2022, BC Partners and its affiliates owned 32.5% of our outstanding common stock and Forethought Life Insurance Company owned 18.6% of our outstanding common stock. Therefore, each such holder is able to exert, and may be able to continue to exert, influence over our management and policies and have significant voting influence on most votes requiring stockholder approval. This concentration of ownership may also have the effect of delaying, preventing or deterring a change of control of us and could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of us.

As a condition of our co-investment exemptive relief, as our Adviser, its principals, and any person controlling, controlled by or under common control with our Adviser or its principals own in the aggregate more than 25% of our common stock they are required to vote such shares as directed by an independent third party when voting on the election or removal of directors and any other matter affecting the composition, size or manner of election of our Board.

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**Item 1B. Unresolved Staff Comments.**

None.

**Item 2. Properties.**

Our corporate headquarters are located at 650 Madison Avenue, 23rd floor, New York, New York 10022 and are provided by the Administrator in accordance with the terms of our Administration Agreement. We believe that our office facilities are suitable and adequate for our business as it is contemplated to be conducted.

**Item 3. Legal Proceedings.**

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

**Item 4. Mine Safety Disclosures.**

Not applicable.

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**PART II**

**Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.**

Market Information

Our outstanding common stock are offered and sold in transactions exempt from registration under the 1933 Act under Section 4(a)(2), Regulation D and Regulation S. Such offerings would cease in the event of an exchange listing. There is no public market for our common stock currently, nor can we give any assurance that one will develop.

Our common stock may not be sold, transferred, assigned, pledged or otherwise disposed of unless (i) if such transfer is prior to an exchange listing, our consent is granted, and (ii) our common stock is registered under applicable securities laws or specifically exempted from registration (in which case the stockholder may, at our option, be required to provide us with a legal opinion, in form and substance satisfactory to us, that registration is not required). Accordingly, an investor must be willing to bear the economic risk of investment in our common stock until we are liquidated. No sale, transfer, assignment, pledge or other disposition, whether voluntary or involuntary, of our common stock may be made except by registration of the transfer on our books. Prior to an exchange listing, each transferee will be required to execute an instrument agreeing to be bound by these restrictions and the other restrictions imposed on our common stock and to execute such other instruments or certifications as are reasonably required by us.

Holders

As of March 6, 2023, there were 74 holders of record of our common stock.

Distributions

On March 6, 2023, the Board declared a quarterly distribution of $0.31 per share for stockholders of record as of March 20, 2023, payable on March 31, 2023. We currently intend to distribute distributions or make distributions to our stockholders on a quarterly basis out of assets legally available for distribution, as determined by our Board in its discretion.

Recent Sales of Unregistered Securities and Use of Proceeds

Except as previously reported by the Company on its current reports on Form 8-K, we did not sell any securities during the period covered by this Annual Report that were not registered under the Securities Act.

**Item 6. [Reserved]**

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**Item 7. Management's Discussion and Analysis of** **Financial Condition and Results of Operations** 

(amounts in thousands, except share and per share data, percentages and as otherwise indicated; for example, with the word "million" or otherwise)

The information contained in this section should be read in conjunction with the consolidated financial statements and related notes thereto appearing elsewhere in this Annual Report. This discussion includes forward-looking statements that involve substantial risks and uncertainties and should be read in conjunction with the "Cautionary Statement Regarding Forward-Looking Statements" set forth on page 2 of this Annual Report on Form 10-K for further information regarding forward-looking statements. Except as otherwise indicated, the terms "we," "us," "our," the "Company" and "BCPL" refer to BC Partners Lending Corporation.

**Overview**

The Company was incorporated under the laws of the State of Maryland on December 22, 2017. We have elected to be treated as a business development company ("BDC") under the Investment Company Act of 1940, as amended (the "1940 Act"), and elected to be treated as a regulated investment company ("RIC") for U.S. federal income tax purposes, and to qualify annually as a RIC under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). As such, we are required to comply with various regulatory requirements, such as the requirement to invest at least 70% of our assets in "qualifying assets," source of income limitations, asset diversification requirements, and the requirement to distribute annually at least 90% of our investment company taxable income and tax-exempt interest. Qualifying assets include investments in "eligible portfolio companies." Under the relevant Securities and Exchange Commission ("SEC") rules, the term "eligible portfolio company" includes most private companies, whose principal place of business is the United States, companies whose securities are not listed on a national securities exchange, and certain public companies that have listed their securities on a national securities exchange and have a market capitalization of less than $250 million. These rules also permit us to include as qualifying assets certain follow-on investments in companies that were eligible portfolio companies at the time of initial investment but that no longer meet the definition. In addition, we will not invest more than 30% of our total assets in companies whose principal place of business is outside the United States. The Company is an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"), and the Company is taking advantage of the extended transition period for complying with certain new or revised accounting standards provided for emerging growth companies in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the "Securities Act").

Our investment objective is to make investments that generate current income and, to a lesser extent, capital appreciation. We intend for our investments primarily to take the form of debt investments, which may include secured debt, unsecured debt, other debt and/or equity in private middle-market companies (we define "middle-market companies" as those with annual earnings before interest, taxes, depreciation and amortization ("EBITDA") between $10 million and $50 million). In addition, to a lesser extent, we may invest in the securities of public companies and in structured products. While our primary focus will be on investments within the United States, we may, on occasion, invest in securities of non-U.S. entities. The first lien term loans may include traditional first lien senior secured loans or unitranche loans. Unitranche loans combine characteristics of traditional first lien senior secured loans as well as second lien and/or mezzanine debt ("Junior Debt"). Unitranche loans will expose us to the risks associated with first lien loans and Junior Debt. While there is no specific collateral associated with senior unsecured debt, such positions are senior in payment priority over subordinated debt investments.

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

We are managed by BC Partners Advisors L.P. (the "Adviser") and supervised by our board of directors (the "Board"), a majority of whom are not "interested persons" of the Company or the Adviser as defined in the 1940 Act. On April 23, 2018, we entered into an Investment Advisory Agreement which was amended and restated on November 7, 2018 and further amended on July 9, 2019 (the "Investment Advisory Agreement") with the Adviser. On August 11, 2022, the Board unanimously approved the renewal of the Investment Advisory Agreement for a period of twelve months, commencing on November 7, 2022. Under the Investment Advisory Agreement, we have agreed to pay the Adviser a base management fee based on average gross assets, excluding cash and cash equivalents but including assets purchased with borrowed amounts, at the end of the two most recently completed calendar quarters and an incentive fee based on our performance. We engaged BC Partners Management LLC (the "Administrator") to act as our administrator. On April 23, 2018, we entered into an Administration Agreement (the "Administration Agreement") with the Administrator. Under the Administration Agreement, we have agreed to reimburse the Administrator for certain services performed to enable us to operate.

On October 25, 2019, we formed a wholly-owned subsidiary, Great Lakes BCPL Funding Ltd. ("BCPL Funding"), a Cayman Islands exempted company, which holds certain of our portfolio loan investments. On December 16, 2019, and amended on March 12, 2021, we, through BCPL Funding, entered into a debt financing facility, as amended on March 12, 2021, pursuant to which up to $75 million is available to us to fund investments and for other general corporate purposes (the "Facility"). See "—Financial Condition, Liquidity and Capital Resources-Debt" below. On January 28, 2020, we formed a wholly-owned subsidiary, BCPL Sub Holdings LLC, a Delaware limited liability company, which holds our equity investment.

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Business Environment and Developments/Outlook

With respect to the U.S. credit markets (in particular for middle market loans), the COVID-19 pandemic has resulted in the following, among other things: (i) government imposition of various forms of shelter-in-place orders and the closing of "non-essential" businesses, resulting in significant disruption to the businesses of many middle-market loan borrowers including supply chains, demand and practical aspects of their operations, as well as in lay-offs of employees, and, while these effects are hoped to be temporary, some effects could be persistent or even permanent; (ii) increased draws by borrowers on revolving lines of credit; (iii) increased requests by borrowers for amendments and waivers of their credit agreements to avoid default, increased defaults by such borrowers and/or increased difficulty in obtaining refinancing at the maturity dates of their loans; (iv) volatility and disruption of these markets including greater volatility in pricing and spreads and difficulty in valuing loans during periods of increased volatility, and liquidity issues; and (v) rapidly evolving proposals and/or actions by state and federal governments to address problems being experienced by the markets and by businesses and the economy in general which will not necessarily adequately address the problems facing the loan market and middle market businesses.

Although the Federal Food and Drug Administration authorized vaccines beginning in December 2020, and a significant portion of the U.S. population have been vaccinated, it remains unclear when or if "herd immunity" will be achieved in the United States or internationally, particularly in light of the continual emergence of new "variants" of COVID-19. Even after the COVID-19 pandemic subsides, the U.S. economy and most other major global economies may continue to experience a recession, and we anticipate our business and operations could be materially adversely affected by a prolonged recession in the United States and other major markets.

During the COVID-19 pandemic, economic activity accelerated across sectors and regions. Nevertheless, due to global supply chain issues, a rise in energy prices and strong consumer demand as economies continued to reopen, inflation has accelerated in the U.S. and globally, resulting in a tightening of monetary policy in the U.S. Inflation is likely to continue in the near to medium-term. Certain of our portfolio companies may be impacted by inflation and persistent inflationary pressures could negatively affect our portfolio companies profit margins.

Geopolitical instability also continues to pose risk. In particular, the current U.S. political environment and the resulting uncertainties regarding actual and potential shifts in U.S. foreign investment, trade, taxation, economic, environmental and other policies under the current Administration, as well as the impact of geopolitical tension, such as a deterioration in the bilateral relationship between the U.S. and China or the conflict between Russia and Ukraine, could lead to disruption, instability and volatility in the global markets. Unfavorable economic conditions would be expected to increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us. These events may limit our investment originations, and limit our ability to grow and could have a material negative impact on our operating results, financial condition, results of operations and cash flows and the fair values of our debt and equity investments.

Certain of our portfolio companies may operate in, or have dealings with, countries subject to sanctions or embargoes imposed by the U.S. government, foreign governments, or the United Nations or other international organizations. In particular, on February 24, 2022, Russian troops began a full-scale invasion of Ukraine and, as of the date hereof, the countries remain in active armed conflict. Around the same time, the U.S., the U.K., the E.U., and several other nations announced a broad array of new or expanded sanctions, export controls, and other measures against Russia, Russian-backed separatist regions in Ukraine, and certain banks, companies, government officials, and other individuals in Russia and Belarus, as well as a number of Russian Oligarchs. The U.S. or other countries could also institute broader sanctions on Russia and others supporting Russia's economy or military efforts. The ongoing conflict and the rapidly evolving measures in response could be expected to have a negative impact on the economy and business activity globally (including in the countries in which the Company invests), and therefore could adversely affect the performance of the Company's portfolio companies. The severity and duration of the conflict and its impact on global economic and market conditions are impossible to predict, and as a result, could present material uncertainty and risk with respect to the Company and its portfolio companies and operations, and the ability of the Company to achieve its investment objectives. Similar risks will exist to the extent that any portfolio companies, service providers, vendors or certain other parties have material operations or assets in Russia, Ukraine, Belarus, or the immediate surrounding areas. Sanctions could also result in Russia taking counter measures or retaliatory actions which could adversely impact our business or the business of our portfolio companies, including, but not limited to, cyberattacks targeting private companies, individuals or other infrastructure upon which our business and the business of our portfolio companies rely.

We are required to carry our investments at fair value as determined in good faith by the Adviser in its role as "valuation designee" of the Company. Decreases in fair values of our investments are recorded as unrealized depreciation. Depending on market conditions, we could incur substantial losses in future periods, which could have a material adverse impact on our business, financial condition and results of operations.

We have had a decrease in our net asset value per share since December 31, 2021 which is primarily a decrease in the mark to market of our investment portfolio driven by the prolonged increase in interest rates throughout the year.

We are permitted under the 1940 Act, as a BDC, to borrow amounts such that our asset coverage, as defined in the 1940 Act, equals at least 150% after such borrowing. In addition, our outstanding borrowings contain affirmative and negative covenants and events of default relating to minimum stockholders' equity, minimum obligors' net worth, minimum asset coverage, minimum liquidity and maintenance of RIC and BDC status, as well as cross-default provisions relating to other indebtedness.

As of December 31, 2022, we are in compliance with our asset coverage requirements under the 1940 Act and we are in compliance with all of the covenants pertaining to all of our borrowings. However, any continued increase in unrealized depreciation of our investment portfolio or further significant reductions in our net asset value as a result of the effects of the COVID-19 pandemic, or otherwise, increases the

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risk of breaching the relevant covenants, including those relating to minimum stockholders' equity, minimum obligor net worth, and minimum asset coverage. If we fail to satisfy the respective covenants in our borrowings, or are unable to cure any event of default or obtain a waiver from the lender, it could result in foreclosure by the lenders under the credit facility, which would accelerate our repayment obligations under the facility and thereby have a material adverse effect on our business, liquidity, financial condition, results of operations and ability to pay distributions to our stockholders.

As of December 31, 2022, our Adviser approved the fair value of our investment portfolio in good faith in accordance with our valuation procedures, with input from third-party valuation firms and the Adviser, as valuation designee, based on information available at the time of approval.

Subscription Agreement

We are authorized to issue 1,000,000,000 shares of common stock at $0.001 par value per share.

We have entered into subscription agreements (the "Subscription Agreements") with investors providing for the private placement of shares of our common stock. Under the terms of the Subscription Agreements, investors are required to fund drawdowns to purchase shares of our common stock up to the amount of their respective capital commitment on an as-needed basis each time we deliver a drawdown notice to our investors with a minimum of 10 business days prior notice. Our initial private offering closed on September 26, 2019 (the "Initial Closing Date").

As of December 31, 2022 and December 31, 2021, we had received capital commitments totaling $47.4 million and $41.8 million, respectively.

During the year ended December 31, 2022, we delivered the following capital call notices to investors:

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| | | | |
|:---|:---|:---|:---|
| **Capital Drawdown Notice Date** | **Common Share<br>Issuance Date** | **Number of<br>Common<br>Shares Issued** | **Aggregate<br>Offering Price** |
| March 16, 2022 | March 30, 2022 | 91677 | $2280 |
| April 19, 2022 | May 6, 2022 | 16000 | 400 |
| June 17, 2022 | July 1, 2022 | 103821 | 2500 |
| November 23, 2022 | November 29, 2022 | 225592 | 5051 |
| **Total** |  | 437090 | $10231 |

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Liquidity

In April 2020 the Company submitted to the SEC an application for exemptive relief intended, if granted, to provide investors with liquidity options with respect to their investments in shares of the Company's common stock. In August 2022, the SEC Staff informed the Company that it did not intend to grant the Company's application at the current time, and the Company withdrew its application. For more information on the Company's application, refer to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2022. The Board continues to consider alternative means of liquidity for the Company's stockholders, including potentially listing the shares of the Company on a national securities exchange or commencing periodic repurchase or tender offers in the future (a "Liquidity Action").

The Company will wind down its operations within ten years after the Initial Closing Date, unless the Board and/or stockholders determine to take a Liquidity Action.

**Our Investment Framework**

We are a Maryland corporation organized to invest primarily in private middle-market companies in the form of secured debt, unsecured debt, other debt and/or equity securities. Our investment objective is to make investments that generate current income and, to a lesser extent, capital appreciation. We define "middle-market companies" as those with EBITDA between $10 million and $50 million.

As of December 31, 2022 and December 31, 2021, the average investment size in each of our portfolio companies was approximately $2.4 million and $2.6 million, respectively, based on fair value.

**Key Components of Our Results of Operations**

Investments

We focus primarily on the direct origination and syndication of loans to middle-market companies domiciled in the United States.

Our level of investment activity (both the number of investments and the size of each investment) can and does vary substantially from period to period depending on many factors, including the amount of debt and equity capital generally available to middle-market companies, the level of merger and acquisition activity for such companies, the general economic environment and the competitive environment for the types of investments we make.

In addition, as part of our risk strategy on investments, we may reduce certain levels of investments through partial sales or syndication to additional investors.

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We may invest up to 30% of the investment portfolio in "non-qualifying" opportunistic investments, including investments in high-yield bonds, debt and equity securities of collateralized loan obligation funds, foreign investments, joint ventures, managed funds, partnerships and distressed debt or debt and equity securities of large cap public companies. At December 31, 2022 and December 31, 2021, the total amount of non-qualifying assets to total assets was approximately 4.0% and 4.0%, respectively.

Revenues

The principal measure of our financial performance is net increase or decrease in net assets resulting from operations, which includes net investment income or loss, net realized gain or loss on investments, net realized gain or loss on foreign currency, net change in unrealized appreciation or depreciation on investments, and net change in unrealized appreciation or depreciation on foreign currency. Net investment income or loss is the difference between our income from interest, distributions, fees and other investment income and our operating and other expenses. Net realized gain or loss on investments is the difference between the proceeds received from dispositions of portfolio investments and their amortized cost, including the respective realized gain or loss on foreign currency for any non-U.S. dollar denominated investment transactions. Net realized gain or loss on foreign currency is the portion of realized gain or loss attributable to foreign currency fluctuations. Net change in unrealized appreciation or depreciation on investments is the net change in the fair value of our investment portfolio, including the respective unrealized appreciation or depreciation on foreign currency for any non-U.S. dollar denominated investments. Net change in unrealized appreciation or depreciation on foreign currency is the net change in the value of receivables or accruals due to the impact of foreign currency fluctuations.

We principally generate revenues in the form of interest income on the debt investments we hold. Our debt investments typically have a term of three to ten years, and bear interest at a floating rate usually determined on the basis of a benchmark, such as London Interbank Offered Rate ("LIBOR"), or an alternate base rate, such as the Prime Rate. Interest on debt securities is generally payable quarterly or semi-annually. In addition, some of our investments may provide for PIK interest. Such amounts of accrued PIK interest are added to the cost of the investment on the respective capitalization dates and generally become due at maturity of the investment or upon the investment being called by the issuer. To a lesser extent, we may also generate revenues in the form of distributions and other distributions on the equity or other securities we anticipate holding. In addition, we may generate revenues in the form of non-recurring commitment, closing, origination, structuring or diligence fees, fees for providing managerial assistance, consulting fees, prepayment fees and performance-based fees. Any such fees generated in connection with our investments will be recognized when earned.

Expenses

Our primary operating expenses include the payment of management and incentive fees, if any, and other expenses under the Investment Advisory Agreement, interest expense from financing arrangements, and other expenses necessary for our operations. The management and incentive fees will compensate the Adviser for its work in identifying, evaluating, negotiating, executing, monitoring and servicing our investments. On August 20, 2019, the Company entered into a letter agreement (the "Letter Agreement") with the Adviser pursuant to which, for the period ending December 31, 2019, the Adviser waived 50% of the base management fee to be paid by the Company under the Investment Advisory Agreement. The waiver was prorated for any partial month or quarter. Management fees waived are not subject to recoupment by the Adviser.

We reimburse the Administrator for expenses necessary to perform services related to our administration and operations, including the Adviser's portion of the compensation and related expenses for certain personnel who provide administrative services. Such services include, among other things, clerical, bookkeeping and recordkeeping services, investor relations, performing or overseeing the performance of our corporate operations (which includes being responsible for the financial records that we are required to maintain and preparing reports for our stockholders and reports filed with the SEC), assisting us in calculating the net asset value per share, overseeing the preparation and filing of tax returns and the printing and dissemination of reports to our stockholders, and generally overseeing the payment of our expenses and the performance of administrative and professional services rendered to us by others.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the cost of our organization and the offering, subject to a cap of 1.50% of the Company's total capital commitments, and further bound by a time limitation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the cost of calculating our net asset value, including the cost of any third-party valuation services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the cost of effecting any sales and repurchases of our common stock and other securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•fees and expenses payable under any dealer manager or placement agent agreements, if any;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•administration fees payable under the Administration Agreement and any sub-administration agreements, including related expenses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•debt service and other costs of borrowings or other financing arrangements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•costs of hedging;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•expenses, including travel expense, incurred by the Adviser, or members of the investment team, or payable to third parties, performing due diligence on prospective portfolio companies and, if necessary, enforcing our rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•transfer agent and custodial fees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•fees and expenses associated with marketing efforts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•federal and state registration fees, any stock exchange listing fees and fees payable to rating agencies;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•federal, state and local taxes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•independent directors' fees and expenses including certain travel expenses;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the costs of any reports, proxy statements or other notices to stockholders (including printing and mailing costs), the costs of any stockholder or director meetings and the compensation of personnel responsible for the preparation of the foregoing and related matters;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•commissions and other compensation payable to brokers or dealers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•research and market data;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•fidelity bond, directors' and officers' errors and omissions liability insurance and other insurance premiums;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•direct costs and expenses of administration, including printing, mailing, long distance telephone and staff;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•fees and expenses associated with independent audits, outside legal and consulting costs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•costs of winding up our affairs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•costs incurred by either the Administrator or us in connection with administering our business, including payments under the Administration Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•extraordinary expenses (such as litigation or indemnification); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•costs associated with reporting and compliance obligations under the 1940 Act and applicable federal and state securities laws.

We are obligated to reimburse the Adviser for expense payments made by the Adviser to us in connection with the Expense Support Agreement following any calendar quarter in which we have available operating funds. The amount of the reimbursement payment for any calendar quarter will be equal to the lesser of (i) the excess operating funds in such calendar quarter, and (ii) the aggregate amount of all expense payments made by the Adviser to us within three years prior to the last business day of such calendar quarter that have not been previously reimbursed by us to the Adviser.

In addition, we and our Administrator have contracted with U.S. Bank N.A. to provide custodial and various accounting and administrative services, including but not limited to, preparing preliminary financial information for review by the Adviser, maintaining accounting and corporate books and records, processing trade information provided by us and performing testing in respect to RIC compliance.

We expect that our general and administrative expenses will increase in dollar terms during periods of asset growth, but will decline as a percentage of total assets during such periods.

Leverage

The amount of leverage we intend to use in any period depends on a number of factors, including cash on-hand available for investing, the cost of financing and general economic and market conditions. Prior to the Small Business Credit Availability Act being signed into law, a BDC generally was not permitted to incur indebtedness unless immediately after such borrowing it has an asset coverage for total borrowings of at least 200%. The Small Business Credit Availability Act, signed into law on March 23, 2018, contains a provision that grants a BDC the option, subject to certain conditions and disclosure obligations, to reduce the asset coverage requirement to 150%. Our Board and initial stockholder have approved the decreased asset coverage ratio.

**Portfolio and Investment Activity**

As of December 31, 2022 we had investments in 42 portfolio companies with an aggregate fair value of $100.4 million. For the year ended December 31, 2022, we invested $46.8 million in 16 portfolio companies and received principal repayments of $29.8 million. As of December 31, 2022, our portfolio was invested 93.7% in first-lien investments and 6.3% in other investments. As of December 31, 2022, the average investment size in each of our portfolio companies was approximately $2.4 million based on fair value.

As of December 31, 2021 we had investments in 35 portfolio companies with an aggregate fair value of $89.6 million. For the year ended December 31, 2021, we invested $123.90 million in 55 portfolio companies and received principal repayments of $117.4 million. As of December 31, 2021 our portfolio was invested 94.8% in first-lien investments and 5.2% in other investments. As of December 31, 2021, the average investment size in each of our portfolio companies was approximately $2.6 million based on fair value

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Our investment activity for the periods ended December 31, 2022 and 2021 was as follows (information presented herein is at par value unless otherwise indicated):

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| | | |
|:---|:---|:---|
|  | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
|  | **2022** | **2021** |
| Investments made in portfolio companies | $77459 | $119691 |
| Investments sold | (43919) | (86900) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net investment activity before investments repaid | 33540 | 32791 |
| Investments repaid | (13434) | (28347) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net investment activity | $20106 | $4444 |
| Portfolio companies at beginning of period | 35 | 38 |
| New portfolio companies | 14 | 31 |
| Exited portfolio companies | (7) | (34) |
| Portfolio companies at end of period | 42 | 35 |
| Number of investments made in existing portfolio companies | 2 | 24 |
| **Percentage of investment commitments at floating rates** | 92.5% | 93.1% |
| **Percentage of investment commitments at fixed rates** | 7.5% | 6.9% |
| **Weighted average contractual interest rate of investment commitments based on par** | 11.1% | 6.2% |

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As of December 31, 2022 and December 31, 2021, our investments consisted of the following:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2021** | **December 31, 2021** |
|  | **Amortized Cost** | **Fair Value** | **Amortized Cost** | **Fair Value** |
| Senior Secured Loan | $101025 | $94047 | $84454 | $84966 |
| Structured Note | 4073 | 4053 | 4073 | 4181 |
| Subordinated Structured Note | 333 | 281 | 333 | 297 |
| Equity/Other | 725 | 2036 |  | 150 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total** | $106156 | $100417 | $88860 | $89594 |

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The following table shows the fair value of our performing and non-accrual investments as of December 31, 2022 and December 31, 2021:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2021** | **December 31, 2021** |
|  | **Fair Value** | **Percentage** | **Fair Value** | **Percentage** |
| Performing | $100417 | 100.0% | $89594 | 100.0% |
| Non-accrual |  |  |  |  |
| &nbsp;&nbsp;&nbsp;**Total** | $100417 | 100.0% | $89594 | 100.0% |

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**Results of Operations**

Our operating results for the year ended December 31, 2022 , 2021 and 2020, were as follows:

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| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2022** | **2021** | **2020** |
| Investment income | $9273 | $7750 | $4227 |
| Net expenses | 6730 | 5624 | 2917 |
| Net investment income | 2543 | 2126 | 1310 |
| Net realized and unrealized gain (loss) | (6687) | 2206 | 1274 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Net increase (decrease) in net assets resulting from operations** | $(4144) | $4332 | $2584 |
| Net investment income per share — basic and diluted | $1.32 | $1.24 | $1.03 |
| Net increase (decrease) in net assets resulting from operations per share - basic and diluted | $(2.15) | $2.53 | $2.04 |

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Investment Income

We generate revenue in the form of interest income on the debt securities that we own, distribution income on any common or preferred stock that we own, and fees generated from the structuring of new deals. Our investments in debt securities will typically have loan maturities of three to ten years and bear interest at a fixed or floating rate.

