BlackRock TCP Capital Corp

Investment income

Investment income totaled $71.5 million and $54.0 million, respectively, for the three months ended June 30, 2024 and 2023, of which $69.0 million and $53.0 million were attributable to interest and fees on our debt investments, $2.5 million and $0.9 million to dividend income and $0.0 million and $0.1 million to other income, respectively. Included in interest and fees on our debt investments were $6.0 million and $0.2 million of non-recurring income related to prepayments and $0.2 million and $0.4 million in amendment fees for the three months ended June 30, 2024 and 2023, respectively. The increase in investment income for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 primarily reflects an increase in interest income due to higher SOFR rates during the three months ended June 30, 2024 and to additional investment income earned on investments acquired as a result of the Merger.

Investment income totaled $127.3 million and $104.3 million, respectively, for the six months ended June 30, 2024 and 2023, of which $123.7 million and $102.0 million were attributable to interest and fees on our debt investments, $3.5 million and $1.8 million to dividend income and $0.1 million and $0.5 million to other income, respectively. Included in interest and fees on our debt investments were $6.4 million and $0.4 million of non-recurring income related to prepayments and $0.4 million and $0.5 million in amendment fees for the six months ended June 30, 2024 and 2023, respectively. The increase in investment income for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 primarily reflects an increase in interest income due to higher SOFR rates during the six months ended June 30, 2024 and to additional investment income earned on investments acquired as a result of the Merger.

Expenses

Total operating expenses for the three months ended June 30, 2024 and 2023 were $35.7 million and $26.4 million, respectively, comprised of $19.7 million and $12.3 million in interest expense and related fees, $6.8 million and $5.9 million in incentive fee expense, $6.6 million and $6.1 million in base management fees, $0.7 million and $0.3 million in professional fees, $0.6 million and $0.4 million in administrative expenses and $1.3 million and $1.4 million in other expenses, respectively. The increase in operating expenses for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 reflects an increase in interest expense due to higher SOFR rates during the three months ended June 30, 2024 and as a result of the higher debt outstanding assumed as a result of the Merger and the issuance of the 2029 Notes, in addition to an increase in incentive fee expense from higher pre-incentive net investment income earned during the three months ended June 30, 2024.

Total operating expenses for the six months ended June 30, 2024 and 2023 were $63.2 million and $51.3 million, respectively, comprised of $33.0 million and $23.8 million in interest expense and related fees, $12.7 million and $11.2 million in incentive fee expense, $12.4 million and $12.0 million in base management fees, $1.6 million and $0.8 million in professional fees, $1.2 million and $0.7 million in administrative expenses and $2.3 million and $2.8 million in other expenses, respectively. The increase in operating expenses for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 reflects an increase in interest expense due to higher SOFR rates during the six months ended June 30, 2024 and as a result of the higher debt outstanding assumed as a result of the Merger and the issuance of the 2029 Notes, in addition to an increase in incentive fee expense from higher pre-incentive net investment income earned during the six months ended June 30, 2024.

Net investment income

Net investment income was $35.8 million and $27.6 million, respectively, for the three months ended June 30, 2024 and 2023. The increase in net investment income for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 primarily reflects the increase in total investment income, partially offset by the increase in expenses during the three months ended June 30, 2024.

Net investment income was $64.1 million and $53.0 million, respectively, for the six months ended June 30, 2024 and 2023. The increase in net investment income for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 primarily reflects the increase in total investment income, partially offset by the increase in expenses during the six months ended June 30, 2024.

Net realized and unrealized gain or loss

Net realized gain (loss) for the three months ended June 30, 2024 and 2023 was $(35.5) million and $(0.4) million, respectively. Net realized losses for the three months ended June 30, 2024 was comprised primarily of $22.8 million and $12.8 million in losses from the restructuring of our investments in Thras.io and Hylan, respectively.

Net realized gain (loss) for the six months ended June 30, 2024 and 2023 was $(35.7) million and $(31.0) million, respectively. Net realized losses for the six months ended June 30, 2024 was comprised primarily of $22.8 million and $12.8 million in losses from the restructuring of our investments in Thras.io and Hylan, respectively. Net realized loss for the six months ended June 30, 2023 was comprised primarily of a $30.7 million loss from reorganization of our investment in AutoAlert.

