Forward-Looking Statements
The information contained in this section should be read in conjunction with our
consolidated financial statements and related notes and schedules thereto
appearing elsewhere in this Quarterly Report on Form 10-Q. Except as otherwise
specified, references to "the Company", "we", "us", and "our" refer to
TriplePoint Venture Growth BDC Corp. and its subsidiaries.
This Quarterly Report on Form 10-Q contains forward-looking statements that
involve substantial risks and uncertainties. These forward-looking statements
are not historical facts, but rather are based on current expectations,
estimates and projections about us, our current and prospective portfolio
investments, our industry, our beliefs, and our assumptions. Words such as
"anticipates," "expects," "intends," "plans," "will," "may," "continue,"
"believes," "seeks," "estimates," "would," "could," "should," "targets,"
"projects," and variations of these words and similar expressions are intended
to identify forward-looking statements. The forward-looking statements contained
in this Quarterly Report on Form 10-Q include statements as to:
•            our and our portfolio companies' future operating results and
             financial condition, including the ability of us and our portfolio
             companies to achieve our respective objectives;

• our business prospects and the prospects of our portfolio companies;




•            our relationships with third parties, including but not 

limited to


             lenders and venture capital investors, including other

investors in


             our portfolio companies;


• the impact and timing of our unfunded commitments;

• the expected market for venture capital investments;




•            the performance of our existing portfolio and other 

investments we


             may make in the future;


• the impact of investments that we expect to make;




•            actual and potential conflicts of interest with TriplePoint Capital
             LLC ("TPC"), TriplePoint Advisers LLC ("Adviser") and its senior
             investment team and Investment Committee;

• our contractual arrangements and relationships with third parties;




•            the dependence of our future success on the U.S. and global
             economies, including with respect to the industries in which we
             invest;

• our expected financings and investments;




•            the ability of our Adviser to attract, retain and have access to
             highly talented professionals, including our Adviser's senior
             management team;


• our ability to qualify and maintain our qualification as a RIC and as a BDC;


•            the adequacy of our available liquidity, cash resources and working
             capital and compliance with covenants under our borrowing
             arrangements; and


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


These statements are not guarantees of future performance and are subject to
risks, uncertainties, and other factors, some of which are beyond our control
and difficult to predict and could cause actual results to differ materially
from those expressed or forecasted in the forward-looking statements, including
without limitation:
•            changes in laws and regulations, changes in political, 

economic or


             industry conditions, and changes in the interest rate

environment or


             other conditions affecting the financial and capital markets,
             including with respect to changes resulting from or in

response to,


             or potentially even the absence of changes as a result of, the
             impact of the Coronavirus ("COVID-19") pandemic;


•            the length and duration of the COVID-19 outbreak in the United
             States as well as worldwide, and the magnitude of its impact and
             time required for economic recovery, including with respect to the
             impact of travel restrictions and other isolation and quarantine
             measures on the ability of the Adviser's investment

professionals to


             conduct in-person diligence on, and otherwise monitor,

existing and


             future investments;


•            an economic downturn and the time period required for robust
             economic recovery therefrom, including the current economic downturn
             as a result of the impact of the COVID-19 pandemic, which has
             already generally had a material impact on our portfolio companies'
             results of operations and financial condition and will likely
             continue to have a material impact on our portfolio companies'
             results of operations and financial condition, for its duration,
             which could lead to the loss of some or all of our investments in
             such portfolio companies and have a material adverse effect on our
             results of operations and financial condition;


•            a contraction of available credit, an inability or

unwillingness of


             our lenders to fund their commitments to us and/or an

inability to


             access capital markets or additional sources of liquidity, including
             as a result of the impact and duration of the COVID-19 pandemic,
             could have a material adverse effect on our results of operations
             and financial condition and impair our lending and investment
             activities;



                                       42

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•            interest rate volatility could adversely affect our results,
             particularly given that we use leverage as part of our

investment


             strategy;


•            currency fluctuations could adversely affect the results of our
             investments in foreign companies, particularly to the extent that we
             receive payments denominated in foreign currency rather than U.S.
             dollars;


•            risks associated with possible disruption in our or our

portfolio


             companies' operations due to wars and other forms of conflict,
             terrorist acts, security operations and catastrophic events such as
             fires, floods, earthquakes, tornadoes, hurricanes and global health
             epidemics; and


•            the risks, uncertainties and other factors we identify in "Risk
             Factors" in our most recent Annual Report on Form 10-K under Part I,
             Item 1A, in our quarterly reports on Form 10-Q, including this
             report, and in our other filings with the SEC that we make

from time


             to time.


Although we believe that the assumptions on which these forward-looking
statements are based are reasonable, any of those assumptions could prove to be
inaccurate, and as a result, the forward-looking statements based on those
assumptions also could be inaccurate. Important assumptions include, without
limitation, our ability to originate new loans and investments, borrowing costs
and levels of profitability and the availability of additional capital. In light
of these and other uncertainties, the inclusion of a projection or
forward-looking statement in this Quarterly Report on Form 10-Q should not be
regarded as a representation by us that our plans and objectives will be
achieved. You should not place undue reliance on these forward-looking
statements, which apply only as of the date of this Quarterly Report on
Form 10-Q.
Overview
We are an externally managed, closed-end, non-diversified management investment
company that has elected to be regulated as a BDC under the 1940 Act. We have
elected to be treated, and intend to qualify annually, as a RIC under Subchapter
M of the Code for U.S. federal income tax purposes.
Our shares are currently listed on the New York Stock Exchange (the "NYSE")
under the symbol "TPVG". The 2022 Notes are currently listed on the NYSE under
the symbol "TPVY".
We were formed to expand the venture growth stage business segment of TPC's
investment platform. TPC is widely recognized as a leading global financing
provider devoted to serving venture capital-backed companies with creative,
flexible and customized debt financing, equity capital and complementary
services throughout their lifespan. TPC is located on Sand Hill Road in Silicon
Valley and has a primary focus in technology, life sciences and other high
growth industries.
Our investment objective is to maximize our total return to stockholders
primarily in the form of current income and, to a lesser extent, capital
appreciation by lending primarily with warrants to venture growth stage
companies focused in technology, life sciences and other high growth industries
backed by TPC's select group of leading venture capital investors.
We commenced investment activities on March 5, 2014. In order to expedite the
ramp-up of our investment activities and further our ability to meet our
investment objectives, on March 5, 2014, we acquired our initial portfolio. On
March 11, 2014, we completed our initial public offering and received $141.6
million of net proceeds in connection with the initial public offering and a
concurrent private placement, net of the portion of the underwriting sales load
and offering costs we paid. In 2015, we completed a follow-on public offering of
our common stock raising $95.9 million after offering costs. In October 2017, we
sold in a private placement transaction 1,594,007 shares of our common stock to
certain investment funds managed by the Alternative Investments & Manager
Selection Group of Goldman Sachs Asset Management, L.P. and 73,855 shares of our
common stock to certain of our executive officers, for total gross proceeds of
$22.6 million. In August 2018, we completed a public offering and a concurrent
private placement offering of an aggregate 6,925,000 shares of our common stock,
raising $94.6 million after offering costs. In January 2020, we completed
follow-on public offering of an aggregate 5,750,000 shares of our common stock,
raising $78.2 million after offering costs.
COVID-19 Developments
The COVID-19 pandemic, and the related effect on the U.S. and global economies,
including the current economic downturn and the uncertainty associated with the
timing and likelihood of economic recovery, has had adverse consequences for the
business operations of some of our portfolio companies and has adversely
affected, and threatens to continue to adversely affect, our operations and the
operations of the Adviser.
While we have been monitoring, and continue to monitor, the COVID-19 pandemic
and its impact on our and our portfolio companies' business, we have continued
to raise capital, maintain appropriate levels of available liquidity, support
and monitor our existing portfolio companies, fund existing unfunded
commitments, and selectively deploy capital in new investment opportunities in
venture growth stage companies. As a result of our focus on maintaining adequate
liquidity amid current market uncertainty, our interest expense has increased
from comparable prior year periods due to maintaining a higher weighted average
outstanding principal balance on borrowings and increased cash reserves. In
addition, while we have not seen a material reduction in demand in the venture
growth stage market, we do expect to see reduced originations during fiscal year
2020, as compared to fiscal year 2019 levels, as we and others, including
potential venture growth stage portfolio companies, navigate the current
challenging environment.
We have seen, and expect to continue to see, certain of our portfolio companies
experience financial distress and, depending on the duration of the COVID-19
pandemic and the extent of its disruption to operations, expect that certain of
our portfolio companies may default on their financial obligations to us and
their other capital providers. The effects of the COVID-19 pandemic have also
impeded, and may continue

