Report of Independent Registered Public
Accounting Firm
To the Board of Directors and Shareholders of
Oxford Lane Capital Corp.
In planning and performing our audit of the financial statements
of Oxford Lane Capital Corp. (“the Company”) as of and for the year ended March 31, 2015, in accordance with the standards
of the Public Company Accounting Oversight Board (United States), we considered the Company’s internal control over financial
reporting, including controls over safeguarding securities, as a basis for designing our auditing procedures for the purpose of
expressing our opinion on the financial statements and to comply with the requirements of Form N-SAR, but not for the purpose of
expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we do
not express an opinion on the effectiveness of the Company’s internal control over financial reporting.
The management of the Company is responsible for establishing
and maintaining effective internal control over financial reporting. In fulfilling this responsibility, estimates and judgments
by management are required to assess the expected benefits and related costs of controls. A company’s internal control over
financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s
internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of a company’s assets that could have a material effect on the
financial statements.
Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject
to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies
or procedures may deteriorate.
A deficiency in internal control over financial reporting exists
when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned
functions, to prevent or detect misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies,
in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s
annual or interim financial statements will not be prevented or detected on a timely basis.
Our consideration of the Company’s internal control over
financial reporting was for the limited purpose described in the first paragraph and would not necessarily disclose all deficiencies
in internal control over financial reporting that might be material weaknesses under standards established by the Public Company
Accounting Oversight Board (United States). However, we noted no deficiencies in the Company’s internal control over financial
reporting and its operation, including controls over safeguarding securities that we consider to be material weaknesses as defined
above as of March 31, 2015.
This report is intended solely for the information and
use of management and the Board of Directors of Oxford Lane Capital Corp. and the Securities and Exchange Commission and is
not intended to be and should not be used by anyone other than these specified parties.
/s/ PricewaterhouseCoopers LLP
May 27, 2015
PricewaterhouseCoopers LLP, 300 Madison
Avenue, New York, NY 10017
T: (646) 471 3000, F: (646) 471 8320,
www.pwc.com/us
Exhibit 99.77Q1
SECOND AMENDED AND RESTATED
DISTRIBUTION REINVESTMENT PLAN
OF
OXFORD LANE CAPITAL CORP.
Oxford Lane Capital Corp., a Maryland corporation
(the "Corporation"), hereby adopts the following plan (the "Plan") with respect to net investment income dividends
and capital gains distributions declared by its Board of Directors on shares of its common stock (the “Common Stock”):
1. Unless a stockholder specifically elects
to receive cash as set forth below, all net investment income dividends and all capital gains distributions hereafter declared
by the Board of Directors shall be payable in shares of the Common Stock of the Corporation, and no action shall be
required on such stockholder's part to
receive a distribution in stock.
2. Such net investment income dividends
and capital gains distributions shall be payable on such date or dates as may be fixed from time to time by the Board of Directors
to stockholders of record at the close of business on the record date(s) established by the Board of Directors for the net investment
income dividend and/or capital gains distribution involved.
3.
The Corporation intends to use primarily newly-issued shares of its Common Stock to implement the Plan, whether its shares
of Common Stock are trading at a premium or at a discount to net asset value per share of the Common Stock. In the case that such
newly issued shares of Common Stock are used to implement the Plan, the number of shares of Common Stock to be issued to a stockholder
shall be determined by dividing the total dollar amount of the distribution payable to such stockholder by an amount equal to ninety
five (95%) percent of the market price per share of the Common Stock at the close of regular trading on the Nasdaq Global Select
Market on the valuation date fixed by the Board of Directors for such distribution. Market price per share of Common Stock on that
date shall be the closing price for such shares of Common Stock on the Nasdaq Global Select Market or, if no sale is reported for
such day, at the average of their electronically-reported bid and asked prices of the shares of Common Stock.
Notwithstanding the foregoing, the Corporation
reserves the right to instruct the Plan Administrator (defined below), to purchase shares of its Common Stock in the open market
in connection with its implementation of the Plan to the extent its shares of Common Stock are trading at a discount to net asset
value per share of its Common Stock. Shares of Common Stock purchased in open market transactions by the Plan Administrator will
be allocated to a stockholder based upon the average purchase price, excluding any Transaction Processing Fees, of all shares of
Common Stock purchased with respect to the net investment income dividends and capital gains distributions. Such purchases will
be effected through a broker-dealer selected by the Plan Administrator. The broker-dealer selected by the Plan Administrator will
act as a dealer and not in a fiduciary, agency or similar capacity (regardless of any relationship between the Plan Administrator
and the Corporation) and may be an affiliate of the Plan Administrator. The broker-dealer may charge per share Transaction Processing
Fees which are in addition to and not in lieu of any compensation the Plan Administrator receives as Plan Administrator. Per share
Transaction Processing Fees include any applicable brokerage commissions the Plan Administrator is required to pay. Neither the
Corporation nor the stockholder will have any authority or power to direct the date, time or price at which shares may be purchased
on the open market by the Plan Administrator and no one, other than the Plan Administrator, may select the broker or dealer through
or from whom purchases are to be made.
4. A stockholder may, however, elect to
receive his or its net investment income dividends and capital gains distributions in cash. To exercise this option, such stockholder
shall notify Computershare Trust Company, N.A. (“Computershare”), the plan administrator and the
Corporation's transfer agent and registrar
(collectively the "Plan Administrator"), by telephone, through the Internet or in writing so that such notice is received
by the Plan Administrator prior to the record date fixed by the Board of Directors for the net investment income dividend and/or
capital gains distribution involved.
