UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C. 20549

 FORM 10-K

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

 For the fiscal year ended December 31, 2023

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

 Commission File Number: 000-56126

 (Exact name of registrant as specified in its charter)

 Maryland

 84-3665200

 (State or Other Jurisdiction of

Incorporation or Organization)

 (I.R.S. Employer

Identification No.)

 1900 Shawnee Mission Parkway, Suite 315,
 Mission Woods, KS

 66205

 (Address of Principal Executive Offices)

 (Zip Code)

 (816) 994-3200

 (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

 PSBD

 New York Stock Exchange

 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 Section 15(d) of the Act. Yes No

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
past 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

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

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.

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.

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

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

the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
No

 The aggregate market value of the common stock held by non-affiliates
of the registrant as of June 30, 2023 has not been provided because trading of the registrant's common stock on The New York Stock
Exchange did not commence until January 18, 2024. There were 32,552,794 issued and outstanding shares of the registrant's common
stock, $0.001 par value per share, on February 28, 2024.

 Documents Incorporated by Reference

 Page

 Item 1.

 Business

 Item 1A.

 Risk Factors

 Item 1B.

 Unresolved Staff Comments

 Item 1C.

 Cybersecurity

 Item 2.

 Properties

 Item 3.

 Legal Proceedings

 Item 4.

 Mine Safety Disclosures

 Item 5.

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

 Item 6.

 [Reserved]

 Item 7.

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item 7A.

 Quantitative and Qualitative Disclosures About Market Risk

 Item 8.

 Consolidated Financial Statements and Supplementary Data

 Item 9.

 Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

 Item 9A.

 Controls and Procedures

 Item 9B.

 Other Information

 Item 9C.

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Item 10.

 Directors, Executive Officers and Corporate Governance

 Item 11.

 Executive Compensation

 Item 12.

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item 13.

 Certain Relationships and Related Transactions, and Director Independence

 Item 14.

 Principal Accounting Fees and Services

 Item 15.

 Exhibits, Consolidated Financial Statements, and Schedules

 Item 16.

 Form 10-K Summary

 SIGNATURES

 i

 Unless indicated otherwise
in this Annual Report on Form 10-K or the context requires otherwise, the terms:

 "we," "us," "our," and the "Company" refer to Palmer Square Capital BDC Inc.;

 "Palmer Square" or "PSCM" refers collectively to Palmer Square Capital Management LLC and its subsidiaries and other affiliated entities;

 "Investment Advisor" refers to Palmer Square BDC Advisor LLC, a majority-owned subsidiary of Palmer Square and our investment adviser;

 "Administrator" refers to the Investment Advisor, in its capacity as our administrator; and

 "stockholders" refers to holders of our common stock, par value $0.001 per share.

 Item 1. Business

 Overview

 We are a financial services
company that primarily lends to and invests in corporate debt securities of companies, including small to large private U.S. companies.
We were organized as a Maryland corporation on August 26, 2019 and are structured as an externally managed, non-diversified closed-end
management investment company. We have elected to be regulated as a business development company ("BDC") under the Investment
Company Act of 1940, as amended (the "1940 Act"). Beginning with our taxable year ended December 31, 2020, we have elected
to be treated as a regulated investment company (a "RIC") under Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"), and we expect to qualify as a RIC annually.

 On January 22, 2024, we completed
our initial public offering (the "IPO") issuing 5,450,000 shares of common stock, par value $0.001, at a public offering price
of $16.45 per share. Our common stock began trading on the New York Stock Exchange under the symbol "PSBD" on January 18,
2024.

 We are externally managed by the Investment Advisor, an investment
adviser that is registered with the Securities and Exchange Commission ("SEC") under the Investment Advisers Act of 1940 (the
"Advisers Act"), pursuant to an amended and restated investment advisory agreement between us and the Investment Advisor (the
"Advisory Agreement"). Subject to the supervision of our Board of Directors (the "Board"), a majority of which
is made up of directors that are not "interested persons" as defined in Section 2(a)(19) of the 1940 Act (the "Independent
Directors"), our Investment Advisor manages our day-to-day operations and provides us with investment advisory and management services
and certain administrative services. The Investment Advisor, in its capacity as Administrator, provides the administrative services necessary
for us to operate pursuant to an administration agreement between us and the Administrator (the "Administration Agreement").
Our Investment Advisor is a majority-owned subsidiary of PSCM, which is a privately-held firm specializing in global alternative (non-traditional)
investments with a total return orientation.

 Our investment objective is
to maximize total return, comprised of current income and capital appreciation. Our current investment focus is guided by two strategies
that facilitate our investment opportunities and core competencies: (1) investing in corporate debt securities and, to a lesser extent,
(2) investing in collateralized loan obligation ("CLO") structured credit funds that typically own corporate debt securities,
including the equity and junior debt tranches of CLOs. To a limited extent, we may enter into derivatives transactions, which may utilize
instruments such as forward contracts, currency options and interest rate swaps, caps, collars and floors to seek to hedge against fluctuations
in the relative values of our portfolio positions from changes in currency exchange rates and market interest rates or to earn income
and enhance our total returns. We may also receive warrants or other rights to acquire equity or similar securities or otherwise purchase
such securities in connection with making a debt investment in a company. We will continue to evaluate other investment strategies in
the ordinary course of business with no specific top-down allocation to any single investment strategy.

 We have two wholly-owned subsidiaries,
Palmer Square BDC Funding I LLC ("PS BDC Funding") and Palmer Square BDC Funding II LLC ("PS BDC Funding II"),
that were established in connection with our obtaining credit facilities from third party lenders. The accounts of these subsidiaries
are consolidated in the Company's financial statements. We "look through" such subsidiaries to determine our compliance
with the provisions of the 1940 Act, including provisions governing capital structure and leverage, and such subsidiaries comply with
such provisions on an aggregate basis with us (Section 18 of the 1940 Act).

 Our Portfolio

 As of December 31, 2023, we had 227 debt and equity investments in
191 portfolio companies and we had total assets of approximately $1.0 billion.

 Listed below are our top ten portfolio companies and industries (excluding
short-term investments) represented as a percentage of total assets as of December 31, 2023:

 Portfolio Company

 2023

 Idera, Inc.

 1.3
 %

 Aptean Inc

 1.2
 %

 Vision Solutions, Inc.

 1.2
 %

 Minotaur Acquisition, Inc.

 1.1
 %

 Gainwell Acquisition Corp.

 1.0
 %

 Infinite Bidco, LLC

 1.0
 %

 Acrisure, LLC

 1.0
 %

 Delta Topco, Inc.

 0.9
 %

 Barracuda Networks, Inc.

 0.9
 %

 Ivanti Software, Inc.

 0.9
 %

 2023

 13.9
 %

 9.2
 %

 7.1
 %

 6.6
 %

 5.8
 %

 4.2
 %

 4.1
 %

 Media

 3.7
 %

 3.4
 %

 2.9
 %

 Listed below are our top ten portfolio companies and industries (excluding
short-term investments) represented as a percentage of total assets as of December 31, 2022:

 Portfolio Company

 2022

 Idera, Inc.

 1.3
 %

 Peraton Corp.

 1.2
 %

 Inmar, Inc.

 1.1
 %

 Minotaur Acquisition, Inc.

 1.1
 %

 Vision Solutions, Inc.

 1.0
 %

 Acrisure, LLC

 1.0
 %

 Barracuda Networks, Inc.

 0.9
 %

 Moneygram International, Inc.

 0.9
 %

 Micro Holding Corp.

 0.9
 %

 Wilsonart LLC

 0.9
 %

 2022

 12.3
 %

 9.4
 %

 8.0
 %

 5.7
 %

 5.6
 %

 3.7
 %

 3.6
 %

 3.1
 %

 Media

 3.1
 %

 2.7
 %

 The Investment Advisor

 The Investment Advisor serves as our investment adviser pursuant to
the Advisory Agreement and manages our day-to-day operations and provides us with investment advisory and management services and certain
administrative services. The investment team (the "Investment Team") of our Investment Advisor is responsible for identifying
investment opportunities, conducting research and due diligence on prospective investments, structuring our investments and monitoring
and servicing our investments. As of December 31, 2023, the Investment Team was comprised of 28 investment professionals, all of whom
dedicate a substantial portion of their time to the Company. In addition, the team has eight dedicated operations professionals. The Investment
Advisor believes that it has experienced support personnel, including individuals with expertise in risk management, legal, accounting,
tax, information technology and compliance, among others.

 The Investment Team employs a blend of top-down and granular, bottom-up
fundamental credit analysis. The senior members of the Investment Team have been actively involved in the alternative credit investing
market for an average of 22 years and have built strong relationships with private equity sponsors, banks and financial intermediaries.
The Investment Advisor has an investment committee (the "Investment Committee") comprised of four members that is responsible
for approving all of our investments and is responsible for the day-to-day management of the portfolio. See " Item 1. Business—Investment
Committee " below for a discussion of the Investment Committee.

 The Investment Advisor has
entered into a Resource Sharing Agreement (the "Resource Sharing Agreement") with PSCM, pursuant to which PSCM provides the
Investment Advisor with access to the resources of PSCM, including the Investment Team, so as to enable the Investment Advisor to fulfill
its obligations under the Advisory Agreement. Through the Resource Sharing Agreement, the Investment Advisor capitalizes on the significant
deal origination, credit underwriting, due diligence, investment structuring, execution, portfolio management and monitoring experience
of PSCM's investment professionals.

 Palmer Square Capital Management

 PSCM is a Delaware limited liability company formed in 2009 and had
approximately $29.5 billion in assets under management as of December 31, 2023 with approximately $3.4 billion in assets under management
in opportunistic strategies (which includes the Company), approximately $3.4 billion in assets under management in income/short duration
strategies and approximately $22.7 billion in assets under management in private credit/structured credit issuance strategies. PSCM and
its affiliates, including the Investment Advisor, manage portfolios of both corporate credit and structured credit as well as diverse
strategies designed with the intent to achieve high risk-adjusted returns over market cycles. We believe PSCM's experience in analyzing
companies and investment structures provides a sustainable competitive advantage over other firms. PSCM is 100% management owned and is
led by Christopher D. Long and Angie K. Long. The firm is an SEC registered investment adviser.

 Investment Advisory Agreement

 Subject to the overall supervision
of our Board and in accordance with the 1940 Act, the Investment Advisor manages our day-to-day operations and provides investment advisory
services to us. Under the terms of the Advisory Agreement, our Investment Advisor:

 determines the composition of our portfolio, the nature and timing of the changes to our portfolio and the manner of implementing such changes;

 identifies, evaluates and negotiates the structure of the investments we make;

 performs due diligence on prospective portfolio companies;

 executes, closes, services and monitors the investments we make;

 determines the securities and other assets that we purchase, retain or sell; and

 provides us with such other investment advisory, research and related services as we may, from time to time, reasonably require for the investment of our funds.

 Pursuant to the Advisory Agreement,
we pay the Investment Advisor a fee for its investment advisory and management services consisting of two components—a base management
fee and, subsequent to the IPO, an incentive fee (the "Income Incentive Fee"). The cost of both the base management fee and,
subsequent to the IPO, the Income Incentive Fee, is ultimately borne by our stockholders.

 Base Management Fee

 In return for providing management
services to the Company, the Company pays the Investment Advisor a base management fee. Upon completion of the IPO, the base management
fee is calculated and paid quarterly at an annual rate of 1.75% of the average value of the weighted average (based on the number of shares
outstanding each day in the quarter) of the Company's total net assets at the end of the two most recently completed calendar quarters.
The base management fee for any partial quarter will be pro-rated based on the number of days actually elapsed in that quarter relative
to the total number of days in such quarter.

 Prior to the IPO, the base
management fee was 2.00% of the average value of the weighted average (based on the number of shares outstanding each day in the quarter)
of the Company's total net assets at the end of the two most recently completed calendar quarters. The Investment Advisor, however,
during any period prior to the IPO, agreed to waive its right to receive management fees in excess of an annual rate of 1.75% of the average
value of the weighted average total net assets at the end of each of the Company's two most recently completed calendar quarters.
The Investment Advisor will not be permitted to recoup any base management fees waived for any period of time prior to the IPO.

 Incentive Fee

 Pursuant to the Advisory Agreement,
the Investment Advisor is not entitled to an incentive fee prior to the IPO because the Advisory Agreement provides that no incentive
fee is payable prior to the IPO. Effective upon completion of the IPO, the Investment Advisor is entitled to the Income Incentive Fee
based on the Company's pre-incentive fee net investment income for the then most recently completed calendar quarter, as adjusted
downward (but not upward) if over the most recently completed and eleven preceding calendar quarters since the IPO (or if shorter, the
number of calendar quarters since the IPO) (each such period is referred to herein as the "Trailing Twelve Quarters") aggregate
net realized losses on the Company's investments exceed the Company's aggregate net investment income over the same period,
excluding the most recently completed quarter, as described in more detail below. In this regard, if the Company's net realized
losses over the Trailing Twelve Quarters since the IPO (or if shorter, the number of calendar quarters since the IPO) are greater than
the Company's net investment income over the same period, excluding the most recently completed quarter, then the pre-incentive
fee net income used in the calculation of the Income Incentive Fee would be subject to a downward adjustment. The amount of the adjustment
would be equal to the amount by which such net realized losses exceed such net investment income. On the other hand, if the Company's
net investment income over the Trailing Twelve Quarters since the IPO (or if shorter, the number of calendar quarters since the IPO) is
equal to or greater than the Company's net realized losses over the same period, excluding the most recently completed quarter,
then no adjustment to pre-incentive fee net investment income would be made. The Income Incentive Fee will be calculated and payable quarterly
in arrears commencing with the first calendar quarter following the IPO. The Company will pay the Investment Advisor an Income Incentive
Fee with respect to its "adjusted net investment income" in each calendar quarter as follows:

 no Income Incentive Fee in any calendar quarter in which the Company's "adjusted net investment income" does not exceed an amount equal to a "hurdle rate" of 1.5% per quarter (6% annualized) of the Company's total net assets at the end of that quarter (the "Hurdle Amount");

 100% of the Company's "adjusted net investment income" with respect to that portion of such "adjusted net investment income," if any, that exceeds the Hurdle Amount but is less than or equal to an amount (the "Catch-Up Amount") determined on a quarterly basis by multiplying 1.6875% by the Company's total net asset value for the immediately preceding calendar quarter. The Catch-Up Amount is intended to provide the Investment Advisor with an incentive fee of 12.5% on all of the Company's "adjusted net investment income" when the Company's "adjusted net investment income" reaches the Catch-Up Amount in any calendar quarter; and

 for any calendar quarter in which the Company's "adjusted net investment income" exceeds the Catch-Up Amount, the Income Incentive Fee shall equal 12.5% of the amount of the Company's "adjusted net investment income" for the calendar quarter.

 "Adjusted net investment
income" means the Company's "pre-incentive fee net investment income" during the then most recently completed
calendar quarter minus the difference, if positive, between (i) the Company's "net realized losses" over the then Trailing
Twelve Quarters (or if shorter, the number of calendar quarters that have occurred since the IPO) and (ii) the Company's "net
investment income" over the Trailing Twelve Quarters (excluding the then most recently completed calendar quarter). No adjustment
(downward or upward) will be made to "pre-incentive fee net investment income" if the difference between clause (i) minus
clause (ii) is zero or negative.

 "Pre-incentive fee net
investment income" means interest income, dividend income and any other income (including any other fees such as commitment, origination,
structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies but excluding fees for providing
managerial assistance) accrued during the calendar quarter, minus operating expenses for the quarter (including the base management fee,
any expenses payable under the Administration Agreement, and any interest expense and dividends paid on any outstanding preferred stock,
but excluding the Income Incentive Fee). "Pre-incentive fee net investment income" includes, in the case of investments with
a deferred interest feature such as market discount, original issue discount ("OID"), debt instruments with payment-in-kind
("PIK") interest, preferred stock with PIK dividends and zero-coupon securities, accrued income that the Company has not yet
received in cash.

 "Net realized losses"
in respect of a particular period means the difference, if positive, between (i) the aggregate realized capital losses on the Company's
investments in such period and (ii) the aggregate realized capital gains on the Company's investments in such period. As noted above,
"net realized losses" will not by itself cause an upward adjustment to adjusted net investment income. "Net investment
income" in respect of the particular period means interest income, dividend income and any other income (including any other fees
such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies
but excluding fees for providing managerial assistance) accrued during the particular period, minus operating expenses for the particular
period (including the base management fee, the Income Incentive Fee, any expenses payable under the Administration Agreement, and any
interest expense and dividends paid on any outstanding preferred stock). "Net investment income" includes, in the case of
investments with a deferred interest feature such as market discount, OID, debt instruments with PIK interest, preferred stock with PIK
dividends and zero-coupon securities, accrued income that the Company has not yet received in cash.

 The Income Incentive Fee amount,
or the calculations pertaining thereto, as appropriate, will be pro-rated for any period less than a full calendar quarter.

 Effective upon completion
of the IPO, the Investment Advisor has also agreed to use the most recently completed and three preceding calendar quarters (each such
period is referred to herein as the "Trailing Four Quarters") in addition to the Trailing Twelve Quarters to compute the incentive
fee payable to it by the Company. In conjunction therewith, the Investment Advisor has agreed to calculate the incentive fee based on
the Trailing Twelve Quarters and the Trailing Four Quarters and in the event that any Trailing Four Quarter period calculation produces
a lower incentive fee as compared to the applicable Trailing Twelve Quarter period calculation for any quarterly period, then the Trailing
Four Quarter Period will be used in connection with the calculation of the incentive fee payable to the Investment Advisor by the Company
for such quarter.

 The following is a graphical
representation of the calculation of the Income Incentive Fee based on "adjusted net investment income" that is now in place
subsequent to the IPO:

 Example 1—Income Incentive Fee:

 Assumptions

 Hurdle rate (1) = 1.5%

 Base management fee (2) = 0.4375%

 Other expenses (legal, accounting, custodian, transfer agent, etc.) (3) = 0.20%

 Alternative 1 - The Company is below the hurdle

 Additional Assumptions

 Investment income (including interest, dividends, fees, etc.) =
1.20%

 Pre-incentive fee net investment income (investment income —
(base management fee + other expenses)) = 0.5625%

 Net realized losses (realized capital losses — realized capital gains) = 0.00% (4)

 Adjusted net investment income (pre-incentive fee net investment income
— ([ if positive ] (net realized losses - net investment income))) = 0.5625% (5)

 Adjusted net investment income does not exceed
the hurdle rate, therefore there is no Income Incentive Fee.

 Alternative 2 - The Company exceeds the hurdle

 Additional Assumptions

 Investment income (including interest, dividends, fees, etc.) = 2.30%

 Pre-incentive fee net investment income (investment income —
(base management fee + other expenses)) = 1.6625%

 Net realized losses (realized capital losses — realized capital gains) = 0.00% (4)

 Adjusted net investment income (pre-incentive fee net investment income — ([ if positive ] (net realized losses - net investment income))) = 1.6625% (5)

 Adjusted net investment income exceeds hurdle
rate, therefore there is an Income Incentive Fee.

 Income Incentive
Fee

 = 100% "Catch-Up" + the
greater of 0% AND (12.5% (adjusted net investment income — 1.6875%)

 = (100% (1.6625% - 1.5000%)) + 0%

 = 100% 0.1625%

 = 0.1625%

 (1)

 Represents a quarter of the 6.0% annualized hurdle rate.

 (2)

 Represents a quarter of the 1.75% annualized base management fee.

 (3)

 Excludes offering expenses.

 (4)

 The calculation of "realized capital losses" and "realized
capital gains" are amounts over the twelve calendar quarters immediately preceding the payment date.

 (5)

 If the amount of net realized losses over the Trailing Twelve Quarters
preceding the payment date (or, alternatively, the Trailing Four Quarters preceding the payment date) exceeds the amount of net investment
income over the same period, excluding the most recently completed quarter, then the amount of adjusted net investment income is reduced
by that amount. Otherwise, the amount of adjusted net investment income is not changed.

 Alternative 3 - The Company exceeds the catch-up

 Additional Assumptions

 Investment income (including interest, dividends, fees, etc.) = 2.70%

 Pre-incentive fee net investment income (investment income - (base management fee + other expenses)) = 2.0625%

 Net realized losses (realized capital losses — realized capital gains) = 0.00% (4)

 Adjusted net investment income (pre-incentive fee net investment income — ([ if positive ] (net realized losses - net investment income))) = 2.0625% (5)

 Adjusted net investment income exceeds hurdle
rate, therefore there is an Income Incentive Fee.

 Income Incentive Fee

 = 100% "Catch-Up" + the
greater of 0% AND (12.5% (adjusted net investment income — 1.6875%)

 = (100% (1.6875% - 1.5000%)) + (12.5%
 (2.0625% - 1.6875%))

 = 0.1875% + (12.5%
0.3750%)

 = 0.1875% + 0.0469%

 = 0.2344%

 Alternative 4 - The Company does not exceed
the hurdle due to net realized losses

 Additional Assumptions

 Investment income (including interest, dividends, fees, etc.) = 2.30%

 Pre-incentive fee net investment income (investment income — (base management fee + other expenses)) = 1.6625%

 Net realized losses (realized capital losses — realized capital gains) = 9.00% (4)

 Adjusted net investment income (pre-incentive fee net investment income — ([ if positive ] (net realized losses - net investment income))) (5)(6)

 = 1.6625% - (9.00% - 8.00%)

 = 1.6625% - 1.00%

 = 0.6625%

 Adjusted net investment income does not exceed
the hurdle rate, therefore there is no Income Incentive Fee.

 (4)

 The calculation of "realized capital losses" and "realized capital gains" are amounts over the twelve calendar quarters immediately preceding the payment date.

 (5)

 If the amount of net realized losses over the Trailing Twelve Quarters preceding the payment date (or, alternatively, the Trailing Four Quarters preceding the payment date) exceeds the amount of net investment income over the same period, excluding the most recently completed quarter, then the amount of adjusted net investment income is reduced by that amount. Otherwise, the amount of adjusted net investment income is not changed.

 (6)

 The example assumes 8.00% net investment income over the twelve calendar quarters preceding the most recently completed quarter.

 Payment of Our Expenses

 All professionals of the Investment
Advisor, when and to the extent engaged in providing investment advisory and management services to us, and the compensation and routine
overhead expenses of personnel allocable to these services to us, are provided and paid for by the Investment Advisor and not by us. We
bear all other out-of-pocket costs and expenses of our operations and transactions.

 Duration and Termination

 The Advisory Agreement was
approved by the Board on November 13, 2019 for an initial two-year term. Unless terminated earlier as described below, the Advisory Agreement
will remain in effect from year to year if approved annually by our Board or by the affirmative vote of the holders of a majority of our
outstanding voting securities, and, in either case, if also approved by a majority of our Independent Directors. At a meeting held on
March 10, 2022, our Board approved an amended and restated Advisory Agreement, to be effective upon completion of the IPO. Our Board most
recently determined to re-approve the Advisory Agreement for an additional one-year term ending January 13, 2025 at a meeting held on
November 9, 2023. The Advisory Agreement automatically terminates in the event of its assignment, as defined in the 1940 Act, by the Investment
Advisor and may be terminated by either party without penalty upon not less than 60 days' written notice to the other. The holders
of a majority of our outstanding voting securities may also terminate the Advisory Agreement without penalty upon 60 days' written
notice.

 The Advisory Agreement provides
that, absent criminal conduct, willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of the
reckless disregard of its duties and obligations under the Advisory Agreement, the Investment Advisor and its professionals and any other
person or entity affiliated with it are entitled to indemnification from us for any damages, liabilities, costs and expenses (including
reasonable attorneys' fees and amounts reasonably paid in settlement) arising from the rendering of our Investment Advisor's
services under the Advisory Agreement or otherwise as our investment adviser.

 Administration Agreement

 The Investment Advisor, in
its capacity as Administrator, provides the administrative services necessary for us to operate pursuant to an administration agreement
between us and the Administrator (the "Administration Agreement"). Pursuant to the Administration Agreement, the Administrator
furnishes office facilities and equipment and provides clerical, bookkeeping, compliance, recordkeeping and other administrative services
at such facilities. Under the Administration Agreement, the Administrator performs, or oversees the performance of, required administrative
services, which include being responsible for the financial and other records that the Company is required to maintain and preparing reports
to stockholders and reports and other materials filed with the SEC. In addition, the Administrator assists the Company in determining
and publishing the Company's net asset value, overseeing the preparation and filing of tax returns and the printing and dissemination
of reports and other materials to stockholders, and generally overseeing the payment of expenses and the performance of administrative
and professional services rendered to the Company by others. Under the Administration Agreement, the Administrator also provides managerial
assistance on the Company's behalf to those portfolio companies that have accepted the offer to provide such assistance.

 Under the Administration Agreement,
the Company reimburses the Administrator based upon its allocable portion of the Administrator's overhead (including rent) in performing
its obligations under the Administration Agreement, including rent, the fees and expenses associated with performing compliance functions
and the Company's allocable portion of the cost of its officers (including the Company's Chief Financial Officer and Chief
Compliance Officer), and any of their respective staff who provide services to the Company, operations staff who provide services to the
Company, and internal audit staff, if any, to the extent internal audit performs a role in the Company's Sarbanes-Oxley internal
control assessment. In addition, if requested to provide managerial assistance to portfolio companies, the Administrator is reimbursed
based on the services provided. The Administration Agreement has an initial term of two years and may be renewed with the approval of
the Board. Our Board most recently determined to re-approve the Administration Agreement for an additional one-year term ending January
13, 2025 at a meeting held on November 9, 2023. The Administration Agreement may be terminated by either party without penalty upon 60
days' written notice to the other party. To the extent that the Administrator outsources any of its functions, the Company pays
the fees associated with such functions on a direct basis without any incremental profit to the Administrator.

 In addition, the Administrator has also entered into an agreement (the
"Sub-Administration Agreement") to delegate certain administrative functions to U.S. Bancorp Fund Services, LLC (the "Sub-Administrator").
The Company has also engaged Equiniti Trust Company, LLC or its affiliates ("Equiniti") directly to serve as transfer agent,
registrar and dividend disbursing agent and engaged U.S. Bank or its affiliates directly to serve as custodian. Prior to the Company's
engagement of Equiniti upon the closing of the IPO, U.S. Bank served as the Company's transfer agent, distribution paying agent and registrar.

 Market Opportunity

 The Investment Team believes
that existing market conditions, including those set forth below, have combined to create an attractive investment environment for us:

 Large Addressable Market
Opportunity. Macro volatility resulting from geopolitical tensions, inflationary pressures and rising interest rates has led to increased
opportunities in the secondary loan market, in addition to presenting higher yielding opportunities in the private credit markets. As
of the date of this report, we believe the pipeline for the primary loan market is building as debt capital markets have become more active
in the past few months. In addition, we also believe demand for floating rate loans has remained strong due to the meaningful increase
in yields.

 Risk Adjusted Returns.
Broadly-syndicated fixed and floating rate loans and corporate debt provides an opportunity set that the Investment Team believes offers
an attractive, risk-adjusted return, including through NAV growth from current porfolio market price improvement and total return opportunities
for broadly syndicated loans. Specifically, the Investment Team believes it can mitigate risk and achieve our investment objective by:
(i) seeking the best relative value, which may equate to buying new loans or other corporate debt issuances at a discount or purchasing
in the secondary market, and (ii) seeking to buy loans or other corporate debt issuances that the Investment Team believes have strong
fundamentals and low default risk and are capable of withstanding significant downward pricing pressure.

 Expansion of Corporate
Debt Market. The corporate debt market segment on which the Investment Team focuses is industry diverse and large, and includes small
to large U.S. companies. In addition, we believe that private equity sponsors have a large pool of uninvested private equity capital.
The Investment Team believes private equity firms are poised to deploy meaningful amounts of capital, thus creating ongoing investment
opportunities for private lenders such as us.

 Regulatory Environment
and Opportunity for Alternative Lenders. Traditional banks have reduced their lending activities to smaller private companies in recent
years and bank stakeholders, including shareholders, lenders and regulators, continue to exert pressure to contain the amount of these
types of assets held on bank balance sheets. Examples of this include continued investor focus on the amount of assets whose fair value
cannot be determined by using observable measures, or "Level 3 assets," held on bank balance sheets. As a result, of decreased
lending by banks to smaller private companies, the Investment Team believes there are increased opportunities for alternative lenders
such as us.

 CLO Equity and Debt.
The Investment Team believes that CLO equity and debt has been a tremendous source of returns for investors historically and has the potential
to offer investors high cash on cash returns with low credit risk and low correlation to traditional assets classes. Because CLO securities
are floating rate instruments designed to mitigate interest rate sensitivity, investors may not directly suffer the same adverse effects
that other asset classes may experience due to rising interest rates. The Investment Team has a strong track record of investing in CLO
equity and debt, and believes CLO investments continue to offer attractive relative value.

 Financing Arrangements

 Bank of America Credit Facility

 On February 18, 2020, the
Company, through a special purpose wholly-owned subsidiary, PS BDC Funding (together with the Company, the "Borrowers") entered
into a Credit Agreement (the "Credit Agreement") with certain financial institutions as lenders ("Lenders"), Bank
of America, N.A. as the administrative agent ("BofA N.A.") and BofA Securities, Inc. ("BofA Securities"), as Lead
Arranger and Sole Book Manager, pursuant to which the Lenders agreed to provide the Company with a revolving line of credit (the "BoA
Credit Facility").

 Under the BoA Credit Facility, which matures on February 18, 2025,
the Lenders have agreed to extend credit to PS BDC Funding in an aggregate amount up to the Commitment (as defined in the Credit Agreement)
amount. The Commitment amount for the BoA Credit Facility is currently $725 million. The Borrowers' ability to draw under the BoA
Credit Facility is scheduled to terminate on February 11, 2025. All amounts outstanding under the BoA Credit Facility are required to
be repaid by February 18, 2025.

 The loans under the BoA Credit
Facility may be base rate loans or Secured Overnight Financing Rate ("SOFR") loans. The base rate loans will bear interest
at the base rate plus 1.40%, and the SOFR loans will bear interest at 1-month SOFR plus 1.40% or 3-month SOFR plus 1.45%. The "base
rate" will be equal to the highest of (a) the federal funds rate plus 0.50%, (b) the prime rate, and (c) 1-month or 3-month SOFR
plus 0.10%. The Credit Agreement includes fallback language in the event that SOFR becomes unavailable. Interest pursuant to base rate
loans is payable quarterly in arrears, and interest pursuant to SOFR loans is payable either quarterly or monthly, as specified by the
Borrowers in a loan notice pertaining thereto. The Credit Agreement requires the payment of a commitment fee of 0.50% for unused Commitments
until the four-month anniversary of the Second Amendment to the Credit Agreement. Thereafter, the commitment fee is 0.50% on unused Commitments
up to 30% of the BoA Credit Facility, and 1.30% on unused Commitments in excess of 30% of the BoA Credit Facility. Such fee is payable
quarterly in arrears. The advance rate for PS BDC Funding's Eligible Collateral Assets ranges from 40% for Second Lien Bank Loans
to 70% for First Lien Bank Loans that are B Assets to 100% for Cash (excluding Excluded Amounts) (as each such term is defined in the
Credit Agreement).

 PS BDC Funding has pledged
all of its assets to BofA N.A., in its capacity as Administrative Agent, to secure its obligations under the BoA Credit Facility. Both
the Company and PS BDC Funding have made customary representations and warranties and are required to comply with various covenants, reporting
requirements, and other customary requirements for similar credit facilities. Borrowing under the BoA Credit Facility is subject to the
leverage restrictions contained in the 1940 Act and PS BDC Funding complies with 1940 Act provisions relating to affiliated transactions
and custody (Section 17, as modified by Section 57, of the 1940 Act). The custodian of the assets pledged to BofA N.A. pursuant to the
BoA Credit Facility is U.S. Bank National Administration. The obligations under the Credit Agreement may be accelerated upon the occurrence
of an event of default under the Credit Agreement, including in the event of a change of control of PS BDC Funding or if the Investment
Advisor ceases to serve as investment adviser to the Company.

 As of December 31, 2023, we
had approximately $504.0 million principal outstanding and $221.0 million of available Commitments under the BoA Credit Facility, and
PS BDC Funding was in compliance with the applicable covenants in the BoA Credit Facility on such date.

 Wells Fargo Credit Facility

 On December 18, 2020, the
Company, through a special purpose wholly-owned subsidiary, PS BDC Funding II (together with the Company, the "WF Borrowers")
entered into a Loan and Security Agreement (the "Loan Agreement") with certain financial institutions as lenders ("WF
Lenders"), Wells Fargo Bank, National Association as the administrative agent ("WFB") and U.S. Bank National Association
("U.S. Bank"), as Collateral Agent and Custodian, pursuant to which the WF Lenders agreed to provide the Company with a line
of credit (the "WF Credit Facility").

 On December 18, 2023, the
Company entered into an amendment to the WF Credit Facility (the "WF Credit Facility Fourth Amendment") that amends the WF
Credit Facility to, among other things: (i) increase the amount available for borrowing under the WF Credit Facility from $150,000,000
to $175,000,000, (ii) extend the facility maturity date from December 18, 2025 to December 18, 2028 and (iii) extend the reinvestment
period from December 18, 2023 to December 18, 2026 (subject to other provisions of the WF Credit Facility).

 The loans under the WF Credit
Facility may be Broadly Syndicated Loans or Middle Market Loans and will bear interest at Daily Simple SOFR, or base rate (to the extent
Daily Simple SOFR is unavailable), plus 2.50%, with an interest rate floor of 0.0%. The "base rate" will be equal to the highest
of (a) the federal funds rate plus 0.50% and (b) the prime rate. The Loan Agreement includes fallback language in the event that Daily
Simple SOFR becomes unavailable. Interest is payable quarterly, as determined by the WFB as the administrative agent. Following an amendment
to the WF Credit Facility on October 13, 2021, the Loan Agreement requires the payment of a non-usage fee of (x) during the first thirteen
months following the closing of the WF Credit Facility, 0.50% multiplied by daily unused Facility Amounts, (y) between thirteen and sixteen
months following the closing of the WF Credit Facility, 0.50% multiplied by the lesser of (1) daily unused Facility Amounts and (2) 50%
of the Facility Amount plus 2.00% multiplied by the greater of (i) the difference between the daily unused Facility Amount and 50% of
the Facility Amount and (ii) zero, and, (z) thereafter, 0.50% multiplied by the lesser of (1) daily unused Facility Amounts and (2) 20%
of the Facility Amount plus 2.00% multiplied by the greater of (i) the difference between the daily unused Facility Amount and 20% of
the Facility Amount and (ii) zero. Such fee is payable quarterly in arrears. The WF Credit Facility includes the option to downsize the
facility by paying a Commitment Reduction Fee. The Fee is equal to 2.00% of the facility reduction amount prior to the one-year anniversary
of the WF Credit Facility Fourth Amendment, and 1.00% thereafter. The applicable percentage for the advance rate on PS BDC Funding II's
Eligible Loans ranges from 67.5% for Middle Market Loans to 70% for Broadly Syndicated Loans (as each such term is defined in the Loan
Agreement).

 PS BDC Funding II has pledged
all of its assets to U.S. Bank, in its capacity as Collateral Agent, to secure its obligations under the WF Credit Facility and U.S. Bank
acts as the custodian of such assets. Both the Company and PS BDC Funding II have made customary representations and warranties and are
required to comply with various covenants, reporting requirements, and other customary requirements for similar credit facilities. Borrowing
under the WF Credit Facility is subject to the leverage restrictions contained in the 1940 Act and PS BDC Funding II complies with 1940
Act provisions relating to affiliated transactions and custody (Section 17, as modified by Section 57, of the 1940 Act). The obligations
under the Loan Agreement may be accelerated upon the occurrence of an event of default under the Loan Agreement, including in the event
of a change of control of PS BDC Funding II, if the Investment Advisor ceases to serve as investment adviser to the Company, or if PSCM
or its affiliates cease to directly or indirectly own a majority of the membership interests of the Investment Advisor.

 As of December 31, 2023, we
had $136.3 million principal outstanding and $38.7 million of available Commitments under the WF Credit Facility, and PS BDC Funding II
was in compliance with the applicable covenants in the WF Credit Facility on such date.

 Investment Criteria for Evaluating Investment
Opportunities

 The Company's investment
objective is to maximize total return, comprised of current income and capital appreciation. However, no assurance can be given that the
Company's investment objective will be achieved, and investment results may vary substantially on a monthly, quarterly and annual
basis. The Investment Advisor seeks to achieve the Company's investment objective by primarily investing in first and second lien
secured loans of small to large private U.S. companies, and to a lesser extent CLO structured credit funds that typically own senior secured
bank loans of public and private companies. The Company seeks to invest in credit and other assets that the Investment Advisor believes
have strong structural protections, limited downside, and low long-term beta, or volatility, in comparison to systemic risk within the
broader credit and equity markets. First and second lien secured loans generally are senior debt instruments that rank ahead of unsecured
debt of a given portfolio company. These loans also have the benefit of security interests on the assets of the portfolio company, which
may rank ahead of or be junior to other security interests. A significant portion of the loans in which the Company may invest or obtain
exposure to through its investments in structured securities may be deemed "Covenant-Lite Loans," which means the loans contain
fewer or no maintenance covenants than other loans and do not include terms which allow the lender to monitor the performance of the borrower
and declare a default if certain criteria are breached. See " Item 1A. Risk Factors—Risks Related to our Investments—Covenant-Lite
Loans " below.

 We seek to maximize returns
and minimize risk for our investors by applying detailed, fundamental credit analysis to make and monitor our portfolio investments. While
the structure of our investments may vary, the Company can invest in senior secured debt, senior unsecured debt, subordinated secured
debt, subordinated unsecured debt, convertible debt, convertible preferred equity, preferred equity, common equity, warrants and other
instruments, many of which generate current yield. Structurally, CLOs are entities that are formed to hold a portfolio of senior secured
loans made to companies whose debt is generally rated below investment grade or, in limited circumstances, unrated. The senior secured
loans within a CLO are limited to senior secured loans which meet specified credit and diversity criteria and are subject to concentration
limitations in order to create an investment portfolio that is diverse by senior secured loan, borrower, and industry, with limitations
on the number of non-U.S. borrowers. As of the date of this report, the Investment Advisor believes that the Company's investment
strategies are positioned to continue to benefit investors for the following three reasons: attractive yields, with a bias for high quality,
short duration and liquid credits; the ability to rotate investments to take advantage of dislocations as they arise; and balance fundamentals
and default risk with valuation.

 In addition, to a lesser extent,
portfolio investments may also include, but are not limited to, corporate structured credit, cash and synthetic CLOs, including the equity
and junior debt tranches of CLOs, collateralized debt obligations (each, a "CDO"), swaps, asset backed securities, corporate
bonds of large U.S. and non-U.S. companies, corporate bank loans, preferred stock, municipal bonds or loans and convertible securities.

 While not our primary investment
objective, our investments may include other equity investments, such as warrants, options to buy a minority interest in a portfolio company,
or contractual payment rights or rights to receive a proportional interest in the operating cash flow or net income of such company. When
determined by the Investment Advisor to be in our best interest, we may acquire a controlling interest in a portfolio company. We do not
intend to create or acquire primary control of any entity which engages in investment activities in securities or other assets other than
entities wholly owned by the Company. Any warrants we receive with our debt securities may require only a nominal cost to exercise, and
thus, as a portfolio company appreciates in value, we may achieve additional investment return from this equity interest.

 Our Investment Advisor may
sell all or a portion of a position of the Company's portfolio holdings when, in its opinion, one or more of the following occurs,
among other reasons: (1) the deterioration of an issuer's fundamentals; (2) changes in business strategy or key personnel; (3) rating
agency downgrades or a decline in credit quality metrics; or (4) the Investment Advisor finds more attractive investment opportunities
for the Company.

 The Investment Advisor has
the ability to invest in both illiquid and less liquid securities. The Investment Advisor may employ leverage, including through borrowing
funds or issuing senior securities, and use derivatives, both for hedging purposes and to earn income and enhance total returns. The Investment
Advisor may employ techniques to hedge investment risk, including without limitation, the use of forward contracts, currency options and
interest rate swaps, caps, collars and floors. The Investment Advisor may use derivatives to earn income and enhance total returns by
investing in derivatives securities and monitoring such investments to ensure that each holding is maintaining its investment potential.

 Investment Approach

 We seek to achieve our investment objective by applying rigorous credit
analysis and asset-based and cash-flow based lending techniques to make and monitor our investments. We are routinely pursuing multiple
investment opportunities, including primary purchases of newly issued securities and secondary purchases of securities on the open market.

 The Investment Advisor employs
a blend of top-down and granular, bottom-up fundamental credit analysis. The top-down approach has three components: (1) macro analysis
whereby the Investment Team undertakes frequent dialogues among its team members regarding macro items including the economic outlook,
financial and credit markets, new and secondary issues, regulatory changes, M&A environment, and valuation levels; (2) cross-asset
relative value analysis which consists of the Investment Team analyzing various asset classes across the credit spectrum for strong relative
value opportunities (e.g., analysis of valuation metrics across loans, bonds, convertibles, CLOs and mortgage credits to identify and
monitor optimal risk / reward opportunities); and (3) active monitoring by the Investment Team of the major sectors within corporate credit,
such as software and technology, healthcare and business services. With regard to the bottom-up analysis, the Investment Team undertakes
frequent dialogue discussing key analyses including items such as determining an issuer's ability to service debt, measuring past
performance and understanding the approach of the management team and their ability to meet goals, deal structure model analysis, document
analysis and other financial modeling and scenario testing. Finally, the bottom-up analysis includes trade specific analysis. For example,
within the credit spectrum, the team also seeks to evaluate many trade specifics including liquidity, position size, upside/downside,
and relative versus absolute value.

 We believe our vast experience
in analyzing and investing in corporate and structured credit provides us with a strong competitive advantage over other lenders with
more limited experience investing in these markets. The Investment Advisor has deep expertise in evaluating, underwriting, monitoring
and trading senior secured first lien, second lien term loans and other corporate debt securities. In addition, the Investment Advisor
also has deep expertise in evaluating the investment merits and structural considerations of CLO debt and equity investments.

 Our capital is generally used
by our corporate borrowers to finance organic growth, acquisitions, recapitalizations and working capital. Our investment decisions are
based on extensive analysis of potential portfolio companies' business operations supported by an in-depth understanding of the
quality of their recurring revenues and cash flow, variability of costs and the inherent value of their assets, including proprietary
intangible assets and intellectual property. In making our CLO investments, we consider the indenture structure for that vehicle, its
operating characteristics and compliance with its various indenture provisions, the collateral manager and its experience managing CLOs,
as well as its corporate loan-based collateral pool.

 The Investment Advisor believes
it can mitigate risk by: (i) seeking the best relative value, which may equate to buying new loans and CLO debt and equity in the primary
market at a discount or purchasing in the secondary market, and (ii) seeking to buy loans and CLO debt and equity that the Investment
Advisor believes have strong fundamentals and low default risk capable of withstanding significant downward pricing pressure.

 Investment Process – Senior Secured Loans

 The Investment Team's senior secured loan investment strategy
has been consistent throughout multiple credit environments and is predicated on the view that a conservative approach to investing in
first lien and second lien senior secured loans is the optimal strategy over the course of a credit cycle. Given the idiosyncratic nature
of secured loans, our Investment Team focuses on downside protection and overall credit quality when evaluating each and every loan borrower.

 The Investment Team evaluates
many factors during the due diligence phase, including: company-specific risk, industry risk, balance sheet risk, cash flow generation,
liquidity of the loan, in addition to other factors. The aggregate output of this information provides a building block for deeper financial
analysis, including base-case financial projections, and more importantly, downside-case financial projections. Once the initial research
process is completed, the Investment Team makes an informed decision on the quality of a particular loan and whether or not it meets our
strict criteria for investment.

 Corporate credit analysts
at the Investment Advisor are each responsible for coverage of specific industries. Our Investment Advisor believes that in order to appropriately
analyze and underwrite senior secured loans, each analyst has to be an expert in their respective industry verticals. As a result, the
Investment Advisor's corporate credit analysts average over 12 years of experience in broadly syndicated and small to large company
credit. As it relates to the due diligence process, each analyst draws not only on their personal analytical skillset, but also utilize
their networks within the industry. This can include calls and visits with existing company management teams, former industry CEOs, industry
experts, private equity sponsors and industry investment bankers. The aggregate of this initial information gathering then lays the groundwork
for fundamental financial analysis and detailed financial modeling, whereby the credit analyst constructs a base case and downside case
set of projections.

 At the conclusion of the due diligence process, the credit analyst
presents a formal investment memorandum to the entire Investment Team, which includes the Investment Committee (which averages over 24
years of credit investing experience) and all industry credit analysts. Our Investment Advisor views this part of our process as unique
across credit investment firms but believes that this more fulsome and collaborative process leads to better investment decisions. Ultimately
the Investment Committee needs to have a unanimous vote in order to approve any of our investments, working in collaboration with our
Chief Investment Officer and the Investment Advisor's loan portfolio manager to size the position appropriately for the risk.

 Of equal importance, the monitoring
phase of each loan investment is critical to the ultimate success of the loan position. Detailed quarterly writeups and model updates
are done for each credit after they report earnings. However, the monitoring process is not just a quarterly event as credit analysts
are digesting daily information and news regarding our borrowers, their industries and their competitors.

 Investment Process – CLO Debt and Equity

 The Investment Advisor's
CLO debt and equity investment strategy has also been consistent throughout multiple credit environments and is focused on three main
areas: structure and documentation of the CLO, the underlying portfolio of the CLO, and the collateral manager of the CLO.

 The structures of CLOs have
become more robust since the pre-financial crisis era, with subordination of each rated tranche essentially improving by one rating category
(i.e., a current BBB-rated tranche may have similar credit support from a subordination perspective as a pre-financial crisis A-rated
tranche). CLO equity leverage is also lower from the pre-financial crisis era, with the equity tranche now representing approximately
9-10% of current structures versus approximately 7% in pre-crisis structures. The Investment Advisor believes that no two CLO structures
are identical, thus it is critical to analyze the nuances of each structure and the underlying documentation. For example, CLOs with higher
overcollateralization cushions can help protect CLO equity from future cash diversion in a stressed scenario. From a documentation standpoint,
while post-financial crisis documents are more standardized, our Investment Team works to understand the nuances of each CLO, such as
optional redemption rights, collateral quality limitations, reinvestment language optionality, and the ability to flush excess par to
the equity holders.

 A second critical aspect of
the CLO investment process is the Investment Advisor's focus on the overall portfolio characteristics and underlying loans within
a CLO. From a top-down perspective we focus on the weighted-average rating factor ("WARF"), diversity, spread, loan bid depth,
facility size, rating distribution and price distribution of the entire portfolio. For example, two portfolios with a weighted-average
price of $98.00 may have very different overall portfolio characteristics, such as a higher concentration in lower-rated loans, which
could lead to issues during a downgrade cycle. In addition, given our strong corporate credit investment team, we focus on the individual
names of the underlying portfolio, with great focus on any loans we perceive to have heightened credit risk.

 The collateral manager of
the CLO is the third aspect the Investment Advisor spends a significant amount of its due diligence effort analyzing. The Investment Advisor
tracks data compiled from third-party sources such as Intex, Moody's Analytics and Bloomberg, as well as proprietary internal systems
to create a detailed analysis of the CLO collateral manager universe. This process leads to rankings of collateral managers based on all
of these criteria. In addition to the analytical and statistical process, the Investment Advisor also performs due diligence on collateral
managers via in-person meetings and via telephone calls. Our goal is to meet the collateral managers we invest in at least twice per year.

 Investment Process – ESG Integration

 We believe that integrating environmental, social and corporate governance
("ESG") criteria and risk assessment should be an important component of our overall investment philosophy and process. PSCM
formed its initial ESG policy statement and integrated an ESG framework into its investment process in 2019 and became a United Nations
Principles for Responsible Investment signatory in 2020. It has also formed an ESG Committee which helps to develop and implement its
ESG policies. The ESG Committee has developed and maintains a proprietary ESG scoring system. The Investment Team is responsible for utilizing
the system to assign a score to each non-investment grade borrower to which the Company is a lender. Each scored non-investment grade
borrower is assigned an environmental score, a social score and a governance score, with the scoring based on whether the non-investment
grade borrower is determined to be subject to material environmental, social, or governance risks that may negatively impact credit quality
and/or valuations and/or whether the non-investment grade borrower is believed to not be sufficiently mitigating such risks. These scores
inform our underwriting and monitoring processes, but are not used on a standalone basis to approve or decline an investment. In addition,
effective March 1, 2021, we have implemented policies and procedures to screen for Prohibited ESG Securities (as defined below) in our
potential investments. Our Investment Committee, together with PSCM's ESG Committee, is responsible for monitoring our investments
to ensure that our ESG guidelines are met.

 Our ESG guidelines state that
we will not directly purchase any "Prohibited ESG Security." We define a "Prohibited ESG Security" as any debt
obligation of, equity interest in, or credit default swap referencing a company where the consolidated group is a group whose Primary
Business Activity (as defined below) at the time of purchase is: (i) the speculative extraction of oil and gas (commonly referred to as
exploration and production); (ii) the speculative extraction of thermal coal or the generation of electricity using coal; (iii) the production
of or trade in Controversial Weapons (as defined below); (iv) the production of or trade in components or services that have been specifically
designed or designated for military purposes for the functioning of Controversial Weapons; or (v) the trade in (a) hazardous chemicals,
pesticides and wastes, ozone depleting substances, endangered or protected wildlife or wildlife products, of which production or trade
is banned by applicable global conventions and agreements; (b) pornography or prostitution; (c) tobacco or tobacco-related products; (d)
subprime lending or payday lending activities; or (e) weapons or firearms. We define "Controversial Weapons" as any controversial
weapons (such as cluster bombs, anti-personnel mines, chemical or biological weapons) which are prohibited under applicable international
treaties or conventions. We define "Primary Business Activity" as, in relation to a consolidated group of companies, for the
purposes of determining whether a security is a Prohibited ESG Security, where such group derives more than 50 percent of its revenues
for the relevant business, trade or production (as applicable).

 Following its effectiveness on March 1, 2021, our ESG guidelines are
followed by our Investment Committee on a go-forward basis, and certain of our investments held prior to March 1, 2021, including as set
forth in the schedule of investments herein or in our prior quarterly reports on Form 10-Q, may not have satisfied our newly adopted ESG
guidelines. Our Investment Committee is responsible for the execution and continued progress of integration of ESG criteria into our investment
strategy, and will support efforts to collaborate with our investors and others in the investment industry to assess and prioritize the
ESG topics that are most relevant to the Company and our investors.

 Investment Process — Ongoing Portfolio
Monitoring

 The Investment Advisor employs
an active relative value scoring system to monitor portfolio investments throughout the life of a loan. Existing positions are assigned
a score of 5 to 1 to each position, which is updated on an ongoing basis and the Investment Advisor's analysts incorporate both
a fundamental and relative value view. The scoring system is as follows:

 5.
 Add Now Where Possible/Outperforming or Compelling Relative
Value

 4.
 Performing At or Above Plan/Add on Relative Where Applicable

 3.
 Hold/Fair Value

 2.
 Sell Opportunistically/Don't Add

 1.
 Sell Now Where Possible/Potential for Impairment.

 Investment Committee

 The Investment Advisor's
Investment Committee is chaired by Angie K. Long, and the other members of the Investment Committee are Christopher D. Long, Matthew L.
Bloomfield and Jeffrey D. Fox. The members of the Investment Committee are jointly responsible for the day to day management of the portfolio,
and have equal rights with respect to the management of the portfolio. The extensive experience of the investment professionals serving
on our Investment Committee includes expertise in privately originated and publicly traded leveraged credit, stressed and distressed debt,
bankruptcy, mergers and acquisitions and private equity. This diverse skill set provides a range of perspectives in the evaluation of
each investment opportunity.

 Competition

 Our primary competitors in
investing in corporate debt and CLO securities include public and private funds, other BDCs, commercial and investment banks, commercial
financing companies and, to the extent they provide an alternative form of financing, private equity and hedge funds. Many of our competitors
are substantially larger and have considerably greater financial, technical and marketing resources than we do. For example, we believe
some competitors may have access to funding sources that are not available to us. In addition, some of our competitors may have higher
risk tolerances or different risk assessments, which could allow them to consider a wider variety of investments and establish more relationships
than us. Furthermore, many of our competitors are not subject to the regulatory restrictions that the 1940 Act imposes on us as a BDC
or to the distribution and other requirements we must satisfy as a RIC.

 We use the expertise of the investment professionals of PSCM to which
we have access pursuant to the Resource Sharing Agreement to assess investment risks and determine appropriate pricing for our investments
in portfolio companies. In addition, we seek to use the relationships of the Investment Advisor to enable us to learn about, and compete
effectively for, financing opportunities with attractive small to large private companies in the industries in which we seek to invest.
For additional information concerning the competitive risks we face, see " 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."

 Expenses

 Our primary operating expenses
include the payment of fees to the Investment Advisor under the Advisory Agreement, our allocable portion of overhead and rental expenses
under the Administration Agreement and other operating costs described below. We bear all other out-of-pocket costs and expenses of our
operations and transactions, including:

 interest expense and other costs associated with our indebtedness;

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

 the cost of effecting sales and repurchases of shares of our common stock and other securities;

 fees payable to third parties relating to making investments, including our Investment Advisor's or its affiliates' travel expenses, research costs and out-of-pocket fees and expenses associated with performing due diligence and reviews of prospective investments;

 transfer agent and custodial fees;

 operating costs incurred prior to the commencement of our operations;

 out-of-pocket fees and expenses associated with marketing efforts;

 federal and state registration fees and any stock exchange listing fees;

 U.S. federal, state and local taxes;

 Independent Directors' fees and expenses;

 brokerage commissions and markups;

 fidelity bond, directors' and officers' liability insurance and other insurance premiums;

 direct costs, such as printing, mailing, long distance telephone and staff;

 fees and expenses associated with independent audits and outside legal costs;

 costs associated with our reporting and compliance obligations under the 1940 Act and other applicable U.S. federal and state securities laws; and

 other expenses incurred by the Administrator or us in connection with administering our business, including payments under the Administration Agreement that will be based upon our allocable portion (subject to the review and approval of our Board) of overhead, including rental expenses.

 Implications of Being an Emerging Growth Company

 We currently are, and expect
to remain, an "emerging growth company," as that term is used in the JOBS Act, until the earliest of:

 up
 to five years measured from the date of the first sale of common stock pursuant to the registration
 statement with respect to the IPO;

 the
 last day of the first fiscal year in which our annual gross revenues are $1.235 billion or
 more;

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

 the
 date 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 million as of June 30th of any year.

 Under the JOBS Act, we are exempt from the provisions of Section 404(b) of
the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"), which would require that our independent registered
public accounting firm provide an attestation report on the effectiveness of our internal control over financial reporting. This may increase
the risk that material weaknesses or other deficiencies in our internal control over financial reporting go undetected.

 In addition, as an emerging growth company, we have elected to take
advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act and Section 13(a) of
the Exchange Act for complying with new or revised accounting standards.

 Employees

 We do not currently have any
employees. Each officer of the Company is an employee of the Investment Advisor or its affiliates. See " Item 10. Directors, Executive
Officers, and Corporate Governance. "

 Our day-to-day investment operations are managed by the Investment
Advisor. Pursuant to its Resource Sharing Agreement with PSCM, the Investment Advisor has access to the individuals who comprise our Investment
Advisor's Investment Committee and Investment Team. The Investment Advisor may hire additional investment professionals to provide
services to us, based upon its needs. See above " Item 1. Business — The Investment Advisor."

 Open Market Share Repurchase Plan

 Our Board authorized us to
repurchase shares of our common stock through an open-market share repurchase program for up to $20 million in the aggregate of shares
of our common stock through 12 months from the date of the IPO. Pursuant to such authorization and concurrently with the closing of the
IPO, we entered into a share repurchase plan (the "Company Rule 10b5-1 Stock Repurchase Plan") to acquire up to $15 million
in the aggregate of shares of our common stock, in accordance with the guidelines specified in Rule 10b-18 and Rule 10b5-1 of the Exchange
Act.

 The Company Rule 10b5-1 Stock
Repurchase Plan is intended to allow us to repurchase shares of our common stock at times when we otherwise might be prevented from doing
so under insider trading laws. The Company Rule 10b5-1 Stock Repurchase Plan will require our agent to repurchase shares of common stock
on our behalf when the market price per share of our common stock is below the most recently reported NAV per share of our common stock
(including any updates, corrections or adjustments publicly announced by us to any previously announced NAV per share). Under the Company
Rule 10b5-1 Stock Repurchase Plan, the agent will increase the volume of purchases made as the price of our common stock declines, subject
to volume restrictions.

