N-2 1 file001.htm FORM N-2

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 21, 2004
SECURITIES ACT FILE NO. 333-
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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549
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FORM N-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
(CHECK APPROPRIATE BOX OR BOXES)

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PRE-EFFECTIVE AMENDMENT NO. __ [ ]
POST-EFFECTIVE AMENDMENT NO. __ [ ]

TECHNOLOGY INVESTMENT CAPITAL CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

8 SOUND SHORE DRIVE, SUITE 255
GREENWICH, CT 06830
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (203) 983-5275

JONATHAN H. COHEN
CHIEF EXECUTIVE OFFICER
TECHNOLOGY INVESTMENT CAPITAL CORP.
8 SOUND SHORE DRIVE, SUITE 255
GREENWICH, CT 06830

(NAME AND ADDRESS OF AGENT FOR SERVICE)

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COPIES TO:

STEVEN B. BOEHM LEONARD B. MACKEY, JR.
CYNTHIA M. KRUS JAY L. BERNSTEIN
SUTHERLAND ASBILL & BRENNAN LLP CLIFFORD CHANCE US LLP
1275 PENNSYLVANIA AVENUE, N.W. 31 WEST 52ND STREET
WASHINGTON, DC 20004 NEW YORK, NEW YORK 10019

APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
As soon as practicable after the Registration Statement becomes effective.

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If any securities being registered on this form will be offered on a delayed or
continuous basis in reliance on Rule 415 under the Securities Act of 1933, other
than securities offered in connection with a dividend reinvestment plan, check
the following box. [ ]

It is proposed that this filing will become effective (check appropriate box):

[ ] when declared effective pursuant to Section 8(c)

CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
================================================================================
PROPOSED MAXIMUM
TITLE OF SECURITIES AGGREGATE OFFERING AMOUNT OF
BEING REGISTERED PRICE(2) REGISTRATION FEE
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Rights to Purchase Common Stock (1) $0 $0
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Common Stock, $0.01 par value per share $55,000,000 $6,969
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(1) Evidencing the rights to subscribe for shares of common stock of the
Registrant being registered herewith. Pursuant to Rule 457(g) of the
Securities Act of 1933, no separate registration fee is required for
the rights because the rights are being registered in the same
registration statement as the common stock of the Registrant
underlying the rights.

(2) Calculated in accordance with Rule 457(o) of the Securities Act of
1933 based on the estimated maximum aggregate offering price of the
common stock of the Registrant.

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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

PROSPECTUS
Subject to completion , 2004
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Shares of Common Stock
Issuable Upon Exercise of Rights to
Subscribe for Such Shares

Technology Investment Capital Corp.
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Technology Investment Capital Corp. is issuing transferable rights to its
stockholders of record as of the close of business on , 2004 entitling
the holders of these rights to subscribe for an aggregate of shares of
our common stock. Record date stockholders will receive one right for each
outstanding share owned on the record date. The rights entitle the holders to
purchase one new share of common stock for every rights held, and record
date stockholders who fully exercise their rights will be entitled to
subscribe, subject to certain limitations and subject to allotment, for
additional shares represented by any unexercised rights. Our common stock is
listed on the Nasdaq National Market under the symbol "TICC." The rights are
transferable and will be listed for trading on the Nasdaq National Market under
the symbol " " during the course of this offer. See "The offer" for a
complete discussion of the terms of this offer. The subscription price will be
% of the average of the last reported sale prices of a share of our common
stock on the Nasdaq National Market on the date on which the offer expires and
the four preceding trading days. The offer will expire at 5:00 p.m., New York
City time, on , 2004, unless extended as described herein.

The net asset value per share of our common stock at June 30, 2004 (the last
date prior to the date of this prospectus on which we determined net asset
value) was $13.61. On October 20, 2004, the last reported sale price of a share
of our common stock on the Nasdaq National Market was $14.68.

We are a closed-end, non-diversified investment company that has elected to be
regulated as a business development company under the Investment Company Act of
1940. We are principally engaged in providing capital to small to mid-size
technology-related companies. While the structures of our financings vary, we
look to invest primarily in the non-public debt and equity of established
technology-related businesses.

SEE "RISK FACTORS" ON PAGE 9 TO READ ABOUT FACTORS YOU SHOULD CONSIDER BEFORE
EXERCISING ANY RIGHTS TO SUBSCRIBE FOR SHARES OF OUR COMMON STOCK.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES, OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

Please read this prospectus before investing and keep it for future reference.
It contains important information about us that a prospective investor ought to
know before investing in our common stock. We have filed additional information
about us with the Securities and Exchange Commission (http://www.sec.gov), which
is available free of charge by contacting Technology Investment Capital Corp. at
8 Sound Shore Drive, Suite 255, Greenwich, CT 06830 or by telephone at (203)
983-5275.

PER SHARE TOTAL(4)
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Estimated subscription price (1) $ $
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Estimated sales load (1)(2) $ $
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Proceeds, before expenses, to us (1)(3) $ $
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(1) Estimated on the basis of % of the market price per share at the close of
trading on , 2004. See "The offer -- The subscription price."

(2) In connection with the offer, UBS Securities LLC, the dealer manager for
this offer, will receive a fee for its financial advisory, marketing and
soliciting services equal to % of the subscription price per share for
each share issued pursuant to the exercise of rights and the
over-subscription privilege. The dealer manager will reallow a part of
its fees to other broker-dealers which have assisted in soliciting the
exercise of rights. We have also agreed to reimburse the dealer manager up
to $ for its partial expenses incurred in connection with the offer.
In addition, we have agreed to indemnify the dealer manager against certain
liabilities under the Securities Act of 1933.

(3) Before deduction of offering expenses incurred by us, estimated to be
$ , including an aggregate of up to $ to be paid to the dealer
manager as partial reimbursement for its expenses.

(4) Assumes all rights are exercised at the estimated subscription price.

As a result of the terms of this offer, stockholders who do not fully exercise
their rights will own, upon completion of this offer, a smaller proportional
interest in us than they owned prior to the offer. In addition, because the
subscription price per share may be less than the net asset value per share, the
offer may result in an immediate dilution of net asset value per share for all
of our stockholders. Such dilution is not currently determinable because it is
not known how many shares will be subscribed for, what the net asset value or
market price of our common stock will be on the expiration date for the offer or
what the subscription price will be. If the subscription price per share is
substantially less than the current net asset value per share, such dilution
could be substantial. Any such dilution will disproportionately affect
nonexercising stockholders. If the subscription price is less than our net asset
value share, then all stockholders will experience a decrease in the net asset
value per share held by them, irrespective of whether they exercise all or any
portion of their rights. See "Risk factors -- Risks Related to this Offering --
Your interest in us may be diluted." in this prospectus.

If you have any questions or need further information about this rights
offering, please call , our information agent for the rights
offering, at .

UBS Investment Bank

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NO DEALER, SALESPERSON OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR
TO REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS. YOU MUST NOT RELY ON ANY
UNAUTHORIZED INFORMATION OR REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS AS
IF WE HAD AUTHORIZED IT. WE ARE OFFERING TO SELL, AND SEEKING OFFERS TO BUY,
SHARES OF COMMON STOCK ONLY IN JURISDICTIONS WHERE OFFERS AND SALES ARE
PERMITTED. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE ONLY AS OF
THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE TIME OF DELIVERY OF THIS
PROSPECTUS OR ANY SALE OF COMMON STOCK.

TABLE OF CONTENTS
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Prospectus summary ........................................................ 1
Fees and expenses ......................................................... 5
Selected financial and other data ......................................... 7
Selected quarterly financial data ......................................... 8
Risk factors .............................................................. 9
The offer ................................................................. 18
Use of proceeds ........................................................... 27
Price range of common stock and distributions ............................. 28
Management's discussion and analysis of financial condition and
results of operations .................................................. 30
Business .................................................................. 35
Portfolio companies ....................................................... 42
Determination of net asset value .......................................... 44
Management ................................................................ 45
Certain U.S. federal income tax considerations ............................ 55
Regulation as a business development company .............................. 59
Dividend reinvestment plan ................................................ 64
Control persons and principal holders of securities ....................... 65
Certain relationships and transactions .................................... 66
Description of capital stock .............................................. 66
Legal matters ............................................................. 72
Custodian, transfer and dividend paying agent and registrar ............... 72
Independent registered public accounting firm ............................. 72
Brokerage allocation and other practices .................................. 72
Index to financial statements ............................................. F-1

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PROSPECTUS SUMMARY

The following summary is qualified in its entirety by reference to the more
detailed information and financial statements appearing elsewhere in this
prospectus. It may not contain all of the information that is important to each
stockholder. Accordingly, to understand the offer fully, stockholders are
encouraged to read the entire document carefully. Except where the context
requires otherwise, the terms "TICC," "we," "us" and "our" refer to Technology
Investment Capital Corp.; "TIM" and "investment adviser" refers to Technology
Investment Management, LLC; and "BDC Partners" refers to BDC Partners, LLC.

THE RIGHTS OFFERING

THE OFFER

We are issuing to stockholders of record on , 2004, the
record date, one transferable right for each share of our common stock held.
Each stockholder on the record date and each other holder of the rights is
entitled to subscribe for one share of our common stock for every rights
held (1 for ). We will not issue fractional shares of our common stock upon
the exercise of rights; accordingly, rights may be exercised only in multiples
of . Any stockholder on the record date who is issued fewer than rights
is entitled to subscribe for one share of our common stock in this offer.

The rights are transferable and will be listed for trading on the Nasdaq
National Market under the symbol " " during the course of this offer. See
"The offer."

SUBSCRIPTION PRICE

The subscription price per share will be % of the average of the last reported
sale prices of a share of our common stock on the Nasdaq National Market on the
expiration date of the rights offering and the four preceding trading days. See
"The offer -- The subscription price." Since the subscription price will be
determined on the expiration date, rights holders who decide to acquire shares
in the primary subscription or under the over-subscription privilege will not
know when they make that decision the purchase price of those shares. See "The
offer -- The subscription price."

OVER-SUBSCRIPTION PRIVILEGE

Record date stockholders who fully exercise all rights issued to them (other
than those rights which cannot be exercised because they represent the right to
acquire less than one share) are entitled to subscribe for additional shares of
our common stock which were not subscribed for by other stockholders. If
sufficient shares of our common stock are available, all record date
stockholders' over-subscription requests will be honored in full. If these
requests exceed the shares of our common stock available, the available shares
will be allocated pro-rata among the record date stockholders who over-subscribe
based on the number of rights originally issued to them by us. See "The offer --
Over-subscription privilege."

PURPOSE OF THE OFFER

Our board of directors has determined that it would be in the best interest of
TICC and its stockholders to increase the equity capital available for making
additional investments in technology-related companies. In connection with the
approval of this rights offering, our board of directors considered, among other
things, the following factors:

o the subscription price relative to the market price and to our net
asset value per share;

o the increased equity capital to be available upon completion of the
rights offering for making additional investments consistent with our
investment objective;

o the dilution to non-exercising stockholders;

o the terms and expenses of the offering relative to other alternatives
for raising capital;

o the size of the offering in relation to the number of shares
outstanding;

o the market price of our common stock, both before and after the
announcement of the equity offering;

o the general condition of the securities markets; and

o any impact on operating expenses associated with an increase in
capital.

There can be no assurance of the amount of dilution that a stockholder will
experience or that the rights offering will be successful.

The purpose of setting the determination of the subscription price upon the
expiration of the offer is to attract the maximum participation of stockholders
in the offer, with minimum dilution to nonparticipating stockholders.

Transferable rights, which may themselves have intrinsic value, also will afford
non-participating stockholders the potential of receiving cash payment upon the
sale of the rights, receipt of which may be viewed as partial compensation for
the dilution of their interests.

SALE OF RIGHTS

The rights are evidenced by a subscription certificate and are transferable
until the expiration date of the rights offering. The rights will be listed for
trading on the Nasdaq National Market under the symbol " " during the
course of the offer. TICC and the dealer manager will use their best efforts to
ensure that an adequate trading market for the rights will exist. No assurance
can be given that a market for the rights will develop. Trading in the rights
on the Nasdaq National Market may be conducted until the close of trading on
the Nasdaq National Market on the last business day prior to the expiration
date of the rights offering. See "The offer -- Sale of rights."

USE OF PROCEEDS

We intend to use the net proceeds from this offering to originate loans to and
make investments in technology-related companies in accordance with our
investment objectives.

HOW TO OBTAIN SUBSCRIPTION INFORMATION

o Contact your broker-dealer, trust company, bank or other nominee, or

o Contact the information agent toll-free at .

HOW TO SUBSCRIBE

o Deliver a completed subscription certificate and payment to the
subscription agent by the expiration date of the rights offering, or

o If your shares are held in an account with your broker-dealer, trust
company, bank or other nominee, have your broker-dealer, trust
company, bank or other nominee deliver a notice of guaranteed delivery
to the subscription agent by the expiration date of the rights
offering.

SUBSCRIPTION AGENT

The subscription agent for this offer is .

DISTRIBUTION ARRANGEMENTS

UBS Securities LLC will act as dealer manager for the offer. Under the terms and
subject to the conditions contained in the dealer manager agreement, the dealer
manager will provide financial advisory services and marketing assistance in
connection with the offer and will solicit the exercise of rights and
participation in the over-subscription privilege by our stockholders. The offer
is not contingent upon any number of rights being exercised. We have agreed to
pay the dealer manager a fee for its financial advisory, marketing
and soliciting services equal to % of the subscription price per share for
shares issued pursuant to the exercise of rights and the over-subscription
privilege. The dealer manager will reallow a portion of its fees to other
broker-dealers that have assisted in soliciting the exercise of rights. In
addition, we have agreed to reimburse the dealer manager up to $ for a
portion of its expenses incurred in connection with the offer.

IMPORTANT DATES TO REMEMBER

Record Date ........................................................ , 2004
Subscription Period ................................................ , 2004
, 2004*
Expiration Date .................................................... , 2004*
Deadline for Subscription Certificates and Payment for Shares+ ..... , 2004*
Deadline for Notice of Guaranteed Delivery+ ........................ , 2004*
Deadline for Payment Pursuant to Notice of Guaranteed Delivery ..... , 2004*
Confirmation Mailed to Participants ................................ , 2004*
Final Payment of Shares ............................................ , 2004*

* Unless the offer is extended.

+ A person exercising rights must deliver by the expiration date of the
rights offering (unless the offer is extended) either (i) a subscription
certificate and payment for shares or (ii) a notice of guaranteed delivery.

TECHNOLOGY INVESTMENT CAPITAL CORP.

BUSINESS

We are a specialty finance company principally providing capital to small- and
medium-sized technology-related companies. Technology-related companies are
businesses that focus on the following sectors: software, Internet, IT services,
media, telecommunications, semiconductors, hardware and technology-enabled
services. We completed our initial public offering in November 2003 raising net
proceeds of approximately $138 million (including proceeds received from the
exercise of the overallotment option) and have since invested approximately
$87.6 million (consisting of approximately $77.6 million in funded capital and
$10.0 million in committed capital) in 8 portfolio companies.

