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TICC Capital: Part I. Financial Information

The following excerpt is from the company's SEC filing.

Item 1.

Financial Statements (Unaudited)

Consolidated Statements of Assets and Liabilities as of September 30, 2015 and December 31, 2014

Consolidated Schedule of Investments as of September 30, 2015

Consolidated Schedule of Investments as of December 31, 2014

Consolidated Statements of Operations for the three and nine months ended September 30, 2015 and 2014

Consolidated Statements of Changes in Net Assets for the nine months ended September 30, 2015 and for the year ended December 31, 2014

Consolidated Statements of Cash Flows for the nine months ended September 30, 2015 and 2014

Notes to Consolidated Financial Statements

Item 2.

Managements Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Statements Regarding Forward-Looking Statements

Overview

Critical Accounting Policies

Portfolio Composition and Investment Activity

Liquidity and Capital Resources

Recent Developments

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Item 4.

Controls and Procedures

PART II. OTHER INFORMATION

Legal Proceedings

Item 1A.

Risk Factors

Unregistered Sales of Equity Securities and Use of Proceeds

Defaults Upon Senior Securities

Mine Safety Disclosures

Item 5.

Other Information

Item 6.

Exhibits

SIGNATURES

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

TICC CAPITAL CORP.

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

(unaudited)

Non-affiliated/non-control investments (cost: $970,201,027

@ 9/30/15; $999,433,538 @ 12/31/14)

908,962,186

967,612,035

Affiliated investments (cost: $7,367,738 @ 9/30/15; $4,268,722 @ 12/31/14)

5,314,226

1,585,303

Control investments (cost: $16,750,000 @ 9/30/15; $16,800,000 @ 12/31/14)

12,904,375

14,960,000

Total investments at fair value (cost: $994,318,765

@ 9/30/15; $1,020,502,260 @ 12/31/14)

927,180,787

984,157,338

Cash and cash equivalents

21,216,120

20,505,323

Restricted cash

18,637,328

20,576,250

Deferred debt issuance costs

4,601,098

5,669,747

Interest and distributions receivable

12,597,507

11,442,289

Securities sold not settled

10,242

Other assets

308,726

290,245

Total assets

984,551,808

1,042,641,192

Accrued interest payable

4,964,485

2,596,564

Investment advisory fee and net investment income incentive fee payable to affiliate

5,830,902

6,183,486

Securities purchased not settled

2,850,000

11,343,179

Credit facility

150,000,000

Accrued expenses

940,623

629,127

Notes payable TICC CLO 2012-1 LLC, net of discount

236,407,052

236,075,775

Convertible senior notes payable

115,000,000

Total liabilities

515,993,062

521,828,131

COMMITMENTS AND CONTINGENCIES (Note 14)

NET ASSETS

Common stock, $0.01 par value, 100,000,000 share authorized; 59,987,986 and 60,303,769 shares issued and outstanding, respectively

599,880

603,038

Capital in excess of par value

620,635,767

623,018,818

Net unrealized depreciation on investments

(67,137,978

(36,344,922

Accumulated net realized losses on investments

(65,368,395

(63,212,472

Distributions in excess of investment income

(20,170,528

(3,251,401

Total net assets

468,558,746

520,813,061

Total liabilities and net assets

Net asset value per common share

See Accompanying Notes.

CONSOLIDATED SCHEDULE OF INVESTMENTS

COMPANY/INVESTMENT

INDUSTRY

PRINCIPAL

AMOUNT

FAIR VALUE

Senior Secured Notes

ABB/Con Cise Optical Group

retail

tranche B term loan, PRIME + 2.50% due

February 06, 2019

6,500,000

6,479,139

6,462,105

Algorithmic Implementations, Inc. (d/b/a Ai Squared)

software

senior secured notes, LIBOR + 6.00% (9.84% all-in floor) due September 11, 2016

13,750,000

Albertsons LLC

grocery

first lien senior secured notes, LIBOR + 4.50% (1.00% floor) due August 25, 2021

16,875,508

16,902,889

16,865,045

AmeriLife Group

diversified insurance

first lien senior secured notes, LIBOR + 4.75% (1.00% floor) due July 10, 2022

17,955,000

17,777,846

17,887,669

Amneal Pharmaceuticals LLC

pharmaceuticals

first lien senior secured notes, LIBOR + 4.00% (1.00% floor) due November 01, 2019

8,902,880

8,889,607

8,880,623

Aricent Technologies, Inc.

telecommunication services

first lien senior secured notes, LIBOR + 4.50% (1.00% floor) due April 14, 2021

14,811,381

14,770,775

14,686,373

second lien senior secured notes, LIBOR + 8.50% (1.00% floor) due April 14, 2022

14,000,000

14,003,932

13,851,320

Ascensus, Inc.

financial intermediaries

senior secured notes, LIBOR + 4.00% (1.00% floor) due December 02, 2019

8,888,028

8,898,364

8,865,808

second lien senior secured notes, LIBOR + 8.00% (1.00% floor) due December 2, 2020

2,000,000

1,976,665

1,992,500

Birch Communications, Inc.

first lien senior secured notes, LIBOR + 6.75% (1.00% floor) due July 18, 2020

18,544,444

18,276,663

18,498,083

BMC Software Finance, Inc.

business services

first lien senior secured notes, LIBOR + 4.00% (1.00% floor) due September 10, 2020

4,738,889

4,752,477

4,295,803

Capstone Logistics Acquisition, Inc.

logistics

first lien senior secured notes, LIBOR + 4.50% (1.00% floor) due October 7, 2021

18,882,437

18,887,469

18,764,422

ConvergeOne Holdings Corp.

first lien senior secured notes, LIBOR + 5.00% (1.00% floor) due June 17, 2020

17,789,924

17,730,793

17,612,025

second lien senior secured notes, LIBOR + 8.00% (1.00% floor) due June 17, 2021

3,000,000

2,973,849

2,970,000

CRCI Holdings, Inc. (a/k/a CLEAResult)

utilities

first lien senior secured notes, LIBOR + 4.00% (1.00% floor) due July 10, 2019

9,822,500

9,795,727

9,760,225

incremental first lien senior secured notes,

LIBOR + 4.25% (1.00% floor) due

6,483,689

6,467,967

6,451,271

Crowne Group, LLC

auto parts manufacturer

first lien senior secured notes, LIBOR + 5.00% (1.00% floor) due September 30, 2020

5,683,195

5,640,571

(Continued on next page)

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

Senior Secured Notes (continued)

CT Technologies Intermediate Holdings, Inc.

