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

FORM 10-Q


(Mark One)
x		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2014


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

COMMISSION FILE NUMBER: 0-50398

TICC CAPITAL CORP.

(Exact name of registrant as specified in its charter)


MARYLAND		20-0188736
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

8 SOUND SHORE DRIVE, SUITE 255
GREENWICH, CONNECTICUT 06830

(Address of principal executive office)

(203) 983-5275

(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

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


Large accelerated filer o		Accelerated filer x
Non-accelerated filer o		Smaller reporting company o

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

Yes o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. The number of shares of the issuer’s common stock, $0.01 par value, outstanding as of November 5, 2014 was 60,357,746.

TABLE OF CONTENTS

TICC CAPITAL CORP.

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION			1
Item 1. Financial Statements (Unaudited)			1
Consolidated Statements of Assets and Liabilities as of September 30, 2014 and December 31, 2013			1
Consolidated Schedule of Investments as of September 30, 2014			2
Consolidated Schedule of Investments as of December 31, 2013			6
Consolidated Statements of Operations for the three and nine months ended September 30, 2014 and 2013			11
Consolidated Statements of Changes in Net Assets for the nine months ended September 30, 2014 and for the year ended December 31, 2013			12
Consolidated Statements of Cash Flows for the nine months ended September 30, 2014 and 2013			13
Notes to Consolidated Financial Statements			14
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			41
Cautionary Statements Regarding Forward-Looking Statements			41
Overview			42
Critical Accounting Policies			43
Portfolio Composition and Investment Activity			49
Liquidity and Capital Resources			66
Recent Developments			70
Item 3. Quantitative and Qualitative Disclosures About Market Risk.			70
Item 4. Controls and Procedures			71
PART II. OTHER INFORMATION			72
Item 1. Legal Proceedings			72
Item 1A. Risk Factors			72
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			72
Item 3. Defaults Upon Senior Securities			72
Item 4. Mine Safety Disclosures			72
Item 5. Other Information			72
Item 6. Exhibits			73
SIGNATURES			75

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

TICC CAPITAL CORP.

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(unaudited)


	September 30, 2014			December 31, 2013
ASSETS
Non-affiliated/non-control investments (cost: $923,914,672 @ 9/30/14; $901,728,071 @ 12/31/13)	$	923,317,755		$	915,546,744
Affiliated investments (cost: $4,217,123 @ 9/30/14; $0 @ 12/31/13)		4,001,877			—
Control investments (cost: $16,900,000 @ 9/30/14; $16,900,000 @ 12/31/13)		15,310,000			16,050,000
Total investments at fair value (cost: $945,031,795 @ 9/30/14; $918,628,071 @ 12/31/13)		942,629,632			931,596,744
Cash and cash equivalents		27,605,274			14,933,074
Restricted cash		51,038,473			32,428,248
Deferred debt issuance costs		7,039,157			7,985,580
Interest and distributions receivable		13,146,943			11,133,972
Other assets		462,790			88,122
Total assets	$	1,041,922,269		$	998,165,740
LIABILITIES
Accrued interest payable	$	4,751,664		$	2,596,893
Investment advisory fee payable to affiliate		7,067,976			7,144,480
Accrued capital gains incentive fee to affiliate		—			3,872,853
Securities purchased not settled		10,721,250			6,994,852
Accrued expenses		1,004,936			637,896
Notes payable – TICC CLO LLC, net of discount		100,160,015			100,041,226
Notes payable – TICC CLO 2012-1 LLC, net of discount		235,964,462			235,635,114
Convertible senior notes payable		115,000,000			115,000,000
Total liabilities		474,670,303			471,923,314
COMMITMENTS AND CONTINGENCIES (Note 14)
NET ASSETS
Common stock, $0.01 par value, 100,000,000 shares authorized, and 60,357,746 and 53,400,745 issued and outstanding, respectively		603,577			534,007
Capital in excess of par value		629,525,871			561,336,766
Net unrealized appreciation on investments		(2,402,163	)		12,968,673
Accumulated net realized losses on investments		(57,629,704	)		(45,439,234	)
Distributions in excess of investment income		(2,845,615	)		(3,157,786	)
Total net assets		567,251,966			526,242,426
Total liabilities and net assets	$	1,041,922,269		$	998,165,740
Net asset value per common share	$	9.40		$	9.85

See Accompanying Notes.

TABLE OF CONTENTS

TICC CAPITAL CORP.

CONSOLIDATED SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2014
(unaudited)


COMPANY ⁽¹⁾	INDUSTRY		INVESTMENT		PRINCIPAL AMOUNT		COST		FAIR VALUE ⁽²⁾		% OF NET ASSETS
Senior Secured Notes
ABB/Con Cise Optical Group		retail		tranche B term loan ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽¹⁰⁾ (4.50%, due February 06, 2019)	$	6,550,217	$	6,524,257	$	6,419,213
Algorithmic Implementations, Inc. (d/b/a “Ai Squared”)		software		senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ (9.84%, due September 11, 2016)		13,900,000		13,900,000		13,900,000
Aricent Technologies, Inc.		telecommunication services		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (5.50%, due April 14, 2021)		9,975,000		9,903,199		9,908,467
				second lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ (9.50%, due April 14, 2022)		18,000,000		17,966,936		17,879,940
ARSLOANE Intermediate, LLC (F/K/A “Pitney Bowes Management Services, Inc.”)		printing and publishing		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (7.50%, due October 01, 2019)		15,880,000		15,783,022		15,784,720
Ascensus, Inc.		financial intermediaries		senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽¹⁰⁾ (5.00%, due December 02, 2019)		9,426,263		9,440,618		9,432,202
				second lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁹⁾ (9.00%, due December 02, 2020)		2,000,000		1,973,248		2,020,000
Attachmate Corporation		enterprise software		senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (7.25%, due November 22, 2017)		6,514,150		6,428,136		6,516,169
				second lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (11.00%, due November 22, 2018)		17,514,795		17,317,748		17,742,487
Birch Communications, Inc.		telecommunication services		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁹⁾ ⁽¹⁰⁾ (7.75%, due July 18, 2020)		16,000,000		15,710,514		15,600,000
Blue Coat System, Inc.		software		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁹⁾ (4.00%, due May 31, 2019)		3,989,928		4,006,889		3,906,818
				second lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ (9.50%, due June 28, 2020)		15,000,000		14,869,805		14,887,500
BMC Software Finance, Inc.		business services		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ (5.00%, due September 10, 2020)		4,788,889		4,804,844		4,705,083
ConvergeOne Holdings Corp.		business services		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (6.00%, due June 17, 2020)		15,960,000		15,902,262		15,840,300
				second lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ (9.00%, due June 17, 2021)		3,000,000		2,970,719		2,985,000
CRCI Holdings, Inc.		utilities		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (5.00%, due July 10, 2019)		9,922,500		9,890,276		9,773,663
CT Technologies Intermediate		healthcare		second lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ (9.25%, due October 04, 2020)		6,500,000		6,638,722		6,467,500
Dell International LLC		electronics		term B senior secured notes ⁽⁴⁾ ⁽⁶⁾ ⁽⁹⁾ (4.50%, due April 29, 2020)		3,979,950		3,979,950		3,949,185
Deltek Systems, Inc.		enterprise software		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽¹⁰⁾ (4.50%, due October 10, 2018)		4,568,625		4,545,953		4,517,228
				second lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ (10.00%, due October 10, 2019)		10,000,000		9,897,099		10,050,000
Edmentum, Inc. (F/K/A “Plato, Inc.”)		education		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (5.50%, due May 17, 2018)		6,525,201		6,469,217		6,459,949
First American Payment Systems		financial intermediaries		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽¹⁰⁾ (5.75%, due October 04, 2018)		3,035,078		3,045,660		3,021,815
				second lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁹⁾ ⁽¹⁰⁾ (10.75%, due April 12, 2019)		13,982,241		13,767,723		13,912,330
First Data Corporation		financial intermediaries		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁹⁾ ⁽¹⁰⁾ (4.15%, due March 24, 2021)		16,050,721		16,006,161		15,809,960
GlobalLogic Holdings Inc.		business services		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (6.25%, due June 02, 2019)		17,368,750		17,295,449		16,804,266
Global Tel Link Corp		telecommunication services		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ (5.00%, due May 23, 2020)		4,597,990		4,576,862		4,552,976
				second lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ (9.00%, due November 23, 2020)		13,000,000		12,859,819		12,870,000
Harvard Drug Group, LLC		pharmaceutical		senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽¹⁰⁾ (5.00%, due October 29, 2019)		3,465,000		3,464,792		3,465,000

(Continued on next page)

See Accompanying Notes.

TABLE OF CONTENTS

TICC CAPITAL CORP.

CONSOLIDATED SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2014
(unaudited)


COMPANY ⁽¹⁾	INDUSTRY		INVESTMENT		PRINCIPAL AMOUNT		COST		FAIR VALUE ⁽²⁾		% OF NET ASSETS
Senior Secured Notes – (continued)
Help/Systems Holdings, Inc.		software		senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ ⁽¹⁴⁾ (5.50%, due June 28, 2019)	$	14,850,000	$	14,720,964	$	14,682,938
				second lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽¹⁴⁾ (9.50%, due June 28, 2020)		15,000,000		14,803,004		14,850,000
HHI Holdings LLC		auto parts manufacturer		senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽¹⁰⁾ (5.00%, due October 05, 2018)		12,517,170		12,566,233		12,470,231
iEnergizer Limited		printing and publishing		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽¹⁰⁾ ⁽¹¹⁾ (7.25%, due May 01, 2019)		7,000,000		6,877,303		6,650,000
Immucor, Inc.		healthcare		senior secured term B notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ (5.00%, due August 19, 2018)		4,366,150		4,265,212		4,333,404
Integra Telecom Holdings, Inc		telecommunication services		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (5.25%, due February 22, 2019)		7,367,800		7,327,021		7,305,616
				second lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ (9.75%, due February 22, 2020)		8,850,000		8,897,602		8,835,221
Jackson Hewitt Tax Service, Inc.		consumer services		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (10.00%, due October 16, 2017)		20,682,892		20,112,714		20,579,478
Knowledge Universe Education		education		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽¹⁰⁾ (5.25%, due March 18, 2021)		4,975,000		4,950,847		4,975,000
Merrill Communications, LLC		printing and publishing		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ ⁽¹⁴⁾ (5.75%, due March 08, 2018)		15,083,900		15,069,357		15,272,449
NAB Holdings, LLC		financial intermediaries		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (4.75%, due May 21, 2021)		15,960,000		15,845,215		15,920,100
Nextag, Inc.		retail		senior secured notes ⁽³⁾ ⁽⁹⁾ ⁽¹⁰⁾ (Cash 0.00%/9.25% PIK, due June 04, 2019)		2,213,120		2,213,121		2,213,120
PGX Holdings		consumer services		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽¹⁰⁾ (6.25%, due September 29, 2020)		9,500,000		9,427,529		9,452,500
Presidio IS Corp.		business services		senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (5.00%, due March 31, 2017)		8,331,082		8,313,490		8,315,503
RBS Holding Company		printing and publishing		second lien senior secured notes ⁽³⁾ ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ (Cash 8.25%/1.25% PIK, due March 23, 2017)		22,717,791		12,116,970		16,561,270
Recorded Books, Inc. (F/K/A “Volume Holdings, Inc.”)		printing and publishing		senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (5.25%, due January 31, 2020)		7,800,000		7,726,788		7,722,000
Safenet, Inc.		software		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (6.75%, due March 05, 2020)		9,950,000		9,858,644		9,900,250
SCS Holdings I Inc. (Sirius Computer Solutions, Inc.)		electronics		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ (7.00%, due December 07, 2018)		3,571,635		3,543,295		3,607,351
Securus Technologies, Inc.		telecommunication services		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ (4.75%, due April 30, 2020)		3,960,004		3,926,495		3,910,504
				second lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ (9.00%, due April 30, 2021)		6,400,000		6,370,859		6,344,000
Sesac Holdco II LLC		radio and television		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (5.00%, due February 08, 2019)		14,421,367		14,434,507		14,331,233
Serena Software Inc.		enterprise software		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁹⁾ ⁽¹⁰⁾ (7.50%, due April 14, 2020)		20,000,000		19,626,287		19,981,200
Source Hov, LLC		business services		first lien senior secured notes ⁽⁴⁾ ⁽⁶⁾ ⁽¹⁰⁾ (5.25%, due April 30, 2018)		4,740,000		4,739,337		4,740,000
				second lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽¹⁰⁾ (8.75%, due April 30, 2019)		11,000,000		11,167,469		11,220,000
Sportsman's Warehouse Holdings		retail		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ ⁽¹¹⁾ (7.25%, due July 11, 2019)		10,171,277		10,087,936		10,272,990
STG-Fairway Acquistions		business services		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (6.25%, due February 28, 2019)		9,234,440		9,161,811		9,217,172
Stratus Technologies, Inc.		computer hardware		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (6.00%, due April 28, 2021)		19,337,500		19,166,809		19,434,188

(Continued on next page)

See Accompanying Notes.

TABLE OF CONTENTS

TICC CAPITAL CORP.

CONSOLIDATED SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2014
(unaudited)


COMPANY ⁽¹⁾	INDUSTRY		INVESTMENT		PRINCIPAL AMOUNT		COST		FAIR VALUE ⁽²⁾		% OF NET ASSETS
Senior Secured Notes – (continued)
Symphony Teleca Services Inc.		business services		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁹⁾ ⁽¹⁰⁾ (5.75%, due August 07, 2019)	$	16,000,000	$	15,842,936	$	15,840,000
Teleguam Holdings LLC		telecommunication services		second lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁹⁾ ⁽¹⁰⁾ (8.75%, due June 10, 2019)		8,000,000		7,958,843		8,020,000
The TOPPS Company, Inc.		leisure goods		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (7.25%, due October 02, 2018)		9,925,000		9,838,293		9,726,500
Travel Leaders Group, LLC		travel		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (7.00%, due December 05, 2018)		15,400,000		15,121,206		15,400,000
Unitek Global Services, Inc.		IT consulting		tranche B term loan ⁽³⁾ ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ ⁽¹⁵⁾ (Cash 11.00%/PIK 4.00% due April 15, 2018)		12,272,255		11,608,601		6,712,923
Vision Solutions		software		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (6.00%, due July 23, 2016)		5,327,648		5,276,923		5,301,010
				second lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁹⁾ ⁽¹⁰⁾ (9.50%, due July 23, 2016)		10,000,000		9,955,365		9,875,000
Waupaca Foundry, Inc.		auto parts manufacturer		senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (4.00%, due June 29, 2017)		14,305,547		14,257,911		14,247,461
Total Senior Secured Notes							$	637,116,777	$	637,402,383		112.4	%
Senior Unsecured Notes
Merrill Communications, LLC		printing and publishing		senior unsecured PIK notes ⁽³⁾ ⁽⁵⁾ ⁽⁹⁾ ⁽¹⁴⁾ (Cash 0.00%/10.00% PIK, due March 08, 2023)		6,314,247		3,593,538		6,314,247
Total Senior Unsecured Notes							$	3,593,538	$	6,314,247		1.1	%
Collateralized Loan Obligation – Debt Investments
AMMC CLO XII, Ltd.		structured finance		CLO secured class F notes ^{(4)(5)(11)(12)} (5.28%, due May 10, 2025)		4,500,000		3,926,898		3,737,700
Carlyle Global Market Strategies CLO 2013-2, Ltd.		structured finance		CLO secured class F notes ^{(4)(5)(11)(12)} (5.63%, due April 18, 2025)		6,000,000		5,170,353		5,235,000
Telos CLO 2013-3, Ltd.		structured finance		CLO secured class B notes ^{(4)(5)(11)(12)} (5.73%, due January 17, 2024)		3,000,000		2,739,957		2,512,800
Total Collateralized Loan Obligation – Debt Investments							$	11,837,208	$	11,485,500		2.0	%
Collateralized Loan Obligation – Equity Investments
ACA CLO 2007-1, Ltd.		structured finance		CLO subordinated notes ^(11)(12)		—		10,583,500		5,368,000
ACAS CLO 2012-1, Ltd.		structured finance		CLO subordinated notes ^(11)(12)		—		4,050,000		4,000,000
AMMC CLO XII, Ltd.		structured finance		CLO subordinated notes ^(11)(12)		—		9,949,500		9,820,286
Apidos CLO XIV		structured finance		CLO subordinated notes ^(11)(12)		—		3,569,719		3,711,750
Ares XXV CLO Ltd.		structured finance		CLO subordinated notes ^(11)(12)		—		12,620,875		11,625,000
Ares XXVI CLO Ltd.		structured finance		CLO subordinated notes ^(11)(12)		—		18,295,625		17,389,531
Ares XXIX CLO Ltd.		structured finance		CLO subordinated notes ^(11)(12)		—		11,156,250		12,240,000
Benefit Street Partners CLO II, Ltd.		structured finance		CLO subordinated notes ^(11)(12)		—		24,704,625		26,498,500
Carlyle Global Market Strategies CLO 2013-2, Ltd.		structured finance		CLO subordinated notes ^(11)(12)		—		7,955,000		9,435,000
Carlyle Global Market Strategies CLO 2014-4, Ltd.		structured finance		CLO subordinated notes ^(7)(11)(12)		—		22,689,920		22,689,920
Catamaran CLO 2012-1 Ltd.		structured finance		CLO subordinated notes ^(11)(12)		—		20,075,000		15,180,000
Catamaran CLO 2013-1 Ltd.		structured finance		CLO subordinated notes ^(11)(12)		—		9,750,000		8,900,000
Cedar Funding II CLO, Ltd.		structured finance		CLO subordinated notes ^(11)(12)		—		15,631,250		14,812,500
Columbus Park CDO Ltd.		structured finance		CLO subordinated notes ^(7)(11)(12)		—		2,331,827		652,665
Halcyon Loan Advisors Funding 2012-2 Ltd.		structured finance		CLO subordinated notes ^(11)(12)		—		6,750,000		7,500,000
HarbourView CLO 2006-1		structured finance		CLO subordinated notes ^(11)(12)		—		3,639,870		2,740,400
Ivy Hill Middle Market Credit Fund VII, Ltd.		structured finance		CLO subordinated notes ^(11)(12)		—		13,272,000		12,880,000
Marea CLO, Ltd.		structured finance		CLO income notes ^(11)(12)		—		12,644,215		12,226,620
Mountain Hawk III CLO, Ltd.		structured finance		CLO income notes ^(11)(12)		—		13,473,000		13,650,000

(Continued on next page)

See Accompanying Notes.

TABLE OF CONTENTS

TICC CAPITAL CORP.

CONSOLIDATED SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2014
(unaudited)



COMPANY ⁽¹⁾	INDUSTRY		INVESTMENT		PRINCIPAL AMOUNT/ SHARES		COST		FAIR VALUE ⁽²⁾		% OF NET ASSETS
Collateralized Loan Obligation – Equity Investments – (continued)
Mountain Hawk III CLO, Ltd.		structured finance		CLO M notes ^(11)(12)(13)		—	$	—	$	679,156
CS Advisors CLO I Ltd.		structured finance		CLO subordinated notes ^(7)(11)(12)		—		4,544,945		2,222,000
Shackleton 2013-III CLO, Ltd.		structured finance		CLO subordinated notes ^(11)(12)		—		13,073,425		12,468,975
Shackleton 2013-IV CLO, Ltd.		structured finance		CLO subordinated notes ^(11)(12)		—		20,573,750		20,855,000
Telos CLO 2013-3, Ltd.		structured finance		CLO subordinated notes ^(11)(12)		—		11,558,333		11,273,333
Telos CLO 2014-5, Ltd.		structured finance		CLO subordinated notes ^(11)(12)		—		9,450,000		8,085,000
Other CLO equity related investments		structured finance		CLO other ^(11)(12)(13)		—		—		4,124,856
Total Collateralized Loan Obligation – Equity Investments						—	$	282,342,629	$	271,028,492		47.8	%
Common Stock
Algorithmic Implementations, Inc. (d/b/a “Ai Squared”)		software		common stock ⁽⁷⁾		100		3,000,000		1,410,000
Integra Telecom Holdings, Inc.		telecommunication services		common stock ⁽⁷⁾		775,846		1,712,397		4,488,087
Merrill Communications, LLC		printing and publishing		common equity ^(7)(9)(14)		728,442		3,425,244		8,712,166
Nextag, Inc.		retail		common equity ^(7)(9)(10)		11,226,123		2,004,002		1,788,757
Total Common Stock Investments							$	10,141,643	$	16,399,010		2.9	%
Warrants
Unitek Global Services, Inc.		IT consulting		warrants to purchase common stock ^(7)(9)(10)		309,080		—		—
Total Warrants							$	—	$	—		0.0	%
Total Investments							$	945,031,795	$	942,629,632		166.2	%

(1)

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” as we own greater than 5% of its voting secturities, 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.

(2)

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

(3)

Portfolio includes $43,517,413 of principal amount of debt investments which contain a PIK provision.

(4)

Notes bear interest at variable rates.

(5)

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

(6)

Cost value reflects repayment of principal.

(7)

Non-income producing at the relevant period end.

(8)

Aggregate gross unrealized appreciation for federal income tax purposes is $30,143,823; aggregate gross unrealized depreciation for federal income tax purposes is $52,830,137. Net unrealized depreciation is $22,686,314 based upon a tax cost basis of $965,315,946.

(9)

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

(10)

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

(11)

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.

(12)

Investment not domiciled in the United States.

(13)

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

(14)

Aggregate investments represent greater than 5% of net assets.

(15)

Investment is on non-accrual status.

See Accompanying Notes.

TABLE OF CONTENTS

TICC CAPITAL CORP.

CONSOLIDATED SCHEDULE OF INVESTMENTS
DECEMBER 31, 2013


COMPANY ⁽¹⁾	INDUSTRY		INVESTMENT		PRINCIPAL AMOUNT		COST ⁽⁸⁾		FAIR VALUE ⁽²⁾		% OF NET ASSETS
Senior Secured Notes
ABB/Con Cise Optical Group		retail		tranche B term loan ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽¹⁰⁾ (4.50%, due February 06, 2019)	$	6,616,667	$	6,585,774	$	6,612,565
Algorithmic Implementations, Inc. (d/b/a “Ai Squared”)		software		senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ (9.84%, due September 11, 2016)		13,900,000		13,900,000		13,900,000
ARSLOANE Intermediate, LLC (F/K/A “Pitney Bowes Management Services, Inc.”)		printing and publishing		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (7.50%, due October 01, 2019)		15,960,000		15,861,012		16,119,600
Ascensus, Inc.		financial intermediaries		senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽¹⁰⁾ (5.00%, due December 02, 2019)		4,500,000		4,477,733		4,516,875
				second lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁹⁾ (9.00%, due December 02, 2020)		2,000,000		1,970,304		2,030,000
Attachmate Corporation		enterprise software		senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (7.25%, due November 22, 2017)		6,951,181		6,841,638		7,075,746
				second lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (11.00%, due November 22, 2018)		17,514,795		17,293,739		17,076,925
Blue Coat System, Inc.		software		second lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ (9.50%, due June 28, 2020)		15,000,000		14,857,231		15,225,000
Compucom Systems, Inc.		IT outsourcing		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽¹⁰⁾ (4.25%, due May 09, 2020)		6,965,000		6,932,582		6,947,588
CRCI Holdings, Inc.		utilities		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (5.00%, due July 10, 2019)		7,730,625		7,691,875		7,537,359
Deltek Systems Inc		enterprise software		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽¹⁰⁾ (5.00%, due October 10, 2018)		4,603,500		4,579,450		4,615,009
				second lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ (10.00%, due October 10, 2019)		10,000,000		9,887,700		10,150,000
DG Fastchannel Inc		advertising		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽¹⁰⁾ ⁽¹¹⁾ (7.25%, due July 26, 2018)		5,099,200		5,045,528		5,118,322
Edmentum, Inc. (F/K/A “Plato, Inc.”)		education		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (5.50%, due May 17, 2018)		6,603,572		6,537,954		6,603,572
First American Payment Systems		financial intermediaries		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽¹⁰⁾ (5.75%, due October 04, 2018)		3,592,000		3,599,307		3,574,040
				second lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁹⁾ ⁽¹⁰⁾ (10.75%, due April 12, 2019)		15,000,000		14,741,562		14,812,500
First Data Corporation		financial intermediaries		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁹⁾ ⁽¹⁰⁾ (4.16%, due March 24, 2017)		16,050,721		15,999,634		16,062,759
				tranche B term loan ⁽⁴⁾ ⁽⁵⁾ ⁽⁹⁾ ⁽¹⁰⁾ (4.16%, due September 24, 2018)		880,952		880,952		881,445
GlobalLogic Holdings Inc.		business services		second lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁹⁾ ⁽¹⁰⁾ (6.25%, due June 02, 2019)		14,500,000		14,399,746		14,463,750
Global Tel Link Corp		telecommunication services		second lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ (9.00%, due November 23, 2020)		13,000,000		12,849,004		12,317,500
Grede Holdings LLC		auto parts manufacturer		senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (4.50%, due April 03, 2017)		7,888,043		7,815,360		7,897,903
GXS Worldwide, Inc.		business services		senior secured notes ⁽⁵⁾ ⁽⁹⁾ (9.75%, due June 15, 2015)		8,000,000		7,956,899		8,230,000
Harvard Drug Group, LLC		pharmaceutical		senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽¹⁰⁾ (5.00%, due October 29, 2019)		3,482,500		3,482,272		3,506,460
Healogics, Inc. (F/K/A “National Healing Corp.”)		healthcare		senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽¹⁰⁾ (5.25%, due February 05, 2019)		3,308,333		3,293,814		3,325,900
				second lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽¹⁰⁾ (9.25%, due February 05, 2020)		4,000,000		3,963,713		4,070,000
Help/Systems Holdings, Inc.		Software		senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ ⁽¹⁴⁾ (5.50%, due June 28, 2019)		14,962,500		14,820,777		14,812,875
				second lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽¹⁴⁾ (9.50%, due June 28, 2020)		15,000,000		14,784,423		15,000,000

(Continued on next page)

See Accompanying Notes.

TABLE OF CONTENTS

TICC CAPITAL CORP.

