424B3 1 tm218934d1_424b3.htm 424B3

Filed pursuant to Rule 424(b)(3)

Registration No. 333-248850

TRINITY CAPITAL INC.

Supplement No. 3 dated March 8, 2021

Prospectus dated October 20, 2020

This Supplement No. 3 dated March 8, 2021 (this “Supplement”) contains information that amends, supplements or modifies certain information contained in the accompanying prospectus of Trinity Capital Inc. (“we,” “us,” “our,” and the “Company”) dated October 20, 2020, as previously supplemented and amended (as so supplemented and amended, the “Prospectus”), and is part of, and should be read in conjunction with, the Prospectus. The Prospectus and this Supplement have been filed with the U.S. Securities and Exchange Commission and are available free of charge at www.sec.gov or by contacting us at 3075 West Ray Road, Suite 525, Chandler, Arizona 85226, calling us at (480) 374-5350 or visiting our corporate website located at www.trincapinvestment.com. Information on our website is not incorporated into or a part of the Prospectus and this Supplement. Capitalized terms used in this Supplement have the same meanings as in the Prospectus, unless otherwise stated herein.

Before investing in our 7.00% Notes due 2025 (the “Notes”), you should read carefully the Prospectus and this Supplement and consider carefully our investment objective, risks and expenses, including the discussion of the material risks of investing in the Notes in “Risk Factors” beginning on page 22 of the Prospectus and any other risk factors included in this Supplement. Investing in the Notes involves a high degree of risk, including credit risk and the risk of the use of leverage, and is highly speculative.

ANNUAL REPORT ON FORM 10-K

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2020

On March 4, 2021, we filed our Annual Report on Form 10-K for the year ended December 31, 2020 (the “Form 10-K”) with the U.S. Securities and Exchange Commission. The Form 10-K, excluding the exhibits thereto, is attached to this Supplement as Annex A , and incorporated herein by reference.

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ANNEX A

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For the Fiscal Year Ended December 31, 2020

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

Commission file number: 000-56139

TRINITY CAPITAL INC.

(Exact name of registrant as specified in its charter)


Maryland	35-2670395
(State or other jurisdiction
of incorporation or organization)	(IRS Employer Identification
No.)


3075
West Ray Road Suite 525 Chandler, Arizona	85226
(Address of principal
executive offices)	(Zip Code)

(480) 374-5350

(Registrant’s telephone number, including area code)

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

| Title of Each Class | | Trading Symbol(s) | | Name of each exchange
on which registered |
| --- | --- | --- | --- | --- |
| Common Stock, par
value $0.001 per share | | TRIN | | Nasdaq Global Select
Market |

Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ◻ No ⌧

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

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

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

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

Large accelerated filer	◻	Accelerated filer	◻
Non-accelerated filer	⌧	Smaller reporting company	◻
		Emerging growth company	⌧

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

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

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

The aggregate market value of the common stock held by non-affiliates of the registrant as of June 30, 2020 has not been provided because trading of the registrant’s common stock on the Nasdaq Global Select Market did not commence until January 29, 2021.

As of March 3, 2021, the registrant had 26,415,275 shares of common stock ($0.001 par value per share) outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive Proxy Statement for its 2021 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission within 120 days following the end of the registrant’s fiscal year, are incorporated by reference into Part III of this annual report on Form 10-K.

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TRINITY CAPITAL INC.

FORM 10-K

TABLE OF CONTENTS


		PAGE NO.
PART I
Item
1	Business	4
Item
1A	Risk
Factors	20
Item
1B	Unresolved
Staff Comments	74
Item
2	Properties	74
Item
3	Legal
Proceedings	74
Item
4	Mine
Safety Disclosures	74
PART II
Item
5	Market
for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	75
Item
6	Selected
Financial Data	77
Item
7	Management’s
Discussion and Analysis of Financial Condition and Results of Operations	79
Item
7A	Quantitative
and Qualitative Disclosures About Market Risk	92
Item 8	Consolidated
Financial Statements and Supplementary Data	96
Item
9	Changes
in and Disagreements with Accountants on Accounting and Financial Disclosure	144
Item
9A	Controls
and Procedures	144
Item
9B	Other
Information	144
PART III
Item
10	Directors,
Executive Officers and Corporate Governance	145
Item
11	Executive
Compensation	145
Item
12	Security
Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	145
Item
13	Certain
Relationships and Related Transactions, and Director Independence	145
Item
14	Principal
Accountant Fees and Services	145
Part
IV
Item
15	Exhibits
and Financial Statement Schedules	146
Item
16	Form
10-K Summary	148
SIGNATURES		149

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Cautionary Note Regarding Forward-Looking Statements

This annual report on Form 10-K contains forward-looking statements that involve substantial risks and uncertainties. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “intends” and similar words or phrases. Accordingly, these statements are only predictions and involve estimates, known and unknown risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed in them. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of several factors discussed under Item 1A. “Risk Factors” of Part I of this annual report on Form 10-K , including, but not limited to, the following:

● o ur limited operating history as a business development company (“BDC”);

● o ur future operating results, including the impact of the SARS-CoV-2 (“COVID-19”) pandemic;

● o ur dependence upon our management team and key investment professionals;

● o ur ability to manage our business and future growth;

● r isks related to investments in growth stage companies, other venture capital-backed companies and generally U.S. companies;

● t he ability of our portfolio companies to achieve their objectives;

● t he use of leverage;

● r isks related to the uncertainty of the value of our portfolio investments;

● c hanges in political, economic or industry conditions, the interest rate environment or conditions affecting the financial and capital markets, including as a result of the COVID-19 pandemic;

● u ncertainty surrounding the financial and/or political stability of the United States, the United Kingdom, the European Union and China, including as a result of the COVID-19 pandemic;

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

● r isks related to changes in interest rates, our expenses, and other general economic conditions and the effect on our net investment income;

● t he effect of the decommissioning of LIBOR;

● t he effect of changes in tax laws and regulations and interpretations thereof;

● t he impact on our business of new or amended legislation or regulations;

● r isks related to market volatility, including general price and volume fluctuations in stock markets;

● o ur ability to make distributions, including as a result of the COVID-19 pandemic; and

● our ability to maintain our status as a BDC under the Investment Company Act of 1940, as amended and qualify annually for tax treatment as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended.

Additionally, there may be other risks that are otherwise described from time to time in the reports that we file with the Securities and Exchange Commission. Any forward-looking statements in this annual report on Form 10-K should be considered in light of various important factors, including the risks and uncertainties listed above, as well as others. All forward-looking statements are necessarily only estimates of future results, and there can be no assurance that actual results will not differ materially from expectations, and, therefore, you are cautioned not to place undue reliance on such statements. Any forward-looking statements are qualified in their entirety by reference to the risk factors discussed throughout this annual report on Form 10-K. See “Item 1A. Risk Factors.” Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. Because we are an investment company, the forward-looking statements and projections contained in this annual report on Form 10-K are excluded from the safe harbor protections provided by Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (the “safe harbor” provision of the Private Securities Litigation Reform Act of 1995).

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PART I

Except where the context suggests otherwise, the terms “we,” “us,” “our,” “the Company,” and “Trinity” refer to Trinity Capital Inc. and its consolidated subsidiaries.

Item 1. Business

Organization

Trinity Capital Inc. (“TCI”), incorporated in Maryland on August 12, 2019, is an internally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). Because TCI is internally managed, all of the executive officers and employees are employed by the Company. Therefore, the Company does not pay any external investment advisory fees, but instead directly incurs the operating costs associated with employing investment and portfolio management professionals.

On January 16, 2020, the Company completed a private equity offering (the “Private Common Stock Offering”) of shares of its common stock pursuant to which it issued and sold 7,000,000 shares for gross proceeds of approximately $105.0 million. An over-allotment option related to the Private Common Stock Offering was exercised in full and on January 29, 2020 the Company issued and sold an additional 1,333,333 shares of its common stock for gross proceeds of approximately $20 million. As a result, in total, the Company issued and sold 8,333,333 shares of its common stock for total aggregate gross proceeds of approximately $125.0 million.

Concurrent with the initial closing of the Private Common Stock Offering, the Company completed a private debt offering (the “144A Note Offering” and together with the Private Common Stock Offering, the “Private Offerings”) of $105.0 million in aggregate principal amount of the Company’s unsecured 7.00% Notes due 2025 (the “2025 Notes”). An over-allotment option related to the 144A Note Offering was exercised in full and on January 29, 2020 the Company issued and sold an additional $20.0 million in aggregate principal amount of the 2025 Notes. As a result, the Company issued and sold $125.0 million in aggregate principal amount of the 2025 Notes.

On January 16, 2020, through a series of transactions (the “Formation Transactions”), we acquired Trinity Capital Investment, LLC ( “TCI, LLC”), Trinity Capital Fund II, L.P. (“Fund II”), Trinity Capital Fund III, L.P. (“Fund III”), Trinity Capital Fund IV, L.P. (“Fund IV”) and Trinity Sidecar Income Fund, L.P. (“Sidecar Fund,” and collectively, the “Legacy Funds”) and all of their respective assets (the “Legacy Assets”), including their respective investment portfolios (the “Legacy Portfolio”), as well as Trinity Capital Holdings, LLC (“Trinity Capital Holdings”), a holding company whose subsidiaries managed and/or had the right to receive fees from certain of the Legacy Funds. We used a portion of the proceeds from the Private Offerings to complete these transactions.

In the Formation Transactions, the Legacy Funds were merged with and into the Company, and we issued 9,183,185 shares of our common stock for an aggregate amount of approximately $137.7 million and paid approximately $108.7 million in cash to the Legacy Funds’ investors, which included the general partners/managers of the Legacy Funds (the “Legacy Investors”), to acquire the Legacy Funds and all of their respective assets, including the Legacy Portfolio. Our senior management team, led by Steven L. Brown, comprises the majority of the senior management team that managed the Legacy Funds and sourced the Legacy Portfolio.

As part of the Formation Transactions, we also acquired 100% of the equity interests of Trinity Capital Holdings for an aggregate purchase price of $10.0 million, which was comprised of 533,332 shares of our common stock, totaling approximately $8.0 million, and approximately $2.0 million in cash. In connection with the acquisition of such equity interests, the Company also assumed a $3.5 million severance related liability with respect to a former member of certain general partners of certain Legacy Funds. In connection with the acquisition of Trinity Capital Holdings, approximately $13.5 million (consisting of the aggregate purchase price and severance related liability assumed) was expensed to Costs related to the acquisition of Trinity Capital Holdings and Legacy Funds in the Consolidated Statements of Operations. As a result of the Formation Transactions, Trinity Capital Holdings became a wholly owned subsidiary of the Company.

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Trinity Funding 1, LLC (“TF1”) was formed on August 14, 2019 as a wholly owned subsidiary of Fund II to serve as a bankruptcy-remote entity for purposes of securing lending. On January 16, 2020, in connection with the Formation Transactions, the Company acquired TF1 through Fund II and became a party to, and assumed, a $300 million credit agreement (as amended, the “Credit Facility”) with Credit Suisse AG (“Credit Suisse”) through TF1. TF1 is included as a consolidated subsidiary of TCI in TCI’s consolidated financial statements.

On January 29, 2021, our common stock began trading on the Nasdaq Global Select Market under the ticker symbol “TRIN,” and we completed our initial public offering of our common stock, par value $0.001, (“IPO”) on February 2, 2021.

In connection with the filing of our 2020 annual tax return, TCI will elect to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), for U.S. federal income tax purposes. As a result, the Company generally does not pay corporate-level U.S. federal income taxes on any net ordinary taxable income or capital gains that it distributes to its stockholders.

Overview

We provide debt, including loans and equipment financings, to growth stage companies, including venture-backed companies and companies with institutional equity investors. Our investment objective is to generate current income and, to a lesser extent, capital appreciation through our investments. We seek to achieve our investment objective by making investments consisting primarily of term loans and equipment financings and, to a lesser extent, working capital loans, equity and equity-related investments. Our equipment financings involve loans for general or specific use, including acquiring equipment, that are secured by the equipment or other assets of the portfolio company. In addition, we may obtain warrants or contingent exit fees from many of our portfolio companies, providing an additional potential source of investment returns. The warrants entitle us to purchase preferred or common ownership shares of a portfolio company, and we typically target the amount of such warrants to scale in proportion to the amount of the debt or equipment financing. Contingent exit fees are cash fees payable upon the consummation of certain trigger events, such as a successful change of control or initial public offering of the portfolio company. In addition, we may obtain rights to purchase additional shares of our portfolio companies in subsequent equity financing rounds.

We target investments in growth stage companies with institutional investor support, experienced management teams, promising products and offerings, and large expanding markets. We define “growth stage companies” as companies that have significant ownership and active participation by sponsors and expected annual revenues of up to $100 million. These companies typically have begun to have success selling their products to the market and need additional capital to expand their operations and sales. Despite often achieving growing revenues, these types of companies typically have limited financing options to fund their growth. Equity, being dilutive in nature, is generally the most expensive form of capital available, while traditional bank financing is rarely available, given the lifecycle stage of these companies. Financing from us bridges this financing gap, providing companies with growth capital, which may result in improved profitability, less dilution for all equity investors, and increased enterprise value. Subject to the requirements of the 1940 Act, we are not limited to investing in any particular industry or geographic area and seek to invest in under-financed segments of the private credit markets.

Our loans and equipment financings may have initial interest-only periods of up to 24 months and generally fully amortize over a total term of up to 60 months. These investments are typically secured by a blanket first position lien, a specific asset lien on mission-critical assets and/or a blanket second position lien. We may also make a limited number of direct equity and equity-related investments in conjunction with our debt investments. We target growth stage companies that have recently issued equity to raise cash to offset potential cash flow needs related to projected growth, have achieved positive cash flow to cover debt service, or have institutional investors committed to providing additional funding. A loan or equipment financing may be structured to tie the amortization of the loan or equipment financing to the portfolio company’s projected cash balances while cash is still available for operations. As such, the loan or equipment financing may have a reduced risk of default. We believe that the amortizing nature of our investments will mitigate risk and significantly reduce the risk of our investments over a relatively short period. We focus on protecting and recovering principal in each investment and structure our investments to provide downside protection.

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Our loans and equipment financings generally range from $2 million to $30 million and we generally limit each loan or equipment financing to approximately five percent or less of our total assets. We believe investments of this scale are generally sufficient to support near-term growth needs of most growth stage companies. We seek to structure our loans and equipment financings such that amortization of the amount invested quickly reduces our risk exposure. Leveraging the experience of our investment professionals, we seek to target companies at their growth stage of development and to identify financing opportunities ignored by the traditional direct lending community.

The following illustrates the lifecycle stage at which we seek to invest in our portfolio companies, although we may, at our discretion, invest in other lifecycle stages.

Human Capital Resources and Management Team

We are an internally managed BDC employing 34 dedicated professionals as of December 31, 2020, including 17 investment, origination and portfolio management professionals, all of whom have experience working on investment and financing transactions for growth and early-stage companies. All of our employees are located in the United States.

Our management team has prior management experience, including with early-stage tech startups, and employs a highly systematized approach. Our senior management team, led by Steven L. Brown, comprises the majority of the senior management team that managed the Legacy Funds and sourced the Legacy Portfolio.

All investment decisions are made by the Investment Committee, whose members consist of Steven L. Brown, Gerald Harder, Kyle Brown and Ron Kundich. We consider these individuals to be our portfolio managers. The Investment Committee approves proposed investments by majority consent, which majority must include Steven L. Brown, in accordance with investment guidelines and procedures established by the Investment Committee.

Our employees drive the success of our business and investment strategy, including achieving our investment objective. We offer competitive compensation, benefits and training programs to develop our employees’ skills and expertise. We are committed to providing a safe, harassment-free work environment guided by principles of fair and equal treatment and focused on employee engagement.

In response to the COVID-19 pandemic, we instituted a temporary work-from-home policy in March 2020, during which our employees primarily worked remotely without disruption to our operations. In May 2020, we began to allow healthy employees to work in the office if they so choose.

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Potential Competitive Advantages

We believe that we are one of only a select group of specialty lenders that has our depth of knowledge, experience, and track record in lending to growth stage companies. Further, we are one of an even smaller subset of specialty lenders that offers both loans and equipment financings. Our other potential competitive advantages include:

• In-house engineering and operations expertise to evaluate growth stage companies’ business products and plans.

We have a history of employing technology experts, including those with engineering and operations expertise, who have developed proven technology and hold patents in their names, as well as executives and other employees who have experience with the products and business plans of growth stage companies. The expertise, knowledge and experience of these individuals allows them to understand and evaluate the business plans, products and financing needs of growth stage companies, including the risks related thereto.

• Direct origination networks that benefit from relationships with venture banks, institutional equity investors and entrepreneurs built during the term of operations of the Legacy Funds, which began in 2008.

We seek to be the first contact for venture bankers who focus on growth stage companies and who have a portfolio company that would benefit from term debt or equipment financings. We have established relationships with the major technology banks over the last 10 years in every major market across the United States and have established standard intercreditor and subordination agreements, which we believe make working with technology banks seamless in most regions across the United States. These banks often will provide revolving credit facilities to growth stage companies and we seek to provide term debt and/or equipment financings to their portfolio companies.

We also focus on sourcing deals from the partners of growth stage institutional investors, including growth stage venture capital firms and private equity firms. We focus on building relationships with investors who have raised recent funds and have the ability to provide ongoing support to their portfolio companies.

We receive referrals directly to the executive officers of growth stage companies from these various stakeholders. Most of these stakeholders have board seats on the portfolio companies referred to us, are intimately involved in the business of such portfolio companies and generally serve as our advocates when term sheets are negotiated. We also receive introductions to companies for potential investment opportunities from executive officers with whom we have had business relationships at former portfolio companies.

• A dedicated staff of professionals covering credit origination and underwriting, as well as portfolio management functions.

We have a broad team of professionals focused on every aspect of the investment lifecycle. We have a credit origination and underwriting team that manages and oversees our investment process from identification of investment opportunity through negotiations of final term sheet and investment in a portfolio company. Our investment management and oversight activities are separate from our origination and underwriting activities. The team members serving our investment management and oversight functions have significant operating experience and are not associated with our origination function to avoid any biased views of performance. This structure helps our originators focus on identifying investment opportunities and building relationships with our portfolio companies.

• A proprietary credit rating system and regimented process for evaluating and underwriting prospective portfolio companies.

Historically, our management team has received significant prospective investment opportunities. In order to quickly review investment opportunities and evaluate risks, we have developed a detailed and consistent credit rating system. This system allows our analysts to receive a full set of financial statements and projections and quickly fill out a rating sheet for each potential investment, which includes using a series of weighted calculations to provide an initial “pass” or “fail” rating on the potential investment, as well as identifying specific risks for further consideration.

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• Scalable software platforms developed during the term of operations of the Legacy Funds, which support our underwriting processes and loan monitoring functions.

We have an internally developed pipeline management tool which gives us a detailed look at our performance in real time. We believe our historical metrics generally predict our quarterly funding needs based upon the number of prospective investment opportunities we have at varying stages of our origination process. We believe this granular look at our underwriting process gives us the ability to increase or decrease marketing efforts in order to manage available capital and achieve our deployment goals.

Market Opportunity

We believe that an attractive market opportunity exists for providing debt and equipment financings to growth stage companies for the following reasons:

• Growth stage companies have generally been underserved by traditional lending sources;

• Unfulfilled demand exists for loans and equipment financings to growth stage companies due to the complexity of evaluating risk in these investments;

• Debt investments with warrants are less dilutive than traditional equity financing and complement equity financing from venture capital and private equity funds;

• Equity funding of growth stage companies, including venture capital backed companies, has increased steadily over the last ten years, resulting in new lending and equipment financing opportunities.

• We estimate that the annual U.S. venture debt and equipment financing market in 2020 exceeded $23 billion. We believe that the equipment financing market is even more fragmented, with the majority of equipment financing providers unable to fund investments for more than $10 million. We believe there are significant growth opportunities for us to expand our market share in the venture debt market and become a one-stop shop for loans and equipment financings for growth stage companies.

Growth Stage Companies are Underserved by Traditional Lenders.

We believe many viable growth stage companies have been unable to obtain sufficient growth financing from traditional lenders, including financial services companies such as commercial banks and finance companies, because traditional lenders have continued to consolidate and have adopted a more risk-averse approach to lending. More importantly, we believe traditional lenders are typically unable to underwrite the risk associated with these companies effectively.

The cash flow characteristics of many growth stage companies include significant research and development expenditures and high projected revenue growth, thus often making such companies difficult to evaluate from a credit perspective. In addition, the balance sheets of many of these companies often include a disproportionately large amount of intellectual property assets, which can be difficult to value. Finally, the speed of innovation in technology and rapid shifts in consumer demand and market share add to the difficulty in evaluating these companies.

Due to the difficulties described above, we believe traditional lenders generally refrain from lending and/or providing equipment financing to growth stage companies, instead preferring the risk-reward profile of traditional fixed asset-based lending. We believe traditional lenders generally do not have flexible product offerings that meet the needs of growth stage companies. The financing products offered by traditional lenders typically impose restrictive covenants and conditions on borrowers, including limiting cash outflows and requiring a significant depository relationship to facilitate rapid liquidation.

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Unfulfilled Demand for Loans and Equipment Financings to Growth Stage Companies.

Private capital in the form of debt and equipment financing from specialty finance companies continues to be an important source of funding for growth stage companies. We believe that the level of demand for debt and equipment financing is a function of the level of annual venture equity investment activity and can be as much as 20% to 30% of such investment activity. We believe this market is largely served by a handful of venture banks, with whom our products generally do not compete, and a relative few term lenders and lessors.

We believe that demand for debt and equipment financing to growth stage companies is currently underserved, given the high level of activity in venture capital equity market for the growth stage companies in which we invest. We believe certain venture lending companies have begun to focus on larger investment opportunities, potentially creating additional opportunities for us in the near term. Our senior management team has seen a significant increase in the number of potential investment opportunities over the last ten years.

Debt Investments with Warrants Complement Equity Financing from Venture Capital and Private Equity Funds.

We believe that growth stage companies and their financial sponsors will continue to view debt and equipment financing as an attractive source of capital because it augments the capital provided by venture capital and private equity funds. We believe that our debt investments, including loans and equipment financings, will provide access to growth capital that otherwise may only be available through incremental equity investments by new or existing equity investors. As such, we intend to provide portfolio companies and their financial sponsors with an opportunity to diversify their capital sources. Generally, we believe many growth stage companies target a portion of their capital to be debt and equipment financing in an attempt to minimize ownership dilution to existing investors and company founders. In addition, because growth stage companies generally reach a more mature stage prior to reaching a liquidity event, we believe our investments could provide the capital needed to grow or recapitalize during the extended growth period sometimes required prior to liquidity events.

Investment Philosophy, Strategy and Process

Overview

We lend money in the form of term loans and equipment financings and, to a lesser extent, working capital loans to growth stage companies. Investors may receive returns from three sources — the loan’s interest payments or equipment financing payments and the associated contractual fees; the final principal payment; and, contingent upon a successful change of control or initial public offering, proceeds from the equity positions or contingent exit fees obtained at loan or equipment financing origination.

We primarily seek to invest in loans and equipment financings to growth stage companies that have generally completed product development and are in need of capital to fund revenue growth. We believe a lack of profitability often limits these companies’ ability to access traditional bank financing and our in-house engineering and operations experience allows us to better understand this risk and earn what we believe to be higher overall returns and better risk-adjusted returns than those associated with traditional bank loans.

Subject to the requirements under the 1940 Act, which require that we invest at least 70% of our total assets in qualifying assets, we may also engage in other lending activities by investing in assets that are not qualifying assets under the requirements of the 1940 Act, including asset-backed lending, which may constitute up to 30% of our total assets.

We believe good candidates for loans and equipment financings appear in all business sectors. We are not limited to investing in any particular industry or geographic area and seek to invest in under-financed segments of the private credit markets. We believe in diversification and do not intend to specialize in any one sector. Our portfolio companies are selected from a wide range of industries, technologies and geographic regions. Since we focus on investing in portfolio companies alongside venture capital firms and technology banks, we anticipate that most of our opportunities will come from sectors that those sources finance.

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Characteristics of Target Portfolio Companies

We seek to invest in a cross-section of growth stage companies. In addition to the criteria discussed in this annual report on Form 10-K, we may consider other factors such as portfolio company size, industry, historical revenue growth, management’s revenue growth projections, relevant operating margins, competition, management capabilities and geographic concentration. We will evaluate prospective portfolio companies quantitatively and qualitatively, and determine investments based on the key factors, including the following items:

• Recent, concurrent, or future funding by a venture capital firm;

• Strong, experienced and flexible management team;

• Successful, market-proven product and/or service with some proprietary characteristics;

• Application of proven technologies that enable their customers to reduce costs, improve strategic positioning or fundamentally change the competitive nature of their industries;

• Detailed business plan with multi-year projections that cover the full term of our investment; and

• A defined exit strategy with identified potential acquirers.

Investment Structure

We seek to structure portfolio investments to mitigate risk and provide attractive risk-adjusted returns for our investors while meeting portfolio companies financing needs. Typically, our loans, equipment financings and equity and equity-related investments take one of the following forms:

• Term Debt and Working Capital Loans . Term debt and working capital loans typically have initial interest-only periods of up to 24 months and may then fully amortize over a total term of up to 60 months. The annual stated interest rate on these loans typically has ranged from 8% to 14%.

• Equipment Financings . Typically, an equipment financing is structured as fully amortizing over a period of up to 60 months. The specific terms of each equipment financing depend on the creditworthiness of the portfolio company and the projected value of the financed assets. Occasionally, we offer an initial period at a lower finance factor to companies with stronger creditworthiness, which is analogous to an interest-only period on a term loan. Annual interest rates on equipment financings typically have ranged from 7% to 14%.

• Additional Deal Considerations. Additional deal considerations typically have included upfront fees of up to 2% of the invested principal, upfront structuring fees of approximately one-half month of finance payments for equipment financings, an upfront deposit of up to three months for equipment financings, and have final payments on average of 8% of invested principal.

• Equity and Equity-Related Securities . We may also seek to obtain warrants entitling us to purchase preferred or common ownership shares of a portfolio company. We typically target the amount of such warrants to scale in proportion to the amount of the debt or equipment financing. We also attempt to structure such warrants so that the exercise price of the warrants will either be the price paid by venture capital investors in the most recent financing round or a current option price set by the portfolio company. Our typical exercise period for warrants is seven to 10 years. In addition, we may obtain rights to purchase additional shares of our portfolio companies in subsequent equity financing rounds.

Concentration Limits; Security

We endeavor to maintain reasonable limits of concentration to specific industries, technologies and geographic regions. By their nature, these limits are subjective and are applied solely at the discretion of management.

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In all our loans, we seek to take a security position in all of the assets of the portfolio company, including intellectual property, if available. From time to time, we may agree to take a security position in less than the total amount of assets. In the case of equipment financings, for instance, the security interest may extend only to the asset(s) financed.

In addition, we seek to enter into standard intercreditor agreements with the major technology banks that we anticipate engaging with, making work-out situations much easier and less contentious. Where and when possible, we will execute deposit account control agreements with our portfolio companies giving us ongoing access to their bank accounts for purposes of ensuring access to our collateral in a default. In all cases, we seek to put in place Uniform Commercial Code filings to perfect our position, and to update these filings frequently to reflect changes in our collateral.

Investment Process

Investment Originations; New Deals Referred

We have a multi-channel sourcing strategy focused primarily on growth stage venture capital firms, private equity firms, technology banks and, to a lesser extent, brokers who focus on our business. We have established relationships with the major technology banks and have established standard intercreditor and subordination agreements, which make working with technology banks seamless in most regions across United States.

We continue to expand our originations team internally in order to continue to focus on building relationships with individuals at top tier venture capital firms as well as building out connections to a nationwide network of technology bankers. We have developed proprietary internal systems and technology to give our originations and marketing team real time information about the broader market and our investment pipeline, which we leverage to attempt to become and maintain our relationship as the first call for our referral sources.

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Initial Rating

The following illustrates our transaction rating methodology for term loans.

The following illustrates our transaction rating methodology for equipment financings.

Our initial rating of every opportunity is based on six factors:

(1) the portfolio company’s investors, specifically their ability and likelihood to provide ongoing financial support as needed;

(2) the experience and strength of the portfolio company’s management team and board of directors;

(3) the portfolio company’s products or services and the market needs that they fulfill;

(4) the portfolio company’s historical and projected financial performance, including a review of revenue potential, growth, gross margins and other metrics;

(5) debt structure and cash life; and

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(6) other factors such as intellectual property, collateral, corporate governance, or other items that are deemed to be relevant by the due diligence team.

Investment opportunities that score an acceptable initial rating are moved on for further consideration.

Preliminary Due Diligence and Executive Summary

The next phase of the due diligence process involves a structured call with the management team of the prospective portfolio company. Following the management call, if the opportunity still appears to be worthy of consideration, an executive summary memorandum is prepared by the due diligence team for consideration and voting by the Investment Committee. The executive summary memorandum is distributed to the Investment Committee, and the deal terms for the investment are defined. If approved by the Investment Committee, we issue a term sheet to the prospective portfolio company.

Confirmatory Due Diligence and On-Site Meeting

If the term sheet offered by us is accepted by the prospective portfolio company, the process of obtaining additional confirmatory due diligence begins. The confirmatory due diligence process typically includes calls with the venture capital partners responsible for the equity financing of the portfolio company, as well as key customers, suppliers, partners, or other stakeholders as may be deemed relevant by the due diligence team. Additional financial analysis is performed, in order to confirm the cash life assumptions that were made prior to term sheet issuance. In the case of an equipment financing, or term loan in which fixed assets make up a significant portion of our collateral, the due diligence team completes an analysis of the equipment or fixed assets being financed, which may include calls to the original manufacturer and/or any dealers, resellers, or refurbishing companies, to evaluate the value of the equipment at inception, as well as the useful life and anticipated value throughout the life of our holding period. Occasionally, we may engage the assistance of an appraiser to assist in valuations.

The final step in the confirmatory diligence process generally involves an on-site meeting, at which members of our due diligence team meet with the management team of the prospective portfolio company for a final review of the portfolio company’s financial performance and forward-looking plans. This meeting is typically held at the business offices of the portfolio company; however, occasionally the meeting will be held via video teleconference if travel to the portfolio company is not possible. One or more members of the Investment Committee will attend the on-site meeting if possible.

Underwriting Report and Investment Committee Vote

Assuming that the confirmatory due diligence process reveals no issues that would cause the due diligence team to recommend against the proposed investment, the due diligence team prepares an Investment Underwriting Report (“IUR”), which is distributed to the Investment Committee. The Investment Committee then meets to discuss and review the deal terms and IUR regarding the proposed investment and a vote takes place. A majority of the Investment Committee, which majority must include Steven L. Brown, is required to approve the transaction.

Investment Management and Oversight

Our investment management and oversight activities are separate from our origination and underwriting activities. The team members serving our investment management and oversight functions have significant operating experience and are not associated with our origination function to avoid any biased views of performance. Beyond the dedicated portfolio management team, all of our management team members and investment professionals are typically involved at various times with our portfolio companies and investments. Our portfolio management team reviews our portfolio companies’ monthly or quarterly financial statements and compares actual results to the portfolio companies’ projections. Additionally, the portfolio management team may initiate periodic calls with the portfolio company’s venture capital partners and its management team and may obtain observer rights on the portfolio company’s board of directors. Our management team and investment professionals anticipate potential problems by monitoring reporting requirements and having frequent calls with the management teams of our portfolio companies.

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Investment Risk Rating System

Our portfolio management team uses an ongoing investment risk rating system to characterize and monitor our outstanding loans and equipment financings. Our portfolio management team monitors and, when appropriate, recommends changes to the investment risk ratings. Our Investment Committee reviews the recommendations and/or changes to the investment risk ratings, which are submitted on a quarterly basis to the Audit Committee (the “Audit Committee”) of our Board of Directors (the “Board”) and the Board.

From time to time, we will identify investments that require closer monitoring or become work-out assets. We will develop a workout strategy for workout assets and our Investment Committee will monitor the progress against the strategy. We may incur losses from our investing activities; however, we work with our troubled portfolio companies in order to recover as much of our investments as is practicable, including possibly taking control of the portfolio company. The risk rating system allows for early detection of issues and escalation to avoid credit losses.

For our investment risk rating system, we review seven different criteria and, based on our review of such criteria, we assign a risk rating on a scale of 1 to 5, as set forth in the following illustration.

As of December 31, 2020, the Company’s debt investment portfolio had a weighted average risk rating score of 3.2.

Managerial Assistance

As a BDC, we are required to offer, and provide upon request, managerial assistance to our portfolio companies. This assistance could involve, among other things, monitoring the operations of our portfolio companies, participating in board and management meetings, consulting with and advising officers of portfolio companies and providing other organizational and financial guidance. We may, from time to time, receive fees for these services. In the event that such fees are received, we expect that they will be incorporated into our operating income and passed through to our stockholders, given the nature of our structure as an internally managed BDC. See “— Regulation as a Business Development Company — Significant Managerial Assistance” for additional information.

Competition

Our prospective markets are highly competitive and are characterized by competitive factors that vary based upon product and geographic region. Competitors vary and may include captive and independent finance companies, other BDCs, equity and debt focused public and private funds, commercial banks and thrift institutions, industrial banks, community banks, leasing companies, hedge funds, insurance companies, mortgage companies, manufacturers and vendors, and other financing providers. There has been substantial competition for attractive investment opportunities in the venture capital business, in particular.

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These lenders will typically offer lower finance rates than non-bank finance companies (including us), but will require cash depository relationships, blanket liens and will often have certain performance and cash covenants, all of which make their lending program less flexible and, we believe, less attractive to borrowers. We compete, in part, on the basis of pricing, terms and structure. For additional information concerning the competitive risks we face, refer to “Item 1A. Risk Factors – Risks Relating to Our Business and Structure – We operate in a highly competitive market for investment opportunities, which could reduce returns and result in losses.”

Emerging Growth Company

The Company is an emerging growth company as defined in t he J umpstart Our Business Startups Act of 2012 (the “JOBS Act”) and is eligible to take advantage of certain specified reduced disclosure and other requirements that are otherwise generally applicable to public companies that are not “emerging growth companies” including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”). Although we have not made a determination whether to take advantage of any or all of these exemptions, we expect to remain an emerging growth company for up to five years following the completion of our IPO or until the earliest of:

• the last day of the first fiscal year in which our annual gross revenues exceed $1.07 billion;

• December 31 of the fiscal year that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act which would occur if the market value of the shares of our common stock that is held by non-affiliates exceeds $700.0 million as of the last business day of our most recently completed second fiscal quarter and we have been publicly reporting for at least 12 months; or

• the date on which we have issued more than $1.0 billion in non-convertible debt securities during the preceding three-year period.

In addition, we will take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.

Regulation as a Business Development Company

We have elected to be regulated as a BDC under the 1940 Act. The 1940 Act contains prohibitions and restrictions relating to transactions between BDCs and their affiliates, principal underwriters and affiliates of those affiliates or underwriters. The 1940 Act requires a majority of the members of the board of directors of a BDC be persons other than “interested persons,” as that term is defined in the 1940 Act. In addition, the 1940 Act provides that we may not change the nature of our business so as to cease to be, or to withdraw our election as, a BDC unless approved by a majority of our outstanding voting securities.

The 1940 Act defines “a majority of the outstanding voting securities” as the lesser of (i) 67% or more of the voting securities present at a meeting if the holders of more than 50% of our outstanding voting securities are present or represented by proxy or (ii) more than 50% of our outstanding voting securities.

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

(1) Securities purchased in transactions not involving any public offering from the issuer of such securities, which issuer (subject to certain limited exceptions) is an eligible portfolio company, or from any person who is, or has been during the preceding 13 months, an affiliated person of an eligible portfolio company, or from any other

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person, subject to such rules as may be prescribed by the SEC. An eligible portfolio company is defined in the 1940 Act as any issuer which:

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

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

c. satisfies any of the following:

i. does not have any class of securities that is traded on a national securities exchange;

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

iii. is controlled by a BDC or a group of companies including a BDC and the BDC has an affiliated person who is a director of the eligible portfolio company; or

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

(2) Securities of any eligible portfolio company controlled by us;

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

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

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

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

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

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

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management meetings, consulting with and advising a portfolio company’s officers or other organizational or financial guidance.

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

Issuance of Derivative Securities. Under the 1940 Act, a BDC is subject to restrictions on the issuance, terms and amount of warrants, options, restricted stock or rights to purchase shares of capital stock that it may have outstanding at any time. In particular, the amount of capital stock that would result from the conversion or exercise of all outstanding warrants, options or rights to purchase capital stock cannot exceed 25% of the BDC’s total outstanding shares of capital stock. This amount is reduced to 20% of the BDC’s total outstanding shares of capital stock if the amount of warrants, options or rights issued pursuant to an executive compensation plan would exceed 15% of the BDC’s total outstanding shares of capital stock. We intend to apply for exemptive relief from the SEC to permit us to issue restricted stock and restricted stock units to our employees, officers and directors subject to the above conditions, among others; although there can be no assurance or guarantee that such exemptive relief will be received from the SEC.

Senior Securities; Coverage Ratio. We are generally permitted, under specified conditions, to issue multiple classes of indebtedness and one class of stock senior to our Common Stock if our asset coverage, as defined in the 1940 Act, is at least equal to 150% immediately after each such issuance. In connection with the organization of the Company, the Board and our initial sole stockholder authorized us to adopt the 150% asset coverage ratio. This means we are permitted to borrow $2 for investment purposes for every $1 of investor equity. For a discussion of the risks associated with leverage refer to Item 1A. Risk Factors — Risks Relating to Our Business and Structure — Regulations governing our operation as a BDC affect our ability to, and the way in which we, raise additional capital. ”

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

Affiliated Transactions. We are prohibited under the 1940 Act from conducting certain transactions with our affiliates without the prior approval of our directors who are not interested persons and, in some cases, the prior approval of the SEC.

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

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

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

Taxation as a Regulated Investment Company

In connection with the filing of our 2020 annual tax return, we will elect to be treated and to qualify each year thereafter as a RIC for U.S. federal income tax purposes. As a RIC, we generally will not have to pay corporate-level U.S. federal income taxes on any ordinary income or capital gains that we distribute to stockholders as distributions. To qualify as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements (as described below). In addition, in order to obtain RIC tax benefits, we must distribute to stockholders, for each taxable

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year, at least 90% of our “investment company taxable income,” which is generally its ordinary income plus the excess of realized net short-term capital gains over realized net long-term capital losses (the “Annual Distribution Requirement”).

If we:

• qualify as a RIC; and

• satisfy the Annual Distribution Requirement,

then we will not be subject to U.S. federal income tax on the portion of income we distribute (or are deemed to distribute) to stockholders. We will be subject to U.S. federal income tax at the regular corporate rates on any income or capital gains not distributed (or deemed distributed) to stockholders.

We are subject to a 4% nondeductible U.S. federal excise tax on certain undistributed income unless we distribute in a timely manner an amount at least equal to the sum of (i) 98% of net ordinary income for each calendar year, (ii) 98.2% of the amount by which capital gains exceeds capital losses (adjusted for certain ordinary losses) for the one-year period ending October 31 in that calendar year and (iii) certain undistributed amounts from previous years on which we paid no U.S. federal income tax (the “Excise Tax Avoidance Requirement”). While we intend to distribute any income and capital gains in order to avoid imposition of this 4% U.S. federal excise tax, we may not be successful in avoiding entirely the imposition of this tax. In that case, we will be liable for the tax only on the amount by which we do not meet the foregoing distribution requirement.

In order to qualify as a RIC for U.S. federal income tax purposes, we must, among other things:

• continue to qualify as a BDC under the 1940 Act at all times during each taxable year;

• derive in each taxable year at least 90% of gross income from dividends, interest, payments with respect to loans of certain securities, gains from the sale of stock or other securities or foreign currencies, net income from certain “qualified publicly traded partnerships,” or other income derived with respect to the business of investing in such stock or securities (the “90% Income Test”); and

• diversify our holdings so that at the end of each quarter of the taxable year:

o at least 50% of the value of our assets consists of cash, cash equivalents, U.S. Government securities, securities of other RICs, and other securities if such other securities of any one issuer do not represent more than 5% of the value of our assets or more than 10% of the outstanding voting securities of the issuer; and

o no more than 25% of the value of our assets is invested in the (i) securities, other than U.S. government securities or securities of other RICs, of one issuer, (ii) securities of two or more issuers that are controlled, as determined under applicable Code rules, by us and that are engaged in the same or similar or related trades or businesses or (iii) securities of one or more “qualified publicly traded partnerships” (the “Diversification Tests”).

We may be required to recognize taxable income in circumstances in which we do not receive cash. For example, if we hold debt obligations that are treated under applicable tax rules as having original issue discount (such as debt instruments with payment-in-kind, or PIK, interest or, in certain cases, increasing interest rates or issued with warrants), we must include in income each year a portion of the original issue discount that accrues over the life of the obligation, regardless of whether cash representing such income is received by us in the same taxable year. We may also have to include in income other amounts that we have not yet received in cash, such as PIK interest and deferred loan origination fees that are paid after origination of the loan. Because any original issue discount or other amounts accrued will be included in our investment company taxable income for the year of accrual, we may be required to make a distribution to

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stockholders in order to satisfy the Annual Distribution Requirement, even though we will not have received the corresponding cash amount.

Although we do not presently expect to do so, we are authorized to borrow funds, to sell assets and to make taxable distributions of our stock and debt securities in order to satisfy distribution requirements. Our ability to dispose of assets to meet distribution requirements may be limited by (i) the illiquid nature of our portfolio and/or (ii) other requirements relating to our status as a RIC, including the Diversification Tests. If we dispose of assets in order to meet the Annual Distribution Requirement or the Excise Tax Avoidance Requirement, we may make such dispositions at times that, from an investment standpoint, are not advantageous. If we are unable to obtain cash from other sources to satisfy the Annual Distribution Requirement, we may fail to qualify for tax treatment as a RIC and become subject to tax as an ordinary corporation.

Under the 1940 Act, we are not permitted to make distributions to our stockholders while debt obligations and other senior securities are outstanding unless certain “asset coverage” tests are met. If we are prohibited from making distributions, we may fail to qualify for tax treatment as a RIC and become subject to tax as an ordinary corporation.

Certain of our investment practices may be subject to special and complex U.S. federal income tax provisions that may, among other things: (i) disallow, suspend or otherwise limit the allowance of certain losses or deductions; (ii) convert lower taxed long-term capital gain into higher taxed short-term capital gain or ordinary income; (iii) convert an ordinary loss or a deduction into a capital loss (the deductibility of which is more limited); (iv) cause us to recognize income or gain without a corresponding receipt of cash; (v) adversely affect the time as to when a purchase or sale of securities is deemed to occur; (vi) adversely alter the characterization of certain complex financial transactions; and (vii) produce income that will not be qualifying income for purposes of the 90% Income Test described above. We will monitor our transactions and may make certain tax decisions in order to mitigate the potential adverse effect of these provisions.

A RIC is limited in its ability to deduct expenses in excess of its “investment company taxable income” (which is, generally, ordinary income plus the excess of net short-term capital gains over net long-term capital losses). If our expenses in a given year exceed investment company taxable income, we would experience a net operating loss for that year. However, a RIC is not permitted to carry forward net operating losses to subsequent years. In addition, expenses can be used only to offset investment company taxable income, not net capital gain. Due to these limits on the deductibility of expenses, we may, for tax purposes, have aggregate taxable income for several years that we are required to distribute and that is taxable to stockholders even if such income is greater than the aggregate net income we actually earned during those years. Such required distributions may be made from cash assets or by liquidation of investments, if necessary. We may realize gains or losses from such liquidations. In the event we realize net capital gains from such transactions, a stockholder may receive a larger capital gain distribution than it would have received in the absence of such transactions.

Failure to Qualify as a RIC

If we have previously qualified as RIC, but are subsequently unable to qualify for treatment as a RIC, and certain cure provisions are not met, we would be subject to tax on all of our taxable income (including net capital gains) at regular corporate rates. We would not be able to deduct distributions to stockholders, nor would distributions be required to be made. Distributions, including distributions of net long-term capital gain, would generally be taxable to stockholders as ordinary dividend income to the extent of our current and accumulated earnings and profits. Subject to certain limitations under the Code, corporate stockholders would be eligible to claim a dividend received deduction with respect to such dividend and non-corporate stockholders would generally be able to treat such distributions as “qualified dividend income,” which is subject to reduced rates of U.S. federal income tax. Distributions in excess of current and accumulated earnings and profits would be treated first as a return of capital to the extent of the stockholder’s tax basis, and any remaining distributions would be treated as a capital gain. In order to requalify as a RIC, in addition to the other requirements discussed above, we would be required to distribute all previously undistributed earnings attributable to the period we failed to qualify as a RIC by the end of the first year that we intend to requalify as a RIC. If we fail to requalify as a RIC for a period greater than two taxable years, we may be subject to regular corporate tax on any net built-in gains with respect to certain assets ( i.e. , the excess of the aggregate gains, including items of income, over

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aggregate losses that would have been realized with respect to such assets if we had been liquidated) that we elect to recognize on requalification or when recognized over the next five years.

Corporate Information

Our principal executive offices are located at 3075 W. Ray Rd, Suite 525, Chandler, Arizona 85226. We maintain a website on the Internet at www.trincapinvestment.com. We make available, free of charge, on our website our proxy statement, annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission, or SEC. Information contained on our website is not incorporated by reference into this annual report on Form 10-K, and you should not consider that information to be part of this annual report on Form 10-K.

We file annual, quarterly and current periodic reports, proxy statements and other information with the SEC, under the Securities Exchange Act of 1934, as amended, or the Exchange Act. In addition, the SEC maintains an Internet website, at www.sec.gov, that contains reports, proxy and information statements, and other information regarding issuers, including us, who file documents electronically with the SEC.

Item 1A. Risk Factors

You should carefully consider the risks and uncertainties described below, together with all of the other information in this annual report on Form 10-K, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes. Our business, operating results, financial condition, or prospects could be materially and adversely affected by any of these risks and uncertainties. If any of these risks occurs, the trading price of our common stock could decline, and you might lose all or part of your investment. Our business, operating results, financial performance, or prospects could also be harmed by risks and uncertainties not currently known to us or that we currently do not believe are material .

Summary of Principal Risk Factors

The following is a summary of the principal risks that you should carefully consider before investing in our securities and is followed by a more detailed discussion of the material risks related to us and an investment in our securities.

We are subject to risks related to our business and structure, including, but not limited to the following:

● We have a limited operating history as a BDC.

● We depend upon our senior management team and investment professionals, including the members of our Investment Committee, for our success.

● Our business model depends to a significant extent upon strong referral relationships with venture capital sponsors, and our inability to develop or maintain these relationships, or the failure of these relationships to generate investment opportunities, could adversely affect our business.

● Global economic, political and market conditions, including uncertainty about the financial stability of the United States, could have a significant adverse effect on our business, financial condition and results of operations.

● Regulations governing our operations as a BDC affect our ability to and the way in which we raise additional capital.

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

● Provisions in our credit facilities may limit our operations.

● We are exposed to risks associated with changes in interest rates, including the decommissioning of LIBOR.

● Most or a substantial portion of our portfolio investments will be recorded at fair value as determined in good faith by the Board and, as a result, there may be uncertainty as to the value of our portfolio investments.

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● The Board may change our investment objective, operating policies and strategies without prior notice or stockholder approval, the effects of which may be adverse.

● Any failure in cyber security systems, as well as the occurrence of events unanticipated in our disaster recovery systems and management continuity planning, could impair our ability to conduct business effectively.

We are subject to risks related to our investments, including, but not limited to the following:

● Our investments are very risky and highly speculative and a lack of liquidity in our investments may adversely affect us.

● Our investment strategy focuses on growth stage companies which are subject to many risks, including dependence on the need to raise additional capital, volatility, intense competition, shortened product life cycles, changes in regulatory and governmental programs, periodic downturns, below investment grade ratings, which could cause you to lose all or part of your investment in us.

● The equipment financing industry is highly competitive and competitive forces could adversely affect the financing rates and resale prices that we may realize on our equipment financing investment portfolio and the prices that we have to pay to acquire our investments.

● The COVID-19 pandemic has caused severe disruptions in the global economy and has disrupted financial activity in the areas in which we or our portfolio companies operate.

● Economic recessions or downturns could impair our portfolio companies and harm our operating results.

● Our investments are geographically concentrated, which may result in a single occurrence in a particular geographic area having a disproportionate negative impact on our investment portfolio.

● We may be subject to risks associated with our investments in senior loans, junior debt securities and covenant-lite loans.

Risks related to an investment in our securities include, but are not limited to, the following:

● We may not be able to pay distributions, our distributions may not grow over time and/or a portion of our distributions may be a return of capital.

● Investing in our common stock may involve an above-average degree of risk, including the risk of dilution.

● The market value of our securities may fluctuate significantly, which may make it difficult to resell our securities, including at an attractive price.

● We may borrow money, which may magnify the potential for gain or loss and may increase the risk of investing in us.

● Our 2025 Notes and our 6.00% Convertible Notes due 2025 (the “Convertible Notes”) are each unsecured and therefore effectively subordinated to any secured indebtedness we currently have outstanding or may incur in the future and rank pari passu with, or equal to, all outstanding and future unsecured unsubordinated indebtedness issued by us and our general liabilities.

We are subject to risks related to U.S. federal income tax including, but not limited to, the following:

● We will be subject to corporate-level U.S. federal income tax if we are unable to qualify or maintain qualification as a RIC under Subchapter M of the Code.

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

Risks R elated to Our Business and Structu r e

W e ha v e limited ope r ating history as a BD C .

We were formed on August 12, 2019 to acquire the assets of the Legacy Funds and have limited operating history as a combined entity or as a BDC. As a result, we are subject to the business risks and uncertainties associated with recently formed businesses, including the risk that we will not achieve our investment objective and the value of a stockholder’s investment could decline substantially or become worthless. In addition, we may be unable to generate sufficient revenue from our operations to make or sustain distributions to our stockholders.

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

W e depend upon our senior mana g ement team and i n v estment p r ofessional s , including the membe r s of the I n v estment Committe e , for our succes s .

Our a bility to achi ev e our i n v estment object iv e and to m a k e distri b utions to our stockholders depends upon the per f o r mance of our senior man a gement. W e depend on the i n v estment e xpertis e , skill and net w o r k of b usiness contacts of our senior man a gement team and i n v estment p r ofession a l s , including the members of the I n v estment Committe e , w ho e v a lu a t e , negoti a t e , structu r e , ex ecut e , monitor and service our i n v estment s . Our success depends to a signi f icant e xtent on the conti n ued service and coo r din a tion of these ind i vidu a l s . The departu r e of a n y of these ind i vidu a ls or competing demands on their time in the futu r e could h a v e a m a teri a l a d v erse e f fect on our a bility to achi ev e our i n v estment object iv e . Furthe r , if these ind i vidu a ls do not maintain their e xisting re l a tionships with f inanci a l institution s , sponsors and i n v estment p r ofession a ls and do not d eve lop n e w re l a tionships with other sou r ces of i n v estment opportunitie s , w e m a y not be a b le to g r o w our i n v estment port f olio or achi ev e our i n v estment object iv e . This could h a v e a m a teri a l a d v erse e f fect on our f inanci a l condition and r esults of ope r a tion s .

Our business mod e l depends to a significant e xtent upon st r ong r efer r al r e lationships with v entu r e capital sponso r s , and our inability to de ve lop or maintain these r e lationship s , or the failu r e of these r e lationships to generate i n v estment opportunitie s , could ad v e r s e ly affect our busines s .

We expect that members of our management team will maintain their relationships with venture capital sponsors, and we will rely to a significant extent upon these relationships to provide us with our deal flow. If we fail to maintain our existing relationships, our relationships become strained as a result of enforcing our rights with respect to non-performing investments in protecting our investments or we fail to develop new relationships with other firms or sources of investment opportunities, then we will not be able to grow our investment portfolio. In addition, persons with whom members of our management team have relationships are not obligated to provide us with investment opportunities and, therefore, there is no assurance that such relationships will lead to the origination of debt or other investments.

Our financial condition and r esults of ope r ations depend on our ability to mana g e our business effecti v e l y .

Our a bility to achi ev e our i n v estment object iv e and g r o w depends on our a bility to man a ge our b usines s . This depend s , in turn, on our a bility to identif y , i n v est in and monitor companies th a t meet our i n v estment criteria. The achi ev ement of our i n v estment object iv e depends upon the ex ecution of our i n v estment p r ocess and our access to f inancing on accept a b le te r m s . Our senior origin a tion p r ofession a ls and other i n v estment personn e l m a y be c a lled upon to p ro vide man a geri a l assistance to our port f olio companie s . These act i vities m a y dist r act them or sl o w our r a te of i n v estment. A n y failu r e to man a ge our b usiness and our futu r e g r o wth e f fect ive l y could h a v e a m a teri a l a d v erse e f fect on our b usines s , f inanci a l condition, r esults of ope r a tions and p r ospect s . Our r esults of ope r a tions depend on ma n y factor s , including the a v ail a bility of opportunities f or i n v estment, r eadi l y accessi b le short and long-te r m funding a ltern a t i v es in the f inanci a l ma r k ets and economic condition s . Furthe r mo r e , if w e cannot successful l y ope r a te our b usiness or implement our i n v estment policies and st r a tegie s , it could neg a t ive l y impact our a bility to p a y distri b utions or other distri b utions and y ou m a y lose a ll or part of y our i n v estment.

W e a r e subject to certain r e gulatory r estrictions that may ad v e r s e ly affect our busines s .

As an intern a l l y man a ged BD C , the si z e and c a tegories of our assets under man a gement a r e limited, and w e will be un a b le to o f fer as wide a v ariety of f inanci a l p r oducts to p r ospect iv e port f olio companies and sponsors (potenti a l l y

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limiting the si z e and d iv ersi f ic a tion of our asset base). W e the r e f o r e m a y not achi e v e e f f iciencies of sc a le and g r e a ter man a gement r esou r ces a v ail a b le to e xtern a l l y man a ged BDC s .

A d dition a l l y , as an intern a l l y man a ged BD C , our a bility to o f fer mo r e competit iv e and f l e xi b le compens a tion structu r e s , such as o f fering both a p r o f it-sharing plan and a long-te r m incent iv e plan, is subject to the limit a tions imposed b y the 1940 Act, w hich m a y limit our a bility to a tt r act and r etain t a lented i n v estment man a gement p r ofession a l s . As such, these limit a tions c ould inhibit our a bility to g r o w , pursue our b usiness plan and a tt r act and r etain p r ofession a l t a lent, a n y or a ll of w hich m a y h a v e a neg a t iv e impact on our b usines s , f inanci a l condition and r esults of ope r a tion s .

Y ou will not ha v e the opportunity to e v aluate the economic merit s , t r ansaction terms or other financial or ope r ational data concerning our i n v estments prior to making an investment in us .

Y ou will not h a v e the opportunity to e v a lu a te the economic merit s , t r ansaction te r ms or other f inanci a l or ope r a tion a l d a ta concerning our i n v estments prior to making an investment in us. You must rely on our investment professionals and the Boa r d to implement our i n v estment policie s , to e v a lu a te our i n v estment opportunities and to structu r e the te r ms of our i n v estment s . Because i n v estors a r e not a b le to e v a lu a te our i n v estments in a dv ance of making an investment in us, an i n v estment in us m a y entail mo r e risk than other types of o f fering s . This a d dition a l risk m a y hinder y our a bility to achi ev e y our o wn person a l i n v estment object iv e re l a ted to port f olio d iv ersi f ic a tion, risk-adjusted i n v estment r eturns and other object i v e s .

Our mana g ement team and/or membe r s of the I n v estment Committee ma y , f r om time to tim e , possess material nonpu b lic information, limiting our i n v estment disc r etion.

Our man a gement team and/or the members of the I n v estment Committee m a y ser v e as di r ectors o f , or in a similar c a pacity with, companies in w hich w e i n v est, the securities of w hich a r e pu r chased or sold on our b e h a l f . In the ev ent th a t m a teri a l nonpu b lic in f o r m a tion is obtained with r espect to such companie s , or w e become subject to t r ading r estrictions under the intern a l t r ading policies of those companies or as a r esult of a pplic a b le l a w or r egul a tion s , w e could be p r ohibited f or a period of time f r om pu r chasing or s e lling the securities of such companie s , and this p r ohibition m a y h a v e a m a teri a l a d v erse e f fect on u s .

W e ope r ate in a highly competiti v e ma r k et for i n v estment opportunitie s , w hich could r educe r eturns and r esult in losse s .

Our competitors include both e xisting and n e wl y f o r med equity and d e bt f ocused pu b lic and pr i v a te fund s , other BDC s , i n v estment bank s , v entu r e-oriented comme r ci a l bank s , comme r ci a l f inancing companies and, to the e xtent they p ro vide an a ltern a t iv e form of f inancing, pr i v a te equity and hedge fund s . Ma n y of our competitors a r e substanti a l l y la r ger and h a v e conside r a b l y g r e a ter f inanci a l, technic a l and ma r k eting r esou r ces than u s . F or e xampl e , some competitors m a y h a v e a l o w er cost of c a pit a l and access to funding sou r ces (including deposits) th a t a r e not a v ail a b le to u s . In a d dition, some of our competitors m a y h a v e higher risk tole r ances or di f fe r ent risk assessments than w e h a v e . Furthe r mo r e , ma n y of our competitors a r e not subject to the r egul a tory r estrictions th a t the 1940 Act imposes on us as a BDC or to the distri b ution and other r equi r ements w e m ust s a tisfy to maintain our a bility to be subject to tax as a RI C . These cha r acteristics could a ll o w our competitors to consider a wider v ariety of i n v estment s , est a b lish mo r e re l a tionships and o f fer better pricing and mo r e f l e xi b le structuring than w e a r e a b le to o f fe r .

The competit iv e p r essu r es w e face m a y h a v e a m a teri a l a d v erse e f fect on our f inanci a l condition, r esults of ope r a tions and cash f l o w s . W e b e li ev e th a t some competitors m a y m a k e loans with r a tes th a t a r e compa r a b le or l o w er than our r a te s . W e m a y lose some i n v estment opportunities if w e do not m a tch our competitors’ pricing, te r ms and structu r e . H o wev e r , if w e m a tch our competitors’ pricing, te r ms and structu r e , w e m a y e xperience dec r eased net inte r est incom e , l o w er yi e lds and inc r eased risk of c r edit los s . As a r esult of this competition, w e m a y not be a b le to t a k e a dv ant a ge of a tt r act iv e i n v estment opportunities f r om time to tim e , and w e m a y not be a b le to identify and m a k e i n v estments th a t a r e consistent with our i n v estment object iv e .

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In a d dition, w e b e li ev e a signi f icant part of our competit iv e a dv ant a ge stems f r om the fact th a t the ma r k et f or i n v estments in sm a ll, fast-g r o wing, pr i v a te companies is underser v ed b y t r adition a l comme r ci a l banks and other f inancing sou r ce s . A signi f icant inc r ease in the n umber and/or the si z e of our competitors i n this ta r get ma r k et could f o r ce us to accept less a tt r act iv e i n v estment te r m s .

T he capital ma r k ets a r e cur r ently in a period of disruption and economic uncertaint y . Such ma r k et conditions ha v e materially and ad v e r s e ly affected d e bt and equity capital ma r k et s , w hich ha v e had, and may continue to ha v e , a n e g ati v e impact on our business and ope r ation s .

The U . S . c a pit a l ma r k ets h a v e e xperienced e xt r eme v ol a tility and disruption f oll o wing the glob a l outb r e a k of C O VID-19 th a t began in December 2019, as e videnced b y the v ol a tility in glob a l stock ma r k ets as a r esult o f , among other thing s , uncertainty sur r ounding the C O VID-19 pandemic and the f luctu a ting price of commodities such as oil. Despite actions of the U . S . fede r a l g o v ernment and f o r eign g o v ernment s , these ev ents h a v e c ontri b uted to unpredictable gene r a l economic conditions th a t a r e m a teri a l l y and a d v ers e l y impacting the b r oader f inanci a l and c r edit ma r k ets and r educing the a v ail a bility of d e bt and equity c a pit a l f or the ma r k et as a w hol e . These conditions could conti n ue f or a p r olonged period of time or w orsen in the futu r e .

G iv en the ongoing and d ynamic n a tu r e of the ci r cumstance s , it is di f f icult to p r edict the full impact of the C O VID-19 pandemic on our b usines s . The e xtent of such impact will depend on futu r e d e v e lopment s , w hich a r e high l y uncertain, including w hen the coronavirus can be cont r olled and a b a ted and whether there will be additional economic shutdowns . As the r esult of the C O VID-19 pandemic and the re l a ted a d v erse loc a l and n a tion a l economic consequence s , w e could be subject to a n y of the f oll o wing risk s , a n y of w hich could h a v e a m a teri a l, a d v erse e f fect on our b usines s , f inanci a l condition, liquidit y , and r esults of ope r a tions:

• Cur r ent ma r k et conditions m a y m a k e it di f f icult to r aise equity c a pit a l becaus e , subject to some limited e x ception s , as a BD C , w e a r e gene r a l l y not a b le to issue a d dition a l sha r es of our common stock a t a price less than the N A V per sha r e without f irst obtaining a pp ro v a l f or such issuance f r om our stockholders and our independent di r ector s . In a d dition, these ma r k et conditions m a y m a k e it di f f icult to access or obtain n e w ind e btedness with similar te r ms to our e xisting ind e btednes s .