                                       43
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to impede, the ability of certain of our portfolio companies to raise additional
capital and/or pursue asset sales or otherwise execute strategic transactions,
which could have a material adverse effect on the valuation of our investments
in such companies. Portfolio companies operating in certain industries may be
more susceptible to these risks than other portfolio companies in other
industries in light of the effects of the COVID-19 pandemic. Some of our
portfolio companies have already taken steps to significantly reduce, modify, or
alter business strategies and operations, and we expect that additional
portfolio companies may take similar steps if subjected to prolonged and severe
financial distress, which may impair their business on a permanent basis. In
addition, due to the completion of equity rounds by certain portfolio companies
at lower valuations than rounds completed prior to the onset of the COVID-19
pandemic, we have experienced unrealized depreciation on certain of our warrant
and equity investments despite the relevant companies' ability to mitigate
disruptions on their business strategies and operations. There can be no
assurance that future equity rounds completed by our portfolio companies will be
at levels greater than or equal to previous rounds, which may result in net
unrealized depreciation on our warrant and equity portfolio in future periods.
In part due to these COVID-19-related developments, the fair value of certain of
our portfolio investments as of June 30, 2020 and our expected recoveries for
certain investments have decreased as compared to their fair value and expected
recoveries as of December 31, 2019, and there may be further decreases in the
fair values of our portfolio investments going forward. As of June 30, 2020, we
had two portfolio companies in which our investments were on non­accrual status
(all of which were generally caused by events unrelated to the COVID-19
pandemic), with an aggregate cost and fair value of $31.8 million and $16.5
million, respectively. The various effects of the COVID-19 pandemic, including
those discussed above, increase the risk that we will place additional
investments on non-accrual status in the future.
As of June 30, 2020, we are permitted under the 1940 Act, as a BDC, to borrow
amounts such that our asset coverage, as defined in the 1940 Act, equals at
least 150% after such borrowing. In addition, the indenture governing the 2022
Notes contains certain covenants, including covenants (i) requiring our
compliance with the asset coverage requirements set forth in Section 18(a)(1)(A)
as modified by Section 61(a) of the 1940 Act (after giving effect to any
exemptive relief granted to us by the SEC); and (ii) if our asset coverage has
been below the 1940 Act minimum asset coverage requirements (after giving effect
to any exemptive relief granted to us by the SEC) for more than six consecutive
months, prohibiting the declaration of any cash dividend or distribution on our
common stock (except to the extent necessary for us to maintain our treatment as
a RIC under Subchapter M of the Code), or purchasing any of our common stock,
unless, at the time of the declaration of the dividend or distribution or the
purchase, and after deducting the amount of such dividend, distribution, or
purchase, we are in compliance with the 1940 Act asset coverage requirements
(after giving effect to any exemptive relief granted to us by the SEC). The
Credit Facility also includes certain covenants, including without limitation, a
covenant requiring 150% asset coverage in accordance with the 1940 Act, and the
Note Purchase Agreement governing the 2025 Notes contains certain covenants,
including without limitation, a minimum asset coverage ratio of 150%, a minimum
interest coverage ratio of 125%, and a minimum stockholders' equity threshold.
Moreover, the fixed rate of the 2025 Notes is subject to a 1.00% increase in the
event that a Below Investment Grade Event (as defined in the Note Purchase
Agreement) occurs, which risk is increased as a result of the impact of the
COVID-19 pandemic. See "Note 6. Borrowings" in the notes to consolidated
financial statements for more information regarding the terms of the Credit
Facility, the 2022 Notes, and the 2025 Notes.
As discussed below under "Results of Operations," our net asset value per share
as of June 30, 2020 decreased as compared to our net asset value per share as of
December 31, 2019, in part due to the aggregate unrealized depreciation of our
investment portfolio caused by the immediate adverse economic effects of the
COVID-19 pandemic and uncertainty regarding the extent and duration of its
impact. Any significant increase in aggregate unrealized depreciation of our
investment portfolio or further significant reductions in our net asset value as
a result of the effects of the COVID-19 pandemic or otherwise increases the risk
of failing to meet the 1940 Act asset coverage requirements and breaching
covenants under the Credit Facility, under the indenture governing the 2022
Notes, and under the Note Purchase Agreement governing the 2025 Notes, or
otherwise triggering an event of default under the relevant borrowing
arrangement. Any such breach of covenant or event of default, if we are not able
to obtain a waiver from the required lenders or debt holders, would have a
material adverse effect on our business, liquidity, financial condition, results
of operations and ability to pay distributions to our stockholders. See "Risk
Factors" in this Quarterly Report on Form 10-Q and our Quarterly Report on Form
10-Q for the quarter ended March 31, 2020, as well as "Risk Factors" in Part I
of our Annual Report on Form 10­K for the year ended December 31, 2019, for more
information. As of June 30, 2020, we were in compliance with the asset coverage
requirements under the 1940 Act, and we were not in breach of any covenants
under the Credit Facility, under the indenture governing the 2022 Notes, or
under the Note Purchase Agreement governing the 2025 Notes. We do not expect to
breach any of these covenants in the near term assuming that conditions do not
materially deteriorate further or for a prolonged period of time.
We will continue to monitor the rapidly evolving situation relating to the
COVID-19 pandemic and related guidance from U.S. and international authorities,
including federal, state and local public health authorities. Given the dynamic
nature of this situation and the fact that there may be developments outside of
our control that require us or our portfolio companies to adjust plans of
operation, we cannot reasonably estimate the full impact of COVID-19 on our
financial condition, results of operations or cash flows in the future. However,
it could have a material adverse impact for a prolonged period of time on our
future net investment income, particularly with respect to our interest income,
the fair value of our portfolio investments, and the results of operations and
financial condition of us and our portfolio companies. See "Risk Factors" in
this Quarterly Report on Form 10-Q for more information.
Portfolio Composition, Investment Activity and Asset Quality
Portfolio Composition
We originate and invest primarily in venture growth stage companies. Companies
at the venture growth stage have distinct characteristics differentiating them
from venture capital-backed companies at other stages in their development
lifecycle. We invest primarily in (i) growth capital loans that have a secured
collateral position and that are generally used by venture growth stage
companies to finance their continued expansion and growth, (ii) equipment
financings, which may be structured as loans or leases, that have a secured
collateral position on specified mission-

                                       44
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critical equipment, (iii) on a select basis, revolving loans that have a secured
collateral position and that are typically used by venture growth stage
companies to advance against inventory, components, accounts receivable,
contractual or future billings, bookings, revenues, sales or cash payments and
collections including proceeds from a sale, financing or the equivalent and
(iv) direct equity investments in venture growth stage companies. In connection
with our growth capital loans, equipment financings and revolving loans, we
generally receive warrant investments that allow us to participate in any equity
appreciation of our borrowers and enhance our overall investment returns.
As of June 30, 2020, we had 206 investments in 69 companies. Our investments
included 114 debt investments, 69 warrant investments, and 23 direct equity and
related investments. As of June 30, 2020, the aggregate cost and fair value of
these investments were $708.5 million and $692.9 million, respectively. As of
June 30, 2020, three of our portfolio companies were publicly traded. As of
June 30, 2020, the 114 debt investments had an aggregate fair value of $652.5
million and a weighted average loan to enterprise value ratio at the time of
underwriting of 9.3%. Enterprise value of a portfolio company is estimated based
on information available, including any information regarding the most recent
rounds of equity funding, at the time of origination.
As of December 31, 2019, we had 187 investments in 68 companies. Our investments
included 102 debt investments, 64 warrant investments, and 21 direct equity and
related investments. As of December 31, 2019, the aggregate cost and fair value
of these investments were $660.7 million and $653.1 million, respectively. As of
December 31, 2019, two of our portfolio companies were publicly traded. As of
December 31, 2019, the 102 debt investments had an aggregate fair value of
$604.5 million and a weighted average loan to enterprise value ratio at the time
of underwriting of 9.3%. Enterprise value of a portfolio company is estimated
based on information available, including any information regarding the most
recent rounds of equity funding, at the time of origination.
The following tables show information on the cost and fair value of our
investments in companies along with the number of companies in our portfolio as
of June 30, 2020 and December 31, 2019:
                                                                 June 30, 2020
Investments by Type                                              Net Unrealized       Number of      Number of
(dollars in thousands)              Cost         Fair Value      Gains (losses)      Investments     Companies
Debt investments                 $ 676,950     $    652,533     $    (24,417 )              114            37
Warrant investments                 18,993           20,996     $      2,003                 69            61
Equity investments                  12,597           19,324     $      6,727                 23            21
Total Investments in Portfolio
Companies                        $ 708,540     $    692,853     $    (15,687 )              206            69   (1)


_______________

(1)Represents non-duplicative number of companies.


                                                               December 31, 2019
Investments by Type                                              Net Unrealized       Number of      Number of
(dollars in thousands)              Cost         Fair Value      Gains (losses)      Investments     Companies
Debt investments                 $ 630,724     $    604,518     $    (26,206 )              102            38
Warrant investments                 18,150           22,090     $      3,940                 64            58
Equity investments                  11,801           26,521     $     14,720                 21            20
Total Investments in Portfolio
Companies                        $ 660,675     $    653,129     $     (7,546 )              187            68   (1)


_______________

(1)Represents non-duplicative number of companies.