(a/k/a Healthport)

healthcare

first lien senior secured notes, LIBOR + 4.25%, (1.00% floor) due December 01, 2021

13,421,363

13,372,388

13,359,893

Edmentum, Inc. (f/k/a Plato, Inc.)

education

(1.00% floor) Cash, 2.00% PIK due

June 10, 2019

6,020,503

5,981,924

4,234,400

First American Payment Systems

first lien senior secured notes, LIBOR + 4.50% (1.25% floor) due October 12, 2018

3,035,078

3,042,700

3,013,590

second lien senior secured notes, LIBOR + 9.50% (1.25% floor) due April 12, 2019

13,982,241

13,800,767

13,842,419

First Data Corporation

first lien senior secured notes, LIBOR + 4.00% due March 24, 2021

16,050,721

16,011,632

16,010,594

Global Healthcare Exchange

first lien senior secured notes, LIBOR + 4.50% (1.00% floor) due August 13, 2022

19,000,000

18,983,820

19,047,500

GlobalLogic Holdings Inc.

first lien senior secured notes, LIBOR + 5.25% (1.00% floor) due June 02, 2019

17,193,750

17,134,105

17,107,781

Global Tel Link Corp

telecommunication services

first lien senior secured notes, LIBOR + 3.75% (1.25% floor) due May 23, 2020

6,031,345

6,007,356

5,896,725

second lien senior secured notes, LIBOR + 7.75% (1.25% floor) due November 23, 2020

13,000,000

12,879,264

12,285,000

Help/Systems Holdings, Inc.

senior secured notes, LIBOR + 4.50 (1.00% floor) due June 28, 2019

14,700,000

14,588,359

second lien senior secured notes LIBOR + 8.50% (1.00% floor) due June 28, 2020

14,826,782

iEnergizer Limited

printing and publishing

first lien senior secured notes, LIBOR + 6.00% (1.25% floor) due May 01, 2019

5,694,081

5,600,002

5,124,673

Immucor, Inc.

senior secured term B notes, LIBOR + 3.75% (1.25% floor) due August 19, 2018

4,321,711

4,237,960

4,285,236

Integra Telecom Holdings, Inc

first lien senior secured notes, LIBOR + 4.00% (1.25% floor) due August 14, 2020

11,258,596

11,220,451

11,181,249

second lien senior secured notes, LIBOR + 8.50%, (1.25% floor) due February 14, 2021

10,806,404

10,871,433

10,729,895

Jackson Hewitt Tax Service, Inc.

consumer services

first lien senior secured notes, LIBOR + 7.00% (1.50% floor) due July 30, 2020

18,000,000

17,676,840

17,640,000

Merrill Communications, LLC

first lien senior secured notes, LIBOR + 4.75% (1.00% floor) due June 01, 2022

23,856,471

23,569,958

23,677,547

NAB Holdings, LLC

first lien senior secured notes, LIBOR + 3.75% (1.00% floor) due May 21, 2021

17,780,000

17,662,039

17,691,100

Novetta, LLC

aerospace and defense

first lien senior secured notes, LIBOR + 5.00% (1.00% floor) due October 2, 2020

12,622,500

12,526,428

12,559,388

Novitex Enterprise Solutions (f/k/a Pitney Bowes Management Services, Inc.)

first lien senior secured notes, LIBOR + 6.25% (1.25% floor) due July 07, 2020

15,661,650

15,576,944

14,721,951

PGX Holdings

first lien senior secured notes, LIBOR + 4.75% (1.00% floor) due September 29,2020

14,835,714

14,807,219

14,829,483

Petco Animal Supplies, Inc.

first lien senior secured notes, LIBOR + 3.00% (1.00% floor) due November 24, 2017

5,937,662

5,905,818

5,927,034

Petsmart, Inc.

first lien senior secured notes, LIBOR + 4.00% (1.00% floor) due March 11, 2022

5,985,000

6,008,065

5,969,439

ProQuest LLC

senior secured notes, LIBOR + 4.25% (1.00% floor) due October 24, 2021

5,954,927

5,988,340

5,944,982

RBS Holding Company

second lien senior secured notes, PRIME + 7.00% due March 23, 2016

22,759,516

15,491,384

18,913,158

Recorded Books, Inc. (f/k/a Volume Holdings, Inc.)

senior secured notes, LIBOR + 4.50% (1.00% floor) due July 31, 2021

8,955,478

8,955,000

SCS Holdings I Inc. (Sirius Computer Solutions, Inc.)

electronics

first lien senior secured notes, LIBOR + 5.75% (1.25% floor) due December 07, 2018

8,009,615

8,025,776

Securus Technologies, Inc.

first lien senior secured notes, LIBOR + 3.50% (1.25% floor) due April 30, 2020

5,899,812

5,858,793

5,698,864

second lien senior secured notes, LIBOR + 7.75% (1.25% floor) due April 30, 2021

6,400,000

6,375,238

5,752,000

Sesac Holdco II LLC

radio and television

first lien senior secured notes, LIBOR + 4.00% (1.00% floor) due February 08, 2019

14,023,105

14,034,750

13,988,047

Serena Software Inc.

enterprise software

first lien senior secured notes, LIBOR + 6.50% (1.00% floor) due April 14, 2020

18,691,246

18,376,270

18,613,304

Source Hov, LLC

first lien senior secured notes, LIBOR + 6.75% (1.00% floor) due October 31, 2019

17,662,500

17,202,191

15,918,328

second lien senior secured notes, LIBOR + 10.50% (1.00% floor) due April 30, 2020

14,468,082

12,900,000

Stratus Technologies, Inc.

computer hardware

first lien senior secured notes, LIBOR + 5.00% (1.00% floor) due April 28, 2021

17,354,167

17,211,347

17,252,992

Teleguam Holdings LLC

second lien senior secured notes, LIBOR + 7.50% (1.25% floor) due June 10, 2019

7,975,044

7,960,000

The TOPPS Company, Inc.

leisure goods

first lien senior secured notes, LIBOR + 6.00% (1.25% floor) due October 02, 2018

9,825,000

9,756,578

9,628,500

Total Merchant Services, Inc.

first lien senior secured notes, LIBOR + 5.50% (1.00% floor) due December 5, 2020

15,880,000

15,737,128

15,959,400

Travel Leaders Group, LLC

travel

first lien senior secured notes, LIBOR + 6.00% (1.00% floor) due December 07, 2020

14,600,000

14,376,711

14,563,500

Unitek Global Services, Inc.

IT consulting

first lien senior secured tranche B term loan,

LIBOR + 7.50%, (1.00% floor) due January 13, 2019

2,638,748

2,605,645

2,498,894

U.S. Telepacific Corp.

first lien senior secured notes, LIBOR + 5.00% (1.00% floor) due November 25, 2020

9,925,000

9,832,837

9,875,375

Vision Solutions

first lien senior secured notes, LIBOR + 4.50% (1.50% floor) due July 23, 2016

4,728,153

4,698,873

4,722,243

second lien senior secured notes, LIBOR + 8.00% (1.50% floor) due July 23, 2017

10,000,000

9,970,413

9,950,000

Wall Street Systems

first lien senior secured notes, LIBOR + 3.50% (1.00% floor) due April 30, 2021

8,124,639

8,128,033

8,080,603

Total Senior Secured Notes

685,378,522

680,407,920

Subordinated Debt

Holdco PIK Debt Cash 0.00%, 15.00% PIK, due July 13, 2019

555,554

550,093

508,332

Total Subrodinated Debt

Collateralized Loan Obligation Debt Investments

Telos CLO 2013-3, Ltd.

structured finance

CLO secured class F notes, LIBOR + 5.50% due January 17, 2024

3,000,000

2,762,650

2,300,700

Total Collateralized Loan Obligation Debt Investments

Collateralized Loan Obligation Equity Investments

AMMC CLO XI, Ltd.

CLO subordinated notes, estimated yield 14.12% due October 30, 2023

6,000,000

3,527,288

3,600,000

AMMC CLO XII, Ltd.

CLO subordinated notes, estimated yield 11.18% due May 10, 2025

12,921,429

8,867,391

7,752,857

Collateralized Loan Obligation Equity Investments (continued)

Ares XXV CLO Ltd.

CLO subordinated notes, estimated yield 4.76% due January 17, 2024

15,500,000

11,503,418

8,370,000

Ares XXVI CLO Ltd.