• Signi f icant changes or v ol a tility in the c a pit a l ma r k ets m a y a lso h a v e a neg a t iv e e f fect on the v a lu a tions of our i n v estment s . W hile most of our i n v estments a r e not pu b lic l y t r aded, a pplic a b l e accounting standa r ds r equi r e us to assume as part of our v a lu a tion p r ocess th a t our i n v estments a r e sold in a princip a l ma r k et to ma r k et participants ( ev en if w e plan on holding an i n v estment th r ough its m a turity).

• Signi f icant changes in the c a pit a l ma r k et s , such as the r ecent disruption in economic act i vity caused b y the C O VID-19 pandemic, h a v e a d v ers e l y a f fected, and m a y conti n ue to a d v ers e l y a f fect, the pace of our i n v estment act i vity and economic act i vity gene r a l l y . A d dition a l l y , the r ecent disruption in economic act i vity caused b y the C O VID-19 pandemic has had, and m a y conti n ue to h a v e , a neg a t i v e e f fect on the potenti a l f or liquidity ev ents i n v olving our i n v estment s . The illiquidity of our i n v estments m a y m a k e it di f f icult f or us to s e ll such i n v estments to access c a pit a l if r equi r ed, and as a r esult, w e could r e a li z e signi f icant l y less than the v a lue a t w hich w e h a v e r eco r ded our i n v estments if w e w e r e r equi r ed to s e ll them f or liquidity purpose s . An in a bility to r aise or access c a pit a l, and a n y r equi r ed s a le of a ll or a portion of our i n v estments as a r esult, could h a v e a m a teri a l a d v erse e f fect on our b usines s , f inanci a l condition or r esults of ope r a tion s .

T he cur r ent period of capital ma r k ets disruption and economic uncertainty may ma k e it difficult to e xtend the maturity o f , or refinance , our e xisting ind e btedness or obtain new ind e btedness and a n y failu r e to do so could ha v e a material ad v e r se effect on our busines s , financial condition or r esults of ope r ation s .

Cur r ent ma r k et conditions m a y m a k e it di f f icult to e xtend the m a turity of or r e f inance our e xisting ind e btedness or obtain n e w ind e btedness with similar te r ms and a n y failu r e to do so could h a v e a m a teri a l a d v erse e f fect on our b usines s . The d e bt c a pit a l th a t will be a v ail a b le to us in the futu r e , if a t a ll, m a y be a t a higher cost and on less f a v o r a b le te r ms and conditions than w h a t w e cur r ent l y e xperienc e , including being a t a higher cost in rising r a te e n vi r onment s . If w e a r e un a b le to r aise or r e f inance d e bt, then our equity i n v estors m a y not bene f it f r om the potenti a l f or inc r eased r eturns on equity r esulting f r om l ev e r a ge and w e m a y be limited in our a bility to m a k e n e w

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commitments or to fund e xisting commitments to our port f olio companie s . An in a bility to e xtend the m a turity o f , or r e f inanc e , our e xisting ind e btedness or obtain n e w ind e btedness could h a v e a m a teri a l a d v erse e f fect on our b usines s , f inanci a l condition or r esults of ope r a tion s .

Capital ma r k ets may e xperience periods of disruption and instabilit y . Such ma r k et conditions may materially and ad v e r s e ly affect d e bt and equity capital ma r k ets in the United States and ab r oad, w hich may ha v e a n e g ati v e impact on our business and ope r ation s .

Fr om time-to-tim e , c a pit a l ma r k ets m a y e xperience periods of disruption and inst a bilit y . During such periods of ma r k et disruption and inst a bilit y , w e and other companies in the f inanci a l services sector m a y h a v e limited acces s , if a v ail a b l e , to a ltern a t iv e ma r k ets f or d e bt and equity c a pit a l. Equity c a pit a l m a y be di f f icult to r aise becaus e , subject to some limited e x ceptions w hich will a pp l y to us as a BD C , w e will gene r a l l y not be a b le to issue a d dition a l sha r es of our common stock a t a price less than net asset v a lue without f irst obtaining a pp ro v a l f or such issuance f r om our stockholders and our independent di r ector s . In a d dition, our a bility to incur ind e btedness (including b y issuing p r efer r ed stock) is limited b y a pplic a b le r egul a tions such th a t our asset c o v e r a g e , as de f ined in the 1940 Act, m ust equ a l a t least 150% immedi a t e l y after each time w e incur ind e btednes s . The d e bt c a pit a l th a t will be a v ail a b l e , if a t a ll, m a y be a t a higher cost and on less f a v o r a b le te r ms and conditions in the futu r e . A n y in a bility to r aise c a pit a l could h a v e a neg a t iv e e f fect on our b usines s , f inanci a l condition and r esults of ope r a tion s .

G iv en the e xt r eme v ol a tility and disloc a tion in the c a pit a l ma r k ets o v er the past s ev e r a l y ear s , ma n y BDCs h a v e faced, and m a y in the futu r e fac e , a ch a llenging e n vi r onment in w hich to r aise or access c a pit a l. In a d dition, signi f icant changes in the c a pit a l ma r k et s , including the e xt r eme v ol a tility and disruption o v er the past s ev e r a l y ear s , has had, and m a y in the futu r e h a v e , a neg a t iv e e f fect on the v a lu a tions of our i n v estments and on the potenti a l f or liquidity ev ents i n v olving these i n v estment s . W hile most of our i n v estments a r e not pu b lic l y t r aded, a pplic a b le accounting standa r ds r equi r e us to assume as part of our v a lu a tion p r ocess th a t our i n v estments a r e sold in a princip a l ma r k et to ma r k et participants ( ev en if w e plan on holding an i n v estment th r ough its m a turity). As a r esult, v ol a tility in the c a pit a l ma r k ets can a d v ers e l y a f fect our i n v estment v a lu a tion s . Furthe r , the illiquidity of our i n v estments m a y m a k e it di f f icult f or us to s e ll such i n v estments if r equi r ed and to v a lue such i n v estment s . Consequent l y , w e m a y r e a li z e signi f icant l y less than the v a lue a t w hich w e carry our i n v estment s . An in a bility to r aise c a pit a l, and a n y r equi r ed s a le of our i n v estments f or liquidity purpose s , could h a v e a m a teri a l a d v erse impact on our b usines s , f inanci a l condition or r esults of ope r a tion s . In a d dition, a p r olonged period of ma r k et illiquidity m a y cause us to r educe the v olume of loans and d e bt securities w e origin a te and/or fund and a d v ers e l y a f fect the v a lue of our port f olio i n v estment s , w hich could h a v e a m a teri a l and a d v erse e f fect on our b usines s , f inanci a l condition, r esults of ope r a tions and cash f l o w s .

W e may need to r aise additional capital to g ro w because w e must distribute most of our incom e .

W e m a y need a d dition a l c a pit a l to fund n e w i n v estments and g r o w our port f olio of i n v estments th r ough pu b lic and/or pr i v a te o f ferings of both d e bt and equit y . Unf a v o r a b le economic conditions could inc r ease our funding costs or r esult in a decision b y lenders not to amend outstanding c r edit facilities or e xtend c r edit to u s . A r eduction in the a v ail a bility of n e w c a pit a l could limit our a bility to g r o w . In a d dition, w e a r e r equi r ed to distri b ute each tax a b le y ear an amount a t least equ a l to 90% of our “i n v estment compa n y tax a b le income” (i. e ., our net o r dinary income and net short-te r m c a pit a l gains in e x cess of net long-te r m c a pit a l losse s , if a n y) to our stockholders to conti n ue to be ta x ed as a RI C . As a r esult, these earnings a r e not a v ail a b le to fund n e w i n v estment s .

W e could r aise capital th r ough other chann e l s .

The Boa r d m a y dete r mine to r aise a d dition a l c a pit a l th r ough other chann e l s , including th r ough pr i v a te or pu b lic o f fering s . C a pit a l r aised th r ough other chann e ls could subject us to a d dition a l r egul a tory r equi r ement s . These a d dition a l p ro visions could a f fect our stockholders and limit our a bility to t a k e certain action s . In a d dition, if c a pit a l is r aised th r ough other chann e l s , w e w ould h a v e to use f inanci a l and other r esou r ces to f ile a n y r equi r ed r egist r a tion st a tements and to comp l y with a n y a d dition a l r egul a tory r equi r ement s .

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R e gulations g ov erning our ope r ation as a BDC affect our ability to and the w ay in w hich w e r aise additional capital.

W e issued the 2025 Notes and the Co n v erti b le Note s , and assumed the C r edit Facility th r ough our w hol l y o wned subsidiar y , T rinity Funding 1, L L C , and m a y issue other d e bt securities or p r efer r ed stock and/or bor r o w money f r om other banks or other f inanci a l institution s , w hich w e r efer to collect ive l y as “senior securitie s , ” up to the maxi m um amount pe r mitted b y the 1940 Act. Under the p ro visions of the 1940 Act, w e a r e pe r mitted as a BDC to issue senior securities in amounts such th a t our asset c o v e r a ge r a ti o , as de f ined in the 1940 Act, equ a ls a t least 150% (if certain r equi r ements a r e met) of tot a l assets less a ll li a bilities and ind e btedness not r ep r esented b y senior securities immedi a t e l y after each issuance of senior securitie s . W e h a v e s a tis f ied the r equi r ements to inc r ease our asset c o v e r a ge r a tio to 150%, including stockholder and Boa r d a pp ro v a l. Under a 150% asset c o v e r a ge r a ti o , w e could potenti a l l y bor r o w $2 f or i n v estment purposes of ev ery $1 of i n v estor equit y .

If the v a lue of our assets decline s , w e m a y be un a b le to s a tisfy this test. If th a t h a ppen s , w e m a y be r equi r ed to s e ll a portion of our i n v estments and, depending on the n a tu r e of our l ev e r a g e , r ep a y a portion of our ind e btedness a t a time w hen such s a les m a y be disa dv ant a geou s . This could h a v e a m a teri a l a d v erse e f fect on our ope r a tions, and w e m a y not be a b le to m a k e distri b utions in an amount su f f icient to be subject to tax a tion as a RI C , or a t a ll. See “— Risks R e l a ted to our Business and Structu r e” W e m a y bor r o w mone y , w hich m a y m a gnify the potenti a l f or gain or loss and m a y inc r ease the risk of i n v esting in u s .” In a d dition, issuance of securities could dilute the pe r cent a ge o wnership of our cur r ent stockholders in u s .

No person or entity f r om w hich w e bor r o w money will h a v e a v eto p o w er or a v ote in a pp ro ving or changing a n y of our fundament a l policie s . If w e issue p r efer r ed stock, the p r efer r ed stock w ould r ank “senior” to common stock in our c a pit a l structu r e , p r efer r ed stockholders w ould h a v e sepa r a te v oting rights on certain m a tters and might h a v e other right s , p r efe r ences or pr i vileges mo r e f a v o r a b le than those of our common stockholder s , and the issuance of p r efer r ed stock could h a v e the e f fect of d e l a ying, deferring or p rev enting a t r ansaction or a change of cont r ol th a t might i n v ol v e a p r emium price f or holders of our common stock or otherwise be in y our best inte r est. Holders of our common stock will di r ect l y or indi r ect l y bear a ll of the costs associ a ted with o f fering and servicing a n y p r efer r ed stock th a t w e issu e . In a d dition, a n y inte r ests of p r efer r ed stockholders m a y not necessari l y a lign with the inte r ests of holders of our common stock and the rights of holders of sha r es of p r efer r ed stock to r ece iv e distri b utions w ould be senior to those of holders of sha r es of our common stock.

In addition, while any senior securities remain outstanding, we will be required to make provisions to prohibit any dividend distribution to our stockholders or the repurchase of such securities or shares unless we meet the applicable asset coverage ratios at the time of the dividend distribution or repurchase. We will also be permitted to borrow amounts up to 5% of the value of our total assets for temporary or emergency purposes, which borrowings would not be considered senior securities.

W e may bor ro w mon e y , w hich may magnify the potential for g ain or loss and may inc r ease the risk of i n v esting in u s .

As part of our b usiness st r a teg y , w e issued the 2025 Notes and the Co n v erti b le Note s , and assumed the C r edit Facility th r ough our w hol l y owned subsidiar y , T rinity Funding 1 , L L C , and w e m a y bor r o w f r om and issue senior d e bt securities to bank s , insu r ance companies and other lenders or i n v estor s . Holders of these senior securities or other c r edit facilities will h a v e claims on our assets th a t a r e superior to the claims of our stockholder s . L ev e r a ge m a gni f ies the potenti a l f or loss on i n v estments in our ind e btedness and on i n v ested equity c a pit a l. As w e use l ev e r a ge to parti a l l y f inance our i n v estment s , y ou will e xperience inc r eased risks of i n v esting in our securitie s . If the v a lue of our assets inc r ease s , then l ev e r a ging w ould cause the net asset v a lue a ttri b ut a b le to our common stock to inc r ease mo r e sharp l y than it w ould h a v e had w e not l ev e r a ged. Co n v ers e l y , if the v a lue of our assets dec r ease s , l ev e r a ging w ould cause net asset v a lue to decline mo r e sharp l y than it otherwise w ould h a v e had w e not l ev e r a ged our b usines s . Simila r l y , a n y inc r ease in our income in e x cess of inte r est p a y a b le on the bor r o w ed funds w ould cause our net i n v estment income to inc r ease mo r e than it w ould without the l ev e r a g e , w hile a n y dec r ease in our income w ould cause net i n v estment income to decline mo r e sharp l y than it w ould h a v e had w e not bor r o w ed. Such a decline could neg a t ive l y a f fect our a bility to p a y common stock distri b ution s , scheduled d e bt p a yments or other p a yments re l a ted to our securitie s . Our a bility to service a n y bor r o wings th a t w e incur will depend la r g e l y on our f inanci a l per f o r mance and will be subject to p re v ailing economic conditions and competit iv e p r essu r e s . L ev e r a ge is gene r a l l y conside r ed a specul a t iv e i n v estment techniqu e .

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The f oll o wing t a b le illust r a tes the e f fect of l ev e r a ge on r eturns f r om an i n v estment in our common stock assuming v arious an n u a l r eturns on our port f oli o , net of e xpense s . L ev e r a ge gene r a l l y m a gni f ies the r eturn of stockholders w hen the port f olio r eturn is posit iv e and m a gni f ies their losses w hen the port f olio r eturn is neg a t iv e . The c a lcul a tions in the t a b le b e l o w a r e h ypothetic a l, and actu a l r eturns m a y be higher or l o w er than those a ppearing in the t a b le b e l o w .


	Assumed
Return on Our Portfolio
	(Net
of Expenses)
	-10%	-5%	0%	5%	10%
Corresponding return to common stockholder (1)	(30.5)%	(18.8)%	(7.0)%	4.7%	16.4%

(1) Assumes (i) $559.7 million in tot a l asset s , (ii) $310.0 million in outstanding princip a l ind e btednes s , (iii) $238.7 million in net assets as of December 31, 2020 and ( i v) w eighted a v e r a ge inte r est r a t e , e x cluding fees (such as fees on und r a wn amounts and amortiz a tion of f inancing costs), of 5.4% as of December 31, 2020.

See “Man a gement ’ s Discussion and An a l ysis of Financi a l Condition and R esults of Ope r a tions — Financi a l Condition, Liquidity and C a pit a l R esou r ces” f or mo r e in f o r m a tion r ega r ding our bor r o wing s .

If w e fail to maintain an effecti v e system of internal cont r ol ov er financial r eportin g , w e may not be a b le to accu r at e ly r eport our financial r esults or p r e v ent f r aud. As a r esult, stockholde r s could lose confidence in our f inancial and other pu b lic r eportin g , w hich could harm our business and the ma r k et price of our common stock.

W e a r e not r equi r ed to comp l y with certain r equi r ements of the Sa r banes-Oxley Act, including the intern a l cont r ol e v a lu a tion and certi f ic a tion r equi r ements of Section 404 of th a t st a tute (“Section 404”), and will not be r equi r ed to comp l y with a ll of those r equi r ements until w e h a v e been subject to the r eporting r equi r ements of the E x change Act f or a speci f ied period of time o r , in the case of the auditor\ a ttest a tion r equi r ements of Section 404 of the Sa r banes-Oxley Act, the d a te w e a r e no longer an eme r ging g r o wth compa n y under the JOBS Act. Acco r ding l y , our intern a l cont r ols o v er f inanci a l r eporting do not cur r ent l y meet a ll of the standa r ds contempl a ted b y Section 404 th a t w e will ev entu a l l y be r equi r ed to meet. W e a r e in the p r ocess of a d d r essing our intern a l cont r ols o v er f inanci a l r eporting and a r e est a b lishing f o r m a l p r ocedu r e s , policie s , p r ocesses and p r actices re l a ted to f inanci a l r eporting and to the identi f ic a tion of k ey f inanci a l r eporting risk s , assessment of their potenti a l impact and link a ge of those risks to speci f ic a r eas and act i vities within the Compa n y .

A d dition a l l y , w e h a v e begun the p r ocess of documenting our intern a l cont r ol p r ocedu r es to s a tisfy the r equi r ements of Section 404, w hich r equi r es an n u a l man a gement assessments of the e f fect iv eness of our intern a l cont r ols o v er f inanci a l r eporting. Our independent r egiste r ed pu b lic accounting f i r m will not be r equi r ed to f o r m a l l y a ttest to the e f fect iv eness of our intern a l cont r ol o v er f inanci a l r eporting until the l a ter of the y ear f oll o wing our f irst an n u a l r eport r equi r ed to be f iled with the SEC pursuant to the E x change Act, or the d a te w e a r e no longer an eme r ging g r o wth compa n y under the JOBS Act. Because w e do not cur r ent l y h a v e comp re hens iv e document a tion of our intern a l cont r ols and h a v e not y et tested our intern a l cont r ols in acco r dance with Section 404, w e cannot conclude in acco r dance with Section 404 th a t w e do not h a v e a m a teri a l w e a kness in our intern a l cont r ol o v er f inanci a l r eporting or a combin a tion of signi f icant de f iciencies th a t could r esult in the conclusion th a t w e h a v e a m a teri a l w e a kness in our intern a l cont r ol o v er f inanci a l r eporting. As a pu b lic entit y , w e will be r equi r ed to complete our initi a l man a gement assessment of our intern a l cont r ol o v er f inanci a l r eporting in a tim e l y manne r . If w e a r e not a b le to implement the r equi r ement s o f Sectio n 40 4 i n a tim e l y manne r o r wit h adequ a t e complianc e , ou r ope r a tion s , f inanci a l r eporting, or f inanci a l r esults could be a d v ers e l y a f fected. M a tters impacting our intern a l cont r ols m a y cause us to be un a b le to r eport our f inanci a l in f o r m a tion on a tim e l y basis and the re b y subject us to a d v erse r egul a tory consequence s , including sanctions b y the SEC or viol a tions of a pplic a b le stock e x change listing rule s , and r esult in a b r each of the c o v enants under the a g r eements g o v erning a n y of our f inancing ar r angement s . The r e could a lso be a neg a t iv e r eaction in the f inanci a l ma r k ets due to a loss of i n v estor con f idence in us and the re li a bility of our f inanci a l st a tement s . Con f idence in the re li a bility of our f inanci a l st a tements could a lso su f fer if w e or our independent r egiste r ed pu b lic accounting f i r m w e r e to r eport a m a teri a l w e a kness in our intern a l cont r ol o v er f inanci a l r eporting. This could m a teri a l l y a d v ers e l y a f fect us and lead to a decline in the ma r k et price of our common stock.

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P r o visions in our c r edit facilities may limit our ope r ation s .

At our disc r etion, w e m a y utili z e the l ev e r a ge a v ail a b le under the C r edit Facility f or i n v estment and ope r a ting purpose s . A d dition a l l y , w e m a y in the futu r e enter into a d dition a l c r edit facilitie s . T o the e xtent w e bor r o w money to m a k e i n v estment s , the a pplic a b le c r edit facility m a y be bac k ed b y a ll or a portion of our loans and securities on w hich the lender will h a v e a security inte r est. W e m a y pledge up to 100% of our assets and m a y g r ant a security inte r est in a ll of our assets under the te r ms of a n y d e bt instrument w e enter into with a lende r . W e e xpect th a t a n y security inte r ests w e g r ant will be set f orth in a pledge and security a g r eement and e videnced b y the f iling of f inancing st a tements b y the a gent f or the lender s . In a d dition, w e e xpect th a t the custodian f or our securities serving as coll a te r a l f or such loan w ould include in its e lect r onic systems notices indic a ting the e xistence of such security inte r ests and, f oll o wing notice of occur r ence of an ev ent of default, if a n y , and during its conti n uanc e , will on l y accept t r ansfer instructions with r espect to a n y such securities f r om the lenders or their designe e . If w e w e r e to default under the te r ms of a n y d e bt instrument, the a gent f or the a pplic a b le lenders w ould be a b le to assume cont r ol of the timing of disposition of a n y or a ll of our assets securing such d e bt, w hich w ould h a v e a m a teri a l a d v erse e f fect on our b usines s , f inanci a l condition, r esults of ope r a tions and cash f l o w s .

In a d dition, a n y security inte r ests and/or neg a t iv e c o v enants r equi r ed b y a n y c r edit facility m a y limit our a bility to c r e a te liens on assets to secu r e a d dition a l d e bt and m a y m a k e it di f f icult f or us to r estructu r e or r e f inance ind e btedness a t or prior to m a turity or obtain a d dition a l d e bt or equity f inancing. In a d dition, if our bor r o wing base under a n y c r edit facility w e r e to dec r eas e , w e m a y be r equi r ed to secu r e a d dition a l assets in an amount su f f icient to cu r e a n y bor r o wing base de f icienc y . In the ev ent th a t a ll of our assets a r e secu r ed a t the time of such a bor r o wing base de f icienc y , w e could be r equi r ed to r ep a y a dv ances under the c r edit facility or m a k e deposits to a collection account, either of w hich could h a v e a m a teri a l a d v erse impact on our a bility to fund futu r e i n v estments and to m a k e distri b ution s .

In a d dition, w e m a y be subject to limit a tions as to h o w bor r o w ed funds m a y be used, w hich m a y include r estrictions on ge o g r a phic and industry concent r a tion s , loan si z e , p a yment f r equency and st a tu s , a v e r a ge lif e , coll a te r a l inte r ests and i n v estment r a ting s , as we ll as r egul a tory r estrictions on l ev e r a ge w hich m a y a f fect the amount of funding th a t m a y be obtained. The r e m a y a lso be certain r equi r ements re l a ting to port f olio per f o r manc e , including r equi r ed mini m um port f olio y i e ld and limit a tions on d e linquencies and cha r ge-o f f s , a viol a tion of w hich could limit further a dv ances and, in some case s , r esult in an ev ent of default. An ev ent of default under a c r edit facility could r esult in an acc e le r a ted m a turity d a te f or a ll amounts outstanding the r eunde r , w hich could h a v e a m a teri a l a d v erse e f fect on our b usiness and f inanci a l condition. This could r educe our liquidity and cash f l o w and impair our a bility to g r o w our b usines s .

A n y defaults under a c r edit facility could ad v e r s e ly affect our busines s .

In the ev ent w e default under a n y c r edit facility or other bor r o wing s , our b usiness could be a d v ers e l y a f fected as w e m a y be f o r ced to s e ll a portion of our i n v estments quick l y and p r em a tu re l y a t w h a t m a y be disa dv ant a geous prices to us in o r der to meet our outstanding p a yment o b lig a tions and/or support w o r king c a pit a l r equi r ements u nder the c r edit facilit y , a n y of w hich w ould h a v e a m a teri a l a d v erse e f fect on our b usines s , f inanci a l condition, r esults of ope r a tions and cash f l o w s . In a d dition, f oll o wing a n y such default, the a gent f or the lenders under such c r edit facility could assume cont r ol of the disposition of a n y or a ll of our asset s , including the s e lection of such assets to be disposed and the timing of such disposition, w hich w ould h a v e a m a teri a l a d v erse e f fect on our b usines s , f inanci a l condition, r esults of ope r a tions and cash f l o w s .

W e a r e exposed to risks associated with chan g es in inte r est r ate s .

Because w e m a y bor r o w money to m a k e i n v estment s , our net i n v estment income will depend, in part, upon the di f fe r ence bet w een the r a te a t w hich w e bor r o w funds and the r a te a t w hich w e i n v est those fund s . As a r esult, w e can o f fer no assu r ance th a t a signi f icant change in ma r k et inte r est r a tes will not h a v e a m a teri a l a d v erse e f fect on our net i n v estment incom e . A r eduction in the inte r est r a tes on n e w i n v estments r e l a t i v e to inte r est r a tes on cur r ent i n v estments could h a v e an a d v erse impact on our net i n v estment incom e . H o w e v e r , an inc r ease in inte r est r a tes could dec r ease the v a lue of a n y i n v estments w e hold w hich earn f i x ed inte r est r a tes and a lso could inc r ease our inte r est e xpens e , the re b y dec r easing our net incom e . Als o , an inc r ease in inte r est r a tes a v ail a b le to i n v estors could m a k e an

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i n v estment in our common stock less a tt r act iv e if w e a r e not a b le to inc r ease our distri b ution r a t e , w hich could r educe the v a lue of our common stock. Furthe r , rising inte r est r a tes could a lso a d v ers e l y a f fect our per f o r mance if such inc r eases cause our bor r o wing costs to rise a t a r a te in e x cess of the r a te th a t our i n v estments yi e ld.

In periods of rising inte r est r a te s , to the e xtent w e bor r o w money subject to a f lo a ting inte r est r a t e , our cost of funds w ould inc r eas e , w hich could r educe our net i n v estment incom e . Furthe r , rising inte r est r a tes could a lso a d v ers e l y a f fect our per f o r mance if w e hold i n v estments with f lo a ting inte r est r a te s , subject to speci f ied mini m um inte r est r a tes (such as a LIBOR f loor), w hile a t the same time eng a ging in bor r o wings subject to f lo a ting inte r est r a tes not subject to such mini m um s . In such a scenari o , rising inte r est r a tes m a y inc r ease our inte r est e xpens e , ev en though our inte r est income f r om i n v estments is not inc r easing in a cor r esponding manner as a r esult of such mini m um inte r est r a te s .

If gene r a l inte r est r a tes ris e , the r e is a risk th a t the port f olio companies in w hich w e hold f lo a ting r a te securities will be un a b le to p a y esc a l a ting inte r est amount s , w hich could r esult in a default under their loan documents with u s . Rising inte r est r a tes could a lso cause port f olio companies to shift cash f r om other p r oduct iv e uses to the p a yment of inte r est, w hich m a y h a v e a m a teri a l a d v erse e f fect on their b usiness and ope r a tions and could, o v er tim e , lead to inc r eased default s . In a d dition, rising inte r est r a tes m a y inc r ease p r essu r e on us to p ro vide f i x ed r a te loans to our port f olio companie s , w hich could a d v ers e l y a f fect our net i n v estment incom e , as inc r eases in our cost of bor r o w ed funds w ould not be accompanied b y inc r eased inte r est income f r om such f i x ed- r a te i n v estment s .

On J u l y 27, 2017, the United Kingdom ’ s Financi a l Conduct A uthority (the “FC A ”), w hich r egul a tes LIBOR, announced th a t it intends to phase out LIBOR b y the end of 2021. It is unclear if a t th a t time w hether LIBOR will cease to e xist or if n e w methods of c a lcul a ting LIBOR will be est a b lished such th a t it conti n ues to e xist after 2021. The U . S . F ede r a l R eser v e , in conjunction with the Altern a t iv e R efe r ence R a tes Committe e , a steering committee comprised of la r ge U . S . f inanci a l institution s , is considering r eplacing U . S . dollar LIBOR with a n e w ind e x c a lcul a ted b y short te r m r epu r chase a g r eement s , bac k ed b y T r easury securities c a lled the Secu r ed O v ernight Financing R a te (“SOFR”). The f irst pu b lic a tion of SOFR w as r e leased in A pril 2018. W hether or not SOFR a ttains ma r k et t r action as a LIBOR r eplacement r emains a question and the futu r e of LIBOR a t this time is uncertain. In a d dition, on Ma r ch 25, 2020, the FCA st a ted th a t a lthough the cent r a l assumption th a t f i r ms cannot re l y on LIBOR being pu b lished after the end of 2021 has not changed, the outb r e a k of C O VID-19 has d e l a y ed the timing of ma n y f i r ms’ t r ansition planning, and the FCA will conti n ue to assess the impact of the C O VID-19 outb r e a k on t r ansition tim e lines and upd a te the ma r k etplace as soon as possi b l e . Furthe r mo r e , on N o v ember 30, 2020, Inte r continent a l E x chang e , Inc. (“ICE”) announced th a t the ICE Benchma r k Administ r a tion Limited, a w hol l y owned subsidiary of ICE and the administ r a tor of LIBOR, will consult in ea r l y December 2020 to consider e xtending the LIBOR t r ansition deadline to the end of J une 2023. The consultation was published on December 4, 2020 and was open for feedback until late January 2021. Despite this potenti a l e xtension of the US LIBOR t r ansition deadlin e , US r egul a tors conti n ue to u r ge f inanci a l institutions to stop entering into n e w LIBOR t r ansactions b y the end of 2021. Although SOFR a ppears to be the p r efer r ed r eplacement r a te f or U . S . dollar LIBOR, a t this tim e , it is not possi b le to p r edict the e f fect of a n y such change s , a n y est a b lishment of a ltern a t i v e r efe r ence r a tes or a n y other r e f o r ms to LIBOR th a t m a y be enacted. The e limin a tion of LIBOR or a n y other changes or r e f o r ms to the dete r min a tion or supervision of LIBOR could h a v e an a d v erse impact on the ma r k et f or or v a lue of a n y LIBOR-lin k ed securitie s , loan s , and other f inanci a l o b lig a tions or e xtensions of c r edit h e ld b y or due to us or on our o v e r a ll f inanci a l condition or r esults of ope r a tion s . In a d dition, if LIBOR ceases to e xist, w e m a y need to r enegoti a te c r edit a g r eements e xtending be y ond 2021 with our port f olio companies th a t utili z e LIBOR as a factor in dete r mining the inte r est r a t e , in o r der to r eplace LIBOR with the n e w standa r d th a t is est a b lished, w hich m a y h a v e an a d v erse e f fect on our o v e r a ll f inanci a l condition or r esults of ope r a tion s . F oll o wing the r eplacement of LIBOR, some or a ll of these c r edit a g r eements m a y bear inte r est a l o w er inte r est r a t e , w hich could h a v e an a d v erse impact on our r esults of ope r a tion s . Furthe r mo r e , under the C r edit Facility with C r edit Suiss e , bor r o wings gene r a l l y will bear inte r est a t a r a te of the th r ee-month LIBOR plus 3.25%. If LIBOR ceases to e xist, w e w ill need to r enegoti a te certain te r ms of the C r edit Facility. If w e a r e un a b le to do s o , amounts d r a wn under the C r edit Facility m a y bear inte r est a t a higher r a t e , w hich w ould inc r ease the cost of our bor r o wings and, in turn, a f fect our r esults of ope r a tion s .

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F alling inte r est r ates may n e g ati ve ly impact our i n v estment incom e .

As a r esult of the decision b y the F ede r a l R eser v e Boa r d to dec r ease the ta r get r ange f or the fede r a l funds r a te in r esponse to the C O VID-19 pandemic, inte r est r a tes h a v e dec r eased. Some of our c r edit a g r eements with our port f olio companies utili z e the prime r a te as a factor in dete r mining inte r est r a t e . H o wev e r , under the C r edit Facility, bor r o wing gene r a l l y will bear inte r est a t a r a te of the th r ee-month LIBOR plus 3.25%. Acco r ding l y , a r eduction in inte r est r a tes will r esult in a dec r ease in our tot a l i n v estment income unless limited b y inte r est r a te f loor s . Furthe r , our net i n v estment income could dec r ease if the r e is not a cor r esponding dec r ease in the inte r est th a t w e p a y on our bor r o wing s .

If w e do not i n v est a sufficient portion of our assets in qualifying asset s , w e could fail to qualify as a BD C , w hich w ould ha v e a material ad v e r se effect on our busines s , financial condition and r esults of ope r ation s .

As a BD C , w e m a y not acqui r e a n y assets other than “qu a lifying assets” unles s , a t the time of and after g i ving e f fect to such acquisition, a t least 70% of our tot a l assets a r e qu a lifying asset s . W e b e li ev e th a t most of the i n v estments th a t w e m a y acqui r e in the futu r e will constitute qualifying asset s . H o wev e r , w e m a y be p r ecluded f r om i n v esting in w h a t w e b e li ev e a r e a tt r act iv e i n v estments if such i n v estments a r e not qu a lifying assets f or purposes of the 1940 Act. If w e do not i n v est a su f f icient portion of our assets in qu a lifying asset s , w e could viol a te the 1940 Act p ro visions a pplic a b le to BDC s . As a r esult of such viol a tion, speci f ic rules under the 1940 Act could p rev ent u s , f or e xampl e , f r om m a king f oll o w-on i n v estments in e xisting port f olio companies w hich could r esult in the dilution of our position or could r equi r e us to dispose of i n v estments a t in a pp r opri a te times in o r der to come into compliance with the 1940 Act. If w e need to dispose of i n v estments quick l y , it could be di f f icult to dispose of such i n v estments on f a v o r a b le te r m s . W e m a y not be a b le to f ind a b u y er f or such i n v estments and, ev en if w e do f ind a b u y e r , w e m a y h a v e to s e ll the i n v estments a t a substanti a l los s . A n y such outcomes w ould h a v e a m a teri a l a d v erse e f fect on our b usines s , f inanci a l condition, r esults of ope r a tion s , and cash f l o w s .

Most or a substantial portion of our portfolio i n v estments will be r eco r ded at fair v alue as determined in good faith b y the Boa r d and, as a r esult, the r e may be uncertainty as to the v alue of our portfolio i n v estment s .

Under the 1940 Act, w e a r e r equi r ed to carry our port f olio i n v estments a t ma r k et v a lue or if the r e is no r eadi l y a v ail a b le ma r k et v a lu e , a t fair v a lue as dete r mined b y the Boa r d. Most or a substanti a l portion of our port f olio i n v estments m a y t a k e the f o r m of securities th a t a r e not pu b lic l y t r aded. The fair v a lue of securities and other i n v estments th a t a r e not pu b lic l y t r aded m a y not be r eadi l y dete r min a b l e , and w e v a lue these securities a t fair v a lue as dete r mined in good faith b y the Boa r d, including to r e f lect signi f icant e v ents a f fecting the v a lue of our securitie s . As part of the v a lu a tion p r oces s , w e m a y t a k e into account the f oll o wing types of factor s , if re l e v ant, in dete r mining the fair v a lue of our i n v estments:

• a comparison of the port f olio compa n y ’ s securities to pu b lic l y t r aded securities;

• the enterprise v a lue of a port f olio compa n y;

• the n a tu r e and r e a liz a b le v a lue of a n y coll a te r a l;

• the port f olio compa n y ’ s a bility to m a k e p a yments and its earnings and discounted cash f l o w ;

• the ma r k ets in w hich the port f olio compa n y does b usiness; and

• changes in the inte r est r a te e n vi r onment and the c r edit ma r k ets gene r a l l y th a t m a y a f fect the price a t w hich similar i n v estments m a y be made in the futu r e and other re l e v ant factor s .

W e e xpect th a t most of our i n v estments (other than cash and cash equ i v a lents) will be classi f ied as L e v e l 3 in the fair v a lue hie r a r c h y and r equi r e disclosu r es a bout the l eve l of dis a gg r eg a tion a long with the inputs and v a lu a tion techniques w e use to measu r e fair v a lu e . This means th a t our port f olio v a lu a tions a r e based on unobser v a b le inputs and our o wn assumptions a bout h o w ma r k et participants w ould price the asset or li a bility in question. Inputs into the dete r min a tion of fair v a lue of our port f olio i n v estments r equi r e signi f icant man a gement judgment or estim a tion. E v en if obser v a b le ma r k et d a ta is a v ail a b l e , such in f o r m a tion m a y be the r esult of consensus pricing in f o r m a tion or b r o k er quote s , w hich include a disclaimer th a t the b r o k er w ould not be h e ld to such a price in an actu a l t r ansaction. The

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non-binding n a tu r e of consensus pricing and/or quotes accompanied b y disclaimers m a teri a l l y r educes the re li a bility of such in f o r m a tion. W e empl o y the services of one or mo r e independent service p ro viders to re vi e w the v a lu a tion of these securitie s . The types of factors th a t the Boa r d m a y t a k e into account in dete r mining the fair v a lue of our i n v estments gene r a l l y includ e , as a pp r opri a t e , comparison to pu b lic l y t r aded securities including such factors as yi e ld, m a turity and measu r es of c r edit qu a lit y , the enterprise v a lue of a port f olio compa n y , the n a tu r e and r e a liz a b le v a lue of a n y coll a te r a l, the port f olio compa n y ’ s a bility to m a k e p a yments and its earnings and discounted cash f l o w , the ma r k ets in w hich the port f olio compa n y does b usiness and other re l e v ant factor s . Because such v a lu a tion s , and particula r l y v a lu a tions of pr i v a te securities and pr i v a te companie s , a r e inhe r ent l y uncertain, m a y f luctu a te o v er short periods of time and m a y be based on estim a te s , our dete r min a tions of fair v a lue m a y di f fer m a teri a l l y f r om the v a lues th a t w ould h a v e been used if a r ea d y ma r k et f or these securities e xisted. Due to this uncertainty in the v a lue of our port f olio i n v estment s , a fair v a lue dete r min a tion m a y cause net asset v a lue on a g iv en d a te to m a teri a l l y underst a te or o v erst a te the v a lue th a t w e m a y ultim a t e l y r e a li z e upon one or mo r e of our i n v estment s . As a r esult, i n v estors pu r chasing sha r es of our common stock based on an o v erst a ted n et asset v a lue w ould p a y a higher price than the v a lue of the i n v estments might w ar r ant. Co n v ers e l y , investors s e lling sha r es during a period in w hich the net asset v a lue underst a tes the v a lue of i n v estments will r ece iv e a l o w er price f or their sha r es than the v a lue the i n v estment port f olio might w ar r ant.

W e will adjust quarte r l y the v a lu a tion of our port f olio to r e f lect the dete r min a tion of the Boa r d of the fair v a lue of each i n v estment in our port f oli o . A n y changes in fair v a lue a r e r eco r ded in our st a tements of ope r a tions as net change in un r e a li z ed gain (loss) on i n v estment s .

T he Boa r d may chan g e our i n v estment objecti v e , ope r ating policies and st r at e gies without prior notice or stockholder app r ov al, the effects of w hich may be ad v e r s e .

The Boa r d has the authorit y , e x cept as otherwise p r ohibited b y the 1940 Act, to modify or w a i v e certain of our ope r a ting policies and st r a tegies without prior notice and without stockholder a pp r o v a l. H o wev e r , a bsent stockholder a pp ro v a l, w e m a y not change the n a tu r e of our b usiness so as to cease to b e , or withd r a w our e lection a s , a BD C . Under Maryland l a w , w e a lso cannot be dissol v ed without prior stockholder a pp ro v a l e x cept b y judici a l action. W e cannot p r edict the e f fect a n y changes to our cur r ent ope r a ting policies and st r a tegies w ould h a v e on our b usines s , ope r a ting r esults and the price v a lue of our common stock. N ev erth e les s , a n y such changes could a d v ers e l y a f fect our b usiness and impair our a bility to m a k e distri b ution s .

Internal and e xternal cyber th r eat s , as w e ll as other disaste r s , could impair our ability to conduct business effecti v e l y .

The occur r ence of a disaste r , such as a cybe r - a ttack a gainst us or a gainst a thi r d party th a t has access to our d a ta or net w o r k s , a n a tu r a l c a tast r oph e , an industri a l accident, failu r e of our disaster r ec o v ery system s , or consequenti a l empl o y ee er r o r , could h a v e an a d v erse e f fect on our a bility to com m unic a te or conduct b usines s , neg a t ive l y impacting our ope r a tions and f inanci a l condition. This a d v erse e f fect can become particula r l y acute if those ev ents a f fect our e lect r onic d a ta p r ocessing, t r ansmission, sto r a g e , and r etri e v a l system s , or impact the a v ail a bilit y , integrit y , or con f identi a lity of our d a ta.

W e depend he a vi l y upon computer systems to per f o r m necessary b usiness function s . Despite our implement a tion of a v ariety of security measu r e s , our computer system s , net w o r k s , and d a ta, li k e those of other companie s , could be subject to cybe r - a ttacks and unauthori z ed acces s , us e , a lte r a tion, or destruction, such as f r om p h ysic a l and e lect r onic b r e a k-ins or unauthori z ed tampering. If one or mo r e of these e v ents occur s , it could potenti a l l y jeopa r di z e the con f identi a l, p r oprietar y , and other in f o r m a tion p r ocessed, sto r ed in, and t r ansmitted th r ough our computer systems and net w o r k s . Such an a ttack could cause interruptions or m a lfunctions in our ope r a tion s , w hich could r esult in f inanci a l losse s , litig a tion, r egul a tory pen a ltie s , client diss a tisfaction or los s , r eput a tion a l dam a g e , and inc r eased costs associ a ted with mitig a tion of dam a ges and r emedi a tion.

Thi r d parties with w hich w e do b usiness m a y a lso be sou r ces of cybersecurity or other technol o gic a l risk. W e outsou r ce certain functions, and these re l a tionships a ll o w f or the sto r a ge and p r ocessing of our in f o r m a tion, as we ll as client, counterpart y , empl o y e e , and bor r o w er in f o r m a tion. W hile w e eng a ge in actions to r educe our e xposu r e r esulting f r om outsou r cing, ongoing th r e a ts m a y r esult in unauthori z ed acces s , los s , e xposu r e , destruction, or other

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cybersecurity incidents th a t a d v ers e l y a f fects our d a ta, r esulting in inc r eased costs and other consequences as described a b o v e .

W e and our third-party p ro viders a r e cur r ent l y impacted b y qua r antines and similar measu r es being enacted b y g o v ernments in r esponse to the C O VID-19 pandemic th a t a r e obstructing the r egular functioning of b usiness w o r k f o r ces (including r equiring empl o y ees to w o r k f r om e xtern a l loc a tions and their homes). In r esponse to the C O VID-19 pandemic, w e instituted a w o r k f r om home policy until it w as deemed safe to r eturn to the o f f ic e . W e h a v e since r eopened our princip a l o f f ice b ut pe r mit empl o y ees to w o r k f r om home on a v oluntary basi s . An e xtended period of r emote w o r king, w hether b y us or our thi r d - party p r o vider s , could st r ain technol o gy r esou r ces and int r oduce ope r a tion a l risk s , including heightened cybersecurity risk. R emote w o r king e n vi r onments m a y be less secu r e and mo r e suscepti b le to hacking a ttack s , including phishing and soci a l engineering a ttempts th a t se e k to e xploit the C O VID-19 pandemic. Acco r ding l y , the risks described a b o v e a r e heightened under cur r ent condition s .

We may incur lender liability as a result of our lending activities.

In r ecent y ear s , a n umber of judici a l decisions h a v e uph e ld the right of bor r o w ers and others to sue lending institutions on the basis of v arious e v olving leg a l theorie s , collect ive l y te r med “lender li a bilit y .” Gene r a l l y , lender li a bility is f ounded on the p r emise th a t a lender has either viol a ted a dut y , w hether implied or cont r actu a l, of good faith and fair de a ling o w ed to the bor r o w er or has assumed a deg r ee of cont r ol o v er the bor r o w er r esulting in the c r e a tion of a f iduciary duty o w ed to the bor r o w er or its other c r editors or stockholder s . W e m a y be subject to a lleg a tions of lender li a bilit y , w hich could be time-consuming and e xpens iv e to defend and r esult in signi f icant li a bilit y .

We may incur liability as a result of providing managerial assistance to our portfolio companies.

In the course of p ro viding signi f icant man a geri a l assistance to certain port f olio companie s , certain of our man a gement and di r ectors m a y ser v e as di r ectors on the boa r ds of such companie s . T o the e xtent th a t litig a tion arises out of i n v estments in these companie s , our man a gement and di r ectors m a y be named as defendant s i n suc h litig a tion , w hic h coul d r esul t i n a n e xpenditu r e o f ou r fund s , th r oug h ou r indemni f ic a tion of such o f f icers and di r ector s , and the d iv ersion of man a gement time and r esou r ce s .

Our management team and investment professionals may not be able to achieve the same or similar returns as those achieved by the Legacy Funds or by such persons while they were employed at prior positions.

The t r ack r eco r d and achi ev ements of our man a gement team and i n v estment p r ofession a ls a r e not necessari l y indic a t iv e of futu r e r esults th a t will be achi ev ed b y u s . As a r esult, w e m a y not be a b le to achi e v e the same or similar r eturns as those achi ev ed b y our man a gement team and i n v estment p r ofession a ls a t their prior position s , including a t the Legacy Fund s .

Risks R elated to Our I n v estments

Our investment strategy focuses on growth stage companies, which are subject to many risks, including dependence on the need to raise additional capital, volatility, intense competition, shortened product life cycles, changes in regulatory and governmental programs, periodic downturns, below investment grade ratings, which could cause you to lose all or part of your investment in us.

W e i n v est primari l y in g r o wth st a ge companie s , ma n y of w hich m a y h a v e nar r o w p r oduct lines and sm a ll ma r k et sha r e s , w hich tend to r ender them mo r e vulne r a b le to competitors’ actions and ma r k et condition s , as we ll as to gene r a l economic d o wnturn s , compa r ed to mo r e m a tu r e companie s . The r e v e n ue s , income (or losses), and p r ojected f inanci a l per f o r mance and v a lu a tions of g r o wth st a ge companies can and often do f luctu a te su d den l y and d r am a tic a l l y . F or these r eason s , i n v estments in our port f olio companie s , if r a ted b y one or mo r e r a tings a genc y , w ould typic a l l y be r a ted b e l o w “i n v estment g r ad e , ” w hich r efers to securities r a ted b y r a tings a gencies b e l o w the f our highest r a ting c a tegorie s . Our ta r get g r o wth st a ge companies a r e ge o g r a phic a l l y concent r a ted and a r e the r e f o r e high l y suscepti b le to m a teri a l l y neg a t iv e loc a l, politic a l, n a tu r a l and economic ev ent s . In a d dition, high g r o wth industries a r e gene r a l l y cha r acteri z ed b y a brupt b usiness c y cles and intense competition. O v e r c a pacity in high g r o wth

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industrie s , t o gether with c y clic a l economic d o wnturn s , m a y r esult in substanti a l dec r eases in the v a lue of ma n y g r o wth st a ge companies and/or their a bility to meet their cur r ent and p r ojected financial per f o r mance to service our d e bt. Furthe r mo r e , g r o wth st a ge companies a lso typic a l l y re l y on v entu r e c a pit a l and pr i v a te equity i n v estor s , or initi a l pu b lic o f fering s , or s a les f or a d dition a l c a pit a l.

V entu r e c a pit a l f i r ms in turn re l y on their limited partners to p a y in c a pit a l o v er time in o r der to fund their ongoing and futu r e i n v estment act i vitie s . T o the e xtent th a t v entu r e c a pit a l f i r ms’ limited partners a r e un a b le or choose not to ful f ill their ongoing funding o b lig a tion s , the v entu r e c a pit a l f i r ms m a y be un a b le to conti n ue ope r a tion a l l y and/or f inanci a l l y supporting the ongoing ope r a tions of our port f olio companies w hich could m a teri a l l y and a d v ers e l y impact our f inancing ar r angement with the port f olio compa n y .

These companie s , their industrie s , their p r oducts and customer demand and the outlook and competit i v e landsc a pe f or their industries a r e a ll subject to chang e , w hich could a d v ers e l y impact their a bility to e x ecute their b usiness plans and gene r a te cash f l o w or r aise a d dition a l c a pit a l th a t w ould ser v e as the basis f or r ep a yment of our loan s . The r e f o r e , our g r o wth st a ge companies m a y face conside r a b l y mo r e risk of loss than do companies a t other st a ges of d e v e lopment.

T he equipment financing industry is highly competiti v e and competiti v e fo r ces could ad v e r s e ly affect the financing r ates and r esale prices that w e may r ealize on our equipment financing i n v estment portfolio and the prices that w e ha v e to pay to acqui r e our i n v estment s .

As part of our i n v estment st r a teg y , w e eng a ge in equipment f inancing, th r ough w hich w e f inance equipment to g r o wth st a ge companie s . Equipment ma n ufactu r er s , corpo r a tion s , partnerships and others o f fer users an a ltern a t iv e to the pu r chase of most types of equipment with p a yment te r ms th a t v ary wid e l y depending on the type of f inancing, the lease or loan te r m and the type of equipment. In se e king equipment f inancing t r ansaction s , w e will compete with f inanci a l institution s , ma n ufactu r ers and pu b lic and pr i v a te leasing companie s , ma n y of w hich m a y h a v e g r e a ter f inanci a l r esou r ces than u s .

Some types of equipment are under special government regulation which may make the equipment more costly to acquire, own, maintain under equipment financings and sell.

The us e , maintenance and o wnership of certain types of equipment a r e r egul a ted b y fede r a l, st a te and/or loc a l authoritie s . R egul a tions m a y impose r estrictions and f inanci a l b u r dens on our o wnership and ope r a tion of equipment. Changes in g o v ernment r egul a tion s , industry standa r ds or de r egul a tion m a y a lso a f fect the o wnershi p , ope r a tion and r es a le v a lue of equipment. F or e xampl e , certain types of equipment a r e subject to e xtens iv e safety and ope r a ting r egul a tions imposed b y g o v ernment and/or industry s e lf- r egul a tory o r ganiz a tions w hich m a y m a k e these types of equipment mo r e cost l y to acqui r e , o wn, maintain under equipment f inancings and s e ll. These a gencies or o r ganiz a tions m a y r equi r e changes or imp r o v ements to equipment, and w e m a y h a v e to spend our o wn c a pit a l to comp l y . These changes m a y a lso r equi r e the equipment to be r em o v ed f r om service f or a period of tim e . The te r ms of equipment f inancings m a y p r o vide f or p a yment r eductions if the equipment m ust r emain out of service f or an e xtended period or is r em o v ed f r om servic e . W e m a y then h a v e r educed ope r a ting rev e n ues f r om equipment f inancings f or these items of equipment. If w e did not h a v e the c a pit a l to m a k e a r equi r ed chang e , w e might be r equi r ed to s e ll the a f fected equipment or to s e ll other items of its equipment in o r der to obtain the necessary cash; in either ev ent, w e could su f fer a loss on our i n v estment and might lose futu r e rev e n ue s , and w e might a lso h a v e a d v erse tax consequence s .

We are subject to risks inherent in the equipment financing business that may adversely affect our ability to finance our portfolio on terms that will permit us to generate profitable rates of return for investors.

A n umber of economic conditions and ma r k et factor s , ma n y of w hich w e cannot cont r ol, could th r e a ten our a bility to ope r a te p r o f it a b l y . These include changes in economic condition s , including f luctu a tions in demand f or equipment, inte r est r a tes and in f l a tion r a tes; the timing of pu r chases and the a bility to f o r ecast technol o gic a l a dv ances f or equipment; technol o gic a l and economic obsolescence; and inc r eases in our e xpense s .

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Demand f or equipment f luctu a te s , and periods of w e a k demand could a d v ers e l y a f fect equipment f inancing r a tes and r es a le prices th a t w e m a y r e a li z e on our i n v estment port f olio w hile periods of high demand could a d v ers e l y a f fect the prices th a t w e h a v e to p a y to acqui r e our i n v estment s . Such f luctu a tions in demand could the r e f o r e a d v ers e l y a f fect the a bility of a leasing p r o g r am to i n v est its c a pit a l in a tim e l y and p r o f it a b le manne r . Equipment lessors h a v e e xperienced a mo r e di f f icult ma r k et in w hich to m a k e suit a b le i n v estments during historic a l periods of r educed g r o wth and r ecession in the U . S . econo m y as a r esult of the softening demand f or c a pit a l equipment during these period s . An economic r ecession r esulting in l o w er l eve ls of c a pit a l e xpenditu r e b y b usinesses m a y r esult in mo r e used equipment becoming a v ail a b le on the ma r k et and d o wn w a r d p r essu r e on prices and equipment f inancing r a tes due to e x cess i n v entor y . P eriods of l o w inte r est r a tes ex ert d o wn w a r d p r essu r e on equipment f inancing r a tes and m a y r esult in less demand f or equipment f inancing s . Furthe r mo r e , a decline in corpo r a te e xpansion or demand f or c a pit a l goods could d e l a y i n v estment of our c a pit a l, and its p r oduction of f inancing rev e n ue s . The r e can be no assu r ance as to w h a t futu r e d eve lopments m a y occur in the econo m y in gene r a l or in the demand f or equipment and other asset -based f inancing in particula r .

Global economic, political and market conditions, including uncertainty about the financial stability of the United States, could have a significant adverse effect on our business, financial condition and results of operations.

D o wng r ades b y r a ting a gencies to the U . S . g o v ernment ’ s c r edit r a ting or concerns a bout its c r edit and de f icit l eve ls in gene r a l could cause inte r est r a tes and bor r o wing costs to ris e , w hich m a y neg a t ive l y impact both the pe r ception of c r edit risk associ a ted with our d e bt port f olio and our a bility to access the d e bt ma r k ets on f a v o r a b le te r m s . In a d dition, a dec r eased U . S . g o v ernment c r edit r a ting could c r e a te b r oader f inanci a l tu r moil and uncertaint y , w hich m a y w eigh he a vi l y on our f inanci a l per f o r mance and the v a lue of our common stock.

Deterio r a tion in the economic conditions in the Eu r ozone and glob a l l y , including inst a bility in f inanci a l ma r k et s , m a y pose a risk to our b usines s . In r ecent y ear s , f inanci a l ma r k ets h a v e been a f fected a t times b y a n umber of glob a l mac r oeconomic and politic a l ev ent s , including the f oll o wing: la r ge s o v e r eign d e bts and f isc a l de f icits of s ev e r a l countries in Eu r ope and in eme r ging ma r k ets jurisdiction s , l eve ls of non-per f o r ming loans on the b a lance sheets of Eu r opean bank s , the potenti a l e f fect of a n y Eu r opean country le a ving the Eu r ozon e , the potenti a l e f fect of the United Kingdom le a ving the Eu r opean Union, and ma r k et v ol a tility and loss of i n v estor con f idence dr iv en b y politic a l ev ent s . Ma r k et and economic disruptions h a v e a f fected, and m a y in the futu r e a f fect, consumer con f idence l eve ls and spending, person a l bankruptcy r a te s , l eve ls of incur r ence and default on consumer d e bt and home price s , among other factor s . W e cannot assu r e y ou th a t ma r k et disruptions in Eu r op e , including the inc r eased cost of funding f or certain g o v ernments and f inanci a l institution s , will not impact the glob a l econo m y , and w e cannot assu r e y ou th a t assistance pack a ges will be a v ail a b l e , or if a v ail a b l e , be su f f icient to st a bili z e countries and ma r k ets in Eu r ope or e ls e w he r e a f fected b y a f inanci a l crisi s . T o the e xtent uncertainty r ega r ding a n y economic r ec o v ery in Eu r ope neg a t ive l y impacts consumer con f idence and consumer c r edit factor s , our and our port f olio companies’ b usines s , f inanci a l condition and r esults of ope r a tions could be signi f icant l y and a d v ers e l y a f fected.

The Chinese c a pit a l ma r k ets h a v e a lso e xperienced periods of inst a bility o v er the past s ev e r a l y ear s . The cur r ent politic a l clim a te has a lso intensi f ied concerns a bout a potenti a l t r ade w ar bet w een the U . S . and China in connection with each country ’ s r ecent or p r oposed tari f fs on the other country ’ s p r oduct s . These ma r k et and economic disruptions and the potenti a l t r ade w ar with China h a v e a f fected, and m a y in the futu r e a f fect, the U . S . c a pit a l ma r k et s , w hich could a d v ers e l y a f fect our and our port f olio companies’ b usines s , f inanci a l condition or r esults of ope r a tion s .

The current global financial market situation, as well as various social and political circumstances in the U.S. and around the world (including wars and other forms of conflict, terrorist acts, security operations and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes and global health epidemics), may contribute to increased market volatility and economic uncertainties or deterioration in the U.S. and worldwide. For example, the recent outbreak of COVID-19 in many countries continues to adversely impact global commercial activity, and has contributed to significant volatility in financial markets. The outbreak of COVID-19 may have a material adverse impact on the ability of our portfolio companies to ful f ill their end customers’ o r ders due to supp l y chain d e l a y s , limited access to k ey commodities or technol o gies or other ev ents th a t impact their ma n ufactu r ers or their supplier s . Such ev ents h a v e

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a f fected, and m a y in the futu r e a f fect, the glob a l and U . S . c a pit a l ma r k et s , and our b usines s , f inanci a l condition or r esults of ope r a tion s .

A d dition a l l y , the U . S . g o v ernment ’ s c r edit and de f icit concern s , the Eu r opean s o v e r eign d e bt crisi s , and the potenti a l trade w ar with China could cause inte r est r a tes to be v ol a til e , w hich m a y neg a t ive l y impact our and our port f olio companies ’ a bility to access the d e bt ma r k ets on f a v o r a b le te r m s .

T he C O VID-19 pandemic has caused se v e r e disruptions in the global economy and has disrupted f inancial activity in the a r eas in w hich w e or our portfolio companies ope r at e .

The C O VID-19 pandemic has r esulted in widesp r ead outb r e a ks of illness and n ume r ous de a th s , a d v ers e l y impacted glob a l and U . S . comme r ci a l act i vity and contri b uted to signi f icant v ol a tility in certain equity and d e bt ma r k et s . The glob a l impact of the outb r e a k is r a pid l y e v olving, and ma n y countries and loc a litie s , including the U . S . and st a tes in w hich our port f olio companies ope r a t e , h a v e r eacted b y instituting qua r antine s , p r ohibitions on t r a ve l and the closu r e of o f f ice s , b usinesse s , school s , r etail sto r es and other pu b lic v e n ue s . Businesses a r e a lso implementing similar p r ecautionary measu r e s . Such measu r e s , as we ll as the gene r a l uncertainty sur r ounding the dangers and impact of the C O VID-19 pandemic, h a v e c r e a ted signi f icant disruption in supp l y chains and economic act i vity and a r e h a ving a particula r l y a d v erse impact on t r ansport a tion, hospit a lit y , tourism, entertainment and other industrie s , including industries in w hich certain of our port f olio companies ope r a t e . The impact of the C O VID-19 pandemic has led to signi f icant v ol a tility and declines in the glob a l pu b lic equity ma r k ets and it is uncertain h o w long this v ol a tility will conti n u e . As the C O VID-19 pandemic conti n ues to sp r ead, the potenti a l impact s , including a glob a l, r egion a l or other economic r ecession, a r e inc r easing l y uncertain and di f f icult to asses s . Although the Federal Food and Drug Administration authorized certain vaccines for emergency use starting in December 2020, it remains unclear how quickly the vaccines will be distributed nationwide and globally or when “herd immunity” will be achieved and the restrictions that were imposed to slow the spread of the virus will be lifted entirely. The delay in distributing the vaccines could cause people to self-isolate and not participate in the economy at pre-pandemic levels for a prolonged period of time.

E v en after the C O VID-19 pandemic subside s , the U . S . econo m y and most other major glob a l economies m a y conti n ue to e xperience a r ecession, and w e anticip a te our b usiness and ope r a tions could be m a teri a l l y a d v ers e l y a f fected b y a p r olonged recession in the United States and other major ma r k et s . Some economists and major i n v estment banks h a v e e xp r essed concern th a t the conti n ued sp r ead of the virus glob a l l y could lead to a w o r ld-wide economic d o wnturn, the impacts of w hich could last f or some time after the C O VID-19 pandemic is cont r olled and/or a b a te s .

The C O VID-19 pandemic (including the p rev ent a t ive measu r es t a k en in r esponse the r eto) has to d a te (i) c r e a ted signi f icant b usiness disruption issues f or certain of our port f olio companie s , and (ii) m a teri a l l y and a d v ers e l y impacted the v a lue and per f o r mance of certain of our port f olio companie s . The C O VID-19 pandemic is h a ving a particula r l y a d v erse impact on industries in w hich certain of our port f olio companies ope r a t e , including ma n ufacturing and r etail. Certain of our port f olio companies in other industries h a v e a lso been signi f icant l y impacted. The C O VID-19 pandemic is conti n uing as of the f iling d a te of this annual report on Form 10-K, and its e xtended du r a tion m a y h a v e further a d v erse impacts on our port f olio companies after December 31, 2020, including f or the r easons described he r ein. Although on Ma r ch 27, 2020, the U . S . g o v ernment enacted the Co r on a virus Aid, R e lie f , and Economic Security Act (the “CARES Act”), w hich contains p ro visions intended to mitig a te the a d v erse economic e f fects of the C O VID-19 pandemic, it is uncertain w hethe r , or h o w m uch, our port f olio companies h a v e bene f ited or m a y bene f it f r om the CARES Act or a n y other subsequent legisl a tion intended to p ro vide f inanci a l re lief or assistanc e . As a r esult of this disruption and the p r essu r es on their liquidit y , certain of our port f olio companies h a v e been, or m a y conti n ue to b e , incent i vi z ed to d r a w on most, if not a ll, of the unfunded portion of a n y re v olving or d e l a y ed d r a w te r m loans made b y u s , subject to a v ail a bility under the te r ms of such loan s .