                                       45
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The following tables show the fair value of the portfolio of investments, by
industry and the percentage of the total investment portfolio, as of June 30,
2020 and December 31, 2019:
                                                                        June 30, 2020
Investments in Portfolio Companies by Industry                                 Percentage of Total
(dollars in thousands)?                                    At Fair Value    

Investments


Business Applications Software                           $        89,870                 13.0 %
Financial Institution and Services                                50,046                  7.2
E-Commerce - Clothing and Accessories                             41,491                  6.0
Network Systems Management Software                               40,820                  5.9
Security Services                                                 35,853                  5.2
Consumer Products and Services                                    35,828                  5.2
E-Commerce - Personal Goods                                       32,786                  4.7
Entertainment                                                     30,328                  4.4
Household & Office Goods                                          30,228                  4.4
Social/Platform Software                                          30,069                  4.3
Real Estate Services                                              30,024                  4.3
Travel & Leisure                                                  29,853                  4.3
Business to Business Marketplace                                  29,548                  4.3
Buildings and Property                                            29,530                  4.3
Shopping Facilitators                                             25,743                  3.7
Healthcare Technology Systems                                     22,077                  3.2
Other Financial Services                                          19,832                  2.9
Food & Drug                                                       16,138                  2.3
Database Software                                                 14,764                  2.1
Consumer Retail                                                   11,401                  1.6
Consumer Non-Durables                                             10,652                  1.5
Commercial Services                                               10,086                  1.5
Human Resources/Recruitment                                        9,944                  1.4
Multimedia and Design Software                                     9,812                  1.4
Communications Software                                            2,000                  0.3
Restaurant / Food Service                                          1,500                  0.2
General Media and Content                                          1,160                  0.2
Building Materials/Construction Machinery                            591                  0.1
Educational/Training Software                                        441                  0.1
Transportation                                                       221                    *
Conferencing Equipment / Services                                    205                    *
Advertising / Marketing                                               12                    *
Medical Software and Information Services                              -                    - %
Total portfolio company investments                      $       692,853                100.0 %


_______________

* Amount represents less than 0.05% of the total portfolio investments.


                                       46
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                                                                      December 31, 2019
Investments in Portfolio Companies by Industry                                  Percentage of Total
(dollars in thousands)?                                    At Fair Value    

Investments


Business Applications Software                           $         74,937                 11.5 %
Consumer Products and Services                                     50,664                  7.8
Financial Institution and Services                                 47,042                  7.2
Security Services                                                  45,252                  6.9
E-Commerce - Clothing and Accessories                              42,539                  6.5
Business to Business Marketplace                                   38,504                  5.9
Entertainment                                                      34,346                  5.3
Network Systems Management Software                                34,188                  5.2
Household & Office Goods                                           32,298                  4.9
Buildings and Property                                             30,459                  4.7
Social / Platform Software                                         30,248                  4.6
Real Estate Services                                               23,076                  3.5
Healthcare Technology Systems                                      21,410                  3.3
Other Financial Services                                           20,344                  3.1
Travel & Leisure                                                   20,311                  3.1
Shopping Facilitators                                              15,745                  2.4
E-Commerce - Personal Goods                                        15,300                  2.3
Database Software                                                  14,891                  2.3
Food & Drug                                                        12,687                  1.9
Consumer Non-Durables                                              10,626                  1.6
Consumer Retail                                                    10,158                  1.6
Commercial Services                                                 9,998                  1.5
Human Resources/Recruitment                                         9,975                  1.5
Communications Software                                             2,000                  0.3
Biofuels / Biomass                                                  1,797                  0.3
Restaurant / Food Service                                           1,593                  0.2
General Media and Content                                           1,073                  0.2
Building Materials / Construction Machinery                           500                  0.1
Educational / Training Software                                       434                  0.1
Conferencing Equipment / Services                                     205                    *
Transportation                                                        193                    *
Wireless Communications Equipment                                     188                    *
Advertising / Marketing                                               148                    *
Medical Software and Information Services                               -                    -
Total portfolio company investments                      $        653,129                100.0 %


_______________

* Amount represents less than 0.05% of the total portfolio investments.

The following table shows the financing product type of our debt investments as of June 30, 2020 and December 31, 2019:


                                                      June 30, 2020                        December 31, 2019
                                                               Percentage of                          Percentage of
Debt Investments By Financing Product                            Total Debt                             Total Debt
(dollars in thousands)                       Fair Value         Investments         Fair Value         Investments
Growth capital loans                       $     645,955            99.0 %        $     599,030            99.1 %
Revolver loans                                     6,578             1.0                  5,488             0.9
Total debt investments                     $     652,533           100.0 %        $     604,518           100.0 %


Investment Activity
During the three months ended June 30, 2020, we entered into debt commitments
with two new portfolio companies and two existing portfolio companies totaling
$13.9 million, funded 10 debt investments for $20.5 million in principal value,
acquired warrant investments representing $0.2 million of value and made equity
investments of $0.1 million. During the three months ended June 30, 2019, we
entered into

                                       47
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debt commitments with five new portfolio companies and four existing portfolio
companies totaling $98.4 million, funded 17 debt investments for $72.5 million
in principal value, acquired warrant investments representing $0.7 million of
value and made equity investments of $1.7 million.
During the six months ended June 30, 2020, we entered into debt commitments with
four new portfolio companies and six existing portfolio companies totaling
$116.5 million, funded 27 debt investments for $99.3 million in principal value,
acquired warrant investments representing $1.2 million of value and made equity
investments of $1.5 million. During the six months ended June 30, 2019, we
entered into debt commitments with 10 new portfolio companies and eight existing
portfolio companies totaling $289.3 million, funded 30 debt investments for
$162.1 million in principal value, acquired warrant investments representing
$2.5 million of value and made equity investments of $2.2 million.
The following table shows the total portfolio investment activity for the three
and six months ended June 30, 2020 and 2019:
                                         For the Three Months Ended June 30,          For the Six Months Ended June 30,
(in thousands)                               2020                   2019                 2020                   2019

Beginning portfolio at fair value $ 713,155 $ 457,695 $ 653,129 $ 433,417 New debt investments, net(1)

                    20,126                 71,082               97,151                158,721
Scheduled principal amortization               (12,134 )               (8,367 )            (17,947 )              (21,327 )
Principal prepayments and early
repayments                                     (25,105 )              (42,551 )            (26,105 )             (100,104 )
Accretion of debt investment fees                4,266                  1,741                8,048                  4,976
Payment-in-kind coupon                           2,764                    291                3,616                  1,062
New warrant investments                            153                    710                1,227                  2,524
New equity investments                             125                  1,662                1,545                  2,162
Proceeds and dispositions of
investments                                    (20,658 )                   20              (20,658 )                 (302 )
Net realized gains (losses)                      1,277                    (17 )                988                    (46 )
Net unrealized gains (losses) on
investments                                      8,884                 13,755               (8,141 )               14,938

Ending portfolio at fair value $ 692,853 $ 496,021 $ 692,853 $ 496,021

_______________


(1)Debt balance is net of fees and discounts applied to the loan at origination.
As of June 30, 2020, our unfunded commitments to 14 companies totaled $180.4
million. During the three and six months ended June 30, 2020, $14.0 million and
$69.3 million, respectively, in unfunded commitments expired or were terminated.
As of December 31, 2019, our unfunded commitments to 16 companies totaled $226.1
million. During the year ended December 31, 2019, $167.1 million in unfunded
commitments expired or were terminated.
The following table shows additional information on our unfunded commitments
regarding milestones, expirations, and types of loans as of June 30, 2020 and
December 31, 2019:
Unfunded Commitments(1)
(in thousands)             June 30, 2020      December 31, 2019
Dependent on milestones   $        33,333    $            59,333
Expiring during:
2020                              151,333                188,083
2021                               29,034                 38,000
Total                     $       180,367    $           226,083


_______________
(1)Does not include backlog of potential future commitments.
Our credit agreements contain customary lending provisions that allow us relief
from funding obligations for previously made commitments in instances where the
underlying company experiences material adverse events that affect the financial
condition or business outlook for the company. Since these commitments may
expire without being drawn upon, unfunded commitments do not necessarily
represent future cash requirements or future earning assets for us. We generally
expect 50% - 75% of our gross unfunded commitments to eventually be drawn before
the expiration of their corresponding availability periods.
The fair value at the inception of the delay draw credit agreements with our
portfolio companies is equal to the fees and/or warrants received to enter into
these agreements, taking into account the remaining terms of the agreements and
the counterparties' credit profile. The unfunded commitment liability reflects
the fair value of these future funding commitments. As of June 30, 2020 and
December 31, 2019, the fair value for these unfunded commitments totaled $1.6
million and $2.2 million, respectively, and was included in "other accrued
expenses and liabilities" in our consolidated statements of assets and
liabilities.
Our level of investment activity can vary substantially from period to period as
our Adviser chooses to slow or accelerate new business originations depending on
market conditions, rate of investment of TPC's select group of leading venture
capital investors, our Adviser's knowledge, expertise and experience, our
funding capacity (including availability under the Credit Facility and our
ability or inability to raise equity or debt capital), and other market
dynamics.