Our investment objective is to maximize our portfolio's total return principally
by investing in the debt securities of technology-related companies. Our primary
focus is on seeking current income by investing in debt securities. We also seek
to provide our stockholders with long-term capital growth through the
appreciation in the value of warrants or other equity instruments that we may
receive when we make debt or equity investments in technology-related companies.

Our capital is generally used by our portfolio companies to finance organic
growth, acquisitions, recapitalizations and working capital. Our investment
decisions are based on extensive analysis of potential portfolio companies'
business operations supported by an in-depth understanding of the quality of
their recurring revenues and cash flow, variability of costs and the inherent
value of their assets, including proprietary intangible assets and intellectual
property.

Our investment activities are managed by TIM. TIM is an investment adviser
registered under the Investment Advisers Act of 1940, which we refer to as the
Advisers Act. TIM is owned by BDC Partners, its managing member, and Royce &
Associates, LLC. Jonathan H. Cohen, our chief executive officer, and Saul B.
Rosenthal, our chief operating officer, are the members of BDC Partners, and
Charles M. Royce, our non-executive chairman, is the president of Royce. Under
the investment advisory agreement, we have agreed to pay TIM an annual base
management fee based on our gross assets as well as an incentive fee based on
our performance. See "Management -- Investment Advisory Agreement."

We were founded in July 2003 and completed an initial public offering of shares
of our common stock in November 2003. We are a Maryland corporation and a
closed-end, non-diversified management investment company that has elected to be
regulated as a business development company under the Investment Company Act of
1940, which we refer to as the 1940 Act. As a business development company, we
are required to meet regulatory tests, including the requirement to invest at
least 70% of our total assets in eligible portfolio companies. See "Regulation
as a Business Development Company". In addition, we have elected to be treated
for federal income tax purposes as a regulated investment company, or RIC, under
the Internal Revenue Code of 1986, which we refer to as the Code.

We intend to concentrate in the technology sector and seek to invest, under
normal circumstances, at least 80% of the value of our net assets (including the
amount of any borrowings for investment purposes) in technology-related
companies.

Our headquarters are at 8 Sound Shore Drive, Greenwich, Connecticut and our
telephone number is (203) 983-5275.

DIVIDEND REINVESTMENT PLAN

We have adopted a dividend reinvestment plan. If your shares of common stock are
registered in your own name, your distributions will automatically be reinvested
under our dividend reinvestment plan in additional whole and fractional shares
of common stock, unless you opt out of our dividend reinvestment plan by
delivering a written notice to our dividend paying agent. If your shares are
held in the name of a broker or other nominee, you should contact the broker or
nominee for details regarding opting out of our dividend reinvestment plan.

PRINCIPAL RISK FACTORS

Investing in our common stock involves a high degree of risk. You should
consider carefully the information found in "Risk Factors." We have a limited
operating history as a business development company and as a regulated
investment company. If we fail to qualify as a regulated investment company, we
could become subject to federal income tax on all of our income, which would
have a material adverse effect on our financial performance. We lend to and
invest in small- and medium-sized private, technology-related companies. These
activities may involve a high degree of business and financial risk. We are also
subject to risks associated with fluctuating interest rates, access to
additional capital, fluctuating quarterly results and valuation of the assets in
our portfolio.

CERTAIN ANTI-TAKEOVER PROVISIONS

Our charter and bylaws, as well as certain statutory and regulatory
requirements, contain certain provisions that may have the effect of
discouraging a third party from making an acquisition proposal for us. These
anti-takeover provisions may inhibit a change in control in circumstances that
could give the holders of our common stock the opportunity to realize a premium
over the market price for our common stock.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

We have filed with the SEC a registration statement on Form N-2, together with
all amendments and related exhibits, under the Securities Act of 1933, with
respect to our shares of common stock offered by this prospectus. The
registration statement contains additional information about us and our shares
of common stock being offered by this prospectus.

We file annual, quarterly and current periodic reports, proxy statements and
other information with the SEC under the Securities Exchange Act of 1934. You
can inspect these reports, proxy statements, and other information, as well as
the registration statement and the related exhibits and schedules, without
charge, at the public reference facilities of the SEC at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference room. The SEC maintains a web site
that contains reports, proxy statements and other information regarding
registrants, including us, that file such information electronically with the
SEC. The address of the SEC's web site is www.sec.gov. Information contained on
the SEC's web site about us is not incorporated into this prospectus and you
should not consider information contained on the SEC's web site to be part of
this prospectus.

FEES AND EXPENSES

The following table is intended to assist prospective investors in understanding
the costs and expenses that an investor in this offering will bear directly or
indirectly. We caution you that some of the percentages indicated in the table
below are estimates and may vary. Except where the context suggests otherwise,
whenever this prospectus contains a reference to fees or expenses paid by "you"
or "us," or that "we" will pay fees or expenses, stockholders will indirectly
bear such fees or expenses as investors in TICC.

STOCKHOLDER TRANSACTION EXPENSES

Sales load (as a percentage of offering price) .......................................... (1)
Offering expenses borne by us (as a percentage of offering price) ....................... (2)
Dividend reinvestment plan expenses ..................................................... None(3)
Total stockholder transaction expenses (as a percentage of offering price) ..............

ESTIMATED ANNUAL EXPENSES (AS A PERCENTAGE OF NET ASSETS ATTRIBUTABLE TO COMMON STOCK)
Management fees ......................................................................... 2.0%(4)
Incentive fees payable under our investment advisory agreement .......................... None(5)
Interest payments on borrowed funds ..................................................... None(6)
Other expenses .......................................................................... 0.8%
Total annual expenses (estimated) ....................................................... 2.8%

(1) We have agreed to pay the dealer manager a fee for its financial advisory,
marketing and soliciting services equal to % of the aggregate
subscription price for the shares issued pursuant to the offer. See "The
offer -- Distribution arrangements."

(2) Amount reflects estimated offering expenses of approximately $ . In
this regard, we have agreed to reimburse the dealer manager in part for its
out-of-pocket expenses up to $ . In addition, we have agreed to pay
a fee to each of the subscription agent and the information agent estimated
to be $ and $ , respectively, plus reimbursement for their
out-of-pocket expenses related to the offer. Total offering expenses are
estimated to be $ , which assumes that the offer is fully
subscribed. See "The offer -- Distribution arrangements."

(3) The expenses of the dividend reinvestment plan are included in "other
expenses."

(4) Our management fee is based on gross assets. See "Management -- Investment
Advisory Agreement."

(5) Based on our projected net operating income and net realized gains, we
would not anticipate paying any incentive fees in fiscal year 2004. Based
on our current business plan, we expect that we will not have any capital
gains and only a small amount of interest income as we complete our
investments during fiscal year 2004. In subsequent years, incentive fees
would increase if, and to the extent that, we earn greater interest income
through our investments in portfolio companies and, to a lesser extent,
realize capital gains upon the sale of warrants or other equity investments
in such companies. The incentive fee consists of two parts. The first part,
which is payable quarterly in arrears, equals 20% of the excess, if any, of
pre-incentive fee net investment income over an annual hurdle rate (equal
to the interest rate payable on a five-year U.S. Treasury Note plus 5%).
The second part of the incentive fee equals 20% of our realized capital
gains, if any, computed net of all realized capital losses and unrealized
capital depreciation and will be payable at the end of each calendar year
beginning on December 31, 2004. For a more detailed discussion of the
calculation of this fee, see "Management -- Investment Advisory Agreement."

(6) Although we may incur indebtedness before the proceeds of this offering are
substantially invested, we have not yet decided to what extent we will
finance investments using debt. However, assuming we borrow for investment
purposes an amount equal to 40% of our total assets (including such
borrowed funds) and that the annual interest rate on the amount borrowed is
4%, our total annual expenses (estimated) would be as follows:

Base management fee ............................................... 3.30%
Incentive fees payable under investment advisory agreement
(20% of realized capital gains and 20% of
pre-incentive fee net investment income) .......................... None
Interest payments on borrowed funds ............................... 2.70%
Other expenses .................................................... 0.80%
Total annual expenses (estimated) ................................. 6.80%

EXAMPLE

The following example, required by the SEC, demonstrates the projected dollar
amount of total cumulative expenses that would be incurred over various periods
with respect to a hypothetical investment in us. In calculating the following
expense amounts, we assumed we would have no additional leverage and that our
operating expenses would remain at the levels set forth in the table above.

1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- --------- --------- ----------
You would pay the following expenses
on a $1,000 investment, assuming
a 5% annual return ................. $ $ $ $

This example and the expenses in the table above should not be considered a
representation of our future expenses, and actual expenses (including leverage
and other expenses) may be greater or less than those shown. Moreover, while the
example assumes, as required by the SEC, a 5% annual return, our performance
will vary and may result in a return greater or less than 5%. The incentive fee
under the investment advisory agreement, which, assuming a 5% annual return,
would either not be payable or have a de minimis effect, is not included in the
example. If we achieve sufficient returns on our investments to trigger an
incentive fee of a material amount, our expenses, and returns to our investors,
would be higher.

In addition, while the example assumes reinvestment of all dividends and
distributions at net asset value, participants in our distribution reinvestment
plan may receive shares valued at the market price in effect at that time. This
price may be at, above or below net asset value. See "Dividend reinvestment
plan" for additional information regarding our dividend reinvestment plan.

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SELECTED FINANCIAL AND OTHER DATA

The selected financial and other data below should be read in conjunction with
our "Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the financial statements and notes thereto. The following
selected financial data for the fiscal year ended December 31, 2003 is derived
from our financial statements that have been audited by PricewaterhouseCoopers
LLP, an independent registered public accounting firm. Interim financial
information is derived from unaudited financial data, but in the opinion of
management, reflects all adjustments (consisting only of normal recurring
adjustments) that are necessary to present fairly the results of such interim
periods. Interim results at and for the six months ended June 30, 2004, are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2004. SEE "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS" ON PAGE 30.

SIX MONTHS YEAR ENDED
ENDED JUNE 30, 2004 DECEMBER 31, 2003
------------------- -------------------
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)

INCOME STATEMENT DATA:
Total investment income ......................... $ 2,156 $ 114
Total expenses .................................. 1,927 692
Net investment income (loss) .................... 229 (578)
Net increase (decrease) in stockholders' equity
resulting from operations ..................... 229 (578)

PER COMMON SHARE DATA:
Net increase (decrease) in stockholders'
equity resulting from operations per
common share -- basic and diluted ............. $ 0.02 $ (0.25)
Net asset value per common share ................ 13.61 13.80
Dividends declared per common share ............. 0.21 --

SELECTED PERIOD-END BALANCES:
Total investment portfolio ...................... $ 33,412 $ --
Total assets .................................... 138,285 138,325
Borrowings ...................................... -- --
Net assets ...................................... 137,407 137,970

OTHER DATA:
Number of portfolio companies ................... 3 --

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SELECTED QUARTERLY FINANCIAL DATA

The following tables set forth certain quarterly financial information for each
of the quarters subsequent to TICC's initial public offering. This information
was derived from our unaudited financial statements. Results for any quarter are
not necessarily indicative of results for the full year or for any future
quarter.

2004 2003
--------------------------- ------------
QTR 2 QTR 1 QTR 4
------------ ------------ ------------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Investment income ................................... $ 1,243 $ 913 $ 114
Total expenses ...................................... 968 959 692
Net investment income (loss) ........................ 275 (46) (578)
Net increase (decrease) in stockholders' equity
resulting from operations ......................... 275 (46) (578)
Net increase (decrease) in stockholders' equity
resulting from operations per common share
-- basic and diluted .............................. $ 0.03 $ (0.01) $ (0.25)

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RISK FACTORS

An investment in our securities involves certain risks relating to our structure
and investment objectives. The risks set out below are not the only risks we
face. If any of the following risks occur, our business, financial condition and
results of operations could be materially adversely affected. In such case, our
net asset value and the trading price of our common stock could decline, and you
may lose all or part of your investment.

RISKS RELATING TO OUR BUSINESS AND STRUCTURE

WE ARE A NEW COMPANY WITH LIMITED OPERATING HISTORY.

We were incorporated in July 2003 and have a limited operating history. We are
subject to all of the business risks and uncertainties associated with any new
business enterprise, including the risk that we will not achieve our investment
objective and that the value of your investment in us could decline
substantially.

ANY FAILURE ON OUR PART TO MAINTAIN OUR STATUS AS A BUSINESS DEVELOPMENT COMPANY
WOULD REDUCE OUR OPERATING FLEXIBILITY.

If we do not remain a business development company, we might be regulated as a
closed-end investment company under the 1940 Act, which would decrease our
operating flexibility.

WE ARE DEPENDENT UPON TIM'S KEY MANAGEMENT PERSONNEL FOR OUR FUTURE SUCCESS,
PARTICULARLY JONATHAN H. COHEN, SAUL B. ROSENTHAL AND LEE D. STERN.

We depend on the diligence, skill and network of business contacts of the senior
management of TIM. The senior management, together with other investment
professionals, will evaluate, negotiate, structure, close, monitor and service
our investments. Our future success will depend to a significant extent on the
continued service and coordination of the senior management team, particularly
Jonathan H. Cohen, the chief executive officer and president of TIM, Saul B.
Rosenthal, the chief operating officer of TIM, and Lee D. Stern, the chief
transaction officer of TIM. Only Messrs. Rosenthal and Stern will devote
substantially all of their business time to our operations. Neither Mr.
Rosenthal nor Mr. Stern has extensive private equity investment experience, and
neither Mr. Cohen nor Mr. Rosenthal has extensive private debt investment
experience. None of these individuals is subject to an employment contract. The
departure of any of these employees could have a material adverse effect on our
ability to achieve our investment objective.

OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS WILL DEPEND ON OUR ABILITY TO
MANAGE OUR FUTURE GROWTH EFFECTIVELY.

TIM is a recently formed investment adviser, and TICC is a recently organized
company. As such, each entity is subject to the business risks and uncertainties
associated with any new business enterprise, including the lack of experience in
managing or operating a business development company. Our ability to achieve our
investment objective will depend on our ability to grow, which will depend, in
turn, on our investment adviser's ability to identify, analyze, invest in and
finance companies that meet our investment criteria. Accomplishing this result
on a cost-effective basis is largely a function of our investment adviser's
structuring of the investment process, its ability to provide competent,
attentive and efficient services to us and our access to financing on acceptable
terms. As we grow, we and TIM, through its managing member, BDC Partners, will
need to hire, train, supervise and manage new employees. Failure to manage our
future growth effectively could have a material adverse effect on our business,
financial condition and results of operations.

WE OPERATE IN A HIGHLY COMPETITIVE MARKET FOR INVESTMENT OPPORTUNITIES.