Furthe r , disruptions in the c a pit a l ma r k ets caused b y the C O VID-19 pandemic h a v e inc r eased the sp r ead bet w een the yi e lds r e a li z ed on risk-f r ee and higher risk securitie s , r esulting in illiquidity in parts of the c a pit a l ma r k et s . These and futu r e ma r k et disruptions and/or illiquidity w ould be e xpected to h a v e an a d v erse e f fect on our b usines s , f inanci a l condition, r esults of ope r a tions and cash f l o w s .

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Unf a v o r a b le economic conditions a lso w ould be e xpected to inc r ease our funding cost s , limit our access to the c a pit a l ma r k ets or r esult in a decision b y lenders not to e xtend c r edit to u s . These ev ents h a v e limited and could conti n ue to limit our i n v estment origin a tion s , limit our a bility to g r o w and h a v e a m a teri a l neg a t i v e impact on our and our port f olio companies’ ope r a ting r esults and the fair v a lues of our d e bt and equity i n v estment s .

Political, social and economic uncertainty, including uncertainty related to the COVID-19 pandemic, creates and exacerbates risks.

Soci a l, politic a l, economic and other conditions and ev ents (such as n a tu r a l disaster s , epidemics and pandemic s , ter r orism, con f licts and soci a l un r est) will occur th a t c r e a te uncertainty and h a v e signi f icant impacts on issuer s , industrie s , g o v ernments and other system s , including the f inanci a l ma r k et s , to w hich companies and their i n v estments a r e e xposed. As glob a l system s , economies and f inanci a l ma r k ets a r e inc r easing l y inte r connected, ev ents th a t once had on l y loc a l impact a r e n o w mo r e li k e l y to h a v e r egion a l or ev en glob a l e f fect s . E v ents th a t occur in one countr y , r egion or f inanci a l ma r k et will, mo r e f r equent l y , a d v ers e l y impact issuers in other countrie s , r egions or ma r k et s , including in est a b lished ma r k ets such as the U . S . These impacts can be e xace r b a ted b y failu r es of g o v ernments and societies to adequ a t e l y r espond to an eme r ging ev ent or th r e a t.

Uncertainty can r esult in or coincide with, among other things: inc r eased v ol a tility in the f inanci a l ma r k ets f or securitie s , der i v a t iv e s , loan s , c r edit and cur r ency; a dec r ease in the re li a bility of ma r k et prices and di f f iculty in v a luing assets (including port f olio compa n y assets); g r e a ter f luctu a tions in sp r eads on d e bt i n v estments and cur r ency e x change r a tes; inc r eased risk of default ( b y both g o v ernment and pr i v a te o b ligors and issuers); further soci a l, economic, and politic a l inst a bility; n a tion a liz a tion of pr i v a te enterprise; g r e a ter g o v ernment a l i n v ol v ement in the econo m y or in soci a l factors th a t impact the econo m y; changes to g o v ernment a l r egul a tion and supervision of the loan, securitie s , der i v a t iv es and cur r ency ma r k ets and ma r k et participants and dec r eased or re vised monitoring of such ma r k ets b y g o v ernments or s e lf- r egul a tory o r ganiz a tions and r educed en f o r cement of r egul a tions; limit a tions on the act i vities of i n v estors in such ma r k ets; cont r ols or r estrictions on f o r eign i n v estment, c a pit a l cont r ols and limit a tions on r ep a tri a tion of i n v ested c a pit a l; the signi f icant loss of liquidity and the in a bility to pu r chas e , s e ll and otherwise fund i n v estments or settle t r ansactions (including, b ut not limited t o , a ma r k et f r ee z e); un a v ail a bility of cur r ency hedging techniques; substanti a l, and in some periods e xt r em e l y high, r a tes of in f l a tion, w hich can last ma n y y ears and h a v e substanti a l neg a t iv e e f fects on c r edit and securities ma r k ets as we ll as the econo m y as a w hole; r ecessions; and di f f iculties in obtaining and /or enforcing leg a l judgment s .

F or e xampl e , the COVID-19 pandemic has led to and f or an unkn o wn period of time will conti n ue to lead to disruptions in loc a l, r egion a l, n a tion a l and glob a l ma r k ets and economies a f fected the r e b y . W ith r espect to the U . S . c r edit ma r k et s , this outb r e a k has r esulted in, and until ful l y r esol v ed is li k e l y to conti n ue to r esult in, the f oll o wing, among other things: (i) g o v ernment imposition of v arious f o r ms of sh e lter in place o r ders and the closing of “non-essenti a l” b usinesse s , r esulting in signi f icant disruption to the b usinesses of ma n y mi d dle-ma r k et loan bor r o w er s , including supp l y chain s , demand and p r actic a l aspects of their ope r a tion s , as we ll as in l a y-o f fs of empl o y ee s , and, w hile these e f fects a r e hoped to be tempo r ar y , some e f fects could be persistent or ev en pe r manent; (ii) inc r eased d r a ws b y bor r o w ers on re v olving lines of c r edit; (iii) inc r eased r equests b y bor r o w ers f or amendments and w a iv ers of their c r edit a g r eements to a v oid default, inc r eased defaults b y such bor r o w ers and/or inc r eased di f f iculty in obtaining r e f inancing a t the m a turity d a tes of their loans; ( i v) v ol a tility and disruption of these ma r k ets including g r e a ter v ol a tility in pricing and sp r eads and di f f iculty in v a luing loans during periods of inc r eased v ol a tilit y , and liquidity issues; and (v) r a pid l y e v olving p r opos a ls and/or actions b y st a te and fede r a l g o v ernments to a d d r ess p r o b lems being e xperienced b y the ma r k ets and b y b usinesses and the econo m y in gene r a l w hich will not necessari l y adequ a t e l y a d d r ess the p r o b lems facing the loan ma r k et a nd b usinesse s . This outb r e a k is h a ving, and a n y futu r e outb r e a ks could h a v e , an a d v erse impact on the ma r k ets and the econo m y in gene r a l, w hich could h a v e a m a teri a l a d v erse impact on, among other thing s , the a bility of lenders to origin a te loan s , the v olume and type of loans origin a ted, and the v olume and type of amendments and w a iv ers g r anted to bor r o w ers and r emedi a l actions t a k en in the ev ent of a bor r o w er default, each of w hich could neg a t ive l y impact the amount and qu a lity of loans a v ail a b le f or i n v estment b y us and r eturns to u s , among other thing s . As of the d a te of this annual report on Form 10-K, it is impossi b le to dete r mine the scope of this outb r e a k, or a n y futu r e outb r e a k s , h o w long a n y such outb r e a k, ma r k et disruption or uncertainties m a y last, the e f fect a n y g o v ernment a l actions will h a v e or the full potenti a l impact on us and our port f olio companie s .

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Although it is impossi b le to p r edict the p r ecise n a tu r e and consequences of these ev ent s , or of a n y politic a l or policy decisions and r egul a tory changes occasioned b y eme r ging ev ents or uncertainty on a pplic a b le l a ws or r egul a tions th a t impact u s , our port f olio companies and our i n v estment s , it is clear th a t these types of ev ents a r e impacting and will, f or a t least some tim e , conti n ue to impact us and our port f olio companies. F or e xampl e , g r o wth st a ge companies in w hich w e m a y i n v est a r e being signi f icant l y impacted b y these eme r ging ev ents and the uncertainty caused b y these ev ent s . The e f fects of a pu b lic he a lth eme r gency m a y m a teri a l l y and a d v ers e l y impact (i) the v a lue and per f o r mance of us and our port f olio companie s , (ii) the a bility of our bor r o w ers to conti n ue to meet loan c o v enants or r ep a y loans p ro vided b y us on a tim e l y basis or a t a ll, w hich m a y r equi r e us to r estructu r e our i n v estments or write d o wn the v a lue of our i n v estment s , (iii) our a bility to r ep a y d e bt o b lig a tion s , on a tim e l y basis or a t a ll, or ( i v) our a bility to sou r c e , man a ge and d iv est i n v estments and achi ev e our i n v estment object iv e s , a ll of w hich could r esult in signi f icant losses to u s .

If the econo m y is un a b le to substanti a l l y r eopen, and high l eve ls of unempl o yment conti n ue f or an e xtended period of tim e , loan d e linquencie s , loan nonaccru a l s , p r o b lem asset s , and bankruptcies m a y inc r eas e . In a d dition, coll a te r a l f or our loans m a y decline in v a lu e , w hich could cause loan losses to inc r ease and the net w orth and liquidity of loan gua r antors could declin e , impairing their a bility to honor commitments to u s . An inc r ease in loan d e linquencies and non-accru a ls or a dec r ease in loan coll a te r a l and gua r antor net w orth could r esult in inc r eased costs and r educed income w hich w ould h a v e a m a teri a l a d v erse e f fect on our b usines s , f inanci a l condition or r esults of ope r a tions.

W e will a lso be neg a t ive l y a f fected if the ope r a tions and e f fect iv eness of us or a port f olio compa n y (or a n y of the k ey personn e l or service p ro viders of the f o r egoing) a r e comp r omised or if necessary or bene f ici a l systems and p r ocesses a r e disrupted.

Any public health emergency, including the COVID-19 pandemic or any outbreak of other existing or new epidemic diseases, or the threat thereof, and the resulting financial and economic market uncertainty could have a significant adverse impact on us and the fair value of our investments and our portfolio companies.

The e xtent of the impact of a n y pu b lic he a lth eme r genc y , including the C O VID-19 pandemic, on our and our port f olio companies’ ope r a tion a l and f inanci a l per f o r mance will depend on ma n y factor s , including the du r a tion and scope of such pu b lic he a lth eme r genc y , the actions t a k en b y g o v ernment a l authorities to contain its f inanci a l and economic impact, the e xtent of a n y re l a ted t r a ve l a d visories and r estrictions implemented, the impact of such pu b lic he a lth eme r gency on o v e r a ll supp l y and demand, goods and service s , i n v estor liquidit y , consumer con f idence and l eve ls of economic act i vity and the e xtent of its disruption to important glob a l, r egion a l and loc a l supp l y chains and economic ma r k et s , a ll of w hich a r e high l y uncertain and cannot be p r edicted. In a d dition, our and our port f olio companies’ ope r a tions m a y be signi f icant l y impacted, or ev en tempo r ari l y or pe r manent l y h a lted, as a r esult of g o v ernment qua r antine measu r e s , v oluntary and p r ecautionary r estrictions on t r a ve l or meetings and other factors re l a ted to a pu b lic he a lth eme r genc y , including its potenti a l a d v erse impact on the he a lth of a n y of our or our port f olio companies’ personn e l. This could c r e a te widesp r ead b usiness conti n uity issues f or us and our port f olio companie s .

These factors m a y a lso cause the v a lu a tion of our i n v estments to di f fer m a teri a l l y f r om the v a lues th a t w e m a y ultim a t e l y r e a li z e . Our v a lu a tion s , and particula r l y v a lu a tions of pr i v a te i n v estments and pr i v a te companie s , a r e inhe r ent l y uncertain, m a y f luctu a te o v er short periods of time and a r e often based on estim a te s , comparisons and qu a lit a t iv e e v a lu a tions of pr i v a te in f o r m a tion. As a r esult, our v a lu a tions m a y not sh o w the completed or conti n uing impact of the C O VID-19 pandemic and the r esulting measu r es t a k en in r esponse the r et o . A n y pu b lic he a lth eme r genc y , including the C O VID-19 pandemic or a n y outb r e a k of other e xisting or n e w epidemic disease s , or the th r e a t the r eo f , and the r esulting f inanci a l and economic ma r k et uncertainty could h a v e a signi f icant a d v erse impact on us and the fair v a lue of our i n v estments and our port f olio companie s .

Economic recessions or downturns could impair our portfolio companies and harm our operating results.

Ma n y of our port f olio companies m a y be suscepti b le to economic sl ow d o wns or r ecessions and m a y be un a b le to r ep a y our d e bt i n v estments during these period s . The r ecent glob a l outb r e a k of C O VID-19 has disrupted economic ma r k et s , and the p r olonged economic impact is uncertain. Some economists and major i n v estment banks h a v e

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e xp r essed concern th a t the conti n ued sp r ead of the virus glob a l l y could lead to a w o r l d wide economic d o wnturn. Ma n y ma n ufactu r ers of goods in China and other countries in Asia h a v e seen a d o wnturn in p r oduction due to the suspension of b usiness and tempo r ary closu r e of factories in an a ttempt to cu r b the sp r ead of the illnes s . As the impact of the C O VID-19 pandemic sp r eads to other parts of the w o r ld, similar impacts m a y occur with r espect to a f fected countrie s . In the past, inst a bility in the glob a l c a pit a l ma r k ets r esulted in disruptions in liquidity in the d e bt c a pit a l ma r k et s , signi f icant write-o f fs in the f inanci a l services secto r , the r e-pricing of c r edit risk in the b r oad l y syndic a ted c r edit ma r k et and the failu r e of major domestic and intern a tion a l f inanci a l institution s . In particula r , in past periods of inst a bilit y , the f inanci a l services sector w as neg a t ive l y impacted b y signi f icant write-o f fs as the v a lue of the assets h e ld b y f inanci a l f i r m s declined , impairin g thei r c a pit a l position s an d a bilitie s t o len d an d i n v est . I n a d dition , conti n ued uncertainty sur r ounding the negoti a tion of t r ade de a ls bet w een Britain and the Eu r opean Union f oll o wing the United Kingdom ’ s e xit f r om the Eu r opean Union and uncertainty bet w een the United St a tes and other countrie s , including China, with r espect to t r ade policie s , t r e a tie s , and tari f f s , among other factor s , h a v e caused disruption in the glob a l ma r k et s . The r e can be no assu r ance th a t ma r k et conditions will not w orsen in the futu r e .

In an economic d o wnturn, w e m a y h a v e non-per f o r ming assets or non-per f o r ming assets m a y inc r eas e , and the v a lue of our port f olio is li k e l y to dec r ease during these period s . A d v erse economic conditions m a y a lso dec r ease the v a lue of a n y coll a te r a l securing our loan s . A s ev e r e r ecession m a y further dec r ease the v a lue of such coll a te r a l and r esult in losses of v a lue in our port f olio and a dec r ease in our rev e n ue s , net incom e , assets and net w orth. Unf a v o r a b le economic conditions a lso could inc r ease our funding cost s , limit our access to the c a pit a l ma r k ets or r esult in a decision b y lenders not to e xtend c r edit to us on te r ms w e deem accept a b l e . These ev ents could p rev ent us f r om inc r easing i n v estments and ha r m our ope r a ting r esult s .

The occur r ence of r ecessionary conditions and/or neg a t iv e d eve lopments in the domestic and intern a tion a l c r edit ma r k ets m a y signi f icant l y a f fect the ma r k ets in w hich w e do b usines s , the v a lue of our i n v estment s , and our ongoing ope r a tion s , costs and p r o f it a bilit y . A n y such unf a v o r a b le economic condition s , including rising inte r est r a te s , m a y a lso inc r ease our funding cost s , limit our access to c a pit a l ma r k ets or neg a t ive l y impact our a bility to obtain f inancing, particula r l y f r om the d e bt ma r k et s . In a d dition, a n y futu r e f inanci a l ma r k et uncertainty could lead to f inanci a l ma r k et disruptions and could further impact our a bility to obtain f inancing. These ev ents could limit our i n v estment origin a tion s , limit our a bility to g r o w and neg a t ive l y impact our ope r a ting r esults and f inanci a l condition.

Our i n v estments a r e g e o g r aphically concent r ated, w hich may r esult in a single occur r ence in a particular g e o g r aphic a r ea having a disp r oportionate n e g ati v e impact on our i n v estment portfoli o .

I n v estments in a particular ge o g r a phic r egion m a y be particula r l y suscepti b le to economic conditions and r egul a tory r equi r ement s . T o the e xtent our i n v estments a r e concent r a ted in a particular r egion or g r oup of r egion s , our i n v estment port f olio m a y be mo r e v ol a tile than a mo r e ge o g r a phic a l l y i n v estment port f oli o . A n y deterio r a tion in the econo m y , or a d v erse ev ents in such r egion s , m a y inc r ease the r a te of d e linquency and default e xperience (and as a consequenc e , losses) with r espect to our i n v estments in such r egion. Our i n v estments a r e ge o g r a phic a l l y concent r a ted in the W estern and Northeastern part of the United St a te s . As r esult, w e m a y be mo r e suscepti b le to being a d v ers e l y a f fected b y a n y single occur r ence in those r egion s .

F or e xampl e , port f olio companies in C a li f ornia, may be particula r l y suscepti b le to certain types of haza r d s , such as earthqu a k e s , f lood s , m udslide s , wild f i r es and other n a tion a l disasters , w hich could h a v e a neg a t i v e impact on their b usiness and neg a t ive l y impacting such compa n y ’ s a bility to meet their o b lig a tions under their d e bt securities th a t w e hold. A d dition a l l y , a d v erse economic conditions or other factors particula r l y a f fecting a speci f ic r egion could inc r ease the risk of loss on our i n v estment s .

Our i n v estments in le v e r a g ed portfolio companies may be ris k y , and y ou could lose all or part of y our i n v estment.

I n v estment in l ev e r a ged companies i n v ol v es a n umber of signi f icant risk s . L ev e r a ged companies in w hich w e i n v est m a y h a v e limited f inanci a l r esou r ces and m a y be un a b le to meet their o b lig a tions under their d e bt securities th a t w e hold. Such d eve lopments m a y be accompanied b y a deterio r a tion in the v a lue of a n y coll a te r a l and a r eduction in the li k e lihood of our r e a lizing a n y gua r antees th a t w e m a y h a v e obtained in connection with our

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i n v estment. In a d dition, our junior secu r ed loans a r e gene r a l l y subo r din a ted to senior loan s . As such, other c r editors m a y r ank senior to us in the ev ent of an insol v enc y .

In a d dition, i n v esting in sm a ll, fast-g r o wing, pr i v a te companies i n v ol v es a n umber of signi f icant risk s , including the f oll o wing:

• these companies m a y h a v e limited f inanci a l r esou r ces and m a y be un a b le to meet their o b lig a tions under their d e bt securities th a t w e hold. This failu r e to meet o b lig a tions m a y be accompanied b y a deterio r a tion in the v a lue of a n y coll a te r a l and a r eduction in the li k e lihood of us r e a lizing a n y gua r antees w e m a y h a v e obtained in connection with our i n v estment;

• they typic a l l y h a v e shorter ope r a ting historie s , nar r o w er p r oduct lines and sm a ller ma r k et sha r es than la r ger b usinesse s , w hich tend to r ender them mo r e vulne r a b le to competitors’ action s , ma r k e t condition s , and gene r a l economic d o wnturns;

• they a r e mo r e li k e l y to depend on the man a gement t a lents and e f f orts of a sm a ll g r oup of persons; the r e f o r e , the de a th, dis a bilit y , r esign a tion or te r min a tion of one or mo r e of these persons could h a v e a m a teri a l a d v erse impact on our port f olio compa n y and, in turn, on us;

• they gene r a l l y h a v e less p r edict a b le ope r a ting r esult s , m a y f r om time to time be parties to litig a tion, m a y be eng a ged in r a pid l y changing b usinesses with p r oducts subject to a substanti a l risk of obsolescenc e , and m a y r equi r e substanti a l a d dition a l c a pit a l to support their ope r a tion s , f inance e xpansion, or maintain their competit iv e position. In a d dition, our ex ecut iv e o f f icers and di r ectors m a y , in the o r dinary course of b usines s , be named as defendants in litig a tion arising f r om our i n v estments in the port f olio companies; and

• they m a y h a v e di f f iculty accessing the c a pit a l ma r k ets to meet futu r e c a pit a l need s , w hich m a y limit their a bility to g r o w or to r ep a y their outstanding d e bt upon m a turit y .

Our investments are very risky and highly speculative.

W e i n v est primari l y in secu r ed loans and s e lect equity and equity- re l a ted i n v estments issued b y , and p ro vide equipment f inancing t o , sm a ll, fast-g r o wing pr i v a te companie s . W e i n v est primari l y in secu r ed loans made to companies w hose d e bt has gene r a l l y not been r a ted b y a n y r a ting a genc y , a lthough w e w ould e xpect such d e bt, if r a ted, to f a ll b e l o w i n v estment g r ad e . Securities r a ted b e l o w i n v estment g r ade a r e often r efer r ed to as “high yi e ld” securities and “junk bond s , ” and a r e conside r ed “high risk” and specul a t iv e in n a tu r e compa r ed to d e bt instruments th a t a r e r a ted a b o v e i n v estment g r ad e .

Gene r a l l y , little pu b lic in f o r m a tion e xists a bout these companie s , and w e a r e r equi r ed to re l y on the a bility of our senior man a gement team and i n v estment p r ofession a ls to obtain adequ a te in f o r m a tion to e v a lu a te the potenti a l r eturns f r om i n v esting in these companie s . If w e a r e un a b le to unc o v er a ll m a teri a l in f o r m a tion a bout these companie s , w e m a y not m a k e a ful l y in f o r med i n v estment decision, and w e m a y lose money on our i n v estment s . Als o , pr i v a t e l y h e ld companies f r equent l y h a v e less d iv erse p r oduct lines and sm a ller ma r k et p r esence than la r ger competitor s . These factors could a d v ers e l y a f fect our i n v estment r eturns as compa r ed to companies i n v esting primari l y in the securities of pu b lic companie s .

Senior Secu r ed Loan s . The r e is a risk th a t the coll a te r a l securing our loans m a y dec r ease in v a lue o v er tim e , m a y be di f f icult to s e ll in a tim e l y manne r , m a y be di f f icult to a pp r aise and m a y f luctu a te in v a lue based upon the success of the b usiness and ma r k et condition s , including as a r esult of the in a bility of the port f olio company to r aise a d dition a l c a pit a l. In some ci r cumstance s , our liens on the coll a te r a l securing our loans could be subo r din a ted to claims of other c r editor s . In a d dition, deterio r a tion in a port f olio compa n y ’ s f inanci a l condition and p r ospect s , including its in a bility to r aise a d dition a l c a pit a l, m a y be accompanied b y deterio r a tion in the v a lue of the coll a te r a l f or the loan. Consequent l y , the fact th a t a loan is secu r ed does not gua r antee th a t w e will r ece iv e princip a l and inte r est p a yments acco r ding to the loa n ’ s te r m s , or a t a ll, or th a t w e will be a b le to collect on the loan should w e be comp e lled to en f o r ce our r emedie s .

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Second Lien Secu r ed Loan s . In structuring our loan s , w e m a y subo r din a te our security inte r est in certain assets of a bor r o w er to another lende r , usu a l l y a bank. In these situ a tion s , a ll of the risks identi f ied a b o v e in Senior Secu r ed Loans w ould be true and a d dition a l risks inhe r ent in holding a junior security position w ould a lso be p r esent.

Equity and Equity- R elated I n v estment s . W hen w e i n v est in secu r ed loan s , w e m a y acqui r e equity and equity- re l a ted securities as we ll. In a d dition, w e m a y i n v est di r ect l y in the equity and equity- re l a ted securities of port f olio companie s . The equity and equity- re l a ted inte r ests w e r ece iv e m a y not a pp r eci a te in v a lue and m a y in fact decline in v a lu e . Acco r ding l y , w e m a y not be a b le to r e a li z e gains f r om our equity and equity- re l a ted inte r est s , and a n y gains th a t w e do r e a li z e on the disposition of a n y equity and equity- r e l a ted inte r ests m a y not be su f f icient to o f fset a n y other losses w e e xperienc e .

In a d dition, w e h a v e i n v ested in and m a y in the futu r e i n v est in or obtain signi f icant e xposu r e to “c o v enant-lite” loan s . W e use the te r m “c o v enant-lite” loans to r efer gene r a l l y to loans th a t do not h a v e a complete set of f inanci a l maintenance c o v enant s . Gene r a l l y , c o v enant-lite loans p ro vide bor r o w er companies mo r e f r eedom to neg a t ive l y impact lenders because their c o v enants a r e incur r ence-based, w hich means they a r e on l y tested and can on l y be b r eached f oll o wing an a f f i r m a t iv e action of the bor r o w e r , r a ther than b y a deterio r a tion in the bor r o w er ’ s f inanci a l condition. Acco r ding l y , because w e i n v est in and h a v e e xposu r e to c o v enant-lite loan s , w e m a y h a v e f ew er rights a gainst a bor r o w er and m a y h a v e a g r e a ter risk of loss on such i n v estments as compa r ed to i n v estments in or e xposu r e to loans with f inanci a l maintenance c o v enant s .

Investing in small, fast-growing companies involves a high degree of risk, and our financial results may be affected adversely if one or more of our significant portfolio investments defaults on its loans or fails to perform as we expect.

Our port f olio will consist primari l y of d e bt , equity and equity- re l a ted i n v estments in sm a ll pr i v a t e l y o wned companie s . I n v esting in these companies i n v ol v es a n umber of signi f icant risk s . T ypic a l l y , the d e bt in w hich w e i n v est is not initi a l l y r a ted b y a n y r a ting a gency; h o wev e r , w e b e li ev e th a t if such i n v estments w e r e r a ted, they w ould be b e l o w i n v estment g r ad e . Securities r a ted b e l o w i n v estment g r ade a r e often r efer r ed to as “high yi e ld” securities and “junk bond s , ” and a r e conside r ed “high risk” and specul a t iv e in n a tu r e compa r ed to d e bt instruments th a t a r e r a ted a b o v e i n v estment g r ad e . Compa r ed to la r ger pu b lic l y o wned companie s , these companies m a y be in a w e a k er f inanci a l position and m a y e xperience wider v ari a tions in their ope r a ting r esult s , w hich m a y m a k e them mo r e vulne r a b le to economic d o wnturn s . T ypic a l l y , these companies need mo r e c a pit a l to compete; h o wev e r , their access to c a pit a l is limited and their cost of c a pit a l is often higher than th a t of their competitor s . Our port f olio companies will face intense competition f r om la r ger companies with g r e a ter f inanci a l, technic a l, and ma r k eting r esou r ces and their success typic a l l y depends on the man a geri a l t a lents and e f f orts of an ind i vidu a l or a sm a ll g r oup of person s . The r e f o r e , the loss of a n y of its k ey empl o y ees could a f fect a port f olio compa n y ’ s a bility to compete e f fect ive l y and ha r m its f inanci a l condition. Furthe r , some of these companies will conduct b usiness in r egul a ted industries th a t a r e suscepti b le to r egul a tory change s . These factors could impair the cash f l o w of our port f olio companies and r esult in other ev ent s , such as bankruptc y . These ev ents could limit a port f olio compa n y ’ s a bility to r ep a y its o b lig a tions to u s , w hich m a y h a v e an a d v erse e f fect on the r eturn on, or the r ec o v ery o f , our i n v estment in these b usinesse s . Deterio r a tion in a bor r o w er ’ s f inanci a l condition and p r ospects m a y be accompanied b y deterio r a tion in the v a lue of the loa n ’ s coll a te r a l.

Ma n y of these companies cannot obtain f inancing f r om pu b lic c a pit a l ma r k ets or f r om t r adition a l c r edit sou r ce s , such as comme r ci a l bank s . Acco r ding l y , loans made to these types of companies pose a higher default risk than loans made to companies th a t h a v e access to t r adition a l c r edit sou r ce s .

We may be subject to risks associated with our investments in covenant-lite loans.

W e h a v e i n v ested in and m a y in the futu r e i n v est in or obtain signi f icant e xposu r e to c o v enant-lite loan s , w hich means the o b lig a tions contain f ew er maintenance c o v enants than other o b lig a tion s , or no maintenance c o v enant s , and m a y not include te r ms th a t a ll o w the lender to monitor the f inanci a l per f o r mance of the bor r o w e r , including f inanci a l r a tio s , and decla r e a default if certain f inanci a l criteria a r e b r eached. W hile these loans m a y still contain other coll a te r a l p r otection s , a c o v enant-lite loan m a y carry mo r e risk than a c o v enant-he a vy loan made b y the same bor r o w er as it does not r equi r e the bor r o w er to p ro vide a f f i r m a tion th a t certain speci f ic f inanci a l tests h a v e been s a tis f ied on a r outine basis as is gene r a l l y r equi r ed under a c o v enant-he a vy loan a g r eement. Gene r a l l y , c o v enant-lite loans p ro vide

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bor r o w ers mo r e f r eedom to neg a t i v e l y impact lenders because their c o v enant s , if a n y , tend to be incur r ence-based, w hich means they a r e on l y tested and can on l y be b r eached f oll o wing an a f f i r m a t iv e action of the bor r o w e r , r a ther than b y a deterio r a tion in the bor r o w er ’ s f inanci a l condition. Our i n v estment in or e xposu r e to a c o v enant-lite loan m a y potenti a l l y hinder our a bility to r eprice c r edit risk associ a ted with the issuer and r educe our a bility to r estructu r e a p r o b lem a tic loan and mitig a te potenti a l los s . As a r esult, our e xposu r e to losses m a y be inc r eased, w hich could r esult in an a d v erse impact on our rev e n ue s , net income and net asset v a lu e .

We may be subject to risks associated with our investments in senior loans.

W e i n v est in senior secu r ed loan s . Senior secu r ed loans a r e usu a l l y r a ted b e l o w i n v estment g r ade or m a y a lso be un r a ted. As a r esult, the risks associ a ted with senior secu r ed loans m a y be conside r ed b y c r edit r a ting a gencies to be similar to the risks of b e l o w i n v estment g r ade f i x ed income instrument s , a lthough senior secu r ed loans a r e senior and secu r ed in cont r ast to other b e l o w i n v estment g r ade f i x ed income instrument s , w hich a r e often subo r din a ted or unsecu r ed. I n v estment in senior secu r ed loans r a ted b e l o w i n v estment g r ade is conside r ed specul a t iv e because of the c r edit risk of their issuer s . Such companies a r e mo r e li k e l y than i n v estment g r ade issuers to default on their p a yments of inte r est and princip a l o w ed to u s , and such defaults could h a v e a m a teri a l a d v erse e f fect on our per f o r manc e . An economic d o wnturn w ould gene r a l l y lead to a higher non-p a yment r a t e , and a senior secu r ed loan m a y lose signi f icant ma r k et v a lue be f o r e a default occur s . Mo r e o v e r , a n y speci f ic coll a te r a l used to secu r e a senior secu r ed loan m a y decline in v a lue or become illiquid, w hich w ould a d v ers e l y a f fect the senior secu r ed loa n ’ s v a lu e .

The r e m a y be less r eadi l y a v ail a b le and re li a b le in f o r m a tion a bout most senior secu r ed loans than is the case f or ma n y other types of securitie s , including securities issued in t r ansactions r egiste r ed under the Securities Act or r egiste r ed under the E x change Act. As a r esult, w e will re l y primari l y on our o wn e v a lu a tion of a bor r o w er ’ s c r edit qu a lity r a ther than on a n y a v ail a b le independent sou r ce s . The r e f o r e , w e will be particula r l y dependent on the an a l ytic a l a bilities of our man a gement team and i n v estment p r ofession a l s .

In gene r a l, the secondary t r ading ma r k et f or senior secu r ed loans is not we ll d eve loped. No act i v e t r ading ma r k et m a y e xist f or certain senior secu r ed loan s , w hich m a y m a k e it di f f icult to v a lue them. Illiquidity and a d v erse ma r k et conditions m a y mean th a t w e m a y not be a b le to s e ll senior secu r ed loans quick l y or a t a fair pric e . T o the e xtent th a t a secondary ma r k et does e xist f or certain senior secu r ed loan s , the ma r k et f or them m a y be subject to ir r egular t r ading act i vit y , wide bid/ask sp r eads and e xtended t r ade settlement period s .

We may be subject to risks associated with our investments in junior debt securities.

W e m a y i n v est in junior d e bt securitie s . Although certain junior d e bt securities a r e typic a l l y senior to common stock or other e quity securitie s , the equity and d e bt securities in w hich w e i n v est m a y be subo r din a ted to substanti a l amounts of senior d e bt, a ll or a signi f icant portion of w hich m a y be secu r ed. Such subo r din a ted i n v estments m a y be cha r acteri z ed b y g r e a ter c r edit risks than those associ a ted with the senior o b lig a tions of the same issue r . These subo r din a ted securities m a y not be p r otected b y a ll of the f inanci a l c o v enant s , such as limit a tions upon a d dition a l ind e btednes s , typic a l l y p r otecting such senior d e bt. Holders of junior d e bt gene r a l l y a r e not entitled to r ece iv e full p a yments in bankruptcy or liquid a tion until senior c r editors a r e paid in full. Holders of equity a r e not entitled to p a yments until a ll c r editors a r e paid in full. In a d dition, the r emedies a v ail a b le to holders of junior d e bt a r e no r m a l l y limited b y r estrictions bene f iting senior c r editor s . In the ev ent a n y port f olio compa n y cannot gene r a te adequ a te cash f l o w to meet senior d e bt servic e , w e m a y su f fer a parti a l or tot a l loss of c a pit a l i n v ested.

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

Certain loans th a t w e m a k e a r e secu r ed b y a second priority security inte r est in the same coll a te r a l pledged b y a port f olio compa n y to secu r e senior d e bt o w ed b y the port f olio compa n y to comme r ci a l banks or other t r adition a l lender s . Often the senior lender has p r ocu r ed c o v enants f r om the port f olio compa n y p r ohibiting the incur r ence of a d dition a l secu r ed d e bt without the senior lender ’ s consent. Prior to and as a condition of pe r mitting the port f olio compa n y to bor r o w money f r om us secu r ed b y the same coll a te r a l pledged to the senior lende r , the senior lender will r equi r e assu r ances th a t it will cont r ol the disposition o f a n y coll a te r a l in the ev ent of bankruptcy or other default. In

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ma n y such case s , the senior lender will r equi r e us to enter into an inte r c r editor a g r eement prior to pe r mitting the port f olio compa n y to bor r o w f r om u s . T ypic a l l y the inte r c r editor a g r eements w e will be r equested to ex ecute will e xp r ess l y subo r din a te our d e bt instruments to those h e ld b y the senior lender and further p ro vide th a t the senior lender sh a ll cont r ol: (1) the commencement of f o r eclosu r e or other p r oceedings to liquid a te and collect on the coll a te r a l; (2) the n a tu r e , timing, and conduct of f o r eclosu r e or other collection p r oceedings; (3) the amendment of a n y coll a te r a l document; (4) the re lease of the security inte r ests in r espect of a n y coll a te r a l; and (5) the w a iv er of defaults under a n y security a g r eement. Because of the cont r ol w e m a y cede to senior lenders under inte r c r editor a g r eements w e m a y ente r , w e m a y be un a b le to r e a li z e the p r oceeds of a n y coll a te r a l securing some of our loan s .

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

W e b e li ev e th a t our bor r o w ers gene r a l l y a r e a b le to r ep a y our loans f r om their a v ail a b le c a pit a l, futu r e c a pit a l- r aising t r ansactions or cur r ent and/or futu r e cash f l o w f r om ope r a tion s . H o wev e r , to a ttempt to mitig a te c r edit risk s , w e typic a l l y t a k e a secu r ed coll a te r a l position. The r e is a risk th a t the coll a te r a l securing our secu r ed loans m a y dec r ease in v a lue o v er tim e , m a y be di f f icult to s e ll in a tim e l y manne r , m a y be di f f icult to a pp r ais e , m a y be liquid a ted a t a price l o w er than w h a t w e consider to be fair v a lue and m a y f luctu a te in v a lue based upon the success of the b usiness and ma r k et condition s , i ncluding as a r esult of the in a bility of a bor r o w er to r aise a d dition a l c a pit a l.

In some ci r cumstance s , other c r editors h a v e claims h a ving priority o v er our senior lien. Although f or certain bor r o w er s , w e m a y be the on l y f o r m of secu r ed d e bt (other than potenti a l l y speci f ic equipment f inancing), other bor r o w ers m a y a lso h a v e other senior secu r ed d e bt, such as re v olving loans and/or te r m loan s , h a ving priority o v er our senior lien. At the time of underwriting our loan s , w e gene r a l l y on l y consider g r o wth c a pit a l loans f or p r ospect iv e bor r o w ers with su f f icient coll a te r a l th a t c o v ers the v a lue of our loan as we ll as the re v olving and/or te r m loans th a t m a y h a v e priority o v er our senior lien; h o wev e r , the r e m a y be instances in w hich w e h a v e incor r ect l y estim a ted the cur r ent or futu r e potenti a l v a lue of the unde r l ying coll a te r a l or the unde r l ying coll a te r a l v a lue has dec r eased, in w hich case our a bility to r ec o v er our i n v estment m a y be m a teri a l l y and a d v ers e l y a f fected.

In a d dition, a substanti a l portion of the assets securing our i n v estment m a y be in the f o r m of int e llectu a l p r opert y , i n v entory and equipment and, to a lesser e xtent, cash and accounts r ece i v a b l e . Int e llectu a l p r opert y , if a n y , th a t is securing our loan could lose v a lue i f , among other thing s , the bor r o w er ’ s rights to the int e llectu a l p r operty a r e ch a llenged or if the bor r o w er ’ s license to the int e llectu a l p r operty is re v o k ed or e xpi r e s . I n v entory m a y not be adequ a te to secu r e our loan if our v a lu a tion of the i n v entory a t the time th a t w e made the loan w as not accu r a te or if the r e is a r eduction in the demand f or the i n v entor y .

Simila r l y , a n y equipment securing our loan m a y not p ro vide us with the anticip a ted security if the r e a r e changes in technol o gy or a dv ances in n e w equipment th a t r ender the particular equipment obsolete or of limited v a lu e , or if the bor r o w er fails to adequ a t e l y maintain or r epair the equipment. The r esidu a l v a lue of the equipment a t the time w e w ould t a k e possession m a y not be su f f icient to s a tisfy the outstanding d e bt and w e could e xperience a loss on the disposition of the equipment. A n y one or mo r e of the p r eceding factors could m a teri a l l y impair our a bility to r ec o v er our i n v estment in a f o r eclosu r e .

Our portfolio may be exposed in part to one or more specific industries, which may subject us to a risk of significant loss in a particular investment or investments if there is a downturn in that particular industry.

Our port f olio m a y be e xposed in part to one or mo r e speci f ic industrie s . A d o wnturn in a n y particular industry in w hich w e a r e i n v ested could signi f icant l y impact the a gg r eg a te r eturns w e r e a li z e . If an industry in w hich w e h a v e signi f icant i n v estments su f fers f r om a d v erse b usiness or economic condition s , as these industries h a v e to v arying deg r ee s , a m a teri a l portion of our i n v estment port f olio could be a f fected a d v ers e l y , w hich, in turn, could a d v ers e l y a f fect our f inanci a l position and r esults of ope r a tion s .

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Our investment portfolio’s concentration in technology-related companies is subject to many risks, including volatility, intense competition, shortened product life cycles, changes in regulatory and governmental programs and periodic downturns, and you could lose all or part of your investment.

As of December 31, 2020, i n v estments in technol o gy- re l a ted companies in the p r ofession a l, scienti f ic and technic a l services industry r ep r esented a pp r o xim a t e l y 16.0% of the fair v a lue of our i n v estment port f oli o , and ma n y of these technol o gy- re l a ted companies h a v e nar r o w p r oduct lines and sm a ll ma r k et sha r e s , w hich tend to r ender them mo r e vulne r a b le to competitors’ actions and ma r k et condition s , as we ll as to gene r a l economic d o wnturn s . The rev e n ue s , income (or losses), and v a lu a tions of technol o gy- r e l a ted companies can and often do f luctu a te su d den l y and d r am a tic a l l y . In a d dition, technol o gy- re l a ted industries a r e gene r a l l y cha r acteri z ed b y a brupt b usiness c y cles and intense competition. O v e r c a pacity in technol o gy- re l a ted industrie s , t o gether with c y clic a l economic d o wnturn s , m a y r esult in substanti a l dec r eases in the ma r k et c a pit a liz a tion of ma n y technol o gy- re l a ted companie s . Such dec r eases in ma r k et c a pit a liz a tion m a y occur a gain, and a n y futu r e dec r eases in technol o gy- re l a ted compa n y v a lu a tions m a y be substanti a l and m a y not be tempo r ary in n a tu r e . The r e f o r e , our port f olio companies m a y face conside r a b l y mo r e risk of loss than do companies in other industry sector s .

Because of r a pid technol o gic a l chang e , the a v e r a ge s e lling prices of p r oducts and some services p ro vided b y technol o gy- re l a ted companies h a v e historic a l l y dec r eased o v er their p r oduct iv e l iv e s . As a r esult, the a v e r a ge s e lling prices of p r oducts and services o f fe r ed b y technol o gy- re l a ted companies m a y dec r ease o v er tim e , w hich could a d v ers e l y a f fect their ope r a ting r esult s , their a bility to meet o b lig a tions under their d e bt securities and the v a lue of their equity securitie s . This could, in turn, m a teri a l l y a d v ers e l y a f fect our b usines s , f inanci a l condition and r esults of ope r a tion s .

I n v estments th a t w e m a y m a k e in sustain a b le and r en e w a b le technol o gy companies will be subject to substanti a l ope r a tion a l risk s , such as unde r estim a ted cost p r ojection s , unanticip a ted ope r a tion and maintenance e xpense s , loss of g o v ernment subsidie s , and in a bility to d e l iv er cost-e f fect iv e a ltern a t iv e ene r gy solutions compa r ed to t r adition a l ene r gy p r oduct s . In a d dition, sustain a b le and r en e w a b le technol o gy companies empl o y a v ariety of means of inc r easing cash f l o w , including inc r easing utiliz a tion of e xisting facilitie s , e xpanding ope r a tions th r ough n e w construction or acquisition s , or securing a d dition a l long-te r m cont r act s . Thu s , some ene r gy companies m a y be subject to construction risk, acquisition risk or other risks arising f r om their speci f ic b usiness st r a tegie s . Furthe r mo r e , p r oduction l eve ls f or sola r , wind and other r en e w a b le ene r gies m a y be dependent upon adequ a te sunlight, wind, or bi o gas p r oduction, w hich can v ary f r om ma r k et to ma r k et and period to period, r esulting in v ol a tility in p r oduction l eve ls and p r o f it a bilit y . Demand f or sustain a b le and r en e w a b le technol o gy is a lso in f luenced b y the a v ail a b le supp l y and prices f or other ene r gy p r oduct s , such as co a l, oil and n a tu r a l gase s . A change in prices in these ene r gy p r oducts could r educe demand f or a ltern a t iv e ene r g y .

A disease pandemic or n a tu r a l disaster m a y a lso impact i n v estments th a t w e m a y m a k e in technol o gy- re l a ted port f olio companie s . The n a tu r e a nd l eve l of n a tu r a l disasters cannot be p r edicted and m a y be e xace r b a ted b y glob a l clim a te chang e . A disease pandemic or major disaste r , such as an earthqu a k e , tsunami, f lood or other c a tast r ophic ev ent could r esult in disruption to the b usiness and ope r a tions of a n y such technol o gy- re l a ted port f olio companie s .

W e m a y i n v est in technol o gy- re l a ted companies th a t a r e re liant on U . S . and f o r eign r egul a tory and g o v ernment a l p r o g r am s . A n y m a teri a l changes or disconti n u a tion, due to change in administ r a tion or U . S . Cong r ess or otherwise could h a v e a m a teri a l a d v erse e f fect on the ope r a tions of a port f olio compa n y in these industries and, in turn, impair our a bility to tim e l y collect princip a l and inte r est p a yments o w ed to us to the e xtent a pplic a b l e .

We may invest in technology-related companies that do not have venture capital or private equity firms as equity investors, and these companies may entail a higher risk of loss than do companies with institutional equity investors, which could increase the risk of loss of your investment.

Our port f olio companies m a y r equi r e substanti a l a d dition a l equity f inancing to s a tisfy their conti n uing w o r king c a pit a l and other cash r equi r ements and, in most instance s , to service the inte r est and princip a l p a yments on our i n v estment. P ort f olio companies th a t do not h a v e v entu r e c a pit a l or pr i v a te equity i n v estors m a y be un a b le to r aise a n y a d dition a l c a pit a l to s a tisfy their o b lig a tions or to r aise su f f icient a d dition a l c a pit a l to r each the n e xt st a ge of d eve lopment. P ort f olio companies th a t do not h a v e v entu r e c a pit a l or pr i v a te equity i n v estors m a y be less f inanci a l l y

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sophistic a ted and m a y not h a v e access to independent members to ser v e on their boa r d s , w hich means th a t they m a y be less successful than port f olio companies sponso r ed b y v entu r e c a pit a l or pr i v a te equity f i r m s . Acco r ding l y , f inancing these types of companies m a y entail a higher risk of loss than w ould f inancing companies th a t a r e sponso r ed b y v entu r e c a pit a l or pr i v a te equity f i r m s .

Our r e lationship with certain portfolio companies may e xpose us to our portfolio companies’ t r ade sec r ets and confidential information w hich may r equi r e us to be parties to non-disclosu r e ag r eements and r estrict us f r om en g aging in certain t r ansaction s .

Our re l a tionship with some of our port f olio companies m a y e xpose us to our port f olio companies’ t r ade sec r ets and con f identi a l in f o r m a tion (including t r ansaction a l d a ta and person a l d a ta a bout their empl o y ees and clients) w hich m a y r equi r e us to be parties to non-disclosu r e a g r eements and r estrict us f r om eng a ging in certain t r ansaction s . Unauthori z ed access or disclosu r e of such in f o r m a tion m a y occu r , r esulting in theft, loss or other mis a pp r opri a tion. A n y theft, los s , imp r oper us e , such as insider t r ading or other mis a pp r opri a tion of con f identi a l in f o r m a tion could h a v e a m a teri a l a d v erse impact on our competit i v e position s , our re l a tionship with our port f olio companies and our r eput a tion and could subject us to r egul a tory inquirie s , en f o r cement and f ine s , c i vil litig a tion ( w hich m a y cause us to incur signi f icant e xpense or e xpose us to losses) and possi b le f inanci a l li a bility or cost s .

Our i n v estment portfolio ’ s concent r ation in the manufacturing industry is subject to v arious risk s , including interruptions to the manufacturing p r ocess and costs of r aw materials and ene r g y , w hich may ad v e r s e ly affect our performanc e .

As of December 31, 2020, i n v estments in the ma n ufacturing industry r ep r esented a pp r o xim a t e l y 20.2% of the fair v a lue of our i n v estment port f oli o . Gene r a l l y , our i n v estments in the ma n ufacturing industry a r e subject to v arious risks including safety or p r oduct li a bility issue s , costs of r a w m a teri a ls and ene r g y , including crude oil, and competition in glob a l ma r k et s . The ma n ufacturing industry is high l y competit iv e , w hich puts p r essu r e on price s . Prices a r e subject to intern a tion a l supp l y and demand as we ll as to the pu r chase costs of r a w m a teri a ls and ene r g y . Ma r k ets f or these p r oduct s , as we ll as prices f or r a w m a teri a ls and ene r gy used b y the ma n ufacturing industr y , a r e c y clic a l and v ol a tile and the costs of r a w m a teri a ls and ene r gy r ep r esent a substanti a l portion of the industry ’ s p r oduction costs and ope r a ting e xpense s . In a d dition, ma n ufacturing facilities a r e subject to planned and unplanned p r oduction shutd o wn s , turna r ounds and out a ge s , w hich could h a v e an a d v erse e f fect on long-te r m p r oduction. Companies in this industry a r e a lso subject to e xtens iv e fede r a l, st a t e , loc a l and f o r eign e n vi r onment a l, he a lth and safety l a ws and r egul a tions concerning, among other thing s , emissions in the ai r , discha r ges to land and w a ter and the gene r a tion, handling, t r e a tment and dispos a l of haza r dous w aste and other m a teri a l s . These r equi r ement s , and en f o r cement of these r equi r ement s , m a y become mo r e stringent in the futu r e . In a d dition, futu r e r egul a tory or other d eve lopments could a lso r estrict or e limin a te the use o f , or r equi r e ma n ufacturing companies to m a k e modi f ic a tions t o , their p r oduct s , pack a ging, ma n ufacturing p r ocesses and technol o g y , w hich could h a v e a signi f icant a d v erse impact on its f inanci a l condition, r esults of ope r a tions and cash f l o w s . A n y of these interruptions to a ma n ufacturing compa n y in w hich w e i n v est could a d v ers e l y a f fect our per f o r manc e .

Our investment portfolio’s concentration in the consumer and retail industry faces considerable uncertainties. Continued adverse changes in the economy may adversely affect consumer spending, which could negatively impact our business.

As of December 31, 2020, investments in the consumer and retail industry represented approximately 15.4% of the fair value of our investment portfolio. The consumer and retail industry is heavily dependent on discretionary consumer spending patterns. Our investments in the consumer and retail industry will be sensitive to numerous factors that affect discretionary consumer income, including adverse general economic conditions, changes in employment trends and levels of unemployment, increases in interest rates, weather, a significant rise in energy or food prices or other events or actions that may lead to a decrease in consumer confidence or a reduction in discretionary income. In addition, in a period of inflationary pricing, increased fuel costs may discourage customers from driving to retail locations, reducing store traffic and possibly sales. Declines in consumer spending, especially for extended periods, could have a material adverse effect on a portfolio company’s business, financial condition and results of operations. If a consumer and retail company in which we invest is unable to navigate these risks, our performance may be adversely affected.

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Our i n v estments in the life sciences industry a r e subject to v arious risk s , including e xtensi v e g ov ernment r e gulation, liti g ation risk and certain other risks particular to that industr y , w hich may ad v e r s e ly affect the performance of such i n v estment s .

W e m a y i n v est in companies in the life sciences industry th a t a r e subject to e xtens iv e r egul a tion b y the F ood and Drug Administ r a tion and to a lesser e xtent, other fede r a l, st a te and other f o r eign a gencie s . If a n y of these port f olio companies fail to comp l y with a pplic a b le r egul a tion s , they could be subject to signi f icant pen a lties and claims th a t could m a teri a l l y and a d v ers e l y a f fect their ope r a tion s . P ort f olio companies th a t p r oduce medic a l d e vices or drugs a r e subject to the e xpens e , d e l a y and uncertainty of the r egul a tory a pp ro v a l p r ocess f or their p r oducts and, ev en if a pp ro v ed, these p r oducts m a y not be accepted in the ma r k etplac e . In a d dition, g o v ernment a l b udgetary const r aints e f fecting the r egul a tory a pp ro v a l p r oces s , n e w l a w s , r egul a tions or judici a l interp r et a tions of e xisting l a ws and r egul a tions might a d v ers e l y a f fect a port f olio compa n y in this industr y . P ort f olio companies in the life sciences industry m a y a lso h a v e a limited n umber of suppliers of necessary components or a limited n umber of ma n ufactu r ers f or their p r oduct s , and the r e f o r e face a risk of disruption to their ma n ufacturing p r ocess if they a r e un a b le to f ind a ltern a t i v e suppliers w hen needed, including in r esponse to a n y supp l y chain disruptions r esulting f r om the C O VID-19 pandemic. A n y of these factors could m a teri a l l y and a d v ers e l y a f fect the ope r a tions of a port f olio compa n y in this industry and, in turn, impair our a bility to tim e l y collect princip a l and inte r est p a yments o w ed to us and consequent l y m a y a d v ers e l y a f fect the per f o r mance of such i n v estment s .

T he main industry secto r s a r ound w hich w e intend to de ve lop our i n v estments a r e all capital intensi v e .

The industry sectors in w hich w e m a k e i n v estment s , technol o g y , b usiness services and industri a l, a r e each c a pit a l intens iv e . Cur r ent l y , f inancing f or c a pit a l-intens iv e companies r emains di f f icult. In some successful companie s , w e b e li ev e w e m a y need to i n v est mo r e than w e cur r ent l y h a v e planned to i n v est in these companie s . The r e can be no assu r ance th a t w e will h a v e the c a pit a l necessary to m a k e such i n v estment s . In a d dition, i n v esting g r e a ter than planned amounts in our port f olio companies could limit our a bility to pursue n e w i n v estments and fund f oll o w-on i n v estment s . Both of these situ a tions could cause us to miss i n v estment opportunities or limit our a bility to p r otect e xisting i n v estments f r om dilution or other actions or ev ents th a t w ould dec r ease the v a lue and potenti a l r eturn f r om these i n v estment s .

The majority of our portfolio companies will need multiple rounds of additional financing to repay their debts to us and continue operations. Our portfolio companies may not be able to raise additional financing, which could harm our investment returns.

The majority of our port f olio companies will often r equi r e substanti a l a d dition a l equity f inancing to s a tisfy their conti n uing w o r king c a pit a l and other cash r equi r ements and, in most instance s , to service the inte r est and princip a l p a yments on our i n v estment. Each r ound of v entu r e f inancing is typic a l l y intended to p ro vide a compa n y with on l y enough c a pit a l to r each the n e xt st a ge of d eve lopment. W e cannot p r edict the ci r cumstances or ma r k et conditions under w hich our port f olio companies will se e k a d dition a l c a pit a l. It is possi b le th a t one or mo r e of our port f olio companies will not be a b le to r aise a d dition a l f inancing or m a y be a b le to do so on l y a t a price or on te r ms unf a v o r a b le to u s , either of w hich w ould neg a t ive l y impact our i n v estment r eturn s . Some of these companies m a y be un a b le to obtain su f f icient f inancing f r om pr i v a te i n v estor s , pu b lic c a pit a l ma r k ets or t r adition a l lender s . This m a y h a v e a signi f icant impact if the companies a r e un a b le to obtain certain federal , state or f o r eign a gency a pp ro v a l for their p r oducts or the ma r k eting the r eo f , of if r egul a tory re vi e w p r ocesses e xtend longer than anticip a ted, and the companies need conti n ued funding f or their ope r a tions during these time s . Acco r ding l y , f inancing these types of companies m a y entail a higher risk of loss than w ould f inancing companies th a t a r e a b le to utili z e t r adition a l c r edit sou r ce s .

If our portfolio companies are unable to commercialize their technologies, products, business concepts or services, the returns on our investments could be adversely affected.

The v a lue of our i n v estments in our port f olio companies m a y decline if they a r e not a b le to comme r ci a li z e their technol o g y , p r oduct s , b usiness concepts or service s . A d dition a l l y , a lthough some of our port f olio companies m a y a l r ea d y h a v e a comme r ci a l l y successful p r oduct or p r oduct line a t the time of our i n v estment, in f o r m a tion technol o g y , e-comme r c e , life scienc e , and ene r gy technol o gy- re l a ted p r oducts and services often h a v e a mo r e limited ma r k et or life

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span than p r oducts in other industrie s . Thu s , the ultim a te success of these companies often depends on their a bility to conti n u a l l y inn o v a te in inc r easing l y competit i v e ma r k et s . If they a r e un a b le to do s o , our i n v estment r eturns could be a d v ers e l y a f fected and their a bility to service their d e bt o b lig a tions to us o v er the te r m of the loan could be impai r ed. Our port f olio companies m a y be un a b le to acqui r e or d eve lop a n y n e w p r oducts successful l y , and the int e llectu a l p r operty they cur r ent l y hold m a y not r emain vi a b l e . E v en if our port f olio companies a r e a b le to d eve lop comme r ci a l l y vi a b le p r oduct s , the ma r k et f or n e w p r oducts and services is high l y competit iv e and r a pid l y changing. Neither our port f olio companies nor w e will h a v e a n y cont r ol o v er the pace of technol o gy d eve lopment. Comme r ci a l success is di f f icult to p r edict, and the ma r k eting e f f orts of our port f olio companies m a y not be successful.

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

Our futu r e success and competit iv e position will depend in part upon the a bility of our port f olio companies to obtain, maintain and p r otect p r oprietary technol o gy used in their p r oducts and service s . Our port f olio companies will re l y , in part, on p a tent, t r ade sec r et, and t r adema r k l a w to p r otect th a t technol o g y , b ut competitors m a y mis a pp r opri a te their int e llectu a l p r opert y , and disputes as to o wnership of int e llectu a l p r operty m a y aris e . P ort f olio companies m a y , f r om time to tim e , be r equi r ed to institute litig a tion to en f o r ce their p a tent s , co p yright s , or other int e llectu a l p r operty rights; p r otect their t r ade sec r ets; dete r mine the v a lidity and scope of the p r oprietary rights of others; or defend a gainst claims of infringement. S uch litig a tion could r esult in substanti a l costs and d iv ersion of r esou r ce s . Simila r l y , if a port f olio compa n y is f ound to infringe or mis a pp r opri a te a thi r d-party ’ s p a tent or other p r oprietary right s , it could be r equi r ed to p a y dam a ges to the thi r d-part y , a lter its p r oducts or p r ocesse s , obtain a license f r om the thi r d-part y , and/or cease act i vities utilizing the p r oprietary right s , including m a king or s e lling p r oducts utilizing the p r oprietary right s . A n y of the f o r egoing ev ents could neg a t ive l y a f fect both the port f olio compa n y ’ s a bility to service our d e bt i n v estment and the v a lue of a n y re l a ted d e bt and equity securities th a t w e o wn, as we ll as a n y coll a te r a l securing our i n v estment.

Loans may become nonperforming for a variety of reasons.

A loan or d e bt o b lig a tion m a y become non-per f o r ming f or a v ariety of r eason s . Such non-per f o r ming loans m a y r equi r e substanti a l w o r k out negoti a tions or r estructuring th a t m a y entail, among other thing s , a substanti a l r eduction in the inte r est r a t e , a substanti a l write-d o wn of the princip a l amount of the loan and/or the defer r a l of p a yment s . In a d dition, such negoti a tions or r estructuring m a y be quite e xtens iv e and p r ot r acted o v er tim e , and the r e f o r e m a y r esult in substanti a l uncertainty with r espect to the ultim a te r ec o v er y . W e m a y a lso incur a d dition a l e xpenses to the e xtent th a t it is r equi r ed to se e k r ec o v ery upon a default on a loan or particip a te in the r estructuring of such o b lig a tion. The liquidity f or defaulted loans m a y be limited, and to the e xtent th a t defaulted loans a r e sold, it is high l y unli k e l y th a t the p r oceeds f r om such s a le will be equ a l to the amount of unpaid princip a l and inte r est the r eon. In connection with a n y such default s , w o r k outs or r estructuring, a lthough w e ex e r cise v oting rights with r espect to an ind i vidu a l loan, w e m a y not be a b le to ex e r cise v otes in r espect of a su f f icient pe r cent a ge of v oting rights with r espect to such loan to dete r mine the outcome of such v ot e .

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

All of our assets m a y be i n v ested in illiquid securitie s , and a substanti a l portion of our i n v estments in l ev e r a ged companies will be subject to leg a l and other r estrictions on r es a le or will otherwise be less liquid than mo r e b r oad l y t r aded pu b lic securitie s . The illiquidity of these i n v estments m a y m a k e it di f f icult f or us to s e ll such i n v estments w hen desi r ed. In a d dition, if w e a r e r equi r ed to liquid a te a ll or a portion of our port f olio quick l y , w e m a y r e a li z e signi f icant l y less than the v a lue a t w hich w e h a v e p re vious l y r eco r ded these i n v estment s . As a r esult, w e do not e xpect to achi ev e liquidity in our i n v estments in the nea r -te r m. H o wev e r , to p a y distri b utions to our stockholders and to maintain the e lection to be r egul a ted as a BDC and qu a lify as a RI C , w e m a y h a v e to dispose of i n v estments if w e do not s a tisfy one or mo r e of the a pplic a b le criteria under the r espect iv e r egul a tory f r am e w o r k s . W e m a y a lso face other r estrictions on our a bility to liquid a te an i n v estment in a port f olio compa n y to the e xtent th a t w e h a v e m a teri a l nonpu b lic in f o r m a tion r ega r ding such port f olio compa n y .

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Price declines and illiquidity in the corporate debt markets may adversely affect the fair value of our portfolio investments, reducing our net asset value through increased net unrealized depreciation.

As a BD C , w e a r e r equi r ed to carry our i n v estments a t ma r k et v a lue o r , if no ma r k et v a lue is ascertain a b l e , a t fair v a lue as dete r mined in good faith b y the Boa r d. W hen an e xtern a l ev ent such as a pu r chase t r ansaction, pu b lic o f fering or subsequent equity s a le occur s , w e use the pricing indic a ted b y the e xtern a l ev ent to cor r obo r a te our v a lu a tion. W e r eco r d dec r eases in the ma r k et v a lues or fair v a lues of our i n v estments as un r e a li z ed dep r eci a tion. Declines in prices and liquidity in the corpo r a te d e bt ma r k ets m a y r esult in signi f icant net un r e a li z ed dep r eci a tion in our port f oli o . The e f fect of a ll of these factors on our port f olio m a y r educe our net asset v a lue b y inc r easing net un r e a li z ed dep r eci a tion in our port f oli o . Depending on ma r k et condition s , w e could incur substanti a l r e a li z ed losses and m a y su f fer a d dition a l un r e a li z ed losses in futu r e period s , w hich could h a v e a m a teri a l a d v erse e f fect on our b usines s , f inanci a l condition and r esults of ope r a tion s .

Our portfolio companies may prepay loans, which prepayment may reduce stated yields if capital returned cannot be invested in transactions with equal or greater expected yields.