                                       48
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The following table shows the debt commitments, fundings of debt investments
(principal balance) and equity investments and non-binding term sheet activity
for the three and six months ended June 30, 2020 and 2019:
                                       For the Three Months Ended       For the Six Months Ended
Commitments and Fundings                        June 30,                        June 30,
(in thousands)                             2020            2019           2020            2019
Debt Commitments
New portfolio companies               $     10,000     $   62,000     $    75,000     $  192,000
Existing portfolio companies                 3,915         36,363          41,488         97,323
Total(1)                              $     13,915     $   98,363     $   116,488     $  289,323

Funded Debt Investments               $     20,507     $   72,538     $    99,267     $  162,055

Equity Investments                    $        125     $    1,662     $     1,545     $    2,162

Non-Binding Term Sheets               $     92,890     $  203,638     $   172,421     $  453,661


_______________
(1)Includes backlog of potential future commitments.
We may enter into commitments with certain portfolio companies that permit an
increase in the commitment amount in the future in the event that conditions to
such increases are met ("backlog of potential future commitments"). If such
conditions to increase are met, these amounts may become unfunded commitments if
not drawn prior to expiration. As of June 30, 2020 and December 31, 2019, this
backlog of potential future commitments totaled $9.1 million and $15.5 million,
respectively.
Asset Quality
Consistent with TPC's existing policies, our Adviser maintains a credit watch
list which places borrowers into five risk categories based on our Adviser's
senior investment team's judgment, where 1 is the highest rating and all new
loans are generally assigned a rating of 2.
 Category           Category Definition                      Action Item

Clear (1)    Performing above expectations        Review quarterly.
             and/or strong financial or
             enterprise profile, value or
             coverage.
White (2)    Performing at expectations and/or    Contact portfolio company
             reasonably close to it. Reasonable   periodically in no event less than
             financial or enterprise profile,     quarterly.
             value or coverage. Generally, all
             new loans are initially graded
             White.
Yellow (3)   Performing generally below           Contact portfolio company monthly
             expectations and/or some proactive   or more frequently as determined
             concern. Adequate financial or       by our Adviser's Investment
             enterprise profile, value or         Committee; contact

venture capital


             coverage.                            investors.
Orange (4)   Needs close attention due to         Contact portfolio company weekly
             performance materially below         or more frequently as determined
             expectations, weak financial         by our Adviser's Investment
             and/or enterprise profile, concern   Committee; contact

venture capital


             regarding additional capital or      investors regularly; our Adviser
             exit equivalent.                     forms a workout group to minimize
                                                  risk of loss.
Red (5)      Serious concern/trouble due to       Maximize value from assets.
             pending or actual default or
             equivalent. May experience partial
             and/or full loss.


The following table shows the credit rankings for the portfolio companies that
had outstanding debt obligations to us as of June 30, 2020 and December 31,
2019:
                                              June 30, 2020                                    December 31, 2019
                                                Percentage of      Number of                       Percentage of      Number of
Credit Category                                   Total Debt       Portfolio                         Total Debt       Portfolio
(dollars in thousands)         Fair Value        Investments       Companies      Fair Value        Investments       Companies
Clear (1)                    $    116,596            17.9 %                 7   $    121,866            20.2 %                 8
White (2)                         415,232            63.6                  24        425,016            70.3                  23
Yellow (3)                        104,205            16.0                   4         31,103             5.1                   3
Orange (4)                         15,000             2.3                   1         22,956             3.8                   1
Red (5)                             1,500             0.2                   1          3,577             0.6                   3
                             $    652,533           100.0 %                37   $    604,518           100.0 %                38


As of June 30, 2020 and December 31, 2019, the weighted average investment
ranking of our debt investment portfolio was 2.03 and 1.94, respectively. During
the three months ended June 30, 2020, portfolio company credit category changes,
excluding fundings and repayments, consisted of the following: one portfolio
company with an aggregate principal balance of $15.0 million was upgraded from
White (2) to Clear (1); one portfolio company with an aggregate principal
balance of $10.0 million was upgraded from Yellow (3) to White (2); one
portfolio company with an aggregate principal balance of $21.6 million was
downgraded from White (2) to Yellow (3); and two portfolio companies with an
aggregate principal balance of $17.0 million were removed from Red (5) as a
result of the finalization of asset sales.

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Results of Operations
Comparison of operating results for the three and six months ended June 30, 2020
and 2019
An important measure of our financial performance is net increase (decrease) in
net assets resulting from operations, which includes net investment income
(loss), net realized gains (losses) and net unrealized gains (losses). Net
investment income (loss) is the difference between our income from interest,
dividends, fees and other investment income and our operating expenses including
interest on borrowed funds. Net realized gains (losses) on investments is the
difference between the proceeds received from dispositions of portfolio
investments and their amortized cost. Net unrealized gains (losses) on
investments is the net change in the fair value of our investment portfolio.
For the three months ended June 30, 2020, our net increase in net assets
resulting from operations was $21.2 million, which was comprised of $11.5
million of net investment income and $9.7 million of net realized and unrealized
gains. For the three months ended June 30, 2019, our net increase in net assets
resulting from operations was $23.9 million, which was comprised of $10.1
million of net investment income and $13.7 million of net realized and
unrealized gains. On a per share basis for the three months ended June 30, 2020,
net investment income was $0.38 per share and the net increase in net assets
from operations was $0.69 per share, as compared to net investment income of
$0.41 per share and a net increase in net assets from operations of $0.96 per
share for the three months ended June 30, 2019.
For the six months ended June 30, 2020, our net increase in net assets resulting
from operations was $16.1 million, which was comprised of $23.8 million of net
investment income and $7.7 million of net realized and unrealized losses. For
the six months ended June 30, 2019, our net increase in net assets resulting
from operations was $34.9 million, which was comprised of $20.0 million of net
investment income and $14.9 million of net realized and unrealized gains. On a
per share basis for the six months ended June 30, 2020, net investment income
was $0.78 per share and the net increase in net assets from operations was $0.53
per share, as compared to net investment income of $0.81 per share and a net
increase in net assets from operations of $1.41 per share for the six months
ended June 30, 2019.
Investment Income
Total investment and other income for the three months ended June 30, 2020 was
$23.8 million as compared to $18.9 million for the three months ended June 30,
2019. The increase in total investment and other income for the three months
ended June 30, 2020, compared to the comparable period of 2019, is primarily due
to higher weighted average principal outstanding on our income-bearing debt
investment portfolio, partially offset by a lower effective yield due to lower
prepayment activity and a decrease in the Prime Rate.
Total investment income for the six months ended June 30, 2020 was $44.6 million
as compared to $36.4 million for the six months ended June 30, 2019. The
increase in total investment income for the six months ended June 30, 2020,
compared to the comparable period of 2019, is primarily due to higher weighted
average principal outstanding on our income-bearing debt investment portfolio,
partially offset by a lower effective yield due to lower prepayment activity and
a decrease in the Prime Rate.
For the three months ended June 30, 2020, we recognized $0.5 million in other
income, consisting of $0.1 million due to the termination or expiration of
unfunded commitments and $0.4 million from the realization of certain fees paid
by portfolio companies and other income related to prepayment activity. For the
three months ended June 30, 2019, we recognized $1.0 million in other income,
primarily consisting of $0.9 million from amortization of certain fees paid by
portfolio companies and other income.
For the six months ended June 30, 2020, we recognized $1.1 million in other
income, consisting of $0.7 million due to the termination or expiration of
unfunded commitments and $0.4 million from the realization of certain fees paid
by portfolio companies and other income related to prepayment activity. For the
six months ended June 30, 2019, we recognized $1.4 million in other income,
consisting of $0.3 million from the termination or expiration of unfunded
commitments and $1.1 million from amortization of certain fees paid by portfolio
companies and other income.
Operating Expenses
Total operating expenses consist of base management fee, income incentive fee,
capital gains incentive fee, interest expense and amortization of fees,
administration agreement expenses, and general and administrative expenses. In
determining the base management fee, our Adviser has agreed to exclude U.S.
Treasury bill assets acquired at the end of each applicable quarter from the
calculation of the gross assets. We anticipate operating expenses will increase
over time as our portfolio continues to grow. However, we anticipate operating
expenses, as a percentage of totals assets and net assets, will generally
decrease over time as our portfolio and capital base expand. We expect base
management and income incentive fees will increase as we grow our asset base and
our earnings. The capital gains incentive fee will depend on realized and
unrealized gains and losses. Interest expenses will generally increase as we
utilize more of the Credit Facility and issue additional debt securities, and we
generally expect expenses under the administration agreement and general and
administrative expenses to increase over time to meet the additional
requirements associated with servicing a larger portfolio.
Total operating expenses for the three months ended June 30, 2020 were $12.3
million as compared to $8.8 million for the three months ended June 30, 2019.
Total operating expenses for the six months ended June 30, 2020 were $20.9
million as compared to $16.4 million for the six months ended June 30, 2019.
Base management fees totaled $3.2 million and $2.1 million for the three months
ended June 30, 2020 and 2019, respectively, and $6.0 million and $3.8 million
for the six months ended June 30, 2020 and 2019, respectively. Base management
fees for the three and six months ended June 30, 2020, as compared to the three
and six months ended June 30, 2019, increased primarily due to an increase in
the average size of our portfolio between periods.