As of December 31, 2022, our portfolio, based on fair value, consisted of 93.7% first-lien debt investments and 6.3% other investments. As of December 31, 2021, our portfolio, based on fair value, consisted of 94.8% first-lien debt investments and 5.2% other

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investments. As of December 31, 2022, we had investments in 42 portfolio companies, with an average investment size of approximately $2.4 million based on fair value. As of December 31, 2021, we had investments in 35 portfolio companies, with an average investment size of approximately $2.6 million based on fair value. As of December 31, 2022 and December 31, 2021, the largest single investment based on fair value represented 5.2% and 4.7%, respectively, of our total investment portfolio. As of December 31, 2022 and December 31, 2021, 92.5% and 93.1%, respectively, of the debt investments based on fair value in our portfolio were at floating rates indexed to LIBOR or Prime.

On July 27, 2017, the Financial Conduct Authority ("FCA") announced that it would phase out the LIBOR as a benchmark by the end of 2021. On March 5, 2021, the Financial Conduct Authority and ICE Benchmark Authority announce On December 6, 2021, the Alternative References Rates Committee released a statement selecting and recommending forms of SOFR, along with associated spread adjustments and conforming changes, to replace references to 1-week and 2-month USD LIBOR. We expect that a substantial portion of our future floating rate investments will be linked to SOFR. At this time, it is not possible to predict the effect of the transition to SOFR that the publication of all EUR and CHF LIBOR settings, the Spot Next/Overnight, 1 week, 2 month and 12 month JPY and GBP LIBOR settings, and the 1 week and 2 months US dollar LIBOR settings ceased to be published as of December 31, 2021, while the publication of the overnight, 1 month, 3 month, 6 month, and 12 months U.S. dollar ("USD") LIBOR settings will cease after June 30, 2023. As an alternative to LIBOR, for example, the U.S. Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S. financial institutions, is considering replacing U.S.-dollar LIBOR with the Secured Overnight Financing Rate ("SOFR"), a new index calculated by short-term repurchase agreements, backed by Treasury securities. Abandonment of or modifications to LIBOR could have adverse impacts on newly issued financial instruments and our existing financial instruments which reference LIBOR. Uncertainty as to the nature of alternative reference rates and as to potential changes or other reforms to LIBOR, or any changes announced with respect to such reforms, may result in a sudden or prolonged increase or decrease in the reported LIBOR rates and the value of LIBOR-based loans and securities, including those of other issuers we or our funds currently own or may in the future own. It remains uncertain how such changes would be implemented and the effects such changes would have on us, issuers of instruments in which we invest and financial markets generally.

The expected discontinuation of LIBOR could have a significant impact on our business. The dollar amount of our outstanding debt investments and borrowings that are linked to LIBOR with maturity dates after the anticipated discontinuation date of 2023 is material. We anticipate significant operational challenges for the transition away from LIBOR including, but not limited to, amending existing loan agreements with borrowers on investments that may have not been modified with fallback language and adding effective fallback language to new agreements in the event that LIBOR is discontinued before maturity. Beyond these challenges, we anticipate there may be additional risks to our current processes and information systems that will need to be identified and evaluated by us. Due to the uncertainty of the replacement for LIBOR, the potential effect of any such event on our cost of capital and net investment income cannot yet be determined. In addition, any further changes or reforms to the determination or supervision of LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR, which could have an adverse impact on the market value for or value of any LIBOR-linked securities, loans, and other financial obligations or extensions of credit held by or due to us and could have a material adverse effect on our business, financial condition and results of operations.

Investment income for the years ended December 31, 2022, 2021 and 2020 were as follows:

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| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2022** | **2021** | **2020** |
| Interest income | $9081 | $7238 | $3983 |
| Fee and other income | 192 | 512 | 244 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total investment income** | $9273 | $7750 | $4227 |
| Weighted average contractual interest rate on income producing debt investments at par | 11.1% | 6.3% | 5.6% |
| Weighted average contractual interest rate on income producing debt investments (adjusted for non-accrual and partial non-accrual) at par | 11.1% | 6.3% | 5.6% |

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For the years ended December 31, 2022, 2021 and 2020, we have generated interest income of $9.1 million and $7.2 million and $4.0 million, respectively. Such revenues represent cash interest earned as well as non-cash portions relating to accretion of discounts. Cash flows related to such non-cash revenues may not occur for a number of reporting periods or years after such revenues are recognized.

The level of interest income we receive is generally related to the principal balance of income-producing investments, multiplied by the contractual interest rates of our investments. Fee income is transaction based, and typically consists of amendment and consent fees, prepayment fees, structuring fees and other non-recurring fees. As such, fee income is generally dependent on new direct origination investments and the occurrence of events at existing portfolio companies resulting in such fees. Any such fees generated will be recognized as earned. We expect the dollar amount of interest and any distribution income that we earn to increase as the size of our investment portfolio increases.

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Expenses

Expenses for the years ended December 31, 2022, 2021 and 2020 were as follows:

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| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2022** | **2021** | **2020** |
| Organization and offering costs | $153 | $12 | $222 |
| Management fees | 982 | 946 | 578 |
| Incentive fees | 146 | 651 | 290 |
| Administrative fees | 507 | 459 | 511 |
| Interest and debt expenses | 2613 | 1632 | 1013 |
| Audit fees | 200 | 203 | 252 |
| Legal fees | 438 | 458 | 192 |
| Professional fees | 342 | 161 | 197 |
| Directors' fees | 150 | 150 | 150 |
| Insurance |  |  | 265 |
| Other expenses | 372 | 683 | 280 |
| &nbsp;&nbsp;&nbsp;**Total expenses before expense support** | 5903 | 5355 | 3950 |
| Expense support from related parties | 827 | 269 | (1033) |
| &nbsp;&nbsp;&nbsp;**Net expenses** | $6730 | $5624 | $2917 |

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Total expenses before expense support were $5.9 million, $5.4 million and $4.0 million for the years ended December 31, 2022, 2021 and 2020, respectively. Management fees were $1.0 million, $0.9 million and $0.6 million for the years ended December 31, 2022, 2021 and 2020, respectively, net of waiver. All organization and offering costs since inception through December 31, 2022 were funded by the Adviser and we will have no responsibility for such costs until the Adviser submits such costs, or a portion thereof, for reimbursement, subject to a cap of 1.50% of our total commitments and provided further that the Adviser or its affiliates may not be reimbursed for payment of excess organization and offering expenses that were incurred more than three years prior to the proposed reimbursement. For the years ended December 31, 2022, 2021 and 2020, we accrued organization and offering costs of $0.2 million, $0.15 million and $0.2 million, respectively. During the years ended December 31, 2022, 2021 and 2020, we incurred $2.6 million, $1.6 million and $1.0 million, respectively, of interest and debt expenses related to our facility. For the years ended December 31, 2022, 2021 and 2020, legal fees were $0.4 million, $0.5 million and $0.2 million, respectively.

We expect our operating expenses related to our ongoing operations to increase in the next several quarters because of the anticipated growth in the size of our asset base. We expect operating expenses as a percentage of our total assets to decrease during periods of asset growth.

On August 22, 2019, we entered into an Expense Support Agreement with the Adviser to ensure that no portion of distributions made to our stockholders will be paid from our offering proceeds or borrowings. Commencing with the fourth quarter 2019 and on a quarterly basis thereafter, pursuant to the Expense Support Agreement between us and the Adviser, the Adviser will reimburse us for operating expenses in an amount that is sufficient to ensure that our net investment income and net short-term capital gains are equal to or greater than the cumulative distributions paid to our stockholders in each quarter. This arrangement is designed to ensure that no portion of distributions made to our stockholders will be paid from offering proceeds or borrowings. The specific amount of expenses reimbursed by the Adviser, if any, will be determined at the end of each quarter. During the years ended December 31, 2022, 2021 and 2020, reimbursements to (from) the Adviser totaled, $0.8 million, $0.3 million and $(1.0) million respectively.

Amounts due to the Adviser for the expected recoveries of organization, offering and operating expenses incurred on behalf of the Company, and amounts due from the Adviser under the Expense Support Agreement for such amounts, are reflected on a net basis in amounts due to/from affiliates on the consolidated statements of assets and liabilities.

Net Realized and Unrealized Gains or Losses

Our investments are generally purchased at a discount to par. We sold and received principal repayments of $29.8 million, $117.4 million and $45.0 million, respectively, during the years ended December 31, 2022, 2021 and 2020, from which we realized net gains (losses) totaling $(0.2) million, $2.1 million and $0.7 million, respectively. We recognized gains on partial principal repayments we received at par value. For the periods ended December 31, 2022, 2021 and 2020, the net change in unrealized appreciation (depreciation) on investments totaled $(6.5) million, $0.2 million and $0.5 million, respectively. The change in unrealized depreciation on investments during the year ended December 31, 2022 was primarily due to the rising interest rate environment.

Net Increase in Net Assets Resulting from Operations

For the years ended December 31, 2022, 2021 and 2020, the net increase (decrease) in net assets resulting from operations was $(4.1) million, $4.3 million and $2.6 million or $(2.15) per share, $2.53 per share and $2.04 per share, respectively.

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**Financial Condition, Liquidity and Capital Resources**

Our liquidity and capital resources are generated from the net proceeds of capital drawdowns of our private placement offerings of shares of our common stock, as well as from proceeds from principal repayments, income earned on investments and cash equivalents, and borrowings from the Facility. We intend to continue to generate cash primarily from future offerings of shares of our common stock, future borrowings and cash flows from operations. We may from time to time enter into additional debt facilities or increase the size of existing facilities to borrow funds to make investments, including before we have fully invested the net proceeds from our private placement offering, to the extent we determine that additional capital would allow us to take advantage of additional investment opportunities, if the market for debt financing presents attractively priced debt financing opportunities, or if our Board determines that leveraging our portfolio would be in our best interests and the best interests of our stockholders. In accordance with the 1940 Act, with certain limited exceptions, we are allowed to incur borrowings, issue debt securities or issue preferred stock if immediately after the borrowing or issuance our ratio of total assets (less total liabilities other than indebtedness) to total indebtedness plus preferred stock, is at least 150%. As of December 31, 2022, our asset coverage ratio was 184.1%. We seek to carefully consider our unfunded commitments for the purpose of planning our capital resources and ongoing liquidity including our financial leverage. Further, we maintain sufficient borrowing capacity within the 150% asset coverage limitation under the 1940 Act and the asset coverage limitation under our credit facility to cover any outstanding unfunded commitments we are required to fund.

The primary uses of cash, including the net proceeds from our issuance and sale of our common stock, are for investments in portfolio companies, repayment of indebtedness, if any, cash distributions to our stockholders, and the cost of operations. As of December 31, 2022, the Adviser and its affiliates have incurred organization and offering costs on our behalf in the amount of $1.4 million. All organization and offering costs, and operating expenses prior to our commencement of operations were funded by the Adviser and we will not have responsibility for such costs until the Adviser submits such costs or a portion thereof for reimbursement, subject to a cap of 1.50% of our total capital commitments for organization and offering costs and provided further that the Adviser or its affiliates may not be reimbursed for payment of excess organization and offering expenses that were incurred more than three years prior to the proposed reimbursement. For the years ended December 31, 2022, and 2021, the Company accrued organization and offering costs of $0.2 million, and $12.0 thousand, respectively.

As of December 31, 2022 and 2021, we had $7.9 million and $15.8 million, respectively, in cash and cash equivalents on hand, plus $17.0 million and $20.0 million, respectively, available to us under our borrowing facility, which is expected to be sufficient for our investing activities and to conduct our operations in the foreseeable future. In the event of a sustained market deterioration, we may need additional liquidity, which would require us to evaluate available alternatives and take appropriate actions.

Equity

We are authorized to issue 1,000,000,000 shares of common stock at $0.001 par value per share. As of December 31, 2022, we had 2,232,134 shares outstanding.

As of December 31, 2022 and 2021, we had received capital commitments totaling $47.4 million and $41.8 million, respectively. On October 2, 2019, pursuant to the Subscription Agreements, we delivered our first capital drawdown notice to investors relating to the issuance of 842,554 common stock for an aggregate offering price of $21.1 million, of which $10.8 million is from the Adviser and its affiliates, executives and employees of the Adviser, and directors of the Company.

The following tables summarizes the total shares issued and proceeds received related to capital drawdowns delivered pursuant to the Subscription Agreements for the years ended December 31, 2022 and 2021:

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| | | | |
|:---|:---|:---|:---|
| **Capital Drawdown Notice Date** | **Common Share<br>Issuance Date** | **Number of<br>Common<br>Shares Issued** | **Aggregate<br>Offering Price** |
| March 16, 2022 | March 30, 2022 | 91677 | $2280 |
| April 19, 2022 | May 6, 2022 | 16000 | 400 |
| June 17, 2022 | July 1, 2022 | 103821 | 2500 |
| November 23, 2022 | November 29, 2022 | 225592 | 5051 |
| **Total** |  | 437090 | $10231 |

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| | | | |
|:---|:---|:---|:---|
| **Capital Drawdown Notice Date** | **Common Share<br>Issuance Date** | **Number of<br>Common<br>Shares Issued** | **Aggregate<br>Offering Price** |
| June 11, 2021 | June 25, 2021 | 61738 | $1620 |
| **Total** |  | 61738 | $1620 |

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Distributions and Distribution Reinvestment

We have elected to be taxed as a RIC under Subchapter M of the Code. To maintain our RIC status, we must distribute at least 90% of our ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any, out of the assets legally available for distribution. In order to avoid certain excise taxes imposed on RICs, we currently intend to distribute during each calendar year an amount at least equal to the sum of (1) 98% of our ordinary income for the calendar year, (2) 98.2% of our capital gains in excess of capital losses for the one-year period ending on October 31 of the calendar year and (3) any ordinary income and net capital gains for preceding years that were not distributed during such years. In addition, although we currently intend to distribute realized net capital gains (i.e., net long-term capital gains in excess of short-term capital losses), if any, at least annually, out of the assets legally available for such distributions, we may in the future decide to retain such capital gains for investment.

We maintain an "opt out" dividend reinvestment plan for our common stockholders. As a result, if we declare a distribution, then stockholders' cash distributions will be automatically reinvested in additional shares of our common stock, unless they specifically "opt out" of the dividend reinvestment plan so as to receive cash distributions.

We may distribute taxable distributions that are payable in cash or shares of our common stock at the election of each stockholder. Under certain applicable provisions of the Code and the Treasury regulations, distributions payable in cash or in shares of stock at the election of stockholders are treated as taxable distributions. The Internal Revenue Service has published guidance indicating that this rule will apply even where the total amount of cash that may be distributed is limited to no more than 20% of the total distribution. Under this guidance, if too many stockholders elect to receive their distributions in cash, the cash available for distribution must be allocated among the stockholders electing to receive cash (with the balance of the distribution paid in stock). If we decide to make any distributions consistent with this guidance that are payable in part in our stock, taxable stockholders receiving such distributions will be required to include the full amount of the distribution (whether received in cash, shares of our stock, or a combination thereof) as ordinary income (or as long-term capital gain to the extent such distribution is properly reported as a capital gain distribution) to the extent of our current and accumulated earnings and profits for U.S. federal income tax purposes. As a result, a U.S. stockholder may be required to pay tax with respect to such distributions in excess of any cash received. If a U.S. stockholder sells the stock it receives in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the distribution, depending on the market price of our stock at the time of the sale. Furthermore, with respect to non-U.S. stockholders, we may be required to withhold U.S. tax with respect to such distributions, including in respect of all or a portion of such distribution that is payable in stock.

We may not be able to achieve operating results that will allow us to make distributions and distributions at a specific level or to increase the amount of these distributions and distributions from time to time. In addition, we may be limited in our ability to make distributions and distributions due to the asset coverage test for borrowings when applicable to us as a business development company under the 1940 Act and due to provisions in future credit facilities. If we do not distribute a certain percentage of our income annually, we will suffer adverse tax consequences, including possible loss of our status as a regulated investment company. We cannot assure stockholders that they will receive any distributions and distributions or distributions and distributions at a particular level.

With respect to the distributions paid to stockholders, income from origination, structuring, closing, commitment and other upfront fees associated with investments in portfolio companies was treated as taxable income and accordingly, distributed to stockholders.

We declared our first distribution on December 19, 2019. Subject to the Board's discretion and applicable legal restrictions, our Board intends to continue to authorize and declare a quarterly distribution amount per share of our common stock. On August 22, 2019, we entered into an Expense Support Agreement with the Adviser to ensure that no portion of distributions made to our stockholders will be paid from our offering proceeds or borrowings.

As described above, we may be prohibited by the 1940 Act from making distributions on our common stock if, at the time of declaration, our asset coverage, as defined in the 1940 Act, is below 150% (subject to any exemptive relief granted to us by the SEC or no-action relief granted by the SEC to another BDC (or to us if we determine to seek such similar no-action or other relief) permitting the BDC to declare any cash distribution notwithstanding the prohibition contained in Section 18(a)(1)(B) as modified by Section 61(a)(1) of the 1940 Act in order to maintain its status as a RIC under the Code). In any such event, we would be prohibited from making distributions required in order to maintain our status as a RIC unless made in accordance with any such exemptive or no-action relief granted by the SEC.

The following tables reflect the distributions declared on shares of our common stock during the years ended December 31, 2022 and 2021:

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| | | | |
|:---|:---|:---|:---|
| **Date Declared** | **Record Date** | **Payment Date** | **Distribution per Share** |
| March 14, 2022 | March 22, 2022 | March 29, 2022 | $0.31 |
| May 9, 2022 | May 27, 2022 | June 3, 2022 | 0.31 |
| August 11, 2022 | August 19, 2022 | September 8, 2022 | 0.31 |
| November 8, 2022 | November 21, 2022 | December 7, 2022 | 0.31 |
| **Total distributions per share** | **Total distributions per share** |  | $1.24 |

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| | | | |
|:---|:---|:---|:---|
| **Date Declared** | **Record Date** | **Payment Date** | **Distribution per Share** |
| March 11, 2021 | March 15, 2021 | March 22, 2021 | $0.31 |
| May 6, 2021 | May 20, 2021 | June 17, 2021 | 0.31 |
| August 4, 2021 | August 16, 2021 | September 16, 2021 | 0.31 |
| November 3, 2021 | November 16, 2021 | December 16, 2021 | 0.31 |
| December 27, 2021 | December 31, 2021 | January 27, 2022 | 1.10 |
| **Total distributions per share** | **Total distributions per share** |  | $2.34 |

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With respect to distributions, we have adopted an "opt out" dividend reinvestment plan ("DRP") for common stockholders. As a result, in the event of a declared distribution, each shareholder that has not "opted out" of the DRP will have their distributions automatically reinvested in additional shares of our common stock rather than receiving cash distributions. Shareholders who receive distributions in the form of shares of common stock will be subject to the same U.S. federal, state and local tax consequences as if they received cash distributions.

The following tables reflect the common stock issued pursuant to the dividend reinvestment plan during the years ended December 31, 2022 and 2021:

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| | | | |
|:---|:---|:---|:---|
| **Date Declared** | **Record Date** | **Payment Date** | **Shares** |
| December 27, 2021 | December 31, 2021 | January 27, 2022 | 19884 |
| March 14, 2022 | March 22, 2022 | March 29, 2022 | 6190 |
| May 9, 2022 | May 27, 2022 | June 3, 2022 | 7685 |
| August 11, 2022 | August 19, 2022 | September 8, 2022 | 8765 |
| November 8, 2022 | November 21, 2022 | December 7, 2022 | 9127 |
| **Total shares issued** |  |  | 51651 |

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| | | | |
|:---|:---|:---|:---|
| **Date Declared** | **Record Date** | **Payment Date** | **Shares** |
| December 11, 2020 | December 28, 2020 | January 29, 2021 | 6653 |
| March 11, 2021 | March 15, 2021 | March 22, 2021 | 5677 |
| May 6, 2021 | May 20, 2021 | June 17, 2021 | 5485 |
| August 4, 2021 | August 16, 2021 | September 16, 2021 | 5503 |
| November 3, 2021 | November 16, 2021 | December 16, 2021 | 5538 |
| **Total shares issued** |  |  | 28856 |

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Debt

On December 16, 2019, we, through BCPL Funding, entered into a debt financing facility with UBS AG, London Branch ("UBS"), as amended on March 12, 2021, pursuant to which up to $75.0 million was be made available to us (the "Facility"). The interest rate applicable to borrowings under the Facility is based on the one month SOFR plus a spread of 291 basis points. The Facility is secured by a security interest in virtually all of our portfolio investments (including cash), subject to certain exceptions. We have provided a make-whole guarantee to the lender in the event that the pledged assets were insufficient to satisfy the repayment of the Facility. The Facility contains covenants and events of default customary for financings of this type. See "Note 5. Borrowings."

**Contractual Obligations**

The following table shows the contractual maturities of our debt obligations as of December 31, 2022:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Payments Due by Period** | **Payments Due by Period** | **Payments Due by Period** | **Payments Due by Period** | **Payments Due by Period** |
| **Contractual Obligations** | **Total** | **Less than<br>1 Year** | **1 to 3<br>Years** | **3 to 5<br>Years** | **More than<br>5 Years** |
| Credit Facility | $58000 | $58000 | $— | $— | $— |
| &nbsp;&nbsp;&nbsp;**Total debt obligations** | $58000 | $58000 | $— | $— | $— |

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**Related-Party Transactions**

We have entered into certain contracts under which we have future commitments with affiliated or related parties. We entered into an Investment Advisory Agreement with the Adviser to provide us with investment advisory services under which we will pay our Adviser an annual base management fee based on our average gross assets, excluding cash and cash equivalents, and an incentive fee based on our performance. We also entered into an administrative agreement with the Administrator to perform (or oversee, or arrange for, the performance of) the administrative services necessary to enable us to operate and under which we will reimburse the Administrator for administrative expenses incurred on our behalf. See "Note 3. Related Party Transactions – Administration Agreement" and "– Investment Advisory Agreement" for a description of our obligations under these agreements. We also entered into an Expense Support Agreement with the Adviser, the purpose of which is to ensure that no portion of distributions made to our stockholders will be paid from our offering proceeds or borrowings. We are obligated to reimburse the Adviser for expense payments made by the Adviser to us in connection with the Expense Support Agreement following any calendar quarter in which we have available operating funds. The amount of the reimbursement payment for any calendar quarter will be equal to the lesser of (i) the excess operating funds in such calendar quarter, and (ii) the aggregate amount of all expense payments made by the Adviser to us within three years prior to the last business day of such calendar quarter that have not been previously reimbursed by us to the Adviser.

**Off-Balance Sheet Arrangements**

Portfolio Company Commitments

As of December 31, 2022 and December 31, 2021, we had the following outstanding commitments to fund investments in current portfolio companies:

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| | | | |
|:---|:---|:---|:---|
| **Portfolio Company** | **Investment** | **December 31, 2022** | **December 31, 2021** |
| Accordion Partners | Senior Secured Loan | $— | $800 |
| AMCP PET HOLDINGS, INC. | Senior Secured Loan |  | 1163 |
| Beta Plus Technologies, Inc | Senior Secured Loan | 525 |  |
| Critical Nurse Staffing DD T/L | Senior Secured Loan | 258 | 258 |
| Datalink, LLC | Senior Secured Loan |  | 600 |
| Premier Imaging DD T/L (LucidHealth) | Senior Secured Loan | 64 | 90 |
| **Total Unfunded Portfolio Company Commitments** | **Total Unfunded Portfolio Company Commitments** | $847 | $2911 |

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We maintain sufficient borrowing capacity to cover outstanding unfunded portfolio company commitments that we may be required to fund. We seek to carefully consider our unfunded commitments for the purpose of planning our capital resources and ongoing liquidity including our financial leverage. Further, we maintain sufficient borrowing capacity within the 150% asset coverage limitation under the 1940 Act and the asset coverage limitation under our credit facility to cover any outstanding unfunded commitments we are required to fund.