 The repurchase of shares pursuant
to the Company Rule 10b5-1 Stock Repurchase Plan is intended to satisfy the conditions of Rule 10b5-1 and Rule 10b-18 under the Exchange
Act and will otherwise be subject to applicable law, including Regulation M, which may prohibit purchases under certain circumstances.

 The Company Rule 10b5-1 Stock
Repurchase Plan will commence beginning 60 calendar days following the end of the "restricted period" under Regulation M and
terminate upon the earliest to occur of (i) 12 months from the date of the Company Rule 10b5-1 Stock Repurchase Plan, (ii) the end of
the trading day on which the aggregate purchase price for all shares purchased under the Company Rule 10b5-1 Stock Repurchase Plan equals
$15 million and (iii) the occurrence of certain other events described in the Company Rule 10b5-1 Stock Repurchase Plan. The "restricted
period" under Regulation M will end upon the closing of the IPO and, therefore, the common stock repurchases/purchases described
above shall not begin prior to 60 days after the closing of the IPO.

 PSCM Rule 10b5-1 Stock Purchase Plan

 In addition, PSCM will purchase
up to $5 million in the aggregate of shares of our common stock in the open market within one year of the date of the IPO if our shares
of common stock trade below a specific level of NAV per share following the completion of the IPO. In order to facilitate PSCM's
purchase commitment, concurrently with the closing of the IPO, PSCM entered into a share purchase plan (the "PSCM Rule 10b5-1 Stock
Purchase Plan") to permit the purchase of up to $2.5 million of our shares of common stock. The purchases of shares pursuant to
the PSCM Rule 10b5-1 Stock Purchase Plan will be implemented in accordance with Rule 10b5-1 and Rule 10b-18 under the Exchange Act.

 The PSCM Rule 10b5-1 Stock
Purchase Plan is intended to allow PSCM to purchase shares of our common stock at times when it otherwise might be prevented from doing
so under insider trading laws. The PSCM Rule 10b5-1 Stock Purchase Plan will require PSCM's agent to purchase shares of common stock
on PSCM's behalf when the market price per share of our common stock is trading below the most recently reported NAV per share of
our common stock (including any updates, corrections or adjustments publicly announced by us to any previously announced NAV per share).
Under the PSCM Rule 10b-1 Stock Purchase Plan, the agent will increase the volume of purchases made as the price of our common stock declines,
subject to volume restrictions.

 The purchase of shares pursuant
to the PSCM Rule 10b5-1 Stock Purchase Plan is intended to satisfy the conditions of Rule 10b5-1 and Rule 10b-18 under the Exchange Act,
and will otherwise be subject to applicable law, including Regulation M, which may prohibit purchases under certain circumstances.

 The PSCM Rule 10b5-1 Stock Purchase Plan will commence beginning 60
calendar days following the end of the "restricted period" under Regulation M and terminate upon the earliest to occur of
(i) 12 months from the date of the PSCM Rule 10b5-1 Stock Purchase Plan, (ii) the end of the trading day on which the aggregate purchase
price for all shares purchased under the PSCM Rule 10b5-1 Stock Purchase Plan equals $2.5 million and (iii) the occurrence of certain
other events described in the PSCM Rule 10b5-1 Stock Purchase Plan. The "restricted period" under Regulation M will end upon
the closing of the IPO and, therefore, the common stock repurchases/purchases described above shall not begin prior to 60 days after the
closing of the IPO.

 Regulation as a Business Development Company

 We have elected to be regulated
as a BDC under the 1940 Act. A BDC must be organized in the United States for the purpose of investing in or lending to primarily private
companies and making significant managerial assistance available to them.

 We may not change the nature
of our business so as to cease to be, or withdraw our election as, a BDC unless authorized by vote of a majority of the outstanding voting
securities, as required by the 1940 Act. A majority of the outstanding voting securities of a company is defined under the 1940 Act as
the lesser of: (a) 67% or more of such company's voting securities present at a meeting if more than 50% of the outstanding voting
securities of such company are present or represented by proxy, or (b) more than 50% of the outstanding voting securities of such company.

 As with other companies regulated
by the 1940 Act, a BDC must adhere to certain substantive regulatory requirements. A majority of our directors must be persons who are
not interested persons, as that term is defined in the 1940 Act. Additionally, we are required to provide and maintain a bond issued by
a reputable fidelity insurance company to protect the BDC. Furthermore, as a BDC, we are prohibited from protecting any director or officer
against any liability to us or our stockholders arising from willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of such person's office.

 We are required to meet an
asset coverage ratio, defined under the 1940 Act as the ratio of our total assets (less all liabilities and indebtedness not represented
by senior securities) to our outstanding senior securities, of at least 150% after each issuance of senior securities.

 We may also be prohibited
under the 1940 Act from knowingly participating in certain transactions with our affiliates without the prior approval of our directors
who are not interested persons, as defined in Section 2(a)(19) of the 1940 Act, and, in some cases, prior approval by the SEC. As a BDC,
we are limited in our ability to invest in any portfolio company in which our Investment Advisor or any of its affiliates currently has
an investment or to make any co-investments with our Investment Advisor or its affiliates without an exemptive order from the SEC, subject
to certain exceptions.

 We do not intend to acquire
securities issued by any investment company that exceed the limits imposed by the 1940 Act. Under these limits, except for registered
money market funds, we generally cannot acquire more than 3% of the voting stock of any investment company, invest more than 5% of the
value of our total assets in the securities of one investment company or invest more than 10% of the value of our total assets in the
securities of investment companies in the aggregate. The portion of our portfolio invested in securities issued by investment companies
ordinarily will subject our stockholders to additional expenses. Our investment portfolio is also subject to diversification requirements
by virtue of our qualification as a RIC for U.S. tax purposes and our intention to continue to operate in a manner so as to qualify for
the tax treatment applicable to RICs.

 We will generally not be able
to issue and sell our common stock at a price below net asset value per share. We may, however, sell our common stock, or warrants, options
or rights to acquire our common stock, at a price below the then-current net asset value of our common stock if our Board determines that
such sale is in our best interests and the best interests of our stockholders, and our stockholders approve such sale. We will comply
with the conditions set forth in Section 63(2) of the 1940 Act when selling our common stock at a price below net asset value. In addition,
we may generally issue new shares of our common stock at a price below net asset value in rights offerings to existing stockholders, in
payment of dividends and in certain other limited circumstances.

 We will be periodically examined
by the SEC for compliance with the 1940 Act.

 Qualifying Assets

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

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

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

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

 satisfies any of the following:

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

 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;

 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

 is a small and solvent company having total assets of not more than $4.0 million and capital and surplus of not less than $2.0 million.

 Securities of any eligible portfolio company that we control.

 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.

 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.

 Securities received in exchange for or distributed on or with respect to securities described above, or pursuant to the exercise of warrants or rights relating to such securities.

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

 Limitations on Leverage

 We are required to meet an
asset coverage ratio, defined under the 1940 Act as the ratio of our total assets (less all liabilities and indebtedness not represented
by senior securities) to our outstanding senior securities, of at least 150% after each issuance of senior securities.

 Managerial Assistance to Portfolio Companies

 A BDC must be operated for
the purpose of making investments in the types of securities described under " —Regulation as a Business Development Company—Qualifying
Assets," 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 significant managerial
assistance. Making available managerial assistance means, among other things, any arrangement whereby the BDC, through its directors,
officers or employees, offers to provide, and, if accepted, does in fact provide, significant guidance and counsel concerning the management,
operations or business objectives and policies of a portfolio company.

 Temporary Investments

 Pending investment in other
types of "qualifying assets," as described above, our investments may 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 we refer to, collectively, as temporary
investments, such that at least 70% of our assets are qualifying assets.

 Senior Securities

 We are permitted, under specified
conditions, to issue multiple classes of indebtedness and one class of stock senior to our common stock if our asset coverage, as defined
in the 1940 Act, is at least equal to 150% immediately after each such issuance. In addition, while any senior securities remain outstanding,
we must make provisions to prohibit any 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 distribution or repurchase. We may also borrow amounts up to 5% of the value of
our total assets for temporary or emergency purposes without regard to asset coverage.

 Code of Ethics

 We and our Investment Advisor
have adopted codes of ethics pursuant to Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act, respectively, that establish
procedures for personal investments and restrict certain transactions by our personnel. The codes of ethics generally do not permit investments
by our employees or employees of our Investment Advisor in securities that may be purchased or held by us.

 We hereby undertake to provide
a copy of the codes to any person, without charge, upon request. Requests for a copy of the codes may be made in writing addressed to
Palmer Square Capital BDC Inc., Attention: Secretary, 1900 Shawnee Mission Parkway, Suite 315, Mission Woods, Kansas 66205, or by emailing
us at: investorrelations@palmersquarecap.com.

 Compliance Policies and Procedures

 We and our Investment Advisor
have adopted and implemented written policies and procedures reasonably designed to detect and prevent violation of the federal securities
laws and are required to review these compliance policies and procedures annually for their adequacy and the effectiveness of their implementation
and designate a chief compliance officer to be responsible for administering the policies and procedures.

 Exchange Act and Sarbanes-Oxley Act Compliance

 The Sarbanes-Oxley Act of 2002 imposes a wide variety of regulatory
requirements on certain publicly held companies and their insiders. Assuming certain requirements are met, many of these requirements
affect us. For example:

 pursuant to Rule 13a-14 of the Exchange Act, our chief executive officer and chief financial officer are required to certify the accuracy of the consolidated financial statements contained in our periodic reports;

 pursuant to Item 307 of Regulation S-K, our periodic reports must disclose our conclusions about the effectiveness of our disclosure controls and procedures;

 pursuant to Rule 13a-15 of the Exchange Act, subject to certain assumptions, our management is required to prepare an annual report regarding its assessment of our internal control over financial reporting and, depending on our accelerated filer status, this report may be required to be audited by our independent registered public accounting firm; and

 pursuant to Item 308 of Regulation S-K and Rule 13a-15 of the Exchange Act, our periodic reports must disclose whether there were material changes in our internal control over financial reporting or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

 The Sarbanes-Oxley Act requires
us to review our current policies and procedures to determine whether we comply with the Sarbanes-Oxley Act and the regulations promulgated
thereunder. We continue to monitor our compliance with all regulations that are adopted under the Sarbanes-Oxley Act and will take actions
necessary to ensure that we are in compliance therewith.

 Proxy Voting Policies and Procedures

 We have delegated our proxy
voting responsibility to our Investment Advisor. The Proxy Voting Policies and Procedures of our Investment Advisor are set forth below.
The guidelines are reviewed periodically by our Investment Advisor and our Independent Directors, and, accordingly, are subject to change.

 An investment adviser registered
under the Advisers Act has a fiduciary duty to act solely in the best interests of its clients. As part of this duty, our Investment Advisor
recognizes that it must vote client securities in a timely manner free of conflicts of interest and in the best interests of its clients.
These policies and procedures for voting proxies for our Investment Advisor's investment advisory clients are intended to comply
with Section 206 of, and Rule 206(4)-6 under, the Advisers Act.

 Our Investment Advisor intends
to vote proxies relating to our securities in the best interest of the Company's stockholders. It reviews on a case-by-case basis
each proposal submitted for a stockholder vote to determine its impact on the portfolio securities held by the Company. Although our Investment
Advisor will generally vote against proposals that may have a negative impact on the Company's portfolio securities, it may vote
for such a proposal if there exists compelling long-term reasons to do so.

 The proxy voting decisions
of our Investment Advisor are made by the senior officers who are responsible for monitoring each of the Company's investments.
To ensure that its vote is not the product of a conflict of interest, it will require that: (a) anyone involved in the decision-making
process disclose to its chief compliance officer any potential conflict that he or she is aware of and any contact that he or she has
had with any interested party regarding a proxy vote; and (b) employees involved in the decision making process or vote administration
are prohibited from revealing how our Investment Advisor intends to vote on a proposal in order to reduce any attempted influence from
interested parties.

 You may obtain information
without charge about how our Investment Advisor voted proxies by making a written request for proxy voting information to: Palmer Square
Capital BDC Inc., 1900 Shawnee Mission Parkway, Suite 315, Mission Woods, Kansas 66205, Attention: Investor Relations.

 Privacy Principles

 The Company looks to protect
nonpublic personal data. The Company's privacy policy summarized below is intended to be compliant with the federal and state regulations
as applied to the Company.

 From time to time, nonpublic personal information of our stockholders
may be collected as required for legitimate business purposes. The Company may share all of the information that we collect with our Investment
Advisor and its affiliates in order to service stockholder accounts or provide stockholders with information about other products and
services offered by the Company or the Investment Advisor or its affiliates that may be of interest to them.

 In addition, the Company may
disclose all of the information that it collects about stockholders to certain third parties who are not affiliated with the Company or
the Investment Advisor or its affiliates under one or more of the following circumstances:

 1.

 As Authorized — if a stockholder requests or authorizes disclosure of the information.

 2.

 As Required by Law — for example, to cooperate with regulators or law enforcement authorities.

 3.

 As Permitted by Law — for example, sharing information with companies that maintain, process or service Company or stockholder accounts or financial products and services or who effect, administer or enforce Company or stockholder transactions is permitted. Among other activities, the Company and its Investment Advisor and its affiliates may share information with persons acting in a representative or fiduciary capacity on the Company's or a stockholder's behalf. The Company believes that sharing of information for these purposes is essential to providing stockholders with necessary or useful services with respect to their accounts.

 The Company and the Investment
Advisor and its affiliates restrict access to nonpublic personal information about stockholders internally to those of their respective
employees and agents who need to know the information to enable them to provide services to the stockholders. The Company and the Investment
Advisor and its affiliates maintain physical, electronic and procedural safeguards to guard stockholder's nonpublic personal information.

 Reporting Obligations

 We are a reporting company
under the Exchange Act and are required to comply with all periodic reporting, proxy solicitation and other applicable requirements under
the Exchange Act.

 We will furnish our stockholders
with annual reports containing audited consolidated financial statements, quarterly reports, and such other periodic reports as we determine
to be appropriate or as may be required by law. As a BDC, we are required to file quarterly reports on Form 10-Q, annual reports on Form
10-K and current reports on Form 8-K with the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements
and other information filed electronically by us with the SEC which is available on the SEC's Internet site at

 Certain U.S. Federal Income Tax Considerations

 The following discussion is a general summary of the material U.S.
federal income tax considerations applicable to us and to an investment in our shares. This summary does not purport to be a complete
description of the income tax considerations applicable to such an investment. For example, we have not described tax consequences that
may be relevant to certain types of holders subject to special treatment under U.S. federal income tax laws, including stockholders subject
to the alternative minimum tax, tax-exempt organizations, insurance companies, dealers in securities, pension plans and trusts, financial
institutions, partnerships and other pass-through entities, U.S. stockholders (as defined below) whose functional currency is not the
U.S. dollar, persons who mark-to-market our shares and persons who hold our shares as part of a "straddle," "hedge"
or "conversion" transaction. This summary assumes that investors hold our common stock as capital assets (within the meaning
of the Code). The discussion is based upon the Code, Treasury regulations, and administrative and judicial interpretations, each as of
the date hereof and all of which are subject to change, possibly retroactively, which could affect the continuing validity of this discussion.
We have not sought and will not seek any ruling from the Internal Revenue Service (the "IRS") regarding any matter discussed
herein. Tax counsel has not rendered any legal opinion regarding any tax consequences relating to us or our stockholders. This summary
does not discuss any aspects of U.S. estate or gift tax or foreign, state or local tax. It does not discuss the special treatment under
U.S. federal income tax laws that could result if we invested in tax-exempt securities or certain other investment assets.

 For purposes of this discussion,
a "U.S. stockholder" generally is a beneficial owner of shares of our common stock who is for U.S. federal income tax purposes:

 a citizen or individual resident of the United States;

 a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States or any political subdivision thereof;

 a trust if (a) a court in the United States has primary supervision over its administration and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (b) the trust has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person for federal income tax purposes; or

 an estate, the income of which is subject to U.S. federal income taxation regardless of its source.

 A "Non-U.S. stockholder"
generally is a beneficial owner of shares of our common stock that is not a U.S. stockholder.

 If a partnership (including
an entity treated as a partnership for U.S. federal income tax purposes) holds shares of our common stock, the tax treatment of a partner
in the partnership will generally depend upon the status of the partner and the activities of the partnership. A prospective stockholder
that is a partner in a partnership holding shares of our common stock should consult his, her or its tax advisers with respect to the
purchase, ownership and disposition of shares of our common stock.

 Tax matters are complicated
and the tax consequences to an investor of an investment in our shares will depend on the facts of the investor's particular situation.
We encourage investors to consult their own tax advisers regarding the specific consequences of such an investment, including tax reporting
requirements, the applicability of federal, state, local and foreign tax laws, including the potential application of U.S. withholding
taxes, eligibility for the benefits of any applicable tax treaty and the effect of any possible changes in the tax laws.

 Election to be Taxed as a RIC

 As a BDC, we have elected, and intend to qualify annually, as a RIC
under Subchapter M of the Code, beginning with our initial taxable year ended December 31, 2020. As a RIC, we generally will not have
to pay corporate-level U.S. federal income taxes on any income that we distribute (or are deemed to distribute) to our stockholders from
our earnings and profits. To qualify for and maintain our qualification as a RIC, we must, among other things, meet certain source-of-income
and asset diversification requirements (as described below). In addition, to obtain RIC tax treatment, we must timely distribute to our
stockholders, for each taxable year, at least 90% of our "investment company taxable income," which is generally our net ordinary
income plus the excess, if any, of realized net short-term capital gains over realized net long-term capital losses (the "Annual
Distribution Requirement").

 Taxation as a RIC

 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 our investment company taxable income and net capital gain (generally defined as net long-term capital gains in
excess of short-term capital losses) we distribute (or are deemed to distribute) to stockholders. We will be subject to U.S. federal income
tax at regular corporate rates on any net income or net capital gain not distributed (or deemed distributed) to our stockholders.

 We will be subject to a nondeductible
U.S. federal excise tax of 4% on certain undistributed income unless we distribute in a timely manner an amount at least equal to the
sum of (1) 98% of our net ordinary income for each calendar year, (2) 98.2% of our capital gain net income for the one-year period ending
October 31 of that calendar year and (3) any income realized, but not distributed, in preceding years and on which we paid no federal
income tax ("Excise Tax Distribution Requirement").

 To qualify as a RIC for federal
income tax purposes, we must, among other things:

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

 derive in each taxable year at least 90% of our gross income from dividends, interest, payments with respect to certain securities, loans, gains from the sale of stock or other securities, net income from certain "qualified publicly-traded partnerships," or other income derived with respect to our 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:

 (i)

 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 such issuer; and

 (ii)

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

 To the extent that we invest
in entities treated as partnerships for U.S. federal income tax purposes (other than a "qualified publicly traded partnership"),
we generally must include the items of gross income derived by the partnerships for purposes of the 90% Income Test, and the income that
is derived from a partnership (other than a "qualified publicly traded partnership") will be treated as qualifying income
for purposes of the 90% Income Test only to the extent that such income is attributable to items of income of the partnership which would
be qualifying income if realized by us directly. In addition, we generally must take into account our proportionate share of the assets
held by partnerships in which we are a partner (other than a "qualified publicly traded partnership") for purposes of the
Diversification Tests.

 A RIC is limited in its ability
to deduct expenses in excess of its investment company taxable income. If our deductible expenses in a given taxable year exceed our investment
company taxable income, we may incur a net operating loss for that taxable year. However, a RIC is not permitted to carry forward net
operating losses to subsequent taxable years and such net operating losses do not pass through to its stockholders. In addition, deductible
expenses can be used only to offset investment company taxable income, not net capital gain. A RIC may not use any net capital losses
(that is, the excess of realized capital losses over realized capital gains) to offset its investment company taxable income, but may
carry forward such net capital losses, and use them to offset future capital gains, indefinitely. Due to these limits on deductibility
of expenses and net capital losses, we may for tax purposes have aggregate taxable income for several taxable years that we are required
to distribute and that is taxable to our stockholders even if such taxable income is greater than the net income we actually earn during
those taxable years.

 Certain of our investment
practices may be subject to special and complex U.S. federal income tax provisions that may, among other things, (1) treat distributions
that would otherwise constitute qualified distribution income as non-qualified distribution income, (2) treat distributions that would
otherwise be eligible for the corporate dividends-received deduction as ineligible for such treatment, (3) disallow, suspend or otherwise
limit the allowance of certain losses or deductions, (4) convert lower-taxed long-term capital gain into higher-taxed short-term capital
gain or ordinary income, (5) convert an ordinary loss or a deduction into a capital loss (the deductibility of which is more limited),
(6) cause us to recognize income or gain without a corresponding receipt of cash, (7) adversely affect the time as to when a purchase
or sale of shares or securities is deemed to occur, (8) adversely alter the characterization of certain complex financial transactions
and (9) produce income that will not be qualifying income for purposes of the 90% Income Test. We intend to monitor our transactions and
may make certain tax elections to mitigate the effect of these provisions and prevent our ability to be subject to tax as a RIC.

 Gain or loss realized by us from warrants acquired by us as well as
any loss attributable to the lapse of such warrants generally will be treated as capital gain or loss. Such gain or loss generally will
be long-term or short-term, depending on how long we held a particular warrant.

 For federal income tax purposes,
we may be required to recognize taxable income in circumstances in which we do not receive a corresponding payment in cash. For example,
if we hold debt obligations that are treated under applicable tax rules as having original issue discount (such as debt instruments with
PIK interest or, in certain cases, increasing interest rates or debt instruments that were issued with warrants), we must include in income
each year a portion of the original issue discount that accrues over the life of the obligation, regardless of whether cash representing
such income is received by us in the same taxable year. We may also have to include in income other amounts that we have not yet received
in cash, such as deferred loan origination fees that are paid after origination of the loan or are paid in non-cash compensation such
as warrants or stock. We anticipate that a portion of our income may constitute original issue discount or other income required to be
included in taxable income prior to receipt of cash. Further, we may elect to amortize market discount and include such amounts in our
taxable income in the current year, instead of upon disposition, as an election not to do so may limit our ability to deduct interest
expenses for tax purposes, which is subject to other limitations under U.S. federal income tax law.

 We intend to invest a portion
of our net assets in below investment grade instruments (rated lower than "Baa3" by Moody's Investors Service or lower
than "BBB-" by Standard & Poor's Corporation), which are often referred to as "junk" bonds. Investments
in these types of instruments may present special tax issues for us. U.S. federal income tax rules are not entirely clear about issues
such as when we may cease to accrue interest, original issue discount or market discount, when and to what extent deductions may be taken
for bad debts or worthless instruments, how payments received on obligations in default should be allocated between principal and income
and whether exchanges of debt obligations in a bankruptcy or workout context are taxable. We will address these and other issues to the
extent necessary to seek to ensure that we distribute sufficient income so that we do not become subject to U.S. federal income or excise
tax.

 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 our stockholders to satisfy the Annual Distribution Requirement, even though we will not have received any corresponding
cash amount. As a result, we may have difficulty meeting the Annual Distribution Requirement necessary to qualify for and maintain RIC
tax treatment under Subchapter M of the Code. We may have to sell some of our investments at times and/or at prices we would not consider
advantageous, raise additional debt or equity capital or forgo new investment opportunities for this purpose. If we are not able to obtain
cash from other sources, we may fail to qualify for RIC tax treatment and thus become subject to corporate-level income tax.

 Although we do not presently
expect to do so, we are authorized to borrow funds and to sell assets to satisfy distribution requirements. However, under the 1940 Act,
we are not permitted to make distributions to our stockholders while our debt obligations and other senior securities are outstanding
unless certain "asset coverage" tests are met. See " Regulation — Regulation as a Business Development Company
— Senior Securities. " Moreover, our ability to dispose of assets to meet our distribution requirements may be limited
by (1) the illiquid nature of our portfolio and/or (2) other requirements relating to our status as a RIC, including the Diversification
Tests. If we dispose of assets to meet the Annual Distribution Requirement or the Excise Tax Distribution Requirement, we may make such
dispositions at times that, from an investment standpoint, are not advantageous.

 A portfolio company in which
we invest may face financial difficulties that require us to work-out, modify or otherwise restructure its investment in the portfolio
company. Any such transaction could, depending upon the specific terms of the transaction, result in unusable capital losses and future
non-cash income. Any such transaction could also result in our receiving assets that give rise to income that is not qualifying income
for purposes of the 90% Income Test.

 Our investment in non-U.S.
securities may be subject to non-U.S. income, withholding and other taxes. In that case, our yield on those securities would be decreased.
Stockholders generally will not be entitled to claim a U.S. foreign tax credit or deduction with respect to non-U.S. taxes paid by the
Company.

 We may invest in stocks of
foreign companies that are classified under the Code as passive foreign investment companies ("PFICs"). In general, a foreign
company is classified as a PFIC if at least 50% of its assets constitute investment-type assets or 75% or more of its gross income is
investment-type income. In general, under the PFIC rules, an "excess distribution" received with respect to PFIC stock is
treated as having been realized ratably over the period during which we held the PFIC stock. We will be subject to tax on the portion,
if any, of the excess distribution that is allocated to our holding period in prior taxable years (and an interest factor will be added
to the tax, as if the tax had actually been payable in such prior taxable years) even though we distribute the corresponding income to
stockholders. Excess distributions include any gain from the sale of PFIC stock as well as certain distributions from a PFIC. All excess
distributions are taxable as ordinary income.

 We may be eligible to elect
alternative tax treatment with respect to PFIC stock. Under such an election, we generally would be required to include in our gross income
its share of the earnings of a PFIC on a current basis, regardless of whether any distributions are received from the PFIC. If this election
is made, the special rules, discussed above, relating to the taxation of excess distributions, would not apply. Alternatively, we may
be able to elect to mark to market our PFIC stock, resulting in any unrealized gains at year end being treated as though they were realized
and reported as ordinary income. Any mark-to-market losses and any loss from an actual disposition of the PFIC's shares would be
deductible as ordinary losses to the extent of any net mark-to-market gains included in income in prior years with respect to stock in
the same PFIC.

 Because the application of
the PFIC rules may affect, among other things, the character of gains, the amount of gain or loss and the timing of the recognition of
income with respect to PFIC stock, as well as subject us to tax on certain income from PFIC stock, the amount that must be distributed
to stockholders, and which will be taxed to stockholders as ordinary income or long-term capital gain, may be increased or decreased substantially
as compared to a fund that did not invest in PFIC stock.

 Under the Code, gains or losses attributable to fluctuations in foreign
currency exchange rates that occur between the time we accrue interest income or other receivables or accrues expenses or other liabilities
denominated in a foreign currency and the time we actually collect such receivables or pays such liabilities generally are treated as
ordinary income or ordinary loss. Similarly, on disposition of some investments, including debt securities and certain forward contracts
denominated in a foreign currency, gains or losses attributable to fluctuations in the value of foreign currency between the date of acquisition
of the security or contract and the date of disposition also are treated as ordinary gain or loss. These gains and losses, referred to
under the Code as "section 988" gains and losses, may increase or decrease the amount of our investment company taxable income
to be distributed to stockholders as ordinary income. For example, fluctuations in exchange rates may increase the amount of income that
we must distribute in order to qualify for treatment as a RIC and to prevent application of an excise tax on undistributed income. Alternatively,
fluctuations in exchange rates may decrease or eliminate income available for distribution. If section 988 losses exceed other investment
company taxable income during a taxable year, we would not be able to make ordinary distributions, or distributions made before the losses
were realized would be re-characterized as a return of capital to stockholders for U.S. federal income tax purposes, rather than as ordinary
dividend income, and would reduce each stockholder's basis in our shares.

 Distributions from capital
gains generally are made after applying any available capital loss carryforwards. Capital loss carryforwards are reduced to the extent
they offset current-year net realized capital gains, whether we retain or distribute such gains. If we incur or have incurred capital
losses in excess of capital gains ("net capital losses"), those losses will be carried forward to one or more subsequent taxable
years; any such carryforward losses will retain their character as short-term or long-term. In the event that we were to experience an
ownership change as defined under the Code, our capital loss carryforwards and other favorable tax attributes, if any, may be subject
to limitation.

 In determining our net capital gain, including also in connection with
determining the amount available to support a capital gain dividend, our taxable income and our earnings and profits, we generally may
elect to treat part or all of any post-October capital loss (defined as any net capital loss attributable to the portion, if any, of the
taxable year after October 31 or, if there is no such loss, the net long-term capital loss or net short-term capital loss attributable
to any such portion of the taxable year) or late-year ordinary loss (generally, the sum of (i) our net ordinary loss, if any, from the
sale, exchange or other taxable disposition of property, attributable to the portion, if any, of the taxable year after October 31, and
(ii) our other net ordinary loss, if any, attributable to the portion, if any, of the taxable year after December 31) as if incurred in
the succeeding taxable year.

 Failure to Qualify as a RIC

 If we were unable to qualify
for treatment as a RIC, we would be subject to tax on all of our taxable income at regular corporate rates, regardless of whether we make
any distributions to our stockholders. Distributions would not be required, and any distributions would be taxable to our stockholders
as ordinary dividend income to the extent of our current and accumulated earnings and profits. Subject to certain limitations in the Code,
such distributions may be eligible for the preferential maximum rate applicable to qualified dividend income of individual stockholders
to the extent of our current and accumulated earnings and profits. Subject to certain limitations under the Code, corporate distributees
may be eligible for a dividends-received deduction. Distributions in excess of our 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.

 To requalify as a RIC in a subsequent taxable year, we would be required
to satisfy the RIC qualification requirements for that year and dispose of any earnings and profits from any year in which we failed to
qualify as a RIC. Subject to a limited exception applicable to RICs that qualified as such under the Code for at least one year prior
to disqualification and that requalify as a RIC no later than the second year following the nonqualifying year, we would be subject to
tax on any unrealized net built-in gains in the assets held by us during the period in which we failed to qualify as a RIC that are recognized
within the subsequent 5 years, unless we made a special election to pay corporate-level U.S. federal income tax on such built-in gains
at the time of our requalification as a RIC. We may decide to be taxed as a regular corporation even if we would otherwise qualify as
a RIC if we determine that treatment as a corporation for a particular year would be in our best interests.

 The remainder of this discussion
assumes that we qualify as a RIC and satisfy the Annual Distribution Requirement.

 Taxation of U.S. Stockholders

 Distributions by us generally are taxable to U.S. stockholders as ordinary
income or capital gains, whether paid in cash or reinvested in additional shares. Distributions of our "investment company taxable
income" (which is, generally, our net ordinary income plus realized net short-term capital gains in excess of realized net long-term
capital losses) will be taxable as ordinary income to U.S. stockholders to the extent of our current or accumulated earnings and profits,
whether paid in cash or reinvested in additional common stock. To the extent such distributions paid by us to non-corporate stockholders
(including individuals) are attributable to dividends from U.S. corporations and certain qualified foreign corporations, such distributions
("Qualifying Dividends") may be eligible for a maximum tax rate of 20%, provided that we properly report such distribution
as "qualifying dividend income" in a written statement furnished to our stockholders and certain holding period and other
requirements are satisfied. In this regard, it is not anticipated that a significant portion of distributions paid by us will be attributable
to qualifying dividends; therefore, our distributions generally will not qualify for the preferential maximum rate applicable to Qualifying
Dividends. Distributions of our net capital gain (which is generally our realized net long-term capital gains in excess of realized net
short-term capital losses) properly reported by us as "capital gain dividends" will be taxable to a U.S. stockholder as long-term
capital gains that are currently generally taxable at a maximum rate of 20% in the case of individuals, trusts or estates, regardless
of the U.S. stockholder's holding period for his, her or its common stock and regardless of whether paid in cash or reinvested in
additional common stock. Distributions in excess of our earnings and profits first will reduce a U.S. stockholder's adjusted tax
basis in such stockholder's common stock and, after the adjusted basis is reduced to zero, will constitute capital gains to such
U.S. stockholder.

 Although we currently intend to distribute any long-term capital gain
at least annually, we may in the future decide to retain some or all of our long-term capital gain, but report the retained amount as
a "deemed distribution." In that case, among other consequences, we will pay tax on the retained amount, each U.S. stockholder
will be required to include his, her or its proportionate share of the deemed distribution in income as if it had been actually distributed
to the U.S. stockholder, and the U.S. stockholder will be entitled to claim a credit equal to his, her or its allocable share of the tax
paid thereon by us. The amount of the deemed distribution net of such tax will be added to the U.S. stockholder's tax basis for
his, her or its common stock. Since we expect to pay tax on any retained capital gain at our regular corporate tax rate, and since that
rate is in excess of the maximum rate currently payable by individuals on net capital gain, the amount of tax that individual stockholders
will be treated as having paid and for which they will receive a credit will exceed the tax they owe on the retained net capital gain.
Such excess generally may be claimed as a credit against the U.S. stockholder's other U.S. federal income tax obligations or may
be refunded to the extent it exceeds a stockholder's liability for U.S. federal income tax. A stockholder that is not subject to
U.S. federal income tax or otherwise required to file a U.S. federal income tax return would be required to file a U.S. federal income
tax return on the appropriate form to claim a refund for the taxes we paid. To utilize the deemed distribution approach, we must provide
written notice to our stockholders prior to the expiration of 60 days after the close of the relevant taxable year. We cannot treat any
of our investment company taxable income as a "deemed distribution."

 For purposes of determining
(1) whether the Annual Distribution Requirement is satisfied for any year and (2) the amount of distributions paid for that year, we may,
under certain circumstances, elect to treat a distribution that is paid during the following taxable year as if it had been paid during
the taxable year in question. If we make such an election, the U.S. stockholder will still be treated as receiving the distribution in
the taxable year in which the distribution is made. However, any distribution declared by us in October, November or December of any calendar
year, payable to stockholders of record on a specified date in such a month and actually paid during January of the following year, will
be treated as if it had been received by our U.S. stockholders on December 31 of the year in which the distribution was declared.

 If an investor purchases shares
of our common stock shortly before the record date of a distribution, the price of the shares will include the value of the distribution
and the investor will be subject to tax on the distribution even though economically it may represent a return of his, her or its investment.

 Certain distributions reported by us as section 163(j) interest dividends
may be treated as interest income by shareholders for purposes of the tax rules applicable to interest expense limitations under section
163(j) of the Code. Such treatment by the shareholder is generally subject to holding period requirements and other potential limitations,
although the holding period requirements are generally not applicable to dividends declared by money market funds and certain other funds
that declare dividends daily and pay such dividends on a monthly or more frequent basis. The amount that we are eligible to report as
a section 163(j) dividend for a tax year is generally limited to the excess of our business interest income over the sum of our (i) business
interest expense and (ii) other deductions properly allocable to our business interest income.

 Stockholders generally will recognize taxable gain or loss if the stockholder
sells or otherwise disposes of his, her or its shares of our common stock. The amount of gain or loss will be measured by the difference
between such stockholder's adjusted tax basis in the common stock sold and the amount of the proceeds received in exchange. Any
gain arising from such sale or disposition generally will be treated as long-term capital gain or loss if the stockholder has held the
shares for more than one year. Otherwise, it will be classified as short-term capital gain or loss. However, any capital loss arising
from the sale or disposition of shares of our common stock held for six months or less will be treated as long-term capital loss to the
extent of the amount of capital gain dividends received, or undistributed capital gain deemed received, with respect to such shares. In
addition, all or a portion of any loss recognized upon a disposition of shares of our common stock may be disallowed if other shares of
our common stock or substantially identical position are purchased or acquired (whether through reinvestment of distributions or otherwise)
within 30 days before or after the disposition.

 In general, individual U.S. stockholders currently are subject to a
maximum federal income tax rate of 20% on their net capital gain (i.e., the excess of realized net long-term capital gains over realized
net short-term capital losses), including any long-term capital gain derived from an investment in our shares. Such rate is lower than
the maximum rate on ordinary income currently payable by individuals. In addition, an additional 3.8% Medicare tax will be imposed on
certain net investment income (including ordinary dividends and capital gain distributions received from us and net gains from redemptions
or other taxable dispositions of our common stock) of U.S. high-income individuals, and certain estates and trusts. Corporate U.S. stockholders
currently are subject to federal income tax on net capital gain at the maximum 21% corporate income tax rate also applied to ordinary
income. Non-corporate stockholders with net capital losses for a year (i.e., capital losses in excess of capital gains) generally may
deduct up to $3,000 of such losses against their ordinary income each year; any net capital losses of a non-corporate stockholder in excess
of $3,000 generally may be carried forward and used in subsequent years as provided in the Code. Corporate stockholders generally may
not deduct any net capital losses for a year but may carry back such losses for three years or carry forward such losses for five years.

 We (or if a U.S. stockholder
holds shares through an intermediary, such intermediary) will send to each of our U.S. stockholders, as promptly as possible after the
end of each calendar year, a notice detailing, on a per share and per distribution basis, the amounts includible in such U.S. stockholder's
taxable income for such year as ordinary income and as long-term capital gain. In addition, the federal tax status of each year's
distributions generally will be reported to the IRS (including the amount of distributions, if any, eligible for the preferential maximum
rate). Distributions paid by us generally will not be eligible for the dividends-received deduction. Distributions may also be subject
to additional state, local and foreign taxes depending on a U.S. stockholder's particular situation.

 We are required to report
adjusted cost basis information for covered securities which generally include shares of a RIC acquired after January 1, 2012 to the IRS
and to taxpayers. The tax regulations require that we elect a default tax identification methodology to perform the required reporting.
We have chosen the first-in-first-out ("FIFO") method as the default tax lot identification method for our stockholders. This
is the method we will use to determine which specific shares are deemed to be sold when a stockholder's entire position is not sold
in a single transaction and is the method in which "covered" share sales will be reported on a stockholder's Form 1099.
However, at the time of purchase or upon the sale of "covered" shares, stockholders may generally choose a different tax lot
identification method. Stockholders should consult a tax advisor with regard to their personal circumstances as the Company and its service
providers do not provide tax advice. Stockholders should contact their financial intermediaries with respect to reporting of cost basis
and available elections for their accounts.

 Backup Withholding.
We may be required to withhold federal income tax ("backup withholding"), currently at a rate of 24%, from all distributions
to any non-corporate U.S. stockholder (1) who fails to furnish us with a correct taxpayer identification number or a certificate that
such stockholder is exempt from backup withholding or (2) with respect to whom the IRS notifies us that such stockholder has failed to
properly report certain interest and dividend income to the IRS and to respond to notices to that effect. An individual's taxpayer
identification number generally is his or her social security number. Any amount withheld under backup withholding is allowed as a credit
against the U.S. stockholder's federal income tax liability, provided that proper information is provided to the IRS.

 Reportable Transactions
Reporting. If a U.S. stockholder recognizes a loss with respect to shares of our common stock of $2 million or more for an individual
stockholder or $10 million or more for a corporate stockholder, the stockholder must file with the IRS a disclosure statement on Form
8886. The fact that a loss is reportable under these regulations does not affect the legal determination of whether the taxpayer's
treatment of the loss is proper. U.S. stockholders should consult their tax advisors to determine the applicability of these regulations
in light of their specific circumstances.

 U.S. Taxation of Tax-Exempt U.S. Stockholders

 A U.S. stockholder that is
a tax-exempt organization for U.S. federal income tax purposes and therefore generally exempt from U.S. federal income taxation may nevertheless
be subject to taxation to the extent that it is considered to derive unrelated business taxable income ("UBTI"). The direct
conduct by a tax-exempt U.S. stockholder of the activities we propose to conduct could give rise to UBTI. However, a BDC is a corporation
for U.S. federal income tax purposes and its business activities generally will not be attributed to its stockholders for purposes of
determining their treatment under current law.

 Therefore, a tax-exempt U.S.
stockholder generally should not be subject to U.S. taxation solely as a result of the stockholder's ownership of our stock and
receipt of dividends with respect to such stock. Moreover, under current law, if we incur indebtedness, such indebtedness generally will
not be attributed to a tax-exempt U.S. stockholder. Therefore, a tax-exempt U.S. stockholder should not be treated as earning income from
"debt- financed property" and dividends we pay should not be treated as "unrelated debt-financed income" solely
as a result of indebtedness that we incur. Proposals periodically are made to change the treatment of "blocker" investment
vehicles interposed between tax-exempt investors and non- qualifying investments. In the event that any such proposals were to be adopted
and applied to BDCs, the treatment of dividends payable to tax- exempt investors could be adversely affected.

 Taxation of Non-U.S. Stockholders

 The following discussion applies
only to Non-U.S. stockholders. Whether an investment in our shares is appropriate for a Non-U.S. stockholder will depend upon that person's
particular circumstances. An investment in our shares by a Non-U.S. stockholder may have adverse tax consequences. Non-U.S. stockholders
should consult their tax advisers before investing in our common stock.

 Distributions of our investment
company taxable income to Non-U.S. stockholders (including interest income and realized net short-term capital gains in excess of realized
long-term capital losses, which generally would be free of withholding if paid to Non-U.S. stockholders directly) will be subject to withholding
of federal tax at a 30% rate (or lower rate provided by an applicable treaty) to the extent of our current and accumulated earnings and
profits unless an applicable exception applies. If the distributions are effectively connected with a U.S. trade or business of the Non-U.S.
stockholder, we will not be required to withhold federal tax if the Non-U.S. stockholder complies with applicable certification and disclosure
requirements, although the distributions will be subject to federal income tax at the rates applicable to U.S. persons. (Special certification
requirements apply to a Non-U.S. stockholder that is a foreign partnership or a foreign trust, and such entities are urged to consult
their own tax advisers.)

 In addition, with respect
to certain distributions made by RICs to Non-U.S. stockholders, no withholding will be required and the distributions generally will not
be subject to federal income tax if (i) the distributions are properly designated in a notice timely delivered to our stockholders as
"interest-related dividends" or "short-term capital gain dividends," (ii) the distributions are derived from sources
specified in the Code for such dividends and (iii) certain other requirements are satisfied. No assurance can be given as to whether any
of our distributions will be reported as eligible for this exemption from withholding tax.

 Actual or deemed distributions
of our net capital gains to a Non-U.S. stockholder, and gains recognized by a Non-U.S. stockholder upon the sale of our common stock,
generally will not be subject to federal withholding tax and will not be subject to U.S. federal income tax unless (i) the distributions
or gains, as the case may be, are effectively connected with a U.S. trade or business of the Non-U.S. stockholder and, if an income tax
treaty applies, are attributable to a permanent establishment maintained by the Non-U.S. stockholder in the United States, or such Non-U.S.
stockholder in the United States or (ii) in the case of an individual stockholder, the stockholder is present in the United States for
a period or periods aggregating 183 days or more during the year of the sale or the receipt of the distributions or gains and certain
other conditions are met.

 If we distribute our net capital
gains in the form of deemed rather than actual distributions, a Non-U.S. stockholder will be entitled to a U.S. federal income tax credit
or tax refund equal to the stockholder's allocable share of the tax we pay on the capital gains deemed to have been distributed.
To obtain the refund, the Non-U.S. stockholder must obtain a U.S. taxpayer identification number and file a U.S. federal income tax return
even if the Non-U.S. stockholder would not otherwise be required to obtain a U.S. taxpayer identification number or file a U.S. federal
income tax return. For a corporate Non-U.S. stockholder, distributions (both actual and deemed), and gains realized upon the sale of our
common stock that are effectively connected to a U.S. trade or business may, under certain circumstances, be subject to an additional
"branch profits tax" at a 30% rate (or at a lower rate if provided for by an applicable treaty). Accordingly, investment in
the shares may not be appropriate for a Non-U.S. stockholder.

 Backup Withholding. A
Non-U.S. stockholder who is a non-resident alien individual, and who is otherwise subject to U.S. federal withholding tax, may be subject
to information reporting and backup withholding of federal income tax on dividends unless the Non-U.S. stockholder provides us or the
dividend disbursing agent with an IRS Form W-8BEN (or an acceptable substitute form) or otherwise meets documentary evidence requirements
for establishing that it is a Non-U.S. stockholder or otherwise establishes an exemption from backup withholding.

 Non-U.S. stockholders may
also be subject to U.S. estate tax with respect to their investment in our common stock.

 Foreign Account Tax Compliance Act

 Legislation commonly referred
to as the "Foreign Account Tax Compliance Act," or "FATCA," generally imposes a 30% withholding tax on payments
of certain types of income to foreign financial institutions ("FFIs") unless such FFIs either (i) enter into an agreement
with the U.S. Treasury to report certain required information with respect to accounts held by U.S. persons (or held by foreign entities
that have U.S. persons as substantial owners) or (ii) reside in a jurisdiction that has entered into an intergovernmental agreement ("IGA")
with the United States to collect and share such information and are in compliance with the terms of such IGA and any enabling legislation
or regulations. The types of income subject to the tax include U.S. source interest and dividends. The information required to be reported
includes the identity and taxpayer identification number of each account holder that is a U.S. person and transaction activity within
the holder's account. Depending on the status of a Non-U.S. stockholder and the status of the intermediaries through which they
hold their shares, Non-U.S. stockholders could be subject to this 30% withholding tax with respect to distributions on their shares. Stockholders
may be requested to provide additional information to us to enable us to determine whether withholding is required, such as W-8BEN, W-8BEN-E
or other applicable series W-8.

 Non-U.S. persons should consult
their own tax advisers with respect to the U.S. federal income tax and withholding tax, and state, local and foreign tax consequences
of an investment in the shares.

 Legislative or Other Actions Affecting RICs

 The foregoing discussion is
only a summary and is based upon existing federal income tax law. You should recognize that the federal income tax treatment of an investment
in us may be modified at any time by legislative, judicial or administrative action. Any such changes may have a retroactive effect with
respect to existing transactions and investments and may modify the statements made above. You are urged to consult with your own tax
advisor with respect to the impact of recent legislation on your investment in our shares.

 THE FOREGOING DISCUSSION SHOULD
NOT BE CONSIDERED TO DESCRIBE FULLY THE FEDERAL INCOME TAX CONSEQUENCES OF AN INVESTMENT IN US. YOU ARE STRONGLY ADVISED TO CONSULT WITH
YOUR TAX ADVISORS WITH RESPECT TO THE FEDERAL, STATE, LOCAL AND FOREIGN INCOME TAX CONSEQUENCES OF AN INVESTMENT IN US.

 Item 1A. Risk Factors

 Investing in our common
stock involves a number of significant risks. The investor should be aware of various risks, including those described below. The investor
should carefully consider these risk factors, together with all of the other information included in this Annual Report. The risks set
out below are not the only risks we face. Additional risks and uncertainties not presently known to us or not presently deemed material
by us may also materially and adversely affect our business, financial condition and/or operating results. If any of the following events
occur, our business, financial condition, results of operations and cash flows could be materially and adversely affected. In such case,
the net asset value of our common stock could decline, and an investor may lose all or part of his or her investment.

 The following is a summary
of the principal risks that you should carefully consider before investing in our securities. Further details regarding each risk included
in the below summary list can be found further below.

 Dependence Upon Key Personnel of PSCM and the Investment Advisor — The success of the Company is highly dependent on the financial and managerial expertise of the Investment Advisor and, in turn, PSCM.

 Operation in a Highly Competitive Market for Investment Opportunities — The business of investing in assets meeting our investment objective is highly competitive.

 Financing Investments With Borrowed Money — The use of leverage magnifies the potential for gain or loss on amounts invested.

 Changes in Interest Rates May Affect Our Cost of Capital and Net Investment Income — Because we borrow money to make investments, our net investment income will depend, in part, upon the difference between the rate at which we borrow funds and the rate at which we invest those funds.

 Investments in Leveraged Portfolio Companies — Leveraged companies in which we invest may have limited financial resources and may be unable to meet their obligations under their loans and debt securities that we hold.

 Investments in CLOs — CLO vehicles that we invest in are typically very highly levered, and therefore, the junior debt and equity tranches that we invest in are subject to a higher degree of risk of total loss.

 Investments in Covenant-Lite Loans — Our investments may include Covenant-Lite Loans, which may give us fewer rights and subject us to greater risk of loss than loans with financial maintenance covenants.

 Risks Regarding Distributions — We cannot assure you that we will achieve investment results that will allow us to make a specified level of cash distributions or year-to-year increases in cash distributions.

 Dependence on Strong Referral Relationships
— We depend upon our Investment Advisor and its affiliates to maintain their relationships with private equity sponsors, placement
agents, investment banks, management groups and other financial institutions, and we expect to rely to a significant extend upon these
relationships to provide us with potential investment opportunities.

 Uncertainty Regarding the Value of
Portfolio Investments — The fair value of loans, securities and other investments that are not publicly traded may not be readily
determinable and we will value these investments at fair value as determined in good faith by our Investment Advisor (subject to the
Board's oversight).

 Investment in High Yield Debt with Greater Credit and Liquidity Risk — We invest in high yield debt, a substantial portion of which may be rated below investment-grade by one or more nationally recognized statistical rating organizations or is unrated but of comparable credit quality to obligations rated below investment-grade, and has greater credit and liquidity risk than more highly rated debt obligations.

 Risks Related to our Business and Structure

 We are dependent upon key personnel of
PSCM and the Investment Advisor.

 Pursuant to the Resource Sharing
Agreement between the Investment Advisor and PSCM, PSCM provides the Investment Advisor with experienced investment professionals and
services so as to enable the Investment Advisor to fulfil its obligations under the Advisory Agreement. Accordingly, our success is highly
dependent on the financial and managerial expertise of the Investment Advisor and, in turn, PSCM. The individuals may not necessarily
continue to remain employed by PSCM or affiliated with PSCM. Although we have attempted to foster a team approach to investing, the loss
of key individuals employed by PSCM or affiliated with PSCM or our Investment Advisor, including Christopher D. Long and Angie K. Long,
could have a material adverse effect on our financial condition, performance and ability to achieve our investment objectives. In addition,
we cannot assure you that our Investment Advisor will remain our investment adviser or that we will continue to have access to PSCM or
its investment professionals. Moreover, the Resource Sharing Agreement may be terminated by either party on 60 days' notice; the
termination of the Resource Sharing Agreement could have a material adverse effect on our financial condition, performance and ability
to achieve our investment objectives.

 The Investment Advisor's and PSCM's investment professionals
expect to devote such time and attention to the conduct of our business as such business shall reasonably require. However, there can
be no assurance, for example, that the members of the Investment Advisor or such investment professionals will devote any minimum number
of hours each week to our affairs or that they will continue to be employed by PSCM. In the event that certain employees of the Investment
Advisor cease to be actively involved with us, we will be required to rely on the ability of PSCM to identify and retain other investment
professionals to conduct our business.

 We are dependent on strong referral relationships.

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

 Our investment decisions may be expedited.

 Investment analyses and decisions
by the Investment Advisor may frequently be required to be undertaken on an expedited basis to take advantage of investment opportunities.
In these cases, the information available to the Investment Advisor at the time of making an investment decision may be limited. Therefore,
no assurance can be given that the Investment Advisor will have knowledge of all circumstances that may adversely affect an investment.

 Our financial condition, results of operations
and cash flows depend on our ability to manage our business effectively.

 Our ability to achieve our
investment objective will depend on our ability to manage our business and to grow our investments and earnings. This will depend, in
turn, on our Investment Advisor's ability to identify, invest in and monitor portfolio companies that meet our investment criteria.
The achievement of our investment objectives on a cost-effective basis will depend upon our Investment Advisor's execution of our
investment process, its ability to provide competent, attentive and efficient services to us and, to a lesser extent, our access to financing
on acceptable terms. Any failure to manage our business and our future growth effectively could have a material adverse effect on our
business, financial condition, results of operations and cash flows.

 Our executive officers and directors, our
Investment Advisor, PSCM and their affiliates, officers, directors and employees may face certain conflicts of interest.

 The employees of PSCM and
our Investment Advisor serve, or may serve, as officers, directors, members, or principals of entities that operate in the same or a related
line of business as we do, or of investment funds, accounts, or investment vehicles managed by it and/or its affiliates. Similarly, PSCM,
the Investment Advisor and their affiliates may have other clients with similar, different or competing investment objectives.

 In serving in these multiple
capacities, they may have obligations to other clients or investors in those entities, the fulfillment of which may not be in the best
interests of us or our stockholders. There is a potential that we will compete with these clients, and other entities managed by the Investment
Advisor and its affiliates, for capital and investment opportunities. As a result, the Investment Advisor and, as applicable, the members
of the Investment Committee may face conflicts in the allocation of investment opportunities among us and the investment funds, accounts
and investment vehicles managed by the Investment Advisor and its affiliates. Our Investment Advisor intends to allocate investment opportunities
among eligible investment funds, accounts and investment vehicles in a manner that is fair and equitable over time and consistent with
its allocation policy. However, we can offer no assurance that such opportunities will be allocated to us fairly or equitably in the short-term
or over time.

 Our Investment Advisor or its affiliates
may, from time to time, possess material non-public information, limiting our investment discretion.

 Principals and other employees
of our Investment Advisor, including members of the Investment Advisor's Investment Committee, may serve as directors of, or in
a similar capacity with, portfolio companies in which we invest, the securities of which are purchased or sold on our behalf. In the event
that material nonpublic information is obtained with respect to such companies, or we become subject to trading restrictions under the
internal trading policies of those companies or as a result of applicable law or regulations, we could be prohibited for a period of time
from purchasing or selling the securities of such companies, and this prohibition may have an adverse effect on us.

 Our management and incentive fee structure
with our Investment Advisor may create incentives for our Investment Advisor that are not fully aligned with the interests of our stockholders
and may induce our Investment Advisor to make speculative investments.

 In the course of our investing
activities, we pay management and incentive fees to the Investment Advisor. We have entered into an Advisory Agreement with the Investment
Advisor. Under the incentive fee structure, our adjusted net investment income for purposes thereof is computed and paid on income that
may include interest income that has been accrued but not yet received in cash. This fee structure may give rise to a conflict of interest
for the Investment Advisor to the extent that it encourages the Investment Advisor to favor debt financings that provide for deferred
interest, rather than current cash payments of interest. The Investment Advisor may have an incentive to invest in deferred interest securities
in circumstances where it would not have done so but for the opportunity to continue to earn the Income Incentive Fee even when the issuers
of the deferred interest securities would not be able to make actual cash payments to us on such securities. This risk could be increased
because, under our Advisory Agreement, the Investment Advisor is not obligated to reimburse us for incentive fees it receives even if
we subsequently incur losses or never receive in cash the deferred income that was previously accrued.

 The valuation process for certain of our
portfolio holdings may create a conflict of interest.

 We may make portfolio investments
in the form of loans and securities that are not publicly traded and for which no market based price quotation is available. Effective
August 11, 2022, our Board designated the Investment Advisor as our valuation designee. The participation of the Investment Advisor's
investment professionals in our valuation process could result in a conflict of interest as the Investment Advisor's base management
fee is based, in part, on the value of our total net assets.

 We operate in a highly competitive market
for investment opportunities, which could reduce returns and result in losses.

 The business of investing
in assets meeting our investment objective is highly competitive. Competition for investment opportunities includes a growing number of
nontraditional participants, such as hedge funds, senior private debt funds, including BDCs, and other private investors, as well as more
traditional lending institutions and competitors. Some of these competitors may have access to greater amounts of capital or may have
different return thresholds than us, and thus these competitors may have advantages not shared by us. Furthermore, many of our competitors
are not subject to the regulatory restrictions that the 1940 Act imposes on us as a BDC or the source-of-income, asset diversification
and distribution requirements we must satisfy to qualify and maintain our RIC status. Increased competition for, or a diminishment in
the available supply of, investments suitable for us could result in lower returns on such investments. Moreover, the identification of
attractive investment opportunities is difficult and involves a high degree of uncertainty. We may incur significant expenses in connection
with identifying investment opportunities and investigating other potential investments which are ultimately not consummated, including
expenses relating to due diligence, transportation, legal expenses and the fees of other third party advisors.

 With respect to the investments
we make, we will not seek to compete based primarily on the interest rates we will offer, and we believe that some of our competitors
may make loans with interest rates that will be lower than the rates we offer. In the secondary market for acquiring existing loans, we
expect to compete generally on the basis of pricing terms. With respect to all investments, we may lose some investment opportunities
if we do not match our competitors' pricing, terms and structure. However, if we match our competitors' pricing, terms and
structure, we may experience decreased net interest income, lower yields and increased risk of credit loss.

 We may need to raise additional capital.

 We may need to raise additional
capital to fund new investments and grow our portfolio of investments. We intend to access the capital markets periodically to issue debt
or equity securities or borrow from financial institutions in order to obtain such additional capital. Unfavorable economic conditions
could increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us.
A reduction in the availability of new capital could limit our ability to grow. In addition, we are required to distribute dividends for
U.S. federal income tax purposes of an amount generally at least equally to 90% of the sum of our net ordinary income and net short-term
capital gains in excess of net long-term capital losses, if any, to our stockholders to qualify and maintain our RIC status. As a result,
these earnings will not be available to fund new investments. An inability on our part to access the capital markets successfully could
limit our ability to grow our business and execute our business strategy fully and could decrease our earnings, if any, which would have
an adverse effect on the value of our securities.

 Our investments in PIK interest income may
expose us to risks, including a possible increase in incentive fees that are payable by us to the Investment Advisor.