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Income incentive fees totaled $2.9 million and $2.5 million for the three months
ended June 30, 2020 and 2019, respectively, and $2.9 million and $5.0 million
for the six months ended June 30, 2020 and 2019, respectively. For the six
months ended June 30, 2020, our income incentive fee was reduced by $2.4 million
due to the total return requirement under the income component of our incentive
fee structure, which resulted in a corresponding increase of $2.4 million in net
investment income.
There was no capital gains incentive fee expense calculated for the three and
six months ended June 30, 2020 and 2019.
Interest expense and fees on our borrowings for the three months ended June 30,
2020 and 2019 totaled $4.3 million and $3.0 million, respectively, and $8.5
million and $5.2 million for the six months ended June 30, 2020 and 2019,
respectively. Interest expense and fees for the three months ended June 30,
2020, as compared to the three months ended June 30, 2019 increased due to a
higher weighted average outstanding principal balance on borrowings, as well as
the issuance of the 2025 Notes, offset by a decrease in interest rates. Interest
expense and fees for the six months ended June 30, 2020, as compared to the six
months ended June 30, 2019 increased due to a higher weighted average
outstanding principal balance on borrowings, as well as the issuance of the 2025
Notes, offset by a decrease in interest rates.
Administration agreement and general and administrative expenses totaled $1.8
million and $1.2 million for the three months ended June 30, 2020 and 2019,
respectively, and $3.5 million and $2.3 million for the six months ended June
30, 2020 and 2019, respectively. The increase for the three and six months ended
June 30, 2020, as compared to the three and six months ended June 30, 2019, was
primarily due to higher overhead allocation between periods and increased use of
professional services.
Net Realized Gains and Losses and Net Unrealized Gains and Losses
Realized gains and losses are included in net realized gains (losses) on
investments in the consolidated statements of operations.
During the three months ended June 30, 2020, we recognized net realized gains on
investments of $0.8 million, consisting of $19.4 million of realized gains from
the sale of publicly traded shares held in CrowdStrike, Inc. offset by $18.0 of
realized losses from the finalization of asset sales and removal of two
obligors, Cambridge Broadband Network Limited and Harvest Power, Inc., rated Red
(5) on our credit watch list, and $0.6 million of other net realized losses.
During the three months ended June 30, 2019, we recognized net realized losses
on investments of approximately $17,000, as a result of changes in foreign
currency between the time of investment and liquidation.
During the six months ended June 30, 2020, we recognized net realized gains on
investments of $0.5 million, consisting of $19.4 million of realized gains from
the sale of publicly traded shares held in CrowdStrike, Inc. offset by $18.0 of
realized losses from the finalization of asset sales and removal of two
obligors, Cambridge Broadband Network Limited and Harvest Power, Inc., rated Red
(5) on our credit watch list, and $0.9 million of other net realized losses.
During the six months ended June 30, 2019, we recognized net realized losses on
investments of approximately $46,000, as a result of changes in foreign currency
between the time of investment and liquidation.
Unrealized gains and losses are included in net change in unrealized gains
(losses) on investments in the consolidated statements of operations.
Net change in unrealized gains during the three months ended June 30, 2020 was
$8.9 million, resulting from the reversal of $18.0 million of previously
recorded unrealized losses from the finalization of asset sales and removal of
two obligors rated Red (5) on our credit watch list and by $2.5 million of net
unrealized gains from mark-to-market related changes and credit-related
adjustments, partially offset by the reversal of $11.6 million of previously
recorded unrealized gains associated with the shares of CrowdStrike, Inc. sold
during the quarter. Net change in unrealized gains during the three months ended
June 30, 2019 was $13.8 million, which primarily consisted of net unrealized
gains of $14.0 million on the investment portfolio related to mark to market
activity attributed to one portfolio company, following its initial public
offering, offset by net unrealized losses of $0.3 million as a result of changes
in funds held in foreign currency for investment and a decline in the price of
our equity in one portfolio company.
Net change in unrealized losses during the six months ended June 30, 2020 was
$8.1 million, resulting primarily from valuation adjustments related to market
yields and credit-related adjustments, the reversal of $11.6 million of
previously recorded unrealized gains associated with the shares of CrowdStrike,
Inc. sold during the quarter, partially offset by the reversal of $18.0 million
of previously recorded unrealized losses from the finalization of asset sales
and removal of two obligors rated Red (5) on our credit watch list. Net change
in unrealized gains during the six months ended June 30, 2019 was $14.9 million,
which consisted of $17.1 million of net unrealized gains on the investment
portfolio related to valuation adjustments primarily from our investment in one
portfolio company following its initial public offering, as well as appreciation
in our investment in another publicly traded portfolio company, offset by the
reversal and recognition of previously recorded net unrealized gains of $1.9
million into income or realized gains due to the disposition of five portfolio
companies and net unrealized losses of $0.3 million as a result of changes in
funds held in foreign currency for investment.
Net change in realized and unrealized gains or losses in subsequent periods may
be volatile as it depends on changes in the market, changes in the underlying
performance of our portfolio companies and their respective industries, and
other market factors.
Portfolio Yield and Total Return
Investment income includes interest income on our debt investments utilizing the
effective yield method including cash interest income as well as the
amortization of any purchase premium, accretion of purchase discount, original
issue discount, facilities fees, and the amortization and payment of the
end-of-term ("EOT") payments. For the three and six months ended June 30, 2020,
interest income totaled $23.3 million and $43.5 million, respectively,
representing a weighted average annualized portfolio yield on total debt
investments for the period held of 13.7% and 13.2%, respectively. For the three
and six months ended June 30, 2019, interest income totaled $17.9 million, and
$35.0 million, respectively, representing a weighted average annualized
portfolio yield on total debt investments for the period held of 16.5% and
16.4%, respectively.

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We calculate weighted average annualized portfolio yields for periods shown as
the annualized rates of the interest income recognized during the period divided
by the average amortized cost of debt investments in the portfolio during the
period. The weighted average yields reported for these periods are annualized
and reflect the weighted average yields to maturities. Should the portfolio
companies choose to repay their loans earlier, our weighted average yields will
increase for those debt investments affected but may reduce our weighted average
yields on the remaining portfolio in future quarters.
The yield on our total debt portfolio, excluding the impact of prepayments, was
12.7% and 12.7%, respectively, for the three and six months ended June 30, 2020.
The yield on our total debt portfolio, excluding the impact of prepayments, was
13.7% and 13.7%, respectively, for the three and six months ended June 30, 2019.
The following table shows the weighted average annualized portfolio yield on our
total debt portfolio comprising of cash interest income, accretion of the net
purchase discount, facilities fees and the value of warrant investments
received, accretion of EOT payments and the accelerated receipt of EOT payments
on prepayments:

Returns on Net Asset Value and For the Three Months Ended June 30,

       For the Six Months Ended June 30,
Total Assets
Portfolio Yield(1)                           2020                  2019               2020                 2019
Weighted average annualized
portfolio yield on total debt
investments(2)                                 13.7 %                  16.5 %           13.2 %               16.4 %
Coupon income                                  10.1 %                  10.6 %           10.0 %               10.6 %
Accretion of discount                           0.9 %                   0.8 %            1.0 %                0.9 %
Accretion of end-of-term payments               1.7 %                   2.3 %            1.7 %                2.2 %
Impact of prepayments during the
period                                          1.0 %                   2.8 %            0.5 %                2.7 %

Prime Rate at end of period(3)                 3.25 %                  5.50 %           3.25 %               5.50 %


_______________

(1) The yields for periods shown are the annualized rates of interest income

or the components of interest income recognized during the period divided

by the average amortized cost of debt investments in the portfolio during

the period.

(2) The weighted average portfolio yields on total debt investments reflected

above do not represent actual investment returns to our stockholders.




(3)    Included as a reference point for coupon income and weighted average
       portfolio yield.