**Recent Developments**

On March 6, 2023, the Board declared a quarterly distribution of $0.31 per share payable on March 31, 2023 to stockholders of record as of March 20, 2023.

On March 3, 2023, the Company delivered an investor capital drawdown notice relating to the issuance of 519,187 shares of the Company's common stock, par value $0.001 per share, for an aggregate offering price of $11.5 million. The shares were issued on March 8, 2023.

**Critical Accounting Policies**

The preparation of our consolidated financial statements in conformity with U.S. generally accepted accounting principles requires us 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 consolidated statements of assets and liabilities. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ. Critical accounting policies are those that require the application of management's most difficult, subjective or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain and that may change in subsequent periods.

Investments at Fair Value

Investment transactions are recorded on the trade date. Realized gains or losses on investments are calculated using the specific identification method as the difference between the net proceeds received (excluding prepayment fees, if any) and the amortized cost basis of the investment without regard to unrealized appreciation or depreciation previously recognized, and include investments charged off during the period, net of recoveries. Net change in unrealized appreciation or depreciation reflects the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation when gains or losses are recognized.

Investments for which market quotations are available are typically valued at those market quotations. To validate market quotations, we utilize a number of factors to determine if the quotations are representative of fair value, including the source and number of the quotations.

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Debt that is not publicly traded but for which there are external pricing sources available as of the valuation date is valued using independent broker-dealer, market maker quotations or independent pricing services. The valuation committee comprised of members of the Adviser, (the "Valuation Committee") subjects these quotes to various criteria including, but not limited to, the number and quality of quotes, the deviation among the quotes and information derived from analyzing the Company's transactions in such investments throughout the reporting period. Generally, such investments are categorized in level 2 of the fair value hierarchy, unless the Valuation Committee determines that the quality, quantity or deviation among quotes warrants significant adjustment to the inputs utilized.

The Board has designated the Adviser as its "valuation designee" pursuant to Rule 2a-5 under the 1940 Act, and in that role the Adviser is responsible for performing fair value determinations relating to all of the Company's investments, including periodically assessing and managing any material valuation risks and establishing and applying fair value methodologies, in accordance with valuation policies and procedures that have been approved by the Board. The Board remains ultimately responsible for fair value determinations under the 1940 Act and satisfies its responsibility through oversight of the valuation designee in accordance with Rule 2a-5.

Investments that are not publicly traded or whose market prices are not readily available, as is expected to be the case for substantially all of the Company's investments, are valued at fair value as determined in good faith by the Adviser, based on, among other things, input of independent third-party valuation firm(s).

The Adviser undertakes a multi-step valuation process, which includes, among other procedures, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The Company's quarterly valuation process begins with each portfolio company or investment being initially valued using certain inputs, among other, provided by the investment professionals responsible for the portfolio investment in conjunction with the Company's portfolio management team. The Company utilizes an independent valuation firm to provide valuation on each material illiquid security at least once every trailing 12-month period;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Preliminary valuations are reviewed and discussed with management of the Adviser and investment professionals; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The Adviser will review the valuations and determine the fair value of each investment. Valuations that are not based on readily available market quotations will be valued in good faith based on, among other things, where applicable, third parties.

As part of the valuation process, the Adviser may consider other information and may use valuation methods including but not limited to (i) market quotes for similar investments, (ii) recent trading activity, (iii) discounting forecasted cash flows of the investment, (iv) models that consider the implied yields from comparable debt, (v) third party appraisal, (vi) sale negotiations and purchase offers received from independent parties and (vii) estimated value of underlying assets to be received in liquidation or restructuring.

Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period. Additionally, the fair value of such investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that may ultimately be realized. Further, such investments are generally less liquid than publicly traded securities and may be subject to contractual and other restrictions on resale. If the Company were required to liquidate a portfolio investment in a forced or liquidation sale, it could realize amounts that are different from the amounts presented and such differences could be material.

In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the unrealized gains or losses reflected herein.

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

The Company classifies the inputs used to measure these fair values into the following hierarchy as defined by current accounting guidance

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible to the Company.

Level 2: Quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or other observable inputs other than quoted prices.

Level 3: Significant inputs that are unobservable for an asset or liability.

A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Investments for which no external pricing sources are available as of the valuation date are included in level 3 of the fair value hierarchy

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Revenue Recognition

We record interest income on an accrual basis to the extent that we expect to collect such amounts. For loans and debt securities with contractual PIK interest, which represents contractual interest accrued and added to the loan balance that generally becomes due at maturity, we will not accrue PIK interest if management determines that the PIK interest is not collectible. We do not accrue as a receivable interest on loans and debt securities if we have reason to doubt our ability to collect such interest. Loan origination fees, original issue discount, and market discount are capitalized and then we amortize such amounts as interest income. Upon the prepayment of a loan or debt security, any unamortized loan origination fees are recorded as interest income. We further record prepayment premiums on loans and debt securities as interest income when we receive such amounts.

Income Taxes

We have elected to be treated for U.S. federal income tax purposes, and to qualify annually, as a RIC under the Code. To qualify for and maintain qualification as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements, and make minimum distributions to stockholders. We will be subject to a 4% nondeductible U.S. federal excise tax on undistributed income. See "Note 2. Significant Accounting Policies – Income Taxes."

**Item 7A. Quantitative and Qualitati** **ve Disclosures About Market Risk** 

We are subject to financial market risks, including valuation risk, interest rate risk, and currency risk. Generally, a rise in the general level of interest rates can be expected to lead to higher interest rates applicable to any variable rate investments we may hold and to declines in the value of any fixed rate investments we may hold. However, for those variable rate investments we may hold that provide for an interest rate floor, our interest income will not decrease below a threshold amount. To the extent that a substantial portion of our investments may be in variable rate investments, an increase in interest rates beyond this threshold would make it easier for us to meet or exceed the hurdle rate applicable to the upper level breakpoint of the pre-incentive fee net investment income incentive fee, and may result in a substantial increase in our net investment income and to the amount of incentive fees payable to the Adviser with respect to our increased pre-incentive fee net investment income. Conversely, a decline in the general level of interest rates, including the current environment, can be expected to lead to lower interest rates applicable to any variable rate investments we may hold and to increases in the value of any fixed rate investments we may hold. Such a decrease would make it more difficult for us to meet or exceed the hurdle rate applicable to the upper level breakpoint of the pre-incentive fee net investment income incentive fee, and may result in a substantial decrease in our net investment income and to the amount of incentive fees payable to the Adviser with respect to our decreased pre-incentive fee net investment income.

In addition, we borrow funds in order to make additional investments. Our net investment income will depend, in part, upon the difference between the rate at which we borrow funds and the rate at which we invest those funds. As a result, we will be subject to risks relating to changes in market interest rates. In periods of rising interest rates when we or any future subsidiaries have debt outstanding or financing arrangements in effect, our interest expense will increase, which could reduce our net investment income, especially to the extent we hold fixed rate investments.

We expect that our long-term investments will be financed primarily with equity and debt. If deemed prudent, we may use interest rate risk management techniques in an effort to minimize our exposure to interest rate fluctuations. These techniques may include various interest rate hedging activities to the extent permitted by the 1940 Act. Adverse developments resulting from changes in interest rates or hedging transactions could have a material adverse effect on our business, financial condition and results of operations.

We invest primarily in illiquid debt of private companies. Most of our investments will not have a readily available market price, and we value these investments at fair value as determined in good faith by our Board, based on, among other things, the input of the Adviser, our Audit Committee and independent third-party valuation firm(s) engaged at the direction of the Board, and in accordance with our valuation policy. There is no single technique for determining fair value. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make. If, in the future, we are required to liquidate a portfolio investment in a forced or liquidation sale, we may realize amounts that are different from the amounts presented and such differences could be material.

Valuation Risk

We have invested, and plan to continue to invest, primarily in illiquid debt and equity securities of private companies. Most of our investments do not have a readily available market price, and we value these investments at fair value as determined in good faith by the Board in accordance with our valuation policy. There is no single standard for determining fair value in good faith. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we may realize amounts that are different from the amounts presented and such differences could be material.

------

Interest Rate Risk

Interest rate sensitivity refers to the change in earnings that may result from changes in the level of interest rates. We intend to continue to fund portions of our investments with borrowings, and at such time, our net investment income will be affected by the difference between the rate at which we invest and the rate at which we borrow. Accordingly, we cannot assure you that a significant change in market interest rates will not have a material adverse effect on our net investment income.

As of December 31, 2022, 92.5% of the debt investments based on fair value in our portfolio were at floating rates indexed to LIBOR, SOFR, or Prime, as was our outstanding debt.

The following table shows the estimated annualized impact on net investment income based on hypothetical base rate changes in interest rates on our loan portfolio and outstanding debt as of December 31, 2022, assuming there are no changes in our investment and borrowing structure.

---

| | | | |
|:---|:---|:---|:---|
|  | **Increase (Decrease) in** | **(Increase) Decrease in** | **Increase (decrease) in** |
| **Basis Point Change** | **Interest Income** | **Interest Expense** | **Net Investment Income** |
| Up 300 basis points | $3041 | $(1740) | $1301 |
| Up 200 basis points | 2028 | (1160) | 868 |
| Up 100 basis points | 1014 | (580) | 434 |
| Down 100 basis points | (1014) | 580 | (434) |
| Down 200 basis points | (2028) | 1160 | (868) |
| Down 300 basis points | (3036) | 1740 | (1296) |

---

Although we believe that this analysis is indicative of our existing sensitivity to interest rate changes, it does not adjust for changes in the credit market, credit quality, the size and composition of the assets in our portfolio and other business developments that could affect our net income. Accordingly, we cannot assure you that actual results would not differ materially from the analysis above.

Currency Risk

From time to time, we may make investments that are denominated in a foreign currency. These investments are translated into U.S. dollars at each balance sheet date, exposing us to movements in foreign exchange rates. We may employ hedging techniques to minimize these risks, but we cannot assure you that such strategies will be effective or without risk to us. We may seek to utilize instruments such as, but not limited to, forward contracts to seek to hedge against fluctuations in the relative values of our portfolio positions from changes in currency exchange rates. As of December 31, 2022, we had no assets or liabilities denominated in currencies other than U.S. dollars.

------

**Item 8. Consolidated Financial Statements and Supplementary Data.**

**INDEX TO CONSOLIDATED FINANCIAL STATEMENTS**

---

| | |
|:---|:---|
|  | **Page** |
| <u>Report of Independent Registered Public Accounting Firm (PCAOB ID No</u> 34<u>)</u> | F-2 |
| <u>Report of Prior Independent Registered Public Accounting Firm (PCAOB ID No 185)</u> | F-4 |
| **Financial Statements:** |  |
| [<u>Consolidated Statements of Assets and Liabilities as of December 31, 2022 and December 31, 20</u>](#consolidated_statements_assets_liabiliti)<u>21</u> | F-5 |
| [<u>Consolidated Statements of Operations for years ended December 31, 2022, 2021 and 2020</u>](#consolidated_statements_operations) | F-6 |
| [<u>Consolidated Statements of Changes in Net Assets for years ended December 31, 2022, 2021 and 2020</u>](#statement_of_changes) | F-7 |
| [<u>Consolidated Statements of Cash Flows for years ended December 31, 2022, 2021 and 2020</u>](#statement_of_cash_flows) | F-8 |
| [<u>Consolidated Schedules of Investments as of December 31, 2022 and December 31, 20</u>](#soi)<u>21</u> | F-9 |
| [<u>Notes to Consolidated Financial Statements</u>](#notes) | F-14 |

---

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**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the shareholders and the Board of Directors of BC Partners Lending Corporation

**Opinion on the Financial Statements and Financial Highlights**

We have audited the accompanying consolidated statements of assets and liabilities of BC Partners Lending Corporation and subsidiaries (the "Company"), including the consolidated schedules of investments, as of December 31, 2022 and 2021, the related consolidated statements of operations, cash flows, changes in net assets, the financial highlights for years ended December 31, 2022 and 2021, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations, changes in net assets, cash flows, and financial highlights for each of the two years in the period ended December 31, 2022 in conformity with accounting principles generally accepted in the United States of America.

**Basis for Opinion**

These financial statements and financial highlights are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with 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 and financial highlights are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by the Company, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of investments owned as of December 31, 2022 and 2021, by correspondence with the custodian, loan agents, and borrowers; when replies were not received, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

**Critical Audit Matters**

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Fair Value of Level 3 Investments — Refer to Notes 2 and 4 to the financial statements

------

Critical Audit Matter Description

The Company held investments classified as Level 3 investments under accounting principles generally accepted in the United States of America. These investments included debt and equity securities with unique contract terms and conditions and/or complexity that considers a combination of multiple levels of market and asset specific inputs. The valuation techniques used in estimating the fair value of these investments vary and certain significant inputs used were unobservable. The fair value of the Company's Level 3 investments was approximately $82,667,000 as of December 31, 2022.

We identified the valuation of Level 3 investments as a critical audit matter because of the judgments necessary for management to select valuation techniques and to use significant unobservable inputs to estimate the fair value, including discount rates utilized. This required a high degree of auditor judgement and extensive audit effort, including in many instances, the need to involve fair value specialists who possess significant valuation experience, to evaluate the appropriateness of the valuation techniques and the significant unobservable inputs, when performing procedures to audit management's estimate of fair value of Level 3 investments.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the valuation of certain Level 3 investments included the following, among other factors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.We evaluated the design and implementation of controls over the Company's valuation of Level 3 investments, including those related to valuation techniques and significant unobservable inputs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.We evaluated the appropriateness of the valuation techniques used for Level 3 investments and tested the related significant unobservable inputs by comparing these inputs to external sources.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.For a selected sample of Level 3 investments, we performed these procedures with the assistance of our fair value specialists to evaluate the valuation techniques and significant unobservable inputs and assumptions used, including discount rates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.We evaluated management's ability to estimate fair value by comparing management's historical estimates to subsequent transactions, taking into account changes in market or investment specific conditions, where applicable.

/s/ Deloitte & Touche LLP

New York, New York

March 9, 2023

We have served as the Company's auditor since 2021.

------

**Report of Independent Registered Public Accounting Firm**

To the Stockholders and Board of Directors

BC Partners Lending Corporation:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statements of operations, changes in net assets, and cash flows of BC Partners Lending Corporation and subsidiaries (the Company) for the year ended December 31, 2020, and the related notes. In our opinion, the consolidated financial statements present fairly, in all material respects, the results of its operations, changes in net assets and its cash flows for the year ended December 31, 2020 in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

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

We conducted our audit 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 consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the consolidated 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 consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ KPMG LLP

We served as the Company's auditor from 2018 to 2021.

New York, New York

March 11, 2021

------

**BC Partners Lending Corporation**

**Consolidated Statements of Assets and Liabilities**

**(dollars in thousands, except share and per share data)**

---

| | | |
|:---|:---|:---|
|  | **December 31, <br>2022** | **December 31, <br>2021** |
| **Assets** |  |  |
| Investments, at fair value: |  |  |
| Non-control/non-affiliate investments (amortized cost of $106,156 and $88,860, respectively) | $100417 | $89594 |
| Forward contracts, at fair value (cost of $0 and $0, respectively) | 55 | 53 |
| Cash | 570 | 1054 |
| Restricted cash | 7379 | 14736 |
| Receivable for unsettled trades | 4 | 7078 |
| Interest and dividends receivable | 1029 | 767 |
| Prepaid expenses | 19 | 78 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total assets** | $109473 | $113360 |
| **Liabilities** |  |  |
| Credit facility (net of deferred financing costs of $772 and $882, respectively) | $57228 | $54118 |
| Payable for unsettled trades |  | 10724 |
| Due to affiliate | 2029 | 1091 |
| Management fees payable | 247 | 240 |
| Incentive fees payable | 206 | 809 |
| Interest expense payable | 748 | 339 |
| Directors' fees payable | 75 | 38 |
| Accounts payable and accrued expenses | 168 | 318 |
| Distribution payable |  | 1918 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities** | $60701 | $69595 |
| Commitments and contingencies (Note 9) |  |  |
| **Net Assets** |  |  |
| Common stock, $0.001 par value, 1,000,000,000 shares authorized; 2,232,134 and 1,743,393 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively | $2 | $2 |
| Capital in excess of par | 54480 | 42966 |
| Total distributable earning (loss) | (5710) | 797 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total net assets** | 48772 | 43765 |
| **Total liabilities and net assets** | $109473 | $113360 |
| **Net asset value per share** | $21.85 | $25.10 |

---

See notes to consolidated financial statements.

------

**BC Partners Lending Corporation**

**Consolidated Statements of Operations**

**(dollars in thousands, except share and per share data)**

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2022** | **2021** | **2020** |
| **Investment income:** |  |  |  |
| Interest income: |  |  |  |
| &nbsp;&nbsp;&nbsp;Non-control/non-affiliate investments | $9081 | $7238 | $3983 |
| Fee and other income | 192 | 512 | 244 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total investment income** | 9273 | 7750 | 4227 |
| **Operating expenses:** |  |  |  |
| Organization and offering costs | 153 | 12 | 222 |
| Management fees | 982 | 946 | 578 |
| Incentive fees | 146 | 651 | 290 |
| Administrative fees | 507 | 459 | 511 |
| Interest and debt expenses | 2613 | 1632 | 1013 |
| Audit fees | 200 | 203 | 252 |
| Legal fees | 438 | 458 | 192 |
| Professional fees | 342 | 161 | 197 |
| Directors' fees | 150 | 150 | 150 |
| Insurance |  |  | 265 |
| Other expenses | 372 | 683 | 280 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total expenses before expense support** | 5903 | 5355 | 3950 |
| Expense support from related parties | 827 | 269 | (1033) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Net expenses** | 6730 | 5624 | 2917 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Net investment income** | 2543 | 2126 | 1310 |
| **Realized and unrealized gain (loss):** |  |  |  |
| Net realized gain (loss) on investments | (216) | 2081 | 692 |
| Net change in unrealized appreciation (depreciation) on investments | (6473) | 191 | 463 |
| Net change in unrealized appreciation (depreciation) on derivatives | 2 | (66) | 119 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Net realized and unrealized gain (loss)** | (6687) | 2206 | 1274 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Net increase (decrease) in net assets resulting from operations** | $(4144) | $4332 | $2584 |
| Net investment income per share — basic and diluted | $1.32 | $1.24 | $1.03 |
| Net increase (decrease) in net assets resulting from operations per share — basic and diluted | $(2.15) | $2.53 | $2.04 |
| Weighted average shares outstanding — basic and diluted | 1926620 | 1710840 | 1266059 |

---

See notes to consolidated financial statements.

------

**BC Partners Lending Corporation**

**Consolidated Statements of Changes in Net Assets**

**(dollars in thousands, except share and per share data)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** |  |  |  |
|  | **Number of shares** | **Par Value** | **Capital in excess of par** | **Total distributable<br>earnings** | **Total net assets** |
| **Balance as of December 31, 2019** | 846633 | $1 | $21165 | $89 | 21255 |
| Net investment income |  |  |  | 1310 | 1310 |
| Net realized loss on investments |  |  |  | 692 | 692 |
| Net change in unrealized depreciation on investments and derivatives |  |  |  | 582 | 582 |
| Issuance of common shares | 786974 | 1 | 18974 |  | 18975 |
| Distributions declared and payable to stockholders |  |  |  | (2163) | (2163) |
| Stock issued in connection with dividend reinvestment plan | 19192 |  | 468 |  | 468 |
| **Balances as of December 31, 2020** | 1652799 | $2 | $40607 | $510 | $41119 |
| Net investment income |  |  |  | 2126 | 2126 |
| Net realized loss on investments |  |  |  | 2081 | 2081 |
| Net change in unrealized depreciation on investments and derivatives |  |  |  | 125 | 125 |
| Issuance of common shares | 61738 |  | 1620 |  | 1620 |
| Distributions declared and payable to stockholders |  |  |  | (4045) | (4045) |
| Stock issued in connection with dividend reinvestment plan | 28856 |  | 739 |  | 739 |
| **Balance as of December 31, 2021** | 1743393 | $2 | $42966 | $797 | $43765 |
| Net investment income |  |  |  | 2543 | 2543 |
| Net realized loss on investments |  |  |  | (216) | (216) |
| Net change in unrealized depreciation on investments and derivatives |  |  |  | (6471) | (6471) |
| Issuance of common shares | 437090 |  | 10231 |  | 10231 |
| Distributions declared and payable to stockholders |  |  |  | (2363) | (2363) |
| Stock issued in connection with dividend reinvestment plan | 51651 |  | 1283 |  | 1283 |
| **Balances at December 31, 2022** | 2232134 | $2 | $54480 | $(5710) | $48772 |

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See notes to consolidated financial statements.

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**BC Partners Lending Corporation**

**Consolidated Statements of Cash Flows**

**(dollars in thousands, except share and per share data)**

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Year ended December 31,** | **For the Year ended December 31,** | **For the Year ended December 31,** |
|  | **2022** | **2021** | **2020** |
| **Operating activities:** |  |  |  |
| Net increase (decrease) in net assets resulting from operations | $(4144) | $4332 | $2584 |
| Adjustments to reconcile net decrease in net assets from operations to net cash used in operating activities: |  |  |  |
| &nbsp;&nbsp;&nbsp;Net realized (gain) loss from investments | 216 | (2081) | (692) |
| &nbsp;&nbsp;&nbsp;Net change in unrealized (appreciation) depreciation on investments | 6473 | (191) | (463) |
| &nbsp;&nbsp;&nbsp;Net change in unrealized (appreciation) depreciation on derivatives | (2) | 66 | (119) |
| &nbsp;&nbsp;&nbsp;Net accretion of discount on investments | (298) | (415) | (325) |
| &nbsp;&nbsp;&nbsp;Amortization of deferred financing costs | 110 | 104 | 82 |
| &nbsp;&nbsp;&nbsp;Payment-in-kind interest income | (204) | (242) | (78) |
| &nbsp;&nbsp;&nbsp;Sales and repayments of investments | 29799 | 117387 | 44966 |
| &nbsp;&nbsp;&nbsp;Purchases of investments | (46809) | (123901) | (89391) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Increase) decrease in operating assets: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Receivable for unsettled trades | 7074 | (2103) | (4975) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest and dividends receivable | (262) | (468) | (249) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due from affiliate |  |  | 582 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses | 59 | (2) | (39) |
| &nbsp;&nbsp;&nbsp;Increase (decrease) in operating liabilities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payable for unsettled trades | (10724) | 3326 | (9878) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to affiliate | 938 | 645 | 92 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management fees payable | 7 | 51 | 167 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Incentive fees payable | (603) | 547 | 249 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense payable | 409 | 112 | 192 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Directors' fees payable | 37 | 38 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | (150) | (484) | 349 |
| **Net cash used in operating activities** | $(18074) | $(3279) | $(56946) |
| **Financing activities:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of shares of common stock | 10231 | 1620 | 18975 |
| &nbsp;&nbsp;&nbsp;Stockholder distributions paid | (2998) | (1997) | (1086) |
| &nbsp;&nbsp;&nbsp;Proceeds from debt | 3000 | 5000 | 30000 |
| &nbsp;&nbsp;&nbsp;Payments of financing costs |  | (256) | (740) |
| **Net cash provided by financing activities** | 10233 | 4367 | 47149 |
| Net increase (decrease) in restricted and unrestricted cash | (7841) | 1088 | (9797) |
| Cash and restricted cash at beginning of year | 15790 | 14702 | 24499 |
| Cash and restricted cash at end of period | $7949 | $15790 | $14702 |
| **Reconciliation of cash and restricted cash** |  |  |  |
| Cash | 570 | 1054 | 599 |
| Restricted cash | 7379 | 14736 | 14103 |
| Total cash and restricted cash | $7949 | $15790 | $14702 |
| **Supplemental information:** |  |  |  |
| Interest paid during the period | $2912 | $1416 | $738 |
| **Supplemental disclosure of non-cash information:** |  |  |  |
| Reinvestment of dividends | $1283 | $739 | $468 |

---

See notes to consolidated financial statements.