 Certain of our debt investments
may contain provisions providing for the payment of PIK interest. Because PIK interest results in an increase in the size of the loan
balance of the underlying loan, the receipt by us of PIK interest will have the effect of increasing our total net assets. As a result,
because the base management fee that we pay to the Investment Advisor is based on the value of our total net assets, the receipt by us
of PIK interest will result in an increase in the amount of the base management fee payable by us. In addition, any such increase in a
loan balance due to the receipt of PIK interest will cause such loan to accrue interest on the higher loan balance, which will result
in an increase in our pre-incentive fee net investment income and, as a result, an increase in incentive fees that are payable by us to
the Investment Advisor.

 Our strategy involves a high degree of leverage.
We intend to continue to finance our investments with borrowed money, which will magnify the potential for gain or loss on amounts invested
and may increase the risk of investing in us.

 The use of leverage magnifies
the potential for gain or loss on amounts invested. The use of leverage is generally considered a speculative investment technique and
increases the risks associated with investing in our securities. We have borrowed and intend to continue to borrow from, and may in the
future issue debt securities to, banks, insurance companies and other lenders. Lenders of these funds will have fixed dollar claims on
our assets that are superior to the claims of our common stockholders, and we would expect such lenders to seek recovery against our assets
in the event of a default. We may pledge up to 100% of our assets and may grant a security interest in all of our assets under the terms
of any debt instruments we may enter into with lenders. If the value of our assets decreases, leveraging would cause net asset value to
decline more sharply than it otherwise would have had we not leveraged, thereby magnifying losses or eliminating our stake in a leveraged
investment. Similarly, any decrease in our revenue or income will cause our net income to decline more sharply than it would have had
we not borrowed. Such a decline would also negatively affect our ability to make dividend payments on our common stock. Our ability to
service any debt will depend largely on our financial performance and will be subject to prevailing economic conditions and competitive
pressures. In addition, our common stockholders will bear the burden of any increase in our expenses as a result of our use of leverage,
including interest expenses.

 As a BDC, we generally are
required to meet a coverage ratio of total assets to total borrowings and other senior securities, which include all of our borrowings
and any preferred stock that we may issue in the future, of at least 150%. If this ratio declines below 150%, we will not be able to incur
additional debt when it is otherwise advantageous or necessary for us to do so. The amount of leverage that we employ will depend on the
Investment Advisor's and our Board's assessment of market and other factors at the time of any proposed borrowing. We cannot
assure you that we will be able to obtain credit at all or on terms acceptable to us.

 [Illustration. The
following table illustrates the effect of leverage on returns from an investment in our common stock assuming various annual returns,
net of expenses. The calculations in the table below are hypothetical and actual results may be higher or lower than those appearing below.

 Assumed Return on Our Portfolio (1)

 (net of expenses)

 (10.0

)%

 (5.0

)%

 0.0

 %

 5.0

 %

 10.0

 %

 Corresponding net return to common stockholder

 (33.13

)%

 (21.12

)%

 (9.12

) %

 2.88

 %

 14.88

 %

 (1)
 Assumes (i) $1.1 billion in total assets as of December 31, 2023,
(ii) $1.1 billion in non-controlled, non-affiliated investments at fair value as of December 31, 2023, (iii) $629.6 million in outstanding
indebtedness as of December 31, 2023, (iv) $462.0 million in net assets as of December 31, 2023 and (iv) weighted average interest rate
of 6.58% on our indebtedness for the twelve months ended December 31, 2023.

 Based on outstanding indebtedness of $629.6 million as of December
31, 2023, and the weighted average effective interest rate of 6.58%, our investment portfolio would have had to produce an annual return
of approximately 3.80% to cover annual interest payments on outstanding debt.

 We are subject to various covenants under
our credit facilities which, if not complied with, could result in reduced availability and/or mandatory prepayments under our credit
facilities.

 We are subject to various
covenants under our credit facilities which, if not complied with, could result in reduced availability and/or mandatory prepayments under
our credit facilities. In the event we default under our credit facilities or any other future borrowing facility, our business could
be adversely affected as we may be forced to sell a portion of our investments quickly and prematurely at what may be disadvantageous
prices to us in order to meet our outstanding payment obligations and/or support working capital requirements under our credit facilities,
or such future borrowing facility, any of which would have a material adverse effect on our business, financial condition, results of
operations and cash flows. In addition, following any such default, the agent for the lenders under our credit facilities, or such future
borrowing facility could assume control of the disposition of any or all of our assets, including the selection of such assets to be disposed
and the timing of such disposition, which would have a material adverse effect on our business, financial condition, results of operations
and cash flows.

 In addition to asset coverage
ratio requirements, our credit facilities contain various covenants which, if not complied with, could accelerate repayment of the indebtedness
under our credit facilities. This could have a material adverse effect on our business, financial condition and results of operations.
Our borrowings under the BoA Credit Facility are collateralized by the assets in a special purpose wholly-owned subsidiary, PS BDC Funding.
The agreements governing the BoA Credit Facility require us to comply with certain financial and operational covenants. These covenants
include a requirement to maintain a first-prior security interest in the collateral for the benefit of the lenders under the BoA Credit
Facility, maintain various policies and procedures, and maintain a minimum borrowing base under the BoA Credit Facility. Our borrowings
under the line of credit provided to us under the WF Credit Facility are collateralized by the assets in a special purpose wholly owned
subsidiary, PS BDC Funding II. The agreements governing the WF Credit Facility require us to comply with certain financial and
operational covenants. These covenants include a requirement to maintain a first-prior security interest in the collateral for the benefit
of the lenders under the WF Credit Facility, maintain various policies and procedures, and maintain a minimum borrowing base under the
WF Credit Facility. Our continued compliance with the covenants under our credit facilities depends on many factors, some of which are
beyond our control.

 Changes in interest
rates may affect our cost of capital and net investment income.

 Because we borrow money to
make investments, our net investment income will depend, in part, upon the difference between the rate at which we borrow funds and the
rate at which we invest those funds. As a result, we can offer no assurance that a significant change in market interest rates would not
have a material adverse effect on our net investment income given that we use debt to finance our investments. In periods of rising interest
rates, our cost of funds could increase, which could reduce our net investment income. In addition, in a prolonged low interest rate environment,
the difference between investment income earned on interest earning assets and the interest expense incurred on interest bearing liabilities
may be compressed, reducing our net investment income and potentially adversely affecting our operating results. We may use interest rate
risk management techniques in an effort to limit our exposure to interest rate fluctuations. Such techniques may include various interest
rate hedging activities to the extent permitted by the 1940 Act.

 We may have uncertainty as to the value
of certain portfolio investments.

 We expect that certain of
our portfolio investments may take the form of securities that are not publicly traded. The fair value of loans, securities and other
investments that are not publicly traded may not be readily determinable and we will value these investments at fair value as determined
in good faith by the Investment Advisor (subject to the Board's oversight). Certain of our investments (other than cash and cash
equivalents) will be classified as Level 2 assets under Topic 820 of the U.S. Financial Accounting Standards Board's Accounting
Standards Codification ("ASC"), as amended, Fair Value Measurements and Disclosures ("ASC 820"). This means
that certain of our portfolio valuations will be based on inputs other than quoted prices which are either directly or indirectly observable,
such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities
in non-active markets including actionable bids from third parties for privately held assets or liabilities, and observable inputs other
than quoted prices such as yield curves and forward currency rates that are entered directly into valuation models to determine the value
of derivatives or other assets or liabilities. Certain other of our investments may be classified as Level 3 under ASC 820, which means
that certain of our portfolio valuations will be based on unobservable inputs and our own assumptions about how market participants would
price the asset or liability in question. We expect that inputs into the determination of fair value of our portfolio investments will
require significant management judgment or estimation. Even if observable market data are available, such information may be the result
of consensus pricing information or broker quotes, which include a disclaimer that the broker would not be held to such a price in an
actual transaction. The non-binding nature of consensus pricing and/or quotes accompanied by disclaimers materially reduces the reliability
of such information. The types of factors that the Board may take into account in determining the fair value of our investments generally
include, as appropriate, comparison to publicly-traded securities including such factors as yield, maturity and measures of credit quality,
the enterprise value of a portfolio company, the nature and realizable value of any collateral, the portfolio company's ability
to make payments and its earnings and discounted cash flow, the markets in which the portfolio company does business and other relevant
factors. Because such valuations, and particularly valuations of private securities and private companies, are inherently uncertain, may
fluctuate over short periods of time and may be based on estimates, our determinations of fair value may differ materially from the values
that would have been used if a ready market for these loans and securities existed. Our net asset value could be adversely affected if
our determinations regarding the fair value of our investments were materially higher than the values that we ultimately realize upon
the disposal of such loans and securities. In addition, the method of calculating the base management fee may result in conflicts of interest
between the Investment Advisor, on the one hand, and our stockholders on the other hand, with respect to valuation of investments.

 We will adjust on a quarterly
basis the valuation of our portfolio to reflect the Investment Advisor's determination (subject to the Board's oversight)
of the fair value of each investment in our portfolio for which market quotes are not readily available. Any changes in fair value are
recorded in our statements of operations as net change in unrealized appreciation or depreciation on investments.

 We may experience fluctuations in our quarterly
operating results.

 We could experience fluctuations
in our quarterly operating results due to a number of factors, including the interest rate payable on the loans and debt securities we
acquire, the default rate on such loans and 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.
Moreover, as of December 31, 2023, 100% of our investments were classified as Level 1 or Level 2, which may cause our NAV to experience
greater fluctuations than funds with a greater proportion of Level 3 assets. In light of these factors, results for any period should
not be relied upon as being indicative of performance in future periods.

 The Board may change our investment objectives,
operating policies and strategies without prior notice or stockholder approval.

 The Board has the authority,
except as otherwise provided in the 1940 Act, to modify or waive certain of our operating policies and strategies without prior notice
and without stockholder approval. We cannot predict the effect any changes to our current operating policies and strategies would have
on our business, operating results and the market price of our common stock. Nevertheless, any such changes could adversely affect our
business and impair our ability to make distributions to our stockholders.

 We are subject to risks related to our
management of ESG activities.

 Our business faces increasing
public scrutiny related to 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.

 Our Investment Advisor and Administrator
each have the ability to resign on 60 days' notice, and we may not be able to find a suitable replacement within that time,
resulting in a disruption in our operations that could adversely affect our financial condition, business and results of operations.

 The Investment Advisor has
the right under the Advisory Agreement to resign as our Investment Advisor at any time upon not less than 60 days' written
notice, whether we have found a replacement or not. Similarly, our Administrator has the right under the Administration Agreement to
resign at any time upon not less than 60 days' written notice, whether we have found a replacement or not. If the Investment
Advisor or Administrator were to resign, we may not be able to find a new investment adviser or administrator, as applicable, or hire
internal management with similar expertise and ability to provide the same or equivalent services on acceptable terms within 60 days,
or at all. If we are unable to do so quickly, our operations are likely to experience a disruption, our financial condition, business
and results of operations as well as our ability to pay distributions to our stockholders are likely to be adversely affected.

 Moreover, pursuant to the
Resource Sharing Agreement, PSCM provides the Investment Advisor with experienced investment professionals and services so as to enable
the Investment Advisor to fulfill its obligations under the Advisory Agreement, and such Resource Sharing Agreement may itself be terminated
on 60 days' notice. If PSCM were to so terminate the Resource Sharing Agreement, the Investment Advisor may be required to seek
to find an alternate means of fulfilling its obligations under the Advisory Agreement, or to resign.

 We are highly dependent on information
systems, and systems failures or cyber-attacks could significantly disrupt our business, which may, in turn, negatively affect the value
of shares of our common stock and our ability to pay distributions.

 Our business relies on secure
information technology systems. These systems are exposed to operational and information security risks resulting from cyberattacks that
threaten the confidentiality, integrity or availability of our information resources (i.e., cyber incidents). Cyber incidents can result
from unintentional events (such as an inadvertent release of confidential information) or deliberate attacks by insiders or third parties.
These attacks could involve gaining unauthorized access to our information systems for purposes of misappropriating assets, stealing and
unauthorized release of confidential information, corrupting data, denial of service attacks on our websites, "ransomware"
that renders systems inoperable until ransom is paid, or various other forms of cybersecurity breaches. Cybersecurity incidents and cyber-attacks
have been occurring more frequently and will likely continue to increase. Such cyber incidents could result in disrupted operations, misstated
or unreliable financial data, liability for stolen assets or information, increased cybersecurity protection and insurance costs, litigation
and damage to our business relationships, any of which could have a material adverse effect on our business, financial condition and results
of operations. As our reliance on technology has increased, so have the risks posed to our information systems, both internal and those
provided by the Investment Advisor and third-party service providers. Cyber incidents affecting us, our Investment Advisor, or third-party
service providers may adversely impact us or the companies in which we invest, causing our investments to lose value. We, along with our
Investment Advisor, have implemented processes, procedures and internal controls to help mitigate cybersecurity risks and cyber intrusions.
However, these measures may not be effective, and there can be no assurance that a cyber incident will not occur or that our financial
results, operations or confidential information will not be negatively impacted by such an incident. In addition, the costs related to
cyber or other security threats or disruptions may not be fully insured or indemnified by other means, and we may be required to expend
additional resources to modify our protective measures and to investigate and remediate vulnerabilities or other exposures arising from
operational and security risks. Furthermore, cybersecurity continues to be a key priority for regulators around the world, and some jurisdictions
have enacted laws requiring companies to notify individuals or the general investing public of data security breaches involving certain
types of personal data, including the SEC, which, on July 26, 2023, adopted amendments requiring the prompt public disclosure of certain
cybersecurity breaches. If we fail to comply with the relevant laws and regulations, we could suffer financial losses, a disruption of
our businesses, liability to investors, regulatory intervention or reputational damage.

 Failure to maintain our status as a business
development company would reduce our operating flexibility.

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

 Our charter includes an exclusive forum
selection provision, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our
directors, officers, or other agents.

 Our charter provides that,
unless we consent in writing to the selection of a different forum, (i) the Circuit Court for Baltimore City, Maryland, or, if that court
does not have jurisdiction, the United States District Court for the District of Maryland, Baltimore Division, shall be, except for any
claims made under the federal U.S. securities laws, the sole and exclusive forum for (a) any derivative action or proceeding brought on
behalf of the Company, (b) any action asserting a claim of breach of any duty owed by a director or officer or other employee of the Company
to the Company or to the stockholders of the Company or asserting a claim of breach of any standard of conduct set forth in the Maryland
General Corporation Law, or the "MGCL", (c) any action asserting a claim against the Company or any director or officer or
other employee of the Company arising pursuant to any provision of the MGCL, the charter or our bylaws, or (d) any action asserting a
claim against the Company or any director or officer or other employee of the Company that is governed by the internal affairs doctrine.
and (ii) the federal district courts of the United States of America shall be the sole and exclusive forum for any claims, suits, actions
or proceedings arising under the federal securities laws. In addition, this provision may increase costs for shareholders in bringing
a claim against us or our directors, officers or other agents. Any person or entity purchasing or otherwise acquiring any interest in
shares of our capital stock will be deemed, to the fullest extent permitted by law, to have notice of and consented to these exclusive
forum provisions. The exclusive forum selection provision in our charter may limit our stockholders' ability to obtain a favorable
judicial forum for disputes with us or our directors, officers or other agents, which may discourage lawsuits against us and such persons.
It is also possible that, notwithstanding such exclusive forum selection provision, a court could rule that such provision is inapplicable
or unenforceable. If this occurred, we may incur additional costs associated with resolving such action in another forum, which could
materially adversely affect our business, financial condition and results of operations.

 We have a limited operating history.

 We began operations on January 23,
2020 and have a limited operating history. As a result, we are subject to all of the business risks and uncertainties associated with
any new business, including the risk that it will not achieve its investment objectives and that the value of your investment could decline
substantially or that the investor will suffer a complete loss of its investment in us.

 In addition, neither PSCM (including
the employees of PSCM that serve on the Investment Team) nor the Investment Advisor has managed a BDC prior to our inception. The 1940
Act imposes numerous constraints on the operations of BDCs that generally do not apply to other investment vehicles managed by PSCM. BDCs
are required, for example, to invest at least 70% of their total assets primarily in securities of U.S. private or thinly traded public
companies, cash, cash equivalents, U.S. government securities and other high-quality debt instruments that mature in one year or less
from the date of investment. We, the Investment Advisor and PSCM have limited experience operating or advising under these constraints,
which may hinder our ability to take advantage of attractive investment opportunities and to achieve our investment objective.

 Risks Related to the 1940 Act

 Our ability to enter into transactions
with our affiliates is restricted.

 The 1940 Act prohibits or
restricts our ability to engage in certain principal transactions and joint transactions with certain "First Tier" affiliates
and "Second Tier" affiliates. For example, we are prohibited from buying or selling any security from or to any person who
owns more than 25% of our voting securities or certain of that person's affiliates (each is a "First Tier" affiliate),
or entering into prohibited joint transactions with such persons, absent the prior approval of the SEC. We consider the Investment
Advisor and its affiliates, including PSCM, to be "First Tier" affiliates for such purposes. We are prohibited under the 1940
Act from participating in certain principal transactions and joint transactions with a "Second Tier" affiliate without the
prior approval of our Independent Directors. Any person that owns, directly or indirectly, 5% or more of our outstanding voting securities
will be a "Second Tier" affiliate for purposes of the 1940 Act, and we are generally prohibited from buying or selling any
security from or to such affiliate without the prior approval of our Independent Directors.

 We may, however, invest alongside
PSCM's investment funds, accounts and investment vehicles in certain circumstances where doing so is consistent with our investment
strategy as well as applicable law and SEC staff interpretations. For example, we may invest alongside such investment funds, accounts
and investment vehicles consistent with guidance promulgated by the SEC staff to purchase interests in a single class of privately placed
securities so long as certain conditions are met, including that the Investment Advisor and PSCM, acting on our behalf and on behalf of
such investment funds, accounts and investment vehicles, negotiate no term other than price.

 In situations where co-investment
with investment funds, accounts and investment vehicles managed by the Investment Advisor and its affiliates, including PSCM, is not permitted
or appropriate, such as when there is an opportunity to invest in different securities of the same issuer or where the different investments
could be expected to result in a conflict between our interests and those of these other clients, the Investment Advisor and PSCM will
need to decide which client will proceed with the investment. These restrictions will limit the scope of investment opportunities that
would otherwise be available to us.

 We, the Investment Advisor
and PSCM have been granted exemptive relief from the SEC to permit greater flexibility to negotiate the terms of co-investments if our
Board determines that it would be advantageous for us to co-invest with investment funds, accounts and investment vehicles managed by
PSCM in a manner consistent with our investment objectives, positions, policies, strategies and restrictions as well as regulatory requirements
and other pertinent factors. We believe that co-investment by us and investment funds, accounts and investment vehicles managed by the
Investment Advisor and its affiliates, including PSCM, may afford us additional investment opportunities and an ability to achieve greater
diversification. Accordingly, our exemptive order permits us to invest with these investment funds, accounts and investment vehicles managed
in the same portfolio companies under circumstances in which such investments would otherwise not be permitted by the 1940 Act. Our exemptive
relief permitting co-investments applies only if our Independent Directors review and approve each co-investment. The exemptive order
imposes other constraints on co-investments that limit the number of instances when we may rely on its protections.

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

 Regulations governing our
operation as a BDC affect our ability to raise, and the way in which we raise, additional capital or borrow for investment purposes,
which may have a negative impact on our growth. We may issue debt securities or preferred stock and/or borrow money from banks or other
financial institutions, which we refer to collectively as "senior securities," up to the maximum amount permitted by the
1940 Act. We are generally able to issue senior securities such that our asset coverage, as defined in the 1940 Act, equals at least
150% of gross assets less all liabilities and indebtedness not represented by senior securities, after each issuance of senior securities.
If the value of our assets decline, we may be unable to satisfy this test. If that happens, we may be required to sell a portion of our
investments at a time when such sales may be disadvantageous to use in order to repay a portion of our indebtedness.

 Risks Related to our Investments

 Economic recessions or downturns could
impair our portfolio companies, and defaults by our portfolio companies will harm our operating results.

 Many of the portfolio companies
in which we have invested or expect to make investments are likely to be susceptible to economic slowdowns or recessions and may be unable
to repay our loans during such periods. Therefore, the number of our non-performing assets is likely to increase, and the value of our
portfolio is likely to decrease during such periods. Adverse economic conditions may decrease the value of collateral securing some of
our loans and debt securities and the value of our equity investments. Economic slowdowns or recessions could lead to financial losses
in our portfolio and a decrease in revenues, net income and assets. Unfavorable economic conditions also could increase our funding costs,
limit our access to the capital markets or result in a decision by lenders not to extend credit to us. These events could prevent us
from increasing our investments and harm our operating results.

 A portfolio company's
failure to satisfy financial or operating covenants imposed by us or other lenders could lead to defaults and, potentially, termination
of its loans and foreclosure on its assets, which could trigger cross-defaults under other agreements and jeopardize our portfolio company's
ability to meet its obligations under the loans and debt securities that we hold. We may incur expenses to the extent necessary to seek
recovery upon default or to negotiate new terms with a defaulting portfolio company.

 We may hold the debt securities of leveraged
portfolio companies.

 Portfolio companies may issue
certain types of debt, such as senior loans, mezzanine or high yield in connection with leveraged acquisitions or recapitalizations in
which the portfolio company incurs a substantially higher amount of indebtedness than the level at which it had previously operated.
Leverage may have important consequences to these portfolio companies and us as an investor. For example, the substantial indebtedness
of a portfolio company could (i) limit its ability to borrow money for its working capital, capital expenditures, debt service requirements,
strategic initiatives or other purposes; (ii) require it to dedicate a substantial portion of its cash flow from operations to the
repayment of its indebtedness, thereby reducing funds available to it for other purposes; (iii) make it more highly leveraged than
some of its competitors, which may place it at a competitive disadvantage; or (iv) subject it to restrictive financial and operating
covenants, which may preclude it from favorable business activities or the financing of future operations or other capital needs.

 A leveraged portfolio company's
income and net assets will tend to increase or decrease at a greater rate than if borrowed money were not used. In addition, a portfolio
company with a leveraged capital structure will be subject to increased exposure to adverse economic factors, such as a significant rise
in interest rates, a severe downturn in the economy or deterioration in the condition of that portfolio company or its industry. If a
portfolio company is unable to generate sufficient cash flow to meet all of its obligations, it may take alternative measures (e.g.,
reduce or delay capital expenditures, sell assets, seek additional capital, or seek to restructure, extend or refinance indebtedness).
These actions may negatively affect our investment in such a portfolio company.

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

 Our investments in secured loans may nonetheless
expose us to losses from default and foreclosure.

 While we invest in secured
loans, they may nonetheless be exposed to losses resulting from default and foreclosure. Therefore, the value of the underlying collateral,
the creditworthiness of the borrower and the priority of the lien are each of great importance. We cannot guarantee the adequacy of the
protection of our interests, including the validity or enforceability of the loan and the maintenance of the anticipated priority and
perfection of the applicable security interests. Furthermore, we cannot assure you that claims may not be asserted that might interfere
with enforcement of our rights. In addition, in the event of any default under a secured loan held directly by us, we will bear a risk
of loss of principal to the extent of any deficiency between the value of the collateral and the principal and accrued interest of the
secured loan, which could have a material adverse effect on our cash flow from operations.

 In the event of a foreclosure,
we may assume direct ownership of the underlying asset. The liquidation proceeds upon sale of such asset may not satisfy the entire outstanding
balance of principal and interest on the loan, resulting in a loss to us. Any costs or delays involved in the effectuation of a foreclosure
of the loan or a liquidation of the underlying property will further reduce the proceeds and thus increase the loss.

 Our investments in mezzanine debt and other
junior securities are subordinate to senior indebtedness of the applicable company and are subject to greater risk.

 The mezzanine debt and other
junior investments in which we may invest are typically contractually or structurally subordinated to senior indebtedness of the applicable
company, or effectively subordinated as a result of being unsecured debt and therefore subject to the prior repayment of secured indebtedness
to the extent of the value of the assets pledged as security. In some cases, the subordinated debt held by us may be subject to the prior
repayment of different classes of senior debt that may be in priority ahead of the debt held by us. In the event of financial difficulty
on the part of a portfolio company, such class or classes of senior indebtedness ranking prior to the debt held by us, and interest thereon
and related expenses, must first be repaid in full before any recovery may be had on our mezzanine debt or other subordinated investments.
Subordinated investments are characterized by greater credit risks than those associated with the senior or senior secured obligations
of the same issuer. In addition, under certain circumstances the holders of the senior indebtedness will have the right to block the payment
of interest and principal on our mezzanine debt or other junior investment and to prevent us from pursuing its remedies on account of
such non-payment against the issuer. Further, in the event of any debt restructuring or workout of the indebtedness of any issuer, the
holders of the senior indebtedness will likely control the creditor side of such negotiations.

 Many issuers of mezzanine
debt or other junior securities are highly leveraged, and their relatively high debt-to-equity ratios create increased risks that their
operations might not generate sufficient cash flow to service their debt obligations. In addition, many issuers of mezzanine debt or
other junior securities may be in poor financial condition, experiencing poor operating results, having substantial capital needs or
negative net worth or be facing special competitive or product obsolescence problems, and may include companies involved in bankruptcy
or other reorganizations or liquidation proceedings. Adverse changes in the financial condition of an issuer, general economic conditions,
or both, may impair the ability of such issuer to make payments on the subordinated securities and result in defaults on such securities
more quickly than in the case of the senior obligations of such issuer. Mezzanine debt and other junior securities may not be publicly
traded, and therefore it may be difficult to obtain information as to the true condition of the issuers. Finally, the market values of
certain of mezzanine debt and other junior securities may reflect individual corporate developments.

 Our investments include Covenant-Lite Loans,
which give us fewer rights and subject us to greater risk of loss than loans with financial maintenance covenants.

 A significant number of high
yield loans in the market, in particular the broadly syndicated loan market, consist of Covenant-Lite Loans, which are loans that do not
require the borrower to maintain debt service or other financial ratios and do not include terms which allow the lender to monitor the
performance of the borrower and declare a default if certain criteria are breached. A significant portion of the loans in which we may
invest or get exposure to through its investments in CDOs or other types of structured securities are Covenant-Lite Loans and it is possible
that such loans may comprise a majority of our portfolio from time to time. Ownership of Covenant-Lite Loans exposes us to different risks,
including with respect to liquidity, price volatility, ability to restructure loans, credit risks and less protective loan documentation,
than is the case with loans that contain financial maintenance covenants. Generally, Covenant-Lite Loans provide borrower companies more
freedom to negatively impact lenders because their covenants are incurrence-based, which means they are only tested and can only be breached
following an affirmative action of the borrower, rather than by a deterioration in the borrower's financial condition. Accordingly,
to the extent we invest in Covenant-Lite Loans, we may have fewer rights against a borrower and may have a greater risk of loss on such
investments as compared to investments in or exposure to loans with financial maintenance covenants.

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

 The terms of loans we acquire
or originate may be subject to early prepayment options or similar provisions which, in each case, could result in us realizing repayments
of such loans earlier than expected, sometimes with no or a nominal prepayment premium. This may happen when there is a decline in interest
rates, when the portfolio company's improved credit or operating or financial performance allows the refinancing of certain classes
of debt with lower cost debt or when the general credit market conditions improve. Additionally, prepayments could negatively impact
our ability to pay, or the amount of, distributions on our common stock, which could result in a decline in the market price of our shares.
Our inability to reinvest such proceeds may materially affect the overall performance.

 We invest in high yield debt, which has
greater credit and liquidity risk than more highly rated debt obligations.

 We invest in high yield debt,
a substantial portion of which may be rated below investment-grade by one or more nationally recognized statistical rating organizations
or is unrated but of comparable credit quality to obligations rated below investment-grade, and has greater credit and liquidity risk
than more highly rated debt obligations. High yield debt is generally unsecured and may be subordinate to other obligations of the obligor.
The lower rating of high yield debt reflect a greater possibility that adverse changes in the financial condition of the obligor or in
general economic conditions (including, for example, a substantial period of rising interest rates or declining earnings) or both may
impair the ability of the obligor to make payment of principal and interest. Many issuers of high yield debt are highly leveraged, and
their relatively high debt-to-equity ratios create increased risks that their operations might not generate sufficient cash flow to service
their debt obligations. In addition, many issuers of high yield debt may be in poor financial condition, experiencing poor operating results,
having substantial capital needs or negative net worth or be facing special competitive or product obsolescence problems, and may include
companies involved in bankruptcy or other reorganizations or liquidation proceedings. Certain of these securities may not be publicly
traded, and therefore it may be difficult to obtain information as to the true condition of the issuers. Overall declines in the below
investment-grade bond and other markets may adversely affect such issuers by inhibiting their ability to refinance their debt at maturity.
High yield debt is often less liquid than higher rated securities, and the market for high yield debt has recently experienced periods
of volatility. The market values of certain of this high yield debt may reflect individual corporate developments.

 Our investments in bank loans and financial
institutions may be less liquid than our other investments and we may incur greater risk with respect to investments we acquire through
assignments or participations of interests.

 We may invest a portion of
our investments in loans originated by banks and other financial institutions. The loans invested in by us may include term loans and
revolving loans, may pay interest at a fixed or floating rate and may be senior or subordinated. Purchasers of bank loans are predominantly
commercial banks, investment funds and investment banks. As secondary market trading volumes for bank loans increase, new bank loans
are frequently adopting standardized documentation to facilitate loan trading, which should improve market liquidity. There can be no
assurance, however, that future levels of supply and demand in bank loan trading will provide an adequate degree of liquidity, that the
current period of illiquidity will not persist or worsen and that the market will not experience periods of significant illiquidity in
the future. In addition, we may make investments in stressed or distressed bank loans, which are often less liquid than performing bank
loans.

 Compared to securities and
to certain other types of financial assets, purchases and sales of loans take relatively longer to settle. This extended settlement process
can (i) increase the counterparty credit risk borne by us; (ii) leave us unable to timely vote, or otherwise act with respect
to, loans we have agreed to purchase; (iii) delay us from realizing the proceeds of a sale of a loan; (iv) inhibit our ability
to re-sell a loan that it has agreed to purchase if conditions change (leaving us more exposed to price fluctuations); (v) prevent
us from timely collecting principal and interest payments; and (vi) expose us to adverse tax or regulatory consequences. To the extent
the extended loan settlement process gives rise to short-term liquidity needs, we may hold cash, sell investments or temporarily borrow
from banks or other lenders.

 In certain circumstances,
loans may not be deemed to be securities, and in the event of fraud or misrepresentation by a borrower or an arranger, lenders will not
have the protection of the anti-fraud provisions of the federal securities laws, as would be the case for bonds or stocks. Instead, in
such cases, lenders generally rely on the contractual provisions in the loan agreement itself, and common-law fraud protections under
applicable state law.

 We may acquire interests
in bank loans either directly (by way of sale or assignment) or indirectly (by way of participation). The purchaser of an assignment
typically succeeds to all the rights and obligations of the assigning institution and becomes a lender under the credit agreement with
respect to the debt obligation; however, its rights can be more restricted than those of the assigning institution. Participation interests
in a portion of a debt obligation typically result in a contractual relationship only with the institution participating out the interest,
and not with the borrower. In purchasing participations, we generally will have no right to enforce compliance by the borrower with the
terms of the loan agreement, nor any rights of set-off against the borrower, and we may not directly benefit from the collateral supporting
the debt obligation in which it has purchased the participation. As a result, we will assume the credit risk of both the borrower and
the institution selling the participation. The bank loans acquired by us are likely to be below investment-grade.

 We invest in structured products and such
investments may involve significant risks.

 We invest, to a limited extent,
in structured products, which may include CDOs, CLOs (including the equity tranches thereof), structured notes, and credit-linked notes.
These investment entities may be structured as trusts or other types of pooled investment vehicles. They may also involve the deposit
with or purchase by an entity of the underlying investments and the issuance by that entity of one or more classes of securities backed
by, or representing interests in, the underlying investments or referencing an indicator related to such investments. CDOs and CLOs are
types of asset-backed securities issued by special purpose vehicles created to reapportion the risk and return characteristics of a pool
of assets. The underlying pool for a CLO, for example, may include domestic and foreign senior loans, senior unsecured loans, and subordinate
corporate loans. Generally, these are not qualified as eligible portfolio companies. Investments in the equity tranche or any similarly
situated tranche of a structured product involve a greater degree of risk than investments in other tranches, and such investments will
be the first to bear losses incurred by a structured product.

 Our CLO investments are typically highly
levered and subject to a higher degree of risk of total loss.

 CLO vehicles that we invest
in are typically very highly levered, and therefore, the junior debt and equity tranches that we invest in are subject to a higher degree
of risk of total loss. We will generally have the right to receive payments only from the CLO vehicles, and will generally not have direct
rights against the underlying borrowers or the entity that sponsored the CLO vehicle. The failure by a CLO vehicle in which we invest
to satisfy certain financial covenants, specifically those with respect to adequate collateralization and/or interest coverage tests,
could lead to a reduction in its payments to us. In the event that a CLO vehicle failed those tests, holders of debt senior to us may
be entitled to additional payments that would, in turn, reduce the payments we would otherwise be entitled to receive. If any of these
occur, it could materially and adversely affect our operating results and cash flows.

 In addition to the general
risks associated with investing in debt securities, CLO vehicles carry additional risks, including: (i) the possibility that distributions
from collateral securities will not be adequate to make interest or other payments; (ii) the quality of the collateral may decline
in value or default; (iii) the fact that our investments in CLO tranches will likely be subordinate to other senior classes of note
tranches thereof; and (iv) the complex structure of the security may not be fully understood at the time of investment and may produce
disputes with the CLO vehicle or unexpected investment results. Our net asset value may also decline over time if our principal recovery
with respect to CLO equity investments is less than the price we paid for those investments.

 Investments in structured
vehicles, including equity and junior debt instruments issued by CLO vehicles, involve risks, including credit risk and market risk.
Changes in interest rates and credit quality may cause significant price fluctuations. Additionally, changes in the underlying leveraged
corporate loans held by a CLO vehicle may cause payments on the instruments we hold to be reduced, either temporarily or permanently.
Structured investments, particularly the subordinated interests in which we intend to invest, may be less liquid than many other types
of securities and may be more volatile than the leveraged corporate loans underlying the CLO vehicles we intend to target. Fluctuations
in interest rates may also cause payments on the tranches of CLO vehicles that we hold to be reduced, either temporarily or permanently.

 The accounting and tax implications
of such investments are complicated. In particular, reported earnings from the equity tranche investments of these CLO vehicles are recorded
under generally accepted accounting principles based upon an effective yield calculation. Current taxable earnings on these investments,
however, will generally not be determinable until after the end of the fiscal year of each individual CLO vehicle that ends within our
fiscal year, even though the investments are generating cash flow. In general, the tax treatment of these investments may result in higher
distributable earnings in the early years and a capital loss at maturity, while for reporting purposes the totality of cash flows
are reflected in a constant yield to maturity.

 Interests we acquire in CLO
vehicles will likely be thinly traded or have only a limited trading market and may be subject to restrictions on resale. Securities issued
by CLO vehicles are generally not listed on any U.S. national securities exchange and no active trading market may exist for the
securities of CLO vehicles in which we may invest. Although a secondary market may exist for our investments in CLO vehicles, the market
for our investments in CLO vehicles may be subject to irregular trading activity, wide bid/ask spreads and extended trade settlement periods.
As a result, these types of investments may be more difficult to value.

 We may be subject to lender liability and
equitable subordination.

 In recent years, a number
of judicial decisions in the United States have upheld the right of borrowers to sue lending institutions on the basis of various
evolving legal theories (collectively termed "lender liability"). Generally, lender liability is founded upon the premise
that an institutional lender has violated a duty (whether implied or contractual) of good faith and fair dealing owed to the borrower
or has assumed a degree of control over the borrower resulting in creation of a fiduciary duty owed to the borrower or its other creditors
or stockholders. Because of the nature of certain of our investments, we could be subject to allegations of lender liability.

 In addition, under common
law principles that in some cases form the basis for lender liability claims, if a lending institution (i) intentionally takes an
action that results in the undercapitalization of a borrower to the detriment of other creditors of such borrower, (ii) engages
in other inequitable conduct to the detriment of such other creditors, (iii) engages in fraud with respect to, or makes misrepresentations
to, such other creditors or (iv) uses its influence as a stockholder to dominate or control a borrower to the detriment of the other
creditors of such borrower, a court may elect to subordinate the claim of the offending lending institution to the claims of the disadvantaged
creditor or creditors, a remedy called "equitable subordination." Because of the nature of certain of our investments, we
could be subject to claims from creditors of an obligor that our investments issued by such obligor should be equitably subordinated.
A significant number of our investments will involve investments in which we will not be the lead creditor. It is, accordingly, possible
that lender liability or equitable subordination claims affecting our investments could arise without our direct involvement.

 If we purchase debt securities
of an affiliate of a portfolio company in the secondary market at a discount, (i) a court might require us to disgorge profit it
realizes if the opportunity to purchase such securities at a discount should have been made available to the issuer of such securities
or (ii) we might be prevented from enforcing such securities at their full face value if the issuer of such securities becomes bankrupt.

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

 Following an initial investment
in a portfolio company, we may decide to provide additional funds to such portfolio company, in order to:

 increase or maintain in whole or in part our position
 as a creditor or equity ownership percentage in a portfolio company;

 exercise warrants, options or convertible securities that were acquired
 in the original or subsequent financing; or

 attempt to preserve or enhance the value of our investment.

 There is no assurance that
we will make follow-on investments or that we will have sufficient funds to make all or any of such investments. Even if we have sufficient
capital to make a desired follow-on investment, we may elect not to make a follow-on investment because we may not want to increase our
concentration of risk, because we prefer other opportunities or because we are restricted by compliance with BDC requirements of the 1940
Act or the desire to maintain our qualification as a RIC. Any decision by us not to make follow-on investments or our inability to
make such investments may have a substantial adverse effect on a portfolio company in need of such an investment. Additionally, a failure
to make such investments may result in a lost opportunity for us to increase our participation in a successful portfolio company or the
dilution of our ownership in a portfolio company if a third party invests in the portfolio company.

 Our portfolio may include equity investments,
which are subordinated to debt investments and are subject to additional risks.

 We expect to make select
equity investments in the common or preferred stock of a company, all of which are subordinated to debt investments. In addition, when
we invest in first lien secured debt, second lien secured debt or subordinated debt, we may acquire warrants to purchase equity investments
from time to time. Our goal is ultimately to dispose of these equity investments and realize gains upon our disposition of such interests.
However, the equity investments we receive may not appreciate in value and, in fact, may decline in value. Accordingly, we may not be
able to realize gains from our equity investments, and any gains that we do realize on the disposition of any equity investments may
not be sufficient to offset any other losses we experience. In addition, many of the equity securities in which we invest may not pay
dividends on a regular basis, if at all.

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

 We may acquire a significant
percentage of our portfolio company investments from privately held companies in directly negotiated transactions. The lack of an established,
liquid secondary market for some of our investments may have an adverse effect on the market value of our investments and on our ability
to dispose of them. Additionally, our investments may be subject to certain transfer restrictions that may also contribute to illiquidity.
Further, our assets that are typically traded in a liquid market may become illiquid due to events relating to the issuer, market events,
economic conditions or investor perceptions. Therefore, no assurance can be given that, if we are determined to dispose of a particular
investment held by us, it could dispose of such investment at the prevailing market price.

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

 We do not generally intend
to hold controlling equity positions in our portfolio companies. As a result, we will be subject to the risk that a portfolio company
may make business decisions with which we disagree, and that the management and/or stockholders of a portfolio company may take risks
or otherwise act in ways that are adverse to our interests. Due to the potential lack of liquidity of the debt and equity investments
that we hold in our portfolio companies, we may not be able to dispose of our investments in the event we disagree with the actions of
a portfolio company and may therefore suffer a decrease in the value of our investments.

 In addition, we may not be in a position to control any portfolio company
by investing in its debt securities. As a result, we are subject to the risk that a portfolio company may make business decisions with
which we disagree and the management of such company, as representatives of the holders of their common equity, may take risks or otherwise
act in ways that do not serve our interests as debt investors.

 Our portfolio companies could incur debt
that ranks equally with, or senior to, our investments in such companies and such portfolio companies could fail to generate sufficient
cash flow to service their debt obligations to us.

 The characterization of certain
of our investments as senior debt or senior secured debt does not mean that such debt will necessarily be repaid in priority to all other
obligations of the businesses in which we invest. Furthermore, debt and other liabilities incurred by non-guarantor subsidiaries of the
borrowers of senior secured loans made by us may be structurally senior to the debt held by us. In the event of insolvency, liquidation,
dissolution, reorganization or bankruptcy of a portfolio company, the debt and other liabilities of such subsidiaries could be repaid
in full before any distribution can be made to an obligor of the senior secured loans held by us. Finally, portfolio companies will typically
incur trade credit and other liabilities or indebtedness, which by their terms may provide that their holders are entitled to receive
principal payments on or before the dates payments are due in respect of the senior secured loans held by us.

 Where we hold a first lien
to secure senior indebtedness, the portfolio companies may be permitted to issue other senior loans with liens that rank junior to the
first liens granted to us. The intercreditor rights of the holders of such other junior lien debt may, in any liquidation, reorganization,
insolvency, dissolution or bankruptcy of such a portfolio company, affect the recovery that we would have been able to achieve in the
absence of such other debt.

 Additionally, certain loans
that we may make to portfolio companies may be secured on a second priority basis by the same collateral securing senior secured debt
of such companies. The first priority liens on the collateral will secure the portfolio company's obligations under any outstanding
senior debt and may secure certain other future debt that may be permitted to be incurred by the portfolio company under the agreements
governing the loans. The holders of obligations secured by first priority liens on the collateral will generally control the liquidation
of, and be entitled to receive proceeds from, any realization of the collateral to repay their obligations in full before us. In addition,
the value of the collateral in the event of liquidation will depend on market and economic conditions, the availability of buyers and
other factors. There can be no assurance that the proceeds, if any, from sales of all of the collateral would be sufficient to satisfy
the loan obligations secured by the second priority liens after payment in full of all obligations secured by the first priority liens
on the collateral. If such proceeds were not sufficient to repay amounts outstanding under the loan obligations secured by the second
priority liens, then we, to the extent not repaid from the proceeds of the sale of the collateral, will only have an unsecured claim
against the portfolio company's remaining assets, if any.

 Even where the senior loans
held by us are secured by a perfected lien over a substantial portion of the assets of a portfolio company and its subsidiaries, the
portfolio company and its subsidiaries will often be able to incur a substantial amount of additional indebtedness, which may have an
exclusive lien over particular assets. For example, debt and other liabilities incurred by non-guarantor subsidiaries of portfolio companies
will be structurally senior to the debt held by us. Accordingly, any such debt and other liabilities of such subsidiaries would, in the
event of liquidation, dissolution, insolvency, reorganization or bankruptcy of such subsidiary, be repaid in full before any distributions
to an obligor of the loans held by us. Furthermore, these other assets over which other lenders have a lien may be substantially more
liquid or valuable than the assets over which we have a lien.

 The rights we may have with
respect to the collateral securing the loans we make to our portfolio companies with senior debt outstanding may also be limited pursuant
to the terms of one or more intercreditor agreements that we enter into with the holders of such senior debt. Under a typical intercreditor
agreement, at any time that obligations that have the benefit of the first priority liens are outstanding, any of the following actions
that may be taken in respect of the collateral will be at the direction of the holders of the obligations secured by the first priority
liens:

 the ability to cause the commencement of enforcement proceedings against
 the collateral;

 the ability to control the conduct of such proceedings;

 the approval of amendments to collateral documents;

 releases of liens on the collateral; and

 waivers of past defaults under collateral documents.

 We may not have the ability
to control or direct such actions, even if our rights are adversely affected.

 We may also make unsecured
debt investments in portfolio companies, meaning that such investments will not benefit from any interest in collateral of such companies.
Liens on any such portfolio company's collateral, if any, will secure the portfolio company's obligations under its outstanding
secured debt and may secure certain future debt that is permitted to be incurred by the portfolio company under its secured debt agreements.
The holders of obligations secured by such liens will generally control the liquidation of, and be entitled to receive proceeds from,
any realization of such collateral to repay their obligations in full before us. In addition, the value of such collateral in the event
of liquidation will depend on market and economic conditions, the availability of buyers and other factors. There can be no assurance
that the proceeds, if any, from sales of such collateral would be sufficient to satisfy our unsecured debt obligations after payment
in full of all secured debt obligations. If such proceeds were not sufficient to repay the outstanding secured debt obligations, then
our unsecured claims would rank equally with the unpaid portion of such secured creditors' claims against the portfolio company's
remaining assets, if any.

 We are subject to risks related to investments
in non-U.S. securities.

 Our portfolio includes debt
securities of non-U.S. companies, including emerging market issuers, to the limited extent such transactions and investments would
not cause us to violate the 1940 Act. Investing in loans and securities of non-U.S. issuers involves many risks including economic,
social, political, financial, tax and security conditions in the non-U.S. market, potential inflationary economic environments, less
liquid markets and regulation by foreign governments. There may be less information publicly available about a non-U.S. issuer than
about a U.S. issuer, and non-U.S. issuers may not be subject to accounting, auditing and financial reporting standards and practices
comparable to those in the United States. In addition, with respect to certain countries, there is a possibility of expropriation,
imposition of non-U.S. withholding or other taxes on distributions, interest, capital gains or other income, limitations on the removal
of funds or other of our assets, political or social instability or diplomatic developments that could affect investments in those countries.
An issuer of securities may be domiciled in a country other than the country in whose currency the instrument is denominated. The values
and relative yields of investments in the securities markets of different countries, and their associated risks, are expected to change
independently of each other.

 Bankruptcy law and process
in non-U.S. jurisdictions may differ substantially from that in the United States, which may result in greater uncertainty
as to the rights of creditors, the enforceability of such rights, reorganization timing and the classification, seniority and treatment
of claims. In certain developing countries, although bankruptcy laws have been enacted, the process for reorganization remains highly
uncertain, while other developing countries may have no bankruptcy laws enacted, adding further uncertainty to the process for reorganization.

 We may be subject to risks if we engage
in hedging transactions.

 We are authorized to use
various investment strategies to hedge interest rate or currency exchange risks. These strategies are generally accepted as portfolio
management techniques and are regularly used by many investment funds and other institutional investors. Techniques and instruments may
change over time as new instruments and strategies are developed or regulatory changes occur. We may use any or all such types of interest
rate hedging transactions and currency hedging transactions at any time and no particular strategy will dictate the use of one transaction
rather than another. The choice of any particular interest rate hedging transactions and currency hedging transactions will be a function
of numerous variables, including market conditions. Investments or liabilities of ours may be denominated in currencies other than the
U.S. dollar, and hence the value of such investments, or the amount of such liabilities, will depend in part on the relative strength
of the U.S. dollar. We may be affected favorably or unfavorably by exchange control regulations or changes in the exchange rate
between foreign currencies and the U.S. dollar. Changes in foreign currency exchange rates may also affect the value of dividends
and interest earned as well as the level of gains and losses realized on the sale of securities. The rates of exchange between the U.S. dollar
and other currencies are affected by many factors, including forces of supply and demand in the foreign exchange markets. These rates
are also affected by the international balance of payments and other economic and financial conditions, government intervention, speculation
and other factors. We are not obligated to engage in any currency hedging operations, and there can be no assurance as to the success
of any hedging operations that we may implement.

 Although we intend to engage
in any interest rate hedging transactions and currency hedging transactions primarily for hedging purposes and not for income or enhancing
total returns, use of interest rate hedging transactions and currency hedging transactions involves certain inherent risks. These risks
include (i) the possibility that the market will move in a manner or direction that would have resulted in gain for us had an interest
rate hedging transaction or currency hedging transaction not been utilized, in which case it would have been better had we not engaged
in the interest rate hedging transaction or currency hedging transaction, (ii) the risk of imperfect correlation between the risk
sought to be hedged and the interest rate hedging transaction or currency hedging transaction utilized, (iii) potential illiquidity
for the hedging instrument utilized, which may make it difficult for us to close-out or unwind an interest rate hedging transaction or
currency hedging transaction and (iv) credit risk with respect to the counterparty to the interest rate hedging transaction or currency
hedging transaction. In addition, it might not be possible for us to hedge fully or perfectly against currency fluctuations affecting
the value of securities denominated in non-U.S. currencies because the value of those loans and securities would likely fluctuate
as a result of factors not related to currency fluctuations.

 We may also enter into certain
hedging and short sale transactions for the purpose of protecting the market value of an investment of ours for a period of time without
having to currently dispose of such investment. Such defensive hedge transactions may be entered into when we are legally restricted
from selling an investment or when we otherwise determine that it is advisable to decrease our exposure to the risk of a decline in the
market value of an investment. Such defensive hedging transactions may expose us to the counterparty's credit risk. There also
can be no assurance that we will accurately assess the risk of a market value decline with respect to an investment or enter into an
appropriate defensive hedge transaction to protect against such risk. Furthermore, we are in no event obligated to enter into any defensive
hedge transaction. We may from time to time employ various investment programs, including the use of derivatives, short sales, swap transactions,
currency hedging transactions, securities lending agreements and repurchase agreements. There can be no assurance that any such investment
program will be undertaken successfully.

 We may invest in derivatives or other assets
that expose us to certain risks, including market risk, liquidity risk and other risks similar to those associated with the use of leverage.

 We may invest in derivatives
and other assets that are subject to many of the same types of risks related to the use of leverage. In October 2020, the SEC adopted
Rule 18f-4 under the 1940 Act regarding the ability of a BDC to use derivatives and other transactions that create future payment or
delivery obligations. Under Rule 18f-4, BDCs that use derivatives are subject to a value-at-risk leverage limit, a derivatives risk management
program and testing requirements and requirements related to board reporting. These requirements apply unless the BDC qualifies as a
"limited derivatives user," as defined under Rule 18f-4. Under Rule 18f-4, a BDC may enter into an unfunded commitment agreement
(which may include delayed draw and revolving loans) that will not be deemed to be a derivatives transaction, such as an agreement to
provide financing to a portfolio company, if the BDC has, among other things, a reasonable belief, at the time it enters into such an
agreement, that it will have sufficient cash and cash equivalents to meet its obligations with respect to all of its unfunded commitment
agreements, in each case as it becomes due. Collectively, these requirements may limit our ability to use derivatives and/or enter into
certain other financial contracts.

 We have adopted updated policies
and procedures in compliance with Rule 18f-4. We expect to qualify as a "limited derivatives user." Future legislation or
rules may modify how we treat derivatives and other financial arrangements for purposes of our compliance with the leverage limitations
of the 1940 Act and, therefore, may increase or decrease the amount of leverage currently available to us under the 1940 Act, which may
be materially adverse to us and our stockholders.

 Our investments in OID and PIK interest
income may expose us to risks associated with such income being required to be included in accounting income and taxable income prior
to receipt of cash.

 Our investments may include
OID and PIK instruments. To the extent OID and PIK interest income constitute a portion of our income, we will be exposed to risks associated
with such income being required to be included in an accounting income and taxable income prior to receipt of cash, including the following:

 OID instruments and PIK securities may have unreliable valuations because
 the accretion of OID as interest income and the continuing accruals of PIK securities require judgments about their collectability
 and the collectability of deferred payments and the value of any associated collateral.

 OID instruments may create heightened credit risks because the inducement
 to the borrower to accept higher interest rates in exchange for the deferral of cash payments typically represents, to some extent,
 speculation on the part of the borrower.

 For accounting purposes, cash distributions to stockholders that include
 a component of accreted OID income do not come from paid-in capital, although they may be paid from the offering proceeds. Thus,
 although a distribution of accreted OID income may come from the cash invested by the stockholders, the 1940 Act does not require
 that stockholders be given notice of this fact.

 The higher interest rates on PIK securities reflects the payment deferral
 and increased credit risk associated with such instruments and PIK securities generally represent a significantly higher credit risk
 than coupon loans.

 The presence of accreted OID income and PIK interest income create
 the risk of non-refundable cash payments to the Investment Advisor in the form of incentive fees on income that will be payable subsequent
 to a Listing based on non-cash accreted OID income and PIK interest income accruals that may never be realized.

 Even if accounting conditions are met, borrowers on such securities
 could still default when our actual collection is expected to occur at the maturity of the obligation.

 PIK interest has the effect of generating investment income and increasing
 the incentive fees that will be payable subsequent to a Listing at a compounding rate. In addition, the deferral of PIK interest
 also reduces the loan-to-value ratio at a compounding rate.

 Market prices of OID instruments are more volatile because they are
 affected to a greater extent by interest rate changes than instruments that pay interest periodically in cash.

 The required recognition of OID, including PIK, interest for U.S. federal
 income tax purposes may have a negative impact on liquidity, because it represents a non-cash component of our taxable income that
 must, nevertheless, be distributed in cash to investors to avoid us being subject to corporate level taxation.

 Federal Income Tax and Other Tax Risks

 We will be subject to corporate-level income
tax if we are unable to qualify as a RIC.

 In order to qualify and be
subject to tax as a RIC under the Code, we must be a BDC at all times during each taxable year and meet certain source-of-income, asset
diversification and distribution requirements. If we do not maintain our status as a BDC, we may fail to qualify as a RIC and, thus,
may be subject to corporate-level income tax. The distribution requirement for a RIC is satisfied if we distribute dividends in respect
of each taxable year of an amount generally at least equal to 90% of our investment company taxable income, determined without regard
to any deduction for dividends paid, to our stockholders. We are subject to certain asset coverage ratio requirements under the 1940
Act and financial covenants under loan and credit agreements that could, under certain circumstances, restrict us from making distributions
necessary to enable us to be subject to tax as a RIC. If we are unable to obtain cash from other sources, we may fail to be subject
to tax as a RIC and, thus, may be subject to corporate-level income tax. To qualify to be subject to tax as a RIC, we must also meet
certain asset diversification requirements at the end of each quarter of our taxable year. Failure to meet these tests may result in
our having to dispose of certain investments quickly in order to satisfy these requirements. Because most of our investments will be
in private or thinly traded public companies, any such dispositions could be made at disadvantageous prices and may result in substantial
losses. If we fail to qualify to be subject to tax as a RIC for any reason and become subject to corporate income tax, the resulting
corporate taxes could substantially reduce our net assets, the amount of income available for distributions to our stockholders and the
amount of funds available for new investments. Such a failure would have a material adverse effect on us and our stockholders.

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

 For U.S. federal income
tax purposes, we will include in income certain amounts that we have not yet received in cash, such as the accretion of OID. This
may arise if we receive warrants in connection with the making of a loan and in other circumstances, or through contracted PIK interest,
which represents contractual interest added to the loan balance and due at the end of the loan term. Such OID, which could be significant
relative to our overall investment activities, or increases in loan balances as a result of contracted PIK arrangements, will be included
in income before we receive any corresponding cash payments. We also may be required to include in income certain other amounts that
we will not receive in cash.

 Since in certain cases we
may recognize income before or without receiving cash representing such income, we may have difficulty meeting the requirement in a given
taxable year to distribute at least 90% of our investment company taxable income, determined without regard to any deduction for dividends
paid, as dividends to our stockholders in order to be subject to tax as a RIC. In such a case, we may have to sell some of our investments
at times we would not consider advantageous, raise additional debt or equity capital or reduce new investment originations to meet these
distribution requirements. If we are not able to obtain such cash from other sources, we may fail to be subject to tax as a RIC and thus
be subject to corporate-level income tax.

 We may be required to withhold U.S. federal
income tax on distributions to non-U.S. stockholders.

 Distributions by a BDC generally
are treated as dividends for U.S. tax purposes, and will be subject to U.S. income or withholding tax unless the stockholder
receiving the dividend qualifies for an exemption from U.S. tax, or the distribution is subject to one of the special look-through
rules described below. Distributions paid out of net capital gains can qualify for a reduced rate of taxation in the hands of an individual
U.S. stockholder, and an exemption from U.S. tax in the hands of a non-U.S. stockholder.

 However, if reported by a
RIC, dividend distributions by the RIC derived from certain interest income (such distributions, "interest-related dividends")
and certain net short-term capital gains (such distributions, "short-term capital gain dividends") generally are exempt from
U.S. withholding tax otherwise imposed on non-U.S. stockholders. Interest-related dividends are dividends that are attributable
to "qualified net interest income" (i.e., "qualified interest income," which generally consists of certain interest
and OID on obligations "in registered form" as well as interest on bank deposits earned by a RIC, less allocable deductions)
from sources within the United States. Short-term capital gain dividends are dividends that are attributable to net short-term capital
gains, other than short-term capital gains recognized on the disposition of U.S. real property interests, earned by a RIC. However,
no assurance can be given as to whether any of our distributions will be eligible for this exemption from U.S. withholding tax or,
if eligible, will be reported as such by us. Furthermore, in the case of shares of our stock held through an intermediary, the intermediary
may have withheld U.S. federal income tax even if we reported the payment as an interest-related dividend or short-term capital
gain dividend. Since our common stock will be subject to significant transfer restrictions, and an investment in our common stock will
generally be illiquid, non-U.S. stockholders whose distributions on our common stock are subject to U.S. withholding tax may
not be able to transfer their shares of our common stock easily or quickly or at all.