A large number of entities compete with us to make the types of investments that
we make in technology-related companies. We compete with a large number of
private equity and venture capital funds, other equity and non-equity based
investment funds, investment banks and other sources of financing, including
traditional financial services companies such as commercial banks and specialty
finance companies. Many of our competitors are substantially larger and have
considerably greater financial, technical and marketing resources than we do.
For example, some competitors may have a lower cost of funds and access to
funding sources that are not available to

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us. In addition, some of our competitors may have higher risk tolerances or
different risk assessments, which could allow them to consider a wider variety
of investments and establish more relationships than us. Furthermore, many of
our competitors are not subject to the regulatory restrictions that the 1940 Act
imposes on us as a business development company. There can be no assurance that
the competitive pressures we face will not have a material adverse effect on our
business, financial condition and results of operations. Also, as a result of
this competition, we may not be able to take advantage of attractive investment
opportunities from time to time, and we can offer no assurance that we will be
able to identify and make investments that are consistent with our investment
objective.

OUR BUSINESS MODEL DEPENDS UPON THE DEVELOPMENT OF STRONG REFERRAL
RELATIONSHIPS WITH PRIVATE EQUITY AND VENTURE CAPITAL FUNDS AND INVESTMENT
BANKING FIRMS.

Senior management of TIM maintains active communication with private equity and
venture capital funds and investment banking firms in order to seek out
investment opportunities. We expect that we will rely to a significant extent
upon these informal relationships to provide us with deal flow. If we fail to
maintain our relationships with key firms, or if we fail to establish strong
referral relationships with other firms or other sources of investment
opportunities, we will not be able to grow our portfolio of loans and achieve
our investment objective. In addition, persons with whom we have informal
relationships are not obligated to provide us with investment opportunities, and
therefore, there is no assurance that such relationships will lead to the
origination of debt or other investments.

WE MAY NOT REALIZE GAINS FROM OUR EQUITY INVESTMENTS.

When we invest in debt securities, we generally expect to acquire warrants or
other equity securities as well. Our goal is ultimately to dispose of these
equity interests and realize gains upon our disposition of such interests. Over
time, the gains that we realize on these equity interests may offset, to some
extent, losses we experience on defaults under debt securities that we hold.
However, the equity interests we receive may not appreciate in value and, in
fact, may decline in value. Accordingly, we may not be able to realize gains
from our equity interests, and any gains that we do realize on the disposition
of any equity interests may not be sufficient to offset any other losses we
experience.

BECAUSE MOST OF OUR INVESTMENTS ARE NOT IN PUBLICLY TRADED SECURITIES, THERE IS
UNCERTAINTY REGARDING THE VALUE OF OUR INVESTMENTS, WHICH COULD ADVERSELY
AFFECT THE DETERMINATION OF OUR NET ASSET VALUE.

Our portfolio investments are not generally in publicly traded securities. As a
result, the fair value of these securities is not readily determinable. We value
these securities at fair value as determined in good faith by our board of
directors based upon the recommendation of its valuation committee. The
valuation committee utilizes the services of Houlihan Lokey Howard & Zukin, an
independent valuation firm. However, the board of directors retains ultimate
authority as to the appropriate valuation of each investment. The types of
factors that the valuation committee takes into account in providing its fair
value recommendation to the board of directors includes, as relevant, the nature
and value of any collateral, the portfolio company's ability to make payments
and its earnings, the markets in which the portfolio company does business,
comparison to valuations of publicly traded companies, comparisons to recent
sales of comparable companies, the discounted value of the cash flows of the
portfolio company and other relevant factors. Because such valuations are
inherently uncertain and may be based on estimates, our determinations of fair
value may differ materially from the values that would be assessed if a ready
market for these securities existed.

THE LACK OF LIQUIDITY IN OUR INVESTMENTS MAY ADVERSELY AFFECT OUR BUSINESS.

As stated above, our investments are not generally in publicly traded
securities. Substantially all of these securities are subject to legal and other
restrictions on resale or will otherwise be less liquid than publicly traded
securities. The illiquidity of our investments may make it difficult for us to
sell such investments if the need arises. Also, if we are required to liquidate
all or a portion of our portfolio quickly, we may realize significantly less
than the value at which we have previously recorded our investments.

In addition, since we generally invest in debt securities with a term of up to
seven years and hold our investments in debt securities and related equity
securities until maturity of the debt, we do not expect realization events, if
any, to occur in the near-term. We expect that our holdings of equity securities
may require several years to appreciate in value, and we can offer no assurance
that such appreciation will occur.

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RISK FACTORS
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WE MAY EXPERIENCE FLUCTUATIONS IN OUR QUARTERLY RESULTS.

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

REGULATIONS GOVERNING OUR OPERATION AS A BUSINESS DEVELOPMENT COMPANY AFFECT OUR
ABILITY TO, AND THE WAY IN WHICH WE RAISE ADDITIONAL CAPITAL, WHICH MAY EXPOSE
US TO RISKS, INCLUDING THE TYPICAL RISKS ASSOCIATED WITH LEVERAGE.

Our business will require a substantial amount of capital, which we may acquire
from the following sources:

SENIOR SECURITIES AND OTHER INDEBTEDNESS

We may issue debt securities or preferred stock and/or borrow money from banks
or other financial institutions, which we refer to collectively as "senior
securities," up to the maximum amount permitted by the 1940 Act. Under the
provisions of the 1940 Act, we are permitted, as a business development company,
to issue senior securities in amounts such that our asset coverage, as defined
in the 1940 Act, equals at least 200% after each issuance of senior securities.
If we issue senior securities, including preferred stock and debt securities, we
will be exposed to typical risks associated with leverage, including an
increased risk of loss. If we incur leverage to make investments, a decrease in
the value of our investments would have a greater negative impact on the value
of our common stock. If we issue debt securities or preferred stock, it is
likely that such securities will be governed by an indenture or other instrument
containing covenants restricting our operating flexibility. In addition, such
securities may be rated by rating agencies, and in obtaining a rating for such
securities, we may be required to abide by operating and investment guidelines
that could further restrict our operating flexibility.

Our ability to pay dividends or issue additional senior securities would be
restricted if our asset coverage ratio were not at least 200%. If the value of
our assets declines, we may be unable to satisfy this test. If that happens, we
may be required to sell a portion of our investments and, depending on the
nature of our leverage, repay a portion of our indebtedness at a time when such
sales may be disadvantageous. Furthermore, any amounts that we use to service
our indebtedness would not be available for distributions to our common
stockholders.

COMMON STOCK

We are not generally able to issue and sell our common stock at a price below
net asset value per share. We may, however, sell our common stock, or warrants,
options or rights to acquire our common stock, at a price below the then-current
net asset value of our common stock if our board of directors determines that
such sale is in the best interests of TICC and its stockholders, and our
stockholders approve such sale (in certain limited exceptions, stockholder
approval may not be required). In any such case, the price at which our
securities are to be issued and sold may not be less than a price which, in the
determination of our board of directors, closely approximates the market value
of such securities (less any distributing commission or discount). If we raise
additional funds by issuing more common stock or senior securities convertible
into, or exchangeable for, our common stock, the percentage ownership of our
stockholders at that time would decrease and they may experience dilution.
Moreover, we can offer no assurance that we will be able to issue and sell
additional equity securities in the future, on favorable terms or at all.

A CHANGE IN INTEREST RATES MAY ADVERSELY AFFECT OUR PROFITABILITY.

A portion of our income will depend upon the difference between the rate at
which we borrow funds (if we do borrow) and the interest rate on the debt
securities in which we invest. We anticipate using a combination of equity and
long-term and short-term borrowings to finance our investment activities. Some
of our investments in debt securities are at fixed rates and others at variable
rates. We may, but will not be required to, hedge against interest rate
fluctuations by using standard hedging instruments such as futures, options and
forward contracts, subject to applicable legal requirements. These activities
may limit our ability to participate in the benefits of lower interest rates
with respect to the hedged portfolio. Adverse developments resulting from
changes in interest rates or hedging

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transactions could have a material adverse effect on our business, financial
condition and results of operations. Also, we have limited experience in
entering into hedging transactions, and we will initially have to purchase or
develop such expertise.

WE WILL BE SUBJECT TO CORPORATE-LEVEL INCOME TAX IF WE ARE UNABLE TO QUALIFY AS
A RIC.

To maintain our qualification as a RIC under the Code, we must meet certain
income source, asset diversification and annual distribution requirements. The
annual distribution requirement for a RIC is satisfied if we distribute at least
90% of our ordinary income and realized net short-term capital gains in excess
of realized net long-term capital losses, if any, to our stockholders on an
annual basis. Because we may use debt financing in the future, we may be subject
to certain asset coverage ratio requirements under the 1940 Act and financial
covenants under loan and credit agreements that could, under certain
circumstances, restrict us from making distributions necessary to qualify as a
RIC. If we are unable to obtain cash from other sources, we may fail to qualify
for special tax treatment as a RIC and, thus, may be subject to corporate-level
income tax on all our income. To qualify as a RIC, we must also meet certain
asset diversification requirements at the end of each calendar quarter. Failure
to meet these tests may result in our having to dispose of certain investments
quickly in order to prevent the loss of RIC status. Because most of our
investments will be in private companies, any such dispositions could be made at
disadvantageous prices and may result in substantial losses. If we fail to
qualify as a RIC for any reason and remain or become subject to corporate income
tax, the resulting corporate taxes could substantially reduce our net assets,
the amount of income available for distribution and the amount of our
distributions. Such a failure would have a material adverse effect on us and our
stockholders.

WE MAY HAVE DIFFICULTY PAYING OUR REQUIRED DISTRIBUTIONS IF WE RECOGNIZE INCOME
BEFORE OR WITHOUT RECEIVING CASH REPRESENTING SUCH INCOME.

For federal income tax purposes, we will include in income certain amounts that
we have not yet received in cash, such as original issue discount, which may
arise if we receive warrants in connection with the making of a loan or possibly
in other circumstances, or contracted payment-in-kind interest, which represents
contractual interest added to the loan balance and due at the end of the loan
term. We also may be required to include in income certain other amounts that we
will not receive in cash.

Since in certain cases we may recognize income before or without receiving cash
representing such income, we may have difficulty meeting the tax requirement to
distribute at least 90% of our ordinary income and realized net short-term
capital gains in excess of realized net long-term capital losses, if any, to
maintain our status as a RIC. Accordingly, we may have to sell some of our
investments at times we would not consider advantageous, raise additional debt
or equity capital or reduce new investment originations to meet these
distribution requirements. If we are not able to obtain cash from other sources,
we may fail to qualify as a RIC and thus be subject to corporate-level income
tax.

THERE ARE SIGNIFICANT POTENTIAL CONFLICTS OF INTEREST, WHICH COULD IMPACT OUR
INVESTMENT RETURNS.

Our executive officers and directors, and the executive officers of our
investment adviser, TIM, and its managing member, BDC Partners, serve or may
serve as officers and directors of entities who operate in the same or related
line of business as we do. Accordingly, they may have obligations to investors
in those entities, the fulfillment of which might not be in the best interests
of us or our stockholders. For example, Jonathan H. Cohen, the chief executive
officer and president of TIM, BDC Partners and TICC, is the principal of JHC
Capital Management, LLC, a registered investment adviser. Steven P. Novak, one
of our independent directors, is also the president of Palladio Capital
Management, LLC, the manager of an equity-oriented hedge fund; Charles M. Royce,
the non-executive chairman of our board of directors, is the president and chief
investment officer of Royce & Associates, LLC, the non-managing member of our
investment adviser.

In order to minimize the potential conflicts of interest that might arise, we
have adopted a policy that prohibits us from making investments in, or otherwise
knowingly doing business with, any company in which any fund or other client
account managed by JHC Capital Management, Royce, or Palladio Capital Management
holds a long or short position. The investment focus of each of these entities
tends to be different from our investment objective. Nevertheless, it is
possible that new investment opportunities that meet our investment objective
may come to the attention of one of these entities in connection with another
investment advisory client or program, and, if so, such

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opportunity might not be offered, or otherwise made available, to us. Also, our
investment policy precluding the investments referenced above could cause us to
miss out on some investment opportunities. However, our executive officers,
directors and investment adviser intend to treat us in a fair and equitable
manner over time consistent with their applicable duties under law so that we
will not be disadvantaged in relation to any other particular client. Finally,
we pay BDC Partners our allocable portion of overhead and other expenses
incurred by BDC Partners in performing its obligations under the administration
agreement, including a portion of the rent and the compensation of our chief
financial officer, vice president of corporate development and other
administrative support personnel, which creates conflicts of interest that our
board of directors must monitor.

CHANGES IN LAWS OR REGULATIONS GOVERNING OUR OPERATIONS MAY ADVERSELY AFFECT OUR
BUSINESS.

We and our portfolio companies are subject to regulation by laws at the local,
state and federal level. These laws and regulations, as well as their
interpretation, may be changed from time to time. Accordingly, any change in
these laws or regulations could have a material adverse effect on our business.

OUR ABILITY TO INVEST IN PRIVATE COMPANIES MAY BE LIMITED IN CERTAIN
CIRCUMSTANCES.

If we are to maintain our status as a business development company, we must not
acquire any assets other than "qualifying assets" unless, at the time of and
after giving effect to such acquisition, at least 70% of our total assets are
qualifying assets. If we acquire debt or equity securities from an issuer that
has outstanding marginable securities at the time we make an investment, these
acquired assets cannot be treated as qualifying assets. This result is dictated
by the definition of "eligible portfolio company" under the 1940 Act, which in
part looks to whether a company has outstanding marginable securities. For a
more detailed discussion of the definition of an "eligible portfolio company"
and the marginable securities requirement, see the section entitled "Regulation
as a Business Development Company."

Amendments promulgated in 1998 by the Federal Reserve expanded the definition of
a marginable security under the Federal Reserve's margin rules to include any
non-equity security. Thus, any debt securities issued by any entity are
marginable securities under the Federal Reserve's current margin rules. As a
result, the staff of the SEC has raised the question to the BDC industry as to
whether a private company that has outstanding debt securities would qualify as
an "eligible portfolio company" under the 1940 Act.

To date, we do not believe that either the SEC or its staff has taken any public
position with respect to the issue discussed above. We continue to monitor this
issue closely, and may be required to adjust our investment focus to comply with
and/or take advantage of any future administrative position, judicial decision
or legislative action.

RISKS RELATED TO OUR INVESTMENTS

OUR PORTFOLIO MAY BE CONCENTRATED IN A LIMITED NUMBER OF PORTFOLIO COMPANIES IN
THE TECHNOLOGY-RELATED SECTOR, WHICH WILL SUBJECT US TO A RISK OF SIGNIFICANT
LOSS IF ANY OF THESE COMPANIES DEFAULTS ON ITS OBLIGATIONS UNDER ANY OF ITS DEBT
SECURITIES THAT WE HOLD OR IF THE TECHNOLOGY-RELATED SECTOR EXPERIENCES A
FURTHER DOWNTURN.