Our weighted average annualized portfolio yield on debt investments may be
higher than an investor's yield on an investment in shares of our common stock.
Our weighted average annualized portfolio yield on debt investments does not
reflect operating expenses that may be incurred by us. In addition, our weighted
average annualized portfolio yield on debt investments and total return figures
disclosed in this Quarterly Report on Form 10-Q do not consider the effect of
any sales commissions or charges that may be incurred in connection with the
sale of shares of our common stock. Our weighted average annualized portfolio
yield on debt investments and total return based on NAV do not represent actual
investment returns to stockholders. Our weighted average annualized portfolio
yield on debt investments and total return figures are subject to change and, in
the future, may be greater or less than the rates in this Quarterly Report on
Form 10-Q. Total return based on NAV is the change in ending NAV per share plus
distributions per share paid during the period assuming participation in our
dividend reinvestment plan divided by the beginning NAV per share for such
period. Total return based on stock price is the change in the ending stock
price of our common stock plus distributions paid during the period assuming
participation in our dividend reinvestment plan divided by the beginning stock
price of our common stock for such period. The total return is for the period
shown and is not annualized.
For the three and six months ended June 30, 2020, our total return per period
based on the change in NAV plus distributions reinvested as of the distribution
date per share was 6.3% and 8.9%, respectively, and our total return per period
based on the change in stock price plus distributions reinvested as of the
distribution date was 85.7% and (20.3)%, respectively.
For the three and six months ended June 30, 2019, our total return per period
based on the change in NAV plus distributions reinvested as of the distribution
date per share was 10.2% and 10.9%, respectively, and our total return per
period based on the change in stock price plus distributions reinvested as of
the distribution date was 9.1% and 37.9%, respectively.

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The table below shows our return on average total assets and return on average NAV for the three and six months ended June 30, 2020 and 2019:



Returns on Net Asset Value and           For the Three Months Ended June 30,          For the Six Months Ended June 30,
Total Assets
(dollars in thousands)                       2020                   2019                 2020                   2019
Net investment income                 $         11,536       $         10,123     $         23,773       $         20,038
Net increase (decrease) in net
assets                                $         21,222       $         23,861     $         16,104       $         34,930

Average net asset value(1)            $        402,488       $        337,318     $        403,421       $        337,366
Average total assets(1)               $        766,742       $        525,645     $        745,565       $        497,375

Net investment income to average
net asset value(2)                                11.5 %                 12.0 %               11.9 %                 12.0 %
Net increase (decrease) in net
assets to average net asset
value(2)                                          21.2 %                 28.4 %                8.0 %                 20.9 %

Net investment income to average
total assets(2)                                    6.1 %                  7.7 %                6.4 %                  8.1 %
Net increase (decrease) in net
assets to average total assets(2)                 11.1 %                 18.2 %                4.3 %                 14.2 %


_______________

(1) The average net asset values and the average total assets are computed

based on daily balances.

(2) Percentage is presented on an annualized basis.




Critical Accounting Policies
The preparation of our financial statements in accordance with GAAP requires us
to make estimates and assumptions that affect the reported amounts of assets,
liabilities, revenues and expenses. Changes in the economic environment,
financial markets and any other parameters used in determining such estimates
could cause actual results to differ. We consider valuation of investments,
income recognition, realized / unrealized gains or losses and U.S. federal
income taxes to be our critical accounting policies and estimates. These
critical accounting policies and estimates, and any changes thereto, are
discussed under "Note 2. Significant Accounting Policies" and "Note 4.
Investments" in the notes to consolidated financial statements included in our
Annual Report on Form 10-K filed with the SEC on March 4, 2020 and under "Note
4. Investments" in the notes to consolidated financial statements included in
this Quarterly Report on Form 10-Q. Any changes to the policies are disclosed in
the notes to the consolidated financial statements in this Quarterly Report on
Form 10-Q.
Liquidity and Capital Resources
We believe that our current cash and cash equivalents on hand, our available
borrowing capacity under the Credit Facility and our anticipated cash flows from
operations, including from contractual monthly portfolio company payments and
cash flows, prepayments, and the ability to liquidate publicly traded
investments, will be adequate to meet our cash needs for our daily operations.
In addition, we also currently have available up to $25.0 million in commitments
from the Adviser under an unsecured revolving loan agreement (the "Adviser
Revolver"), any advance under which must be approved by the Adviser in advance
in its sole discretion. This "Liquidity and Capital Resources" section should be
read in conjunction with "COVID-19 Developments" above and the disclosure
referenced in "Risk Factors" below in this Quarterly Report on Form 10-Q.
Cash Flows
During the six months ended June 30, 2020, net cash used by operating
activities, consisting primarily of purchases, sales and repayments of
investments and the items described in "Results of Operations," was $25.1
million, and net cash provided by financing activities was $21.6 million due to
net proceeds received from our January 2020 public follow-on offering of common
stock and the issuance of the 2025 Notes in March 2020, partially offset by net
repayments under the Credit Facility of $104.3 million and $21.3 million in
distributions paid. As of June 30, 2020, cash, including restricted cash, was
$23.0 million.
During the six months ended June 30, 2019, net cash used in operating
activities, consisting primarily of purchases, sales and repayments of
investments and the items described in "Results of Operations," was $30.4
million, and net cash provided by financing activities was $44.8 million due to
borrowings under the Credit Facility of $62.8 million, offset by $16.8 million
in distributions paid and costs incurred in connection with the amendment and
renewal of the Credit Facility in May 2019, which are deferred and expensed over
the term of the Credit Facility. As of June 30, 2019, cash, including restricted
cash, was $24.4 million.
Capital Resources and Borrowings
As a BDC, we generally have an ongoing need to raise additional capital for
investment purposes. As a result, we expect, from time to time, to access the
debt and equity markets when we believe it is necessary and appropriate to do
so. In this regard, we continue to explore various options for obtaining
additional debt or equity capital for investments. This may include expanding or
extending the Credit Facility or the issuance of additional shares of our common
stock or debt securities. 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.

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Credit Facility
We have $300 million in total commitments available under the Credit Facility,
subject to various covenants and borrowing base requirements. The Credit
Facility also includes an accordion feature, which allows us to increase the
size of the Credit Facility to up to $400 million. The revolving period under
the Credit Facility expires on May 31, 2021 and the maturity date of the Credit
Facility is November 30, 2022. Borrowings under the Credit Facility bear
interest at the sum of (i) a floating rate based on certain indices, including
LIBOR and commercial paper rates, plus (ii) a margin of 2.80% if facility
utilization is greater than or equal to 75%, 2.90% if utilization is greater
than or equal to 50%, 3.00% if utilization is less than 50% and 4.5% during the
amortization period. See "Note 6. Borrowings" in the notes to consolidated
financial statements for more information regarding the terms of the Credit
Facility.
As of June 30, 2020 and December 31, 2019, we had outstanding borrowings of
$158.0 million and $262.3 million, respectively, under the Credit Facility,
excluding deferred credit facility costs of $1.0 million and $1.6
million, respectively, which is included in the consolidated statements of
assets and liabilities. We had $142.0 million and $37.7 million of remaining
capacity on our Credit Facility as of June 30, 2020 and December 31, 2019,
respectively.
2022 Notes
On July 14, 2017, we completed a public offering of $65.0 million in aggregate
principal amount of the 2022 Notes and received net proceeds of $62.8 million,
after the payment of fees and offering costs. On July 24, 2017, as a result of
the underwriters' full exercise of their option to purchase additional 2022
Notes, we issued an additional $9.75 million in aggregate principal amount of
the 2022 Notes and received net proceeds of $9.5 million, after the payment of
fees and offering costs. The interest on the 2022 Notes, which accrues at an
annual rate of 5.75%, is payable quarterly on January 15, April 15, July 15 and
October 15. The maturity date of the 2022 Notes is July 15, 2022.
As of June 30, 2020 and December 31, 2019, we have recorded in the consolidated
statements of assets and liabilities our liability for the 2022 Notes, net of
deferred issuance costs, of $73.7 million and $73.5 million, respectively. See
"Note 6. Borrowings" in the notes to consolidated financial statements for more
information regarding the 2022 Notes.
2025 Notes
On March 19, 2020, we completed a private offering of $70.0 million in aggregate
principal amount of the 2025 Notes and received net proceeds of $69.1 million,
after the payment of fees and offering costs. The interest on the 2025 Notes,
which accrues at an annual rate of 4.50%, is payable semiannually on March 19
and September 19 each year, beginning on September 19, 2020. The maturity date
of the 2025 Notes is March 19, 2025.
As of June 30, 2020, we have recorded in the consolidated statements of assets
and liabilities our liability for the 2025 Notes, net of deferred issuance
costs, of $69.0 million. See "Note 6. Borrowings" in the notes to consolidated
financial statements for more information regarding the 2025 Notes.
Adviser Revolver
On May 6, 2020, we entered into the Adviser Revolver with the Adviser, which has
a maximum credit limit of $50.0 million, with $25.0 million currently available
and an accordion feature for an additional $25.0 million in commitments from the
Adviser. Any advance of funds under the Adviser Revolver, and any exercise of
the accordion feature, must be approved by the Adviser in advance in its sole
discretion. The Adviser Revolver expires on December 31, 2020, and borrowings
thereunder bear an annual interest rate of 6.0%, payable quarterly. Any of our
obligations under the Adviser Revolver are unsecured and are expressly
subordinated and junior in right of payment to all of our other indebtedness for
borrowed funds. As of June 30, 2020, we had no outstanding borrowings under the
Adviser Revolver.
Asset Coverage Requirements
On June 21, 2018, our stockholders voted at a special meeting of stockholders to
approve a proposal to authorize us to be subject to a reduced asset coverage
ratio of at least 150% under the 1940 Act. As a result of the stockholder
approval at the special meeting, effective June 22, 2018, our applicable minimum
asset coverage ratio under the 1940 Act has been decreased to 150% from 200%.
Thus, we are permitted under the 1940 Act, under specified conditions, to issue
multiple classes of debt 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. As of June 30, 2020, our asset coverage
for borrowed amounts was 234%.
Contractual Obligations
The following table shows a summary of our payment obligations for repayment of
debt as of June 30, 2020:
                                                              June 30, 2020
Payments Due By Period                     Less than 1
(in thousands)                Total           year          1-3 years       3-5 years       More than 5 years
Credit Facility            $  158,000     $         -     $   158,000     $         -     $                 -
2022 Notes                     74,750               -          74,750               -                       -
2025 Notes                     70,000               -               -          70,000                       -
Total                      $  302,750     $         -     $   232,750     $    70,000     $                 -