 A failure of any portion
of our distributions to qualify for the exemption for interest-related dividends or short-term capital gain dividends would not affect
the treatment of non-U.S. stockholders that qualify for an exemption from U.S. withholding tax on dividends by reason of their
special status (for example, foreign government-related entities and certain pension funds resident in favorable treaty jurisdictions).

 Our business may be adversely affected
if we fail to maintain our qualification as a RIC.

 To maintain RIC tax treatment
under the Code, we must be a BDC at all times during each taxable year and meet the following minimum annual distribution, income source
and asset diversification requirements. The minimum annual distribution requirement for a RIC will be satisfied if we distribute dividends
to our stockholders in respect of each taxable year of an amount generally at least equal to 90% of our investment company taxable income,
determined without regard to any deduction for dividends paid. In this regard, a RIC may, in certain cases, satisfy the 90% distribution
requirement by distributing dividends relating to a taxable year after the close of such taxable year under the "spillback dividend"
provisions of Subchapter M of the Code. We would be taxed, at regular corporate rates, on any retained income and/or gains, including
any short-term capital gains or long-term capital gains. We must also satisfy an additional annual distribution requirement with respect
to each calendar year in order to avoid a 4% excise tax on the amount of any under-distribution. Because we may use debt financing, we
are subject to (i) an asset coverage ratio requirement under the 1940 Act and may, in the future, be subject to (ii) certain
financial covenants under loan and credit agreements that could, under certain circumstances, restrict us from making distributions necessary
to satisfy the distribution requirements. If we are unable to obtain cash from other sources, or chose or be required to retain a portion
of our taxable income or gains, we could (1) be required to pay excise tax and (2) fail to qualify for RIC tax treatment, and
thus become subject to corporate-level income tax on our taxable income (including gains).

 The income source requirement
will be satisfied if we obtain at least 90% of our gross income each taxable year from dividends, interest, gains from the sale of stock
or securities, or other income derived from the business of investing in stock or securities. The asset diversification requirement will
be satisfied if we meet certain asset diversification requirements at the end of each quarter of our taxable year. To satisfy this requirement,
at least 50% of the value of our assets at the close of each quarter of each taxable year must consist of cash, cash equivalents (including
receivables), U.S. Government securities, securities of other RICs, and other acceptable securities; and no more than 25% of the
value of our assets can be invested in the securities, other than U.S. government securities or securities of other RICs, of one
issuer, 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 of certain "qualified publicly traded partnerships." Failure to meet these
requirements may result in our having to dispose of certain investments quickly in order to prevent the loss of RIC status. Because a
significant portion of our investments will be in private companies, and therefore may be relatively illiquid, any such dispositions
could be made at disadvantageous prices and could result in substantial losses.

 We may invest in certain
debt and equity investments through taxable subsidiaries and the net taxable income of these taxable subsidiaries will be subject to
federal and state corporate income taxes. We also may invest in certain foreign debt and equity investments which could be subject to
foreign taxes (such as income tax, withholding, and value added taxes). If we fail to qualify for or maintain RIC tax treatment for any
reason and are subject to corporate income tax, the resulting corporate taxes could substantially reduce our net assets, the amount of
income available for distribution, and the amount of our distributions.

 There is a risk that you may not receive
distributions or that our distributions may not grow over time and a portion of our distributions may be a return of capital.

 We intend to make distributions
on a quarterly basis to our stockholders out of assets legally available for distribution. We cannot assure you that we will achieve
investment results that will allow us to make a specified level of cash distributions or year-to-year increases in cash distributions.
Our ability to pay distributions might be adversely affected by the impact of one or more of the risk factors described in this Annual
Report. Due to the asset coverage test applicable to us under the 1940 Act as a BDC and certain limitations under Maryland law, we may
be limited in our ability to make distributions. In addition, if we violate certain covenants under our credit facilities, or any future
credit or other borrowing facility, our ability to pay distributions to our stockholders could be limited because we may be required
by its terms to use all payments of interest and principal that we receive from our current investments as well as any proceeds received
from the sale of our current investments to repay amounts outstanding thereunder.

 Furthermore, the tax treatment
and characterization of our distributions may vary significantly from time to time due to the nature of our investments. The ultimate
tax characterization of our distributions made during a taxable year may not finally be determined until after the end of that taxable
year. We may make distributions during a taxable year that exceed our investment company taxable income and net capital gains for that
taxable year. In such a situation, the amount by which our total distributions exceed investment company taxable income and net capital
gains generally would be treated as a return of capital up to the amount of a stockholder's tax basis in the shares, with any amounts
exceeding such tax basis treated as a gain from the sale or exchange of such shares. A return of capital generally is a return of a stockholder's
investment rather than a return of earnings or gains derived from our investment activities. Moreover, we may pay all or a substantial
portion of our distributions from the proceeds of the sale of shares of our common stock or from borrowings in anticipation of future
cash flow, which could constitute a return of stockholders' capital and will lower such stockholders' tax basis in our shares,
which may result in increased tax liability to stockholders when they sell such shares.

 General Risk Factors

 Global capital markets could enter a period
of severe disruption and instability. These conditions have historically affected and could again materially and adversely affect debt
and equity capital markets in the United States and around the world and our business.

 The U.S. and global capital
markets have, from time to time, experienced periods of disruption characterized by the freezing of available credit, a lack of liquidity
in the debt capital markets, significant losses in the principal value of investments, the re-pricing of credit risk in the broadly syndicated
credit market, the failure of major financial institutions and general volatility in the financial markets. During these periods of disruption,
general economic conditions deteriorated with material and adverse consequences for the broader financial and credit markets, and the
availability of debt and equity capital for the market as a whole, and financial services firms in particular, was reduced significantly.
These conditions may reoccur for a prolonged period of time or materially worsen in the future.

 We may in the future have
difficulty accessing debt and equity capital markets, and a severe disruption in the global financial markets, deterioration in credit
and financing conditions, uncertainty between the United States and other countries with respect to trade policies, or uncertainty regarding
U.S. government spending and deficit levels or other global economic and political conditions, including future recessions, political
instability, geopolitical turmoil and foreign hostilities, and disease, pandemics and other serious health events, could have a material
adverse effect on our business, financial condition and results of operations.

 Inflation may adversely affect the business,
results of operations and financial condition of our portfolio companies.

 Certain of our portfolio companies are in industries that may be impacted
by inflation. If such portfolio companies are unable to pass any increases in their costs of operations along to their customers, it could
adversely affect their operating results and impact their ability to pay interest and principal on our loans, particularly if interest
rates rise in response to inflation. In addition, any projected future decreases in our portfolio companies' operating results due
to inflation could adversely impact the fair value of those investments. Any decreases in the fair value of our investments could result
in future realized or unrealized losses and therefore reduce our net increase (decrease) in net assets resulting from operations.

 Events outside of our control, including
public health crises, could negatively affect our portfolio companies, our Investment Advisor and the results of our operations.

 Periods of market volatility
could continue to occur in response to pandemics or other events outside of our control. We, the Investment Advisor, and the portfolio
companies in which we invest in could be affected by force majeure events (i.e., events beyond the control of the party claiming that
the event has occurred, such as acts of God, fire, flood, earthquakes, outbreaks of an infectious disease, pandemic or any other serious
public health concern, acts of war, terrorism, labor strikes, major plant breakdowns, pipeline or electricity line ruptures, failure
of technology, defective design and construction, accidents, demographic changes, government macroeconomic policies, social instability,
etc.). Some force majeure events could adversely affect the ability of a party (including us, the Investment Advisor, a portfolio company
or a counterparty to us, the Investment Advisor, or a portfolio company) to perform its obligations until it is able to remedy the force
majeure event or could lead to the unavailability of essential equipment and technologies. These risks could, among other effects, adversely
impact the cash flows available from a portfolio company, damage property, cause personal injury or loss of life, or instigate disruptions
of service. Certain events causing catastrophic loss could be either uninsurable, or insurable at such high rates as to adversely impact
us, the Investment Advisor, or our portfolio companies, as applicable, and insurance proceeds received, if any, could be inadequate to
completely or even partially cover any loss of revenues or investments, any increases in operating and maintenance expenses, or any replacements
or rehabilitation of property. Force majeure events that are incapable of or are too costly to cure could have permanent adverse effects.

 In addition, certain force
majeure events (such as events of war or an outbreak of an infectious disease, such as the global outbreak of COVID-19) could have a broader
negative impact on the world economy and international business activity generally, or in any of the countries in which we invest or in
which our portfolio companies operate. Such force majeure events could result in or coincide with: increased volatility in the global
securities, derivatives and currency markets; a decrease in the reliability of market prices and difficulty in valuing assets; greater
fluctuations in currency exchange rates; increased risk of default (by both government and private issuers); further social, economic,
and political instability; nationalization of private enterprise; greater governmental involvement in the economy or in social factors
that impact the economy; less governmental regulation and supervision of the securities markets and market participants and decreased
monitoring of the markets by governments or self-regulatory organizations and reduced enforcement of regulations; limited, or limitations
on, the activities of investors in such markets; controls or restrictions on foreign investment, capital controls and limitations on repatriation
of invested capital; inability to purchase and sell investments or otherwise settle security or derivative transactions (i.e., a market
freeze); unavailability of currency hedging techniques; substantial, and in some periods extremely high, rates of inflation, which can
last many years and have substantial negative effects on credit and securities markets as well as the economy as a whole; recessions;
and difficulties in obtaining and/or enforcing legal judgments.

 Additionally, a major governmental
intervention into industry, including the nationalization of an industry or the assertion of control over one or more portfolio companies
or its assets, could result in a loss to us, including if the investment in such portfolio companies is canceled, unwound or acquired
(which could result in inadequate compensation). Any of the foregoing could therefore have an adverse effect on our business and results
of operations.

 Global economic, political and market conditions,
including downgrades of the U.S. credit rating, may adversely affect our business, results of operations and financial condition.

 The current global financial
market situation, as well as various social and political tensions in the United States and around the world (including the bilateral
relationship between the U.S. and China, the conflict in the Red Sea and the conflict between Russia and Ukraine), may contribute to increased
market volatility, may have long-term effects on the United States and worldwide financial markets and may cause economic uncertainties
or deterioration in the U.S. and worldwide. The impact of downgrades by rating agencies to the U.S. government's sovereign credit
rating or its perceived creditworthiness as well as potential government shutdowns and uncertainty surrounding transfers of power could
adversely affect the U.S. and global financial markets and economic conditions.

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

 The conflict between Russia
and Ukraine could lead to disruption, instability and volatility in global markets, economies and industries that could negatively impact
our business, results of operations and financial condition. The conflict has already resulted in significant volatility in certain equity,
debt and currency markets, material increases in certain commodity prices, and economic uncertainty. The conflict may escalate and its
resolution is unclear. The U.S. government and other governments have imposed severe sanctions against Russia and Russian interests and
threatened additional sanctions and controls. Sanctions and export control laws and regulations are complex, frequently changing, and
increasing in number, and they may impose additional legal compliance costs or business risks associated with our operations.

 New or modified laws or regulations governing
our operations could adversely affect our business.

 We and our portfolio companies
will be subject to regulation by laws at the U.S. federal, state and local levels. These laws and regulations, as well as their
interpretation, may change from time to time, and new laws, regulations and interpretations may also come into effect. Any such new or
changed laws or regulations could have a material adverse effect on our business.

 Recent strain on the banking system may
adversely impact us.

 The financial markets recently
have encountered volatility associated with concerns about the balance sheets of banks, especially small and regional banks who may have
significant losses associated with investments that make it difficult to fund demands to withdraw deposits and other liquidity needs.
Although the federal government has announced measures to assist these banks and protect depositors, some banks have already been impacted
and others may be materially and adversely impacted. A significant adverse development with one or more national or regional banks, financial
institutions or other participants in the financial or capital markets may spread to others and lead to significant concentrated or market-wide
problems (such as defaults, liquidity problems, impairment charges, additional bank runs and/or losses) for other participants in these
markets. Future developments, including actions taken by the U.S. Department of Treasury, Federal Deposit Insurance Corporation ("FDIC")
and Federal Reserve Board, and systemic risk in the U.S. and global banking sectors and broader economies in general, are difficult to
assess and quantify, and the form and magnitude of such developments or other actions could have an adverse effect on our business, financial
condition and results of operations.

 For example, in response to
the rapidly declining financial condition of regional banks Silicon Valley Bank ("SVB") and Signature Bank ("Signature"),
the California Department of Financial Protection and Innovation (the "CDFPI") and the New York State Department of Financial
Services (the "NYSDFS") closed SVB and Signature on March 10, 2023 and March 12, 2023, respectively, and the FDIC
was appointed as receiver for SVB and Signature. Although the U.S. Department of the Treasury, the Federal Reserve and the FDIC have taken
measures to stabilize the financial system, uncertainty and liquidity concerns in the broader financial services industry remain. Additionally,
should there be additional systemic pressure on the financial system and capital markets, we cannot assure you of the response of any
government or regulator, and any response may not be as favorable to industry participants as the measures currently being pursued. In
addition, highly publicized issues related to the U.S. and global capital markets in the past have led to significant and widespread investor
concerns over the integrity of the capital markets. The situation related to SVB and Signature could in the future lead to further rules
and regulations for public companies, banks, financial institutions and other participants in the U.S. and global capital markets, and
complying with the requirements of any such rules or regulations may be burdensome. Even if not adopted, evaluating and responding to
any such proposed rules or regulations could results in increased costs and require significant attention from the Investment Advisor.

 Risks Relating to Our Common Stock

 Investing in our common stock involves an
above average degree of risk.

 The investments we make in
accordance with our investment objectives may result in a higher amount of risk than alternative investment options and a higher risk
of volatility or loss of principal. Therefore, an investment in shares of our common stock may not be suitable for someone with lower
risk tolerance. In addition, our common stock is intended for long-term investors who can accept the risks of investing primarily in illiquid
loans and other debt or debt-like instruments and should not be treated as a trading vehicle.

 The market price of our common stock may
fluctuate significantly.

 We currently list our common
stock on the NYSE under the symbol "PSBD." The market price and liquidity of the market for shares of our common stock may
be significantly affected by numerous factors, some of which are beyond our control and may not be directly related to our operating performance.
These factors include:

 significant volatility in the market price and trading volume
of securities of BDCs or other companies in our sector, which are not necessarily related to the operating performance of these companies;

 price and volume fluctuations in the overall stock market
from time to time;

 the inclusion or exclusion of our stock from certain indices;

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

 any loss of RIC or BDC status;

 changes in earnings or perceived changes or variations in
operating results;

 changes or perceived changes in the value of our portfolio
of investments;

 changes in accounting guidelines governing valuation of our
investments;

 any shortfall in revenue or net income or any increase in
losses from levels expected by investors or securities analysts;

 the inability of our Investment Advisor to employ additional
experienced investment professionals or the departure of any of our Investment Advisor's key personnel;

 short-selling pressure with respect to shares of our common
stock or BDCs generally;

 future sales of our securities convertible into or exchangeable
or exercisable for our common stock or the conversion of such securities;

 uncertainty surrounding the strength of the U.S. economy;

 operating performance of companies comparable to us;

 general economic trends and other external factors; and

 loss of a major funding source.

 In the past, following periods
of volatility in the market price of a company's securities, securities class action litigation has often been brought against that
company. If our stock price fluctuates significantly, we may be the target of securities litigation in the future. Securities litigation
could result in substantial costs and divert management's attention and resources from our business.

 We cannot assure you that a market for shares
of our common stock will be maintained or the market price of our shares will trade close to NAV.

 We cannot assure you that
a trading market for our common stock can be sustained. In addition, we cannot predict the prices at which our common stock will trade,
whether at, above or below NAV. Shares of closed-end investment companies, including BDCs, frequently trade at a discount from NAV, and
our common stock may also be discounted in the market. This characteristic of closed-end investment companies is separate and distinct
from the risk that our NAV per share may decline. In addition, if our common stock trades below its NAV, we will generally not be able
to sell additional shares of our common stock to the public at its market price without, among other things, the requisite stockholders'
approval of such a sale.

 Sales of substantial amounts of our common
stock in the public market may have an adverse effect on the market price of our common stock.

 Subsequent to the IPO, we have 32,552,794 shares of common stock outstanding.
Sales of substantial amounts of our common stock, or the availability of such shares for sale, could adversely affect the prevailing market
prices for our common stock. If this occurs and continues, it could impair our ability to raise additional capital through the sale of
equity securities should we desire to do so.

 Purchases of shares of our common stock
by us under our open market repurchase program, including the Company Rule 10b5-1 Stock Repurchase Plan, and by PSCM, including through
the PSCM Rule 10b5-1 Stock Purchase Plan, may result in the price of shares of our common stock being higher than the price that otherwise
might exist in the open market.

 Our Board authorized us to
repurchase shares of our common stock through an open-market share repurchase program for up to $20 million in the aggregate of shares
of our common stock through 12 months from the date of the IPO. Pursuant to such authorization and concurrently with the closing
of the IPO, we entered into the Company Rule 10b5-1 Stock Repurchase Plan to acquire up to $15 million in the aggregate of shares
of our common stock, in accordance with the guidelines specified in Rule 10b-18 and Rule 10b5-1 of the Exchange Act. In addition, PSCM
will purchase up to $5 million in the aggregate of shares of our common stock in the open market within one year of the date of the
IPO. Concurrently with the closing of the IPO, PSCM entered into the PSCM Rule 10b5-1 Stock Purchase Plan to permit the purchase of up
to $2.5 million of our shares of common stock in connection with its purchase commitment. These activities may have the effect of
maintaining the market price of shares of our common stock or retarding a decline in the market price of the shares of our common stock,
and, as a result, the price of our shares of common stock may be higher than the price that otherwise might exist in the open market.

 We may in the future determine to issue
preferred stock, which could adversely affect the market value of our common stock.

 The issuance of shares of preferred
stock with dividend or conversion rights, liquidation preferences or other economic terms more favorable to the holders of preferred stock
than to our common stockholders could adversely affect the market price for our common stock by making an investment in the common stock
less attractive. In addition, the dividends on any preferred stock we issue must be cumulative. Payment of dividends and repayment of
the liquidation preference of preferred stock must take preference over any distributions or other payments to our common stockholders,
and holders of preferred stock are not subject to any of our expenses or losses and are not entitled to participate in any income or appreciation
in excess of their stated preference (other than convertible preferred stock that converts into common stock). In addition, under the
1940 Act, participating preferred stock and preferred stock constitutes a "senior security" for purposes of the asset coverage
test.

 Provisions of the Maryland General Corporation
Law and of our charter and bylaws could deter takeover attempts and have an adverse impact on the price of our common stock.

 The Maryland General Corporation
Law, our charter and our bylaws contain provisions that may discourage, delay or make more difficult a change in control or the removal
of our directors. We are subject to Subtitle 6 of Title 3 of the Maryland General Corporate Law, the Maryland Business Combination Act,
subject to any applicable requirements of the 1940 Act. Our Board has adopted a resolution exempting from the Business Combination Act
any business combination between us and any other person, subject to prior approval of such business combination by our Board, including
approval by a majority of our independent directors. If the resolution exempting business combinations is repealed or our Board does not
approve a business combination, the Business Combination Act may discourage third parties from trying to acquire control of us and increase
the difficulty of consummating such an offer. We are subject to Subtitle 7 of Title 3 of the Maryland General Corporate Law, the Maryland
Control Share Acquisition Act. Our bylaws exempt from the Maryland Control Share Acquisition Act acquisitions of our common stock by any
person. If we amend our bylaws to repeal the exemption from the Control Share Acquisition Act, the Control Share Acquisition Act also
may make it more difficult for a third party to obtain control of us and increase the difficulty of consummating such an offer. We intend
to give the SEC prior notice should our Board elect to amend our bylaws to repeal the exemption from the Control Share Acquisition Act.

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

 ITEM 1B. UNRESOLVED STAFF COMMENTS

 None.

 ITEM 1C. CYBERSECURITY

 We have processes in place
to assess, identify, and manage material risks from cybersecurity threats. Our business is dependent on the communications and information
systems of the Investment Advisor and other third-party service providers. The Investment Advisor manages our day-to-day operations and
has implemented a cybersecurity program that applies to us and our business.

 Cybersecurity Program Overview

 The Investment Advisor has
instituted a cybersecurity program designed to identify, assess, and mitigate cyber risks applicable to us and to protect the systems,
data and other digital assets of the Company. The cyber risk management program involves risk assessments, implementation of security
measures, and ongoing monitoring of systems and networks, including networks on which we rely. The Investment Advisor actively monitors
the current threat landscape in an effort to identify material risks arising from new and evolving cybersecurity threats, including material
risks faced by us.

 We rely on the Investment
Advisor to engage external experts, including cybersecurity assessors, consultants, and auditors to evaluate cybersecurity measures and
risk management processes, including those applicable to us.

 We rely on the Investment
Advisor's risk management program and processes, which include cyber risk assessments.

 We depend on and engage various
third parties, including suppliers, vendors, and service providers, to operate our business. We rely on the expertise of risk management,
legal, information technology, and compliance personnel of the Investment Advisor when identifying and overseeing risks from cybersecurity
threats associated with our use of such entities.

 Board Oversight of Cybersecurity Risks

 The Board provides strategic
oversight on cybersecurity matters, including risks associated with cybersecurity threats. The Board receives periodic updates from our
Investment Advisor's Chief Operating Officer ("COO") and Chief Compliance Officer ("CCO") regarding the overall
state of the Investment Advisor's cybersecurity program, information on the current threat landscape, and risks from cybersecurity
threats and cybersecurity incidents impacting us.

 Management's Role in Cybersecurity Risk
Management

 Our management, including
the COO and CCO, is responsible for assessing and managing material risks from cybersecurity threats. Members of our management possess
relevant expertise in various disciplines that are key to effectively managing such risks, such as operations management, IT management,
oversight of third-party service providers and managing relationships with outside cybersecurity experts. Our management team is informed
about and monitors the prevention, detection, mitigation, and remediation of cybersecurity incidents impacting us, including through the
receipt of notifications from service providers and reliance on communications with risk management, legal, information technology, and/or
compliance personnel of the Investment Advisor.

 Assessment of Cybersecurity Risk

 The potential impact of risks
from cybersecurity threats on us are assessed on an ongoing basis, and how such risks could materially affect our business strategy, operational
results, and financial condition are regularly evaluated. During the reporting period, we have not identified any risks from cybersecurity
threats, including as a result of previous cybersecurity incidents, that we believe have materially affected, or are reasonably likely
to materially affect, us, including our business strategy, operational results, and financial condition.

 ITEM 2. PROPERTIES

 Our headquarters are located
at 1900 Shawnee Mission Parkway, Suite 315, Mission Woods, Kansas 66205. We believe that our office facilities are suitable and adequate
for our business.

 ITEM 3. LEGAL PROCEEDINGS

 We are not currently subject
to any material legal proceedings, nor, to our knowledge, is any material legal proceeding 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 loans to or other contracts with our portfolio companies.

 ITEM 4. MINE SAFETY DISCLOSURES

 None.

 ITEM 5. MARKET FOR REGISTRANT'S COMMON
EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 Market Information

 Our common stock began trading on the New York Stock Exchange ("NYSE")
on January 18, 2024 under the symbol "PSBD" in connection with our IPO, which closed on January 22, 2024. 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, 2023.

 As of the date hereof, none
of our shares of common stock are subject to outstanding options or warrants, nor do we have any outstanding equity that is convertible
into shares of our common stock. In addition, as of the date hereof, we have not granted any registration rights to any of our stockholders.
No stock has been authorized for issuance under any equity compensation plans.

 Holders

 As of February 28, 2024, we had 228 record holders of our common stock.
This number does not include stockholders for whom shares are held in "nominee" or "street name."

 The following table reflects
the distributions declared on shares during the fiscal year ended December 31, 2023:

 Declaration
 Date

 Record
 Date

 Per
 Share

 Payment
 Date

 Total
 Declared

 5/16/2023

 5/17/2023

 $
 0.520

 5/18/2023

 $
 13,183,368

 8/14/2023

 8/15/2023

 0.540

 8/16/2023

 13,928,820

 9/29/2023

 9/29/2023

 0.560

 10/17/2023

 14,678,378

 12/20/2023

 12/21/2023

 0.535

 12/22/2023

 14,277,719

 $
 56,068,285

 The following table reflects
the distributions declared on shares during the fiscal year ended December 31, 2022:

 Declaration
 Date

 Record
 Date

 Per
 Share

 Payment
 Date

 Total
 Declared

 5/12/2022

 5/17/2022

 $
 0.370

 5/18/2022

 $
 8,439,969

 8/11/2022

 8/16/2022

 0.440

 8/17/2022

 10,147,434

 11/10/2022

 11/15/2022

 0.440

 11/16/2022

 10,284,466

 12/30/2022

 12/30/2022

 0.640

 1/17/2023

 15,183,248

 $
 44,055,117

 The following table reflects
the distributions declared on shares during the fiscal year ended December 31, 2021:

 Declaration
 Date

 Record
 Date

 Per
 Share

 Payment
 Date

 Total
 Declared

 5/13/2021

 5/18/2021

 $
 0.31

 5/19/2021

 $
 4,050,180

 8/12/2021

 8/17/2021

 0.25

 8/18/2021

 3,738,707

 11/12/2021

 11/16/2021

 0.17

 11/17/2021

 3,713,626

 12/30/2021

 12/31/2021

 0.65

 1/19/2022

 14,449,980

 $
 25,952,493

 Distribution Reinvestment Plan

 The Company has adopted a
dividend reinvestment plan that provides for reinvestment of its dividends and other distributions on behalf of the Company's stockholders,
unless a stockholder elects to receive cash. As a result, if the Company's Board authorizes, and the Company declares, a cash dividend
or other distribution, then stockholders who do not "opt out" of the Company's dividend reinvestment plan will have
their cash dividends and distributions automatically reinvested in additional shares of the Company's common stock, rather than
receiving cash dividends and distributions.

 Prior to the IPO, the Board
primarily used newly-issued shares of the Company's common stock to implement the dividend reinvestment plan. The number of shares
of common stock to be issued to a participant prior to the IPO would be equal to the quotient determined by dividing the cash value of
the dividend payable to such stockholder by the net asset value per share as of the date such dividend was declared.

 After the IPO, the Board intends
to primarily use newly-issued shares to implement the dividend reinvestment plan, whether or not the shares are trading at a price per
share at, below or above net asset value. However, the Board reserves the right to purchase shares in the open market in connection with
the implementation of the dividend reinvestment plan. The Board will examine the full facts and circumstances of each such dividend to
determine the approach (i.e., to use newly issued shares or effectuate open market purchases to implement the dividend reinvestment plan)
that is in the best interests of stockholders taking into account the Board's fiduciary duties to stockholders, including by weighing
the potential dilution in connection with such issuance to be incurred by the Company's stockholders against the Company's
need and usage of reinvested funds, and, if we use newly issued shares to implement the dividend reinvestment plan at a time when the
shares are trading at a price below NAV, the stockholders' receipt of fewer shares than they would have if we had effectuated open
market purchases. The number of newly issued shares to be issued to a participant would be determined by dividing the total dollar amount
of the dividend payable to such stockholder by the market price per share of the Company's common stock at the close of regular
trading on a national securities exchange on the dividend payment date. Shares purchased in open market transactions by Equiniti, the
plan administrator and the Company's transfer agent, registrar and dividend disbursing agent, will be allocated to a participant
based upon the average purchase price, excluding any brokerage charges or other charges, of all shares of the Company's common stock
purchased with respect to the dividend.

 A registered stockholder may
elect to receive an entire distribution in cash by notifying Equiniti in writing so that such notice is received by the plan administrator
no later than the record date for distributions to stockholders. The plan administrator will set up an account for shares acquired through
the plan for each stockholder who has not elected to receive dividends or other distributions in cash and hold such shares in noncertificated
form.

 There will be no brokerage
charges or other charges to stockholders who participate in the plan. The plan administrator's fees are paid by the Company.

 Stockholders who receive dividends
and other distributions in the form of stock are generally subject to the same U.S. federal, state and local tax consequences as are stockholders
who elect to receive their distributions in cash. However, since a participating stockholder's cash dividends will be reinvested,
such stockholder will not receive cash with which to pay any applicable taxes on reinvested dividends. A stockholder's basis for
determining gain or loss upon the sale of stock received in a dividend or other distribution from the Company will generally be equal
to the total dollar amount of the distribution payable to the stockholder. Any stock received in a dividend or other distribution will
have a new holding period for tax purposes commencing on the day following the day on which the shares are credited to the U.S. stockholder's
account.

 Participants may terminate
their accounts under the plan by so notifying the plan administrator by submitting a letter of instruction terminating the participant's
account under the plan to Equiniti. The plan may be terminated by the Company upon notice in writing mailed to each participant at least
30 days prior to any record date for the payment of any dividend by the Company.

 If participants withdraw from
the plan or the plan is terminated, the plan administrator will cause the shares held for the participant under the plan to be delivered
to the participant. If an investor holds common stock with a brokerage firm that does not participate in the plan, such investor will
not be able to participate in the plan and any dividend reinvestment may be affected on different terms than those described above.

 Stockholders can obtain additional
information about the dividend reinvestment plan by contacting Equiniti via telephone at (877) 248-6417 or by mailing a request to Equiniti
Trust Company, LLC, 55 Challenger Rd, Ridgefield Park, NJ 07660.

 Recent sales of Unregistered Securities

 During the year ended December 31, 2023, the Company issued and sold
2,816,166 shares of its common stock at an aggregate purchase price of approximately $46.7 million. These amounts include shares issued
in reinvestment. The issuance of the shares of common stock was exempt from the registration requirements of the Securities Act, pursuant
to Section 4(a)(2) and Rule 506(b) of Regulation D thereof. The Company relied, in part, upon representations that each investor was an
accredited investor as defined in Regulation D under the Securities Act. The Company did not engage in solicitation or advertising, and
did not offer securities to the public, in connection with such issuances and sales.

 ITEM 6. [Reserved]

 Not applicable.

 ITEM 7. MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 The following discussion
and analysis should be read in conjunction with our consolidated financial statements and related notes and other financial information
appearing elsewhere in this Annual Report on Form 10-K.

 Forward Looking Statements

 This annual report on Form
10-K contains forward-looking statements that involve substantial known and unknown risks, uncertainties and other factors. Undue reliance
should not be placed on such statements. These forward-looking statements are not historical facts, but rather are based on current expectations,
estimates and projections about our company, our current and prospective portfolio investments, our industry, our beliefs and our assumptions.
Words such as "anticipates," "expects," "intends," "plans," "will," "may,"
"continue," "believes," "seeks," "estimates," "would," "could,"
"should," "targets," "projects," and variations of these words and similar expressions are intended
to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties
and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially
from those expressed or forecasted in the forward-looking statements, including:

 our future operating results;

 our business prospects and the prospects of our portfolio companies;

 changes in political, economic or industry conditions, the interest
rate environment or conditions affecting the financial and capital markets, including the liquidity of certain banks;

 uncertainty surrounding the financial and
political stability of the United States, the United Kingdom, the European Union and China, and the war between Russia and Ukraine;

 the impact of fluctuations in interest rates
and foreign exchange rates on our business and our portfolio companies;

 rising levels of inflation, and its impact on us, on our portfolio companies and on the industries in which we invest;

 the ability of the Investment Advisor to locate suitable investments
 for us and to monitor and administer our investments;

 the ability of the Investment Advisor and its affiliates to attract
 and retain highly talented professionals;

 risk associated with possible disruptions in our operations or the
economy generally, including a possible slowdown in the economy and risk of recession;

 the timing of cash flows, if any, from the operations of the companies
 in which we invest;

 the ability of the companies in which we invest to achieve their objectives;

 our ability to continue to effectively manage our business due to the
disruptions caused by global political and economic instability;

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

 our ability to maintain our qualification as a BDC and as a RIC under
 the Code;

 the use of borrowed money to finance a portion of our investments;

 the adequacy, availability and pricing of our financing sources and
 working capital;

 actual or potential conflicts of interest with the Investment Advisor
 and its affiliates;

 our contractual arrangements and relationships with third parties;

 loss of key personnel, and the illiquid nature of our investments;
and

 the risks, uncertainties and other factors we identify under "Item
 1A. Risk Factors" and elsewhere in this annual report on Form 10-K.

 Although we believe that the
assumptions on which these forward-looking statements are based are reasonable, any of the assumptions could prove to be inaccurate, and
as a result, the forward-looking statements based on those assumptions also could be inaccurate. In light of these and other uncertainties,
the inclusion of a projection or forward-looking statement in this annual report on Form 10-K should not be regarded as a representation
by us that our plans and objectives will be achieved. These risks and uncertainties include those described or identified in the section
entitled "Item 1A. Risk Factors" and elsewhere in this annual report on Form 10-K. You should not place undue reliance on
these forward-looking statements, which apply only as of the date of this annual report on Form 10-K. Moreover, we assume no duty and
do not undertake to update the forward-looking statements. Because we are a BDC, the forward-looking statements and projections contained
in this in this annual report on Form 10-K are excluded from the safe harbor protection provided by Sections 27A of the Securities Act
and Section 21E of the Exchange Act.

 Overview

 We are a financial services
company that primarily lends to and invests in corporate debt securities of companies, including small to large private U.S. companies.
We were organized as a Maryland corporation on August 26, 2019 and are structured as an externally managed, non-diversified closed-end
management investment company. We have elected to be regulated as a BDC under the 1940 Act. Beginning with our taxable year ended December
31, 2020, we have elected to be treated as a RIC under Subchapter M of the Code, and we expect to qualify as a RIC annually.

 On January 22, 2024, we completed
our IPO, issuing 5,450,000 shares of common stock, par value $0.001, at a public offering price of $16.45 per share. Our common stock
began trading on the New York Stock Exchange under the symbol "PSBD" on January 18, 2024.

 We are externally managed
by the Investment Advisor, an investment adviser that is registered with the SEC under the Advisers Act, pursuant to the Advisory Agreement.
Subject to the supervision of our Board, a majority of which is made up of Independent Directors, our Investment Advisor manages our day-to-day
operations and provides us with investment advisory and management services and certain administrative services. The Investment Advisor,
in its capacity as Administrator, provides the administrative services necessary for us to operate pursuant to the Administration Agreement.
The Administrator has entered into the Sub-Administration Agreement to delegate certain administrative functions to the Sub-Administrator.
Our Investment Advisor is a majority-owned subsidiary of PSCM, which is a privately held firm specializing in global alternative (non-traditional)
investments with a total return orientation.

 Our investment objective is
to maximize total return, comprised of current income and capital appreciation. However, no assurance can be given that our investment
objective will be achieved, and investment results may vary substantially on a monthly, quarterly and annual basis. The Company's
current investment focus is guided by two strategies that facilitate our investment opportunities and core competencies: (1) investing
in corporate debt securities and, to a lesser extent, (2) investing in CLO structured credit funds that typically own corporate debt securities,
including the equity and junior debt tranches of CLOs. We seek to invest in credit and other assets that the Investment Advisor believes
have strong structural protections, limited downside, and low long-term beta, or volatility, in comparison to systemic risk within the
broader credit and equity markets. A significant portion of the loans in which we may invest or obtain exposure to through our investments
in structured securities may be deemed "Covenant-Lite Loans," which means the loans contain fewer or no maintenance covenants
compared to other loans and do not include terms which allow the lender to declare a default if certain covenants are breached.

 Revenues

 We generate revenue primarily
in the form of interest and fee income on debt investments we hold and capital gains, if any, on investments. Our debt investments generally
bear interest at a floating rate usually determined on the basis of a benchmark. Interest on debt securities is generally payable quarterly
or semi-annually. In some instances, we receive payments on our debt investments based on scheduled amortization of the outstanding balances.
In addition, we receive repayments of some of our debt investments prior to their scheduled maturity date. The frequency or volume of
these repayments is expected to fluctuate significantly from period to period. Our portfolio activity also reflects the proceeds of sales
of securities. We may also generate revenue in the form of commitment, origination, amendment, structuring or due diligence fees, fees
for providing managerial assistance and consulting fees.

 Expenses

 Our primary operating expenses
include the payment of fees to the Investment Advisor under the Advisory Agreement, our allocable portion of overhead and rental expenses
under the Administration Agreement and other operating costs described below. We bear all other out-of-pocket costs and expenses of our
operations and transactions, including:

 interest expense and other costs associated with our indebtedness;

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

 the
 cost of effecting sales and repurchases of shares of our common stock and other securities;

 fees
 payable to third parties relating to making investments, including our Investment Advisor's
 or its affiliates' travel expenses, research costs and out-of-pocket fees and expenses
 associated with performing due diligence and reviews of prospective investments;

 transfer
 agent and custodial fees;

 operating
 costs incurred prior to the commencement of our operations;

 out-of-pocket
 fees and expenses associated with marketing efforts;

 federal
 and state registration fees and any stock exchange listing fees;

 U.S.
 federal, state and local taxes;

 Directors' fees and expenses;

 brokerage
 commissions and markups;

 fidelity
 bond, directors' and officers' liability insurance and other insurance premiums;

 direct
 costs, such as printing, mailing, long distance telephone and staff;

 fees
 and expenses associated with independent audits and outside legal costs;

 costs
 associated with our reporting and compliance obligations under the 1940 Act and other applicable
 U.S. federal and state securities laws; and

 other
 expenses incurred by the Administrator or us in connection with administering our business,
 including payments under the Administration Agreement that will be based upon our allocable
 portion (subject to the review and approval of our Board) of overhead, including rental expenses.

 Portfolio and Investment Activity

 As of December 31, 2023,
our weighted average total yield to maturity of debt and income producing securities at fair value was 10.51%, and our weighted average
total yield to maturity of debt and income producing securities at amortized cost was 8.93%.

 As of December 31, 2022, our
weighted average total yield to maturity of debt and income producing securities at fair value was 11.47%, and our weighted average total
yield to maturity of debt and income producing securities at amortized cost was 8.70%.

 As of December 31, 2023, we
had 227 debt and equity investments in 191 portfolio companies with an aggregate fair value of approximately $1.0 billion.

 As of December 31, 2022, we
had 204 debt and equity investments in 176 portfolio companies with an aggregate fair value of approximately $966.9 million.

 Our investment activity for the years ended December 31, 2023, 2022,
and 2021 is presented below (information presented herein is at amortized cost unless otherwise indicated).

 For the Year Ended

 2023

 2022

 2021

 New investments:

 Gross investments

 $
 273,733,424

 $
 278,951,054

 $
 926,351,937

 Less: sold investments

 (247,083,117
)

 (314,355,643
)

 (401,760,802
)

 Total new investments

 26,650,307

 (35,404,589
)

 524,591,135

 Principal amount of investments funded:

 First-lien senior secured debt investments

 $
 267,272,174

 $
 247,233,397

 $
 829,591,637

 Second-lien senior secured debt investments

 3,858,750

 19,102,118

 57,492,916

 Corporate bonds

 2,602,500

 -

 2,883,300

 Convertible bonds

 -

 3,728,288

 1,025,000

 Collateralized securities and structured products - debt

 -

 -

 14,757,907

 -

 8,887,251

 20,101,177

 Common stock

 -

 -

 500,000

 Total principal amount of investments funded

 273,733,424

 278,951,054

 926,351,937

 Principal amount of investments sold or repaid:

 First-lien senior secured debt investments

 233,535,659

 292,852,517

 380,386,061

 Second-lien senior secured debt investments

 8,013,549

 11,938,325

 12,583,308

 -

 987,500

 -

 Convertible bonds

 -

 4,504,808

 3,026

 2,533,909

 1,976,080

 -

 Collateralized securities and structured products - debt

 1,501,875

 8,788,407

 Common Stock

 -

 594,538

 -

 Total principal amount of investments sold or repaid

 247,083,117

 314,355,643

 401,760,802

 Our investment activity for the years ended December 31, 2023 and December
31, 2022, is presented below (information presented herein is at par unless otherwise indicated). New investment commitment refers to
funded commitments in new securities made during the year that remained outstanding as of December 31, 2023 and December 31, 2022 respectively.

 For the Year
 Ended

 2023

 2022

 2021

 Number
 of new investment commitments

 Average
 new investment commitment amount

 $
 3,802,624

 $
 4,784,093

 $
 4,521,355

 average maturity for new investment commitments

 5.19
 years

 5.95
 years

 5.85
 years

 of new debt investment commitments at floating rates

 98.82
 %

 100.00
 %

 99.42
 %

 of new debt investment commitments at fixed rates

 1.18
 %

 0.00
 %

 0.58
 %

 average interest rate of new investment commitments

 10.22
 %

 9.17
 %

 4.80
 %

 average spread over reference rate of new floating rate investment commitments

 4.87
 %

 4.80
 %

 4.39
 %

 average interest rate on investment sold or paid down

 9.56
 %

 5.45
 %

 4.40
 %

 (1)
 New
 CLO equity investments do not have an ascribed interest rate, and are therefore excluded
 from the calculation.

 (2)
 Variable
 rate loans bear interest at a rate that may be determined by reference to either a) LIBOR
 (which can include one-, two-, three- or six-month LIBOR) or b) the CME Term Secured Overnight
 Financing Rate ("SOFR" or "S") (which can include one-, three-, or
 six-month SOFR), which resets periodically based on the terms of the loan agreement. At the
 borrower's option, loans may instead reference an alternate base rate (which can include
 the Federal Funds Effective Rate or the Prime Rate), which also resets periodically based
 on the terms of the loan agreements. Loans that reference SOFR may include a Credit Spread
 Adjustment ("CSA"), where the CSA is a defined additional spread amount based
 on the tenor of SOFR the borrower selects (making the reference rate S+CSA).

 As of December 31, 2023 and December 31, 2022,
our investments consisted of the following:

 Fair

 Fair

 Cost

 Value

 Cost

 Value

 First-lien senior secured debt

 $
 984,089,538

 $

 $
 951,753,250

 $

 Second-lien senior secured debt

 67,449,770

 71,513,263

 4,495,104

 1,884,529

 14,859,567

 17,589,330

 24,478,438

 27,012,348

 Short-term investments

 $
 1,159,135,422

 $

 $
 1,120,099,935

 $

 The table below describes
investments by industry composition based on fair value as of December 31, 2023 and December 31, 2022:

2023

2022

 14.0
 %

 12.9
 %

 9.3
 %

 9.9
 %

 7.2
 %

 5.9
 %

 6.7
 %

 8.4
 %

 5.9
 %

 5.8
 %

 Short Term Investments

 5.8
 %

 4.9
 %

 4.2
 %

 2.6
 %

 4.2
 %

 3.9
 %

 Media

 3.7
 %

 3.2
 %

 3.4
 %

 2.8
 %

 2.9
 %

 3.3
 %

 2.9
 %

 3.7
 %

 2.6
 %

 2.5
 %

 2.0
 %

 1.3
 %

 1.7
 %

 1.9
 %

 1.7
 %

 2.1
 %

 1.7
 %

 1.5
 %

 1.6
 %

 0.6
 %

 1.6
 %

 1.6
 %

 1.5
 %

 1.2
 %

 1.4
 %

 1.1
 %

 Energy Equipment and Services

 1.4
 %

 0.6
 %

 1.3
 %

 1.3
 %

 1.2
 %

 1.4
 %

 1.2
 %

 2.5
 %

 1.2
 %

 2.0
 %

 1.0
 %

 2.1
 %

 Oil, Gas and Consumable Fuels

 0.9
 %

 1.7
 %

 0.8
 %

 0.3
 %

 Healthcare Equipment and Supplies

 0.8
 %

 0.9
 %

 Specialty Retail

 0.6
 %

 1.3
 %

 Real Estate Management and Development

 0.6
 %

 0.6
 %

 Wireless Telecommunication Services

 0.6
 %

 0.6
 %

 Pharmaceuticals

 0.6
 %

 0.6
 %

 Electrical Equipment

 0.5
 %

 0.5
 %

 Road and Rail

 0.5
 %

 0.5
 %

 Household Durables

 0.4
 %

 0.3
 %

 Industrial Conglomerates

 0.4
 %

 0.4
 %

 Technology Hardware, Storage and Peripherals

 -
 %

 0.4
 %

 Textiles, Apparel and Luxury Goods

 -
 %

 0.1
 %

 Airlines

 -
 %

 0.8
 %

 Total

 100.0
 %

 100.0
 %

 The table below shows the weighted average yields and interest rate
of our debt investments at fair value as of December 31, 2023 and December 31, 2022:

 2023

 2022

 average total yield of debt and income producing securities

 10.51
 %

 11.47
 %

 average interest rate of debt and income producing securities (1)

 10.10
 %

 8.83
 %

 average spread over reference rate of all floating rate investments (2)

 4.61
 %

 4.47
 %

 (1)
 CLO
 equity securities are considered income producing securities but do not have an ascribed
 interest rate, and therefore are excluded from the calculation

 (2)
 Variable
 rate loans bear interest at a rate that may be determined by reference to either a) LIBOR
 (which can include one-, two-, three- or six-month LIBOR) or b) SOFR (which can include one-,
 three-, or six-month SOFR), which resets periodically based on the terms of the loan agreement.
 At the borrower's option, loans may instead reference an alternate base rate (which
 can include the Federal Funds Effective Rate or the Prime Rate), which also resets periodically
 based on the terms of the loan agreements. Loans that reference SOFR may include CSA, where
 the CSA is a defined additional spread amount based on the tenor of SOFR the borrower selects
 (making the reference rate S+CSA).

 Results of Operations

 The following table represents
the operating results for the years ended December 31, 2023, 2022, and 2021:

 2023

 2022

 2021

 Total investment income

 $
 112,223,607

 $
 74,499,900

 $
 39,685,653

 Less: Net expenses

 54,236,087

 33,419,068

 16,851,412

 Net investment income

 57,987,520

 41,080,832

 22,834,241

 Net realized gains (losses) on investments

 (2,715,413
)

 (8,130,187
)

 4,753,263

 Net change in unrealized gains (losses) on investments

 (107,432,980
)

 (8,527,786
)

 Net increase (decrease) in net assets resulting from operations

 $

 $
 (74,482,335
)

 $

 Investment Income

 Investment income for the
years ended December 31, 2023, 2022, and 2021, was as follows:

 2023

 2022

 2021

 Interest from investments

 $
 107,739,382

 $
 73,705,450

 $
 38,897,216

 Dividend income

 4,066,745

 610,203

 9,597

 Other income

 417,480

 184,247

 778,840

 Total investment income

 $
 112,223,607

 $
 74,499,900

 $
 39,685,653

 For the years ended December
31, 2023, 2022, and 2021 total investment income was driven by interest income from our investments. The size of our investment portfolio
at fair value increased from $600.1 million as of December 31, 2020 to $1.1 billion as of December 31, 2021, decreased from $1.1
billion as of December 31, 2021 to $966.9 million as of December 31, 2022, and increased from $966.9 million as of December 31,
2022 to $1.0 billion as of December 31, 2023. All debt and short-term investments were income producing, and there were no loans on non-accrual
status as of December 31, 2023.

 Expenses

 Operating expenses for the years ended December 31, 2023, 2022, and
2021, was as follows:

 2023

 2022

 2021

 Interest expense

 $
 44,483,152

 $
 23,452,169

 $
 8,616,661

 Management fees

 8,408,074

 8,328,713

 6,369,583

 Other operating expenses

 2,320,870

 2,604,275

 2,586,366

 Directors fees

 Management fee waiver

 (1,051,009
)

 (1,041,089
)

 (796,198
)

 $
 54,236,087

 $
 33,419,068

 $
 16,851,412

 Net expenses for the year
ended December 31, 2023 were $54.2 million, which consisted of $44.5 million in interest and debt financing, $8.4 million in management
fees, $2.3 million in other operating expenses, and $75 thousand in directors fees offset by $1.1 million in management fee waiver from
the Investment Advisor.

 Interest expense increased during the year ended December 31, 2023,
primarily due to increased average interest rates under our BoA Credit Facility and WF Credit Facility. Average debt outstanding decreased
from $667.5 million to $629.6 million for the years ended December 31, 2022 and December 31, 2023, respectively. Management fees increased
due to a higher value of average net assets during the period. Average net assets increased from $416.4 million to $420.4 million as of
December 31, 2022 and December 31, 2023, respectively.

 Net expenses for the year
ended December 31, 2022 were $33.4 million, which consisted of $23.5 million in interest and debt financing, $8.3 million in management
fees, $2.6 million in other operating expenses, and $75 thousand in directors fees offset by $1.0 million in management fee waiver from
the Investment Advisor.

 Interest expense increased
during the year ended December 31, 2022 as a result of an increase in outstanding debt. Average debt outstanding increased from $477.0
million to $667.5 million for the years ended December 31, 2021 and December 31, 2022, respectively. Management fees increased due to
a higher value of average net assets during the period. Average net assets increased from $318.5 million to $416.4 million as of December
31, 2021 and December 31, 2022, respectively.

 Net expenses for the year
ended December 31, 2021 were $16.9 million, which consisted of $8.6 million in interest and debt financing, $6.4 million in management
fees, $2.6 million in other operating expenses, and $75 thousand in directors fees offset by $796 thousand in management fee waiver from
the Investment Advisor.

 Net Change in Unrealized Gains (Losses) on

 We fair value our portfolio
investments quarterly and any changes in fair value are recorded as unrealized gains or losses. During the years ended December 31, 2023,
2022, and 2021, net unrealized gains (losses) on our investment portfolio were comprised of the following:

 For the Year Ended

 For the Year Ended

 For the Year Ended

 2023

 2022

 2021

 Unrealized gains on investments

 $
 65,920,976

 $
 1,635,443

 $
 6,224,196

 Unrealized (losses) on investments

 (13,357,432
)

 (109,068,423
)

 (14,751,982
)

 Net change in unrealized gains (losses) on investments

 $

 $
 (107,432,980
)

 $
 (8,527,786
)

 The change in unrealized appreciation (depreciation) for the years
ended December 31, 2023, 2022, and 2021 totaled $52.6 million, $(107.4) million, and $(8.5) million, respectively. For the year ended
December 31, 2023, this consisted of net unrealized appreciation of $41.1 million related to existing portfolio investments and net unrealized
appreciation of $11.5 million related to exited portfolio investments (a portion of which has been reclassified to realized gains). For
the year ended December 31, 2022, this consisted of net unrealized depreciation of $106.2 million related to existing portfolio investments
and net unrealized depreciation of $1.2 million related to exited portfolio investments (a portion of which has been reclassified to realized
gains). For the year ended December 31, 2021, this consisted of net unrealized depreciation of $864 thousand related to existing portfolio
investments and unrealized appreciation of $2.7 million related to new portfolio investments, and net unrealized depreciation of $10.4
million related to exited portfolio investments (a portion of which has been reclassified to realized gains).

 Financial Condition, Liquidity and Capital
Resources

 We anticipate cash to be generated from registered offerings of our
common stock and other future offerings of equity and debt securities (including on-balance sheet CLO financings), and cash flows from
operations, including interest earned from the temporary investment of cash in cash equivalents, U.S. government securities and other
high-quality debt investments that mature in one year or less. On January 14, 2020, our sole stockholder approved the application of the
reduced asset coverage requirements in Section 61(a)(2) of the 1940 Act to us effective as of such date. As a result of the reduced asset
coverage requirement, we are permitted, under specified conditions, to issue multiple classes of indebtedness and one class of stock senior
to our common stock if our asset coverage, as defined in the 1940 Act, is at least equal to 150% immediately after each such issuance.
If we are unable to obtain leverage or raise equity capital on terms that are acceptable to us, our ability to grow our portfolio could
be substantially impacted. Furthermore, while any indebtedness and senior securities remain outstanding, we may be required to prohibit
any distribution to our stockholders or the repurchase of shares unless we meet the applicable asset coverage ratios at the time of the
distribution or repurchase. In connection with borrowings, our lenders, including under the BoA Credit Facility and the WF Credit Facility,
may require us to pledge assets, investor commitments to fund capital calls and/or the proceeds of those capital calls. In addition, such
lenders may ask us to comply with positive or negative covenants that could have an effect on our operations.

 During the year ended December 31, 2023, we experienced a net increase
in cash and cash equivalents of $466 thousand. During the period, net cash provided by operating activities was $19.5 million, primarily
as a result of proceeds received from sale of investments (excluding investments in short-term money market funds) of $247.1 million,
partially offset by fundings of portfolio investments (excluding investments in short-term money market funds) of $273.7 million. We invested
in short-term money market funds during the period, and as of the end of the period we held $63.8 million in fair value of short-term
money market funds. During the same period, net cash used in financing activities was $19.1 million, primarily consisting of $1.0 million
of net repayments under the BoA Credit Facility and WF Credit Facility, $1.8 million of payments of debt issuance costs and distributions
paid in cash of $33.9 million, partially offset by proceeds from the issuance of common stock of $17.6 million.

 During the year ended December
31, 2022, we experienced a net increase in cash and cash equivalents of $557 thousand. During the period, net cash provided by operating
activities was $25.1 million, primarily as a result of proceeds received from sale of investments (excluding investments in short-term
money market funds) of $314.4 million, partially offset by fundings of portfolio investments (excluding investments in short-term money
market funds) of $279.0 million. We invested in short-term money market funds during the period, and as of the end of the period we held
$50.3 million in fair value of short-term money market funds. During the same period, net cash used in financing activities was $24.6
million, primarily consisting of $10.8 million of net repayments under the BoA Credit Facility and WF Credit Facility and distributions
paid in cash of $18.8 million, partially offset by proceeds from the issuance of common stock of $5.0 million.

 During the year ended December 31, 2021, we experienced a net increase
in cash and cash equivalents of $411 thousand. During the period, net cash used in operating activities was $438 million, primarily as
a result of fundings of portfolio investments (excluding investments in short-term money market funds) of $926.4 million, partially offset
by proceeds received from sale of investments (excluding investments in short-term money market funds) of $406.8 million. We invested
in short-term money market funds during the period, and as of the end of the period we held $78.1 million in fair value of short-term
money market funds. During the same period, net cash provided by financing activities was $438.4 million, primarily consisting of $256.6
million of net borrowing under the BoA Credit Facility and WF Credit Facility and proceeds from the issuance of common stock of $188.9
million, partially offset by distributions paid in cash of $6.3 million.

 As of December 31, 2023 and December 31, 2022, we had cash and cash
equivalents of $2.1 million and $1.7 million, respectively. As of December 31, 2023, we had $504.0 million principal outstanding under
the BoA Credit Facility and $136.3 million principal outstanding under the WF Credit Facility. As of December 31, 2022, we had $514.5
million principal outstanding under the BoA Credit Facility and $126.8 million principal outstanding under the WF Credit Facility.

 During the years ended December 31, 2023, 2022, and 2021, we had aggregate
capital commitments and undrawn capital commitments from investors as follows:

 December
 31, 2023

 December
 31, 2022

 December
 31, 2021

 Unfunded

 % of

Funded

 Unfunded

 % of
 Funded

 Unfunded

 Commitments (1)

 % of
 Funded

 Common stock

 $
 17,654,225

 $
 -

 %

 $
 5,023,800

 $
 -

 %

 $
 193,511,571

 $
 4,650,000

 %

 (1)
 100% of the unfunded commitments
were drawn down in January 2022.

 As a BDC, we are required
to meet a coverage ratio of total assets to total borrowings and other senior securities, which include all of our borrowings and any
preferred stock that we may issue in the future, of at least 150%. If this ratio declines below 150%, we cannot incur additional debt
and could be required to sell a portion of our investments to repay some debt when it is disadvantageous to do so. As of December 31,
2023, our asset coverage ratio was 172%.

 Capital Contributions

 During the years ended December 31, 2023, 2022, and 2021, the Company
issued and sold 2,816,166 shares at an aggregate purchase price of $46.7 million, 1,716,297 shares at an aggregate purchase price of $29.2
million, and 10,007,526 shares at an aggregate purchase price of $206.6 million, respectively. These amounts include shares issued in
reinvestment.

 Financing Arrangements

 Bank of America Credit Facility

 On February 18, 2020, we,
through a special purpose wholly-owned subsidiary, PS BDC Funding, entered into the Credit Agreement with the Lenders, BofA N.A. as the
administrative agent and BofA Securities, as Lead Arranger and Sole Book Manager, pursuant to which the Lenders agreed to provide us
with a revolving line of credit.

 Under the BoA Credit Facility, which matures on February 18, 2025,
the Lenders have agreed to extend credit to PS BDC Funding in an aggregate amount up to the Commitment (as defined in the Credit Agreement)
amount. The Commitment amount for the BoA Credit Facility is currently $725 million. The Borrowers' ability to draw under the BoA
Credit Facility is scheduled to terminate on February 11, 2025. All amounts outstanding under the BoA Credit Facility are required to
be repaid by February 18, 2025.