CONSOLIDATED SCHEDULE OF INVESTMENTS – (Continued)
DECEMBER 31, 2013


COMPANY ⁽¹⁾	INDUSTRY		INVESTMENT		PRINCIPAL AMOUNT		COST ⁽⁸⁾		FAIR VALUE ⁽²⁾		% OF NET ASSETS
Senior Secured Notes – (continued)
HHI Holdings LLC		auto parts manufacturer		senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽¹⁰⁾ (5.00%, due October 05, 2018)	$	4,022,989	$	3,992,685	$	4,056,943
Hoffmaster Group, Inc.		retail		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (6.50%, due January 03, 2018)		6,684,258		6,662,625		6,667,547
iEnergizer Limited		printing and publishing		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽¹⁰⁾ ⁽¹¹⁾ ⁽¹²⁾ (7.25%, due May 01, 2019)		7,600,000		7,461,635		7,493,600
Immucor, Inc.		healthcare		senior secured term B notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ (5.00%, due August 19, 2018)		4,399,480		4,272,831		4,418,178
Integra Telecom Holdings, Inc		telecommunication services		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (5.25%, due February 22, 2019)		7,423,900		7,377,750		7,513,581
				second lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ (9.75%, due February 22, 2020)		7,000,000		7,000,000		7,187,250
Jackson Hewitt Tax Service, Inc.		consumer services		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (10.00%, due October 17, 2017)		24,218,750		23,417,067		23,976,563
JHCI Holdings, Inc.		logistics		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽¹⁰⁾ (7.00%, due July 11, 2019)		8,791,364		8,759,354		8,778,177
Mercury Payment Systems, LLC		financial intermediaries		senior secured notes ⁽⁴⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (5.50%, due July 01, 2017)		4,887,605		4,887,605		4,909,013
Merrill Communications, LLC		printing and publishing		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ ⁽¹⁴⁾ (7.25%, due March 08, 2018)		16,321,045		16,299,279		16,640,611
Mirion Technologies, Inc		utilities		senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ (5.75%, due March 30, 2018)		2,439,635		2,402,608		2,436,585
Mmodal, Inc		healthcare		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (7.75%, due August 17, 2019)		9,541,573		9,441,549		8,253,461
NAB Holdings, LLC		financial intermediaries		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (7.00%, due April 24, 2018)		9,805,000		9,793,660		9,854,025
National Vision, Inc		retail		senior secured term B notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (7.00%, due August 02, 2018)		5,191,111		5,144,171		5,204,089
New Breed Logistics		logistics		senior secured term B notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (6.00%, due October 01, 2019)		11,678,003		11,674,611		11,692,601
Nextag, Inc.		retail		senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁷⁾ ⁽⁹⁾ ⁽¹⁰⁾ ⁽¹⁵⁾ (9.25%, due January 27, 2016)		10,012,180		9,417,380		5,506,699
Otter Products, LLC		chemicals and plastics		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (5.25%, due April 30, 2020)		14,664,000		14,662,652		14,590,680
Packaging Coordinators, Inc.		packaging and containers		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽¹⁰⁾ (5.50%, due May 10, 2020)		4,987,500		4,964,326		4,987,500
Philips Plastics Corporation		healthcare		senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ (4.75%, due February 12, 2017)		2,932,875		2,916,909		2,925,543
Presidio IS Corp.		business services		senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (5.75%, due March 31, 2017)		9,875,000		9,850,057		9,883,196
RBS Holding Company		printing and publishing		second lien senior secured notes ⁽³⁾ ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ (Cash 8.25%/1.25% PIK, due March 23, 2017)		22,686,300		11,090,554		16,697,117
Renfro Corporation		clothing		senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (5.75%, due January 30, 2019)		4,631,667		4,658,084		4,625,877
Roundys Supermarkets, Inc.		grocery		term B senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽¹⁰⁾ ⁽¹¹⁾ (5.75%, due February 13, 2019)		6,926,246		6,676,199		6,918,696
SCS Holdings I Inc. (Sirius Computer Solutions, Inc.)		electronics		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ (7.00%, due December 07, 2018)		3,845,673		3,811,027		3,893,744
Securus Technologies, Inc.		telecommunication services		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ (4.75%, due April 30, 2020)		3,990,000		3,953,241		3,946,349
				second lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ (9.00%, due April 30, 2021)		6,400,000		6,369,803		6,340,032
Sedgwick Claims Management Services, Inc.		insurance		first lien senior secured notes ⁽⁴⁾ ⁽⁶⁾ ⁽¹⁰⁾ (4.25%, due June 12, 2018)		1,990,000		1,990,000		1,999,910
				second lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽¹⁰⁾ (8.00%, due December 12, 2018)		1,500,000		1,493,075		1,524,375

(Continued on next page)

See Accompanying Notes.

TABLE OF CONTENTS

TICC CAPITAL CORP.

CONSOLIDATED SCHEDULE OF INVESTMENTS – (Continued)
DECEMBER 31, 2013


COMPANY ⁽¹⁾	INDUSTRY		INVESTMENT		PRINCIPAL AMOUNT		COST ⁽⁸⁾		FAIR VALUE ⁽²⁾		% OF NET ASSETS
Senior Secured Notes – (continued)
Sesac Holdco II LLC		radio and television		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽¹⁰⁾ (5.00%, due February 08, 2019)	$	8,236,800	$	8,290,039	$	8,267,688
				second lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽¹⁰⁾ (10.00%, due July 12, 2019)		2,000,000		1,972,970		2,040,000
Skillsoft Corporation		business services		senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽¹⁰⁾ (5.00%, due May 26, 2017)		2,547,640		2,560,457		2,563,563
Source Hov, LLC		business services		first lien senior secured notes ⁽⁴⁾ ⁽⁶⁾ ⁽¹⁰⁾ (5.25%, due April 30, 2018)		4,776,000		4,775,407		4,801,886
				second lien senior secured notes ⁽⁴⁾ ⁽¹⁰⁾ (8.75%, due April 30, 2019)		2,000,000		1,999,627		2,022,500
Sportsman’s Warehouse Holdings		retail		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (7.25%, due July 11, 2019)		14,962,500		14,819,558		15,037,313
Sterling Infosystems, Inc.		business services		senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ (5.76%, due February 01, 2018)		2,557,588		2,517,998		2,554,391
STG-Fairway Acquistions		business services		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (6.25%, due February 28, 2019)		9,304,704		9,221,643		9,287,304
Stratus Technologies, Inc.		computer hardware		first lien high yield notes ⁽⁵⁾ ⁽⁹⁾ (12.00%, due March 29, 2015)		9,282,000		9,010,471		9,282,000
Sumtotal Systems, Inc.		business services		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ (6.28%, due November 16, 2018)		4,679,730		4,639,832		4,609,534
				second lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽¹⁰⁾ (10.25%, due May 16, 2019)		11,250,000		11,050,805		11,053,125
Technimark LLC		chemicals and plastics		senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (5.50%, due April 17, 2019)		14,109,186		14,063,239		14,038,640
Teleguam Holdings LLC		telecommunication services		second lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁹⁾ ⁽¹⁰⁾ (8.75%, due June 10, 2019)		10,000,000		9,923,000		10,000,000
The TOPPS Company, Inc.		leisure goods		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁹⁾ ⁽¹⁰⁾ (7.25%, due October 02, 2018)		10,000,000		9,903,295		9,975,000
Travelclick Inc		travel		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (5.75%, due March 16, 2016)		10,502,287		10,462,173		10,554,798
Travel Leaders Group, LLC		travel		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (7.00%, due December 05, 2018)		16,000,000		15,683,843		15,720,000
Unitek Global Services, Inc.		IT consulting		tranche B term loan ⁽³⁾ ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (Cash 11.00%/PIK 4.00% due April 15, 2018)		11,601,578		11,386,946		11,485,562
Vision Solutions		software		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁹⁾ ⁽¹⁰⁾ (6.00%, due July 23, 2016)		6,000,000		5,940,000		6,012,000
				second lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁹⁾ ⁽¹⁰⁾ (9.50%, due July 23, 2016)		10,000,000		9,936,507		10,050,000
Wall Street Systems		financial intermediaries		first lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (5.75%, due October 25, 2019)		4,950,000		4,885,123		4,971,681
				second lien senior secured notes ⁽⁴⁾ ⁽⁵⁾ (9.25%, due October 23, 2020)		10,000,000		9,821,617		10,075,000
Waupaca Foundry, Inc.		IT consulting		senior secured notes ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ ⁽⁹⁾ ⁽¹⁰⁾ (4.50%, due June 29, 2017)		14,902,773		14,843,578		14,902,773
Total Senior Secured Notes							$	639,198,848	$	644,710,393		122.5	%
Senior Unsecured Notes
Merrill Communications, LLC		printing and publishing		senior unsecured PIK notes ⁽³⁾ ⁽⁵⁾ ⁽⁹⁾ ⁽¹⁴⁾ (0.00% Cash/10.00% PIK, due March 8, 2023)		5,863,406		3,068,694		5,793,045
Total Senior Unsecured Notes							$	3,068,694	$	5,793,045		1.1	%
Collateralized Loan Obligation – Debt Investments
ACA CLO 2007-1, Ltd.		structured finance		CLO secured class E notes ⁽⁴⁾ ⁽⁵⁾ ⁽¹¹⁾ ⁽¹²⁾ (4.99%, due June 15, 2022)		1,957,994		1,771,170		1,817,997
AMMC CLO XII, Ltd.		structured finance		CLO secured class F notes ⁽⁴⁾ ⁽⁵⁾ ⁽¹¹⁾ ⁽¹²⁾ (5.29%, due May 10, 2025)		4,500,000		3,900,232		3,881,250

(Continued on next page)

See Accompanying Notes.

TABLE OF CONTENTS

TICC CAPITAL CORP.

CONSOLIDATED SCHEDULE OF INVESTMENTS – (Continued)
DECEMBER 31, 2013


COMPANY ⁽¹⁾	INDUSTRY		INVESTMENT		PRINCIPAL AMOUNT		COST ⁽⁸⁾		FAIR VALUE ⁽²⁾		% OF NET ASSETS
Collateralized Loan Obligation – Debt Investments – (continued)
Carlyle Global Market Strategies CLO 2013-2, Ltd.		structured finance		CLO secured class F notes ⁽⁴⁾ ⁽⁵⁾ ⁽¹¹⁾ ⁽¹²⁾ (5.65%, due April 18, 2025)	$	6,000,000	$	5,134,093	$	5,344,800
Catamaran CLO 2012-1 Ltd.		structured finance		CLO secured class F notes ⁽⁴⁾ ⁽⁵⁾ ⁽¹¹⁾ ⁽¹²⁾ (6.50%, due December 20, 2023)		6,000,000		5,075,724		5,585,400
Emporia Preferred Funding III, Ltd.		structured finance		CLO secured Class E notes ⁽⁴⁾ ⁽⁵⁾ ⁽¹¹⁾ ⁽¹²⁾ (3.94%, due April 23, 2021)		10,991,000		8,084,311		9,562,170
Telos CLO 2013-3, Ltd.		structured finance		CLO secured class F notes ⁽⁴⁾ ⁽⁵⁾ ⁽¹¹⁾ ⁽¹²⁾ (5.74%, due January 17, 2024)		3,000,000		2,725,546		2,662,200
Total Collateralized Loan Obligation – Debt Investments							$	26,691,076	$	28,853,817		5.5	%
Collateralized Loan Obligation – Equity Investments
ACA CLO 2007-1, Ltd.		structured finance		CLO subordinated notes ⁽¹¹⁾ ⁽¹²⁾		—		10,583,500		8,174,000
ACAS CLO 2012-1, Ltd.		structured finance		CLO subordinated notes ⁽¹¹⁾ ⁽¹²⁾		—		4,050,000		4,200,000
AMMC CLO XII, Ltd.		structured finance		CLO subordinated notes ⁽¹¹⁾ ⁽¹²⁾		—		9,949,500		10,466,357
Apidos CLO XIV		structured finance		CLO subordinated notes ⁽¹¹⁾ ⁽¹²⁾		—		3,569,719		3,863,250
Ares XXV CLO Ltd.		structured finance		CLO subordinated notes ⁽¹¹⁾ ⁽¹²⁾		—		12,620,875		12,400,000
Ares XXVI CLO Ltd.		structured finance		CLO subordinated notes ⁽¹¹⁾ ⁽¹²⁾		—		15,234,375		16,312,500
Benefit Street Partners CLO II, Ltd.		structured finance		CLO subordinated notes ⁽¹¹⁾ ⁽¹²⁾		—		12,870,000		15,860,000
Canaras Summit CLO Ltd.		structured finance		CLO income notes ⁽¹¹⁾ ⁽¹²⁾		—		4,355,000		3,780,000
Carlyle Global Market Strategies CLO 2013-2, Ltd.		structured finance		CLO subordinated notes ⁽¹¹⁾ ⁽¹²⁾		—		7,955,000		9,250,000
Catamaran CLO 2012-1 Ltd.		structured finance		CLO subordinated notes ⁽¹¹⁾ ⁽¹²⁾		—		20,075,000		17,380,000
Cedar Funding II CLO, Ltd.		structured finance		CLO subordinated notes ⁽¹¹⁾ ⁽¹²⁾		—		23,981,250		23,862,500
Columbus Park CDO Ltd.		structured finance		CLO subordinated notes ⁽¹¹⁾ ⁽¹²⁾		—		8,150,000		7,800,000
Galaxy XV CLO, Ltd.		structured finance		CLO income notes ⁽¹¹⁾ ⁽¹²⁾		—		7,012,500		7,095,000
Gale Force 4 CLO, Ltd.		structured finance		CLO income notes ⁽¹¹⁾ ⁽¹²⁾		—		1,965,000		2,010,000
Halcyon Loan Advisors Funding 2012-2 Ltd.		structured finance		CLO subordinated notes ⁽¹¹⁾ ⁽¹²⁾		—		6,750,000		7,425,000
HarbourView CLO 2006-1		structured finance		CLO subordinated notes ⁽¹¹⁾ ⁽¹²⁾		—		3,639,870		3,757,000
Ivy Hill Middle Market Credit Fund VII, Ltd.		structured finance		CLO subordinated notes ⁽¹¹⁾ ⁽¹²⁾		—		13,272,000		13,272,000
Jersey Street CLO, Ltd.		structured finance		CLO income notes ⁽¹¹⁾ ⁽¹²⁾		—		7,535,613		6,598,800
Lightpoint CLO VIII, Ltd.		structured finance		CLO subordinated notes ⁽¹¹⁾ ⁽¹²⁾		—		4,612,500		3,300,000
Marea CLO, Ltd.		structured finance		CLO income notes ⁽¹¹⁾ ⁽¹²⁾		—		10,934,215		10,506,620
North End CLO, Ltd.		structured finance		CLO income notes ⁽¹¹⁾ ⁽¹²⁾		—		4,615,234		4,887,500
Octagon Investment Partners XI, Ltd.		structured finance		CLO income notes ⁽¹¹⁾ ⁽¹²⁾		—		2,434,163		2,403,225
CS Advisors CLO I Ltd.		structured finance		CLO subordinated notes ⁽⁷⁾ ⁽¹¹⁾ ⁽¹²⁾		—		4,812,135		2,828,000
Shackleton 2013-III CLO, Ltd.		structured finance		CLO subordinated notes ⁽¹¹⁾ ⁽¹²⁾		—		10,798,425		10,716,619
Sheridan Square CLO, Ltd.		structured finance		CLO subordinated notes ⁽¹¹⁾ ⁽¹²⁾		—		4,136,511		4,094,302
Stone Tower CLO VII Ltd.		structured finance		CLO subordinated notes ⁽¹¹⁾ ⁽¹²⁾		—		12,739,000		8,775,000
Telos CLO 2013-3, Ltd.		structured finance		CLO subordinated notes ⁽¹¹⁾ ⁽¹²⁾		—		11,558,333		12,286,666

(Continued on next page)

See Accompanying Notes.

TABLE OF CONTENTS

TICC CAPITAL CORP.

CONSOLIDATED SCHEDULE OF INVESTMENTS – (Continued)
DECEMBER 31, 2013



COMPANY ⁽¹⁾	INDUSTRY		INVESTMENT		PRINCIPAL AMOUNT/ SHARES		COST ⁽⁸⁾		FAIR VALUE ⁽²⁾		% OF NET ASSETS
Collateralized Loan Obligation – Equity Investments – (continued)
Other CLO equity related investments		structured finance		CLO other ⁽¹³⁾	$	—	$	—	$	3,862,285
Total Collateralized Loan Obligation – Equity Investments							$	240,209,718	$	237,166,624		45.1	%
Common Stock
Algorithmic Implementations, Inc. (d/b/a “Ai Squared”)		software		common stock ⁽⁷⁾		100		3,000,000		2,150,000
Integra Telecom Holdings, Inc.		telecommunication services		common stock ⁽⁷⁾		775,846		1,712,397		4,412,302
Merrill Communications, LLC		printing and publishing		common equity ⁽⁷⁾		728,442		3,425,244		7,197,009
Stratus Technologies, Inc.		computer hardware		common equity ⁽⁷⁾		223,210		379,810		4,464
Total Common Stock Investments							$	8,517,451	$	13,763,775		2.6	%
Preferred Equity
Stratus Technologies, Inc.		computer hardware		preferred equity ⁽⁷⁾		50,796		217,284		381,986
Total Preferred Equity Investments							$	217,284	$	381,986		0.1	%
Warrants
Fusionstorm, Inc.		IT value-added reseller		warrants to purchase common stock ⁽⁷⁾		540,371		725,000		500,000
Unitek Global Services, Inc.		IT consulting		warrants to purchase common stock ⁽⁷⁾		309,080		—		427,105
Total Warrants							$	725,000	$	927,105		0.2	%
Total Investments							$	918,628,071	$	931,596,744		177.0	%

(1)

Other than Algorithmic Implementation, Inc. (d/b/a Ai Squared), which we may be deemed to control, 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.

(2)

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

(3)

Portfolio includes approximately $40.2 million of principal amount of debt investments which contain a PIK provision.

(4)

Notes bear interest at variable rates.

(5)

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

(6)

Cost value reflects repayment of principal.

(7)

Non-income producing at the relevant period end.

(8)

Aggregate gross unrealized appreciation for federal income tax purposes is $37,039,932; aggregate gross unrealized depreciation for federal income tax purposes is $44,355,411. Net unrealized depreciation is $7,315,479 based upon a tax cost basis of $938,912,223.

(9)

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

(10)

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

(11)

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.

(12)

Investment not domiciled in the United States.

(13)

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

(14)

Aggregate investments represent greater than 5% of net assets.

(15)

Investment is on non-accrual status.

See Accompanying Notes.

TABLE OF CONTENTS

TICC CAPITAL CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)


	Three Months Ended September 30, 2014			Three Months Ended September 30, 2013			Nine Months Ended September 30, 2014			Nine Months Ended September 30, 2013
INVESTMENT INCOME
From non-affiliated/non-control investments:
Interest income – debt investments	$	12,727,990		$	14,039,082		$	38,350,310		$	38,334,197
Distributions from securitization vehicles and equity investments		15,170,869			12,256,961			45,047,290			31,676,007
Commitment, amendment fee income and other income		1,877,067			787,777			4,267,879			3,505,135
Total investment income from non-affiliated/non-control investments		29,775,926			27,083,820			87,665,479			73,515,339
From affiliated investments:
Interest income – debt investments		50,436			—			65,139			—
Distributions from equity investments		—			—			—			—
Total investment income from affiliated investments		50,436			—			65,139			—
From control investments:
Interest income – debt investments		349,361			364,557			1,036,691			1,088,641
Distributions from equity investments		—			—			—			—
Total investment income from control investments		349,361			364,557			1,036,691			1,088,641
Total investment income		30,175,723			27,448,377			88,767,309			74,603,980
EXPENSES
Compensation expense		472,903			310,415			1,399,476			924,818
Investment advisory fees		5,366,277			4,932,640			15,764,248			13,912,382
Professional fees		603,940			386,793			1,601,883			1,474,966
Interest expense and other debt financing expenses		4,963,796			4,977,313			14,805,182			13,980,611
General and administrative		384,543			540,512			1,567,799			1,453,455
Total expenses before incentive fees		11,791,459			11,147,673			35,138,588			31,746,232
Net investment income incentive fees		1,701,699			1,791,981			4,806,278			4,426,322
Capital gains incentive fees		(837,963	)		2,270,014			(3,872,853	)		(414,404	)
Total incentive fees		863,736			4,061,995			933,425			4,011,918
Total expenses		12,655,195			15,209,668			36,072,013			35,758,150
Net investment income		17,520,528			12,238,709			52,695,296			38,845,830
Net change in unrealized appreciation on investments
Non-Affiliate/non-control investments		(15,123,443	)		12,704,136			(18,359,672	)		(41,034	)
Affiliated investments		(198,545	)		—			3,728,836			—
Control investments		—			(12,093	)		(740,000	)		(43,821	)
Total net change in unrealized appreciation on investments		(15,321,988	)		12,692,043			(15,370,836	)		(84,855	)
Net realized (losses) gains on investments
Non-Affiliated/non-control investments		(3,460,465	)		(1,341,975	)		(6,925,632	)		7,126,844
Affiliated investments		—			—			(5,264,838	)		—
Control investments		—			—			—			—
Total net realized (losses) gains on investments		(3,460,465	)		(1,341,975	)		(12,190,470	)		7,126,844
Net (decrease) increase in net assets resulting from operations	$	(1,261,925	)	$	23,588,777		$	25,133,990		$	45,887,819
Net increase in net assets resulting from net investment income per common share:
Basic	$	0.29		$	0.23		$	0.90		$	0.77
Diluted	$	0.28		$	0.22		$	0.85		$	0.74
Net (decrease) increase in net assets resulting from operations per common share:
Basic	$	(0.02	)	$	0.45		$	0.43		$	0.91
Diluted	$	(0.02	)	$	0.41		$	0.43		$	0.85
Weighted average shares of common stock outstanding:
Basic		60,268,078			52,751,722			58,307,825			50,314,364
Diluted		70,301,230			62,784,874			68,340,977			60,347,516
Dividends Declared Per Share	$	0.29		$	0.29		$	0.87		$	0.87

See Accompanying Notes.

TABLE OF CONTENTS

TICC CAPITAL CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)


	Nine Months Ended September 30, 2014			Year Ended December 31, 2013
Increase in net assets from operations:
Net investment income	$	52,695,295		$	55,792,632
Net realized (losses) gains on investments		(12,190,470	)		6,395,596
Net change in unrealized appreciation on investments		(15,370,836	)		(3,243,494	)
Net increase in net assets resulting from operations		25,133,989			58,944,734
Distributions to shareholders		(52,383,124	)		(61,353,645	)
Capital share transactions:
Issuance of common stock (net of offering costs of $2,033,950 and $4,603,745, respectively)		66,411,050			115,879,644
Reinvestment of dividends		1,847,625			3,169,164
Net increase in net assets from capital share transactions		68,258,675			119,048,808
Total increase in net assets		41,009,540			116,639,897
Net assets at beginning of period		526,242,426			409,602,529
Net assets at end of period (including over distributed net investment income of $2,845,615 and $3,157,786, respectively)	$	567,251,966		$	526,242,426
Capital share activity:
Shares sold		6,750,000			11,692,173
Shares issued from reinvestment of dividends		207,002			337,286
Net increase in capital share activity		6,957,002			12,029,459

See Accompanying Notes.

TABLE OF CONTENTS

TICC CAPITAL CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)


	Nine Months Ended September 30, 2014			Nine Months Ended September 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net increase in net assets resulting from operations	$	25,133,989		$	45,887,819
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided (used) by operating activities:
Accretion of discounts on investments		(2,084,266	)		(2,899,992	)
Accretion of discount on notes payable and deferred debt issuance costs		1,394,558			1,364,824
Increase in investments due to PIK		(966,960	)		(1,827,150	)
Purchases of investments		(355,027,153	)		(466,565,850	)
Repayments of principal and reductions to investment cost value		220,455,237			137,939,868
Proceeds from the sale of investments		102,755,346			88,969,712
Net realized gains (losses) on investments		12,190,470			(7,126,844	)
Net change in unrealized appreciation on investments		15,370,836			84,855
Increase in interest and distributions receivable		(2,012,971	)		(3,234,950	)
Increase in other assets		(374,667	)		(66,824	)
Increase in accrued interest payable		2,154,771			511,444
(Decrease) increase in investment advisory fee payable		(76,504	)		1,793,711
Decrease in accrued capital gains incentive fee		(3,872,853	)		(1,966,979	)
Increase in accrued expenses		367,040			838,626
Net cash provided (used) by operating activities		15,406,873			(206,297,730	)
CASH FLOWS FROM INVESTING ACTIVIES
Change in restricted cash		(18,610,225	)		(7,327,839	)
Net cash used by investing activities		(18,610,225	)		(7,327,839	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of Notes Payable – TICC CLO 2012-1 LLC (net of discount of $0 and $253,875, respectively)		—			119,746,125
Deferred debt issuance costs		—			(1,069,313	)
Proceeds from the issuance of common stock		68,445,000			120,483,390
Offering expenses from the issuance of common stock		(2,033,950	)		(4,460,619	)
Distributions paid (net of stock issued under dividend reinvestment plan of $1,847,625 and $2,438,548, respectively)		(50,535,499	)		(43,450,452	)
Net cash provided by financing activities		15,875,551			191,249,131
Net increase (decrease) in cash and cash equivalents		12,672,200			(22,376,438	)
Cash and cash equivalents, beginning of period		14,933,074			51,392,949
Cash and cash equivalents, end of period	$	27,605,274		$	29,016,511
NON-CASH FINANCING ACTIVITIES
Value of shares issued in connection with dividend reinvestment plan	$	1,847,625		$	2,438,548
SUPPLEMENTAL DISCLOSURES
Securities sold not settled	$	—		$	4,911,617
Securities purchased not settled	$	10,721,250		$	25,800,000
Cash paid for interest	$	11,255,851		$	12,104,347

See Accompanying Notes.

TABLE OF CONTENTS

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

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 solely of normal recurring accruals, necessary for the fair statement of consolidated financial results for the interim periods have been included. The current period’s 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 Company’s Form 10-K for the year ended December 31, 2013, as filed with the Securities and Exchange Commission (“SEC”).

Certain less significant amounts in prior period financial statements have been reclassified to conform to current period presentation.

NOTE 2. ORGANIZATION

The Company 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 regulated 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 Company’s investment objective is to maximize its total return, by investing primarily in corporate debt securities.

TICC’s 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.

On August 23, 2012, the Company completed a $160 million debt securitization financing transaction, consisting of $120 million in secured notes and $40 million of subordinated notes. The secured notes and subordinated notes offered in the debt securitization were issued by TICC CLO 2012-1, a subsidiary of TICC. On February 25, 2013 and May 28, 2013, TICC CLO 2012-1 issued additional secured notes totaling an aggregate of $120 million and subordinated notes totaling an aggregate of $40 million, which subordinated notes were purchased by the Company. For further information on this securitization, see Note 4.

The Company consolidated the results of its subsidiaries, Holdings, TICC CLO and TICC CLO 2012-1, in its consolidated financial statements as the subsidiaries are operated solely for investment activities of the Company, and the Company has substantial equity at risk. The creditors of TICC CLO and TICC CLO 2012-1 have received security interests in the assets owned by TICC CLO and TICC CLO 2012-1, respectively, and such assets are not intended to be available to the creditors of TICC (or any other affiliate of TICC).

TABLE OF CONTENTS

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 2. ORGANIZATION – (continued)

On September 26, 2012, the Company closed a private placement of 5-year unsecured 7.50% Senior Convertible Notes Due 2017 (the “Convertible Notes”). A total of $105 million aggregate principal amount of the Convertible Notes was issued at the closing. An additional $10 million aggregate principal amount of the Convertible Notes were issued on October 22, 2012 pursuant to the exercise of the initial purchasers’ option to purchase additional Convertible Notes. The Convertible Notes are convertible into shares of the Company’s common stock based on an initial conversion rate of 87.2448 shares of the Company’s common stock per $1,000 principal amount of Convertible Notes. For further information on these Convertible Notes, see Note 4.

NOTE 3. INVESTMENT VALUATION

The most significant estimates made in the preparation of TICC’s consolidated financial statements are 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. TICC is required to specifically fair value each individual investment on a quarterly basis.

ASC 820-10, Fair Value Measurements and Disclosure, 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 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 TICC’s investments are based upon “Level 3” inputs.