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Off-Balance Sheet Arrangements
Commitments
We are a party to financial instruments with off-balance sheet risk in the
normal course of business to meet the financial needs of our portfolio
companies. As of June 30, 2020 and December 31, 2019, our unfunded commitments
totaled $180.4 million to 14 portfolio companies and $226.1 million to 16
portfolio companies, respectively, of which $33.3 million and $59.3 million,
respectively, was dependent upon the portfolio companies reaching certain
milestones before the debt commitment becomes available to them. Our credit
agreements contain customary lending provisions that allow us relief from
funding obligations for previously made commitments in instances where the
underlying portfolio company experiences material adverse events that affect the
financial condition or business outlook for the portfolio company.
The following table shows our unfunded commitments by portfolio company as of
June 30, 2020 and 2019:
Unfunded Commitments(1)
(in thousands)                     June 30, 2020      December 31, 2019
BlueVine Capital, Inc.            $        30,000    $            30,000
Capsule Corp.                              30,000                 10,000
Cohesity, Inc.                             30,000                      -
Hims, Inc.                                 25,000                 25,000
Freshly Inc.                               15,000                 18,000
OfferUp Inc.                               10,000                 20,000
Transfix, Inc.                             10,000                 10,000
Curology, Inc.                              9,000                 15,000
Grove Collaborative, Inc.                   5,333                 21,750
Pencil and Pixel, Inc.                      5,000                      -
Signifyd, Inc.                              4,000                 10,000
Farmer's Business Network, Inc.             3,034                      -
Sonder USA, Inc.                            3,000                  8,333
Mind Candy Limited                          1,000                      -
Toast, Inc.                                     -                 35,000
Moda Operandi, Inc.                             -                 10,000
Nurx Inc.                                       -                  5,000
OneSource Virtual, Inc.                         -                  5,000
Brooklinen, Inc.                                -                  3,000
Total                             $       180,367    $           226,083


_____________

(1) Does not include backlog of potential future commitments. Refer to

"Investment Activity" above.

Distributions


We have elected to be treated, and intend to qualify annually, as a RIC under
the Code. To obtain and maintain RIC tax treatment, we must distribute at least
90% of our net ordinary income and net realized short-term capital gains in
excess of our net realized long-term capital losses, if any, to our
stockholders. In order to avoid a non-deductible 4% U.S. federal excise tax on
certain of our undistributed income, we would need to distribute during each
calendar year an amount at least equal to the sum of: (a) 98% of our ordinary
income (not taking into account any capital gains or losses) for such calendar
year; (b) 98.2% of the amount by which our capital gains exceed our capital
losses (adjusted for certain ordinary losses) for a one-year period ending on
October 31 of the calendar year (unless an election is made by us to use our
taxable year); and (c) certain undistributed amounts from previous years on
which we paid no U.S. federal income tax. For the tax years ended December 31,
2019 and 2018, we were subject to a 4% U.S. federal excise tax and we may be
subject to this tax in future years. In such cases, we will be liable for the
tax only on the amount by which we do not meet the foregoing distribution
requirement.
To the extent our taxable earnings fall below the total amount of our
distributions for the year, a portion of those distributions may be deemed a
return of capital to our stockholders. Our Adviser monitors available taxable
earnings, including net investment income and realized capital gains, to
determine if a return of capital may occur for the year. The tax character of
distributions will be determined at the end of the taxable year. Stockholders
should read any written disclosure accompanying a dividend payment carefully and
should not assume that the source of any distribution is our taxable ordinary
income or capital gains. The specific tax characteristics of our distributions
will be reported to stockholders after the end of the taxable year.
The following table shows our cash distributions per share that have been
authorized by our Board since our initial public offering to June 30, 2020. From
March 5, 2014 (commencement of operations) to December 31, 2015, and during the
years ended December 31, 2017 and December 31, 2018, distributions represent
ordinary income as our earnings exceeded distributions. Approximately $0.24 per
share of the distributions during the year ended December 31, 2016 represented a
return of capital. During the year ended December 31, 2019, distributions
represent ordinary income and long term capital gains. Depending on the duration
of the COVID-19 pandemic and the extent of its impact on our portfolio
companies' operations and our net investment income, any future distributions to
our stockholders may be for amounts less than our

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historical distributions, may be made less frequently than historical practices,
and may be made in part cash and part stock (as per each stockholder's
election), subject to a limitation that the aggregate amount of cash to be
distributed to all stockholders must be at least 10% of the aggregate declared
distribution for distributions declared on or before December 31, 2020, and at
least 20% of the aggregate declared distribution for distributions declared on
or after January 1, 2021.
Period Ended      Date Announced        Record Date         Payment Date         Per Share Amount
March 31, 2014     April 3, 2014      April 15, 2014       April 30, 2014     $           0.09   (1)

June 30, 2014 May 13, 2014 May 30, 2014 June 17, 2014

               0.30
September 30,
2014              August 11, 2014     August 29, 2014    September 16, 2014               0.32
December 31,
2014             October 27, 2014    November 28, 2014   December 16, 2014                0.36
December 31,
2014             December 3, 2014    December 22, 2014   December 31, 2014                0.15   (2)

March 31, 2015 March 16, 2015 March 26, 2015 April 16, 2015

               0.36

June 30, 2015 May 6, 2015 May 29, 2015 June 16, 2015

               0.36
September 30,
2015              August 11, 2015     August 31, 2015    September 16, 2015               0.36
December 31,
2015             November 10, 2015   November 30, 2015   December 16, 2015                0.36

March 31, 2016 March 14, 2016 March 31, 2016 April 15, 2016

               0.36

June 30, 2016 May 9, 2016 May 31, 2016 June 16, 2016

               0.36
September 30,
2016              August 8, 2016      August 31, 2016    September 16, 2016               0.36
December 31,
2016             November 7, 2016    November 30, 2016   December 16, 2016                0.36

March 31, 2017 March 13, 2017 March 31, 2017 April 17, 2017

               0.36

June 30, 2017 May 9, 2017 May 31, 2017 June 16, 2017

               0.36
September 30,
2017              August 8, 2017      August 31, 2017    September 15, 2017               0.36
December 31,
2017             November 6, 2017    November 17, 2017    December 1, 2017                0.36

March 31, 2018 March 12, 2018 March 23, 2018 April 6, 2018

               0.36

June 30, 2018 May 2, 2018 May 31, 2018 June 15, 2018

               0.36
September 30,
2018              August 1, 2018      August 31, 2018    September 14, 2018               0.36
December 31,
2018             October 31, 2018    November 30, 2018   December 14, 2018                0.36
December 31,
2018             December 6, 2018    December 20, 2018   December 28, 2018                0.10   (2)

March 31, 2019 March 1, 2019 March 20, 2019 March 29, 2019

               0.36

June 30, 2019 May 1, 2019 May 31, 2019 June 14, 2019

               0.36
September 30,
2019               July 31, 2019      August 30, 2019    September 16, 2019               0.36
December 31,
2019             October 30, 2019    November 29, 2019   December 16, 2019                0.36

March 31, 2020 February 28, 2020 March 16, 2020 March 30, 2020

               0.36

June 30, 2020 April 30, 2020 June 16, 2020 June 30, 2020

              0.36
Total cash
distributions                                                                 $           9.24


_____________

(1) The amount of this initial distribution reflected a quarterly distribution

rate of $0.30 per share, prorated for the 27 days for the period from the

pricing of our initial public offering on March 5, 2014 (commencement of

operations), through March 31, 2014.

(2) Represents a special distribution.