 Prior to February 3, 2023, the loans under the BOA Credit Facility
may have been base rate loans or euro currency loans. The base rate loans bore interest at the base rate plus 1.30%, and the eurocurrency
rate loans bore interest at 1-month or 3-month LIBOR plus 1.30%. The "base rate" was equal to the highest of (a) the federal
funds rate plus 0.50%, (b) the prime rate, and (c) 1-month or 3-month LIBOR. On February 3, 2023, the
Company entered into an omnibus amendment to the BoA Credit Facility that, among other things: (i) removed LIBOR transition language and
(ii) replaced eurocurrency rate loans with SOFR loans.

 As of February 3, 2023, the
loans under the BoA Credit Facility may be base rate loans or SOFR loans. The base rate loans will bear interest at the base rate plus
1.40%, and the SOFR loans will bear interest at 1-month SOFR plus 1.40% or 3-month SOFR plus 1.45%. The "base rate" will be
equal to the highest of (a) the federal funds rate plus 0.50%, (b) the prime rate, and (c) 1-month or 3-month SOFR plus 0.10%. The Credit
Agreement includes fallback language in the event that SOFR becomes unavailable. Interest pursuant to base rate loans is payable quarterly
in arrears, and interest pursuant to SOFR loans is payable either quarterly or monthly, as specified by the Borrowers in a loan notice
pertaining thereto. The Credit Agreement requires the payment of a commitment fee of 0.50% for unused Commitments until the four-month
anniversary of the Second Amendment to the Credit Agreement. Thereafter, the commitment fee is 0.50% on unused Commitments up to 30% of
the BoA Credit Facility, and 1.30% on unused Commitments in excess of 30% of the BoA Credit Facility. Such fee is payable quarterly in
arrears. The advance rate for PS BDC Funding's Eligible Collateral Assets ranges from 40% for Second Lien Bank Loans to 70% for
First Lien Bank Loans that are B Assets to 100% for Cash (excluding Excluded Amounts) (as each such term is defined in the Credit Agreement).

 PS BDC Funding has pledged all of its assets to BofA N.A., in its capacity
as Administrative Agent, to secure its obligations under the BoA Credit Facility. Both the Company and PS BDC Funding have made customary
representations and warranties and are required to comply with various covenants, reporting requirements, and other customary requirements
for similar credit facilities. Borrowing under the BoA Credit Facility is subject to the leverage restrictions contained in the 1940 Act
and PS BDC Funding complies with 1940 Act provisions relating to affiliated transactions and custody (Section 17, as modified by Section
57, of the 1940 Act). The custodian of the assets pledged to BofA N.A. pursuant to the BoA Credit Facility is U.S. Bank National Administration.
The obligations under the Credit Agreement may be accelerated upon the occurrence of an event of default under the Credit Agreement, including
in the event of a change of control of PS BDC Funding or if the Investment Advisor ceases to serve as investment adviser to the Company.

 As of December 31, 2023,
we had approximately $504.0 million principal outstanding and $221.0 million of available Commitments under the BoA Credit Facility,
and PS BDC Funding was in compliance with the applicable covenants in the BoA Credit Facility on such date.

 Wells Fargo Credit Facility

 On December 18, 2020, we,
through a special purpose wholly-owned subsidiary, PS BDC Funding II, entered into the Loan Agreement with the WF Lenders, WFB as the
administrative agent and U.S. Bank, as Collateral Agent and Custodian, pursuant to which the WF Lenders agreed to provide us with a line
of credit.

 On December 18, 2023, we entered into an amendment to the WF Credit
Facility (the "WF Credit Facility Fourth Amendment") that amends the WF Credit Facility to, among other things: (i) increase
the amount available for borrowing under the WF Credit Facility from $150,000,000 to $175,000,000, (ii) extend the facility maturity date
from December 18, 2025 to December 18, 2028 and (iii) extend the reinvestment period from December 18, 2023 to December 18, 2026 (subject
to other provisions of the WF Credit Facility).

 Prior to April 10, 2023 the loans under the WF Credit Facility may
have been Broadly Syndicated Loans or Middle Market loans and were eurocurrency rate loans unless
such rate was unavailable, in which case the loans were base rate loans until such rate was available. Broadly Syndicated Loans bore interest
at the LIBOR or base rate, as applicable, plus 1.85%, and Middle Market Loans bore interest at LIBOR or base rate, as applicable, plus
2.35%. The "base rate" was equal to the highest of (a) the federal funds rate plus 0.50% and (b) the prime rate. On April
10, 2023, the Company entered into an amendment to the WF Credit Facility that, among other things: (i) transferred and assigned U.S.
Bank National Association's rights and obligations as collateral agent and as a secured party to U.S. Bank Trust Company, National
Association, (ii) referenced SOFR instead of LIBOR and (iii) removed LIBOR transition language.

 As of April 10, 2023, the
loans under the WF Credit Facility may be Broadly Syndicated Loans or Middle Market Loans and will bear interest at Daily Simple SOFR
or base rate (to the extent Daily Simple SOFR is unavailable), plus 2.50%, with an interest rate floor of 0.0%. The "base rate"
will be equal to the highest of (a) the federal funds rate plus 0.50% and (b) the prime rate. The Loan Agreement includes fallback language
in the event that Daily Simple SOFR becomes unavailable. Interest is payable quarterly, as determined by the WFB as the administrative
agent. Following an amendment to the WF Credit Facility on October 13, 2021, the Loan Agreement requires the payment of a non-usage fee
of (x) during the first thirteen months following the closing of the WF Credit Facility, 0.50% multiplied by daily unused Facility Amounts,
(y) between thirteen and sixteen months following the closing of the WF Credit Facility, 0.50% multiplied by the lesser of (1) daily unused
Facility Amounts and (2) 50% of the Facility Amount plus 2.00% multiplied by the greater of (i) the difference between the daily unused
Facility Amount and 50% of the Facility Amount and (ii) zero, and, (z) thereafter, 0.50% multiplied by the lesser of (1) daily unused
Facility Amounts and (2) 20% of the Facility Amount plus 2.00% multiplied by the greater of (i) the difference between the daily unused
Facility Amount and 20% of the Facility Amount and (ii) zero. Such fee is payable quarterly in arrears. The WF Credit Facility includes
the option to downsize the facility by paying a Commitment Reduction Fee. The Fee is equal to 2.00% of the facility reduction amount prior
to the one-year anniversary of the WF Credit Facility Fourth Amendment, and 1.00% thereafter. The applicable percentage for the advance
rate on PS BDC Funding II's Eligible Loans ranges from 67.5% for Middle Market Loans to 70% for Broadly Syndicated Loans (as each
such term is defined in the Loan Agreement).

 PS BDC Funding II has pledged all of its assets to U.S. Bank, in its
capacity as Collateral Agent, to secure its obligations under the WF Credit Facility and U.S. Bank acts as the custodian of such assets.
Both the Company and PS BDC Funding II have made customary representations and warranties and are required to comply with various covenants,
reporting requirements, and other customary requirements for similar credit facilities. Borrowing under the WF Credit Facility is subject
to the leverage restrictions contained in the 1940 Act and PS BDC Funding II complies with 1940 Act provisions relating to affiliated
transactions and custody (Section 17, as modified by Section 57, of the 1940 Act). The obligations under the Loan Agreement may be accelerated
upon the occurrence of an event of default under the Loan Agreement, including in the event of a change of control of PS BDC Funding II,
if the Investment Advisor ceases to serve as investment adviser to the Company, or if PSCM or its affiliates cease to directly or indirectly
own a majority of the membership interests of the Investment Advisor.

 As of December 31, 2023, we had approximately $136.3 million principal
outstanding and $38.7 million of available Commitments under the WF Credit Facility, and PS BDC Funding II was in compliance with the
applicable covenants in the WF Credit Facility on such date.

 Distribution Policy

 To the extent that we have
income available, we intend to distribute quarterly dividends to our stockholders. Our quarterly dividends, if any, will be determined
by our Board. Any dividends to our stockholders will be declared out of assets legally available for distribution.

 We have elected to be treated,
and intend to operate in a manner so as to continuously qualify, as a RIC under the Code. To obtain and maintain RIC tax treatment, among
other things, we must distribute dividends to our stockholders in respect of each taxable year of an amount at least equal to 90% of
the sum of our net ordinary income and net short-term capital gains in excess of our net long-term capital losses ("investment
company taxable income"), determined without regard to any deduction for dividends paid. In order to avoid certain excise taxes
imposed on RICs, we currently intend to distribute dividends to our stockholders in respect of each calendar year of an amount at least
equal to the sum of: (1) 98% of our net ordinary income (taking into account certain deferrals and elections) for such calendar year;
(2) 98.2% of our capital gains in excess of capital losses ("capital gain net income"), adjusted for certain ordinary losses,
generally for the one-year period ending on October 31 of such calendar year; and (3) any net ordinary income and capital gain net income
for preceding years that were not distributed during such years and on which we previously paid no U.S. federal income tax. Under certain
applicable provisions of the Code and U.S. Treasury regulations, distributions payable in cash or in shares of stock at the election
of the stockholders are treated as taxable dividends. The IRS has published guidance indicating that this rule will apply even where
the total amount of cash that may be distributed is limited to no more than 20% of the total distribution. Under this guidance, if too
many stockholders elect to receive their distributions in cash, the cash available for distribution must be allocated among the stockholders
electing to receive cash (with the balance of the distribution paid in stock). If we decide to make any distributions consistent with
this guidance that are payable in part in stock, taxable stockholders receiving such dividends will be required to include the full amount
of the dividend (whether received in cash, shares of our stock, or a combination thereof) as ordinary income (or as long-term capital
gain to the extent such distribution is properly reported as a capital gain dividend) to the extent of our current and accumulated earnings
and profits for U.S. federal income tax purposes. As a result, a U.S. stockholder may be required to pay tax with respect to such dividends
in excess of any cash received. If a U.S. stockholder sells the stock it receives in order to pay this tax, the sales proceeds may be
less than the amount included in income with respect to the dividend, depending on the value of our stock at the time of the sale. Furthermore,
with respect to non-U.S. stockholders, the Company may be required to withhold U.S. tax with respect to such dividends, including in
respect of all or a portion of such dividend that is payable in stock.

 For these excise tax purposes,
we will be deemed to have distributed any net ordinary taxable income or capital gain net income on which we have paid U.S. federal income
tax. Depending on the level of taxable income earned in a calendar year, we may choose to carry forward taxable income for distribution
in the following calendar year, and pay any applicable U.S. federal excise tax. We may not be able to achieve results that will permit
the payment of cash distributions.

 We currently intend to distribute
net capital gains (i.e., net long-term capital gains in excess of net short-term capital losses), if any, at least annually out of the
assets legally available for such distributions. However, we may decide in the future to retain such capital gains for investment, incur
a corporate-level tax on such capital gains, and elect to treat such capital gains as deemed distributions to our stockholders. If this
happens, our stockholders will be treated for U.S. federal income tax purposes as if they had received an actual distribution of the
capital gains that we retain and reinvested the net after tax proceeds in us. In this situation, our stockholders would be eligible to
claim a tax credit equal to their allocable share of the tax we paid on the capital gains deemed distributed to them. We may not be able
to achieve operating results that will permit us to pay any cash distributions, and if we issue senior securities, we will be prohibited
from making distributions if doing so would cause us to fail to maintain the asset coverage ratios stipulated by the 1940 Act or if such
distributions are limited by the terms of any of our borrowings.

 We have adopted a dividend
reinvestment plan that provides for reinvestment of our dividends and other distributions on behalf of our stockholders, unless a stockholder
elects to receive cash. As a result, if our Board authorizes, and we declare, a cash dividend or other distribution, then stockholders
who do not "opt out" of the Company's dividend reinvestment plan will have their cash dividends and distributions automatically
reinvested in additional shares of our common stock, rather than receiving cash dividends and distributions.

 Prior to the IPO, the Board
primarily used newly-issued shares of the Company's common stock to implement the dividend reinvestment plan. The number of shares
of common stock to be issued to a participant prior to the IPO would be equal to the quotient determined by dividing the cash value of
the dividend payable to such stockholder by the net asset value per share as of the date such dividend was declared.

 After the IPO, the Board intends
to primarily use newly-issued shares to implement the dividend reinvestment plan, whether or not the shares are trading at a price per
share at, below or above net asset value. However, the Board reserves the right to purchase shares in the open market in connection with
the implementation of the dividend reinvestment plan. The Board will examine the full facts and circumstances of each such dividend to
determine the approach (i.e., to use newly issued shares or effectuate open market purchases to implement the dividend reinvestment plan)
that is in the best interests of stockholders taking into account the Board's fiduciary duties to stockholders, including by weighing
the potential dilution in connection with such issuance to be incurred by the Company's stockholders against the Company's
need and usage of reinvested funds, and, if we use newly issued shares to implement the dividend reinvestment plan at a time when the
shares are trading at a price below NAV, the stockholders' receipt of fewer shares than they would have if we had effectuated open
market purchases. The number of newly issued shares to be issued to a participant would be determined by dividing the total dollar amount
of the dividend payable to such stockholder by the market price per share of our common stock at the close of regular trading on a national
securities exchange on the dividend payment date. Shares purchased in open market transactions by Equiniti, the plan administrator and
our transfer agent, registrar, and dividend disbursing agent, will be allocated to a participant based upon the average purchase price,
excluding any brokerage charges or other charges, of all shares of our common stock purchased with respect to the dividend.

 A registered stockholder may elect to receive an entire distribution
in cash by notifying Equiniti in writing so that such notice is received by the plan administrator no later than the record date for distributions
to stockholders. The plan administrator will set up an account for shares acquired through the plan for each stockholder who has not elected
to receive dividends or other distributions in cash and hold such shares in noncertificated form.

 Critical Accounting Policies

 Our consolidated financial
statements are prepared in conformity with accounting principles generally accepted in the United States of America, which requires us
to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial
statements and the reported amounts of revenues and expenses during the reporting periods.

 Critical accounting policies are those that require the application
of management's most difficult, subjective, or complex judgments, often because of the need to make estimates about the effect of
matters that are inherently uncertain and that may change in subsequent periods. The preparation of these financial statements will require
management 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. In addition to the discussion below, we have described our critical accounting policies in the notes to our consolidated financial
statements.

 Valuation of Portfolio Investments

 In December 2020, the SEC
adopted Rule 2a-5 under the 1940 Act, which permits a BDC's board of directors to either (i) choose to continue to determine fair
value in good faith, or (ii) designate its investment adviser as the valuation designee tasked with determining fair value in good faith,
subject to the board's oversight. Our Board has designated the Investment Advisor to serve as our valuation designee effective
August 11, 2022.

 Under procedures established by our Board, we value investments for
which market quotations are readily available at such market quotations. Assets listed on an exchange will be valued at their last sales
prices as reported to the consolidated quotation service at 4:00 P.M. Eastern Time on the date of determination. If no such sales of such
securities occurred, such securities will be valued at the mean between the last available bid and ask prices as reported by an independent,
third-party pricing service on the date of determination (unless the prices provided by the pricing service is believed by the Investment
Advisor to be unreliable or a significant event has occurred subsequent to the provision of the prices that the Investment Advisor determines
will affect the fair value of the securities). Debt and equity securities that are not publicly traded or whose market prices are not
readily available (or for which either of the events noted in the parenthetical immediately above occur) are valued at fair value by the
Investment Advisor. Such determination of fair values may involve subjective judgments and estimates, although we will also engage independent
valuation providers to review the valuation of each portfolio investment that constitutes a material portion of our portfolio and that
does not have a readily available market quotation at least once annually. With respect to unquoted securities, our Investment Advisor
will value each investment considering, among other measures, discounted cash flow models, comparisons of financial ratios of peer companies
that are public and other factors. With respect to Level 3 assets, we intend to retain one or more independent providers of financial
advisory services to assist the Investment Advisor by performing certain limited third-party valuation services. We may appoint additional
or different third-party valuation firms in the future.

 When an external event such
as a purchase transaction, public offering or subsequent equity sale occurs with respect to a fair-valued portfolio company or comparable
company, the Investment Advisor will use the pricing indicated by the external event in connection with its fair valuation determination
process. Because we expect that there will not be a readily available market for many of the investments in our portfolio, we expect
to value many of our portfolio investments at fair value as determined in good faith by the Investment Advisor using a documented valuation
policy and a consistently applied valuation process. 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 differ significantly from the values that would have
been used had readily available market quotations existed for such investments, and the differences could be material.

 Net Realized Gains or Losses and Net Change
in Unrealized Appreciation or Depreciation

 We measure realized gains
or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, without
regard to unrealized appreciation or depreciation previously recognized, but considering unamortized upfront fees and prepayment penalties.
Net change in unrealized appreciation or depreciation reflects the change in portfolio investment values during the reporting period,
including any reversal of previously recorded unrealized appreciation or depreciation, when gains or losses are realized. Realized gains
and losses from securities transactions and unrealized appreciation and depreciation of securities are determined using the identified
cost basis method for financial reporting.

 Related Party Transactions

 We have entered into the Advisory Agreement with the Investment Advisor
and the Administration Agreement with the Investment Advisor (in such capacity, the Administrator). Mr. Christopher D. Long and Mr. Jeffrey
D. Fox, each an executive officer of ours and an interested member of our Board, and Angie K. Long and Scott A. Betz, each an executive
officer of ours, have an indirect pecuniary interest in the Investment Advisor. The Investment Advisor is a registered investment adviser
under the Advisers Act that is majority-owned by PSCM. See " Note 3. Agreements and Related Party Transactions – Administration
Agreement " and " – Investment Advisory Agreement " in the notes to the accompanying consolidated financial
statements.

 Contractual Obligations

 We have certain contracts under which we have material future commitments.
We have entered into the Advisory Agreement with the Investment Advisor in accordance with the 1940 Act. Payments for investment advisory
services under the Advisory Agreement are equal to (a) a base management fee calculated at an annual rate of 1.75% of the average value
of the weighted average of our total net assets at the end of the two most recently completed quarters and (b) an incentive fee based
on our performance. The Investment Advisor agreed to waive its right to receive management fees in excess of 1.75% of the total net assets
during any period prior to the IPO. We have entered into an Administration Agreement with the Administrator to serve as our administrator.
Pursuant to the Administration Agreement, the Administrator furnishes us with office facilities and equipment, provides us with clerical,
bookkeeping and recordkeeping services at such facilities, and provides us with other services necessary for us to operate or has engaged
a third-party firm to perform some or all of these functions.

 A summary of our significant
contractual payment obligations related to the repayment of our outstanding indebtedness at December 31, 2023 is as follows:

 Payments Due by Period

 Total

 Less than
 1 year

 1-3 years

 3-5 years

 After
 5 years

 BoA Credit Facility, Net

 $

 $
 -

 $

 $
 -

 $
 -

 WF Credit Facility, Net

 $

 $
 -

 $
 -

 $

 $
 -

 Total contractual obligations

 $
 641,828,805

 $
 -

 $

 $

 $
 -

 Off-Balance Sheet Arrangements

 Unfunded commitments to provide
funds to portfolio companies are not recorded on our consolidated statements of assets and liabilities. Our unfunded commitments may
be significant from time to time. Unfunded commitments may expire without being drawn upon and the total commitment amount does not necessarily
represent future cash requirements. As of December 31, 2023 and December 31, 2022, we had fifteen unfunded commitments totaling $20.1
million, and two unfunded commitments totaling $2.6 million, respectively. See " Note 8. Commitments and Contingencies " in
the notes to the accompanying consolidated financial statements for specific identification of the unfunded commitments. We believe we
maintain sufficient liquidity in the form of cash (including restricted cash, if any), receivables and borrowing capacity to fund these
unfunded commitments should the need arise. See Financial Condition, Liquidity and Capital Resources above.

 Other than contractual commitments
and other legal contingencies incurred in the normal course of our business, we do not have any off- balance sheet financings or liabilities.

 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK

 We are subject to financial
market risks, including changes in interest rates. Interest rate sensitivity refers to the change in our earnings that may result from
changes in the level of interest rates. Because we fund a portion of our investments with borrowings, our net investment income will
be affected by the difference between the rate at which we invest and the rate at which we borrow. 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.

 Assuming that the consolidated
statement of assets and liabilities as of December 31, 2023 was to remain constant and that we took no actions to alter our existing
interest rate sensitivity, the following table shows the annualized impact of hypothetical base rate changes in interest rate.

 Change in Interest Rates

 Increase
 (Decrease)
 in Interest
 Income

 Increase
 (Decrease)
 in Interest
 Expense

 Net
 Increase
 (Decrease)
 in Net
 Investment
 Income

 Down 25 basis points

 $
 (2,707,525
)

 $
 (1,600,625
)

 $
 (1,106,900
)

 Up 100 basis points

 10,828,317

 6,402,500

 4,425,817

 Up 200 basis points

 21,540,626

 12,805,000

 8,735,626

 Up 300 basis points

 32,151,029

 19,207,500

 12,943,529

 The data in the table are
based on our current statement of assets and liabilities. As of December 31, 2023, the Company had $14.6 million in net purchases that
had not yet settled and $20.1 million in unfunded commitments. After settlement of these purchases, the change in interest expense will
be larger as a result of the increase in the amount borrowed under the BoA Credit Facility or WF Credit Facility, as applicable. The
table does not include any change in dividend income from our money market investments.

 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.

 We measure exposure to interest
rate and currency exchange rate fluctuations on an ongoing basis and may hedge against interest rate and currency exchange rate fluctuations
by using standard hedging instruments such as futures, options, swaps and forward contracts and credit hedging contracts, such as credit
default swaps, in each case, 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.

 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 Index to Consolidated Financial Statements

 Page

 Report of Independent Registered Public Accounting Firm

 Consolidated Statement of Assets and Liabilities as of December 31, 2023 and 2022

 Consolidated Statement of Operations for the years ended December 31, 2023, 2022, and 2021

 Consolidated Statement of Changes in Net Assets for the years ended December 31, 2023, 2022, and 2021

 Consolidated Statement of Cash Flows for the years ended December 31, 2023, 2022, and 2021

 Consolidated Schedule of Investments as of December 31, 2023 and 2022

 F-7 – F-28

 Notes to Consolidated Financial Statements

 F-29 – F-47

 F- 1

 Report of Independent Registered Public Accounting
Firm

 To the Board of Directors and Stockholders of Palmer Square Capital
BDC Inc.

 Opinion on the Financial Statements

 We have audited the accompanying consolidated
statements of assets and liabilities, including the consolidated schedules of investments, of Palmer Square Capital BDC Inc. and its subsidiaries
(the "Company") as of December 31, 2023 and 2022, and the related consolidated statements of operations, changes in net assets
and cash flows for each of the three years in the period ended December 31, 2023, including 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 as of December 31, 2023 and 2022, and the results of its operations, changes
in its net assets and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles
generally accepted in the United States of America.

 Basis for Opinion

 These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated 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 of these consolidated
financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the consolidated 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 its internal control over financial reporting. As part
of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing
an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our audits included performing procedures to assess
the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements. Our procedures included confirmation
of securities owned as of December 31, 2023 and 2022 by correspondence with the custodian, brokers and agent banks. We believe that our
audits provide a reasonable basis for our opinion.

 /s/ PricewaterhouseCoopers LLP

 Kansas City, Missouri

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

 PCAOB ID: 238

 F- 2

 Consolidated Statement of Assets and Liabilities

 2023

 2022

 Assets:

 Non-controlled, non-affiliated investments, at fair value (amortized cost of $ 1,159,135,422 and $ 1,120,099,935, respectively)

 $

 $

 Cash and cash equivalents

 2,117,109

 1,650,801

 Receivables:

 Receivable for sales of investments

 97,141

 31,014,356

 Receivable for paydowns of investments

 344,509

 136,119

 Due from investment adviser

 1,718,960

 234,102

 Dividend receivable

 301,637

 141,997

 Interest receivable

 8,394,509

 6,465,594

 Prepaid expenses and other assets

 30,100

 598,327

 Total Assets

 $
 1,121,814,718

 $
 1,057,453,028

 Liabilities:

 Credit facilities, net (Note 6)

 $
 641,828,805

 $
 641,309,417

 Payables:

 Payable for investments purchased

 14,710,524

 42,750,748

 Distributions payable

 -

 6,941,066

 Management fee payable

 2,252,075

 1,872,815

 Accrued other general and administrative expenses

 1,067,921

 1,135,500

 Total Liabilities

 $
 659,859,325

 $
 694,009,546

 Commitments and contingencies (Note 8)

 Net Assets:

 Common Shares, $ 0.001 par value; 450,000,000 shares authorized; 27,102,794 and 24,286,628 as of December 31, 2023 and December 31, 2022, respectively issued and outstanding

 $
 27,103

 $
 24,287

 Additional paid-in capital

 520,663,106

 473,921,377

 Total distributable earnings (accumulated deficit)

 ( 58,734,816
)

 ( 110,502,182
)

 Total Net Assets

 $
 461,955,393

 $

 Total Liabilities and Net Assets

 $
 1,121,814,718

 $
 1,057,453,028

 Net Asset Value Per Common Share

 $
 17.04

 $
 14.96

 The accompanying notes are an integral part of
these consolidated financial statements.

 F- 3

 Consolidated Statement of Operations

 2023

 2022

 2021

 Income:

 Investment income from non-controlled, non-affiliated investments:

 Interest income

 $
 107,739,382

 $
 73,705,450

 $
 38,897,216

 Dividend income

 4,066,745

 610,203

 9,597

 Other income

 417,480

 184,247

 778,840

 Total investment income from non-controlled, non-affiliated investments

 112,223,607

 74,499,900

 39,685,653

 Total Investment Income

 112,223,607

 74,499,900

 39,685,653

 Expenses:

 Interest expense

 44,483,152

 23,452,169

 8,616,661

 Management fees

 8,408,074

 8,328,713

 6,369,583

 Professional fees

 792,645

 741,961

 758,435

 Directors fees

 Other general and administrative expenses

 1,528,225

 1,862,314

 1,827,931

 Total Expenses

 55,287,096

 34,460,157

 17,647,610

 Less: Management fee waiver (Note 3)

 ( 1,051,009
)

 ( 1,041,089
)

 ( 796,198
)

 54,236,087

 33,419,068

 16,851,412

 Net Investment Income (Loss)

 57,987,520

 41,080,832

 22,834,241

 Realized and unrealized gains (losses) on investments and foreign currency transactions

 Net realized gains (losses):

 Non-controlled, non-affiliated investments

 ( 2,715,413
)

 ( 8,130,187
)

 4,753,263

 Total net realized gains (losses)

 ( 2,715,413
)

 ( 8,130,187
)

 4,753,263

 Net change in unrealized gains (losses):

 Non-controlled, non-affiliated investments

 ( 107,432,980
)

 ( 8,527,786
)

 Total net change in unrealized gains (losses)

 ( 107,432,980
)

 ( 8,527,786
)

 Total realized and unrealized gains (losses)

 49,848,131

 ( 115,563,167
)

 ( 3,774,523
)

 Net Increase (Decrease) in Net Assets Resulting from Operations

 $

)

 Per Common Share Data:

 Basic and diluted net investment income per common share

 $
 2.26

 1.78

 1.47

 Basic and diluted net increase (decrease) in net assets resulting from operations

 $
 4.20

 ( 3.22
)

 1.23

 Weighted Average Common Shares Outstanding - Basic and Diluted

 25,700,603

 23,130,666

 15,494,614

 The accompanying notes are an integral part of
these consolidated financial statements.

 F- 4

 Consolidated Statement of Changes in Net Assets

 2023

 2022

 2021

 Increase (Decrease) in Net Assets Resulting from Operations:

 Net investment income (loss)

 $
 57,987,520

 $
 41,080,832

 $
 22,834,241

 Net realized gains (losses) on investments and foreign currency transactions

 ( 2,715,413
)

 ( 8,130,187
)

 4,753,263

 Net change in unrealized gains (losses) on investments, foreign currency translations, and foreign currency exchange contracts

 ( 107,432,980
)

 ( 8,527,786
)

 Net Increase (Decrease) in Net Assets Resulting from Operations

)

 Decrease in Net Assets Resulting from Stockholder Distributions

 Dividends and distributions to stockholders

 ( 56,068,285
)

 ( 43,102,007
)

 ( 17,845,775
)

 Distributions declared from realized gains

 -

 ( 953,110
)

 ( 8,106,718
)

 Net Decrease in Net Assets Resulting from Stockholder Distributions

 ( 56,068,285
)

 ( 44,055,117
)

 ( 25,952,493
)

 Increase in Net Assets Resulting from Capital Share Transactions

 Issuance of common shares

 17,654,225

 5,023,801

 188,861,571

 Reinvestment of distributions

 29,090,320

 24,159,545

 17,683,821

 Net Increase in Net Assets Resulting from Capital Share Transactions

 46,744,545

 29,183,346

 206,545,392

 Total Increase (Decrease) in Net Assets

 98,511,911

 ( 89,354,106
)

 199,652,617

 Net Assets, Beginning of Period

 452,797,588

 253,144,971

 Net Assets, End of Period

 $
 461,955,393

 $

 452,797,588

 The accompanying notes are an integral part of
these consolidated financial statements.

 F- 5

Consolidated Statement of Cash Flows

 2023

 2022

 2021

 Cash Flows from Operating Activities:

 Net increase (decrease) in net assets resulting from operations

 $

 $
)

 $

 Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash used in operating activities:

 Net realized (gains)/losses on investments

 2,715,413

 8,130,187

 ( 4,753,263
)

 Net change in unrealized (gains)/losses on investments

 ( 52,563,544
)

 107,432,980

 8,527,786

 Net accretion of discount on investments

 ( 1,851,339
)

 ( 1,717,453
)

 ( 286,282
)

 Purchases of short-term investments

 ( 578,708,751
)

 ( 374,447,403
)

 ( 662,604,311
)

 Purchases of portfolio investments

 ( 273,733,424
)

 ( 278,951,054
)

 ( 926,351,937
)

 Proceeds from sale of short-term investments

 565,459,502

 402,242,952

 637,566,416

 Proceeds from sale of portfolio investments

 247,083,117

 314,355,643

 406,800,208

 Amortization of deferred financing cost

 1,005,799

 988,243

 909,269

 Increase/(decrease) in operating assets and liabilities:

 (Increase)/decrease in receivable for sales of investments

 30,917,215

 ( 13,620,479
)

 ( 5,631,875
)

 (Increase)/decrease in interest and dividends receivable

 ( 2,088,555
)

 ( 2,770,690
)

 ( 2,224,325
)

 (Increase)/decrease in due from investment adviser

 ( 1,484,858
)

 46,638

 ( 125,387
)

 (Increase)/decrease in receivable for paydowns of investments

 ( 208,390
)

 91,429

 ( 106,157
)

 (Increase)/decrease in prepaid expenses and other assets

 568,233

 ( 402,331
)

 ( 195,996
)

 Increase/(decrease) in interest payable on credit facilities

 2,326,070

 1,160,678

 -

 Increase/(decrease) in payable for investments purchased

 ( 28,040,224
)

 ( 61,528,210
)

 88,725,508

 Increase/(decrease) in management fees payable

 379,260

 ( 373,103
)

 1,003,097

 Increase/(decrease) in directors fee payable

 -

 ( 5,000
)

 -

 Increase/(decrease) in accrued other general and administrative expenses

 ( 67,579
)

 ( 1,038,008
)

 1,676,221

 Net cash provided by (used in) operating activities

 19,543,596

 25,112,684

 ( 438,011,310
)

 Cash Flows from Financing Activities:

 Borrowings on the credit facilities

 27,500,000

 81,250,000

 256,629,745

 Payments on the credit facilities

 ( 28,500,000
)

 ( 92,000,000
)

 -

 Payments of debt issuance costs

 ( 1,812,482
)

 -

 ( 780,621
)

 Distributions paid in cash

 ( 33,919,031
)

 ( 18,829,187
)

 ( 6,288,461
)

 Proceeds from issuance of common shares, net of change in subscriptions receivable of $ -

 17,654,225

 5,023,801

 188,861,571

 Net cash provided by (used in) financing activities

 ( 19,077,288
)

 ( 24,555,386
)

 438,422,234

 Net increase/(decrease) in cash and cash equivalents

 466,308

 557,298

 410,924

 Cash and cash equivalents, beginning of period

 1,650,801

 1,093,503

 682,579

 Cash and cash equivalents, end of period

 $
 2,117,109

 $
 1,650,801

 1,093,503

 Supplemental and Non-Cash Information:

 Interest paid during the period

 $
 42,157,082

 $
 22,291,491

 $
 7,313,093

 Distributions declared during the period

 $
 56,068,285

 $
 44,055,117

 $
 25,952,493

 Reinvestment of distributions during the period

 $
 29,090,320

 $
 24,159,545

 $
 17,683,821

 Distributions payable

 $
 -

 $
 6,941,066

 $
 5,874,681

 The accompanying notes are an integral part of
these consolidated financial statements.

 F- 6

 Date

 Par

 Fair

 Value

 Debt

 First
 Lien Senior Secured (2)

 Holdings PLC (4)(6)

 10.82%
 (S + CSA + 5.25%)

 7/8/2028

 $
 3,391,190

 $
 3,170,705

 $
 3,301,560

 0.6
 %

 AAdvantage
 Loyalty IP Ltd. (4)(6)

 10.43%
 (S + CSA + 4.75%)

 4/20/2028

 3,375,000

 3,349,525

 3,472,300

 0.7
 %

 AccentCare,
 Inc. (6)

 9.65%
 (S + CSA + 4.00%)

 6/22/2026

 5,909,529

 5,910,503

 4,648,848

 0.9
 %

 Accession
 Risk Management Group, Inc. (9)

 11.35%
 (S + 6.00%)

 10/30/2029

 167,153

 140,244

 154,018

 0.0
 %

 Accession
 Risk Management Group, Inc.

 11.41%
 (S + CSA + 6.00%)

 10/30/2029

 375,000

 375,000

 373,125

 0.1
 %

 Accession
 Risk Management Group, Inc.

 11.02%
 (S + CSA + 5.50%)

 11/1/2029

 798,244

 778,995

 798,244

 0.2
 %

 Accession
 Risk Management Group, Inc. (7)

 11.01%
 (S + CSA + 5.50%)

 11/1/2029

 6,129,372

 6,094,817

 6,129,372

 1.2
 %

 Acrisure,
 LLC (6)

 9.90%

 2/15/2027

 4,949,000

 4,925,187

 4,970,652

 1.0
 %

 Acrisure,
 LLC (6)

 9.15%

 5,782,273

 5,774,311

 5,780,741

 1.2
 %

 AI
 Aqua Merger Sub, Inc., (6)(7)

 9.09%
 (S + 3.75%)

 6/16/2028

 7,584,500

 7,588,317

 7,599,745

 1.6
 %

 Aimbridge
 Acquisition Co., Inc. (6)

 9.22%
 (S + CSA + 3.75%)

 2/2/2026

 4,885,204

 4,823,681

 4,565,932

 1.0
 %

 Alliant
 Holdings Intermediate LLC (6)

 8.86%
 (S + 3.50%)

 11/6/2030

 2,378,637

 2,377,608

 2,392,172

 0.5
 %

 Allied
 Universal Holdco LLC (6)

 9.21%
 (S + CSA + 3.75%)

 4/7/2028

 6,842,500

 6,836,638

 6,824,778

 1.5
 %

 Amentum
 Government Services Holdings LLC (6)

 9.36%
 (S + 4.00%)

 2/15/2029

 5,910,000

 5,890,084

 5,923,298

 1.3
 %

 American
 Rock Salt Company LLC (6)

 Metals and
 Mining

 9.47%
 (S + CSA + 4.00%)

 6/9/2028

 5,854,900

 5,848,790

 5,551,177

 1.2
 %

 Amynta
 Agency Borrower, Inc. (6)

 9.61%
 (S + 4.25%)

 2/28/2028

 6,965,044

 6,784,256

 6,982,456

 1.5
 %

 AP
 Gaming I, LLC (4)(6)

 9.46%
 (S + CSA + 4.00%)

 2/15/2029

 8,601,812

 8,501,084

 8,647,488

 1.9
 %

 Apollo
 Finco BV (4)

 Household
 Durables

 8.74%
 (E + 4.85%)

 1,000,000

 789,613

 810,000

 0.2
 %

 Aptean
 Inc (6)(7)

 9.71%

 4/23/2026

 8,721,003

 8,706,221

 8,709,907

 1.9
 %

 Aptean
 Inc (7)

 10.61%
 (S + 5.25%)

 12/14/2030

 4,711,640

 4,664,524

 4,664,524

 1.0
 %

 AQA
 Acquisition Holding, Inc. (6)

 9.89%

 3/3/2028

 8,345,432

 8,250,166

 8,349,604

 1.8
 %

 Aramsco,

 10.10%
 (S + 4.75%)

 10/10/2030

 4,087,129

 3,991,632

 4,091,137

 0.9
 %

 ARC
 Falcon I Inc. (6)

 8.96%
 (S + CSA + 3.50%)

 8/31/2028

 4,906,369

 4,889,855

 4,866,505

 1.1
 %

 Aretec
 Group, Inc. (6)

 Financial Services

 9.96%
 (S + CSA + 4.50%)

 8/9/2030

 4,987,469

 4,838,877

 4,990,860

 1.1
 %

 F- 7

Date

Par

 Fair

Value

 Ascend Learning, LLC (6)

 8.96% (S + CSA + 3.50%)

 11/18/2028

 7,350,000

 7,323,339

 7,235,671

 1.6
 %

 Aspire Bakeries Holdings, LLC (6)

 12/13/2030

 2,970,012

 3,015,000

 0.7
 %

 AssuredPartners, Inc. (6)

 4,371,635

 4,374,552

 4,388,028

 0.9
 %

 AssuredPartners, Inc. (6)

 8.86% (S + 3.50%)

 1,965,000

 1,956,461

 1,971,878

 0.4
 %

 Athletico Management, LLC (6)

 9.75% (S + CSA + 4.25%)

 2/2/2029

 7,116,625

 7,090,060

 6,015,790

 1.3
 %

 Autokiniton US Holdings, Inc. (6)(7)

 3/27/2028

 8,051,692

 8,056,553

 8,092,675

 1.8
 %

 Aveanna Healthcare LLC (4)(6)

 9.24% (S + CSA + 3.75%)

 6/30/2028

 5,096,375

 5,061,286

 4,757,848

 1.0
 %

 Barracuda Networks, Inc. (6)

 9.88% (S + 4.50%)

 8/15/2029

 7,425,000

 7,238,805

 7,269,558

 1.6
 %

 B'laster Holdings, LLC (7)

 10.94% (S + 5.50%)

 10/16/2029

 4,433,334

 4,342,011

 4,362,774

 0.9
 %

 Boxer Parent Company, Inc. (6)

 12/2/2028

 5,043,125

 1.1
 %

 Castle US Holding Corporation (7)

 9.40% (S + CSA + 3.75%)

 1/27/2027

 1,957,895

 1,951,797

 1,384,163

 0.3
 %

 Castle US Holding Corporation (6)(7)

 9.65% (S + CSA + 4.00%)

 1/31/2027

 5,986,178

 5,943,311

 4,184,338

 0.9
 %

 CCI Buyer, Inc. (6)(7)

 Wireless Telecommunication Services

 9.35% (S + 4.00%)

 12/17/2027

 6,726,117

 6,720,617

 6,716,499

 1.5
 %

 CCS-CMGC Holdings, Inc. (6)

 11.32% (S + CSA + 5.50%)

 10/1/2025

 5,299,922

 5,265,722

 4,499,131

 1.0
 %

 CDK Global (6)

 9.35% (S + 4.00%)

 7/6/2029

 3,970,000

 3,857,969

 3,997,075

 0.9
 %

 Congruex Group LLC (7)

 11.28% (S + CSA + 5.75%)

 4/28/2029

 6,156,250

 6,030,595

 5,879,219

 1.3
 %

 Connectwise LLC (6)

 9/29/2028

 7,840,000

 7,830,094

 7,840,000

 1.7
 %

 Consolidated Communications, Inc. (4)(6)

 10/2/2027

 4,428,009

 4,139,814

 4,133,458

 0.9
 %

 ConvergeOne Holdings Corp. (6)(7)(2)

 12.50% (P + 4.00%)

 1/4/2026

 9,736,877

 9,630,247

 5,537,849

 1.2
 %

 Corelogic, Inc. (6)

 4/14/2028

 7,820,000

 7,813,343

 7,631,030

 1.7
 %

 CP Atlas Buyer, Inc (6)

 11/23/2027

 6,826,201

 6,749,038

 6,733,024

 1.5
 %

 CPM Holdings, Inc. (6)

 9.84% (S + 4.50%)

 9/27/2028

 4,050,000

 3,991,878

 4,068,569

 0.9
 %

 Creation Technologies, Inc. (4)(7)

 11.18% (S + CSA + 5.50%)

 9/14/2028

 4,925,000

 4,870,143

 4,801,875

 1.0
 %

 Crown Subsea Communications Holding, Inc. (6)

 10.71% (S + CSA + 5.25%)

 4/27/2027

 1,828,125

 1,797,330

 1,840,693

 0.4
 %

 F- 8

Date

Par

 Fair

Value

 Curia Global, Inc. (6)

 9.23% (S + CSA + 3.75%)

 8/30/2026

 4,800,817

 4,790,688

 4,334,249

 0.9
 %

 Deerfield Dakota Holding, LLC (6)

 9.10% (S + 3.75%)

 2/25/2027

 4,825,000

 4,785,512

 4,788,813

 1.0
 %

 Delta Topco, Inc. (6)

 9.12% (S + 3.75%)

 10/29/2027

 6,832,331

 6,829,206

 6,837,455

 1.5
 %

 DIRECTV Financing, LLC (6)

 Media

 10.65% (S + CSA + 5.00%)

 8/2/2027

 4,785,000

 4,758,070

 4,793,685

 1.0
 %

 Dotdash Meredith, Inc. (6)

 Media

 9.44% (S + CSA + 4.00%)

 11/23/2028

 9,800,000

 9,764,648

 9,751,000

 2.1
 %

 EAB Global, Inc. (6)

 6/28/2028

 1,773,812

 1,767,846

 1,773,812

 0.4
 %

 ECI Software Solutions, Inc. (6)

 9.36% (S + CSA + 3.75%)

 9/30/2027

 2,835,691

 2,828,591

 2,840,341

 0.6
 %

 ECL Entertainment, LLC (7)

 10.11% (S + 4.75%)

 9/3/2030

 4,987,500

 4,891,150

 5,007,450

 1.1
 %

 EFS Cogen Holdings I, LLC (6)(7)

 9.11% (S + 3.50%)

 10/29/2027

 7,276,177

 7,281,384

 7,275,740

 1.6
 %

 Endurance International Group, Inc., The (6)

 9.42% (S + CSA + 3.50%)

 2/10/2028

 4,638,599

 4,584,186

 4,556,705

 1.0
 %

 EnergySolutions, LLC (6)

 9.36% (S + 4.00%)

 9/20/2030

 2,992,500

 2,956,004

 2,996,241

 0.6
 %

 Enverus Holdings, Inc. (7)

 10.86% (S + 5.50%)

 12/22/2029

 6,216,216

 6,113,561

 6,113,547

 1.3
 %

 EP Purchaser, LLC (6)

 10.11% (S + CSA + 4.50%)

 11/6/2028

 4,974,929

 4,913,751

 4,922,070

 1.1
 %

 EPIC Y-Grade Services, LP (6)

 Energy Equipment and Services

 11.49% (S + CSA + 6.00%)

 6/30/2027

 7,000,000

 6,728,726

 6,856,080

 1.5
 %

 Fertitta Entertainment, LLC (6)

 9.36% (S + 4.00%)

 1/29/2029

 7,368,750

 7,344,237

 7,381,424

 1.6
 %

 Filtration Group Corp. (6)

 Industrial Conglomerates

 9.72% (S + CSA + 4.25%)

 10/23/2028

 3,970,000

 3,932,675

 3,992,331

 0.9
 %

 Flexera Software LLC (6)(7)

 9.22% (S + CSA + 3.75%)

 1/26/2028

 8,710,472

 8,692,911

 8,716,613

 1.9
 %

 Fugue Finance, LLC (4)(6)

 9.39% (S + 4.00%)

 1/31/2028

 3,945,188

 3,877,785

 3,968,306

 0.9
 %

 Gainwell Acquisition Corp. (6)

 9.45% (S + CSA + 4.00%)

 10/1/2027

 8,787,797

 8,657,860

 8,568,102

 1.9
 %

 Garda World Security Corporation (4)(6)

 9.62% (S + 4.25%)

 2/12/2029

 7,919,799

 7,690,415

 7,941,698

 1.7
 %

 Generation Bridge Northeast, LLC (6)

 8/22/2029

 4,405,585

 4,362,895

 4,428,538

 1.0
 %

 Genuine Financial Holdings LLC (4)(6)

 9.36% (S + 4.00%)

 9/20/2030

 3,990,000

 3,932,484

 3,986,429

 0.9
 %

 F- 9

Date

Par

 Fair

Value

 Getty Images, Inc. (4)(6)(7)

 Media

 9.95% (S + CSA + 4.50%)

 2/13/2026

 7,744,017

 7,745,054

 7,789,513

 1.7
 %

 Global Medical Response, Inc. (6)

 9.93% (S + CSA + 4.25%)

 9/24/2025

 9,003,023

 8,974,743

 7,097,398

 1.5
 %

 Gloves Buyer, Inc.

 10.47% (S + CSA + 5.00%)

 12/29/2027

 1,995,000

 1,929,386

 1,970,063

 0.4
 %

 Grab Holdings Inc (4)(6)

 2/27/2026

 2,180,433

 2,192,657

 2,192,698

 0.5
 %

 Great Outdoors Group, LLC (6)

 Specialty Retail

 9.22% (S + CSA + 3.75%)

 3/6/2028

 6,936,707

 6,914,945

 6,945,377

 1.5
 %

 Grinding Media Inc. (7)

 9.68% (S + CSA + 4.00%)

 9/21/2028

 4,887,500

 4,870,648

 4,887,500

 1.1
 %

 HAH Group Holding Company LLC (6)

 10.46% (S + CSA + 5.00%)

 10/22/2027

 703,731

 689,126

 699,776

 0.2
 %

 HAH Group Holding Company LLC (6)

 10.46% (S + CSA + 5.00%)

 10/20/2027

 5,561,417

 5,445,970

 5,530,162

 1.2
 %

 Hamilton Projects Acquiror, LLC (6)(7)

 6/11/2027

 7,664,093

 7,634,935

 7,709,004

 1.7
 %

 Helios Software Holdings, Inc. (4)(6)

 9.70% (S + CSA + 4.25%)

 7/18/2030

 2,500,000

 2,403,593

 2,501,825

 0.5
 %

 Help/Systems Holdings, Inc. (6)

 9.48% (S + CSA + 4.00%)

 11/19/2026

 6,778,876

 6,751,274

 6,442,373

 1.4
 %

 HUB International Ltd.

 9.66% (S + 4.25%)

 6/20/2030

 4,089,750

 4,050,095

 4,112,469

 0.9
 %

 Idera, Inc. (6)

 9.28% (S + CSA + 3.75%)

 9,699,709

 9,669,409

 9,669,397

 2.1
 %

 IMA Financial Group, Inc. (7)

 9.22% (S + CSA + 3.75%)

 10/16/2028

 4,900,000

 4,882,618

 4,906,125

 1.1
 %

 Imagefirst Holdings, LLC (7)

 10.72% (S + CSA + 5.00%)

 4/27/2028

 4,145,833

 4,033,403

 4,145,833

 0.9
 %

 Indicor, LLC (6)

 9.35% (S + 4.00%)

 11/22/2029

 3,970,050

 3,844,297

 3,983,707

 0.9
 %

 Indy US Holdco, LLC (6)

 Media

 11.61% (S + 6.25%)

 3/6/2028

 6,567,000

 5,900,941

 6,439,764

 1.4
 %

 Infinite Bidco, LLC (6)

 9.39% (S + CSA + 3.75%)

 6,345,825

 6,307,674

 6,203,044

 1.3
 %

 Infinite Bidco, LLC

 11.88% (S + CSA + 6.25%)

 2,970,000

 2,963,048

 2,940,300

 0.6
 %

 F- 10

Date

Par

 Fair

Value

 Inmar, Inc. (6)(7)

 10.85% (S + 5.50%)

 5/1/2026

 7,782,563

 7,537,171

 7,704,737

 1.7
 %

 Invenergy Thermal Operating I LLC (7)

 9.92% (S + CSA + 4.50%)

 8/14/2029

 3,558,261

 3,489,433

 3,572,725

 0.8
 %

 Invenergy Thermal Operating I LLC (7)

 9.92% (S + CSA + 4.50%)

 8/14/2029

 294,071

 288,403

 295,267

 0.1
 %

 iSolved, Inc. (6)

 9.48% (S + 4.00%)

 10/5/2030

 2,600,000

 2,574,027

 2,608,125

 0.6
 %

 Ivanti Software, Inc. (6)

 9.67% (S + CSA + 4.00%)

 12/1/2027

 972,500

 971,445

 924,079

 0.2
 %

 Ivanti Software, Inc. (6)

 9.91% (S + CSA + 4.25%)

 12/1/2027

 6,852,938

 6,816,310

 6,523,722

 1.4
 %

 IVC Acquisition, Ltd. (4)(6)

 10.87% (S + 5.50%)

 11/17/2028

 4,900,475

 5,027,075

 1.1
 %

 Jack Ohio Finance LLC (7)

 10.22% (S + CSA + 4.75%)

 10/31/2028

 4,895,434

 4,898,075

 4,838,843

 1.0
 %

 Jones DesLauriers Insurance Management Inc. (4)(7)

 9.62% (S + 4.25%)

 3/16/2030

 2,750,000

 2,730,178

 2,765,469

 0.6
 %

 Kestrel Acquisition, LLC (6)

 9.72% (S + CSA + 4.25%)

 5/2/2025

 5,900,476

 5,636,874

 5,831,735

 1.3
 %

 Kleopatra Finco S.a.r.l (4)(6)

 10.48% (S + CSA + 4.73%)

 2/4/2026

 1,945,000

 1,942,008

 1,841,069

 0.4
 %

 LBM Acquisition LLC (6)(7)

 12/31/2027

 7,316,803

 7,259,009

 7,247,074

 1.6
 %

 Life Time, Inc. (4)(6)

 10.11% (S + CSA + 4.25%)

 1/15/2026

 7,582,556

 7,570,881

 7,643,216

 1.7
 %

 Lifescan Global Corporation (6)

 Healthcare Equipment and Supplies

 11.98% (S + CSA + 6.50%)

 12/31/2026

 5,406,440

 5,394,007

 4,068,346

 0.9
 %

 Lightstone Holdco LLC (6)

 11.13% (S + 5.75%)

 2/1/2027

 4,741,832

 4,364,801

 4,525,486

 1.0
 %

 Lightstone Holdco LLC (6)

 11.13% (S + 5.75%)

 2/1/2027

 268,194

 246,863

 255,957

 0.1
 %

 LogMe In, Inc. (6)

 10.28% (S + CSA + 4.75%)

 8/31/2027

 9,744,042

 9,663,298

 6,493,722

 1.4
 %

 Magenta Buyer LLC (6)

 10.64% (S + CSA + 5.00%)

 7/27/2028

 5,390,000

 5,353,819

 3,857,219

 0.8
 %

 Mariner Wealth Advisors, LLC (7)

 9.70% (S + CSA + 4.25%)

 8/18/2028

 4,954,962

 4,804,638

 4,964,253

 1.1
 %

 Maverick 1, LLC

 9.89% (S + CSA + 4.25%)

 5/18/2028

 4,975,000

 4,751,890

 4,931,469

 1.1
 %

 Max US Bidco Inc.

 10.35% (S + 5.00%)

 10/3/2030

 5,725,000

 5,445,089

 5,365,756

 1.2
 %

 Medical Solutions L.L.C. (7)

 8.71% (S + CSA + 3.25%)

 4,916,517

 4,899,589

 4,629,736

 1.0
 %

 F- 11

Date

Par

 Fair

Value

 Mermaid Bidco, Inc.

 9.88% (S + 4.50%)

 12/22/2027

 1,990,000

 1,954,539

 2,002,438

 0.4
 %

 Michael Baker International, LLC (7)

 10.47% (S + CSA + 5.00%)

 11/2/2028

 6,125,000

 6,078,246

 6,125,000

 1.3
 %

 Micro Holding Corp. (6)

 5/3/2028

 9,786,662

 9,541,199

 9,639,862

 2.1
 %

 Midwest Veterinary Partners, LLC (6)

 9.47% (S + CSA + 4.00%)

 4/27/2028

 8,793,690

 8,730,243

 8,740,136

 1.9
 %

 Minotaur Acquisition, Inc. (6)(7)

 10.21% (S + CSA + 4.75%)

 3/27/2026

 11,820,011

 11,750,011

 11,767,918

 2.5
 %

 Mitchell International, Inc. (6)

 9.40% (S + CSA + 3.75%)

 10/16/2028

 9,825,000

 9,773,159

 9,834,923

 2.1
 %

 MLN US HoldCo LLC (6)

 12/31/2025

 4,056,188

 4,014,973

 473,215

 0.1
 %

 Momentive Performance Materials USA, LLC (6)

 9.86% (S + 4.50%)

 3/29/2028

 3,845,938

 3,708,614

 3,732,982

 0.8
 %

 NAPA Management Services Corporation (6)

 10.71% (S + CSA + 5.25%)

 2/23/2029

 7,860,000

 7,804,787

 7,254,937

 1.6
 %

 National Mentor Holdings, Inc. (6)

 9.20% (S + CSA + 3.75%)

 291,993

 291,396

 266,748

 0.1
 %

 National Mentor Holdings, Inc. (6)

 9.20% (S + CSA + 3.75%)

 9,041,196

 9,022,958

 8,259,494

 1.8
 %

 Navicure, Inc. (6)

 9.47% (S + CSA + 4.00%)

 10/22/2026

 4,578,249

 4,579,772

 4,601,140

 1.0
 %

 Nexus Buyer LLC (6)

 9.86% (S + 4.50%)

 12/11/2028

 4,850,569

 4,975,025

 1.1
 %

 NorthStar Group Services, Inc. (6)(7)

 10.97% (S + CSA + 5.50%)

 11/9/2026

 8,418,468

 8,395,525

 8,413,206

 1.8
 %

 NSM Top Holdings Corp. (6)

 Healthcare Equipment and Supplies

 10.70% (S + CSA + 5.25%)

 11/12/2026

 4,885,496

 4,870,473

 4,751,145

 1.0
 %

 OMNIA Partners, LLC (6)

 9.63% (S + 4.25%)

 7/25/2030

 2,376,731

 2,351,405

 2,396,244

 0.5
 %

 OneDigital Borrower LLC (6)

 9.71% (S + CSA + 4.25%)

 11/16/2027

 9,771,519

 9,690,190

 9,777,675

 2.1
 %

 Orchid Merger Sub II, LLC (4)(6)

 10.25% (S + CSA + 4.75%)

 7/27/2027

 4,106,250

 3,949,028

 2,477,444

 0.5
 %

 Padagis, LLC (6)

 Pharmaceuticals

 10.43% (S + CSA + 4.75%)

 7/31/2028

 6,588,235

 6,558,110

 6,382,353

 1.4
 %

 F- 12

Date

Par

 Fair

Value

 Patriot Growth Insurance Services, LLC (7)(10)

 11.10% (S + 5.75%)

 10/14/2028

 350,000

 276,916

 293,500

 0.1
 %

 PECF USS Intermediate Holding III Corporation (7)

 9.89% (S + CSA + 4.25%)

 11/6/2028

 4,900,000

 4,893,280

 3,849,293

 0.8
 %

 Peraton Corp. (7)

 2/1/2028

 4,778,345

 4,786,723

 4,796,264

 1.0
 %

 PMHC II Inc. (6)

 9.81% (S + CSA + 4.25%)

 2/2/2029

 6,522,438

 6,474,251

 6,266,301

 1.4
 %

 Prairie ECI Acquiror LP (6)

 Oil, Gas and Consumable Fuels

 10.21% (S + CSA + 4.75%)

 3/11/2026

 9,656,148

 9,533,263

 9,679,227

 2.1
 %

 Pretium PKG Holdings, Inc.