A consequence of this limited number of investments is that the aggregate
returns we realize may be significantly adversely affected if a small number of
investments perform poorly or if we need to write down the value of any one
investment. Beyond our income tax asset diversification requirements, we do not
have fixed guidelines for diversification, and our investments could be
concentrated in relatively few issuers. In addition, we intend to concentrate in
the technology-related sector and to invest, under normal circumstances, at
least 80% of the value of our net assets (including the amount of any borrowings
for investment purposes) in technology-related companies. As a result, a further
downturn in the technology-related sector could materially adversely affect us.

THE TECHNOLOGY-RELATED SECTOR IS SUBJECT TO MANY RISKS, INCLUDING VOLATILITY,
INTENSE COMPETITION, DECREASING LIFE CYCLES AND PERIODIC DOWNTURNS.

We invest in companies in the technology-related sector, some of which may have
relatively short operating histories. The revenues, income (or losses) and
valuations of technology-related companies can and often do fluctuate suddenly
and dramatically. Also, the technology-related market is generally characterized
by abrupt business cycles and intense competition. Since mid-2000, there has
been substantial excess capacity and a significant

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slowdown in many industries in the technology-related sector. In addition, this
overcapacity, together with a cyclical economic downturn, resulted in
substantial decreases in the market capitalization of many technology-related
companies. While such valuations have recovered to some extent, we can offer no
assurance that such decreases in market capitalizations will not recur, or that
any future decreases in technology company valuations will be insubstantial or
temporary in nature. Therefore, our portfolio companies may face considerably
more risk of loss than companies in other industry sectors.

In addition, because of rapid technological change, the average selling prices
of products and some services provided by the technology-related sector have
historically decreased over their productive lives. As a result, the average
selling prices of products and services offered by our portfolio companies may
decrease over time, which could adversely affect their operating results and
their ability to meet their obligations under their debt securities, as well as
the value of any equity securities, that we may hold. This could, in turn,
materially adversely affect our business, financial condition and results of
operations.

OUR INVESTMENTS IN THE TECHNOLOGY-RELATED COMPANIES THAT WE ARE TARGETING MAY
BE EXTREMELY RISKY AND WE COULD LOSE ALL OR PART OF OUR INVESTMENT.

Investment in the technology-related companies that we are targeting involves a
number of significant risks, including:

o although a prospective portfolio company's assets are one component of
our analysis when determining whether to provide debt capital, we
generally do not base an investment decision primarily on the
liquidation value of a company's balance sheet assets. Instead, given
the nature of the companies that TICC invests in, we also review the
company's historical and projected cash flows, equity capital and
"soft" assets, including intellectual property (patented and
non-patented), databases, business relationships (both contractual and
non-contractual) and the like. Accordingly, considerably higher levels
of overall risk will likely be associated with TICC's portfolio
compared with that of a traditional asset-based lender whose security
consists of primarily receivables, inventories, equipment and other
tangible assets. Interest rates payable by our portfolio companies may
not compensate for these additional risks.

o these companies may have limited financial resources and may be unable
to meet their obligations under their debt securities that we hold,
which may be accompanied by a deterioration in the value of any
collateral and a reduction in the likelihood of us realizing any
guarantees we may have obtained in connection with our investment;

o they typically have limited operating histories, narrower product
lines and smaller market shares than larger businesses, which tend to
render them more vulnerable to competitors' actions and market
conditions, as well as general economic downturns;

o because they are generally privately owned, there is generally little
publicly available information about these businesses; therefore,
although TIM's agents will perform "due diligence" investigations on
these portfolio companies, their operations and their prospects, we
may not learn all of the material information we need to know
regarding these businesses;

o they are more likely to depend on the management talents and efforts
of a small group of persons; therefore, the death, disability,
resignation or termination of one or more of these persons could have
a material adverse impact on our portfolio company and, in turn, on
us; and

o they generally have less predictable operating results, may from time
to time be parties to litigation, may be engaged in rapidly changing
businesses with products subject to a substantial risk of
obsolescence, and may require substantial additional capital to
support their operations, finance expansion or maintain their
competitive position.

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

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though we may have structured our interest as senior debt, depending on the
facts and circumstances, including the extent to which we actually provided
significant "managerial assistance" to that portfolio company, a bankruptcy
court might recharacterize our debt holding and subordinate all or a portion of
our claim to that of other creditors.

OUR INCENTIVE FEE MAY INDUCE TIM TO MAKE SPECULATIVE INVESTMENTS.

The incentive fee payable by us to TIM may create an incentive for TIM to make
investments on our behalf that are risky or more speculative than would be the
case in the absence of such compensation arrangement. The way in which the
incentive fee payable to TIM is determined, which is calculated as a percentage
of the return on invested capital, may encourage TIM to use leverage to increase
the return on our investments. Under certain circumstances, the use of leverage
may increase the likelihood of default, which would disfavor holders of our
common stock. Similarly, because TIM will receive the incentive fee based, in
part, upon the capital gains realized on our investments, the investment adviser
may invest more than would otherwise be appropriate in companies whose
securities are likely to yield capital gains, as compared to income producing
securities. Such a practice could result in our investing in more speculative
securities than would otherwise be the case, which could result in higher
investment losses, particularly during cyclical economic downturns.

OUR PORTFOLIO COMPANIES MAY INCUR DEBT THAT RANKS EQUALLY WITH, OR SENIOR TO,
OUR INVESTMENTS IN SUCH COMPANIES.

We intend to invest primarily in senior debt securities, but may also invest in
subordinated debt securities, issued by our portfolio companies. In some cases
portfolio companies will be permitted to have other debt that ranks equally
with, or senior to, the debt securities in which we invest. By their terms, such
debt instruments may provide that the holders thereof are entitled to receive
payment of interest or principal on or before the dates on which we are entitled
to receive payments in respect of the debt securities in which we invest. Also,
in the event of insolvency, liquidation, dissolution, reorganization or
bankruptcy of a portfolio company, holders of debt instruments ranking senior to
our investment in that portfolio company would typically be entitled to receive
payment in full before we receive any distribution in respect of our investment.
After repaying such senior creditors, such portfolio company may not have any
remaining assets to use for repaying its obligation to us. In the case of debt
ranking equally with debt securities in which we invest, we would have to share
on an equal basis any distributions with other creditors holding such debt in
the event of an insolvency, liquidation, dissolution, reorganization or
bankruptcy of the relevant portfolio company. In addition, we will not be in a
position to control any portfolio company by investing in its debt securities.
As a result, we are subject to the risk that a portfolio company in which we
invest may make business decisions with which we disagree and the management of
such companies, as representatives of the holders of their common equity, may
take risks or otherwise act in ways that do not best serve our interests as debt
investors.

RISKS RELATED TO THIS OFFERING

OUR COMMON STOCK PRICE MAY BE VOLATILE.

The trading price of our common stock may fluctuate substantially. The price of
the common stock that will prevail in the market after this offering may be
higher or lower than the price you pay, depending on many factors, some of which
are beyond our control and may not be directly related to our operating
performance. These factors include, but are not limited to, the following:

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

o significant volatility in the market price and trading volume of
securities of regulated investment companies, business development
companies or other financial services companies;

o changes in regulatory policies or tax guidelines with respect to
regulated investment companies or business development companies;

o actual or anticipated changes in our earnings or fluctuations in our
operating results or changes in the expectations of securities
analysts;

o general economic conditions and trends;

o loss of a major funding source; or

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o departures of key personnel.

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

THERE IS A RISK THAT YOU MAY NOT RECEIVE DIVIDENDS OR THAT OUR DIVIDENDS MAY NOT
GROW OVER TIME.

We cannot assure you that we will achieve investment results or maintain a tax
status that will allow or require any specified level of cash distributions or
year-to-year increases in cash distributions. See "Price Range of Common Stock
and Distributions."

PROVISIONS OF THE MARYLAND GENERAL CORPORATION LAW AND OF OUR CHARTER AND BYLAWS
COULD DETER TAKEOVER ATTEMPTS AND HAVE AN ADVERSE IMPACT ON THE PRICE OF OUR
COMMON STOCK.

Our charter and bylaws, as well as certain statutory and regulatory
requirements, contain certain provisions that may have the effect of
discouraging a third party from making an acquisition proposal for us. These
anti-takeover provisions may inhibit a change of control in circumstances that
could give the holders of our common stock the opportunity to realize a premium
over the market price for our common stock.

YOUR INTEREST IN US MAY BE DILUTED.

Stockholders who do not fully exercise their rights should expect that they
will, at the completion of the offer, own a smaller proportional interest in us
than would otherwise be the case if they fully exercised their rights. We cannot
state precisely the amount of any such dilution in share ownership because we do
not know at this time what proportion of the shares will be purchased as a
result of the offer.

In addition, if the subscription price is less than our net asset value per
share, then our stockholders would experience an immediate dilution of the
aggregate net asset value of their shares as a result of the offer. The amount
of any decrease in net asset value is not predictable because it is not known at
this time what the subscription price and net asset value per share will be on
the expiration date of the rights offering or what proportion of the shares will
be purchased as a result of the offer. Such dilution could be substantial.

The fact that the rights are transferable may reduce the effects of any dilution
as a result of the offer. Rights holders can transfer or sell their rights. The
cash received from the sale of rights is partial compensation for any possible
dilution. There can be no assurances, however, that a market for the rights will
develop or the rights will have any value in that market.

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16

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FORWARD-LOOKING STATEMENTS AND PROJECTIONS

THIS PROSPECTUS 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 OUR INDUSTRY, OUR BELIEFS, AND OUR ASSUMPTIONS. WORDS SUCH AS
"ANTICIPATES", "EXPECTS," "INTENDS," "PLANS," "BELIEVES," "SEEKS," AND
"ESTIMATES" AND VARIATIONS OF THESE WORDS AND SIMILAR EXPRESSIONS ARE INTENDED
TO IDENTIFY FORWARD-LOOKING STATEMENTS. THESE STATEMENTS ARE NOT GUARANTEES OF
FUTURE PERFORMANCE AND ARE SUBJECT TO RISKS, UNCERTAINTIES, AND OTHER FACTORS,
SOME OF WHICH ARE BEYOND OUR CONTROL AND DIFFICULT TO PREDICT AND COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED OR FORECASTED IN THE
FORWARD-LOOKING STATEMENTS INCLUDING WITHOUT LIMITATION:

o AN ECONOMIC DOWNTURN COULD IMPAIR OUR CUSTOMERS' ABILITY TO REPAY OUR
LOANS AND INCREASE OUR NON-PERFORMING ASSETS,

o AN ECONOMIC DOWNTURN COULD DISPROPORTIONATELY IMPACT THE
TECHNOLOGY-RELATED INDUSTRY IN WHICH WE CONCENTRATE CAUSING US TO
SUFFER LOSSES IN OUR PORTFOLIO AND EXPERIENCE DIMINISHED DEMAND FOR
CAPITAL IN THIS INDUSTRY SECTOR,

o A CONTRACTION OF AVAILABLE CREDIT AND/OR AN INABILITY TO ACCESS THE
EQUITY MARKETS COULD IMPAIR OUR LENDING AND INVESTMENT ACTIVITIES,

o INTEREST RATE VOLATILITY COULD ADVERSELY AFFECT OUR RESULTS AND

o THE RISKS, UNCERTAINTIES AND OTHER FACTORS WE IDENTIFY IN "RISK
FACTORS" AND ELSEWHERE IN THIS PROSPECTUS AND IN OUR FILINGS WITH THE
SEC.

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 INCORRECT. IMPORTANT ASSUMPTIONS INCLUDE OUR ABILITY
TO ORIGINATE NEW LOANS AND INVESTMENTS, CERTAIN MARGINS 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 PROSPECTUS SHOULD NOT BE REGARDED AS A REPRESENTATION BY US THAT OUR
PLANS AND OBJECTIVES WILL BE ACHIEVED. THESE RISKS AND UNCERTAINTIES INCLUDE
THOSE DESCRIBED IN "RISK FACTORS" AND ELSEWHERE IN THIS PROSPECTUS. YOU SHOULD
NOT PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH APPLY ONLY
AS OF THE DATE OF THIS PROSPECTUS.

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17

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THE OFFER

PURPOSE OF THE OFFER

Our board of directors has determined that this rights offering is in our best
interest and in the best interests of our stockholders. The offering gives
existing stockholders the right to purchase additional shares at a price that
may be below market. The offering will increase the equity capital available for
making additional investments. In connection with the approval of this rights
offering, our board of directors considered, among other things, the following
factors:

o the subscription price relative to the market price and to our net
asset value per share;

o the increased equity capital to be available upon completion of the
rights offering for making additional investments consistent with our
investment objective;

o the dilution to non-exercising stockholders;

o the terms and expenses of the offering relative to other alternatives
for raising capital;

o the size of the offering in relation to the number of shares
outstanding;

o the market price of our common stock, both before and after the
announcement of the equity offering;

o the general condition of the securities markets; and

o any impact on operating expenses associated with an increase in
capital.

There can be no assurance of the amount of dilution that a stockholder will
experience or that the rights offering will be successful.

In determining that this offer was in our best interest and in the best interest
of our stockholders, the board of directors retained UBS Securities LLC, the
dealer manager for this offer, to provide us with financial advisory, marketing
and soliciting services relating to this offer, including advice with respect to
the structure, timing and terms of the offer. In addition, our board of
directors considered, among other things, using a fixed pricing versus variable
pricing mechanism, the benefits and drawbacks of conducting a non-transferable
versus a transferable rights offering, the effect on us if this offer is not
fully subscribed and the experience of the dealer manager in conducting rights
offerings.

Although we have no present intention to do so, we may, in the future and in our
discretion, choose to make additional rights offerings from time to time for a
number of shares and on terms which may or may not be similar to this offer. Any
such future rights offering will be made in accordance with the 1940 Act. For a
discussion of certain benefits of this offer to our affiliates, see "-- Certain
effects of this offer" below.

TERMS OF THE OFFER

We are issuing to our stockholders transferable rights to subscribe for an
aggregate of shares. Each stockholder is being issued one transferable
right for each whole share owned on the record date. The rights entitle the
stockholder to acquire at the subscription price one share for every rights
held (1-for ). Rights may be exercised at any time during the subscription
period, which commences on , 2004, the record date, and ends at 5:00 p.m.,
New York City time, on , 2004, the expiration date, unless extended by us.

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18

THE OFFER
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THE OFFER

The rights will be listed for trading on the Nasdaq National Market under the
symbol " " during the course of the offer. The shares of our common stock,
once issued, will be listed on the Nasdaq National Market under the symbol
"TICC." The rights will be evidenced by subscription certificates which will be
mailed to stockholders, except as discussed below under "-- Foreign
stockholders."

We will not issue fractional shares upon the exercise of rights; accordingly,
rights may be exercised only in multiples of , except that any stockholder
who is issued fewer than rights is entitled to subscribe for one full share
in this offer.