For the three and six months ended June 30, 2020 and for the year ended
December 31, 2019, distributions paid were comprised of interest-sourced
distributions (qualified interest income) in amounts equal to 100.0%, 100.0% and
98.8% of total distributions paid, respectively. As of June 30, 2020, we had
estimated Spillover Income of $8.9 million, or $0.29 per share.
Recent Accounting Pronouncements
In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic
820): Disclosure Framework - Changes to Disclosure Requirements for Fair Value
Measurement", which is intended to improve the effectiveness of fair value
measurement disclosures. The amendment, among other things, affects certain
disclosure requirements related to transfers between Level 1 and Level 2 of the
fair value hierarchy, and Level 3 fair value measurements as they relate to
valuation process, unrealized gains and losses, measurement uncertainty, and
significant unobservable inputs. The new guidance is effective for interim and
annual periods beginning after December 15, 2019. Early adoption is permitted
for any interim or annual period. The adoption of these rules did not have a
material impact on the consolidated financial statements and disclosures.
In August 2018, the SEC adopted rules (the "SEC Release") amending certain
disclosure requirements intended to eliminate redundant, duplicative,
overlapping, outdated or superseded, in light of other SEC disclosure
requirements, U.S. GAAP requirements or changes in the information environment.
In part, the SEC Release requires an investment company to present distributable
earnings in total on the consolidated balance sheet and consolidated statement
of changes in net assets, rather than showing the three components of
distributable earnings as previously shown. We adopted this part of the SEC
Release during the year ended December 31, 2018. The impact of the adoption of
these rules on our consolidated financial statements was not material.
Additionally, the SEC Release requires disclosure of changes in net assets
within a registrant's

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Form 10-Q filing on a quarter-to-date and year-to-date basis for both the
current year and prior year comparative periods. We adopted the new requirement
to present changes in net assets in interim financial statements within Form
10-Q filings effective January 1, 2019. The adoption of these rules did not have
a material impact on the consolidated financial statements.
Recent Developments
Dividends
On July 30, 2020, the Board declared a $0.36 per share regular quarterly
distribution, payable on September 15, 2020 to stockholders of record on August
31, 2020.
Recent Portfolio Activity
From July 1, 2020 through August 4, 2020, we closed $22.0 million of additional
debt commitments and funded $3.9 million in new investments. TPC's direct
originations platform entered into $43.2 million of additional non-binding
signed term sheets with venture growth stage companies, subject to due
diligence, definitive documentation and investment committee approval, as well
as compliance with TPC's allocation policy. From July 1, 2020 through August 4,
2020, we received $29.1 million of principal prepayments generating
approximately $1.0 million of prepayment fees and interest income.
Item 3. Quantitative and Qualitative Disclosures about Market Risk


We are subject to financial market risks, including changes in interest rates.
We are also subject to risks relating to the capital markets; conditions
affecting the general economy; legislative reform; and local, regional, national
or global political, social or economic instability. U.S. and global capital
markets and credit markets have experienced a higher level of stress due to the
global COVID-19 pandemic, which has resulted in an increase in the level of
volatility across such markets and in values of publicly-traded securities. Any
continuation of the stresses on capital markets and credit markets, or a further
increase in volatility could result in a contraction of available credit for us
and/or an inability by us to access the equity or debt capital markets or could
otherwise cause an inability or unwillingness of our lenders to fund their
commitments to us, any of which may have a material adverse effect on our
results of operations and financial condition.
Interest Rate Risk
Interest rate sensitivity refers to the change in our earnings and in the
relative values of our portfolio 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 is 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 change in market interest rates will not have a material
adverse effect on our net investment income.
Changes in interest rates may affect both our cost of funding and our interest
income from portfolio investments. Our risk management systems and procedures
are designed to identify and analyze our risk, to set appropriate policies and
limits and to continually monitor these risks. Our investment income will be
affected by changes in various interest rates, including LIBOR and Prime Rates,
to the extent that any debt investments include floating interest rates. Debt
investments are made with either floating rates that are subject to contractual
minimum interest rates for the term of the investment or fixed interest rates.
In connection with the COVID-19 pandemic, the U.S. Federal Reserve and other
central banks have reduced certain interest rates and LIBOR has decreased. A
prolonged reduction in interest rates could reduce our gross investment income
and could result in a decrease in our net investment income if such decreases in
interest rates are not offset by a corresponding increase in the spread over
Prime that we earn on any portfolio investments, a decrease in our operating
expenses or a decrease in the interest rate of our floating interest rate
liabilities tied to LIBOR. For example, the weighted-average annualized
portfolio yield on our total debt investments decreased for the three- and
six-month periods ended June 30, 2020 as compared to the comparable 2019 periods
in part due to a decrease in the Prime Rate between periods.
As of June 30, 2020, a majority of the debt investments (approximately 69.7% or
$469.6 million in principal balance) in our portfolio bore interest at floating
rates, which generally are Prime-based, all of which have interest rate floors
and some of which have interest rate caps for a limited period. Substantially
all of our unfunded commitments float with changes in the Prime Rate from the
date we enter into the commitment to the date of the actual draw. In addition,
our interest expense will be affected by changes in the published LIBOR rate in
connection with our Credit Facility; however, our 2022 Notes bear interest at a
fixed rate. In addition, our 2025 Notes bear interest at a fixed rate (subject
to a 1.00% increase in the fixed rate in the event that a Below Investment Grade
Event (as defined in the Note Purchase Agreement) occurs).
As of June 30, 2020, our floating rate borrowings totaled $158.0 million, which
comprised of 52.2% of our outstanding debt. Due to the fact that the majority of
our floating rate debt investment portfolio is subject to interest-rate floors
above the current Prime Rate, small interest rate increases would generally
decrease our net investment income because our interest expense would increase
without a corresponding increase the spread over LIBOR or the Prime Rate that we
earn on any portfolio investments; however, a decrease in interest rates would
generally increase our net investment income because our interest expense
attributable to borrowings under the Credit Facility would decrease. This is
illustrated in the following table which shows the annual impact on net
investment income of base rate changes in interest rates (considering interest
rate floors for variable rate instruments) assuming no changes in our investment
and borrowing structure from the June 30, 2020 consolidated statement of assets
and liabilities:

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Change in Interest Rates                    Increase (decrease)    (Increase) decrease in   Net increase (decrease)
(in thousands)                               in interest income       interest expense      in net investment income
Up 300 basis points                         $            5,565     $         (4,740 )       $             825
Up 200 basis points                         $            1,196     $         (3,160 )       $          (1,964 )
Up 100 basis points                         $               76     $         (1,580 )       $          (1,504 )
Up 50 basis points                          $               19     $           (790 )       $            (771 )
Down 50 basis points                        $                -     $            292         $             292
Down 100 basis points                       $                -     $            292         $             292
Down 200 basis points                       $                -     $            292         $             292
Down 300 basis points                       $                -     $            292         $             292


This analysis is indicative of the potential impact on our investment income as
of June 30, 2020, assuming an immediate and sustained change in interest rates
as noted. It should be noted that we anticipate growth in our portfolio funded
in part with additional borrowings and such additional borrowings, all else
being equal, will increase our investment income sensitivity to interest rates,
and such changes could be material. In addition, this analysis does not adjust
for potential changes in our portfolio or our borrowing facilities nor does it
take into account any changes in the credit performance of our loans that might
occur should interest rates change.
Because it is our intention to hold loans to maturity, the fluctuating relative
value of these loans that may occur due to changes in interest rate may have an
impact on unrealized gains and losses during quarterly reporting periods. Based
on our assessment of the interest rate risk, as of June 30, 2020, we had no
hedging transactions in place as we deemed the risk acceptable, and we did not
believe it was necessary to mitigate this risk at that time.
While hedging activities may mitigate our exposure to adverse fluctuations in
interest rates, certain hedging transactions that we may enter into in the
future, such as interest rate swap agreements, may also limit our ability to
participate in the benefits of lower interest rates with respect to our
portfolio investments. In addition, there can be no assurance that we will be
able to effectively hedge our interest rate risk.
Substantially all of our assets and liabilities are financial in nature. As a
result, changes in interest rates and other factors drive our performance more
directly than does inflation. Changes in interest rates do not necessarily
correlate with inflation rates or changes in inflation rates.
Item 4. Controls and Procedures


(a) Evaluation of Disclosure Controls and Procedures
As of June 30, 2020 (the end of the period covered by this report), we,
including our Chief Executive Officer and Chief Financial Officer, evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934,
as amended). Based on that evaluation, our management, including the Chief
Executive Officer and Chief Financial Officer, concluded that our disclosure
controls and procedures were effective and provided reasonable assurance that
information required to be disclosed in our periodic SEC filings is recorded,
processed, summarized and reported within the time periods specified in the
SEC's rules and forms, and that such information is accumulated and communicated
to our management, including our Chief Executive Officer and Chief Financial
Officer, as appropriate, to allow timely decisions regarding required
disclosure. However, in evaluating the disclosure controls and procedures,
management recognizes that any controls and procedures, no matter how well
designed and operated can provide only reasonable assurance of achieving the
desired control objectives, and management necessarily is required to apply its
judgment in evaluating the cost-benefit relationship of such possible controls
and procedures.
(a) Changes in Internal Controls Over Financial Reporting
Management has not identified any change in the Company's internal control over
financial reporting that occurred during the quarter ended June 30, 2020 that
has materially affected, or is reasonably likely to materially affect, the
Company's internal control over financial reporting.

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