The loans th a t will unde r lie our port f olio m a y be c a ll a b le a t a n y tim e , and ma n y of them can be r epaid with no p r emium to pa r . It is not clear a t this time w hen or if a n y loan might be c a lled. W hether a loan is c a lled will depend both on the conti n ued posit iv e per f o r mance of the port f olio compa n y and the e xistence of f a v o r a b le f inancing ma r k et conditions th a t a ll o w such compa n y the a bility to r eplace e xisting f inancing with less e xpens iv e c a pit a l. As ma r k et conditions change f r equent l y , it is unkn o wn w hen, and i f , this m a y be possi b le f or each port f olio compa n y . Risks associ a ted with o wning loans include the fact th a t p r ep a yments m a y occur a t a n y tim e , sometimes without p r emium or pen a lt y , and th a t the ex e r cise of p r ep a yment rights during periods of declining sp r eads could cause us to r ei n v est p r ep a yment p r oceeds in l o w e r -yi e lding instrument s . In the case of some of these loan s , h a ving the loan c a lled ea r l y m a y r educe our achi e v a b le yi e ld if the c a pit a l r eturned cannot be i n v ested in t r ansactions with equ a l or g r e a ter e xpected yi e ld s , especi a l l y during periods of declining inte r est r a tes in the b r oader ma r k et, such in cur r ent ma r k et condition s .

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

Our i n v estments m a y include origin a l issue discount, or OI D . T o the e xtent origin a l issue discount constitutes a portion of our incom e , w e a r e e xposed to typic a l risks associ a ted with such income being r equi r ed to be included in tax a b le and accounting income prior to r eceipt of cash, including the f oll o wing:

• W e m ust include in income each y ear a portion of the OID th a t accrues o v er the life of the o b lig a tion, r ega r dless of w hether cash r ep r esenting such income is r ece iv ed b y us in the same tax a b le y ea r . Because a n y OID or other amounts accrued will be included in i n v estment compa n y tax a b le income f or the y ear of the accru a l, w e m a y be r equi r ed to m a k e a distri b ution to our stockholders in o r der to s a tisfy our an n u a l distri b ution r equi r ement s , ev en though w e will not h a v e r ece iv ed a n y cor r esponding cash amount. As a r esult, w e m a y h a v e to s e ll some of our i n v estments a t times or a t prices th a t w ould not be a dv ant a geous to u s , r aise a d dition a l d e bt or equity c a pit a l or f o r go n e w i n v estment opportunitie s .

• The higher yi e ld of OID instruments r e f lect the p a yment defer r a l and c r edit risk associ a ted with these instrument s .

• E v en if the accounting conditions for income accru a l a r e met, the bor r o w er could still default w hen our actu a l collection is supposed to occur a t the m a turity of the o b lig a tion.

• OID instruments m a y h a v e un re li a b le v a lu a tions because their conti n uing accru a ls r equi r e conti n uing judgments a bout the collect a bility of the defer r ed p a yments and the v a lue of the coll a te r a l .

• OID instruments gene r a l l y r ep r esent a signi f icant l y higher c r edit risk than coupon loan s .

• OID income r ece iv ed b y us m a y c r e a te uncertainty a bout the sou r ce of our cash distri b utions to stockholder s . F or accounting purpose s , a n y cash distri b utions to stockholders r ep r esenting OID or ma r k et

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discount income a r e not t r e a ted as coming f r om paid-in c a pit a l, ev en though the cash to p a y them comes f r om the o f fering p r oceed s . Thu s , a lthough a distri b ution of OID or ma r k et discount inte r est comes f r om the cash i n v ested b y the stockholder s , Section 19(a) of the 1940 Act does not r equi r e th a t stockholders be g iv en notice of this fact b y r eporting it as a r eturn of c a pit a l.

W e a r e a non-di v e r sifi ed i n v estment compa n y within the meaning of the 1940 Act, and the r efo r e w e a r e not limited b y the 1940 Act with r espect to the p r oportion of our assets that may be i n v ested in securities of a single issue r .

W e a r e classi f ied as a non-d iv ersi f ied i n v estment compa n y within the meaning of the 1940 Act, w hich means th a t w e a r e not limited b y the 1940 Act with r espect to the p r oportion of our assets th a t w e m a y i n v est in securities of a single issue r . Our port f olio m a y be concent r a ted in a limited n umber of port f olio companies and industrie s . Be y ond the asset d iv ersi f ic a tion r equi r ements associ a ted with our qu a li f ic a tion as a RIC under the Cod e , w e do not h a v e f i x ed guid e lines f or d iv ersi f ic a tion. T o the e xtent th a t w e assume la r ge positions in the securities of a sm a ll n umber of issuer s , our net asset v a lue m a y f luctu a te to a g r e a ter e xtent than th a t of a d iv ersi f ied i n v estment compa n y as a r esult of changes in the f inanci a l condition or the ma r k et ’ s assessment of the issue r . W e m a y a lso be mo r e suscepti b le to a n y single economic or r egul a tory occur r ence than a d iv ersi f ied i n v estment compa n y . As a r esult, the a gg r eg a te returns w e r e a li z e m a y be signi f icant l y a d v ers e l y a f fected if a sm a ll n umber of i n v estments per f o r m poo r l y or if w e need to write d o wn the v a lue of a n y one i n v estment. A d dition a l l y , w hile w e a r e not ta r geting a n y speci f ic industrie s , our i n v estments m a y be concent r a ted in re l a t ive l y f e w industrie s . As a r esult, a d o wnturn in a n y particular industry in w hich w e a r e i n v ested could a lso signi f icant l y impact the a gg r eg a te r eturns w e r e a li z e .

We may hold the debt securities of leveraged companies that may, due to the significant volatility of such companies, enter into bankruptcy proceedings.

L ev e r a ged companies m a y e xperience bankruptcy or similar f inanci a l dist r es s . The bankruptcy p r ocess has a n umber of signi f icant inhe r ent risk s . Ma n y ev ents in a bankruptcy p r oceeding a r e the p r oduct of contested m a tters and a d v ersary p r oceedings and a r e be y ond the cont r ol of the c r editor s . A bankruptcy f iling b y a port f olio compa n y m a y a d v ers e l y and pe r manent l y a f fect the port f olio compa n y . If the p r oceeding is co n v erted to a liquid a tion, the v a lue of the issuer m a y not equ a l the liquid a tion v a lue th a t w as b e li ev ed to e xist a t the time of the i n v estment. The du r a tion of a bankruptcy p r oceeding is a lso di f f icult to p r edict, and a c r editor ’ s r eturn on i n v estment can be a d v ers e l y a f fected b y d e l a ys until the plan of r eo r ganiz a tion or liquid a tion ultim a t e l y becomes e f fect iv e . The administ r a t iv e costs in connection with a bankruptcy p r oceeding a r e f r equent l y high and w ould be paid out of the d e btor ’ s est a te prior to a n y r eturn to c r editor s . Because the standa r ds f or classi f ic a tion of claims under bankruptcy l a w a r e va gu e , our in f luence with r espect to the class of securities or other o b lig a tions w e o wn m a y be lost b y inc r eases in the n umber and amount of claims in the same class or b y di f fe r ent classi f ic a tion and t r e a tment. In the ea r l y st a ges of the bankruptcy p r oces s , it is often di f f icult to estim a te the e xtent o f , or ev en to identif y , a n y contingent claims th a t might be mad e . In a d dition, certain claims th a t h a v e priority b y l a w ( f or e xampl e , claims f or ta x es) m a y be substanti a l.

Our failure to make follow-on investments in our portfolio companies could impair the value of our portfolio.

F oll o wing an initi a l i n v estment in a port f olio compa n y , w e m a y m a k e a d dition a l i n v estments in th a t port f olio compa n y as “ f oll o w-o n ” i n v estment s , in se e king to:

• inc r ease or maintain in w hole or in part our position as a c r editor or equity o wnership pe r cent a ge in a port f olio compa n y;

• ex e r cise w ar r ant s , options or co n v erti b le securities th a t w e r e acqui r ed in the origin a l or subsequent f inancing; or

• p r eser v e or enhance the v a lue of our i n v estment.

W e h a v e disc r etion to m a k e f oll o w-on i n v estment s , subject to the a v ail a bility of c a pit a l r esou r ces and the p ro visions of the 1940 Act. F ailu r e on our part to m a k e f oll o w-on i n v estments m a y , in some ci r cumstance s , jeopa r di z e the conti n ued vi a bility of a port f olio compa n y and our initi a l i n v estment, or m a y r esult in a missed opportunity f or us to inc r ease our particip a tion in a successful ope r a tion. E v en if w e h a v e su f f icient c a pit a l to m a k e a desi r ed f oll o w-on i n v estment, w e m a y e lect not to m a k e a f oll o w-on i n v estment because w e m a y not w ant to inc r ease our l eve l of risk,

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because w e p r efer other opportunities or because w e a r e inhibited b y compliance with BDC r equi r ements or the desi r e to maintain our RIC st a tu s .

Because we will not hold controlling equity interests in the majority of our portfolio companies, we may not be able to exercise control over our portfolio companies or prevent decisions by management of our portfolio companies, which could decrease the value of our investments.

W e do not e xpect to hold cont r olling equity positions in the majority of our port f olio companie s . Our d e bt i n v estments m a y p ro vide limited cont r ol fe a tu r es such as r estrictions on the a bility of a port f olio compa n y to assume a d dition a l d e bt or to use the p r oceeds of our i n v estment f or other than certain speci f ied purpose s . “Cont r ol” under the 1940 Act is p r esumed a t mo r e than 25% equity o wnershi p and m a y a lso be p r esent a t l o w er o wnership l eve ls w he r e w e p ro vide man a geri a l assistanc e . W hen w e do not acqui r e a cont r olling equity position in a port f olio compa n y , w e m a y be subject to the risk th a t a port f olio compa n y m a y m a k e b usiness decisions with w hich w e dis a g r e e , and th a t the man a gement and/or stockholders of a port f olio compa n y m a y t a k e risks or otherwise act in w a ys th a t a r e a d v erse to our inte r est s . Due to the lack of liquidity of the d e bt and equity and equity- re l a ted i n v estments th a t w e typic a l l y hold in our port f olio companie s , w e m a y not be a b le to dispose of our i n v estments in the ev ent w e dis a g r ee with the actions of a port f olio compa n y and m a y the r e f o r e su f fer a dec r ease in the v a lue of our i n v estment s .

Defaults by our portfolio companies will harm our operating results.

A port f olio compa n y ’ s failu r e to s a tisfy f inanci a l or ope r a ting c o v enants imposed b y us or other lenders could lead to defaults and, potenti a l l y , te r min a tion of its loans and f o r eclosu r e on its asset s . This could trigger c r oss-defaults under other a g r eements and jeopa r di z e such port f olio compa n y ’ s a bility to meet its o b lig a tions under the d e bt or equity securities th a t w e hold. W e m a y incur e xpenses to the e xtent necessary to se e k r ec o v ery upon default or to negoti a te n e w te r m s , w hich m a y include the w a iv er of certain f inanci a l c o v enant s , with a defaulting port f olio compa n y . In a d dition, w e h a v e i n v ested in and m a y in the futu r e i n v est in or obtain signi f icant e xposu r e to “c o v enant-lite” loan s . W e use the te r m “c o v enant-lite” loans to r efer gene r a l l y to loans th a t do not h a v e a complete set of f inanci a l maintenance c o v enant s . Gene r a l l y , c o v enant-lite loans p ro vide bor r o w er companies mo r e f r eedom to neg a t ive l y impact lenders because their c o v enants a r e incur r ence-based, w hich means they a r e on l y tested and can on l y be b r eached f oll o wing an a f f i r m a t iv e action of the bor r o w e r , r a ther than b y a deterio r a tion in the bor r o w er ’ s f inanci a l condition. Acco r ding l y , because w e i n v est in and h a v e e xposu r e to c o v enant-lite loan s , w e m a y h a v e f ew er rights a gainst a bor r o w er and m a y h a v e a g r e a ter risk of loss on such i n v estments as compa r ed to i n v estments in or e xposu r e to loans with f inanci a l maintenance c o v enant s .

Furthe r , ma n y of our i n v estments will li k e l y h a v e a princip a l amount outstanding a t m a turit y , w hich could r esult in a substanti a l loss to us if the bor r o w er is un ab le to r e f inance or r ep a y .

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

Although our i n v estments a r e primari l y secu r ed, some i n v estments m a y be unsecu r ed and subo r din a ted to substant iv e amounts of senior ind e btednes s . The port f olio companies in w hich w e i n v est usu a l l y h a v e , or m a y be pe r mitted to incu r , other d e bt th a t r anks equ a l l y with, or senior t o , the d e bt securities in w hich w e i n v est. By their te r m s , such d e bt instruments m a y p ro vide th a t the holders a r e entitled to r ece iv e p a yment of inte r est or princip a l on or be f o r e the d a tes on w hich w e a r e entitled to r ece iv e p a yments in r espect of the d e bt securities in w hich w e i n v est. Als o , in the ev ent of insol v enc y , liquid a tion, dissolution, r eo r ganiz a tion or bankruptcy of a port f olio compa n y , holders of d e bt instruments r anking senior to our i n v estment in th a t port f olio company w ould typic a l l y be entitled to r ece iv e p a yment in full be f o r e w e r ece iv e a n y distri b ution in r espect of our i n v estment. After r ep a ying senior c r editor s , the port f olio compa n y m a y not h a v e a n y r emaining assets to use f or r ep a ying its o b lig a tion to u s . In the case of d e bt r anking equ a l l y with d e bt securities in w hich w e i n v est, w e w ould h a v e to sha r e a n y distri b utions on an equ a l and r a t a b le basis with other c r editors holding such d e bt in the ev ent of an insol v enc y , liquid a tion, dissolution, r eo r ganiz a tion or bankruptcy of the re l e v ant port f olio compa n y .

A d dition a l l y , certain loans th a t w e m a k e to port f olio companies m a y be secu r ed on a second-priority basis b y the same coll a te r a l securing senior secu r ed d e bt of such companie s . The f irst-priority liens on the coll a te r a l will secu r e

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the port f olio compa n y ’ s o b lig a tions under a n y outstanding senior d e bt and m a y secu r e certain other futu r e d e bt th a t m a y be pe r mitted to be incur r ed b y the port f olio compa n y under the a g r eements g o v erning the loan s . The holders of o b lig a tions secu r ed b y f irst-priority liens on the coll a te r a l will gene r a l l y cont r ol the liquid a tion o f , and be entitled to r ece iv e p r oceeds f r om, a n y r e a liz a tion of the coll a te r a l to r ep a y their o b lig a tions in full be f o r e u s . In a d dition, the v a lue of the coll a te r a l in the ev ent of liquid a tion will depend on ma r k et and economic condition s , the a v ail a bility of b u y ers and other factor s . The r e can be no assu r ance th a t the p r oceed s , if a n y , f r om s a les of a ll of the coll a te r a l w ould be su f f icient to s a tisfy the loan o b lig a tions secu r ed b y the second-priority liens after p a yment in full of a ll o b lig a tions secu r ed b y the f irst-priority liens on the coll a te r a l. If such p r oceeds w e r e not su f f icient to r ep a y amounts outstanding under the loan o b lig a tions secu r ed b y the second-priority lien s , then, to the e xtent not r epaid f r om the p r oceeds of the s a le of the coll a te r a l, w e will on l y h a v e an unsecu r ed claim a gainst the port f olio compa n y ’ s r emaining asset s , if a n y .

The rights w e m a y h a v e with r espect to the coll a te r a l securing the loans w e m a k e to our port f olio companies with senior d e bt outstanding m a y a lso be limited pursuant to the te r ms of one or mo r e inte r c r editor a g r eements th a t w e enter into with the holders of such senior d e bt, including in unit r anche t r ansaction s . Under a typic a l inte r c r editor a g r eement, a t a n y time th a t o b lig a tions th a t h a v e the bene f it of the f irst-priority liens a r e outstanding, a n y of the f oll o wing actions th a t m a y be t a k en in r espect of the coll a te r a l will be a t the di r ection of the holders of the o b lig a tions secu r ed b y the f irst-priority liens:

• the a bility to cause the commencement of en f o r cement p r oceedings a gainst the coll a te r a l;

• the a bility to cont r ol the conduct of such p r oceedings;

• the a pp ro v a l of amendments to coll a te r a l documents;

• re leases of liens on the coll a te r a l; and

• w a iv ers of past defaults under coll a te r a l document s .

W e m a y not h a v e the a bility to cont r ol or di r ect such action s , ev en if our rights a r e a d v ers e l y a f fected. In a d dition, a bankruptcy court m a y choose not to en f o r ce an inte r c r editor a g r eement or other a g r eement with c r editor s .

W e m a y a lso m a k e unsecu r ed loans to port f olio companie s , meaning th a t such loans will not bene f it f r om a n y inte r est in coll a te r a l of such companie s . Liens on such port f olio companies’ coll a te r a l, if a n y , will secu r e the port f olio compa n y ’ s o b lig a tions under its outstanding secu r ed d e bt and m a y secu r e certain futu r e d e bt th a t is pe r mitted to be incur r ed b y the port f olio compa n y under its secu r ed loan a g r eement s . The holders of o b lig a tions secu r ed b y such liens will gene r a l l y cont r ol the liquid a tion o f , and be entitled to r ece i v e p r oceeds f r om, a n y r e a liz a tion of such coll a te r a l to r ep a y their o b lig a tions in full be f o r e u s . In a d dition, the v a lue of such coll a te r a l in the ev ent of liquid a tion will depend on ma r k et and economic condition s , the a v ail a bility of b u y ers and other factor s . The r e can be no assu r ance th a t the p r oceed s , if a n y , f r om s a les of such coll a te r a l w ould be su f f icient to s a tisfy our unsecu r ed loan o b lig a tions after p a yment in full of a ll secu r ed loan o b lig a tion s . If such p r oceeds w e r e not su f f icient to r ep a y the outstanding secu r ed loan o b lig a tion s , then our unsecu r ed claims w ould r ank equ a l l y with the unpaid portion of such secu r ed c r editors’ claims a gainst the port f olio compa n y ’ s r emaining asset s , if a n y .

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

The disposition of our investments may result in contingent liabilities.

A signi f icant portion of our i n v estments m a y i n v ol v e pr i v a te securitie s . In connection with the disposition of an i n v estment in pr i v a te securitie s , w e m a y be r equi r ed to m a k e r ep r esent a tions a bout the b usiness and f inanci a l a f fairs of the port f olio compa n y typic a l of those made in connection with the s a le of a b usines s . W e m a y a lso be r equi r ed to

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indemnify the pu r chasers of such i n v estment to the e xtent th a t a n y such r ep r esent a tions turn out to be inaccu r a te or with r espect to potenti a l li a bilitie s . These ar r angements m a y r esult in contingent li a bilities th a t ultim a t e l y r esult in funding o b lig a tions th a t w e m ust s a tisfy th r ough our r eturn of distri b utions p re vious l y made to u s .

We may be subject to additional risks if we engage in hedging transactions and/or invest in foreign securities.

The 1940 Act gene r a l l y r equi r es th a t 70% of our i n v estments be in issuers each of w hom, in a d dition to other r equi r ement s , is o r gani z ed under the l a ws o f , and has its princip a l place of b usiness in, a n y st a te of the United St a te s , the District of Columbia, Puerto Ric o , the V i r gin Islands or a n y other possession of the United St a te s . Our i n v estment st r a tegy does not contempl a te a signi f icant n umber of i n v estments in securities of non- U . S . companie s . W e e xpect th a t these i n v estments w ould f ocus on the same i n v estments th a t w e m a k e in U . S . g r o wth st a ge companies and, acco r ding l y , w ould be complementary to our o v e r a ll st r a tegy and enhance the d iv ersity of our holding s .

T o the e xtent th a t these i n v estments a r e denomin a ted in a f o r eign cur r enc y , w e m a y eng a ge in hedging t r ansaction s . Eng a ging in either hedging t r ansactions or i n v esting in f o r eign securities w ould entail a d dition a l risks to our stockholder s . W e m a y , f or e xampl e , use instruments such as inte r est r a te s wa p s , c a p s , collars and f loor s , f or w a r d cont r acts or cur r ency options or bor r o w under a c r edit facility in f o r eign cur r encies to minimi z e our f o r eign cur r ency e xposu r e . In each such cas e , w e gene r a l l y w ould se e k to hedge a gainst f luctu a tions of the re l a t iv e v a lues of our port f olio positions f r om changes in ma r k et inte r est r a tes or cur r ency e x change r a te s . Hedging a gainst a decline in the v a lues of our port f olio positions w ould not e limin a te the possibility of f luctu a tions in the v a lues of such positions or p rev ent losses if the v a lues of the positions declined. H o wev e r , such hedging could est a b lish other positions designed to gain f r om those same d eve lopment s , the re b y o f fsetting the decline in the v a lue of such port f olio position s . Such hedging t r ansactions could a lso limit the opportunity f or gain if the v a lues of the unde r l ying port f olio positions inc r eased. Mo r e o v e r , it might not be possi b le to hedge a gainst an e x change r a te or inte r est r a te f luctu a tion th a t w as so gene r a l l y anticip a ted th a t w e w ould not be a b le to enter into a hedging t r ansaction a t an accept a b le pric e .

W hile w e m a y enter into such t r ansactions to se e k to r educe cur r ency e x change r a te and inte r est r a te risk s , unanticip a ted changes in cur r ency e x change r a tes or inte r est r a tes could r esult in poo r er o v e r a ll i n v estment per f o r mance than if w e had not eng a ged in a n y such hedging t r ansaction s . In a d dition, the deg r ee of cor re l a tion bet w een price m o v ements of the instruments used in a hedging st r a tegy and price m o v ements in the port f olio positions being hedged could v ar y . Mo r e o v e r , f or a v ariety of r eason s , w e might not se e k to est a b lish a perfect cor re l a tion bet w een the hedging instruments and the port f olio holdings being hedged. A n y such imperfect cor re l a tion could p rev ent us f r om achi e ving the intended hedge and e xpose us to risk of los s . In a d dition, it might not be possi b le to hedge ful l y or perfect l y a gainst cur r ency f luctu a tions a f fecting the v a lue of securities denomin a ted in non- U . S . cur r encies because the v a lue of those securities w ould li k e l y f luctu a te as a r esult of factors not re l a ted to cur r ency f luctu a tion s .

T he new ma r k et structu r e applica b le to deri v ati v es imposed b y the Dodd- F r ank Act may affect our ability to use ov er-the-counter (“ OT C”) deri v ati v es for hedging pu r pose s .

The Do d d- F r ank Act enacted, and the U . S . Commodity Futu r es T r ading Commission (“CF T C”) and SEC h a v e issued or p r oposed rules to implement, both b r oad n e w r egul a tory r equi r ements and b r oad n e w structu r a l r equi r ements a pplic a b le to O T C der i v a t iv es ma r k ets and, to a lesser e xtent, listed commodity futu r es (and futu r es options) ma r k et s . Similar changes a r e in the p r ocess of being implemented in other major f inanci a l ma r k et s .

R ecent and anticip a ted r egul a tory changes r equi r e th a t certain types of O T C der i v a t iv e s , including those th a t w e m a y use f or hedging act i vitie s , including inte r est r a te and c r edit default s wa p s , be clea r ed and t r aded on r egul a ted pl a t f o r m s , and these r egul a tory changes a r e e xpected to a pp l y to f o r eign e x change t r ansactions in the futu r e . U . S . r egul a tors h a v e a lso adopted rules r equiring us to post coll a te r a l with r espect to clea r ed O T C der i v a t iv es and rules imposing ma r gin r equi r ements f or O T C der i v a t iv es ex ecuted with r egiste r ed s wa p de a lers th a t a r e not clea r ed. The ma r gin r equi r ements f or clea r ed and unclea r ed O T C der i v a t iv es m a y , in o r der to maintain our ex emption f r om commodity pool ope r a tor (“CPO”) r egist r a tion under the CF T C No-Action Letter 12-40, limit our a bility to enter into hedging t r ansactions or to obtain synthetic i n v estment e xposu r e s , in either case a d v ers e l y a f fecting our a bility to

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mitig a te risk. Furthe r mo r e , a n y failu r e b y us to ful f ill a n y coll a te r a l r equi r ement ( e .g., a so-c a lled “ma r gin c a ll”) m a y r esult in a default and could h a v e a m a teri a l a d v erse impact on our b usines s , f inanci a l condition and r esults of ope r a tion s .

The Do d d- F r ank Act a lso imposed r equi r ements re l a ting to r e a l-time pu b lic and r egul a tory r eporting of O T C der i v a t iv e t r ansaction s , enhanced document a tion r equi r ement s , position limits on an e xpanded ar r a y of der i v a t iv e s , and r eco r d k eeping r equi r ement s . T a k en as a w hol e , these changes could signi f icant l y inc r ease the cost of using unclea r ed O T C der i v a t iv es to hedge risk s , including inte r est r a te and f o r eign e x change risk; r educe the l eve l of e xposu r e w e a r e a b le to obtain f or risk man a gement purposes th r ough O T C der i v a t i v es (including as the r esult of the CF T C imposing position limits on a d dition a l p r oducts); r educe the amounts a v ail a b le to us to m a k e non-der i v a t iv es i n v estments; impair liquidity in certain O T C der i v a t i v es; and a d v ers e l y a f fect the qu a lity of ex ecution pricing obtained b y u s , a ll of w hich could a d v ers e l y impact our i n v estment r eturn s .

W e may not r ealize g ains f r om our equity and equity- r e lated i n v estment s .

W e m a y in the futu r e m a k e i n v estments th a t include w ar r ants or other equity or equity- r e l a ted securitie s . In a d dition, w e m a y f r om time to time m a k e non-cont r ol, equity co-i n v estments in companies in conjunction with pr i v a te equity sponsor s . Our go a l is ultim a t e l y to r e a li z e gains upon our disposition of such equity and equity- re l a ted inte r est s . H o wev e r , the equity and equity- re l a ted inte r ests w e r ece iv e m a y not a pp r eci a te in v a lue and, in fact, m a y decline in v a lu e . Acco r ding l y , w e m a y not be a b le to r e a li z e gains f r om our equity and equity- re l a ted inte r est s , and a n y gains th a t w e do r e a li z e on the disposition of a n y equity and equity- re l a ted inte r ests m a y not be su f f icient to o f fset a n y other losses w e e xperienc e . W e a lso m a y be un a b le to r e a li z e a n y v a lue if a port f olio compa n y does not h a v e a liquidity ev ent, such as a s a le of the b usines s , r ec a pit a liz a tion or pu b lic o f fering, w hich w ould a ll o w us to s e ll the unde r l ying equity inte r est s . W e often se e k puts or similar rights to g iv e us the right to s e ll our equity and equity- re l a ted securities back to the port f olio compa n y issue r . W e m a y be un a b le to ex e r cise these put rights f or the conside r a tion p ro vided in our i n v estment documents if the issuer is in f inanci a l dist r es s .

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

In N o v ember 2020, the SEC adopted a rulemaking r ega r ding the a bility of a BDC (or a r egiste r ed i n v estment compa n y) to use der i v a t iv es and other t r ansactions th a t c r e a te futu r e p a yment or d e l iv ery o b lig a tions. Under the newly adopted rules, BDCs th a t use der i v a t iv es will be subject to a v a lue- a t-risk (“ V aR”) l ev e r a ge limit, certain othe r der i v a t iv e s ris k man a gemen t p r o g r a m an d testin g r equi r ement s an d r equi r ement s re l a te d t o boa r d r eporting. These n e w r equi r ements will a pp l y unless the BDC qu a li f ies as a “limited der i v a t iv es use r , ” under the adopted rules. Under the new rul e , a BDC m a y enter into an unfunded commitment a g r eement th a t is not a der i v a t iv es t r ansaction, such as an a g r eement to p ro vide f inancing to a port f olio compa n y , if the BDC has, among other things, a r eason a b le b e lie f , a t the time it enters into such an a g r eement, th a t it will h a v e su f f icient cash and cash equ i v a lents to meet its o b lig a tions with r espect to a ll of its unfunded commitment a g r eement s , in each case as it becomes du e . Collect ive l y , these p r oposed requirements m a y limit our a bility to use der i v a t iv es and/or enter into certain other f inanci a l cont r act s .

Risks R elated to an I n v estment in Our Common Stock

We may not be able to pay distributions, our distributions may not grow over time and/or a portion of our distributions may be a return of capital.

W e intend to p a y distri b utions to our stockholders out of assets leg a l l y a v ail a b le f or distri b ution. W e cannot assu r e y ou th a t w e will achi ev e i n v estment r esults th a t will a ll o w us to sustain a speci f ied l eve l of cash distri b utions or m a k e periodic inc r eases in cash distri b ution s . Our a bility to p a y distri b utions might be a d v ers e l y a f fected b y , among other thing s , the impact of one or mo r e of the risk factors described he r ein. If w e decla r e a d i vidend, and if enough stockholders opt to r ece iv e cash distri b utions r a ther than particip a te in our distri b ution r ei n v estment plan, w e m a y be f o r ced to s e ll some of our i n v estments in o r der to m a k e cash d i vidend p a yment s . In a d dition, the in a bility to s a tisfy the asset c o v e r a ge test a pplic a b le to us as a BDC could limit our a bility to p a y distri b ution s . All distri b utions will be paid a t the disc r etion of the Boa r d and will depend on our earning s , our f inanci a l condition, maintenance of our RIC st a tu s , compliance with a pplic a b le BDC r egul a tions and such other factors as the Boa r d m a y deem re l e v ant f r om time to tim e . W e cannot assu r e y ou th a t w e will p a y distri b utions to our stockholder s .

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W hen w e m a k e distri b ution s , w e will be r equi r ed to dete r mine the e xtent to w hich such distri b utions a r e paid out of cur r ent or accu m ul a ted earnings and p r o f it s . Distri b utions in e x cess of cur r ent and accu m ul a ted earnings and p r o f its will be t r e a ted as a non-tax a b le r eturn of c a pit a l to the e xtent of an i n v estor ’ s basis in our stock and, assuming th a t an i n v estor holds our stock as a c a pit a l asset, the r eafter as a c a pit a l gain.

I n v esting in our common stock may i n v ol v e an ab ov e-a v e r a g e d e g r ee of risk.

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

Provisions of the Maryland General Corporation Law (the “MGCL”) and our Charter and Bylaws could deter takeover attempts and have an adverse effect on the price of our common stock.

The MGCL and our Charter and Byl a ws contain p ro visions th a t m a y discou r a g e , d e l a y or m a k e mo r e di f f icult a change in cont r ol of us or the r em o v a l of our di r ector s . W e a r e subject to the Maryland Business Combin a tion Act, subject to a n y a pplic a b le r equi r ements of the 1940 Act. The Boa r d has adopted a r esolution ex empting f r om the Maryland Business Combin a tion Act a n y b usiness combin a tion bet w een us and a n y other person, subject to prior a pp ro v a l of such b usiness combin a tion b y the Boa r d, including a pp ro v a l b y a majority of our independent di r ector s . If the r esolution ex empting b usiness combin a tions is r epe a led or the Boa r d does not a pp ro v e a b usiness combin a tion, the Maryland Business Combin a tion Act m a y discou r a ge thi r d parties f r om trying to acqui r e cont r ol of us and inc r ease the di f f iculty of consumm a ting such an o f fe r . In a d dition, w e m a y amend our Byl a ws to be subject to the Maryland Cont r ol Sha r e Acquisition Act, b ut on l y if the Boa r d dete r mines th a t it w ould be in our best inte r est s , including in light of the Boa r d ’ s f iduciary o b lig a tion s , a pplic a b le fede r a l and st a te l a w s , and the particular facts and ci r cumstances sur r ounding the Boa r d’s decision. If such conditions a r e met, and w e amend our Byl a ws to r epe a l the ex emption f r om the Maryland Cont r ol Sha r e Acquisition Act, the Maryland Cont r ol Sha r e Acquisition Act a lso m a y m a k e it mo r e di f f icult f or a thi r d party to obtain cont r ol of us and inc r ease the di f f iculty of consumm a ting such a t r ansaction.

W e h a v e adopted certain measu r es th a t m a y m a k e it di f f icult f or a thi r d-party to obtain cont r ol of u s , including p ro visions of our Charter classifying the Boa r d in th r ee st a gge r ed te r ms and authorizing the Boa r d to classify or r eclassify sha r es of our c a pit a l stock in one or mo r e classes or series and to cause the issuance of a d dition a l sha r es of our stock. These p ro vision s , as we ll as other p ro visions of our Charter and Byl a w s , m a y d e l a y , defer or p rev ent a t r ansaction or a change in cont r ol th a t might otherwise be in the best inte r ests of our stockholder s .

Our Bylaws include an exclusive forum selection provision, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, off icers or other agents.

Our Byl a ws r equi r e th a t, unless w e consent in writing to the s e lection of an a ltern a t iv e f orum, the Ci r cuit Court f or B a ltimo r e City (o r , if th a t court does not h a v e jurisdiction, the United St a tes District Court f or the District of Maryland, Northern D i vision) sh a ll be the sole and e x clus iv e f orum f or (i) a n y der i v a t iv e action or p r oceeding b r ought on b e h a lf of the Compa n y (ii) a n y action asserting a claim of b r each of a n y standa r d of conduct or leg a l duty o w ed b y a n y of the Compa n y ’ s di r ecto r , o f f icer or other a gent to the Compa n y or to its stockholder s , (iii) a n y action asserting a claim arising pursuant to a n y p ro vision of the MGCL or the Charter or the Byl a ws (as either m a y be amended f r om time to time), or ( i v) a n y action asserting a claim g o v erned b y the intern a l a f fairs doctrin e .

This e x clus iv e f orum s e lection p ro vision in our Byl a ws will not a pp l y to claims arising under the fede r a l securities l a w s , including the Securities Act and the E x change Act. The r e is uncertainty as to w hether a court w ould en f o r ce such a p ro vision, and i n v estors cannot w a iv e compliance with the fede r a l securities l a ws and the rules and r egul a tions the r eunde r . In a d dition, this p ro vision m a y inc r ease costs f or stockholders in bringing a claim a gainst us or our di r ector s , o f f icers or other a gent s . A n y i n v estor pu r chasing or otherwise acquiring our sha r es is deemed to h a v e notice of and consented to the f o r egoing p r o vision.

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The e x clus iv e f orum s e lection p ro vision in our Byl a ws m a y limit our stockholders’ a bility to obtain a f a v o r a b le judici a l f orum f or disputes with us or our di r ector s , o f f icers or other a gent s , w hich m a y discou r a ge l a wsuits a gainst us and such person s . It is a lso possi b le th a t, notwithstanding such e x clus iv e f orum s e lection p ro vision, a court could rule th a t such p ro vision is in a pplic a b le or unen f o r ce a b l e . If this occur r ed, w e m a y incur a d dition a l costs associ a ted with r esolving such action in another f orum, w hich could m a teri a l l y a d v ers e l y a f fect our b usines s , f inanci a l condition and r esults of ope r a tion s .

We cannot assu r e y ou that a ma r k et for our common stock will de ve lop or , if one develops, that the market will continue, which would adversely affect the liquidity and price of our common stock .

Our common stock began trading on the Nasdaq Glob a l S e lect Ma r k et under the symbol “TRIN” on January 29, 2021. We cannot assu r e y ou th a t an act iv e t r ading ma r k et will d eve lop f or our common stock o r , if one d eve lop s , th a t the t r ading ma r k et can be sustained. In a d dition, w e cannot p r edict the prices a t w hich our common stock will t r ad e . Sha r es of closed-end i n v estment companie s , including BDC s , f r equent l y t r ade a t a discount f r om their net asset v a lue and our stock m a y a lso be discounted in the ma r k et. This cha r acteristic of closed-end i n v estment companies is sepa r a te and distinct f r om the risk th a t our net asset v a lue per sha r e of common stock m a y declin e . W e cannot p r edict w hether our common stock will t r ade a t, a b o v e or b e l o w net asset v a lu e . In a d dition, if our common stock t r ades b e l o w its net asset v a lu e , w e will gene r a l l y not be a b le to s e ll a d dition a l sha r es of our common stock to the pu b lic a t its ma r k et price without f irst obtaining the a pp ro v a l of a majority of our stockholders (including a majority of our una f f ili a ted stockholders) and our independent di r ectors f or such issuanc e .

A stockholder’s interest in us will be diluted if additional shares of our common stock are issued in the future, which could reduce the overall value of an investment in us.

Our stockholders do not h a v e p r eempt iv e rights to pu r chase a n y sha r es w e issue in the futu r e . Our charter authori z es us to issue up to 200 million sha r es of common stock. Pursuant to our charte r , a majority of our enti r e Boa r d m a y amend our charter to inc r ease the n umber of sha r es of common stock w e m a y issue without stockholder a pp ro v a l. Our Boa r d m a y e lect to s e ll a d dition a l sha r es in the futu r e or issue equity inte r ests in pr i v a te or pu b lic o f fering s . T o the e xtent w e issue a d dition a l equity inte r ests a t or b e l o w net asset v a lu e , y our pe r cent a ge o wnership inte r est in us m a y be diluted. In a d dition, depending upon the te r ms and pricing of a n y future o f ferings and the v a lue of our i n v estment s , y ou m a y a lso e xperience dilution in the book v a lue and fair v a lue of y our sha r e s .

Under the 1940 Act, w e gene r a l l y a r e p r ohibited f r om issuing or s e lling our common stock a t a price b e l o w net asset v a lue per sha r e , w hich m a y be a disa dv ant a ge as compa r ed with certain pu b lic companie s . W e m a y , h o wev e r , s e ll our common stock, or w ar r ant s , option s , or rights to acqui r e our common stock, a t a price b e l o w the cur r ent net asset v a lue of our common stock if our Boa r d and independent di r ectors dete r mine th a t such s a le is in our best inte r ests and the best inte r ests of our stockholder s , and our stockholder s , including a majority of those stockholders th a t a r e not a f f ili a ted with u s , a pp ro v e such s a l e . In a n y such cas e , the price a t w hich our securities a r e to be issued and sold m a y not be less than a price th a t, in the dete r min a tion of our Boa r d, clos e l y a pp r o xim a tes the fair v a lue of such securities (less a n y distri b uting commission or discount). If w e r aise a d dition a l funds b y issuing common stock or senior securities co n v erti b le int o , or e x change a b le f o r , our common stock, then the pe r cent a ge o wnership of our stockholders a t th a t time will dec r ease and y ou will e xperience dilution. Stockholders will experience dilution upon the conversion of some or all of the Convertible Notes into shares of our common stock. The existence of the Convertible Notes may also encourage short selling by market participants because the conversion of the Convertible Notes could depress the market price for our common stock.

Sales of substantial amounts of our common stock in the pu b lic ma r k et may ha v e an ad v e r se effect on the ma r k et price of our common stock.

A n y futu r e pu b lic r es a le of a n y sha r es of our common stock under the Common Stock R egist r a tion Rights Ag r eement and/or the Co n v erti b le Notes R egist r a tion Rights Ag r eement, and/or the e xpi r a tion of a pplic a b le lock-up period s , subject to a pplic a b le securities l a w s , s a les of substanti a l amounts of our common stock, or the pe r ception th a t such s a les could occu r , could a d v ers e l y a f fect the p re v ailing ma r k et prices f or our common stock. If this occur s , it could impair our a bility to r aise a d dition a l c a pit a l th r ough the s a le of equity securities should w e desi r e to do s o . W e

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cannot p r edict w h a t e f fect, if a n y , futu r e s a les of securitie s , or the a v ail a bility of securities f or futu r e s a le s , will h a v e on the ma r k et price of our common stock p r e v ailing f r om time to tim e .

The market value of our common stock may fluctuate significantly.

The ma r k et v a lue and liquidit y , if a n y , of the ma r k et f or sha r es of our common stock m a y be signi f icant l y a f fected b y n ume r ous factor s , some of w hich a r e be y ond our cont r ol and m a y not be di r ect l y re l a ted to our ope r a ting per f o r manc e . These factors include:

• changes in the v a lue of our port f olio of i n v estments and der i v a t iv e instruments as a r esult of changes in ma r k et factor s , such as inte r est r a te shift s , and a lso port f olio speci f ic per f o r manc e , such as port f olio compa n y default s , among other r easons;

• changes in r egul a tory policies or tax guid e line s , particula r l y with r espect to RICs or BDCs;

• loss of RIC or BDC st a tus;

• distri b utions th a t e x ceed our net i n v estment income and net income as r eported acco r ding to GAAP;

• changes in earnings or v ari a tions in ope r a ting r esults;

• changes in accounting guid e lines g o v erning v a lu a tion of our i n v estments;

• a n y shortf a ll in rev e n ue or net income or a n y inc r ease in losses f r om l eve ls e xpected b y i n v estors;

• departu r e of k ey personn e l;

• gene r a l economic t r ends and other e xtern a l factors; and

• loss of a major funding sou r c e .

If we issue preferred stock or convertible debt securities, the net asset value of our common stock may become more volatile.

W e cannot assu r e y ou th a t the issuance of p r efer r ed stock and/or co n v erti b le d e bt securities w ould r esult in a higher yi e ld or r eturn to the holders of our common stock. The issuance of p r efer r ed stock or co n v erti b le d e bt w ould li k e l y cause the net asset v a lue of our common stock to become mo r e v ol a til e . If the d i vidend r a te on the p r efer r ed stock, or the inte r est r a te on the co n v erti b le d e bt securitie s , w e r e to a pp r oach the net r a te of r eturn on our i n v estment port f oli o , the bene f it of such l ev e r a ge to the holders of our common stock w ould be r educed. If the d i vidend r a te on the p r efer r ed stock, or the inte r est r a te on the co n v erti b le d e bt securitie s , w e r e to e x ceed the net r a te of r eturn on our port f oli o , the use of l ev e r a ge w ould r esult in a l o w er r a te of r eturn to the holders of common stock than if w e had not issued the p r efer r ed stock or co n v erti b le d e bt securitie s . A n y decline in the net asset v a lue of our i n v estment w ould be borne enti re l y b y the holders of our common stock. The r e f o r e , if the ma r k et v a lue of our port f olio w e r e to declin e , the l e v e r a ge w ould r esult in a g r e a ter dec r ease in net asset v a lue to the holders of our common stock than if w e w e r e not l ev e r a ged th r ough the issuance of p r efer r ed stock or d e bt securitie s . This decline in net asset v a lue w ould a lso tend to cause a g r e a ter decline in the ma r k et pric e , if a n y , f or our common stock.

The r e is a lso a risk th a t, in the ev ent of a sharp decline in the v a lue of our net asset s , w e w ould be in danger of failing to maintain r equi r ed asset c o v e r a ge r a tio s , w hich m a y be r equi r ed b y the p r efer r ed stock or co n v erti b le d e bt, or our cur r ent i n v estment income might not be su f f icient to meet the d i vidend r equi r ements on the p r efer r ed stock or the inte r est p a yments on the d e bt securitie s . In o r der to counte r act such an ev ent, w e might need to liquid a te i n v estments in o r der to fund the r edemption of some or a ll of the p r efer r ed stock or co n v erti b le d e bt. In a d dition, w e w ould p a y (and the holders of our common stock w ould bear) a ll costs and e xpenses re l a ting to the issuance and ongoing maintenance of the p r efer r ed stock, d e bt securitie s , co n v erti b le d e bt, or a n y combin a tion of these securitie s . Holders of p r efer r ed stock or co n v erti b le d e bt m a y h a v e di f fe r ent inte r ests than holders of common stock and m a y a t times h a v e disp r oportion a te in f luence o v er our a f fair s .

Stockholde r s will e xperience dilution in their o wne r ship pe r centa g e if th e y do not participate in our distribution r ei n v estment plan.

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Stockholde r s may e xperience dilution in the net asset v alue of their sha r es if th e y do not participate in our distribution r ei n v estment plan and if our sha r es a r e t r ading at a discount to net asset v alu e .

All distri b utions decla r ed in cash p a y a b le to stockholders th a t a r e participants in our distri b ution r ei n v estment plan will gene r a l l y be autom a tic a l l y r ei n v ested in sha r es of our common stock if the i n v estor does not e lect to opt out of the plan. As a r esult, stockholders th a t opt out of our distri b ution r ei n v estment plan m a y e xperience acc r etion to the net asset v a lue of their sha r es if our sha r es a r e t r ading a t a p r emium to net asset v a lue and dilution if our sha r es a r e t r ading a t a discount to net asset v a lu e . The l eve l of acc r etion or discount w ould depend on v arious factor s , including the p r oportion of our stockholders w ho particip a te in the plan, the l eve l of p r emium or discount a t w hich our sha r es a r e t r ading and the amount of the distri b ution p a y a b le to stockholder s .

Risks R elated to the 2025 Notes

The 2025 Notes are unsecured and therefore are effectively subordinated to any secured indebtedness we have currently incurred or may incur in the future.

The 2025 Notes a r e not secu r ed b y a n y of our assets or a n y of the assets of our subsidiarie s . As a r esult, the 2025 Notes a r e e f fect ive l y subo r din a ted, or junio r , to a n y secu r ed ind e btedness or other o b lig a tions w e or our subsidiaries h a v e cur r ent l y incur r ed, including the C r edit Facility, and m a y incur in the futu r e (or a n y ind e btedness th a t is initi a l l y unsecu r ed th a t w e l a ter secu r e) to the e xtent of the v a lue of the assets securing such ind e btednes s . In a n y liquid a tion, dissolution, bankruptcy or other similar p r oceeding, the holders of a n y of our e xisting or futu r e secu r ed ind e btedness and the secu r ed ind e btedness of our subsidiaries m a y assert rights a gainst the assets pledged to secu r e th a t ind e btedness in o r der to r ece iv e full p a yment of their ind e btedness be f o r e the assets m a y be used to p a y other c r editor s , including the holders of the 2025 Note s . Secu r ed ind e btedness is e f fect ive l y senior to the 2025 Notes to the e xtent of the v a lue of the assets securing such ind e btednes s .

The 2025 Notes are structurally subordinated to the indebtedness and other liabilities of our subsidiaries.

The 2025 Notes a r e o b lig a tions e x clus ive l y of us and not of a n y of our subsidiarie s . None of our subsidiaries a r e a gua r antor of the 2025 Notes and the 2025 Notes a r e not r equi r ed to be gua r anteed b y a n y subsidiaries w e m a y acqui r e or c r e a te in the futu r e . E x cept to the e xtent w e a r e a c r editor with r ec o gni z ed claims a gainst our subsidiarie s , a ll claims of c r editors (including t r ade c r editors) and holders of p r efer r ed stock, if a n y , of our subsidiaries will h a v e priority o v er our equity inte r ests in such subsidiaries (and the r e f o r e the claims of our c r editor s , including holders of the 2025 Notes) with r espect to the assets of such subsidiarie s . E v en if w e a r e r ec o gni z ed as a c r editor of one or mo r e of our subsidiarie s , our claims w ould still be e f fect ive l y subo r din a ted to a n y security inte r ests in the assets of a n y such subsidiary and to a n y ind e btedness or other li a bilities of a n y such subsidiary senior to our claim s . Consequent l y , the 2025 Notes will be structu r a l l y subo r din a ted, or junio r , to the C r edit Facility and a ll e xisting and futu r e ind e btedness and other o b lig a tions (including t r ade p a y a b les) incur r ed b y a n y of our subsidiarie s , f inancing ve hicles or similar facilities and a n y subsidiarie s , f inancing ve hicles or similar facilities th a t w e m a y in the futu r e acqui r e or est a b lish.

The 2025 Notes Indenture contains limited protection for holders of the 2025 Notes.

The 2025 Notes Indentu r e (as de f ined in this annual report on Form 10-K) o f fers limited p r otection to holders of the 2025 Note s . The te r ms of the 2025 Notes Indentu r e and the 2025 Notes do not r estrict our or a n y of our subsidiaries’ a bility to eng a ge in, or otherwise be a party t o , a v ariety of corpo r a te t r ansaction s , ci r cumstances or ev ents th a t could h a v e an a d v erse impact on y our i n v estment in the 2025 Note s . In particula r , the te r ms of the 2025 Notes Indentu r e and the 2025 Notes will not place a n y r estrictions on our or our subsidiaries’ a bility to:

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• issue securities or otherwise incur a d dition a l ind e btedness or other o b lig a tion s , including (1) a n y ind e btedness or other o b lig a tions th a t w ould be pari passu, or equ a l, in right of p a yment to the 2025 Note s , (2) a n y ind e btedness or other o b lig a tions th a t w ould be secu r ed and the r e f o r e r ank e f fect ive l y senior in right of p a yment to the 2025 Notes to the e xtent of the v a lue of the assets securing such ind e btednes s , (3) ind e btedness or other o b lig a tions of ours th a t a r e gua r anteed b y one or mo r e o f our subsidiaries and w hich the r e f o r e a r e structu r a l l y senior to the 2025 Notes and (4) securitie s , ind e btedness or other o b lig a tions incur r ed b y our subsidiaries th a t w ould be senior to our equity inte r ests in our subsidiaries and the r e f o r e r ank structu r a l l y senior to the 2025 Notes with r espect to the assets of those subsidiarie s , in each case other than an incur r ence of ind e btedness or other o b lig a tions th a t w ould cause a viol a tion of Section 18(a)(1)(A) as modi f ied b y Section 61(a) of the 1940 Act or a n y successor p ro visions of the 1940 Act, b ut g i ving e f fect, in either cas e , to a n y e x empt i v e re lief g r anted to us b y the SE C . Cur r ent l y , these p ro visions gene r a l l y p r ohibit us f r om incurring a d dition a l bor r o wing s , including th r ough the issuance of a d dition a l d e bt securitie s , unless our asset c o v e r a g e , as de f ined in the 1940 Act, equ a ls a t least 150% after such bor r o wings;

• p a y d i vidends on, or pu r chase or r edeem or m a k e a n y p a yments in r espect o f , c a pit a l stock or other securities r anking junior in right of p a yment to the 2025 Notes;

• s e ll assets (other than certain limited r estrictions on our a bility to consolid a t e , me r ge or s e ll a ll or substanti a l l y a ll of our assets);

• c r e a te liens (including liens on the sha r es of our subsidiaries) or enter into s a le and leas e back t r ansactions;

• enter into t r ansactions with a f f ili a tes;

• m a k e i n v estments; or

• c r e a te r estrictions on the p a yment of d i vidends or other amounts to us f r om our subsidiarie s .

In a d dition, the 2025 Notes Indentu r e does not r equi r e us to o f fer to pu r chase the 2025 Notes in connection with a change of cont r ol or a n y other ev ent. Furthe r mo r e , the te r ms of the 2025 Notes Indentu r e and the 2025 Notes do not p r otect holders of the 2025 Notes in the ev ent th a t w e e xperience changes (including signi f icant a d v erse changes) in our f inanci a l condition, r esults of ope r a tions or c r edit r a ting s , as they do not r equi r e th a t w e or our subsidiaries adhe r e to a n y f inanci a l tests or r a tios or speci f ied l eve ls of net w orth, rev e n ue s , incom e , cash f l o w , or liquidit y .

Our a bility to r ec a pit a li z e , incur a d dition a l d e bt and t a k e a n umber of other actions th a t a r e not limited b y the te r ms of the 2025 Notes m a y h a v e important consequences f or y ou as a holder of the 2025 Note s , including m a king it mo r e di f f icult f or us to s a tisfy our o b lig a tions with r espect to the 2025 Notes or neg a t ive l y a f fecting the t r ading v a lue of the 2025 Notes to the e xtent such a t r ading ma r k et d eve lops f or the 2025 Note s .

Certain of our cur r ent d e bt instruments include mo r e p r otections f or their holders than the 2025 Notes Indentu r e and the 2025 Note s . In a d dition, other d e bt w e issue or incur in the futu r e could contain mo r e p r otections f or its holders than the 2025 Notes Indentu r e and the 2025 Note s , including a d dition a l c o v enants and ev ents of default. The issuance or incur r ence of a n y such d e bt with inc r ement a l p r otections could a f fect the ma r k et f or and t r ading l eve ls and prices of the 2025 Notes to the e xtent such a ma r k et d e v e lops f or the 2025 Note s .

If we default on our obligations to pay our other indebtedness, we may not be able to make payments on the

2025 Notes.

A n y default under the a g r eements g o v erning our ind e btedness or under other ind e btedness to w hich w e m a y be a part y , th a t is not w a iv ed b y the r equi r ed lenders or holders and the r emedies sought b y the holders of such ind e btedness could m a k e us un a b le to p a y princip a l, p r emium, if a n y , and inte r est on the 2025 Notes and substanti a l l y dec r ease the ma r k et v a lue of the 2025 Note s .

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with the v arious c o v enant s , including f inanci a l and ope r a ting c o v enant s , in the instruments g o v erning our ind e btednes s , w e could be in default under the te r ms of the a g r eements g o v erning such ind e btednes s . In the ev ent of such default, the holders of such ind e btedness could e lect to decla r e a ll the funds bor r o w ed the r eunder to be due and p a y a b l e , t o gether with accrued and unpaid inte r est, the lenders under our cur r ent ind e btedness or other d e bt w e m a y incur in the futu r e could e lect to te r min a te their commitment s , cease m a king further loans and institute f o r eclosu r e p r oceedings a gainst our asset s , and w e could be f o r ced into bankruptcy or liquid a tion.

If our ope r a ting per f o r mance decline s , w e m a y in the futu r e need to se e k to obtain w a iv ers f r om the r equi r ed lenders or holders under the a g r eements g o v erning our ind e btednes s , or other ind e btedness th a t w e m a y incur in the futu r e , to a v oid being in default. If w e b r each our c o v enants under the a g r eements g o v erning our ind e btedness and se e k a w a iv e r , w e m a y not be a b le to obtain a w a iv er f r om the r equi r ed lenders or holder s . If this occur s , w e w ould be in default and our lenders or d e bt holders could ex e r cise their rights as described a b o v e , and w e could be f o r ced into bankruptcy or liquid a tion.

If w e a r e un a b le to r ep a y d e bt, lenders h a ving secu r ed o b lig a tion s , including C r edit Suisse under the C r edit Facility, could p r oceed a gainst the coll a te r a l securing the d e bt. Because the 2025 Notes Indentu r e has c r oss-acc e le r a tion p ro vision s , and a n y futu r e d e bt will li k e l y h a v e , customary c r oss-default and c r oss- acc e le r a tion p ro vision s , if the ind e btedness the r eunde r , he r eunder or under a n y futu r e c r edit facility is acc e le r a ted, w e m a y be un a b le to r ep a y or f inance the amounts du e .

The optional redemption provision may materially adversely affect a holder’s return on the 2025 Notes.

The 2025 Notes a r e r edeem a b le in w hole or in part a t a n y time or f r om time to time on or after J a n uary 16, 2023 a t our option. W e m a y choose to r edeem the 2025 Notes a t times w hen p re v ailing inte r est r a tes a r e l o w er than the inte r est r a te paid on the 2025 Note s . In this ci r cumstanc e , y ou m a y not be a b le to r ei n v est the r edemption p r oceeds in a compa r a b le security a t an e f fect iv e inte r est r a te as high as th a t of the 2025 Notes being r edeemed.

A d o wng r ad e , suspension or withd r a w al of the r ating assigned b y a r ating a g ency to us and/or the 2025 Note s , if a n y , could cause the ma r k et v alue of the 2025 Notes to decline signific antl y .

A n y c r edit r a tings assigned to us and/or the 2025 Notes a r e an assessment b y r a ting a gencies of our a bility to p a y our o b lig a tion s . Consequent l y , r e a l or anticip a ted changes to a n y such c r edit r a tings will gene r a l l y a f fect the ma r k et v a lue of the 2025 Note s . These c r edit r a ting s , h o wev e r , m a y not r e f lect the potenti a l impact of risks re l a ted to ma r k et conditions gene r a l l y or other factors discussed he r ein th a t could impact the ma r k et v a lue of the 2025 Note s .

Gene r a l l y , r a ting a gencies base their r a tings on such m a teri a l and in f o r m a tion, and such of their o wn i n v estig a tion s , studies and assumption s , as they deem a pp r opri a t e . A n y such c r edit r a tings should be e v a lu a ted independent l y f r om similar r a tings of other securities or companie s . C r edit r a tings a r e not a r ecommend a tion to b u y , s e ll or hold a n y securit y , and m a y be subject to re vision or withd r a w a l a t a n y time b y the issuing o r ganiz a tion in its sole disc r etion. Neither w e nor a n y r a ting a gents undert a k e a n y o b lig a tion to maintain a n y c r edit r a tings assigned to us and/or the 2025 Notes or to a d vise our stockholders or holders of the 2025 Notes of a n y changes to such c r edit r a ting s . The r e can be no assu r ance th a t a n y c r edit r a tings assigned to us and/or the 2025 Notes will r emain f or a n y g iv en period of tim e .

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Risks R elated to the Co n v ertible Notes

The Convertible Notes are unsecured and therefore are effectively subordinated to any secured indebtedness currently outstanding or that may be incurred in the future and rank pari passu with, or equal to, all outstanding and future unsecured unsubordinated indebtedness issued by us and our general liabilities.

The Co n v erti b le Notes a r e not secu r ed b y a n y of our assets or a n y of the assets of a n y of our subsidiarie s . As a r esult, the Co n v erti b le Notes a r e e f fect ive l y subo r din a ted to a n y outstanding secu r ed ind e btedness as of the d a te of this annual report on Form 10-K (including the C r edit Facility) or th a t w e or our subsidiaries m a y incur in the futu r e (or a n y ind e btedness th a t is initi a l l y unsecu r ed as to w hich w e subsequent l y g r ant a security inte r est) to the e xtent of the v a lue of the assets securing such ind e btednes s . In a n y liquid a tion, dissolution, bankruptcy or other similar p r oceeding, the holders of a n y of our secu r ed ind e btedness or secu r ed ind e btedness of our subsidiaries m a y assert rights a gainst the assets pledged to secu r e th a t ind e btedness in o r der to r ece iv e full p a yment of their ind e btedness be f o r e the assets m a y be used to p a y other c r editor s , including the holders of the Co n v erti b le Note s . As of December 31, 2020, th r ough of our w hol l y owned subsidiar y , T rinity Funding 1, L L C , w e had a pp r o xim a t e l y $135 million of bor r o wings outstanding under the C r edit Facility. The ind e btedness under the C r edit Facility is e f fect ive l y senior to the Co n v erti b le Notes to the e xtent of the v a lue of the assets securing such ind e btednes s . In a d dition, as of December 31, 2020, w e had $125 million in a gg r eg a te princip a l amount of the 2025 Notes outstanding, w hich r ank pari passu with the Co n v erti b le Note s .

The Convertible Notes are structurally subordinated to the indebtedness and other liabilities of our subsidiaries.

The Co n v erti b le Notes a r e o b lig a tions e x clus ive l y of T rinity C a pit a l Inc., and not of a n y of our subsidiarie s . None of our subsidiaries is a gua r antor of the Co n v erti b le Note s , and the Co n v erti b le Notes a r e not r equi r ed to be gua r anteed b y a n y subsidiary w e m a y acqui r e or c r e a te in the futu r e . A n y assets of our subsidiaries will not be di r ect l y a v ail a b le to s a tisfy the claims of our c r editor s , including holders of the Co n v erti b le Note s . E x cept to the e xtent w e a r e a c r editor with r ec o gni z ed claims a gainst our subsidiarie s , a ll claims of c r editors of our subsidiaries will h a v e priority o v er our equity inte r ests in such entities (and the r e f o r e the claims of our c r editor s , including holders of the Co n v erti b le Notes) with r espect to the assets of such entitie s . E v en if w e a r e r ec o gni z ed as a c r editor of one or mo r e of these entitie s , our claims w ould still be e f fect ive l y subo r din a ted to a n y security inte r ests in the assets of a n y such entity and to a n y ind e btedness or other li a bilities of a n y such entity senior to our claim s . Consequent l y , the Co n v erti b le Notes a r e structu r a l l y subo r din a ted to a ll ind e btedness and other li a bilitie s , including t r ade p a y a b le s , of a n y of our e xisting or futu r e subsidiarie s . Certain of these entities ser v e as gua r antors under the C r edit Facility, and in the futu r e our subsidiaries m a y incur substanti a l a d dition a l ind e btednes s , a ll of w hich is and w ould be structu r a l l y senior to the Co n v erti b le Note s .

The Convertible Notes Indenture contains limited protection for holders of the Convertible Notes.