TICC’s Board of Directors determines the value of its investment portfolio each quarter. In connection with that determination, members of TICC Management’s portfolio management team prepare portfolio company valuations using the most recent portfolio company financial statements and forecasts. Since March 2004, TICC has engaged third-party valuation firms to provide assistance in valuing its certain of its syndicated loans and bilateral investments, although TICC’s Board of Directors ultimately determines the appropriate valuation of each such investment.

To the extent that TICC believes that it has become probable that a loan is not collectible or probable that an equity investment is not realizable, TICC will classify that amount as a realized loss. Changes in fair value, other than such changes that are considered probable of non-collection or non-realization, as described above, are recorded in the statement of operations as net change in unrealized appreciation or depreciation.

In accordance with ASC 820-10-35, TICC’s 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 for which TICC obtains indicative bid quotes for purposes of determining the fair value of its syndicated loan investments have shown these attributes of illiquidity as described by ASC-820-10-35. Due to limited market liquidity in the syndicated loan market, TICC believes that the non-binding indicative bids received from agent banks for certain syndicated investments that TICC owns may not be determinative of their fair value and therefore alternative valuation procedures may need to be undertaken. As a result, TICC has engaged 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, including a

TABLE OF CONTENTS

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 3. INVESTMENT VALUATION – (continued)

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. TICC has considered the factors described in ASC 820-10 and has determined that TICC is properly valuing the securities in its portfolio.

During the past several years, TICC has acquired a number of debt and equity positions in collateralized loan obligation (“CLO”) investment vehicles and more recently CLO warehouse investments. These investments are special purpose financing vehicles. In valuing such investments, TICC considers the operating metrics of the specific investment vehicle, including compliance with collateralization tests, defaulted and restructured securities, and payment defaults, if any. In addition, TICC considers the indicative prices provided by a recognized industry pricing service as a primary source, and the implied yield of such marks, supplemented by actual trades executed in the market at or around period-end, as well as the indicative prices provided by the broker who arranges transactions in such investment vehicles. Additional factors include any available information on other relevant transactions including firm bids and offers in the market and information resulting from bids-wanted-in-competition. 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 TICC’s Board of Directors for its determination of fair value of these investments.

Under the valuation procedures approved by TICC’s Board of Directors, upon the recommendation of the Valuation Committee, a third-party valuation firm will prepare valuations for each of TICC’s bilateral investments for which market quotations are not readily available 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, the frequency of those third-party valuations of TICC’s portfolio securities 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. TICC Management also retains the authority to seek, on TICC’s behalf, additional third party valuations with respect to both TICC’s bilateral portfolio securities and TICC’s syndicated loan investments. TICC’s Board of Directors retains ultimate authority as to the third-party review cycle as well as the appropriate valuation of each investment.

TABLE OF CONTENTS

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 3. INVESTMENT VALUATION – (continued)

The Company’s assets measured at fair value on a recurring basis at September 30, 2014, were as follows:


($ in millions)	Fair Value Measurements at Reporting Date Using						Total
Assets	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Senior Secured Notes	$	0.0	$	19.8	$	617.6	$	637.4
Senior Unsecured Notes		0.0		0.0		6.3		6.3
CLO Debt		0.0		0.0		11.5		11.5
CLO Equity		0.0		0.0		271.0		271.0
Common Stock		0.0		0.0		16.4		16.4
Preferred Shares		0.0		0.0		0.0		0.0
Warrants to purchase equity		0.0		0.0		0.0		0.0
Total	$	0.0	$	19.8	$	922.8	$	942.6

Level 2 securities are valued based on quotations for those identical securities received from independent pricing services or from dealers who make markets in such securities in markets that are not considered active. If there are several different sources of quotations and there is a reasonable level of trading activity, we will categorize these investments as Level 2 in the hierarchy.

Significant Unobservable Inputs for Level 3 Investments

The following table provides quantitative information about the Company’s Level 3 fair value measurements as of September 30, 2014. The Company’s 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 table, therefore, is not all-inclusive, but provides information on the significant Level 3 inputs that are pertinent to the Company’s fair value measurements.

($ in millions)

Quantitative Information about Level 3 Fair Value Measurements

Range/Weighted Average ⁽⁸⁾

Assets

Fair Value
as of
September 30,
2014

Valuation
Techniques/
Methodologies

Unobservable Input

Corporate debt investments syndicated

610.0

market quotes

NBIB ⁽¹⁾
ICG ⁽⁴⁾

54.7% – 102.0%/97.6%
2 – 5/2.1

bilateral

13.9

valuation analysis ⁽²⁾ /
enterprise value

EBITDA ⁽³⁾
market multiples ⁽³⁾
ICG ⁽⁴⁾

$3.1/ncm ⁽⁶⁾
5.0x – 6.0x/ncm ⁽⁶⁾
3/3.0

CLO debt

11.5

market quotes

NBIB ⁽¹⁾
ICG ⁽⁴⁾

83.1% – 87.3%/85.1%
2/2.0

CLO equity

271.0

market quotes/
net present value ⁽⁷⁾

NBIB ⁽¹⁾

22.0% – 113.0%/82.7%

Other investments

16.4

valuation analysis ⁽²⁾ /
enterprise value

EBITDA ⁽³⁾
market multiples ⁽³⁾
discount rates ⁽⁵⁾

$3.1 – $173.3/ncm ⁽⁶⁾
3.0x – 9.2x/ncm ⁽⁶⁾
20.0% – 30.0%/ncm ⁽⁶⁾

Total Fair Value for Level 3 Investments

922.8

TABLE OF CONTENTS

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 3. INVESTMENT VALUATION – (continued)

(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. 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.

(2)

For the Company’s bilateral debt investments and equity investments, third-party valuation firms evaluate the financial and operational information of the portfolio companies that the Company provides to them, as well as independent market and industry information that they consider appropriate in forming an opinion as to the fair value of the Company’s 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 valuation is prepared by TICC Management, which may include liquidation analysis or which may utilize a subsequent transaction to provide an indication of fair value.

(3)

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.

(4)

The Company has adopted a credit grading system for its debt investments as part of the valuation process. The internal credit grading (ICG), which ranges from 1 (highest) to 5 (lowest), is an unobservable input which represents a proprietary grading system developed by TICC Management.

(5)

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

(6)

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”).

(7)

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 yields for the equity tranche of the respective CLO vehicle.

(8)

Weighted averages are calculated based on fair value of investments.

Significant increases or decreases in any of the unobservable inputs in isolation may result in a significantly lower or higher fair value measurement.

TABLE OF CONTENTS

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 3. INVESTMENT VALUATION – (continued)

The following table provides quantitative information about the Company’s Level 3 fair value measurements as of December 31, 2013:

($ in millions)

Quantitative Information about Level 3 Fair Value Measurements

Range/Weighted Average ⁽⁸⁾

Assets

Fair Value as of
December 31,
2013

Valuation
Techniques/
Methodologies

Unobservable Input

Corporate debt investments syndicated

619.7

market quotes

NBIB ⁽¹⁾
ICG ⁽⁴⁾

55.0% – 102.9%/98.0%
2 – 5/2.1

bilateral

13.9

valuation analysis ⁽²⁾ /
enterprise value

EBITDA ⁽³⁾
market multiples ⁽³⁾
ICG ⁽⁴⁾

$3.0/ncm ⁽⁶⁾
5.50 – 6.50x/ncm ⁽⁶⁾
3/3.0

CLO debt

28.9

market quotes

NBIB ⁽¹⁾
ICG ⁽⁴⁾

86.3% – 93.1%/88.9%
2/2.0

CLO equity

237.2

market quotes/net
present value ⁽⁷⁾

NBIB ⁽¹⁾

28.0% – 122.0%/83.3%

Other investments

15.0

valuation analysis ⁽²⁾ /
enterprise value

EBITDA ⁽³⁾
market multiples ⁽³⁾
discount rates ⁽⁵⁾

$2.9 – $184.7/ncm ⁽⁶⁾
3.9 – 8.6x/ncm ⁽⁶⁾
20% – 35.0%/ncm ⁽⁶⁾

Total Fair Value for Level 3 Investments

914.7

(1)

(2)

(3)

(4)

(5)

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

(6)

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”).

(7)

(8)

Weighted averages are calculated based on fair value of investments.

TABLE OF CONTENTS

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 3. INVESTMENT VALUATION – (continued)

Significant increases or decreases in any of the unobservable inputs in isolation may result in a significantly lower or higher fair value measurement.

Financial Instruments Disclosed, But Not Carried, At Fair Value

The following table presents the carrying value and fair value of the Company’s financial liabilities disclosed, but not carried, at fair value as of September 30, 2014 and the level of each financial liability within the fair value hierarchy.


($ in thousands)	Carrying Value		Fair Value		Level 1		Level 2		Level 3
TICC CLO LLC Class A Notes, net of discount	$	100,160	$	101,250	$	—	$	—	$	101,250
TICC CLO 2012-1 LLC Class A-1 Notes, net of discount		174,220		176,088		—		—		176,088
TICC CLO 2012-1 LLC Class B-1 Notes, net of discount		19,510		20,010		—		—		20,010
TICC CLO 2012-1 LLC Class C-1 Notes, net of discount		22,172		23,011		—		—		23,011
TICC CLO 2012-1 LLC Class D-1 Notes, net of discount		20,062		21,011		—		—		21,011
2017 Convertible Notes		115,000		123,050						123,050
Total	$	451,124	$	464,420	$	—	$	—	$	464,420

The following table presents the carrying value and fair value of the Company’s financial liabilities disclosed, but not carried, at fair value as of December 31, 2013 and the level of each financial liability within the fair value hierarchy:


($ in thousands)	Carrying Value		Fair Value		Level 1		Level 2		Level 3
TICC CLO LLC Class A Notes, net of discount	$	100,041	$	100,617	$	—	$	—	$	100,617
TICC CLO 2012-1 LLC Class A-1 Notes, net of discount		174,072		173,061		—		—		173,061
TICC CLO 2012-1 LLC Class B-1 Notes, net of discount		19,471		19,950		—		—		19,950
TICC CLO 2012-1 LLC Class C-1 Notes, net of discount		22,105		23,058		—		—		23,058
TICC CLO 2012-1 LLC Class D-1 Notes, net of discount		19,987		21,000		—		—		21,000
2017 Convertible Notes		115,000		124,631						124,631
Total	$	450,676	$	462,317	$	—	$	—	$	462,317

The fair values of the Company’s debt are determined in accordance with ASC 820, which defines fair value in terms of the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. Fair value is based upon quotations received from dealers who make markets in these securities. Such quotations are based upon actual trades or actual bids and offers, to the extent that they are available, or by reference to comparable securities in the marketplace. As of September 30, 2014 and December 31, 2013, the debt would be deemed to be level 3 of the fair value hierarchy due to the general illiquidity of the market for these instruments.

TABLE OF CONTENTS

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 3. INVESTMENT VALUATION – (continued)

A reconciliation of the fair value of investments for the three months ended September 30, 2014, utilizing significant unobservable inputs, is as follows:



($ in millions)	Senior Secured Note Investments			Senior Unsecured Note Investments		Collateralized Loan Obligation Debt Investments			Collateralized Loan Obligation Equity Investments			Common Stock Investments		Preferred Share Equity Investments		Warrants to Purchase Equity Investments			Total
Balance at June 30, 2014	$	657.1		$	6.1	$	21.5		$	264.6		$	14.5	$	0.0	$	0.1		$	963.9
Realized gains (losses) included in earnings		0.2			0.0		1.5			(5.2	)		0.0		0.0		0.0			(3.5	)
Unrealized (depreciation) appreciation included in earnings ⁽¹⁾		(8.5	)		0.0		(1.8	)		(6.6	)		1.9		0.0		(0.1	)		(15.1	)
Accretion of discount		0.5			0.0		0.1			0.0			0.0		0.0		0.0			0.6
Purchases		38.0			0.0		0.0			59.6			0.0		0.0		0.0			97.6
Repayments and Sales		(69.8	)		0.0		(9.8	)		(41.4	)		0.0		0.0		0.0			(121.0	)
Payment in Kind income		0.1			0.2		0.0			0.0			0.0		0.0		0.0			0.3
Transfers in and/or out of level 3		0.0			0.0		0.0			0.0			0.0		0.0		0.0			0.0
Balance at September 30, 2014	$	617.6		$	6.3	$	11.5		$	271.0		$	16.4	$	0.0	$	0.0		$	922.8
The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to our Level 3 assets still held at the reporting date and reported within the net change in unrealized gains or losses on investments in our Statement of Operations	$	(8.6	)	$	0.0	$	(0.1	)	$	(12.5	)	$	2.0	$	0.0	$	(0.1	)	$	(19.3	)

(1)

Includes rounding adjustments to reconcile period balances.

TABLE OF CONTENTS

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 3. INVESTMENT VALUATION – (continued)

A reconciliation of the fair value of investments for the nine months ended September 30, 2014, utilizing significant unobservable inputs, is as follows:



($ in millions)	Senior Secured Note Investments			Senior Unsecured Note Investments		Collateralized Loan Obligation Debt Investments			Collateralized Loan Obligation Equity Investments			Common Stock Investments			Preferred Share Equity Investments			Warrants to Purchase Equity Investments			Total
Balance at December 31, 2013	$	627.8		$	5.8	$	28.9		$	237.1		$	13.8		$	0.4		$	0.9		$	914.7
Realized gains (losses) included in earnings		(6.0	)		0.0		2.2			(7.4	)		(0.4	)		(0.2	)		(0.4	)		(12.2	)
Unrealized (depreciation) appreciation included in earnings ⁽¹⁾		(5.0	)		0.1		(2.5	)		(8.4	)		1.0			(0.2	)		(0.2	)		(15.2	)
Accretion of discount ⁽¹⁾		1.7			0.0		0.3			0.0			0.0			0.0			0.0			2.0
Purchases		236.7			0.0		0.0			120.2			2.0			0.0			0.0			358.9
Repayments and Sales ⁽¹⁾		(238.2	)		0.0		(17.4	)		(70.5	)		0.0			0.0			(0.3	)		(326.4	)
Payment in Kind income		0.6			0.4		0.0			0.0			0.0			0.0			0.0			1.0
Transfers in and/or out of level 3		0.0			0.0		0.0			0.0			0.0			0.0			0.0			0.0
Balance at September 30, 2014	$	617.6		$	6.3	$	11.5		$	271.0		$	16.4		$	0.0		$	0.0		$	922.8
The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to our Level 3 assets still held at the reporting date and reported within the net change in unrealized gains or losses on investments in our Statement of Operations	$	(8.2	)	$	0.0	$	(0.5	)	$	(14.9	)	$	0.6		$	0.0		$	(0.4	)	$	(23.4	)

(1)

Includes rounding adjustments to reconcile period balances.

Our assets measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820-10-35 at December 31, 2013, were as follows:


($ in millions)	Fair Value Measurements at Reporting Date Using						Total
Assets	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Senior Secured Notes	$	0.0	$	16.9	$	627.8	$	644.7
Senior Unsecured Notes		0.0		0.0		5.8		5.8
CLO Debt		0.0		0.0		28.9		28.9
CLO Equity		0.0		0.0		237.1		237.1
Common Stock		0.0		0.0		13.8		13.8
Preferred Shares		0.0		0.0		0.4		0.4
Warrants to purchase equity		0.0		0.0		0.9		0.9
Total	$	0.0	$	16.9	$	914.7	$	931.6

TABLE OF CONTENTS

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 3. INVESTMENT VALUATION – (continued)

A reconciliation of the fair value of investments for the three months ended September 30, 2013, utilizing significant unobservable inputs, is as follows:



($ in millions)	Senior Secured Note Investments			Senior Unsecured Note Investments		Collateralized Loan Obligation Debt Investments			Collateralized Loan Obligation Equity Investments			Subordinated Note Investments		Common Stock Investments		Preferred Share Equity Investments			Warrants to Purchase Equity Investments		Total
Balance at June 30, 2013	$	627.6		$	5.3	$	45.0		$	195.9		$	0.0	$	14.5	$	0.4		$	0.5	$	889.2
Realized (losses) gains included in earnings		(3.4	)		0.0		3.3			0.3			0.0		0.0		(1.5	)		0.0		(1.3	)
Unrealized appreciation (depreciation) included in earnings ⁽¹⁾		12.2			0.1		(3.2	)		1.6			0.0		0.3		1.5			0.0		12.5
Accretion of discount		0.5			0.0		0.1			0.0			0.0		0.0		0.0			0.0		0.6
Purchases ⁽¹⁾		62.1			0.0		5.6			17.3			0.0		0.0		0.0			0.0		85.0
Repayments and Sales		(34.3	)		0.0		(19.5	)		(8.2	)		0.0		0.0		0.0			0.0		(62.0	)
Payment in Kind income		0.4			0.2		0.0			0.0			0.0		0.0		0.0			0.0		0.6
Transfers in and/or out of level 3		0.0			0.0		0.0			0.0			0.0		0.0		0.0			0.0		0.0
Balance at September 30, 2013	$	665.1		$	5.6	$	31.3		$	206.9		$	0.0	$	14.8	$	0.4		$	0.5	$	924.6
The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to our Level 3 assets still held at the reporting date and reported within the net change in unrealized gains or losses on investments in our Statement of Operations	$	9.2		$	0.0	$	0.0		$	4.4		$	0.0	$	0.3	$	0.0		$	0.0	$	13.9

(1)

Includes rounding adjustments to reconcile period balances.

TABLE OF CONTENTS

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 3. INVESTMENT VALUATION – (continued)

A reconciliation of the fair value of investments for the nine months ended September 30, 2013, utilizing significant unobservable inputs, is as follows:



($ in millions)	Senior Secured Note Investments			Senior Unsecured Note Investments			Collateralized Loan Obligation Debt Investments			Collateralized Loan Obligation Equity Investments			Subordinated Note Investments			Common Stock Investments		Preferred Share Equity Investments			Warrants to Purchase Equity Investments		Total
Balance at December 31, 2012	$	485.1		$	0.0		$	55.6		$	109.3		$	0.1		$	4.4	$	2.7		$	0.5	$	657.7
Realized (losses) gains included in earnings		(2.3	)		0.6			10.9			(0.5	)		0.0			0.0		(1.5	)		0.0		7.2
Unrealized appreciation (depreciation) included in earnings		12.9			2.8			(8.6	)		(13.1	)		0.0			7.0		(1.0	)		0.0		0.0
Accretion of discount		2.0			0.0			0.8			0.0			0.0			0.0		0.0			0.0		2.8
Purchases		332.7			3.1			17.0			124.2			0.0			3.4		0.0			0.0		480.4
Repayments and Sales		(166.7	)		(1.1	)		(44.4	)		(13.0	)		(0.1	)		0.0		0.0			0.0		(225.3	)
Payment in Kind income		1.4			0.2			0.0			0.0			0.0			0.0		0.2			0.0		1.8
Transfers in and/or out of level 3		0.0			0.0			0.0			0.0			0.0			0.0		0.0			0.0		0.0
Balance at September 30, 2013	$	665.1		$	5.6		$	31.3		$	206.9		$	0.0		$	14.8	$	0.4		$	0.5	$	924.6
The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to our Level 3 assets still held at the reporting date and reported within the net change in unrealized gains or losses on investments in our Statement of Operations	$	9.8		$	2.7		$	0.4		$	(8.0	)	$	0.0		$	7.0	$	(2.5	)	$	0.0	$	9.4

The following table shows the fair value of TICC’s portfolio of investments by asset class as of September 30, 2014 and December 31, 2013:


	September 30, 2014					December 31, 2013
	Investments at Fair Value		Percentage of Total Portfolio			Investments at Fair Value		Percentage of Total Portfolio
	(dollars in millions)					(dollars in millions)
Senior Secured Notes	$	637.4		67.6	%	$	644.7		69.2	%
Senior Unsecured Notes		6.3		0.7	%		5.8		0.6	%
CLO Debt		11.5		1.2	%		28.9		3.1	%
CLO Equity		271.0		28.8	%		237.1		25.5	%
Common Stock		16.4		1.7	%		13.8		1.5	%
Preferred Shares		0.0		0.0	%		0.4		0.0	%
Warrants		0.0		0.0	%		0.9		0.1	%
Total	$	942.6		100.0	%	$	931.6		100.0	%

TABLE OF CONTENTS

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 4. BORROWINGS

In accordance with the 1940 Act, with certain limited exceptions, the Company is only allowed to borrow amounts such that its asset coverage, as defined in the 1940 Act, is at least 200% after such borrowing. As of September 30, 2014, the Company’s asset coverage for borrowed amounts was 223.2%.

The following are the Company’s outstanding principal amounts, carrying values and fair values of the Company’s notes payable as of September 30, 2014 and December 31, 2013. Fair values of our notes payable are based upon the bid price provided by the placement agent at the measurement date:



	As of
	September 30, 2014							December 31, 2013
($ in thousands)	Principal Amount		Carrying Value			Fair Value		Principal Amount		Carrying Value			Fair Value
TICC CLO LLC 2021 Notes	$	101,250	$	100,160	⁽¹⁾	$	101,250	$	101,250	$	100,041	⁽¹⁾	$	100,617
TICC CLO 2012-1 LLC Class A-1 2023 Notes		176,000		174,220	⁽¹⁾		176,088		176,000		174,072	⁽¹⁾		173,061
TICC CLO 2012-1 LLC Class B-1 2023 Notes		20,000		19,510	⁽¹⁾		20,010		20,000		19,471	⁽¹⁾		19,950
TICC CLO 2012-1 LLC Class C-1 2023 Notes		23,000		22,172	⁽¹⁾		23,011		23,000		22,105	⁽¹⁾		23,058
TICC CLO 2012-1 LLC Class D-1 2023 Notes		21,000		20,062	⁽¹⁾		21,011		21,000		19,987	⁽¹⁾		21,000
Sub-total TICC CLO 2012-1, LLC		240,000		235,964			240,120		240,000		235,635			237,069
2017 Convertible Notes		115,000		115,000			123,050		115,000		115,000			124,631
	$	456,250	$	451,124		$	464,420	$	456,250	$	450,676		$	462,317

(1)

Represents the aggregate principal amount outstanding less the unaccreted discount. As of September 30, 2014, the total unaccreted discount for the 2021 Notes, the 2023 Class A Notes, the 2023 Class B Notes, the 2023 Class C Notes and the 2023 Class D Notes was approximately $1,090, $1,780, $490, $828 and $938, respectively. As of December 31, 2013, the total unaccreted discount for the 2021 Notes, the 2023 Class A Notes, the 2023 Class B Notes, the 2023 Class C Notes and the 2023 Class D Notes was approximately $1,209, $1,928, $529, $895 and $1,013, respectively.

The weighted average stated interest rate and weighted average maturity on all our debt outstanding as of September 30, 2014 were 3.90% and 6.98 years, respectively, and as of December 31, 2013 were 3.90% and 7.73 years, respectively.

Debt Securitization

Notes Payable — TICC CLO LLC

On August 10, 2011, the Company completed a $225.0 million debt securitization financing transaction. The Class A Notes and the subordinated notes offered in the debt securitization were issued by TICC CLO LLC (“2011 Securitization Issuer” or “TICC CLO”), a subsidiary of TICC Capital Corp. 2011-1 Holdings, LLC (“Holdings”), which is in turn a direct subsidiary of TICC. The Class A Notes are secured by the assets held by the 2011 Securitization Issuer. The securitization was executed through a private placement of $101.25 million of secured notes rated AAA/Aaa by Standard & Poor’s Rating Service (“S&P”) and Moody’s Investors Service Inc. (“Moody’s”), respectively, and bearing interest at the three-month LIBOR plus 2.25%. Holdings retained all of the subordinated notes, which totaled $123.75 million (the “2011 Subordinated Notes”), and retained all the membership interests in the 2011 Securitization Issuer. The notes were sold at a discount to par, and the amount of the discount is being amortized over the term of the notes. The Class A Notes are included in the September 30, 2014 consolidated statements of assets and liabilities. For the three and nine months ended September 30, 2014, the Class A note holders were paid interest on the Class A notes of approximately $0.6 million and $1.9 million, respectively. The 2011 Subordinated Notes do not bear interest, but are entitled to the residual economic interest in the 2011 Securitization Issuer.

TABLE OF CONTENTS

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 4. BORROWINGS – (continued)

During a period of up to three years from the closing date, all principal collections received on the underlying collateral may be used by the Securitization Issuer to purchase new collateral under the Company’s direction in its capacity as collateral manager of the 2011 Securitization Issuer and in accordance with its investment strategy, allowing it to maintain the initial leverage in the securitization for such three-year period. The Class A Notes are scheduled to mature on July 25, 2021.

The proceeds of the private placement of the Class A Notes, net of discount and debt issuance costs, were used for investment purposes. As part of the securitization, the Company entered into a master loan sale agreement with Holdings and the 2011 Securitization Issuer under which it agreed to sell or contribute certain senior secured and second lien loans (or participation interests therein) to Holdings, and Holdings agreed to sell or contribute such loans (or participation interests therein) to the 2011 Securitization Issuer and to purchase or otherwise acquire subordinated notes issued by the Securitization Issuer. The Class A Notes are the secured obligations of the 2011 Securitization Issuer, and an indenture governing the Notes includes customary covenants and events of default.

The Company serves as collateral manager to the 2011 Securitization Issuer under a collateral management agreement. The Company is entitled to a deferred fee for our services as collateral manager. The deferred fee is eliminated in consolidation.

As of September 30, 2014, there were 41 investments in portfolio companies with a total fair value of approximately $218.3 million, securing the Class A Notes. The pool of loans in the securitization must meet certain requirements, including asset mix and concentration, collateral coverage, term, agency rating, minimum coupon, minimum spread and sector diversity requirements.

Deferred debt issuance costs represent fees and other direct incremental costs incurred in connection with the Company’s debt securitization. As of September 30, 2014, the Company had a deferred debt issuance balance of approximately $2.1 million. Discount on the notes of the 2011 Securitization Issuer at the time of issuance totaled approximately $1.6 million. These amounts are being amortized and included in interest expense in the consolidated statements of operations over the term of the debt securitization.

The following table sets forth the components of interest expense, effective annualized average interest rates and cash paid for interest for the three and nine months ended September 30, 2014 and 2013, respectively:


TICC CLO LLC	Three Months Ended September 30, 2014			Nine Months Ended September 30, 2014			Three Months Ended September 30, 2013			Nine Months Ended September 30, 2013
Stated interest expense	$	642,399		$	1,907,378		$	651,644		$	1,946,438
Amortization of deferred issuance costs		76,251			226,266			76,251			226,266
Note discount expense		40,047			118,788			39,983			118,600
Total interest expense	$	758,697		$	2,252,432		$	767,878		$	2,291,304
Effective annualized average interest rate		2.97	%		2.97	%		3.01	%		3.03	%
Cash paid for interest	$	634,405		$	1,908,191		$	646,396		$	1,955,876

Effective January 1, 2014 and through January 26, 2014, the interest rate of approximately 2.488% charged under the securitization was based on three-month LIBOR of 0.238%. Effective January 27, 2014 and through April 24, 2014, the interest rate of approximately 2.489% charged under the securitization was based on three-month LIBOR of 0.239%. Effective April 25, 2014 and through July 24, 2014, the interest rate of approximately 2.479% charged under the securitization was based on three-month LIBOR of 0.229%. Effective July 25, 2014 and through September 30, 2014, the interest rate of approximately 2.484% charged under the securitization was based on three-month LIBOR of 0.234%.