------

**BC Partners Lending Corporation**

**Consolidated Schedule of Investments**

**December 31, 2022**

**(dollars in thousands)**

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Investment (1) (2) (3) (18)** | **Industry** | **Interest Rate** | **Reference Rate and Spread (4)** | **Floor** | **Maturity** | **Par / Shares** | **Amortized Cost (11) (12)** | **Fair<br>Value** | **Footnotes** |
| **Senior Secured Loan - 193.2%** |  |  |  |  |  |  |  |  |  |
| Accurate Background LLC | Information Technology | 10.77% | L + 6.00% | 1.00% | 3/26/2027 | $2962 | $2746 | $2858 | (8) |
| Accurate Background LLC | Information Technology | 10.77% | L + 6.00% | 0.00% | 3/26/2027 | 499 | 459 | 481 | (8) |
| Advantage Capital Holdings LLC | Financials | 13.00% | 5.00% cash / 8.00% PIK | 0.00% | 4/14/2027 | 4184 | 4184 | 4064 | (8) (15) |
| ALCV Purchaser, Inc. | Consumer Discretionary | 11.15% | L + 6.75% | 1.00% | 2/26/2026 | 2333 | 2309 | 2310 | (8) |
| AMCP PET HOLDINGS, INC. | Consumer Staples | 11.39% | L + 6.25% | 1.00% | 10/5/2026 | 500 | 494 | 484 |  |
| AMCP PET HOLDINGS, INC. | Consumer Staples | 11.39% | L + 6.25% | 1.00% | 10/5/2026 | 1960 | 1933 | 1896 | (8) |
| American Academy Holdings | Healthcare | 15.38% | L + 4.75 Cash / 6.25% PIK | 1.00% | 1/1/2025 | 182 | 181 | 179 | (8) |
| American Academy Holdings | Healthcare | 15.38% | L + 4.75 Cash / 6.25% PIK | 1.00% | 1/1/2025 | 918 | 910 | 901 | (8) |
| American Academy Holdings | Healthcare | 12.00% | N/A | 0.00% | 1/1/2025 | 1573 | 1536 | 1278 | (8) |
| Ancile Solutions, Inc. | Information Technology | 11.77% | L + 7.00% | 1.00% | 6/11/2026 | 1915 | 1871 | 1876 | (8) |
| Beta Plus Technologies, Inc | Information Technology | 8.87% | S + 4.75% | 0.00% | 6/29/2029 | 525 |  | (21) | (7) (10)(17) |
| Beta Plus Technologies, Inc | Information Technology | 8.87% | S + 4.75% | 0.00% | 6/29/2029 | 3472 | 3405 | 3385 | (8) |
| C. J. FOODS, INC. | Consumer Staples | 10.40% | L + 6.00% | 1.00% | 3/16/2027 | 1724 | 1665 | 1700 | (5) (8) |
| C.P. Converters, Inc., Seventh Amendment Acquisition Loan | Industrials | 11.27% | L + 6.50% | 1.00% | 6/18/2023 | 1875 | 1867 | 1858 | (8) |
| CenExcel Clinicial Research Holdings, Inc | Healthcare | 11.09% | S + 6.50% | 0.00% | 11/10/2025 | 432 | 432 | 429 | (8) |
| Critical Nurse Staffing LLC | Healthcare | 10.77% | L + 6.00% | 1.00% | 10/30/2026 | 310 | 50 | 49 | (7) (8) |
| Critical Nurse Staffing LLC | Healthcare | 10.77% | L + 6.00% | 1.00% | 10/30/2026 | 680 | 671 | 672 | (8) |
| Datalink, LLC | Healthcare | 10.65% | L + 6.25% | 1.00% | 11/23/2026 | 3137 | 3076 | 3113 | (8) |
| DRI Holdings Inc | Information Technology | 9.65% | L + 5.25% | 0.50% | 12/21/2028 | 3975 | 3719 | 3453 | (5) (8) |
| Florida Foods Products, LLC | Consumer Staples | 9.59% | S + 5.00% | 1.00% | 10/18/2028 | 1000 | 943 | 964 | (8) |
| Florida Foods Products, LLC | Consumer Staples | 9.59% | S + 5.00% | 1.00% | 10/18/2028 | 1985 | 1951 | 1928 | (8) |
| Grindr Capital LLC | Information Technology | 12.36% | S + 8.00% | 1.50% | 11/15/2027 | 2000 | 2000 | 1988 | (8) |
| H.W. Lochner T/L (Elysium Infrastructure) | Industrials | 10.34% | S + 5.75% | 1.00% | 7/2/2027 | 2963 | 2915 | 2829 | (5) (8) |
| H-CA II T/L | Financials | 19.00% | N/A | 0.00% | 2/16/2024 | 2000 | 2000 | 2000 | (8) |
| Idera, Inc. | Information Technology | 11.89% | L + 6.75% | 0.75% | 2/5/2029 | 4000 | 3970 | 3740 | (8) |
| Ivanti Software, Inc. | Information Technology | 12.02% | L + 7.25% | 1.00% | 12/1/2028 | 4000 | 3904 | 2340 | (5) (8) |
| Lucky Bucks T/L (7/21) | Gaming | 10.64% | L + 5.50% | 0.75% | 7/21/2027 | 3800 | 3738 | 2239 | (8) |
| MAG DS CORP. | Industrials | 10.27% | L + 5.50% | 1.00% | 4/1/2027 | 2778 | 2680 | 2521 | (8) |
| Marble Point T/L | Financials | 10.77% | L + 6.00% | 1.00% | 8/11/2028 | 925 | 904 | 925 | (8) |
| Material Handling Systems, Inc. | Information Technology | 10.09% | S + 5.50% | 1.00% | 6/29/2029 | 3990 | 3590 | 3471 | (8) |
| Money Transfer Acquisition, Inc | Financials | 12.61% | S + 8.25% | 1.00% | 12/14/2027 | 4000 | 3909 | 3920 | (8) |
| Monotype Imaging Holdings Corp., Incremental Tranche A-3 Term Loan | Information Technology | 10.27% | L + 5.50% | 1.00% | 10/9/2026 | 3856 | 3800 | 3765 | (5) (8) |
| MSM Acquisitions, Inc. | Information Technology | 10.77% | L + 6.00% | 1.00% | 12/9/2026 | 1154 | 1155 | 1124 | (8) |
| MSM Acquisitions, Inc. | Information Technology | 10.77% | L + 6.00% | 1.00% | 12/9/2026 | 2767 | 2744 | 2695 | (8) |
| NAVIGA INC. | Information Technology | 11.68% | S + 7.00% | 1.00% | 12/30/2022 | 1991 | 1981 | 1938 | (8) |
| NAVIGA INC. | Information Technology | 11.68% | S + 7.00% | 1.60% | 12/29/2023 | 208 | 206 | 202 | (8) |
| NAVIGA INC. | Information Technology | 11.68% | S + 7.00% | 1.00% | 12/30/2022 | 1875 | 1859 | 1826 | (8) |
| Neptune Bidco US Inc | Communication Services | 9.36% | S + 5.00% | 0.00% | 4/11/2029 | 3500 | 3168 | 3137 | (8) |
| Premier Imaging, LLC | Healthcare | 10.15% | L + 5.75% | 1.00% | 1/2/2025 | 90 | 25 | 24 | (7) (10) |
| Premier Imaging, LLC | Healthcare | 10.15% | L + 5.75% | 1.00% | 1/2/2025 | 966 | 963 | 952 | (8) |
| Premier Imaging, LLC | Healthcare | 10.15% | L + 5.75% | 1.00% | 1/2/2025 | 937 | 933 | 923 | (8) |
| Premier Imaging, LLC | Healthcare | 10.15% | L + 5.75% | 0.00% | 12/29/2028 | 95 | 95 | 94 |  |
| Premier Imaging, LLC | Healthcare | 10.15% | L + 5.75% | 1.00% | 1/2/2025 | 1769 | 1759 | 1743 | (8) |
| Project Leopard Holdings Company Inc | Information Technology | 9.71% | S + 5.35% | 1.00% | 7/20/2029 | 4000 | 3733 | 3663 | (5) (8) |
| Reception Purchaser, LLC | Transportation | 10.36% | S + 6.00% | 1.50% | 5/31/2028 | 1990 | 1962 | 1953 | (8) |
| RN Enterprises, LLC | Healthcare | 10.86% | S + 6.50% | 1.00% | 12/23/2025 | 980 | 960 | 960 | (8) |
| RSA Security, LLC | Information Technology | 12.52% | L + 7.75% | 0.75% | 4/27/2029 | 4000 | 3939 | 2028 | (5) (8) |
| San Vicente Capital LLC | Information Technology | 12.77% | L + 8.00% | 1.50% | 11/15/2027 | 2049 | 2024 | 2036 | (8) |
| Symplr Software Inc | Information Technology | 8.86% | S + 4.50% | 0.75% | 12/22/2027 | 1125 | 1122 | 945 | (5) (8) |
| TLE Holdings, LLC | Consumer Discretionary | 11.14% | L + 6.00% | 1.00% | 6/28/2024 | 967 | 965 | 960 | (8) |
| Virgin Pulse, Inc. | Information Technology | 12.02% | L + 7.25% | 0.75% | 4/6/2029 | 3000 | 2975 | 2599 | (8) |
| Wonder Love Inc | Communication Services | 9.77% | L + 5.00% | 1.00% | 11/18/2024 | 650 | 645 | 650 | (8) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total Senior Secured Loan** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Senior Secured Loan** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Senior Secured Loan** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Senior Secured Loan** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Senior Secured Loan** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Senior Secured Loan** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Senior Secured Loan** | $101025 | $94047 |  |
| **Structured Note - 8.3%** |  |  |  |  |  |  |  |  |  |
| Churchill Middle Market CLO IV Ltd., Class E-2 Notes | Collateralized Loan Obligation - Debt Class | 13.77% | L + 9.00% | 0.00% | 1/23/2032 | 3900 | 3840 | 3731 | (8) (13) |
| Halsey Point CLO II Ltd., Class E | Collateralized Loan Obligation - Debt Class | 7.77% | L + 3.00% | 0.00% | 7/20/2031 | 333 | 233 | 322 | (13) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total Structured Note** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Structured Note** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Structured Note** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Structured Note** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Structured Note** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Structured Note** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Structured Note** | $4073 | $4053 |  |
| **Subordinated Structured Note - 0.6%** |  |  |  |  |  |  |  |  |  |
| Halsey Point CLO II Ltd., Class Subordinated Notes | Collateralized Loan Obligation - Equity Class | 7.77% | L + 3.00% | 0.00% | 7/20/2031 | 333 | 333 | 281 | (13) (14) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total Subordinated Structured Note** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Subordinated Structured Note** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Subordinated Structured Note** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Subordinated Structured Note** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Subordinated Structured Note** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Subordinated Structured Note** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Subordinated Structured Note** | $333 | $281 |  |
| **Equity/Other - 4.2%** |  |  |  |  |  |  |  |  |  |
| Advantage Capital Holdings LLC |  |  |  | N/A |  |  |  | 1176 | (6) (9) |
| American Academy Holdings |  |  |  | N/A |  |  |  | 86 | (6) (9) |
| American Academy Holdings |  |  |  | N/A |  | 45 |  | 52 | (6) (9) |
| Aperture Dodge 18 |  |  |  | N/A |  | 508 | 508 | 508 | (6) (7) (9) |
| Great Lakes II Funding LLC |  |  |  | N/A |  | 83 | 83 | 80 | (6) (9) |
| Green Park M-1 Series |  |  |  | N/A |  |  | 34 | 34 | (6) (7) (9) |
| Green Park M-1 Series |  |  |  | N/A |  | 1 |  |  | (6) (9) |
| GreenPark Infrastructure A Series |  |  |  | N/A |  |  | 100 | 100 | (6) (9) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total Equity/Other** |  |  |  |  |  |  | $725 | $2036 |  |
| **Total Investments (13) - 206.3%** |  |  |  |  |  |  | $106156 | $100417 |  |

---

------

**Forward contracts** <sup>(16)</sup>**:**

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Security** | **Counterparty** | **Settlement Date** | **Par** | **Unrealized Appreciation** |
| Halsey Point CLO II Ltd., Class Subordinated Notes | Advantage Capital Holdings, LLC | 7/20/2031 | 333 | $55 |
|  |  |  |  | $**55** |

---

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

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

(3)Except as otherwise noted, certain of the Company's portfolio company investments are subject to legal restrictions on sales.

(4)Represents the actual interest rate for partially or fully funded debt in effect as of the reporting date. Variable rate loans bear interest at a rate that may be determined by the larger of the floor of the reference to either LIBOR ("L") or Secured Overnight Financing Rate ("SOFR" or "S") or alternate base rate (commonly known as the U.S. Prime Rate ("P"), unless otherwise noted) at the borrower's option, which reset periodically based on the terms of the credit agreement. L loans are typically indexed to 12 month, 6 month, 3 month, 2 month, or 1 month L rates. As of December 31, 2022, rates for the 6 month, 3 month, and 1 month L are 5.14%, 4.77%, and 4.39%, respectively. As of December 31, 2022, rates for 3 months and 1 month S ("SOFR") are 4.59% and 4.36%.

(5)Other than the investments noted by this footnote, the fair value of each of the Company's investments is determined in good faith using significant unobservable inputs by the Adviser in its role as "valuation designee" in accordance with Rule 2a-5 under the 1940 Act, pursuant to valuation policies and procedures that have been approved by the Company's board of directors (the "Board").

(6)Ownership of equity investments may occur through a holding company.

(7)All or a portion of this commitment was unfunded at December 31, 2022.

(8)Security, or a portion thereof, is held through Great Lakes BCPL Funding Ltd., a wholly-owned subsidiary and a bankruptcy remote special purpose entity, and is pledged as collateral supporting the amounts outstanding under the debt financing facility at Great Lakes BCPL Funding Ltd. (See Note 5 in the accompanying consolidated unaudited financial statements).

(9)Non-income producing investment.

(10)The date disclosed represents the commitment period of the unfunded term loan.

(11)The amortized cost represents the initial cost adjusted for the accretion of discount or amortization of premium, as applicable, on debt investments using the effective interest method.

(12)As of December 31, 2022, the estimated cost basis of investments for U.S. federal tax purposes was $106,156, resulting in estimated gross unrealized appreciation and depreciation of $1,766 and $(7,499), respectively.

(13)Investments the Company has determined are not qualifying assets under Section 55(a) of the 1940 Act. The status of these assets under the 1940 Act is subject to change. The Company monitors the status of these assets on an ongoing basis. Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of total assets. Non-qualifying assets represented 4.0% of total assets as of December 31, 2022.

(14)This investment is in the subordinated note of the collateralized loan obligation security, which is entitled to recurring distributions that are generally equal to the excess cash flow generated from the underlying investments after payment of the contractual payments in debt holders and fund expenses. The current estimated yield, calculated using amortized cost, is based on the current projections of this excess cash flow taking into account assumptions made regarding expected prepayments, losses and future reinvestment rates. These assumptions are periodically reviewed and adjusted. Ultimately, the actual yield may be higher or lower than the estimated yield if actual results differ from those used for the assumptions.

(15)Investment bears interest at 12% per year with such interest to be paid, at the election of the borrower in cash or paid-in kind ("PIK") interest. To the extent that any portion of interest is in the form of PIK interest, the interest rate is increased to 13% with a minimum of 5% of the total interest in the form of cash interest (i.e., 5% cash interest and 8% PIK interest).

(16)The Company may sell any of the referenced securities in whole or in part to any third-party prior to the settlement date of the forward contracts without consent of the counterparty. Upon such sale to a third-party, the Company and counterparty shall have no further obligations in respect of that specific amount of referenced security sold.

(17)The negative cost is the result of the capitalized discount being greater than the principal amount outstanding on the loan. The negative fair value is the result of the capitalized discount on the loan.

(18)Percentages are based on the net assets.

See notes to consolidated financial statements.

------

**BC Partners Lending Corporation**

**Consolidated Schedule of Investments**

**December 31, 2021**

**(dollars in thousands)**

------

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Investment (1) (2) (3) (18)** | **Industry** | **Interest Rate** | **Reference Rate and Spread (4)** | **Floor** | **Maturity** | **Par / Shares** | **Par / Shares** | **Amortized Cost (11) (12)** | **Fair<br>Value** | **Footnotes** |
| **Senior Secured Loan - 194.1%** |  |  |  |  |  |  |  |  |  |  |
| Accordion Partners | Financials | 1.00% | L +1.00% | 0.00% | 9/24/2027 | $| 800 | $(6) | $(11) | (7) (8) (10) (17) |
| Accordion Partners | Financials | 6.50% | L +5.50% | 1.00% | 9/24/2027 |  | 3192 | 3146 | 3148 | (8) |
| Accurate Background LLC | Information Technology | 7.00% | L + 6.00% | 1.00% | 3/26/2027 |  | 2994 | 2736 | 2754 | (8) |
| Advantage Capital Holdings LLC | Financials | 13.00% | 5.00% cash / 8.00% PIK | 0.00% | 1/9/2025 |  | 1881 | 1881 | 1912 | (8) (15) |
| Advantage Capital Holdings LLC | Financials | 13.00% | 5.00% cash / 8.00% PIK | 0.00% | 1/9/2025 |  | 2120 | 2121 | 2154 | (8) (15) |
| ALCV Purchaser, Inc. | Consumer Discretionary | 7.75% | L +6.75% | 1.00% | 2/26/2026 |  | 2917 | 2878 | 2913 | (8) |
| AMCP PET HOLDINGS, INC. | Consumer Staples | 1.00% | L +1.00% | 0.00% | 10/5/2026 |  | 1000 | (18) |  | (7) (10) (17) |
| AMCP PET HOLDINGS, INC. | Consumer Staples | 7.25% | L +6.25% | 1.00% | 10/5/2026 |  | 500 | 330 | 337 | (7) |
| AMCP PET HOLDINGS, INC. | Consumer Staples | 7.25% | L +6.25% | 1.00% | 10/5/2026 |  | 1980 | 1946 | 1980 | (8) |
| Ancile Solutions, Inc. | Information Technology | 8.00% | L +7.00% | 1.00% | 6/11/2026 |  | 1991 | 1935 | 1949 | (8) |
| AP Core Holdings II (Yahoo/Verizon) T/L B2 | Media | 6.25% | L +5.50% | 0.75% | 7/21/2027 |  | 1000 | 995 | 1003 | (5) (8) |
| AP Core Holdings II (Yahoo/Verizon) T/L B1 (7/21) | Media | 6.25% | L +5.50% | 0.75% | 7/21/2027 |  | 2975 | 2942 | 2980 | (5) (8) |
| C. J. FOODS, INC. | Consumer Staples | 7.00% | L +6.00% | 1.00% | 3/16/2027 |  | 2724 | 2615 | 2714 | (8) |
| C.P. Converters, Inc., Seventh Amendment Acquisition Loan | Industrials | 7.50% | L +6.50% | 1.00% | 6/18/2023 |  | 1925 | 1900 | 1920 | (8) |
| Critical Nurse Staffing LLC | Healthcare | 7.00% | L +6.00% | 1.00% | 10/30/2026 |  | 687 | 676 | 675 | (8) |
| Critical Nurse Staffing LLC | Healthcare | 7.00% | L +6.00% | 1.00% | 10/30/2026 |  | 311 | 50 | 50 | (8) |
| Datalink, LLC | Healthcare | 7.25% | L +6.25% | 1.00% | 11/23/2026 |  | 3230 | 3156 | 3230 | (8) |
| Datalink, LLC | Healthcare | 1.00% | L +1.00% | 0.00% | 11/23/2026 |  | 600 |  |  | (7) (10) |
| DRI Holdings Inc | Information Technology | 5.50% | L +5.25% | 0.50% | 12/21/2028 |  | 2000 | 1980 | 1993 | (5) |
| H-CA II T/L | Financials | 19.00% | N/A | 0.00% | 2/16/2024 |  | 2000 | 2000 | 2000 |  |
| H.W. Lochner T/L (Elysium Infrastructure) | Industrials | 6.75% | L +5.75% | 1.00% | 7/2/2027 |  | 2993 | 2936 | 2960 | (8) |
| Idera, Inc. | Information Technology | 7.50% | L +6.75% | 0.75% | 2/5/2029 |  | 4000 | 3966 | 3980 | (8) |
| Ivanti Software, Inc. | Information Technology | 5.75% | L +4.75% | 1.00% | 12/1/2028 |  | 4000 | 3892 | 4010 | (5) (8) |
| Lucky Bucks T/L (7/21) | Gaming | 6.25% | L +5.50% | 0.75% | 7/21/2027 |  | 4000 | 3924 | 3918 | (8) |
| MAG DS CORP. | Industrials | 6.50% | L +5.50% | 1.00% | 4/1/2027 |  | 2859 | 2740 | 2700 | (8) |
| Marble Point T/L | Financials | 7.00% | L +6.00% | 1.00% | 8/11/2028 |  | 975 | 949 | 951 | (8) |
| Mileage Plus Holdings LLC | Industrials | 6.25% | L +5.25% | 1.00% | 6/25/2027 |  | 1000 | 984 | 1057 | (1) (5) (8) |
| Monotype Imaging Holdings Corp., Incremental Tranche A-3 Term Loan | Information Technology | 6.50% | L +5.50% | 1.00% | 10/9/2026 |  | 3895 | 3826 | 3905 | (5) (8) |
| MSM Acquisitions, Inc. | Information Technology | 7.00% | L +6.00% | 1.00% | 12/9/2026 |  | 1166 | 1169 | 1166 | (8) |
| MSM Acquisitions, Inc. | Information Technology | 7.00% | L +6.00% | 1.00% | 12/9/2026 |  | 2795 | 2765 | 2795 | (8) |
| Nasco Healthcare Inc. | Consumer Discretionary | 6.50% | L +5.50% | 1.00% | 6/30/2023 |  | 743 | 741 | 731 | (8) |
| NAVIGA INC. | Information Technology | 8.00% | L +7.00% | 1.00% | 12/29/2022 |  | 2011 | 1996 | 1980 | (8) |
| NAVIGA INC. | Information Technology | 8.00% | L +7.00% | 1.00% | 12/29/2022 |  | 1894 | 1870 | 1865 | (8) |
| Premier Imaging, LLC | Healthcare | 6.25% | L +5.25% | 1.00% | 1/2/2025 |  | 1769 | 1755 | 1752 | (8) |
| Premier Imaging, LLC | Healthcare | 6.25% | L +5.25% | 1.00% | 1/2/2025 |  | 966 | 961 | 957 | (8) |
| Premier Imaging, LLC | Healthcare | 6.25% | L +5.25% | 1.00% | 1/2/2025 |  | 937 | 931 | 928 | (8) |
| Premier Imaging, LLC | Healthcare | 7.00% | N/A | 0.00% | 12/29/2028 |  | 96 | 96 | 95 |  |
| Premier Imaging, LLC | Healthcare | 7.00% | L +6.00% | 1.00% | 1/2/2025 |  | 90 | (1) | (1) | (7) (10) (17) |
| Priority Holdings, LLC. | Information Technology | 7.75% | L +6.75% | 1.00% | 4/22/2027 |  | 3648 | 3613 | 3612 | (8) |
| RSA Security, LLC | Information Technology | 8.50% | L +7.75% | 0.75% | 4/16/2028 |  | 4000 | 3933 | 3710 | (8) |
| San Vicente Capital LLC | Information Technology | 9.50% | L +8.00% | 1.50% | 6/10/2025 |  | 1460 | 1444 | 1465 | (8) |
| Teneo Holdings LLC | Industrials | 6.25% | L +5.25% | 1.00% | 7/11/2025 |  | 1985 | 1971 | 1993 | (5) (8) |
| TLE Holdings, LLC | Consumer Discretionary | 7.00% | L +6.00% | 1.00% | 6/28/2024 |  | 977 | 974 | 972 | (8) |
| Virgin Pulse, Inc. | Information Technology | 8.00% | L +7.25% | 0.75% | 3/30/2029 |  | 3000 | 2972 | 2970 | (8) |
| Wonder Love Inc | Communication Services | 6.00% | L +5.00% | 1.00% | 11/18/2024 |  | 794 | 784 | 794 | (8) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total Senior Secured Loan** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Senior Secured Loan** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Senior Secured Loan** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Senior Secured Loan** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Senior Secured Loan** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Senior Secured Loan** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Senior Secured Loan** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Senior Secured Loan** | $84454 | $84966 |  |
| **Structured Note - 9.6%** |  |  |  |  |  |  |  |  |  |  |
| Churchill Middle Market CLO IV Ltd., Class E-2 Notes | Collateralized Loan Obligation - Debt Class | 9.48% | L +9.00% | 0.00% | 1/23/2032 |  | 3900 | 3840 | 3855 | (8) (13) |
| Halsey Point CLO II Ltd., Class E | Collateralized Loan Obligation - Debt Class | 3.48% | L +3.00% | 0.00% | 7/20/2031 |  | 333 | 233 | 326 | (13) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total Structured Note** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Structured Note** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Structured Note** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Structured Note** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Structured Note** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Structured Note** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Structured Note** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Structured Note** | $4073 | $4181 |  |
| **Subordinated Structured Note - 0.7%** |  |  |  |  |  |  |  |  |  |  |
| Halsey Point CLO II Ltd., Class Subordinated Notes | Collateralized Loan Obligation - Equity Class | 0.00% | N/A | 0.00% | 7/20/2031 |  | 333 | 333 | 297 | (13) (14) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total Subordinated Structured Note** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Subordinated Structured Note** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Subordinated Structured Note** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Subordinated Structured Note** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Subordinated Structured Note** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Subordinated Structured Note** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Subordinated Structured Note** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Subordinated Structured Note** | $333 | $297 |  |
| **Equity/Other - 0.3%** |  |  |  |  |  |  |  |  |  |  |
| Advantage Capital Holdings LLC |  |  |  | N/A |  |  |  |  | 150 | (6) (9) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total Equity** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Equity** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Equity** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Equity** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Equity** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Equity** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Equity** | &nbsp;&nbsp;&nbsp;&nbsp;**Total Equity** | $— | $150 |  |
| **Total Investments (13) - 204.7%** | **Total Investments (13) - 204.7%** | **Total Investments (13) - 204.7%** | **Total Investments (13) - 204.7%** | **Total Investments (13) - 204.7%** | **Total Investments (13) - 204.7%** | **Total Investments (13) - 204.7%** | **Total Investments (13) - 204.7%** | $88860 | $89594 |  |

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**Forward contracts** <sup>(16)</sup>**:**

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| | | | | |
|:---|:---|:---|:---|:---|
| **Security** | **Counterparty** | **Settlement Date** | **Par** | **Unrealized Appreciation** |
| Halsey Point CLO II Ltd., Class Subordinated Notes | Advantage Capital Holdings, LLC | 7/1/2031 | 333 | $53 |
|  |  |  |  | $**53** |

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

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

(3)Except as otherwise noted, certain of the Company's portfolio company investments are subject to legal restrictions on sales.