For the three months ended June 30, 2024 and 2023, the change in net unrealized appreciation (depreciation) was $(51.6) million and $(11.0) million, respectively. The change in net unrealized depreciation for the three months ended June 30, 2024 primarily reflects a $31.2 million unrealized loss on our investment in SellerX, a $20.8 million unrealized loss on our investment in Pluralsight, a $11.3 million unrealized loss on our investment in Lithium, and a $4.0 million unrealized loss on our investment in Edmentum and other unrealized losses across the portfolio, partially offset by $18.9 million and $12.3 million reversals of previous unrealized losses from the restructuring of our investments in Thras.io and Hylan, respectively. The change in net unrealized depreciation for the three months ended June 30, 2023 primarily reflects a $3.9 million unrealized loss on our investment in Astra Acquisition, a $3.4 million unrealized loss on our investment in Thras.io, a $3.4 million unrealized loss on our investment in Hylan, a $2.2 million unrealized loss on our investment in Magenta Buyer, a $1.8 million unrealized loss on our investment in GACP II, partially offset by a $6.3 million unrealized gain on our investment in Aventiv.

For the six months ended June 30, 2024 and 2023, the change in net unrealized appreciation (depreciation) was $(74.6) million and $17.0 million, respectively. The change in unrealized depreciation of $(74.6) million is net of $21.3 million in unrealized appreciation resulting from a reduction of the cost basis of investments acquired as a result of the Merger from allocation of the purchase discount paid by the Company. The change in net unrealized depreciation for the six months ended June 30, 2024 primarily reflects a

$31.5 million unrealized loss on our investment in SellerX, a $23.0 million unrealized loss on our investment in Pluralsight, a $17.3 million unrealized loss on our investment in Edmentum, a $14.2 million unrealized loss on our investment in Razor, a $13.0 million unrealized loss on our investment in Lithium, an $8.4 million unrealized loss on our investment in Aventiv and a $7.6 million unrealized loss on our investment in Astra, partially offset by $17.0 million, $11.0 million, and $6.3 million reversals of previous unrealized losses from the restructuring of our investments in Thras.io, Hylan and Perch, respectively. The change in net unrealized appreciation for the six months ended June 30, 2023 primarily reflects a $36.8 million reversal of previously recognized unrealized losses from the reorganization of our investment in AutoAlert, partially offset by a $7.1 million unrealized loss on our investment in Astra, a $5.6 million unrealized loss in Hylan and a $3.2 million unrealized loss on our investment in Magenta Buyer.

Incentive compensation

Incentive fees, included in operating expenses for the three months ended June 30, 2024 and 2023 were $6.8 million and $5.9 million, and for the six months ended June 30, 2024 and 2023 were $12.7 million and $11.2 million, respectively, and were each payable due to our performance exceeding the cumulative total return threshold during those periods. The increase in incentive fee expense for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023, respectively, was the result of higher pre-incentive fee net investment income earned during the three and six months ended June 30, 2024 which was driven by higher SOFR rates and additional investment income earned on investments acquired as a result of the Merger.

Income tax expense, including excise tax

The Company has elected to be treated as a RIC under Subchapter M of the Code and operates in a manner so as to qualify for the tax treatment applicable to RICs. To qualify as a RIC, the Company must, among other things, timely distribute to its shareholders generally at least 90% of its investment company taxable income, as defined by the Code, for each year. The Company has made and intends to continue to make the requisite distributions to its shareholders which will generally relieve the Company from U.S. federal income taxes.

Depending on the level of taxable income earned in a tax year, we may choose to carry forward taxable income in excess of current year dividend distributions from such current year taxable income into the next tax year and pay a 4% excise tax on such income. Any excise tax expense is recorded at year end as such amounts are known. No excise tax was incurred for the six months ended June 30, 2024.

On March 18, 2024, the Company completed its previously announced Merger with BCIC. Pursuant to the Merger Agreement, BCIC was merged with and into Merger Sub, with Merger Sub continuing as the surviving company and as a subsidiary of SVCP. The Merger was considered a tax-free reorganization and the Company has elected to carry forward the historical cost basis of the acquired BCIC investments for tax purposes. As a result of the Merger, BCIC’s separate existence ceased.