TABLE OF CONTENTS

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 4. BORROWINGS – (continued)

The amounts, ratings and interest rates (expressed as a spread to LIBOR) of the Class A Notes are as follows:


Description		Class A Notes
Type		Senior Secured Floating Rate
Amount Outstanding		$101,250,000
Moody’s Rating		“Aaa”
Standard & Poor’s Rating		“AAA”
Interest Rate		LIBOR + 2.25%
Stated Maturity		July 25, 2021

Notes Payable — TICC CLO 2012-1 LLC

On August 23, 2012, the Company completed a $160 million debt securitization financing transaction, consisting of $120 million in secured notes and $40 million of subordinated notes. On February 25, 2013 and May 28, 2013, TICC CLO 2012-1 LLC issued additional secured notes totaling an aggregate of $120 million and subordinated notes totaling an aggregate of $40 million, which subordinated notes were purchased by us, under the “accordion” feature of the debt securitization which allowed, under certain circumstances and subject to the satisfaction of certain conditions, for an increase in the amount of secured and subordinated notes. It is not necessary that the Company owns all or any of the notes permitted by this feature, which may affect the accounting treatment of the debt securitization financing transaction. As of September 30, 2014 the secured notes of the 2012 Securitization Issuer have an aggregate face amount of $240 million and were issued in four classes. The class A-1 notes have a current face amount of $176 million, are rated AAA (sf) /Aaa (sf) by Standard & Poor’s Ratings Services (S&P) and Moody’s Investors Service, Inc. (Moody’s), respectively, and bear interest at three-month LIBOR plus 1.75%. The class B-1 notes have a current face amount of $20 million, are rated AA (sf) /Aa2 (sf) by S&P and Moody’s, respectively, and bear interest at three-month LIBOR plus 3.50%. The class C-1 notes have a current face amount of $23 million, are rated A (sf) /A2 (sf) by S&P and Moody’s, respectively, and bear interest at three-month LIBOR plus 4.75%. The class D-1 notes have a current face amount of $21 million, are rated BBB (sf) /Baa2 (sf) by S&P and Moody’s, respectively, and bear interest at three-month LIBOR plus 5.75%. TICC presently owns all of the subordinated notes, which totaled $80 million as of September 30, 2014.

During a period of up to four years from the closing date, all principal collections received on the underlying collateral may be used by the 2012 Securitization Issuer to purchase new collateral under our direction in our capacity as collateral manager of the 2012 Securitization Issuer and in accordance with our investment strategy, allowing us to maintain the initial leverage in the securitization for such four-year period. All note classes are scheduled to mature on August 25, 2023.

The proceeds of the private placement of the Classes A, B, C, D and 2012 Subordinated Notes of the 2012 Securitization Issuer, net of discount and debt issuance costs, were used for investment purposes. As part of the securitization, the Company entered into a master loan sale agreement with TICC CLO 2012-1 pursuant to which TICC agreed to sell or contribute certain senior secured and second lien loans (or participation interests therein) to TICC CLO 2012-1, and to purchase or otherwise acquire the 2012 Subordinated Notes. The Classes A, B, C, D and 2012 Subordinated Notes of the 2012 Securitization Issuer are the secured obligations of TICC CLO 2012-1, and an indenture governing the notes of the 2012 Securitization Issuer includes customary covenants and events of default.

TABLE OF CONTENTS

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 4. BORROWINGS – (continued)

As of September 30, 2014, there were 40 investments in portfolio companies with a total fair value of approximately $290.2 million, collateralizing the secured notes of the 2012 Securitization Issuer. The pool of loans in the securitization must meet certain requirements, including asset mix and concentration, collateral coverage, term, agency rating, minimum coupon, minimum spread and sector diversity requirements.

Deferred debt issuance costs represent fees and other direct incremental costs incurred in connection with our debt securitization. As of September 30, 2014, TICC had deferred debt issuance balance of approximately $3.1 million. Aggregate net discount on the notes of the 2012 Securitization Issuer at the time of issuance totaled approximately $4.9 million. These amounts are being amortized and included in interest expense in the consolidated statements of operations over the term of the debt securitization. The following table sets forth the components of interest expense, effective annualized average interest rates and cash paid for interest of the Class A-1, B-1, C-1 and D-1 for the three and nine months ended September 30, 2014 and 2013, respectively:


TICC CLO 2012-1 LLC	Three Months Ended September 30, 2014			Nine Months Ended September 30, 2014			Three Months Ended September 30, 2013			Nine Months Ended September 30, 2013
Stated interest expense	$	1,695,008		$	5,034,494		$	1,718,508		$	4,248,519
Amortization of deferred issuance costs		86,662			257,160			86,662			228,597
Note discount expense		111,149			329,347			110,502			326,507
Total interest expense	$	1,892,819		$	5,621,001		$	1,915,672		$	4,803,623
Effective annualized average interest rate		3.13	%		3.13	%		3.17	%		3.34	%
Cash paid for interest	$	1,656,290		$	5,035,160		$	1,683,650		$	4,997,429

Effective January 1, 2014 and through February 24, 2014, the interest charged under the securitization was based on three-month LIBOR, which was 0.238%. Effective February 25, 2014 and through May 26, 2014, the interest charged under the securitization was based on three month LIBOR, which was approximately 0.235%. Effective May 27, 2014 and through August 24, 2014, the interest charged was based on three month LIBOR, which was approximately 0.227%. Effective August 25, 2014, the interest charged was based on three month LIBOR, which was approximately 0.235%.

The classes, interest rates, spread over LIBOR, cash paid for interest, stated interest expense and note discount expense of each of the Class A-1, B-1, C-1 and D-1 for the three and nine months ended September 30, 2014 are as follows:


	Stated Interest Rate			LIBOR Spread (basis points)		Three Months Ended September 30, 2014						Nine Months Ended September 30, 2014
TICC CLO 2012-1 LLC	Stated Interest Rate			LIBOR Spread (basis points)		Cash Paid for Interest		Stated Interest Expense		Note Discount Expense		Cash Paid for Interest		Stated Interest Expense		Note Discount Expense
Class A-1 Notes		1.98490	%		175	$	869,946	$	890,680	$	49,944	$	2,646,961	$	2,646,473	$	148,137
Class B-1 Notes		3.73490	%		350		186,358		190,658		13,536		566,208		566,153		40,117
Class C-1 Notes		4.98490	%		475		286,186		292,729		22,511		869,160		869,095		66,654
Class D-1 Notes		5.98490	%		575		313,800		320,941		25,158		952,831		952,773		74,439
Total						$	1,656,290	$	1,695,008	$	111,149	$	5,035,160	$	5,034,494	$	329,347

TABLE OF CONTENTS

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 4. BORROWINGS – (continued)


	Stated Interest Rate			LIBOR Spread (basis points)		Three Months Ended September 30, 2013						Nine Months Ended September 30, 2013
TICC CLO 2012-1 LLC	Stated Interest Rate			LIBOR Spread (basis points)		Cash Paid for Interest		Stated Interest Expense		Note Discount Expense		Cash Paid for Interest		Stated Interest Expense		Note Discount Expense
Class A-1 Notes		2.01210	%		175	$	890,010	$	907,914	$	49,854	$	2,699,715	$	2,263,488	$	143,936
Class B-1 Notes		3.76210	%		350		188,638		192,616		13,469		551,786		473,534		39,372
Class C-1 Notes		5.01210	%		475		288,808		294,981		22,314		835,803		722,255		67,730
Class D-1 Notes		6.01210	%		575		316,194		322,997		24,865		910,125		789,242		75,469
Total						$	1,683,650	$	1,718,508	$	110,502	$	4,997,429	$	4,248,519	$	326,507

The amounts, ratings and interest rates (expressed as a spread to LIBOR) of the Class A-1, B-1, C-1, D-1 and 2012 Subordinated Notes as of September 30, 2014 are as follows:

Description

Class A-1 Notes

Class B-1 Notes

Class C-1 Notes

Class D-1 Notes

Subordinated
Notes

Type

Senior Secured
Floating Rate

Secured Deferrable
Floating Rate

Subordinated

Amount Outstanding

$176,000,000

$20,000,000

$23,000,000

$21,000,000

$80,000,000

Moody’s Rating

“Aaa”

“Aa2”

“A2”

“Baa2”

N/A

Standard & Poor’s Rating

“AAA”

“AA”

“A”

“BBB”

N/A

Interest Rate

LIBOR + 1.75%

LIBOR + 3.50%

LIBOR + 4.75%

LIBOR + 5.75%

N/A

Stated Maturity

August 25, 2023

Junior Classes

B-1, C-1, D-1 and
Subordinated

C-1, D-1 and
Subordinated

D-1 and
Subordinated

Subordinated

None

The amounts, ratings and interest rates (expressed as a spread to LIBOR) of the Class A-1, B-1, C-1, D-1 and 2012 Subordinated Notes as of December 31, 2013 are as follows:

Description

Class A-1 Notes

Class B-1 Notes

Class C-1 Notes

Class D-1 Notes

Subordinated
Notes

Type

Senior Secured
Floating Rate

Secured Deferrable
Floating Rate

Subordinated

Amount Outstanding

$176,000,000

$20,000,000

$23,000,000

$21,000,000

$80,000,000

Moody’s Rating

“Aaa”

“Aa2”

“A2”

“Baa2”

N/A

Standard & Poor’s Rating

“AAA”

“AA”

“A”

“BBB”

N/A

Interest Rate

LIBOR + 1.75%

LIBOR + 3.50%

LIBOR + 4.75%

LIBOR + 5.75%

N/A

Stated Maturity

August 25, 2023

Junior Classes

B-1, C-1, D-1 and
Subordinated

C-1, D-1 and
Subordinated

D-1 and
Subordinated

Subordinated

None

TICC serves as collateral manager to the 2012 Securitization Issuer under a collateral management agreement. TICC is entitled to a deferred fee for its services as collateral manager. The deferred fee is eliminated in consolidation.

2017 Convertible Notes

On September 26, 2012, the Company issued $105,000,000 aggregate principal amount of the Convertible Notes and an additional $10,000,000 aggregate principal amount of the Convertible Notes was issued on October 22, 2012 pursuant to the exercise of the initial purchasers’ option to purchase additional Convertible Notes. The Convertible Notes bear interest at a rate of 7.50% per year, payable semi-annually in arrears on May 1 and November 1 of each year, commencing on May 1, 2013. The Convertible Notes are

TABLE OF CONTENTS

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 4. BORROWINGS – (continued)

convertible into shares of our common stock based on an initial conversion rate of 87.2448 shares of our common stock per $1,000 principal amount of Convertible Notes, which is equivalent to an initial conversion price of approximately $11.46 per share of common stock. The conversion price for the Convertible Notes will be reduced for quarterly cash dividends paid to common shares to the extent that the quarterly dividend exceeds $0.29 cents per share, subject to adjustment. The Convertible Notes mature on November 1, 2017, unless previously converted in accordance with their terms. The Company does not have the right to redeem the Convertible Notes prior to maturity. Deferred debt issuance costs represent fees and other direct incremental costs incurred in connection with the Convertible Notes. As of September 30, 2014, the Company had deferred debt issuance balance of approximately $1.9 million. This amount is being amortized and is included in interest expense in the consolidated statements of operations over the term of the Convertible Notes.

The following table sets forth the components of interest expense, effective annualized average interest rates and cash paid for interest of the 2017 Convertible Notes for the three and nine months ended September 30, 2014 and 2013, respectively:


2017 Convertible Notes	Three Months Ended September 30, 2014			Nine Months Ended September 30, 2014			Three Months Ended September 30, 2013			Nine Months Ended September 30, 2013
Stated interest expense	$	2,156,250		$	6,468,750		$	2,132,292		$	6,420,833
Amortization of deferred issuance costs		156,028			462,997			161,474			464,854
Total interest expense	$	2,312,278		$	6,931,747		$	2,293,766		$	6,885,687
Effective annualized average interest rate		7.98	%		8.06	%		7.91	%		8.01	%
Cash paid for interest	$	—		$	4,312,500		$	—		$	5,151,042

In certain circumstances, the Convertible Notes will be convertible into shares of the Company’s common stock at its initial conversion rate (listed below) subject to customary anti-dilution adjustments and the requirements of its indenture, at any time on or prior to the close of business on the business day immediately preceding the maturity date. We will in certain circumstances increase the conversion rate by a number of additional shares.


	November 2017 Convertible Notes
Conversion premium		10.00%
Closing stock price		$10.42
Closing stock price date		September 20, 2012
Initial conversion price		$11.46
Initial conversion rate (shares per one thousand dollar principal amount)		87.2448
Maturity date		November 1, 2017

As of September 30, 2014, the principal amount of the Convertible Notes exceeded the value of the underlying shares multiplied by the per share closing price of the Company’s common stock.

The Convertible Notes are the Company’s general, unsecured obligations and rank equal in right of payment with all of the Company’s existing and future senior, unsecured indebtedness and senior in right of payment to any of the Company’s subordinated indebtedness. As a result, the Convertible Notes will be effectively subordinated to the Company’s existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness and structurally subordinated to any existing and future liabilities and other indebtedness of the Company’s subsidiaries.

TABLE OF CONTENTS

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 5. EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted net increase in net assets resulting from net investment income per share for the three and nine months ended September 30, 2014 and 2013, respectively:


	Three Months Ended September 30, 2014		Three Months Ended September 30, 2013		Nine Months Ended September 30, 2014		Nine Months Ended September 30, 2013
Earnings per common share – basic:
Net increase in net assets resulting from investment income	$	17,520,528	$	12,238,709	$	52,695,296	$	38,845,830
Weighted average common shares outstanding – basic		60,268,078		52,751,722		58,307,825		50,314,364
Earnings per common share – basic	$	0.29	$	0.23	$	0.90	$	0.77
Earnings per common share – diluted:
Net increase in net assets resulting from investment income, before adjustments	$	17,520,528	$	12,238,709	$	52,695,296	$	38,845,830
Adjustments for interest on convertible senior notes, base management fees, deferred issuance costs and incentive fees		1,857,852		1,845,550		5,571,062		5,541,657
Net increase in net assets resulting from investment income, as adjusted	$	19,378,380	$	14,084,259	$	58,266,358	$	44,387,487
Weighted average common shares outstanding – basic		60,268,078		52,751,722		58,307,825		50,314,364
Adjustments for dilutive effect of convertible notes		10,033,152		10,033,152		10,033,152		10,033,152
Weighted average common shares outstanding – diluted		70,301,230		62,784,874		68,340,977		60,347,516
Earnings per common share – diluted	$	0.28	$	0.22	$	0.85	$	0.74

TABLE OF CONTENTS

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 5. EARNINGS PER SHARE – (continued)

The following table sets forth the computation of basic and diluted net (decrease) and increase in net assets resulting from operations per share for the three and nine months ended September 30, 2014 and 2013, respectively:


	Three Months Ended September 30, 2014			Three Months Ended September 30, 2013		Nine Months Ended September 30, 2014		Nine Months Ended September 30, 2013
Earnings per common share – basic:
Net (decrease) increase in net assets resulting from operations	$	(1,261,925	)	$	23,588,777	$	25,133,990	$	45,887,819
Weighted average common shares outstanding – basic		60,268,078			52,751,722		58,307,825		50,314,364
Earnings per common share – basic	$	(0.02	)	$	0.45	$	0.43	$	0.91
Earnings per common share – diluted:
Net (decrease) increase in net assets resulting from operations, before adjustments	$	(1,261,925	)	$	23,588,777	$	25,133,990	$	45,887,819
Adjustments for interest on convertible senior notes, base management fees, deferred issuance costs and incentive fees		—			1,845,550		—		5,541,657
Net (decrease) increase in net assets resulting from operations, as adjusted	$	(1,261,926	)	$	25,434,327	$	25,133,990	$	51,429,476
Weighted average common shares outstanding – basic		60,268,078			52,751,722		58,307,825		50,314,364
Adjustments for dilutive effect of convertible notes		—			10,033,152		—		10,033,152
Weighted average common shares outstanding – diluted		60,268,078			62,784,874		58,307,825		60,347,516
Earnings per common share – diluted	$	(0.02	)	$	0.41	$	0.43	$	0.85

Due to the anti-dilutive effect on the computation of diluted earnings per share for the three months and nine months ended September 30, 2014, the adjustments for interest on convertible senior notes, base management fees, deferred issuance costs and incentive fees as well as adjustments for dilutive effect of convertible notes were excluded from the respective periods’ diluted earnings per share computation.

NOTE 6. RELATED PARTY TRANSACTIONS

The Company has entered into an investment advisory agreement with TICC Management (the “Investment Advisory Agreement”) under which TICC Management, subject to the overall supervision of TICC’s Board of Directors, manages the day-to-day operations of, and provides investment advisory services to, TICC. For providing these services TICC Management receives a fee from TICC, consisting of two components: a base management fee (the “Base Fee”) and an incentive fee. The Base Fee is calculated at an annual rate of 2.00%. The Base Fee is payable quarterly in arrears, and is calculated based on the average value of TICC’s gross assets at the end of the two most recently completed calendar quarters, and appropriately adjusted for any equity or debt capital raises, repurchases or redemptions during the current calendar quarter. Accordingly, the Base Fee will be payable regardless of whether the value of the Company’s gross assets have decreased during the quarter.

The incentive fee has two parts. The first part is calculated and payable quarterly in arrears based on the Company’s “Pre-Incentive Fee Net Investment Income” for the immediately preceding calendar quarter. For

TABLE OF CONTENTS

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 6. RELATED PARTY TRANSACTIONS – (continued)

this purpose, “Pre-Incentive Fee Net Investment Income” means interest income, dividend income and any other income (including any other fees, such as commitment, origination, structuring, diligence and consulting fees or other fees that TICC receives from portfolio companies) accrued during the calendar quarter, minus the Company’s operating expenses for the quarter (including the Base Fee, expenses payable under the Company’s administration agreement with BDC Partners (the “Administration Agreement”), and any interest expense and dividends 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 PIK interest and zero coupon securities), accrued income that the Company has not yet received in cash. Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. Pre-Incentive Fee Net Investment Income, expressed as a rate of return on the value of the Company’s net assets at the end of the immediately preceding calendar quarter, is compared to one-fourth of an annual “hurdle rate.” Given that this portion of the incentive fee is payable without regard to any capital gain, capital loss or unrealized depreciation that may occur during the quarter, this portion of TICC Management’s incentive fee may also be payable notwithstanding a decline in net asset value that quarter.

For each year commencing on or after January 1, 2005, the annual hurdle rate has been determined as of the immediately preceding December 31 ^st by adding 5.0% to the interest rate then payable on the most recently issued five-year U.S. Treasury Notes, up to a maximum annual hurdle rate of 10.0%. The annual hurdle rate for the 2013, 2012 and 2011 calendar year was 5.72%, 5.83% and 7.01%, respectively. The current hurdle rate for the 2014 calendar year, calculated as of December 31, 2013, is 6.75%.

The second part of the incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, as of the termination date), and equals 20% of our “Incentive Fee Capital Gains,” which consist of our realized capital gains for each calendar year, computed net of all realized capital losses and unrealized capital depreciation for that calendar year. For accounting purposes only, in order to reflect the theoretical capital gains incentive fee that would be payable for a given period as if all unrealized gains were realized, we will accrue a capital gains incentive fee based upon net realized capital gains and unrealized capital depreciation for that calendar year (in accordance with the terms of the Investment Advisory Agreement), plus unrealized capital appreciation on investments held at the end of the period. It should be noted that a fee so calculated and accrued would not necessarily be payable under the Investment Advisory Agreement, and may never be paid based upon the computation of capital gains incentive fees in subsequent periods. Amounts paid under the Investment Advisory Agreement will be consistent with the formula reflected in the Investment Advisory Agreement.

Incentive fees, based upon pre-incentive fee net investment income, were approximately $1.7 million and $1.8 million for the quarters ended September 30, 2014 and 2013, respectively; for the nine months ended September 30, 2014 and 2013, TICC incurred pre-incentive fee net investment income incentive fees of approximately $4.8 million and $4.4 million, respectively. The net investment income incentive fee payable to TICC Management as of September 30, 2014 and December 31, 2013, was approximately $1.7 million and $2.2 million, respectively.

The capital gains incentive fee expense recorded under the hypothetical liquidation calculation for the quarter ended September 30, 2014 resulted in an accrual reversal of approximately $0.8 million compared with an expense of approximately $2.3 million for the quarter ended September 30, 2013. For the nine months ended September 30, 2014, the capital gains incentive fee liability under the hypothetical liquidation calculation was reduced by approximately $3.9 million compared with a reduction of approximately $0.4 million for the nine months ended September 30, 2013. The amount of capital gains incentive fee expense related to the hypothetical liquidation of the portfolio (and assuming no other changes in realized or unrealized gains and losses) would only become payable to TICC Management in the event of a complete liquidation of our portfolio as of period end and the termination of the Investment Advisory Agreement on

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TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 6. RELATED PARTY TRANSACTIONS – (continued)

such date. Also, it should be noted that the capital gains incentive fee expense fluctuates with our overall investment results. The accrued capital gains incentive fee payable as of September 30, 2014 and December 31, 2013 was approximately $0.0 million and $3.9 million, respectively.

In addition, in the event the Company recognizes payment-in-kind, or “PIK,” interest income in excess of its available capital, the Company may be required to liquidate assets in order to pay a portion of the incentive fee. TICC Management, however, is not required to reimburse the Company for the portion of any incentive fees attributable to PIK loan interest income in the event of a subsequent default.

The Company has also entered into the Administration Agreement with BDC Partners under which BDC Partners provides administrative services for TICC. The Company pays BDC Partners an allocable portion of overhead and other expenses incurred by BDC Partners in performing its obligations under the Administration Agreement, including a portion of the rent and the compensation of the chief financial officer, chief compliance officer, controller and other administrative support personnel, which creates potential conflicts of interest that the Board of Directors must monitor.

TICC Management is controlled by BDC Partners, its managing member. Charles M. Royce holds a minority, non-controlling interest in TICC Management. BDC Partners, as the managing member of TICC Management, manages the business and internal affairs of TICC Management. Jonathan H. Cohen, the Company’s Chief Executive Officer, as well as a Director, is the managing member of BDC Partners. Saul B. Rosenthal, the Company’s President and Chief Operating Officer, is also the President and Chief Operating Officer of TICC Management and a member of BDC Partners. Messrs. Cohen and Rosenthal have an equal equity interest in BDC Partners. Charles M. Royce, the Company’s non-executive Chairman of the Board of Directors, does not take part in the management or participate in the operations of TICC Management; however, Mr. Royce is expected to be available from time to time to TICC Management to provide certain consulting services without compensation.

For the quarters ended September 30, 2014 and 2013, respectively, TICC incurred base investment advisory fees of approximately $5.4 million and $4.9 million in accordance with the terms of the Investment Advisory Agreement; for the nine months ending September 30, 2014 and 2013, TICC incurred investment advisory fees of approximately $15.8 million and $13.9 million, respectively. The base investment advisory fee payable as of September 30, 2014 and December 31, 2013 was approximately $5.4 million and $5.0 million, respectively. For the quarters ended September 30, 2014 and 2013, TICC incurred approximately $473,000 and $310,000, respectively, in compensation expenses for the services of employees allocated to the administrative activities of TICC, pursuant to the Administration Agreement with BDC Partners; for the nine months ended September 30, 2014 and 2013, TICC incurred compensation expenses of approximately $1.4 million and $925,000, respectively. As of September 30, 2014 and December 31, 2013 approximately $407,000 and $24,000 were accrued for compensation expense at the end of each respective period. In addition, TICC incurred approximately $18,000 and $20,000 for reimbursement of facility costs allocated under the Administration Agreement for the quarters ended September 30, 2014 and 2013, respectively; for the nine months ended September 30, 2014 and 2013, TICC incurred approximately $55,000 and $62,000, respectively. As of September 30, 2014 and December 31, 2013 approximately $6,000 and $0 remained payable for facility costs at the end of each respective period.

Messrs. Cohen and Rosenthal currently serve as Chief Executive Officer and President, respectively, for T2 Advisers, LLC, which serves as the collateral manager of T2 Income Fund CLO I Ltd. BDC Partners is the managing member of T2 Advisers, LLC. In addition, Mr. Conroy serves as the Chief Financial Officer, Chief Compliance Officer and Treasurer of T2 Advisers, LLC.

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TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 6. RELATED PARTY TRANSACTIONS – (continued)

(“Oxford Lane Management”). BDC Partners provides Oxford Lane Capital Corp. with office facilities and administrative services pursuant to an administration agreement and also serves as the managing member of Oxford Lane Management. In addition, Patrick F. Conroy serves as the Chief Financial Officer, Chief Compliance Officer and Corporate Secretary of Oxford Lane Capital Corp. and Chief Financial Officer, Chief Compliance Officer and Treasurer of Oxford Lane Management.

BDC Partners has adopted a written policy with respect to the allocation of investment opportunities among TICC, Oxford Lane Capital Corp. and T2 Income Fund CLO I Ltd. in view of the potential conflicts of interest raised by the relationships described above.

NOTE 7. DIVIDENDS

The Company intends to continue to operate so as to qualify to be taxed as a RIC under the Code and, as such, the Company would not be subject to federal income tax on the portion of its taxable income and gains distributed to stockholders. To qualify as a RIC, the Company is required, among other requirements, to distribute at least 90% of its annual investment company taxable income, as defined by the Code. The amount to be paid out as a dividend is determined by the Board of Directors each quarter and is based upon the annual earnings estimated by the management of the Company. To the extent that the Company’s taxable earnings fall below the amount of dividends declared, however, a portion of the total amount of the Company’s dividends for the fiscal year may be deemed a return of capital for tax purposes to the Company’s stockholders.

The Company intends to comply with the applicable provisions of the Code pertaining to regulated investment companies to make distributions of taxable income sufficient to relieve it of substantially all Federal income taxes. The Company, at its discretion, may carry forward taxable income in excess of calendar year distributions and pay a 4% excise tax on this income. The Company will accrue excise tax on estimated excess taxable income, if any, as required.

The Company paid a dividend of $0.29 per share on March 31, 2014, June 30, 2014 and September 30, 2014. The Company has a dividend reinvestment plan under which all distributions are paid to stockholders in the form of additional shares, unless a stockholder elects to receive cash.

NOTE 8. NET ASSET VALUE PER SHARE

The Company’s net asset value per share at September 30, 2014 was $9.40 and at December 31, 2013 was $9.85. In determining the Company’s net asset value per share, the Board of Directors determined in good faith the fair value of the Company’s portfolio investments for which reliable market quotations are not readily available.

NOTE 9. PAYMENT-IN-KIND

The Company has investments in its portfolio which contain a payment-in-kind, or PIK, provision. The PIK interest and PIK fee is added to the cost basis of the investment and recorded as income. To maintain the Company’s status as a RIC (as discussed in Note 7 above), this non-cash source of income must be paid out to stockholders in the form of dividends, even though the Company has not yet collected the cash. Amounts necessary to pay these dividends may come from available cash or the liquidation of certain investments. For the three months ended September 30, 2014 and 2013, the Company recorded approximately $0.3 million and $0.6 million in PIK income, respectively. For the nine months ended September 30, 2014 and 2013, the Company recorded approximately $1.0 million and $1.8 million in PIK income, respectively.