The rights are transferable. Rights holders who are not stockholders may
purchase shares as described above, which we refer to as the primary
subscription, but are not entitled to subscribe for shares pursuant to the
over-subscription privilege (as described below). Stockholders and rights
holders who purchase shares in the primary subscription and stockholders who
purchase shares pursuant to the over-subscription privilege are hereinafter
referred to as exercising rights holders.

Shares not subscribed for during the primary subscription will be offered, by
means of the over-subscription privilege, to record date stockholders who fully
exercise the rights issued to them pursuant to this offer (other than those
rights that cannot be exercised because they represent in the aggregate the
right to acquire less than one share) and who wish to acquire more than the
number of shares they are entitled to purchase pursuant to the exercise of their
rights, subject to certain limitations and subject to allotment. Investors who
are not stockholders are not entitled to subscribe for any shares pursuant to
the over-subscription privilege. See "-- Over-subscription privilege" below.

For purposes of determining the number of shares a stockholder may acquire
pursuant to the offer, broker-dealers, trust companies, banks or others whose
shares are held of record by Cede & Co. ("Cede") or by any other depository or
nominee will be deemed to be the holders of the rights that are issued to Cede
or the other depository or nominee on their behalf.

There is no minimum number of rights which must be exercised in order for the
offer to close.

OVER-SUBSCRIPTION PRIVILEGE

Shares not subscribed for by rights holders will be offered, by means of the
over-subscription privilege, to record date stockholders who have fully
exercised the rights issued to them and who wish to acquire more than the number
of shares they are entitled to purchase pursuant to the primary subscription.
Stockholders should indicate, on the subscription certificate which they submit
with respect to the exercise of the rights issued to them, how many additional
shares they are willing to acquire pursuant to the over-subscription privilege.
If sufficient additional shares remain, all stockholders' over-subscription
requests will be honored in full. If stockholder requests for shares pursuant to
the over-subscription privilege exceed the additional shares available, the
available additional shares will be allocated pro-rata among stockholders who
oversubscribe based on the number of rights originally issued to such
stockholders. The percentage of remaining shares each over-subscribing
stockholder may acquire will be rounded down to result in delivery of whole
shares. The allocation process may involve a series of allocations to assure
that the total number of shares available for over-subscriptions is distributed
on a pro-rata basis.

Banks, brokers, trustees and other nominee holders of rights will be required to
certify to the subscription agent, before any over-subscription privilege may be
exercised with respect to any particular beneficial owner, as to the aggregate
number of rights exercised pursuant to the primary subscription and the number
of shares subscribed for pursuant to the over-subscription privilege by such
beneficial owner and that such beneficial owner's primary subscription was
exercised in full. Nominee holder over-subscription certificates and beneficial
owner listing certification forms will be distributed to banks, brokers,
trustees and other nominee holders with the subscription certificates.

We will not offer or sell in connection with the offer any shares that are not
subscribed for pursuant to the primary subscription or the over-subscription
privilege.

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19

THE OFFER
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THE SUBSCRIPTION PRICE

The subscription price for the shares to be issued pursuant to the offer will
be % of the average of the last reported sale prices of a share on the Nasdaq
National Market on the expiration date of the rights offering and the preceding
four trading days. For example, if the average of the last reported sale prices
of a share on the Nasdaq National Market on the expiration date and the
preceding four trading days is $ , the subscription price would be $ per
share ( % of market price). Since the expiration date will be , 2004
(unless we extend the subscription period), rights holders will not know the
subscription price at the time of exercise and will be required initially to
pay for both the shares subscribed for pursuant to the primary subscription
and, if eligible, any additional shares subscribed for pursuant to the
over-subscription privilege at the estimated subscription price of $ per
share. See "-- Payment for shares" below. Rights holders who exercise their
rights will have no right to rescind a purchase after receipt of their completed
subscription certificates together with payment for shares by the subscription
agent. We do not have the right to withdraw the rights or cancel this offer
after the rights have been distributed.

EXPIRATION OF THE OFFER

The offer will expire at 5:00 p.m., New York City time, on , 2004, unless
extended by us. The rights will expire on the expiration date of the rights
offering and thereafter may not be exercised.

Any extension of the offer will be followed as promptly as practicable by
announcement thereof, and in no event later than 9:00 a.m., New York City time,
on the next business day following the previously scheduled expiration date.
Without limiting the manner in which we may choose to make such announcement, we
will not, unless otherwise required by law, have any obligation to publish,
advertise or otherwise communicate any such announcement other than by issuing a
press release or such other means of announcement as we deem appropriate.

SUBSCRIPTION AGENT

The subscription agent is . The subscription agent will receive for its
administrative, processing, invoicing and other services a fee estimated to be
approximately $ , plus reimbursement for all out-of-pocket expenses related
to the offer.

Completed subscription certificates must be sent together with proper payment
of the subscription price for all shares subscribed for in the Primary
Subscription and the over-subscription privilege (for stockholders) to the
subscription agent by one of the methods described below. Alternatively, notices
of guaranteed delivery may be sent by facsimile to to be received by the
subscription agent prior to 5:00 p.m., New York City time, on the expiration
date of the rights offering. Facsimiles should be confirmed by telephone
at . We will accept only properly completed and executed subscription
certificates actually received at any of the addresses listed below, prior to
5:00 p.m., New York City time, on the expiration date of the rights offering or
by the close of business on the third business day after the expiration date of
the rights offering following timely receipt of a notice of guaranteed delivery.
See "-- Payment for shares" below.

SUBSCRIPTION CERTIFICATE
DELIVERY METHOD ADDRESS/NUMBER
------------------------------------ ------------------------------------------
By Notice of Guaranteed Delivery Contact your broker-dealer, trust company,
bank, or other nominee to notify us of
your intent to exercise the rights.

By First Class Mail Only
(No Overnight /Express Mail)

By Hand to New York Delivery Window

By Express Mail or Overnight Courier

DELIVERY TO AN ADDRESS OTHER THAN ONE OF THE ADDRESSES LISTED ABOVE WILL NOT
CONSTITUTE VALID DELIVERY.

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THE OFFER
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INFORMATION AGENT

Any questions or requests for assistance concerning the method of subscribing
for shares or for additional copies of this prospectus or subscription
certificates or notices of guaranteed delivery may be directed to the
information agent at its telephone number and address listed below:

Stockholders may also contact their brokers or nominees for information with
respect to the offer. The information agent will receive a fee estimated to be
$ , plus reimbursement for its out-of-pocket expenses related to the
offer.

SALE OF RIGHTS

THE RIGHTS ARE TRANSFERABLE UNTIL THE EXPIRATION DATE

The rights will be listed for trading on the Nasdaq National Market under the
symbol " ," subject to notice of issuance. We will use our best efforts to
ensure that an adequate trading market for the rights will exist, although no
assurance can be given that a market for the rights will develop. Trading in
the rights on the Nasdaq National Market is expected to be conducted on a
"when-issued" basis beginning on or about , until and including on or
about . Thereafter, the rights are expected to trade on a "regular-way"
basis until and including , 2004 (or if the offer is extended, until the
last business day prior to the expiration date). Rights holders are encouraged
to contact their broker, bank, trustee or other nominees for more information
about trading of the rights.

SALES THROUGH SUBSCRIPTION AGENT AND DEALER MANAGER

Stockholders who do not wish to exercise any or all of their rights may instruct
the subscription agent to sell any rights they do not intend to exercise
themselves through or to the dealer manager. Subscription certificates
representing the rights to be sold through or to the dealer manager must be
received by the subscription agent on or before (or if the offer is
extended, until two business days prior to the expiration date). Upon the timely
receipt by the subscription agent of appropriate instructions to sell rights,
the subscription agent will ask the dealer manager either to purchase or to use
its best efforts to complete the sale and the subscription agent will remit the
proceeds of the sale to the selling stockholders. If the rights can be sold,
sales of such rights will be deemed to have been effected at the
weighted-average price received by the dealer manager on the day such rights are
sold. The sale price of any rights sold to the dealer manager will be based upon
the then current market price for the rights. The dealer manager will also
attempt to sell all rights which remain unclaimed as a result of subscription
certificates being returned by the postal authorities to the subscription agent
as undeliverable as of the fourth business day prior to the expiration date of
the rights offering. The subscription agent will hold the proceeds from those
sales for the benefit of such non-claiming stockholders until such proceeds are
either claimed or revert to the state. There can be no assurance that the dealer
manager will purchase or be able to complete the sale of any such rights, and
neither we nor the dealer manager has guaranteed any minimum sales price for the
rights. If a stockholder does not utilize the services of the subscription agent
and chooses to use another broker-dealer or other financial institution to sell
rights, then the other broker-dealer or financial institution may charge a fee
to sell the rights.

OTHER TRANSFERS

The rights evidenced by a subscription certificate may be transferred in whole
by endorsing the subscription certificate for transfer in accordance with the
accompanying instructions. A portion of the rights evidenced by a single
subscription certificate (but not fractional rights) may be transferred by
delivering to the subscription agent a subscription certificate properly
endorsed for transfer, with instructions to register such portion of the rights
evidenced thereby in the name of the transferee and to issue a new subscription
certificate to the transferee evidencing such transferred rights. In such event,
a new subscription certificate evidencing the balance of the rights, if any,
will be issued to the stockholder or, if the stockholder so instructs, to an
additional transferee. The signature on the subscription certificate must
correspond to the name as written upon the face of the subscription certificate

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21

THE OFFER
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in every particular, without alteration or enlargement, or any change. A
signature guarantee must be provided by an eligible financial institution as
defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, subject to
the standards and procedures adopted by us.

Stockholders wishing to transfer all or a portion of their rights should allow
at least five business days prior to the expiration date of the rights offering
for (i) the transfer instructions to be received and processed by the
subscription agent; (ii) a new subscription certificate to be issued and
transmitted to the transferee or transferees with respect to transferred rights,
and to the transferor with respect to retained rights, if any; and (iii) the
rights evidenced by such new subscription certificate to be exercised or sold by
the recipients thereof. Neither we nor the subscription agent nor the dealer
manager shall have any liability to a transferee or transferor of rights if
subscription certificates are not received in time for exercise or sale prior to
the expiration date of the rights offering.

Except for the fees charged by the subscription agent and dealer manager, which
will be paid by us, all commissions, fees and other expenses (including
brokerage commissions and transfer taxes) incurred or charged in connection with
the purchase, sale or exercise of rights will be for the account of the
transferor of the rights, and none of those commissions, fees or expenses will
be paid by us, the subscription agent or the dealer manager.

We anticipate that the rights will be eligible for transfer through, and that
the exercise of the primary subscription (but not the over-subscription
privilege) may be effected through, the facilities of the Depository Trust
Company or DTC. Stockholders of DTC exercised rights may exercise the
over-subscription privilege in respect of such DTC exercised rights by properly
executing and delivering to the subscription agent, at or prior to 5:00 p.m.,
New York City time, on the expiration date of the rights offering, a nominee
holder over-subscription certificate or a substantially similar form
satisfactory to the subscription agent, together with payment of the
subscription price for the number of shares for which the over-subscription
privilege is to be exercised.

METHODS FOR EXERCISING RIGHTS

Rights are evidenced by subscription certificates that, except as described
below under "-- Foreign stockholders," will be mailed to record date
stockholders or, if a record date stockholder's shares are held by Cede or any
other depository or nominee on their behalf, to Cede or such depository or
nominee. Rights may be exercised by completing and signing the subscription
certificate that accompanies this prospectus and mailing it in the envelope
provided, or otherwise delivering the completed and signed subscription
certificate to the subscription agent, together with payment in full for the
shares at the subscription price by the expiration date of the rights offering.
Rights may also be exercised by contacting your broker, trustee or other
nominee, who can arrange, on your behalf, to guarantee delivery of payment and
delivery of a properly completed and executed subscription certificate pursuant
to a notice of guaranteed delivery by the close of business on the third
business day after the expiration date. A fee may be charged for this service.
Completed subscription certificates and related payments must be received by the
subscription agent prior to 5:00 p.m., New York City time, on or before the
expiration date (unless payment is effected by means of a notice of guaranteed
delivery as described below under "-- Payment for shares") at the offices of the
subscription agent at the address set forth above. Fractional shares will not be
issued upon the exercise of rights.

EXERCISING RIGHTS HOLDERS

Exercising rights holders who are owners of record may choose either option set
forth under "-- Payment for shares" below. If time is of the essence,
alternative (2) will permit delivery of the subscription certificate and payment
after the expiration date.

RECORD DATE STOCKHOLDERS WHOSE SHARES ARE HELD BY A NOMINEE

Record date stockholders whose shares are held by a nominee, such as a bank,
broker or trustee, must contact that nominee to exercise their rights. In that
case, the nominee will complete the subscription certificate on behalf of the
record date stockholder and arrange for proper payment by one of the methods set
forth under "-- Payment for shares" below.

NOMINEES

Nominees, such as brokers, trustees or depositories for securities, who hold
shares for the account of others should notify the respective beneficial owners
of the shares as soon as possible to ascertain the beneficial owners' intentions

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22

THE OFFER
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and to obtain instructions with respect to the rights. If the beneficial owner
so instructs, the nominee should complete the subscription certificate and
submit it to the subscription agent with the proper payment as described under
"-- Payment for shares" below.

All questions as to the validity, form, eligibility (including times of receipt
and matters pertaining to beneficial ownership) and the acceptance of
subscription forms and the subscription price will be determined by us, which
determinations will be final and binding. No alternative, conditional or
contingent subscriptions will be accepted. We reserve the right to reject any or
all subscriptions not properly submitted or the acceptance of which would, in
the opinion of our counsel, be unlawful.

FOREIGN STOCKHOLDERS

Subscription certificates will not be mailed to foreign stockholders. Foreign
stockholders will receive written notice of this offer. The subscription agent
will hold the rights to which those subscription certificates relate for these
stockholders' accounts until instructions are received to exercise the rights,
subject to applicable law. If no instructions have been received by 5:00 p.m.,
New York City time, on , 2004, three business days prior to the expiration
date (or, if the subscription period is extended, on or before three business
days prior to the extended expiration date), the subscription agent will
transfer the rights of these stockholders to the dealer manager, which will
either purchase the rights or use its best efforts to sell them. The net
proceeds, if any, from sale of those rights will be remitted to these
stockholders.

PAYMENT FOR SHARES

Exercising rights holders may choose between the following methods of payment:

(1) An exercising rights holder may send the subscription certificate
together with payment for the shares acquired in the primary
subscription and any additional shares subscribed for pursuant to the
over-subscription privilege (for record date stockholders) to the
subscription agent based on the estimated subscription price of $
per share ( % of $ , the last reported sale price of a share on
the Nasdaq National Market on , 2004). To be accepted, the
payment, together with a properly completed and executed subscription
certificate, must be received by the subscription agent at one of the
subscription agent's offices set forth above, prior to 5:00 p.m., New
York City time, on the expiration date.