(4)Represents the actual interest rate for partially or fully funded debt in effect as of the reporting date. Variable rate loans bear interest at a rate that may be determined by the larger of the floor of the reference to either LIBOR ("L") or alternate base rate (commonly known as the U.S. Prime Rate ("P"), unless otherwise noted) at the borrower's option, which reset periodically based on the terms of the credit agreement. L loans are typically indexed to 12 month, 6 month, 3 month, 2 month, or 1 month L rates. As of December 31, 2021, rates for the 12 month, 6 month, 3 month, 2 month and 1 month L are 0.10%, 0.15%, 0.21%, 0.15% and 0.10%, respectively. As of December 31, 2021, P was 3.25%. For investments with multiple reference rates or alternate base rates, the interest rate shown is the weighted average interest rate in effect at December 31, 2021.

(5)Other than the investments noted by this footnote, the fair value of each of the Company's investments is determined in good faith using significant unobservable inputs by the Adviser in its role as "valuation designee" in accordance with Rule 2a-5 under the 1940 Act, pursuant to valuation policies and procedures that have been approved by the Company's board of directors (the "Board").

(6)Ownership of equity investments may occur through a holding company.

(7)All or a portion of this commitment was unfunded at December 31, 2021.

(8)Security, or a portion thereof, is held through Great Lakes BCPL Funding Ltd., a wholly-owned subsidiary and a bankruptcy remote special purpose entity, and is pledged as collateral supporting the amounts outstanding under the debt financing facility at Great Lakes BCPL Funding Ltd. (See Note 5 in the accompanying consolidated financial statements).

(9)Non-income producing investment.

(10)The date disclosed represents the commitment period of the unfunded term loan.

(11)The amortized cost represents the initial cost adjusted for the accretion of discount or amortization of premium, as applicable, on debt investments using the effective interest method.

(12)As of December 31, 2021, the estimated cost basis of investments for U.S. federal tax purposes was $88,863, resulting in estimated gross unrealized appreciation and depreciation of $1,205 and $(420), respectively.

(13)Investments the Company has determined are not qualifying assets under Section 55(a) of the 1940 Act. The status of these assets under the 1940 Act is subject to change. The Company monitors the status of these assets on an ongoing basis. Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of total assets. Non-qualifying assets represented 4.0% of total assets as of December 31, 2021.

(14)This investment is in the subordinated note of the collateralized loan obligation security, which is entitled to recurring distributions that are generally equal to the excess cash flow generated from the underlying investments after payment of the contractual payments in debt holders and fund expenses. The current estimated yield, calculated using amortized cost, is based on the current projections of this excess cash flow taking into account assumptions made regarding expected prepayments, losses and future reinvestment rates. These assumptions are periodically reviewed and adjusted. Ultimately, the actual yield may be higher or lower than the estimated yield if actual results differ from those used for the assumptions.

(15)Investment bears interest at 12% per year with such interest to be paid, at the election of the borrower in cash or paid-in kind ("PIK") interest. To the extent that any portion of interest is in the form of PIK interest, the interest rate is increased to 13% with a minimum of 5% of the total interest in the form of cash interest (i.e., 5% cash interest and 8% PIK interest).

(16)The Company may sell any of the referenced securities in whole or in part to any third-party prior to the settlement date of the forward contracts without consent of the counterparty. Upon such sale to a third-party, the Company and counterparty shall have no further obligations in respect of that specific amount of referenced security sold.

(17)The negative cost is the result of the capitalized discount being greater than the principal amount outstanding on the loan. The negative fair value is the result of the capitalized discount on the loan.

(18)Percentages are based on the net assets.

See notes to consolidated financial statements.

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**BC Partners Lending Corporation** 

**Notes to Consolidated Financ** **ial Statements (Unaudited)**

**(in thousands, except share and per share data, percentages and as otherwise indicated;**

**for example, with the word "million" or otherwise)**

**Note 1. Organization**

BC Partners Lending Corporation ("BCPL" or the "Company") is a Maryland corporation formed on December 22, 2017. The Company has elected to be regulated as a business development company ("BDC") under the Investment Company Act of 1940, as amended (the "1940 Act"). In addition, the Company has elected to be treated for U.S. federal income tax purposes, and to qualify annually, as a regulated investment company ("RIC") under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). The Company is an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"), and the Company will take advantage of the extended transition period for complying with certain new or revised accounting standards provided for emerging growth companies in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the "Securities Act").

The Company's investment objective is to make investments that generate current income and, to a lesser extent, capital appreciation. The Company intends to invest primarily in private middle-market companies in the form of secured debt, unsecured debt, other debt and/or equity securities. In addition, to a lesser extent, the Company may invest in securities of public companies and in structured products.

The Company was formed primarily to invest in the U.S. middle-market credit sector. On October 25, 2019, the Company formed a wholly-owned, special-purpose, bankruptcy-remote subsidiary, Great Lakes BCPL Funding Ltd. ("BCPL Funding"), a Cayman Islands exempted company, which holds certain of the Company's portfolio loan investments that are used as collateral for the debt financing facility at BCPL Funding. On January 28, 2020, the Company formed a wholly-owned, bankruptcy-remote subsidiary, BCPL Sub Holdings LLC, a Delaware limited liability company, which holds the Company's equity investment.

The Company is managed by BC Partners Advisors L.P. (the "Adviser"), an affiliate of BC Partners LLP ("BC Partners"). BC Partners Management LLC (the "Administrator"), also an affiliate of BC Partners, provides administrative services necessary for the Company to operate.

The Company conducts private offerings (each, a "Private Offering") of its common stock to accredited investors in reliance on exemptions from the registration requirements of the Securities Act. At the closing of each Private Offering, each investor makes a capital commitment (a "Capital Commitment") to purchase shares of the Company's common stock pursuant to a subscription agreement entered into with the Company. Investors are required to fund drawdowns to purchase shares of the Company's common stock up to the amount of their respective Capital Commitment on an as-needed basis each time the Company delivers a drawdown notice to its investors. The Company's initial Private Offering closed on September 26, 2019 (the "Initial Closing").

In April 2020 the Company submitted to the SEC an application for exemptive relief intended, if granted, to provide investors with liquidity options with respect to their investments in shares of the Company's common stock. In August 2022, the SEC Staff informed the Company that it did not intend to grant the Company's application at the current time, and the Company withdrew its application. For more information on the Company's application, refer to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2022. The Company's board of directors (the "Board") continues to consider alternative means of liquidity for the Company's stockholders, including potentially listing the shares of the Company on a national securities exchange or commencing periodic repurchase or tender offers in the future (a "Liquidity Action").

The Company will wind down its operations within ten years after the after the Initial Closing Date, unless the Board and/or stockholders determine to take a Liquidity Action.

The Company's fiscal year ends on December 31.

**Note 2. Significant Accounting Policies**

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") pursuant to the requirements for reporting on Form 10-K and Regulation S-X, as appropriate. These consolidated financial statements reflect adjustments that in the opinion of the Company are necessary for the fair presentation of the financial position and results of operations as of and for the periods presented herein. The Company is an investment company under U.S. GAAP and therefore applies the accounting and reporting guidance applicable to investment companies. The Company has evaluated subsequent events through the date of issuance of the consolidated financial statements.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP 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 consolidated financial statements. Actual results could differ from those estimates, and such differences could be material.

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Consolidation

In accordance with U.S. GAAP guidance on consolidation, the Company will generally not consolidate its investment in a portfolio company other than an investment company subsidiary or a controlled operating company whose business consists of providing services to the Company. Accordingly, the Company consolidated the accounts of the Company's wholly-owned subsidiaries in its consolidated financial statements. All significant intercompany balances and transactions have been eliminated in consolidation.

Segments

In accordance with U.S. GAAP guidance on segment reporting, the Company has determined that its operations comprise a single reporting segment.

Cash and Restricted Cash

Cash consists of deposits held at a custodian bank. Restricted cash consists of deposits pledged as collateral. Cash and restricted cash are held at major financial institutions and, at times, may exceed the insured limits under applicable law.

Investments

Investment transactions are recorded on the trade date. Realized gains or losses on investments are calculated using the specific identification method as the difference between the net proceeds received (excluding prepayment fees, if any) and the amortized cost basis of the investment without regard to unrealized appreciation or depreciation previously recognized, and include investments charged off during the period, net of recoveries. Net change in unrealized appreciation or depreciation reflects the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation when gains or losses are recognized.

Investments for which market quotations are available are typically valued at those market quotations. To validate market quotations, the Company will utilize a number of factors to determine if the quotations are representative of fair value, including the source and number of the quotations.

Debt that is not publicly traded but for which there are external pricing sources available as of the valuation date is valued using independent broker-dealer, market maker quotations or independent pricing services. The valuation committee, comprised of members of the Adviser, (the "Valuation Committee") subjects these quotes to various criteria including, but not limited to, the number and quality of quotes, the deviation among the quotes and information derived from analyzing the Company's own transactions in such investments throughout the reporting period. Generally, such investments are categorized in level 2 of the fair value hierarchy, unless the Valuation Committee determines that the quality, quantity or deviation among quotes warrants significant adjustment to the inputs utilized.

The Board has designated the Adviser as its "valuation designee" pursuant to Rule 2a-5 under the 1940 Act, and in that role the Adviser is responsible for performing fair value determinations relating to all of the Company's investments, including periodically assessing and managing any material valuation risks and establishing and applying fair value methodologies, in accordance with valuation policies and procedures that have been approved by the Board. The Board remains ultimately responsible for fair value determinations under the 1940 Act and satisfies its responsibility through oversight of the valuation designee in accordance with Rule 2a-5.

Investments that are not publicly traded or whose market prices are not readily available, as is expected to be the case for substantially all of the Company's investments, are valued at fair value as determined in good faith by the Adviser, based on, among other things, input of independent third-party valuation firm(s).

The Adviser undertakes a multi-step valuation process, which includes, among other procedures, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The Company's quarterly valuation process begins with each portfolio company or investment being initially valued using certain inputs, among others, provided by the investment professionals responsible for the portfolio investment in conjunction with the Company's portfolio management team. The Company utilizes an independent valuation firm to provide valuation on each material illiquid security at least once every trailing 12-month period;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Preliminary valuations are reviewed and discussed with management of the Adviser and investment professionals; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The Adviser will review the valuations and determine the fair value of each investment. Valuations that are not based on readily available market quotations will be valued in good faith based on, among other things, the input of, where applicable, third parties.

As part of the valuation process, the Adviser may consider other information and may use valuation methods including but not limited to (i) market quotes for similar investments, (ii) recent trading activity, (iii) discounting forecasted cash flows of the investment, (iv) models that consider the implied yields from comparable debt, (v) third party appraisal, (vi) sale negotiations and purchase offers received from independent parties and (vii) estimated value of underlying assets to be received in liquidation or restructuring.

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Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period. Additionally, the fair value of such investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that may ultimately be realized. Further, such investments are generally less liquid than publicly traded securities and may be subject to contractual and other restrictions on resale. If the Company were required to liquidate a portfolio investment in a forced or liquidation sale, it could realize amounts that are different from the amounts presented and such differences could be material.

In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the unrealized gains or losses reflected herein.

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

The Company classifies the inputs used to measure these fair values into the following hierarchy as defined by current accounting guidance:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible to the Company.

Level 2: Quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or other observable inputs other than quoted prices.

Level 3: Significant inputs that are unobservable for an asset or liability.

A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Investments for which no external pricing sources are available as of the valuation date are included in level 3 of the fair value hierarchy.

Forward Contracts

The Company may enter into forward purchase contracts primarily to manage credit risk. When entering into a forward purchase contract, the Company agrees to deliver a fixed quantity of securities for an agreed-upon price on an agreed future date. Forward contracts entered into by the Company are not designated as hedging instruments, and as a result, the Company presents changes in fair value through net change in unrealized appreciation (depreciation) on derivative instruments in the consolidated statements of operations. Realized and unrealized gains and losses of derivative instruments are included in the consolidated statements of operations. These instruments involve market risk, credit risk, or both kinds of risks. Risks arise from the possible inability of counterparties to meet the terms of their contracts and movements in fair value. The Company attempts to limit counterparty risk by only dealing with well-known counterparties.

Revenue Recognition

Interest income is recorded on an accrual basis and includes the accretion of discounts and amortization of premiums. Discounts from and premiums to par value on debt investments purchased are accreted/amortized into interest income over the life of the respective security using the effective interest method. The amortized cost of debt investments represents the original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion of discounts and amortization of premiums, if any.

Loans are generally placed on non-accrual status when there is reasonable doubt that principal or interest will be collected in full. The Company considers many factors relevant to an investment when placing it on or removing it from non-accrual status including, but not limited to, the delinquency status of the investment, economic and business conditions, the overall financial condition of the underlying investment, the value of the underlying collateral, bankruptcy status, if any, and any other facts or circumstances relevant to the investment. Accrued interest is generally reversed when a loan is placed on non-accrual status. Payments received on non-accrual loans may be recognized as income or applied to principal depending upon management's judgment regarding collectability of the outstanding principal and interest. Non-accrual loans may be restored to accrual status when past due principal and interest is paid current and are likely to remain current based on management's judgment.

Dividend income on preferred equity securities is recorded on the accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly-traded portfolio companies.

Loan origination fees, original issue discount and market discount are capitalized, and the Company amortizes such amounts as interest income over the respective term of the loan or security. Upon the prepayment of a loan or security, any unamortized loan origination fees and original issue discount are recorded as interest income. The Company records prepayment premiums on loans and securities as fee income when it receives such amounts.

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Payment-in-Kind Interest

Payment-in-kind ("PIK") interest, computed at the contractual rate specified in each loan agreement, is added to the principal balance of the loan and recorded as interest income and generally becomes due at maturity. To maintain the Company's status as a RIC, this non-cash source of income must be paid out to stockholders in the form of distributions, even though the Company has not yet collected the cash.

Deferred Financing Costs

Origination and other expenses related to the Company's borrowings are recorded as deferred financing costs and amortized as part of interest expense using the straight-line method over the stated life of the debt instrument. Unamortized deferred financing costs are presented as a direct deduction to the respective debt instrument.

Organization and Offering Costs

Organization costs include, among other things, the cost of incorporating, including the cost of legal services and other fees pertaining to the Company's organization. Costs associated with the organization of the Company are expensed as incurred. Offering costs include, among other things, marketing expenses and printing, legal fees, due diligence fees, and other costs in connection with the Company's offering of shares of its common stock, including the preparation of the Company's registration statement, and salaries and direct expenses of the Adviser's personnel, employees of its affiliates and others while engaged in such activities. Offering costs are capitalized as deferred offering expenses and are amortized over twelve months from incurrence.

Earnings per Share

Basic earnings per share is calculated by dividing net income or loss attributable to common stockholders by the weighted average number of common stock outstanding during the period.

Income Taxes

The Company has elected to be treated for U.S. federal income tax purposes, and to qualify annually, as a RIC under the Code. So long as the Company maintains its status as a RIC, it will generally not pay corporate-level U.S. federal income or excise taxes on any ordinary income or capital gains that it distributes at least annually to its stockholders as distributions. Any tax liability related to income earned and distributed by the Company represents obligations of the Company's stockholders and will not be reflected in the consolidated financial statements of the Company.

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

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

The Company has analyzed the tax positions taken on federal and state income tax returns for all open tax years and has concluded that no provision for income tax for uncertain tax positions is required in the Company's consolidated financial statements. The Company's major tax jurisdictions are U.S. federal, New York State, and foreign jurisdictions where the Company makes significant investments. The Company's federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.

Distributions to Common Stockholders

Distributions to the Company's stockholders are recorded on the record date. The amount to be paid out as a distribution is determined by the Board and is generally based upon earnings estimated by the Adviser. Net realized capital gains, if any, would generally be distributed at least annually, although the Company may decide to retain such capital gains.

The Company has adopted an "opt out" dividend reinvestment plan ("DRP") for its stockholders. As a result, if the Company makes a cash distribution, its stockholders will have their cash distributions reinvested in additional shares of the Company's common stock, including fractional shares as necessary, unless they specifically "opt out" of the DRP to receive the distribution in cash. Under the DRP, cash distributions to participating stockholders will be reinvested in additional shares of the Company's common stock at a purchase price equal to the net asset value per share as of the last day of the calendar quarter immediately preceding the date such distribution was declared.

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The Company may distribute taxable distributions that are payable in cash or shares of its common stock at the election of each stockholder. Under certain applicable provisions of the Code and the Treasury regulations, distributions payable in cash or in shares of stock at the election of stockholders are treated as taxable distributions. The Internal Revenue Service has published guidance indicating that this rule will apply even where the total amount of cash that may be distributed is limited to no more than 20% of the total distribution. Under this guidance, if too many stockholders elect to receive their distributions in cash, the cash available for distribution must be allocated among the stockholders electing to receive cash (with the balance of the distribution paid in stock). If the Company decides to make any distributions consistent with this guidance that are payable in part in its stock, taxable stockholders receiving such distributions will be required to include the full amount of the distribution (whether received in cash, shares of the Company's stock, or a combination thereof) as ordinary income (or as long-term capital gain to the extent such distribution is properly reported as a capital gain distribution) to the extent of the Company's current and accumulated earnings and profits for U.S. federal income tax purposes. As a result, a U.S. stockholder may be required to pay tax with respect to such distributions in excess of any cash received. If a U.S. stockholder sells the stock it receives in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the distribution, depending on the market price of the Company's stock at the time of the sale. Furthermore, with respect to non-U.S. stockholders, the Company may be required to withhold U.S. tax with respect to such distributions, including in respect of all or a portion of such distribution that is payable in stock.

Recent Accounting Pronouncements

In June 2022, the Financial Accounting Standards Board issued Accounting Standards Update 2022-03, Fair Value Measurement (Topic 820) – Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (ASU 2022-03). The accounting standard update clarifies the guidance in Topic 820 when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security and introduces new disclosure requirements for equity securities subject to contractual sale restrictions and measured at fair value in accordance with Topic 820. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company is currently evaluating the impact that adoption of this new accounting standard will have on its consolidated financial statements, but the impact of the adoption is not expected to be material.

**Note 3. Related Party Transactions**

Administration Agreement

On April 23, 2018, the Company entered into an Administration Agreement (the "Administration Agreement") with the Administrator. Under the terms of the Administration Agreement, the Administrator will perform (or oversee, or arrange for, the performance of) the administrative services necessary for the operation of the Company, which includes office facilities, equipment, bookkeeping and recordkeeping services and such other services as the Administrator, subject to review by the Board, shall from time to time determine to be necessary or useful to perform its obligations under this Administration Agreement.

The Company will reimburse the Administrator for services performed under the terms of the Administration Agreement. In addition, pursuant to the Administration Agreement, the Administrator may delegate its obligations under the Administration Agreement to affiliates or third-parties and the Company pays or reimburses the Administrator for certain expenses incurred by any such affiliates or third-parties for work done on its behalf.

The Administration Agreement had an initial term of two years from its effective date and will remain in effect from year-to-year thereafter if approved annually by (i) the vote of the Board, or by the vote of a majority of the outstanding voting securities of the Company, and (ii) the vote of a majority of the Company's Board who are not parties to the Administration Agreement or "interested persons" of the Company, of the Adviser or of any of their respective affiliates, as defined in the 1940 Act. The Administration Agreement was most recently approved on March 5, 2020. The Administration Agreement may be terminated at any time, without the payment of any penalty, upon 60 days' written notice, by the vote of a majority of the outstanding voting shares of the Company or by the vote of the Board or by the Administrator.

No person who is an officer, director or employee of the Adviser or its affiliates and who serves as a director of the Company receives any compensation from the Company for his or her services as a director. However, the Company reimburses the Administrator (or its affiliates) for an allocable portion of the compensation paid by the Administrator (or its affiliates) to the Company's Chief Compliance Officer and Chief Financial Officer and their respective staffs (based on a percentage of time such individuals devote, on an estimated basis, to the business affairs of the Company).

For the years ended December 31, 2022, 2021 and 2020 the Company incurred administrative fees of $0.5 million, $0.5 million, and $0.5 million respectively. As of December 31, 2022 and 2021 such amounts were partially offset against amounts due from the Adviser in connection with the Expense Support and Conditional Reimbursement Agreement (the "Expense Support Agreement"), as described below.

Investment Advisory Agreement

On April 23, 2018, the Company entered into an Investment Advisory Agreement with the Adviser which was amended and restated on November 7, 2018 and further amended on July 9, 2019 (as amended, the "Investment Advisory Agreement"). On August 11, 2022, the Board unanimously approved the renewal of the Investment Advisory Agreement for a period of twelve months commencing on November 7, 2022. The amendments were each approved at the time by the Company's sole stockholder. Under the terms of the Investment Advisory Agreement, the Adviser will be responsible for managing the Company's business and activities, including sourcing investment opportunities, conducting

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research, performing due diligence on potential investments, structuring its investments, monitoring its portfolio companies and providing managerial assistance to portfolio companies.

Under the terms of the Investment Advisory Agreement, the Company will pay the Adviser a base management fee and may also pay to it certain incentive fees.

The base management fee is payable quarterly in arrears at an annual rate of 1.00% (1.50% if an exchange listing occurs) of the Company's average gross assets, excluding cash and cash equivalents but including assets purchased with borrowed amounts, at the end of the two most recently completed calendar quarters. The management fee for any partial month or quarter will be appropriately prorated and adjusted for any share issuances or repurchases during the relevant month or quarter.

On August 20, 2019, the Company entered into a letter agreement (the "Letter Agreement") with the Adviser pursuant to which, for the period ended December 31, 2019, the Adviser waived 50% of the base management fee to be paid by the Company under the Investment Advisory Agreement. The waiver was prorated for any partial month or quarter. Management fees waived are not subject to recoupment by the Adviser.

For the years ended December 31, 2022, 2021 and 2020, the Company incurred management fees of $1.0 million, $1.0 million, and $0.6 million respectively. As of December 31, 2022, such amounts were partially offset against amounts due from the Adviser in connection with the Expense Support Agreement, as described below.

The incentive fee consists of two parts, as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)The first component, the income incentive fee, payable at the end of each quarter in arrears, equals 100% of the pre-incentive fee net investment income in excess of a 1.50% quarterly preferred return but less than 1.76% (1.818% if an exchange listing occurs), the upper level breakpoint, and 15% (17.50% if an exchange listing occurs) of the amount of pre-incentive fee net investment income that exceeds 1.76% (1.818% if an exchange listing occurs) in any calendar quarter. For purposes of determining whether pre-incentive fee net investment income exceeds the hurdle rate, pre-incentive fee net investment income is expressed as a rate of return on the value of the Company's net assets at the end of the immediately preceding calendar quarter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)The second component, the capital gains incentive fee, payable at the end of each calendar year in arrears, equals 15.0% of cumulative realized capital gains from inception through the end of such calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gains incentive fee for prior periods. The Company accrues, but does not pay, a capital gains incentive fee with respect to unrealized capital appreciation because a capital gains incentive fee would be owed to the Adviser if the Company were to sell the relevant investment and realize a capital gain.

For the years ended December 31, 2022, 2021 and 2020, the Company incurred incentive fees of $0.1 million, $0.7 million and $0.3 million respectively.

The Investment Advisory Agreement will be in effect for a period of two years from its effective date and will remain in effect from year-to-year thereafter if approved annually by (i) the vote of the Board, or by the vote of a majority of the outstanding voting securities of the Company, and (ii) the vote of a majority of the Company's Board who are not parties to the Investment Advisory Agreement or "interested persons" of the Company, of the Adviser or of any of their respective affiliates, as defined in the 1940 Act. The Investment Advisory Agreement may be terminated at any time, without the payment of any penalty, upon 60 days' written notice and, in certain circumstances, upon 120 days' written notice, by the vote of a majority of the outstanding voting shares of the Company or by the vote of the Board or by the Adviser.