 10.39% (S + 5.00%) incl. 2.50% PIK

 1,481,076

 1,428,726

 1,455,165

 0.3
 %

 Pretium PKG Holdings, Inc. (6)(7)

 9.99% (S + 4.60%) incl. 1.40% PIK

 5,517,720

 5,479,051

 4,345,205

 0.9
 %

 Project Alpha Intermediate Holding, Inc. (6)

 10.11% (S + 4.75%)

 10/28/2030

 8,000,000

 7,842,603

 8,059,160

 1.7
 %

 Project Boost Purchaser, LLC (6)

 6/1/2026

 5,850,000

 5,844,776

 5,862,197

 1.3
 %

 Prometric Holdings, Inc. (6)

 10.72% (S + CSA + 5.25%)

 1/31/2028

 5,706,603

 5,561,435

 5,711,083

 1.2
 %

 PS Holdco, LLC (7)

 Road and Rail

 9.72% (S + CSA + 4.25%)

 10/31/2028

 5,378,706

 5,361,695

 5,292,996

 1.1
 %

 PT Intermediate Holdings III, LLC (7)

 11.47% (S + CSA + 5.98%)

 491,250

 487,340

 492,478

 0.1
 %

 PT Intermediate Holdings III, LLC (7)

 11.47% (S + CSA + 5.98%)

 1,505,350

 1,494,290

 1,509,113

 0.3
 %

 PT Intermediate Holdings III, LLC (7)

 11.47% (S + CSA + 5.98%)

 2,273,600

 2,267,494

 2,279,284

 0.5
 %

 PT Intermediate Holdings III, LLC (7)

 11.47% (S + CSA + 5.98%)

 2,097,200

 2,097,200

 2,102,443

 0.5
 %

 PT Intermediate Holdings III, LLC

 11.85% (S + 6.50%)

 1,409,701

 1,388,314

 1,424,623

 0.3
 %

 Quest Software US Holdings Inc. (6)

 9.78% (S + CSA + 4.25%)

 2/1/2029

 9,381,250

 9,301,754

 7,213,149

 1.6
 %

 Radiology Partners, Inc. (6)

 10.18% (S + CSA + 4.25%)

 7/9/2025

 5,971,261

 5,967,601

 4,846,067

 1.0
 %

 RC Buyer, Inc. (6)

 8.89% (S + CSA + 3.25%)

 7/28/2028

 2,052,750

 2,049,357

 2,046,335

 0.4
 %

 RealPage, Inc. (6)

 Real Estate Management and Development

 8.47% (S + CSA + 3.00%)

 6,842,500

 6,835,914

 6,804,456

 1.5
 %

 RealTruck Group, Inc.

 10.47% (S + CSA + 5.00%)

 1/31/2028

 1,951,919

 0.4
 %

 RealTruck Group, Inc. (6)

 1/20/2028

 6,909,625

 6,905,406

 6,834,759

 1.5
 %

 Red Planet Borrower, LLC (6)

 7,820,000

 7,793,625

 7,532,146

 1.6
 %

 F- 13

Date

Par

 Fair

Value

 Redstone Holdco 2 LP (6)(7)

 10.22% (S + CSA + 4.75%)

 4/14/2028

 4,892,258

 4,867,936

 3,728,439

 0.8
 %

 Refresco (4)(6)

 9.63% (S + 4.25%)

 7/12/2029

 4,930,051

 4,960,049

 1.1
 %

 Renaissance Holding Corp. (6)

 10.11% (S + 4.75%)

 4/5/2030

 7,727,778

 7,559,120

 7,765,335

 1.7
 %

 Rocket Software, Inc. (6)

 10.11% (S + 4.75%)

 11/28/2028

 8,337,684

 8,117,739

 8,207,407

 1.8
 %

 Rohm Holding GMBH (4)(6)(7)

 10.88% (S + CSA + 5.00%)

 7/31/2026

 8,753,760

 8,745,516

 7,768,962

 1.7
 %

 Runner Buyer Inc. (7)

 Household Durables

 11.00% (S + CSA + 5.50%)

 10/20/2028

 4,912,500

 4,876,527

 3,889,079

 0.8
 %

 Ryan, LLC (7)

 9.86% (S + 4.50%)

 11/8/2030

 4,885,714

 4,789,346

 4,911,040

 1.1
 %

 Shearer's Foods, LLC (6)

 9/23/2027

 1,656,972

 1,650,032

 1,661,396

 0.4
 %

 Simon & Schuster, Inc. (6)

 Media

 9.39% (S + 4.00%)

 10/30/2030

 1,980,410

 2,008,750

 0.4
 %

 Sophia, L.P. (6)

 10/7/2027

 6,157,383

 6,137,486

 6,168,929

 1.3
 %

 Sovos Compliance, LLC (7)

 7/28/2028

 3,922,945

 3,918,460

 3,883,716

 0.8
 %

 Specialty Building Products Holdings, LLC (6)(7)

 10/5/2028

 9,825,000

 9,813,016

 9,825,000

 2.1
 %

 Summer BC Holdco B LLC (4)(7)

 Media

 10.11% (S + CSA + 4.50%)

 12/4/2026

 4,887,500

 4,890,408

 4,850,086

 1.0
 %

 Talen Energy Supply, LLC (4)(6)

 9.87% (S + 4.50%)

 5/17/2030

 2,198,476

 2,136,074

 2,214,052

 0.5
 %

 Talen Energy Supply, LLC (4)(6)

 9.87% (S + 4.50%)

 5/17/2030

 1,790,476

 1,739,503

 1,803,162

 0.4
 %

 Tank Holding Corp. (11)

 11.46% (S + CSA + 6.00%)

 3/31/2028

 302,243

 285,571

 268,521

 0.1
 %

 Tank Holding Corp.

 11.21% (S + CSA + 5.75%)

 3/31/2028

 2,487,374

 2,439,747

 2,387,879

 0.5
 %

 Tank Holding Corp.

 11.46% (S + CSA + 6.00%)

 3/31/2028

 2,084,250

 2,044,729

 2,006,091

 0.4
 %

 Tecta America Corp. (6)(7)

 9.47% (S + CSA + 4.00%)

 4/6/2028

 8,497,933

 8,484,923

 8,532,477

 1.8
 %

 The Edelman Financial Center, LLC (6)

 4/7/2028

 7,780,122

 7,715,379

 7,800,817

 1.7
 %

 F- 14

Date

Par

 Fair

Value

 Thryv, Inc. (4)(6)

 13.97% (S + CSA + 8.50%)

 2/18/2026

 4,935,721

 4,941,411

 4,941,915

 1.1
 %

 Titan US Finco, LLC (4)(7)

 Media

 9.61% (S + CSA + 4.00%)

 5,895,000

 5,885,073

 5,811,468

 1.3
 %

 Tosca Services, LLC (6)

 9.14% (S + CSA + 3.50%)

 8/18/2027

 6,829,192

 6,786,034

 5,746,287

 1.2
 %

 Transnetwork, LLC (7)

 10.85% (S + 5.50%)

 11/20/2030

 5,200,000

 5,096,000

 5,187,000

 1.1
 %

 U.S. Renal Care, Inc. (6)(7)

 10.47% (S + CSA + 5.00%)

 6/20/2028

 7,836,947

 7,749,489

 5,975,672

 1.3
 %

 UKG Inc. (6)

 9.99% (S + CSA + 4.50%)

 5/4/2026

 4,975,000

 4,869,333

 5,002,586

 1.1
 %

 US Radiology Specialists, Inc. (6)

 10.75% (S + CSA + 5.25%)

 12/10/2027

 8,790,600

 8,715,244

 8,731,967

 1.9
 %

 Veracode (6)

 9.98% (S + CSA + 4.50%)

 4/20/2029

 8,690,000

 8,653,769

 8,247,375

 1.8
 %

 VeriFone Systems, Inc. (6)

 9.64% (S + 4.00%)

 8/20/2025

 2,915,601

 2,896,373

 2,829,955

 0.6
 %

 Verscend Holding Corp. (6)

 9.47% (S + CSA + 4.00%)

 8/27/2025

 6,002,422

 5,994,020

 6,029,913

 1.3
 %

 Vision Solutions, Inc. (6)

 9.64% (S + CSA + 4.00%)

 4/24/2028

 9,775,000

 9,753,558

 9,716,350

 2.1
 %

 Vocus Group DD T/L (4)(6)

 9.14% (S + CSA + 3.50%)

 5/26/2028

 1,975,000

 1,958,023

 1,979,938

 0.4
 %

 WarHorse Gaming, LLC

 14.74% (S + CSA + 9.25%)

 6/28/2028

 4,806,421

 5,125,000

 1.1
 %

 WaterBridge Midstream Operating, LLC (6)

 Energy Equipment and Services

 11.39% (S + CSA + 5.75%)

 6/22/2026

 8,140,282

 8,058,105

 8,162,708

 1.8
 %

 Watlow Electric Manufacturing Company (6)

 Electrical Equipment

 9.40% (S + CSA + 3.75%)

 3,193,863

 3,176,511

 3,199,852

 0.7
 %

 White Cap Buyer LLC (6)

 9.11% (S + 3.75%)

 10/8/2027

 2,910,656

 2,893,120

 2,920,363

 0.6
 %

 Wilsonart LLC (6)

 8.70% (S + CSA + 3.25%)

 12/18/2026

 5,354,560

 5,314,657

 5,374,211

 1.2
 %

 Total First Lien Senior Secured

 995,596,712

 $
 984,089,538

 $

 206.1
 %

 F- 15

Date

Par

 Fair

Value

 Second Lien Senior Secured (2)

 American Rock Salt Company LLC

 12.72% (S + CSA + 7.25%)

 6/4/2029

 2,750,000

 2,770,553

 2,406,250

 0.6
 %

 ARC Falcon I Inc. (6)

 12.46% (S + CSA + 7.00%)

 9/24/2029

 1,984,833

 1,815,000

 0.4
 %

 Artera Services, LLC (6)

 12.70% (S + CSA + 7.25%)

 3/6/2026

 9,060,000

 8,515,560

 6,235,862

 1.3
 %

 Aruba Investments, Inc. (6)

 13.21% (S + CSA + 7.75%)

 10/27/2028

 2,350,000

 2,322,955

 2,217,813

 0.5
 %

 Asurion, LLC (6)

 10.72% (S + CSA + 5.25%)

 1/19/2029

 5,970,805

 5,677,020

 1.2
 %

 Barracuda Networks, Inc.

 12.38% (S + 7.00%)

 8/15/2030

 2,919,701

 2,681,880

 0.6
 %

 DCert Buyer, Inc. (6)

 12.36% (S + 7.00%)

 2/19/2029

 1,500,000

 1,498,435

 1,372,500

 0.3
 %

 Delta Topco, Inc.

 12.62% (S + 7.25%)

 3,435,617

 3,465,588

 3,447,213

 0.7
 %

 Energy Acquisition LP

 Electrical Equipment

 13.96% (S + CSA + 8.50%)

 6/25/2026

 2,812,400

 2,747,137

 2,474,912

 0.5
 %

 Gainwell Acquisition Corp.

 13.52% (S + CSA + 8.00%)

 2,959,549

 2,925,000

 0.6
 %

 Help/Systems Holdings, Inc.

 12.35% (S + CSA + 6.75%)

 11/19/2027

 3,656,217

 3,659,888

 3,004,386

 0.7
 %

 Idera, Inc.

 12.28% (S + CSA + 6.75%)

 2/5/2029

 5,023,383

 4,896,875

 1.1
 %

 Infinite Bidco, LLC (6)

 12.64% (S + CSA + 7.00%)

 2/24/2029

 2,729,999

 2,726,270

 2,334,149

 0.5
 %

 Ivanti Software, Inc.

 12.91% (S + CSA + 7.25%)

 12/1/2028

 3,009,723

 2,434,995

 0.5
 %

 Magenta Buyer LLC

 13.89% (S + CSA + 8.25%)

 7/27/2029

 4,991,100

 1,900,000

 0.4
 %

 Paradigm Outcomes

 13.04% (S + CSA + 7.50%)

 10/26/2026

 1,500,000

 1,484,212

 1,398,750

 0.3
 %

 F- 16

Date

Par

 Fair

Value

 Peraton Corp.

 13.22% (S + CSA + 7.75%)

 2/26/2029

 2,898,876

 2,949,038

 2,891,180

 0.6
 %

 Pretium PKG Holdings, Inc. (6)

 12.21% (S + CSA + 6.75%)

 9/30/2029

 1,984,274

 840,000

 0.2
 %

 Quest Software US Holdings Inc.

 13.03% (S + CSA + 7.50%)

 2/1/2030

 2,962,166

 1,811,775

 0.4
 %

 Vision Solutions, Inc.

 12.89% (S + CSA + 7.25%)

 4/23/2029

 3,500,000

 3,504,600

 3,223,658

 0.7
 %

 Total Second Lien Senior Secured

 68,193,109

 67,449,770

 12.1
 %

 Altice Financing S.A. (4)

 5.00 %

 1/15/2028

 2,607,052

 2,733,750

 0.6
 %

 KOBE US Midco 2 Inc

 10.00% PIK

 11/1/2026

 1,995,000

 1,888,052

 1,506,225

 0.3
 %

 Total Corporate Bonds

 4,995,000

 4,495,104

 0.9
 %

 Total Debt Investments

 $
 1,068,784,821

 $
 1,056,034,412

 $
 1,012,329,819

 219.1
 %

 CLO Mezzanine (2)

 522 Funding CLO 2020-6, Ltd. (4)

 13.71% (S + CSA + 8.04%)

 10/23/2034

 2,800,000

 2,730,416

 2,500,181

 0.5
 %

 Carlyle US CLO 2020-2, Ltd (4)

 14.17% (S + CSA + 8.53%)

 1/25/2035

 3,898,845

 3,612,187

 0.8
 %

 Elmwood CLO III Ltd. (4)

 13.42% (S + CSA + 7.74%)

 10/20/2034

 1,933,361

 1,822,391

 0.4
 %

 F- 17

Date

Par

 Fair

Value

 GoldenTree Loan Management US 2020-7A (4)

 13.43% (S + CSA + 7.75%)

 4/20/2034

 1,904,602

 1,768,848

 0.4
 %

 GoldenTree Loan Management US 2021-10A (4)

 13.47% (S + CSA + 7.79%)

 7/20/2034

 1,250,000

 1,219,485

 1,079,204

 0.2
 %

 GoldenTree Loan Management US 2021-9A (4)

 12.43% (S + CSA + 6.75%)

 1/20/2033

 1,907,039

 1,795,407

 0.4
 %

 Thayer Park CLO, Ltd. (4)

 14.55% (S + CSA + 8.87%)

 4/20/2034

 1,300,000

 1,265,819

 1,186,402

 0.3
 %

 Total CLO Mezzanine

 15,350,000

 14,859,567

 3.0
 %

 Ares CLO Ltd 2021-62A (4)

 NA

 1/25/2034

 3,924,864

 3,170,040

 0.6
 %

 Babson CLO 2018-4A, Ltd. (4)

 NA

 10/15/2030

 1,693,196

 1,303,519

 0.3
 %

 Dryden 86 CLO, Ltd. (4)

 NA

 7/17/2030

 4,132,788

 3,077,510

 0.7
 %

 HPS Loan Management 12-2018, Ltd. (4)

 NA

 7/18/2031

 7,500,000

 3,893,560

 3,360,577

 0.7
 %

 Long Point Park CLO, Ltd. (4)

 NA

 1/17/2030

 6,358,000

 3,126,918

 1,710,370

 0.4
 %

 Regatta XII Funding Ltd. (4)

 NA

 10/15/2032

 4,117,741

 3,310,569

 0.7
 %

 Signal Peak CLO, LLC (4)

 NA

 10/26/2034

 2,250,892

 1,695,404

 0.4
 %

 Stratus CLO Series 2021-1A (4)

 NA

 12/29/2029

 1,338,479

 1,325,320

 0.3
 %

 Total CLO Equity

 41,858,000

 24,478,438

 4.1
 %

 Total Equity and Other Investments

 $
 57,208,000

 $
 39,338,005

 $
 32,717,929

 7.1
 %

 F- 18

 Number of
 Shares

 Cost

 Fair
 Value

 Short-Term Investments

 Fidelity Investments Money Market Government Portfolio - Institutional Class, 5.29 % (8)

 13.8
 %

 Total Short-Term Investments

 $

 $

 13.8
 %

 $
 1,159,135,422

 $

 240.0
 %

 Liabilities in Excess of Other Assets

 ( 646,855,360
)

 ( 140.0
)%

 Net Assets

 $
 461,955,393

 100.0
 %

 (1)
 The amortized cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments
using the effective interest method.

 (2)
 Loan contains a variable rate structure, subject to an interest rate
floor. Variable rate loans bear interest at a rate that may be determined by reference to either the London Interbank Offered Rate ("LIBOR"
or "L") (which can include one-, two-, three- or six-month LIBOR), the Secured Overnight Financing Rate ("SOFR"
or "S"), SOFR + Credit Spread Adjustment (S+CSA), where the Credit Spread Adjustment is a defined additional spread amount
based on the tenor of SOFR the borrower selects, the Euro Interbank Offered Rate ("Euribor" or "E"), the U.S. Prime
Rate ("P"), or an alternate base rate (which can include the Federal Funds Effective Rate), at the borrower's option,
and which reset periodically based on the terms of the loan agreement. For the holdings as of December 31, 2023 that have S+CSA as the
base rate, the credit spread adjustment ranges from 10bps to 42.8bps.

 (3)
 As of December 31, 2023, all investments are non-controlled, non-affiliated investments. Non-controlled, non-affiliated investments
are defined as investments in which the Company owns less than 5% of the portfolio company's outstanding voting securities and
does not have the power to exercise control over the management or policies of such portfolio company.

 (4)
 Non-qualifying investment as defined by Section 55(a) of the Investment Company Act of 1940. The Company may not acquire any non-qualifying
asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Company's total assets. As of December 31,
2023, 13.2% of the Company's total assets were in non-qualifying investments.

 (5)
 As of December 31, 2023, the tax cost of the Company's investments approximates their amortized cost.

 (6)
 Security or portion thereof held within Palmer Square BDC Funding I, LLC ("PS BDC Funding") and is pledged as collateral supporting
the amounts outstanding under a revolving credit facility with Bank of America, N.A. ("BofA N.A.") (see Note 6 to the consolidated financial statements).

 (7)
 Security or portion thereof held within Palmer Square BDC Funding II, LLC ("PS BDC Funding II") and is pledged as collateral
supporting the amounts outstanding under a revolving credit facility with Wells Fargo Bank, National Association ("WFB") (see
Note 6 to the consolidated financial statements).

 (8)
 7-day effective yield as of December 31, 2023.

 (9)
 Of the $2,625,000 commitment to Accession Risk Management Group, Inc., $2,457,857.14 was unfunded as of December 31, 2023.

 (10)
 Of the $5,000,000 commitment to Patriot Growth Insurance Services, LLC, $4,650,000 was unfunded as of December 31, 2023.

 (11)
 Of the $899,242.50 commitment to Tank Holding Corp., $597,000 was unfunded as of December 31, 2023.

 The accompanying notes are an integral part of these consolidated financial statements.

 F- 19

 As of December 31, 2022

 Date

 Par

 Fair

 Value

 Debt Investments

 First Lien Senior Secured (2)

 AAdvantage Loyalty
 IP Ltd. (4)(7)

 8.99% (L + 4.75%)

 4/20/2028

 $

 3,750,000

 $

 3,716,805

 $

 3,740,039

 0.9

 %

 AccentCare, Inc. (7)

 8.73% (L + 4.00%)

 6/22/2026

 5,970,140

 5,971,668

 4,059,695

 1.1

 %

 Acrisure, LLC (7)

 5,842,349

 5,829,939

 5,496,511

 1.5

 %

 Acrisure, LLC (7)

 8.63% (L + 4.25%)

 2/15/2027

 4,999,500

 4,968,962

 4,851,590

 1.3

 %

 AI Aqua Merger Sub, Inc., (7)(8)

 7.97% (S + 3.75%)

 6/16/2028

 7,661,500

 7,664,792

 7,235,329

 2.0

 %

 Aimbridge Acquisition Co.,

 8.13% (L + 3.75%)

 2/2/2026

 4,936,225

 4,848,346

 4,508,945

 1.2

 %

 Alliant Holdings Intermediate

 7.85% (L + 3.50%)

 11/5/2027

 5,925,000

 5,919,495

 5,799,094

 1.6

 %

 Allied Universal Holdco LLC
 (7)

 8.17% (S + CSA + 3.75%)

 4/7/2028

 6,912,500

 6,907,152

 6,580,735

 1.8

 %

 Amentum Government Services
 Holdings LLC (7)

 8.76% (S + 4.00%)

 2/15/2029

 5,970,000

 5,944,146

 5,831,944

 1.6

 %

 American Rock Salt Company

 8.38% (L + 4.00%)

 6/9/2028

 5,914,950

 5,906,545

 5,582,234

 1.5

 %

 Amynta Agency Borrower, Inc.
 (7)

 8.88% (L + 4.50%)

 2/28/2025

 8,837,032

 8,726,822

 8,395,181

 2.3

 %

 AP Gaming I, LLC (4)(5)(7)

 8.73% (S + CSA + 4.00%)

 2/15/2029

 8,689,362

 8,574,269

 8,254,894

 2.3

 %

 Aptean Inc (7)(8)

 8.98% (L + 4.25%)

 4/23/2026

 7,804,752

 7,806,146

 7,492,562

 2.1

 %

 AQA Acquisition Holding, Inc.
 (5)(7)

 8.98% (L + 4.25%)

 11/19/2027

 8,431,026

 8,314,473

 8,107,865

 2.2

 %

 ARC Falcon I Inc. (7)

 8.13% (L + 3.75%)

 8/31/2028

 4,319,427

 4,298,413

 3,740,771

 1.0

 %

 Aruba Investments Holdings,

 8.14% (L + 4.00%)

 10/28/2027

 2,463,819

 2,437,480

 2,400,178

 0.7

 %

 Ascend Learning, LLC (7)

 11/18/2028

 7,425,000

 7,392,488

 7,038,789

 1.9

 %

 AssuredPartners, Inc. (7)

 4,416,472

 4,421,141

 4,288,394

 1.2

 %

 AssuredPartners, Inc. (7)

 7.82% (S + 3.50%)

 1,985,000

 1,973,934

 1,932,398

 0.5

 %

 Athletico Management, LLC (7)

 8.98% (S + CSA + 4.25%)

 2/2/2029

 7,188,875

 7,157,111

 5,890,384

 1.6

 %

 Autokiniton US Holdings, Inc.
 (7)(8)

 8.79% (L + 4.50%)

 3/27/2028

 8,134,273

 8,142,050

 7,895,370

 2.2

 %

 Aveanna Healthcare LLC (4)(5)(7)

 8.14% (L + 3.75%)

 6/30/2028

 5,149,341

 5,111,181

 3,988,165

 1.1

 %

 Barracuda Networks, Inc. (7)

 8.59% (S + 4.50%)

 4/13/2029

 7,500,000

 7,285,329

 7,245,825

 2.0

 %

 BBB Industries (8)

 9.67% (S + CSA + 5.25%)

 6/29/2029

 3,616,539

 3,650,000

 1.0

 %

 BCP Renaissance Parent LLC
 (7)

 Oil, Gas and Consumable Fuels

 7.82% (S + 3.50%)

 10/30/2026

 7,569,511

 7,554,173

 7,511,377

 2.1

 %

 Belfor Holdings, Inc. (5)(7)

 8.38% (L + 3.75%)

 3/31/2026

 1,994,832

 1,989,845

 1,984,858

 0.5

 %

 Castle US Holding Corporation
 (7)(8)

 8.38% (L + 4.00%)

 1/29/2027

 6,037,233

 5,981,767

 3,758,177

 1.0

 %

 Castle US Holding Corporation
 (8)

 8.13% (L + 3.75%)

 1/29/2027

 1,974,737

 1,966,699

 1,230,508

 0.3

 %

 CCI Buyer, Inc. (7)(8)

 Wireless Telecommunication Services

 8.58% (S + 4.00%)

 12/17/2027

 6,795,280

 6,789,067

 6,509,879

 1.8

 %

 F- 20

 As of December 31, 2022

Date

Par

 Fair

Value

 CCS-CMGC Holdings, Inc. (7)

 9.91% (L + 5.50%)

 10/1/2025

 5,355,711

 5,303,965

 4,263,360

 1.2

 %

 CDK Global (7)

 9.08% (S + 4.50%)

 7/6/2029

 3,883,280

 3,970,680

 1.1

 %

 Congruex Group LLC (8)

 9.99% (S + CSA + 5.75%)

 4/28/2029

 6,218,750

 6,073,258

 6,063,281

 1.7

 %

 Connectwise LLC (7)

 9/29/2028

 7,920,000

 7,908,488

 7,543,800

 2.1

 %

 Consolidated Communications, Inc. (4)(7)

 10/2/2027

 1,428,009

 1,412,497

 1,265,573

 0.3

 %

 ConvergeOne Holdings Corp. (7)(8)

 9.38% (L + 5.00%)

 1/4/2026

 9,839,102

 9,682,304

 5,765,959

 1.6

 %

 Corelogic, Inc. (7)

 7.94% (L + 3.50%)

 4/14/2028

 7,900,000

 7,893,718

 6,618,739

 1.8

 %

 CP Atlas Buyer, Inc (7)

 11/23/2027

 6,894,514

 6,800,708

 6,064,484

 1.7

 %

 Creation Technologies, Inc. (4)(8)

 9.25% (L + 5.50%)

 9/14/2028

 4,975,000

 4,911,130

 4,004,875

 1.1

 %

 Curia Global, Inc. (7)

 8.16% (L + 3.75%)

 8/30/2026

 4,850,056

 4,836,404

 4,017,980

 1.1

 %

 Dave & Buster's, Inc. (4)(5)(7)

 9.44% (S + CSA + 5.00%)

 6/22/2029

 4,981,250

 4,982,825

 1.4

 %

 DCert Buyer, Inc. (7)

 8.70% (S + 4.00%)

 10/16/2026

 7,835,452

 7,835,021

 7,586,402

 2.1

 %

 Deerfield Dakota Holding, LLC (7)

 8.07% (S + 3.75%)

 2/25/2027

 4,875,000

 4,824,100

 4,564,999

 1.3

 %

 Delta Topco, Inc. (7)

 8.15% (S + 3.75%)

 10/29/2027

 6,902,406

 6,897,810

 6,398,530

 1.8

 %

 Digi International Inc. (4)(8)

 Technology Hardware, Storage and Peripherals

 9.38% (L + 5.00%)

 12/22/2028

 4,386,161

 4,308,443

 4,353,265

 1.2

 %

 DIRECTV Financing, LLC (7)

 Media

 9.38% (L + 5.00%)

 8/2/2027

 5,325,000

 5,287,772

 5,195,762

 1.4

 %

 Dotdash Meredith, Inc. (7)

 Media

 8.22% (S + CSA + 4.00%)

 11/23/2028

 9,900,000

 9,856,743

 8,563,500

 2.4

 %

 EAB Global, Inc. (7)

 6/28/2028

 1,791,912

 1,784,394

 1,728,237

 0.5

 %

 ECI Software Solutions, Inc. (7)

 8.48% (L + 3.75%)

 9/30/2027

 6,864,925

 6,841,429

 6,607,490

 1.8

 %

 ECL Entertainment, LLC (8)

 11.88% (L + 7.50%)

 3/31/2028

 1,970,000

 2,006,853

 1,968,365

 0.5

 %

 EFS Cogen Holdings I, LLC (7)(8)

 8.23% (L + 3.50%)

 10/29/2027

 7,680,240

 7,686,971

 7,404,558

 2.0

 %

 Endurance International Group, Inc., The (7)

 7.72% (L + 3.50%)

 2/10/2028

 4,686,175

 4,620,144

 4,229,273

 1.2

 %

 Ensemble RCM, LLC (7)

 7.94% (S + CSA + 3.75%)

 7/24/2026

 5,689,474

 5,618,296

 5,636,135

 1.6

 %

 Fertitta Entertainment, LLC (7)

 8.32% (S + 4.00%)

 1/29/2029

 7,443,750

 7,415,307

 7,092,070

 2.0

 %

 Filtration Group Corporation (7)

 Industrial Conglomerates

 10/20/2028

 3,950,000

 3,941,824

 3,887,452

 1.1

 %

 Flexera Software LLC (7)(8)

 8.14% (L + 3.75%)

 1/26/2028

 8,837,266

 8,817,772

 8,503,129

 2.3

 %

 F- 21

 As

 Rate

 Date

 Par

 Fair

 Value

 Garda
 World Security Corporation (4)(5)(7)

 Consumer Services

 8.53%
 (S + 4.25%)

 2/12/2029

 7,000,000

 6,772,500

 6,755,000

 1.9

 %

 Getty
 Images, Inc. (5)(7)(8)

 Media

 8.94%

 2/13/2026

 8,356,730

 8,358,691

 8,351,507

 2.3

 %

 GIP
 III Stetson I, LP (7)

 Energy
 Equipment and Services

 8.63%

 7/19/2025

 1,855,663

 1,804,227

 1,822,614

 0.5

 %

 Global
 Medical Response, Inc. (7)

 8.42%

 9/24/2025

 9,095,838

 9,053,579

 6,429,666

 1.8

 %

 Grab
 Holdings Inc (4)(7)

 IT

 8.89%

 2/27/2026

 4,903,031

 4,942,597

 4,854,001

 1.3

 %

 Great
 Outdoors Group, LLC (7)

 Specialty
 Retail

 8.13%

 3/6/2028

 7,007,670

 6,979,386

 6,749,262

 1.9

 %

 Grinding
 Media Inc. (8)

 Metals
 and Mining

 7.93%

 9/21/2028

 4,937,500

 4,916,856

 4,616,563

 1.3

 %

 HAH
 Group Holding Company LLC (5)(7)

 9.43%
 (S + CSA + 5.00%)

 10/22/2027

 710,949

 693,320

 679,845

 0.2

 %

 HAH
 Group Holding Company LLC (5)(7)

 9.43%
 (S + CSA + 5.00%)

 10/20/2027

 5,618,604

 5,479,223

 5,372,790

 1.5

 %

 Hamilton
 Projects Acquiror, LLC (7)(8)

 8.17%

 6/11/2027

 8,721,780

 8,681,952

 8,596,404

 2.4

 %

 Help/Systems
 Holdings, Inc. (7)

 8.19%
 (S + CSA + 4.00%)

 11/19/2026

 6,849,306

 6,812,195

 6,193,485

 1.7

 %

 Hyland
 Software, Inc. (7)

 7.88%

 7/1/2024

 4,905,349

 4,904,261

 4,849,551

 1.3

 %

 Idera,

 IT

 7.5%

 9,799,449

 9,760,546

 9,266,604

 2.5

 %

 IMA
 Financial Group, Inc. (8)

 7.88%

 10/16/2028

 4,928,624

 4,801,525

 1.3

 %

 Ineos
 US Finance LLC (4)(5)(7)

 8.17%
 (S + CSA + 3.75%)

 11/8/2027

 4,077,252

 3,934,548

 4,021,189

 1.1

 %

 Infinite
 Bidco LLC (7)

 Electronic
 Equipment, Instruments and Components

 7.98%

 6,409,925

 6,364,641

 6,169,552

 1.7

 %

 Inmar,
 Inc. (7)(8)

 8.47%

 5/1/2024

 7,842,418

 7,822,586

 7,158,167

 2.0

 %

 Ivanti
 Software, Inc. (7)

 8.73%

 12/1/2027

 982,500

 980,602

 778,022

 0.2

 %

 Ivanti
 Software, Inc. (7)

 9.01%

 12/1/2027

 6,922,688

 6,877,857

 5,512,917

 1.5

 %

 Jack
 Ohio Finance LLC (8)

 9.13%

 10/31/2028

 4,948,645

 4,950,641

 4,862,044

 1.3

 %

 Kestrel
 Acquisition, LLC (7)

 8.64%

 5/2/2025

 6,832,098

 6,333,128

 6,657,025

 1.8

 %

 Kleopatra
 Finco S.a.r.l (4)(7)

 8.26%
 (S + CSA + 4.75%)

 2/4/2026

 1,965,000

 1,959,187

 1,753,763

 0.5

 %

 LBM
 Acquisition LLC (7)(8)

 Building

 7.12%

 12/31/2027

 7,391,911

 7,318,369

 6,441,385

 1.8

 %

 Life
 Time, Inc. (4)(7)

 9.48%

 12/10/2024

 7,582,556

 7,575,249

 7,555,335

 2.1

 %

 Lifescan
 Global Corporation (7)

 Equipment and Supplies

 9.74%
 (L + 6.00%)

 10/1/2024

 6,146,918

 6,121,209

 4,471,883

 1.2

 %

 F- 22

 As

 Rate

 Date

 Par

 Fair

 Value

 Lightstone
 Holdco LLC (7)

 10.07%
 (S + 5.75%)

 2/1/2027

 4,795,064

 4,322,409

 4,411,459

 1.2

 %

 Lightstone
 Holdco LLC (7)

 10.07%
 (S + 5.75%)

 2/1/2027

 271,204

 244,463

 249,508

 0.1

 %

 LogMe In,

 IT

 9.14%

 8/31/2027

 9,844,496

 9,742,894

 6,379,233

 1.8

 %

 LSF9
 Atlantis Holdings, LLC (7)

 Specialty
 Retail

 11.83%
 (S + 7.25%)

 3/29/2029

 6,912,500

 6,654,959

 6,734,503

 1.9

 %

 Magenta
 Buyer LLC (7)

 9.17%

 7/27/2028

 5,445,000

 5,401,766

 4,687,818

 1.3

 %

 Mariner
 Wealth Advisors, LLC (5)(8)

 Financial Services

 9.04%

 8/18/2028

 2,865,000

 2,891,250

 0.8

 %

 Maxar
 Technologies, Inc. (4)(5)(7)

 8.67%

 6/14/2029

 3,888,979

 3,888,979

 3,890,709

 1.1

 %

 Medical
 Solutions L.L.C. (8)

 7.88%

 4,966,304

 4,945,113

 4,665,744

 1.3

 %

 Michael
 Baker International, LLC (8)

 Construction
 and Engineering

 9.38%
 (L + 5.00%)

 11/2/2028

 6,187,500

 6,132,616

 6,001,875

 1.7

 %

 Micro
 Holding Corp. (7)

 IT

 8.13%

 9/13/2024

 9,861,126

 9,824,488

 9,604,046

 2.6

 %

 Midwest
 Veterinary Partners, LLC (7)

 8.38%

 4/27/2028

 8,882,538

 8,806,026

 8,038,697

 2.2

 %

 Milano
 Acquisition Corporation (5)(7)

 8.73%

 10/1/2027

 8,878,393

 8,719,701

 8,356,788

 2.3

 %

 Minotaur
 Acquisition, Inc. (7)(8)

 Financial Services

 9.17%
 (S + CSA + 5.00%)

 3/27/2026

 11,944,106

 12,017,475

 11,356,411

 3.1

 %

 Mitchell
 International, Inc. (7)

 8.41%

 10/16/2028

 9,925,000

 9,862,344

 9,175,514

 2.5

 %

 MLN
 US HoldCo LLC (7)

 Telecommunication Services

 8.25%

 12/31/2025

 4,056,188

 3,997,358

 1,429,806

 0.4

 %

 Moneygram
 International, Inc. (4)(7)

 Consumer Services

 8.88%

 7/21/2026

 9,895,833

 9,876,860

 9,891,182

 2.7

 %

 NAPA
 Management Services Corporation (7)

 9.67%
 (S + CSA + 5.25%)

 2/23/2029

 7,940,000

 7,874,026

 6,538,114

 1.8

 %

 National
 Mentor Holdings, Inc. (7)

 8.33%

 9,134,164

 9,111,508

 6,434,516

 1.8

 %

 National
 Mentor Holdings, Inc. (7)

 8.48%

 291,993

 291,242

 205,693

 0.1

 %

 Navicure,

 Technology

 8.38%

 10/22/2026

 4,625,815

 4,627,579

 4,556,428

 1.3

 %

 NorthStar
 Group Services, Inc. (7)(8)

 Commercial
 Services and Supplies

 9.94%
 (S + CSA + 5.50%)

 11/9/2026

 8,649,114

 8,620,554

 8,526,599

 2.3

 %

 NSM
 Top Holdings Corp. (7)

 Equipment and Supplies

 9.67%
 (S + CSA + 5.25%)

 11/12/2026

 4,936,387

 4,916,697

 4,450,967

 1.2

 %

 OneDigital
 Borrower LLC (7)

 8.49%

 11/16/2027

 9,871,228

 9,770,988

 9,352,989

 2.6

 %

 Orchid
 Merger Sub II, LLC (4)(7)

 9.58%
 (S + CSA + 4.75%)

 5/12/2027

 4,331,250

 4,127,214

 3,789,844

 1.0

 %

 Padagis,

 Pharmaceuticals

 8.49%

 7/31/2028

 6,588,235

 6,553,975

 5,874,532

 1.6

 %

 PECF
 USS Intermediate Holding III Corporation (8)

 8.63%

 11/6/2028

 4,940,828

 4,145,972

 1.1

 %

 Peraton
 Corp. (7)(8)

 8.13%

 2/1/2028

 10,644,693

 10,616,273

 10,414,075

 2.9

 %

 PetVet
 Care Centers, LLC (7)

 7.88%

 2/14/2025

 6,867,196

 6,857,497

 6,475,079

 1.8

 %

 PMHC
 II Inc. (7)

 8.49%

 2/2/2029

 6,588,488

 6,532,502

 5,601,927

 1.5

 %

 F- 23

 As

 Rate

 Date

 Par

 Fair

 Value

 PQ
 Performance Chemicals (7)

 7.39%

 4/28/2028

 4,947,652

 4,830,383

 1.3

 %

 Prairie
 ECI Acquiror LP (7)

 Oil,
 Gas and Consumable Fuels

 9.13%

 3/11/2026

 7,182,326

 7,013,472

 7,000,757

 1.9

 %

 Pretium
 PKG Holdings, Inc. (7)(8)

 8.73%

 9/22/2028

 5,940,000

 5,892,087

 4,764,741

 1.3

 %

 Project
 Alpha Intermediate Holding, Inc. (5)(7)

 8.39%

 4/26/2024

 8,350,738

 8,289,560

 8,167,022

 2.2

 %

 Project
 Boost Purchaser, LLC (7)

 7.88%

 6/1/2026

 5,910,000

 5,899,689

 5,714,261

 1.6

 %

 Proofpoint,
 Inc. (5)(7)

 IT

 7.98%

 6/9/2028

 2,421,385

 2,414,428

 2,334,276

 0.6

 %

 PS
 Holdco, LLC (8)

 Road
 and Rail

 8.63%

 10/31/2028

 5,433,731

 5,411,542

 5,060,162

 1.4

 %

 PT
 Intermediate Holdings III LLC (8)

 2,296,800

 2,287,978

 2,227,896

 0.6

 %

 PT
 Intermediate Holdings III LLC (8)

 496,250

 491,647

 481,363

 0.1

 %

 PT
 Intermediate Holdings III LLC (8)

 1,520,750

 1,507,724

 1,475,128

 0.4

 %

 PT
 Intermediate Spider DD T/L (Parts Town) (8)

 2,118,600

 2,118,600

 2,055,042

 0.6

 %

 Quest
 Software US Holdings Inc. (7)

 8.49%

 2/1/2029

 9,476,250

 9,385,131

 7,353,001

 2.0

 %

 Radiology
 Partners, Inc. (7)

 8.64%

 7/9/2025

 5,993,919

 5,064,390

 1.4

 %

 RC
 Buyer, Inc. (7)

 Auto
 Components

 8.23%

 7/28/2028

 2,073,750

 2,069,336

 1,946,090

 0.5

 %

 RealPage,

 Real
 Estate Management and Development

 7.38%
 (L + 3.00%)

 6,912,500

 6,903,165

 6,587,613

 1.8

 %

 Red
 Planet Borrower, LLC (7)

 Internet
 Software and Services

 8.13%

 7,900,000

 7,866,755

 4,984,900

 1.4

 %

 Redstone
 Holdco 2 LP (7)(8)

 IT

 9.11%

 4/14/2028

 7,900,000

 7,852,104

 5,507,406

 1.5

 %

 Refresco
 (4)(7)

 Food

 8.52%
 (S + 4.25%)

 12/13/2024

 4,958,869

 4,850,000

 1.3

 %

 Renaissance
 Holdings Corp. (7)

 8.72%
 (S + 4.50%)

 4/1/2027

 4,975,000

 4,836,940

 4,795,900

 1.3

 %

 Rocket
 Software, Inc. (5)(7)

 8.63%

 11/28/2025

 3,490,933

 3,377,477

 3,364,823

 0.9

 %

 Rocket
 Software, Inc. (7)

 8.63%

 11/28/2025

 4,932,406

 4,912,516

 4,762,855

 1.3

 %

 Rodan
 & Fields, LLC (7)

 Textiles,
 Apparel and Luxury Goods

 8.32%

 6/16/2025

 1,714,103

 1,561,291

 640,063

 0.2

 %

 Rohm
 Holding GMBH (4)(7)(8)

 8.37%

 7/31/2026

 8,845,183

 8,830,408

 7,418,897

 2.0

 %

 RSC
 Acquisition, Inc. (8)

 (S + CSA + 5.50%)

 9/30/2026

 6,193,331

 6,147,556

 6,023,015

 1.7

 %

 Runner
 Buyer Inc. (8)

 Household
 Durables

 10/20/2028

 4,962,500

 4,919,797

 3,523,375

 1.0

 %

 Sabert
 Corporation (8)

 8.94%

 11/26/2026

 2,101,808

 2,109,801

 2,091,299

 0.6

 %

 Shearer's
 Foods, LLC (7)

 Food

 7.88%

 9/23/2027

 1,674,054

 1,665,320

 1,600,814

 0.4

 %

 Sophia,
 L.P. (7)

 8.57%
 (S + 4.00%)

 10/7/2027

 1,990,000

 1,971,843

 1,941,912

 0.5

 %

 Sovos
 Compliance, LLC (8)

 8.57%

 7/28/2028

 3,962,945

 3,955,834

 3,660,771

 1.0

 %

 F- 24

 As

 Rate

 Date

Par

 Fair

 Value

 Specialty
 Building Products Holdings, LLC (7)(8)

 Building

 7.64%

 10/5/2028

 9,925,000

 9,909,395

 8,969,768

 2.5

 %

 Summer
 BC Holdco B LLC (4)(8)

 Media

 8.17%

 12/4/2026

 4,937,500

 4,942,258

 4,595,998

 1.3

 %

 Surgery
 Center Holdings, Inc. (4)(7)

 8.05%

 9/3/2026

 4,217,676

 4,201,753

 4,175,035

 1.1

 %

 Tecta
 America Corp. (7)(8)

 Construction
 and Engineering

 8.69%

 4/6/2028

 8,585,091

 8,568,674

 8,263,150

 2.3

 %

 The
 Edelman Financial Center, LLC (7)

 Financial Services

 7.88%

 4/7/2028

 7,859,918

 7,783,213

 7,354,919

 2.0

 %

 Thryv,
 Inc. (4)(7)

 12.88%
 (L + 8.50%)

 2/18/2026

 4,850,226

 4,861,233

 4,791,636

 1.3

 %

 Tidal
 Power Holdings, LLC (4)(7)

 8.48%

 4/1/2027

 848,961

 847,980

 846,838

 0.2

 %

 Titan
 US Finco, LLC (4)(8)

 Media

 7.67%

 5,955,000

 5,942,128

 5,711,857

 1.6

 %

 Tosca
 Services, LLC (7)

 7.94%
 (S + CSA + 3.50%)

 8/18/2027

 6,899,596

 6,847,551

 5,640,420

 1.6

 %

 Traverse
 Midstream Partners LLC (7)

 Oil,
 Gas and Consumable Fuels

 8.95%

 9/27/2024

 3,162,774

 3,153,165

 3,160,798

 0.9

 %

 Truck
 Hero, Inc. (7)

 Auto
 Components

 8.13%

 1/20/2028

 6,980,675

 6,973,011

 6,016,469

 1.7

 %

 U.S.
 Renal Care, Inc. (7)(8)

 9.44%
 (L + 5.00%)

 6/26/2026

 8,820,648

 8,697,196

 4,978,153

 1.4

 %

 U.S.
 Renal Care, Inc. (7)

 9.94%

 6/26/2026

 493,750

 488,355

 278,660

 0.1

 %

 U.S.
 Silica Company (4)(7)

 Metals
 and Mining

 8.44%

 4/25/2025

 7,856,622

 7,724,787

 7,797,697

 2.1

 %

 UKG

 8.13%

 4/8/2026

 4,365,880

 4,352,517

 4,217,746

 1.2

 %

 United
 Airlines, Inc. (4)(7)

 Airlines

 8.11%

 4/21/2028

 7,887,124

 7,944,048

 7,809,909

 2.1

 %

 US
 Radiology Specialists, Inc. (7)

 8.94%
 (L + 5.25%)

 12/10/2027

 8,880,300

 8,788,150

 8,046,395

 2.2

 %

 Veracode
 (7)

 8.94%
 (S + CSA + 4.75%)

 4/20/2029

 8,778,000

 8,735,737

 8,245,878

 2.3

 %

 VeriFone
 Systems, Inc. (7)

 Commercial
 Services and Supplies

 8.36%

 8/20/2025

 2,946,292

 2,916,464

 2,714,743

 0.7

 %

 Verscend
 Holding Corp. (7)

 Technology

 8.38%

 8/27/2025

 6,063,985

 6,052,127

 6,037,455

 1.7

 %

 Vision
 Solutions, Inc. (7)

 IT

 8.36%

 4/24/2028

 9,875,000

 9,848,442

 8,203,656

 2.3

 %

 WaterBridge
 Midstream Operating, LLC (7)

 Energy
 Equipment and Services

 9.13%
 (L + 5.75%)

 6/22/2026

 3,959,079

 3,866,350

 3,816,176

 1.1

 %

 Watlow
 Electric Manufacturing Company (7)

 Electrical
 Equipment

 8.15%
 (S + CSA + 3.75%)

 3,281,909

 3,260,223

 3,165,007

 0.9

 %

 Wencor
 Group (7)

 8.42%

 6/19/2026

 2,976,923

 2,913,743

 2,906,221

 0.8

 %

 White
 Cap Buyer LLC (7)(8)

 Building

 8.07%
 (S + 3.75%)

 10/8/2027

 6,890,281

 6,880,543

 6,674,960

 1.8

 %

 Wilsonart
 LLC (7)(8)

 Building

 7.98%

 12/18/2026

 9,849,375

 9,807,312

 9,397,535

 2.6

 %

 Zelis
 Cost Management Buyer, Inc. (7)

 Technology

 7.88%

 9/30/2026

 4,744,302

 4,738,488

 4,701,319

 1.3

 %

 Total
 First Lien Senior Secured

 959,720,843

 $

 951,753,250

 $

 239.6

 %

 F- 25

 As

 Rate

 Date

Par

 Fair

 Value

 Second
 Lien Senior Secured (2)

 American
 Rock Salt Company LLC

 Metals
 and Mining

 11.63%
 (L + 7.25%)

 6/4/2029

 2,750,000

 2,774,395

 2,640,000

 0.7

 %

 ARC
 Falcon I Inc. (7)

 11.38%
 (L + 7.00%)

 9/24/2029

 1,982,524

 1,745,000

 0.5

 %

 Artera
 Services, LLC (7)

 Construction
 and Engineering

 11.98%
 (L + 7.25%)

 3/6/2026

 7,810,000

 7,499,293

 4,867,309

 1.3

 %

 Aruba
 Investments, Inc. (7)

 12.14%
 (L + 7.75%)

 10/27/2028

 2,350,000

 2,318,902

 2,150,250

 0.6

 %

 Asurion,

 9.63%
 (L + 5.25%)

 1/19/2029

 5,965,262

 4,699,290

 1.3

 %

 Barracuda
 Networks, Inc.

 11.09%
 (S + 7.00%)

 5/17/2030

 2,912,610

 2,741,250

 0.8

 %

 DCert
 Buyer, Inc. (7)

 IT

 11.7%
 (L + 7.00%)

 2/19/2029

 1,500,000

 1,497,620

 1,375,500

 0.4

 %

 Delta
 Topco, Inc.

 IT

 11.65%
 (S + 7.25%)

 3,435,617

 3,470,139

 2,735,610

 0.8

 %

 Energy
 Acquisition LP

 Electrical
 Equipment

 12.88%
 (L + 8.50%)

 6/25/2026

 2,812,400

 2,726,657

 2,271,013

 0.6

 %

 Epicor
 Software Corporation (7)

 12.13%
 (L + 7.75%)

 7/31/2028

 3,044,723

 2,968,500

 0.8

 %

 Help/Systems
 Holdings, Inc.

 10.94%
 (S + CSA + 6.75%)

 11/19/2027

 3,656,217

 3,663,047

 2,911,263

 0.8

 %

 Idera,
 Inc.

 IT

 10.5%
 (L + 6.75%)

 2/5/2029

 5,027,564

 4,150,000

 1.1

 %

 Infinite
 Bidco LLC (7)

 Electronic
 Equipment, Instruments and Components

 11.73%
 (L + 7.00%)

 2/24/2029

 2,729,999

 2,725,339

 2,525,249

 0.7

 %

 Inmar,

 12.38%
 (L + 8.00%)

 5/1/2025

 5,004,820

 4,675,000

 1.3

 %

 Ivanti
 Software, Inc.

 12.01%
 (L + 7.25%)

 12/1/2028

 3,011,509

 1,755,000

 0.5

 %

 Magenta
 Buyer LLC

 12.67%
 (L + 8.25%)

 7/27/2029

 4,990,886

 3,975,000

 1.1

 %

 Paradigm
 Outcomes

 12.05%
 (S + CSA + 7.50%)

 10/26/2026

 1,500,000

 1,479,565

 1,440,000

 0.4

 %

 Peraton
 Corp.

 12.09%
 (L + 7.75%)

 2/26/2029

 2,912,425

 2,970,059

 2,783,551

 0.8

 %

 Pretium
 PKG Holdings, Inc. (7)

 11.54%
 (L + 6.75%)

 9/30/2029

 1,982,769

 1,247,510

 0.3

 %

 Quest
 Software US Holdings Inc.

 11.59%
 (S + 7.50%)

 2/1/2030

 2,958,821

 1,851,255

 0.5

 %

 Vision
 Solutions, Inc.

 IT

 11.61%
 (L + 7.25%)

 4/23/2029

 3,500,000

 3,506,759

 2,610,790

 0.7

 %

 Total
 Second Lien Senior Secured

 71,956,658

 71,513,263

 16.0

 %

 Corporate
 Bonds

 KOBE
 US Midco 2 Inc

 9.25 %

 11/1/2026

 1,900,000

 1,884,529

 0.4

 %

 Total

 1,900,000

 1,884,529

 0.4

 %

 Total
 Debt Investments

 1,033,577,501

 $

 1,025,151,042

 $

 930,331,572

 256.0

 %

 F- 26

 As

 Rate

 Date

Par

 Fair

 Value

 CLO
 Mezzanine (2)

 Funding CLO 2020-6, Ltd. (4)

 Note

 12.36%
 (L + 8.04%)

 10/23/2034

 2,800,000

 2,723,983

 2,188,332

 0.7

 %

 Barings
 CLO 2013-IA Class FR (4)

 Note

 10.99%
 (L + 6.75%)

 1/20/2028

 1,935,102

 1,788,731

 0.5

 %

 Carlyle
 US CLO 2020-2, Ltd (4)

 Note

 12.89%
 (L + 8.53%)

 1/25/2035

 3,889,711

 3,213,525

 0.9

 %

 Elmwood
 CLO III Ltd. (4)

 Note

 11.98%
 (L + 7.74%)

 10/20/2034

 1,927,196

 1,600,079

 0.4

 %

 GoldenTree
 Loan Management US 2020-7A (4)

 Note

 11.99%
 (L + 7.75%)

 4/20/2034

 1,895,346

 1,532,172

 0.4

 %

 GoldenTree
 Loan Management US 2021-10A (4)

 Note

 12.03%
 (L + 7.79%)

 7/20/2034

 1,250,000

 1,216,595

 983,411

 0.3

 %

 GoldenTree
 Loan Management US 2021-9A (4)

 Note

 10.99%
 (L + 6.75%)

 1/20/2033

 1,896,778

 1,558,971

 0.4

 %

 Magnetite
 CLO, Ltd. 2015-16A (4)

 Note

 10.69%
 (L + 6.50%)

 1/18/2028

 1,000,000

 842,116

 854,968

 0.2

 %

 Thayer
 Park CLO, Ltd. (4)

 Note

 13.11%
 (L + 8.87%)

 4/20/2034

 1,300,000

 1,262,503

 1,012,532

 0.3

 %

 Total

 18,350,000

 17,589,330

 4.1

 %

 CLO
 Equity

 Ares
 CLO Ltd 2021-62A (4)

 NA

 1/25/2034

 4,225,172

 3,679,447

 1.0

 %

 Babson
 CLO 2018-4A, Ltd. (4)

 NA

 10/15/2030

 1,856,928

 1,637,600

 0.5

 %

 Dryden
 86 CLO, Ltd. (4)

 NA

 7/17/2030

 4,395,442

 3,732,464

 1.0

 %

 HPS
 Loan Management 12-2018, Ltd. (4)

 NA

 7/18/2031

 7,500,000

 4,290,326

 3,006,631

 0.8

 %

 Long
 Point Park CLO, Ltd. (4)

 NA

 1/17/2030

 6,358,000

 3,836,615

 2,550,735

 0.7

 %

 Regatta
 XII Funding Ltd. (4)

 NA

 10/15/2032

 4,430,480

 3,845,111

 1.1

 %

 Signal
 Peak CLO, LLC (4)

 NA

 10/26/2034

 2,437,836

 2,253,444

 0.6

 %

 Stratus
 CLO Series 2021-1A (4)

 NA

 12/29/2029

 1,539,549

 1,094,792

 0.3

 %

 Total

 41,858,000

 27,012,348

 6.0

 %

 Total
 Other Investments

 60,208,000

 $

 44,601,678

 $

 36,532,945

 10.1

 %

 F- 27

 As

 Number
 of

 Fair

 Shares

 Cost

 Value

 Short-Term

 Fidelity Investments Money Market Government Portfolio - Institutional Class, 4.10 % (9)

 13.9

 %

 Total
 Short-Term Investments

 $

 $

 13.9

 %

 Total

 $

 1,120,099,935

 $

 280.0

 %

 Liabilities
 in Excess of Other Assets

 ( 653,768,250

)

 ( 180.0

)%

 Net
 Assets

 $

 100.0

 %

 (1)
 The amortized cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method.

 (2)
 Loan contains a variable rate structure, subject to an interest rate floor. Variable rate loans bear interest at a rate that may be determined by reference to either the London Interbank Offered Rate ("LIBOR" or "L") (which can include one-, two-, three- or six-month LIBOR), SOFR + Credit Spread Adjustment (S+CSA), where the Credit Spread Adjustment is a defined additional spread amount based on the tenor of SOFR the borrower selects, or an alternate base rate (which can include the Federal Funds Effective Rate or the Prime Rate), at the borrower's option, and which reset periodically based on the terms of the loan agreement. For the holdings as of December 31, 2022 that have S+CSA as the base rate, the CSA is 10bp for 1M SOFR, 15bp for 3M SOFR, and 25bp for 6M SOFR. For the avoidance of doubt, loan floors apply to S+CSA, not S.

 (3)
 As of December 31, 2022, all investments are non-controlled, non-affiliated investments. Non-controlled, non-affiliated investments are defined as investments in which the Company owns less than 5% of the portfolio company's outstanding voting securities and does not have the power to exercise control over the management or policies of such portfolio company.

 (4)
 Non-qualifying investment as defined by Section 55(a) of the Investment Company Act of 1940. The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Company's total assets. As of December 31, 2022, 14.9% of the Company's total assets were in non-qualifying investments.

 (5)
 Investments or a portion of investments are unsettled as of December 31, 2022.

 (6)
 As of December 31, 2022, the tax cost of the Company's investments approximates their amortized cost.

 (7)
 Security or portion thereof held within Palmer Square BDC Funding I, LLC ("PS BDC Funding") and is pledged as collateral supporting the amounts outstanding under a revolving credit facility with Bank of America, N.A. ("BofA N.A.") (see Note 6 to the consolidated financial statements).

 (8)
 Security or portion thereof held within Palmer Square BDC Funding II, LLC ("PS BDC Funding II") and is pledged as collateral supporting the amounts outstanding under a revolving credit facility with Wells Fargo Bank, National Association ("WFB") (see Note 6 to the consolidated financial statements).

 (9)
 7-day effective yield as of December 31, 2022.

 The
accompanying notes are an integral part of these consolidated financial statements.