(2) An exercising rights holder may send a notice of guaranteed delivery
by facsimile or otherwise from a bank, trust company or New York Stock
Exchange member guaranteeing delivery of (i) payment of the full
subscription price for the shares subscribed for in the primary
subscription and any additional shares subscribed for pursuant to the
over-subscription privilege (for record date stockholders) and (ii) a
properly completed and executed subscription certificate. The
subscription agent will not honor a notice of guaranteed delivery
unless a properly completed and executed subscription certificate and
full payment for the shares is received by the subscription agent by
the close of business on , 2004 (or, if the offer is extended,
until the third business day after the expiration date).

All payments by an exercising rights holder must be in U.S. dollars by money
order or check drawn on a bank or branch located in the United States and
payable to . The subscription agent will deposit all funds
received by it prior to the final payment date into a segregated
interest-bearing account (which interest will accrue to the benefit of TICC)
pending pro-ration and distribution of the shares.

THE METHOD OF DELIVERY OF SUBSCRIPTION CERTIFICATES AND PAYMENT OF THE
SUBSCRIPTION PRICE TO US WILL BE AT THE ELECTION AND RISK OF THE EXERCISING
RIGHTS HOLDERS, BUT IF SENT BY MAIL IT IS RECOMMENDED THAT SUCH CERTIFICATES AND
PAYMENTS BE SENT BY REGISTERED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT
REQUESTED, AND THAT A SUFFICIENT NUMBER OF DAYS BE ALLOWED TO ENSURE DELIVERY TO
THE SUBSCRIPTION AGENT AND CLEARANCE OF PAYMENT PRIOR TO 5:00 P.M., NEW YORK
CITY TIME, ON THE EXPIRATION DATE OR THE DATE GUARANTEED PAYMENTS ARE DUE UNDER
A NOTICE OF GUARANTEED DELIVERY (AS APPLICABLE). BECAUSE UNCERTIFIED PERSONAL
CHECKS MAY TAKE AT LEAST FIVE BUSINESS DAYS TO CLEAR, YOU ARE STRONGLY URGED TO
PAY, OR ARRANGE FOR PAYMENT, BY MEANS OF CERTIFIED OR CASHIER'S CHECK OR MONEY
ORDER.

On a date within eight business days following the expiration date, the
subscription agent will send to each exercising rights holder (or, if shares are
held by Cede or any other depository or nominee, to Cede or such other

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23

THE OFFER
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depository or nominee) a confirmation showing (i) the number of shares purchased
pursuant to the primary subscription; (ii) the number of shares, if any,
acquired pursuant to the over-subscription privilege (forrecord date
stockholders); (iii) the per share and total purchase price for the shares; and
(iv) any additional amount payable to us by the exercising rights holder or any
excess to be refunded by us to the exercising rights holder, in each case based
on the subscription price as determined on the expiration date. If any
exercising rights holder, if eligible, exercises his right to acquire shares
pursuant to the over-subscription privilege, any excess payment which would
otherwise be refunded to him will be applied by us toward payment for shares
acquired pursuant to the exercise of the over-subscription privilege. Any
additional payment required from an exercising rights holder must be received by
the subscription agent within ten business days after the confirmation date. Any
excess payment to be refunded by us to an exercising rights holder will be
mailed by the subscription agent to the rights holder as promptly as
practicable.

WHICHEVER OF THE TWO METHODS DESCRIBED ABOVE IS USED, ISSUANCE OF THE SHARES
PURCHASED IS SUBJECT TO COLLECTION OF CHECKS AND ACTUAL PAYMENT. If an
exercising rights holder who subscribes for shares pursuant to the primary
subscription or over-subscription privilege (for record date stockholders) does
not make payment of any amounts due by the expiration date or the date
guaranteed payments are due under a notice of guaranteed delivery, the
subscription agent reserves the right to take any or all of the following
actions: (i) find other record date stockholders who wish to subscribe for such
subscribed and unpaid for shares; (ii) apply any payment actually received by it
from the exercising rights holder toward the purchase of the greatest whole
number of shares which could be acquired by such exercising rights holder upon
exercise of the primary subscription and/or the over-subscription privilege,
and/or (iii) exercise any and all other rights or remedies to which it may be
entitled, including, without limitation, the right to set off against payments
actually received by it with respect to such subscribed for shares.

All questions concerning the timeliness, validity, form and eligibility of any
exercise of rights will be determined by TICC, whose determinations will be
final and binding. We in our sole discretion may waive any defect or
irregularity, or permit a defect or irregularity to be corrected within such
time as we may determine, or reject the purported exercise of any right.
Subscriptions will not be deemed to have been received or accepted until all
irregularities have been waived or cured within such time as we determine in our
sole discretion. The subscription agent will not be under any duty to give
notification of any defect or irregularity in connection with the submission of
subscription certificates or incur any liability for failure to give such
notification.

EXERCISING RIGHTS HOLDERS WILL HAVE NO RIGHT TO RESCIND THEIR SUBSCRIPTION AFTER
RECEIPT OF THEIR PAYMENT FOR SHARES BY THE SUBSCRIPTION AGENT, EXCEPT AS
PROVIDED BELOW UNDER "-- NOTICE OF NAV DECLINE."

NOTICE OF NAV DECLINE

We, as required by the SEC's registration form, will suspend the offer until we
amend this prospectus if, subsequent to the effective date of this prospectus,
our net asset value declines more than 10% from our net asset value as of that
date. Accordingly, the expiration date would be extended and we would notify
record date stockholders of the decline and permit exercising rights holders to
cancel their exercise of rights.

DELIVERY OF STOCK CERTIFICATES

Participants in our dividend reinvestment plan will have any shares that they
acquire pursuant to the offer credited to their stockholder dividend
reinvestment accounts in the plan. Stockholders whose shares are held of record
by Cede or by any other depository or nominee on their behalf or their
broker-dealers' behalf will have any shares that they acquire credited to the
account of Cede or the other depository or nominee. With respect to all other
stockholders, stock certificates for all shares acquired will be mailed after
payment for all the shares subscribed for has cleared, which may take up to 15
days from the date of receipt of the payment.

FEDERAL INCOME TAX CONSEQUENCES OF THE OFFER

For federal income tax purposes, neither the receipt nor the exercise of the
rights by record date stockholders will result in taxable income to such
stockholders, and no loss will be realized if the rights expire without
exercise.

A record date stockholder's basis in a right will be zero unless either (i) the
fair market value of the right on the date of distribution is 15% or more of the
fair market value of the shares with respect to which the right was distributed

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24

THE OFFER
--------------------------------------------------------------------------------

or (ii) the record date stockholder elects, in his or her federal income tax
return for the taxable year in which the right is received, to allocate part of
the basis of the shares to the right. If either of clauses (i) and (ii) is
applicable, then if the right is exercised, the record date stockholder will
allocate his or her basis in the shares with respect to which the right was
distributed between the shares and the right in proportion to the fair market
values of each on the date of distribution.

The holding period of a right received by a record date stockholder includes the
holding period of the shares with regard to which the right is issued. If the
right is exercised, the holding period of the shares acquired begins on the date
the right is exercised.

If a right is sold, a gain or loss will be realized by the rights holder in an
amount equal to the difference between the basis of the right sold and the
amount realized on its disposition.

A record date stockholder's basis for determining gain or loss upon the sale of
a share acquired upon the exercise of a right will be equal to the sum of the
record date stockholder's basis in the right, if any, and the subscription price
per share. A record date stockholder's gain or loss recognized upon a sale of a
share acquired upon the exercise of a right will be capital gain or loss
(assuming the share was held as a capital asset at the time of sale) and will be
long-term capital gain or loss if the share is held for more than one year.

The foregoing is a general summary of the material U.S. federal income tax
consequences of the offer under the provisions of the Code and Treasury
regulations in effect as of the date of the prospectus that are generally
applicable to record date stockholders who are United States persons within the
meaning of the Code, and does not address any foreign, state or local tax
consequences. The Code and Treasury regulations are subject to change or
differing interpretations by legislative or administrative action, which may be
retroactive. Exercising rights holders should consult their tax advisors
regarding specific questions as to foreign, federal, state or local taxes.

ERISA CONSIDERATIONS

Stockholders who are employee benefit plans subject to the Employee Retirement
Income Security Act of 1974, which we refer to as ERISA (including corporate
savings and 401(k) plans), Keogh or H.R. 10 plans of self-employed individuals
and individual retirement accounts should be aware that additional contributions
of cash to a retirement plan (other than rollover contributions or
trustee-to-trustee transfers from other retirement plans) in order to exercise
rights would be treated as contributions to the retirement plan and, when taken
together with contributions previously made, may result in, among other things,
excise taxes for excess or nondeductible contributions. In the case of
retirement plans qualified under Section 401(a) of the Code and certain other
retirement plans, additional cash contributions could cause the maximum
contribution limitations of Section 415 of the Code or other qualification rules
to be violated. It may also be a reportable distribution and there may be other
adverse tax and ERISA consequences if rights are sold or transferred by a
retirement plan.

Retirement plans and other tax exempt entities, including governmental plans,
should also be aware that if they borrow in order to finance their exercise of
rights, they may become subject to the tax on unrelated business taxable income
under Section 511 of the Code. If any portion of an individual retirement
account is used as security for a loan, the portion so used is also treated as
distributed to the IRA depositor.

ERISA contains fiduciary responsibility requirements, and ERISA and the Code
contain prohibited transaction rules that may impact the exercise of rights. Due
to the complexity of these rules and the penalties for noncompliance, retirement
plans should consult with their counsel and other advisers regarding the
consequences of their exercise of rights under ERISA and the Code.

DISTRIBUTION ARRANGEMENTS

UBS Securities LLC, which is a broker-dealer and member of the National
Association of Securities Dealers, Inc., will act as dealer manager for this
offer. Under the terms and subject to the conditions contained in the dealer
management agreement, the dealer manager will provide financial advisory and
marketing services in connection with this offer and will solicit the exercise
of rights and participation in the over-subscription privilege. This offer is
not contingent upon any number of rights being exercised. We have agreed to pay
the dealer manager a fee for its financial advisory, marketing and soliciting
services equal to % of the aggregate subscription price for shares issued
pursuant to this offer.

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25

THE OFFER
--------------------------------------------------------------------------------

The dealer manager will reallow to broker-dealers included in the selling group
to be formed and managed by the dealer manager selling fees equal to % of
the subscription price per share for each share issued pursuant to this offer
as a result of their selling efforts. In addition, the dealer manager will
reallow to other broker-dealers that have executed and delivered a soliciting
dealer agreement and have solicited the exercise of rights, solicitation fees
equal to % of the subscription price per share for each share issued
pursuant to the exercise of rights as a result of their soliciting efforts,
subject to a maximum fee based on the number of shares held by each
broker-dealer through DTC on the record date. Fees will be paid to the
broker-dealer designated on the applicable portion of the subscription
certificates or, in the absence of such designation, to the dealer manager.

In addition, we have agreed to reimburse the dealer manager an amount up to
$ for a portion of its expenses incurred in connection with this offer. We
have agreed to indemnify the dealer manager or contribute to losses arising out
of certain liabilities, including liabilities under the Securities Act. The
dealer manager agreement also provides that the dealer manager will not be
subject to any liability to us in rendering the services contemplated by the
dealer manager agreement except for any act of bad faith, willful misconduct,
or gross negligence of the dealer manager or reckless disregard by the dealer
manager of its obligations and duties under the dealer manager agreement.

Prior to the expiration of this offer, the dealer manager may independently
offer for sale shares, including shares acquired through purchasing and
exercising the rights, at prices it sets. The dealer manager may realize
profits or losses independent of any fees described in this prospectus.

CERTAIN EFFECTS OF THIS OFFER

Our investment adviser will benefit from this offer because a portion of the
investment advisory fee we pay to the investment adviser is based on our gross
assets. See "Management -- Investment Advisory Agreement." It is not possible
to state precisely the amount of additional compensation the investment adviser
will receive as a result of this offer because it is not known how many shares
will be subscribed for and because the proceeds of the offer will be invested
in additional portfolio securities, which will fluctuate in value. However,
assuming (i) all rights are exercised, (ii) the average value of our gross
assets remains between $ million and $ million, and (iii) the
subscription price is $ per share, and after giving effect to dealer
manager fees and other expenses related to this offer, the investment adviser
would receive additional annualized advisory fees of $ and the amount of
the administrative fee received would not change. Two of our directors who
voted to authorize this offer are interested persons of the investment adviser.
The other three directors who approved this offer are not affiliated with the
investment adviser.

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26

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USE OF PROCEEDS

If shares of our common stock are sold at the subscription price of $ ,
the net proceeds of the offer are estimated to be approximately $ , after
deducting dealer manager fees and other expenses related to this offer payable
by us estimated at approximately $ . We plan to use the net proceeds of
this offering to fund investments in accordance with our investment objective.
See "Business -- General."

We estimate that it will take up to one year for us to substantially invest the
net proceeds of this offering, depending on the availability of attractive
opportunities and market conditions. However, we can offer no assurance that we
will be able to achieve this goal.

Pending these uses, we will invest the net proceeds primarily in cash, cash
equivalents, and U.S. government securities and other high-quality debt
investments that mature in one year or less. The management fee payable by us to
our investment adviser will not be reduced while our assets are invested in such
securities.

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27

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PRICE RANGE OF COMMON STOCK AND DISTRIBUTIONS

Our common stock is traded on the Nasdaq National Market under the symbol
"TICC." We completed the initial public offering of our common stock in November
2003 at the price of $15.00 per share. Prior to such date there was no public
market for our common stock.

The following table sets forth the range of high and low closing prices of our
common stock as reported on the Nasdaq National Market and the dividends
declared by us for each fiscal quarter since our initial public offering. The
stock quotations are interdealer quotations and do not include markups,
markdowns or commissions.

PREMIUM/ PREMIUM/
PRICE RANGE DISCOUNT DISCOUNT CASH
----------------------- OF HIGH SALES OF LOW SALES DIVIDEND
NAV(A) HIGH LOW PRICE TO NAV PRICE TO NAV PER SHARE(B)
----------- ----------- ----------- --------------- -------------- -------------

FISCAL 2004
Fourth quarter (through October 20, 2004) .... * $ 14.70 $ 13.85 * * **
Third quarter ................................ * 14.15 11.90 * * $ 0.11
Second quarter ............................... $ 13.61 15.02 12.97 110% 95% 0.11
First quarter ................................ 13.69 16.75 13.86 122% 101% 0.10
FISCAL 2003
Fourth quarter ............................... 13.80 15.66 14.88 113% 108% 0.00

(a) Net asset value per share is determined as of the last day in the relevant
quarter and therefore may not reflect the net asset value per share on the
date of the high and low sales prices. The net asset values shown are based
on outstanding shares at the end of each period.

(b) Represents the dividend declared in the specified quarter.

* Net asset value has not yet been calculated for this period.

** Our board of directors has not yet declared a dividend for the fourth
quarter of 2004.

The last reported price for our common stock on October 20, 2004 was $14.68 per
share. As of October 20, 2004, we had 91 shareholders of record.