The Adviser may, from time to time, pay amounts owed by the Company to third-party providers of goods or services, including the Board, and the Company will subsequently reimburse the Adviser for such amounts paid on its behalf. Amounts payable to the Adviser are settled in the normal course of business without formal payment terms. Prior to the Company's commencement of operations, the Adviser and its affiliates have incurred operating expenses on behalf of the Company in the amount of $1.2 million, including audit fees of $0.2 million, legal fees of $0.5 million, professional fees of $22.3 thousand, directors' fees of $0.2 million, insurance of $0.2 million and other expenses of $62.4 thousand. The Company will have no responsibility for such costs until the Adviser submits such costs, or a portion thereof, for reimbursement.

For the period ended December 31, 2019, the Company recognized operating expenses reimbursable to the Adviser of $1.2 million. Amounts incurred by the Adviser subsequent to the Company's commencement of operations were offset against amounts due from the Adviser in connection with the Expense Support Agreement, as described below. For the years ended December 31, 2022 and 2021, the Adviser paid operating expenses on behalf of the Company in the amount of $1.5 million and $1.2 million, respectively. As of December 31, 2022, such amounts were partially offset against amounts due from(to) the Adviser in connection with the Expense Support Agreement, as described below.

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Co-investment Exemptive Relief

As a BDC, the Company is subject to certain regulatory restrictions in making its investments. For example, BDCs generally are not permitted to co-invest with certain affiliated entities in transactions originated by the BDC or its affiliates in the absence of an exemptive order from the SEC. However, BDCs are permitted to, and may, simultaneously co-invest in transactions where price is the only negotiated term. On October 23, 2018, the SEC issued an order granting the Company's application for exemptive relief to co-invest, subject to the satisfaction of certain conditions, in certain private placement transactions, with other funds managed by the Adviser or its affiliates, including BCP Special Opportunities Fund I LP, BCP Special Opportunities Fund II LP, BCP Special Opportunities Fund III LP, Portman Ridge Finance Corporation, Logan Ridge Finance Corporation and any future funds that are advised by the Adviser or its affiliated investment advisers. Under the terms of the exemptive order, in order for the Company to participate in a co-investment transaction a "required majority" (as defined in Section 57(o) of the 1940 Act) of the Company's independent directors must conclude that (i) the terms of the proposed transaction, including the consideration to be paid, are reasonable and fair to the Company and its stockholders and do not involve overreaching with respect of the Company or its stockholders on the part of any person concerned, and (ii) the proposed transaction is consistent with the interests of the Company's stockholders and is consistent with the Company's investment objectives and strategies and certain criteria established by the Board.

Organization and Offering Costs

Under the Investment Advisory Agreement and the Administrative Agreement, the Company, either directly or through reimbursements to the Adviser or its affiliates, is responsible for its organization and portfolio offering costs in an amount up to 1.50% of total capital commitments. Prior to the Company's commencement of operations, the Adviser funded the Company's organization and offering costs in the amount of $1.4 million. The Company will have no responsibility for such costs until the Adviser submits such costs, or a portion thereof, for reimbursement, subject to a cap of 1.50% of the Company's total commitments and provided further that the Adviser or its affiliates may not be reimbursed for payment of excess organization and offering expenses that were incurred more than three years prior to the proposed reimbursement. For the years ended December 31, 2022, 2021 and 2020, the Company accrued organization and offering costs of $0.2 million, $12.0 thousand and $0.2 million respectively.

Amounts due to the Adviser for the expected recoveries of organization, offering and operating expenses incurred on behalf of the Company, and amounts due from the Adviser under the Expense Support Agreement for such amounts are reflected on a net basis in amounts due to/from affiliates on the consolidated statements of assets and liabilities.

Expense Support Agreement

On August 22, 2019, the Company entered into the Expense Support Agreement with the Adviser, the purpose of which is to ensure that no portion of distributions made to the Company's stockholders will be paid from the Company's offering proceeds or borrowings (the "Distribution Objective").

Commencing with the fourth quarter of 2019 and on a quarterly basis thereafter, the Adviser will reimburse the Company for operating expenses in an amount sufficient to meet the Distribution Objective. Any payment so required to be made by the Adviser is referred to herein as an "Expense Payment."

The Adviser's obligation to make an Expense Payment becomes a liability of the Adviser, and the right to such Expense Payment becomes an asset of the Company, no later than the last business day of the applicable calendar quarter. The Expense Payment for any calendar quarter shall, as promptly as possible, be: (i) paid by the Adviser to the Company in any combination of cash or other immediately available funds, and/or (ii) offset against amounts due from the Company to the Adviser.

Pursuant to the Expense Support Agreement, "Available Operating Funds" means the sum of (i) the Company's net investment company taxable income (including net short-term capital gains reduced by net long-term capital losses), (ii) the Company's net capital gains (including the excess of net long-term capital gains over net short-term capital losses), and (iii) distributions paid to or otherwise earned by the Company on account of investments in portfolio companies (to the extent such amounts listed in clause (iii) are not included under clauses (i) and (ii) above.)

Following any calendar quarter in which Available Operating Funds exceed the cumulative distributions paid to the Company's stockholders in such calendar quarter (the amount of such excess being hereinafter referred to as "Excess Operating funds"), the Company shall pay such Excess Operating Funds, or a portion thereof in accordance with the stipulation below, as applicable, to the Adviser until such time as all Expense Payments made by the Adviser to the Company within three years prior to the last business day of such calendar quarter have been reimbursed or waived. Any payments required to be made by the Company pursuant to the preceding sentence are referred to herein as a "Reimbursement Payment."

The amount of the Reimbursement Payment for any calendar quarter will be equal to the lesser of (i) the Excess Operating Funds in such calendar quarter, and (ii) the aggregate amount of all Expense Payments made by the Adviser to the Company within three years prior to the last business day of such calendar quarter that have not been previously reimbursed by the Company to the Adviser.

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The Company's obligation to make a Reimbursement Payment becomes a liability to the Company, and the right to such Reimbursement Payment becomes an asset of the Adviser, no later than the last business day of the applicable calendar quarter. The Reimbursement Payment for any calendar quarter shall, as promptly as possible, be paid by the Company to the Adviser in any combination of cash or other immediately available funds. Any Reimbursement Payments shall be deemed to have reimbursed the Adviser for Expense Payments in chronological order beginning with the oldest Expense Payment eligible for reimbursement.

The Expense Support Agreement may be terminated at any time, without penalty, by the Company or the Adviser, with or without notice. The Expense Support Agreement automatically terminates in the event of (a) the termination by the Company of the Investment Advisory Agreement, or (b) the Board determines to dissolve or liquidate the Company. Upon termination of the Expense Support Agreement, the Company will be required to pay the Adviser an amount equal to all Expense Payments paid by the Adviser to the Company within three years prior to the date of such termination and that have not been previously reimbursed by the Company to the Adviser. Such repayment shall be made to the Adviser no later than 30 days after such date of termination or the date of such event, as applicable.

For the years ended December 31, 2022 and 2021, the gross Expense Payment support by the Adviser to the Company was $0.0 million and $0.2 million, respectively. For the years ended December 31, 2022 and 2021, the gross Expense Reimbursement recoverable by the Adviser from the Company was $0.8 million and $0.5 million, respectively.

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| | | | | |
|:---|:---|:---|:---|:---|
| **Quarter Ended** | **Expense Payment<br>Received from<br>Adviser (1)** | **Reimbursement<br>Payment made to<br>Adviser** | **Unreimbursed<br>Expense Payment (1)** | **Eligible for Reimbursement<br>through (1)** |
| &nbsp;&nbsp;&nbsp;December 31, 2019 | $2165 | $1446 | $719 | &nbsp;&nbsp;&nbsp;December 31, 2022 |
| &nbsp;&nbsp;&nbsp;March 31, 2020 | 346 |  | 346 | &nbsp;&nbsp;&nbsp;March 31, 2023 |
| &nbsp;&nbsp;&nbsp;June 30, 2020 | 752 |  | 752 | &nbsp;&nbsp;&nbsp;June 30, 2023 |
| &nbsp;&nbsp;&nbsp;September 30, 2020 | 68 |  | 68 | &nbsp;&nbsp;&nbsp;September 30, 2023 |
| &nbsp;&nbsp;&nbsp;March 31, 2021 | 217 |  | 217 | &nbsp;&nbsp;&nbsp;March 31, 2024 |
|  | $3548 | $1446 | $2102 |  |

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<sup>(1)</sup> <sup>The actual date that the estimated Expense Payment is eligible for reimbursement will be determined when such Expense Payment is actually made by the Adviser.</sup>

As of December 31, 2022, due to affiliate includes amounts payable for administrative fee, operating expenses reimbursable and reimbursement payment.

Potential Conflicts of Interest

The members of the senior management and investment teams of the Adviser serve or may serve as officers, directors or principals of entities that operate in the same or a related line of business as the Company does, or of investment vehicles managed by the same personnel. In serving in these multiple and other capacities, they may have obligations to other clients or investors in those entities, the fulfillment of which may or may not be in the Company's best interests or in the best interest of the Company's stockholders. The Company's investment objectives may overlap with the investment objectives of such investment funds, accounts or other investment vehicles.

**Note 4. Investments and Fair Value Measurements**

The following table summarizes the composition of the Company's investment portfolio at amortized cost and fair value as of December 31, 2022:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** |
|  | **Amortized** | **Percentage of** | **Fair** | **Percentage of** |
|  | **Cost** | **Portfolio** | **Value** | **Portfolio** |
| Senior Secured Loan | $101025 | 95.2% | $94047 | 93.7% |
| Structured Note | 4073 | 3.8% | 4053 | 4.0% |
| Subordinated Structured Note | 333 | 0.3% | 281 | 0.3% |
| Equity/Other | 725 | 0.7% | 2036 | 2.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $106156 | 100.0% | $100417 | 100.0% |

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The following table summarizes the composition of the Company's investment portfolio at amortized cost and fair value as of December 31, 2021:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
|  | **Amortized** | **Percentage of** | **Fair** | **Percentage of** |
|  | **Cost** | **Portfolio** | **Value** | **Portfolio** |
| Senior Secured Loan | $84454 | 95.0% | $84966 | 94.8% |
| Structured Note | 4073 | 4.6% | 4181 | 4.7% |
| Subordinated Structured Note | 333 | 0.4% | 297 | 0.3% |
| Equity/Other |  | 0.0% | 150 | 0.2% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $88860 | 100.0% | $89594 | 100.0% |

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Generally, under the 1940 Act, the Company would be presumed to "control" a portfolio company if it owned more than 25% of its voting securities or it had the power to exercise control over the management or policies of such portfolio company, and would be an "affiliated person" of a portfolio company if it owned 5% or more of its voting securities. As of December 31, 2022 and December 31, 2021, the Company did not "control" and was not an "affiliated person" of any of its portfolio companies, each as defined in the 1940 Act.

The following tables summarize the industry and geographic composition of the Company's investment portfolio based on amortized cost and fair value as of December 31, 2022:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** |
|  | **Amortized** | **Percentage of** | **Fair** | **Percentage of** |
|  | **Cost** | **Portfolio** | **Value** | **Portfolio** |
| Information Technology | $51202 | 48.2% | $46392 | 46.2% |
| Industrials | 8104 | 7.6% | 7850 | 7.8% |
| Financials | 11080 | 10.4% | 12165 | 12.1% |
| Healthcare | 11591 | 10.9% | 11455 | 11.4% |
| Consumer Staples | 6986 | 6.7% | 6972 | 6.9% |
| Consumer Discretionary | 3274 | 3.1% | 3270 | 3.3% |
| Collateralized Loan Obligation - Debt Class | 4073 | 3.8% | 4053 | 4.0% |
| Gaming | 3738 | 3.5% | 2239 | 2.3% |
| Communication Services | 3813 | 3.6% | 3787 | 3.8% |
| Transportation | 1962 | 1.8% | 1953 | 1.9% |
| Collateralized Loan Obligation - Equity Class | 333 | 0.4% | 281 | 0.3% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $106156 | 100.0% | $100417 | 100.0% |

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** |
|  | **Amortized** | **Percentage of** | **Fair** | **Percentage of** |
|  | **Cost** | **Portfolio** | **Value** | **Portfolio** |
| United States | $101750 | 95.8% | $96083 | 95.7% |
| International | 4406 | 4.2% | 4334 | 4.3% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $106156 | 100.0% | $100417 | 100.0% |

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The following tables summarize the industry and geographic composition of the Company's investment portfolio based on amortized cost and fair value as of December 31, 2021:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
|  | **Amortized** | **Percentage of** | **Fair** | **Percentage of** |
|  | **Cost** | **Portfolio** | **Value** | **Portfolio** |
| Information Technology | $38097 | 42.8% | $38154 | 42.6% |
| Industrials | 10531 | 11.9% | 10630 | 11.9% |
| Financials | 10091 | 11.4% | 10304 | 11.5% |
| Healthcare | 7624 | 8.6% | 7686 | 8.6% |
| Consumer Staples | 4873 | 5.5% | 5031 | 5.6% |
| Consumer Discretionary | 4593 | 5.2% | 4616 | 5.2% |
| Collateralized Loan Obligation - Debt Class | 4073 | 4.6% | 4181 | 4.6% |
| Media | 3937 | 4.4% | 3983 | 4.4% |
| Gaming | 3924 | 4.4% | 3918 | 4.4% |
| Communication Services | 784 | 0.9% | 794 | 0.9% |
| Collateralized Loan Obligation - Equity Class | 333 | 0.3% | 297 | 0.3% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $88860 | 100.0% | $89594 | 100.0% |

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
|  | **Amortized** | **Percentage of** | **Fair** | **Percentage of** |
|  | **Cost** | **Portfolio** | **Value** | **Portfolio** |
| United States | $84454 | 95.0% | $85116 | 95.0% |
| International | 4406 | 5.0% | 4478 | 5.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $88860 | 100.0% | $89594 | 100.0% |

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The following table summarizes the fair value hierarchy of the Company's investment portfolio as of December 31, 2022:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Fair Value Measurements** | **Fair Value Measurements** | **Fair Value Measurements** | **Fair Value Measurements** |
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
| Senior Secured Loan | $— | $17805 | $76242 | $94047 |
| Structured Note |  |  | 4053 | 4053 |
| Subordinated Structured Note |  |  | 281 | 281 |
| Equity/Other |  |  | 2036 | 2036 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $— | $17805 | $82612 | $100417 |
| Forward contracts |  |  | 55 | 55 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $— | $17805 | $82667 | $100472 |

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The following table summarizes the fair value hierarchy of the Company's investment portfolio as of December 31, 2021:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Fair Value Measurements** | **Fair Value Measurements** | **Fair Value Measurements** | **Fair Value Measurements** |
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
| Senior Secured Loan | $— | $16941 | $68025 | $84966 |
| Structured Note |  |  | 4181 | 4181 |
| Subordinated Structured Note |  |  | 297 | 297 |
| Junior Secured Loan |  |  | 150 | 150 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $— | $16941 | $72653 | $89594 |
| Forward contracts |  |  | 53 | 53 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $— | $16941 | $72706 | $89647 |

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The following is a reconciliation of the Company's investment portfolio for which level 3 inputs were used in determining fair value for the year ended December 31, 2022:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Senior Secured<br>Loan** | **Structured<br>Note** | **Subordinated Structured Note** | **Equity/other** | **Total<br>Investments** | **Forward<br>Contracts** |
| Balance as of January 1, 2022 | $68025 | $4181 | $297 | $150 | $72653 | $53 |
| Purchases of investments | 34311 |  |  | 746 | 35057 |  |
| Proceeds from principal repayments and sales of investments | (20920) |  |  | (21) | (20941) |  |
| Payment in-kind interest income | 205 |  |  |  | 205 |  |
| Net accretion of discounts (amortization of premiums) | 234 |  |  |  | 234 |  |
| Net change in unrealized appreciation (depreciation) on investments | (1927) | (128) | (16) | 1161 | (910) | 2 |
| Net realized loss on investments | 37 |  |  |  | 37 |  |
| Transfers into level 3 | 3905 |  |  |  | 3905 |  |
| Transfers out of level 3 | (7628) |  |  |  | (7628) |  |
| Balance as of December 31, 2022 | $76242 | $4053 | $281 | $2036 | $82612 | $55 |
| Net change in unrealized appreciation (depreciation) on Level 3 investments still held | $(1809) | $(128) | $(16) | $1162 | $(791) | $2 |

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The following is a reconciliation of the Company's investment portfolio for which level 3 inputs were used in determining fair value for the year ended December 31, 2021:

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Senior Secured<br>Loan** | **Structured<br>Note** | **Subordinated Structured Note** | **Junior Secured** | **Repurchases<br>Agreement** | **Equity/other** | **Total<br>Investments** | **Forward<br>Contracts** |
| Balance as of January 1, 2021 | $54146 | $1948 | $271 | $990 | $1372 | $— | $58727 | $119 |
| Purchases of investments | 87388 | 9710 |  |  |  |  | 97098 |  |
| Proceeds from principal repayments and sales of investments | (73660) | (7722) |  | (1017) | (1372) |  | (83771) |  |
| Payment in-kind interest income | 242 |  |  |  |  |  | 242 |  |
| Net accretion of discounts (amortization of premiums) | 370 |  |  |  | 2 |  | 372 |  |
| Net change in unrealized appreciation (depreciation) on investments | (6) | 3 | 26 |  | (70) | 150 | 103 | (66) |
| Net realized gain on investments | 1060 | 242 |  | 27 | 68 |  | 1397 |  |
| Transfers into level 3 | 5148 |  |  |  |  |  | 5148 |  |
| Transfers out of level 3 | (6663) |  |  |  |  |  | (6663) |  |
| Balance as of December 31, 2021 | $68025 | $4181 | $297 | $— | $— | $150 | $72653 | $53 |
| Net change in unrealized appreciation (depreciation) on Level 3 investments still held | $35 | $48 | $26 | $— | $— | $150 | $259 | $(66) |

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The valuation techniques and significant unobservable inputs used in the valuation of level 3 investments as of December 31, 2022 were as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
|  |  | **Quantitative Information About Level 3 Fair Value Measurements** | **Quantitative Information About Level 3 Fair Value Measurements** | **Quantitative Information About Level 3 Fair Value Measurements** |
| **Asset Category** | **Fair Value** | **Valuation<br>Technique/<br>Methodology** | **Unobservable<br>Input** | **Range<br>(Weighted<br>Average)** |
| Equity/Other | $2037 | Enterprise Valuation | Average EBITDA Multiple | 10x - 13x (10.6x) |
| Senior Secured Loan | 4880 | Recent Transaction | Transaction Price | 98 - 98 (98) |
| Senior Secured Loan | 71361 | Discounted Cash Flows | Market Yield | 6.2% - 21.0% (9.6%) |
| Structured Note | 4053 | Discounted Cash Flows | Market Yield | 9.3% - 12.2% (12.0%) |
| Subordinated Structured Note | 281 | Discounted Cash Flows | Market Yield | 14.2% - 15.2% (14.7%) |
|  | 82612 |  |  |  |
| Forward Contracts | $55 | Option Pricing Model | Expected Volatility | 1.0% - 2.0% (1.5%) |

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The valuation techniques and significant unobservable inputs used in the valuation of level 3 investments as of December 31, 2021 were as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
|  |  | **Quantitative Information About Level 3 Fair Value Measurements** | **Quantitative Information About Level 3 Fair Value Measurements** | **Quantitative Information About Level 3 Fair Value Measurements** |
| **Asset Category** | **Fair Value** | **Valuation<br>Technique/<br>Methodology** | **Unobservable<br>Input** | **Range<br>(Weighted<br>Average)** |
| Equity/Other | $150 | Enterprise Valuation | Average EBITDA Multiple | 6.3x (6.3x) |
| Senior Secured Loan | 3486 | Recent Transaction | Transaction Price | 92.0 - 99.1 (96.5) |
| Senior Secured Loan | 64539 | Discounted Cash Flows | Market Yield | 6.0% - 15.5% (8.2%) |
| Structured Note | 4181 | Discounted Cash Flows | Market Yield | 7.4% - 11.0% (10.7%) |
| Subordinated Structured Note | 297 | Discounted Cash Flows | Discount Rate | 12.1% - 12.6% (12.4%) |
|  |  |  | Probability of Default | 1.5% - 2.0% (1.8%) |
|  |  |  | Loss Severity | 25% - 35% (30%) |
|  |  |  | Recovery Rate | 65% - 75% (70%) |
|  |  |  | Prepayment Rate | 15.0% - 25.0% (20.0%) |
|  | $72653 |  |  |  |
| Forward Contracts | $53 | Option Pricing Model | Expected Volatility | 2.0% - 4.0% (3.0%) |

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The Company considers the par amounts at December 31, 2022 to be representative of the volume of its derivative activities during the year ended December 31, 2022.

As of December 31, 2022, the Company's open forward contracts were as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| **Security** | **Counterparty** | **Settlement Date** | **Par** | **Unrealized Appreciation** |
| Halsey Point CLO II Ltd., Class Subordinated Notes | Advantage Capital Holdings, LLC | 7/20/2031 | 333 | $55 |
|  |  |  |  | $**55** |

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The Company may sell any of the referenced securities in whole or in part to any third-party prior to the settlement date of the forward contracts without consent of the counterparty. Upon such sale to a third-party, the Company and counterparty shall have no further obligations in respect of that specific amount of referenced security sold.

The following table identifies the fair value amount of the forward contracts included on the consolidated statement of assets and liabilities at December 31, 2022. The following table also identifies the realized and unrealized gain and loss amounts included on the consolidated statement of operations for the year ended December 31, 2022.

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| | | | | |
|:---|:---|:---|:---|:---|
| **Type of Contract** | **Derivative <br>Assets** | **Derivative <br>Liabilities** | **Realized <br>Gain (Loss)** | **Unrealized Appreciation** |
| Forward contracts - credit risk | $55 | $— | $— | $2 |
|  | $55 | $— | $— | $2 |

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**Note 5. Borrowings**

In accordance with the 1940 Act, with certain limitations, the Company is allowed to borrow amounts such that its asset coverage, as defined in the 1940 Act, is at least 200% (or 150% if certain conditions are met) after such borrowing. Our Board and initial stockholder have approved our ability to utilize the increased leverage limit, which requires asset coverage of at least 150%. As of December 31, 2022 and December 31, 2021, the Company's asset coverage was 184.1% and 179.6%, respectively.

On December 16, 2019, the Company, through BCPL Funding, entered into a debt financing facility with UBS AG, London Branch ("UBS"), pursuant to which up to $50.0 million will be made available to the Company (the "Facility"). On March 12, 2021, the Facility was amended (the "Second A&R Facility"), pursuant to which the amount made available to the Company was increased from $50.0 million to $75.0 million.

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Pursuant to the Facility, the Company sold certain loans in its portfolio to BCPL Funding (the "Initial Loans"), in consideration for certain Class A Notes (the "Class A Notes") issued by BCPL Funding. The Initial Loans secure the obligations of BCPL Funding under the Class A Notes, issued pursuant to an indenture between BCPL Funding and U.S. Bank National Association, as trustee (the "Indenture"). On March 12, 2021, in connection with the Second A&R Facility, BCPL Funding entered into a Supplemental Indenture with the trustee (the "Second A&R Indenture"). The Second A&R Indenture expands the asset eligibility criteria and allows for the issuance of additional Class A Notes. Pursuant to the Second A&R Indenture, BCPL Funding issued additional Class A Notes which were purchased by the Company pursuant to a Subscription Agreement between the Company and BCPL Funding, dated as of March 12, 2021. The obligations of BCPL Funding under the additional Class A Notes are secured by the Portfolio Assets to be sold by the Company to BCPL Funding from time to time pursuant to the A&R Issuer Sale and Contribution Agreement. Principal on the Class A Notes will be due and payable at maturity on December 18, 2029. The Class A Notes do not provide for interest payments. The Indenture contains events of default customary for similar transactions, including: (a) the failure to make principal payments on the Class A Notes at their stated maturity or redemption date or to make payments with respect to expenses due under the Indenture within three business days of when due; (b) an event of default occurs under the Repurchase Agreement (defined below); and (c) BCPL Funding is required to register as an investment company under the 1940 Act.