Net increase (decrease) in net assets resulting from operations

The net increase (decrease) in net assets applicable to common shareholders resulting from operations was $(51.3) million and $16.3 million for the three months ended June 30, 2024 and 2023, respectively. The decrease in net assets resulting from operations during the three months ended June 30, 2024 was primarily due to higher net realized and unrealized losses, partially offset by higher net investment income compared to the three months ended June 30, 2023.

The net increase (decrease) in net assets applicable to common shareholders resulting from operations was $(46.2) million and $39.0 million for the six months ended June 30, 2024 and 2023, respectively. The decrease in net assets resulting from operations during the six months ended June 30, 2024 was primarily due to higher net realized and unrealized losses, partially offset by higher net investment income compared to the six months ended June 30, 2023.

Net investment income, net realized and unrealized gain (loss) and net increase (decrease) in net assets resulting from operations can vary from period to period as a result of various factors, including acquisitions, the level of new investment commitments, the recognition of realized gains and losses and changes in unrealized appreciation and depreciation on the investment portfolio.

Supplemental Non-GAAP information

On March 18, 2024, the Company completed its previously announced Merger with BCIC. The Merger has been accounted for as an asset acquisition of BCIC by the Company in accordance with the asset acquisition method of accounting as detailed in ASC 805-50 ("ASC 805"), Business Combinations-Related Issues. The Company determined the fair value of the shares of the Company's common stock that were issued to former BCIC shareholders pursuant to the Merger Agreement plus transaction costs to be the consideration paid in connection with the Merger under ASC 805. The consideration paid to BCIC shareholders was less than the aggregate fair values of the BCIC assets acquired and liabilities assumed, which resulted in a purchase discount (the “purchase discount”). The consideration paid was allocated to the individual BCIC assets acquired and liabilities assumed based on the relative fair values of net identifiable assets acquired other than “non-qualifying” assets and liabilities (for example, cash) and did not give rise to goodwill. As a result, the purchase discount was allocated to the cost basis of the BCIC investments acquired by the Company on a pro-rata basis based on their relative fair values as of the effective time of the Merger. Immediately following the Merger, the investments were marked to their respective fair values in accordance with ASC 820 which resulted in immediate recognition of net unrealized appreciation in the Consolidated Statement of Operations as a result of the Merger. The purchase discount allocated to the BCIC debt investments acquired will amortize over the remaining life of each respective debt investment through interest income, with a corresponding adjustment recorded to unrealized appreciation or depreciation on such investment acquired through its ultimate disposition. The purchase discount allocated to BCIC equity investments acquired will not amortize over the life of such investments through interest income and, assuming no subsequent change to the fair value of the equity investments acquired and disposition of such equity investments at fair value, the Company may recognize a realized gain with a corresponding reversal of the unrealized appreciation on disposition of such equity investments acquired.

As a supplement to the Company’s reported GAAP financial measures, we have provided the following non-GAAP financial measures that we believe are useful:

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“Adjusted net investment income” – excludes the amortization of purchase accounting discount from net investment income calculated in accordance with GAAP;

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“Adjusted net realized and unrealized gain (loss)” – excludes the unrealized appreciation resulting from the purchase discount and the corresponding reversal of the unrealized appreciation from the amortization of the purchase discount from the determination of net realized and unrealized gain (loss) determined in accordance with GAAP; and

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“Adjusted net increase (decrease) in net assets resulting from operations” – calculates net increase (decrease) in net assets resulting from operations based on Adjusted net investment income and Adjusted net realized and unrealized gain (loss).

We believe that the adjustment to exclude the full effect of purchase discount accounting under ASC 805 from these financial measures is meaningful because of the potential impact on the comparability of these financial measures that we and investors use to assess our financial condition and results of operations period over period. Although these non-GAAP financial measures are intended to enhance investors’ understanding of our business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP. The aforementioned non-GAAP financial measures may not be comparable to similar non-GAAP financial measures used by other companies.

Liquidity and capital resources

Since our inception, our liquidity and capital resources have been generated primarily through the initial private placement of common shares of Special Value Continuation Fund, LLC (the predecessor entity) which were subsequently converted to common stock of the Company, the net proceeds from the initial and secondary public offerings of our common stock, amounts outstanding under our Leverage Program, and cash flows from operations, including investments sales and repayments and income earned from investments and cash equivalents. The primary uses of cash have been investments in portfolio companies, cash distributions to our equity holders, payments to service our Leverage Program and other general corporate purposes.