The Co n v erti b le Notes Indentu r e o f fers limited p r otection to holders of the Co n v erti b le Note s . The te r ms of the Co n v erti b le Notes Indentu r e and the Co n v erti b le Notes do not r estrict our or a n y of our subsidiaries’ a bility to eng a ge in, or otherwise be a party t o , a v ariety of corpo r a te t r ansaction s , ci r cumstances or ev ents th a t could h a v e a m a teri a l a d v erse impact on the holders’ i n v estment in the Co n v erti b le Note s . In particula r , the te r ms of the Co n v erti b le Notes Indentu r e and the Co n v erti b le Notes will not place a n y r estrictions on our or our subsidiaries’ a bility to:

• issue securities or otherwise incur a d dition a l ind e btedness or other o b lig a tion s , including (1) a n y ind e btedness or other o b lig a tions th a t w ould be equ a l in right of p a yment to the Co n v erti b le Note s , (2) a n y ind e btedness or other o b lig a tions th a t w ould be secu r ed and the r e f o r e r ank e f fect ive l y senior in right of p a yment to the Co n v erti b le Notes to the e xtent of the v a lues of the assets securing such d e bt, (3) ind e btedness of ours th a t is gua r anteed b y one or mo r e of our subsidiaries and w hich the r e f o r e is structu r a l l y senior to the Co n v erti b le Notes and (4) securitie s , ind e btedness or o b lig a tions issued or incur r ed b y our subsidiaries th a t w ould be senior to our equity inte r ests in those entities and the r e f o r e r ank structu r a l l y senior to the Co n v erti b le Notes with r espect to the assets of our subsidiarie s , in each case other than a n incur r ence of ind e btedness or other o b lig a tion th a t w ould cause a viol a tion of Section 18(a)(1)(A) as modi f ied b y such p ro visions of Section 61(a) of the 1940 Act as m a y be a pplic a b le to us

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f r om time to time or a n y successor p ro vision s , w hether or not w e conti n ue to be subject to such p ro visions of the 1940 Act, b ut g i ving e f fect, in each cas e , to a n y ex empt iv e re lief g r anted to us b y the SE C . Cur r ent l y , these p ro visions gene r a l l y p r ohibit us f r om m a king a d dition a l bor r o wing s , including th r ough the issuance of a d dition a l d e bt or the s a le of a d dition a l d e bt securitie s , unless our asset c o v e r a g e , as de f ined in the 1940 Act, equ a ls a t least 150%;

• p a y d i vidends on, or pu r chase or r edeem or m a k e a n y p a yments in r espect o f , c a pit a l stock or other securities r anking junior in right of p a yment to the Co n v erti b le Notes;

• s e ll assets (other than certain limited r estrictions on our a bility to consolid a t e , me r ge or s e ll a ll or substanti a l l y a ll of our assets);

• enter into t r ansactions with a f f ili a tes;

• c r e a te liens (including liens on the sha r es of our subsidiaries) or enter into s a le and leas e back t r ansactions;

• m a k e i n v estments; or

• c r e a te r estrictions on the p a yment of d i vidends or other amounts to us f r om our subsidiarie s .

Furthe r mo r e , the te r ms of the Co n v erti b le Notes Indentu r e and the Co n v erti b le Notes do not p r otect holders of the Co n v erti b le Notes in the ev ent th a t w e e xperience changes (including signi f icant a d v erse changes) in our f inanci a l condition, r esults of ope r a tions or c r edit r a ting s , if a n y , as they do not r equi r e th a t w e or our subsidiaries adhe r e to a n y f inanci a l tests or r a tios or speci f ied l eve ls of net w orth, r e v e n ue s , incom e , cash f l o w , or liquidit y .

Our a bility to r ec a pit a li z e , incur a d dition a l d e bt (including a d dition a l d e bt th a t m a tu r es prior to the m a turity of the Co n v erti b le Notes), and t a k e a n umber of other actions th a t a r e not limited b y the te r ms of the Co n v erti b le Notes m a y h a v e important consequences f or holders of the Co n v erti b le Note s , including m a king it mo r e di f f icult f or us to s a tisfy our o b lig a tions with r espect to the Co n v erti b le Notes or neg a t i v e l y a f fecting the t r ading v a lue of the Co n v erti b le Note s .

Other d e bt w e issue or incur in the futu r e could contain mo r e p r otections f or its holders than the Co n v erti b le Notes Indentu r e and the Co n v erti b le Note s , including a d dition a l c o v enants and ev ents of default. The issuance or incur r ence of a n y such d e bt with inc r ement a l p r otections could a f fect the ma r k et f o r , t r ading l eve l s , and prices of the Co n v erti b le Note s .

If we default on our obligations to pay our other indebtedness, we may not be able to make payments on the

Convertible Notes.

A n y default under the a g r eements g o v erning our ind e btedness or under other ind e btedness to w hich w e m a y be a part y , th a t is not w a iv ed b y the r equi r ed lenders or holders and the r emedies sought b y the holders of such ind e btedness could m a k e us un a b le to p a y princip a l, p r emium, if a n y , and inte r est on the Co n v erti b le Notes and substanti a l l y dec r ease the ma r k et v a lue of the Co n v erti b le Note s .

If w e a r e un a b le to gene r a te su f f icient cash f l o w and a r e otherwise un a b le to obtain funds necessary to meet r equi r ed p a yments of princip a l, p r emium, if a n y , and inte r est on our ind e btednes s , or if w e otherwise fail to comp l y with the v arious c o v enant s , including f inanci a l and ope r a ting c o v enant s , in the instruments g o v erning our ind e btednes s , w e could be in default under the te r ms of the a g r eements g o v erning such ind e btednes s . In the ev ent of such default, the holders of such ind e btedness could e lect to decla r e a ll the funds bor r o w ed the r eunder to be due and p a y a b l e , t o gether with accrued and unpaid inte r est, the lenders under our cur r ent ind e btedness or other d e bt w e m a y incur in the futu r e could e lect to te r min a te their commitment s , cease m a king further loans and institute f o r eclosu r e p r oceedings a gainst our asset s , and w e could be f o r ced into bankruptcy or liquid a tion.

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and se e k a w a iv e r , w e m a y not be a b le to obtain a w a iv er f r om the r equi r ed lenders or holder s . If this occur s , w e w ould be in default and our lenders or d e bt holders could ex e r cise their rights as described a b o v e , and w e could be f o r ced into bankruptcy or liquid a tion.

If w e a r e un a b le to r ep a y d e bt, lenders h a ving secu r ed o b lig a tion s , including C r edit Suisse under the C r edit Facility, could p r oceed a gainst the coll a te r a l securing the d e bt. Because the Co n v erti b le Notes Indentu r e wil l h a v e , an d a n y futu r e d e b t wil l li k e l y h a v e , customar y c r oss-defaul t p ro vision s , i f th e ind e btedness the r eunde r , he r eunder or under a n y futu r e c r edit facility is acc e le r a ted, w e m a y be un a b le to r ep a y or f inance the amounts du e .

We may not have, or have the ability to raise, the funds necessary to purchase the Convertible Notes as required upon a fundamental change, and our future debt may contain limitations on our ability to deliver shares of our common stock upon conversion or purchase of the Convertible Notes.

Holders of the Co n v erti b le Notes will h a v e the right to r equi r e us to pu r chase their Co n v erti b le Notes f or cash upon the occur r ence of a fundament a l change a t a pu r chase price equ a l to 100% of their princip a l amount, plus accrued and unpaid inte r est, if any. As defined in the Convertible Notes Indenture, a fundamental change means the occurrence of either a change in control or, after the initial listing of our common stock on a national securities exchange, the termination of trading of our common stock on any such exchange. We m a y not h a v e enough a v ail a b le cash or be a b le to obtain f inancing a t the time w e a r e r equi r ed to m a k e pu r chases of Co n v erti b le Notes sur r ende r ed the r e f o r . In a d dition, our a bility to pu r chase the Co n v erti b le Notes or to d e l iv er sha r es of our common stock upon co n v ersions of the Co n v erti b le Notes m a y be li mited b y l a w , b y r egul a tory authority or b y a g r eements g o v erning our ind e btednes s . Our failu r e to pu r chase Co n v erti b le Notes a t a time w hen the pu r chase is r equi r ed b y the Co n v erti b le Notes Indentu r e or d e l iv er a n y sha r es of our common stock upon futu r e co n v ersions of the Co n v erti b le Notes as r equi r ed b y the Co n v erti b le Notes Indentu r e w ould constitute a default under the Co n v erti b le Notes Indentu r e . A default under the Co n v erti b le Notes Indentu r e or the fundament a l change its e lf could a lso lead to a default under the C r edit Facility and/or the 2025 Notes Indentu r e . If the r ep a yment of the re l a ted ind e btedness w e r e to be acc e le r a ted after a n y a pplic a b le notice or g r ace period s , w e m a y not h a v e su f f icient funds to r ep a y the ind e btedness and pu r chase the Co n v erti b le Note s .

T he co n v e r sion r ate of the Co n v erti b le Notes may not be adjusted for all diluti v e e v ent s .

The co n v ersion r a te of the Co n v erti b le Notes is subject to adjustment upon certain ev ent s , including the issuance of certain stock d i vidends on our common stock, certain issuance of rights or w ar r ants subd i vision s , combin a tion s , certain distri b utions of c a pit a l stock, ind e btedness or asset s , certain cash d i vidends and certain issuer tender or e x change o f fer s . H o wev e r , the co n v ersion r a te will not be adjusted f or other ev ent s , such as a thi r d-party tender or e x change o f fer or an issuance of common stock f or cash, th a t m a y a d v ers e l y a f fect the t r ading price of the Co n v erti b le Notes or the common stock. An ev ent th a t a d v ers e l y a f fects the v a lue of the Co n v erti b le Notes m a y occu r , and th a t ev ent m a y not r esult in an adjustment to the co n v ersion r a t e .

T he fo r ced co n v e r sion p r o vision may materially ad v e r s e ly affect the holde r s’ r eturn on the Co n v erti b le Note s .

At our option, w e m a y cause the holders to co n v ert a ll or a portion of the then outstanding princip a l amount of the Co n v erti b le Notes plus accrued b ut unpaid inte r est, b ut e x cluding the d a te of such co n v ersion, a t a n y time on or prior to the close of b usiness on the b usiness d a y immedi a t e l y p r eceding the m a turity d a t e , i f , f oll o wing the listing of our common stock on a n a tion a l securities e x chang e , the closing s a le price of our common stock on such n a tion a l securities e x change f or a n y 30 consecut iv e t r ading d a ys e x ceeds 120% of the co n v ersion pric e , as m a y be adjusted. Upon such co n v ersion, w e will p a y or d e l iv e r , as the case m a y b e , cash, sha r es of our common stock or a combin a tion of cash and sha r es of our common stock, a t our e lection, per $1,000 princip a l amount of the Co n v erti b le Note s , equ a l to the co n v ersion r a t e , and a f o r ced co n v ersion m a k e- w hole p a yment, if a n y , in cash, as described Co n v erti b le Notes Indentu r e . In this ci r cumstanc e , t he holders m a y not be a b le to r ei n v est the p r oceeds the r ef r om in a compa r a b le security a t an e f fect iv e inte r est r a te as high as th a t of the Co n v erti b le Note s .

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There is currently no public market for the Convertible Notes, and an active trading market may not develop for the Convertible Notes. The failure of a market to develop for the Convertible Notes could adversely affect the liquidity and value of the Convertible Notes.

The Co n v erti b le Notes a r e a n e w issue of securitie s , and the r e is no e xisting ma r k et f or the Co n v erti b le Note s . W e do not intend to a pp l y f or listing of the Co n v erti b le Notes on a n y securities e x change or f or quot a tion of the Co n v erti b le Notes on a n y autom a ted de a ler quot a tion system. A ma r k et m a y not d e v e lop f or the Co n v erti b le Note s , and the r e can be no assu r ance as to the liquidity of a n y ma r k et th a t m a y d eve lop f or the Co n v erti b le Note s . If an act iv e , liquid ma r k et does not d eve lop f or the Co n v erti b le Note s , the ma r k et price and liquidity of the Co n v erti b le Notes m a y be a d v ers e l y a f fected. If a n y of the Co n v erti b le Notes a r e t r aded after their initi a l issuanc e , they m a y t r ade a t a discount f r om their initi a l o f fering pric e .

The liquidity of the t r ading ma r k et, if a n y , and futu r e t r ading prices of the Co n v erti b le Notes will depend on ma n y factor s , including, among other thing s , the price of our common stock, p re v ailing inte r est r a te s , our ope r a ting r esult s , f inanci a l per f o r mance and p r ospect s , the ma r k et f or similar securities and the o v e r a ll securities ma r k et, and m a y be a d v ers e l y a f fected b y unf a v o r a b le changes in these factor s . Historic a l l y , the ma r k et f or co n v erti b le d e bt has been subject to disruptions th a t h a v e caused v ol a tility in price s . It is possi b le th a t the ma r k et f or the Co n v erti b le Notes will be subject to disruptions th a t m a y h a v e a neg a t i v e e f fect on the holders of the Co n v erti b le Note s , r ega r dless of our ope r a ting r esult s , f inanci a l per f o r mance or p r ospect s .

W e h a v e a g r eed to f ile a r es a le r egist r a tion st a tement f or the Convertible Notes. Under the Convertible Notes Registration Rights Agreement, we are required to register the resale of the Convertible Notes under the Securities Act. Until such a registration statement has been declared effective, holders of the Convertible Notes may not offer or sell the Convertible Notes except pursuant to an ex emption f r om, or in a t r ansaction not subject t o , the r egist r a tion r equi r ements of the Securities Act and a pplic a b le st a te securities l a ws or pursuant to an e f fect iv e r egist r a tion st a tement. The SE C , h o wev e r , has b r oad disc r etion to dete r mine w hether a n y r egist r a tion st a tement will be decla r ed e f fect iv e and m a y d e l a y or de n y the e f fect iv eness of a n y such r egist r a tion st a tement f iled b y us f or a v ariety of r eason s . Our a bility to h a v e decla r ed e f fect iv e b y the SEC a r egist r a tion st a tement pertaining to the r es a le of the Co n v erti b le Notes on a tim e l y basis will depend upon our a bility to r esol v e a n y issues th a t m a y be r aised b y the SE C . No assu r ance can be g iv en as to w hen a r egist r a tion st a tement with r espect to the Co n v erti b le Notes will become e f fect iv e . F ailu r e to h a v e the r egist r a tion st a tement become e f fect iv e could a d v ers e l y a f fect the liquidity and price of the Co n v erti b le Note s .

T he Co n v erti b le Notes may bear the r estricted l e g end indefinitely if w e issue additional Co n v erti b le Note s .

The Co n v erti b le Notes Indentu r e will a ll o w us to issue a d dition a l Co n v erti b le Notes in the futu r e on the same te r ms and conditions as the Co n v erti b le Notes o f fe r ed he re b y , e x cept f or a n y di f fe r ences in the issue price and inte r est accrued prior to the issue d a te of the a d dition a l Co n v erti b le Notes; p ro vided th a t if a n y such a d dition a l notes a r e not fungi b le with the Co n v erti b le Notes initi a l l y o f fe r ed he re b y f or U . S . fede r a l income tax purpose s , those a d dition a l notes will h a v e a sepa r a te CUSIP n umbe r . Subject to certain e x ception s , the Co n v erti b le Notes Indentu r e will p ro vide th a t the Co n v erti b le Notes and a n y sha r es of common stock issued upon co n v ersion of the Co n v erti b le Notes will bear a r estricted securities legend until the d a te th a t is one y ear after the l a ter of last d a te of origin a l issuance of the Co n v erti b le Notes or the last d a y of issuance of a n y a d dition a l Co n v erti b le Note s , or such l a ter d a t e , if a n y , as m a y be r equi r ed b y a pplic a b le l a w . W e m a y , b ut a r e not r equi r ed t o , r em o v e the r estricted securities legend f r om a n y glob a l Co n v erti b le Notes p r ompt l y after such d a t e . H o wev e r , because the issuance of a n y a d dition a l Co n v erti b le Notes w ould cause such d a te to be d e l a y ed be y ond one y ear after the last d a te of origin a l issuance of the Co n v erti b le Notes o f fe r ed he re b y , a n y a d dition a l Co n v erti b le Notes th a t w e issue a t a l a ter d a te will cause the r em o v a l of the r estricted legend, if a t a ll, to be d e l a y ed be y ond such d a t e . As a r esult of the f o r egoing, y our a bility to r es e ll in the pu b lic ma r k et the Co n v erti b le Notes and common stock issu a b le upon co n v ersion of the Co n v erti b le Notes m a y be d e l a y ed, w hich m a y a d v ers e l y a f fect the si z e of the ma r k et f or these securities and pricing on r e-s a le s .

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The accounting for convertible debt securities is subject to uncertainty.

The accounting f or co n v erti b le d e bt securities is subject to f r equent scruti n y b y the accounting r egul a tory bodies and is subject to chang e . W e cannot p r edict if or w hen a n y such change could be made and a n y such change could h a v e an a d v erse impact on our r eported or futu r e f inanci a l r esult s . A n y such impacts could a d v ers e l y a f fect the ma r k et price of our common stock and in turn negatively impact the market price of the Convertible Notes.

The market value of our common stock and of the Convertible Notes may fluctuate significantly, and this may make it difficult for holders to resell the Convertible Notes or common stock issued upon conversion of the Convertible Notes when holders want or at prices holders find attractive.

The r e is cur r ent l y no pu b lic ma r k et f or the Co n v erti b le Notes or our common stock and the r e can be no assu r ance th a t a ma r k et f or the Co n v erti b le Notes or our common stock will d eve lo p . In a d dition, the ma r k et v a lue and liquidit y , if a n y , of the ma r k et f or the Co n v erti b le Notes or our common stock m a y be signi f icant l y a f fected b y n ume r ous factor s , some of w hich a r e be y ond our cont r ol and m a y not be di r ect l y re l a ted to our ope r a ting per f o r manc e . In a d dition, because the Co n v erti b le Notes a r e co n v erti b le into our common stock, v ol a tility or dep r essed prices f or our common stock could h a v e a similar e f fect on the t r ading price of the Co n v erti b le Note s . These factors include:

• changes in r egul a tory policies or tax guid e line s , particula r l y with r espect to RICs or BDCs;

• loss of RIC or BDC st a tus;

• distri b utions th a t e x ceed our net i n v estment income and net income as r eported acco r ding to GAAP;

• changes in earnings or v ari a tions in ope r a ting r esults;

• changes in accounting guid e lines g o v erning v a lu a tion of our i n v estments;

• a n y shortf a ll in rev e n ue or net income or a n y inc r ease in losses f r om l eve ls e xpected b y i n v estors;

• departu r e of k ey personn e l;

• gene r a l economic t r ends and other e xtern a l factors; and

• loss of a major funding sou r c e .

Under the Convertible Notes Registration Rights Agreement , w e h a v e a g r eed to f ile a r es a le r egist r a tion st a tement f or the Co n v erti b le Notes and a n y sha r es of common stock to be issued upon co n v ersion of the Co n v erti b le Note s . Under the Convertible Notes Registration Rights Agreement, w e a r e r equi r ed to r egister the r es a le of the Co n v erti b le Notes and such sha r es under the Securities Act. Until a n y such r es a le r egist r a tion st a tement has been decla r ed e f fect iv e , holders of the Co n v erti b le Notes and such sha r es m a y not o f fer or s e ll the Co n v erti b le Notes and such sha r es e x cept pursuant to an ex emption f r om, or in a t r ansaction not subject t o , the r egist r a tion r equi r ements of the Securities Act and a pplic a b le st a te securities l a ws or pursuant to an e f fect iv e r egist r a tion st a tement. The SE C , h o wev e r , has b r oad disc r etion to dete r mine w hether a n y r egist r a tion st a tement will be decla r ed e f fect iv e and m a y d e l a y or de n y the e f fect iv eness of a n y such r es a le r egist r a tion st a tement f iled b y us f or a v ariety of r eason s . Our a bility to h a v e decla r ed e f fect iv e b y the SEC a r egist r a tion st a tement pertaining to the r es a le of the Co n v erti b le Notes and/or a n y sha r es of common stock to be issued upon co n v ersion of the Co n v erti b le Notes on a tim e l y basis will depend upon our a bility to r esol v e a n y issues th a t m a y be r aised b y the SE C . No assu r ance can be g iv en as to w hen a n y such r es a le r egist r a tion st a tement with r espect to the Co n v erti b le Notes and/or a n y sha r es of common stock to be issued upon co n v ersion of the Co n v erti b le Notes will become e f fect iv e . F ailu r e to h a v e a n y such r es a le r egist r a tion st a tement become e f fect iv e could a d v ers e l y a f fect the liquidity and price of the Co n v erti b le Notes and/or a n y sha r es of common stock issued upon co n v ersion of the Co n v erti b le Note s , as a pplic a b l e .

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Future sales of our common stock in the public market or the issuance of securities senior to our common stock could adversely affect the trading price of our common stock and the value of the Convertible Notes and our ability to raise funds in new stock offerings.

Futu r e s a les of substanti a l amounts of our common stock or equity- re l a ted securities in the pu b lic ma r k et, or the pe r ception th a t such s a les could occu r , could a d v ers e l y a f fect the p re v ailing ma r k et v a lue of our common stock and the v a lue of the Co n v erti b le Notes and could impair our a bility to r aise c a pit a l th r ough futu r e o f ferings of our securitie s , should w e decide to o f fer them. No p r ediction can be made as to the e f fect th a t futu r e s a les of sha r es of common stock, or the a v ail a bility of sha r es of common stock f or futu r e s a l e , will h a v e on the t r ading price of our common stock or the v a lue of the Co n v erti b le Note s .

Holders of the Convertible Notes will not be entitled to any rights with respect to our common stock, but will be subject to all changes made with respect to our common stock.

Holders of the Co n v erti b le Notes will not be entitled to a n y rights with r espect to our common stock (including, without limit a tion, v oting rights or rights to r ece iv e a n y d i vidends or other distri b utions on our common stock), b ut will be subject to a ll changes a f fecting our common stock. Holders will on l y be entitled to rights in r espect of our common stock if and w hen w e d e l iv er sha r es of our common stock upon co n v ersion f or their Co n v erti b le Notes and, to a limited e xtent, under the co n v ersion r a te adjustments a pplic a b le to the Co n v erti b le Note s . F or e xampl e , in the ev ent th a t an amendment is p r oposed to our charter or b yl a ws r equiring stockholder a pp ro v a l and the r eco r d d a te f or dete r mining the stockholders of r eco r d entitled to v ote on the amendment occurs prior to a holder ’ s co n v ersion of Co n v erti b le Note s , the holder will not be entitled to v ote on the amendment, a lthough the holder will n ev erth e less be subject to a n y changes in the p o w er s , p r efe r ences or rights of our common stock th a t r esult f r om such amendment.

Upon co n v e r sion of the Co n v erti b le Note s , holde r s may r ecei v e less v alua b le conside r ation than e xpected because the ma r k et v alue or net asset v alue per sha r e of our common stock may decline after holde r s e x e r cise their co n v e r sion right but befo r e w e settle our co n v e r sion o b li g ation.

Under the Convertible Notes, a converting holder may be exposed to fluctuations in the market value or net asset value per share of our common stock during the period from the date such holder surrenders its Convertible Notes for conversion until the date we settle our conversion obligation.

Because w e m a y s a tisfy our co n v ersion o b lig a tion sol e l y in sha r es of our common stock upon co n v ersion of the Co n v erti b le Note s , under such ci r cumstances w e will d e l iv er sha r es of our common stock, t o gether with cash f or a n y f r action a l sha r e , on the second b usiness d a y f oll o wing the re l e v ant co n v ersion d a t e . Acco r ding l y , if the ma r k et v a lue or net asset v a lue per sha r e of our common stock dec r eases during this period, the ma r k et v a lue of the sha r es of our common stock th a t holders r ece iv e will be a d v ers e l y a f fected and w ould be less than the co n v ersion v a lue of the Co n v erti b le Notes on the co n v ersion d a t e .

T he adjustment to the co n v e r sion r ate for Co n v erti b le Notes co n v erted in connection with a ma k e- w hole adjustment e v ent may not adequat e ly compensate holde r s for a n y lost v alue of their Co n v erti b le Notes as a r esult of such t r ansaction.

F oll o wing a m a k e- w hole adjustment ev ent, if a holder e lects to co n v ert its Co n v erti b le Notes in connection with such corpo r a te t r ansaction, w e will inc r ease the co n v ersion r a te b y an a d dition a l n umber of sha r es of our common stock upon co n v ersion in certain ci r cumstance s . As defined in the Convertible Notes Indenture, a make-whole adjustment event means any change of control and any termination of trading of our common stock on any national securities exchange. The inc r ease in the co n v ersion r a te will be dete r mined based on the d a te on w hich the m a k e- w hole adjustment ev ent occurs or becomes e f fect iv e and the price paid (or deemed to be paid) per sha r e of our common stock in the m a k e- w hole adjustment ev ent, as described in the Co n v erti b le Notes Indentu r e . The adjustment to the co n v ersion r a te f or Co n v erti b le Notes co n v erted in connection with a m a k e- w hole adjustment ev ent m a y not adequ a t e l y compens a te holders f or a n y lost v a lue of their Co n v erti b le Notes as a r esult of such t r ansaction. In a d dition, if the price paid (or deemed to be paid) per sha r e of our common stock in the m a k e- w hole adjustment ev ent is g r e a ter than $20.00 per sha r e or less than $13.01 per sha r e (in each cas e , subject to adjustment), no inc r ease in the co n v ersion r a te will be mad e . Mo r e o v e r , in no ev ent will the co n v ersion r a te per $1,000 princip a l amount of

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Co n v erti b le Notes e x ceed the maxi m um co n v ersion r a te described further in the Co n v erti b le Notes Indentu r e , w hich is subject to adjustment as described in such section.

Our o b lig a tion to inc r ease the co n v ersion r a te upon the occur r ence of a m a k e- w hole adjustment e v ent could be conside r ed a pen a lt y , in w hich case the en f o r ce a bility the r eof w ould be subject to gene r a l principles of r eason a b leness of economic r emedie s .

Some significant restructuring transactions may not constitute a fundamental change, in which case we would not be obligated to offer to purchase the Convertible Notes.

Upon the occur r ence of a fundament a l chang e , holders h a v e the right to r equi r e us to pu r chase their Co n v erti b le Note s . H o wev e r , the fundament a l change p ro visions will not a f f o r d p r otection to holders in the ev ent of other t r ansactions th a t could a d v ers e l y a f fect the Co n v erti b le Note s . F or e xampl e , t r ansactions such as l ev e r a ged r ec a pit a liz a tion s , r e f inancing s , r estructuring s , or acquisitions initi a ted b y us m a y not constitute a fundament a l change r equiring us to r epu r chase the Co n v erti b le Note s . In a d dition, holders m a y not be entitled to r equi r e us to pu r chase their Co n v erti b le Notes upon a fundament a l change in certain ci r cumstances i n v olving a signi f icant change in the composition of our Boa r d, or in connection with a p r o xy contest w he r e our Boa r d does not endorse a dissident sl a te of di r ectors b ut a pp ro v es them f or purposes of the de f inition of “conti n uing di r ectors” as set f orth in the Co n v erti b le Notes Indentu r e . In the ev ent of a n y such t r ansaction, the holders w ould not h a v e the right to r equi r e us to pu r chase their Co n v erti b le Note s , e v en though each of these t r ansactions could inc r ease the amount of our ind e btednes s , or otherwise a d v ers e l y a f fect our c a pit a l structu r e or a n y c r edit r a ting s , the re b y a d v ers e l y a f fecting the holder s .

P r o visions of the Co n v erti b le Notes could discou r a g e an acquisition of us b y a thi r d part y .

Certain p ro visions of the Co n v erti b le Notes could m a k e it mo r e di f f icult or mo r e e xpens iv e f or a thi r d party to acqui r e u s . Upon the occur r ence of certain t r ansactions constituting a fundament a l chang e , holders of the Co n v erti b le Notes will h a v e the right, a t their option, to r equi r e us to pu r chase f or cash a ll of their Co n v erti b le Notes or a n y portion of the princip a l amount of such Co n v erti b le Notes in integ r a l m ultiples of $1,000. W e m a y a lso be r equi r ed to inc r ease the co n v ersion r a te in the ev ent of certain t r ansactions constituting a m a k e- w hole adjustment ev ent. These p ro visions could discou r a ge an acquisition of us b y a thi r d part y .

A d o wng r ad e , suspension or withd r a w al of the r ating assigned b y a r ating a g ency to us and/or the Co n v erti b le Note s , if a n y , could cause the ma r k et v alue of the Co n v erti b le Notes to decline significantly .

A n y c r edit r a tings assigned to us and/or the Co n v erti b le Notes a r e an assessment b y r a ting a gencies of our a bility to p a y our o b lig a tion s . Consequent l y , r e a l or anticip a ted changes to a n y such c r edit r a tings will gene r a l l y a f fect the ma r k et v a lue of the Co n v erti b le Note s . These c r edit r a ting s , h o wev e r , m a y not r e f lect the potenti a l impact of risks re l a ted to ma r k et conditions gene r a l l y or other factors discussed he r ein th a t could impact the ma r k et v a lue of the Co n v erti b le Note s .

If an i n v estment g r ade r a ting is not maintained with r espect to the Co n v erti b le Note s , a d dition a l inte r est of 0.75% per an n um will accrue on the Co n v erti b le Notes until such time as the Co n v erti b le Notes h a v e r ece iv ed an i n v estment g r ade r a ting of “BBB-” (or its equ i v a lent) or bette r . An e xplan a tion of the signi f icance of a c r edit r a ting m a y be obtained f r om the r a ting a genc y . Gene r a l l y , r a ting a gencies base their r a tings on such m a teri a l and in f o r m a tion, and such of their o wn i n v estig a tion s , studies and assumption s , as they deem a pp r opri a t e . A c r edit r a ting should be e v a lu a ted independent l y f r om similar r a tings of other securities or companie s . A c r edit r a ting is not a r ecommend a tion to b u y , s e ll or hold securities and m a y be subject to re vision or withd r a w a l a t a n y tim e . The r e can be no assu r ance th a t a c r edit r a ting will r emain f or a n y g iv en period of tim e .

Conversions of the Convertible Notes will dilute the ownership interest of our existing stockholders, including holders who had previously converted their Convertible Notes, if shares of our common stock are issued upon conversions of the Convertible Notes.

The co n v ersion of some or a ll of the Co n v erti b le Notes into sha r es of our common stock will dilute the o wnership inte r ests of our e xisting stockholder s . A n y s a les of our common stock issu a b le upon such co n v ersion

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could a d v ers e l y a f fect p re v ailing ma r k et prices of our common stock. In a d dition, the e xistence of the Co n v erti b le Notes m a y encou r a ge short s e lling b y ma r k et participants because the co n v ersion of the Co n v erti b le Notes could dep r ess the ma r k et price of our common stock.

If the Co n v erti b le featu r e of the Co n v erti b le Notes is deemed to be g r eater than incidental and i n v estment in the Co n v erti b le Notes b y Benefit Plan I n v esto r s is “significant ” within the Plan Asset R e gulation, w e could be subject to ERISA f iduciary duties and other p r o visions of ERISA.

Under certain ci r cumstance s , our unde r ling assets could be t r e a ted as “plan assets” of empl o y ee bene f it plans subject to the Empl o y ee R eti r ement Income Security Act of 1974, as amended (“ERIS A ”) or section 4975 of the Code (“Bene f it Plan I n v estors”). This could occur if the co n v ertibility fe a tu r e of the Co n v erti b le Notes w e r e to be t r e a ted as g r e a ter than “incident a l , ” and, as such, the Co n v erti b le Notes w e r e deemed to be equity under the ERIS A ’ s plan asset r egul a tion (DOL R eg. section 2510.3-101 as modi f ied b y Section 3(42) of ERISA, the “Plan Asset R egul a tio n ”). If i n v estment b y Bene f it Plan I n v estors in the C on v erti b le Notes is “signi f icant” and the Co n v erti b le Notes w e r e deemed equity inte r est s , in each case under the Plan Asset R egul a tion and an e x ception to the Plan Asset R egul a tion did not a pp l y , w e and our man a gement w ould be subject to ERISA f iduciary duties and certain t r ansactions w e might enter int o , or m a y h a v e ente r ed int o , in the o r dinary course of our b usiness might constitute non- ex empt “p r ohibited t r ansactions” under section 406 of ERISA or section 4975 of the Code and might h a v e to be r escinded a t signi f icant cost to u s .

If the Co n v erti b le Notes a r e issued with original issue discount and a bankruptcy petition w e r e filed b y or a g ainst u s , holde r s of the Co n v erti b le Notes may r ecei v e a lesser amount for their claim than th e y w ould ha v e been entitled to r ecei v e under the Co n v erti b le Notes Indentu r e .

If the Co n v erti b le Notes a r e issued with origin a l issue discount and a bankruptcy petition w e r e f iled b y or a gainst us under the United St a tes Bankruptcy Code after the issuance of the Co n v erti b le Note s , the claim b y a n y holder of the Co n v erti b le Notes f or the princip a l amount of the Co n v erti b le Notes m a y be limited to an amount equ a l to the sum of: the origin a l issue price f or the Co n v erti b le Notes and th a t portion of a n y origin a l issue discount th a t does not constitute “unm a tu r ed inte r est” f or purposes of the United St a tes Bankruptcy Cod e .

A n y origin a l issue discount th a t w as not amorti z ed as of the d a te of the bankruptcy f iling w ould constitute unm a tu r ed inte r est. Acco r ding l y , holders of the Co n v erti b le Notes under these ci r cumstances m a y r ece iv e a lesser amount than they w ould be entitled to under the te r ms of the Co n v erti b le Notes Indentu r e , ev en if su f f icient funds a r e a v ail a b l e .

Holde r s may be subject to tax if w e ma k e or fail to ma k e certain adjustments to the co n v e r sion r ate of the Co n v erti b le Note s , e v en though the holde r s did not r ecei v e a cor r esponding cash distribution.

The co n v ersion r a te of the Co n v erti b le Notes is subject to adjustment in certain ci r cumstance s , including the p a yment of cash d i vidend s . If the co n v ersion r a te is adjusted as a r esult of a distri b ution th a t is tax a b le to our common stockholder s , such as a cash d i vidend, a holder m a y be deemed to h a v e r ece iv ed a d i vidend subject to U . S . fede r a l income tax without the r eceipt of a n y cash. In a d dition, a failu r e to adjust (or to adjust adequ a t e l y) the co n v ersion r a te after an ev ent th a t inc r eases a holder ’ s p r oportion a te inte r est in us could be t r e a ted as a deemed tax a b le d i vidend to the holde r . If a m a k e- w hole adjustment ev ent occurs on or prior to the b usiness d a y immedi a t e l y p r eceding the st a ted m a turity d a te of the Co n v erti b le Note s , under some ci r cumstance s , w e will inc r ease the co n v ersion r a te f or the Co n v erti b le Notes co n v erted in connection with the m a k e- w hole adjustment ev ent. Such inc r ease m a y a lso be t r e a ted as a distri b ution subject to U . S . fede r a l income tax as a d i vidend. In a d dition, if a holder is a non- U . S . holde r , such holder m a y be subject to U . S . fede r a l withholding tax in connection with such a deemed distri b ution. If withholding tax is paid on a holder ’ s b e h a lf as a r esult of an adjustment to the co n v ersion r a te of the Co n v erti b le Note s , the withholding a gent m a y o f fset such p a yments a gainst p a yments of cash and common stock on the Co n v erti b le Note s . Holders a r e u r ged to consult their tax a d visor with r espect to the U . S . fede r a l income tax consequences r esulting f r om an adjustment to the co n v ersion r a te of the Co n v erti b le Note s .

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Because the Convertible Notes will initially be held in book-entry form, holders must rely on DTC’s procedures to receive communications relating to the Convertible Notes and exercise their rights and remedies.

W e will initi a l l y issue the Co n v erti b le Notes in the f o r m of one or mo r e glob a l notes r egiste r ed in the name of Cede & C o ., as nominee of D T C . Bene f ici a l inte r ests in glob a l notes will be sh o wn on, and t r ansfers of glob a l notes will be e f fected on l y th r ough, the r eco r ds maintained b y D T C . E x cept in limited ci r cumstance s , w e will not issue certi f ic a ted Co n v erti b le Note s . Acco r ding l y , if a holder o wns a bene f ici a l inte r est in a glob a l not e , then the holder will not be conside r ed an o wner or holder of the Co n v erti b le Note s . Instead, D T C or its nominee will be the sole holder of the Co n v erti b le Note s . Unli k e persons w ho h a v e certi f ic a ted Co n v erti b le Notes r egiste r ed in their name s , o wners of bene f ici a l inte r ests in glob a l notes will not h a v e the di r ect right to act on our solicit a tions f or consents or r equests f or w a iv ers or other actions f r om holder s . Instead, those bene f ici a l o wners will be pe r mitted to act on l y to the e xtent th a t they h a v e r ece i v ed a pp r opri a te p r o xies to do so f r om D T C o r , if a pplic a b l e , a D T C participant. The a pplic a b le p r ocedu r es f or the g r anting of these p r o xies m a y not be su f f icient to en a b le o wners of bene f ici a l inte r ests in glob a l notes to v ote on a n y r equested actions on a tim e l y basi s . In a d dition, notices and other com m unic a tions re l a ting to the Co n v erti b le Notes will be sent to D T C . W e e xpect D T C to f or w a r d a n y such com m unic a tions to D T C participant s , w hich in turn w ould f or w a r d such com m unic a tions to indi r ect D T C participant s . But w e can m a k e no assu r ances th a t holders tim e l y r ece iv e a n y such com m unic a tion s .

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U . S . F ede r al Income T ax Risks

We cannot predict how tax reform legislation will affect us, our investments, or our stockholders, and any such legislation could adversely affect our business.

Legisl a t iv e or other actions re l a ting to ta x es could h a v e a neg a t iv e e f fect on u s . The rules de a ling with U . S . fede r a l income tax a tion a r e constant l y under re vi e w b y persons i n v ol v ed in the legisl a t iv e p r ocess and b y the Intern a l R ev e n ue Service (“IRS”) and the U . S . T r easury Department. The U . S . House of R ep r esent a t iv es and U . S . Sen a te passed tax r e f o r m legisl a tion in December 2017 (the “2017 T ax Act”), w hich the P r esident signed into l a w short l y the r eafte r . Such legisl a tion made ma n y changes to the Cod e , including, among other thing s , signi f icant changes to the tax a tion of b usiness entitie s , the deductibility of inte r es t e xpens e , an d th e ta x t r e a tmen t o f c a pit a l i n v estment . Suc h legisl a tio n coul d signi f icant l y an d neg a t i v e l y a f fect our a bility to qu a lify as a RIC and h a v e a d v erse U . S . fede r a l income tax consequences to us and our stockholder s . A d dition a l l y , the U . S . T r easury and IRS a r e in the p r ocess of issuing r egul a tions and administ r a t iv e interp r et a tions of the 2017 T ax Act, and a n y such r egul a tion s , interp r et a tion s , a n y court decisions interp r eting the 2017 T ax Act or the r egul a tions or administ r a t iv e interp r et a tions the r eunde r , or a n y other changes in the tax l a ws could simila r l y , signi f icant l y and neg a t ive l y a f fect our a bility to qu a lify f or tax t r e a tment as a RIC or the U . S . fede r a l income tax consequences to us and our stockholders of such qu a li f ic a tion, or could h a v e other a d v erse consequence s . Stockholders a r e u r ged to consult with their tax a d visor r ega r ding tax legisl a t iv e , r egul a tor y , or administ r a t iv e d eve lopments and p r opos a ls and their potenti a l e f fect on an i n v estment in our securitie s .

F or a n y period that w e do not qualify as a “pu b licly offe r ed r e gulated i n v estment compa n y , ” as defined in the Cod e , U . S . stockholde r s that a r e individual s , trusts or estates will be ta x ed as though th e y r ecei v ed a distribution of some of our e xpense s .

A “pu b lic l y o f fe r ed r egul a ted i n v estment compa n y” is a RIC w hose sha r es a r e either (i) conti n uous l y o f fe r ed pursuant to a pu b lic o f fering, (ii) r egula r l y t r aded on an est a b lished securities ma r k et or (iii) h e ld b y a t least 500 persons a t a ll times during the tax a b le y ea r . No assu r ance can be p ro vided th a t w e will qu a lify as a pu b lic l y o f fe r ed r egul a ted i n v estment compa n y f or a n y tax a b le y ea r . F or a n y period th a t w e a r e not a pu b lic l y o f fe r ed r egul a ted i n v estment compa n y , f or purposes of computing the tax a b le income of a non- corpo r a te U . S . stockholde r , (i) our earnings will be computed without t a king into account such non- corpo r a te U . S . stockholder ’ s a lloc a b le portion of our a f fected e xpense s , (ii) such non-corpo r a te U . S . stockholder ’ s a lloc a b le portion of our a f fected e xpenses will be t r e a ted as an a d dition a l distri b ution to the stockholde r , (iii) such non-corpo r a te U . S . stockholder will be t r e a ted as h a ving paid or incur r ed the a lloc a b le portion of our a f fected e xpenses f or the c a lendar y ea r , and ( i v) such a lloc a b le portion of our a f fected e xpenses will be deducti b le b y such stockholder on l y to the e xtent pe r mitted under the limit a tions described b e l o w . F or non-corpo r a te U . S . stockholder s , including ind i vidu a l s , trust s , and est a te s , signi f icant limit a tions gene r a l l y a pp l y to the deductibility of certain a f fected e xpenses of a non-pu b lic l y o f fe r ed r egul a ted i n v estment compa n y . In particula r , these e xpense s , w hich a r e t r e a ted as “misc e llaneous itemi z ed deduction s , ” a r e cur r ent l y not deducti b le b y ind i vidu a ls (and beginning in 2026, will be deducti b le on l y to the e xtent they e x ceed 2% of such a stockholder ’ s adjusted g r oss income), and a r e not deducti b le f or a ltern a t iv e mini m um tax purpose s .

We will be subject to corporate-level U.S. federal income tax if we are unable to qualify or maintain qualification as a RIC under Subchapter M of the Code.

W e intend to e lect to be t r e a ted as a RIC under Subch a pter M of the Code f or our f isc a l y ear ending December 31, 2020, and intend to qu a lify an n u a l l y the r eafte r ; h o wev e r , no assu r ance can be g iv en th a t w e will be a b le to qu a lify f or and maintain RIC st a tu s . T o qu a lify f or RIC tax t r e a tment under the Code and to be re li ev ed of U . S . fede r a l ta x es on income and gains distri b uted to our stockholder s , w e m ust meet certain r equi r ement s , including sou r ce-of-incom e , asset-d iv ersi f ic a tion and an n u a l distri b ution r equi r ement s . The an n u a l distri b ution r equi r ement a pplic a b le to RICs is s a tis f ied if w e tim e l y distri b ute a t least 90% of our net o r dinary income and net short-te r m c a pit a l gains in e x cess of net long-te r m c a pit a l losse s , if a n y , to our stockholders on an an n u a l basi s . T o the e xtent w e use d e bt f inancing, w e will be subject to certain asset c o v e r a ge r a tio r equi r ements under the 1940 Act and m a y be subject to f inanci a l c o v enants under loan and c r edit a g r eement s , e ach of w hich could, under certain ci r cumstance s , r estrict us f r om m a king an n u a l distri b utions necessary to r ece iv e RIC tax t r e a tment. If w e a r e un a b le to obtain cash f r om other sou r ce s , w e m a y fail to qu a lify to be ta x ed as a RIC and, thu s , m a y be subject to corpo r a te-l eve l U . S . fede r a l income

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tax on our enti r e tax a b le income without r ega r d to a n y distri b utions made b y u s . In o r der to be ta x ed as a RI C , w e m ust a lso meet certain asset-d iv ersi f ic a tion r equi r ements a t the end of each c a lendar quarte r . F ailu r e to meet these tests m a y r esult in our h a ving to dispose of certain i n v estments quick l y in o r der to p r e v ent the loss of RIC st a tu s . Because most of our i n v estments a r e in pr i v a te or thin l y t r aded pu b lic companie s , a n y such dispositions could be made a t disa dv ant a geous prices and m a y r esult in substanti a l losse s . If w e fail to be ta x ed as a RIC f or a n y r eason and become subject to corpo r a te-l eve l U . S . fede r a l income tax, the r esulting corpo r a te ta x es could substanti a l l y r educe our net asset s , the amount of income a v ail a b le f or distri b utions to stockholders and the amount of our distri b utions and the amount of funds a v ail a b le f or n e w i n v estment s . Such a failu r e w ould h a v e a m a teri a l a d v erse e f fect on us and our stockholder s .

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

F or U . S . fede r a l income tax purpose s , w e m a y be r equi r ed to r ec o gni z e tax a b le income in ci r cumstances in w hich w e do not r ece iv e a cor r esponding p a yment in cash. F or e xampl e , since w e will li k e l y hold d e bt o b lig a tions th a t a r e t r e a ted under a pplic a b le tax rules as h a ving OID (such as d e bt instruments with PIK, secondary ma r k et pu r chases of d e bt securities a t a discount to pa r , inte r est o r , in certain case s , inc r easing inte r est r a tes or d e bt instruments th a t w e r e issued with w ar r ants), w e m ust include in income each y ear a portion of the OID th a t accrues o v er the life of the o b lig a tion, r ega r dless of w hether cash r ep r esenting such income is r ece iv ed b y us in the same tax a b le y ea r . W e m a y a lso h a v e to include in income other amounts th a t w e h a v e not y et r ece iv ed in cash, such as un r e a li z ed a pp r eci a tion f or f o r eign cur r ency f or w a r d cont r acts and defer r ed loan origin a tion fees th a t a r e paid after origin a tion of the loan or a r e paid in non-cash compens a tion such as w ar r ants or stock. Furthe r mo r e , w e m a y i n v est in non- U . S . corpo r a tions (or other non- U . S . entities t r e a ted as corpo r a tions f or U . S . fede r a l income tax purposes) th a t could be t r e a ted under the Code and U . S . T r easury r egul a tions as “pass iv e f o r eign i n v estment companies” and/or “cont r olled f o r eign corpo r a tion s .” The rules re l a ting to i n v estment in these types of non- U . S . entities a r e designed to ensu r e th a t U . S . taxp a y ers a r e eithe r , in e f fect, ta x ed cur r ent l y (or on an acc e le r a ted basis with r espect to corpo r a te- l eve l ev ents) or ta x ed a t inc r eased tax r a tes a t distri b ution or disposition. In certain ci r cumstances this could r equi r e us to r ec o gni z e income w he r e w e do not r ece iv e a cor r esponding p a yment in cash.

Un r e a li z ed a pp r eci a tion on der i v a t iv e s , such as f o r eign cur r ency f or w a r d cont r act s , m a y be included in tax a b le income w hile the r eceipt of cash m a y occur in a subsequent period w hen the re l a ted cont r act e xpi r e s . A n y un r e a li z ed dep r eci a tion on i n v estments th a t the f o r eign cur r ency f or w a r d cont r acts a r e designed to hedge a r e not cur r ent l y deducti b le f or tax purpose s . This can r esult in inc r eased tax a b le income w he re b y w e m a y not h a v e su f f icient cash to p a y distri b utions or w e m a y opt to r etain such tax a b le income and p a y a 4% U . S . fede r a l e x cise tax. In such cases w e could still re l y upon the “spillback p ro visions” to maintain RIC tax t r e a tment.

W e anticip a te th a t a portion of our income m a y constitute OID or other income r equi r ed to be included in tax a b le income prior to r eceipt of cash. Furthe r , w e m a y e lect to amorti z e ma r k et discounts with r espect to d e bt securities acqui r ed in the secondary ma r k et and include such amounts in our tax a b le income in the cur r ent y ea r , instead of upon disposition, as an e lection not to do so w ould limit our a bility to deduct inte r est e xpenses f or U . S . fede r a l income tax purpose s . Because a n y OID or other amounts a ccrued will be included in our i n v estment compa n y tax a b le income f or the y ear of the accru a l, w e m a y be r equi r ed to m a k e a distri b ution to our sha re holders in o r der to s a tisfy the An n u a l Distri b ution R equi r ement, ev en if w e will not h a v e r ece iv ed a n y cor r esponding cash amount. As a r esult, w e m a y h a v e di f f iculty meeting the An n u a l Distri b ution R equi r ement necessary to maintain RIC tax t r e a tment under the Cod e . W e m a y h a v e to s e ll some of our i n v estments a t times and/or a t prices w e w ould not consider a dv ant a geou s , r aise a d dition a l d e bt or equity c a pit a l, m a k e a parti a l sha r e distri b ution, or f o r go n e w i n v estment opportunities f or this purpos e . If w e a r e not a b le to obtain cash f r om other sou r ce s , and choose not to m a k e a qu a lifying sha r e distri b ution, w e m a y fail to qu a lify f or RIC tax t r e a tment and thus become subject to corpo r a te-l eve l U . S . fede r a l income tax.

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We may choose to pay a portion of our distributions in our own stock, in which case you may be required to pay tax in excess of the cash you receive.

W e m a y distri b ute tax a b le distri b utions th a t a r e p a y a b le in part in our stock. In acco r dance with certain a pplic a b le T r easury r egul a tions and a rev e n ue p r ocedu r e issued b y the IR S , a RIC m a y t r e a t a distri b ution of its o wn stock as ful f illing its RIC distri b ution r equi r ements if each stockholder m a y e lect to r ece iv e his or her enti r e distri b ution in either cash or stock of the RI C , subject to a limit a tion th a t the a gg r eg a te amount of cash to be distri b uted to a ll stockholders m ust be a t least 20% ( w hich has been tempo r ari l y r educed to 10% f or distri b utions decla r ed on or after A pril 1, 2020, and on or be f o r e December 31, 2020) of the a gg r eg a te decla r ed distri b ution. If too ma n y stockholders e lect to r ece iv e cash, the cash a v ail a b le f or distri b ution m ust be a lloc a ted among the s ha re holders e lecting to r ece iv e cash (with the b a lance of the distri b ution paid in stock). In no ev ent will a n y stockholde r , e lecting to r ece iv e cash, r ece iv e the lesser of (a) the portion of the distri b ution such sha re holder has e lected to r ece iv e in cash or (b) an amount equ a l to his or her enti r e distri b ution times the pe r cent a ge limit a tion on cash a v ail a b le f or distri b ution. If these and certain other r equi r ements a r e met, f or U . S . fede r a l income tax purpose s , the amount of the d i vidend paid in stock will be equ a l to the amount of cash th a t could h a v e been r ece iv ed instead of stock. T ax a b le stockholders r ece i ving such distri b utions will be r equi r ed to include the full amount of the d i vidend as o r dinary income (or as long-te r m c a pit a l gain or qu a li f ied d i vidend income to the e xtent such distri b ution is p r ope r l y r eported as such) to the e xtent of our cur r ent and accu m ul a ted earnings and p r o f its f or U . S . fede r a l income tax purpose s .

As a r esult of r ece i ving distri b utions in the f o r m of our common stock, a U . S . stockholder m a y be r equi r ed to p a y tax with r espect to such distri b utions in e x cess of a n y cash r ece iv ed. If a U . S . stockholder s e lls the stock such stockholder r ece iv es as a d i vidend in o r der to p a y this tax, the s a les p r oceeds m a y be less than the amount included in income with r espect to the d i vidend, depending on the ma r k et price of our stock a t the time of the s a l e . Furthe r mo r e , with r espect to non- U . S . stockholder s , w e m a y be r equi r ed to withhold U . S . fede r a l tax with r espect to such distri b ution s , including in r espect of a ll or a portion of such d i vidend th a t is p a y a b le in sha r es of our common stock. In a d dition, if a signi f icant n umber of our stockholders dete r mine to s e ll sha r es of our stock in o r der to p a y ta x es o w ed on distri b ution s , it m a y put d o wn w a r d p r essu r e on the t r ading price of sha r es of our common stock.

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General Risk Factors

We are subject to risks related to corporate social responsibility.

Our business faces increasing public scrutiny related to environmental, social and governance (“ESG”) activities. We risk damage to our brand and reputation if we fail to act responsibly in a number of areas, such as environmental stewardship, corporate governance and transparency and considering ESG factors in our investment processes. Adverse incidents with respect to ESG activities could impact the value of our brand, the cost of our operations and relationships with investors, all of which could adversely affect our business and results of operations. Additionally, new regulatory initiatives related to ESG could adversely affect our business.

Additionally, new regulatory initiatives related to ESG that are applicable to us and our portfolio companies could adversely affect our business. In May 2018, the European Commission adopted an “action plan on financing sustainable growth.” The action plan is, among other things, designed to define and reorient investment toward sustainability. The action plan contemplates establishing EU labels for green financial products; increasing disclosure requirements in the financial services sector around ESG and strengthening the transparency of companies on their ESG policies and introducing a ‘green supporting factor’ in the EU prudential rules for banks and insurance companies to incorporate climate risks into banks’ and insurance companies’ risk management policies. There is a risk that a significant reorientation in the market following the implementation of these and further measures could be adverse to our portfolio companies if they are perceived to be less valuable as a consequence of, e.g., their carbon footprint or “greenwashing” (i.e., the holding out of a product as having green or sustainable characteristics where this is not, in fact, the case). We and our portfolio companies are subject to the risk that similar measures might be introduced in other jurisdictions in the future. Additionally, compliance with any new laws or regulations increases our regulatory burden and could make compliance more difficult and expensive, affect the manner in which we or our portfolio companies conduct our businesses and adversely affect our profitability.

There are significant financial and other resources necessary to comply with the requirements of being a public entity.

We are subject to the reporting requirements of the Exchange Act and certain requirements of the Sarbanes-Oxley Act (as defined in this annual report on Form 10-K). These requirements may place a strain on our systems and resources. The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal controls over financial reporting, which are discussed below. In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal controls, significant resources and management oversight will be required. We have implemented procedures, processes, policies and practices for the purpose of addressing the standards and requirements applicable to public companies. These activities may divert management’s attention from other business concerns, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. We incur significant additional annual expenses related to these steps and, among other things, directors’ and officers’ liability insurance, director fees, reporting requirements of the SEC, transfer agent fees, additional administrative expenses, increased auditing and legal fees and similar expenses.

The systems and resources necessary to comply with public company reporting requirements will increase further once we cease to be an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As long as we remain an emerging growth company, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. We will remain an emerging growth company for up to five years following an IPO or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1.07 billion, (ii) December 31 of the fiscal year that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act which would occur if the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the last business day of our most recently completed second fiscal quarter and we have been publicly reporting for at least 12 months or (iii) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the preceding three-year period.

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We may experience fluctuations in our operating results.

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

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

We and our portfolio companies are subject to regulation at the local, state and federal level. These laws and regulations, as well as their interpretation, may change from time to time, including as the result of interpretive guidance or other directives from the U.S. President and others in the executive branch, and new laws, regulations and interpretations may also come into effect, including those governing the types of investments we or our portfolio companies are permitted to make, any of which could have a material adverse effect on our business. In particular, on July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, became law. The Dodd-Frank Act impacts many aspects of the financial services industry. Many of the provisions of the Dodd-Frank Act have been implemented, while others will still require final rulemaking by regulatory authorities. President Trump and certain members of Congress have indicated that they will seek to amend or repeal portions of the Dodd-Frank Act, among other federal laws, and drastically reduce the role of regulatory agencies, such as the Consumer Financial Protection Bureau, which may create regulatory uncertainty in the near term. While the impact of the Dodd- Frank Act, and U.S. federal tax reform legislation enacted in December 2017, on us and our portfolio companies may not be known for an extended period of time, the Dodd-Frank Act and U.S. federal tax reform, including future rules implementing its provisions and the interpretation of those rules, along with other legislative and regulatory proposals directed at the financial services industry or affecting taxation that are proposed or pending in the U.S. Congress, may negatively impact the operations, cash flows or financial condition of us or our portfolio companies, impose additional costs on us or our portfolio companies, intensify the regulatory supervision of us or our portfolio companies or otherwise adversely affect our business or the business of our portfolio companies. In addition, if we do not comply with applicable laws and regulations, we could lose any licenses that we then hold for the conduct of our business and may be subject to civil fines and criminal penalties.

Additionally, changes to the laws and regulations governing our operations, including those associated with RICs, may cause us to alter our investment strategy in order to avail ourselves of new or different opportunities or result in the imposition of corporate-level U.S. federal income taxes on us. Such changes could result in material differences to the strategies and plans set forth in this annual report on Form 10-K and may shift our investment focus from the areas of expertise of our investment professionals to other types of investments in which our investment professionals may have little or no expertise or experience. Any such changes, if they occur, could have a material adverse effect on our results of operations and the value of your investment.

Over the last several years, there also has been an increase in regulatory attention to the extension of credit outside of the traditional banking sector, raising the possibility that some portion of the non-bank financial sector will be subject to new regulation. While it cannot be known at this time whether any regulation will be implemented or what form it will take, increased regulation of non-bank credit extension could negatively impact our operations, cash flows or financial condition, impose additional costs on us, intensify the regulatory supervision of us or otherwise adversely affect our business, financial condition and results of operations.

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

As a result of the United States presidential election, which occurred on November 3, 2020 and subsequent senate runoff elections, the Democratic Party controls the executive and legislative branches of government. Changes in federal policy, including tax policies, and at regulatory agencies occur over time through policy and personnel changes following elections, which lead to changes involving the level of oversight and focus on the financial services industry or

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the tax rates paid by corporate entities. The nature, timing and economic and political effects of potential changes to the current legal and regulatory framework affecting financial institutions remain highly uncertain. Uncertainty surrounding future changes may adversely affect our operating environment and therefore our business, financial condition, results of operations and growth prospects.

Terrorist attacks, acts of war, global health emergencies or natural disasters may impact the businesses in which we invest and harm our business, operating results and financial condition.

T er r orist act s , acts of w a r , glob a l he a lth eme r gencies or n a tu r a l disasters m a y disrupt our ope r a tion s , as we ll as the ope r a tions of the b usinesses in w hich w e i n v est. Such acts h a v e c r e a ted, and conti n ue to c r e a t e , economic and politic a l uncertainties and h a v e contri b uted to glob a l economic inst a bilit y . Futu r e ter r orist act i vitie s , military or security ope r a tion s , glob a l he a lth eme r gencies or n a tu r a l disasters could further w e a k en the domestic/glob a l economies and c r e a te a d dition a l uncertaintie s , w hich m a y neg a t ive l y impact the b usinesses in w hich w e i n v est di r ect l y or indi r ect l y and, in turn, could h a v e a m a teri a l a d v erse impact on our b usines s , ope r a ting r esults and f inanci a l condition. Losses f r om ter r orist a ttack s , glob a l he a lth eme r gencies and n a tu r a l disasters a r e gene r a l l y uninsu r a b l e .

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Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

We do not own any real estate or other physical properties materially important to our operations. Currently, we lease office space in Chandler, Arizona for our corporate headquarters. We believe that our office facilities are suitable and adequate for our business as it is contemplated to be conducted.

Item 3. Legal Proceedings

We are not currently subject to any material legal proceedings, nor, to our knowledge, are any material legal proceedings threatened against us. 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. Furthermore, third parties may seek to impose liability on us in connection with the activities of our portfolio companies. Our business is also subject to extensive regulation, which may result in regulatory proceedings against us. While the outcome of any future legal or regulatory proceedings cannot be predicted with certainty, we do not expect that any such future proceedings will have a material effect upon our financial condition or results of operations.

Item 4. Mine Safety Disclosures

Not Applicable .

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PART II

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

Common Stock

Our common stock began trading on the Nasdaq Global Select Market on January 29, 2021 under the symbol “TRIN” in connection with our IPO of shares of our common stock. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Developments — Initial Public Offering.” Shares of BDCs may trade at a market price that is less than the value of the net assets attributable to those shares. The possibility that our shares of common stock will trade at a discount from net asset value per share or at premiums that are unsustainable over the long term are separate and distinct from the risk that our net asset value per share will decrease. It is not possible to predict whether our common stock will trade at, above, or below net asset value per share. See “Item 1A. Risk Factors—Risks Related to an Investment in Our Common Stock.” On March 3, 2021, the last reported closing sales price of our common stock on the Nasdaq Global Select Market was $15.26 per share, which represented a premium of approximately 17.1% to our net asset value per share of $13.03 as of December 31, 2020.

Prior to our IPO, the shares of our common stock were offered and sold in transactions exempt from registration under the Securities Act. As such, there was no public market for shares of our common stock during the year ended December 31, 2020.

Holders

As of March 3, 2021, there were approximately 213 holders of record of our common stock, which did not include stockholders for whom shares are held in “nominee” or “street name.”

Distributions

To obtain and maintain our tax treatment as a RIC, we must, among other things, timely distribute (or be treated as distributing) in each taxable year dividends of an amount equal to at least 90% of our investment company taxable income (which includes, among other items, dividends, interest, the excess of any net short-term capital gains over net long-term capital losses, as well as other taxable income, excluding any net capital gains reduced by deductible expenses) and 90% of our net tax-exempt income (which is the excess of our gross tax-exempt interest income over certain disallowed deductions) for that taxable year. As a RIC, we generally will not be subject to corporate-level U.S. federal income tax on our investment company taxable income and net capital gains that we distribute to stockholders. In addition, to avoid the imposition of a nondeductible 4% U.S. federal excise tax, we must timely distribute (or be treated as distributing) in each calendar year an amount at least equal to the sum of: (i) 98% of our net ordinary income, excluding certain ordinary gains and losses, recognized during a calendar year; (ii) 98.2% of our capital gain net income, adjusted for certain ordinary gains and losses, recognized for the twelve-month period ending on October 31 of such calendar year; and (iii) 100% of any income or net capital gains that we recognized in preceding years, but were not distributed in such years, and on which we paid no U.S. federal income tax.

We generally intend to make quarterly distributions and to distribute, out of assets legally available for distribution, substantially all of our available earnings, as determined by the Board in its sole discretion and in accordance with RIC requirements.

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The following table summarizes distributions declared for the year ended December 31, 2020:


Declaration Date	Record Date	Payment Date	Per Share Amount
May 14, 2020	May 29, 2020	June 5, 2020	$	0.22
August 12, 2020	August 21, 2020	September 4, 2020		0.27
November 12, 2020	November 20, 2020	December 4, 2020		0.27
December 22, 2020	December 30, 2020	January 15, 2021		0.27
Total			$	1.03

Distribution Reinvestment Plan

We have adopted an “opt out” distribution reinvestment plan for our stockholders. As a result, if we declare a dividend, then stockholders’ cash distributions will be automatically reinvested in additional shares of our common stock, unless they specifically “opt out” of the distribution reinvestment plan so as to receive cash distributions. Stockholders who receive distributions in the form of shares of our common stock generally are subject to the same U.S. federal income tax consequences as are stockholders who elect to receive their distributions in cash.