In connection with the Second A&R Facility, the Company entered into a Second Amended and Restated Confirmation with UBS, dated as of March 12, 2021, and amended and restated as of April 8, 2022 and October 11, 2022 (the "Fourth A&R Confirmation"). The Fourth A&R Confirmation is in respect of a repurchase transaction with UBS, which supplements, forms part of, and is subject to the SIFMA/ICMA Global Master Repurchase Agreement (2011 version), dated as of December 12, 2019 and amended on August 14, 2020 (including any annexes thereto, the "GMRA," and such GMRA, as supplemented and evidenced by the Fourth A&R Confirmation, the "Repurchase Agreement"). Pursuant to the Repurchase Agreement, UBS purchased the Class A Notes held by the Company for an initial purchase price of $20.0 million, which price may increase from time to time up to a maximum aggregate purchase price of $75.0 million, in connection with the purchase by UBS of the increased funded outstanding principal amount of the Class A Notes held by the Company. Such increases in the purchase price under the Repurchase Agreement are conditioned upon the satisfaction of certain criteria with respect to the characteristics and total value of the Portfolio Assets held by BCPL Funding, and composition of the Portfolio Assets, in each case as set forth in the Second A&R Indenture, among others, which criteria are customary for similar transactions. The scheduled Repurchase Date under the Fourth A&R Confirmation is December 19, 2023. The financing fee under the Facility is equal to Term SOFR plus a spread of 2.91161% per year for the relevant period. Pursuant to the Repurchase Agreement, the Company has made certain representations and warranties and is required to comply with various covenants, reporting requirements and other requirements customary for similar transactions. In addition to customary events of default included in similar transactions, the Repurchase Agreement also contains the following events of default, among others: (a) the failure to pay the repurchase price upon the applicable payment dates; (b) the failure to make a voluntary contribution of cash to BCPL Funding if the settlement for the commitment the Company made for the voluntary contribution of Portfolio Assets under the Contribution Agreement does not occur, each within the periods as set forth in the Repurchase Agreement, caused by negative changes in the value or composition of the Portfolio Assets that result in a failure to satisfy the criteria with respect thereto set forth in the Indenture; (c) the occurrence of an act by the Company that constitutes fraud or criminal negligence in respect of its investment activity pursuant to the Collateral Management Agreement; and (d) any officer or employee of the Company who has direct responsibility for the management of the Portfolio Assets is indicted for any act constituting fraud or criminal negligence in respect of investment activity and such person fails to be removed from such person's managing the Portfolio Assets within the period as set forth in the Collateral Management Agreement.

On October 11, 2022, Company entered into a Fourth Amended and Restated Confirmation with UBS, (the "Fourth A&R Confirmation"), which supplements and is subject to the SIFMA/ICMA Global Master Repurchase Agreement (2011 version), dated as of December 12, 2019, between the Company and UBS (including any annexes thereto, the "GMRA", and such GMRA, together with the Fourth A&R Confirmation, the "Fourth A&R Repurchase Agreement"), to amend the Third Amended and Restated Confirmation, dated as of April 8, 2022. Pursuant to the Third Repurchase Agreement, the Company could sell certain Class A Notes, dated as of December 18, 2019, for up to a maximum aggregate purchase price of $75,000,000. Pursuant to the Fourth A&R Repurchase Agreement, the maximum aggregate purchase price was decreased to $55,000,000 and includes an option for the Company to increase such maximum aggregate purchase price to $75,000,000. The other material commercial terms of the Third Confirmation, including the repurchase date, pricing rate and spread, remain unchanged.

The Company had provided a make-whole guarantee to the lender in the event that the pledged assets were insufficient to satisfy the repayment of the Facility.

Debt obligations consisted of the following as of December 31, 2022:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** |
|  | **Total<br>Aggregate<br>Borrowing<br>Capacity** | **Total<br>Principal<br>Outstanding** | **Less<br>Deferred<br>Financing<br>Costs** | **Amount per<br>Consolidated<br>Statements of<br>Assets and<br>Liabilities** |
| Credit Facility | $75000 | $58000 | $(772) | $57228 |
| **Total Debt** | $75000 | $58000 | $(772) | $57228 |

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Debt obligations consisted of the following as of December 31, 2021:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
|  | **Total<br>Aggregate<br>Borrowing<br>Capacity** | **Total<br>Principal<br>Outstanding** | **Less<br>Deferred<br>Financing<br>Costs** | **Amount per<br>Consolidated<br>Statements of<br>Assets and<br>Liabilities** |
| Credit Facility | $75000 | $55000 | $(882) | $54118 |
| **Total Debt** | $75000 | $55000 | $(882) | $54118 |

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Due to the short-term nature of the Facility, the outstanding principal balance approximates fair value. The fair value of the Facility would be categorized as Level 3.

For the years ended December 31, 2022, 2021 and 2020 the components of interest expense were as follows:

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| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2022** | **2021** | **2020** |
| Interest expense | $2503 | $1528 | $931 |
| Amortization of deferred financing and debt issuance costs | 110 | 104 | 82 |
| **Total Interest Expense** | $2613 | $1632 | $1013 |
| Average debt outstanding | 55148 | 53669 | 26357 |
| Weighted average interest rate | 4.7% | 2.8% | 3.5% |

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**Note 6. Share Transactions**

The Company is authorized to issue 1,000,000,000 shares of common stock at $0.001 par value per share.

On April 10, 2018, the Company issued 4,000 shares of common stock to an affiliate of the Adviser for aggregate proceeds of $100,000.

The Company has entered into subscription agreements (the "Subscription Agreements") with investors, including the Adviser and its affiliates, providing for the private placement of shares of the Company's common stock. Under the terms of the Subscription Agreements, investors are required to fund drawdowns to purchase shares of the Company's common stock up to the amount of their respective capital commitment on an as-needed basis each time the Company delivers a drawdown notice to its investors with a minimum of 10 business days prior notice. As of December 31, 2022 and December 31, 2021, the Company had received capital commitments totaling $47.4 million and $41.8 million, respectively.

The following tables summarizes the total shares issued and proceeds received related to capital drawdowns delivered pursuant to the Subscription Agreements during the years ended December 31, 2022 and 2021:

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| | | | |
|:---|:---|:---|:---|
| **Capital Drawdown Notice Date** | **Common Share<br>Issuance Date** | **Number of<br>Common<br>Shares Issued** | **Aggregate<br>Offering Price** |
| March 16, 2022 | March 30, 2022 | 91677 | $2280 |
| April 19, 2022 | May 6, 2022 | 16000 | 400 |
| June 17, 2022 | July 1, 2022 | 103821 | 2500 |
| November 23, 2022 | November 29, 2022 | 225592 | 5051 |
| **Total** |  | 437090 | $10231 |

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| | | | |
|:---|:---|:---|:---|
| **Capital Drawdown Notice Date** | **Common Share<br>Issuance Date** | **Number of<br>Common<br>Shares Issued** | **Aggregate<br>Offering Price** |
| June 11, 2021 | June 25, 2021 | 61738 | $1620 |
| **Total** |  | 61738 | $1620 |

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Distributions

The Company may fund its cash distributions to stockholders from any sources of funds available to it, including offering proceeds, borrowings, net investment income from operations, capital gains proceeds from the sale of assets, non-capital gains proceeds from the sale of assets, distributions paid to the Company on account of preferred and common equity investments in portfolio companies and expense reimbursements from the Adviser, which are subject to recoupment. The Company has not established limits on the amount of funds it may use from available sources to make distributions. During certain periods, the Company's distributions may exceed its taxable earnings. As a result, it

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is possible that a portion of the distributions the Company makes may represent a return of capital. A return of capital generally is a return of a stockholder's investment rather than a return of earnings or gains derived from the Company's investment activities.

The following tables summarizes the distribution declarations for the years ended December 31, 2022 and 2021:

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| | | | | |
|:---|:---|:---|:---|:---|
| **Date Declared** | **Record Date** | **Payment Date** | **Amount<br>Per Share** | **Distributions<br>Declared** |
| March 14, 2022 | March 22, 2022 | March 29, 2022 | $0.31 | $546 |
| May 9, 2022 | May 27, 2022 | June 3, 2022 | 0.31 | 582 |
| August 11, 2022 | August 19, 2022 | September 8, 2022 | 0.31 | 616 |
| November 8, 2022 | November 21, 2022 | December 7, 2022 | 0.31 | 619 |
| **Total distributions declared** |  |  | $1.24 | $2363 |

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| | | | | |
|:---|:---|:---|:---|:---|
| **Date Declared** | **Record Date** | **Payment Date** | **Amount<br>Per Share** | **Distributions<br>Declared** |
| March 11, 2021 | March 15, 2021 | March 22, 2021 | $0.31 | $516 |
| May 6, 2021 | May 20, 2021 | June 17, 2021 | 0.31 | 535 |
| August 4, 2021 | August 16, 2021 | September 16, 2021 | 0.31 | 537 |
| November 3, 2021 | November 16, 2021 | December 16, 2021 | 0.31 | 539 |
| December 27, 2021 | December 31, 2021 | January 27, 2022 | 1.10 | 1918 |
| **Total distributions declared** |  |  | $2.34 | $4045 |

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With respect to distributions, we have adopted an "opt out" dividend reinvestment plan ("DRP") for common stockholders. As a result, in the event of a declared distribution, each shareholder that has not "opted out" of the DRP will have their distributions automatically reinvested in additional shares of our common stock rather than receiving cash distributions. Shareholders who receive distributions in the form of shares of common stock will be subject to the same U.S. federal, state and local tax consequences as if they received cash distributions.

The following tables reflect the common stock issued pursuant to the dividend reinvestment plan during the years ended ended December 31, 2022 and 2021:

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| | | | |
|:---|:---|:---|:---|
| **Date Declared** | **Record Date** | **Payment Date** | **Shares** |
| December 27, 2021 | December 31, 2021 | January 27, 2022 | 19884 |
| March 14, 2022 | March 22, 2022 | March 29, 2022 | 6190 |
| May 9, 2022 | May 27, 2022 | June 3, 2022 | 7685 |
| August 11, 2022 | August 19, 2022 | September 8, 2022 | 8765 |
| November 8, 2022 | November 21, 2022 | December 7, 2022 | 9127 |
| **Total shares issued** |  |  | 51651 |

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| | | | |
|:---|:---|:---|:---|
| **Date Declared** | **Record Date** | **Payment Date** | **Shares** |
| December 11, 2020 | December 28, 2020 | January 29, 2021 | 6653 |
| March 11, 2021 | March 15, 2021 | March 22, 2021 | 5677 |
| May 6, 2021 | May 20, 2021 | June 17, 2021 | 5485 |
| August 4, 2021 | August 16, 2021 | September 16, 2021 | 5503 |
| November 3, 2021 | November 16, 2021 | December 16, 2021 | 5538 |
| **Total shares issued** |  |  | 28856 |

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**Note 7. Income Tax**

Taxable income generally differs from increase in net assets from operations due to temporary and permanent differences in the recognition of income and expenses, and generally excludes net unrealized gains or losses, as unrealized gains and losses are generally not included in taxable income until they are realized.

The Company may make adjustments to certain components of net assets to reflect permanent differences between financial and tax reporting, which may include differences in book and tax basis of certain assets and liabilities and nondeductible federal taxes or losses, among other items. These reclassifications have no effect on net assets or results of operations. For the years ended December 31, 2022, 2021 and 2020, there were no adjustments made.

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The following table reconciles increase in net assets resulting from operations for the years ended December 31, 2022, 2021 and 2020, to undistributed taxable income at December 31, 2022, 2021 and 2020:

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| | | | |
|:---|:---|:---|:---|
|  | **2022** | **2021** | **2020** |
| Increase in net assets resulting from operations | $(4144) | $4332 | $2584 |
| Adjustments: |  |  |  |
| &nbsp;&nbsp;&nbsp;Net change in unrealized depreciation (appreciation) on investments | 6471 | (125) | (582) |
| &nbsp;&nbsp;&nbsp;Other expenses not currently deductible | (7) | (113) | 145 |
| &nbsp;&nbsp;&nbsp;Other book-tax differences | (2) | (6) | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Taxable Income** | $2318 | $4088 | $2155 |

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The tax character of distributions paid during the years ended December 31, 2022, 2021 and 2020 was as follows:

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| | | | |
|:---|:---|:---|:---|
|  | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
|  | **2022** | **2021** | **2020** |
| Ordinary Income | $2317 | $3555 | $2163 |
| Capital Gain | 47 | 490 |  |
| **Total** | $2364 | $4045 | $2163 |

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As of December 31, 2022 and 2021, the components of distributable earnings on a tax basis were as follows:

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| | | |
|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2021** |
| Undistributed net investment income | $2 | $— |
| Undistributed net realized gain |  | 47 |
| Other expenses not currently deductible | 193 | (32) |
| Net change in unrealized appreciation on investments and derivatives | (5683) | 785 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total distributable earnings** | $(5488) | $800 |

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As of December 31, 2022, the tax cost of the Company's investments approximates their amortized cost and net unrealized appreciation of U.S. federal income tax purposes was $106,156 and $(5,683) (gross unrealized appreciation of $1,766; gross unrealized depreciation of $(7,449). As of December 31, 2021, the tax cost of the Company's investments approximates their amortized cost and net unrealized appreciation of U.S. federal income tax purposes was $88,863 and $785 (gross unrealized appreciation of $1,205; gross unrealized depreciation of $(420).

**Note 8. Earnings Per Share**

The following table sets forth the computation of basic and diluted earnings per common stock for the three and years ended ended December 31, 2022 and 2021:

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| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2022** | **2021** | **2020** |
| Increase (decrease) in net assets resulting from operations per share - basic and diluted | $(4144) | $4332 | $2584 |
| Weighted average shares of common stock outstanding - basic and diluted | 1926620 | 1710840 | 1266059 |
| Net increase (decrease) in net assets resulting from operations per share - basic and diluted | $(2.15) | $2.53 | $2.04 |

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**Note 9. Financial Highlights**

The following is a schedule of financial highlights for the years ended December 31, 2022, 2021, 2020 and 2019:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31, 2022** | **For the Year Ended December 31, 2021** | **For the Year Ended December 31, 2020** | **For the Period from October 2, 2019 <br>(Commencement of Operations)<br> to December 31, 2019** |
| **Per share data:** |  |  |  |  |
| Net asset value, beginning of period | $25.10 | $24.88 | $25.11 | $25.00 |
| Results of operations: |  |  |  |  |
| &nbsp;&nbsp;Net investment income (1) | 1.32 | 1.24 | 1.03 | 0.01 |
| &nbsp;&nbsp;Net realized and unrealized gain (loss) (6) | (3.33) | 1.32 | 0.35 | 0.13 |
| Net increase (decrease) in net assets resulting from operations (1) | (2.01) | 2.56 | 1.38 | 0.14 |
| Stockholder distributions: (2) |  |  |  |  |
| &nbsp;&nbsp;Distributions from net investment income | (1.24) | (2.34) | (1.61) | (0.01) |
| Net decrease in net assets resulting from stockholder distributions | (1.24) | (2.34) | (1.61) | (0.01) |
| Net asset value, end of period (7) | $21.85 | $25.10 | $24.88 | $25.11 |
| Shares outstanding, end of period | 2232134 | 1743393 | 1652799 | 846633 |
| Total return based on net asset value (3) | -4.5% | 7.4% | 4.2% | 0.5% |
| **Ratio/Supplemental Data:** |  |  |  |  |
| Net assets, end of period | $48772 | $43765 | $41119 | $21255 |
| Ratio of net investment income to average net assets (4) | 5.3% | 4.9% | 4.1% | 0.2% |
| Ratio of total expenses to average net assets (4) | 12.4% | 12.3% | 12.4% | 30.1% |
| Ratio of net expenses to average net assets (4) | 14.1% | 12.9% | 9.1% | 5.0% |
| Average debt outstanding | $55148 | $53669 | $26357 | $3043 |
| Portfolio turnover | 31.7% | 131.5% | 83.9% | 9.8% |
| Total amount of senior securities outstanding | $58000 | $55000 | $50000 | $20000 |
| Asset coverage per unit (5) | $1841 | $1796 | $1822 | $2063 |
| Total committed capital, end of period | $51990 | $41759 | $40439 | $27214 |
| Ratio of total contributed capital to total committed capital, end of period | 100.0% | 100.0% | 99.3% | 77.8% |

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(1)The per share data was derived by using the weighted average shares outstanding during the period.

(2)The per share data for distributions reflects the actual amount of distributions paid during the period.

(3)Total return based on net asset value is calculated as the change in net asset value per share during the period, assuming dividends and distributions, if any, are reinvested in accordance with the Company's dividend reinvestment plan divided by the beginning net asset value per share. Total return is not annualized.

(4)The computation of average net assets during the period is based on averaging net assets for the period reported. Ratio, excluding incentive fees, and nonrecurring expenses, such as organization and offering costs, is annualized.

(5)Asset coverage per unit is the ratio of the carrying value of the Company's consolidated total assets, less liabilities and indebtedness not represented by senior securities, to the aggregate amount of senior securities representing indebtedness. Asset coverage per unit is expressed in terms of dollar amounts per $1,000 of indebtedness and is calculated on a consolidated basis.

(6)The amount shown at this caption is the balancing figure derived from the other figures in the schedule. The amount shown at this caption is derived from total change in net asset value during the period and differs from the amount calculated using average shares because of the timing of issuances of the Company's shares in relation to changes in net asset value during the period.

(7)Represents the impact of different share amounts used in calculating per share data as a result of calculating certain per share data based on weighted average shares outstanding during the year or period and certain per share data on shares outstanding as of a year or period end or transaction date.

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**Note 10. Selected Quarterly Financial Data (unaudited)**

The following is the quarterly results of operations for the years ended December 31, 2022, 2021 and 2020:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Quarter Ended** | **For the Quarter Ended** | **For the Quarter Ended** | **For the Quarter Ended** |
|  | **December 31,<br>2022** | **September 30,<br>2022** | **June 30,<br>2022** | **March 31,<br>2022** |
| Investment income | $3108 | $2417 | $1890 | $1858 |
| Net expenses | 2329 | 1795 | 1306 | 1300 |
| Net investment income | 779 | 622 | 584 | 558 |
| Net realized and unrealized gain (loss) | (3282) | (1264) | (1734) | (407) |
| Net increase in net assets resulting from operations | (2503) | (642) | (1150) | 151 |
| Net asset value per share as of the end of the quarter | $21.85 | $23.35 | $23.97 | $24.89 |
| Net investment income per share | $0.37 | $0.31 | $0.31 | $0.32 |
| Net increase in net assets resulting from operations per share | $(1.20) | $(0.32) | $(0.61) | $0.09 |

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Quarter Ended** | **For the Quarter Ended** | **For the Quarter Ended** | **For the Quarter Ended** |
|  | **December 31,<br>2021** | **September 30,<br>2021** | **June 30,<br>2021** | **March 31,<br>2021** |
| Investment income | $1954 | $2077 | $2056 | $1663 |
| Net expenses | 1417 | 1539 | 1520 | 1148 |
| Net investment income | 537 | 538 | 536 | 515 |
| Net realized and unrealized gain (loss) | (205) | 263 | 356 | 1792 |
| Net increase in net assets resulting from operations | 332 | 801 | 892 | 2037 |
| Net asset value per share as of the end of the quarter | $25.10 | $26.32 | $26.17 | $25.95 |
| Net investment income per share | $0.31 | $0.31 | $0.31 | $0.32 |
| Net increase in net assets resulting from operations per share | $0.19 | $0.46 | $0.52 | $1.39 |

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Quarter Ended** | **For the Quarter Ended** | **For the Quarter Ended** | **For the Quarter Ended** |
|  | **December 31,<br>2020** | **September 30,<br>2020** | **June 30,<br>2020** | **March 31,<br>2020** |
| Investment income | $1424 | $1174 | $928 | $701 |
| Net expenses | 1158 | 747 | 574 | 438 |
| Net investment income | 266 | 427 | 354 | 263 |
| Net realized and unrealized gain (loss) | 704 | 876 | 915 | (1221) |
| Net increase (decrease) in net assets resulting from operations | 970 | 1303 | 1269 | (958) |
| Net asset value per share as of the end of the quarter | $24.88 | $24.97 | $24.34 | $23.56 |
| Net investment income per share | $0.16 | $0.31 | $0.31 | $0.31 |
| Net increase (decrease) in net assets resulting from operations per share | $0.59 | $0.93 | $1.10 | $(1.11) |

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**Note 11. Commitments and Contingencies**

The Company enters into contracts that contain a variety of indemnification provisions. The Company's maximum exposure under these arrangements is unknown; however, the Company has not had prior claims or losses pursuant to these contracts. The Adviser has reviewed the Company's existing contracts and expects the risk of loss to the Company to be remote.

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From time to time, the Company may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of the Company's rights under contracts with its portfolio companies. As of December 31, 2022, the Company is not aware of any pending or threatened litigation.

The Adviser and its affiliates have incurred organization and offering costs and operating expenses on behalf of the Company in the amount of approximately $1.4 million and $1.2 million, respectively, from December 22, 2017 (inception) to October 2, 2019 (commencement of operations). The Company will have no responsibility for any organization and offering costs, nor operating expenses funded by the Adviser prior to the commencement of operations until the Adviser submits such costs, or a portion thereof, for reimbursement, subject to a cap of 1.50% of the Company's total commitments for organization and offering costs and provided further that the Adviser or its affiliates may not be reimbursed for payment of excess organization and offering expenses that were incurred more than three years prior to the proposed reimbursement. For the period from October 2, 2019 (commencement of operations) through December 31, 2022, the Company accrued organization and offering costs of $0.8 million and recognized operating expenses funded by the Adviser prior to the Company's commencement of operations of $1.2 million.

See Note 3 for a discussion of the Company's conditional reimbursement to the Adviser under the Expense Support Agreement.

The Company may, from time to time, enter into commitments to fund investments. As of December 31, 2022 and December 31, 2021, the Company had the following outstanding commitments to fund investments in current portfolio companies:

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| | | | |
|:---|:---|:---|:---|
| **Portfolio Company** | **Investment** | **December 31, 2022** | **December 31, 2021** |
| Accordion Partners | Senior Secured Loan | $— | $800 |
| AMCP PET HOLDINGS, INC. | Senior Secured Loan |  | 1163 |
| Beta Plus Technologies, Inc | Senior Secured Loan | 525 |  |
| Critical Nurse Staffing DD T/L | Senior Secured Loan | 258 | 258 |
| Datalink, LLC | Senior Secured Loan |  | 600 |
| Premier Imaging DD T/L (LucidHealth) | Senior Secured Loan | 64 | 90 |
| **Total Unfunded Portfolio Company Commitments** | **Total Unfunded Portfolio Company Commitments** | $847 | $2911 |

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The Company maintains sufficient capacity to cover outstanding unfunded portfolio company commitments that the Company may be required to fund.

**Note 12. Senior Securities Asset Coverage**

Information about the Company's senior securities is shown in the table below for the years ended December 31, 2022, 2021 and 2020:

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| | | | | |
|:---|:---|:---|:---|:---|
| **Class and Year** | **Total Amount<br>Outstanding(1)** | **Asset<br>Coverage<br>Per Unit(2)** | **Involuntary<br>Liquidating<br>Preference<br>Per Unit(3)** | **Average<br>Market<br>Value<br>Per Unit(4)** |
| **Credit Facility** | **Credit Facility** | **Credit Facility** | **Credit Facility** | **Credit Facility** |
| December 31, 2022 | $58000 | 1841 |  | N/A |
| December 31, 2021 | $55000 | 1796 |  | N/A |
| December 31, 2020 | 50000 | 1822 |  | N/A |

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(1)Total amount of each class of senior securities outstanding at the end of the year or period presented.

(2)Asset coverage per unit is the ratio of the carrying value of the Company's consolidated total assets, less all liabilities excluding indebtedness represented by senior securities in this table, to the aggregate amount of senior securities representing indebtedness. Asset coverage per unit is expressed in terms of dollar amounts per $1,000 of indebtedness and is calculated on a consolidated basis.

(3)The amount to which such class of senior security would be entitled upon our involuntary liquidation in preference to any security junior to it. The "—" in this column indicates information that the SEC expressly does not require to be disclosed for certain types of senior securities.

(4)Not applicable because the senior securities are not registered for public trading.

**Note 13. Subsequent Events**

The Company has evaluated subsequent events through the date of filing of this Annual Report on Form 10-K, and determined that there have been no events that have occurred that would require adjustments to our disclosures in the consolidated financial statements, except as discussed below.

On March 6, 2023, the Board declared a quarterly distribution of $0.31 per share for stockholders of record as of March 20, 2023, payable on March 31, 2023. We currently intend to distribute distributions or make distributions to our stockholders on a quarterly basis out of assets legally available for distribution, as determined by our Board in its discretion.1

On March 3, 2023, the Company delivered an investor capital drawdown notice relating to the issuance of 519,187 shares of the Company's common stock, par value $0.001 per share, for an aggregate offering price of $11.5 million. The shares were issued on March 8, 2023.

------

**Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.**

None.

**Item 9A. Controls and Procedures.**

**Management's annual report on internal control over financial reporting.**

Evaluation of disclosure controls and procedures

As required by Rule 13a-15(b) under the 1934 Act, we evaluated, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the 1934 Act) as of December 31, 2022. Based on the foregoing evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of December 31, 2022, our disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level that we would meet our disclosure obligations.

Management's annual report on internal control over financial reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act). Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 COSO Framework). Based on our evaluation under the framework in Internal Control—Integrated Framework, management concluded that our internal control over financial reporting was effective as of December 31, 2022.

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

**Attestation report of the registered public accounting firm.**

The rules of the SEC do not require, and this Annual Report does not include, an attestation report of our independent registered public accounting regarding internal control over financial reporting.