On February 27, 2024, the Board of Directors approved a new dividend reinvestment plan (the “DRIP”) for the Company. The DRIP was effective as of, and will apply to the reinvestment of cash distributions with a record date after March 18, 2024. Under the DRIP, shareholders will automatically receive cash dividends and distributions unless they “opt in” to the DRIP and elect to have their dividends and distributions reinvested in additional shares of the Company’s common stock. Notwithstanding the foregoing, the former shareholders of BCIC that participated in the BCIC dividend reinvestment plan at the time of the Merger have been automatically enrolled in the Company’s DRIP and will have their shares reinvested in additional shares of the Company’s common stock on future distributions, unless they “opt out” of the DRIP. For the six months ended June 30, 2024, approximately $0.8 million of cash distributions were reinvested for electing Participants through purchase of shares in the open market in accordance with the terms of the DRIP.

On February 24, 2015, the Company’s Board of Directors approved a stock repurchase plan (the “Company Repurchase Plan”) to acquire up to $50.0 million in the aggregate of the Company’s common stock at prices at certain thresholds below the Company’s net asset value per share, in accordance with the guidelines specified in Rule 10b-18 and Rule 10b5-1 of the 1934 Act. The Company Repurchase Plan is designed to allow the Company to repurchase its common stock at times when it otherwise might be prevented from doing so under insider trading laws. The Company Repurchase Plan requires an agent selected by the Company to repurchase shares of common stock on the Company’s behalf if and when the market price per share is at certain thresholds below the most recently reported net asset value per share. Under the plan, the agent will increase the volume of purchases made if the price of the Company’s common stock declines, subject to volume restrictions. The timing and amount of any stock repurchased depends on the terms and conditions of the Company Repurchase Plan, the market price of the common stock and trading volumes, and no assurance can be given that any particular amount of common stock will be repurchased. The Company Repurchase Plan was re-approved on April 24, 2024, to be in effect through the earlier of two trading days after our second quarter 2024 earnings release, unless further extended or terminated by our Board of Directors, or such time as the approved $50.0 million repurchase amount has been fully utilized, subject to certain conditions. No shares were repurchased by the Company under the Company Repurchase plan for the six months ended June 30, 2024 and 2023.

Total leverage outstanding and available under the combined Leverage Program at June 30, 2024 were as follows:

(1)

Except for the 2024 Notes, 2026 Notes and 2029 Notes, all carrying values are the same as the principal amounts outstanding.

(2)

As of June 30, 2024, $8.0 million of the outstanding amount bore interest at a rate of EURIBOR + 2.00%.

(3)

(4)

(5)

(6)

Debt assumed by the Company as a result of the Merger with BCIC.

(7)

The applicable margin for SOFR-based borrowings could be either 1.75% or 2.00% depending on a ratio of the borrowing base to certain committed indebtedness, and is also subject to a credit spread adjustment of 0.10%. If Merger Sub elects to borrow based on the alternate base rate, the applicable margin could be either 0.75% or 1.00% depending on a ratio of the borrowing base to certain committed indebtedness.

(8)

Merger Sub Facility includes a $60.0 million accordion which allows for expansion of the facility to up to $325.0 million subject to consent from the lender and other customary conditions.

(9)

(10)

The 2025 Notes consist of two tranches: $35.0 million aggregate principal amount with a fixed interest rate of 6.85% and $57.0 million aggregate principal amount bearing interest at a rate equal to SOFR plus 3.14%.

Under Section 61(a) of the 1940 Act, prior to March 23, 2018, a BDC was generally not permitted to issue senior securities unless after giving effect thereto the BDC met a coverage ratio of total assets, less liabilities and indebtedness not represented by senior securities, to total senior securities, which includes all borrowings of the BDC, of at least 200%. On March 23, 2018, the Small Business Credit Availability Act (“SBCAA”) was signed into law, which among other things, amended Section 61(a) of the 1940 Act to add a new Section 61(a)(2) that reduces the asset coverage requirement applicable to BDCs from 200% to 150% so long as the BDC meets certain disclosure requirements and obtains certain approvals. The reduced asset coverage requirement would permit a BDC to have a ratio of total outstanding indebtedness to common equity of 2:1 as compared to a maximum of 1:1 under the 200% asset coverage requirement.