Sales of Unregistered Securities

During the year ended December 31, 2020, we issued a total of 271,414 shares of our common stock pursuant to our distribution reinvestment plan. On January 15, 2021, we issued 87,710 shares of our common stock in connection with the dividend declared on December 22, 2020. These issuances were not subject to the registration requirements of the Securities Act. The aggregate value of the shares of our common stock issued pursuant to our distribution reinvestment plan during the year ended December 31, 2020 was approximately $3.4 million and the value of our common shares issued in January 2021 was approximately $1.1 million.

Equity Compensation Plan Information

See “Item 10. Executive Compensation” and “Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.”

Information furnished under Part II. Item 5 of the Form 10-K shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Exchange Act.

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Item 6. Selected Financial Data

The selected financial and other data as of and for the year ended December 31, 2020 and for the period August 12, 2019 (date of inception) to December 31, 2019 is derived from our consolidated financial statements that have been audited by Ernst & Young, LLP, an independent registered public accounting firm. We were formed on August 12, 2019 and commenced operations on January 16, 2020. Prior to January 16, 2020, we had no operations, except for matters relating to our formation and organization as a BDC. As a result, there are no significant financial results for comparative purposes. The selected financial and other data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes included elsewhere herein.


				For the Period
				of
August 12, 2019
	Year
Ended			(date
of inception)
(in thousands,
except share and per share amounts)	December 31, 2020			to
December 31, 2019
Investment income:
Interest income	$	51,255		$	—
Fee income		3,709			—
Total investment income		54,964			—
Operating expenses:
Interest expense and other debt financing
costs		16,773			—
Compensation and benefits		10,433			—
Professional fees		2,283
General and administrative		2,104			524
Total operating expense		31,593			524
Net investment income		23,371			—
Net realized gain/(loss) on investments		(9,403)			—
Net change in unrealized appreciation
(depreciation) on investments		(4,966)			—
Costs related to the acquisition of
Trinity Capital Holdings and Legacy Funds		(15,114)			—
Net increase in net assets resulting
from operations	$	(6,112)		$	(524)
Net investment income per common share
(basic and diluted)	$	1.29		$	N/M
Net increase/(decrease) in net assets
resulting from operations attributable to common stock per share (basic and diluted)	$	(0.34)		$	N/M
Weighted-average shares outstanding
- basic and diluted		18,092,494			10
Distributions declared per common share:	$	1.03		$	n/a

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				For the Period
				of
August 12, 2019
	Year
Ended			(date
of inception)
(dollars
in thousands)	December 31, 2020			to
December 31, 2019
Balance
sheet data:
Investments, at value	$	493,651		$	—
Cash and cash equivalents		61,101			—
Total assets		559,708			6,202
Total liabilities		320,960			6,726
Total net assets		238,748			(524)

Other
Data:
Number of portfolio companies at period
end		80			—
Effective yield on secured loan investments (1)		12.5	%		—	%
Effective yield on equipment financing
investments (1)		14.9	%		—	%
Total return based on change in NAV (2)		(6.1)	%		—	%
Total debt investments, at value		443,219			—
Total warrant investments, at value		17,778			—
Total equity investments, at value		32,654			—
Unfunded commitments (3)		116			—
Net asset value per share (4)	$	13.03		$	(52,418.20)

N/M – Not Material

(1) Effective yield is calculated based on our average secured loan and equipment financing investments at cost at the end of each period and includes amortization of deferred fees and accretion of original issue discount, but excludes all other fee income. The weighted-average annual effective yield is higher than what an investor in shares of our common stock will realize on its investment because it does not reflect any debt investments on non-accrual status, our expenses or any sales load paid by an investor. For information on our investments on non-accrual status. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Portfolio Asset Quality".

(2) The total return equals the change in the ending net asset value over the beginning of the period price per share plus distributions paid per share during the period, divided by the beginning price assuming the distribution is reinvested on the date of issuance. The total return does not reflect any sales load that must be paid by investors.

(3) Amount represents unfunded commitments, which have been requested by the portfolio company and unencumbered by milestones. Amount excludes unfunded commitments which have not been requested or are not available due to the borrower having not met certain milestones.

(4) Based on common shares outstanding at period end.

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

The following discussion and analysis or our financial condition and results of operations should be read together with the consolidated financial statements and the related notes that are included in Item 8 of Part II of this annual report on Form 10-K. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the section entitled “Risk Factors.” Please also see the section entitled “Cautionary Note Regarding Forward-Looking Statements.”

Overview

We are a specialty lending company providing debt, including loans and equipment financings, to growth stage companies, including venture-backed companies and companies with institutional equity investors. We are an internally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (“the1940 Act”). We also intend to elect to be treated, and intend to qualify annually thereafter, as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”) for U.S. federal income tax purposes. As a BDC and a RIC, we are required to comply with certain regulatory requirements.

Our investment objective is to generate current income and, to a lesser extent, capital appreciation through our investments. We seek to achieve our investment objective by making investments consisting primarily of term loans and equipment financings and, to a lesser extent, working capital loans, equity and equity-related investments. In addition, we may obtain warrants or contingent exit fees at funding from many of our portfolio companies, providing an additional potential source of investment returns. We generally are required to invest at least 70% of our total assets in qualifying assets in accordance with the 1940 Act but may invest up to 30% of our total assets in non-qualifying assets, as permitted by the 1940 Act.

We target investments in growth stage companies, which are typically private companies, including venture-backed companies and companies with institutional equity investors. We define “growth stage companies” as companies that have significant ownership and active participation by sponsors, such as institutional investors or private equity firms, and expected annual revenues of up to $100.0 million. Subject to the requirements of the 1940 Act, we are not limited to investing in any particular industry or geographic area and seek to invest in under-financed segments of the private credit markets.

We invest in debt, including loans and equipment financings, that may have initial interest-only periods of up to 24 months and may then fully amortize over a total term of up to 60 months and are typically secured by a blanket first lien, a specific asset lien on mission critical assets, or a blanket second lien. We may also make a limited number of direct equity and equity-related investments in conjunction with our debt investments.

Our History

Trinity Capital Inc. was incorporated under the general corporation laws of the State of Maryland on August 12, 2019 and commenced operations on January 16, 2020. Prior to January 16, 2020, we had no operations, except for matters relating to our formation and organization as a BDC.

On January 16, 2020, through a series of transactions (the “Formation Transactions”), we acquired Trinity Capital Investment, LLC ( “TCI, LLC”), Trinity Capital Fund II, L.P. (“Fund II”), Trinity Capital Fund III, L.P. (“Fund III”), Trinity Capital Fund IV, L.P. (“Fund IV”) and Trinity Sidecar Income Fund, L.P. (“Sidecar Fund,” and collectively, the “Legacy Funds”) and all of their respective assets (the “Legacy Assets”), including their respective investment portfolios (the “Legacy Portfolio”), as well as Trinity Capital Holdings, LLC (“Trinity Capital Holdings”), a holding company whose subsidiaries managed and/or had the right to receive fees from certain of the Legacy Funds. In order to complete these transactions we used a portion of the proceeds from our private equity offering and private debt offering that occurred on January 16, 2020 (refer to "Item 8. Consolidated Financial Statements and Supplementary Data - Note 1. Organization and Basis of Presentation" for further discussion of these transactions).

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The Legacy Funds were merged with and into the Company, and we issued 9,183,185 shares of our common stock for an aggregate amount of approximately $137.7 million and paid approximately $108.7 million in cash to the Legacy Funds’ investors, which included the general partners/managers of the Legacy Funds (the “Legacy Investors”), to acquire the Legacy Funds and all of their respective assets, including the Legacy Portfolio. Our senior management team, led by Steven L. Brown, comprises the majority of the senior management team that managed the Legacy Funds and sourced the Legacy Portfolio.

On February 2, 2021, we completed our initial public offering of 8,006,291 shares of our common stock at a price of $14.00 per share, inclusive of the underwriters option to purchase additional shares, which was exercised in full. Our common stock began trading on the Nasdaq Global Select Market on January 29, 2021 under the symbol “TRIN.” Proceeds from this offering were primarily used to pay down a portion of our existing indebtedness outstanding under the Credit Facility.

COVID-19 Developments

In March 2020, the outbreak of COVID-19 was recognized as a pandemic by the World Health Organization. Shortly thereafter, the President of the United States declared a National Emergency throughout the United States attributable to such pandemic. The pandemic has become increasingly widespread in the United States, including in the markets in which the Company primarily operates. During the year ended December 31, 2020, and subsequent to December 31, 2020, the COVID-19 pandemic has had a significant impact on the U.S. and global economy.

We have and continue to assess the impact of the COVID-19 pandemic on our portfolio companies. We cannot predict the full impact of the COVID-19 pandemic, including its duration in the United States and worldwide, the effectiveness of governmental responses designed to mitigate strain on businesses and the economy, and the magnitude of the economic impact of the outbreak, including with respect to the travel restrictions with a view to partially or fully reopening their economies, many cities world-wide have since experienced a surge in the reported number of cases, hospitalizations and deaths related to the COVID-19 pandemic. These increases have led to the re-introduction of restrictions and business shutdowns in certain states, counties and cities in the United States and globally and could continue to lead to the re-introduction of such restrictions and business shutdowns elsewhere. Additionally, as of February 2021, travelers from the United States are not allowed to visit Canada, Australia or the majority of countries in Europe, Asia, Africa and South America. These continued travel restrictions may prolong the global economic downturn. In addition, although the Federal Food and Drug Administration authorized vaccines for emergency use starting in December 2020, it remains unclear when the restrictions that were imposed to slow the spread of the virus will be lifted entirely. The delay in distributing vaccines could lead people to continue to self-isolate and not participate in the economy at pre-pandemic levels for a prolonged period of time. Even after the COVID-19 pandemic subsides, the U.S. economy and most other major global economies may continue to experience a recession, and we anticipate our business operations could be materially adversely affected by a prolonged recession in the United States and other major markets. As such, we are unable to predict the duration of any business and supply-chain disruptions, the extent to which the COVID-19 pandemic will negatively affect our portfolio companies’ operating results or the impact that such disruptions may have on our results of operations and financial condition. Though the magnitude of the impact remains to be seen, we expect our portfolio companies and, by extension, our operating results to be adversely impacted by the COVID-19 pandemic and, depending on the duration and extent of the disruption to the operations of our portfolio companies, we expect that certain portfolio companies will experience financial distress and may possibly default on their financial obligations to us and their other capital providers. Some of our portfolio companies have significantly curtailed business operations, furloughed or laid off employees and terminated service providers, and deferred capital

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expenditures, which could impair their business on a permanent basis and additional portfolio companies may take similar actions. We continue to closely monitor our portfolio companies, which includes assessing each portfolio company’s operational and liquidity exposure and outlook; however, any of these developments would likely result in a decrease in the value of our investment in any such portfolio company. In addition, to the extent that the impact to our portfolio companies results in reduced interest payments or permanent impairments on our investments, we could see a decrease in our net investment income, which would increase the percentage of our cash flows dedicated to our debt obligations and could impact the amount of any future distributions to our stockholders.

Critical Accounting Policies

The Company’s financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and pursuant to Regulation S-X under the Securities Act of 1933, as amended (the “Securities Act”). The Company follows accounting and reporting guidance as determined by the Financial Accounting Standards Board (“FASB”), in FASB Accounting Standards Codification (“ASC”) 946, Financial Services — Investment Companies .

The preparation of our financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Changes in the economic environment, financial markets and any other parameters used in determining such estimates could cause actual results to differ materially. Valuation of investments, income recognition, realized / unrealized gains or losses and U.S. federal income taxes are considered to be our critical accounting policies and estimates. For additional information, please refer to “Note 2 - Summary of Significant Accounting Policies” in the notes to the consolidated financial statements included with this annual report on Form 10-K.

Valuation of Investments

The most significant estimate inherent in the preparation of the Company’s consolidated financial statements is the valuation of investments and the related amounts of unrealized appreciation and depreciation of investments recorded. The Company’s investments are carried at fair value in accordance with the 1940 Act and ASC 946 and measured in accordance with ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the observability of inputs used to measure fair value, and provides disclosure requirements for fair value measurements. ASC 820 requires the Company to assume that each of the portfolio investments is sold in a hypothetical transaction in the principal or, as applicable, most advantageous market using market participant assumptions as of the measurement date. Market participants are defined as buyers and sellers in the principal market that are independent, knowledgeable and willing and able to transact. The Company values its investments at fair value as determined in good faith by the Company’s Board of Directors (the “Board”) in accordance with the provisions of ASC 820 and the 1940 Act.

While the Board is ultimately and solely responsible for determining the fair value of the Company’s investments, the Company has engaged independent valuation firms to provide the Company with valuation assistance with respect to its investments. The Company engages independent valuation firms on a discretionary basis. Specifically, on a quarterly basis, the Company will identify portfolio investments with respect to which an independent valuation firm will assist in valuing certain investments. The Company selects these portfolio investments based on a number of factors, including, but not limited to, the potential for material fluctuations in valuation results, size, credit quality and the time lapse since the last valuation of the portfolio investment by an independent valuation firm.

Investments recorded on the Company’s Consolidated Statements of Assets and Liabilities as of December 31, 2020 are categorized based on the inputs to the valuation techniques as follows:

Level 1 — Investments whose values are based on unadjusted quoted prices for identical assets in an active market that the Company has the ability to access (examples include investments in active exchange-traded equity securities and investments in most U.S. government and agency securities).

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Level 2 — Investments whose values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the investment.

Level 3 — Investments whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement (for example, investments in illiquid securities issued by privately held companies). These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the investment.

Given the nature of lending to venture capital-backed growth stage companies, substantially all of the Company’s investments in these portfolio companies are considered Level 3 assets under ASC 820 because there is no known or accessible market or market indexes for these investment securities to be traded or exchanged. The Company uses an internally developed portfolio investment rating system in connection with its investment oversight, portfolio management and analysis and investment valuation procedures. This system takes into account both quantitative and qualitative factors of the portfolio companies. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been reported had a ready market for the investments existed, and it is reasonably possible that the difference could be material.

Fair value estimates are made at discrete points in time based on relevant information. These estimates may be subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. The carrying amounts of the Company’s financial instruments, consisting of cash, investments, receivables, payables and other liabilities approximate the fair values of such items due to the short-term nature of these instruments.

Income Recognition

Interest Income

The Company recognizes interest income on an accrual basis and recognizes it as earned in accordance with the contractual terms of the loan agreement to the extent that such amounts are expected to be collected. Original issue discount (“OID”) initially includes the estimated fair value of detachable equity warrants obtained in conjunction with the origination of debt securities, and is accreted into interest income over the term of the loan as a yield enhancement based on the effective yield method. In addition, the Company may also be entitled to an end-of-term (“EOT”) fee. Debt EOT fees to be paid at the termination of the financing arrangements are accreted into interest income over the contractual life of the debt based on the effective yield method. As of December 31, 2020, Trinity Capital had an EOT payment receivable of approximately $37.9 million, which is included as a component of the cost basis of the Company’s current debt securities.

Income related to application or origination payments, net of related expenses, and generally collected in advance, includes loan commitment and facility fees for due diligence, as well as fees for transaction services rendered by the Company to borrowers. Loan and commitment fees in excess of the related expenses are amortized into interest income over the contractual life of the loan. In certain loan arrangements, warrants or other equity interests are received from the borrower as additional origination fees. The Company recognizes nonrecurring fees over the remaining term of the loan commencing in the quarter relating to specific loan modifications.

When a portfolio company pays off their outstanding indebtedness prior to the scheduled maturity date, then the acceleration of the accretion of the OID and EOT is recognized as interest income.

Fee Income

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generally earned when the portfolio company enters into an equipment financing arrangement or pays off their outstanding indebtedness prior to the scheduled maturity.

Portfolio Composition and Investment Activity

Portfolio Composition

As of December 31, 2020, our investment portfolio had an aggregate fair value of approximately $493.7 million and was comprised of approximately $320.7 million in secured loans, $122.5 million in equipment financings, and $50.5 million in equity and equity-related investments, including warrants, across 80 portfolio companies.

A summary of the composition of our investment portfolio at cost and fair value as a percentage of total investments as of December 31, 2020 are shown in following table:


		Fair
Type	Cost	Value
Secured Loans	65.1%	65.0%
Equipment Financings	24.7%	24.8%
Equity	6.6%	6.6%
Warrants	3.6%	3.6%
Total	100.0%	100.0%

The following table shows the composition of our investment portfolio by geographic region at cost and fair value as a percentage of total investments as of December 31, 2020. The geographic composition is determined by the location of the corporate headquarters of the portfolio company.


		Fair
Geographic
Region	Cost	Value
United States
West	49.6%	48.8%
Northeast	26.4%	25.9%
Midwest	9.5%	8.9%
Mountain	6.8%	6.9%
Southeast	2.2%	3.6%
South	0.1%	0.4%
Canada	5.4%	5.5%
Total	100.0%	100.0%

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Set forth below is a table showing the industry composition of our investment portfolio at cost and fair value as a percentage of total investments as of December 31, 2020:


		Fair
Industry	Cost	Value
Manufacturing	20.8%	20.2%
Professional, Scientific, and Technical
Services	15.6%	16.0%
Retail Trade	15.7%	15.4%
Finance and Insurance	7.0%	7.2%
Information	6.4%	6.2%
Rental and Leasing Services	5.8%	5.9%
Utilities	5.4%	5.5%
Pharmaceutical	3.5%	4.9%
Wholesale Trade	4.8%	4.8%
Agriculture, Forestry, Fishing and
Hunting	4.2%	4.2%
Real Estate	3.5%	3.5%
Health Care and Social Assistance	2.9%	2.3%
Educational Services	1.9%	2.0%
Construction	2.0%	1.4%
Administrative and Support and Waste
Management and Remediation Services	0.5%	0.5%
Total	100.0%	100.0%

As of December 31, 2020, our debt investments had a weighted average time to maturity of approximately 3.0 years. Additional information regarding our portfolio is set forth in the schedule of investments and the related notes thereto included with this annual report on Form 10-K.

Investment Activity

During the year ended December 31, 2020, in addition to $417.0 million in investments we acquired in connection with the Formation Transactions, we made an aggregate of approximately $144.3 million of investments in 18 new portfolio companies and approximately $95.7 million of investments in 18 existing portfolio companies. During the year ended December 31, 2020, we received an aggregate of $160.9 million in proceeds from repayments of our investments including proceeds of approximately $108.8 million from early repayments.

The following table provides a summary of the changes in the investment portfolio for the year ended December 31, 2020 (in thousands):


	Year
Ended
	December 31, 2020
Fair Value as of January 1, 2020	$	—
Formation Transactions acquisitions		417,023
Purchases		238,564
Non-cash conversion		1,263
Proceeds from Paydowns and Sales		(52,111)
Proceeds from early repayments		(108,790)
Amortization and Accretion		11,788
Net Realized Gain (Loss)		(9,403)
Third Party Participation (1)		283
Change in Unrealized Appreciation (Depreciation)		(4,966)
Fair Value as of December 31, 2020	$	493,651

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(1) Certain third parties have rights to 17,485 shares of Nanotherapeutics common stock at a fair value of approximately $0.6 million as of December 31, 2020. The activity related to these shares and the related liability is recorded against unrealized appreciation/(depreciation).

The level of our investment activity can vary substantially from period to period depending on many factors, including the amount of debt, including loans and equipment financings, and equity capital required by growth stage companies, the general economic environment and market conditions, including as a result of the COVID-19 pandemic, and the competitive environment for the types of investments we make.

Portfolio Asset Quality

The following table shows the distribution of our loan and equipment financing investments on the 1 to 5 investment risk rating scale range at fair value as of December 31, 2020 (dollars in thousands):


		Investments
at	Percentage
of
Investment
Risk Rating Scale Range	Designation	Fair
Value	Total
Portfolio
4.0 - 5.0	Very Strong Performance	$ 92,519	20.9%
3.0 - 3.9	Strong Performance	212,969	48.0%
2.0 - 2.9	Performing	116,895	26.4%
1.6 - 1.9	Watch	19,230	4.3%
1.0 - 1.5	Default/Workout	1,606	0.4%
Total		$ 443,219	100.0%

As of December 31, 2020, our loan and equipment financing investments had a weighted average risk rating score of 3.2.

Debt Investments on Non-Accrual Status

When a debt security becomes 90 days or more past due, or if our management otherwise does not expect that principal, interest, and other obligations due will be collected in full, we will generally place the debt security on non-

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accrual status and cease recognizing interest income on that debt security until all principal and interest due has been paid or we believe the borrower has demonstrated the ability to repay its current and future contractual obligations. Any uncollected interest is reversed from income in the period that collection of the interest receivable is determined to be doubtful. However, we may make exceptions to this policy if the investment has sufficient collateral value and is in the process of collection.

As of December 31, 2020, loans to three portfolio companies were on non-accrual status with a total cost of approximately $3.4 million, and a total fair market value of approximately $2.2 million, or 0.5%, of the fair value of the Company’s investment portfolio.

Results of Operations

The following discussion and analysis of our results of operations encompasses our consolidated results for the year ended December 31, 2020. We were formed on August 12, 2019 and commenced operations on January 16, 2020. Prior to January 16, 2020, we had no operations, except for matters relating to our formation and organization as a BDC. As a result, there are no significant financial results for comparative purposes.

Investment Income

The following table sets forth the components of investment income (in thousands):


	Year
Ended
	December 31, 2020
Stated interest income	$	38,179
Amortization of original issue discount		10,750
Acceleration of amortization of original
issue discount		2,326
Prepayment penalty and related fees		2,032
Other fee income		1,677
Total investment income	$	54,964

We generate revenues primarily in the form of investment income from the investments we hold, generally in the form of interest income from our debt securities. Investment income represents interest income recognized as earned in accordance with the contractual terms of the loan agreement. Interest income from original issue discount (“OID”) represents the estimated fair value of detachable equity warrants obtained in conjunction with the origination of debt securities, including loans and equipment financings and is accreted into interest income over the term of the loan as a yield enhancement. Interest income from payment-in-kind (“PIK”) represents contractually deferred interest added to the loan balance recorded on an accrual basis to the extent such amounts are expected to be collected.

Loan and commitment fees in excess of related expenses are amortized into interest income over the contractual life of the loan. The Company also recognizes certain fees as one-time fee income, including, but not limited to, prepayment penalties, fees related to select covenant default, late-payment fees, structuring fees and exit fees related to a change in ownership of the portfolio company.

For the year ended December 31, 2020, total investment income was approximately $55.0 million, which represents an approximate effective yield of 14.0% on the average investments during such period.

Operating Expenses

Our operating expenses are comprised of interest and fees on our borrowings, employee compensation and general and administrative expenses. Our operating expenses totaled approximately $31.6 million for the year ended December 31, 2020.

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Interest and Fees on our Borrowings

Interest and fees on our borrowings totaled approximately $16.8 million for the year ended December 31, 2020, which is primarily comprised of interest and fees related to the Credit Facility, the 2025 Notes and the Convertible Notes. We had a weighted average cost of debt, comprised of interest and fees, of approximately 6.6% for the year ended December 31, 2020.

Employee Compensation and Benefits

Employee compensation and benefits totaled approximately $10.4 million for the year ended December 31, 2020. As of December 31, 2020, the Company had 34 employees.

The Board has approved the 2019 Trinity Capital Inc. Long-Term Incentive Plan and the Trinity Capital Inc. 2019 Non-Employee Director Restricted Stock Plan, each to be effective upon receipt of exemptive relief from the SEC and stockholder approval of such plans. We have applied for an exemptive order from the SEC to permit us to issue certain securities under such plans. If such exemptive relief and stockholder approval are obtained, the Compensation Committee may award such securities in such amounts and on such terms as the Compensation Committee determines and consistent with any exemptive order the SEC may issue and the terms of such plans, as applicable. The SEC is not obligated to grant an exemptive order to allow this practice and will do so only if it determines that such practice is consistent with stockholder interests and does not involve overreaching by management or our Board. We cannot provide any assurance that we will receive such exemptive relief from the SEC or such stockholder approval.

Professional Fees Expenses

Professional fees expenses include legal fees, accounting fees, third-party valuation fees, and talent acquisition fees. Our professional fees expenses totaled approximately $2.3 million for the year ended December 31, 2020.

General and Administrative Expenses

General and administrative expenses include insurance premiums, rent, taxes and other various expenses related to our ongoing operations. Our general and administrative expenses totaled approximately $2.1 million for the year ended December 31, 2020.

Net Investment Income

As a result of approximately $55.0 million in total investment income as compared to approximately $31.6 million in total expenses, net investment income for the year ended December 31, 2020 was approximately $23.4 million or $1.29 per share.

Net Realized Gains and Losses

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The net realized gains (losses) from the sales, repayments, or exits of investments were comprised of the following (in thousands):


		Year
Ended
		December 31, 2020
Net realized gain (loss) on investments:
Gross realized gains		$ 1,350
Gross realized losses		(10,753)
Total net realized gains/(losses) on
investments		$ (9,403)

Net Change in Unrealized Appreciation / (Depreciation) from Investments

Net change in unrealized appreciation (depreciation) from investments primarily reflects the net change in the fair value of the investment portfolio and financial instruments and the reclassification of any prior period unrealized appreciation or depreciation on exited investments and financial instruments to realized gains or losses.

Net unrealized appreciation and depreciation on investments is comprised of the following (in thousands):


	Year
Ended
	December 31, 2020
Gross unrealized appreciation	$	15,162
Gross unrealized depreciation		(19,845)
Third party participation (1)		(283)
Net unrealized appreciation/depreciation
reclassified related to net realized gains or losses (2)		—
Total net unrealized gains (losses)
on investments	$	(4,966)

(2) Investments were recorded at their fair values in the Formation Transactions on January 16, 2020, therefore no reclassification of unrealized appreciation (depreciation) was recorded during the year ended December 31, 2020.

The changes in net unrealized appreciation/(depreciation) from investments during the year ended December 31, 2020 consisted of the following (in thousands):


	Net
Unrealized
	Appreciation
Portfolio
Company	(Depreciation)
Nanotherapeutics, Inc.	$	6,976
Hospitalists Now, Inc.		1,314
Instart Logic, Inc.		978
GrubMarket, Inc.		960
Lucidworks, Inc.		703
Birchbox, Inc.		(1,335)
Untuckit, Inc.		(1,867)
Project Frog, Inc.		(2,915)
Workwell Prevention & Care Inc.		(2,977)
Atieva, Inc.		(3,021)
Other, net		(3,782)
Total	$	(4,966)

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Financial Condition, Liquidity and Capital Resources

Our liquidity and capital resources are generated primarily from the net proceeds of offerings of our securities, including the Private Offerings, borrowings under the Credit Facility, the Convertible Notes offering and cash flows from our operations, including investment sales and repayments, as well as income earned on investments and cash equivalents. Our primary use of our funds includes investments in portfolio companies, payments of interest on our outstanding debt, and payments of fees and other operating expenses we incur. We also expect to use our funds to pay distributions to our stockholders. We have used, and expect to continue to use, our borrowings, including under the Credit Facility or any future credit facility, and proceeds from the turnover of our portfolio to finance our investment objectives and activities.

We may, from time to time, enter into additional credit facilities, increase the size of our existing Credit Facility, or issue additional securities in private or public offerings. Any such incurrence or issuance would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions, and other factors.

For the year ended December 31, 2020, we experienced a net increase in cash and cash equivalents in the amount of $61.1 million, which is the net result of $211.3 million of cash provided by our financing activities offset by $58.2 million of cash used in our operating activities and $92.0 million used in investing activities.

The $58.2 million of net cash used in our operating activities resulted primarily from the $239.8 million of cash used for the purchase of investments partially offset by cash proceeds totaling $160.9 million from the sales and repayments of debt and equity investments. The $92.0 million used in investing activities was primarily related to $89.5 million used for the acquisition of the Legacy Funds in the Formation Transactions, $2.2 million used in the acquisition of Trinity Capital Holdings and $0.3 million for the acquisition of capital assets.

During the year ended December 31, 2020, net cash provided by financing activities of $211.3 million was primarily provided from proceeds from the issuance of our common stock of $125.0 million, proceeds of $125.0 million from the issuance of our 2025 Notes, and net proceeds of $48.7 million from the issuance of our Convertible Notes, partially offset by net repayments under our Credit Facility of $55.0 million and distributions paid of $10.4 million.

As of December 31, 2020, we had $86.7 million in available liquidity, including $44.7 million in unrestricted cash and cash equivalents. We had available borrowing capacity of $42.0 million under the Credit Facility, subject to its terms and regulatory requirements. We primarily invest cash on hand in interest bearing deposit accounts. As of December 31, 2020, we had approximately $16.4 million of restricted cash which consists of approximately $15.7 million related to the Credit Facility covenants, and approximately $0.7 million held in escrow related to the payout of a settlement with a former member of certain general partners of certain of the Legacy Funds.

In January 2020, in connection with the Formation Transactions, we became a party to, and assumed, the Credit Facility through our wholly owned subsidiary, Trinity Funding 1, LLC. The Credit Facility matures on January 8, 2022, unless extended, and we have the ability to borrow up to an aggregate of $300.0 million. In addition, borrowings under the Credit Facility are subject to floating interest rates based on LIBOR, generally bearing interest at a rate of the three-month LIBOR plus 3.25%. During the year ended December 31, 2020, we repaid approximately $85.0 million and borrowed an additional $30.0 million under the Credit Facility. As of December 31, 2020, approximately $135.0 million was outstanding under the Credit Facility.

In January 2020, we completed the Private Common Stock Offering in reliance upon the available exemptions from the registration requirements of the Securities Act, pursuant to which we issued and sold 8,333,333 shares of our common stock for aggregate gross proceeds of approximately $125.0 million. A portion of the proceeds of the Private Common Stock Offering were used to complete the Formation Transactions and repay a portion of the outstanding borrowings under the Credit Facility.

In January 2020, concurrent with the completion of the Private Common Stock Offering, we completed the 144A Note Offering in reliance upon the available exemptions from the registration requirements of the Securities Act, pursuant to which we issued and sold $125.0 million in aggregate principal amount of the unsecured 2025 Notes

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that mature on January 16, 2025, unless repurchased or redeemed in accordance with their terms prior to such date and bear interest at a fixed rate of 7.00% per year payable quarterly on March 15, June 15, September 15 and December 15 of each year. A portion of the proceeds of the 144A Note Offering were used to complete the Formation Transactions and repay a portion of the outstanding borrowings under the Credit Facility. Aggregate estimated offering expenses in connection with the transaction, including the fees and commissions, were approximately $4.8 million. As of December 31, 2020, we had $125 million in aggregate principal amount of 2025 Notes outstanding.

In December 2020, we issued $50.0 million in aggregate principal amount of the Convertible Notes. The sale generated net proceeds of $47.0 million, including $1.7 million of debt issuance costs and $1.3 million of original issue discount. The Convertible Notes bear interest at a rate of 6.00% per year, payable semiannually in arrears on May 1 and November 1, of each year. The Convertible Notes mature on December 11, 2025, unless earlier converted by noteholders or purchased by the Company at the noteholders option upon the occurrence of a fundamental change, as defined in the indenture governing the Convertible Notes. As of December 31, 2020, we had $50.0 million in aggregate principal amount of Convertible Notes outstanding.

Refer to “Item 8. Financial Statements and Supplementary Data – Note 5 – Borrowings” included in the notes to our consolidated financial statements appearing elsewhere in this report for a discussion of our borrowings.

Reduced Asset Coverage Requirements

In accordance with the 1940 Act, with certain limited exceptions, we are only allowed to incur borrowings, issue debt securities or issue preferred stock, if immediately after the borrowing or issuance, the ratio of total assets (less total liabilities other than indebtedness) to total indebtedness plus preferred stock, is at least 150%. On September 27, 2019, the Board, including a “required majority” (as such term is defined in Section 57(o) of the 1940 Act) and our initial stockholder approved the application to us of the 150% minimum asset coverage ratio set forth in Section 61(a)(2) of the 1940 Act. As a result, effective September 28, 2019, the asset coverage ratio under the 1940 Act applicable to us decreased from 200% to 150%, permitting us to potentially borrow $2 for investment purposes of every $1 of investor equity. As of December 31, 2020, our asset coverage ratio was approximately 177.0% and our asset coverage ratio per unit was approximately $1,770.

Commitments and Off-Balance Sheet Arrangements

Other than contractual commitments with respect to our portfolio companies and other legal contingencies incurred in the normal course of our business, we do not have any off-balance sheet financings or liabilities as of December 31, 2020.

The Company’s commitments and contingencies consist primarily of unfunded commitments to extend credit in the form of loans to the Company’s portfolio companies. A portion of these unfunded contractual commitments as of December 31, 2020 are dependent upon the portfolio company reaching certain milestones before the debt commitment becomes available. Furthermore, the Company’s credit agreements with its portfolio companies generally contain customary lending provisions that allow the Company relief from funding obligations for previously made commitments in instances where the underlying portfolio company experiences materially adverse events that affect the financial condition or business outlook for the company. Since a portion of these commitments may expire without being withdrawn, unfunded contractual commitments do not necessarily represent future cash requirements. As such, the Company’s disclosure of unfunded contractual commitments includes only those which are available at the request of the portfolio company and unencumbered by milestones. As of December 31, 2020, the Company had outstanding unfunded commitments of approximately $0.1 million to one portfolio company, Dandelion, Inc. The Company will fund its future unfunded commitments from the same sources it uses to fund its investment commitments that are funded at the time they are made (which are typically through existing cash and cash equivalents and borrowings under the Credit Facility).

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claims that may be made against the Company; however, based on the Company’s experience, the risk of loss is remote and no such claims are expected to occur. As such, the Company has not accrued any liability in connection with such indemnifications.

Contractual Obligations

A summary of our contractual payment obligations as of December 31, 2020, is as follows:


	Payments
Due by Period
	Less
than 1
	year		1
- 3 years		4
- 5 years		After
5 years		Total
Credit Facility (2)	$	—	$	135,000	$	—	$	—	$	135,000
7.00% Notes		—		—		125,000		—		125,000
Convertible Notes		—		—		50,000		—		50,000
Operating Leases (1)		225		845		751		1,619		3,440
Total Contractual Obligations	$	225	$	135,845	$	175,751	$	1,619	$	313,440

(1) Relates to lease for the Company's office, which expires on July 31, 2022 and is subject to a five-year extension option, plus the lease the Company signed for a new space in downtown Phoenix, Arizona with an estimated commencement date in mid-2021. The Company has recorded the current lease as a right-of-use asset and lease liability in its financial statements, and will record the new lease as such upon its commencement date in mid-2021. No right of use asset or corresponding lease liability has been recorded on the new lease as the lease has not commenced.

(2) On February 3, 2021, we repaid $90.0 million under the Credit Facility from proceeds received from the initial public offering of our common stock. See “Recent Developments.”

Distributions

We intend to pay quarterly distributions to our stockholders out of assets legally available for distribution. All distributions will be paid at the discretion of the Board and will depend on our earnings, financial condition, maintenance of our tax treatment as a RIC, compliance with applicable BDC regulations and such other factors as the Board may deem relevant from time to time.

The following table summarizes our cash distributions per share that have been authorized by the board. All distributions represent ordinary income as the Company’s taxable earnings exceeded distributions.


Declaration Date	Record Date	Payment Date	Per Share Amount
May 14, 2020	May 29, 2020	June 5, 2020	$	0.22
August 12, 2020	August 21, 2020	September 4, 2020		0.27
November 12, 2020	November 20, 2020	December 4, 2020		0.27
December 22, 2020	December 30, 2020	January 15, 2021		0.27
Total			$	1.03

Related Party Transactions

As discussed herein, the Legacy Funds were merged with and into the Company and we issued 9,183,185 shares of our common stock at $15.00 per share for a total value of approximately $137.7 million and paid approximately $108.7 million in cash to the Legacy Investors, which include the general partners/managers of the Legacy Funds. In addition, as part of the Formation Transactions, we acquired 100% of the equity interests of Trinity Capital Holdings for shares of our common stock and cash. Members of our management, including Steven L. Brown, Kyle Brown, Gerald Harder and Ron Kundich, owned 100% of the equity interests in Trinity Capital Holdings and controlling interests in the general partners/managers of the Legacy Funds.

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As a result of the Formation Transactions, Messrs. S. Brown, K. Brown, Harder and Kundich collectively received (i) 533,332 shares of the Company’s common stock valued at approximately $8.0 million and approximately $2.0 million in cash in exchange for their equity interests in Trinity Capital Holdings, and (ii) 377,441 shares of the Company’s common stock valued at approximately $5.7 million for their limited partner and general partner interests in the Legacy Funds.

We have entered into indemnification agreements with our directors and executive officers. The indemnification agreements are intended to provide our directors and executive officers with the maximum indemnification permitted under Maryland law and the 1940 Act. Each indemnification agreement provides that we shall indemnify the director or executive officer who is a party to the agreement, or an “Indemnitee,” including the advancement of legal expenses, if, by reason of his or her corporate status, the Indemnitee is, or is threatened to be, made a party to or a witness in any threatened, pending, or completed proceeding, to the maximum extent permitted by Maryland law and the 1940 Act.

Recent Developments

Initial Public Offering

On February 2, 2021, the Company completed its initial public offering of 8,006,291 shares of its common stock at a price of $14.00 per share, inclusive of the underwriters option to purchase additional shares with net proceeds of approximately $105.4 million. The Company’s shares of common stock began trading on the Nasdaq Global Select Market on January 29, 2021 under the symbol “TRIN.” Proceeds from this offering were primarily used to pay down a portion of our existing indebtedness under the Credit Facility.

Credit Facility Paydown

On February 3, 2021, the Company repaid $90.0 million of its existing indebtedness under the Credit Facility using proceeds from its initial public offering. As of March 4, 2021, the Company had $45.0 million in borrowings outstanding under the Credit Facility.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Uncertainty with respect to the economic effects of the COVID-19 pandemic has introduced significant volatility in the financial markets, and the effect of the volatility could materially impact our market risks, including those listed below. We are subject to financial market risks, including valuation risk and interest rate risk.

Valuation Risk

Our investments may not have a readily available market price, and we value these investments at fair value as determined in good faith by the Board of Directors in accordance with our valuation policy. There is no single standard for determining fair value in good faith. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period, including as a result of the impact of the COVID-19 pandemic on the economy and financial and capital markets. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and it is possible that the difference could be material.

Interest Rate Risk

Interest rate sensitivity and risk refer to the change in earnings that may result from changes in the level of interest rates. To the extent that we borrow money to make investments, including under the Credit Facility or any future financing arrangement, our net investment income will be affected by the difference between the rate at which we

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borrow funds and the rate at which we invest these funds. In periods of rising interest rates, our cost of borrowing funds would increase, which may reduce our net investment income. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income.

As of December 31, 2020, approximately 25.3% of our debt investments at fair value represented floating-rate investments based on PRIME, and approximately 74.7% of our debt investments at fair value represented fixed-rate investments. In addition, borrowings under the Credit Facility are subject to floating interest rates based on LIBOR, generally bearing interest at a rate of the three-month LIBOR plus 3.25%.

Based on our Consolidated Statements of Operations as of December 31, 2020, the following table shows the annualized impact on net income of hypothetical base rate changes in the PRIME rate on our debt investments (considering interest rate floors for floating rate instruments) and the hypothetical base rate changes in the three-month LIBOR on our Credit Facility and there are no changes in our investment and borrowing structure (in thousands):


	Interest	Interest	Net
	Income	Expense	Income/(Loss)
Up 300 basis points	$ 2,656	$ 4,050	$ (1,394)
Up 200 basis points	$ 1,523	$ 2,700	$ (1,177)
Up 100 basis points	$ 603	$ 1,350	$ (747)
Down 100 basis points	$ —	$ (292)	$ 292
Down 200 basis points	$ —	$ (292)	$ 292
Down 300 basis points	$ —	$ (292)	$ 292

Currency Risk

In addition, any investments we make that are denominated in a foreign currency will be subject to risks associated with changes in currency exchange rates. These risks include the possibility of significant fluctuations in the foreign currency markets, the imposition or modification of foreign exchange controls and potential illiquidity in the secondary market. These risks will vary depending upon the currency or currencies involved. As of December 31, 2020, we had one foreign domiciled portfolio. Our exposure to currency risk related to this investment is minimal as payments from such portfolio company are received in U.S. dollars. No other investments as of December 31, 2020 were subject to currency risk.

Hedging

We do not currently engage in any hedging activities. However, we may, in the future, hedge against interest rate and currency exchange rate fluctuations by using standard hedging instruments such as futures, options and forward contracts subject to the requirements of the 1940 Act. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in benefits of lower interest rates with respect to our portfolio of investments with fixed interest rates. We may also borrow funds in local currency as a way to hedge our non-U.S. denominated investments.

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Item 8. Consolidated Financial Statements and Supplementary Data

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

| Report
of Independent Registered Public Accounting Firm | Error!
Bookmark not defined. |
| --- | --- |
| Consolidated
Statements of Assets and Liabilities as of December 31, 2020 and December 31, 2019 | 96 |
| Consolidated
Statements of Operations for the Year Ended December 31, 2020 and the period August 12, 2019 (date of inception) to December 31, 2019 | 97 |
| Consolidated
Statements of Changes in Net Assets for the Year Ended December 31, 2020 and the period August 12, 2019 (date of inception) to December
31, 2019 | 98 |
| Consolidated
Statement of Cash Flows for the Year Ended December 31, 2020 and the period August 12, 2019 (date of inception) to December 31, 2019 | 99 |
| Consolidated
Schedule of Investments as of December 31, 2020 | 101 |
| Notes
to Consolidated Financial Statements | 115 |

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Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Trinity Capital Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated statement of assets and liabilities of Trinity Capital Inc. (the Company), including the consolidated schedule of investments, as of December 31, 2020 and the statement of assets and liabilities as of December 31, 2019, the related consolidated statements of operations, changes in net assets and cash flows for the year ended December 31, 2020 and for the period August 12, 2019 (date of inception) to December 31, 2019, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2020 and 2019, and the results of its operations, changes in its net assets, and its cash flows for the year ended December 31, 2020 and for the period August 12, 2019 (date of inception) to December 31, 2019, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of the Company’s internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of investments owned as of December 31, 2020, by correspondence with the underlying investee companies, or by other appropriate auditing procedures where confirmation was not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2019.

Los Angeles, California

March 4, 2021

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TRINITY CAPITAL INC.

Consolidated Statements of Assets and Liabilities

(In thousands, except share and per share data)


	December 31,		December 31,
	2020		2019

ASSETS
Investments at fair value:
Control investments (cost of $57,072
and $0, respectively)	$	48,730	$	—
Affiliate investments (cost of $20,653
and $0, respectively)		27,650		—
Non-control / Non-affiliate investments
(cost of $420,611 and $0, respectively)		417,271		—
Total investments (cost of $498,336
and $0, respectively)		493,651		—
Cash and cash equivalents		44,656		—
Restricted cash		16,445		—
Interest receivable		3,468		—
Deferred financing costs		—		3,525
Deferred offering costs		—		2,677
Prepaid expenses		744		—
Other assets		744		—
Total
assets	$	559,708	$	6,202

LIABILITIES
Credit facility, net of $2,107 and
$0, respectively, of unamortized deferred financing costs	$	132,893	$	—
Notes payable, net of $4,697, and $0,
respectively, of unamortized deferred financing costs		120,303		—
Convertible notes payable, net of $3,448,
and $0, respectively, of unamortized deferred financing costs and discount		46,552
Accounts payable and accrued liabilities		7,309		5,668
Due to related party		—		1,058
Distribution payable		4,947
Other liabilities		8,956		—
Total
liabilities		320,960		6,726

Commitments and contingencies (Note
6)

NET ASSETS
Common stock, $0.001 par value per
share (200,000,000 authorized, 18,321,274 and 10 shares issued and outstanding as of December 31, 2020 and December 31, 2019,
respectively)		18		—
Paid-in capital in excess of par		263,366		—
Distributable earnings/(accumulated
loss)		(24,636)		(524)
Total
net assets		238,748		(524)
Total
liabilities and net assets	$	559,708	$	6,202
NET ASSET
VALUE PER SHARE	$	13.03	$	(52,418.20)

See accompanying notes to consolidated financial statements.

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TRINITY CAPITAL INC.

Consolidated Statements of Operations

(In thousands, except share and per share data)


			For the Period
	For the		of
August 12, 2019
	Year
Ended		(date
of inception)
	December 31, 2020		to
December 31, 2019
INVESTMENT
INCOME:
Interest income:
Control investments	$	3,661	$	—
Affiliate investments		1,191		—
Non-Control / Non-Affiliate investments		46,403		—
Total interest income		51,255		—
Fee income:
Non-Control / Non-Affiliate investments		3,709		—
Total fee income		3,709		—
Total investment
income		54,964		—

EXPENSES:
Interest expense and other debt financing
costs		16,773		—
Compensation and benefits		10,433		—
Professional fees		2,283		—
General and administrative		2,104		524
Total expenses		31,593		524

NET INVESTMENT
INCOME		23,371		(524)

NET REALIZED
GAIN/(LOSS) FROM INVESTMENTS:
Control investments		—		—
Affiliate investments		—		—
Non-Control / Non-Affiliate investments		(9,403)		—
Net realized
loss from investments		(9,403)		—

NET CHANGE
IN UNREALIZED APPRECIATION/(DEPRECIATION) FROM INVESTMENTS:
Control investments		(8,342)		—
Affiliate investments		6,997		—
Non-Control / Non-Affiliate investments		(3,621)		—
Net change
in unrealized appreciation/(depreciation) from investments		(4,966)		—

NET INCREASE/(DECREASE)
IN NET ASSETS RESULTING FROM OPERATIONS BEFORE FORMATION COSTS		9,002		(524)
Costs related to the acquisition of
Trinity Capital Holdings and Legacy Funds		(15,114)		—
NET INCREASE/(DECREASE)
IN NET ASSETS RESULTING FROM OPERATIONS	$	(6,112)	$	(524)

NET INVESTMENT
INCOME PER SHARE - BASIC AND DILUTED	$	1.29	$	N/M

NET INCREASE/(DECREASE)
IN NET ASSETS RESULTING FROM OPERATIONS PER SHARE - BASIC AND DILUTED	$	(0.34)		N/M

WEIGHTED
AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED		18,092,494		10

N/M – not material

See accompanying notes to consolidated financial statements.

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TRINITY CAPITAL INC.

Consolidated Statements of Changes in Net Assets

(In thousands, except share and per share data)


								Distributable
						Paid In
Capital		Earnings
	Common Stock					in
Excess of		(Accumulated			Total
	Shares		Par Value			Par
Value		Loss)			Net
Assets
Balance
as of August 12, 2019 (date of inception)	—		$	—		$	—	$	—	$	—
Issuance of common stock, net of issuance
costs	10			—			—		—		—
Net increase/(decrease) in net assets
resulting from operations:
Net investment income/(loss)	—			—			—		(524)		(524)
Balance
as of December 31, 2019	10			—			—		(524)		(524)
Issuance of shares related to Formation
Transaction (1)	9,716,517			10			145,738		—		145,748
Issuance of common stock, net of issuance
costs	8,333,333			8			114,463		—		114,471
Distributions to stockholders	—			—			—		(18,738)		(18,738)
Net increase/(decrease) in net assets
resulting from operations:
Net investment income/(loss)	—			—			—		23,371		23,371
Net realized gain/(loss) from investments	—			—			—		(9,403)		(9,403)
Net unrealized appreciation/(depreciation)
from investments	—			—			—		(4,966)		(4,966)
Equity component of convertible notes	—			—			462		—		462
Issuance of common stock pursuant
to distribution reinvestment plan	271,414			—			3,441		—		3,441
Costs related to the acquisition of
Trinity Capital Holdings and Legacy Funds	—			—			—		(15,114)		(15,114)
Tax reclassification	—			—			(738)		738		—
Balance
as of December 31, 2020	18,321,274		$	18		$	263,366	$	(24,636)	$	238,748

(1) See “Note 1 - Organization and Basis of Presentation.”

See accompanying notes to consolidated financial statements.

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TRINITY CAPITAL INC.

Consolidated Statement of Cash Flows

(In thousands)


			For
the Period August 12, 2019
	For the Year
Ended		(date
of inception)
	December 31, 2020		to
December 31, 2019
Cash flows
from operating activities:
Net decrease in net assets resulting
from operations	$	(6,112)	$	(524)
Adjustments to reconcile net decrease
in net assets resulting from operations to net cash provided by/(used in) operating activities:
Purchase of investments, net of deferred
fees of $1.4 million		(239,827)		—
Proceeds from sales and paydowns of
investments		160,901		—
Net change in unrealized depreciation
from investments		4,966		—
Net realized gain/(loss) from investments		9,403		—
Accretion of original issue discounts
and end of term payments on investments		(11,788)		—
Costs related to the acquisition of
Trinity Capital Holdings and Legacy Funds		15,114		—
Amortization of deferred financing
costs		3,025		—
Depreciation of fixed assets		50		—
Change in operating assets and liabilities
Increase in interest receivable		(2,355)		—
Increase in prepaid expenses		(608)		—
Increase in other assets		(331)		—
Increase in accounts payable and accrued
liabilities		6,003		384
Increase/(Decrease) in due to related
party		(1,058)		140
Increase in other liabilities		4,391		—
Net cash
used in operating activities		(58,226)		—

Cash flows
used in investing activities:
Formation Transactions of Legacy Funds,
net of cash acquired (1)		(89,515)		—
Acquisition of Trinity Capital Holdings		(2,211)		—
Acquisition of fixed assets		(253)		—
Net cash
used in investing activities		(91,979)		—

Cash flows
provided by/(used in) financing activities
Issuance of common stock		125,000		—
Common stock issuance costs		(10,529)		—
Distributions paid		(10,350)		—
Proceeds from issuance of convertible
notes, net of original issue discount		48,688
Financing costs paid related to convertible
notes		(1,703)		—
Proceeds from issuance of notes payable		125,000		—
Financing costs paid related to notes
payable		(5,775)		—
Proceeds under credit facility		30,000		—
Repayments under credit facility		(85,000)		—
Financing costs paid related to credit
facility		(4,025)		—
Net cash
provided by financing activities		211,306		—

Net increase
in cash, cash equivalents and restricted cash		61,101		—
Cash, beginning
of period		—		—
Cash, cash
equivalents and restricted cash at end of period	$	61,101	$	—

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			For
the Period August 12, 2019
	For the Year
Ended		(date
of inception)
	December 31, 2020		to
December 31, 2019
Supplemental
and non-cash investing and financing activities:
Cash paid for interest	$	12,856	$	—
Shares issued to Trinity Capital Holdings (1)	$	8,000	$	—
Assumption of severance liability (1)	$	3,508	$	—
Shares issued to the Legacy Investors
as part of the Formation Transactions (1)	$	137,748	$	—
Issuance of common stock pursuant to
distribution reinvestment plan	$	3,441	$	—
Non-cash settlement of investments	$	1,262	$	—
Deferred offering costs	$	—	$	2,677
Deferred financing cost		—		3,525
	$	—	$	6,202
Due to related party for offering and
financing cost	$	—	$	918
Accounts payable and accrued liabilities		—		5,284
	$	—	$	6,202

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the Consolidated Statements of Assets and Liabilities that sum to the total of the same such amounts on the Consolidated Statement of Cash Flows:


	As of December 31,
	2020		2019
Cash and cash equivalents	$	44,656	$	—
Restricted cash		16,445		—
Total cash, cash equivalents and restricted
cash shown in the Consolidated Statements of Cash Flows	$	61,101	$	—

(1) See Formation Transactions under “Note 1 - Organization and Basis of Presentation”

See accompanying notes to consolidated financial statements.

100

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TRINITY CAPITAL INC.

Consolidated Schedule of Investments

December 31, 2020

(In thousands, except share and per share data)


Portfolio
Company (1)	Type
of Investment (3)	Maturity Date		Interest Rate (4)		Principal Amount (5)		Cost		Fair Value (6)
Debt Securities

Administrative
and Support and Waste Management and Remediation (2)
SeaOn Environmental, LLC	Equipment Financing		January 1, 2023		Fixed interest rate 9.0%; EOT 12.0%	$	2,134	$	2,370	$	2,328

Sub-total:
Administrative and Support and Waste Management and Remediation (1.0%)*						$	2,134	$	2,370	$	2,328

Agriculture,
Forestry, Fishing and Hunting (2)
Bowery Farming, Inc.	Equipment Financing		January 1, 2023		Fixed interest rate 8.5%; EOT 8.5%	$	2,481	$	2,742	$	2,574
	Equipment Financing		February 1, 2023		Fixed interest rate 8.7%; EOT 8.5%		2,453		2,650		2,684
	Equipment Financing		May 1, 2023		Fixed interest rate 8.7%; EOT 8.5%		3,054		3,259		3,303
	Equipment Financing		January 1, 2024		Fixed interest rate 7.5%; EOT 8.5%		10,000		9,912		9,912
Total Bowery Farming, Inc.							17,988		18,563		18,473

Robotany, Inc.	Equipment Financing		January 1, 2024		Fixed interest rate 7.6%; EOT 22.0%	$	1,667	$	1,720	$	1,709

Sub-total:
Agriculture, Forestry, Fishing and Hunting (8.5%)*						$	19,655	$	20,283	$	20,182

Construction
Dandelion Energy, Inc.	Equipment Financing		April 1, 2024		Fixed interest rate 9.0%; EOT 12.5%	$	460	$	467	$	471
	Equipment Financing		November 1, 2024		Fixed interest rate 9.2%; EOT 12.5%		545		551		551
	Equipment Financing (14)		December 1, 2024		Fixed interest rate 9.1%; EOT 12.5%		558		563		563
	Equipment Financing		January 1, 2025		Fixed interest rate 9.2%; EOT 12.5%		791		791		791
Total Dandelion Energy, Inc.							2,354		2,372		2,376

Project Frog, Inc. (7)	Secured Loan		May 1, 2023		Fixed interest rate 12.0%	$	4,128	$	4,045	$	4,029

Sub-total:
Construction (2.7%)*						$	6,482	$	6,417	$	6,405

Educational
Services (2)
Examity, Inc.	Secured Loan		February 1, 2022		Fixed interest rate 11.5%; EOT 8.0%	$	3,280	$	4,028	$	3,994
	Secured Loan		February 1, 2022		Fixed interest rate 11.5%; EOT 4.0%		3,516		1,775		1,775
	Secured Loan		January 1, 2023		Fixed interest rate 12.25%; EOT 4.0%		1,658		1,005		1,004
Total Examity, Inc.							8,454		6,808		6,773

Qubed, Inc. dba Yellowbrick	Secured Loan		October 1, 2023		Variable interest rate PRIME + 8.3%
or Floor rate 11.5%; EOT 5.0% (9)	$	1,906		$	1,950	$	1,957
	Secured Loan		October 1, 2023		Fixed interest rate 11.5%; EOT 4.0%		476		481		493
Total Qubed, Inc. dba Yellowbrick							2,382		2,431		2,450

Sub-total:
Educational Services (3.9%)*						$	10,836	$	9,239	$	9,223

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December 31, 2020

(In thousands, except share and per share data)


Portfolio
Company (1)	Type
of Investment (3)	Maturity Date		Interest Rate (4)		Principal Amount (5)		Cost		Fair Value (6)

Debt Securities,
Continued

Finance
and Insurance (2)
DailyPay, Inc.	Secured Loan		November 1, 2024		Variable interest rate PRIME + 7.0%
or Floor rate 12.0%; EOT 6.0% (9)	$	20,000		$	19,800	$	20,062
	Secured Loan		January 1, 2025		Variable interest rate PRIME + 7.0%
or Floor rate 12.0%; EOT 6.0% (9)		5,000			4,939		4,939
Total DailyPay, Inc.							25,000		24,739		25,001

Petal Card, Inc.	Secured Loan		December 1, 2023		Fixed interest rate 11.0%; EOT 3.0%	$	10,000	$	9,998	$	10,116

Sub-total:
Finance and Insurance (14.7%)*						$	35,000	$	34,737	$	35,117

Health
Care and Social Assistance (2)
Lark Technologies, Inc.	Secured Loan		April 1, 2025		Variable interest rate PRIME + 8.3%
or Floor rate 11.5%; EOT 4.0% (9)	$	5,000		$	4,809	$	4,874

WorkWell Prevention & Care Inc.	Secured Loan		March 1, 2024		Fixed interest rate 8.0%; EOT 10.0%	$	3,370	$	3,608	$	3,493
	Secured Loan		March 1, 2024		Fixed interest rate 8.0%; EOT 10.0%		700		734		693
Total WorkWell Prevention & Care
Inc. (7)							4,070		4,342		4,186

Sub-total:
Health Care and Social Assistance (3.8%)*						$	9,070	$	9,151	$	9,060

Information (2)
Firefly Systems, Inc.	Equipment Financing		February 1, 2023		Fixed interest rate 9.0%; EOT 10.0%	$	3,946	$	4,080	$	4,052
	Equipment Financing		September 1, 2023		Fixed interest rate 9.0%; EOT 10.0%		3,208		3,308		3,307
	Equipment Financing		October 1, 2023		Fixed interest rate 9.0%; EOT 10.0%		386		396		396
Total Firefly Systems, Inc.							7,540		7,784		7,755

Gobiquity, Inc.	Equipment Financing		April 1, 2022		Fixed interest rate 7.5%; EOT 20.0%	$	296	$	394	$	395

Hytrust, Inc.	Secured Loan		February 1, 2021		Fixed interest rate 11.1%; EOT 10.5%	$	194	$	717	$	621

Oto Analytics, Inc.	Secured Loan		March 1, 2023		Fixed interest rate 11.5%; EOT 6.0%	$	7,294	$	7,755	$	7,735

RapidMiner, Inc.	Secured Loan		April 1, 2024		Fixed interest rate 12.0%; EOT 7.5%	$	10,000	$	10,099	$	10,113

Smule, Inc.	Secured Loan		January 1, 2022		Fixed interest rate 0.0% (17)	$	145	$	145	$	145

STS Media, Inc. (11)	Secured Loan		May 1, 2022		Fixed interest rate 11.9%; EOT 4.0%	$	7,811	$	737	$	100

Unitas Global, Inc.	Equipment Financing		July 1, 2021		Fixed interest rate 9.0%; EOT 12.0%	$	580	$	938	$	921
	Equipment Financing		April 1, 2021		Fixed interest rate 7.8%; EOT 6.0%		53		76		74
Total Unitas Global, Inc.							633		1,014		995

Sub-total:
Information (11.7%)*						$	33,913	$	28,645	$	27,859

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December 31, 2020

(In thousands, except share and per share data)


Portfolio
Company (1)	Type
of Investment (3)	Maturity Date		Interest Rate (4)		Principal Amount (5)		Cost		Fair Value (6)
Debt Securities,
Continued

Manufacturing (2)
AyDeeKay LLC	Secured Loan		August 1, 2024		Variable interest rate PRIME + 7.5%
or Floor rate 10.8%; EOT 3.0% (9)	$	12,000		$	11,893	$	11,779

BHCosmetics, LLC	Equipment Financing		March 1, 2021		Fixed interest rate 8.9%; EOT 5.0%	$	106	$	165	$	165
	Equipment Financing		April 1, 2021		Fixed interest rate 8.7%; EOT 5.0%		159		217		218
Total BHCosmetics, LLC							265		382		383

Footprint International Holding, Inc.	Equipment Financing		March 1, 2024		Fixed interest rate 10.3%; EOT 8.0%	$	14,771	$	15,244	$	15,352
	Secured Loan		July 1, 2024		Fixed interest rate 12.0%; EOT 9.0%		7,000		7,095		7,177
Total Footprint International Holding,
Inc.							21,771		22,339		22,529

Happiest Baby, Inc.	Equipment Financing		September 1, 2022		Fixed interest rate 8.4%; EOT 9.5%	$	924	$	1,031	$	998
	Equipment Financing		November 1, 2022		Fixed interest rate 8.6%; EOT 9.5%		748		822		830
	Equipment Financing		January 1, 2023		Fixed interest rate 8.6%; EOT 9.5%		719		775		786
	Equipment Financing		June 1, 2023		Fixed interest rate 8.2%; EOT 9.5%		901		953		955
	Equipment Financing		January 1, 2024		Fixed interest rate 7.8%; EOT 9.5%		1,248		1,270		1,278
Total Happiest Baby, Inc.							4,540		4,851		4,847

Health-Ade, LLC	Equipment Financing		February 1, 2022		Fixed interest rate 9.4%; EOT 15.0%	$	1,361	$	1,887	$	1,877
	Equipment Financing		April 1, 2022		Fixed interest rate 8.6%; EOT 15.0%		784		1,031		1,030
	Equipment Financing		July 1, 2022		Fixed interest rate 9.1%; EOT 15.0%		1,956		2,436		2,441
Total Health-Ade, LLC							4,101		5,354		5,348

Mainspring Energy, Inc.	Secured Loan		August 1, 2023		Fixed
interest rate 11.0%; EOT 3.8%	$	8,592		$	8,759	$	8,801
	Secured Loan		December 1, 2024		Fixed
interest rate 11.0%; EOT 3.8%		5,500			5,267		5,267
Total Mainspring Energy, Inc.							14,092		14,026		14,068