In addition, the Company recorded original issue discount income of approximately $0.6 million and $0.7 million for the three months ended September 30, 2014 and 2013, respectively, representing the amortization of the discount attributed to certain debt securities purchased by the Company, including original

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TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 9. PAYMENT-IN-KIND – (continued)

issue discount (“OID”) and market discount. The Company had discount income of approximately $2.1 million and $2.9 million for the nine months ended September 30, 2014 and 2013, respectively.

NOTE 10. OTHER INCOME

Other income generally includes closing fees, origination fees and amendment fees associated with investments in portfolio companies. Such fees may be paid at closing of the Company’s investments or at the time the terms of the underlying loan agreement are revised and are generally fully earned, non-refundable, and non-recurring. Also, the Company may receive fees in connection CLO equity investments which may be paid over the life of the underlying CLO vehicle; such fees are recognized as income when earned.

For the three months ended September 30, 2014, the Company recorded other income of approximately $1.9 million which includes approximately $1.0 million representing a success fee associated with the Company’s investment in a warehouse facility as well approximately $0.5 million from amendment and prepayment fees associated with several of the Company’s debt investments. For the three months ended September 30, 2013, the Company recorded other income of approximately $0.8 million. For the nine months ended September 30, 2014, the Company recorded approximately $4.3 million which includes approximately $2.3 million representing amendment and prepayment fees associated with several of the Company’s debt investments. For the nine months ended September 30, 2013, TICC recorded other income of approximately $3.5 million.

The 1940 Act requires that a business development company make available managerial assistance to its portfolio companies. The Company may receive fee income for managerial assistance it renders to portfolio companies in connection with its investments. For the three and nine months ended September 30, 2014 and 2013, respectively, the Company received no fee income for managerial assistance.

NOTE 11. DISTRIBUTIONS FROM SECURITIZATION VEHICLES AND EQUITY INVESTMENTS

The Company receives distributions on the “equity” tranches of securitization vehicles in which it invests. These tranches represent the residual economic interests in such securitization vehicles, and those distributions are determined by the respective trustee on a quarterly basis. The distributions are recognized in the period that they are finally determined and payable. The Company earned approximately $15.2 million in such distributions during the quarter ended September 30, 2014, compared to approximately $12.3 million during the quarter ended September 30, 2013. The Company earned approximately $45.0 million in such distributions during the nine months ended September 30, 2014, compared with approximately $31.7 million during the nine months ended September 30, 2013.

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TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 12. FINANCIAL HIGHLIGHTS

Financial highlights for the three and nine months ended September 30, 2014 and 2013, respectively, are as follows:


	Three Months Ended September 30, 2014 (unaudited)			Three Months Ended September 30, 2013 (unaudited)			Nine Months Ended September 30, 2014 (unaudited)			Nine Months Ended September 30, 2013 (unaudited)
Per Share Data
Net asset value at beginning of period	$	9.71		$	9.75		$	9.85		$	9.90
Net investment income ⁽¹⁾		0.29			0.23			0.90			0.77
Net realized and unrealized capital (losses) gains ⁽²⁾		(0.31	)		0.22			(0.47	)		0.14
Total from net investment operations		(0.02	)		0.45			0.43			0.91
Distributions per share from net investment income		(0.29	)		(0.29	)		(0.87	)		(0.87	)
Distributions based on weighted average share impact		—			(0.01	)		(0.01	)		(0.04	)
Total distributions ⁽³⁾		(0.29	)		(0.30	)		(0.88	)		(0.91	)
Effect of shares issued, net of offering expenses		—			—			—			—
Net asset value at end of period	$	9.40		$	9.90		$	9.40		$	9.90
Per share market value at beginning of period	$	9.90		$	9.62		$	10.34		$	10.12
Per share market value at end of period	$	8.83		$	9.74		$	8.83		$	9.74
Total return ⁽⁴⁾		(7.88	)%		4.26	%		(6.52	)%		4.90	%
Shares outstanding at end of period		60,357,746			53,326,368			60,357,746			53,326,368
Ratios/Supplemental Data
Net assets at end of period (000’s)	$	567,252		$	528,063		$	567,252		$	528,063
Average net assets (000’s)	$	576,241		$	520,602		$	565,430		$	499,240
Ratio of expenses to average net assets:
Expenses before incentive fees ⁽⁵⁾		8.19	%		8.57	%		8.29	%		8.48	%
Net investment income incentive fees ⁽⁵⁾		1.18	%		1.38	%		1.13	%		1.18	%
Capital gains incentive fees ⁽⁵⁾		(0.58	)%		1.74	%		(0.91	)%		(0.11	)%
Total ratio of expenses to average net assets ⁽⁵⁾		8.79	%		11.69	%		8.51	%		9.55	%
Ratio of expenses, excluding interest expense, to average net assets ⁽⁵⁾		5.33	%		7.86	%		5.02	%		5.82	%
Ratio of net investment income to average net assets ⁽⁵⁾		12.16	%		9.40	%		12.43	%		10.37	%

(1)

Represents per share net investment income for the period, based upon average shares outstanding.

(2)

Net realized and unrealized capital gains include rounding adjustments to reconcile change in net asset value per share.

(3)

Management monitors available taxable earnings, including net investment income and realized capital gains, to determine if a tax return of capital may occur for the year. To the extent the Company’s taxable earnings fall below the total amount of the Company’s distributions for that fiscal year, a portion of those distributions may be deemed a tax return of capital to the Company’s stockholders. The tax character of distributions will be determined at the end of the fiscal year.

(4)

Total return equals the increase or decrease of ending market value over beginning market value, plus distributions, divided by the beginning market value, assuming dividend reinvestment prices obtained under the Company’s dividend reinvestment plan, excluding any discounts. Total return is not annualized.

(5)

Annualized.

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TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 13. CASH AND CASH EQUIVALENTS

At September 30, 2014 and December 31, 2013, respectively, cash and cash equivalents consisted of:


	September 30, 2014		December 31, 2013
Cash	$	27,605,274	$	14,933,074
Cash Equivalents		—		—
Total Cash and Cash Equivalents	$	27,605,274	$	14,933,074

Restricted cash represents amounts that are collected and are held by Bank of New York as trustee and custodian of the assets for both of the Company’s debt securitization vehicles. Restricted cash is held by the trustee for payment of interest expense and principal on the outstanding borrowings or reinvestment in new assets; as of September 30, 2014 and December 31, 2013, the restricted cash balances were $51,038,473 and $32,428,248, respectively.

NOTE 14. COMMITMENTS AND CONTINGENCIES

In the normal course of business, the Company enters into a variety of undertakings containing warranties and indemnifications that may expose the Company to some risk of loss. The risk of future loss arising from such undertakings, while not quantifiable, is expected to be remote.

As of September 30, 2014, the Company had one commitment of up to approximately $15.0 million to purchase an additional debt investment. Subsequent to September 30, 2014, the Company was allocated approximately $4.0 million on that commitment.

The Company is not currently subject to any material legal proceedings. From time to time, the Company may be a party to certain legal proceedings in the ordinary course of business, including proceedings related to the enforcement of the Company’s rights under contracts with its portfolio companies. While the outcome of these legal proceedings cannot be predicted with certainty, the Company does not expect that these proceedings will have a material impact upon its financial condition or results of operations.

NOTE 15. RECENT ACCOUNTING PRONOUNCEMENTS

In June 2013, the FASB issued ASU 2013-08, Financial Services — Investment Companies (Topic 946): Amendments to the Scope, Measurement, and Disclosure Requirements, which amends the criteria that define an investment company and clarifies the measurement guidance and requires new disclosures for investment companies. The Company has adopted this standard for its fiscal year end December 31, 2014 and determined that it is an investment company and follows the accounting and reporting guidance under the Topic 946. The adoption of the standard did not have a material impact on the Company’s consolidated results of operations and financial condition.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) . The update supersedes the revenue recognition requirements in ASC 605, Revenue Recognition . Under the new guidance, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is not permitted. The adoption of the amended guidance in the standard is not expected to have a significant effect on the Company’s consolidated results of operations and financial condition.

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TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 15. RECENT ACCOUNTING PRONOUNCEMENTS – (continued)

In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Presentation of Financial Statements — Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern . The update is intended to define management’s responsibility to evaluate whether there is a substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosure. Amendments in this update become effective in the annual period ending after December 15, 2016, with early application permitted. The Company will evaluate the application of this pronouncement and will adopt the standard for the quarter ending March 31, 2016.

NOTE 16. SUBSEQUENT EVENTS

On October 27, 2014, TICC Funding, LLC (“TICC Funding”), a special purpose vehicle and wholly-owned subsidiary of the Company, entered into a revolving credit facility (the “Facility”) with Citibank, N.A. The Company used part of the proceeds from the Facility to redeem all of the $101,250,000 secured notes issued by TICC CLO LLC. Subject to certain exceptions, pricing under the Facility is based on the London interbank offered rate (“LIBOR”) for an interest period equal to three months plus a spread of 1.50% per annum. Interest on the loans is payable quarterly in arrears. In connection with the redemption of the secured notes issued by TICC CLO LLC, the Company will write-off approximately $3.1 million of discount and deferred debt issuance costs.

Pursuant to the terms of the credit agreement governing the Facility, TICC Funding has borrowed, on a revolving basis, the maximum aggregate principal amount of $150,000,000. The Facility is secured by a pool of loans initially consisting of loans sold by TICC CLO to TICC Funding, loans sold and contributed by the Company to TICC Funding, and loans purchased by TICC Funding from unaffiliated third parties. The Company may sell and contribute additional loans to TICC Funding from time to time. The Company will act as the collateral manager of the loans owned by TICC Funding, and has retained a residual interest through its ownership of TICC Funding.

The period during which TICC Funding may request additional borrowings under the Facility will terminate on October 27, 2016. All amounts borrowed under the Facility will mature, and all accrued and unpaid interest thereunder will be due and payable, on October 27, 2017. TICC Funding is required to pay certain fees in connection with the Facility, including a fee on the unused portion of the commitment under the Facility. TICC Funding may prepay any borrowing at any time without a premium or penalty, except that TICC Funding might be liable for certain funding breakage fees if prepayments occur prior to expiration of the relevant interest period. TICC Funding may also permanently reduce all or a portion of the Facility amount from time to time upon payment of a prepayment fee if such reduction occurs prior to October 27, 2016.

On October 30, 2014, the Board of Directors declared a distribution of $0.29 per share for the fourth quarter, payable on December 31, 2014 to shareholders of record as of December 17, 2014.

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SCHEDULE 12-14

TICC CAPITAL CORP.
INVESTMENTS IN AND ADVANCES TO AFFILIATES
(AMOUNTS IN THOUSANDS)



Name of Issuer	Title of Issue or Nature of Indebtedness		Amount of Income or Dividends Credited to Income ⁽²⁾		Value as of December 31, 2013		Gross Additions ⁽³⁾		Gross Reductions ⁽⁴⁾			Change in Unrealized (Loss)/Gain			Value as of September 30, 2014
CONTROL INVESTMENT:
Algorithmic Implementations, Inc. (d/b/a “Ai Squared”)		Senior Secured Notes	$	1,036.7	$	13,900.0	$	—	$	—		$	—		$	13,900.0
		Common Stock ⁽¹⁾		—		2,150.0		—		—			(740.0	)		1,410.0
Total Control Investment				1,036.7		16,050.0		—		—			(740.0	)		15,310.0
AFFILIATED INVESTMENT:
Nextag, Inc. ⁽⁵⁾		Senior Secured Notes		—		5,506.7		—		(9,417.4	)		3,910.7			—
				—		5,506.7		—		(9,417.4	)		3,910.7			—
Nextag, Inc.		Senior Secured Notes		65.1		—		2,213.1		—			—			2,213.1
		Common Stock ⁽¹⁾		—		—		2,004.0		—			(215.2	)		1,788.8
				65.1		—		4,217.1		—			(215.2	)		4,001.9
Total Affiliated Investment				65.1		5,506.7		4,217.1		(9,417.4	)		3,695.5			4,001.9
TOTAL CONTROL AND AFFILIATED INVESTMENTS			$	1,101.8	$	21,556.7	$	4,217.1	$	(9,417.4	)	$	2,955.5		$	19,311.9

(1)

Common stock is non-income producing.

(2)

Represents the total amount of interest or dividends credited to income for the portion of the year an investment was a control or affiliate investment, as appropriate.

(3)

Gross additions include increases in investments resulting from new portfolio investments, paid-in-kind interest or dividends, the amortization of discounts and fees.

(4)

Gross reductions include decreases in investments resulting from principal collections related to investment repayments or sales, the amortization of premiums and acquisition costs. Gross reductions also include approximately $5.3 million in realized losses in connection with the restructuring of our investment held in Nextag, Inc.

(5)

Represents previously held investment in Nextag, Inc. which was restructured on June 4, 2014. Our investment held in Nextag at December 31, 2013 was not deemed an affiliate and the restructuring on June 4, 2014 resulted in the status update.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about TICC, our current and prospective portfolio investments, our industry, our beliefs, and our assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “will,” “may,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “should,” “targets,” “projects,” and variations of these words and similar expressions are intended to identify forward-looking statements. The forward-looking statements contained in this Quarterly Report on Form 10-Q involve risks and uncertainties, including statements as to:

•

our future operating results;

•

our business prospects and the prospects of our portfolio companies;

•

the impact of investments that we expect to make;

•

our contractual arrangements and relationships with third parties;

•

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

•

the ability of our portfolio companies to achieve their objectives;

•

our expected financings and investments;

•

the adequacy of our cash resources and working capital; and

•

the timing of cash flows, if any, from the operations of our portfolio companies.

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:

•

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;

•

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

•

interest rate volatility could adversely affect our results, particularly because we use leverage as part of our investment strategy;

•

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; and

•

the risks, uncertainties and other factors we identify in Item 1A — Risk Factors contained in our Annual Report on Form 10-K for the year ended December 31, 2013, elsewhere in this Quarterly Report on Form 10-Q and in our other filings with the SEC.

Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions also could be inaccurate. Important assumptions include our ability to originate new loans and investments, certain margins and levels of profitability and the availability of additional capital. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this Quarterly Report on Form 10-Q 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 Item 1A — Risk Factors contained in our Annual Report on Form 10-K for the year ended

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December 31, 2013, and elsewhere in this Quarterly Report on Form 10-Q. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Quarterly Report on Form 10-Q.

Except where the context requires otherwise, the terms “TICC,” “Company,” “we,” “us” and “our” refer to TICC Capital Corp. together with its subsidiaries, TICC Capital Corp. 2011-1 Holdings LLC (“Holdings”), TICC CLO LLC (“2011 Securitization Issuer” or “TICC CLO”) and TICC CLO 2012-1 LLC (“2012 Securitization Issuer” or “TICC CLO 2012-1”); “TICC Management” refers to TICC Management, LLC; and “BDC Partners” refers to BDC Partners, LLC.

The following analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes thereto contained elsewhere in this Quarterly Report on Form 10-Q.

OVERVIEW

Our investment objective is to maximize our portfolio’s total return. Our primary focus is to seek current income by investing in corporate debt securities. We have also invested and may continue to invest in structured finance investments, including CLO vehicles, which own debt securities. We may also invest in publicly traded debt and/or equity securities. We operate as a closed-end, non-diversified management investment company and have elected to be regulated as a business development company under the Investment Company Act of 1940, as amended (the “1940 Act”). We have elected to be treated for tax purposes as a regulated investment company (“RIC”), under the Internal Revenue Code of 1986, as amended (the “Code”), beginning with our 2003 taxable year.

Our investment activities are managed by TICC Management, a registered investment adviser under the Investment Advisers Act of 1940, as amended. TICC Management is owned by BDC Partners, its managing member, and Charles M. Royce, our non-executive Chairman, who holds a minority, non-controlling interest in TICC Management. Jonathan H. Cohen, our Chief Executive Officer, and Saul B. Rosenthal, our President and Chief Operating Officer, are the controlling members of BDC Partners. Under an investment advisory agreement (the “Investment Advisory Agreement”), we have agreed to pay TICC Management an annual base fee calculated on gross assets, and an incentive fee based upon our performance. Under an amended and restated administration agreement (the “Administration Agreement”), we have agreed to pay or reimburse BDC Partners, as administrator, for certain expenses incurred in operating TICC. Our executive officers and directors, and the executive officers of TICC Management and BDC Partners, serve or may serve as officers and directors of entities that operate in a line of business similar to our own. Accordingly, they may have obligations to investors in those entities, the fulfillment of which might not be in the best interests of us or our stockholders.

On August 10, 2011, we completed a $225.0 million debt securitization financing transaction. On August 23, 2012, we completed our second such transaction, a $160.0 million debt securitization financing. On February 25, 2013 and on May 28, 2013, we completed the sale of an aggregate of $120.0 million of additional secured notes and an aggregate of $40.0 million of subordinated notes in connection with these transactions. On September 26, 2012, we completed a private placement of 5-year unsecured 7.50% Senior Convertible Notes Due 2017 (the “Convertible Notes”). A total of $105.0 million aggregate principal amount of the Convertible Notes were issued at the closing. An additional $10.0 million aggregate principal amount of the Convertible Notes were issued on October 22, 2012 pursuant to the exercise of the initial purchasers’ option to purchase additional Convertible Notes. For more information about these transactions, see “— Liquidity and Capital Resources — Borrowings.”

We generally expect to invest between $5 million and $50 million in each of our portfolio companies, although this investment size may vary proportionately as the size of our capital base changes and market conditions warrant, and accrue interest at fixed or variable rates. We expect that our investment portfolio will be diversified among a large number of investments with few investments, if any, exceeding 5% of the total portfolio. As of September 30, 2014, our debt investments had stated interest rates of between 4.00% and 11.00% (excluding our investment in Unitek Global Services, Inc.) and maturity dates of between 22 and 127 months. In addition, our total portfolio had a weighted average yield on debt investments of approximately 8.0%.

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Our loans may carry a provision for deferral of some or all of the interest payments and amendment fees, which will be added to the principal amount of the loan. This form of deferred income is referred to as “payment-in-kind,” or “PIK,” interest or other income and, when earned, is recorded as interest or other income and an increase in the principal amount of the loan. For the quarter ended September 30, 2014, we recognized approximately $0.3 million from PIK interest income associated with our investments in Merrill Communications, LLC, RBS Holding Company and Nextag, Inc. compared to PIK interest of approximately $0.6 million for the quarter ended September 30, 2013. In the event we recognize deferred loan interest income in excess of our available capital as a result of our receipt of PIK income, we may be required to liquidate assets in order to pay a portion of the incentive fee due to TICC Management.

We have historically and may continue to borrow funds to make investments. As a result, we are exposed to the risks of leverage, which may be considered a speculative investment technique. Borrowings, also known as leverage, magnify the potential for gain and loss on amounts invested and therefore increase the risks associated with investing in our securities. In addition, the costs associated with our borrowings, including any increase in the management fee payable to TICC Management, will be borne by our common stockholders.

In addition, as a BDC under the 1940 Act, we are required to make available significant managerial assistance, for which we may receive fees, to our portfolio companies. These fees would be generally non-recurring, however in some instances they may have a recurring component. We have received no fee income for managerial assistance to date.

Prior to making an investment, we may enter into a non-binding term sheet with the potential portfolio company. These term sheets are generally subject to a number of conditions, including but not limited to the satisfactory completion of our due diligence investigations of the company’s business and legal documentation for the loan.

To the extent possible, we will generally seek to invest in loans that are collateralized by a security interest in the borrower’s assets or guaranteed by a principal to the transaction. Interest payments, if not deferred, are normally payable quarterly with most debt investments having scheduled principal payments on a monthly or quarterly basis. When we receive a warrant to purchase stock in a portfolio company, the warrant will typically have a nominal strike price, and will entitle us to purchase a modest percentage of the borrower’s stock.

During the quarter ended September 30, 2014, we closed approximately $97.6 million in portfolio investments, including additional investments of approximately $35.8 million in existing portfolio companies and approximately $61.8 million in new portfolio companies. During the quarter ended September 30, 2014, we recognized a total of $73.7 million from repayments on debt investments, and we recognized approximately $48.3 million from the sale of portfolio investments. We realized net losses on investments during the quarter ended September 30, 2014 in the amount of approximately $3.5 million. For the quarter ended September 30, 2014, we had net unrealized depreciation of approximately $15.3 million.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements and related disclosures in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified our investment valuation policy as a critical accounting policy.

Investment Valuation

The most significant estimate inherent in the preparation of our consolidated financial statements is the valuation of investments and the related amounts of unrealized appreciation and depreciation of investments recorded. There is no single 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 we make. We are required to specifically fair value each individual investment on a quarterly basis.

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In May 2011, the FASB issued ASU 2011-04, “ Fair Value Measurement which represents amendments to achieve common fair value measurement and disclosure requirements in US GAAP and IFRS .” The amendments are of two types: (i) those that clarify the FASB’s intent about the application of existing fair value measurement and disclosure requirements and (ii) those that change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The amendments that change a particular principle or requirement for measuring fair value or disclosing information about fair value measurements relate to (i) measuring the fair value of the financial instruments that are managed within a portfolio; (ii) application of premium and discount in a fair value measurement; and (iii) additional disclosures about fair value measurements. We adopted this update on January 1, 2012. We have increased our disclosures related to Level 3 fair value measurements in addition to other required disclosures. There were no related impacts on our financial position or results of operations.

ASC 820-10, “ Fair Value Measurements and Disclosure ,” which establishes a three-level valuation hierarchy for disclosure of fair value measurements, 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. We have determined that due to the general illiquidity of the market for our investment portfolio, whereby little or no market data exists, all of our investments are based upon “Level 3” inputs.

Our Board of Directors determines the value of our investment portfolio each quarter. In connection with that determination, members of TICC Management’s portfolio management team prepare portfolio company valuations using the most recent portfolio company financial statements and forecasts. Since March 2004, we have engaged third-party valuation firms to provide assistance in valuing our bilateral investments and, more recently, for certain of our syndicated loans, although our Board of Directors ultimately determines the appropriate valuation of each such investment.

Under the valuation procedures approved by our Board of Directors, upon the recommendation of the Valuation Committee, a third-party valuation firm will prepare valuations for each of our bilateral investments for which market quotations are not readily available 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 our 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 our total assets as of the previous quarter, after taking into account any repayment of principal during the current quarter. In addition, the frequency of those third-party valuations of our portfolio securities is based upon the grade assigned to each such security under our credit grading system as follows: Grade 1, at least annually; Grade 2, at least semi-annually; Grades 3, 4, and 5, at least quarterly. TICC Management also retains the authority to seek, on our behalf, additional third party valuations with respect to both our bilateral portfolio securities and our syndicated loan investments. Our Board of Directors retains ultimate authority as to the third-party review cycle as well as the appropriate valuation of each investment.

In accordance with ASC 820-10-35, “ Determining Fair Value When the Volume and Level of Activity for the Asset or Liability have Significantly Decreased and Identifying Transactions That Are Not Orderly ,” our 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 for which we obtain indicative bid quotes for purposes of determining the fair value of our syndicated loan investments have shown these attributes of illiquidity as described by ASC-820-10-35. Due to limited market liquidity in the syndicated loan market,

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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 and therefore alternative valuation procedures may need to be undertaken. As a result, TICC has engaged third-party valuation firms to provide assistance in valuing certain syndicated investments that we own. In addition, TICC Management prepares an analysis of each syndicated loan, including a 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. We have considered the factors described in ASC 820-10 and have determined that we are properly valuing the securities in our portfolio.

During the past few years, we have acquired a number of debt and equity positions in CLO investment vehicles. These investments are special purpose financing vehicles. In valuing such investments, we consider the operating metrics of the specific investment vehicle, including compliance with collateralization tests, defaulted and restructured securities, and payment defaults, if any. In addition, we consider the indicative prices provided by the broker who arranges transactions in such investment vehicles, as well as any available information on other relevant transactions in the market. 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 our Board of Directors for its determination of fair value of these investments.

Our assets measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820-10 at September 30, 2014, were as follows:


($ in millions)	Fair Value Measurements at Reporting Date Using
Assets	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Senior Secured Notes	$	0.0	$	19.8	$	617.6	$	637.4
Senior Unsecured Notes		0.0		0.0		6.3		6.3
CLO Debt		0.0		0.0		11.5		11.5
CLO Equity		0.0		0.0		271.0		271.0
Common Stock		0.0		0.0		16.4		16.4
Preferred Shares		0.0		0.0		0.0		0.0
Warrants to purchase equity		0.0		0.0		0.0		0.0
Total	$	0.0	$	19.8	$	922.8	$	942.6

A reconciliation of the fair value of investments for the three months ended September 30, 2014, utilizing significant unobservable inputs, is as follows:



($ in millions)	Senior Secured Note Investments			Senior Unsecured Note Investments		Collateralized Loan Obligation Debt Investments			Collateralized Loan Obligation Equity Investments			Common Stock Investments		Preferred Share Equity Investments		Warrants to Purchase Equity Investments			Total
Balance at June 30, 2014	$	657.1		$	6.1	$	21.5		$	264.6		$	14.5	$	0.0	$	0.1		$	963.9
Realized gains (losses) included in earnings		0.2			0.0		1.5			(5.2	)		0.0		0.0		0.0			(3.5	)
Unrealized (depreciation) appreciation included in earnings ⁽¹⁾		(8.5	)		0.0		(1.8	)		(6.6	)		1.9		0.0		(0.1	)		(15.1	)
Accretion of discount		0.5			0.0		0.1			0.0			0.0		0.0		0.0			0.6
Purchases		38.0			0.0		0.0			59.6			0.0		0.0		0.0			97.6

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($ in millions)	Senior Secured Note Investments			Senior Unsecured Note Investments		Collateralized Loan Obligation Debt Investments			Collateralized Loan Obligation Equity Investments			Common Stock Investments		Preferred Share Equity Investments		Warrants to Purchase Equity Investments			Total
Repayments and Sales		(69.8	)		0.0		(9.8	)		(41.4	)		0.0		0.0		0.0			(121.0	)
Payment in Kind income		0.1			0.2		0.0			0.0			0.0		0.0		0.0			0.3
Transfers in and/or out of level 3		0.0			0.0		0.0			0.0			0.0		0.0		0.0			0.0
Balance at September 30, 2014	$	617.6		$	6.3	$	11.5		$	271.0		$	16.4	$	0.0	$	0.0		$	922.8
The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to our Level 3 assets still held at the reporting date and reported within the net change in unrealized gains or losses on investments in our Statement of Operations	$	(8.6	)	$	0.0	$	(0.1	)	$	(12.5	)	$	2.0	$	0.0	$	(0.1	)	$	(19.3	)

(1)

Includes rounding adjustments to reconcile period balances.