**Changes in internal control over financial reporting.**

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) under the 1934 Act) that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**Item 9B. Other Information.**

None.

**Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.**

Not Applicable.

------

**PART III**

**Item 10. Directors, Executive Officers and Corporate Governance.**

The information required by Item 10 is hereby incorporated by reference from our definitive Proxy Statement relating to our 2023 Annual Meeting of Stockholders, to be filed with the SEC within 120 days following the end of our fiscal year ended December 31, 2022.

**Item 11. Executive Compensation.**

The information required by Item 11 is hereby incorporated by reference from our definitive Proxy Statement relating to our 2023 Annual Meeting of Stockholders, to be filed with the SEC within 120 days following the end of our fiscal year ended December 31, 2022.

**Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.**

The information required by Item 12 is hereby incorporated by reference from our definitive Proxy Statement relating to our 2023 Annual Meeting of Stockholders, to be filed with the SEC within 120 days following the end of our fiscal year ended December 31, 2022.

**Item 13. Certain Relationships and Related Transactions, and Director Independence.**

The information required by Item 13 is hereby incorporated by reference from our definitive Proxy Statement relating to our 2023 Annual Meeting of Stockholders, to be filed with the SEC within 120 days following the end of our fiscal year ended December 31, 2022.

**Item 14. Principal Accountant Fees and Services.**

The information required by Item 14 is hereby incorporated by reference from our definitive Proxy Statement relating to our 2023 Annual Meeting of Stockholders, to be filed with the SEC within 120 days following the end of our fiscal year ended December 31, 2022.

------

**PART IV**

**Item 15. Exhibits, Consolidated Financial Statement Schedules.**

The following documents are filed as part of this Annual Report:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Consolidated Financial Statements – Consolidated Financial statements are included in Item 8. See the Index to the Consolidated Financial Statements on page F-1 of this Annual Report on Form 10-K.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Consolidated Financial Statement Schedules – None. We have omitted consolidated financial statement schedules because they are not required or are not applicable, or the required information is shown in the consolidated financial statements or notes to the consolidated financial statements included in this Annual Report on Form 10-K.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Exhibits – The following is a list of all exhibits filed as part of this Annual Report on Form 10-K, including those incorporated by reference.

The following exhibits are filed as part of this report or hereby incorporated by reference to exhibits previously filed with the SEC (and are numbered in accordance with Item 601 of Regulation S-K):

---

| | |
|:---|:---|
| **Exhibit**<br>**Number** | **Description of Document** |
| &nbsp;&nbsp;&nbsp;&nbsp;3.1 | [<u>Articles of Amendment and Restatement (incorporated by reference to Exhibit 3.1 to Amendment No. 1 to Form 10 filed on April 23, 2018)</u>](https://www.sec.gov/Archives/edgar/data/1726548/000119312518126964/d528317dex31.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;3.2 | [<u>Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to Amendment No. 1 to Form 10 filed on April 23, 2018)</u>](https://www.sec.gov/Archives/edgar/data/1726548/000119312518126964/d528317dex32.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;4.1 | [<u>Form of Subscription Agreement (incorporated by reference to Exhibit 4.1 to the annual report on Form 10-K for the fiscal year ended December 31, 2019)</u>](https://www.sec.gov/Archives/edgar/data/1726548/000156459020009003/bcpl-ex41_283.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;4.2 | [<u>Description of Capital Stock (incorporated by reference to Exhibit 4.2 to the annual report on Form 10-K for the fiscal year ended December 31, 2019)</u>](https://www.sec.gov/Archives/edgar/data/1726548/000156459020009003/bcpl-ex42_279.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;4.3 | [<u>Indenture, dated as of December 16, 2019, by and between Great Lakes BCPL Funding Ltd. And U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.3 to the annual report on Form 10-K for the fiscal year ended December 31, 2019)</u>](https://www.sec.gov/Archives/edgar/data/1726548/000156459020009003/bcpl-ex43_147.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;4.4 | [<u>Rule 144A Global Class A Notes and Regulation S Global Class A Notes (incorporated by reference to Exhibit 4.4 to the annual report on Form 10-K for the fiscal year ended December 31, 2019)</u>](https://www.sec.gov/Archives/edgar/data/1726548/000156459020009003/bcpl-ex44_281.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;4.5  | [<u>Supplemental Indenture dated as of March 12, 2021, by and among Great Lakes BCPL Funding Ltd. and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 the current report on Form 8-K filed on March 16, 2021)</u>](https://www.sec.gov/Archives/edgar/data/1726548/000119312521083014/d103734dex41.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;4.6 | [<u>Second Amended and Restated Indenture, dated as of March 12, 2021, between Great Lakes BCPL Funding Ltd. and U.S. Bank National Association (incorporated by reference to Exhibit 4.2 the current report on Form 8-K filed on March 16, 2021)</u>](https://www.sec.gov/Archives/edgar/data/1726548/000119312521083014/d103734dex42.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;4.7 | [<u>Exhibits to Second Amended and Restated Indenture, dated as of March 12, 2021, between Great Lakes BCPL Funding Ltd. and U.S. Bank National Association (incorporated by reference to Exhibit 4.3 the current report on Form 8-K filed on March 16, 2021)</u>](https://www.sec.gov/Archives/edgar/data/1726548/000119312521083014/d103734dex43.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;4.8 | [<u>Rule 144A Global Note Representing Class A Notes Due 2029 (incorporated by reference to Exhibit 4.4 the current report on Form 8-K filed on March 16, 2021)</u>](https://www.sec.gov/Archives/edgar/data/1726548/000119312521083014/d103734dex44.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;4.9 | [<u>Regulation S Global Note Representing Class A Notes Due 2029 (incorporated by reference to Exhibit 4.5 the current report on Form 8-K filed on March 16, 2021)</u>](https://www.sec.gov/Archives/edgar/data/1726548/000119312521083014/d103734dex45.htm) |
| 10.1 | [<u>Amended and Restated Investment Advisory Agreement by and between BC Partners Lending Corporation and BC Partners Advisors L.P., dated November 7, 2018 (incorporated by reference to Exhibit 10.1 to the quarterly report on Form 10-Q for the quarterly period ended September 30, 2018)</u>](https://www.sec.gov/Archives/edgar/data/1726548/000119312518320844/d598706dex101.htm) |
| 10.1.1 | [<u>First Amendment to Amended and Restated Investment Advisory Agreement dated as of July 9, 2019, by and between BC Partners Lending Corporation and BC Partners Advisors L.P. (incorporated by reference to Exhibit 10.1 to the current report on Form 8-K filed on July 10, 2019)</u>](https://www.sec.gov/Archives/edgar/data/1726548/000119312519191917/d64480dex101.htm) |
| 10.2 | [<u>Administration Agreement (incorporated by reference to Exhibit 10.2 to Amendment No. 1 to Form 10 filed on April 23, 2018)</u>](https://www.sec.gov/Archives/edgar/data/1726548/000119312518126964/d528317dex102.htm) |
| 10.3 | [<u>Dividend Reinvestment Plan (incorporated by reference to Exhibit 10.3 to Amendment No. 1 to Form 10 filed on April 23, 2018)</u>](https://www.sec.gov/Archives/edgar/data/1726548/000119312518126964/d528317dex103.htm) |
| 10.4 | [<u>Form of Indemnification Agreement (incorporated by reference to Exhibit 10.4 to Amendment No. 1 to Form 10 filed on April 23, 2018)</u>](https://www.sec.gov/Archives/edgar/data/1726548/000119312518126964/d528317dex104.htm) |
| 10.5 | [<u>Transfer Agency Agreement (incorporated by reference to Exhibit 10.6 to Amendment No. 1 to Form 10 filed on April 23, 2018)</u>](https://www.sec.gov/Archives/edgar/data/1726548/000119312518126964/d528317dex106.htm) |

---

------

---

| | |
|:---|:---|
| 10.6 | [<u>Letter Agreement by and between BC Partners Lending Corporation and BC Partners Advisers L.P., dated August 20, 2019 (incorporated by reference to Exhibit 10.1 to the current report on Form 8-K filed on August 23, 2019)</u>](https://www.sec.gov/Archives/edgar/data/1726548/000119312519227990/d789197dex101.htm) |
| 10.7 | [<u>Expense Support and Conditional Reimbursement Agreement by and between BC Partners Lending Corporation, a Maryland corporation, and BC Partners Advisers L.P., a Delaware limited partnership, dated August 20, 2019 (incorporated by reference to Exhibit 10.2 to the current report on Form 8-K filed on August 23, 2019)</u>](https://www.sec.gov/Archives/edgar/data/1726548/000119312519227990/d789197dex102.htm) |
| 10.8 | [<u>Master Participation and Assignment Agreement, dated as of December 16, 2019, between Great Lakes BCPL Funding Ltd. and BC Partners Lending Corporation (incorporated by reference to Exhibit 10.8 to the annual report on Form 10-K for the fiscal year ended December 31, 2019)</u>](https://www.sec.gov/Archives/edgar/data/1726548/000156459020009003/bcpl-ex108_278.htm) |
| 10.9 | [<u>Subscription Agreement, dated as of December 16, 2019, between Great Lakes BCPL Funding Ltd. and BC Partners Lending Corporation (incorporated by reference to Exhibit 10.9 to the annual report on Form 10-K for the fiscal year ended December 31, 2019)</u>](https://www.sec.gov/Archives/edgar/data/1726548/000156459020009003/bcpl-ex109_143.htm) |
| 10.10 | [<u>SIFMA/ICMA Global Master Repurchase Agreement (2011 version), by and between UBS AG, London Branch and BC Partners Lending Corporation, dated December 12, 2019, together with the related Annexes thereto, and the Confirmation thereto, dated as of December 16, 2019 (incorporated by reference to Exhibit 10.10 to the annual report on Form 10-K for the fiscal year ended December 31, 2019)</u>](https://www.sec.gov/Archives/edgar/data/1726548/000156459020009003/bcpl-ex1010_282.htm) |
| 10.11 | <u>Fourth Amended and Restated Confirmation in respect of the SIFMA/ICMA Global Master Repurchase Agreement, by and between UBS AG, London Branch and BC Partners Lending Corporation, dated October 11, 2022 (incorporated by reference to Exhibit 10.1 to the current report on Form 8-K filed on October 12, 2022)<br></u><br>|
| 10.12 | [<u>Collateral Management Agreement, dated as of December 16, 2019, between Great Lakes BCPL Funding Ltd. and BC Partners Lending Corporation (incorporated by reference to Exhibit 10.11 to the annual report on Form 10-K for the fiscal year ended December 31, 2019)</u>](https://www.sec.gov/Archives/edgar/data/1726548/000156459020009003/bcpl-ex1011_139.htm) |
| 10.13 | [<u>Collateral Administration Agreement, dated as of December 16, 2019, between Great Lakes BCPL Funding Ltd., BC Partners Lending Corporation and U.S. Bank National Association as administrator (incorporated by reference to Exhibit 10.12 to the annual report on Form 10-K for the fiscal year ended December 31, 2019)</u>](https://www.sec.gov/Archives/edgar/data/1726548/000156459020009003/bcpl-ex1012_138.htm) |
| 10.14 | [<u>Account Control Agreement dated as of December 16, 2019 between Great Lakes BCPL Funding Ltd. and U.S. Bank National Association as trustee and custodian (incorporated by reference to Exhibit 10.13 to the annual report on Form 10-K for the fiscal year ended December 31, 2019)</u>](https://www.sec.gov/Archives/edgar/data/1726548/000156459020009003/bcpl-ex1013_137.htm) |
| 10.15 | [<u>Issuer Sale and Contribution Agreement, dated as of December 16, 2019, between Great Lakes BCPL Funding Ltd., BC Partners Lending Corporation and U.S. Bank National Association as trustee (incorporated by reference to Exhibit 10.14 to the annual report on Form 10-K for the fiscal year ended December 31, 2019)</u>](https://www.sec.gov/Archives/edgar/data/1726548/000156459020009003/bcpl-ex1014_136.htm) |
| 10.16 | [<u>Letter Agreement regarding Appointment of Valuation Agent, dated as of December 16, 2019, be-tween Great Lakes BCPL Funding Ltd., BC Partners Lending Corporation and UBS AG, London Branch (incorporated by reference to Exhibit 10.15 to the annual report on Form 10-K for the fiscal year ended December 31, 2019)</u>](https://www.sec.gov/Archives/edgar/data/1726548/000156459020009003/bcpl-ex1015_135.htm) |
| 10.17\* | [<u>Fund of Funds Agreement, dated as of March 3, 2023, between First Trust Alternative Opportunities Fund and BC Partners Lending Corporation.</u>](bcpl-ex10_17.htm) |
| 31.1\* | [<u>Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</u>](bcpl-ex31_1.htm) |
| 31.2\* | [<u>Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</u>](bcpl-ex31_2.htm) |
| 32.1\* | [<u>Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</u>](bcpl-ex32_1.htm) |
| 32.2\* | [<u>Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</u>](bcpl-ex32_2.htm) |

---

------

\* Filed herewith.

**Item 16. Form 10-K Summary.**

None.

------

**SIGNATURES**

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

---

| | | |
|:---|:---|:---|
|  | **BC Partners Lending Corporation** | **BC Partners Lending Corporation** |
| Date: March 9, 2023 | By: | /s/ Edward Goldthorpe |
|  | Name: | Edward Goldthorpe |
|  | Title: | Chief Executive Officer<br>|
| Date: March 9, 2023 | By: | /s/ Jason Roos |
|  | Name: | Jason Roos |
|  | Title: | Chief Financial Officer |

---

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

---

| | | |
|:---|:---|:---|
| **Signature**  | **Title**  | **Date**  |
| /s/ Edward Goldthorpe<br>Edward Goldthorpe | Chief Executive Officer and President and Chairman of the <br>Board of Directors <br>(Principal Executive Officer)  | March 9, 2023  |
| /s/ Jason Roos<br>Jason Roos | Chief Financial Officer<br>(Principal Financial Officer) | March 9, 2023  |
| /s/ Alexander Duka<br>Alexander Duka | Director  | March 9, 2023  |
| /s/ George Grunebaum<br>George Grunebaum | Director  | March 9, 2023  |
| /s/ Robert Warshauer<br>Robert Warshauer | Director  | March 9, 2023  |

---

------

## Ex-10

Exhibit 10.17

**FUND OF FUNDS INVESTMENT AGREEMENT**

This FUND OF FUNDS INVESTMENT AGREEMENT (the "Agreement"), dated as of March 3, 2023, is between First Trust Alternative Opportunities Fund, a trust organized under the laws of Delaware (the "Acquiring Fund"), and BC Partners Lending Corporation, a Maryland corporation (the "Acquired Fund" and, together with the Acquiring Fund, the "Funds").

WHEREAS, the Acquiring Fund is a closed-end management investment company that is registered with the U.S. Securities and Exchange Commission under the Investment Company Act of 1940 (the "1940 Act");

WHEREAS, the Acquired Fund is a closed-end management investment company that has elected to be regulated as a business development company ("BDC") under the 1940 Act;

WHEREAS, Section 12(d)(1) of the 1940 Act, which is made applicable to BDCs by Section 60 of the 1940 Act, generally limit the ability of a registered investment company or BDC to invest in shares of another registered investment company or BDC;

WHEREAS, Rule 12d1-4 under the 1940 Act permits a registered investment company or BDC to invest in shares of another registered investment company or BDC in excess of the limitations under Section 12(d)(1) subject to certain terms and conditions; and

WHEREAS, the Acquiring Fund, from time to time, may wish to acquire shares of the Acquired Fund in excess of the limitations under Sections 12(d)(1)(A), (B), and (C), as applicable, in reliance on Rule 12d1-4.

NOW, THEREFORE, in consideration of the potential benefits to the Funds arising out of the investment by the Acquiring Fund in the Acquired Fund, the Funds agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;**1.** **<u>Representations and Obligations of the Acquired Fund</u>**

The Acquired Fund agrees to:

&nbsp;&nbsp;&nbsp;&nbsp;(a)comply with the Agreement and those terms and conditions of Rule 12d1-4 that are applicable to an acquired fund that is a BDC;

&nbsp;&nbsp;&nbsp;&nbsp;(b)promptly notify the Acquiring Fund if the Acquired Fund fails to comply with the applicable terms and conditions of Rule 12d1-4 or this Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;(c)provide, subject to applicable law, the Acquiring Fund and its investment adviser (and, if applicable, subadviser) with information about the fees and expenses of the Acquired Fund reasonably requested by the Acquiring Fund and its investment adviser (and, if applicable, subadviser) to comply with the terms and conditions of Rule 12d1-4.

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **<u>Representations and Obligations of the Acquiring Fund</u>**

The Acquiring Fund agrees to:

&nbsp;&nbsp;&nbsp;&nbsp;(a)comply with the terms and conditions of Rule 12d1-4 and this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;(b)promptly notify the Acquired Fund if the Acquiring Fund fails to comply with the terms and conditions of Rule 12d1-4 or this Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;(c)adopt policies and procedures reasonably designed to prevent violations of Rule 12d1-4.

------

&nbsp;&nbsp;&nbsp;&nbsp;**3.** **<u>Condition to Initial Purchase in Reliance on Rule 12d1-4</u>**

The Acquiring Fund and the Acquired Fund agree that, prior to the initial acquisition by the Acquiring Fund of shares of the Acquired Fund in reliance on Rule 12d1-4, the investment adviser (or, if applicable, subadviser) to each of the Acquiring Fund and the Acquired Fund must make in writing the applicable findings required by Rule 12d1-4.

&nbsp;&nbsp;&nbsp;&nbsp;**4.** **<u>Indemnification</u>**

&nbsp;&nbsp;&nbsp;&nbsp;(a)The Acquiring Fund agrees to hold harmless, indemnify and defend the Acquired Fund, including any principals, directors or trustees, officers, employees and agents ("Acquired Fund Agents"), against and from any and all losses, costs, expenses or liabilities incurred by or claims or actions ("Claims") asserted against the Acquired Fund, including any Acquired Fund Agents, to the extent such Claims result from: (i) a violation of any provision of this Agreement or (ii) a violation of the terms and conditions of Rule 12d1-4, in each case by the Acquiring Fund, its principals, directors or trustees, officers, employees, agents, advisers or if applicable, subadvisers.

&nbsp;&nbsp;&nbsp;&nbsp;(b)The Acquired Fund agrees to hold harmless, indemnify and defend the Acquiring Fund, including any principals, directors or trustees, officers, employees and agents ("Acquiring Fund Agents"), against and from any and all Claims asserted against the Acquiring Fund, including any Acquiring Fund Agents, to the extent such Claims result from: (i) a violation of any provision of this Agreement or (ii) a violation of the terms and conditions of Rule 12d1-4, in each case by the Acquired Fund, its principals, directors or trustees, officers, employees, agents, advisers or if applicable, subadvisers.

&nbsp;&nbsp;&nbsp;&nbsp;(c)Any indemnification pursuant to this Section shall include any reasonable counsel fees and expenses incurred in connection with investigating and/or defending the applicable Claims. This Section shall survive any termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;**5.** **<u>Voting</u>**

If the Acquiring Fund and its "Advisory Group" (as defined in Rule 12d1-4) hold, individually or in the aggregate, less than 10% of the Acquired Fund's outstanding shares, the Acquiring Fund and its Advisory Group shall vote such shares at any meeting of shareholders of the Acquired Fund.

&nbsp;&nbsp;&nbsp;&nbsp;**6.** **<u>Notices</u>**

Except as otherwise noted, all notices, including all information that either party is required to provide under the terms of this Agreement, shall be in writing and shall be delivered to the contact identified below (which may be changed from time to time upon written notice to the other party) by (i) Federal Express or other comparable overnight courier; (ii) registered or certified mail, postage prepaid, return receipt requested; (iii) facsimile with confirmation during normal business hours; or (iv) e-mail (to all parties set forth below). All notices, demands or requests so given will be deemed given when actually received.

If to the Acquiring Fund:

Marc Bassewitz

First Trust Capital Management L.P.

225 W. Wacker Drive, 21<sup>st</sup> Floor

Chicago, IL 60606

Email: mbassewitz@FirstTrustCapital.com

If to the Acquired Fund:

------

Jason Roos

BC Partners Advisors LP

650 Madison Avenue \| 23<sup>rd</sup> Floor

New York, NY 10022

Jason.roos@bcpartners.com

and

David Held

BC Partners Advisors LP

650 Madison Avenue \| 23<sup>rd</sup> Floor

New York, NY 10022

David.held@bcpartners.com

&nbsp;&nbsp;&nbsp;&nbsp;**7.** **<u>Termination and Governing Law</u>**

(a)This Agreement will continue until terminated in writing by either party upon 60 days' notice to the other party. Upon termination of this Agreement, to the extent necessary to comply with Section 12(d)(1) of the 1940 Act and Rule 12d1-4, the Acquiring Fund shall be entitled to reduce the amount of any remaining unpaid capital commitment to the Acquired Fund, pursuant to the Subscription Agreement between the Acquiring Fund and the Acquired Fund, in such amounts as may be necessary or advisable in its sole discretion to ensure compliance with such section and rule, including to $0.

(b)This Agreement will be governed by laws of New York without regard to choice of law principles.

&nbsp;&nbsp;&nbsp;&nbsp;**8.** **<u>Miscellaneous</u>**

&nbsp;&nbsp;&nbsp;&nbsp;(a)This Agreement may not be assigned by either party without the prior written consent of the other. In the event either party assigns this Agreement to a third party as provided in this Section, such third party shall be bound by the terms and conditions of this Agreement applicable to the assigning party. Any assignment in contravention of this Section shall be null and void.

&nbsp;&nbsp;&nbsp;&nbsp;(b)Except as expressly set forth herein, nothing in this Agreement shall confer any rights upon any person or entity other than the parties hereto and their respective successors and permitted assigns.

&nbsp;&nbsp;&nbsp;&nbsp;(c)No amendment, modification, or supplement of any provision of this Agreement will be valid or effective unless made in writing in the manner provided by Section 6 and signed by a duly authorized representative of each party.

&nbsp;&nbsp;&nbsp;&nbsp;(d)This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. This Agreement shall become binding when any two or more counterparts thereof, individually or taken together, bear the signatures of both parties hereto. For purposes hereof, a facsimile copy of this Agreement, including the signature pages hereto, shall be deemed an original.

&nbsp;&nbsp;&nbsp;&nbsp;(e)If any provision of this Agreement is determined to be invalid, illegal or unenforceable, the remaining provisions of this Agreement remain in full force and effect, if the essential terms and conditions of this Agreement for both parties remain valid, legal and enforceable.

[Remainder of page intentionally left blank]

------

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

FIRST TRUST ALTERNATIVE OPPORTUNITIES FUND

____<u>/s/ Chad Eisenberg</u>__________________________

Print Name: Chad Eisenberg

Title: Treasurer

BC PARTNERS LENDING CORPORATION

____<u>/s/ Jason Roos</u>______________________________

Print Name: Jason Roos

Title: CFO

------

## Ex-31

**Exhibit 31.1** 

**CERTIFICATION OF CHIEF EXECUTIVE OFFICER** 

**PURSUANT TO RULE 13a-14(a)/15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED** 

**PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002** 

I, Edward Goldthorpe, certify that:

1. I have reviewed this Annual Report on Form 10-K of BC Partners Lending Corporation;

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;

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 of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

&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;b)[Reserved]

&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 the end of the period covered by this report based on such evaluation; and

&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 registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&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;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.

Date: March 9, 2023

---

| |
|:---|
| /s/ Edward Goldthorpe |
| Edward Goldthorpe |
| Chief Executive Officer |

---

------

## Ex-31

**Exhibit 31.2** 

**CERTIFICATION OF CHIEF FINANCIAL OFFICER** 

**PURSUANT TO RULE 13a-14(a)/15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED** 

**PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002** 

I, Jason Roos, certify that:

1. I have reviewed this Annual Report on Form 10-K of BC Partners Lending Corporation;

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;

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 of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

&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;b)[Reserved]

&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 the end of the period covered by this report based on such evaluation; and

&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 registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&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;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.

Date: March 9, 2023

---

| |
|:---|
| /s/ Jason Roos |
| Jason Roos |
| Chief Financial Officer |

---

------

## Ex-32

**Exhibit 32.1** 

**CERTIFICATION OF CHIEF EXECUTIVE OFFICER** 

**PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED** 

**PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002** 

In connection with the Annual Report on Form 10-K of BC Partners Lending Corporation (the "Company") for the year ended December 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Edward Goldthorpe, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 9, 2023

---

| |
|:---|
| /s/ Edward Goldthorpe |
| Edward Goldthorpe |
| Chief Executive Officer |

---

------

## Ex-32

**Exhibit 32.2** 

**CERTIFICATION OF CHIEF FINANCIAL OFFICER** 

**PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED** 

**PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002** 

In connection with the Annual Report on Form 10-K of BC Partners Lending Corporation (the "Company") for the year ended December 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Jason Roos, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 9, 2023

---

| |
|:---|
| /s/ Jason Roos |
| Jason Roos |
| Chief Financial Officer |

---

------