Effective November 7, 2018, the Company’s Board of Directors, including a “required majority” (as such term is defined in Section 57(o) of the 1940 Act) of our Board of Directors, approved the application of the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act, as amended by the SBCAA (the “Asset Coverage Ratio Election”), which would have resulted (had the Company not received earlier shareholder approval) in our asset coverage requirement applicable to senior securities being reduced from 200% to 150%, effective on November 7, 2019. On February 8, 2019, the shareholders of the Company approved the Asset Coverage Ratio Election, and, as a result, effective on February 9, 2019, our asset coverage requirement applicable to senior securities was reduced from 200% to 150%. As of June 30, 2024, the Company’s asset coverage ratio was 173.8%.

On July 13, 2015, we obtained exemptive relief from the SEC to permit us to exclude debt outstanding under the SBA Debentures from our asset coverage test under the 1940 Act. The exemptive relief provides us with increased flexibility under the 150% asset coverage test by permitting the SBIC to borrow up to $160.0 million more than it would otherwise be able to absent the receipt of this exemptive relief.

Net cash provided by operating activities during the six months ended June 30, 2024 was $119.8 million, consisting primarily of $53.4 million in net investment income (net of non-cash income and expenses) and the settlement of dispositions of investments (net of acquisitions) of $66.4 million.

Net cash used by financing activities was $37.4 million during the six months ended June 30, 2024, consisting primarily of $297.3 million in net credit facility repayments, $56.0 million in dividends paid to common shareholders (including $7.3 million of dividends declared by BCIC prior to the Merger and paid to former BCIC shareholders out of cash and cash equivalents acquired) and $5.5 million in payments of associated debt issuance costs, offset by $321.4 million in proceeds from the issuance of the 2029 Notes.

At June 30, 2024, we had $194.7 million in cash and cash equivalents.

The Operating Facility, Funding Facility II and Merger Sub Facility (in the aggregate) are secured by substantially all of the assets in our portfolio, including cash and cash equivalents, and are subject to compliance with customary affirmative and negative covenants, including the maintenance of a minimum shareholders’ equity, the maintenance of a ratio of not less than 150% of total assets (less total liabilities other than indebtedness) to total indebtedness, and restrictions on certain payments and issuance of debt. Unfavorable economic conditions may result in a decrease in the value of our investments, which would affect both the asset coverage ratios and the value of the collateral securing the Operating Facility, Funding Facility II and Merger Sub Facility, and may therefore impact our ability to borrow under the Operating Facility, Funding Facility II and Merger Sub Facility. In addition to regulatory restrictions that restrict our ability to raise capital, the Leverage Program contains various covenants which, if not complied with, could accelerate repayment of debt, thereby materially and adversely affecting our liquidity, financial condition and results of operations. At June 30, 2024, we were in compliance with all financial and operational covenants required by the Leverage Program.

Unfavorable economic conditions, while potentially creating attractive opportunities for us, may decrease liquidity and raise the cost of capital generally, which could limit our ability to renew, extend or replace the Leverage Program on terms as favorable as are currently included therein. If we are unable to renew, extend or replace the Leverage Program upon the various dates of maturity, we expect to have sufficient funds to repay the outstanding balances in full from our net investment income and sales of, and repayments of principal from, our portfolio company investments, as well as from anticipated debt and equity capital raises, among other sources. Unfavorable economic conditions may limit our ability to raise capital or the ability of the companies in which we invest to repay our loans or engage in a liquidity event, such as a sale, recapitalization or initial public offering. The Operating Facility, Funding Facility II, Merger Sub Facility, the 2024 Notes, the 2025 Notes, the 2026 Notes and the 2029 Notes, mature in May 2026, August 2027, September 2028, August 2024, December 2025, February 2026 and May 2029, respectively. Any inability to renew, extend or replace the Leverage Program could adversely impact our liquidity and ability to find new investments or maintain distributions to our shareholders.