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A reconciliation of the fair value of investments for the nine months ended September 30, 2014, utilizing significant unobservable inputs, is as follows:



($ in millions)	Senior Secured Note Investments			Senior Unsecured Note Investments		Collateralized Loan Obligation Debt Investments			Collateralized Loan Obligation Equity Investments			Common Stock Investments			Preferred Share Equity Investments			Warrants to Purchase Equity Investments			Total
Balance at December 31, 2013	$	627.8		$	5.8	$	28.9		$	237.1		$	13.8		$	0.4		$	0.9		$	914.7
Realized (losses) gains included in earnings		(6.0	)		0.0		2.2			(7.4	)		(0.4	)		(0.2	)		(0.4	)		(12.2	)
Unrealized (depreciation) appreciation included in earnings ⁽¹⁾		(5.0	)		0.1		(2.5	)		(8.4	)		1.0			(0.2	)		(0.2	)		(15.2	)
Accretion of discount ⁽¹⁾		1.7			0.0		0.3			0.0			0.0			0.0			0.0			2.0
Purchases		236.7			0.0		0.0			120.2			2.0			0.0			0.0			358.9
Repayments and Sales ⁽¹⁾		(238.2	)		0.0		(17.4	)		(70.5	)		0.0			0.0			(0.3	)		(326.4	)
Payment in Kind income		0.6			0.4		0.0			0.0			0.0			0.0			0.0			1.0
Transfers in and/or out of level 3		0.0			0.0		0.0			0.0			0.0			0.0			0.0			0.0
Balance at September 30, 2014	$	617.6		$	6.3	$	11.5		$	271.0		$	16.4		$	0.0		$	0.0		$	922.8
The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to our Level 3 assets still held at the reporting date and reported within the net change in unrealized gains or losses on investments in our Statement of Operations	$	(8.2	)	$	0.0	$	(0.5	)	$	(14.9	)	$	0.6		$	0.0		$	(0.4	)	$	(23.4	)

(1)

Includes rounding adjustments to reconcile period balances.

Our assets measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820-10 at December 31, 2013, were as follows:


($ in millions)	Fair Value Measurements at Reporting Date Using
Assets	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Senior Secured Notes	$	0.0	$	16.9	$	627.8	$	644.7
Senior Unsecured Notes		0.0		0.0		5.8		5.8
CLO Debt		0.0		0.0		28.9		28.9
CLO Equity		0.0		0.0		237.1		237.1
Common Stock		0.0		0.0		13.8		13.8
Preferred Shares		0.0		0.0		0.4		0.4
Warrants to purchase equity		0.0		0.0		0.9		0.9
Total	$	0.0	$	16.9	$	914.7	$	931.6

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A reconciliation of the fair value of investments for the three months ended September 30, 2013, utilizing significant unobservable inputs, is as follows:



($ in millions)	Senior Secured Note Investments			Senior Unsecured Note Investments		Collateralized Loan Obligation Debt Investments			Collateralized Loan Obligation Equity Investments			Subordinated Note Investments		Common Stock Investments		Preferred Share Equity Investments			Warrants to Purchase Equity Investments		Total
Balance at June 30, 2013	$	627.6		$	5.3	$	45.0		$	195.9		$	0.0	$	14.5	$	0.4		$	0.5	$	889.2
Realized gains (losses) included in earnings		(3.4	)		0.0		3.3			0.3			0.0		0.0		(1.5	)		0.0		(1.3	)
Unrealized appreciation (depreciation) included in earnings ⁽¹⁾		12.2			0.1		(3.2	)		1.6			0.0		0.3		1.5			0.0		12.5
Accretion of discount		0.5			0.0		0.1			0.0			0.0		0.0		0.0			0.0		0.6
Purchases ⁽¹⁾		62.1			0.0		5.6			17.3			0.0		0.0		0.0			0.0		85.0
Repayments and Sales		(34.3	)		0.0		(19.5	)		(8.2	)		0.0		0.0		0.0			0.0		(62.0	)
Payment in Kind income		0.4			0.2		0.0			0.0			0.0		0.0		0.0			0.0		0.6
Transfers in and/or out of level 3		0.0			0.0		0.0			0.0			0.0		0.0		0.0			0.0		0.0
Balance at September 30, 2013	$	665.1		$	5.6	$	31.3		$	206.9		$	0.0	$	14.8	$	0.4		$	0.5	$	924.6
The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to our Level 3 assets still held at the reporting date and reported within the net change in unrealized gains or losses on investments in our Statement of Operations	$	9.2		$	0.0	$	0.0		$	4.4		$	0.0	$	0.3	$	0.0		$	0.0	$	13.9

(1)

Includes rounding adjustments to reconcile period balances.

A reconciliation of the fair value of investments for the nine months ended September 30, 2013, utilizing significant unobservable inputs, is as follows:


($ in millions)	Senior Secured Note Investments			Senior Unsecured Note Investments			Collateralized Loan Obligation Debt Investments			Collateralized Loan Obligation Equity Investments			Subordinated Note Investments			Common Stock Investments		Preferred Share Equity Investments			Warrants to Purchase Equity Investments		Total
Balance at December 31,2012	$	485.1		$	0.0		$	55.6		$	109.3		$	0.1		$	4.4	$	2.7		$	0.5	$	657.7
Realized (losses) gains included in earnings		(2.3	)		0.6			10.9			(0.5	)		0.0			0.0		(1.5	)		0.0		7.2
Unrealized appreciation (depreciation) included in earnings		12.9			2.8			(8.6	)		(13.1	)		0.0			7.0		(1.0	)		0.0		0.0
Accretion of discount		2.0			0.0			0.8			0.0			0.0			0.0		0.0			0.0		2.8
Purchases		332.7			3.1			17.0			124.2			0.0			3.4		0.0			0.0		480.4
Repayments and Sales		(166.7	)		(1.1	)		(44.4	)		(13.0	)		(0.1	)		0.0		0.0			0.0		(225.3	)
Payment in Kind income		1.4			0.2			0.0			0.0			0.0			0.0		0.2			0.0		1.8
Transfers in and/or out of level 3		0.0			0.0			0.0			0.0			0.0			0.0		0.0			0.0		0.0
Balance at September 30, 2013	$	665.1		$	5.6		$	31.3		$	206.9		$	0.0		$	14.8	$	0.4		$	0.5	$	924.6
The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to our Level 3 assets still held at the reporting date and reported within the net change in unrealized gains or losses on investments in our Statement of Operations	$	9.8		$	2.7		$	0.4		$	(8.0	)	$	0.0		$	7.0	$	(2.5	)	$	0.0	$	9.4

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PORTFOLIO COMPOSITION AND INVESTMENT ACTIVITY

The total fair value of our investment portfolio was approximately $942.6 million and $931.6 million as of September 30, 2014 and December 31, 2013, respectively. The increase in investments during the nine months ended September 30, 2014 was due primarily to purchases of investments of approximately $362.9 million, partially offset by debt repayments and sales of securities totaling approximately $327.4 million. Funding for these new investments was provided by an equity capital raise totaling $66.4 million and the deployment of capital available as of December 31, 2013.

In certain instances, we receive payments based on scheduled amortization of the outstanding balances and sales of portfolio investments. In addition, we receive repayments of some of our debt investments prior to their scheduled maturity date. The frequency or volume of these repayments may fluctuate significantly from period to period. For the quarter ended September 30, 2014, we recognized proceeds of approximately $48.3 million largely from the aggregate proceeds from the sale of several CLO equity investments ($27.3 million), whereas for the year ended December 31, 2013, we recognized proceeds of approximately $118.5 million from the sales of securities. Also, during the quarter ended September 30, 2014, we had repayments and amortization payments of approximately $73.7 million, whereas for the year ended December 31, 2013, we had repayments and amortization payments of approximately $203.9 million.

As of September 30, 2014, we had investments in debt securities of, or loans to, 53 portfolio companies, with a fair value of approximately $655.2 million, and equity investments in 29 portfolio companies, with a fair value of approximately $287.4 million. These debt investments included approximately $1.0 million in accrued PIK interest, which, as described in “Overview” above, is added to the carrying value of our investments, reduced by repayments of principal.

As of December 31, 2013, we had investments in debt securities of, or loans to, 68 portfolio companies, with a fair value of approximately $679.4 million, and equity investments in 33 portfolio companies, with a fair value of approximately $252.2 million. These debt investments included approximately $2.1 million in accrued PIK interest, which, as described in “Overview” above, is added to the carrying value of our investments, reduced by repayments of principal.

A reconciliation of the investment portfolio for the nine months ended September 30, 2014 and the year ended December 31, 2013 follows:


	September 30, 2014			December 31, 2013
	(dollars in millions)			(dollars in millions)
Beginning Investment Portfolio	$	931.6		$	667.5
Portfolio Investments Acquired		362.9			577.5
Debt repayments		(224.6	)		(203.9	)
Sales of securities		(102.8	)		(118.5	)
Payment in Kind ⁽¹⁾		1.0			2.1
Original Issue Discount		2.1			3.7
Net Unrealized Depreciation		(15.4	)		(3.2	)
Net Realized (Losses) Gains		(12.2	)		6.4
	$	942.6		$	931.6

(1)

Includes rounding adjustments to reconcile period balances at December 31, 2013.

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The following table indicates the quarterly portfolio investment activity for the past seven quarters:


	New Investments		Debt Repayments		Sales of Securities
	(dollars in millions)		(dollars in millions)		(dollars in millions)
Quarter ended
September 30, 2014	$	97.6	$	73.7	$	48.3
June 30, 2014		178.3		116.6		33.4
March 31, 2014		87.0		34.3		21.1
Total	$	362.9	$	224.6	$	102.8
December 31, 2013	$	85.2	$	66.0	$	26.2
September 30, 2013		85.0		22.3		39.6
June 30, 2013		190.8		85.8		17.7
March 31, 2013		216.5		29.8		35.0
Total	$	577.5	$	203.9	$	118.5

The following table shows the fair value of our portfolio of investments by asset class as of September 30, 2014 and December 31, 2013:


	September 30, 2014					December 31, 2013
	Investments at Fair Value		Percentage of Total Portfolio			Investments at Fair Value		Percentage of Total Portfolio
	(dollars in millions)					(dollars in millions)
Senior Secured Notes	$	637.4		67.6	%	$	644.7		69.2	%
Senior Unsecured Notes		6.3		0.7	%		5.8		0.6	%
CLO Debt		11.5		1.2	%		28.9		3.1	%
CLO Equity		271.0		28.8	%		237.1		25.5	%
Common Stock		16.4		1.7	%		13.8		1.5	%
Preferred Shares		0.0		0.0	%		0.4		0.0	%
Warrants		0.0		0.0	%		0.9		0.1	%
Total	$	942.6		100.0	%	$	931.6		100.0	%

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The following table shows our portfolio of investments by industry at fair value, as of September 30, 2014 and December 31, 2013:


	September 30, 2014					December 31, 2013
	Investments at Fair Value		Percentage of Fair Value			Investments at Fair Value		Percentage of Fair Value
	(dollars in millions)					(dollars in millions)
Structured finance	$	282.5		30.0	%	$	266.0		28.6	%
Telecommunication services		99.7		10.6	%		51.7		5.5	%
Business services		89.7		9.5	%		69.5		7.4	%
Software		88.7		9.4	%		77.2		8.3	%
Printing and publishing		77.0		8.2	%		69.9		7.5	%
Financial intermediaries		60.1		6.4	%		71.7		7.7	%
Enterprise software		58.8		6.3	%		38.9		4.2	%
Consumer services		30.0		3.2	%		24.0		2.6	%
Auto parts manufacturer		26.7		2.8	%		12.0		1.3	%
Retail		20.7		2.2	%		39.0		4.2	%
Computer hardware		19.4		2.1	%		9.7		1.0	%
Travel		15.4		1.6	%		26.3		2.8	%
Radio and television		14.4		1.5	%		10.3		1.1	%
Education		11.4		1.2	%		6.6		0.7	%
Healthcare		10.8		1.1	%		23.0		2.5	%
Utlities		9.8		1.0	%		10.0		1.1	%
Leisure goods		9.7		1.0	%		10.0		1.1	%
Electronics		7.6		0.8	%		3.9		0.4	%
IT consulting		6.7		0.7	%		26.8		2.9	%
Pharmaceutical		3.5		0.4	%		3.5		0.4	%
Chemicals and plastics		0.0		0.0	%		28.6		3.1	%
Logistics		0.0		0.0	%		20.5		2.2	%
IT outsourcing		0.0		0.0	%		6.9		0.7	%
Grocery		0.0		0.0	%		6.9		0.7	%
Advertising		0.0		0.0	%		5.1		0.5	%
Packaging and containers		0.0		0.0	%		5.0		0.5	%
Clothing		0.0		0.0	%		4.6		0.5	%
Insurance		0.0		0.0	%		3.5		0.4	%
IT value-added reseller		0.0		0.0	%		0.5		0.1	%
Total	$	942.6		100.0	%	$	931.6		100.0	%

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PORTFOLIO GRADING

We have adopted a credit grading system to monitor the quality of our debt investment portfolio. As of September 30, 2014 and December 31, 2013, our portfolio had a weighted average grade of 2.1 and 2.1, respectively, based upon the fair value of the debt investments in the portfolio. Equity securities are not graded.

At September 30, 2014 and December 31, 2013, our debt investment portfolio was graded as follows:


Grade	Summary Description		September 30, 2014
Grade	Summary Description		Principal Value		Percentage of Total Portfolio			Portfolio at Fair Value		Percentage of Total Portfolio
			(dollars in millions)					(dollars in millions)
1		Company is ahead of expectations and/or outperforming financial covenant requirements and such trend is expected to continue.	$	—		0.0	%	$	—		0.0	%
2		Full repayment of principal and interest is expected		606.0		90.1	%		600.4		91.6	%
3		Closer monitoring is required. Full repayment of principal and interest is expected.		54.2		8.1	%		48.1		7.4	%
4		A reduction of interest income has occurred or is expected to occur. No loss of principal is expected.		—		0.0	%		—		0.0	%
5		A loss of some portion of principal is expected.		12.3		1.8	%		6.7		1.0	%
			$	672.5		100.0	%	$	655.2		100.0	%


Grade	Summary Description		December 31, 2013
Grade	Summary Description		Principal Value		Percentage of Total Portfolio			Portfolio at Fair Value		Percentage of Total Portfolio
			(dollars in millions)					(dollars in millions)
1		Company is ahead of expectations and/or outperforming financial covenant requirements and such trend is expected to continue.	$	—		0.0	%	$	—		0.0	%
2		Full repayment of principal and interest is expected		593.6		85.3	%		589.1		86.7	%
3		Closer monitoring is required. Full repayment of principal and interest is expected.		91.9		13.2	%		84.8		12.5	%
4		A reduction of interest income has occurred or is expected to occur. No loss of principal is expected.		—		0.0	%		—		0.0	%
5		A loss of some portion of principal is expected.		10.0		1.5	%		5.5		0.8	%
			$	695.5		100.0	%	$	679.4		100.0	%

We expect that a portion of our investments will be in the grades 3, 4 or 5 categories from time to time, and, as such, we will be required to work with troubled portfolio companies to improve their business and protect our investment. The number and amount of investments included in grades 3, 4 or 5 may fluctuate from period to period.

Further discussion regarding the other investments which experienced significant unrealized depreciation is presented in “Results of Operations.”

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RESULTS OF OPERATIONS

Set forth below is a comparison of our results of operations for the three months ended September 30, 2014 to the three months ended September 30, 2013.

Investment Income

As of September 30, 2014, our debt investments had stated interest rates of between 4.00% and 11.00% (excluding our investment in Unitek Global Services, Inc.) and maturity dates of between 22 and 127 months. In addition, our total portfolio had a weighted average yield on debt investments of approximately 8.0%, compared with 8.7% as of September 30, 2013. The reduction in the weighted average yield on our debt portfolio over the past year is primarily a result of the investment restrictions of the securitization vehicles that we have sponsored, which require us to generally invest in higher-rated and/or larger corporate loans which carry correspondingly lower yields, as well as the refinancing and repricing of many of those loans at lower rates due to current market conditions.

Investment income for the three months ended September 30, 2014 was approximately $30.2 million compared to approximately $27.4 million for the three months ended September 30, 2013. This increase was due largely to an increase in the amount of distributions from the equity interests in our CLO vehicle investments and the amount of performing assets in the portfolio. The total principal value of income producing debt investments as of September 30, 2014 and September 30, 2013 was approximately $660.3 million and $733.4 million, respectively. For the quarter ended September 30, 2014, investment income consisted of approximately $12.2 million in cash interest from portfolio investments, approximately $0.6 million in amortization of original issue and market discount, approximately $15.2 million in distributions from the equity interest in securitized vehicle investments, as well as approximately $0.3 million in PIK interest income.

For the quarter ended September 30, 2014, other income of approximately $1.9 million was recorded, including approximately $1.4 million representing fees associated with five of our CLO equity investments, including a CLO warehouse facility, compared to other income of approximately $0.8 million for the quarter ended September 30, 2013. Other income generally includes closing fees, origination fees and amendment fees associated with investments in portfolio companies. Such fees may be paid at closing of our investments or at the time the terms of the underlying loan agreement are revised and are generally fully earned, non-refundable, and non-recurring. Also, the Company may receive fees in connection with CLO equity investments which may be paid over the life of the underlying CLO vehicle; such fees are recognized as income when earned.

Operating Expenses

Total expenses for the quarter ended September 30, 2014 were approximately $12.7 million, which includes the capital gains incentive fee accrual reversal of approximately $0.8 million.

Expenses before incentive fees, for the quarter ended September 30, 2014, were approximately $11.8 million. This amount consisted of investment advisory fees, interest expense and other debt financing expenses, professional fees, compensation expense, and general and administrative expenses. Expenses before incentive fees increased approximately $0.6 million from the quarter ended September 30, 2013, attributable primarily to increased investment advisory fees (consisting of the base management fee) and professional fees. Expenses before incentive fees for the quarter ended September 30, 2013 were approximately $11.1 million.

The investment advisory base fee for the quarter ended September 30, 2014 was approximately $5.4 million and the investment advisory fee in the comparable period in 2013 was approximately $4.9 million. The increase in the base management fee is due to an increase in average gross assets. At each of September 30, 2014 and December 31, 2013, respectively, approximately $7.1 million and $7.1 million of investment advisory fees remained payable to TICC Management, including the net investment income incentive fee discussed below.

Interest expense and other debt financing expenses for the third quarter of 2014 was approximately $5.0 million, which was directly related to our debt securitization financing transactions as well as our Convertible Note transaction. Interest expense for the third quarter of 2013 was also approximately $5.0 million.

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TICC CLO LLC

In August 2011, secured notes in the amount of $101,250,000 were issued by a newly formed special purpose vehicle in which a wholly-owned subsidiary of TICC owns all of the equity. Under this structure, the notes bear interest, after the effective date, at three-month London Inter Bank Offered Rate (“LIBOR”) plus 2.25% (prior to the effective date, the Class A Notes bear interest at five-month LIBOR plus 2.25%). For the three months ended September 30, 2014, the total interest expense under the securitization was approximately $759,000, comprised of stated interest expense (approximately $643,000), accreted discount (approximately $40,000) and amortized deferred debt issuance costs (approximately $76,000). The accrued interest payable on the Class A Notes during the third quarter of 2014 was approximately $475,000. At December 31, 2013, interest expense of approximately $476,000 remained payable. For further information on this securitization, see “— Liquidity and Capital Resources — Borrowings.”

TICC CLO 2012-1 LLC

On August 23, 2012, the Company completed a $160 million debt securitization financing transaction, consisting of $120 million in secured notes and $40 million of subordinated notes. On February 25, 2013 and May 28, 2013, TICC CLO 2012-1 issued additional secured notes totaling an aggregate of $120 million and subordinated notes totaling an aggregate of $40 million, which subordinated notes were purchased by the Company, under the “accordion” feature of the debt securitization which allowed, under certain circumstances and subject to the satisfaction of certain conditions, for an increase in the amount of secured and subordinated notes. It is not necessary that the Company own all or any of the notes permitted by this feature, which may affect the accounting treatment of the debt securitization financing transaction. As of September 30, 2014, the secured notes of the 2012 Securitization Issuer have an aggregate face amount of $240 million and were issued in four classes. The class A-1 notes have a current face amount of $176 million, are rated AAA (sf) /Aaa (sf) by Standard & Poor’s Ratings Services (S&P) and Moody’s Investors Service, Inc. (Moody’s), respectively, and bear interest at three-month LIBOR plus 1.75%. The class B-1 notes have a current face amount of $20 million, are rated AA (sf) /Aa2 (sf) by S&P and Moody’s, respectively, and bear interest at three-month LIBOR plus 3.50%. The class C-1 notes have a current face amount of $23 million, are rated A (sf) /A2 (sf) by S&P and Moody’s, respectively, and bear interest at three-month LIBOR plus 4.75%. The class D-1 notes have a current face amount of $21 million, are rated BBB (sf) /Baa2 (sf) by S&P and Moody’s, respectively, and bear interest at three-month LIBOR plus 5.75%. TICC presently owns all of the subordinated notes, which totaled $80 million as of September 30, 2014. For further information on this securitization, see “— Liquidity and Capital Resources — Borrowings.”

For the three months ended September 30, 2014, the aggregate interest expense under the securitization was approximately $1.9 million, comprised of stated interest expense (approximately $1.7 million), accreted discount (approximately $0.1 million) and amortized deferred debt issuance costs (approximately $0.1 million). The aggregate accrued interest payable on the notes of the 2012 Securitization Issuer during the third quarter of 2014 was approximately $683,000. At December 31, 2013, aggregate interest expense of approximately $683,000 million remained payable.

2017 Convertible Notes

On September 26, 2012, we issued $105,000,000 aggregate principal amount of the Convertible Notes. An additional $10.0 million aggregate principal amount of the Convertible Notes was issued on October 22, 2012 pursuant to the exercise of the initial purchasers’ option to purchase additional Convertible Notes. The Convertible Notes mature on November 1, 2017. The Convertible Notes bear interest at a rate of 7.50% per year, payable semi-annually in arrears on May 1 and November 1 of each year, which commenced on May 1, 2013. For the three months ended September 30, 2014, the aggregate interest expense on the Convertible Notes was approximately $2.3 million, comprised of stated interest expense (approximately $2.2 million) and amortized deferred debt issuance costs (approximately $0.1 million). The accrued interest payable on the Convertible Notes during the third quarter of 2014 was approximately $3.6 million. At December 31, 2013, aggregate interest expense on the Convertible Notes of approximately $1.4 million remained payable.

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The table below summarizes the components of interest expense for the three months ended September 30, 2014 and 2013:


(dollars in thousands)	Three Months Ended September 30, 2014								Three Months Ended September 30, 2013
(dollars in thousands)	Stated Interest Expense		Note Discount Expense		Amortization of Deferred Debt Issuance Costs		Total		Stated Interest Expense		Note Discount Expense		Amortization of Deferred Debt Issuance Costs		Total
TICC CLO LLC Class A Notes	$	642.4	$	40.0	$	76.3	$	758.7	$	651.6	$	40.0	$	76.2	$	767.8
TICC CLO 2012-1 LLC Class A-1 Notes		890.7		49.9		—		940.6		907.9		49.8		—		957.7
TICC CLO 2012-1 LLC Class B-1 Notes		190.7		13.5		—		204.2		192.6		13.5		—		206.1
TICC CLO 2012-1 LLC Class C-1 Notes		292.7		22.5		—		315.2		295.0		22.3		—		317.3
TICC CLO 2012-1 LLC Class D-1 Notes		320.9		25.2		—		346.1		323.0		24.9		—		347.9
TICC CLO 2012-1 amortization of deferred debt		—		—		86.7		86.7		—		—		86.7		86.7
2017 Convertible Notes		2,156.3		—		156.0		2,312.3		2,132.3		—		161.5		2,293.8
Total	$	4,493.7	$	151.1	$	319.0	$	4,963.8	$	4,502.4	$	150.5	$	324.4	$	4,977.3

Professional fees, consisting of legal, valuation, audit and tax fees, were approximately $604,000 for the quarter ended September 30, 2014, compared to approximately $387,000 for the quarter ended September 30, 2013. This increase was primarily the result of the timing of certain professional services fees, which increased by approximately $217,000.

Compensation expenses were approximately $473,000 for the quarter ended September 30, 2014 compared to approximately $310,000 for the quarter ended September 30, 2013, reflecting the allocation of compensation expenses for the services of our chief financial officer, chief compliance officer, controller and senior accountants, and other administrative support personnel. At September 30, 2014 and December 31, 2013, respectively, approximately $407,000 and $24,000 of compensation expenses remained payable.

General and administrative expenses, consisting primarily of directors’ fees, insurance, listing fees, transfer agent and custodian fees, market data services, facilities costs and other expenses, were approximately $385,000 for the three months ended September 30, 2014 compared to approximately $541,000 for the same period in 2013. Office supplies, facilities costs and other expenses are allocated to us under the terms of the Administration Agreement.

Incentive Fees

The net investment income incentive fee for the third quarter of 2014 was approximately $1.7 million compared to $1.8 million in the third quarter of 2013. The net investment income incentive fee is calculated and payable quarterly in arrears based on our “Pre-Incentive Fee Net Investment Income” for the immediately preceding calendar quarter subject to a hurdle rate which is determined as of December 31 of the preceding year. For this purpose, “Pre-Incentive Fee Net Investment Income” means interest income, dividend income and any other income accrued during the calendar quarter minus our operating expenses for the quarter (including the base fee, expenses payable under the Administration Agreement with BDC Partners, and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee).

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accrual reversal of approximately $838,000 as a result of the net impact of net unrealized appreciation and net realized losses on our portfolio for the quarter ended September 30, 2014. For the quarter ended September 30, 2013, an accrual of approximately $2.3 million was recorded under the hypothetical liquidation calculation.

The amount of the capital gains incentive fee which will actually be payable is determined in accordance with the terms of the Investment Advisory Agreement and is calculated as of the end of each calendar year (or upon termination of the Investment Advisory Agreement). The terms of the Investment Advisory Agreement state that the capital gains incentive fee calculation is based on net realized gains, if any, offset by gross unrealized depreciation for the calendar year. No effect is given to gross unrealized appreciation in this calculation. For the year ended December 31, 2013, such an accrual was not required under the terms of the Investment Advisory Agreement.

Realized and Unrealized Gains/Losses on Investments

For the quarter ended September 30, 2014, we recorded net realized losses on investments of approximately $3.5 million, which represents the loss on the sale of our equity investment in Stone Tower CLO VII, Ltd. of approximately $4.4 and net realized gains from the sale and repayment of several other of our debt and equity investments which totaled approximately $0.9 million.

Based upon the fair value determinations made in good faith by the Board of Directors, during the quarter ended September 30, 2014, we had net unrealized depreciation of approximately $15.3 million, comprised of $4.0 million in gross unrealized appreciation, $23.6 million in gross unrealized depreciation and approximately $4.3 million relating to the reversal of prior period net unrealized depreciation as investments were realized. The most significant changes in net unrealized appreciation and depreciation during the quarter ended September 30, 2014 were as follows (in millions):


Portfolio Company	Changes in unrealized appreciation (depreciation)
Stone Tower CLO VII Ltd	$	4.9
Merrill Communications, LLC		2.2
Canaras Summit CLO Ltd		0.9
RBS Holding Company		0.8
Ares XXIX CLO Ltd		0.5
Catamaran CLO 2013-1 Ltd		(0.5	)
HarbourView CLO 2006-1		(0.5	)
Marea CLO, Ltd		(0.6	)
AMMC CLO XII, Ltd		(0.8	)
Catamaran CLO 2012-1 Ltd		(0.9	)
Cedar Funding II CLO, Ltd		(1.0	)
Ivy Hill Middle Market Credit Fund VII, Ltd		(1.0	)
Ares XXV CLO Ltd		(1.1	)
Telos CLO 2013-3, Ltd		(1.1	)
ACA CLO 2007-1, Ltd		(1.3	)
Ares XXVI CLO Ltd		(1.4	)
Benefit Street Partners CLO II, Ltd		(1.4	)
Emporia Preferred Funding III, Ltd		(1.7	)
Unitek Global Services, Inc		(5.2	)
Net all other		(6.1	)
Total	$	(15.3	)

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For the quarter ended September 30, 2013, we recorded net realized losses on investments of approximately $1.3 million, which primarily represented the loss on the write-off of our debt and equity investments in GenuTec Business Solutions of approximately $4.7 million. This loss was partially offset by the net realized gains from the sale of several of our CLO and equity investments which totaled approximately $3.5 million.