 F- 28

 Notes
to Consolidated Financial Statements

 Note
1. Organization

 Organization

Square Capital BDC Inc. (the "Company") is a financial services company that primarily lends to and invests in corporate
debt securities of companies, including small to large private U.S. companies. The Company was organized as a Maryland corporation on
August 26, 2019 and is structured as an externally managed, non-diversified closed-end management investment company. The Company has
elected to be regulated as a business development company ("BDC") under the Investment Company Act of 1940, as amended (the
"1940 Act"). Beginning with its taxable year ending December 31, 2020, the Company has elected to be treated as a regulated
investment company ("RIC") under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code") and
expects to qualify as a RIC each year thereafter. The Company commenced operations on January 23, 2020. Palmer Square BDC Funding I,
LLC ("PS BDC Funding") was formed on January 21, 2020 and entered into a senior, secured revolving credit facility with Bank
of America, N.A. ("BofA N.A.") Palmer Square BDC Funding II LLC ("PS BDC Funding II") was formed on September
8, 2020 and entered into a senior, secured credit facility with Wells Fargo, National Association ("WFB").

 The Company's investment objective is to maximize total return,
comprised of current income and capital appreciation. The Company's current investment focus is guided by two strategies that facilitate
its investment opportunities and core competencies: (1) investing in corporate debt securities and, to a lesser extent, (2) investing
in collateralized loan obligation ("CLO") structured credit funds that typically own corporate debt securities, including
the equity and junior debt tranches of CLOs. To a limited extent, the Company may enter into derivatives transactions, which may utilize
instruments such as forward contracts, currency options and interest rate swaps, caps, collars and floors to seek to hedge against fluctuations
in the relative values of the Company's portfolio positions from changes in currency exchange rates and market interest rates or
to earn income and enhance the Company's total returns. The Company may receive or purchase warrants or rights to acquire equity
or other securities in connection with making a debt investment in a company. During the years ended December 31, 2023, 2022, and 2021,
the Company did not invest in any derivative contracts.

 The
Company is externally managed by Palmer Square BDC Advisor LLC (the "Investment Advisor"), an investment adviser that is
registered with the Securities and Exchange Commission (the "SEC") under the Investment Advisers Act of 1940, pursuant to
an investment advisory agreement between the Company and the Investment Advisor (the "Advisory Agreement"). The Investment
Advisor, in its capacity as administrator (the "Administrator"), provides the administrative services necessary for the Company
to operate pursuant to an administration agreement between the Company and the Administrator (the "Administration Agreement").
The Company's fiscal year ends on December 31.

 The
Company has two wholly-owned subsidiaries: PS BDC Funding, a special purpose wholly-owned subsidiary established for utilizing the Company's
revolving credit facility with BofA N.A., and PS BDC Funding II, a special purpose wholly-owned subsidiary established for utilizing
the Company's credit facility with WFB. These subsidiaries are consolidated in the financial statements of the Company.

 On January 22, 2024, the Company completed its initial public offering
("IPO"), issuing 5,450,000 shares of common stock, par value $ 0.001, at a public offering price of $ 16.45 per share. The Company's
common stock began trading on the New York Stock Exchange under the symbol "PSBD" on January 18, 2024. See Note 13 "Subsequent
Events."

 Note
2. Significant Accounting Policies

 The
Company is an investment company and applies specific accounting and financial reporting requirements under Financial Accounting Standards
Board ("FASB") Accounting Standards Topic 946, Financial Services-Investment Companies. The Company's functional
currency is U.S. dollars ("USD") and these consolidated financial statements have been prepared in that currency. The accompanying
consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States
of America ("GAAP") and pursuant to Regulation S-X.

 F- 29

 Use
of Estimates

 The
preparation of the consolidated 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 consolidated
financial statements. Actual results could differ from those estimates.

 Indemnifications

 In
the normal course of business, the Company enters into contracts that contain a variety of representations which provide general indemnifications.
The Company's maximum exposure under these arrangements cannot be known; however, the Company expects any risk of loss to be remote.

 Cash
and Cash Equivalents

 Cash
is comprised of cash on deposit with major financial institutions. Cash equivalents consist of highly liquid investments with original
maturities of three months or less. The Company places its cash with high credit quality institutions to minimize credit risk exposure.

 Debt
Issuance Costs

 The Company records origination
and other expenses related to its debt obligations as deferred financing costs. These expenses are deferred and amortized over the life
of the related debt instrument. Debt issuance costs are presented on the consolidated statement of assets and liabilities as a direct
deduction from the debt liability. In circumstances in which there is not an associated debt liability amount recorded in the consolidated
financial statements when the debt issuance costs are incurred, such debt issuance costs will be reported on the consolidated statement
of assets and liabilities as an asset until the debt liability is recorded. As of December 31, 2023, the balance of debt issuance costs
was $( 1.6) million, representing deferred financing costs of $ 3.2 million less accrued interest of $ 4.8 million, included in BoA Credit
Facility and WF Credit Facility (each as defined below), net of $ 641.8 million on the consolidated statement of assets and liabilities.
As of December 31, 2022, the balance of debt issuance costs was $( 0.1) million, representing deferred financing costs of $ 2.4 million
less accrued interest of $ 2.5 million, included in BoA Credit Facility and WF Credit Facility (each as defined below), net of $ 641.3 million
on the consolidated statement of assets and liabilities.

 Income
Taxes

 The
Company has elected to be treated as a RIC under Subchapter M of the Code. So long as the Company maintains its status as a RIC, it generally
will not pay corporate-level U.S. federal income taxes on any ordinary income or capital gains that it distributes at least annually
to its stockholders as dividends.

 To
qualify as a RIC, the Company must, among other things, meet certain source-of-income and asset diversification requirements. In addition,
to qualify for RIC tax treatment, the Company must distribute to its stockholders, for each taxable year, at least 90 % of its "investment
company taxable income" for that year, which is generally its ordinary income plus the excess of its realized net short-term capital
gains over its realized net long-term capital losses. In order for the Company not to be subject to U.S. federal excise taxes, it must
distribute annually an amount at least equal to the sum of (i) 98% of its net ordinary income (taking into account certain deferrals
and elections) for the calendar year, (ii) 98.2% of its capital gains in excess of capital losses for the one year period ending October
31 in such calendar year and (iii) any net ordinary income and capital gains in excess of capital losses for preceding years that were
not distributed during such years. The Company, at its discretion, may carry forward taxable income in excess of calendar year dividends
and pay a 4% nondeductible U.S. federal excise tax on this income.

 The
Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to determine
whether the tax positions are "more-likely-than-not" to be sustained by the applicable tax authority. Tax positions not deemed
to meet the "more-likely-than-not" threshold are reserved and recorded as a tax benefit or expense in the current year. All
penalties and interest associated with income taxes are included in income tax expense. Conclusions regarding tax positions are subject
to review and may be adjusted at a later date based on factors including, but not limited to, on-going analyses of tax laws, regulations
and interpretations thereof.

 F- 30

 Basis
of Consolidation

 As
provided under ASC 946, the Company will generally not consolidate its investment in a company other than a substantially wholly owned
investment company subsidiary or a controlled operating company whose business consists of providing services to the Company. Accordingly,
the Company consolidated the results of the Company's wholly owned investment company subsidiaries (PS BDC Funding and PS BDC Funding
II) in its consolidated financial statements.

and Dividend Income Recognition

income is recorded on the accrual basis and includes amortization of premiums or accretion of discounts. Discounts and premiums to par
value on securities purchased are accreted and amortized, respectively, into interest income over the contractual life of the respective
security using the effective interest method. The amortized cost of investments represents the original cost adjusted for the amortization
of premiums or accretion of discounts, if any. Upon prepayment of a loan or debt security, any prepayment premiums, unamortized upfront
loan origination fees, paydown gains/losses and unamortized discounts are recorded as interest income in the current period.

 Dividend
income on preferred equity securities is recorded on the accrual basis to the extent that such amounts are payable by the portfolio company
and are expected to be collected. Dividend income on common equity securities and money market funds is recorded on the record date for
private portfolio companies or on the ex-dividend date for publicly-traded portfolio companies.

 Non-Accrual
Status

 Loans
are generally placed on non-accrual status when there is reasonable doubt that principal or interest will be collected in full. Accrued
interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized
as income or applied to principal depending upon management's judgment regarding collectability. Non-accrual loans are restored
to accrual status when past due principal and interest is paid current and, in management's judgment, are likely to remain current.
Management may make exceptions to this treatment and determine not to place a loan on non-accrual status if the loan has sufficient collateral
value and is in the process of collection.

 Management
reviews all loans that have principal or interest that is 90 days past due, or when there is reasonable doubt as to the collection of
principal or interest to determine if a loan will be placed on non-accrual status. When a loan is placed on non-accrual status, the accrued
interest and unpaid interest is generally reversed, and any discount (market or original) is no longer accreted to interest income. Interest
payments received while a loan is on non-accrual status may be applied to principal or recognized as income, as determined by management's
judgement regarding collectability.

 A
loan may be taken off non-accrual status if past due payments are made, and if management determines the issuer is likely to remain current
on future payments. Management may make exceptions to this policy if the loan has sufficient collateral value or is in the process of
collection. Management may also leave a loan on accrual status while actively seeking recovery of past due payment. As of December 31,
2023 and 2022 the Company had no portfolio investments on non-accrual status.

 Other
Income

 From
time to time, the Company may receive fees for services provided to portfolio companies. These fees are generally only available to the
Company as a result of closing investments, are normally paid at the closing of the investments, are generally non-recurring and are
recognized as revenue when earned upon closing of the investment. The services that the Investment Advisor provides vary by investment,
but can include closing, work, diligence or other similar fees and fees for providing managerial assistance to the Company's portfolio
companies. In addition, the Company may generate revenue in the form of consent, waiver, amendment, unused, and prepayment fees associated
with the Company's investment activities and commitment, organization, structuring or diligence fees, monitoring fees and possibly
consulting and performance- based fees.

 Offering
Costs

 Offering costs in connection
with the offering of common stock of the Company are capitalized as a deferred charge and amortized to expense on a straight-line basis
over 12 months from the commencement of operations, January 23, 2020. These expenses consist primarily of legal fees and other costs incurred
with the Company's share offerings, the preparation of the Company's registration statement, and registration fees.

 F- 31

 Net
Realized Gains or Losses and Net Change in Unrealized Appreciation or Depreciation

 The
Company measures realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost
basis of the investment, without regard to unrealized appreciation or depreciation previously recognized, but considering unamortized
upfront fees and prepayment penalties. Net change in unrealized appreciation or depreciation reflects the change in portfolio investment
values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation, when gains
or losses are realized.

 New
Accounting Pronouncements

 In
March 2020, the FASB issued Accounting Standards Update 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects
of Reference Rate Reform on Financial Reporting ("ASU 2020-04"). The guidance provides optional expedients and exceptions
for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions, subject to meeting
certain criteria, that reference LIBOR or another reference rate expected to be discontinued. ASU 2020-04 was effective for all entities
as of March 12, 2020 through December 31, 2022. In December 2022 the FASB issued Accounting Standards Update 2022-06, Reference Rate
Reform (Topic 848) – Deferral of the Sunset Date of Topic 848 which extended the effective period through December 31, 2024.

 On July 26, 2023, the SEC adopted amendments intended to enhance and
standardize disclosures related to cybersecurity. The amendments require timely disclosure of material cybersecurity incidents and annual
disclosures related to cybersecurity risk management, strategy, and governance. The disclosures are effective beginning with annual reports
for fiscal years ending on or after December 15, 2023. The Company has evaluated the impact of adoption on its consolidated financial
statements and is effective for the current filing.

 Note
3. Agreements and Related Party Transactions

 Administration
Agreement

 The
Company has entered into the Administration Agreement with the Administrator. Pursuant to the Administration Agreement, the Administrator
furnishes office facilities and equipment and provides clerical, bookkeeping, compliance, recordkeeping and other administrative services
at such facilities. Under the Administration Agreement, the Administrator performs, or oversees the performance of, required administrative
services, which include being responsible for the financial and other records that the Company is required to maintain and preparing
reports to stockholders and reports and other materials filed with the SEC. In addition, the Administrator assists the Company in determining
and publishing the Company's net asset value, overseeing the preparation and filing of tax returns and the printing and dissemination
of reports and other materials to stockholders, and generally overseeing the payment of expenses and the performance of administrative
and professional services rendered to the Company by others. Under the Administration Agreement, the Administrator also provides managerial
assistance on the Company's behalf to those portfolio companies that have accepted the offer to provide such assistance.

 Under
the Administration Agreement, the Company reimburses the Administrator based upon its allocable portion of the Administrator's
overhead (including rent) in performing its obligations under the Administration Agreement, including rent, the fees and expenses associated
with performing compliance functions and the Company's allocable portion of the cost of its officers (including the Company's
Chief Financial Officer and Chief Compliance Officer), and any of their respective staff who provide services to the Company, operations
staff who provide services to the Company, and internal audit staff, if any, to the extent internal audit performs a role in the Company's
Sarbanes-Oxley internal control assessment. In addition, if requested to provide managerial assistance to portfolio companies, the Administrator
is reimbursed based on the services provided. The Administration Agreement has an initial term of two years and may be renewed with the
approval of the Company's board of directors (the "Board"). The agreement was renewed during the year for an additional
 one year period. The Administration Agreement may be terminated by either party without penalty upon 60 days' written notice to
the other party. To the extent that the Administrator outsources any of its functions, the Company pays the fees associated with such
functions on a direct basis without any incremental profit to the Administrator.

 In addition, the Administrator has, pursuant to a sub-administration
agreement, engaged U.S. Bancorp Fund Services, LLC to act on behalf of the Company's Administrator in the performance of certain
other administrative services. The Company has also engaged Equiniti Trust Company, LLC or its affiliates ("Equiniti") directly
to serve as transfer agent, registrar and dividend disbursing agent and engaged U.S. Bank or its affiliates directly to serve as custodian.
Prior to the Company's engagement of Equiniti upon the closing of the IPO, U.S. Bank served as the Company's transfer agent, distribution
paying agent and registrar.

 Investment Advisory Agreement

 The Investment Advisor serves
as the investment adviser of the Company and is registered as an investment adviser with the SEC. The Investment Advisor's primary
business is to provide a variety of investment management services, including an investment program for the Company. The Investment Advisor
is responsible for all business activities and oversight of the investment decisions made for the Company.

 F- 32

 Subsequent to the IPO, in return for providing management services
to the Company, the Company pays the Investment Advisor a base management fee, calculated and paid quarterly in arrears at an annual rate
of 1.75 % of the average value of the weighted average (based on the number of shares outstanding each day in the quarter) of the Company's
total net assets at the end of the two most recently completed calendar quarters. The base management fee for any partial quarter will
be pro-rated based on the number of days actually elapsed in that quarter relative to the total number of days in such quarter.

 Prior to the IPO, the base
management fee was 2.00 % of the average value of the weighted average (based on the number of shares outstanding each day in the quarter)
of the Company's total net assets at the end of the two most recently completed calendar quarters. The Investment Advisor, however,
during any period prior to the IPO, agreed to waive its right to receive management fees in excess of an annual rate of 1.75 % of the
average value of the weighted average total net assets at the end of each of our two most recently completed calendar quarters. The Investment
Advisor will not be permitted to recoup any base management fees waived for any period of time prior to the IPO.

 Additionally, pursuant
to the Advisory Agreement, the Investment Advisor is not entitled to an incentive fee prior to the IPO because the Advisory Agreement
provides that no incentive fee is payable prior to the listing of the Company's common stock on a national securities exchange.
Effective upon completion of the IPO, the Investment Advisor is entitled to an incentive fee (the "Income Incentive Fee")
based on the Company's pre-incentive fee net investment income for the then most recently completed calendar quarter, as adjusted
downward (but not upward) if over the most recently completed and eleven preceding calendar quarters since the IPO (or if shorter, the
number of calendar quarters since the IPO) (each such period is referred to herein as the "Trailing Twelve Quarters") aggregate
net realized losses on the Company's investments exceed the Company's aggregate net investment income over the same period,
excluding the most recently completed quarter, as described in more detail below. In this regard, if the Company's net realized
losses over the Trailing Twelve Quarters since the IPO (or if shorter, the number of calendar quarters since the IPO) are greater than
the Company's net investment income over the same period, excluding the most recently completed quarter, then the pre-incentive
fee net income used in the calculation of the Income Incentive Fee would be subject to a downward adjustment. The amount of the adjustment
would be equal to the amount by which such net realized losses exceed such net investment income. On the other hand, if the Company's
net investment income over the Trailing Twelve Quarters since the IPO (or if shorter, the number of calendar quarters since the IPO)
is equal to or greater than the Company's net realized losses over the same period, excluding the most recently completed quarter,
then no adjustment to pre-incentive fee net investment income would be made. The Income Incentive Fee will be calculated and payable
quarterly in arrears commencing with the first calendar quarter following the IPO. The Company will pay the Investment Advisor an Income
Incentive Fee with respect to its "adjusted net investment income" in each calendar quarter as follows:

 no Income Incentive Fee in any calendar quarter in which the Company's "adjusted net investment income" does not exceed an amount equal to a "hurdle rate" of 1.5 % per quarter ( 6 % annualized) of the Company's total net assets at the end of that quarter (the "Hurdle Amount");

 100 % of the Company's "adjusted net investment income" with respect to that portion of such "adjusted net investment income," if any, that exceeds the Hurdle Amount but is less than or equal to an amount (the "Catch-Up Amount") determined on a quarterly basis by multiplying 1.6875 % by the Company's total net asset value for the immediately preceding calendar quarter. The Catch-Up Amount is intended to provide the Investment Advisor with an incentive fee of 12.5 % on all of the Company's "adjusted net investment income" when the Company's "adjusted net investment income" reaches the Catch-Up Amount in any calendar quarter; and

 for any calendar quarter in which the Company's "adjusted net investment income" exceeds the Catch-Up Amount, the Income Incentive Fee shall equal 12.5 % of the amount of the Company's "adjusted net investment income" for the calendar quarter.

 "Adjusted net investment
income" means the Company's "pre-incentive fee net investment income" during the then most recently completed
calendar quarter minus the difference, if positive, between (i) the Company's "net realized losses" over the then Trailing
Twelve Quarters (or if shorter, the number of calendar quarters that have occurred since the IPO) and (ii) the Company's "net
investment income" over the Trailing Twelve Quarters (excluding the then most recently completed calendar quarter). No adjustment
(downward or upward) will be made to "pre-incentive fee net investment income" if the difference between clause (i) minus
clause (ii) is zero or negative.

 "Pre-incentive
fee net investment income" means interest income, dividend income and any other income (including any other fees such as commitment,
origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies but excluding
fees for providing managerial assistance) accrued during the calendar quarter, minus operating expenses for the quarter (including the
base management fee, any expenses payable under the Administration Agreement, and any interest expense and dividends paid on any outstanding
preferred stock, but excluding the Income Incentive Fee). "Pre-incentive fee net investment income" includes, in the case
of investments with a deferred interest feature such as market discount, original issue discount ("OID"), debt instruments
with payment-in-kind ("PIK") interest, preferred stock with PIK dividends and zero-coupon securities, accrued income that
the Company has not yet received in cash.

 F- 33

 "Net realized losses"
in respect of a particular period means the difference, if positive, between (i) the aggregate realized capital losses on the Company's
investments in such period and (ii) the aggregate realized capital gains on the Company's investments in such period. As noted above,
"net realized losses" will not by itself cause an upward adjustment to adjusted net investment income. "Net investment
income" in respect of the particular period means interest income, dividend income and any other income (including any other fees
such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies
but excluding fees for providing managerial assistance) accrued during the particular period, minus operating expenses for the particular
period (including the base management fee, the Income Incentive Fee, any expenses payable under the Administration Agreement, and any
interest expense and dividends paid on any outstanding preferred stock). "Net investment income" includes, in the case of
investments with a deferred interest feature such as market discount, OID, debt instruments with PIK interest, preferred stock with PIK
dividends and zero-coupon securities, accrued income that the Company has not yet received in cash.

 The
Income Incentive Fee amount, or the calculations pertaining thereto, as appropriate, will be pro-rated for any period less than a full
calendar quarter.

 Effective upon completion
of the IPO, the Investment Advisor has also agreed to use the most recently completed and three preceding calendar quarters (each such
period is referred to herein as the "Trailing Four Quarters") in addition to the Trailing Twelve Quarters to compute the
incentive fee payable to it by the Company. In conjunction therewith, the Investment Advisor has agreed to calculate the incentive fee
based on the Trailing Twelve Quarters and the Trailing Four Quarters and in the event that any Trailing Four Quarter period calculation
produces a lower incentive fee as compared to the applicable Trailing Twelve Quarter period calculation for any quarterly period, then
the Trailing Four Quarter Period will be used in connection with the calculation of the incentive fee payable to the Investment Advisor
by the Company for such quarter.

 The Investment Advisor has agreed to pay all offering costs in connection
with the IPO. These expenses consist primarily of legal fees and other costs incurred with the Company's share offerings, the preparation
of the Company's registration statement, and registration fees. The Company is not obligated to repay any such offering costs paid
by our Investment Advisor. As the December 31, 2023, the balance of Due from Advisor was $ 1.4 million, representing the offering costs
incurred on the statement of assets and liabilities.

 Note
4. Investments

 The
following table presents the composition of the Company's investment portfolio at amortized cost and fair value as of December
31, 2023 and December 31, 2022:

 Fair

 Fair

 Cost

 Value

 Cost

 Value

 First-lien senior secured debt

 $
 984,089,538

 $

 $
 951,753,250

 $

 Second-lien senior secured debt

 67,449,770

 71,513,263

 4,495,104

 1,884,529

 14,859,567

 17,589,330

 24,478,438

 27,012,348

 Short-term investments

 $
 1,159,135,422

 $

 $
 1,120,099,935

 $

 As of December 31, 2023, approximately 14.2 % of the long-term investment
portfolio at amortized cost and 14.1 % of the long-term investment portfolio measured at fair value, respectively, were invested in non-qualifying
assets. As of December 31, 2022 approximately 16.0 % of the long-term investment portfolio at amortized cost and 16.3 % of the long-term
investment portfolio measured at fair value, respectively, were invested in non-qualifying assets. With respect to the Company's
total assets, 13.2 % and 14.9 % of the Company's total assets were in non-qualifying assets as defined by Section 55(a) of the 1940
Act as of December 31, 2023 and December 31, 2022, respectively.

 F- 34

 The
industry composition of investments based on fair value, as a percentage of total investments at fair value, as of December 31, 2023
and December 31, 2022 was as follows:

 2023

 2022

 14.0
 %

 12.9
 %

 9.3
 %

 9.9
 %

 7.2
 %

 5.9
 %

 6.7
 %

 8.4
 %

 5.9
 %

 5.8
 %

 Short Term Investments

 5.8
 %

 4.9
 %

 4.2
 %

 2.6
 %

 4.2
 %

 3.9
 %

 Media

 3.7
 %

 3.2
 %

 3.4
 %

 2.8
 %

 2.9
 %

 3.3
 %

 2.9
 %

 3.7
 %

 2.6
 %

 2.5
 %

 2.0
 %

 1.3
 %

 1.7
 %

 1.9
 %

 1.7
 %

 2.1
 %

 1.7
 %

 1.5
 %

 1.6
 %

 0.6
 %

 1.6
 %

 1.6
 %

 1.5
 %

 1.2
 %

 1.4
 %

 1.1
 %

 Energy Equipment and Services

 1.4
 %

 0.6
 %

 1.3
 %

 1.3
 %

 1.2
 %

 1.4
 %

 1.2
 %

 2.5
 %

 1.2
 %

 2.0
 %

 1.0
 %

 2.1
 %

 Oil, Gas and Consumable Fuels

 0.9
 %

 1.7
 %

 0.8
 %

 0.3
 %

 Healthcare Equipment and Supplies

 0.8
 %

 0.9
 %

 Specialty Retail

 0.6
 %

 1.3
 %

 Real Estate Management and Development

 0.6
 %

 0.6
 %

 Wireless Telecommunication Services

 0.6
 %

 0.6
 %

 Pharmaceuticals

 0.6
 %

 0.6
 %

 Electrical Equipment

 0.5
 %

 0.5
 %

 Road and Rail

 0.5
 %

 0.5
 %

 Household Durables

 0.4
 %

 0.3
 %

 Industrial Conglomerates

 0.4
 %

 0.4
 %

 Technology Hardware, Storage and Peripherals

 -

 %

 0.4
 %

 Textiles, Apparel and Luxury Goods

 -

 %

 0.1
 %

 Airlines

 -

 %

 0.8
 %

 Total

 100.0
 %

 100.0
 %

 Note
5. Fair Value of Investments

 Fair
value is defined as the price that the Company would receive upon selling an investment or paying to transfer a liability in an orderly
transaction to a market participant in the principal or most advantageous market for the investment. Accounting guidance emphasizes that
valuation techniques maximize the use of observable market inputs and minimize the use of unobservable inputs.

 F- 35

 Inputs
refer broadly to the assumptions that market participants would use in pricing an asset or liability, including assumptions about risk.
Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in
pricing an asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are
inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on the best information
available in the circumstances. The valuation hierarchical levels are based upon the transparency of the inputs to the valuation of the
investment as of the measurement date. The three levels are defined as follows:

 Level
1 — Valuations based on quoted prices in active markets for identical assets or liabilities at the measurement date.

 Level
2 — Valuations based on inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly
observable at the measurement date. This category includes quoted prices for similar assets or liabilities in active markets, quoted
prices for identical or similar assets or liabilities in non-active markets including actionable bids from third parties for privately
held assets or liabilities, and observable inputs other than quoted prices such as yield curves and forward currency rates that are entered
directly into valuation models to determine the value of derivatives or other assets or liabilities.

 Level
3 — Valuations based on inputs that are unobservable and where there is little, if any, market activity at the measurement date.

in private investment companies measured based upon net asset value as a practical expedient to determine fair value are not required
to be categorized in the fair value hierarchy. As of December 31, 2023 and as of December 31, 2022, there were no investments accounted
for using the practical expedient.

 The
inputs for the determination of fair value may require significant management judgment or estimation and are based upon management's
assessment of the assumptions that market participants would use in pricing the assets or liabilities. These investments include debt
and equity investments in private companies or assets valued using the market or income approach and may involve pricing models whose
inputs require significant judgment or estimation because of the absence of any meaningful current market data for identical or similar
investments. The inputs in these valuations may include, but are not limited to, capitalization and discount rates, beta and earnings
before interest, taxes, depreciation, and amortization ("EBITDA") multiples. The information may also include pricing information
or broker quotes, which include a disclaimer that the broker would not be held to such a price in an actual transaction. The non-binding
nature of consensus pricing and/or quotes accompanied by disclaimer would result in classification as Level 3 information, assuming no
additional corroborating evidence.

 Pricing
inputs and weightings applied to determine fair value require subjective determination. Accordingly, valuations do not necessarily represent
the amounts that may eventually be realized from sales or other dispositions of investments.

 A
financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input that is significant
to the fair value measurement.

 The
following table presents the fair value hierarchy of investments as of December 31, 2023:

 Fair Value Hierarchy as of December 31, 2023

 Investments:

 Level 1

 Level 2

 Level 3

 Total

 First-lien senior secured debt

 $
 -

 $

 -

 $

 Second-lien senior secured debt

 -

 -

 -

 -

 Convertible Bond

 -

 -

 -

 -

 -

 -

 -

 -

 Equity

 -

 -

 -

 -

 Short Term Investments

 -

 -

 $

 $
 1,045,047,748

 $
 -

 $

 The
following table presents the fair value hierarchy of investments as of December 31, 2022:

 Fair Value Hierarchy as of December
 31, 2022

 Investments:

 Level 1

 Level 2

 Level 3

 Total

 First-lien senior secured debt

 $
 -

 $

 $
 -

 $

 Second-lien senior secured debt

 -

 -

 -

 -

 -

 -

 -

 -

 Short Term Investments

 -

 -

 $

 $
 966,864,517

 $
 -

 $

 F- 36

 Debt
Not Carried at Fair Value

 The
fair value of the BoA Credit Facility and the WF Credit Facility, which would be categorized as Level 3 within the fair value hierarchy
as of December 31, 2023, approximates their respective carrying values because the BoA Credit Facility and WF Credit Facility each have
variable interest based on selected short term rates.

 Note
6. Borrowings

 In
accordance with the 1940 Act, with certain limitations, BDCs are permitted to borrow amounts such that their asset coverage ratios, as
defined in the 1940 Act, are at least 150 % after such borrowing. As of December 31, 2023, the Company's asset coverage ratio was
 172 %.

 Bank
of America Credit Facility

 On
February 18, 2020, the Company, through a special purpose wholly-owned subsidiary, PS BDC Funding (together with the Company, the "Borrowers")
entered into a Credit Agreement (the "Credit Agreement") with certain financial institutions as lenders ("Lenders"),
BofA N.A. as the Administrative Agent and BofA Securities, Inc. ("BofA Securities"), as Lead Arranger and Sole Book Manager,
pursuant to which the Lenders agreed to provide the Company with a revolving line of credit (the "BoA Credit Facility").

 Under the BoA Credit Facility, which matures on February 18, 2025,
the Lenders have agreed to extend credit to PS BDC Funding in an aggregate amount up to the Commitment (as defined in the Credit Agreement)
amount. The Commitment amount for the BoA Credit Facility is currently $725 million. The Borrowers' ability to draw under the BoA
Credit Facility is scheduled to terminate on February 11, 2025. All amounts outstanding under the BoA Credit Facility are required to
be repaid by February 18, 2025. As the Company raises additional capital, we may enter into additional credit agreements to expand our
borrowing capacity.

 Debt
obligations under the BoA Credit Facility consisted of the following as of December 31, 2023:

 Committed

 Outstanding

 Amount

Available (1)

 Net

Carrying

Value (2)

 BoA Credit Facility

 $
 725,000,000

 $
 504,000,000

 $
 221,000,000

 $

 Total debt

 $
 725,000,000

 $
 504,000,000

 $
 221,000,000

 $

 (1)
 The
amount available reflects any limitations related to the BoA Credit Facility's borrowing base.

 (2)
 The
carrying value of the BoA Credit Facility is presented net of deferred financing costs of $ 739 thousand and accrued interest of $ 2.156
million.

 F- 37

 Debt
obligations under the BoA Credit Facility consisted of the following as of December 31, 2022:

 December
 31, 2022

Principal Committed

 Outstanding

 Amount

 Available (1)

 Net

Carrying

 Value (2)

 BoA
 Credit Facility

 $

 725,000,000

 $

 514,500,000

 $

 210,500,000

 $

 513,726,164

 Total
 debt

 $

 725,000,000

 $

 514,500,000

 $

 210,500,000

 $

 513,726,164

 (1)
 The
amount available reflects any limitations related to the BoA Credit Facility's borrowing base.

 (2)
 The
carrying value of the BoA Credit Facility is presented net of deferred financing costs of $ 1.358 million and accrued interest of $ 584
thousand.

 Average
debt outstanding under the BoA Credit Facility during the years ended December 31, 2023, 2022, and 2021 was $ 498.3 million, $ 544.0 million
and $ 433.1 million, respectively.

 Prior to February 3, 2023, the loans under the BOA Credit Facility
may have been base rate loans or euro currency loans. The base rate loans bore interest at the base rate plus 1.30%, and the eurocurrency
rate loans bore interest at 1-month or 3-month LIBOR plus 1.30%. The "base rate" was equal to the highest of (a) the federal
funds rate plus 0.50%, (b) the prime rate, and (c) 1-month or 3-month LIBOR. On February 3, 2023, the Company entered into an omnibus
amendment to the BoA Credit Facility that, among other things: (i) removed LIBOR transition language and (ii) replaced eurocurrency rate
loans with SOFR loans.

 As of February 3, 2023, the loans under the BoA Credit Facility may
be base rate loans or Secured Overnight Financing Rate ("SOFR") loans. The base rate loans will bear interest at the base
rate plus 1.40%, and the SOFR loans will bear interest at 1-month SOFR plus 1.40% or 3-month SOFR plus 1.45%. The "base rate"
will be equal to the highest of (a) the federal funds rate plus 0.50%, (b) the prime rate, and (c) 1-month or 3-month SOFR plus 0.10%.
The Credit Agreement includes fallback language in the event that SOFR becomes unavailable. Interest pursuant to base rate loans is payable
quarterly in arrears, and interest pursuant to SOFR loans is payable either quarterly or monthly, as specified by the Borrowers in a loan
notice pertaining thereto. The Credit Agreement requires the payment of a commitment fee of 0.50% for unused Commitments until the four-month
anniversary of the Second Amendment to the Credit Agreement. Thereafter, the commitment fee is 0.50% on unused Commitments up to 30% of
the BoA Credit Facility, and 1.30% on unused Commitments in excess of 30% of the BoA Credit Facility. Such fee is payable quarterly in
arrears. The advance rate for PS BDC Funding's Eligible Collateral Assets ranges from 40% for Second Lien Bank Loans to 70% for
First Lien Bank Loans that are B Assets to 100% for Cash (excluding Excluded Amounts) (as each such term is defined in the Credit Agreement).

 For
the years ended December 31, 2023, 2022, and 2021, the components of interest expense with respect to the BoA Credit Facility were as
follows:

 2023

 2022

 2021

 Interest expense

 $
 33,703,442

 $
 17,356,543

 $
 6,711,315

 Amortization of debt issuance costs

 646,738

 635,331

 550,610

 Total interest expense

 $
 34,350,180

 $
 17,991,874

 $
 7,261,925

 Average interest rate

 6.42
 %

 2.97
 %

 1.40
 %

 F- 38

 PS BDC Funding has pledged
all of its assets to BofA N.A., in its capacity as Administrative Agent, to secure its obligations under the BoA Credit Facility. Both
the Company and PS BDC Funding have made customary representations and warranties and are required to comply with various covenants, reporting
requirements and other customary requirements for similar credit facilities. Borrowing under the BoA Credit Facility is subject to the
leverage restrictions contained in the 1940 Act and PS BDC Funding complies with 1940 Act provisions relating to affiliated transactions
and custody (Section 17, as modified by Section 57, of the 1940 Act). The custodian of the assets pledged to BofA N.A. pursuant to the
BoA Credit Facility is U.S. Bank National Administration ("US Bank"). The obligations under the Credit Agreement may be accelerated
upon the occurrence of an event of default under the Credit Agreement, including in the event of a change of control of PS BDC Funding
or if the Investment Advisor ceases to serve as investment adviser to the Company.

 Wells
Fargo Credit Facility

 On
December 18, 2020, the Company, through a special purpose wholly-owned subsidiary, Palmer Square BDC Funding II LLC ("PS BDC Funding
II" and together with the Company, the "WF Borrowers") entered into a Loan and Security Agreement (the "Loan
Agreement") with certain financial institutions as lenders ("WF Lenders"), WFB as the administrative agent and U.S.
Bank, as Collateral Agent and Custodian, pursuant to which the WF Lenders agreed to provide the Company with a line of credit (the "WF
Credit Facility").

 On December 18, 2023, the
Company entered into an amendment to the WF Credit Facility (the "WF Credit Facility Fourth Amendment") that amends the WF
Credit Facility to, among other things: (i) increase the amount available for borrowing under the WF Credit Facility from $ 150,000,000
to $ 175,000,000, (ii) extend the facility maturity date from December 18, 2025 to December 18, 2028 and (iii) extend the reinvestment
period from December 18, 2023 to December 18, 2026 (subject to other provisions of the WF Credit Facility).

 Debt
obligations under the WF Credit Facility consisted of the following as of December 31, 2023:

Committed

 Outstanding

 Amount

Available (1)

 Net

Carrying

Value (2)

 WF Credit Facility

 $
 175,000,000

 $
 136,250,000

 $
 38,750,000

 $

 Total debt

 $
 175,000,000

 $
 136,250,000

 $
 38,750,000

 $

 (1)
 The
amount available reflects any limitations related to the WF Credit Facility's borrowing base.

 (2)
 The
carrying value of the WF Credit Facility is presented net of deferred financing costs of $ 2.472 million and accrued interest of $ 2.634
million.

 Debt
obligations under the WF Credit Facility consisted of the following as of December 31, 2022:

Committed

 Outstanding

 Amount
 Available (1)

 Net

 Carrying
 Value (2)

 WF Credit Facility

 $
 150,000,000

 $
 126,750,000

 $
 23,250,000

 $
 127,583,253

 Total debt

 $
 150,000,000

 $
 126,750,000

 $
 23,250,000

 $
 127,583,253

 (1)
 The
amount available reflects any limitations related to the WF Credit Facility's borrowing base.

 (2)
 The
carrying value of the WF Credit Facility is presented net of deferred financing costs of $ 1.047 million and accrued interest of $ 1.880
million.

 Average debt outstanding under the WF Credit Facility during the years
ended December 31, 2023, 2022, and 2021, was $ 131.4 million and $ 123.4 million and $ 13.9 million, respectively.

 Prior to April 10, 2023 the loans under the WF Credit Facility may
have been Broadly Syndicated Loans or Middle Market loans and were eurocurrency rate loans unless
such rate was unavailable, in which case the loans were base rate loans until such rate was available. Broadly Syndicated Loans bore interest
at the LIBOR or base rate, as applicable, plus 1.85%, and Middle Market Loans bore interest at LIBOR or base rate, as applicable, plus
2.35%. The "base rate" was equal to the highest of (a) the federal funds rate plus 0.50% and (b) the prime rate. On April
10, 2023, the Company entered into an amendment to the WF Credit Facility that, among other things: (i) transferred and assigned U.S.
Bank National Association's rights and obligations as collateral agent and as a secured party to U.S. Bank Trust Company, National
Association, (ii) referenced SOFR instead of LIBOR and (iii) removed LIBOR transition language.

 F- 39

 As
of April 10, 2023, the loans under the WF Credit Facility may be Broadly Syndicated Loans or Middle Market Loans and will bear
interest at Daily Simple SOFR, or base rate (to the extent Daily Simple SOFR is unavailable), plus 2.50%, with an interest rate floor
of 0.0%. The "base rate" will be equal to the highest of (a) the federal funds rate plus 0.50% and (b) the prime rate. The
Loan Agreement includes fallback language in the event that Daily Simple SOFR becomes unavailable. Interest is payable quarterly, as
determined by the WFB as the administrative agent. Following an amendment to the WF Credit Facility on October 13, 2021, the Loan Agreement
requires the payment of a non-usage fee of (x) during the first thirteen months following the closing of the WF Credit Facility, 0.50%
multiplied by daily unused Facility Amounts, (y) between thirteen and sixteen months following the closing of the WF Credit Facility,
0.50% multiplied by the lesser of (1) daily unused Facility Amounts and (2) 50% of the Facility Amount plus 2.00% multiplied by the greater
of (i) the difference between the daily unused Facility Amount and 50% of the Facility Amount and (ii) zero and, (z) thereafter, 0.50%
multiplied by the lesser of (1) daily unused Facility Amounts and (2) 20% of the Facility Amount plus 2.00% multiplied by the greater
of (i) the difference between the daily unused Facility Amount and 20% of the Facility Amount and (ii) zero. Such fee is payable quarterly
in arrears. The WF Credit Facility includes the option to downsize the facility by paying a Commitment Reduction Fee. The Fee is equal
to 2.00% of the facility reduction amount prior to the one-year anniversary of the WF Credit Facility Fourth Amendment, and 1.00% thereafter.
The applicable percentage for the advance rate on PS BDC Funding II's Eligible Loans ranges from 67.5% for Middle Market Loans
to 70% for Broadly Syndicated Loans (as each such term is defined in the Loan Agreement).

 For
the years ended December 31, 2023, 2022, and 2021, the components of interest expense with respect to the WF Credit Facility were as
follows:

 For the Year Ended December 31,

 2023

 2022

 2021

 Interest expense

 $
 9,773,911

 $
 5,107,383

 $
 996,077

 Amortization of debt issuance costs

 359,061

 352,912

 358,659

 Total interest expense

 $
 10,132,972

 $
 5,460,295

 $
 1,354,736

 Average interest rate

 7.20
 %

 4.03
 %

 2.18
 %

 PS BDC Funding II has pledged
all of its assets to U.S. Bank, in its capacity as Collateral Agent, to secure its obligations under the WF Credit Facility and U.S. Bank
acts as the custodian of such assets. Both the Company and PS BDC Funding II have made customary representations and warranties and are
required to comply with various covenants, reporting requirements, and other customary requirements for similar credit facilities. Borrowing
under the WF Credit Facility is subject to the leverage restrictions contained in the 1940 Act and PS BDC Funding II complies with 1940
Act provisions relating to affiliated transactions and custody (Section 17, as modified by Section 57, of the 1940 Act). The obligations
under the Loan Agreement may be accelerated upon the occurrence of an event of default under the Loan Agreement, including in the event
of a change of control of PS BDC Funding II, if the Investment Advisor ceases to serve as investment adviser to the Company, or if PSCM
or its affiliates cease to directly or indirectly own a majority of the membership interests of the Investment Advisor.

 Senior Securities

 Information about the Company's senior securities is shown in
the following table for the fiscal years ended December 31, 2023, 2022, 2021, and 2020 (in thousands).

 Class and Period Ended

 Total Amount Outstanding Exclusive of Treasury Securities (1) ($ in Millions)

 Asset Coverage per Unit (2)

 Involuntary Liquidating Preference per Unit (3)

 Average Market Value per Unit (4)

 BoA Credit Facility

 504.0

 1,721.5

 —

 —

 514.5

 1,566.8

 —

 —

 December 31, 2021

 552.0

 1,694.5

 —

 —

 December 31, 2020

 395.0

 1,640.9

 WF Credit Facility

 136.3

 1,721.5

 —

 —

 126.8

 1,566.8

 —

 —

 December 31, 2021

 100.0

 1,694.5

 —

 —

 December 31, 2020

 0.0

 1,640.9

 (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 our total consolidated assets, less all liabilities and indebtedness not represented by senior securities, to the aggregate amount of senior securities representing indebtedness. Asset coverage per unit is expressed in terms of dollar amounts per $ 1,000 of indebtedness.

 (3)
 The amount to which such class of senior security would be entitled upon the voluntary liquidation of the issuer in preference to any security junior to it. The "—" in this column indicates that the SEC expressly does not require this information to be disclosed for certain types of senior securities.

 (4)
 Not applicable because such senior securities are not registered for public trading.

 F- 40

 Note
7. Share Transactions

 Offering
Proceeds

 During
the years ended December 31, 2023, 2022, and 2021, the Company issued and sold 2,816,166 shares at an aggregate purchase price of $ 46.7
million, 1,716,297 shares at an aggregate purchase price of $ 29.2 million, and 10,007,526 shares at an aggregate purchase price of $ 206.6
million, respectively. These amounts include shares issued in reinvestment.

 Distribution
Reinvestment Plan

 The
Company has adopted a dividend reinvestment plan that will provide for reinvestment of its dividends and other distributions on behalf
of the Company's stockholders, unless a stockholder elects to receive cash. As a result, if the Company's Board authorizes,
and the Company declares, a cash dividend or other distribution, then stockholders who do not "opt out" of the Company's
dividend reinvestment plan will have their cash dividends and distributions automatically reinvested in additional shares of the Company's
common stock, rather than receiving cash dividends and distributions.

 Prior
 to the IPO, the Board primarily used newly-issued shares of the Company's common stock
 to implement the dividend reinvestment plan. The number of shares of common stock to be issued
 to a participant prior to the IPO would be equal to the quotient determined by dividing the
 cash value of the dividend payable to such stockholder by the net asset value per share as
 of the date such dividend was declared.

 After
 the IPO, the Board intends to primarily use newly-issued shares to implement the dividend
 reinvestment plan, whether or not the shares are trading at a price per share at, below or
 above net asset value. However, the Board reserves the right to purchase shares in the open
 market in connection with the implementation of the dividend reinvestment plan. The Board
 will examine the full facts and circumstances of each such dividend to determine the approach
 (i.e., to use newly issued shares or effectuate open market purchases to implement the dividend
 reinvestment plan) that is in the best interests of stockholders taking into account the
 Board's fiduciary duties to stockholders, including by weighing the potential dilution
 in connection with such issuance to be incurred by the Company's stockholders against
 the Company's need and usage of reinvested funds,and, if the Company's uses
 newly issued shares to implement the dividend reinvestment plan at a time when the shares
 are trading at a price below NAV, the stockholders' receipt of fewer shares than they
 would have if the Company had effectuated open market purchases. The number of newly issued
 shares to be issued to a participant would be determined by dividing the total dollar amount
 of the dividend payable to such stockholder by the market price per share of the Company's
 common stock at the close of regular trading on a national securities exchange on the dividend
 payment date. Shares purchased in open market transactions by Equiniti, the plan administrator
 and the Company's transfer agent, registrar and dividend disbursing agent, will be
 allocated to a participant based upon the average purchase price, excluding any brokerage
 charges or other charges, of all shares of the Company's common stock purchased with
 respect to the dividend.

 A
 registered stockholder may elect to receive an entire distribution in cash by notifying Equiniti
 in writing so that such notice is received by the plan administrator no later than the record
 date for distributions to stockholders. The plan administrator will set up an account for
 shares acquired through the plan for each stockholder who has not elected to receive dividends
 or other distributions in cash and hold such shares in noncertificated form.

 There
will be no brokerage charges or other charges to stockholders who participate in the plan. The plan administrator's fees will be
paid by the Company.

 Stockholders
who receive dividends and other distributions in the form of stock are generally subject to the same U.S. federal, state and local tax
consequences as are stockholders who elect to receive their distributions in cash. However, since a participating stockholder's
cash dividends will be reinvested, such stockholder will not receive cash with which to pay any applicable taxes on reinvested dividends.
A stockholder's basis for determining gain or loss upon the sale of stock received in a dividend or other distribution from the
Company will generally be equal to the total dollar amount of the distribution payable to the stockholder. Any stock received in a dividend
or other distribution will have a new holding period for tax purposes commencing on the day following the day on which the shares are
credited to the U.S. stockholder's account.

 Participants
 may terminate their accounts under the plan by so notifying the plan administrator by submitting
 a letter of instruction terminating the participant's account under the plan to Equiniti.
 The plan may be terminated by the Company upon notice in writing mailed to each participant
 at least 30 days prior to any record date for the payment of any dividend by the Company.

 If
participants withdraw from the plan or the plan is terminated, the plan administrator will cause the shares held for the participant
under the plan to be delivered to the participant. If an investor holds common stock with a brokerage firm that does not participate
in the plan, such investor will not be able to participate in the plan and any dividend reinvestment may be affected on different terms
than those described above.

 Open
Market Share Repurchase Plan

 The
Board authorized the Company to repurchase shares of its common stock through an open-market share repurchase program for up to $ 20 million
in the aggregate of shares of the Company's common stock through 12 months from the date of the IPO. Pursuant to such authorization
and concurrently with the closing of the IPO, the Company entered into a share repurchase plan (the "Company Rule 10b5-1 Stock
Repurchase Plan") to acquire up to $ 15 million in the aggregate of shares of its common stock, in accordance with the guidelines
specified in Rule 10b-18 and Rule 10b5-1 of the Exchange Act.

 The
Company Rule 10b5-1 Stock Repurchase Plan is intended to allow the Company to repurchase shares of its common stock at times when it
otherwise might be prevented from doing so under insider trading laws. The Company Rule 10b5-1 Stock Repurchase Plan will require the
Company's agent to repurchase shares of the Company's common stock on the Company's behalf when the market price per
share of the Company's common stock is below the most recently reported NAV per share of common stock (including any updates, corrections
or adjustments publicly announced by the Company to any previously announced NAV per share). Under the Company Rule 10b5-1 Stock Repurchase
Plan, the agent will increase the volume of purchases made as the price of the Company's common stock declines, subject to volume
restrictions.

 F- 41

 The
repurchase of shares pursuant to the Company Rule 10b5-1 Stock Repurchase Plan is intended to satisfy the conditions of Rule 10b5-1 and
Rule 10b-18 under the Exchange Act and will otherwise be subject to applicable law, including Regulation M, which may prohibit purchases
under certain circumstances.

 The
Company Rule 10b5-1 Stock Repurchase Plan will commence beginning 60 calendar days following the end of the "restricted period"
under Regulation M and terminate upon the earliest to occur of (i) 12 months from the date of the Company Rule 10b5-1 Stock Repurchase
Plan, (ii) the end of the trading day on which the aggregate purchase price for all shares purchased under the Company Rule 10b5-1 Stock
Repurchase Plan equals $ 15 million and (iii) the occurrence of certain other events described in the Company Rule 10b5-1 Stock Repurchase
Plan. The "restricted period" under Regulation M will end upon the closing of the IPO and, therefore, the common stock repurchases/purchases
described above shall not begin prior to 60 days after the closing of the IPO.

 PSCM
Rule 10b5-1 Stock Purchase Plan

 In
addition, PSCM will purchase up to $ 5 million in the aggregate of shares of the Company's common stock in the open market within
one year of the date of the IPO if the shares of the Company's common stock trade below a specific level of NAV per share following
the completion of the IPO. In order to facilitate PSCM's purchase commitment, concurrently with the closing of the IPO, PSCM entered
into a share purchase plan (the "PSCM Rule 10b5-1 Stock Purchase Plan") to permit the purchase of up to $ 2.5 million of shares
of the Company's common stock. The purchases of shares pursuant to the PSCM Rule 10b5-1 Stock Purchase Plan will be implemented
in accordance with Rule 10b5-1 and Rule 10b-18 under the Exchange Act.

 The
PSCM Rule 10b5-1 Stock Purchase Plan is intended to allow PSCM to purchase shares of the Company's common stock at times when it
otherwise might be prevented from doing so under insider trading laws. The PSCM Rule 10b5-1 Stock Purchase Plan will require PSCM's
agent to purchase shares of common stock on PSCM's behalf when the market price per share of the Company's common stock is
trading below the most recently reported NAV per share of common stock (including any updates, corrections or adjustments publicly announced
by the Company to any previously announced NAV per share). Under the PSCM Rule 10b-1 Stock Purchase Plan, the agent will increase the
volume of purchases made as the price of the Company's common stock declines, subject to volume restrictions.

 The
purchase of shares pursuant to the PSCM Rule 10b5-1 Stock Purchase Plan is intended to satisfy the conditions of Rule 10b5-1 and Rule
10b-18 under the Exchange Act, and will otherwise be subject to applicable law, including Regulation M, which may prohibit purchases
under certain circumstances.

 The
PSCM Rule 10b5-1 Stock Purchase Plan will commence beginning 60 calendar days following the end of the "restricted period"
under Regulation M and terminate upon the earliest to occur of (i) 12 months from the date of the PSCM Rule 10b5-1 Stock Purchase Plan,
(ii) the end of the trading day on which the aggregate purchase price for all shares purchased under the PSCM Rule 10b5-1 Stock Purchase
Plan equals $ 2.5 million and (iii) the occurrence of certain other events described in the PSCM Rule 10b5-1 Stock Purchase Plan. The
"restricted period" under Regulation M will end upon the closing of the IPO and, therefore, the common stock repurchases/purchases
described above shall not begin prior to 60 days after the closing of the IPO.

 Note
8. Commitments and Contingencies

 As
of December 31, 2023 and December 31, 2022, the Company had an aggregate of $ 20.1 million and $ 2.6 million, respectively, of unfunded
commitments to provide debt financing to its portfolio companies. As of each of December 31, 2023 and December 31, 2022, there were no
capital calls or draw requests made by the portfolio companies to fund these commitments. Such commitments are generally up to the Company's
discretion to approve or are subject to the satisfaction of certain financial and nonfinancial covenants and involve, to varying degrees,
elements of credit risk in excess of the amount recognized in the Company's consolidated statements of assets and liabilities and
are not reflected in the Company's consolidated statement of assets and liabilities.

 A
summary of the composition of the unfunded commitments as of December 31, 2023 is shown in the table below:

 Expiration
 Date (1)

 As of

 2023

 Accession Risk Management Group,
 Inc.

 2/14/2025

 2,457,847

 Aptean Inc.

 1/30/2031

 436,880

 Aptean Inc.

 1/30/2026

 851,480

 Aramsco, Inc.

 10/10/2025

 712,871

 B'Laster Holdings, LLC

 10/25/2025

 466,666

 Enverus Holdings, Inc.

 12/22/2025

 310,811

 Enverus Holdings, Inc.

 12/24/2029

 472,973

 ImageFirst Holdings, LLC

 4/28/2025

 833,333

 MRI Software LLC

 2/10/2027

 6,363,630

 MRI Software LLC

 2/10/2027

 636,370

 OMNIA Partners, LLC

 1/25/2024

 223,269

 Patriot Growth Insurance Services, LLC

 11/17/2025

 4,650,000

 PT Intermediate Holdings III, LLC

 9/1/2024

 579,942

 Ryan, LLC

 11/14/2024

 514,286

 Tank Holding Corp.

 5/22/2024

 597,000

 Total unfunded commitments

 $
 20,107,358

 (1)
 Commitments are generally subject to borrowers meeting certain criteria such as compliance with covenants and certain operational metrics. These amounts may remain outstanding until the commitment period of an applicable loan expires, which may be shorter than its maturity.

 F- 42

 A
summary of the composition of the unfunded commitments as of December 31, 2022 is shown in the table below:

 Expiration

 Date (1)

 As
 of
 2022

 ARC Falcon I Inc.

 3/30/2023

 $
 636,943

 Vocus Group

 6/18/2023

 Total unfunded commitments

 $
 2,636,943

 (1)

 are generally subject to borrowers meeting certain criteria such as compliance with covenants and certain operational metrics. These
 amounts may remain outstanding until the commitment period of an applicable loan expires, which may be shorter than its maturity.

 From
time to time, the Company may become a party to certain legal proceedings incidental to the normal course of its business. As of December
31, 2023, management is not aware of any pending or threatened litigation.

 Note
9. 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 earnings available to common stockholders by the weighted average number of shares outstanding during the period. Other potentially
dilutive common shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis. As
of each of December 31, 2023, 2022, and 2021, there were no dilutive shares.

 The
following table sets forth the computation of basic and diluted earnings per share of common stock for the years ended December 31, 2023,
2022, and 2021:

 For
 the Year Ended December 31,

 2023

 2022

 2021

 Net
 increase (decrease) in net assets resulting from operations

 $

 $
)

 $

 Weighted average shares of common stock outstanding - basic and diluted

 25,700,603

 23,130,666

 15,494,614

 Earnings (loss) per share of common stock - basic and diluted

 $
 4.20

 $
 ( 3.22
)

 $
 1.23

 Note
10. Income Taxes

 The
Company intends to elect to be treated as a RIC under the Internal Revenue Code ("Code") for its taxable year end December
31, 2023. As a RIC, the Company is not subject to federal income tax on the portion of its taxable income and gains distributed currently
to its stockholders as a dividend. The Company anticipates distributing substantially all of its taxable income and gains, within the
Subchapter M rules, and thus the Company anticipates that it will not incur any federal or state income tax at the RIC level. As a RIC,
the Company is also subject to a federal excise tax based on distributive requirements of its taxable income on a calendar year basis
(e.g., calendar year 2023). Depending on the level of taxable income earned in a tax year, the Company may choose to carry forward taxable
income in excess of current year distributions into the next tax year and pay a 4 % excise tax on such income, to the extent required.

 The
permanent differences for tax purposes from distributable earnings to additional paid in capital were reclassified for tax purposes for
the tax years ended December 31, 2023, 2022, and 2021. These reclassifications have no impact on net assets.

 Year
 Ended December 31,

 2023

 2022

 2021

 Increase (decrease) in distributable
 earnings

 $

 -

 $

 -

 $

 -

 Increase (decrease) in capital in excess of par value

 $

 -

 $

 -

 $

 -

 F- 43

 The
following reconciles net increase in net assets resulting from operations to taxable income for the years ended December 31, 2023, 2022,
and 2021:

 Year
 Ended December 31,

 2023

 2022

 2021

 Net increase (decrease) in net
 assets resulting from operations

 $

 $
)

 $

 Net change in unrealized appreciation (depreciation)
 from investments

 ( 52,563,544
)

 107,432,980

 8,527,786

 Other book tax differences

 1,677,010

 8,109,784

 ( 897,245
)

 Taxable income before
 deductions for distributions

 $
 56,949,117

 $
 41,060,429

 $
 26,690,259

 Year
 Ended December 31,

 2023

 2022

 2021

 Distributions paid from:

 Ordinary income

 $
 56,068,285

 $
 43,482,016

 $
 22,163,852

 Capital gains

 -

 573,101

 3,788,641

 Return of Capital

 -

 -

 -

 Total

 $
 56,068,285

 $
 44,055,117

 $
 25,952,493

 For
the years ended December 31, 2023, 2022, and 2021, the components of accumulated earnings on a tax basis were as follows:

 Year Ended
 2023

 Year Ended
 2022

 Year Ended
 2021

 Undistributed net investment income (loss)

 $
 148,613

 $
 -

 $
 1,834,053

 Undistributed capital gains

 -

 -

 513,796

 Capital loss carryforward

 ( 9,042,947
)

 -

 -

 Other accumulated gain (loss)

 ( 85,947
)

 ( 7,575,518
)

 ( 101,573
)

 Net unrealized appreciation (depreciation)

 ( 49,754,535
)

 ( 102,926,664
)

 5,788,994

 Total

 $
 ( 58,734,816
)

 $
 ( 110,502,182
)

 $
 8,035,270

losses can be carried forward indefinitely to offset future capital gains. As of December 31, 2023, the Company had $ 9,042,947 in capital
loss carryforwards. As of December 31, 2022, and 2021, the Company had no capital loss carryforwards.