Challenges in the market are intensified for us by certain regulatory limitations under the Code and the 1940 Act. To maintain our qualification as a RIC, we must satisfy, among other requirements, an annual distribution requirement to pay out at least 90% of our ordinary income and short-term capital gains to our shareholders. Because we are required to distribute our income in this manner, and because the illiquidity of many of our investments may make it difficult for us to finance new investments through the sale of current investments, our ability to make new investments is highly dependent upon external financing. While we anticipate being able to continue to satisfy all covenants and repay the outstanding balances under the Leverage Program when due, there can be no assurance that we will be able to do so, which could lead to an event of default.

Contractual obligations

In addition to obligations under our Leverage Program, we have entered into several contracts under which we have future commitments. Pursuant to an investment management agreement, the Advisor manages our day-to-day operations and provides investment advisory services to us. Payments under the investment management agreement are equal to a percentage of the value of our total assets (excluding cash and cash equivalents) and an incentive compensation, plus reimbursement of certain expenses incurred by the Advisor. Under our administration agreement, the Administrator provides us with administrative services, facilities and personnel. Payments under the administration agreement are equal to an allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations to us and may include rent and our allocable portion of the cost of certain of our officers and their respective staffs. We are responsible for reimbursing the Advisor for due diligence and negotiation expenses, fees and expenses of custodians, administrators, transfer and distribution agents, counsel and directors, insurance, filings and registrations, proxy expenses, expenses of communications to investors, compliance expenses, interest, taxes, portfolio transaction expenses, costs of responding to regulatory inquiries and reporting to regulatory authorities, costs and expenses of preparing and maintaining our books and records, indemnification, litigation and other extraordinary expenses and such other expenses as are approved by the directors as being reasonably related to our organization, offering, capitalization, operation or administration and any portfolio investments, as applicable. The Advisor is not responsible for any of the foregoing expenses and such services are not investment advisory services under the 1940 Act. Either party may terminate each of the investment management agreement and administration agreement without penalty upon not less than 60 days’ written notice to the other.

Distributions

Our quarterly dividends and distributions to common shareholders are recorded on the ex-dividend date. Distributions are declared considering our estimate of annual taxable income available for distribution to shareholders and the amount of taxable income carried over from the prior year for distribution in the current year. We do not have a policy to pay distributions at a specific level and expect to continue to distribute substantially all of our taxable income. We cannot assure shareholders that they will receive any distributions or distributions at a particular level.

The following tables summarize dividends declared for the six months ended June 30, 2024 and 2023:

(1)

Dividends reinvested through purchase of shares in the open market.

(1)

No dividend reinvestment plan was effective for the six months ended June 30, 2023.

In addition, the Company paid $7.3 million of dividends payable assumed in the Merger that were declared on March 4, 2024 by the BCIC Board of Directors for the benefit of former BCIC shareholders of record as of March 15, 2024. Such amount was paid from BCIC cash and cash equivalents acquired by the Company in the Merger.

We have elected to be taxed as a RIC under Subchapter M of the Code. In order to maintain favorable RIC tax treatment, we must distribute annually to our shareholders at least 90% of our ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any, out of the assets legally available for distribution. In order to avoid certain excise taxes imposed on RICs, we must distribute during each calendar year an amount at least equal to the sum of:

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98% of our ordinary income (not taking into account any capital gains or losses) for the calendar year;

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98.2% of the amount by which our capital gains exceed our capital losses (adjusted for certain ordinary losses) for the one-year period generally ending on October 31 of the calendar year; and

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certain undistributed amounts from previous years on which we paid no U.S. federal income tax.

We may, at our discretion, carry forward taxable income in excess of calendar year distributions and pay a 4% excise tax on this income. If we choose to do so, all other things being equal, this would increase expenses and reduce the amounts available to be distributed to our shareholders. We will accrue excise tax on estimated taxable income as required. In addition, although we currently intend to distribute realized net capital gains (i.e., net long-term capital gains in excess of short-term capital losses), if any, at least annually, out of the assets legally available for such distributions, we may in the future decide to retain such capital gains for investment.