CLO subordinated notes, estimated yield 9.80% due April 15, 2025

14,250,000

10,577,547

7,346,757

Ares XXIX CLO Ltd.

CLO subordinated notes, estimated yield 11.92% due April 17, 2026

12,750,000

10,338,546

7,440,953

Benefit Street Partners CLO II, Ltd.

CLO subordinated notes, estimated yield 13.65% due July 15, 2024

23,450,000

22,638,457

19,850,265

Carlyle Global Market Strategies

CLO 2013-2, Ltd.

CLO subordinated notes, estimated yield 16.98% due April 18, 2025

10,125,000

7,789,656

7,028,021

CLO 2014-4, Ltd.

CLO subordinated notes, estimated yield 15.98% due October 15, 2026

25,784,000

19,477,450

17,902,222

Catamaran CLO 2012-1 Ltd.

CLO subordinated notes, estimated yield (.40%) due December 20, 2023

22,000,000

17,096,038

9,055,200

Catamaran CLO 2013-1 Ltd.

CLO subordinated notes, estimated yield 7.14% due January 27, 2025

8,517,770

Cedar Funding II CLO, Ltd.

CLO subordinated notes, estimated yield 10.73% due March 9, 2025

18,750,000

14,817,101

12,515,625

CIFC Funding 2012-1, Ltd.

CLO subordinated notes, estimated yield 13.64% due August 14, 2024

8,400,000

7,905,000

Halcyon Loan Advisors Funding 2012-2 Ltd.

CLO subordinated notes, estimated yield 16.15% due December 20, 2024

7,500,000

5,940,551

5,156,250

Halcyon Loan Advisors Funding 2014-2 Ltd.

CLO subordinated notes, estimated yield 15.72% due April 28, 2025

6,551,394

5,520,000

Hull Street CLO Ltd.

CLO subordinated notes, estimated yield 16.31% due October 18, 2026

4,157,285

3,025,500

Ivy Hill Middle Market Credit Fund VII, Ltd.

CLO subordinated notes, estimated yield 14.85% due October 20, 2025

12,549,004

11,783,733

Jamestown CLO V Ltd.

CLO subordinated notes, estimated yield 15.30% due January 17, 2027

6,196,275

4,000,800

Marea CLO, Ltd.

CLO subordinated notes, estimated yield 5.54% due October 15, 2023

14,217,000

11,642,231

7,160,315

MidOcean Credit CLO IV

CLO income notes, estimated yield 19.59% due April 15, 2027

9,500,000

8,620,993

8,455,000

Mountain Hawk III CLO, Ltd.

CLO income notes, estimated yield 7.59% due April 18, 2025

12,379,826

6,403,308

CLO M notes due April 18, 2025

2,389,676

539,194

Newmark Capital Funding 2013-1 CLO Ltd.

CLO income notes, estimated yield 12.71% due June 2, 2025

20,000,000

14,530,875

11,400,000

Och Ziff CLO XII, Ltd.

CLO subordinated notes, estimated yield 14.22% due April 30, 2027

13,850,000

13,170,498

12,465,000

CS Advisors CLO I Ltd.

CLO subordinated notes, estimated yield (46.37%) due August 27, 2020

10,100,000

1,809,726

50,500

Shackleton 2013-III CLO, Ltd.

CLO subordinated notes, estimated yield 8.67% due April 15, 2025

9,407,500

8,159,594

5,101,978

Shackleton 2013-IV CLO, Ltd.

CLO subordinated notes, estimated yield 11.72% due January 13, 2025

21,500,000

18,320,851

12,747,015

CLO subordinated notes, estimated yield 11.05% due January 17, 2024

10,416,666

8,544,099

7,083,333

Telos CLO 2013-4, Ltd.

CLO subordinated notes, estimated yield 20.39% due July 17, 2024

6,478,082

6,287,445

Telos CLO 2014-5, Ltd.

CLO subordinated notes, estimated yield 14.04% due April 17, 2015

10,500,000

8,450,800

6,235,847

Windriver 2012-1 CLO, Ltd.

CLO subordinated notes, estimated yield 16.14% due January 15, 2024

5,650,357

5,446,771

CLO equity side letter related

3,103,898

Total Collateralized Loan Obligation Equity Investments

296,703,103

237,232,787

Common Stock

common stock

Integra Telecom Holdings, Inc.

775,846

1,712,397

4,424,048

AMOUNT/SHARES

Common Stock (continued)

common equity

815,266

535,000

Total Common Stock

5,247,397

4,424,048

Preferred Equity

Series A Preferred Equity

5,706,866

3,677,000

2,307,000

Total Preferred Equity

3,677,000

2,307,000

Total Investments

994,318,765

927,180,787

Other than Algorithmic Implementation, Inc. (d/b/a Ai Squared), which we may be deemed to control and Unitek Global Services, Inc., of which we are deemed to be an affiliate. We do not control and are not an affiliate of any of our portfolio companies, each as defined in the Investment Company Act of 1940 (the 1940 Act). In general, under the 1940 Act, we would be presumed to control a portfolio company if we owned 25% or more of its voting securities and would be an affiliate of a portfolio company if we owned 5% or more of its voting securities.

Fair value is determined in good faith by the Board of Directors of the Company.

Portfolio includes $29,335,573 of principal amount of debt investments which contain a PIK provision at September 30, 2015, or during the quarter then ended.

Notes bear interest at variable rates.

Cost value reflects accretion of original issue discount or market discount.

Cost value reflects repayment of principal.

Non-income producing at the relevant period end.

Aggregate gross unrealized appreciation for federal income tax purposes is $12,829,314; aggregate gross unrealized depreciation for federal income tax purposes is $127,966,167. Net unrealized depreciation is $115,136,853 based upon a tax cost basis of $1,042,317,640.

All or a portion of this investment represents collateral under the TICC Funding LLC credit facility.

All or a portion of this investment represents TICC CLO 2012-1 LLC collateral.

Indicates assets that the Company believes do not represent qualifying assets under Section 55(a) of the Investment Company Act of 1940, as amended. Qualifying assets must represent at least 70% of the Company's total assets at the time of acquisition of any additional non-qualifying assets.

Investment not domiciled in the United States.

Fair value represents discounted cash flows associated with fees earned from CLO equity investments.

Aggregate investments represent greater than 5% of net assets.

The principal balance outstanding for this debt investment, in whole or in part, is indexed to 90-day LIBOR.

The principal balance outstanding for this debt investment, in whole or in part, is indexed to 1 year LIBOR.

The principal balance outstanding for this debt investment, in whole or in part, is indexed to 30-day LIBOR

The principal balance outstanding for this debt investment, in whole or in part, is indexed to 180-day LIBOR

The CLO subordinated notes and income notes are considered equity positions in the CLO funds. Equity investments are entitled to recurring distributions which are generally equal to the remaining cash flow of the payments made by the underlying fund's securities less contractual payments to debt holders and fund expenses. The estimated yield indicated is based upon a current projection of the amount and timing of these recurring distributions and the estimated amount of repayment of principal upon termination. Such projections are periodically reviewed and adjusted, and the estimated yield may not ultimately be realized.