Shares of business development companies may trade at a market price that is
less than the value of the net assets attributable to those shares. The
possibility that our shares of common stock will trade at a discount from net
asset value or at premiums that are unsustainable over the long term are
separate and distinct from the risk that our net asset value will decrease.
During the second quarter of 2004, our shares of common stock traded at a
discount to the net assets attributable to those shares. As of October 20, 2004,
our shares of common stock traded at premium of approximately 108% to the net
assets attributable to those shares based upon our net asset value as of June
30, 2004. It is not possible to predict whether the shares offered hereby will
trade at, above, or below net asset value.

We currently intend to distribute a minimum of 90% of our ordinary income and
short-term capital gains, if any, on a quarterly basis to our stockholders. We
did not declare a dividend for the period ended December 31, 2003.

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28

PRICE RANGE OF COMMON STOCK AND DISTRIBUTIONS
--------------------------------------------------------------------------------

The following table reflects the dividends per share that we have declared on
our common stock:

DATE DECLARED RECORD DATE PAYMENT DATE AMOUNT
--------------------------- ---------------- ---------------- ----------
July 28, 2004 ............. Sept. 10, 2004 Sept. 30, 2004 $ 0.11
May 5, 2004 ............... June 10, 2004 June 30, 2004 0.11
February 2, 2004 .......... March 15, 2004 April 5, 2004 0.10
-------
Total Declared ............ $ 0.32
=======

Our ability to make distributions will be limited by asset coverage requirements
under the 1940 Act. For a more detailed discussion, see "Regulation as a
Business Development Company".

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29

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

The information contained in this section should be read in conjunction with the
Selected Financial and Other Data and our financial statements and notes thereto
appearing elsewhere in this prospectus.

OVERVIEW

Our investment objective is to maximize our portfolio's total return,
principally by investing in the debt and/or equity securities of
technology-related companies. Our primary focus is to seek current income
through investment in non-public debt and long-term capital appreciation by
acquiring accompanying warrants or other equity securities. We operate as a
closed-end, non-diversified management investment company, and have elected to
be treated as a business development company under the 1940 Act. We have elected
to be treated for tax purposes as a RIC under the Code beginning with the 2003
taxable year.

Our investment activities are managed by TIM, a registered investment adviser
under the Advisers Act. TIM is owned by BDC Partners, its managing member, and
Royce & Associates, LLC. Jonathan H. Cohen, our chief executive officer, and
Saul B. Rosenthal, our chief operating officer, are the members of BDC Partners,
and Charles M. Royce, our non-executive chairman, is the president of Royce.
Under the investment advisory agreement, we have agreed to pay TIM an annual
base fee and an incentive fee based upon our performance. Under an
administration agreement, we have agreed to pay or reimburse BDC Partners, as
administrator, for certain expenses incurred in operating TICC.

We concentrate our investments in companies having annual revenues of less than
$100 million and/or a market capitalization of less than $200 million. We focus
on companies that create products or provide services requiring advanced
technology and companies that compete in industries characterized by such
products or services, including companies in the following businesses: Internet,
IT services, media, telecommunications, semiconductors, hardware and
technology-enabled services.

While the structure of our investments varies, we invest primarily in the debt
of established technology-related companies. We seek to invest in entities that,
as a general matter, have been operating for at least one year prior to the date
of our investment and at the time of our investment, have employees and
revenues. Most of these companies will have financial backing provided by
private equity or venture capital funds or other financial or strategic sponsors
at the time we make an investment. Our investments typically range from $5
million to $15 million, mature in up to seven years and accrue interest at fixed
or variable rates. Our loans may carry a provision for deferral of some or all
of the interest payments, which is added to the principal amount of the loan.
This form of deferred interest is referred to as "payment-in-kind" or "PIK"
interest and, when earned, is recorded as interest income and an increase in the
principal amount of the loan. We had PIK interest of approximately $243,000 for
the quarter ended June 30, 2004.

To the extent possible, our loans are collateralized by a security interest in
the borrower's assets or guaranteed by a principal to the transaction. Interest
payments, if not deferred, are normally payable quarterly. In addition, we seek
an equity component in connection with a substantial portion of our investments,
in the form of warrants to purchase stock or similar equity instruments. When we
receive a warrant to purchase stock in a portfolio company, the warrant will
frequently have a nominal strike price, and will entitle us to purchase a modest
percentage of the borrower's stock.

In addition, as a business development company under the 1940 Act, we are
required to offer to make available significant managerial assistance, for which
we may receive fees, to our portfolio companies. These fees are generally
non-recurring, however in some instances they may have a recurring component. We
have received no fee income for managerial assistance to date.

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30

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
--------------------------------------------------------------------------------

Prior to making an investment, we typically enter into a non-binding term sheet
with the potential portfolio company. These term sheets are generally subject to
a number of conditions, including but not limited to the satisfactory completion
of our due diligence investigations of the company's business and legal
documentation for the loan.

Since our initial public offering in November 2003 through October 20, 2004, we
made 8 loans to target companies in the total amount of approximately $77.6
million, with a commitment of an additional $10.0 million to three of our
portfolio companies.

We completed the following transactions since our initial public offering:

AMOUNT AT
COST
PORTFOLIO COMPANY DATE INVESTMENT (IN THOUSANDS)
------------------------------------------- ------------- ----------------------------- ---------------

Questia Media, Inc. (1)(2) ................ January 2004 Senior secured notes $ 8,411

MortgageIT, Inc. .......................... March 2004 Senior secured notes 15,000

Advanced Aesthetics Institute ............. March 2004 Warrants to purchase --
common stock
Senior secured notes 10,000

The Endurance International Group (1) ..... July 2004 Warrants to purchase --
convertible preferred stock
Senior secured notes 7,000

DirectRevenue, LLC ........................ August 2004 Warrants to purchase --
common stock
Senior secured notes 6,700

Avue Technologies Corporation (1) ......... August 2004 Warrants to purchase --
common stock
Senior secured notes 2,500

Trenstar Inc. (2) ......................... September 200 Warrants to purchase --
convertible preferred stock
Senior secured notes 15,000

3001, Inc. (3) ............................ October 2004 Senior unsecured notes 10,000
Preferred stock 2,000
Common stock 1,000

TOTAL INVESTMENTS: ........................ $77,611

(1) Total investment includes issuance of additional senior notes and warrants
upon the satisfaction of certain specified conditions.

(2) Includes a pay-in-kind component.

(3) Preferred stock and common stock are indirectly held through limited
liability company interests.

In addition, we currently have several transactions in our pipeline, and we
expect some additional transactions to close during the fourth quarter of 2004.
However, we continue to conduct due diligence and finalize terms regarding such
transactions. There can be no assurance when or if these transactions will
close.

In addition, we believe that we have a strong pipeline of potential transactions
in various stages. We continue to work diligently toward the consummation of
additional investments, and our management is actively involved in identifying
and evaluating potential opportunities. We currently believe that we will have
substantially invested the net proceeds from our initial public offering by the
end of 2004 based upon our current pipeline.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements and related disclosures in conformity
with generally accepted accounting principles in the United States requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, disclosure of contingent assets and liabilities at the
date of the financial statements, and revenues and expenses during the periods
reported. Actual results could materially differ from those estimates. We have
identified our investment valuation process as our most critical accounting
policy.

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31

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
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INVESTMENT VALUATION

The most significant estimate inherent in the preparation of our financial
statements is the valuation of investments and the related amounts of unrealized
appreciation and depreciation of investments recorded.

We value our investment portfolio each quarter. Members of our portfolio
management team provide information to our board of directors on each portfolio
company including the most recent financial statements and forecasts, if any. In
addition, we have engaged the firm of Houlihan Lokey Howard & Zukin to evaluate
our portfolio investments, although our board of directors retains ultimate
authority as to the appropriate valuation of each investment. At June 30, 2004,
our board of directors used the information provided by the portfolio management
team and Houlihan Lokey in its determination of the final fair value of
investments, as noted in the Schedule of Investments.

The board of directors' final determination of fair value is based on some or
all of the following factors, as applicable, and any other factors considered to
be relevant:

o the nature of any restrictions on the disposition of the securities;

o assessment of the general liquidity/illiquidity of the securities;

o the issuer's financial condition, including its ability to make
payments and its earnings and discounted cash flow;

o the markets in which the issuer does business;

o the cost of the investment;

o the size of the holding and the capitalization of issuer;

o the nature and value of any collateral;

o the prices of any recent transactions or bids/offers for the
securities or similar securities or any comparable securities that are
publicly traded; and

o any available analyst, media or other reports or information deemed
reliable by the independent valuation firm regarding the issuer or the
markets or industry in which it operates.

Fair value securities may include, but are not limited to, the following:

o private placements and restricted securities that do not have an
active trading market;

o securities whose trading has been suspended or for which market quotes
are no longer available;

o debt securities that have recently gone into default and for which
there is no current market;

o securities whose prices are stale; and

o securities affected by significant events.

RESULTS OF OPERATIONS

We were incorporated on July 21, 2003 and commenced operations in November 2003.
Therefore, there is no period with which to compare the results of operations
for the six months ended June 30, 2004 and the year ended December 31, 2003.

FOR THE SIX MONTHS ENDED JUNE 30, 2004

INVESTMENT AND RELATED PORTFOLIO INCOME

Investment income for the six months ended June 30, 2004 was approximately
$2,157,000. This amount primarily consisted of interest income of approximately
$525,000 from our investment in U.S. government securities, money market funds
and other high-quality debt investments, $691,000 cash interest from portfolio
investments, and $411,000 in PIK from one of our debt investments. Non-recurring
fee income of $530,000 was also recorded.

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32

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
--------------------------------------------------------------------------------

Interest income from our investment in U.S. government securities, money market
funds and other high-quality debt investments reflects the investment of the net
proceeds from our initial public offering that have not been invested in
portfolio securities. Income from investments in debt securities was relatively
modest since we did not close our first investment until January 28, 2004 and
the other two investments were closed during the last week of March 2004.

OPERATING EXPENSES

Operating expenses for the six months ended June 30, 2004 were approximately
$1,927,000. This amount consisted of investment advisory fees, salaries and
benefits, professional fees, and general and administrative expenses.

The investment advisory fee for the six months was approximately $1,379,000,
representing the base management fee as provided for in our investment advisory
agreement. On June 17, 2004, our shareholders approved an amendment to our
investment advisory agreement that changed our base fee from 2.0% of net assets
to 2.0% of gross assets. The portion of the investment advisory fee payable
subsequent to that date was calculated in accordance with the terms of that
amendment.

Salaries and benefits were approximately $98,000, reflecting the allocation of
compensation expenses for the services of our chief financial officer, office
manager, and the vice president of corporate development.

Professional fees, consisting of legal and audit fees, were approximately
$202,000, and insurance costs were $40,040. Directors' fees were $70,500 for the
six months ended June 30, 2004.

General and administrative expenses, consisting primarily of office supplies,
facilities costs and other expenses, were approximately $138,000. General and
administrative expenses are allocated to us under the terms of the
administration agreement with BDC Partners.

NET INCREASE IN STOCKHOLDERS' EQUITY RESULTING FROM OPERATIONS

We had a net increase in stockholders' equity resulting from operations of
$229,000 for the six months ended June 30, 2004. Based on a weighted-average of
10,022,279 (basic and fully diluted) shares outstanding, our net increase in
stockholders' equity from operations per common share for the six months ended
June 30, 2004 was $0.02 for basic and fully diluted earnings.

FOR THE YEAR ENDED DECEMBER 31, 2003

INVESTMENT AND RELATED PORTFOLIO INCOME

Investment income for the period from inception (July 21, 2003) through December
31, 2003 was approximately $114,000. This amount consisted of interest income
from the investment in U.S. government securities, money market funds and other
high-quality debt investments from November 26, 2003 through December 31, 2003.
Interest income from our investment in U.S. government securities, money market
funds and other high-quality debt investments reflects the investment of the net
proceeds from our initial public offering pending our investment of such
proceeds in accordance with our investment objective and policies.

OPERATING EXPENSES

Expenses for the period from inception through December 31, 2003 were
approximately $692,000. This amount consisted primarily of organizational
expenses, investment advisory fees, professional fees, salaries and benefits for
administrative personnel, and general and administrative expenses.

Our investment advisory fees were $259,000 for the period. The remainder of the
expenses incurred for the period from inception through December 31, 2003
consisted of approximately $349,000 in organization expenses, $30,000 in
professional fees, $27,000 in salaries for administrative personnel, $19,000 in
general and administrative expenses, and $8,000 for insurance. A substantial
portion of these expenses were incurred in connection with our organization and
the commencement of operations.

NET DECREASE IN STOCKHOLDER'S EQUITY RESULTING FROM OPERATIONS

As a result of the investment income and expenses described above, we had a net
decrease in stockholder's equity resulting from operations of approximately
$578,000 for the period from inception through December 31, 2003.

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33

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
--------------------------------------------------------------------------------

Based on a weighted-average of 2,348,987 shares outstanding, our net decrease in
stockholder's equity resulting from operations per common share for the period
from inception through December 31, 2003 was $(0.25), basic and fully-diluted.

LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2004, we had investments in debt securities of, or loans to, three
private companies, totaling approximately $33.4 million. This number includes
approximately $411,000 in accrued PIK interest which, as described above, is
added to the carrying value of our investments.

Cash used by operating activities for the six months ended June 30, 2004,
consisting primarily of the items described above, was approximately $307,000
reflecting the non-cash income related to PIK interest and the increase in
accrued interest receivable, offset to some degree by income from operations and
the increase in accrued expenses.

During the six months ended June 30, 2004, cash and cash equivalents decreased
from approximately $138.2 million at the beginning of the period to
approximately $104.1 million at the end of the period, due primarily to our
investing activities.

In order to qualify as a regulated investment company and to avoid corporate
level tax on the income we distribute to our stockholders, we are required,
under Subchapter M of the Code, to distribute at least 90% of our ordinary
income and short-term capital gains to our stockholders on an annual basis. In
accordance with these requirements, we declared a dividend of $0.10 per common
share for the first quarter of 2004, which was paid in April 2004, and a
dividend of $0.11 per share for the second quarter of 2004, which was paid on
June 30, 2004.

CERTAIN RELATED PARTY TRANSACTIONS

TIM is owned by BDC Partners, its managing member, and Royce. Jonathan H. Cohen,
our chief executive officer, and Saul B. Rosenthal, our chief operating officer,
are the members of BDC Partners, and Charles M. Royce, our non-executive
chairman, is the president of Royce & Associates, LLC. Since our initial public
offering in November 2003 to June 30, 2004, TICC paid or owed to TIM investment
advisory fees of $1,637,087, and paid to BDC Partners $122,798 as reimbursement
for compensation expenses paid by BDC Partners to employees for administrative
services rendered to TICC, pursuant to an administration agreement. In addition,
TICC reimbursed TIM and BDC Partners for organizational and offering expenses of
$332,600 which were advanced by them on behalf of TICC in connection with TICC's
initial public offering in November 2003.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are subject to financial market risks, including changes in interest rates.
As of June 30, 2004, three loans in our portfolio were at fixed rates. Over time
some of our investments will be at variable rates. We may in the future hedge
against interest rate fluctuations by using standard hedging instruments such as
futures, options and forward contracts. While hedging activities may insulate us
against adverse changes in interest rates, they may also limit our ability to
participate in the benefits of lower interest rates with respect to our
portfolio of investments.