Miyoko's Kitchen	Equipment Financing		September 1, 2022		Fixed interest rate 8.8%; EOT 9.0%	$	580	$	617	$	618
	Equipment Financing		March 1, 2023		Fixed interest rate 8.9%; EOT 9.0%		867		889		896
Total Miyoko's Kitchen							1,447		1,506		1,514

Molekule, Inc.	Equipment Financing		January 1, 2024		Fixed interest rate 8.8%; EOT 10.0%	$	2,526	$	2,571	$	2,588
	Equipment Financing		April 1, 2024		Fixed interest rate 9.0%; EOT 10.0%		542		550		554
	Equipment Financing		July 1, 2024		Fixed interest rate 8.8%; EOT 10.0%		879		879		881
Total Molekule, Inc.							3,947		4,000		4,023

Second Nature Brands, Inc.	Equipment Financing		April 1, 2024		Fixed interest rate 9.7%; EOT 11.50%	$	2,196	$	2,157	$	2,144

Store Intelligence, Inc. (8)	Secured Loan		June 1, 2024		Fixed interest rate 12.0%; EOT 7.8%	$	12,001	$	12,232	$	11,884

The Fynder Group, Inc.	Equipment Financing		May 1, 2024		Fixed interest rate 9.1%; EOT 10.0%	$	612	$	604	$	604

Vertical Communications, Inc.	Secured Loan		November 1, 2024		Fixed interest rate 9.5%; EOT 26.4%	$	12,000	$	12,937	$	12,787
	Secured Loan		July 1, 2022		Fixed interest rate 9.5%		807		807		816
Total Vertical Communications, Inc. (7)							12,807		13,744		13,603

Sub-total: Manufacturing
(38.9%)*						$	89,779	$	93,088	$	92,726

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December 31, 2020

(In thousands, except share and per share data)


Portfolio
Company (1)	Type
of Investment (3)	Maturity Date		Interest Rate (4)		Principal Amount (5)		Cost		Fair Value (6)
Debt Securities,
Continued

Pharmaceutical (2)
Zosano Pharma Corporation	Equipment Financing		April 1, 2022		Fixed interest rate 9.4%; EOT 12.0%	$	2,256	$	2,756	$	2,530
	Equipment Financing		July 1, 2022		Fixed interest rate 9.7%; EOT 12.0%		1,501		1,757		1,642
	Equipment Financing		January 1, 2023		Fixed interest rate 9.9%; EOT 12.0%		1,608		1,769		1,710
	Equipment Financing		April 1, 2023		Fixed interest rate 9.9%; EOT 12.0%		1,787		1,919		1,884
	Equipment Financing		May 1, 2023		Fixed interest rate 10.5%; EOT 12.0%		1,316		1,420		1,384
Total Zosano Pharma Corporation							8,468		9,621		9,150

Sub-total: Pharmaceutical
(3.8%)*						$	8,468	$	9,621	$	9,150

Professional,
Scientific, and Technical Services (2)
Augmedix, Inc.	Secured Loan		April 1, 2023		Fixed interest rate 12.0%; EOT 6.5%	$	9,422	$	9,602	$	9,629

BackBlaze, Inc.	Equipment Financing		January 1, 2023		Fixed interest rate 7.2%; EOT 11.5%	$	907	$	1,042	$	1,046
	Equipment Financing		April 1, 2023		Fixed interest rate 7.4%; EOT 11.5%		117		131		132
	Equipment Financing		June 1, 2023		Fixed interest rate 7.4%; EOT 11.5%		905		1,001		1,006
	Equipment Financing		August 1, 2023		Fixed interest rate 7.5%; EOT 11.5%		180		196		197
	Equipment Financing		September 1, 2023		Fixed interest rate 7.7%; EOT 11.5%		185		201		201
	Equipment Financing		October 1, 2023		Fixed interest rate 7.5%; EOT 11.5%		186		200		201
	Equipment Financing		November 1, 2023		Fixed interest rate 7.2%; EOT 11.5%		621		670		670
	Equipment Financing		December 1, 2023		Fixed interest rate 7.5%; EOT 11.5%		822		881		881
	Equipment Financing		January 1, 2024		Fixed interest rate 7.4%; EOT 11.5%		717		764		763
	Equipment Financing		February 1, 2024		Fixed interest rate 7.4%; EOT 11.5%		732		775		775
	Equipment Financing		March 1, 2024		Fixed interest rate 7.2%; EOT 11.5%		636		673		672
	Equipment Financing		April 1, 2024		Fixed interest rate 7.4%; EOT 11.5%		192		201		206
	Equipment Financing		May 1, 2024		Fixed interest rate 7.3%; EOT 11.5%		1,246		1,303		1,311
	Equipment Financing		August 1, 2024		Fixed interest rate 7.5%; EOT 11.5%		1,336		1,374		1,378
	Equipment Financing		October 1, 2024		Fixed interest rate 7.2%; EOT 11.5%		239		243		237
Total BackBlaze, Inc.							9,021		9,655		9,676

Cuebiq, Inc.	Secured Loan		April 1, 2024		Variable interest rate PRIME + 7.3%
or Floor rate 12.0%; EOT 4.5% (9)	$	5,000		$	5,030	$	4,963

Edeniq, Inc.	Secured Loan		September 1, 2021		Fixed interest rate 13.0%; EOT 9.5%	$	3,039	$	1,102	$	859
	Secured Loan		September 1, 2021		Fixed interest rate 13.0%; EOT 9.5%		2,282		762		648
Total Edeniq, Inc. (7)
(11)							5,321		1,864		1,507

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Consolidated Schedule of Investments

December 31, 2020

(In thousands, except share and per share data)


Portfolio
Company (1)	Type
of Investment (3)	Maturity Date		Interest Rate (4)		Principal Amount (5)		Cost		Fair Value (6)
Debt Securities,
Continued

Professional,
Scientific, and Technical Services, Continued
Incontext Solutions, Inc.	Secured Loan		October 1, 2023		Fixed interest rate 11.75%; EOT 11.4%	$	7,149	$	7,401	$	6,998

Matterport, Inc.	Secured Loan		May 1, 2022		Fixed interest rate 11.5%; EOT 5.0%	$	4,870	$	5,560	$	5,599

Pendulum Therapeutics, Inc.	Equipment Financing		May 1, 2023		Fixed interest rate 7.7%; EOT 5.0%	$	347	$	338	$	338
	Equipment Financing		August 1, 2023		Fixed interest rate 7.8%; EOT 5.0%		2,084		2,147		2,164
	Equipment Financing		October 1, 2023		Fixed interest rate 7.7%; EOT 5.0%		616		620		626
	Equipment Financing		February 1, 2024		Fixed interest rate 9.8%; EOT 6.0%		894		895		881
Total Pendulum Therapeutics, Inc.							3,941		4,000		4,009

Reciprocity, Inc.	Secured Loan		October 1, 2024		Variable interest rate PRIME + 8.0%
or Floor rate 11.3%; EOT 2.0% (9)	$	10,000		$	9,862	$	9,805

Sun Basket, Inc.	Secured Loan		December 1, 2024		Variable interest rate PRIME + 8.5%
or Floor rate 11.8%; EOT 5.0% (9)		18,375			17,831		17,831

Utility Associates, Inc. (11)	Secured Loan		October 1, 2023		Fixed interest rate 11.0%	$	750	$	830	$	604

Sub-total: Professional,
Scientific, and Technical Services (29.6%)*						$	73,849	$	71,635	$	70,621

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December 31, 2020

(In thousands, except share and per share data)


Portfolio
Company (1)	Type
of Investment (3)	Maturity Date		Interest Rate (4)		Principal Amount (5)		Cost		Fair Value (6)
Debt Securities,
Continued

Real
Estate (2)
Knockaway, Inc.	Secured Loan		December 1, 2023		Fixed interest rate 11.0%; EOT 3.0%	$	10,000	$	10,103	$	10,112
	Secured Loan		February 1 , 2024		Fixed interest rate 11.0%; EOT 3.0%		2,500		2,519		2,549
	Secured Loan		March 1, 2024		Fixed interest rate 11.0%; EOT 3.0%		2,500		2,516		2,548
Total Knockaway, Inc.							15,000		15,138		15,209

Wanderjaunt, Inc.	Equipment Financing		June 1, 2023		Fixed interest rate 10.2%; EOT 12.0%	$	387	$	388	$	380
	Equipment Financing		August 1, 2023		Fixed interest rate 10.2%; EOT 12.0%		1,230		1,313		1,296
Total Wanderjaunt, Inc.							1,617		1,701		1,676

Sub-total: Real
Estate (9.6%)*						$	16,617	$	16,839	$	16,885

Rental
and Leasing Services (2)
EquipmentShare, Inc.	Equipment Financing		July 1, 2023		Fixed interest rate 10.7%; EOT 5.0%	$	7,538	$	7,685	$	7,730
	Equipment Financing		August 1, 2023		Fixed interest rate 10.1%; EOT 5.0%		864		879		884
	Equipment Financing		September 1, 2023		Fixed interest rate 10.2%; EOT 5.0%		1,908		1,935		1,944
	Equipment Financing		October 1, 2023		Fixed interest rate 10.4%; EOT 5.0%		3,422		3,458		3,470
	Equipment Financing		October 1, 2024		Fixed interest rate 8.3%; EOT 10.0%		429		435		435
	Equipment Financing		November 1, 2023		Fixed interest rate 10.4%; EOT 5.0%		811		818		818
	Equipment Financing		November 1, 2023		Fixed interest rate 10.5%; EOT 5.0%		2,560		2,581		2,581
	Equipment Financing		December 1, 2023		Fixed interest rate 10.1%; EOT 5.0%		2,491		2,506		2,506
	Equipment Financing		January 1, 2024		Fixed interest rate 10.1%; EOT 5.0%		1,995		2,002		2,002
	Equipment Financing		January 1, 2024		Fixed interest rate 10.5%; EOT 5.0%		797		799		799
Total EquipmentShare, Inc.							22,815		23,098		23,169

Maxwell Financial Labs, Inc.	Secured Loan		November 1, 2024		Variable interest rate PRIME + 8.0%
or Floor rate 11.25%; EOT 4.0% (9)	$	3,000		$	2,964	$	2,964
	Secured Loan		January 1, 2025		Variable interest rate PRIME + 8.0%
or Floor rate 11.25%; EOT 4.0% (9)		3,000			2,938		2,938
Total Maxwell Financial Labs, Inc.							6,000		5,902		5,902

Sub-total: Rental
and Leasing Services (12.2%)*						$	28,815	$	29,000	$	29,071

Retail
Trade (2)
Birchbox, Inc. (7)	Secured Loan		July 1, 2024		Fixed interest rate 9.0%; EOT 7.5%	$	10,000	$	10,433	$	9,924

Boosted eCommerce, Inc. (16)	Secured Loan		January 1, 2023		Variable interest rate PRIME + 7.75%
or Floor rate 11.0%; EOT 3.25% (9)	$	5,000		$	4,933	$	4,933

Gobble, Inc.	Secured Loan		July 1, 2023		Fixed interest rate 11.3%; EOT 6.0%	$	3,443	$	3,544	$	3,556
	Secured Loan		July 1, 2023		Fixed interest rate 11.5%; EOT 6.0%		1,730		1,781		1,795
Total Gobble Inc.							5,173		5,325		5,351

Madison Reed, Inc.	Secured Loan		May 1, 2024		Variable interest rate PRIME + 6.0%
or Floor rate 10.3%; EOT 4.0% (9)	$	17,500		$	17,471	$	17,835

Portofino Labs, Inc. (16)	Secured Loan		July 1, 2025		Variable interest rate PRIME + 8.25%
or Floor rate 11.5%; EOT 4.0% (9)	$	2,000		$	1,984	$	1,984

Super73, Inc. (16)	Secured Loan		January 1, 2025		Variable interest rate PRIME + 7.3%
or Floor rate 11.8%; EOT 4.0% (9)	$	5,500		$	5,416	$	5,416

UnTuckIt, Inc.	Secured Loan		June 1, 2024		Fixed interest rate 12.0%; EOT 5.0%	$	20,000	$	21,098	$	19,230

Sub-total: Retail
Trade (27.1%)*						$	65,173	$	66,660	$	64,673

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Consolidated Schedule of Investments

December 31, 2020

(In thousands, except share and per share data)


Portfolio
Company (1)	Type
of Investment (3)	Maturity Date	Interest Rate (4)	Principal Amount (5)		Cost		Fair Value (6)
Debt Securities,
Continued

Utilities (2)
Invenia, Inc.	Secured Loan	January 1, 2023	Fixed interest rate 11.5%; EOT 5.0%	$	6,570	$	7,042	$	6,991
	Secured Loan	May 1, 2023	Fixed interest rate 11.5%; EOT 5.0%		3,326		3,537		3,550
	Secured Loan	January 1, 2024	Fixed interest rate 11.5%; EOT 5.0%		3,000		3,058		3,165
	Secured Loan	February 1, 2024	Fixed interest rate 11.5%; EOT 5.0%		4,000		4,103		4,200
	Secured Loan	July 1, 2024	Fixed interest rate 11.5%: EOT 5.0%		4,000		4,043		4,160
	Secured Loan	November 1, 2024	Fixed interest rate 11.5%: EOT 5.0%		5,000		5,017		5,017
Total Invenia, Inc. (13)					25,896		26,800		27,083

Sub-total: Utilities
(11.4%)*				$	25,896	$	26,800	$	27,083

Wholesale
Trade
BaubleBar, Inc. (2)	Secured Loan	March 1, 2023	Fixed interest rate 11.5%; EOT 7.3%	$	5,752	$	6,576	$	6,148

Grandpad, Inc.	Equipment Financing	June 1, 2023	Fixed interest rate 10.6%; EOT 5.0%	$	2,899	$	2,907	$	2,907
	Equipment Financing	July 1, 2023	Fixed interest rate 10.8%; EOT 5.0%		3,672		3,667		3,667
Total Grandpad, Inc. (16)					6,571		6,574		6,574

GrubMarket, Inc.	Secured Loan	July 1, 2024	Fixed interest rate 10.5%; EOT 3.0%	$	10,000	$	9,875	$	10,114

Sub-total: Wholesale
Trade (9.6%)*				$	22,323	$	23,025	$	22,836

Total: Debt
Securities (186.0%)* (15)				$	448,010	$	447,510	$	443,219

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December 31, 2020

(In thousands, except share and per share data)


Portfolio
Company (1)	Type
of Investment (3)	Expiration
Date	Series		Shares	Strike
Price		Cost		Fair
Value (6)
Warrant
Investments

Agriculture,
Forestry, Fishing and Hunting (2)
Bowery Farming, Inc.	Warrant		June 10, 2029	Common Stock	68,863	$	5.08	$	410	$	403
	Warrant		December 22, 2030	Common Stock	29,925	$	6.24	$	160	$	160
Total Bowery Farming, Inc.									570		563


Robotany, Inc.	Warrant		July 19, 2029	Common Stock	262,870	$	0.26	$	128	$	92

Sub-Total:
Agriculture, Forestry, Fishing and Hunting (0.3%)*								$	698	$	655

Construction (2)
Project Frog, Inc. (7)	Warrant		July 26, 2026	Preferred Series AA	391,990	$	0.19	$	18	$	2

Sub-Total:
Construction (0.0%)*								$	18	$	2

Educational
Services (2)
Qubed, Inc. dba Yellowbrick	Warrant		September 28, 2028	Common Stock	222,222	$	0.90	$	120	$	593

Sub-Total:
Educational Services (0.2%)*								$	120	$	593

Finance
and Insurance (2)
DailyPay, Inc.	Warrant		September 30, 2030	Common Stock	89,264	$	3.00	$	151	$	206

Petal Card, Inc.	Warrant		November 27, 2029	Preferred Series B	250,268	$	1.32	$	147	$	350

Realty Mogul, Co	Warrant		December 18, 2027	Preferred Series B	234,421	$	3.88	$	285	$	25

Sub-Total:
Finance and Insurance (0.2%)*								$	583	$	581

Health
Care and Social Assistance (2)
Lark Technologies, Inc.	Warrant		September 30, 2030	Common Stock	76,231	$	1.76	$	177	$	163

Sub-Total:
Health Care and Social Assistance (0.1%)*								$	177	$	163

Information (2)
Convercent, Inc.	Warrant		November 30, 2025	Preferred Series 1	3,139,579	$	0.16	$	924	$	610

Figg, Inc. (12)	Warrant		March 31, 2028	Common Stock	935,198	$	0.07	$	—	$	—

Everalbum, Inc.	Warrant		July 29, 2026	Preferred Series A	851,063	$	0.10	$	24	$	6

Firefly Systems, Inc.	Warrant		January 29, 2030	Common Stock	133,147	$	1.14	$	282	$	132

Gtxcel, Inc.	Warrant		September 24, 2025	Preferred Series C	1,000,000	$	0.21	$	83	$	4
	Warrant		September 24, 2025	Preferred Series D	1,000,000	$	0.21		83		12
Total Gtxcel, Inc.									166		16

Hytrust, Inc.	Warrant		June 23, 2026	Preferred Series D2	424,808	$	0.82	$	172	$	—

Lucidworks, Inc.	Warrant		June 27, 2026	Preferred Series D	619,435	$	0.77	$	806	$	1,509

Oto Analytics, Inc.	Warrant		August 31, 2028	Preferred Series B	1,018,718	$	0.79	$	295	$	221

RapidMiner, Inc.	Warrant		March 25, 2029	Preferred Series C-1	11,624	$	60.22	$	528	$	357

STS Media, Inc. (12)	Warrant		March 15, 2028	Preferred Series C	20,210	$	24.74	$	—	$	—


Sub-Total:
Information (1.2%)*								$	3,197	$	2,851

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TRINITY CAPITAL INC.

Consolidated Schedule of Investments

December 31, 2020

(In thousands, except share and per share data)


Portfolio
Company (1)	Type
of Investment (3)	Expiration
Date	Series		Shares	Strike
Price		Cost		Fair
Value (6)
Warrant
Investments, Continued

Manufacturing (2)
Atieva, Inc. (13)	Warrant		March 31, 2027	Preferred Series D	390,016	$	5.13	$	3,067	$	1,053
	Warrant		September 8, 2027	Preferred Series D	195,008	$	5.13		1,533		526
Total Atieva, Inc.									4,600		1,579

AyDeeKay LLC	Warrant		March 30, 2028	Preferred Series G	6,250	$	35.42	$	31	$	32

Footprint International Holding, Inc.	Warrant		February 14, 2030	Common Stock	26,852	$	0.31	$	5	$	81
	Warrant		June 22, 2030	Common Stock	10,836	$	0.31		4		33
Total Footprint International Holding,
Inc.									9		114

Happiest Baby, Inc.	Warrant		May 16, 2029	Common Stock	182,554	$	0.33	$	193	$	126

Hexatech, Inc. (12)	Warrant		April 2, 2022	Preferred Series A	226	$	2.77	$	—	$	—

Lensvector, Inc.	Warrant		December 30, 2021	Preferred Series C	85,065	$	1.18	$	32	$	—

Mainspring Energy, Inc.	Warrant		July 9, 2029	Common Stock	140,186	$	1.15	$	283	$	394
	Warrant		November 20, 2030	Common Stock	81,294	$	1.15		226		229
Total Mainspring Energy, Inc.									509		623

Molekule, Inc.	Warrant		June 19, 2030	Preferred Series C-1	32,051		3.12	$	16	$	23

SBG Labs, Inc.	Warrant		June 29, 2023	Preferred Series A-1	42,857	$	0.70	$	13	$	10
	Warrant		September 18, 2024	Preferred Series A-1	25,714	$	0.70		8		6
	Warrant		January 14, 2024	Preferred Series A-1	21,492	$	0.70		7		5
	Warrant		March 24, 2025	Preferred Series A-1	12,155	$	0.70		4		3
	Warrant		October 10, 2023	Preferred Series A-1	11,150	$	0.70		4		3
	Warrant		May 6, 2024	Preferred Series A-1	11,145	$	0.70		4		3
	Warrant		June 9, 2024	Preferred Series A-1	7,085	$	0.70		2		2
	Warrant		May 20, 2024	Preferred Series A-1	342,857	$	0.70		110		80
	Warrant		March 26, 2025	Preferred Series A-1	200,000	$	0.70		65		48
Total SBG Labs, Inc.									217		160

The Fynder Group, Inc.	Warrant		October 14, 2030	Common Stock	107,190	$	0.49	$	201	$	282

Vertical Communications, Inc. (7)
(12)	Warrant		July 11, 2026	Preferred Series A	828,479	$	1.00	$	—	$	—

Sub-Total:
Manufacturing (1.2%)*								$	5,808	$	2,939

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TRINITY CAPITAL INC.

Consolidated Schedule of Investments

December 31, 2020

(In thousands, except share and per share data)


Portfolio
Company (1)	Type
of Investment (3)	Expiration
Date	Series		Shares	Strike
Price		Cost		Fair
Value (6)
Warrant
Investments, Continued

Pharmaceutical (2)
Nanotherapeutics, Inc. (8)	Warrant		November 14, 2021	Common Stock	67,961	$	1.03	$	1,122	$	2,216

Zosano Pharma Corporation	Warrant		September 25, 2025	Common Stock	75,000	$	3.59	$	69	$	18

Sub-Total:
Pharmaceutical (0.9%)*								$	1,191	$	2,234

Professional,
Scientific, and Technical Services (2)
Augmedix, Inc.	Warrant		September 3, 2029	Preferred Series B	580,383	$	2.88	$	449	$	379

Continuity, Inc.	Warrant		March 29, 2026	Preferred Series C	1,588,806	$	0.25	$	21	$	45

Crowdtap, Inc.	Warrant		December 16, 2025	Preferred Series B	442,233	$	1.09	$	42	$	140
	Warrant		November 30, 2027	Preferred Series B	100,000	$	1.09		9		32
Total Crowdtap, Inc.									51		172

Dynamics, Inc.	Warrant		March 10, 2024	Common Stock	17,000	$	10.59	$	86	$	—

E La Carte, Inc.	Warrant		July 28, 2027	Common Stock	497,183	$	0.30	$	186	$	123
	Warrant		July 28, 2027	Preferred Series A	104,284	$	7.49		15		34
	Warrant		July 28, 2027	Preferred Series AA-1	106,841	$	7.49		15		1
Total E La Carte, Inc.									216		158

Edeniq, Inc.	Warrant		December 23, 2026	Preferred Series B	2,685,501	$	0.22	$	—	$	—
	Warrant		December 23, 2026	Preferred Series B	2,184,672	$	0.01		—		—
	Warrant		March 12, 2028	Preferred Series C	5,106,972	$	0.44		—		—
	Warrant		October 15, 2028	Preferred Series C	3,850,294	$	0.01		—		—
Total Edeniq, Inc. (7)(12)									—		—

Fingerprint Digital, Inc.	Warrant		April 29, 2026	Preferred Series B	48,102	$	10.39	$	165	$	84

Hologram, Inc.	Warrant		January 27, 2030	Common Stock	193,054	$	0.26	$	49	$	33

Hospitalists Now, Inc.	Warrant		March 30, 2026	Preferred Series D2	135,807	$	5.89	$	71	$	272
	Warrant		December 6, 2026	Preferred Series D2	750,000	$	5.89		391		1,505
Total Hospitalists Now, Inc.									462		1,777

Incontext Solutions, Inc.	Warrant		September 28, 2028	Preferred Series AA-1	332,858	$	1.47	$	34	$	47

Matterport, Inc.	Warrant		April 20, 2028	Common Stock	143,813	$	1.43	$	434	$	603

Pendulum Therapeutics, Inc.	Warrant		October 9, 2029	Preferred Series B	55,263	$	1.90	$	44	$	65
	Warrant		July 15, 2030	Preferred Series B	36,842	$	1.90		36		43
Total Pendulum Therapeutics, Inc.									80		108

Reciprocity, Inc.	Warrant		September 25, 2030	Common Stock	114,678	$	4.17	$	99	$	145

Resilinc, Inc.	Warrant		December 15, 2025	Preferred Series A	589,275	$	0.51	$	40	$	100


Saylent Technologies, Inc.	Warrant		March 31, 2027	Preferred Series C	24,096	$	9.96	$	108	$	94

Sun Basket, Inc.	Warrant		October 5, 2027	Preferred Series C-2	249,306	$	6.02	$	111	$	343
	Warrant		December 31, 2030	Common Stock	118,678	$	0.89		545		546
									656		889

Utility Associates, Inc.	Warrant		June 30, 2025	Preferred Series A	92,511	$	4.54	$	55	$	4
	Warrant		May 1, 2026	Preferred Series A	60,000	$	4.54		36		3
	Warrant		May 22, 2027	Preferred Series A	200,000	$	4.54		120		8
Total Utility Associates, Inc.									211		15

Sub-Total:
Professional, Scientific, and Technical Services (2.0%)*								$	3,161	$	4,649

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TRINITY CAPITAL INC.

Consolidated Schedule of Investments

December 31, 2020

(In thousands, except share and per share data)


Portfolio
Company (1)	Type
of Investment (3)	Expiration
Date	Series		Shares	Strike
Price		Cost		Fair
Value (6)
Warrant
Investments, Continued

Real
Estate (2)
Egomotion Corporation	Warrant		December 10, 2028	Preferred Series A	60,786	$	1.32	$	—	$	53
	Warrant		June 29, 2028	Preferred Series A	121,571	$	1.32		219		106
Total Egomotion Corporation									219		159

Knockaway, Inc.	Warrant		May 24, 2029	Preferred Series B	87,955	$	8.53	$	209	$	272

Sub-Total:
Real Estate (0.2%)*								$	428	$	431

Rental
and Leasing Services (2)

Maxwell Financial Labs, Inc.	Warrant		October 7, 2030	Common Stock	106,735	$	0.29	$	21	$	33
	Warrant		December 22, 2030	Common Stock	110,860	$	0.29		34		34
Total Maxwell Financial Labs, Inc.									55		67

Sub-Total:
Rental and Leasing Services (0.0%)*								$	55	$	67

Retail
Trade (2)
Boosted eCommerce, Inc. (16)	Warrant		December 14, 2030	Preferred Series A-1	759,263	$	0.84	$	259	$	259

Gobble, Inc.	Warrant		May 9, 2028	Common Stock	74,635	$	1.20	$	73	$	63
	Warrant		December 27, 2029	Common Stock	10,000	$	1.22		617		467
Total Gobble, Inc.									690		530

Madison Reed, Inc.	Warrant		March 23, 2027	Preferred Series C	194,553	$	2.57	$	185	$	241
	Warrant		July 18, 2028	Common Stock	43,158	$	0.99		71		78
	Warrant		May 19, 2029	Common Stock	36,585	$	1.23		56		62
Total Madison Reed, Inc.									312		381

Portofino Labs, Inc. (16)	Warrant		December 31, 2030	Common Stock	39,659	$	1.53	$	15	$	15

Super73, Inc. (16)	Warrant		December 31, 2030	Common Stock	177,305	$	3.16	$	105	$	105

Trendly, Inc.	Warrant		August 10, 2026	Preferred Series A	245,506	$	1.14	$	222	$	256

Sub-Total:
Retail Trade (0.6%)*								$	1,603	$	1,546

Wholesale
Trade (2)
BaubleBar, Inc.	Warrant		March 29, 2027	Preferred Series C	531,806	$	1.96	$	638	$	207
	Warrant		April 20, 2028	Preferred Series C	60,000	$	1.96		72		23
Total BaubleBar, Inc.									710		230

GrubMarket, Inc.	Warrant		June 15, 2030	Common Stock	405,000	$	1.10	$	116	$	837

Sub-Total:
Wholesale Trade (0.4%)*								$	826	$	1,067

Total:
Warrant Investments (7.4%)* (15)								$	17,865	$	17,778

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TRINITY CAPITAL INC.

Consolidated Schedule of Investments

December 31, 2020

(In thousands, except share and per share data)


Portfolio
Company (1)	Type
of Investment (3)	Shares
/ Principal		Series		Cost		Fair
Value (6)
Equity
Investments
Construction (2)
Project Frog, Inc.	Equity			8,118,527	Preferred Series AA-1		$	702	$	36
	Equity			6,300,134	Preferred Series BB			2,667		449
Total Project Frog, Inc. (7)								3,369		485

Sub-Total: Construction
(0.2%)*							$	3,369	$	485

Health
Care and Social Assistance (2)
WorkWell Prevention & Care Inc.	Equity			7,000,000	Common Stock		$	51	$	—
	Equity			3,450	Preferred Series P			3,450		657
			$	1,470	Convertible Notes (10)			1,519		1,542
Total WorkWell Prevention & Care
Inc. (7)								5,020		2,199

Sub-Total: Health
Care and Social Assistance (0.9%)*							$	5,020	$	2,199

Manufacturing (2)
Store Intelligence, Inc. (8)	Equity			1,430,000	Preferred Series A		$	608	$	694

Vertical Communications, Inc.	Equity			3,892,485	Preferred Series 1 (12)		$	—	$	—
	Equity		$	5,500,000	Convertible Notes (10)			3,966		3,350
Total Vertical Communications, Inc. (7)								3,966		3,350

Sub-Total: Manufacturing
(1.7%)*							$	4,574	$	4,044

Pharmaceutical (2)
Nanotherapeutics, Inc. (8)	Equity			382,277	Common Stock (18)		$	6,691	$	12,856

Sub-Total: Pharmaceutical
(5.4%)*							$	6,691	$	12,856

Professional,
Scientific, and Technical Services (2)
Dynamics, Inc.	Equity			17,726	Preferred Series A		$	390	$	—
	Equity			15,000	Common Stock			—		—
Total Dynamics, Inc.								390		—

Edeniq, Inc.	Equity			7,807,499	Preferred Series B (12)		$	—	$	—
	Equity			2,441,082	Preferred Series C (12)			—		—
	Equity		$	1,303,373	Convertible Notes (10)(12)			—		—
Total Edeniq, Inc. (7)								—		—

Instart Logic, Inc.	Equity		$	2,600,000	Convertible Notes (10)		$	2,646	$	3,625

Sub-Total:
Professional, Scientific, and Technical Services (1.5%)*							$	3,036	$	3,625

Retail
Trade (2)
Birchbox, Inc. (7)	Equity			3,140,927	Preferred Series D		$	10,271	$	9,445

Sub-Total:
Retail Trade (4.0%)*							$	10,271	$	9,445

Total: Equity
Investments (13.7%)* (15)							$	32,961	$	32,654

Total Investment
in Securities (207.2%)*							$	498,336	$	493,651

Cash, Cash
Equivalents, and Restricted Cash
Goldman Sachs Financial Square Government
Institutional Fund							$	60,284	$	60,284
Other cash accounts								817		817
Cash, Cash
Equivalents, and Restricted Cash (25.6%)*								61,101		61,101

Total
Portfolio Investments and Cash and Cash Equivalents (232.9% of net assets)							$	559,437	$	554,752

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TRINITY CAPITAL INC.

Consolidated Schedule of Investments

December 31, 2020

(In thousands, except share and per share data)

Value as a percent of net assets

(1) All portfolio companies are located in North America. As of December 31, 2020, the Company had one foreign domiciled portfolio in Canada. The Company generally acquires its investments in private transactions exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”). These investments are generally subject to certain limitations on resale and may be deemed to be “restricted securities” under the Securities Act.

(2) Trinity Capital uses the North American Industry Classification System (“NAICS”) code for classifying the industry grouping of its portfolio companies.

(3) All debt investments are income producing unless otherwise noted. All equity and warrant investments are non-income producing unless otherwise noted. Equipment financed under our equipment financing investments relates to operational equipment essential to revenue production for the portfolio company in the industry noted.

(4) Interest rate is the fixed or variable rate of the debt investments and does not include any original issue discount, end-of-term (“EOT”) payment, or any additional fees related to such investments, such as deferred interest, commitment fees, prepayment fees or exit fees. EOT payments are contractual payments due in cash at the maturity date of the loan, including upon prepayment, and are a fixed rate determined at the inception of the loan. At the end of the term of certain equipment financings, the borrower has the option to purchase the underlying assets at fair market value in certain cases subject to a cap, or return the equipment and pay a restocking fee. The fair values of the financed assets have been estimated as a percentage of original cost for purpose of the EOT payment value. The EOT payment is amortized and recognized as non-cash income over the loan or equipment financing prior to its payment.

(5) Principal is net of repayments, if any, as per the terms of the debt instrument’s contract.

(6) All investments were valued at fair value using Level 3 significant unobservable inputs as determined in good faith by the Company’s board of directors.

(7) This investment is deemed to be a “Control Investment.” Control Investments are defined by the Investment Company Act of 1940, as amended, as investments in companies in which the Company owns more than 25% of the voting securities or maintains greater than 50% of the board representation. As defined in the Investment Company Act, Trinity Capital is deemed to be an “Affiliated Person” of this portfolio company. See “Note 3 – Investments” in the accompanying notes to the Financial Statements.

(8) This investment is deemed to be a “Affiliate Investment.” Affiliate Investments are defined by the Investment Company Act of 1940, as amended, as investments in companies in which the Company owns between 5% and 25% of the voting securities. As defined in the Investment Company Act, Trinity Capital is deemed to be an “Affiliated Person” of this portfolio company. See “Note 3 – Investments” in the accompanying notes to the Financial Statements.

(9) The interest rate on variable interest rate investments represents a benchmark rate plus spread. The benchmark interest rate is subject to interest rate floors. The benchmark rate PRIME was 3.25% as of December 31, 2020.

(10) Convertible notes represent investments through which the Company will participate in future equity rounds at preferential rates. There are no principal or interest payments made against the note unless conversion does not take place.

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(11) Debt is on non-accrual status as of December 31, 2020 and is therefore considered non-income producing.

(12) Investment has zero cost basis as it was purchased at a fair market value of zero as part of the Formation Transaction.

(13) Indicates an asset that the Company deems as a “non-qualifying asset” under section 55(a) by the Investment Company Act of 1940, as amended. The Company’s percentage of non-qualifying assets represents 5.1% of the Company’s total assets as of December 31, 2020. Qualifying assets must represent at least 70% of the Company’s total assets at the time of acquisition of any additional non-qualifying assets.

(14) Investment has an unfunded commitment as of December 31, 2020 (see “Note 6 – Commitments and Contingencies”). The fair value of the investment includes the impact of the fair value of any unfunded commitments.

(15) All of the Company’s debt, warrant and equity securities are pledged as collateral supporting the amounts outstanding under the credit agreement with Credit Suisse AG (see “Note 5 – Borrowings”), except as noted.

(16) Investment is not pledged as collateral supporting amounts outstanding under the credit agreement with Credit Suisse AG.

(17) Investment is considered non-income producing.

(18) Certain third parties have rights to 17,485 shares of Nanotherapeutics common stock at a fair value of approximately $0.6 million as of December 31, 2020.

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TRINITY CAPITAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1. Organization and Basis of Presentation

Trinity Capital Inc., formed on August 12, 2019 as a Maryland corporation, is a specialty lending company focused on providing debt, including loans and equipment financings, to growth stage companies, including venture-backed companies and companies with institutional equity investors. The Company commenced operations on January 16, 2020. Prior to January 16, 2020, the Company had no operations, except for matters relating to its formation and organization as a business development company (“BDC”).

The Company is an internally managed, closed-end, non-diversified management investment company that has elected to be regulated as a BDC under the Investment Company Act of 1940, as amended (the “1940 Act”). The Company intends to elect to be treated, and intends to qualify annually thereafter, as a regulated investment company (a “RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), for U.S. federal income tax purposes.

On September 27, 2019, the Company was initially capitalized with the issuance of 10 shares of its common stock for $150 to its sole stockholder. On January 16, 2020, the Company completed a series of transactions, including a private equity offering, a private debt offering, and the acquisition of Trinity Capital Investment, LLC (“TCI”), Trinity Capital Fund II, L.P. (“Fund II”), Trinity Capital Fund III, L.P. (“Fund III”), Trinity Capital Fund IV, L.P. (“Fund IV”), and Trinity Sidecar Income Fund, L.P. (“Sidecar Fund”) (collectively the “Legacy Funds”) through mergers of the Legacy Funds with an into the Company (the “Formation Transactions”). See “ Formation Transactions ” below.

The Company’s common stock began trading on the Nasdaq Global Select Market on January 29, 2021 under the symbol “TRIN” in connection with its initial public offering of shares of its common stock (“IPO”). See “Note 14 – Subsequent Events.”

Basis of Presentation

The Company’s consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and pursuant to the requirements for reporting on Form 10-K and Regulation S-X. As an investment company, the Company follows accounting and reporting guidance determined by the Financial Accounting Standards Board (“FASB”), in Accounting Standards Codification, as amended (“ASC”) Topic 946 - Financial Services – Investment Companies (“ASC 946”).

Formation Transactions

The Formation Transactions were accounted for as a business combination in accordance with FASB ASC 805, Business Combinations (“ASC 805”) , and as a result the assets acquired, and liabilities assumed were recorded at fair values as of January 16, 2020. Transaction costs related to the acquisition of a business are expensed as incurred and excluded from the fair value of the consideration transferred.

On January 16, 2020, the Company completed a private equity offering (the “Private Common Stock Offering”) of shares of its common stock pursuant to which it issued and sold 7,000,000 shares for gross proceeds of approximately $105.0 million. On January 29, 2020, an over-allotment option related to the Private Common Stock Offering was exercised in full and the Company issued and sold an additional 1,333,333 shares of its common stock for gross proceeds of approximately $20 million. As a result, the Company issued and sold an aggregate of 8,333,333 shares of its common stock for total aggregate gross proceeds of approximately $125 million.

On January 16, 2020, concurrent with the initial closing of the Private Common Stock Offering, the Company completed a private debt offering (the “144A Note Offering” and together with the Private Common Stock Offering, the “Private Offerings”) of $105.0 million in aggregate principal amount of the Company’s unsecured 7.00% Notes due

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2025 (the “2025 Notes”). On January 29, 2020, an over-allotment option related to the 144A Note Offering was exercised in full and on the Company issued and sold an additional $20 million in aggregate principal amount of the Notes. As a result, the Company issued and sold $125 million in aggregate principal amount of the Notes. See “Note 5 - Borrowings” and “Note 7 – Stockholder’s Equity.”

On January 16, 2020, immediately following the consummation of the Private Offerings, the Company used a portion of the proceeds of the Private Offerings to acquire, through the Formation Transactions, the Legacy Funds and Trinity Capital Holdings, LLC (“Trinity Capital Holdings”). Each member/limited partner of the Legacy Funds was given the option to elect to receive cash and or shares of the Company’s common stock in exchange for its limited partner interests or membership interests, as applicable. The general partners, managers or managing members of the Legacy Funds received only shares in exchange for their interests held in such capacities. As a result of the Formation Transactions, the Legacy Funds were merged with and into the Company.

As consideration for the partnership and membership interests in the Legacy Funds, the Company issued 9,183,185 shares of its common stock at $15.00 per share for a total value of approximately $137.7 million and paid approximately $108.7 million in cash to the Legacy Investors totaling approximately $246.4 million. The acquisition consideration of the Formation Transactions was based on valuations as of September 30, 2019, as adjusted for assets that were disposed of by the Legacy Funds, as well as earnings, capital contributions and distributions paid to the members/limited partners, and material events affecting the portfolio companies of the Legacy Funds subsequent to September 30, 2019 and through the closing date of the Formation Transactions.

A summary of the fair value of the assets acquired and liabilities assumed from the Legacy Funds as of the acquisition date is as follows (in thousands):


Investments acquired	$	417,023
Interest receivable and other assets
acquired		1,191
Accounts payable and accrued liabilities
assumed		(680)
Customer deposits assumed		(4,250)
Credit facility assumed		(190,000)
Financing fees related to credit facility
acquired		1,900
Cash acquired		19,183
Total net assets acquired	$	244,367

The total merger consideration of the Legacy Funds of approximately $246.4 million exceeded the fair value of the net assets acquired as of the acquisition date, and as a result, the Company included a loss of approximately $2.1 million in Costs related to the acquisition of Trinity Capital Holdings and Legacy Funds in the Consolidated Statements of Operations. During the year ended December 31, 2020, upon filing the final tax returns for the Legacy Funds, the Company reversed approximately $0.4 million of accrued liabilities assumed related to expected tax expense of the Legacy Funds.

Additionally, as part of the Formation Transactions, the Company also used a portion of the proceeds of the Private Offerings to acquire 100% of the equity interests of Trinity Capital Holdings, the sole member of Trinity Management IV, LLC, the investment manager to Fund IV and the sub-adviser to Fund II and Fund III, the Company issued 533,332 shares of common stock at $15.00 per share for a total value of approximately $8.0 million and paid approximately $2.0 million in cash. The Company also assumed a $3.5 million severance related liability with respect to a former member of certain general partners of certain Legacy Funds. Prior to the completion of the Formation Transactions, Trinity Capital Holdings acquired approximately $0.2 million of certain net assets from Trinity SBIC Management, LLC, the investment manager to Fund II and Fund III.

In connection with the acquisition of Trinity Capital Holdings, approximately $13.5 million (consisting of the aggregate purchase price and severance related liability assumed) was expensed to Costs related to the acquisition of Trinity Capital Holdings and Legacy Funds in the Consolidated Statements of Operations. Under ASC 805, such amount represents the settlement price, based on the estimated fair value of the future profits and cash flows that would otherwise have been contractually due to Trinity Capital Holdings, had the underlying management agreements with

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each of the Legacy Funds not been canceled in order to enter into the Formation Transactions and operate the Company as an internally managed BDC.

Principles of Consolidation

Under ASC 946, the Company is precluded from consolidating portfolio company investments, including those in which it has a controlling interest, unless the portfolio company is another investment company. An exception to this general principle occurs if the Company holds a controlling interest in an operating company that provides all or substantially all of its services directly to the Company or to its portfolio companies. None of the portfolio investments made by the Company qualify for this exception. Therefore, the Company’s investment portfolio is carried on the Consolidated Statements of Assets and Liabilities at fair value, as discussed further in “Note 3 - Investments,” with any adjustments to fair value recognized as "Net unrealized appreciation (depreciation) from investments" on the Consolidated Statements of Operations.

The Company’s consolidated operations include the activities of its wholly owned subsidiary, Trinity Funding 1, LLC (“TF1”). On January 16, 2020, in connection with the Formation Transactions, the Company acquired TF1 through Fund II and became a party to, and assumed, a $300 million credit agreement (as amended, the “Credit Facility”) with Credit Suisse AG (“Credit Suisse”) through TF1. TF1 was formed on August 14, 2019 as a Delaware limited liability company with Fund II as its sole equity member. TF1 is a special purpose bankruptcy-remote entity and is a separate legal entity from the Company. Any assets conveyed to TF1 are not available to creditors of the Company or any other entity other than TF1’s lenders. TF1 is consolidated for financial reporting purposes and in accordance with GAAP, and the portfolio investments held by this subsidiary are included in the Company’s consolidated financial statements and recorded at fair value. All intercompany balances and transactions have been eliminated.

Note 2. Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. These estimates and assumptions also affect the reported amounts of revenues, costs and expenses during the reporting period. Management evaluates these estimates and assumptions on a regular basis. Actual results could differ materially from those estimates.

Investment Transactions

Loan originations are recorded on the date of the legally binding commitment. Realized gains or losses are recorded using the specific identification method as the difference between the net proceeds received, excluding prepayment fees, if any, and the amortized cost basis of the investment without regard to unrealized gains or losses previously recognized, and include investments written off during the period, net of recoveries. The net change in unrealized gains or losses primarily reflects the change in investment fair values as of the last business day of the reporting period and also includes the reversal of previously recorded unrealized gains or losses with respect to investments realized during the period.

Valuation of Investments

The Company’s investments are carried at fair value in accordance with the 1940 Act and ASC 946 and measured in accordance with ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the observability of inputs used to measure fair value, and provides disclosure requirements for fair value measurements. ASC 820 requires the

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Company to assume that each of the portfolio investments is sold in a hypothetical transaction in the principal or, as applicable, most advantageous market using market participant assumptions as of the measurement date. Market participants are defined as buyers and sellers in the principal market that are independent, knowledgeable and willing and able to transact. The Company values its investments at fair value as determined in good faith pursuant to a consistent valuation policy by the Company’s Board of Directors (the “Board”) in accordance with the provisions of ASC 820 and the 1940 Act.

While the Board is ultimately and solely responsible for determining the fair value of the Company’s investments, the Company has engaged independent valuation firms to provide the Company with valuation assistance with respect to its investments. The Company engages independent valuation firms on a discretionary basis. Specifically, on a quarterly basis, the Company will identify portfolio investments with respect to which an independent valuation firm will assist in valuing. The Company selects these portfolio investments based on a number of factors, including, but not limited to, the potential for material fluctuations in valuation results, size, credit quality and the time lapse since the last valuation of the portfolio investment by an independent valuation firm.

Investments recorded on the Company’s Consolidated Statements of Assets and Liabilities are categorized based on the inputs to the valuation techniques as follows:

Given the nature of lending to venture capital-backed growth stage companies, substantially all of the Company’s investments in these portfolio companies are considered Level 3 assets under ASC 820 because there is no known or accessible market or market indexes for these investment securities to be traded or exchanges. The Company uses an internally developed portfolio investment rating system in connection with its investment oversight, portfolio management and analysis and investment valuation procedures. This system takes into account both quantitative and qualitative factors of the portfolio companies. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been reported had a ready market for the investments existed, and it is reasonably possible that the difference could be material.

Debt Securities

The debt securities identified on the Consolidated Schedule of Investments are secured loans and equipment financings made to growth stage companies.

For portfolio investments in debt securities for which the Company has determined that third-party quotes or other independent pricing are not available, the Company generally estimates the fair value based on the assumptions that hypothetical market participants would use to value the investment in a current hypothetical sale using an income approach.

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In its application of the income approach to determine the fair value of debt securities, the Company bases its assessment of fair value on projections of the discounted future free cash flows that the security will likely generate, including analyzing the discounted cash flows of interest and principal amounts for the security, as set forth in the associated loan and equipment financing agreements, as well as market yields and the financial position and credit risk of the portfolio company (the “Hypothetical Market Yield Method”). The discount rate applied to the future cash flows of the security is based on the calibrated yield implied by the terms of the Company’s investment adjusted for changes in market yields and performance of the subject company. The Company’s estimate of the expected repayment date of its loans and equipment financings securities is either the maturity date of the instrument or the anticipated pre-payment date, depending on the facts and circumstances. The Hypothetical Market Yield Method analysis also considers changes in leverage levels, credit quality, portfolio company performance, market yield movements, and other factors. If there is deterioration in credit quality or if a security is in workout status, the Company may consider other factors in determining the fair value of the security, including, but not limited to, the value attributable to the security from the enterprise value of the portfolio company or the proceeds that would most likely be received in a liquidation analysis.

Equity-Related Securities and Warrants

Often the Company is issued warrants by issuers as yield enhancements. These warrants are recorded as assets at estimated fair value on the grant date. Depending on the facts and circumstances, the Company usually utilizes a combination of one or several forms of the market approach as well as contingent claim analyses (a form of option analysis) to estimate the fair value of the securities as of the measurement date. As part of its application of the market approach, the Company estimates the enterprise value of a portfolio company utilizing customary pricing multiples, based on the development stage of the underlying issuers, or other appropriate valuation methods, such as considering recent transactions in the equity securities of the portfolio company or third-party valuations that are assessed to be indicative of fair value of the respective portfolio company, and, if appropriate based on the facts and circumstances performs an allocation of the enterprise value to the equity securities utilizing a contingent claim analysis and/or other waterfall calculation by which it allocates the enterprise value across the portfolio company’s securities in order of their preference relative to one another.

Cash, Cash Equivalents and Restricted Cash

Cash, cash equivalents and restricted cash consist of funds deposited with financial institutions and short-term (original maturity of three months for less) liquid investments in money market deposit accounts. Cash equivalents are classified as Level I assets and are valued using the Net Asset Value (“NAV”) per share of the money market fund. As of December 31, 2020, cash, cash equivalents and restricted cash consisted of $61.1 million of which $60.3 million is held in the Goldman Sachs Financial Square Government Institutional Fund. Cash held in demand deposit accounts may exceed the Federal Deposit Insurance Corporation (“FDIC”) insured limit and therefore is subject to credit risk. All of the Company’s cash deposits are held at large established high credit quality financial institutions, and management believes that the risk of loss associated with any uninsured balances is remote. As of December 31, 2020, restricted cash consisted of approximately $15.7 million related to the Credit Facility covenants (See “Note 5 – Borrowings”), and approximately $0.7 million held in escrow related to the payout of a severance related liability assumed as part of the Formation Transactions with respect to a former member of certain general partners of certain Legacy Funds.

Other Assets

Other assets generally consist of fixed assets net of accumulated depreciation, right of use asset, security deposits and other assets.

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Equity Offering Costs

A portion of the net proceeds of the Private Common Stock Offering was used to pay for offering costs of such offering. Offering costs charged against the proceeds from the Private Common Stock Offering were approximately $10.6 million during the year ended December 31, 2020.

Debt Issuance Costs

The Company records costs related to the issuance of debt obligations as deferred debt financing costs. These costs are deferred and amortized using the effective yield method for the Credit Facility, the 2025 Notes and the Convertible Notes (as defined below), over the stated maturity life of the obligations. As of December 31, 2020, there were $2.1 million, $4.7 million and $1.7 million of deferred financing costs netted against the Credit Facility, the 2025 Notes and the Convertible Notes balances, respectively, on the Company’s Consolidated Statements of Assets and Liabilities. As of December 31, 2019, deferred financing costs were approximately $3.5 million relating to the Credit Facility and the 2025 Notes.

Income Recognition

Interest Income

The Company recognizes interest income on an accrual basis and recognizes it as earned in accordance with the contractual terms of the loan agreement to the extent that such amounts are expected to be collected. Original issue discount (“OID”) initially includes the estimated fair value of detachable equity warrants obtained in conjunction with the origination of debt securities and is accreted into interest income over the term of the loan as a yield enhancement based on the effective yield method. In addition, the Company may also be entitled to an end-of-term (“EOT”) fee. EOT fees to be paid at the termination of the debt agreements are accreted into interest income over the contractual life of the debt based on the effective yield method. As of December 31, 2020, the EOT payment receivable of approximately $37.9 million is included as a component of the cost basis of the Company’s current debt securities.

When a portfolio company pre-pays their indebtedness prior to the scheduled maturity date, then the acceleration of the unaccreted OID and EOT is recognized as interest income.

Fee Income

The Company recognizes one-time fee income, including, but not limited to, structuring fees, prepayment penalties, and exit fees related to a change in ownership of the portfolio company, as other income when earned. These fees are generally earned when the portfolio company enters into an equipment financing arrangement or pays off their outstanding indebtedness prior to the scheduled maturity.

Non-Accrual Policy

When a debt security becomes 90 days or more past due, or if management otherwise does not expect that principal, interest, and other obligations due will be collected in full, the Company will generally place the debt security on non-accrual status and cease recognizing interest income on that debt security until all principal and interest due has been paid or the Company believes the borrower has demonstrated the ability to repay its current and future contractual obligations. Any uncollected interest is reversed from income in the period that collection of the interest receivable is

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determined to be doubtful. However, the Company may make exceptions to this policy if the investment has sufficient collateral value and is in the process of collection.

As of December 31, 2020, loans to three portfolio companies were on non-accrual status with a total cost of approximately $3.4 million, and a total fair value of approximately $2.2 million, or 0.5%, of the total fair value of the Company’s investment portfolio.

Net Realized Gains or Losses

Realized gains or losses are measured by the difference between the net proceeds from the sale or redemption of an investment or a financial instrument and the cost basis of the investment or financial instrument, without regard to unrealized appreciation or depreciation previously recognized, and includes investments written-off during the period net of recoveries and realized gains or losses from in-kind redemptions. Net proceeds excludes any prepayment penalties, exit fees, and OID and EOT acceleration. Prepayment penalties and exit fees received at the time of sale or redemption are included in fee income on the Consolidated Statements of Operations. OID and EOT acceleration is included in interest income on the Consolidated Statement of Operations.

Net Unrealized Appreciation or Depreciation

Net unrealized appreciation or depreciation reflects the net change in the fair value of the investment portfolio and financial instruments and the reclassification of any prior period unrealized appreciation or depreciation on exited investments and financial instruments to realized gains or losses.

Earnings Per Share

Basic earnings per share (“EPS”) is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding for the period. Other potentially dilutive common shares, and the related impact to earnings are considered when calculating earnings per share on a diluted basis. Potential common shares associated with the conversion option embedded in the Convertible Notes are anti-dilutive when the Company’s average NAV is below the conversion price.

Income Taxes

The Company evaluates tax positions taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority in accordance with ASC Topic 740, Income Taxes (“ASC 740”) , as modified by ASC 946. Tax benefits of positions not deemed to meet the more-likely-than-not threshold, or uncertain tax positions, would be recorded as tax expense in the current year. It is the Company’s policy to recognize accrued interest and penalties related to uncertain tax benefits in income tax expense. The Company has no material uncertain tax positions as of December 31, 2020. All the Company’s tax returns remain subject to examination by U.S. federal and state tax authorities.

Distributions

Distributions to common stockholders are recorded on the record date. The amount to be paid out as a distribution is determined by the Board each quarter and is generally based upon the earnings estimated by management. Net realized capital gains, if any, are distributed at least annually, although the Company may decide to retain such capital gains for investment.

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Note 3. Investments

The Company provides debt, including loans and equipment financings, to growth stage companies, including venture capital-backed companies and companies with institutional equity investors, primarily in the United States. The Company’s investment strategy includes making investments consisting primarily of term loans and equipment financings, and, to a lesser extent, working capital loans, equity and equity-related investments. In addition, the Company may obtain warrants or contingent exit fees at funding from many of the portfolio companies.

Debt Securities

The Company’s debt securities primarily consist of direct investments in interest-bearing secured loans and equipment financings to privately held companies based in the United States. Secured loans are generally secured by a blanket first lien or a blanket second lien on the assets of the portfolio company. Equipment financings typically include a specific asset lien on mission critical assets as well as a second lien on the assets of the portfolio company. These debt securities typically have a term of between three and five years from the original investment date. Certain of the debt securities are “covenant-lite” loans, which generally are loans that do not have a complete set of financial maintenance covenants and have covenants that are incurrence-based, meaning they are only tested and can only be breached following an affirmative action of the borrower rather than by a deterioration in the borrower’s financial condition. The equipment financings in the investment portfolio generally have fixed interest rates. The loans in the investment portfolio generally have fixed interest rates or floating interest rates subject to interest rate floors. Both equipment financings and loans generally include an EOT payment.

The specific terms of each debt security vary depending on the creditworthiness of the portfolio company and the projected value of the financed assets. Companies with stronger creditworthiness may receive an initial period of lower financing factor, which is analogous to an interest-only period on a traditional term loan. Equipment financings may include upfront interim payments and security deposits. Equipment financing arrangements have various structural protections, including customary default penalties, information and reporting rights, material adverse change or investor abandonment provisions, consent rights for any additions or changes to senior debt, and, as needed, intercreditor agreements with cross-default provisions to protect the Company’s second lien positions.

Warrant Investments

In connection with the Company’s debt investments, the Company may receive equity warrants in the portfolio company. Warrants received in connection with a debt investment typically include a potentially discounted contract price to exercise, and thus, as a portfolio company appreciates in value, the Company may achieve additional investment return from this equity interest. The warrants are typically contain provisions that protect the Company as a minority-interest holder, as well as secured or unsecured put rights, or rights to sell such securities back to the portfolio company, upon the occurrence of specified events. In certain cases, the Company may also obtain follow-up rights in connection with these equity interests, which allow the Company to participate in future financing rounds.

Equity Investments

In specific circumstances, the Company may seek to make direct equity investments in situations where it is appropriate to align the interests of the Company with key management and stockholders of the portfolio company, and to allow for participation in the appreciation in the equity values of portfolio company. These equity investments are generally made in connection with debt investments. The Company seeks to maintain fully diluted equity positions in the portfolio companies of 5% to 50% and may have controlling equity interests in some instances.

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Portfolio Industry Classification

The Company’s portfolio investments are in companies conducting business in a variety of industries. The following table summarizes the composition of the Company’s portfolio investments by industry at cost and fair value and as a percentage of the total portfolio as of December 31, 2020 (dollars in thousands):


	Cost			Fair
Value
Industry	Amount		%	Amount		%
Manufacturing	$	103,471	20.8%	$	99,709	20.2%
Professional, Scientific, and Technical
Services		77,831	15.6%		78,893	16.0%
Retail Trade		78,534	15.7%		75,664	15.4%
Finance and Insurance		35,320	7.0%		35,699	7.2%
Information		31,843	6.4%		30,709	6.2%
Rental and Leasing Services		29,055	5.8%		29,138	5.9%
Utilities		26,800	5.4%		27,083	5.5%
Pharmaceutical		17,503	3.5%		24,240	4.9%
Wholesale Trade		23,850	4.8%		23,903	4.8%
Agriculture, Forestry, Fishing and
Hunting		20,981	4.2%		20,837	4.2%
Real Estate		17,267	3.5%		17,316	3.5%
Health Care and Social Assistance		14,348	2.9%		11,422	2.3%
Educational Services		9,359	1.9%		9,816	2.0%
Construction		9,804	2.0%		6,894	1.4%
Administrative and Support and Waste
Management and Remediation Services		2,370	0.5%		2,328	0.5%
Total	$	498,336	100.0%	$	493,651	100.0%

The geographic composition is determined by the location of the corporate headquarters of the portfolio company. The following table summarizes the composition of the Company’s portfolio investments by geographic region of the United States and other countries at cost and fair value and as a percentage of the total portfolio as of December 31, 2020 (dollars in thousands):


	Cost			Fair Value
Geographic
Region	Amount		%	Amount		%
United States:
West	$	247,204	49.6%	$	241,096	48.8%
Northeast		131,692	26.4%		127,801	25.9%
Midwest		47,324	9.5%		44,092	8.9%
Mountain		33,842	6.8%		33,969	6.9%
Southeast		11,011	2.2%		17,834	3.6%
South		463	0.1%		1,777	0.4%
Canada		26,800	5.4%		27,082	5.5%
Total	$	498,336	100.0%	$	493,651	100.0%

The following table summarizes the composition of the Company’s portfolio investments by investment type at cost and fair value and as a percentage of the total portfolio as of December 31, 2020 (dollars in thousands):


	Cost		Fair Value
Investment	Amount	%	Amount		%
Secured Loan	$ 324,544	65.1%	$	320,718	65.0%
Equipment Financing	122,966	24.7%		122,501	24.8%
Equity	32,961	6.6%		32,654	6.6%
Warrants	17,865	3.6%		17,778	3.6%
Total	$ 498,336	100.0%	$	493,651	100.0%

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The Company classifies its investment portfolio in accordance with the requirements of the 1940 Act. Under the 1940 Act, (a) “Control Investments” are defined as investments in which Trinity Capital owns more than 25% of the voting securities or has rights to maintain greater than 50% of the board representation, (b) “Affiliate Investments” are defined as investments in which the Company owns between 5% and 25% (inclusive) of the voting securities and does not have rights to maintain greater than 50% of the board representation, and (c) “Non-Control/Non-Affiliate Investments” are defined as investments that are neither Control Investments nor Affiliate Investments.

The following table summarizes the Company’s control and affiliated investments including realized gains and losses and changes in unrealized appreciation and depreciation for the year ended December 31, 2020 (in thousands, except share data):


			As of December 31, 2020							Year
Ended December 31, 2020
													Net change in
													Unrealized
										Interest			(Depreciation)/			Realized
Portfolio
Company	Investment (1)		Fair Value			Principal		Shares		Income			Appreciation			Gain/(Loss)
Control
Investments
Birchbox, Inc.
	Secured Loan, June 1, 2024, Fixed Interest
	Rate 9.0%; EOT 3.0%		$	9,924		$	10,000	n/a		$	1,289		$	(509)		$	—
	Preferred Series D			9,445		$	—	3,140,927			—			(826)			—

Edeniq, Inc.
	Secured Loan, June 1, 2021, Fixed Interest
	Rate 13.0%; EOT 9.5%			859		$	3,039	n/a		$	—		$	(243)		$	—
	Secured Loan, September 1, 2021, Fixed
Interest
	Rate 13.0%; EOT 9.5%			648		$	2,282	n/a			—			(114)			—
	Warrants, December 23, 2026, Preferred
Series B		—			n/a		2,685,501		—			—			—
	Warrants, December 23, 2026, Preferred
Series B		—			n/a		2,184,672		—			—			—
	Warrants, March 12, 2028, Preferred
Series C		—			n/a		5,106,972		—			—			—
	Warrants, October 15, 2028, Preferred
Series C		—			n/a		3,850,294		—			—			—
	Preferred Series B			—			n/a	7,807,499			—			—			—
	Preferred Series C			—			n/a	2,441,082			—			—			—
	Convertible Note			—		$	1,303	n/a			—			—			—

Project Frog, Inc.
	Secured Loan, May 1, 2023, Fixed Interest
	Rate 12.0%			4,029		$	4,128	n/a			552			(16)			—
	Warrants, July 26, 2026, Preferred Series
AA		2			n/a		391,990		—			(16)			—
	Preferred Series AA-1			36			n/a	8,118,527			—			(666)			—
	Preferred Series BB			449			n/a	6,300,134			—			(2,218)			—

Vertical Communications, Inc.
	Secured Loan, November 1, 2024, Fixed
Interest
	Rate 9.5%; EOT 26.4%			12,787		$	12,000	n/a			1,378			(150)			—
	Secured Loan, July 1, 2022, Fixed Interest
	Rate 9.5%			816		$	807	n/a			47			9			—
	Warrants, July 11, 2026, Preferred Series
A		—			n/a		828,479		—			—			—
	Preferred Series 1			—			n/a	3,892,485			—			—			—
	Convertible Notes			3,350			5,500	n/a			—			(616)			—

WorkWell Prevention and Care Inc.
	Secured Loan, March 1, 2024, Fixed Interest
	Rate 8.0%; EOT
10.0%		3,493		$	3,370		n/a		320			(115)			—
	Secured Loan, March 1, 2024, Fixed Interest
	Rate 8.0%; EOT 10.0%			693		$	700	n/a			75			(41)			—
	Common Stock			—			n/a	7,000,000			—			(51)			—
	Preferred Series P			657			n/a	3,450			—			(2,793)			—
	Convertible Note			1,542			1,470	n/a			—			23			—
Total Control
Investments			$	48,730						$	3,661		$	(8,342)		$	—

Affiliate
Investments
Nanotherapeutics, Inc.
	Warrants, November 14, 2021, Common
Stock		2,216			n/a		67,961		—			1,094			—
	Common Stock (2)			12,856			n/a	382,277			—			6,165			—

Store Intelligence, Inc.
	Secured Loan, June 1, 2024, Fixed Interest
	Rate 12.0%; EOT 7.8%			11,884		$	12,001	n/a			1,191			(348)			—
	Preferred Series A			694			n/a	1,430,000			—			86			—
Total Affiliate
Investments			$	27,650						$	1,191		$	6,997		$	—

Total Control
and Affiliate Investments			$	76,380						$	4,852		$	(1,345)		$	—

(1) This schedule should be read in conjunction with the Consolidated Schedule of Investments and notes to the financial statements. Supplemental information can be located within the Consolidated Schedule of Investments including cost of investments and if the investments are income producing.