DECEMBER 31, 2014

% OF NET

tranche B term loan, LIBOR + 3.50% (1.00% floor) due February 06, 2019

6,541,775

6,517,166

6,378,231

13,800,000

first lien senior secured notes, 4.50% due April 14, 2021

13,009,539

12,986,480

4,991,646

4,971,679

4,972,927

14,923,753

14,877,921

14,874,057

14,005,937

13,982,500

Novitex Enterprise Solutions (F/K/A Pitney Bowes Management Services, Inc.)

first lien senior secured notes, LIBOR + 6.25% (1.25% floor) due October 01, 2019

15,840,300

15,746,596

15,048,285

9,402,519

9,415,372

9,320,247

1,974,098

1,976,260

15,544,444

15,270,572

15,233,555

Blue Coat System, Inc.

first lien senior secured notes, LIBOR + 3.00% (1.00% floor) due May 31, 2019

3,979,856

3,996,178

3,832,601

second lien senior secured notes, LIBOR + 8.50% (1.00% floor) due June 28, 2020

14,874,235

14,625,000

4,776,389

4,791,903

4,636,106

first lien senior secured notes, LIBOR + 4.50% (1.00% floor) due June 17, 2020

13,965,000

14,024,103

13,877,719

15,920,000

15,864,439

15,840,400

2,971,530

2,910,000

9,897,500

9,866,707

9,610,473

first lien senior secured notes, LIBOR + 5.00%, (1.00% floor) due December 01, 2021

8,969,867

8,932,500

Deltek Systems, Inc.

first lien senior secured notes, LIBOR + 3.50% (1.00% floor) due October 10, 2018

4,557,000

4,534,433

4,500,038

second lien senior secured notes, LIBOR + 8.75% (1.25% floor) due October 10, 2019

9,899,125

10,025,000

Edmentum, Inc. (F/K/A Plato, Inc.)

first lien senior secured notes, LIBOR + 4.50% (1.00% floor) due May 17, 2018

6,508,724

6,455,462

5,272,066

first lien senior secured notes, LIBOR + 4.50% (1.25% floor) due October 04, 2018

3,044,185

3,002,845

13,766,556

13,860,036

first lien senior secured notes, (LIBOR + 4.00%) due March 24, 2021

16,007,723

15,797,601

17,325,000

17,255,320

17,065,125

6,081,329

6,057,284

6,010,360

12,862,984

12,685,790

14,812,500

14,688,520

14,590,313

14,809,418

14,775,000

6,682,947

6,120,000

4,355,040

4,257,926

4,291,064

first lien senior secured notes, LIBOR + 4.00% (1.25% floor) due February 22, 2019

10,341,486

10,302,601

10,037,757

second lien senior secured notes, LIBOR + 8.50%, (1.25% floor) due February 22, 2020

8,850,000

8,896,162

8,772,563

first lien senior secured notes, LIBOR + 8.50% (1.25% floor) due October 16, 2017

20,682,892

20,152,560

20,579,478

Knowledge Universe Education

first lien senior secured notes, LIBOR + 4.25% (1.00% floor) due March 18, 2021

10,947,425

10,982,820

10,920,056

first lien senior secured notes, LIBOR + 4.75% (1.00% floor) due March 08, 2018

17,083,900

17,084,727

16,955,771

17,915,000

17,784,542

17,803,031

Nextag, Inc.

senior secured notes, Cash 0.00%/9.25% PIK, due

June 04, 2019

2,264,719

2,264,720

first lien senior secured notes, LIBOR + 5.00% (1.00% floor) due September 29, 2020

12,718,125

12,610,453

12,654,534

first lien senior secured notes, LIBOR + 5.25% (1.00% floor) due September 29, 2020

15,403,125

15,367,784

15,383,871

5,984,416

5,941,589

5,907,097

Presidio IS Corp.

senior secured notes, LIBOR + 4.00% (1.00% floor) due March 31, 2017

8,331,082

8,315,126

8,305,091

6,037,262

5,940,000

second lien senior secured notes, LIBOR + 6.75% (1.50% floor) cash 1.25% PIK due March 23, 2017

22,731,656

12,520,134

15,502,989

Recorded Books, Inc. (F/K/A Volume Holdings, Inc.)

senior secured notes, LIBOR + 4.25% (1.00% floor) due January 31, 2020

9,300,000

9,213,403

9,207,000

Safenet, Inc.

first lien senior secured notes PRIME + 3.5% due March 05, 2020

9,837,828

3,388,942

3,363,761

5,944,956

5,898,190

5,858,754

6,370,703

6,272,000

14,384,593

14,397,006

14,231,829

19,640,149

19,768,800

17,471,194

17,460,000

14,405,564

14,287,500

STG-Fairway Acquisitions

first lien senior secured notes, LIBOR + 5.00% (1.25% floor) due February 28, 2019

9,211,018

9,141,920

9,038,311

19,075,000

18,909,604

18,939,949

Symphony Teleca Services Inc.

first lien senior secured notes, LIBOR + 4.75% (1.00% floor) due August 07, 2019

16,000,000

15,847,256

15,840,000

7,962,890

7,952,000

9,900,000

9,816,492

9,603,000

financial intermediary

15,840,699

first lien senior secured notes, LIBOR + 6.00% (1.00% floor) due December 05, 2018

15,200,000

14,934,118

15,124,000

tranche B term loan, LIBOR + 13.50%, (1.50% floor) Cash 0.00%/PIK 15.00% due April 15, 2018

12,772,315

11,608,604

6,667,148

9,900,312

9,779,200

US FT HoldCo. Inc. (A/K/A Fundtech)

first lien senior secured notes, LIBOR + 3.50% (1.00% floor) due November 30, 2017

6,207,712

6,227,876

6,139,427

5,248,096

5,202,145

5,195,615

second lien senior secured notes, LIBOR + 8.00% (1.50% floor) due July 23, 2016

9,958,342

9,600,000

5,878,332

5,863,887

5,654,955

705,342,148

696,953,550

Senior Unsecured Notes

senior unsecured PIK notes Cash 0.00%/10.00% PIK, due March 08, 2023

6,351,153

3,724,816

Total Senior Unsecured Notes

CLO secured class F notes, LIBOR + 5.05% due May 10, 2025

4,500,000

3,936,123

3,701,250

CLO secured class F notes, LIBOR + 5.40% due April 18, 2025

5,183,376

5,122,200

2,744,951

2,521,200

11,864,450

11,344,650

ACAS CLO 2012-1, Ltd.

CLO subordinated notes due September 20, 2023

4,050,000

CLO subordinated notes due May 10, 2025

9,949,500

9,303,429

CLO subordinated notes due January 17, 2024

12,620,875

10,850,000

CLO subordinated notes due April 15, 2025

22,750,000

18,295,625

15,479,495

CLO subordinated notes due April 17, 2026

11,156,250

10,784,314

CLO subordinated notes due July 15, 2024

24,704,625

22,760,050

Carlyle Global Market Strategies CLO 2013-2, Ltd.

CLO subordinated notes due April 18, 2025

7,848,089

Carlyle Global Market Strategies CLO 2014-4, Ltd.