 As
of December 31, 2023, 2022, and 2021, the Company's aggregate unrealized appreciation and depreciation on investments based on
cost for U.S. federal income tax purposes was as follows:

 2023

 2022

 2021

 Tax cost

 $
 1,158,548,300

 $
 1,120,121,398

 $
 1,188,452,438

 Gross unrealized appreciation

 9,383,672

 1,008,264

 9,331,858

 Gross unrealized depreciation

 ( 59,138,207
)

 ( 103,934,928
)

 ( 3,542,964
)

 Net unrealized appreciation/(depreciation) on investments

 $
 ( 49,754,535
)

 $
 ( 102,926,664
)

 $
 5,788,994

 The
Company adopted FASB ASC Topic 740, Accounting for Uncertainty in Income Taxes ("ASC 740") as of January 23, 2020,
commencement of operations. ASC 740 provides guidance for how uncertain tax positions should be recognized, measured, presented, and
disclosed in the consolidated financial statements. ASC 740 requires the evaluation of tax positions taken or expected to be taken in
the course of preparing the Company's tax returns to determine whether the tax positions are "more-likely-than-not"
of being sustained by the applicable tax authority. The Company recognizes the tax benefits of uncertain tax positions only where the
position is "more likely than not" to be sustained assuming examination by tax authorities. As of December 31, 2023, management
has analyzed the Company's tax positions, and has concluded that no liability for unrecognized tax benefits should be recorded
related to uncertain tax positions taken in the Company's current year tax return. The Company identifies its major tax jurisdiction
as U.S. Federal. The 2020-2023 tax years remain subject to examination by U.S. federal, state and local authorities. Management's
determinations regarding ASC 740 may be subject to review and adjustment at a later date based upon factors including, but not limited
to, an ongoing analysis of tax laws, regulations and interpretations thereof.

 F- 44

 Note
11. Financial Highlights

 The
following per share of common stock data has been derived from information provided in the consolidated financial statements. The following
is a schedule of financial highlights for the years ended December 31, 2023, 2022, and 2021, and for the period January 23, 2020 (Commencement
of Operations) through December 31, 2020:

 For the Period

 January 23,

 2020
 (Commencement
 of Operations)

 through

 For
 the Year Ended December 31,

 2023

 2022

 2021

 2020

 Per Common
 Share Operating Performance

 Net
 Asset Value, Beginning of Period

 $
 14.96

 $
 20.06

 $
 20.15

 20.00

 Results of Operations:

 Net
 Investment Income (1)

 2.26

 1.78

 1.47

 1.32

 Net
 Realized and Unrealized Gain (Loss) on Investments (4)

 1.98

 ( 5.00
)

 ( 0.18
)

 ( 0.19
)

 Net
 Increase (Decrease) in Net Assets Resulting from Operations

 4.24

 ( 3.22
)

 1.29

 1.13

 to Common Stockholders

 from Net Investment Income

 ( 2.16
)

 ( 1.85
)

 ( 1.01
)

 ( 0.98
)

 from Realized Gains

 -

 ( 0.03
)

 ( 0.37
)

 -

 Net
 Decrease in Net Assets Resulting from Distributions

 ( 2.16
)

 ( 1.88
)

 ( 1.38
)

 ( 0.98
)

 Net
 Asset Value, End of Period

 $
 17.04

 $
 14.96

 $
 20.06

 20.15

 Shares Outstanding,
 End of Period

 27,102,794

 24,286,628

 22,570,331

 12,562,805

 Ratio/Supplemental
 Data

 Net assets, end
 of period

 $
 461,955,393

 $

 $
 452,797,588

 253,144,971

 Weighted-average
 shares outstanding

 25,700,603

 23,130,666

 15,494,614

 11,156,932

 Total
 Return (3)

 29.21
 %

 ( 16.51
 %)

 8.10
 %

 4.29
 %

 turnover

 %

 %

 %

 %

 Ratio
 of operating expenses to average net assets without waiver (2)

 13.15
 %

 8.28
 %

 5.54
 %

 5.69
 %

 Ratio
 of operating expenses to average net assets with waiver (2)

 12.90
 %

 8.03
 %

 5.29
 %

 5.44
 %

 Ratio
 of net investment income (loss) to average net assets without waiver (2)

 13.54
 %

 9.61
 %

 6.92
 %

 7.18
 %

 Ratio
 of net investment income (loss) to average net assets with waiver (2)

 13.79
 %

 9.86
 %

 7.17
 %

 7.43
 %

 (1)
 The per common share data was derived by using weighted average shares outstanding.

 (2)
 The ratios reflect an annualized amount.

 (3)
 Total return is calculated as the change in net asset value ("NAV") per share during the period, plus distributions per share (if any), divided by the beginning NAV per share. Total return is not annualized. Assumes reinvestment of distributions.

 (4)
 Realized and unrealized gains and losses per share in this caption are balancing amounts necessary to reconcile the change in net asset value per share for the period, and may not reconcile with the aggregate gains and losses in the Consolidated Statements of Operations due to share transactions during the period.

 F- 45

 Note
12. Selected Quarterly Financial Data (Unaudited)

 The
following are the quarterly results of operations for the years ended December 31, 2023, 2022, and 2021. The following information reflects
all normal recurring adjustments necessary for a fair presentation of the information for the periods presented. The operating results
for any quarter are not necessarily indicative of results for any future period.

 For
 the Three Months Ended

 March
 31,
 2023

 June
 30,
 2023

 September 30,

 2023

 2023

 Investment income

 $
 26,185,502

 $
 27,441,864

 $
 28,773,690

 $
 29,822,551

 12,592,823

 13,241,745

 13,969,777

 14,431,742

 Net investment income (loss)

 13,592,679

 14,200,119

 14,803,913

 15,390,809

 Net realized
 gain (loss) on investments, and foreign currency transactions

 ( 317,446
)

 ( 2,570
)

 ( 2,103,618
)

 ( 291,779
)

 Net
 change in unrealized gain (loss) on investments, foreign currency translations, and foreign currency contracts

 14,813,089

 9,743,113

 21,152,793

 6,854,549

 Increase (decrease) in
 net assets resulting from operations

 $
 28,088,322

 $
 23,940,662

 $
 33,853,088

 $
 21,953,579

 Net asset value per share as of the end
 of the quarter

 $
 16.12

 $
 16.55

 $
 16.76

 $
 17.04

 For
 the Three Months Ended

 March
 31,
 2022

 June
 30,
 2022

 September 30,

 2022

 2022

 Investment income

 $
 14,254,960

 $
 16,497,241

 $
 19,973,554

 $
 23,774,145

 5,584,387

 6,947,708

 9,521,115

 11,365,858

 Net investment income (loss)

 8,670,573

 9,549,533

 10,452,439

 12,408,287

 Net realized
 gain (loss) on investments, and foreign currency transactions

 ( 369,870
)

 ( 486,754
)

 ( 496,697
)

 ( 6,776,866
)

 Net
 change in unrealized gain (loss) on investments, foreign currency translations, and foreign currency contracts

 ( 11,731,503
)

 ( 74,394,896
)

 ( 16,711,415
)

 ( 4,595,166
)

 Increase (decrease) in
 net assets resulting from operations

 $
 ( 3,430,800
)

 $
 ( 65,332,117
)

 $
 ( 6,755,673
)

 $
 1,036,255

 Net asset value per share as of the end
 of the quarter

 $
 19.91

 $
 16.71

 $
 16.00

 $
 14.96

 For
 the Three Months Ended

 March
 31,
 2021

 June 30,

 2021

 September 30,

 2021

 2021

 Investment income

 $
 9,674,876

 $
 7,869,228

 $
 8,875,949

 $
 13,265,600

 3,637,128

 3,673,024

 3,966,032

 5,575,228

 Net investment income (loss)

 6,037,748

 4,196,204

 4,909,917

 7,690,372

 Net realized
 gain (loss) on investments, and foreign currency transactions

 1,132,657

 2,712,837

 489,555

 418,214

 Net
 change in unrealized gain (loss) on investments, foreign currency translations, and foreign currency contracts

 ( 1,826,413
)

 ( 1,871,880
)

 ( 673,345
)

 ( 4,156,148
)

 Increase (decrease) in
 net assets resulting from operations

 $
 5,343,992

 $
 5,037,161

 $
 4,726,127

 $
 3,952,438

 Net asset value per share as of the end
 of the quarter

 $
 20.57

 $
 20.65

 $
 20.70

 $
 20.06

 Note
13. Subsequent Events

 The
Company's management has evaluated subsequent events through the date of issuance of the consolidated financial statements included
herein. There have been no subsequent events that require recognition or disclosure in these consolidated financial statements except
for the following:

 Initial
Public Offering

 On January 22, 2024, the Company completed its IPO, issuing 5,450,000
shares of common stock, par value $ 0.001, at a public offering price of $ 16.45 per share. Total net proceeds were $ 89,652,500. The Company's
common stock began trading on the New York Stock Exchange under the symbol "PSBD" on January 18, 2024. Proceeds from this
offering were primarily used to make investments in accordance with the Company's investment objectives and strategies.

 Unfunded
Capital Commitments

 As
of January 24, 2024, OMNIA Partners, LLC was fully funded for $ 223,269.

 As
of January 31, 2024, $ 33,214 of the outstanding commitment to Accession Risk Management Group Inc. was funded. The balance of the remaining
unfunded commitment is $ 2,424,643.

 As
of February 8, 2024, $ 41,439 of the outstanding commitment to Aptean Inc. was funded. The balance of the remaining unfunded commitment
is $ 810,041.

 F- 46

 ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 Not
Applicable.

 ITEM
9A. CONTROLS AND PROCEDURES

 Evaluation
of Disclosure Controls and Procedures

 Our
management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended,
or the Exchange Act), as of the end of the period covered by this Annual Report on Form 10-K. Based on such evaluation, our Chief Executive
Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures were effective at a
reasonable assurance level.

 Internal
Control Over Financial Reporting

 Our
management, including our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate
internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal
control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of our financial statements for external reporting purposes in accordance with GAAP. Internal control over financial
reporting includes those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately
and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of
the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that
could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may
deteriorate.

 Management
(with the participation of our Chief Executive Officer and Chief Financial Officer) conducted an evaluation of the effectiveness of our
internal control over financial reporting based on the framework in Internal Control — Integrated Framework issued in 2013
by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that our internal
control over financial reporting was effective as of December 31, 2023.

 Changes
in Internal Control over Financial Reporting

 There
have been no changes in our internal control over financial reporting during our fiscal quarter ended December 31, 2023 that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 ITEM
9B. OTHER INFORMATION

 None.

 ITEM
9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

 None.

 PART
III

 ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 Management

 Our
Board oversees our management. Our Board currently consists of five members, three of whom are not "interested persons" as
defined in Section 2(a)(19) of the 1940 Act. Our Board elects our officers, who serve at the discretion of our Board until the next election
of officers or until his or her successor is duly elected and qualifies, or until his or her death, resignation, retirement, disqualification
or removal. The responsibilities of our Board include the quarterly valuation of our assets and the oversight of our investment activity,
corporate governance activities and financing arrangements. Oversight of our investment activities extends to oversight of the risk management
processes employed by our Investment Advisor as part of its day-to-day management of our investment activities. Our Board reviews risk
management processes at both regular and special board meetings throughout the year, consulting with appropriate representatives of our
Investment Advisor as necessary and periodically requesting the production of risk management reports or presentations. The goal of our
Board's risk oversight function is to ensure that the risks associated with our investment activities are accurately identified,
thoroughly investigated and responsibly addressed. However, our Board's oversight function cannot eliminate all risks or ensure
that particular events do not adversely affect the value of investments.

 Our
Board has also established an Audit Committee, a Nominating and Corporate Governance Committee and a Compensation Committee, and may
establish additional committees in the future.

 Board
of Directors and Officers

 Our
Board is presently composed of five directors. Under our charter and bylaws, our directors are divided into three classes. At each annual
meeting, directors are elected for a term expiring at the third succeeding annual meeting, with the term of office of only one of these
three classes of directors expiring each year. Each director will hold office for the term to which he or she is elected and until his
or her successor is duly elected and qualifies, or until his or her death, resignation, retirement, disqualification or removal.

 Directors

 Name, Address and Age
 (1)

 Position(s)

 held with

 Company

 Term of Office and

 Length of Time Served

 Principal Occupation(s)

 During the Past 5 Years

 Other Public

 Directorships Held

 During the Past 5 years (2)

 Independent Director

 Christopher C. Nelson – 49

 Class II Director since November 2019; Term Expires
 2026

 Wealth Advisor at SeaCrest
 Wealth Management, a financial advisory firm, since May 2018. Vice President at Enterprise Trust Company, an investment management
 firm, from February 2013 to February 2018.

 None

 Megan L. Webber – 49

 Class I Director since November 2019; Term Expires
 2025

 of Investment Reporting at The Anschutz Corporation, a private holding company.

 Member of the Board of Trustees
 of Palmer Square Opportunistic Income Fund since August 2014. Member of the Board of Trustees of Montage Managers Trust, a registered
 investment company (ceased operations in 2017).

 James W. Neville Jr. – 59

 Class III Director since November
 2019; Term Expires 2024

 Proprietary trader
 and investor. Portfolio Manager at Great Plains Principal Trading, an asset management firm, from January 2012 through June 2019.

 Member of the Board
 of Trustees of Palmer Square Opportunistic Income Fund since August 2014. Member of the Board of Trustees of Montage Managers Trust,
 a registered investment company (ceased operations in 2017).

 Interested Director

 Christopher D. Long – 48

 Chief Executive Officer and Chairman

 Class I Director since November 2019; Term Expires
 2025

 Chief Executive Officer of
 Palmer Square Capital Management LLC.

 Member of the Board of Trustees
 of Palmer Square Opportunistic Income Fund from August 2014 to October 2018.

 Jeffrey D. Fox – 48

 Chief Financial Officer and Director

 Class III Director since November 2019; Term Expires
 2024

 President of Palmer Square
 Capital Management LLC since March 2020. Managing Director of Palmer Square Capital Management LLC from April 2013 to March 2020.

 None

 (1)

 The business address of
 each of our directors is c/o Palmer Square Capital BDC Inc., 1900 Shawnee Mission Parkway, Suite 315, Mission Woods, Kansas 66205.

 (2)

 No director otherwise serves
 as a director of an investment company subject to the 1940 Act.

 Executive
Officers Who Are Not Directors

 Information
regarding our executive officers who do not serve on the Board is as follows:

 Name,
 Address and Age (1)

 Positions

 held with Company

 Occupation(s) During the Past 5 Years

 Angie
 K. Long – 49

 Chief
 Investment Officer

 Ms.
 Long was appointed as our Chief Investment Officer in 2019. Ms. Long also serves as Chief Investment Officer of PSCM and has key
 responsibilities for all investment-related activities at PSCM. Prior to joining PSCM in 2011, Ms. Long worked for JPMorgan Chase
 & Co. in New York for 13 years. Ms. Long held many senior roles including Deputy Head of North American Credit Trading, Head
 of High Yield Trading, and Head of Credit Derivatives Trading. Ms. Long has been a trader of many products including high yield bonds,
 high yield credit derivatives, distressed debt, capital structure arbitrage, and structured credit. In addition, she worked with
 the Global Head of Credit Trading to help oversee risk management for the High Yield and High Grade credit trading books. Ms. Long
 is married to Christopher D. Long, our Chairman and Chief Executive Officer. Ms. Long received an AB degree in Economics from Princeton
 University and is also a CFA charterholder.

 Matthew L. Bloomfield – 43

 President

 Mr. Bloomfield was appointed
 as our President in 2022. Mr. Bloomfield is the Portfolio Manager for PSCM's US CLO management platform and has key responsibilities
 for all of PSCM's leveraged loan product offerings and risk management. He is a member of both the US and European CLO investment
 committees, as well as a member of the Company's Investment Committee. Prior to joining PSCM in 2015, Mr. Bloomfield worked
 at Golub Capital in Chicago, most recently as an Associate Portfolio Manager within the Broadly Syndicated Loan Group where he focused
 on investing in leveraged loans via CLOs and separately managed accounts. Prior to joining Golub Capital, Mr. Bloomfield worked at
 Giuliani Capital Advisors in Chicago as an Analyst and subsequently Associate in the Investment Banking Group where he focused on
 special situations and restructuring mandates. Mr. Bloomfield earned an MBA in Finance from Northwestern University's Kellogg
 School of Management, as well as a BS and BGS in Business Administration and Economics, respectively, from the University of Kansas.

 Scott
 A. Betz – 46

 Chief
 Compliance Officer

 Mr.
 Betz was appointed as our Chief Compliance Officer in 2019. Mr. Betz also serves as Chief Operating Officer of PSCM and previously
 served as Chief Compliance Officer of PSCM from March 2018 to March 2021. Prior to joining in March 2018, Mr. Betz worked for over
 14 years at Scout Investments, most recently as Chief Operating Officer, Chief Compliance Officer and Treasurer. Prior to joining
 Scout Investments, Mr. Betz worked for over six years at UMB Bank as a Performance Measurement Specialist and subsequently as Investment
 Technology Officer. Mr. Betz received an MBA degree and a BA degree in Political Science from the University of Missouri-Kansas City.

 (1)

 The business address of
 each of our officers is c/o Palmer Square Capital BDC Inc., 1900 Shawnee Mission Parkway, Suite 315, Mission Woods, Kansas 66205.

 Information
About Each Director's Experience, Qualifications, Attributes or Skills

 The
Board believes that, collectively, the directors have balanced and diverse experience, qualifications, attributes and skills, which allow
the Board to operate effectively in governing the Company and protecting the interests of its stockholders. Below is a description of
the various experiences, qualifications, attributes and/or skills with respect to each director considered by the Board.

 Interested
Directors

 Christopher
D. Long

 Mr.
Long was appointed as our Chairman and Chief Executive Officer in 2019 and has served on our Board since November 2019. Mr. Long has
also served as Chief Executive Officer of our Investment Advisor since 2019 and Chief Executive Officer of PSCM since 2009 and is responsible
for managing our Investment Advisor's and PSCM's overall business. Mr. Long also served as our President from November 2019
to March 2022 and as President of PSCM from 2009 to March 2020. Since PSCM's inception, Mr. Long has been successful in not only
building a highly-experienced investment team, but also an integrated credit investment platform that manages mutual fund offerings,
private funds and separately managed accounts. PSCM has a client list that spans not only institutions and family offices, but also registered
investment advisers, banks/trusts, and broker-dealers. Mr. Long's previous work experience includes key investment roles at Prairie
Capital and Sandell Asset Management as well as working at Morgan Stanley in the Credit Derivatives and Distressed Securities Group focused
on the firm's proprietary investments. Before Morgan Stanley, he worked at TH Lee Putnam Ventures, a private equity fund sponsored
by Thomas H Lee Partners and Putnam Investments. In that role, he also served on the Board of Directors of Avero, Inc. and was a Board
Observer for Parago, Inc. He started his career at JPMorgan & Co. in Leveraged Finance and Mergers & Acquisitions (FIG Group)
advising corporations and private equity firms on investment banking and capital markets. Mr. Long previously served on the board of
trustees of Palmer Square Opportunistic Income Fund (Nasdaq) from August 2014 to October 2018. Mr. Long is married to Angie K. Long,
our Chief Investment Officer. He received an MBA degree from the Harvard Business School and an AB degree in Economics cum laude from
Princeton University. The Board believes that Mr. Long's strong investment and operating leadership experience qualifies him to
serve on the Board.

 Jeffrey
D. Fox

 Mr.
Fox was appointed as our Chief Financial Officer in 2019 and has served on our Board since November 2019. Mr. Fox has also served as
Chief Financial Officer of our Investment Advisor since 2019 and as President of PSCM since March 2020. Mr. Fox previously served as
our Treasurer from November 2019 to March 2022 and as Managing Director of PSCM from April 2013 to March 2020. Prior to joining PSCM
in April 2013, Mr. Fox worked for Sandler O'Neill and Partners from September 2011 to March 2013 where he was a Managing Director
within Fixed Income where he was involved in the structuring and sales of many products including Collateralized Loan Obligations. Before
Sandler O'Neill, Mr. Fox worked for Soci t G n rale as a Director within Global Markets Advisory where
he was instrumental in the US CDO/CLO and RMBS Credit Advisory effort. His work included the restructuring of various structured credit
legacy positions for European institutions as well as the modeling behind the corporate rating and pricing for various structured products.
Prior to Soci t G n rale, Mr. Fox was employed by JPMorgan Chase & Co/Bear Stearns, where he was an
Associate Director in the FAST organization focusing on the structuring of Trust Preferred CDOs and CLOs. Also while at Bear Stearns,
Mr. Fox managed the global CDO analytics desk which included intensive credit modeling of various asset classes. Mr. Fox received a MS
degree in Computer Information Systems from Arizona State University and a BS degree in Geology with a minor in Mathematics from Northern
Arizona University. The Board believes that Mr. Fox's strong operational and financial experience qualifies him to serve on the
Board.

Directors

 Megan
L. Webber

 Ms. Webber has served on our Board since November 2019. Ms. Webber
is a Director of Investment Reporting at The Anschutz Corporation, where she has worked for over 23 years. Prior to Anschutz Corporation,
she was a Supervising Audit Senior at KPMG, LLP from 1997 to 2000. Ms. Webber has served on the board of trustees of Palmer Square Opportunistic
Income Fund (Nasdaq) since 2014, and previously served on the board of trustees of Montage Managers Trust from July 2015 to March 2017.
Ms. Webber received a BS in Accounting from Indiana University and received her CPA license in 1997. The Board believes that Ms. Webber's
strong financial and audit experience qualifies her to serve on the Board.

 James
W. Neville Jr.

 Mr.
Neville has served on our Board since November 2019. Mr. Neville is an active proprietary trader and investor. He was a Portfolio Manager
at Great Plains Principal Trading from January 2012 through June 2019. Prior to Great Plains Principal Trading, Mr. Neville served as
a proprietary trader for over 23 years, focusing on agriculture futures and options as well as stock index futures and energy. Mr. Neville
has served on the board of directors of Palmer Square Opportunistic Income Fund (Nasdaq) since 2014. The Board believes that Mr. Neville's
strong investment management and trading experience qualifies him to serve on the Board.

 Christopher
C. Nelson

 Mr.
Nelson has served on our Board since November 2019. Mr. Nelson is a Wealth Advisor at SeaCrest Wealth Management, where he has worked
since May 2018. Prior to SeaCrest Wealth Management, Mr. Nelson was a Vice President at Enterprise Trust Company from February 2013 to
February 2018, where he led the Kansas City team. Prior to that, Mr. Nelson held investment management roles at The Private Bank, Kornitzer
Capital Management, and The Bank of New York. Mr. Nelson received a Bachelor of Arts in English from Gettysburg College in Gettysburg,
Pennsylvania. The Board believes that Mr. Nelson's strong investment management experience qualifies him to serve on the Board.

 Committees
of the Board of Directors

 An
Audit Committee, a Nominating and Corporate Governance Committee and a Compensation Committee have been established by our Board.

 Audit
Committee

 The
members of our Audit Committee are Megan L. Webber, James W. Neville Jr. and Christopher C. Nelson, each of whom meets the independence
standards established by the SEC for audit committees and is independent for purposes of the 1940 Act. Ms. Webber serves as Chair of
our Audit Committee. Our Board has determined that Ms. Webber is an "audit committee financial expert" under SEC rules. Our
Audit Committee's responsibilities include selecting our independent registered public accounting firm; reviewing with such independent
registered public accounting firm the planning, scope and results of their audit of our financial statements; pre-approving the fees
for services performed; reviewing, in consultation with the independent registered public accounting firm, the adequacy of internal control
systems; reviewing our annual financial statements; overseeing internal audit staff, if any, and periodic filings; and receiving our
audit reports and financial statements.

 Nominating
and Corporate Governance Committee

 The
members of the Nominating and Corporate Governance Committee are Megan L. Webber, James W. Neville and Christopher C. Nelson, each of
whom is an independent director. Mr. Nelson serves as Chairman of the Nominating and Corporate Governance Committee. The Nominating and
Corporate Governance Committee operates pursuant to a charter approved by our Board. The Nominating and Corporate Governance Committee
is responsible for selecting, researching and nominating qualified nominees to be elected to the Board by our stockholders at the annual
stockholder meeting, selecting qualified nominees to fill any vacancies on our Board or a committee of our Board (consistent with criteria
approved by our board of directors), developing and recommending to our Board a set of corporate governance principles applicable to
us and overseeing the evaluation of our Board and our management.

 Compensation
Committee

 The
members of our Compensation Committee are Megan L. Webber, James W. Neville and Christopher C. Nelson, each of whom is an independent
director. Mr. Neville serves as Chairman of the Compensation Committee. The Compensation Committee is responsible for determining,
or recommending to the Board for determination, the compensation, if any, of our chief executive officer and all other executive officers.
The Compensation Committee also assists the Board with matters related to compensation generally, except with respect to compensation
of the directors. It is the responsibility of the independent directors to review their own compensation and recommend to all of the
directors the appropriate level of compensation. As none of our executive officers currently is compensated by us, the Compensation Committee
does not produce and/or review a report on executive compensation practices.

 Section
16(a) Beneficial Ownership Reporting Compliance

 Section 16(a)
of the Exchange Act requires the Company's officers and directors, and persons who own more than 10% of our Common Stock, to file
reports of securities ownership and changes in such ownership with the SEC. Officers, directors, and greater than 10% stockholders also
are required by SEC rules to furnish the Company with copies of all Section 16(a) forms they file.

 Based
solely on the Company's review of Forms 3, 4 and 5 filed by such persons and information provided by the Company's directors
and officers, the Company believes that during the year ended December 31, 2023, all Section 16(a) filing requirements applicable
to such persons were met in a timely manner.

 Code of
Conduct, Code of Ethics and Insider Trading Policy

 We
expect each of our officers and directors, as well as any person affiliated with our operations, to act in accordance with the highest
standards of personal and professional integrity at all times and to comply with the Company's policies and procedures and all
laws, rules and regulations of any applicable international, federal, provincial, state or local government. To this effect, the Board
has adopted a Code of Ethics. The Code of Ethics applies to all of the Company's directors and officers.

 As
required by the 1940 Act and the Advisers Act, we and our Investment Advisor have each adopted a Code of Ethics that establishes procedures
that apply to our directors, executive officers, officers, their respective staffs and the employees of our Investment Advisor with respect
to their personal investments and investment transactions. Our Code of Ethics generally does not permit investments by our directors,
officers or any other covered person in securities that may be purchased or held by us.

 Nomination
of Directors

 There
have been no material changes to the procedures by which stockholders may recommend nominees to our Board since the filing of our Proxy
Statement for our 2022 Annual Meeting of Stockholders.

 ITEM
11. EXECUTIVE COMPENSATION

 None
of our officers receives direct compensation from us. However, Messrs. Betz, Long, Fox and Bloomfield and Ms. Long, through their
indirect financial interests in our Investment Advisor, have an indirect pecuniary interest in the investment advisory fees paid by us
under the Advisory Agreement. In addition, the Company is responsible for expenses incurred by the Administrator in connection with administering
the Company's business, including making payments to the Administrator based upon the Company's allocable portion of the
Administrator's overhead and other expenses associated with performing its obligations under the Administration Agreement, including
rent, the fees and expenses associated with performing compliance functions and the allocable portion of the costs of compensation and
related expenses of the Company's Chief Compliance Officer and Chief Financial Officer and their respective administrative support
staffs.

 Compensation
of Directors

 The
Independent Directors receive an annual fee of $25,000. They also receive reimbursement of reasonable out-of-pocket expenses incurred
in connection with attending each regular Board meeting, each special meeting and each committee meeting attended. We have obtained directors'
and officers' liability insurance on behalf of our directors and officers. No compensation is paid to directors who are "interested
persons." The Board reviews and determines the compensation of Independent Directors.

 The
following table shows information regarding the compensation earned by our directors for the year ended December 31, 2023. No compensation
is paid by us to any interested director or executive officer of the Company.

 Name

 Compensation
 from Palmer Square Capital BDC Inc. (1)

 Pension
 or
 Retirement
 Benefits Accrued as Part of Our Expenses (2)

 Total

 Compensation
 from
 Palmer Square

 Capital BDC Inc. Paid
 to
 Director (1)

 Independent Directors

 Megan L. Webber

 $

 —

 $

 James W. Neville Jr.

 $

 —

 $

 Christopher C. Nelson

 $

 —

 $

 Interested Directors

 Christopher D. Long

 $
 —

 —

 $
 —

 Jeffrey D. Fox

 $
 —

 —

 $
 —

 (1)

 For a description of the
 Independent Directors' compensation, see above.

 (2)

 We do not have a profit-sharing
 or retirement plan, and directors do not receive any pension or retirement benefits.

 ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 The
following table shows information as of February 28, 2024, unless otherwise indicated, regarding the beneficial ownership of our Common
Stock by: (i) each person known to the Company to beneficially own more than 5% of the outstanding shares of Common Stock; (ii) each
director of the Company; (iii) each executive officer of the Company; and (iv) all directors and executive officers as a group.
With respect to persons known to the Company to beneficially own more than 5% of the outstanding shares of Common Stock, the Company
bases such knowledge on beneficial ownership filings made by the holders with the SEC and other information known to the Company.

 The percentage ownership is based on 32,552,794 shares of our Common
Stock issued and outstanding as of February 28, 2024. Unless otherwise indicated, all persons named as beneficial owners of our Common
Stock have sole voting power and sole investment power with respect to the shares indicated as beneficially owned. None of the shares
of Common Stock beneficially owned by our officers or directors has been pledged as security for an obligation. In addition, unless otherwise
indicated, the address for each person named below is c/o Palmer Square Capital BDC Inc., Attention: Secretary, 1900 Shawnee Mission Parkway,
Suite 315, Mission Woods, Kansas 66205.

 Name and
 Address

 Shares

 Owned (1)

 Percentage of

 Common

 Stock

 Outstanding (2)

 Christopher D. Long

 98,005

 (3)

 *

 Jeffrey D. Fox

 10,992

 *

 Megan L. Webber

 —

 —

 James W. Neville Jr.

 —

 —

 Christopher C. Nelson

 —

 —

 Angie K. Long

 98,005

 (3)

 *

 Scott A. Betz

 5,595

 *

 Matthew L. Bloomfield

 85,968

 *

 All directors and executive officers as a group
 (8 persons)

 200,561

 *

 Excelsior Holdings D2 LLC (4)

 3,730,065

 11.46

 %

 Alaris Master Fund, LP (5)

 3,707,377

 11.39

 %

 Caravel Holdings LLC (6)

 3,983,290

 12.24

 %

 Martin C. Bicknell (7)

 2,954,714

 9.08

 %

 First Trust Capital Management L.P. (8)

 2,122,165

 6.52

 %

 *

 Represents less than 1.0%
 of the issued and outstanding shares of our Common Stock as of the Record Date.

 (1)

 Beneficial ownership has
 been determined in accordance with Rule 13d-3 under the Exchange Act.

 (2)

 Based
 on a total of 32,552,794 shares of Common Stock issued and outstanding as of February 28,
 2024.

 (3)

 Includes
 98,005 shares of Common Stock indirectly held by the Angie K. Long Irrevocable Trust, for
 which Mr. Long and Ms. Long disclaim beneficial ownership except to the extent of his or
 her pecuniary interests therein.

 (4)

 As of
 February 28, 2024, Excelsior Holdings D2 LLC ("Excelsior") owned 3,730,065 shares of our Common Stock. Excelsior Holdings
 D LLC, a Delaware limited liability company ("Holdings LLC") is the managing member of Excelsior. As managing member
 of Excelsior, Holdings LLC exercises dispositive and voting power over the shares beneficially owned by Excelsior. The principal
 business address of each of Excelsior and Holdings LLC is 6000 France Ave. S., Suite 550, Minneapolis, Minnesota, 55435.

 (5)

 As of
 February 28, 2024, Alaris Master Fund LP owned 3,707,377 shares of our Common Stock. Alaris Capital, LLC is the general partner of
 Alaris Master Fund LP and may be deemed to be an indirect beneficial owner of the shares. The principal business address of each
 of Alaris Master Fund LP and Alaris Capital, LLC is 4900 Main Street, Suite 600, Kansas City, Missouri 64112.

 (6)

 Based
 on information provided in a Schedule 13G/A filed on October 18, 2021 and a Form 4 filed on October 18, 2021, Caravel Holdings LLC
 reported shared voting and dispositive power with respect to 3,983,290 shares of our Common Stock. The shares are owned directly
 by Caravel Holdings LLC, which is a wholly owned subsidiary of Seaboard Foods LLC, which is a wholly owned subsidiary of Seaboard
 Corporation. Seaboard Foods LLC and Seaboard Corporation may each be deemed to be an indirect beneficial owner of the shares. The
 principal business address of each of Caravel Holdings LLC, Seaboard Foods LLC and Seaboard Corporation is 9000 West 67th Street,
 Merriam, Kansas 66202.

 (7)

 As
 of February 28, 2024, Martin Christopher Bicknell beneficially owned 2,954,714 shares of
 our Common Stock. 1,562,896 shares are owned directly by 1248 Holdings, LLC and 1,391,817
 shares are owned directly by BFFV19, LLC. Mr. Bicknell is the Elected Manager of each of
 the entities that collectively own all of the outstanding membership interests of BFFV19,
 LLC, and has sole voting and dispositive power over the shares owned by 1248 Holdings, LLC,
 and thus, Mr. Bicknell may be deemed to be an indirect beneficial owner of the shares owned
 by each of BFFV19, LLC and 1248 Holdings, LLC. The principal business address of each of
 BFFV19, LLC, 1248 Holdings, LLC and Mr. Bicknell is 5700 W 112th Street, Suite 500, Overland
 Park, Kansas 66211.

 (8)

 Based
 on information provided in a Schedule 13G filed on January 25, 2024, First Trust Capital
 Management L.P. ("FTCM"), First Trust Capital Solutions L.P. ("FTCS")
 and FTCS Sub GP LLC ("Sub GP") reported sole dispositive and voting power with
 respect to 2,122,165 shares of our Common Stock. FTCS and Sub GP may be deemed to control
 FTCM and therefore may be deemed to be beneficial owners of the Common Stock reported in
 the Schedule 13G. The principal business address of FTCM, FTCS and Sub GP is 225 W. Wacker
 Drive, 21st Floor, Chicago, IL 60606.

 ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 Transactions
with Related Persons

 Investment
Advisory Agreement

 We
have entered into the Advisory Agreement with our Investment Advisor pursuant to which we pay the Investment Advisor a base management
fee and incentive fee (which incentive fee is only payable following the completion of the IPO) in exchange for the Investment Advisor's
services sourcing, reviewing and structuring investment opportunities for us, underwriting and performing diligence on our investments
and monitoring our investment portfolio on an ongoing basis. Our Board initially approved the Advisory Agreement at an in-person meeting
in November 2019, and the Company entered into the Advisory Agreement in January 2020. Unless terminated earlier as described below,
the Advisory Agreement will remain in effect from year to year if approved annually by our Board or by the affirmative vote of the holders
of a majority of our outstanding voting securities, and, in either case, if also approved by a majority of our Independent Directors.
At a meeting held on March 10, 2022, our Board approved an amended and restated Advisory Agreement, to be effective upon completion of
the IPO. Our Board most recently determined to re-approve the Advisory Agreement for an additional one-year term ending January 13, 2025
at a meeting held on November 9, 2023. Messrs. Long, Fox, Bloomfield and Betz and Ms. Long, through their indirect financial interests
in our Investment Advisor, have an indirect pecuniary interest in the investment advisory fees paid by us under the Advisory Agreement.
Under the incentive fee structure, our adjusted net investment income for purposes thereof will be computed and paid on income that may
include interest income that has been accrued but not yet received in cash. This fee structure may give rise to a conflict of interest
for our Investment Advisor to the extent that it encourages the Investment Advisor to favor debt financings that provide for deferred
interest, rather than current cash payments of interest. Additionally, in the Investment Advisor's capacity as our valuation designee
pursuant to Rule 2a-5 under the 1940 Act, we rely on investment professionals from the Investment Advisor in connection with the valuation
of our portfolio investments. While the valuation for each portfolio investment that constitutes a material portion of our portfolio
and that does not have a readily available market quotation will be reviewed by an independent valuation firm at least once annually,
the ultimate determination of fair value will be made by our Investment Advisor (subject to the Board's oversight) and not by such
third-party valuation firm. The participation of the Investment Advisor's investment professionals in our valuation process could
result in a conflict of interest as the Investment Advisor's management fee is based, in part, on the value of our total net assets.
For the year ended December 31, 2023, the Investment Advisor earned a base management fee of $8.4 million, offset by $1.1 million in
management fee waiver from the Investment Advisor, and did not earn an incentive fee, as our Common Stock was not listed on a national
securities exchange.

 Administration
Agreement

 We
have entered into the Administration Agreement with the Administrator pursuant to which the Administrator furnishes us with office facilities
and equipment and provides us with clerical, bookkeeping, recordkeeping and other administrative services. Our Board approved the Administration
Agreement in November 2019, and the Company entered into the Administration Agreement in January 2020. Our Board most recently determined
to re-approve the Administration Agreement for an additional one-year term ending January 13, 2025 at a meeting held on November 9, 2023.
Under the Administration Agreement, the Administrator performs, or oversees the performance of, our required administrative services,
which include, among other things, being responsible for the financial records which we are required to maintain and preparing reports
to our stockholders and reports filed with the SEC.

 Resource
Sharing Agreement

 The
Investment Advisor is an affiliate of PSCM, with whom it has entered into a resource sharing agreement (the "Resource Sharing Agreement").
Under this agreement, PSCM provides the Investment Advisor experienced investment professionals and access to the senior investment personnel
and other resources of PSCM and its affiliates. The Resource Sharing Agreement provides the Investment Advisor with access to deal flow
generated by the professionals of PSCM and its affiliates and commits the members of the Investment Advisor's investment committee
to serve in that capacity. The Investment Advisor seeks to capitalize on what we believe to be the significant deal origination, credit
underwriting, due diligence, investment structuring, execution, portfolio management and monitoring experience of PSCM's investment
professionals. The Resource Sharing Agreement may be terminated by either party on 60 days' notice.

 License
Agreement

 We
have also entered into a license agreement (the "License Agreement") with PSCM under which PSCM has granted us a non-exclusive,
royalty-free license to use the name "Palmer Square" for specified purposes in our business. Under the License Agreement,
we have a right to use the "Palmer Square" name, subject to certain conditions, for so long as our Investment Advisor or
one of its affiliates remains our investment adviser. Other than with respect to this limited license, we will have no legal right to
the "Palmer Square" name.

 Policies
and Procedures for Managing Conflicts; Co-investment Opportunities

 We
have procedures in place for the review, approval and monitoring of transactions involving the Company and certain persons related to
the Company. As a BDC, the 1940 Act restricts us from participating in certain transactions with certain persons affiliated with the
Company, including our officers, directors, and employees and any person controlling or under common control with us. In addition, each
of our directors and executive officers is required to complete questionnaire on an annual basis designed to elicit information about
any potential related-party transactions. In order to ensure that we do not engage in any prohibited transactions with any persons affiliated
with the Company, our officers screen each of our transactions for any possible affiliations, close or remote, between the proposed portfolio
investment, the Company, companies controlled by us and our employees and directors. We will not enter into any transactions unless and
until we are satisfied that the transaction is not prohibited by the 1940 Act or, if such prohibitions exist, we have taken appropriate
actions to seek Board review and approval or exemptive relief from the SEC for such transaction.

 The
Investment Advisor, PSCM, and their affiliates, partners and employees (collectively, "PSCM Affiliates") may engage in any
other business and furnish investment management and advisory services and other types of services to others which may include, without
limitation, serving as investment manager or sponsor of other collective investment vehicles or managed accounts that acquire interests
in, provide financing to or otherwise deal in securities or other investments that would be suitable investments for us. PSCM Affiliates
furnish investment management or advisory services to other persons with investment policies similar or different to those of us. Such
persons may own securities or other instruments of the same class or type or which may be senior to those held by us, and they have incentives,
financial or otherwise, to favor certain accounts or vehicles over others. There is no assurance that accounts with similar strategies
or investment objectives will hold the same investments or perform in a similar manner. This and other future activities of PSCM Affiliates
may give rise to additional conflicts of interest.

 Subject
to certain 1940 Act restrictions on co-investments with affiliates or in accordance with the conditions of the co-investment exemptive
relief provided by the SEC (as discussed below), the Investment Advisor offers us the right to participate in all investment opportunities
that it determines are appropriate for us in view of our investment objective, positions, policies, strategies and restrictions as well
as regulatory requirements and other relevant factors. Such offers are subject to the exception that, in accordance with the Investment
Advisor's code of ethics and allocation policies, we might not participate in each individual opportunity but, on an overall basis,
the Investment Advisor will seek to allocate investments across applicable client accounts in a manner that is fair and equitable on
an overall basis.

 We,
the Investment Advisor and PSCM have been granted exemptive relief from the SEC to permit greater flexibility to negotiate the terms
of co-investments if our Board determines that it would be advantageous for us to co-invest with investment funds, accounts and investment
vehicles managed by PSCM in a manner consistent with our investment objectives, positions, policies, strategies and restrictions as well
as regulatory requirements and other pertinent factors. We believe that co-investment by us and investment funds, accounts and investment
vehicles managed by the Investment Advisor and its affiliates, including PSCM, may afford us additional investment opportunities and
an ability to achieve greater diversification. Accordingly, our exemptive order permits us to invest with these investment funds, accounts
and investment vehicles managed in the same portfolio companies under circumstances in which such investments would otherwise not be
permitted by the 1940 Act. Our exemptive relief permitting co-investments applies only if our independent directors review and approve
each co-investment. The exemptive relief imposes other constraints on co-investments that limit the number of instances when the Company
may rely on its protections.

 The
Investment Advisor and its affiliates have both subjective and objective policies and procedures in place that are designed to manage
the potential conflicts of interest between the Investment Advisor's fiduciary obligations to us and its similar fiduciary obligations
to other clients. To the extent that we compete with entities sponsored or managed by the Investment Advisor or its affiliates for a
particular investment opportunity, the Investment Advisor will allocate investment opportunities across the entities for which such opportunities
are appropriate, consistent with (1) its internal conflict of interest and allocation policies, (2) the requirements of the Advisers
Act, and (3) certain restrictions under the 1940 Act regarding co-investments with affiliates. The Investment Advisor's allocation
policies are intended to ensure that, over time, we may generally share equitably with other accounts sponsored or managed by the Investment
Advisor or its affiliates in investment opportunities, particularly those involving a security with limited supply or involving differing
classes of securities of the same issuer which may be suitable for us and such other accounts. There can be no assurance that the Investment
Advisor's or its affiliates' efforts to allocate any particular investment opportunity fairly among all clients for whom
such opportunity is appropriate will result in an allocation of all or part of such opportunity to us. Not all conflicts of interest
can be expected to be resolved in our favor.

Independence

 The
1940 Act requires that at least a majority of the Company's directors not be "interested persons" (as defined in the
1940 Act) of the Company. On an annual basis, each member of our Board is required to complete an independence questionnaire designed
to provide information to assist the Board in determining whether the director is independent under the 1940 Act and our corporate governance
guidelines. Our Board has determined that each of our directors, other than Mr. Christopher D. Long and Mr. Jeffrey D. Fox, is independent
under the 1940 Act. Our governance guidelines require any director who has previously been determined to be independent to inform the
Chairman of the Board and our Secretary of any change in circumstance that may cause his or her status as an Independent Director to
change. The Board limits membership on the Audit Committee, Nominating and Corporate Governance Committee and Compensation Committee
to Independent Directors.

 ITEM
14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

 The following aggregate fees by PricewaterhouseCoopers LLP ("PwC"),
the Company's independent registered accounting firm for the fiscal years ended December 31, 2023, 2022, and 2021, were billed to
the Company for work attributable to audit, tax and other services provided to the Company for such fiscal year.

 Fiscal Year

 Ended

 Fiscal Year

 Ended

 Fiscal Year

 Ended

 2023

 2022

 2021

 Audit Fees

 $
 364,574

 $
 343,010

 $
 301,970

 Audit-Related Fees

 45,000

 45,000

 40,000

 Tax Fees

 44,000

 42,000

 40,000

 All Other Fees

 2,000

 Total

 $
 455,574

 $
 430,910

 $
 382,870

 Audit
Fees

 Audit
fees consist of fees billed for professional services rendered for the audit of our year-end financial statements and services that were
provided by PwC for the fiscal years ended December 31, 2023, 2022, and 2021 in connection with statutory and regulatory filings.

 Audit-Related
Fees

 Audit-related
services consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review
of our financial statements and are not reported under "Audit Fees." These services include attest services that are not
required by statute or regulation and consultations concerning financial accounting and reporting standards.

 Tax
Fees

 Tax
fees consist of fees billed for professional services for tax compliance and filings. These services include assistance regarding federal,
state, and local tax compliance and filings.

 All
Other Fees

 Other
fees would include fees billed for products and services other than the services reported above.

 The
Audit Committee has established a pre-approval policy that describes the permitted audit, audit-related, tax and other services to be
provided by PwC, the Company's independent auditor. The policy requires that the Audit Committee pre-approve the audit and permissible
non-audit services performed by the independent auditor in order to assure that the provision of such service does not impair the auditor's
independence.

 Any
requests for audit, audit-related, tax and other services that have not received general pre-approval must be submitted to the Audit
Committee for specific pre-approval, and cannot commence until such approval has been granted. Normally, pre-approval is provided at
regularly scheduled meetings of the Audit Committee. However, the Audit Committee may delegate pre-approval authority to one or more
of its members. The member or members to whom such authority is delegated must report any pre-approval decisions to the Audit Committee
at its next scheduled meeting. The Audit Committee does not delegate its responsibilities to pre-approve services performed by the independent
auditor to management.

 PART
IV

 ITEM
15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 (a)
DOCUMENTS FILED AS PART OF THIS REPORT

 The
following is a list of our consolidated financial statements included in this Annual Report on Form 10-K under Item 8 of Part II hereof:

 1.
CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

to Consolidated Financial Statements

 Page

 Report
 of Independent Registered Public Accounting Firm

 Statement of Assets and Liabilities as of December 31, 2023 and 2022

 Statement of Operations for the years ended December 31, 2023, 2022, and 2021

 Statement of Changes in Net Assets for the years ended December 31, 2023, 2022, and 2021

 Statement of Cash Flows for the years ended December 31, 2023, 2022, and 2021

 Schedule of Investments as of December 31, 2023 and 2022

 F-7 – F-28

 Notes
 to Consolidated Financial Statements

 F-29 – F-47

 (b) EXHIBITS

 3.1

 Articles
 of Amendment and Restatement, dated January 17, 2020 (Incorporated by reference to Exhibit 3.1 to Registrant's Amendment No.
 1 to the Registration Statement on Form 10 (File No. 000-56126) filed on January 16, 2020).

 3.2

 Articles
 of Amendment to the Articles of Amendment and Restatement, dated December 27, 2023 (Incorporated by reference to Exhibit (a)(2)
 to Registrant's Amendment No. 2 to the Registration Statement on Form N-2 (File No. 333-274967) filed on January 8, 2024).

 3.3

 Bylaws
 (Incorporated by reference to Exhibit 3.2 to Registrant's Registration Statement on Form 10 (File No. 000-56126) filed on November
 27, 2019)

 4.1

 Description
 of securities (Incorporated by reference to Exhibit 4.1 to Registrant's Annual Report on Form 10-K (File No. 000-56126) filed
 on March 12, 2021)

 10.1

 Investment
 Advisory Agreement, dated as of January 14, 2020, by and between the Registrant and Palmer Square BDC Advisor LLC (Incorporated by
 reference to Exhibit 10.1 to Registrant's Quarterly Report on Form 10-Q (File No. 000-56126) filed on May 15, 2020)

 10.2

 Amended
 and Restated Investment Advisory Agreement by and between the Registrant and Palmer Square BDC Advisor LLC (Incorporated by reference
 to Exhibit (g)(2) to Registrant's Registration Statement on Form N-2 (File No. 333-274967) filed on October 13, 2023).

 10.3

 Form
 of Administration Agreement (Incorporated by reference to Exhibit 10.2 to Registrant's Registration Statement on Form 10 (File
 No. 000-56126) filed on November 27, 2019)

 10.4

 Form
 of Advisory Agreement Waiver Letter (Incorporated by reference to Exhibit 10.3 to Registrant's Registration Statement on Form
 10 (File No. 000-56126) filed on November 27, 2019)

 10.5

 Custody
 Agreement, dated as of December 17, 2019, by and between the Registrant and U.S. Bank National Association (Incorporated by reference
 to Exhibit 10.4 to Registrant's Amendment No. 1 to Registration Statement on Form 10 (File No. 000-56126) filed on January
 16, 2020)

 10.6

 Form
 of Indemnification Agreement for Directors and Officers (Incorporated by reference to Exhibit 10.5 to Registrant's Registration
 Statement on Form 10 (File No. 000-56126) filed on November 27, 2019)

 10.7

 Form
 of Trademark Licensing Agreement (Incorporated by reference to Exhibit 10.6 to Registrant's Amendment No. 1 to Registration
 Statement on Form 10 (File No. 000-56126) filed on January 16, 2020)

 10.8

 Form
 of Subscription Agreement (Incorporated by reference to Exhibit 10.7 to Registrant's Amendment No. 1 to Registration Statement
 on Form 10 (File No. 000-56126) filed on January 16, 2020)

 10.9

 Dividend
 Reinvestment Plan (Incorporated by reference to Exhibit 10.8 to Registrant's Amendment No. 1 to Registration Statement on Form
 10 (File No. 000-56126) filed on January 16, 2020)

 10.10

 Credit
 Agreement, dated February 18, 2020, by and among Palmer Square BDC Funding I LLC, as the borrower, Bank of America, N.A., as administrative
 agent and as lender, and BofA Securities, Inc., as sole lead arranger and sole book manager (Incorporated by reference to Exhibit
 10.1 to Registrant's Current Report on Form 8-K (File No. 814-01334) filed on February 20, 2020)

 10.11

 Sale
 and Contribution Agreement, dated February 18, 2020, by and between the Registrant, as the seller, and Palmer Square BDC Funding
 I LLC, as the purchaser (Incorporated by reference to Exhibit 10.2 to Registrant's Current Report on Form 8-K (File No. 814-01334)
 filed on February 20, 2020)

 10.12

 Loan
 and Security Agreement, dated December 18, 2020, by and among the Registrant, as the collateral manager, Palmer Square BDC Funding
 II LLC, as the borrower, Wells Fargo Bank, National Association, as the administrative agent, U.S. Bank National Association, as
 the collateral agent and custodian, and the lenders party thereto (Incorporated by reference to Exhibit 10.11 to Registrant's
 Annual Report on Form 10-K (File No. 000-56126) filed on March 12, 2021)

 10.13

 Loan
 Sale Agreement, dated December 18, 2020, by and between the Registrant, as the seller, and Palmer Square BDC Funding II LLC, as the
 purchaser (Incorporated by reference to Exhibit 10.12 to Registrant's Annual Report on Form 10-K (File No. 000-56126) filed
 on March 12, 2021)

 10.14

 First
 Amendment to Credit Agreement, dated October 12, 2020, by and among Palmer Square BDC Funding I LLC, as the borrower, and Bank of
 America, N.A., as administrative agent and as lender (Incorporated by reference to Exhibit 10.13 to Registrant's Annual Report
 on Form 10-K (File No. 000-56126) filed on March 11, 2022)

 10.15

 Second
 Amendment to Credit Agreement, dated September 29, 2021, by and among Palmer Square BDC Funding I LLC, as the borrower, and Bank
 of America, N.A., as administrative agent and as lender (Incorporated by reference to Exhibit 10.1 to Registrant's Quarterly
 Report on Form 10-Q (File No. 814-01334) filed on November 15, 2021)

 10.16

 Omnibus
 Amendment to Loan Documents, dated February 3, 2023, by and among Palmer Square BDC Funding I LLC, as the borrower, Bank of America,
 N.A., as administrative agent and as lender, U.S. Bank Trust Company, National Association, as the collateral administrator, and
 U.S. Bank National Association, as the intermediary (Incorporated by reference to Exhibit 10.1 to Registrant's Current Report
 on Form 8-K (File No. 814-01334) filed on February 9, 2023)

 10.17

 Amendment
 No. 3 to Loan and Security Agreement, dated April 10, 2023, by and among Palmer Square BDC Funding II LLC, as the borrower, Palmer
 Square Capital BDC Inc., as the collateral manager and equityholder, and Wells Fargo Bank, National Association, as administrative
 agent and as lender. (Incorporated by reference to Exhibit 10.1 to Registrant's Current Report on Form 8-K (File No. 814-01334)
 filed on April 13, 2023).

 10.18

 Amendment
 No. 4 to Loan and Security Agreement, dated December 18, 2023, by and among Palmer Square BDC Funding II LLC, as the borrower, Palmer
 Square Capital BDC Inc., as the collateral manager and equityholder, Wells Fargo Bank, National Association, as administrative agent
 and as lender, U.S. Bank Trust Company, National Association, as collateral agent, and U.S. Bank National Association, as custodian
 (Incorporated by reference to Exhibit 10.1 to Registrant's Current Report on Form 8-K (File No. 814-01334) filed on December
 20, 2023).

 10.19

 Transfer
 Agency and Registrar Services Agreement by and between the Registrant and Equiniti Trust Company, LLC (Incorporated by reference
 to Exhibit (k)(1) to Registrant's Amendment No. 1 to the Registration Statement on Form N-2 (File No. 333-274967) filed on
 November 20, 2023)

 21.1*

 Subsidiaries
 of Registrant

 31.1*

 Certification
 of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley
 Act of 2002

 31.2*

 Certification
 of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley
 Act of 2002

 32.1*

 Certification
 of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 32.2*

 Certification
 of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 Palmer Square Capital BDC Inc. Clawback Policy*

 101.INS

 101.SCH

 101.CAL

 Document.*

 101.DEF

 Document.*

 101.LAB

 101.PRE

 Document.*

 Cover Page Interactive Data File (formatted as Inline

 *

 Filed herewith

 ITEM
16. FORM 10-K SUMMARY

 The
Registrant has elected not to provide summary information.

 SIGNATURES

 Pursuant to the requirements
of section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

 Dated: February 28, 2024

 By:

 /s/ Christopher D. Long

 Christopher D. Long

 Chief Executive Officer

 (Principal Executive Officer)

 Pursuant to the requirements
of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.

 Signature

 Title

 Date

 /s/ Christopher D. Long

 Chief Executive Officer and Chairman of the Board of Directors

 Christopher D. Long

 (Principal Executive Officer)

 /s/ Jeffrey D. Fox

 Chief Financial Officer and Director

 Jeffrey D. Fox

 (Principal Financial and Accounting Officer)

 /s/ Megan L. Webber

 Megan L. Webber

 /s/ James W. Neville Jr.

 James W. Neville Jr.

 /s/ Christopher C. Nelson

 Christopher C. Nelson

 1.47 1.78 2.26 1.23 3.22 4.20 15494614 23130666 25700603 Loan contains a variable rate structure, subject to an interest rate floor. Variable rate loans bear interest at a rate that may be determined by reference to either the London Interbank Offered Rate ("LIBOR" or "L") (which can include one-, two-, three- or six-month LIBOR), SOFR + Credit Spread Adjustment (S+CSA), where the Credit Spread Adjustment is a defined additional spread amount based on the tenor of SOFR the borrower selects, or an alternate base rate (which can include the Federal Funds Effective Rate or the Prime Rate), at the borrower's option, and which reset periodically based on the terms of the loan agreement. For the holdings as of December 31, 2022 that have S+CSA as the base rate, the CSA is 10bp for 1M SOFR, 15bp for 3M SOFR, and 25bp for 6M SOFR. For the avoidance of doubt, loan floors apply to S+CSA, not S.
 As of December 31, 2022, all investments are non-controlled, non-affiliated investments. Non-controlled, non-affiliated investments are defined as investments in which the Company owns less than 5% of the portfolio company's outstanding voting securities and does not have the power to exercise control over the management or policies of such portfolio company.
 Non-qualifying investment as defined by Section 55(a) of the Investment Company Act of 1940. The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Company's total assets. As of December 31, 2022, 14.9% of the Company's total assets were in non-qualifying investments.
 Investments or a portion of investments are unsettled as of December 31, 2022.
 As of December 31, 2022, the tax cost of the Company's investments approximates their amortized cost.
 15494614 23130666 25700603 1.23 3.22 4.20 false FY 0001794776 0

 2024-02-28

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