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(2) Certain third parties have rights to 17,485 shares of Nanotherapeutics common stock at a fair value of approximately $0.6 million as of December 31, 2020.

Unconsolidated Significant Subsidiaries

In accordance with Rule 10-01(b)(1) of Regulation S-X, as amended, the Company must determine which of its unconsolidated controlled portfolio companies, if any, are considered “significant subsidiaries.” In evaluating these unconsolidated controlled portfolio companies, there are two significance tests utilized per Rule 1-02(w) of Regulation S-X to determine if any of the Company’s Control Investments (as defined in “Note 2 - Summary of Significant Accounting Policies”) are considered significant subsidiaries: the investment test, and the income test. As of December 31, 2020, the Company did not have any significant subsidiaries.

Certain Risk Factors

In the ordinary course of business, the Company manages a variety of risks including market risk, credit risk and liquidity risk. The Company identifies, measures and monitors risk through various control mechanisms, including trading limits and diversifying exposures and activities across a variety of instruments, markets and counterparties.

Market risk is the risk of potential adverse changes to the value of financial instruments because of changes in market conditions, including as a result of changes in the credit quality of a particular issuer, credit spreads, interest rates, and other movements and volatility in security prices or commodities. In particular, the Company may invest in issuers that are experiencing or have experienced financial or business difficulties (including difficulties resulting from the initiation or prospect of significant litigation or bankruptcy proceedings), which involves significant risks. The Company manages its exposure to market risk through the use of risk management strategies and various analytical monitoring techniques.

The Company’s investments may, at any time, include securities and other financial instruments or obligations that are illiquid or thinly traded, making purchase or sale of such securities and financial instruments at desired prices or in desired quantities difficult. Furthermore, the sale of any such investments may be possible only at substantial discounts, and it may be extremely difficult to value any such investments accurately.

The Company’s investments consist of growth stage companies, many of which have relatively limited operating histories and also may experience variation in operating results. Many of these companies conduct business in regulated industries and could be affected by the changes in government regulations. Most of the Company’s borrowers will need additional capital to satisfy their continuing working capital needs and other requirements, and in many instances, to service the interest and principal payments on the debt.

Concentrations of Credit Risk

Credit risk is the risk of default or non-performance by portfolio companies, equivalent to the investment’s carrying amount. The top three industries of the Company’s portfolio companies as of December 31, 2020, are in the “Manufacturing,” “Professional, Scientific, and Technical Services” and “Retail Trade” sectors. Industry and sector concentrations will vary from period to period based on portfolio activity.

As of December 31, 2020, the Company’s ten largest portfolio companies represented approximately 42.5% of the total fair value of the Company’s investments in portfolio companies. As of December 31, 2020, the Company had 14 portfolio companies that represented 5% or more of the Company’s net assets. The Company did not have any investments as of December 31, 2019.

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Note 4. Fair Value of Financial Instruments

ASC 820 defines fair value, establishes a framework for measuring fair value, and establishes a fair value hierarchy based on the quality of inputs used to measure fair value and enhances disclosure requirements for fair value measurements. The Company accounts for its investments at fair value.

In accordance with ASC 820, the Company has categorized its investments based on the priority of the inputs to the valuation technique into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical investments (Level 1) and the lowest priority to unobservable inputs (Level 3). See “Note 2 - Summary of Significant Accounting Policies.”

As required by ASC 820, when the inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety. For example, a Level 3 fair value measurement may include inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Therefore, unrealized appreciation and depreciation related to such investments categorized within the Level 3 tables below may include changes in fair value that are attributable to both observable inputs (Levels 1 and 2) and unobservable inputs (Level 3).

As of December 31, 2020, the Company’s portfolio investments consisted primarily of investments in secured loans and equipment financings. All of the Company’s portfolio investments were categorized as Level 3 as of December 31, 2020. The Company held no portfolio investments as of December 31, 2019.

The fair value determination of each portfolio investment categorized as Level 3 required one or more of the following unobservable inputs:

● Financial information obtained from each portfolio company, including unaudited statements of operations and balance sheets for the most recent period available as compared to budgeted numbers;

● Current and projected financial condition of the portfolio company;

● Current and projected ability of the portfolio company to service its debt obligations;

● Type and amount of collateral, if any, underlying the investment;

● Current financial ratios (e.g., fixed charge coverage ratio, interest coverage ratio and net debt/EBITDA ratio) applicable to the investment;

● Current liquidity of the investment and related financial ratios (e.g., current ratio and quick ratio);

● Pending debt or capital restructuring of the portfolio company;

● Projected operating results of the portfolio company;

● Current information regarding any offers to purchase the investment;

● Current ability of the portfolio company to raise any additional financing as needed;

● Changes in the economic environment, which may have a material impact on the operating results of the portfolio company;

● Internal occurrences that may have an impact (both positive and negative) on the operating performance of the portfolio company;

● Qualitative assessment of key management;

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● Contractual rights, obligations or restrictions associated with the investment; and

● Time to exit.

The use of significant unobservable inputs creates uncertainty in the measurement of fair value as of the reporting date. The significant unobservable inputs used in the fair value measurement of the Company’s investments, are (i) earnings before interest, tax, depreciation, and amortization (“EBITDA”) and revenue multiples (both projected and historic), and (ii) volatility assumptions. Significant increases (decreases) in EBITDA and revenue multiple inputs in isolation would result in a significantly higher (lower) fair value measurement. Similarly, significant increases (decreases) in volatility inputs in isolation would result in a significantly higher (lower) fair value assessment. On the contrary, significant increases (decreases) in weighted average cost of capital inputs in isolation would result in a significantly lower (higher) fair value measurement. However, due to the nature of certain investments, fair value measurements may be based on other criteria, such as third-party appraisals of collateral and fair values as determined by independent third parties, which are not presented in the tables below.

The following table provides a summary of the significant unobservable inputs used to fair value the Level 3 portfolio investments as of December 31, 2020 (dollars in thousands):


	Fair Value as of
	December 31,			Valuation Techniques/		Unobservable		Weighted
Investment
Type	2020			Methodologies		Inputs (1)	Range	Average (2)

Debt investments	$	330,184		Discounted Cash Flows		Hypothetical Market
Yield	9.5% - 31.2%		15.1	%

		99,053		Originated within
the past three months	Origination Market
Yield	12.9% - 15.2%		14.2	%

		2,211		Liquidation Scenario		Probability Weighting
of Alternative Outcomes	60.0% - 90.0%		n/a

		11,771		Transactions Precedent (6)		Transaction Price	n/a	n/a

Equity investments		3,623		Liquidation Scenario		Probability Weighting
of Alternative Outcomes	30.0% - 70.0%		n/a

		5,550		Market Approach		Revenue Multiple Only (3)	0.5 - 0.9	0.7

		23,481		Market Approach		Revenue Multiple (3)	0.36x - 3.0x	1.8	x
						Company Specific Adjustment (4)	(17.5)% - 150.0%	74.9	%
						Volatility (5)	45.0% - 80.0%	59.8	%
						Risk-Free Interest
Rate	0.1% - 0.2%		0.1	%
						Estimated Time to
Exit (in years)	0.5 - 2.0		1.1

Warrants		15,133		Market Approach		Revenue Multiple (3)	0.3x - 20.75x	3.2	x
						EBITDA Multiple	n/a	10.9	x
						Company Specific Adjustment (4)	(50.0)% - 10.0%	(13.1)	%
						Volatility (5)	20.0% - 104.7%	53.4	%
						Risk-Free Interest
Rate	0.1% - 3.0%		0.9	%
						Estimated Time to
Exit (in years)	0.2 - 10.0		3.3

		2,645		Black Scholes Option
Pricing Model	Volatility (5)		46.8% - 132.3%		52.0	%
						Risk-Free Interest
Rate	0.1% - 0.7%		0.1	%
						Estimated Time to
Exit (in years)	0.5 - 7.3		0.8

Total Level
Three Investments	$	493,651

(1) The significant unobservable inputs used in the fair value measurement of the Company’s debt securities are hypothetical market yields and premiums/(discounts). The hypothetical market yield is defined as the exit price of an investment in a hypothetical market to hypothetical market participants where buyers and sellers are willing participants. The significant unobservable inputs used in the fair value measurement of the Company’s equity and warrant securities are revenue multiples and portfolio company specific adjustment factors. Additional inputs used in the option pricing model (“OPM”) include industry volatility, risk free interest rate and estimated time to exit. Significant increases (decreases) in the inputs in isolation would result in a significantly higher (lower) fair value measurement, depending on the materiality of the investment. For some investments, additional consideration may be given to data from the last round of financing or merger/acquisition events near the measurement date.

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(2) Weighted averages are calculated based on the fair market value of each investment.

(3) Represents amounts used when the Company has determined that market participants would use such multiples when pricing the investments.

(4) Represents amounts used when the Company has determined market participants would take into account these discounts when pricing the investments.

(5) Represents the range of industry volatility used by market participants when pricing the investment.

(6) Represents investments where there is an observable transaction or pending event for the investment.

The following table provides a summary of changes in the debt, including loans and equipment financings (collectively “Debt”), equity and equity warrants fair value of the Company’s Level 3 portfolio investments for the year ended December 31, 2020 (in thousands):


	Type of Investment
					Equity
	Debt		Equity		Warrants		Total
Fair Value as of January 1, 2020	$	—	$	—	$	—	$	—
Formation Transactions acquisitions		375,858		24,066		17,099		417,023
Purchases, net of deferred fees of
$1.4 million		234,418		2,170		1,976		238,564
Non-cash conversion		(10,148)		10,879		532		1,263
Proceeds from Paydowns and Sales		(157,046)		(3,855)		—		(160,901)
Amortization and Accretion		11,788		—		—		11,788
Net Realized Gain/(Loss)		(7,361)		(300)		(1,742)		(9,403)
Third Party Participation (1)		—		283		—		283
Change in Unrealized Appreciation/(Depreciation)		(4,290)		(589)		(87)		(4,966)
Fair Value as of December 31, 2020	$	443,219	$	32,654	$	17,778	$	493,651

Net change in unrealized appreciation/depreciation
on Level 3 investments still held as of December 31, 2020	$	(4,290)	$	(589)	$	(87)	$	(4,966)

During the year ended December 31, 2020, there were no transfers into or out of Level 3.

Fair Value of Financial Instruments Carried at Cost

As of December 31, 2020, the carrying value of the Credit Facility is approximately $132.9 million, net of unamortized deferred financing costs of $2.1 million. The carrying value of the Company’s Credit Facility as of December 31, 2020 approximates the fair value, which was estimated using a market yield approach with Level 3 inputs.

As discussed in “Note 5 - Borrowings,” as of December 31, 2020, the 2025 Notes have a fixed interest rate with a carrying value of approximately $120.3 million, net of unamortized deferred financing costs of $4.7 million. The fair value of the 2025 Notes as of December 31, 2020 was $131.4 million, which was estimated using a relative market yield approach with Level 3 inputs.

As of December 31, 2020, the carrying value of the Convertible Notes is approximately $46.6 million, net of unamortized deferred financing costs and discount of $3.4 million. The Convertible Notes have a fixed interest rate as discussed in “Note 5 – Borrowings.” The cost of the Convertible Notes as of December 31, 2020 approximates the fair value, based on the recent funding.

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The fair value amounts have been measured as of the reporting date and have not been reevaluated or updated for purposes of these financial statements subsequent to that date. As such, the fair values of these financial instruments subsequent to the reporting date may be different than amounts reported.

Note 5. Borrowings

Credit Suisse Credit Facility

On January 9, 2020, TF1 and its affiliates borrowed $190.0 million under the Credit Facility. On January 16, 2020, in connection with the Formation Transactions, through its wholly owned subsidiary, TF1, the Company became a party to, and assumed, the Credit Facility with Credit Suisse. During the year ended December 31, 2020, the Company borrowed an additional $30.0 million and made repayments of $85.0 million to Credit Suisse. The Company incurred approximately $4.0 million of financing costs in connection with the Credit Facility that were capitalized and deferred using the straight-line method over the life of the facility. As of December 31, 2020, unamortized deferred financing costs related to the Credit Facility were $2.1 million and presented as a direct deduction from the carrying amount of the debt liability on the Consolidated Statements of Assets and Liabilities.

The Credit Facility matures on January 8, 2022, unless extended. Borrowings under the Credit Facility bear interest at a rate of the three-month London Interbank Offered Rate (“LIBOR”) plus 3.25%. The Credit Facility is collateralized by all investments held by TF1 and permits an advance rate of up to 65% of eligible investments. The Company has the ability to borrow up to an aggregate of $300.0 million, and the Credit Facility borrowing base contains certain criteria for eligible investments and includes concentration limits as defined in the Credit Facility. As of December 31, 2020, the Company had $135.0 million in borrowings outstanding under the Credit Facility and a borrowing availability of approximately $42.0 million.

The summary information regarding the Credit Facility is as follows (dollars in thousands):


	Year
Ended
	December 31, 2020
Stated interest expense	$	5,052
Amortization of deferred financing
costs		1,918
Total interest and amortization of
deferred financing costs	$	6,970

Weighted average effective interest
rate		5.6	%
Weighted average outstanding balance	$	126,271

The Credit Facility contains covenants that, among other things, require the Company to maintain minimum tangible net worth and leverage ratios, minimum cash balance of $15.0 million, and a cash reserve of 60 days for interest.

2025 Notes

Concurrent with the completion of a private common stock offering, on January 16, 2020, the Company completed the “144A Note Offering” of $105.0 million in aggregate principal amount of the unsecured 2025 Notes in reliance upon the available exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). Keefe, Bruyette & Woods, Inc. (“KBW”), as the initial purchaser, exercised in full its option to purchase or place additional Notes and on January 29, 2020 the Company issued and sold an additional $20.0 million in aggregate principal amount of the 2025 Notes. As a result, the Company issued and sold a total of $125.0 million in aggregate principal amount of the 2025 Notes pursuant to the 144A Note Offering.

The 2025 Notes were issued pursuant to an Indenture dated as of January 16, 2020 (the “Base Indenture”), between the Company and U.S. Bank National Association, as trustee (the “Trustee”), and a First Supplemental Indenture, dated as of January 16, 2020 (the “First Supplemental Indenture” and together with the Base Indenture, the “2025 Notes

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Indenture”), between the Company and the Trustee. The 2025 Notes mature on January 16, 2025 (the “Maturity Date”), unless repurchased or redeemed in accordance with their terms prior to such date. The 2025 Notes are redeemable, in whole or in part, at any time, or from time to time, at the Company’s option, on or after January 16, 2023 at a redemption price equal to 100% of the outstanding principal amount thereof, plus accrued and unpaid interest to, but excluding, the date of redemption. The holders of the 2025 Notes do not have the option to have the notes repaid or repurchased by the Company prior to the Maturity Date.

The 2025 Notes bear interest at a fixed rate of 7.00% per year payable quarterly on March 15, June 15, September 15 and December 15 of each year, commencing on March 15, 2020. The 2025 Notes are direct, general unsecured obligations of the Company and rank pari passu, or equal in right of payment with all of the Company’s existing and future unsecured indebtedness or other obligations that are not so subordinated.

Concurrently with the closing of the 144A Note Offering on January 16, 2020, the Company entered into a registration rights agreement (the “2025 Notes Registration Rights Agreement”) for the benefit of the purchasers of the 2025 Notes in the 144A Note Offering. Pursuant to the terms of the 2025 Notes Registration Rights Agreement, the Company filed with the SEC a registration statement registering the public resale of the 2025 Notes by the holders thereof that elected to include their Notes in such registration statement, which was declared effective on October 20, 2020. Under the 2025 Notes Registration Rights Agreement, the Company is obligated to use its commercially reasonable efforts to continuously maintain such registration statement’s effectiveness under the Securities Act, subject to certain permitted blackout periods, for the period described in the 2025 Notes Registration Rights Agreement.

Aggregate offering costs in connection with the 2025 Notes issuance, including the underwriter’s discount and commissions, were approximately $5.8 million which were capitalized and deferred. As of December 31, 2020, unamortized deferred financing costs related to the 2025 Notes were $4.7 million and were included in the Notes payable on the Consolidated Statements of Assets and Liabilities.

For the year ended December 31, 2020, the components of interest expense and related fees for the 2025 Notes are as follows (in thousands):


	Year
Ended
	December 31, 2020
Stated interest expense	$	8,385
Amortization of deferred financing
costs		1,078
Total interest and amortization of
deferred financing costs	$	9,463

Weighted average effective interest
rate		7.9	%

Convertible Notes due 2025

On December11, 2020, the Company completed a private offering (the “Private Convertible Note Offering”) of $50 million in aggregate principal amount of its unsecured 6.00% Convertible Notes due 2025 (the “Convertible Notes”) in reliance upon the available exemptions from the registration requirements of the Securities Act. KBW acted as the initial purchaser and placement agent in connection with the Private Convertible Note Offering pursuant to a purchase/placement agreement dated December 4, 2020 by and between the Company and KBW.

The Convertible Notes were issued pursuant to the Base Indenture and a Second Supplemental Indenture, dated as of December 11, 2020 (the “Second Supplemental Indenture” and together with the Base Indenture, the “Convertible Notes Indenture”), between the Company and the Trustee.

The Convertible Notes bear interest at a fixed rate of 6.00% per year, subject to additional interest upon certain events, payable semiannually in arrears on May 1 and November 1 of each year, beginning on May 1, 2021. If an investment grade rating is not maintained with respect to the Convertible Notes, additional interest of 0.75% per annum will accrue on the Convertible Notes until such time as the Convertible Notes have received an investment grade rating of “BBB-” (or its equivalent) or better. The rating remained unchanged as of December 31, 2020. The Convertible Notes

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mature on December 11, 2025 (the “Convertible Notes Maturity Date”), unless earlier converted or repurchased in accordance with their terms.

Holders may convert their Convertible Notes, at their option, at any time on or prior to the close of business on the business day immediately preceding the Convertible Notes Maturity Date. The conversion rate is initially 66.6667 shares of the Company’s common stock, per $1,000 principal amount of the Convertible Notes (equivalent to an initial conversion price of approximately $15.00 per share of common stock). The conversion rate will be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events, further described in the Convertible Note Indenture, that occur prior to the Convertible Notes Maturity Date, the Company will increase the conversion rate for a holder who elects to convert its Convertible Notes in connection with such a corporate event in certain circumstances. Upon conversion of the Convertible Notes, the Company will pay or deliver, as the case may be, cash, shares of common stock, or a combination of cash and shares of common stock, at the Company’s election, per $1,000 principal amount of the Convertible Notes, equal to the then existing conversion rate.

At the Company’s option, it may cause holders to convert all or a portion of the then outstanding principal amount of the Convertible Notes plus accrued but unpaid interest, at any time on or prior to the close of business on the business day immediately preceding the Convertible Notes Maturity Date, if the closing sale price of the Company’s common stock for any 30 consecutive trading days exceeds 120% of the conversion price, as may be adjusted. Upon such conversion, the Company will pay or deliver, as the case may be, cash, shares of common stock, or a combination of cash and shares of common stock, at the Company’s election, per $1,000 principal amount of the Convertible Notes , equal to the then existing conversion rate, and a forced conversion make-whole payment (as defined in the Second Supplemental Indenture), if any, in cash.

The Company may not redeem the Convertible Notes at its option prior to maturity. In addition, if the Company undergoes a fundamental change (as defined in the Second Supplemental Indenture), holders may require the Company to repurchase for cash all or part of such holders’ Convertible Notes at a repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

The Convertible Notes are direct unsecured obligations of the Company and rank pari passu, or equal, in right of payment with all of the Company’s existing and future unsecured indebtedness or other obligations that are not so subordinated, including, without limitation, the 2025 Notes, and senior in right of payment to all of the Company’s future indebtedness or other obligations that are expressly subordinated, or junior, in right of payment to the Convertible Notes.

Concurrently with the closing of the Convertible Note Offering, on December 11, 2020, the Company entered into a registration rights agreement (the “Convertible Notes Registration Rights Agreement”) for the benefit of the holders of the Convertible Notes and the shares of common stock issuable upon conversion thereof. Under the Convertible Notes Registration Rights Agreement and subject to the terms and conditions set forth therein, the Company has agreed to use its commercially reasonable efforts to file with or confidentially submit to the SEC a registration statement registering resales of the Convertible Notes under the Securities Act by the holders thereof, within 180 days after December 11, 2020 (the “Convertible Notes Issue Date”) (or if such 180th day is not a business day, the next succeeding business day). The Company has also agreed to use its commercially reasonable efforts to cause such resale registration statement related to the Convertible Notes to be declared effective by the SEC at the earliest possible time after the initial submission or filing thereof, but in no event later than 270 days after the Convertible Notes Issue Date (or if such 270th day is not a business day, the next succeeding business day), and to continuously maintain such resale registration statement’s effectiveness under the Securities Act, subject to certain permitted blackout periods, for the period described in the Convertible Notes Registration Rights Agreement.

In addition, under the Convertible Notes Registration Rights Agreement and subject to the terms and conditions set forth therein, the Company has agreed to file with or confidentially submit to the SEC a registration statement registering under the Securities Act resales of the shares of common stock to be issued upon the conversion of the Convertible Notes, including shares issued by stock dividend, stock distribution, stock split or otherwise thereupon at the time of such submission or filing, as soon as reasonably practicable after the later of (i) the completion of an initial public

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offering of the Company’s equity or equity-linked securities, including the Company’s common stock, and the listing of such securities on a national securities exchange (collectively, an “IPO”) and (ii) the date that is 180 days after the Convertible Notes Issue Date (or, if such 180th day is not a business day, the next succeeding business day). The Company has also agreed to use its commercially reasonable efforts to cause such resale registration statement related to the shares of common stock to be issued upon Conversion of the Convertible Notes to be declared effective by the SEC no later than six months after the completion of an IPO and concurrently therewith cause such shares of common stock to be listed on a national securities exchange, and to continuously maintain such resale registration statement’s effectiveness under the Securities Act, subject to certain permitted blackout periods, for the period described in the Convertible Notes Registration Rights Agreement.

Nevertheless, the Company can offer no assurance that it will file any such resale registration statements, that the SEC will ever declare either of such resale registration statements effective, or that the shares of common stock issued upon conversion of the Convertible Notes will ever be listed on a national securities exchange.

Aggregate offering costs in connection with the Convertible Note Offering, including the initial purchaser and placement agent discount and commissions, were approximately $1.6 million which were capitalized and deferred. As of December 31, 2020, unamortized deferred financing costs related to the Convertible Notes were $1.6 million and were included in the Convertible Notes payable on the Consolidated Statements of Assets and Liabilities.

The Convertible Notes are accounted for in accordance with ASC 470-20 Debt Instruments with Conversion and Other Options . In accounting for the Convertible Notes, the Company estimated at the time of issuance that the values of the debt and the embedded conversion feature of the Convertible Notes were approximately 99.1% and 0.9%, respectively. The original issue discount of 0.9%, or approximately $0.5 million, attributable to the conversion feature of the Convertible Notes was recorded in “capital in excess of par value” in the Consolidated Statements of Assets and Liabilities. As a result, the Company records interest expense comprised of both stated interest expense as well as the original issue discount resulting in an estimated effective interest rate of approximately 7.1% annualized.

As of December 31, 2020, the components of the carrying value of the Convertible Notes were as follows (in thousands):


	Year
Ended
	December 31, 2020
Principal amount of debt	$	50,000
Unamortized debt issuance cost		(1,672)
Original issue discount related to
equity component, net of accretion		(467)
Original issue discount, net of accretion		(1,308)
Carrying value of Convertible Notes	$	46,552

For the year ended December 31, 2020, the components of interest expense and related fees for the Convertible Notes were as follows (in thousands):


	Year
Ended
	December 31, 2020
Stated interest expense	$	175
Amortization of deferred financing
costs and original issue discount		29
Total interest and amortization of
deferred financing costs and original issue discount	$	204

Weighted average effective interest
rate		7.1	%

As of December 31, 2020, the Company was in compliance with the terms of the Credit Facility, the 2025 Notes Indenture, and the Convertible Notes Indenture.

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Note 6. Commitments and Contingencies

Unfunded Commitments

The Company’s commitments and contingencies consist primarily of unused commitments to extend credit in the form of loans or equipment financings to the Company’s portfolio companies. A portion of unfunded contractual commitments as of December 31, 2020 are generally dependent upon the portfolio company reaching certain milestones before the commitment becomes available. Furthermore, the Company’s credit agreements contain customary lending provisions that allow the Company relief from funding obligations for previously made commitments in instances where the underlying portfolio company experiences materially adverse events that affect the financial condition or business outlook for the Company. Since a portion of these commitments may expire without being withdrawn, unfunded contractual commitments do not necessarily represent future cash requirements. As such, the Company’s disclosure of unfunded contractual commitments as of December 31, 2020 includes only those commitments which are available at the request of the portfolio company and are unencumbered by milestones or additional lending provisions.

As of December 31, 2020, the Company had outstanding unfunded commitments of approximately $0.1 million to one portfolio company, Dandelion, Inc. As of December 31, 2020, the Company had sufficient liquidity (through cash on hand and available borrowings under the Credit Facility) to fund such unfunded commitments should the need arise.

In the normal course of business, the Company enters into contracts that provide a variety of representations and warranties, and general indemnifications. Such contracts include those with certain service providers, brokers and trading counterparties. Any exposure to the Company under these arrangements is unknown as it would involve future claims that may be made against the Company; however, based on the Company’s experience, the risk of loss is remote and no such claims are expected to occur. As such, the Company has not accrued any liability in connection with such indemnifications.

Leases

Effective January 1, 2019, FASB ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”) required that a lessee evaluate its leases to determine whether they should be classified as operating or financing leases. The Company identified one significant operating lease for its office space. The lease commenced February 21, 2017 and expires July 31, 2022. The lease contains a five-year extension option for a final expiration date of July 31, 2027 which the company does not expect to exercise.

The total lease expense incurred for the year ended December 31, 2020 was approximately $0.2 million. As of December 31, 2020, the right of use asset and the lease liability was $0.3 million and $0.4 million, respectively. As of December 31, 2020, the remaining lease term was 1.5 years and the discount rate was 3.25%. The Company has also entered into a lease for new office space with an estimated commencement date in mid-2021 and a lease term of eight years. A right of use asset and corresponding lease liability will be recorded upon commencement of the lease, and future minimum payments under the term of the new lease have been included in the table below.

The following table shows future minimum payments under the Company’s operating leases as of December 31, 2020 (in thousands):


For the
Years Ended December 31,		Total
2021	$	225
2022		484
2023		361
2023		371
2024		380
Thereafter		1,619
Total	$	3,440

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Legal Proceedings

The Company may, from time to time, be involved in litigation arising out of its operations in the normal course of business or otherwise. Furthermore, third parties may try to seek to impose liability on the Company in connection with the activities of its portfolio companies. As of December 31, 2020, there are no material legal matters or material litigation pending of which the Company is aware.

Note 7. Stockholder’s Equity

The Company authorized 200,000,000 shares of its common stock with a par value of $0.001 per share. On September 27, 2019, the Company was initially capitalized with the issuance of 10 shares of its common stock for an aggregate purchase price of $150 to its sole shareholder.

Private Common Stock Offerings

On January 16, 2020, the Company completed a private offering of shares of its common stock (the “Private Common Stock Offering”) in reliance upon the available exemptions from the registration requirements of the Securities Act, pursuant to which the Company issued and sold 7,000,000 shares of its common stock for aggregate gross proceeds of approximately $105.0 million. KBW acted as the initial purchaser and placement agent in connection with the Private Common Stock Offering pursuant to a purchase/placement agreement, dated January 8, 2020 by and between the Company and KBW. KBW exercised in full its option to purchase or place additional shares and on January 29, 2020 the Company issued and sold an additional 1,333,333 shares of its common stock. As a result, the Company issued and sold a total of 8,333,333 shares of its common stock pursuant to the Private Common Stock Offering for aggregate net proceeds of approximately $114.4 million, net of offering costs of approximately $10.6 million.

Concurrently with the closing of the Private Common Stock Offering, on January 16, 2020, the Company entered into a registration rights agreement for the benefit of the purchasers of the shares of the Company’s common stock in the Private Common Stock Offering and the Legacy Investors (as defined below) that received shares of the Company’s common stock in connection with the Formation Transactions that were not the Company’s directors, officers and affiliates.

On December 15, 2020, at the Company’s 2020 annual meeting of stockholders, the Company’s stockholders approved amending and restating such registration rights agreement to change the registration deadline described below to December 31, 2021 from December 31, 2020. No other changes were made to the registration rights agreement, which as so amended and restated became effective on December 15, 2020 (the “Common Stock Registration Rights Agreement”).

Absent an amendment approved in accordance with the terms of the Common Stock Registration Rights Agreement, the Company is obligated to use commercially reasonable efforts to cause (i) a resale registration statement (the “Resale Registration Statement”) registering the public resale of the shares of the Company’s common stock issued in the Private Common Stock Offering and the Formation Transactions, and the shares of the Company’s common stock issues in respect thereof whether by contingent dividend, stock dividend, stock distribution, stock split, or otherwise, except for such shares issued to the Company’s directors, officers and affiliates (the “Registrable Shares”), to be declared effective by the SEC as soon as practicable after the initial filing of the Resale Registration Statement, but in no event later than December 31, 2021 and (ii) the Registrable Shares to be listed on a national securities exchange concurrently with the effectiveness of the Resale Registration Statement. Under the Common Stock Registration Rights Agreement, the Company is also obligated to use commercially reasonable efforts to continuously maintain the Resale Registration Statement’s effectiveness under the Securities Act, subject to certain permitted blackout periods, for the period described in the Common Stock Registration Rights Agreement.

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Formation Transactions

On January 16, 2020, immediately following the initial closings of the Private Offerings, the Company used the proceeds from the Private Offerings to complete the Formation Transactions, pursuant to which the Company acquired and assumed all of the assets and liabilities of the Legacy Funds through mergers of the Legacy Funds with and into the Company. In consideration for the Legacy Funds, the Company issued 9,183,185 shares of common stock at $15.00 per share for a total value of approximately $137.7 million and paid approximately $108.7 million in cash to the Legacy Funds’ investors, which included the general partners/managers of the Legacy Funds (the “Legacy Investors”). The acquisition consideration of the Formation Transactions was based on valuations as of December 31, 2019, as adjusted for assets that were disposed of by the Legacy Funds, as well as earnings, capital contributions and distributions paid to the members/limited partners, and material events affecting the portfolio companies of the Legacy Funds subsequent to December 31, 2019 and through the closing date of the Formation Transactions.

As part of the Formation Transactions, the Company also used a portion of the proceeds of the Private Offerings to acquire 100% of the equity interests of Trinity Capital Holdings, LLC (“Trinity Capital Holdings”) for an aggregate purchase price of $10.0 million, which was comprised of 533,332 shares of its common stock totaling approximately $8.0 million and approximately $2.0 million in cash. As a result of this transaction, Trinity Capital Holdings became a wholly owned subsidiary of the Company. Refer to “Note 1 – Organization and Basis of Presentation” for further details.

Long-Term Incentive Plan

The Board has approved the 2019 Trinity Capital Inc. Long-Term Incentive Plan and the Trinity Capital Inc. 2019 Non-Employee Director Restricted Stock Plan, each to be effective upon receipt of exemptive relief from the SEC and stockholder approval of such plans. The Company has applied for an exemptive order from the SEC to permit us to issue securities under such plans. If such exemptive relief and stockholder approval are obtained, the Compensation Committee may award such securities in such amounts and on such terms as the Compensation Committee determines and consistent with any exemptive order the SEC may issue and the terms of such plans, as applicable. The SEC is not obligated to grant an exemptive order to allow this practice and will do so only if it determines that such practice is consistent with stockholder interests and does not involve overreaching by management or the Board. The Company cannot provide any assurance that such exemptive relief from the SEC or such stockholder approval will be received.

Distribution Reinvestment Plan

The Company’s distribution reinvestment plan (“DRIP”) provides for the reinvestment of distributions in the form of common stock on behalf of its stockholders, unless a stockholder has elected to receive distributions in cash. As a result, if the Company declares a cash distribution, its stockholders who have not “opted out” of the DRIP by the opt out date will have their cash distribution automatically reinvested into additional shares of the Company’s common stock. The share requirements of the DRIP may be satisfied through the issuance of common shares or through open market purchases of common shares by the DRIP plan administrator. Newly issued shares will be valued based upon the final closing price of the Company’s common stock on the valuation date determined for each distribution by the Board.

The Company’s DRIP is administered by its transfer agent on behalf of the Company’s record holders and participating brokerage firms. Brokerage firms and other financial intermediaries may decide not to participate in the Company’s DRIP but may provide a similar distribution reinvestment plan for their clients. For the year ended December 31, 2020, the Company issued 271,414 shares of common stock for a total of approximately $3.4 million under the DRIP.

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Distributions

The following table reflects the distributions per share that the Company has paid, including shares issued under the DRIP, on its common stock during the year ended December 31, 2020 ($ in thousands except per share):


Declaration Date	Record Date	Payment Date	Per Share Amount
May 14, 2020	May 29, 2020	June 5, 2020	$	0.22
August 12, 2020	August 21, 2020	September 4, 2020		0.27
November 12, 2020	November 20, 2020	December 4, 2020		0.27
December 22, 2020	December 30, 2020	January 15, 2021		0.27
Total			$	1.03

Note 8. Earnings Per Share

In accordance with the provisions of ASC Topic 260 – Earnings per Share (“ASC 260”), basic earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding for the period. Other potentially dilutive common shares, and the related impact to earnings are considered when calculating earnings per share on a diluted basis. Potential common shares associated with the conversion option embedded in the Convertible Notes are anti-dilutive when the Company’s average NAV is below the conversion price. The following table sets forth the computation of the weighted average basic and diluted net increase (decrease) in net assets per share from operations for the year ended December 31, 2020 (in thousands except shares and per share information):



	Year
Ended
	December 31, 2020
Net increase/(decrease) in net assets
resulting from operations	$	(6,112)
Weighted average common shares outstanding		18,092,494
Net increase/(decrease) in net assets
resulting from operations per common share - basic and diluted	$	(0.34)

For the year ended December 31, 2020, the effect of the Convertible Notes was anti-dilutive and, accordingly, was excluded from the calculation of diluted earnings per share.

Note 9. Income Taxes

The Company intends to elect to be treated for U.S. federal tax purposes as a RIC under Subchapter M of the Code and operate in a manner so as to qualify annually thereafter for the tax treatment applicable to RICs. As a RIC, the Company generally will not pay corporate-level income tax on the portion of its taxable income distributed to stockholders, generally required to be at least 90% of its investment company taxable income (which is generally its net ordinary taxable income and realized net short-term capital gains in excess of realized net long-term capital losses) and 90% of its tax-exempt income to maintain its RIC status (pass-through tax treatment for amounts distributed). The amount to be paid out as a distribution is determined by the Board each quarter and is based upon the annual earnings estimated by the management of the Company. To the extent the Company’s earnings fall below the amount of dividend distributions declared, however, a portion of the total amount of the Company’s distributions for the fiscal year may be deemed a return of capital for tax purposes to the Company’s stockholders.

Because federal income tax regulations differ from accounting principles generally accepted in the United States, distributions in accordance with tax regulations may differ from net investment income and realized gains recognized for financial reporting purposes. Differences may be permanent or temporary in nature. Permanent differences are reclassified among capital accounts in the financial statements to reflect their appropriate tax character. Temporary

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differences arise when certain items of income, expense, gain or loss are recognized at some time in the future. Also, recent tax legislation requires that income be recognized for tax purposes no later than when recognized for financial reporting purposes.

During the year ended December 31, 2020, the Company reclassified for book purposes amounts arising from permanent book to tax differences primarily related to nondeductible expenses for income tax purposes as follows:


		Year
Ended
	December 31, 2020
Additional paid-in capital	$	(738)
Distributable earnings/(accumulated
loss)		738

The Company has available $7.1 million of capital losses, which can be used to offset future capital gains. All of these losses are permitted to carry forward for an unlimited period.

For income tax purposes distributions paid to shareholders are reported as ordinary income, return of capital, long-term capital gains, or a combination thereof. The tax character of distributions paid for the year ended December 31, 2020 was ordinary income in the amount of approximately $18.7 million with no distributions made from long-term capital gain. No distributions were paid during the period ended December 31, 2019 as the Company had no operations and had no income subject to distribution.

As of December 31, 2020, the components of distributable earnings on a tax basis detailed below differ from the amounts reflected in the Company’s Consolidated Statements of Assets and Liabilities by temporary book or tax differences primarily arising from the tax treatment of costs related to the acquisition of Trinity Capital Holdings and Legacy Funds and deferral of organization costs.


		Year
Ended
	December 31, 2020
Accumulated capital gains/(losses)	$	(7,077)
Other temporary differences		(14,200)
Undistributed ordinary income		1,607
Unrealized appreciation/(depreciation)		(4,966)
Components of distributable earnings	$	(24,636)

The following table sets forth the tax cost basis and the estimated aggregate gross unrealized appreciation and depreciation from investments for federal income tax purposes (in thousands):


	Year
Ended
	December 31, 2020
Tax Cost of Investments	$	498,336

Unrealized appreciation (2)	$	14,879
Unrealized depreciation		(19,845)
Net unrealized/(appreciation) depreciation
reversed related to net realized gains or losses (1)		—
Net unrealized appreciation/(depreciation)
from investments	$	(4,966)

(1) The net unrealized (appreciation) depreciation reversed related to net realized gains or losses represents the unrealized appreciation or depreciation recorded on the related asset at the end of the prior period. Investments were recorded at their fair values in the Formation Transactions on January 16, 2020, therefore no reversal of unrealized appreciation (depreciation) was recorded during the year ended December 31, 2020.

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(2) Certain third parties have rights to 17,485 shares of Nanotherapeutics common stock at a fair value of approximately $0.6 million as of December 31, 2020. The activity related to these shares and the related liability is recorded against unrealized appreciation/(depreciation).

As of December 31, 2020, the components of distributable earnings on a tax basis detailed below differ from the amounts reflected in the Company’s Consolidated Statements of Assets and Liabilities by temporary book or tax differences primarily arising from the treatment of costs related to the acquisition of Trinity Capital Holdings and Legacy Funds and deferral of organizational cost.

In order for the Company not to be subject to federal excise taxes, it must distribute annually an amount at least equal to the sum of (i) 98% of its ordinary income (taking into account certain deferrals and elections), (ii) 98.2% of its net capital gains from the current year and (iii) any undistributed ordinary income and net capital gains from preceding year on which it paid corporate-level U.S. federal income tax. 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. If the Company chooses to do so, this generally would increase expenses and reduce the amount available to be distributed to stockholders. The Company will accrue excise tax on estimated undistributed taxable income as required on an annual basis. For the period ended December 31, 2020, the Company recorded an expense for excise tax of approximately $0.1 million.

Based on the analysis of the Company’s tax position, the Company has no uncertain tax positions that met the recognition or measurement criteria as of December 31, 2020. The Company does not anticipate any significant increase or decrease in unrecognized tax benefits for the next twelve months. All of the Company’s tax returns remain subject to examination by U.S. federal and state tax authorities.

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Note 10. Financial Highlights

We were formed on August 12, 2019 and commenced operations on January 16, 2020. Prior to January 16, 2020, we had no operations, except for matters relating to our formation and organization as a BDC. As a result, there are no significant financial results for comparative purposes. The following presents financial highlights for the year ended December 31, 2020 (in thousands except share and per share information):




	Year
Ended
	December 31, 2020
Per Share Data:
Net asset value, beginning of period (1)	$	14.97

Net investment income (2)		1.29
Net realized and unrealized gains/(losses)
on investments (3)		(0.81)
Costs related to acquisition of Trinity
Capital Holdings and Legacy Funds		(0.82)
Net decrease in net assets resulting
from operations		(0.34)

Offering costs		(0.58)
Other (10)		(0.02)
Equity component of convertible notes		0.03
Distributions		(1.03)
Total increase/(decrease) in net assets		(1.94)

Net asset
value, end of period	$	13.03

Shares outstanding, end of period		18,321,274
Weighted average shares outstanding (2)		18,092,494
Total return based on net asset value (4) (7) (8)		(6.1)	%

Ratio/Supplemental
Data:
Net assets, end of period*	$	238,748
Ratio of total expenses to average
net assets (5)		14.3	%
Ratio of net investment income to average
net assets (5)		10.5	%
Ratio of interest and credit facility
expenses to average net assets (5)		7.6	%
Portfolio turnover rate (6)
(8)		36.5	%
Asset coverage ratio (9)		177.0	%

Rounded to nearest thousand

(1) The net asset value as of January 16, 2020 (commencement of operations) is calculated based on the initial common stock purchase price of $15.00 per share less the accumulated loss of $0.03 per share from August 12, 2019 (the date of inception) through December 31, 2019.

(2) Calculated based upon weighted average shares outstanding for the period from January 16, 2020 (commencement of operations) through December 31, 2020.

(3) Net realized and unrealized gains (losses) on investments include rounding adjustments to reconcile the change in net asset value per share.

(4) Total return based on net asset value is calculated as the change in net asset value per share during the period plus declared distributions per share during the period, divided by the beginning net asset value per share.

(5) Annualized.

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(6) Portfolio turnover rate is calculated using the lesser of year-to-date cash sales/repayments or year-to-date cash purchases over the average of the total investments at fair value.

(7) Total return excluding costs related to acquisition of Trinity Capital Holdings and the Legacy Funds would have been (0.6%).

(8) Not annualized.

(9) Based on outstanding debt of $310.0 million as of December 31, 2020.

(10) Includes the impact of the different share amounts as a result of calculating certain per share data based on the weighted-average basic shares outstanding during the period and certain per share data based on the shares outstanding as of a period end or transaction date.

Senior Securities

Information about the Company’s senior securities (including debt securities and other indebtedness) is shown in the following table as of December 31, 2020. No senior securities were outstanding as of December 31, 2019.


Class and Period	Total Amount Outstanding Exclusive of Treasury Securities (1)		Asset Coverage per Unit (2)		Involuntary Liquidating Preference per Unit (3)	Average Market
Value per Unit (4)
Credit
Facility
December 31, 2020	$	135,000	$	1,770	-	na
December 31, 2019		-		-	-	na

2025 Notes
December 31, 2020	$	125,000	$	1,770	-	na
December 31, 2019		-		-	-	na

Convertible
Notes
December 31, 2020	$	50,000	$	1,770	-	na
December 31, 2019		-		-	-	na

Total
December 31, 2020	$	310,000	$	1,770	-	na
December 31, 2019		-		-	-	na

(1) Total amount of each class of senior securities outstanding at the end of the period presented.

(2) Asset coverage per unit is the ratio of the carrying value of total assets, less all liabilities excluding indebtedness represented by senior securities in this table to the aggregate amount of senior securities representing indebtedness. Asset coverage per unit is express in terms of dollar amounts per $1,000 of indebtedness and is calculated on a consolidated basis.

(3) The amount to which such class of senior security would be entitled upon the Company’s involuntary liquidation in preference to any security junior to it. The “—” in this column indicates information that the SEC expressly does not require to be disclosed for certain types of senior securities.

(4) Not applicable because the senior securities are not registered for public trading.

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Note 11. Related Party Transactions

As of December 31, 2019, the Company had payables to an affiliate of approximately $1.1 million related to organizational and offering cost expenses, which are included in Due to related party on the Consolidated Statements of Assets and Liabilities. The Company repaid these amounts during the quarter ended March 31, 2020.

Through the Formation Transactions, the Company acquired 100% of the equity interests of Trinity Capital Holdings and the Legacy Funds were merged with and into the Company. Members of the Company’s management, including Steven L. Brown, Kyle Brown, Gerald Harder and Ron Kundich, owned 100% of the equity interests in Trinity Capital Holdings and controlling interests in the general partners/managers of the Legacy Funds.

During the year ended December 31, 2020, certain related parties received distributions from the Company relating to their shares held. Refer to “Note 7 – Stockholder’s Equity” for further details on the Company’s Distribution Reinvestment Plan and the distributions declared.

The Company has entered into indemnification agreements with its directors and executive officers. The indemnification agreements are intended to provide the Company’s directors and executive officers the maximum indemnification permitted under Maryland law and the 1940 Act. Each indemnification agreement provides that the Company shall indemnify the director or executive officer who is a party to the agreement, or an “Indemnitee,” including the advancement of legal expenses, if, by reason of his or her corporate status, the Indemnitee is, or is threatened to be, made a party to or a witness in any threatened, pending, or completed proceeding, to the maximum extent permitted by Maryland law and the 1940 Act.

The Company and its executives and directors are covered by Directors and Officers Insurance, with the directors and officers being indemnified by us to the maximum extent permitted by Maryland law subject to the restrictions of the 1940 Act.

Note 12. Selected Quarterly Data (Unaudited)

The following tables set forth certain quarterly financial information for each of the last four quarters, or since the Company began operations. This information was derived from the Company’s unaudited consolidated financial statements. Results for any quarter are not necessarily indicative of results for the full year or for any further quarter.




	Quarter
Ended		Quarter
Ended		Quarter
Ended		Quarter
Ended
	March
31, 2020		June
30, 2020		September
30, 2020		December
31, 2020
Total investment income	$	12,248	$	13,847	$	13,529	$	15,340
Net investment income		5,708		6,761		5,616		5,286
Net increase/(decrease) in net assets
resulting from operations		(35,051)		6,882		12,334		9,723
Net increase/(decrease) in net assets
resulting from Net Investment income per common share	$	0.32	$	0.37	$	0.31	$	0.29
Net increase/(decrease) in net assets
resulting from operations per common share	$	(1.97)	$	0.38	$	0.68	$	0.53

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Note 13. Recent Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”) which requires lessees to recognize on the balance sheet a right-of-use asset, representing its right to use the underlying asset for the lease term, and a lease liability for all leases with terms greater than 12 months. The guidance also requires qualitative and quantitative disclosures designed to assess the amount, timing, and uncertainty of cash flows arising from leases. The standard requires the use of a modified retrospective transition approach, which includes a number of optional practical expedients that entities may elect to apply. The guidance is effective for annual periods beginning after December 15, 2020, and interim periods therein. Early adoption is permitted. The Company adopted ASU 2016-02 effective January 1, 2020. Under ASU 2016-02, the Company evaluates leases to determine if the leases are considered financing or operating leases. The Company currently has one operating lease for office space for which the Company recognized a right-of-use asset and a lease liability for the operating lease obligation included in Other assets and Other liabilities, respectively, in the Consolidated Statements of Assets and Liabilities. Non-lease components (maintenance, property tax, insurance and parking) are not included in the lease cost. The lease expense is presented as a single lease cost that is amortized on a straight-line basis over the life of the lease. Refer to “Note 6 – Commitments and Contingencies” for further discussion regarding the lease obligation.

In March 2020, the FASB issued ASU 2020-04, “ Reference rate reform (Topic 848) - Facilitation of the effects of reference rate reform on financial reporting. ” The amendments in this update provide optional expedients and exceptions for applying U.S. GAAP to certain contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform and became effective upon issuance for all entities. ASU 2020-04 is elective and is effective on March 12, 2020 through December 31, 2022. The Company does not plan on adopting, as it expects that the adoption of this guidance will not have a material impact on its consolidated financial statements.

In May 2020, the SEC adopted rule amendments that will impact the requirement of investment companies, including BDCs, to disclose the financial statements of certain of their portfolio companies or acquired funds (the “Final Rules”). The Final Rules adopted a new definition of “significant subsidiary” set forth in Rule l-02(w)(2) of Regulation S-X under the Securities Act. Rules 3-09 and 4-08(g) of Regulation S-X require investment companies to include separate financial statements or summary financial information, respectively, in such investment company's periodic reports for any portfolio company that meets the definition of “significant subsidiary.” The Final Rules amend the definition of “significant subsidiary” in a manner that is intended to more accurately capture those portfolio companies that are more likely to materially impact the financial condition of an investment company. The Final Rules were effective on January l, 2021, but voluntary compliance was permitted in advance of the effective date. The Company elected to comply with the Final Rules effective June 30, 2020 which did not have a material impact on the consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (“ASU 2020-06”) under which the accounting for convertible instruments will be simplified by removing major separation models required under current GAAP. Accordingly, more convertible instruments will be reported as a single liability or equity with no separate accounting for embedded conversion features. Certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception will be removed and, as a result, more equity contracts will qualify for the scope exception. ASU 2020-06 will also simplify the diluted earnings-per-share calculation in certain areas. ASU 2020-06 will be effective for years beginning after December 31, 2021, including interim periods within those fiscal years. Early adoption will be permitted for fiscal periods beginning after December 15, 2020 (including interim periods within the same fiscal year). The Company will early adopt ASU 2020-06 on January 1, 2021, and does not expect the adoption to materially impact the consolidated financial statements other than no longer separately accounting for the embedded conversion feature.

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Note 14. Subsequent Events

The Company’s management evaluated subsequent events through the date of issuance of the consolidated financial statements included herein. Other than the items below, there have been no subsequent events that occurred during the period that would require recognition or disclosure.

Initial Public Offering

On February 2, 2021, the Company completed its initial public offering of 8,006,291 shares of its common stock at a price of $14.00 per share, inclusive of the underwriters option to purchase additional shares, which was exercised in full. Total net proceeds were approximately $105.4 million. The Company’s shares of common stock began trading on the Nasdaq Global Select Market on January 29, 2021 under the symbol “TRIN.” Proceeds from this offering were primarily used to pay down a portion of existing indebtedness under the Credit Facility.

Credit Facility Paydown

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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

In accordance with Rules 13a-15(b) and 15d-15(b) under the Exchange Act, we, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) as of the end of the period covered by this annual report on Form 10-K and determined that our disclosure controls and procedures are effective as of the end of the period covered by this annual report on Form 10-K.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act). Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 COSO Framework). Based on our evaluation under the framework in Internal Control—Integrated Framework, management concluded that our internal control over financial reporting was effective as of December 31, 2020.

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.

This annual report on Form 10-K does not include an attestation report of the company’s registered public accounting firm pursuant to the rules of the Securities and Exchange Commission.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the year ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

None.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by Item 10 is hereby incorporated by reference from our definitive Proxy Statement relating to our 2021 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission within 120 days following the end of our fiscal year.

The Company has adopted a code of business conduct and ethics that applies to directors, officers and employees. The code of business conduct and ethics is available on the Company’s website at www.ir.trincapinvestment.com/governance/governance-documents. The Company will report any amendments to or waivers of a required provision of the code of business conduct and ethics on the Company’s website or in a Current Report on Form 8-K.

Item 11. Executive Compensation

The information required by Item 11 is hereby incorporated by reference from our definitive Proxy Statement relating to our 2021 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission within 120 days following the end of our fiscal year.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by Item 12 is hereby incorporated by reference from our definitive Proxy Statement relating to our 2021 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission within 120 days following the end of our fiscal year.

Item 13. Certain Relationships and Related Transactions and Director Independence

The information required by Item 13 is hereby incorporated by reference from our definitive Proxy Statement relating to our 2021 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission within 120 days following the end of our fiscal year.

Item 14. Principal Accountant Fees and Services

The information required by Item 14 is hereby incorporated by reference from our definitive Proxy Statement relating to our 2021 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission within 120 days following the end of our fiscal year.

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PART IV

Item 15. Exhibits and Financial Statement Schedules

The following financial statements of the “Company” are filed herewith:

| Report
of Independent Registered Public Accounting Firm | 95 |
| --- | --- |
| Consolidated
Statements of Assets and Liabilities as of December 31, 2020 and December 31, 2019 | 96 |
| Consolidated
Statements of Operations for the Year Ended December 31, 2020 and the period August 12, 2019 (date of inception) to December 31, 2019 | 97 |
| Consolidated
Statements of Changes in Net Assets for the Year Ended December 31, 2020 and the period August 12, 2019 (date of inception) to December
31, 2019 | 98 |
| Consolidated
Statement of Cash Flows for the Year Ended December 31, 2020 and the period August 12, 2019 (date of inception) to December 31, 2019 | 99 |
| Consolidated
Schedule of Investments as of December 31, 2020 | 101 |
| Notes
to Consolidated Financial Statements | 115 |

The following exhibits are filed as part of this annual report on Form 10-K or hereby incorporated by reference to exhibits previously filed with the SEC:

| Exhibit Number | | Description
of Exhibits |
| --- | --- | --- |
| 3.1 | | Articles of Amendment and Restatement
(incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form 10 filed on January 16, 2020). |
| 3.2 | | Bylaws
(incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form 10 filed on January 16, 2020). |
| 4.1 | | Amended
and Restated Registration Rights Agreement, dated December 15, 2020 (Common Stock) (incorporated by reference to Exhibit 10.1 to the Company’s
Current Report on Form 8-K, filed December 16, 2020). |
| 4.2 | | Registration
Rights Agreement, dated January 16, 2020 (Notes) (incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement
on Form 10 filed on January 16, 2020). |
| 4.3 | | Registration
Rights Agreement, dated December 11, 2020 (Convertible Notes) (incorporated by reference to Exhibit 10.1 to the Company’s Current
Report on Form 8-K, filed on December 14, 2020). |
| 4.4 | | Indenture,
dated January 16, 2020, by and between Trinity Capital Inc. and U.S. Bank National Association, as trustee (incorporated by
reference to Exhibit 4.3 to the Company’s Registration Statement on Form 10 filed on January 16, 2020). |
| 4.5 | | First
Supplemental Indenture, dated January 16, 2020, relating to the 7.00% Notes due 2025, by and between Trinity Capital Inc.
and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.4 to the Company’s Registration Statement
on Form 10 filed on January 16, 2020). |
| 4.6 | | Form of
7.00% Note due 2025 (included as part of and incorporated by reference to Exhibit 4.5 hereto) . |
| 4.7 | | Second
Supplemental Indenture, dated December 11, 2020 relating to the 6.00% Convertible Notes due 2025, between Trinity Capital Inc. and U.S.
Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed
on December 14, 2020) . |
| 4.8 | | Form
of 6.00% Convertible Notes due 2025 (included as a part of and incorporated by reference to Exhibit 4.7 hereof). |
| 4.9* | | Description
of Registrant’s Securities |

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| 10.1 | | Distribution
Reinvestment Plan (incorporated by reference to Exhibit 10.11 to the Company’s Registration Statement on Form 10 filed on January
16, 2020). |
| --- | --- | --- |
| 10.2 | | Custody
and Account Agreement, dated January 8, 2020, by and between the Company and Wells Fargo Bank, National Association (incorporated by reference
to Exhibit 10.14 to the Company’s Registration Statement on Form 10 filed on January 16, 2020) . |
| 10.3 | | Credit
Agreement, dated January 8, 2020, with Credit Suisse AG (incorporated by reference to Exhibit 10.1 to the Company’s Registration
Statement on Form 10 filed on January 16, 2020). |
| 10.4 | | First
Amendment to Credit Agreement, dated March 31, 2020, with Credit Suisse AG (incorporated by reference to Exhibit 99(k)(2) to the Company’s
Registration Statement on Form N-2 filed on September 16, 2020). |
| 10.5 | | Second
Amendment to Credit Agreement, dated September 29, 2020, with Credit Suisse AG (incorporated by reference to Exhibit (k)(3) to Pre-Effective
Amendment No. 1 to the Company’s Registration Statement on Form N-2 filed on October 19, 2020). |
| 10.6 | | Sale
and Contribution Agreement, dated January 8, 2020 (incorporated by reference to Exhibit 10.2 to the Company’s Registration Statement
on Form 10 filed on January 16, 2020). |
| 10.7 | | Security
Agreement, dated January 8, 2020 (incorporated by reference to Exhibit 10.3 to the Company’s Registration Statement on Form 10 filed
on January 16, 2020). |
| 10.8 | | Servicing
Agreement, dated January 8, 2020 (incorporated by reference to Exhibit 10.4 to the Company’s Registration Statement on Form 10 filed
on January 16, 2020) . |
| 10.9 | | Custodial
Agreement, dated January 8, 2020 (incorporated by reference to Exhibit 10.5 to the Company’s Registration Statement on Form 10 filed
on January 16, 2020). |
| 10.10 # | | Employment
Offer Letter, dated January 16, 2020, by and between the Company and Steven L. Brown (incorporated by reference to Exhibit 10.6 to the
Company’s Registration Statement on Form 10 filed on January 16, 2020). |
| 10.11 # | | Employment
Offer Letter, dated January 16, 2020, by and between the Company and Kyle Brown (incorporated by reference to Exhibit 10.7 to the Company’s
Registration Statement on Form 10 filed on January 16, 2020). |
| 10.12 # | | Employment
Offer Letter, dated January 16, 2020, by and between the Company and Gerald Harder (incorporated by reference to Exhibit 10.8 to the Company’s
Registration Statement on Form 10 filed on January 16, 2020). |
| 10.13# | | Separation
and General Release Agreement, dated November 26, 2020, by and between the Company and Susan Echard. |
| 10.14 | | Form
of Indemnification Agreement (Directors) (incorporated by reference to Exhibit 10.12 to the Company’s Registration Statement on
Form 10 filed on January 16, 2020). |
| 10.15 | | Form
of Indemnification Agreement (Officers) (incorporated by reference to Exhibit 10.13 to the Company’s Registration Statement on Form
10 filed on January 16, 2020). |
| 10.16 | | Transfer
Agency Agreement and Registrar Services Agreement, dated November 1, 2019, by and between the Company and American Stock Transfer &
Trust Company, LLC (incorporated by reference to exhibit 10.15 to the Company’s Registration Statement on Form 10 filed on January
16, 2020). |
| 21.1 | | List of Subsidiaries |
| | | Trinity Capital Holdings, LLC (Delaware) |
| | | Trinity Funding 1, LLC (Delaware) |
| 24.1 | | Power
of Attorney (included on the signature pages herein) . |
| 31.1 | | Certification
of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as
Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 31.2 | | Certification
of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as
Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 . |
| 32.1 | | Certification
of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002. |
| 32.2* | | Certification
of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002. |

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Filed herewith.

Management contract or compensatory plan or arrangement.

Item 16. Form 10-K Summary

Not applicable.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	TRINITY
CAPITAL INC.

Dated: March 4, 2021	By:	/s/ Steven L. Brown
		Steven L. Brown
		Chairman and Chief Executive Officer
		(Principal Executive Officer)



Dated: March 4, 2021	By:	/s/ David Lund
		David Lund
		Chief Financial Officer and Treasurer
		(Principal Financial and Accounting
Officer)

Each person whose signature appears below constitutes and appoints Steven L. Brown and David Lund, and each of them, such person’s true and lawful attorney-in-act and agent, with full power of substitution and revocation, for such person and in such person’s name, place and stead, in any and all capacities, to sign one or more Annual Reports on Form 10-K for the year ended December 31, 2020, and any and all amendments thereto, and to file same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as such person might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents and each of them, or their or his substitutes, may lawfully do or cause to be done hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant in the capacities on March 4, 2021.


/s/ Steven L. Brown		/s/ Kyle Brown
Chairman and Chief Executive Officer		President and Chief Investment Officer

/s/ Richard R. Ward		/s/ Michael E. Zacharia
Director		Director

/s/ Edmund G. Zito		/s/ Ronald E. Estes
Director		Director

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Trinity Capital Inc. Prospectus 2021

32127_prs_2021-03-08_e725fe1d-e526-41d8-98a3-6477a9fa71da.zip

Management contract or compensatory plan or arrangement.

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Trinity Capital Inc. — Prospectus 2021

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Management contract or compensatory plan or arrangement.

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