CLO subordinated notes due October 15, 2026

22,689,920

21,916,400

CLO subordinated notes due December 20,

20,075,000

14,520,000

CLO subordinated notes due January 27, 2025

9,750,000

8,300,000

CLO subordinated notes due March 9, 2025

15,631,250

14,062,500

7,200,000

CLO subordinated notes due October 18, 2026

4,412,500

CLO subordinated notes due October 20, 2025

13,272,000

11,343,930

CLO subordinated notes due January 17, 2027

CLO subordinated notes due October 15, 2023

12,644,215

10,750,460

CLO income notes due April 18, 2025

13,473,000

11,729,070

570,082

CLO income notes due June 2, 2025

16,400,000

15,400,000

CLO subordinated notes due August 27, 2020

4,543,935

2,070,500

13,407,500

13,073,425

10,496,657

CLO subordinated notes due January 13, 2025

20,573,750

17,688,284

12,666,666

11,558,333

10,639,999

CLO subordinated notes due April 17, 2015

9,450,000

7,671,510

Other CLO equity related investments

CLO other

3,816,649

289,429,203

259,813,918

1,160,000

4,258,112

728,442

3,425,244

4,275,955

11,226,123

2,004,002

Total Common Stock Investments

10,141,643

9,694,067

Warrants

warrants to purchase common stock

309,080

Total Warrants

Other than Algorithmic Implementation, Inc. (d/b/a Ai Squared), which we may be deemed to control and Nextag, Inc., of which we are deemed to be an affiliate. We do not control and are not an affiliate of any of our portfolio companies, each as defined in the Investment Company Act of 1940 (the 1940 Act). In general, under the 1940 Act, we would be presumed to control a portfolio company if we owned 25% or more of its voting securities and would be an affiliate of a portfolio company if we owned 5% or more of its voting securities.

Portfolio includes $44,119,843 of principal amount of debt investments which contain a PIK provision.

Aggregate gross unrealized appreciation for federal income tax purposes is $14,859,779; aggregate gross unrealized depreciation for federal income tax purposes is $69,463,970. Net unrealized depreciation is $54,604,191 based upon a tax cost basis of $1,038,761,529.

All or a portion of this investment represents collateral under the revolving credit agreement.

Indicates assets that the Company believes do not represent qualifying assets under Section 55(a) of the Investment Company Act of 1940, as amended. Qualifying assets must represent at least 70% of the Companys total assets at the time of acquisition of any additional non-qualifying assets.

Aggregate investments represent greater than 5% of net assets on a fair value basis.

Investment is on non-accrual status. During the period ended December 31, 2014, the investment defaulted on its principal and interest payments.

The principal balance outstanding for this debt investment, in whole or in part, is indexed to 30-day LIBOR.

The principal balance outstanding for this debt investment, in whole or in part, is indexed to 180-day LIBOR.

The principal balance outstanding for this debt investment, in whole or in part, is indexed to 60-day LIBOR.

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months

Ended

Nine Months

INVESTMENT INCOME

From non-affiliated/non-control investments:

Interest income debt investments

13,720,125

12,727,990

39,025,069

38,350,310

Income from securitization vehicles and investments

8,617,121

15,170,869

26,396,541

45,047,290

Commitment, amendment fee income and other income

372,935

1,877,067

1,985,306

4,267,879

Total investment income from non-affiliated/non-control investments

22,710,181

29,775,926

67,406,916

87,665,479

From affiliated investments:

78,616

50,436

221,097

65,139

Total investment income from affiliated investments

From control investments:

345,591

349,361

1,026,283

1,036,691

Total investment income from control investments

23,134,388

30,175,723

68,654,296

88,767,309

EXPENSES

Compensation expense

89,660

472,903

965,293

1,399,476

Investment advisory fees

5,255,583

5,366,277

15,574,269

15,764,248

Professional fees

818,926

603,940

2,330,702

1,601,883

Interest expense and other debt financing expenses

5,031,343

4,963,796

14,969,915

14,805,182

General and administrative

488,939

384,543

1,673,389

1,567,799

Total expenses before incentive fees

11,684,451

11,791,459

35,513,568

35,138,588

Net investment income incentive fees

575,319

1,701,699

(929,933

4,806,278

Capital gains incentive fees

(837,963

(3,872,853

Total incentive fees

863,736

933,425

12,259,770

12,655,195

34,583,635

36,072,013

10,874,618

17,520,528

34,070,661

52,695,296

Net change in unrealized appreciation/depreciation on investments

Non-Affiliate/non-control investments

(37,399,544

(15,123,443

(34,358,991

(18,359,672

(1,610,530

(198,545

5,571,560

3,728,836

(2,005,625

(740,000

Total net change in unrealized appreciation/depreciation on investments

(41,015,699

(15,321,988

(30,793,056

(15,370,836

Net realized gains/(losses) on investments

Non-Affiliated/non-control investments

406,343

(3,460,465

4,606,405

(6,925,632

(6,762,328

(5,264,838

Total net realized gains/(losses) on investments

(2,155,923

(12,190,470

Net (decrease) increase in net assets resulting from operations

(29,734,738

(1,261,925

1,121,682

25,133,990

Net increase in net assets resulting from net investment income per common share:

Diluted

Net (decrease) increase in net assets resulting from operations per common share:

(0.50

(0.02

Weighted average shares of common stock outstanding:

60,268,078

59,997,565

58,307,825

70,021,138

70,301,230

70,030,717

68,340,977

Distributions per share

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

Increase (decrease) in net assets from operations:

34,070,661

65,457,844

Net realized losses on investments

(19,492,649

Net change in unrealized appreciation/(depreciation) on investments

(49,313,595

Net increase (decrease) in net assets resulting from operations

(3,348,400

Distributions to shareholders

Distributions from net investment income

(50,989,788

(60,189,322

Tax return of capital distributions

(9,697,552

Total distributions to shareholders

(69,886,874

Capital share transactions:

Issuance of common stock (net of offering costs of $0 and $2,033,950, respectively)

66,411,050

Repurchase of common stock

(2,386,209

(1,172,574

Reinvestment of distributions

2,567,433

Net (decrease)/increase in net assets from capital share transactions

67,805,909

Total decrease in net assets

(52,254,315

(5,429,365

Net assets at beginning of period

526,242,426

Net assets at end of period (including over distributed net investment income of $20,170,528 and $3,251,401, respectively)

468,558,746

520,813,061

Capital share activity:

Shares sold

Shares repurchased

(315,783

(154,600

Shares issued from reinvestment of distributions

307,624

Net (decrease) increase in capital share activity

6,903,024

CONSOLIDATED STATEMENTS OF CASH FLOWS

CASH FLOWS FROM OPERATING ACTIVITIES

Net increase in net assets resulting from operations

25,133,989

Adjustments to reconcile net increase in net assets resulting from operations to net cash used by operating activities:

Accretion of discounts on investments

(30,137,613

(2,084,266

Accretion of discount on notes payable and deferred debt issuance costs

1,400,334

1,394,558

Increase in investments due to PIK

(519,286

(966,960

Purchases of investments

(215,296,186

(355,027,153

Repayments of principal and reductions to investment cost value

210,451,894

220,455,237

Proceeds from the sale of investments

51,024,934

102,755,346

Increase in interest and distributions receivable

(1,155,218

(2,012,971

Increase in other assets

(18,481

(374,667

Increase in accrued interest payable

2,367,921

2,154,771

Decrease in investment advisory fee payable

(352,584

(76,504

Decrease in accrued capital gains incentive fee

Increase in accrued expenses

311,496

367,040

Net cash provided (used) by operating activities

52,147,872

15,406,873

CASH FLOWS FROM INVESTING ACTIVITIES

Change in restricted cash

1,938,922

(18,610,225

Net cash provided (used) by investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from the issuance of common stock

68,445,000

Offering expenses from the issuance of common stock

(2,033,950

Distributions paid (net of stock issued under dividend reinvestment plan of $0 and $1,847,625, respectively)