We may not be able to achieve operating results that will allow us to make dividends and distributions at a specific level or to increase the amount of these dividends and distributions from time to time. Also, we may be limited in our ability to make dividends and distributions due to the asset coverage test applicable to us as a BDC under the 1940 Act and due to provisions in our existing and future credit facilities. If we do not distribute a certain percentage of our income annually, we will suffer adverse tax consequences, including possible loss of favorable RIC tax treatment. In addition, in accordance with U.S. generally accepted accounting principles and tax regulations, we include in income certain amounts that we have not yet received in cash, such as PIK interest, which represents contractual interest added to the loan balance that becomes due at the end of the loan term, or the accrual of original issue or market discount. Since we may recognize income before or without receiving cash representing such income, we may have difficulty meeting the requirement to distribute at least 90% of our investment company taxable income to obtain tax benefits as a RIC and may be subject to an excise tax.

In order to satisfy the annual distribution requirement applicable to RICs, we have the ability to declare a large portion of a dividend in shares of our common stock instead of in cash. As long as a portion of such dividend is paid in cash and certain requirements are met, the entire distribution would be treated as a dividend for U.S. federal income tax purposes.

Related Parties

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

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Each of the Company, TCPC Funding II, and the SBIC has entered into an investment management agreement with the Advisor.

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The Administrator provides us with administrative services necessary to conduct our day-to-day operations. For providing these services, facilities and personnel, the Administrator may be reimbursed by us for expenses incurred by the Administrator in performing its obligations under the administration agreement, including our allocable portion of the cost of certain of our officers and the Administrator’s administrative staff and providing, at our request and on our behalf, significant managerial assistance to our portfolio companies to which we are required to provide such assistance. The Administrator is an affiliate of the Advisor and certain other series and classes of SVOF/MM, LLC serve as the general partner or managing member of certain other funds managed by the Advisor.

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We have entered into a royalty-free license agreement with BlackRock and the Advisor, pursuant to which each of BlackRock and the Advisor has agreed to grant us a non-exclusive, royalty-free license to use the name "BlackRock" and "TCP."

The Advisor and its affiliates, employees and associates currently do and in the future may manage other funds and accounts. The Advisor and its affiliates may determine that an investment is appropriate for us and for one or more of those other funds or accounts. Accordingly, conflicts may arise regarding the allocation of investments or opportunities among us and those accounts. In general, the Advisor will allocate investment opportunities pro rata among us and the other funds and accounts (assuming the investment satisfies the objectives of each) based on the amount of committed capital each then has available. The allocation of certain investment opportunities in private placements is subject to independent director approval pursuant to the terms of the co-investment exemptive order applicable to us. In certain cases, investment opportunities may be made other than on a pro rata basis. For example, we may desire to retain an asset at the same time that one or more other funds or accounts desire to sell it or we may not have additional capital to invest at a time the other funds or accounts do. If the Advisor is unable to manage our investments effectively, we may be unable to achieve our investment objective. In addition, the Advisor may face conflicts in allocating investment opportunities between us and certain other entities that could impact our investment returns. While our ability to enter into transactions with our affiliates is restricted under the 1940 Act, we have received an exemptive order from the SEC permitting certain affiliated investments subject to certain conditions. As a result, we may face conflict of interests and investments made pursuant to the exemptive order conditions which could in certain circumstances affect adversely the price paid or received by us or the availability or size of the position purchased or sold by us.

Recent Developments

On August 1, 2024, the Company’s Board of Directors re-approved the Company Repurchase Plan, to be in effect through the earlier of two trading days after the Company’s third quarter 2024 earnings release or such time as the approved $50 million repurchase amount has been fully utilized, subject to certain conditions.

On August 1, 2024, the Operating Facility was amended to (i) extend the expiration date of the Operating Facility and the maturity date with respect to loans made thereunder to August 1, 2028 and August 1, 2029, respectively, (ii) delete references to the 2022 Notes, (iii) remove certain borrowing base restrictions, (iv) lower the SOFR adjustment, (v) update the minimum amount of stockholder’s equity figure, (vi) update the “change in control” provisions to account for personnel changes and structuring variations and (vii) update certain mechanical/administrative provisions, including provisions for replacing CDOR and other reference rates.

On August 7, 2024, the Company’s Board of Directors declared a third quarter regular dividend of $0.34 per share payable on September 30, 2024 to shareholders of record as of the close of business on September 16, 2024.