Based upon the fair value determinations made in good faith by the Board of Directors, during the quarter ended September 30, 2013, we had net unrealized appreciation of approximately $12.7 million, comprised of $22.3 million in gross unrealized appreciation, $8.2 million in gross unrealized depreciation and approximately $1.4 million relating to the reversal of prior period net unrealized appreciation as investments were realized. The most significant changes in net unrealized appreciation and depreciation during the quarter ended September 30, 2013 were as follows (in millions):


Portfolio Company	Changes in unrealized appreciation (depreciation)
RBS Holding Company	$	7.9
Genutec Business Solutions		4.7
Other equity related investments		4.0
Ares XXVI CLO Ltd.		1.5
Unitek Global Services, Inc		1.1
Marea CLO Ltd.		0.9
Integra Telecom Holdings, Inc		0.7
Benefit Street Partners CLO II Ltd.		0.7
AMMC CLO XII, Ltd.		0.6
Jersey Street 2006-1A CLO LTD		(0.7	)
Muir Grove CLO LTD 2007 1X E		(0.7	)
Stone Tower CLO VII Ltd.		(0.8	)
Harbourview CLO 2006-1		(0.8	)
ACA CLO 2007-1 Ltd.		(1.0	)
CS Advisors CLO I Ltd. (Sargas CLO)		(1.0	)
ACA CLO 2006-2, Limited		(1.4	)
Hewetts Island CDO IV 2006-4 E		(1.6	)
GSC Partners 2007-8X CDO		(1.9	)
Net all other		0.5
Total	$	12.7

Please see “— Portfolio Grading” for more information.

Net Increase in Net Assets Resulting from Net Investment Income

Net investment income for the quarter ended September 30, 2014 and 2013 was approximately $17.5 million and $12.2 million, respectively. This increase was due to an increase in the amount of distributions from the CLO equity investments in our portfolio as well as greater commitment and amendment fee income. These increases were partially offset by higher management fees.

Excluding the impact of the capital gains incentive fee accrual reversal of approximately $838,000, core net investment income for the quarter ended September 30, 2014 was approximately $16.7 million compared to approximately $14.5 million for the same period in 2013.

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Based on weighted-average shares outstanding of 60,268,078 (basic) and 70,301,230 (diluted), the net increase in net assets resulting from net investment income per common share for the quarter ended September 30, 2014 was approximately $0.29 (basic) and $0.28 (diluted), compared to approximately $0.23 per share (basic) and $0.22 (diluted) for the same period in 2013.

Excluding the impact of the capital gains incentive fee accrual reduction, the net increase in net assets resulting from core net investment income per common share for the quarter ended September 30, 2014 would have been $0.28 (basic) and $0.26 (diluted), compared to $0.28 per share (basic) and $0.26 per share (diluted), for the same period in 2013.

Please see “— Supplemental Information Regarding Core Net Investment Income and Core Net Increase in Net Assets Resulting from Operations” below for more information.

Net (Decrease) Increase in Net Assets Resulting from Operations

We had a net decrease in net assets resulting from operations of approximately $1.3 million for the quarter ended September 30, 2014, compared to a net increase of approximately $23.6 million for the comparable period in 2013. This decrease was attributable to greater net unrealized depreciation and net realized losses, partially offset by an increase in distributions from the CLO equity investments in our portfolio, greater commitment and amendment fee income as well lower capital gains incentive fees.

Due to the anti-dilutive effect on the computation of diluted earnings per share for the three months ended September 30, 2014, the adjustments for interest on convertible senior notes, base management fees, deferred issuance costs and incentive fees as well as adjustments for dilutive effect of convertible notes were excluded from the respective period’s diluted earnings per share computation. Based on weighted-average shares outstanding of 60,268,078 (basic and diluted), we had, for the quarter ended September 30, 2014, a net decrease in net assets resulting from operations per common share of approximately $0.02 (basic and diluted), compared to a net increase in net assets resulting from operations per share of approximately $0.45 (basic) and $0.41 (diluted) for the same period in 2013.

Excluding the impact of the capital gains incentive fee, we would have had a core net decrease in net assets resulting from operations per common share of $0.03 (basic and diluted), compared to a core net increase in net assets resulting from operations of $0.49 per share (basic) and $0.44 (diluted) for the same period in 2013.

Please see “— Supplemental Information Regarding Core Net Investment Income and Core Net Increase in Net Assets Resulting from Operations” below for more information.

Set forth below is a comparison of our results of operations for the nine months ended September 30, 2014 to the nine months ended September 30, 2013.

Investment Income

Investment income for the nine months ended September 30, 2014 was approximately $88.8 million compared to approximately $74.6 million for the nine months ended September 30, 2013. This increase was due largely to an increase in the amount of distributions from the equity interests in our CLO vehicle investments. The total principal value of income producing debt investments as of September 30, 2014 and September 30, 2013 was approximately $660.3 million and $733.4 million, respectively. For the nine months ended September 30, 2014, investment income consisted of approximately $36.4 million in cash interest from portfolio investments, approximately $2.1 million in amortization of original issue and market discount, approximately $45.0 million in distributions from the equity interest in securitized vehicle investments, as well as approximately $1.0 million in PIK interest income.

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For the nine months ended September 30, 2014, other income of approximately $4.3 million was recorded, including approximately $1.9 million representing fees associated with five of our CLO equity investments, compared to other income of approximately $3.5 million for the nine months ended September 30, 2013. Other income generally includes closing fees, origination fees and amendment fees associated with investments in portfolio companies. Such fees may be paid at closing of our investments or at the time the terms of the underlying loan agreement are revised and are generally fully earned, non-refundable, and non-recurring. Also, the Company may receive fees in connection with CLO equity investments which may be paid over the life of the underlying CLO vehicle; such fees are recognized as income when earned.

Operating Expenses

Total expenses for the nine months ended September 30, 2014 were approximately $36.1 million, which includes the capital gains incentive fee accrual reversal of approximately $3.9 million.

Expenses before incentive fees, for the nine months ended September 30, 2014, were approximately $35.1 million. This amount consisted of investment advisory fees, interest expense and other debt financing expenses, professional fees, compensation expense, and general and administrative expenses. Expenses before incentive fees increased approximately $3.4 million from the nine months ended September 30, 2013, attributable primarily to increased investment advisory fees (consisting of the base management fee) and higher interest expense associated with the secured notes issued under our debt securitization transactions and Convertible Notes. Expenses before incentive fees for the nine months ended September 30, 2013 were approximately $31.7 million.

The investment advisory base fee for the nine months ended September 30, 2014 was approximately $15.8 million and the investment advisory fee in the comparable period in 2013 was approximately $13.9 million. The increase in the base management fee is due to an increase in average gross assets. At each of September 30, 2014 and December 31, 2013, respectively, approximately $7.1 million and $7.1million of investment advisory fees remained payable to TICC Management, including the net investment income incentive fee discussed below.

Interest expense and other debt financing expenses for the nine months ended September 30, 2014 was approximately $14.8 million, which was directly related to our debt securitization financing transactions as well as our Convertible Note transaction. Interest expense for the nine months ended September 30, 2013 was approximately $14.0 million.

TICC CLO LLC

In August 2011, secured notes in the amount of $101,250,000 were issued by a newly formed special purpose vehicle in which a wholly-owned subsidiary of TICC owns all of the equity. Under this structure, the notes bear interest, after the effective date, at three-month London Inter Bank Offered Rate (“LIBOR”) plus 2.25% (prior to the effective date, the Class A Notes bear interest at five-month LIBOR plus 2.25%). For the nine months ended September 30, 2014, the total interest expense under the securitization was approximately $2.3 million, comprised of stated interest expense (approximately $1.9 million), accreted discount (approximately $119,000) and amortized deferred debt issuance costs (approximately $226,000). The accrued interest payable on the Class A Notes during the third quarter of 2014 was approximately $475,000. At December 31, 2013, interest expense of approximately $476,000 remained payable. For further information on this securitization, see “— Liquidity and Capital Resources — Borrowings.”

TICC CLO 2012-1 LLC

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affect the accounting treatment of the debt securitization financing transaction. As of September 30, 2014, the secured notes of the 2012 Securitization Issuer have an aggregate face amount of $240 million and were issued in four classes. The class A-1 notes have a current face amount of $176 million, are rated AAA (sf) /Aaa (sf) by Standard & Poor’s Ratings Services (S&P) and Moody’s Investors Service, Inc. (Moody’s), respectively, and bear interest at three-month LIBOR plus 1.75%. The class B-1 notes have a current face amount of $20 million, are rated AA (sf) /Aa2 (sf) by S&P and Moody’s, respectively, and bear interest at three-month LIBOR plus 3.50%. The class C-1 notes have a current face amount of $23 million, are rated A (sf) /A2 (sf) by S&P and Moody’s, respectively, and bear interest at three-month LIBOR plus 4.75%. The class D-1 notes have a current face amount of $21 million, are rated BBB (sf) /Baa2 (sf) by S&P and Moody’s, respectively, and bear interest at three-month LIBOR plus 5.75%. TICC presently owns all of the subordinated notes, which totaled $80 million as of September 30, 2014. For further information on this securitization, see “— Liquidity and Capital Resources-Borrowings.”

For the nine months ended September 30, 2014, the aggregate interest expense under the securitization was approximately $5.6 million, comprised of stated interest expense (approximately $5.0 million), accreted discount (approximately $0.3 million) and amortized deferred debt issuance costs (approximately $0.3 million). The aggregate accrued interest payable on the notes of the 2012 Securitization Issuer during the third quarter of 2014 was approximately $683,000. At December 31, 2013, aggregate interest expense of approximately $683,000 million remained payable.

2017 Convertible Notes

On September 26, 2012, we issued $105,000,000 aggregate principal amount of the Convertible Notes. An additional $10.0 million aggregate principal amount of the Convertible Notes was issued on October 22, 2012 pursuant to the exercise of the initial purchasers’ option to purchase additional Convertible Notes. The Convertible Notes mature on November 1, 2017. The Convertible Notes bear interest at a rate of 7.50% per year, payable semi-annually in arrears on May 1 and November 1 of each year, which commenced on May 1, 2013. For the nine months ended September 30, 2014, the aggregate interest expense on the Convertible Notes was approximately $6.9 million, comprised of stated interest expense (approximately $6.4 million) and amortized deferred debt issuance costs (approximately $0.5 million). The accrued interest payable on the Convertible Notes during the third quarter of 2014 was approximately $3.6 million. At December 31, 2013, aggregate interest expense on the Convertible Notes of approximately $1.4 million remained payable.

The table below summarizes the components of interest expense for the nine months ended September 30, 2014 and 2013:


(dollars in thousands)	Nine Months Ended September 30, 2014								Nine Months Ended September 30, 2013
(dollars in thousands)	Stated Interest Expense		Note Discount Expense		Amortization of Deferred Debt Issuance Costs		Total		Stated Interest Expense		Note Discount Expense		Amortization of Deferred Debt Issuance Costs		Total
TICC CLO LLC Class A Notes	$	1,907.4	$	118.8	$	226.2	$	2,252.4	$	1,946.4	$	118.6	$	226.3	$	2,291.3
TICC CLO 2012-1 LLC Class A-1 Notes		2,646.5		148.1		—		2,794.6		2,263.5		143.9		—		2,407.4
TICC CLO 2012-1 LLC Class B-1 Notes		566.2		40.1		—		606.3		473.5		39.4		—		512.9
TICC CLO 2012-1 LLC Class C-1 Notes		869.1		66.7		—		935.8		722.3		67.7		—		790.0
TICC CLO 2012-1 LLC Class D-1 Notes		952.8		74.4		—		1,027.2		789.2		75.5		—		864.7
TICC CLO 2012-1 amortization of deferred debt		—		—		257.2		257.2		—		—		228.6		228.6
2017 Convertible Notes		6,468.7		—		463.0		6,931.7		6,420.8		—		464.9		6,885.7
Total	$	13,410.7	$	448.1	$	946.4	$	14,805.2	$	12,615.7	$	445.1	$	919.8	$	13,980.6

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Professional fees, consisting of legal, valuation, audit and tax fees, were approximately $1.6 million for the nine months ended September 30, 2014, compared to approximately $1.5 million for the nine months ended September 30, 2013. This increase was primarily the result of the timing of certain professional services.

Compensation expenses were approximately $1.4 million for the nine months ended September 30, 2014 compared to approximately $0.9 million for the nine months ended September 30, 2013, reflecting the allocation of compensation expenses for the services of our chief financial officer, chief compliance officer, controller and senior accountants, and other administrative support personnel. At September 30, 2014 and December 31, 2013, respectively, approximately $407,000 and $24,000 of compensation expenses remained payable.

General and administrative expenses, consisting primarily of directors’ fees, insurance, listing fees, transfer agent and custodian fees, market data services, facilities costs and other expenses, were approximately $1.6 million for the nine months ended September 30, 2014 compared to approximately $1.5 million for the same period in 2013. Office supplies, facilities costs and other expenses are allocated to us under the terms of the Administration Agreement.

Incentive Fees

The net investment income incentive fee for the nine months ended September 30, 2014 was approximately $4.8 million compared to $4.4 million for the nine months ended September 30, 2013. The net investment income incentive fee is calculated and payable quarterly in arrears based on our “Pre-Incentive Fee Net Investment Income” for the immediately preceding calendar quarter subject to a hurdle rate which is determined as of December 31 of the preceding year. For this purpose, “Pre-Incentive Fee Net Investment Income” means interest income, dividend income and any other income accrued during the calendar quarter minus our operating expenses for the quarter (including the base fee, expenses payable under the Administration Agreement with BDC Partners, and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee).

The capital gains incentive fee expense, as reported under generally accepted accounting principles, is calculated on the basis of net realized and unrealized gains and losses at the end of each period. The expense related to the hypothetical liquidation of the portfolio (and assuming no other changes in realized or unrealized gains and losses) would only become payable to our investment adviser in the event of a complete liquidation of our portfolio as of period end and the termination of the Investment Advisory Agreement on such date. The capital gains incentive fee expense for the nine months ended September 30, 2014 resulted in an accrual reversal of approximately $3.9 million as a result of the impact of net unrealized depreciation and net realized losses on our portfolio for the nine months ended September 30, 2014. For the nine months ended September 30, 2013, an accrual reversal of approximately $0.4 million was recorded under the hypothetical liquidation calculation.

Realized and Unrealized Gains/Losses on Investments

For the nine months ended September 30, 2014, we recorded net realized losses on investments of approximately $12.2 million, which represents the loss on the restructuring of our debt investment in Nextag Inc. of approximately $5.3 million, the loss on the sale of our equity investment in Stone Tower CLO VII, Ltd. of approximately $4.4 million and net realized losses from the sale and repayment of several of our debt and equity investments which totaled approximately $2.5 million.

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Based upon the fair value determinations made in good faith by the Board of Directors, during the nine months ended September 30, 2014, we had net unrealized depreciation of approximately $15.4 million, comprised of $6.7 million in gross unrealized appreciation, $30.4 million in gross unrealized depreciation and approximately $8.3 million relating to the reversal of prior period net unrealized depreciation as investments were realized. The most significant changes in net unrealized appreciation and depreciation during the nine months ended September 30, 2014 were as follows (in millions):


Portfolio Company	Changes in unrealized appreciation (depreciation)
Stone Tower CLO VII Ltd	$	4.0
Nextag, Inc		3.7
Merrill Communications, LLC		1.4
Lightpoint CLO VIII, Ltd		1.3
Mmodal, Inc		1.2
Ares XXIX CLO Ltd		1.1
Jersey Street CLO, Ltd		0.9
Mountain Hawk III CLO, Ltd		0.9
Canaras Summit CLO Ltd		0.6
Global Tel Link Corp		0.5
Shackleton 2013-III CLO, Ltd		(0.5	)
GlobalLogic Holdings Inc		(0.5	)
Algorithmic Implementations, Inc		(0.7	)
Cedar Funding II CLO, Ltd		(0.7	)
AMMC CLO XII, Ltd		(0.8	)
Ares XXV CLO Ltd		(0.8	)
Catamaran CLO 2013-1 Ltd		(0.9	)
HarbourView CLO 2006-1		(1.0	)
Benefit Street Partners CLO II, Ltd		(1.2	)
RBS Holding Company		(1.2	)
Telos CLO 2013-3, Ltd		(1.2	)
Columbus Park CDO Ltd		(1.3	)
Telos CLO 2014-5, Ltd		(1.4	)
Emporia Preferred Funding III, Ltd		(1.5	)
Ares XXVI CLO Ltd		(2.0	)
Catamaran CLO 2012-1 Ltd		(2.7	)
ACA CLO 2007-1, Ltd		(2.9	)
Unitek Global Services, Inc		(5.4	)
Net all other		(4.3	)
Total	$	(15.4	)

For the nine months ended September 30, 2013, we recorded net realized gains on investments of approximately $7.1 million, which primarily represents the gain on the sale of several of our CLO debt and equity investments which totaled approximately $10.4 million and was partially offset by the loss associated with the write-off of our investment in Genutec Business Solutions of approximately $4.7 million.

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Based upon the fair value determinations made in good faith by the Board of Directors, during the nine months ended September 30, 2013, we had net unrealized depreciation of approximately $0.1 million, comprised of $34.0 million in gross unrealized appreciation, $24.6 million in gross unrealized depreciation and approximately $9.5 million relating to the reversal of prior period net unrealized appreciation as investments were realized. The most significant changes in net unrealized appreciation and depreciation during the nine months ended September 30, 2013 were as follows (in millions):


Portfolio Company	Changes in unrealized appreciation (depreciation)
Merrill Communications, LLC	$	9.4
RBS Holding Company		8.1
Genutec Business Solutions		4.7
Other equity related investments		4.0
ARES XXVI CLO Ltd.		1.5
Band Digital, Inc.		1.3
Integra Telecom Holdings, Inc.		1.3
Carlyle Global Market Strategies CLO 2013-2 Ltd.		1.0
Halcyon Loan Advisors Funding		0.8
Benefit Street Partners CLO II Ltd.		0.7
AMMC CLO XII, Ltd.		0.6
Flagship 2005-4A D		(0.6	)
Harbourview CLO 2006-1		(0.6	)
Nextag, Inc.		(0.7	)
Lightpoint CLO VII LTD		(0.7	)
CIFC CLO – 2006-1A B2L		(0.8	)
Muir Grove CLO LTD 2007 1X E		(0.9	)
Landmark V CDO LTD.		(0.9	)
Gale 2007-4A CLO		(0.9	)
Lightpoint CLO VII LTD 2007-7		(1.0	)
Hewetts Island CDO IV 2006-4 E		(1.1	)
Jersey Street 2006-1A CLO Ltd.		(1.6	)
Canaras Summit CLO Ltd.		(1.7	)
Lightpoint CLO VIII Ltd.		(1.7	)
ACA CLO 2007-1 Ltd.		(2.0	)
Hewetts Island CDO III 2005-1A D		(2.2	)
GSC Partners 2007-8X CDO		(2.2	)
ACA CLO 2006-2, Limited		(2.2	)
Catamaran CLO 2012-1 Ltd.		(2.7	)
CS Advisors CLO I Ltd. (Sargas CLO)		(3.0	)
Pegasus Solutions, Inc.		(3.3	)
Stone Tower CLO VII Ltd.		(4.0	)
Net all other		1.3
Total	$	(0.1	)

Please see “— Portfolio Grading” for more information.

Net Increase in Net Assets Resulting from Net Investment Income

Net investment income for the nine months ended September 30, 2014 and 2013 was approximately $52.7 million and $38.8 million, respectively. This increase was due primarily to an increase in the amount of distributions from the CLO equity investments in our portfolio and lower capital gains incentive fees. These were partially offset by increased interest expense and higher management fees.

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Excluding the impact of the capital gains incentive fee accrual reversal of approximately $3.9 million, core net investment income for the nine months ended September 30, 2014 was approximately $48.8 million compared to approximately $38.4 million for the same period in 2013.

Based on weighted-average shares outstanding of 58,307,825 (basic) and 68,340,977 (diluted), the net increase in net assets resulting from net investment income per common share for the nine months ended September 30, 2014 was approximately $0.90 (basic) and $0.85 (diluted), compared to approximately $0.77 per share (basic) and $0.74 (diluted) for the same period in 2013.

Excluding the impact of the capital gains incentive fee accrual reduction, the net increase in net assets resulting from core net investment income per common share for the nine months ended September 30, 2014 would have been $0.84 (basic) and $0.80 (diluted), compared to $0.76 per share (basic) and $0.73 per share (diluted), for the same period in 2013.

Please see “— Supplemental Information Regarding Core Net Investment Income and Core Net Increase in Net Assets Resulting from Operations” below for more information.

Net Increase in Net Assets Resulting from Operations

We had a net increase in net assets resulting from operations of approximately $25.1 million for the nine months ended September 30, 2014, compared to a net increase of approximately $45.9 million for the comparable period in 2013. This decrease was attributable to greater net unrealized depreciation and net realized losses as well as greater interest expense and higher management fees. This decrease was partially offset by an increase in the amount of distributions from the CLO equity investments in our portfolio as well as lower capital gains incentive fees.

Due to the anti-dilutive effect on the computation of diluted earnings per share for the nine months ended September 30, 2014, the adjustments for interest on convertible senior notes, base management fees, deferred issuance costs and incentive fees as well as adjustments for dilutive effect of convertible notes were excluded from the respective period’s diluted earnings per share computation. Based on weighted-average shares outstanding of 58,307,825 (basic and diluted), we had, for the nine months ended September 30, 2014, a net increase in net assets resulting from operations per common share of approximately $0.43 (basic and diluted), compared to a net increase in net assets resulting from operations per share of approximately $0.91 (basic) and $0.85 (diluted) for the same period in 2013.

Excluding the impact of the capital gains incentive fee accrual, we would have had a core net increase in net assets resulting from operations per common share of $0.36 (basic and diluted), compared to a core net increase in net assets resulting from operations of $0.90 per share (basic) and $0.85 per share (diluted) for the same period in 2013.

Please see “— Supplemental Information Regarding Core Net Investment Income and Core Net Increase in Net Assets Resulting from Operations” below for more information.

Supplemental Information Regarding Core Net Investment Income and Core Net Increase in Net Assets Resulting from Operations

The following tables provide a reconciliation of net investment income to core net investment income (for the three and nine months ended September 30, 2014 and 2013, respectively):


	Three Months Ended September 30, 2014						Nine Months Ended September 30, 2014
	Amount			Per Share Amounts			Amount			Per Share Amounts
Net investment income	$	17,520,528		$	0.291		$	52,695,296		$	0.904
Capital gains incentive fee		(837,963	)		(0.014	)		(3,872,853	)		(0.066	)
Core net investment income	$	16,682,565		$	0.277		$	48,822,443		$	0.838

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	Three Months Ended September 30, 2013				Nine Months Ended September 30, 2013
	Amount		Per Share Amounts		Amount			Per Share Amounts
Net investment income	$	12,238,709	$	0.232	$	38,845,830		$	0.772
Capital gains incentive fee		2,270,014		0.043		(414,404	)		(0.008	)
Core net investment income	$	14,508,723	$	0.275	$	38,431,426		$	0.764

The following tables provide a reconciliation of net increase in net assets resulting from operations to core net increase in net assets resulting from operations (for the three and nine months ended September 30, 2014 and 2013, respectively):


	Three Months Ended September 30, 2014						Nine Months Ended September 30, 2014
	Amount			Per Share Amounts			Amount			Per Share Amounts
Net (decrease) increase in net assets resulting from operations	$	(1,261,925	)	$	(0.021	)	$	25,133,990		$	0.431
Capital gains incentive fee		(837,963	)		(0.014	)		(3,872,853	)		(0.066	)
Core net (decrease) increase in net assets resulting from operations	$	(2,099,888	)	$	(0.035	)	$	21,261,137		$	0.365


	Three Months Ended September 30, 2013				Nine Months Ended September 30, 2013
	Amount		Per Share Amounts		Amount			Per Share Amounts
Net increase in net assets resulting from operations	$	23,588,777	$	0.447	$	45,887,819		$	0.912
Capital gains incentive fee		2,270,014		0.043		(414,404	)		(0.008	)
Core net increase (decrease) in net assets resulting from operations	$	25,858,791	$	0.490	$	45,473,415		$	0.904

In addition, the following ratio is presented to supplement the financial highlights included in Note 12 to the financial statements:


	2014						2013
	Three Months Ended September 30, 2014			Nine Months Ended September 30, 2014			Three Months Ended September 30, 2013			Nine Months Ended September 30, 2013
Ratio of core net investment income to average net assets, for the three and nine months ended September 30, 2014 and 2013, respectively		11.58	%		11.52	%		11.15	%		10.26	%

The following table provides a reconciliation of the ratio of net investment income to average net assets to the ratio of core net investment income to average net assets, for the three and nine months ended September 30, 2014 and 2013, respectively.


	2014						2013
	Three Months Ended September 30, 2014			Nine Months Ended September 30, 2014			Three Months Ended September 30, 2013			Nine Months Ended September 30, 2013
Ratio of net investment income to average net assets		12.16	%		12.43	%		9.40	%		10.37	%
Ratio of capital gain incentive fee to average net assets		(0.58	)%		(0.91	)%		1.75	%		(0.11	)%
Ratio of core net investment income to average net assets		11.58	%		11.52	%		11.15	%		10.26	%

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LIQUIDITY AND CAPITAL RESOURCES

During the nine months ended September 30, 2014, cash and cash equivalents increased from approximately $14.9 million at the beginning of the period to approximately $27.6 million at the end of the period. Net cash used by operating activities for the period, consisting primarily of the items described in “— Results of Operations,” was approximately $15.4 million, largely reflecting purchases of new investments of approximately $355.0 million partially offset by the proceeds from principal repayments and sales of investments of approximately $323.2 million. Net cash used by investing activities reflects the change in restricted cash in the debt securitization entity. During the period, net cash provided by financing activities was approximately $15.9 million, reflecting primarily the net proceeds of approximately $66.4 resulting from an equity offering, partially offset by the distribution of dividends.

Equity Follow-On Offerings

On March 19, 2014, we completed a public offering of approximately 6.75 million shares of our common stock at a public offering price of $10.14 per share for total gross proceeds of approximately $68.4 million.

Contractual Obligations

We have certain obligations with respect to the investment advisory and administration services we receive. See “— Overview”. We incurred approximately $15.8 million for investment advisory services, excluding pre-incentive net investment income incentive fees, and approximately $1.6 million for administrative services for the nine months ended September 30, 2014.

A summary of our significant contractual payment obligations is as follows as of September 30, 2014. See “Note 4. Borrowings” to our consolidated financial statements.