(50,535,499

Net cash (used) provided by financing activities

(53,375,997

15,875,551

Net increase in cash and cash equivalents

710,797

12,672,200

Cash and cash equivalents, beginning of period

14,933,074

Cash and cash equivalents, end of period

21,216,120

27,605,274

NON-CASH FINANCING ACTIVITIES

Value of shares issued in connection with dividend reinvestment plan

1,847,625

SUPPLEMENTAL DISCLOSURES

10,242

2,850,000

10,721,250

Cash paid for interest

11,201,660

11,255,851

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. UNAUDITED INTERIM FINANCIAL STATEMENTS

Interim consolidated financial statements of TICC Capital Corp. (TICC and, together with its subsidiaries, the Company) are prepared in accordance with generally accepted accounting principles (GAAP) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain disclosures accompanying annual financial statements prepared in accordance with GAAP are omitted. In the opinion of management, all adjustments, consisting of normal recurring accruals, necessary for the fair statement of consolidated financial results for the interim periods have been included. The current periods consolidated results of operations are not necessarily indicative of results that may be achieved for the year. The interim consolidated financial statements and notes thereto should be read in conjunction with the financial statements and notes thereto included in the Companys Form 10-K for the year ended December 31, 2014, as filed with the Securities and Exchange Commission (SEC).

NOTE 2. ORGANIZATION

TICC was incorporated under the General Corporation Laws of the State of Maryland on July 21, 2003 and is a non-diversified, closed-end investment company. TICC has elected to be treated as a business development company under the Investment Company Act of 1940, as amended (the 1940 Act). In addition, TICC has elected to be treated for tax purposes as a regulated investment company (RIC), under Subchapter M of the Internal Revenue Code of 1986, as amended (the Code). The Companys investment objective is to maximize its total return, by investing primarily in corporate debt securities.

TICCs investment activities are managed by TICC Management, LLC (TICC Management), a registered investment adviser under the Investment Advisers Act of 1940, as amended. BDC Partners, LLC (BDC Partners) is the managing member of TICC Management and serves as the administrator of TICC.

The Companys operations include the activities of its wholly-owned subsidiary, TICC Capital Corp. 2011-1 Holdings, LLC (Holdings), TICC CLO LLC (2011 Securitization Issuer or TICC CLO), TICC CLO 2012-1 LLC (2012 Securitization Issuer or TICC CLO 2012-1) and TICC Funding, LLC (TICC Funding) for the periods in which they were held. These subsidiaries were formed for the purpose of enabling the Company to obtain debt financing and are operated solely for the investment activities of the Company, and the Company has substantial equity at risk. TICC Funding was formed on September 17, 2014, for the purpose of entering into a credit and security agreement with Citibank, N.A., to replace the financing previously obtained through TICC CLO. TICC CLO effectively ceased operations on October 27, 2014, and the notes payable by TICC CLO were repaid with borrowings under the debt facility of TICC Funding. See Note 7. Borrowings for additional information on the Companys subsidiaries and their borrowings.

NOTE 3. CHANGE OF ACCOUNTING FOR COLLATERALIZED LOAN OBLIGATION EQUITY INVESTMENT INCOME

During the first quarter of 2015, the Company identified a non-material error in its accounting for income from Collateralized Loan Obligation (CLO) equity investments. The Company had recorded income from its CLO equity investments using the dividend recognition model as described in ASC 946-320; specifically, dividends were recognized on the applicable record date, subject to estimation and collectability, with a reduction to cost basis in those instances where the Company believed that a return of capital had occurred. The Company has determined that the appropriate method for recording investment income on CLO equity investments is the effective yield method as described in ASC 325-40. This method requires the calculation of an effective yield to expected redemption based upon an estimation of the amount and timing of future cash flows, including recurring cash flows as well as future principal repayments; the difference between the actual cash received (and record date distributions to be received) and the effective yield income calculation is an adjustment to cost. The effective yield is reviewed quarterly and adjusted as appropriate.

NOTE 3. CHANGE OF ACCOUNTING FOR COLLATERALIZED LOAN OBLIGATION EQUITY INVESTMENT INCOME (continued)

The difference between the two methods resulted in an income reclassification error which would generally have resulted in a decrease in total investment income with a corresponding and offsetting increase to net change in unrealized appreciation/depreciation on investments and net realized gains/losses on investments. The Company quantified this error and assessed it in accordance with the guidance provided in SEC Staff Accounting Bulletin (SAB) 108,

Considering the Effects of Prior Year Misstatements When Quantifying Misstatements in Current Year Financial Statements

. Based on this assessment, the Company concluded that the error in income classification did not have a material impact on the Companys previously filed consolidated financial statements.

As a result of this misclassification of income, net investment income incentive fees were overstated by approximately $2.4 million on a cumulative basis through 2014 and, as a result, total net assets as of December 31, 2014 were understated by the same amount, approximately $0.04 per share. The Company also considered this indirect impact of the error in classification, concluded that the error was not material to the Companys previously filed consolidated financial statements. The error was corrected by an out-of-period adjustment in the first quarter of 2015, reducing net investment income incentive fees by approximately $2.4 million and recognizing a corresponding due from affiliate of $2.4 million. TICC Management repaid in full to TICC, on April 30, 2015, the portion of its previously paid net investment income incentive fees attributable to the overstated amounts.

Prospectively as of January 1, 2015, the Company records income from its CLO equity investments using the effective yield method in accordance with the accounting guidance in ASC 325-40,

Beneficial Interests in Securitized Financial Assets

, based upon an estimation of an effective yield to maturity utilizing assumed cash flows.

NOTE 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Holdings, TICC CLO, TICC CLO 2012-1 and TICC Funding. All inter-company accounts and transaction have been eliminated in consolidation.

During the quarter ended September 30, 2015, the Company recorded an out of period adjustment related to a miscalculation of discount accretion which increased interest income and increased investment cost, by approximately $1.4 million. The increase in the investment cost has a corresponding effect on the investment's unrealized depreciation of the same amount. Management concluded the adjustment was not material to previously filed financial statements.

The Company follows the accounting and reporting guidance in FASB Accounting Standards Codification 946.

USE OF ESTIMATES

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America that require management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results may differ from those estimates.

In the normal course of business, the Company may enter into contracts that contain a variety of representations and provide indemnifications. The Companys maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Company that have not yet occurred. However, based upon experience, the Company expects the risk of loss to be remote.

NOTE 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

CONSOLIDATION

As provided under Regulation S-X and ASC Topic 946-810 Financial Services Investment Companies, the Company will generally not consolidate its investment in a company other than a wholly-owned investment company or a controlled operating company whose business consists of providing services to the Company. TICC CLO, TICC CLO 2012-1 and TICC Funding would be considered investment companies but for the exceptions under Sections 3(c)(1) and 3(c)(7) under the 1940 Act, and were established solely for the purpose of allowing the Company to borrow funds for the purpose of making investments. The Company owns all of the equity in these entities and controls the decision making power that drives their economic performance. Accordingly, the Company consolidates the results of the Companys wholly-owned subsidiaries in its financial statements, and follows the accounting and reporting guidance in ASC 946-810.

CASH, CASH EQUIVALENTS AND RESTRICTED CASH

Cash and cash equivalents consist of demand deposits and highly liquid investments with original maturities of three months or less. Cash and cash equivalents are carried at cost or amortized cost which approximates fair value. At September 30, 2015 and December 31, 2014, cash and cash equivalents consisted solely of demand deposits.