5. The Plan Administrator will set up an
account for shares acquired pursuant to the Plan for each stockholder who has not so elected to receive dividends and distributions
in cash (each a "Participant"). The Plan Administrator may hold each Participant's shares, together with the shares of
other Participants, in non-certificated form in the Plan Administrator's name or that of its nominee. Upon request by a Participant,
received by telephone, through the Internet or in writing prior to the record date, Computershare will, instead of crediting shares
to and/or carrying shares in a Participant's account, issue, without charge to the Participant, a certificate registered in the
Participant's name for the number of whole shares payable to the Participant and a check for any fractional share, less any applicable
fees.
6. The Plan Administrator will confirm
to each Participant each acquisition made pursuant to the Plan as soon as practicable. Although each Participant may from time
to time have an undivided fractional interest (computed to six decimal places) in a share of Common Stock of the Corporation, no
certificates for a fractional share will be issued. However, dividends and distributions on fractional shares will be credited
to each Participant's account. In the event of termination of a Participant's account under the Plan, the Plan Administrator will
adjust for any such undivided fractional interest in cash at the market value of the Corporation's shares at the time of termination,
less any applicable fees.
7. The Plan Administrator will forward
to each Participant any Corporation related proxy solicitation materials and each Corporation report or other communication to
stockholders, and will vote any shares held by it under the Plan in accordance with the instructions set forth on
proxies returned by Participants to the
Corporation.
8. In the event that the Corporation makes
available to its stockholders rights to purchase additional shares or other securities, the shares held by the Plan Administrator
for each Participant under the Plan will be added to any other shares held by the Participant in certificated
form in calculating the number of rights
to be issued to the Participant.
9. The Plan Administrator's service fee,
if any, and expenses for administering the Plan, including Transaction Processing Fees on purchases on the open market, will be
paid for by the Corporation.
10.
Each Participant may terminate his or its account under the Plan by so notifying the Plan Administrator by telephone, through the
Internet or in writing. Such termination will be effective immediately if the Participant's notice is received by the Plan Administrator
prior to any dividend or distribution record date.
If notice to stop distributions is received after a record date for a
distribution payment, the Plan Administrator, in its sole discretion, may either pay such distribution in cash or reinvest it in
shares on behalf of the discontinuing Participant. If such distribution is reinvested, the Plan Administrator may sell the shares
purchased and remit the proceeds to the Participant, less any applicable fees.
The
Plan may be terminated by the Corporation upon notice in writing mailed to each Participant at least 30 days prior to any record
date for the payment of any dividend or distribution by the Corporation. Upon any termination,
the
Plan Administrator will cause a certificate or certificates to be issued for the full shares held for the Participant under the
Plan and a cash adjustment for any fractional share less any applicable fees to be delivered to the Participant. If a Participant
elects by his or its telephonic, Internet or written notice to the Plan Administrator in advance of termination to have the Plan
Administrator sell part or all of his or its shares and remit the proceeds to the Participant, the Plan Administrator is authorized
to deduct a $2.50 transaction fee plus
a Transaction Processing Fee for each share sold, from the proceeds. Per share Transaction
Processing Fees include any applicable brokerage commissions the Plan Administrator is required to pay.
11. The automatic reinvestment of dividends
does not relieve Participants of any taxes which may be payable on dividends. Participants will receive tax information annually,
including any dividend income Participants received during the year (which consists of any Transaction Processing fees paid on
the Participant’s behalf by the Corporation on dividends) for their personal records and to help them prepare their federal
income tax return. For further information as to tax consequences of participation in the Plan, Participants should consult with
their own tax advisors.
12. These terms and conditions may be amended
or supplemented by the Corporation at any time but, except when necessary or appropriate to comply with applicable law or the rules
or policies of the Securities and Exchange Commission or any other regulatory authority, only by mailing to each Participant appropriate
written notice at least 30 days prior to the effective date thereof. The amendment or supplement shall be deemed to be accepted
by each Participant unless, prior to the effective date thereof, the Plan Administrator receives telephonic, Internet or written
notice of the termination of his or its account under the Plan. Any such amendment may include an appointment by the Plan Administrator
in its place and stead of a successor agent under these terms and conditions, with full power and authority to perform all or any
of the acts to be performed by the Plan Administrator under these terms and conditions. Upon any such appointment of any agent
for the purpose of receiving dividends and distributions, the Corporation will be authorized to pay to such successor agent, for
each Participant's account, all dividends and distributions payable on shares of the Corporation held in the Participant's name
or under the Plan for retention or application by such successor agent as provided in these terms and conditions.
13. The Plan Administrator will at all
times act in good faith and use its best efforts within reasonable limits to ensure its full and timely performance of all services
to be performed by it under this Plan and to comply with applicable law, but assumes no responsibility and shall not be
liable for loss or damage due to errors
unless such error is caused by the Plan Administrator's negligence, bad faith, or willful misconduct or that of its employees or
agents.
14.
Contact information for the Plan Administrator is as follows: through the Internet at www.computerhsare/investor, telephone
number is 1-800-426-5523 and written correspondence can be mailed to Computershare Trust Company, N.A., P.O. Box 30170, College
Station, TX 77845.
15. These terms and conditions shall be
governed by the laws of the State of New York.
Adopted: May 13, 2015