Contractual obligations	Total		Payments Due by Period
Contractual obligations	Total		Less than 1 year		1 – 3 years		3 – 5 years		More than 5 years
Long-term debt obligations:
TICC CLO LLC	$	101,250,000	$	—	$	—	$	—	$	101,250,000
TICC CLO 2012-1 LLC		240,000,000		—		—		—		240,000,000
TICC Convertible Notes		115,000,000		—		—		115,000,000		—
Total	$	456,250,000	$	—	$	—	$	115,000,000	$	341,250,000

Off-Balance Sheet Arrangements

We currently have no off-balance sheet arrangements, including any risk management of commodity pricing or other hedging practices.

Borrowings

On August 10, 2011, the Company completed a $225.0 million debt securitization financing transaction. The Class A Notes offered in the securitization were issued by TICC CLO, and are secured by the assets held by the trustee on behalf of the 2011 Securitization Issuer. The notes are an obligation of TICC CLO. The securitization was executed through a private placement of $101.25 million of Aaa/AAA Class A Notes which bear interest, after the effective date, at three-month LIBOR plus 2.25% (prior to the effective date, the Class A Notes bear interest at five-month LIBOR plus 2.25%). The notes were sold at a discount to par, and the amount of the discount is being amortized over the term of the notes. The Class A Notes are included in the September 30, 2014 consolidated statements of assets and liabilities. For the three and nine months ended September 30, 2014, the Class A note holders were paid interest on the Class A notes of approximately $0.6 million and $1.9 million, respectively. Holdings retained all of the 2011 Subordinated Notes totaling $123.75 million and all of the membership interests in the 2011 Securitization Issuer. The 2011 Subordinated Notes do not bear interest, but are entitled to the residual economic interest in the 2011 Securitization Issuer.

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On August 23, 2012, the Company completed a $160 million debt securitization financing transaction, consisting of $120 million in secured notes and $40 million of subordinated notes. On February 25, 2013 and May 28, 2013, TICC CLO 2012-1 issued an additional secured notes totaling an aggregate of $120 million and subordinated notes totaling an aggregate of $40 million, which subordinated notes were purchased by the Company, under the “accordion” feature of the debt securitization which allowed, under certain circumstances and subject to the satisfaction of certain conditions, for an increase in the amount of secured and subordinated notes. It is not necessary that the Company own all or any of the notes permitted by this feature, which may affect the accounting treatment of the debt securitization financing transaction. As of September 30, 2014, the secured notes of the 2012 Securitization Issuer have an aggregate face amount of $240 million and were issued in four classes. The class A-1 notes have a current face amount of $176 million, are rated AAA (sf) /Aaa (sf) by Standard & Poor’s Ratings Services (S&P) and Moody’s Investors Service, Inc. (Moody’s), respectively, and bear interest at three-month LIBOR plus 1.75%. The class B-1 notes have a current face amount of $20 million, are rated AA (sf) /Aa2 (sf) by S&P and Moody’s, respectively, and bear interest at three-month LIBOR plus 3.50%. The class C-1 notes have a current face amount of $23 million, are rated A (sf) /A2 (sf) by S&P and Moody’s, respectively, and bear interest at three-month LIBOR plus 4.75%. The class D-1 notes have a current face amount of $21 million, are rated BBB (sf) /Baa2 (sf) by S&P and Moody’s, respectively, and bear interest at three-month LIBOR plus 5.75%. TICC presently owns all of the subordinated notes, which totaled $80 million as of September 30, 2014. For the three and nine months ended September 30, 2014, the class A-1, B-1, C-1 and D-1 were paid in aggregate $1.7 million and $5.0 million, respectively.

On September 26, 2012, the Company issued $105,000,000 aggregate principal amount of the Convertible Notes and an additional $10,000,000 aggregate principal amount of the Convertible Notes was issued on October 22, 2012. The Convertible Notes are convertible into shares of our common stock based on an initial conversion rate of 87.2448 shares of our common stock per $1,000 principal amount of Convertible Notes, which is equivalent to an initial conversion price of approximately $11.46 per share of common stock. The conversion price for the Convertible Notes will be reduced for quarterly cash dividends paid to common shares to the extent that the quarterly dividend exceeds $0.29 cents per share, subject to adjustment. The Convertible Notes mature on November 1, 2017, unless previously converted in accordance with their terms. The Convertible Notes are our general unsecured obligations, rank equally in right of payment with our future senior unsecured debt, and rank senior in right of payment to any potential subordinated debt, should any be issued in the future. For the three and nine months ended September 30, 2014, note holders were paid interest of $0 and $4.3 million, respectively.

Distributions

In order to qualify as a regulated investment company and to avoid corporate level tax on the income we distribute to our stockholders, we are required, under Subchapter M of the Code, to distribute at least 90% of our ordinary income and short-term capital gains to our stockholders on an annual basis.

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The following table reflects the cash distributions, including dividends, dividends reinvested and returns of capital, if any, per share that our Board of Directors has declared on our common stock since the beginning of 2011:

Date Declared

Record Date

Payment Date

Amount

Fiscal 2014

October 30, 2014

December 17, 2014

December 31, 2014

0.29

July 31, 2014

September 16, 2014

September 30, 2014

0.29

May 1, 2014

June 16, 2014

June 30, 2014

0.29

March 5, 2014

March 25, 2014

March 31, 2014

0.29

Total (2014)

1.16

Fiscal 2013

October 29, 2013

December 17, 2013

December 31, 2013

0.29

July 30, 2013

September 16, 2013

September 30, 2013

0.29

April 30, 2013

June 14, 2013

June 28, 2013

0.29

February 28, 2013

March 22, 2013

March 29, 2013

0.29

Total (2013)

1.16

⁽¹⁾

Fiscal 2012

November 1, 2012

December 17, 2012

December 31, 2012

0.29

July 26, 2012

September 14, 2012

September 28, 2012

0.29

May 2, 2012

June 15, 2012

June 29, 2012

0.27

March 1, 2012

March 21, 2012

March 30, 2012

0.27

Total (2012)

1.12

⁽¹⁾

Fiscal 2011

November 3, 2011

December 16, 2011

December 30, 2011

0.25

July 28, 2011

September 16, 2011

September 30, 2011

0.25

May 3, 2011

June 16, 2011

June 30, 2011

0.25

March 3, 2011

March 21, 2011

March 31, 2011

0.24

Total (2011)

0.99

⁽¹⁾

(1)

Distributions for the fiscal years ended December 31, 2013, 2012 and 2011 were funded from taxable earnings.

Related Parties

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

•

We have entered into the Investment Advisory Agreement with TICC Management. TICC Management is controlled by BDC Partners, its managing member. Charles M. Royce, as the non-managing member, holds a minority, non-controlling interest in TICC Management. BDC Partners, as the managing member of TICC Management, manages the business and internal affairs of TICC Management. In addition, BDC Partners provides us with office facilities and administrative services pursuant to the Administration Agreement.

•

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•

Messrs. Cohen and Rosenthal currently serve as Chief Executive Officer and President, respectively, of Oxford Lane Capital Corp., a non-diversified closed-end management investment company that invests primarily in leveraged corporate loans, and its investment adviser, Oxford Lane Management, LLC (“Oxford Lane Management”). BDC Partners provides Oxford Lane Capital Corp. with office facilities and administrative services pursuant to an administration agreement and also serves as the managing member of Oxford Lane Management. In addition, Patrick F. Conroy serves as the Chief Financial Officer, Chief Compliance Officer and Corporate Secretary of Oxford Lane Capital Corp. and Chief Financial Officer, Chief Compliance Officer and Treasurer of Oxford Lane Management.

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 policies and procedures whereby our executive officers screen each of our transactions for any possible affiliations between the proposed portfolio investment, us, companies controlled by us and our employees 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 board review and approval or exemptive relief for such transaction. Our Board of Directors reviews these procedures on an annual basis.

We have also adopted a Code of Ethics which applies to, among others, our senior officers, including our Chief Executive Officer and Chief Financial Officer, as well as all of our officers, directors and employees. Our Code of Ethics requires that all employees and directors avoid any conflict, or the appearance of a conflict, between an individual’s personal interests and our interests. Pursuant to our Code of Ethics, each employee and director must disclose any conflicts of interest, or actions or relationships that might give rise to a conflict, to our Chief Compliance Officer. Our Audit Committee is charged with approving any waivers under our Code of Ethics. As required by the NASDAQ Global Select Market corporate governance listing standards, the Audit Committee of our Board of Directors is also required to review and approve any transactions with related parties (as such term is defined in Item 404 of Regulation S-K).

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RECENT DEVELOPMENTS

On October 27, 2014, TICC Funding, LLC (“TICC Funding”), a special purpose vehicle and wholly-owned subsidiary of TICC Capital Corp., entered into a revolving credit facility (the “Facility”) with Citibank, N.A. We used part of the proceeds from the Facility to redeem all of the $101,250,000 secured notes issued by TICC CLO LLC. Subject to certain exceptions, pricing under the Facility is based on the London interbank offered rate (“LIBOR”) for an interest period equal to three months plus a spread of 1.50% per annum. Interest on the loans is payable quarterly in arrears. In connection with the redemption of the secured notes issued by TICC CLO LLC, we will write-off approximately $3.1 million of discount and deferred debt issuance costs.

Pursuant to the terms of the credit agreement governing the Facility, TICC Funding has borrowed, on a revolving basis, the maximum aggregate principal amount of $150,000,000. The Facility is secured by a pool of loans initially consisting of loans sold by TICC CLO to TICC Funding, loans sold and contributed by us to TICC Funding, and loans purchased by TICC Funding from unaffiliated third parties. We may sell and contribute additional loans to TICC Funding from time to time. We will act as the collateral manager of the loans owned by TICC Funding, and have retained a residual interest through our ownership of TICC Funding.

On October 30, 2014, the Board of Directors declared a distribution of $0.29 per share for the fourth quarter, payable on December 31, 2014 to shareholders of record as of December 17, 2014.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are subject to financial market risks, including changes in interest rates. As of September 30, 2014, two debt investments in our portfolio were at a fixed rate, and the remaining sixty-five debt investments were at variable rates, representing approximately $8.5 million and $664.0 million in principal debt, respectively. At September 30, 2014, approximately $651.7 million of our variable rate investments were income producing. The variable rates are based upon the five-year Treasury note, the Prime rate or LIBOR, and, in the case of our syndicated-loan investments are generally reset quarterly, whereas our bilateral investment is generally reset annually. We expect that future debt investments will generally be made at variable rates. Many of the variable rate investments contain floors.

To illustrate the potential impact of a change in the underlying interest rate on our net investment income as it pertains to our debt portfolio, we have assumed a 1% increase in the underlying five-year Treasury note, the Prime rate or LIBOR, and no other change in our portfolio as of September 30, 2014. We have also assumed outstanding variable rate borrowings of $341.3 million. Under this analysis, net investment income would decrease by $2.3 million on an annualized basis, reflecting the amount of investments in our portfolio which have implied floors that would be unaffected by a 1% change in the underlying interest rate. However, if the increase in rates was more significant, such as 5%, the net effect on net investment income would be an increase of approximately $9.3 million. To the extent that the rate underlying certain investments, as well as our borrowings, is at a historic low, it is not possible for the underlying rate to decrease by 1% or 5%. If the underlying rate decreased to 0%, it would have a minimal effect on net investment income. Although management believes that this analysis is indicative of our existing interest rate sensitivity, it does not adjust for changes in the credit quality, size and composition of our portfolio, and other business developments, including a change in the level of our borrowings, that could affect the net increase (or decrease) in net assets resulting from operations. Accordingly, no assurances can be given that actual results would not differ materially from the results under this hypothetical analysis.

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In addition, to illustrate the impact of a change in the underlying interest rate on our total investment income as it pertains to our CLO equity investments, we have assumed a 1% increase in the underlying three-month LIBOR, and no other change in our CLO portfolio, or to any of the credit, spread, default rate or other factors, as of September 30, 2014. Under this analysis, the effect on total investment income would be a decrease of approximately $21.0 million on an annualized basis, reflecting the portfolio assets held within these CLO vehicles which have implied floors that would be unaffected by a 1% change in the underlying interest rate, compared to the debt carried by those CLO vehicles which are at variable rates and which would be affected by a change in three-month LIBOR. If the increase in three-month LIBOR was more significant, such as 5%, the net effect on total investment income would be a decrease of approximately $10.6 million. Although management believes that this analysis is indicative of our existing interest rate sensitivity, it does not adjust for changes in any of the other assumptions that effect the return on CLO equity investments, both positively and negatively (and which could accompany changes to the three-month LIBOR rate), such as default rates, recovery rates, prepayment rates and reinvestment rates, that could affect the net increase (or decrease) in net assets resulting from operations. Accordingly, no assurances can be given that actual results would not differ materially from the results under this hypothetical analysis.

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

ITEM 4. CONTROLS AND PROCEDURES.

(a) Evaluation of Disclosure Controls and Procedures

As of September 30, 2014 (the end of the period covered by this report), we, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended). Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective and provided reasonable assurance that information required to be disclosed in our periodic SEC filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. However, in evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of such possible controls and procedures.

(b) Changes in Internal Controls Over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended) that occurred during the quarter ended September 30, 2014 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We are not currently subject to any material legal proceedings. From time to time, we may be a 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. While the outcome of these legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material effect upon our financial condition or results of operations.

ITEM 1A. RISK FACTORS.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, which could materially affect our business, financial condition and/or operating results. The risks described in our Annual Report on Form 10-K are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results. There have been no material changes during the nine months ended September 30, 2014 to the risk factors discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2013.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

While we did not engage in unregistered sales of equity securities during the nine months ended September 30, 2014, we issued a total of 207,002 shares of common stock under our dividend reinvestment plan. This issuance was not subject to the registration requirements of the Securities Act of 1933, as amended. The aggregate valuation price for the shares of common stock issued under the dividend reinvestment plan was approximately $1,847,625.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

None.

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ITEM 6. EXHIBITS.

The following exhibits are filed as part of this report or hereby incorporated by reference to exhibits previously filed with the SEC:


3.1		Articles of Incorporation (Incorporated by reference to the Registrant’s Registration Statement on Form N-2 (File No. 333-109055), filed on September 23, 2003).
3.2		Articles of Amendment (Incorporated by reference to Current Report on Form 8-K (File No. 814-00638) filed December 3, 2007).
3.3		Amended and Restated Bylaws (Incorporated by reference to Pre-Effective Amendment No. 2 to the Registrant’s Registration Statement on Form N-2 (File No. 333-109055), filed on November 19, 2003).
4.1		Form of Share Certificate (Incorporated by reference to the Registrant’s Registration Statement on Form N-2 (File No. 333-109055), filed on September 23, 2003).
4.2		Indenture, dated September 26, 2012, relating to the 7.50% Senior Convertible Notes due 2017, by and between the Registrant and the Bank of New York Mellon, as trustee (Incorporated by reference to Exhibit 4.1 to the Registrant’s report on Form 8-K filed on September 27, 2012).
10.1		Investment Advisory Agreement between Registrant and TICC Management, LLC (Incorporated by reference to Exhibit 10.1 to the Registrant’s report on Form 8-K filed on July 1, 2011).
10.2		Form of Custody Agreement between Registrant and U.S. Bank National Association (filed herewith).
10.3		Amended and Restated Administration Agreement between Registrant and BDC Partners, LLC. (Incorporated by reference to Exhibit 10.3 to the Registrant’s quarterly report on Form 10-Q filed on May 10, 2012).
10.4		Amended and Restated Dividend Reinvestment Plan (Incorporated by reference to Exhibit 4.1 to the Registrant’s report on Form 8-K filed on May 30, 2012).
10.5		Purchase Agreement by and among the Registrant, TICC Capital Corp. 2011-1 Holdings, LLC, TICC CLO LCC and Guggenheim Securities, LLC (Incorporated by reference to Exhibit 10.1 to the Registrant’s report on Form 8-K filed on August 11, 2011).
10.6		Master Loan Sale Agreement by and among the Registrant, TICC Capital Corp. 2011-1 Holdings, LLC and TICC CLO LLC (Incorporated by reference to Exhibit 10.2 to the Registrant’s report on Form 8-K filed on August 11, 2011).
10.7		Indenture by and between TICC CLO LLC and The Bank of New York Mellon Trust Company, National Association (Incorporated by reference to Exhibit 10.3 to the Registrant’s report on Form 8-K filed on August 11, 2011).
10.8		Collateral Management Agreement by and between TICC CLO LLC and the Registrant (Incorporated by reference to Exhibit 10.4 to the Registrant’s report on Form 8-K filed on August 11, 2011).
10.9		Collateral Administration Agreement by and among TICC CLO LLC, the Registrant and The Bank of New York Mellon Trust Company, National Association (Incorporated by reference to Exhibit 10.5 to the Registrant’s report on Form 8-K filed on August 11, 2011).
10.10		Purchase Agreement, dated August 13, 2012, by and among TICC Capital Corp., TICC CLO 2012-1 LLC and Guggenheim Securities, LLC (Incorporated by reference to Exhibit 10.1 to the Registrant’s report on Form 8-K filed on August 23, 2012).
10.11		Master Loan Sale Agreement, dated August 23, 2012, by and among TICC Capital Corp. and TICC CLO 2012-1 LLC (Incorporated by reference to Exhibit 10.2 to the Registrant’s report on Form 8-K filed on August 23, 2012).
10.12		Indenture, dated August 23, 2012, by and between TICC CLO 2012-1 LLC and The Bank of New York Mellon Trust Company, National Association (Incorporated by reference to Exhibit 10.3 to the Registrant’s report on Form 8-K filed on August 23, 2012).

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10.13		Collateral Management Agreement, dated August 23, 2012, by and between TICC CLO 2012-1 LLC and TICC Capital Corp. (Incorporated by reference to Exhibit 10.4 to the Registrant’s report on Form 8-K filed on August 23, 2012).
10.14		Collateral Administration Agreement, dated August 23, 2012, by and among TICC CLO 2012-1 LLC, TICC Capital Corp. and The Bank of New York Mellon Trust Company, National Association (Incorporated by reference to Exhibit 10.5 to the Registrant’s report on Form 8-K filed on August 23, 2012).
10.15		Upsize Purchase Agreement, dated January 24, 2013, by and among TICC Capital Corp., TICC CLO 2012-1 LLC and Guggenheim Securities, LLC (Incorporated by reference to the Registrant’s report on Form 8-K filed on February 26, 2013).
10.16		Subordinated Note Purchase Agreement, dated February 25, 2013, by and among TICC Capital Corp. and TICC CLO 2012-1 LLC (Incorporated by reference to the Registrant’s report on Form 8-K filed on February 26, 2013).
10.17		Second Upsize Purchase Agreement, dated May 21, 2013, by and among TICC Capital Corp., TICC CLO 2012-1 LLC and Guggenheim Securities, LLC (Incorporated by reference to the Registrant’s report on Form 8-K filed on May 29, 2013).
10.18		Subordinated Note Purchase Agreement, dated May 28, 2013, by and among TICC Capital Corp. and TICC CLO 2012-1 LLC (Incorporated by reference to the Registrant’s report on Form 8-K filed on May 29, 2013).
10.19		Form of Credit and Security Agreement, dated as of October 27, 2014, among TICC Funding, LLC, the lenders from time to time party thereto, Citibank, N.A., The Bank of New York Mellon Trust Company, National Association, and TICC Capital Corp. (Incorporated by reference to the Registrant’s report on Form 8-K filed on October 29, 2014).
10.20		Form of Sale, Contribution and Master Participation Agreement, dated as of October 27, 2014, by and among TICC Capital Corp. and TICC Funding, LLC (Incorporated by reference to the Registrant’s report on Form 8-K filed on October 29, 2014).
10.21		Form of Collateral Administration Agreement, dated as of October 27, 2014, by and among TICC Funding, LLC, TICC Capital Corp. and The Bank of New York Mellon Trust Company, National Association (Incorporated by reference to the Registrant’s report on Form 8-K filed on October 29, 2014).
11		Computation of Per Share Earnings (included in the notes to the financial statements contained in this report).
31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended (filed herewith).
31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended (filed herewith).
32.1		Certification of Chief Executive Officer pursuant to section 906 of The Sarbanes-Oxley Act of 2002 (filed herewith).
32.2		Certification of Chief Financial Officer pursuant to section 906 of The Sarbanes-Oxley Act of 2002 (filed herewith).

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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.


		TICC CAPITAL CORP.
Date: November 6, 2014		By: /s/ Jonathan H. Cohen Jonathan H. Cohen Chief Executive Officer (Principal Executive Officer)
Date: November 6, 2014		By: /s/ Patrick F. Conroy Patrick F. Conroy Chief Financial Officer (Principal Financial and Accounting Officer)

		Page

1.	DEFINITIONS	2

2.	APPOINTMENT OF CUSTODIAN	8

3.	DUTIES OF CUSTODIAN	8

4.	REPORTING	17

5.	DEPOSIT IN U.S. SECURITIES SYSTEMS	18

6.	SECURITIES HELD OUTSIDE OF THE UNITED STATES	18

7.	CERTAIN GENERAL TERMS	21

8.	COMPENSATION OF CUSTODIAN	23

9.	RESPONSIBILITY OF CUSTODIAN	23

10.	SECURITY CODES	27

11.	TAX LAW	27

12.	EFFECTIVE PERIOD, TERMINATION	27

13.	REPRESENTATIONS AND WARRANTIES	28

14.	PARTIES IN INTEREST; NO THIRD PARTY BENEFIT	29

15.	NOTICES	29

16.	CHOICE OF LAW AND JURISDICTION	30

17.	ENTIRE AGREEMENT; COUNTERPARTS	30

18.	AMENDMENT; WAIVER	31

19.	SUCCESSOR AND ASSIGNS	31

20.	SEVERABILITY	31

21.	REQUEST FOR INSTRUCTIONS	31

22.	OTHER BUSINESS	32

23.	REPRODUCTION OF DOCUMENTS	32

24.	MISCELLANEOUS	32

Witness:	TICC CAPITAL CORP.

	By:
Name:		Name:
Title:		Title:

Witness:	U.S. BANK NATIONAL
	ASSOCIATION

	By:
Name:		Name:
Title:		Title:


Name	Title	Signature


Name	Title	Signature


Name	Title	Signature


Name	Title	Signature


Name	Title	Signature


Name	Title	Signature


Name	Title	Signature

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

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2014

COMMISSION FILE NUMBER: 0-50398

TICC CAPITAL CORP.

8 SOUND SHORE DRIVE, SUITE 255 GREENWICH, CONNECTICUT 06830

(203) 983-5275

TICC CAPITAL CORP. TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

TICC CAPITAL CORP. CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (unaudited)

TICC CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2014 (unaudited)

TICC CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2014 (unaudited)

TICC CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2014 (unaudited)

TICC CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2014 (unaudited)

TICC CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2013

TICC CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS – (Continued) DECEMBER 31, 2013

TICC CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS – (Continued) DECEMBER 31, 2013

TICC CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS – (Continued) DECEMBER 31, 2013

TICC CAPITAL CORP. CONSOLIDATED SCHEDULE OF INVESTMENTS – (Continued) DECEMBER 31, 2013

TICC CAPITAL CORP. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

TICC CAPITAL CORP. CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS (unaudited)

TICC CAPITAL CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

TICC CAPITAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2014

NOTE 1. UNAUDITED INTERIM FINANCIAL STATEMENTS

NOTE 2. ORGANIZATION

TICC CAPITAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2014

NOTE 2. ORGANIZATION – (continued)

NOTE 3. INVESTMENT VALUATION

TICC CAPITAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2014

NOTE 3. INVESTMENT VALUATION – (continued)

TICC CAPITAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2014

NOTE 3. INVESTMENT VALUATION – (continued)

Significant Unobservable Inputs for Level 3 Investments

TICC CAPITAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2014

NOTE 3. INVESTMENT VALUATION – (continued)

TICC CAPITAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2014

NOTE 3. INVESTMENT VALUATION – (continued)

TICC CAPITAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2014

NOTE 3. INVESTMENT VALUATION – (continued)

Financial Instruments Disclosed, But Not Carried, At Fair Value

TICC CAPITAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2014

NOTE 3. INVESTMENT VALUATION – (continued)

TICC CAPITAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2014

NOTE 3. INVESTMENT VALUATION – (continued)

TICC CAPITAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2014

NOTE 3. INVESTMENT VALUATION – (continued)

TICC CAPITAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2014

NOTE 3. INVESTMENT VALUATION – (continued)

TICC CAPITAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2014

NOTE 4. BORROWINGS

Debt Securitization

Notes Payable — TICC CLO LLC

TICC CAPITAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2014

NOTE 4. BORROWINGS – (continued)

TICC CAPITAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2014

NOTE 4. BORROWINGS – (continued)

Notes Payable — TICC CLO 2012-1 LLC

TICC CAPITAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2014

NOTE 4. BORROWINGS – (continued)

TICC CAPITAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2014

NOTE 4. BORROWINGS – (continued)

2017 Convertible Notes

TICC CAPITAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2014

NOTE 4. BORROWINGS – (continued)

TICC CAPITAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2014

NOTE 5. EARNINGS PER SHARE

TICC CAPITAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2014

NOTE 5. EARNINGS PER SHARE – (continued)

NOTE 6. RELATED PARTY TRANSACTIONS

TICC CAPITAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2014

NOTE 6. RELATED PARTY TRANSACTIONS – (continued)

TICC CAPITAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2014

NOTE 6. RELATED PARTY TRANSACTIONS – (continued)

TICC CAPITAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2014

NOTE 6. RELATED PARTY TRANSACTIONS – (continued)

NOTE 7. DIVIDENDS

NOTE 8. NET ASSET VALUE PER SHARE

NOTE 9. PAYMENT-IN-KIND

TICC CAPITAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2014

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

8 SOUND SHORE DRIVE, SUITE 255
GREENWICH, CONNECTICUT 06830

TICC CAPITAL CORP.

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TICC CAPITAL CORP.

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(unaudited)

TICC CAPITAL CORP.

CONSOLIDATED SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2014
(unaudited)

TICC CAPITAL CORP.

CONSOLIDATED SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2014
(unaudited)

TICC CAPITAL CORP.

CONSOLIDATED SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2014
(unaudited)

TICC CAPITAL CORP.

CONSOLIDATED SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2014
(unaudited)

TICC CAPITAL CORP.

CONSOLIDATED SCHEDULE OF INVESTMENTS
DECEMBER 31, 2013

TICC CAPITAL CORP.

CONSOLIDATED SCHEDULE OF INVESTMENTS – (Continued)
DECEMBER 31, 2013

TICC CAPITAL CORP.

CONSOLIDATED SCHEDULE OF INVESTMENTS – (Continued)
DECEMBER 31, 2013

TICC CAPITAL CORP.

CONSOLIDATED SCHEDULE OF INVESTMENTS – (Continued)
DECEMBER 31, 2013

TICC CAPITAL CORP.

CONSOLIDATED SCHEDULE OF INVESTMENTS – (Continued)
DECEMBER 31, 2013

TICC CAPITAL CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

TICC CAPITAL CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)

TICC CAPITAL CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

TICC CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

TICC CAPITAL CORP.
INVESTMENTS IN AND ADVANCES TO AFFILIATES
(AMOUNTS IN THOUSANDS)

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. 1350)

CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. 1350)