Restricted cash represents the cash held by the trustees of the Companys CLO and special purpose vehicle subsidiaries. These amounts are held by the trustee for payment of interest expense and operating expenses of the entity, principal repayments on borrowings, or new investments, based upon the terms of the respective indenture, and are not available for general corporate purposes.

INVESTMENT VALUATION

The Company fair values its investment portfolio in accordance with the provisions of ASC 820,

Fair Value Measurement and Disclosure

. Estimates made in the preparation of TICCs consolidated financial statements include the valuation of investments and the related amounts of unrealized appreciation and depreciation of investments recorded. TICC believes that there is no single definitive method 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 TICC makes.

ASC 820-10 clarified the definition of fair value and requires companies to expand their disclosure about the use of fair value to measure assets and liabilities in interim and annual periods subsequent to initial recognition. ASC 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820-10 also establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, which includes inputs such as quoted prices for similar securities in active markets and quoted prices for identical securities in markets that are not active; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions. TICC considers the attributes of current market conditions on an on-going basis and has determined that due to the general illiquidity of the market for its investment portfolio, whereby little or no market data exists, almost all of TICCs investments are based upon Level 3 inputs as of September 30, 2015.

TICCs Board of Directors determines the value of its investment portfolio each quarter. In connection with that determination, members of TICC Managements portfolio management team prepare a quarterly analysis of each portfolio investment using the most recent portfolio company financial statements, forecasts and other relevant financial and operational information. Since March 2004, TICC has engaged third-party valuation firms to provide assistance in valuing certain of its syndicated loans and bilateral investments,

including related equity investments, although TICCs Board of Directors ultimately determines the appropriate valuation of each such investment. Changes in fair value, as described above, are recorded in the statement of operations as net change in unrealized appreciation or depreciation.

Syndicated Loans

In accordance with ASC 820-10-35, TICCs valuation procedures specifically provide for the review of indicative quotes supplied by the large agent banks that make a market for each security. However, the marketplace from which TICC obtains indicative bid quotes for purposes of determining the fair value of its syndicated loan investments has shown attributes of illiquidity as described by ASC-820-10-35. During such periods of illiquidity, when TICC believes that the non-binding indicative bids received from agent banks for certain syndicated investments that we own may not be determinative of their fair value or when no market indicative quote is available, TICC may engage third-party valuation firms to provide assistance in valuing certain syndicated investments that TICC owns. In addition, TICC Management prepares an analysis of each syndicated loan, financial summary, covenant compliance review, recent trading activity in the security, if known, and other business developments related to the portfolio company. All available information, including non-binding indicative bids which may not be determinative of fair value, is presented to the Valuation Committee to consider in its determination of fair value. In some instances, there may be limited trading activity in a security even though the market for the security is considered not active. In such cases the Valuation Committee will consider the number of trades, the size and timing of each trade, and other circumstances around such trades, to the extent such information is available, in its determination of fair value. The Valuation Committee will evaluate the impact of such additional information, and factor it into its consideration of the fair value that is indicated by the analysis provided by third-party valuation firms, if any.

Collateralized Loan Obligations Debt and Equity

During the past several years, TICC has acquired a number of debt and equity positions in CLO investment vehicles and more recently CLO warehouse investments. These investments are special purpose financing vehicles. In valuing such investments, TICC considers the indicative prices provided by a recognized industry pricing service as a primary source, and the implied yield of such prices, supplemented by actual trades executed in the market at or around period-end, as well as the indicative prices provided by the broker who arranges transactions in such investment vehicles. TICC also considers those instances in which the record date for an equity distribution payment falls on the last day of the period, and the likelihood that a prospective purchaser would require a downward adjustment to the indicative price representing substantially all of the pending distribution. Additional factors include any available information on other relevant transactions including firm bids and offers in the market and information resulting from bids-wanted- in-competition. In addition, TICC considers the operating metrics of the specific investment vehicle, including compliance with collateralization tests, defaulted and restructured securities, and payment defaults, if any. TICC Management or the Valuation Committee may request an additional analysis by a third-party firm to assist in the valuation process of CLO investment vehicles. All information is presented to TICCs Board of Directors for its determination of fair value of these investments.

Bilateral Investments (Including Equity)

Bilateral investments for which market quotations are readily available are valued by an independent pricing agent or market maker. If such market quotations are not readily available, under the valuation procedures approved by TICCs Board of Directors, upon the recommendation of the Valuation Committee, a third-party valuation firm will prepare valuations for each of TICCs bilateral investments that, when combined with all other investments in the same portfolio company, (i) have a value as of the previous quarter of greater than or equal to 2.5% of its total assets as of the previous quarter, and (ii) have a value as of the current quarter of greater than or equal to 2.5% of its total assets as of the previous quarter, after taking into

account any repayment of principal during the current quarter. In addition, in those instances where a third-party valuation is prepared for a portfolio investment which meets the parameters noted in (i) and (ii) above, the frequency of those third-party valuations is based upon the grade assigned to each such security under its credit grading system as follows: Grade 1, at least annually; Grade 2, at least semi-annually; Grades 3, 4, and 5, at least quarterly. Bilateral investments which do not meet the parameters in (i) and (ii) above are not required to have a third-party valuation and, in those instances, a valuation analysis will be prepared by TICC Management. TICC Management also retains the authority to seek, on TICCs behalf, additional third party valuations with respect to both TICCs bilateral portfolio securities and TICCs syndicated loan investments. TICCs Board of Directors retains ultimate authority as to the third-party review cycle as well as the appropriate valuation of each investment.

Interest Income

Interest income is recorded on an accrual basis using the contractual rate applicable to each debt investment and includes the accretion of discounts and amortization of premiums. Discounts from and premiums to par value on securities purchased are accreted/amortized into interest income over the life of the respective security using the effective yield method. The amortized cost of investments represents the original cost adjusted for the accretion of discounts and amortization of premiums, if any.

Generally, when interest and/or principal payments on a loan become past due, or if the Company otherwise does not expect the borrower to be able to service its debt and other obligations, the Company will place the loan on non-accrual status and will generally cease recognizing interest income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or due to restructuring such that the interest income is deemed to be collectible. The Company generally restores non-accrual loans to accrual status when past due principal and interest is paid and, in the Companys judgment, is likely to remain current. As of September 30, 2015, the Company held no non-accrual assets in its portfolio; as of September 30, 2014, the Companys investment in Unitek Global Services, Inc.s senior secured notes was on non-accrual status.

In addition, the Company earns income from the discount on debt securities it purchases, including original issue discount (OID) and market discount. Original issue discount and market discounts are capitalized and amortized into income using the interest method, as applicable.

Income from Securitization Vehicles and Equity Investments

Income from investments in the equity class securities of CLO vehicles (typically income notes or subordinated notes) is recorded using the effective interest method in accordance with the provisions of ASC 325-40,

, based upon an estimation of an effective yield to maturity utilizing assumed cash flows, including those CLO equity investments that have not made their inaugural distribution for the relevant period end. The Company monitors the expected residual payments, and effective yield is determined and updated periodically, as needed. Accordingly, investment income recognized on CLO equity securities in the GAAP statement of operations differs from both the tax-basis investment income and from the cash distributions actually received by the Company during the period.

Payment-In-Kind

TICC has investments in its portfolio which contain a contractual payment-in-kind (PIK) provision. Certain PIK investments offer issuers the option at each payment date of making payments in cash or additional securities. PIK interest computed at the contractual rate is accrued into income and added to the principal balance on the capitalization date. Upon capitalization, PIK is subject to the fair value estimates

associated with their related investments. PIK investments on non-accrual status are restored to accrual status once it becomes probable that PIK will be realized. To maintain its status as a RIC, this income must be paid out to stockholders in the form of dividends, even though TICC has not collected any cash. Amounts necessary to pay these dividends may come from available cash or the liquidation of certain investments.

Other Income

Other income includes distributions from fee letters, closing or origination fees, and success fees associated with portfolio investments. Distributions from fee letters are an enhancement to the return on a CLO equity investment and are based upon a percentage of the collateral managers fees, and are recorded as other income when earned. Closing or origination fees, if any, are normally paid at closing of an investment, are fully earned and non-refundable, and generally are non-recurring. The Company may also earn success fees associated with its investments in certain securitization vehicles or CLO warehouse facilities, which are contingent upon a take-out of the warehouse by a permanent CLO structure; such fees are earned and recognized when the take-out is completed.

DEFERRED DEBT ISSUANCE COSTS

Deferred debt issuance costs consist of fees and expenses incurred in connection with the closing or amending of credit facilities and debt offerings, and are capitalized at the time of payment. These costs are amortized using the straight line method over the terms of the respective credit facilities and debt securities. This amortization expense is included in interest expense in the Companys financial statements. Upon early termination of debt, or a credit facility, the remaining balance of unaccreted fees related to such debt is accelerated into interest expense.

EQUITY OFFERING COSTS

Equity offering costs consist of fees and expenses incurred in connection with the registration and public offer and sale of the Companys common stock, including legal, accounting and printing fees. These costs are deferred at the time of incurrence and are subsequently charged to capital when the offering takes place or as shares are issued. Deferred costs are periodically reviewed and expensed if the related registration is no longer active.

SHARE REPURCHASES

From time to time, the Companys Board of Directors may authorize a share repurchase program under which shares are purchased in open market transactions. Since the Company is incorporated in the State of Maryland, state law requires share repurchases to be accounted for as a share retirement. The cost of repurchased shares is charged against capital on the settlement date. As of September 30, 2015, the Company did not have an active share repurchase program.

OTHER ASSETS

Other assets consists of prepaid expenses associated primarily with insurance costs.

U.S. FEDERAL INCOME TAXES

The Company intends to operate so as to qualify to be taxed as a RIC under Subchapter M of the Code and, as such, to not be subject to U.S. federal income tax on the portion of its taxable income and gains distributed to stockholders. To qualify for RIC tax treatment, TICC is required to distribute at least 90% of its investment company taxable income, as defined by the Code.

Because U.S. federal income tax regulations differ from accounting principles generally accepted in the United States, distributions in accordance with tax regulations may differ from net investment income and realized gains recognized for financial reporting purposes. Differences may be permanent or temporary. Permanent differences are reclassified among capital accounts in the financial statement to reflect their tax character. Temporary differences arise when certain items of income, expense, gain or loss are recognized at some time in the future. Differences in classification may also result from the treatment of short-term gains as ordinary income for tax purposes.

For tax purposes, the cost basis of the portfolio investments at September 30, 2015 and December 31, 2014, was approximately $1,042,317,640 and $1,038,761,529, respectively.

NOTE 5. FAIR VALUE

The Companys assets measured at fair value on a recurring basis at September 30, 2015 were as follow:

($ in millions)

Fair Value Measurements at Reporting Date Using

Quoted Prices in

Active Markets for

Identical Assets

(Level 1)

Significant Other

Observable Inputs

(Level 2)

Unobservable

(Level 3)

CLO Debt

CLO Equity

The Companys assets measured at fair value on a recurring basis at December 31, 2014 were as follows:

NOTE 5. FAIR VALUE (continued)

Significant Unobservable Inputs for Level 3 Investments

The following tables provide quantitative information about the Companys Level 3 fair value measurements as of September 30, 2015 and December 31, 2014, respectively. The Companys valuation policy, as described above, establishes parameters for the sources and types of valuation analysis, as well as the methodologies and inputs that the Company uses in determining fair value. If the Valuation Committee or TICC Management determines that additional techniques, sources or inputs are appropriate or necessary in a given situation, such additional work will be undertaken. The tables, therefore, are not all-inclusive, but provide information on the significant Level 3 inputs that are pertinent to the Companys fair value measurements. The weighted average calculations in the table below are based on principal balances for all debt related calculations and CLO equity.

Quantitative Information about Level 3 Fair Value Measurements

Techniques/

Methodologies

Range/Weighted Average

Corporate debt investments syndicated

551.2

Market quotes

70.3% 100.5%/98.0%

Yield Analysis

99.4% 99.5%/99.4%

Discount Margin

4.50%/ncm

Recent transactions

Actual trade/payoff

100.0%

Market quotes/

Enterprise value

83.1% 94.7%/84.5%

EBITDA multiples

4.25x 5.75x/ncm

1.7/ncm

Market multiples

5.0x $6.0x/ncm

Discount rates

CLO debt

41.2% 90.0%/63.5%

0.5% 0.5%/0.5%

Discounted cash flow

10.4% 16.7%/ncm

Equity Shares

1.7 $188.6/ncm

Discounted cash flow

4.3x-8.6x/ncm

20.0%/ncm

Total Fair Value for Level 3 Investments

878.1

The Company generally uses prices provided by an independent pricing service, or broker or agent bank non-binding indicative bid prices (NBIB) on or near the valuation date as the primary basis for the fair value determinations for syndicated notes, and CLO debt and equity investments, which may be adjusted for pending equity distributions as of valuation date. These bid prices are non-binding, and may not be determinative of fair value. Each bid price is evaluated by the Valuation Committee in conjunction with additional information compiled by TICC Management, including financial performance, recent business developments, and, in the case of CLO debt and equity investments, performance and covenant compliance information as provided by the independent trustee.

EBITDA, or earnings before interest expense, taxes, depreciation and amortization, is an unobservable input which is generally based on most recently available twelve month financial statements provided by the portfolio company. Market multiples, also an unobservable input, represent an estimation of where market participants might value an enterprise based upon information available for comparable companies in the market.

Discount rate represents the rate at which future cash flows are discounted to calculate a present value, reflecting market assumptions for risk.

The calculation of weighted average for a range of values, for multiple investments within a given asset category, is not considered to provide a meaningful representation (ncm).

The Company will calculate the fair value of certain CLO equity investments based upon the net present value of expected contractual payment streams discounted using estimated market yields for the equity tranche of the respective CLO vehicle. TICC will also consider those investments in which the record date for an equity distribution payment falls on the last day of the period, and the likelihood that a prospective purchaser would require an adjustment to the transaction price representing substantially all of the pending distribution.

Prices provided by independent pricing services are evaluated in conjunction with actual trades and payoffs and, in certain cases, the value represented by actual trades or payoffs may be more representative of fair value as determined by the Valuation Committee.

For the Companys bilateral debt investments and equity investments, third-party valuation firms evaluate the financial and operational information of the portfolio companies that we provide to them, as well as independent market and industry information that they consider appropriate in forming an opinion as to the fair value of our securities. In those instances where the carrying value and/or internal credit rating of the investment does not require the use of a third-party valuation firm, a...


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