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34

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BUSINESS

GENERAL

We are a specialty finance company principally providing capital to small- and
medium-sized technology-related companies. Technology-related companies are
businesses that focus on the following sectors: software, Internet, IT services,
media, telecommunications, semiconductors, hardware and technology-enabled
services. We completed our initial public offering in November 2003 and have
since invested $87.6 million (consisting of $77.6 million in funded capital and
$10.0 million in committed capital) in 8 portfolio companies.

Our investment objective is to maximize our portfolio's total return principally
by investing in the debt securities of technology-related companies. Our primary
focus is on seeking current income by investing in debt securities. We also seek
to provide our stockholders with long-term capital growth through the
appreciation in the value of warrants or other equity instruments that we may
receive when we make debt investments, or equity investments in
technology-related companies.

We concentrate our investments in companies having annual revenues of less than
$100 million and/or a market capitalization of less than $200 million. Our
investments typically range from $5 million to $15 million, mature in up to
seven years and accrue interest at fixed or variable rates.

Our investment activities are managed by TIM. TIM is an investment adviser
registered under the Advisers Act. TIM is owned by BDC Partners, its managing
member, and Royce & Associates, LLC. Jonathan H. Cohen, our chief executive
officer, and Saul B. Rosenthal, our chief operating officer, are the members of
BDC Partners, and Charles M. Royce, our non-executive chairman, is the president
of Royce. Under the investment advisory agreement, we have agreed to pay TIM an
annual base management fee based on our gross assets as well as an incentive fee
based on our performance. See "Management -- Investment Advisory Agreement."

We were founded in July 2003 and completed an initial public offering of shares
of our common stock in November 2003. We are a Maryland corporation and a
closed-end, non-diversified management investment company that has elected to be
regulated as a business development company under the 1940 Act. As a business
development company, we are required to meet certain regulatory tests, including
the requirement to invest at least 70% of our total assets in eligible portfolio
companies. See "Regulation as a Business Development Company". In addition, we
have elected to be treated for federal income tax purposes as a RIC under the
Code.

Our headquarters are at 8 Sound Shore Drive, Greenwich, Connecticut and our
telephone number is (203) 983-5275.

MARKET OPPORTUNITY

The period since mid-2000 has seen a dramatic shift in the competitive landscape
across the technology-related sector. Significant declines in corporate and
consumer demand for information technology products and services have driven
vigorous price competition and spurred numerous corporate reorganizations in
technology-related industries. Many companies have merged with competitors,
scaled-back their operations or simply closed down in response to these
difficult business conditions, and we expect to see further consolidation in
these industries. At the same time, technology-related companies with strong
balance sheets, stable revenues and efficient operating structures are
benefiting from the consolidation or elimination of competitors in their
markets.

LARGE, UNDERSERVED MARKET FOR PRODUCT

Following the technology-related market downturn, an increasing number of
well-positioned technology-related companies have been seeking to raise capital.
Historically, growing technology-related companies have generally

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relied upon equity rather than debt financing. As a result, the market for debt
financing for technology-related companies is generally less developed than the
debt markets serving other industries. In spite of the large number of
technology-related companies in the United States today, we believe that these
companies are significantly underserved by traditional lenders such as banks,
savings and loan institutions and finance companies for the following reasons:

o Non-traditional financial profile -- The balance sheet of a
technology-related company often includes a disproportionately large
amount of intellectual property assets as compared to the balance
sheets of industrial and service companies, which makes them difficult
to evaluate using traditional lending criteria. Additionally, the high
revenue growth rates characteristic of technology-related companies
often render them difficult to evaluate from a credit perspective.
Moreover, technology-related companies often incur relatively high
expenditures for research and development, utilize unorthodox sales
and marketing techniques and selling channels, and experience rapid
shifts in technology, consumer demand and market share. These
attributes can make it difficult for traditional lenders to analyze
technology-related companies using conventional analytical methods.

o Industry scale, concentration and regulation -- Many companies in
technology-related industries lack the size, and the markets in which
they operate lack the scale, necessary to service large loans by
traditional lenders. In the banking industry, in particular,
consolidation over the last decade has increased the size, and reduced
the number, of surviving banks. The surviving institutions have sought
to limit their credit exposures to, and the monitoring costs
associated with loans to, smaller businesses. In addition, traditional
lending institutions operate in a regulatory environment that favors
lending to large, established businesses. In response to such
regulation, many traditional lending institutions have developed loan
approval processes which conflict with the entrepreneurial culture of
smaller technology-related companies.

For the reasons outlined above, we believe that many viable technology-related
companies have either not been able, or have elected not, to obtain financing
from traditional lending institutions. We believe that these factors are likely
to continue, given the ongoing consolidation in the financial services industry.

COMPLEMENTING PRIVATE EQUITY AND VENTURE CAPITAL FUNDS

Our investment approach complements other sources of capital available to
technology-related companies. For example, although we may compete with private
equity and venture capital funds as a source of capital for such businesses,
those types of investors typically invest primarily in equity-based securities.
We believe that the nature of our investments in debt securities is often viewed
by such entities as an attractive alternative source of capital. Private equity
and venture capital funds often base their investments on anticipated annual
internal rates of return that are substantially higher than the annual internal
rates of return that we set as our operating target. Moreover, private equity
and venture capital funds generally require a significantly greater percentage
of equity ownership interests than we require. However, private equity and
venture capital investments typically entail considerably more risk than the
debt investments that we make, as they are usually uncollateralized and rank
lower in priority in the capital structure of the portfolio companies. We
believe the prospect of obtaining additional capital without incurring
substantial incremental dilution makes us attractive to owner-managers as a
prospective source of capital.

In addition, in many cases, we expect that private equity and venture capital
funds will generally welcome an investment by us in their portfolio companies.
After making an initial investment, these funds often seek to stabilize or
reduce their financial exposure to their portfolio companies, a goal that
financing from us could accomplish by providing non-equity capital. In the
current investment climate, it is possible that we will offer one of the only
viable alternative source of capital for a technology-related company other than
incremental equity investments by the company's existing financial sponsors. As
such, we provide technology-related companies and their financial sponsors with
an opportunity to diversify the company's capital sources. In addition to
enabling incremental growth, this can facilitate access to other alternative
sources of capital in the future.

COMPETITIVE ADVANTAGES

We believe that we are well positioned to provide financing to technology-
related companies for the following reasons:

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o Focus on technology;

o Expertise in originating, structuring and monitoring investments;

o Flexible investment approach; and

o Established deal sourcing network.

FOCUS ON TECHNOLOGY

We concentrate our investments in companies in technology-related industries. We
believe that this focus, together with our experience in analyzing and financing
such companies, affords us a sustainable competitive advantage. In particular,
we have expertise in assessing the value of intellectual property assets, and in
evaluating the operating characteristics of technology-related companies. As a
result, we believe that we have a competitive advantage over less specialized
lenders, particularly over lenders with limited experience in lending to
technology-related companies. In addition, we believe that our specialization in
financing companies within the technology sector enables us to advise portfolio
companies on consolidation and exit financing opportunities more rapidly and
effectively than less specialized lenders.

EXPERTISE IN ORIGINATING, STRUCTURING AND MONITORING INVESTMENTS

We believe that our strong combination of experience and contacts in the
technology sector has attracted well-positioned prospective portfolio companies.

o Jonathan H. Cohen, our chief executive officer and president, has more
than 15 years of experience in technology-related equity research and
investment. He was named to Institutional Investor's "All-American"
research team in 1996, 1997 and 1998. During his career, Mr. Cohen has
managed technology research groups covering computer software and
hardware companies, telecommunication companies and semiconductor
companies at several firms, including Wit SoundView, Merrill Lynch &
Co., UBS Securities and Salomon Smith Barney. Mr. Cohen is currently
the portfolio manager of Royce Technology Value Fund, a
technology-focused mutual fund.

o Saul B. Rosenthal, our chief operating officer, has six years of
experience in the capital markets, with a focus on small to
middle-market transactions in the technology sector. Mr. Rosenthal
previously served as president of Privet Financial Securities, LLC, a
broker-dealer providing advisory services to technology companies, and
previously led the private financing/public company effort at
SoundView Technology Group, where he co-founded SoundView's Private
Equity Group. He was a vice-president and co-founder of the Private
Equity Group at Wit Capital from 1998 to 2000. Prior to joining Wit
Capital, Mr. Rosenthal was an attorney at the law firm of Shearman &
Sterling LLP.

o Lee D. Stern, our executive vice president, has more than 20 years of
financial and investment experience in leveraged finance and in
financing technology companies. Prior to joining TICC, Mr. Stern was a
senior professional at Hill Street Capital, and prior to that, he was
a partner of Thomas Weisel Partners and its predecessor, NationsBanc
Montgomery, where he focused on leveraged transactions relating to
acquisition finance and leveraged buyouts, including private and
public mezzanine finance. Mr. Stern was also previously a managing
director at Nomura Securities International, Inc., where he played a
key role in building that firm's merchant banking and principal debt
investing business, and was a member of Nomura Securities
International's commitment and underwriting committees.

We believe that our extensive experience in researching, analyzing and investing
in technology companies and structuring debt investments affords us a
competitive advantage in providing financing to technology-related companies.

FLEXIBLE INVESTMENT APPROACH

We have significant flexibility in selecting and structuring our investments. We
are not subject to many of the regulatory limitations that govern traditional
lending institutions such as banks. Also, we have fairly broad latitude as to
the term and nature of our investments. We recognize that technology-related
companies regularly make corporate development decisions that impact their
financial performance, valuation and risk profile. In some cases, these
decisions can favorably impact long-term enterprise value at the expense of
short-term financial performance.

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We seek to structure our investments so as to take into account the uncertain
and potentially variable financial performance of our portfolio companies. This
enables our portfolio companies to retain access to committed capital at
different stages in their development and eliminate some of the uncertainty
surrounding their capital allocation decisions. We calculate rates of return on
invested capital based on a combination of up-front commitment fees, current and
deferred interest rates and exit values, which may take the form of common
stock, warrants, or other equity-linked instruments. We believe that this
flexible approach to structuring investments will facilitate positive, long-term
relationships with our portfolio companies and their equity sponsors and enable
us to become a preferred source of capital to them. We also believe our approach
should enable debt financing to develop into a viable alternative capital source
for funding the growth of technology-related companies that wish to avoid the
dilutive effects of equity financings for existing equity holders.

We are not subject to periodic capital return requirements. Such requirements,
which are standard for most private funds, typically require that such funds
return to investors the initial capital investment after a pre-agreed time,
together with any capital gains on such investment. These provisions often force
such funds to seek the return of their investments in portfolio companies
through mergers, public equity offerings or other liquidity events more quickly
than they otherwise might, which can result in a lower overall return to
investors and adversely affect the ultimate viability of the affected portfolio
companies. We believe that our flexibility to take a longer-term view should
help us to maximize returns on our invested capital while still meeting the
needs of our portfolio companies.

ESTABLISHED DEAL SOURCING NETWORK

Through the senior investment professionals of TIM and our directors, we have
extensive contacts and sources from which to generate investment opportunities.
These contacts and sources include private equity and venture capital funds,
public and private companies, investment bankers, attorneys, accountants and
commercial bankers. We believe that senior professionals of TIM have developed
strong reputations within the investment community over their years in the
investment banking, investment management and equity research businesses.

INVESTMENT PROCESS

IDENTIFICATION OF PROSPECTIVE PORTFOLIO COMPANIES

We identify and source new prospective portfolio companies through a network of
venture capital and private equity funds, investment banks, accounting and law
firms and direct company relationships. We have identified several criteria that
we believe are important in seeking our investment objective with respect to
technology-related companies. These criteria provide general guidelines for our
investment decisions; however, we do not require each prospective portfolio
company in which we choose to invest to meet all of these criteria.

o Experienced management -- We generally require that our portfolio
companies have an experienced management team. We also require the
portfolio companies to have in place proper incentives to induce
management to succeed and to act in concert with our interests as
investors, including having significant equity interests.

o Significant financial or strategic sponsor and / or strategic partner
-- We prefer to invest in technology-related companies in which
established private equity or venture capital funds or other financial
or strategic sponsors have previously invested and are willing to make
an ongoing contribution to the management of the business.

o Strong competitive position in industry -- We seek to invest in
technology-related companies that have developed a strong competitive
position within their respective sector or niche of a
technology-related industry.

o Profitable on a cash flow basis -- We focus on technology-related
companies that are profitable or nearly profitable on an operating
cash flow basis. Typically, we would not expect to invest in start-up
companies.

o Clearly defined exit strategy -- Prior to making an investment in a
debt security that is accompanied by an equity-based security in a
portfolio company, we analyze the potential for that company to
increase the liquidity of its common equity through a future event
that would enable us to realize appreciation, if any,

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in the value of our equity interest. Liquidity events may include an
initial public offering, a merger or an acquisition of the company, a
private sale of our equity interest to a third party, or a purchase of
our equity position by the company or one of its stockholders.

o Liquidation value of assets -- Although we do not operate as an
asset-based lender, the prospective liquidation value of the assets,
if any, collateralizing the debt securities that we hold is an
important factor in our credit analysis. We emphasize both tangible
assets, such as accounts receivable, inventory and equipment, and
intangible assets, such as intellectual property, software code,
customer lists, networks and databases.

DUE DILIGENCE

If a technology-related company meets some of the characteristics described
above, we perform a preliminary due diligence review including company and
technology assessments, market analysis, competitive analysis, evaluation of
management, risk analysis and transaction size, pricing and structure analysis.
The criteria delineated below provide general parameters for our investment
decisions, although not all of such criteria will be followed in each instance.
Upon successful completion of this preliminary evaluation process, we will
decide whether to deliver a non-binding letter of intent, after which we
generally receive an upfront advance to cover our due diligence-related
expenses, begin the due diligence process and move forward towards the
completion of a transaction.

The following outlines our due diligence process:

MANAGEMENT TEAM AND FINANCIAL SPONSOR

o management assessment including a review of management's track record
with respect to product development and marketing, mergers and
acquisitions, alliances, collaborations, research and development
outsourcing and other strategic activities, reference and background
checks; and

o financial sponsor reputation, track record, experience and knowledge.

BUSINESS

o industry and competitive analysis;

o customer and vendor interviews to assess both business prospects and
standard practices of the company;

o assessment of likely exit strategies; and

o potential regulatory / legal issues.

FINANCIAL CONDITION

o detailed review of the historical financial performance and the
quality of earnings;

o development of detailed pro forma financial projections;

o review of internal controls and accounting systems;

o review of assets and liabilities, including contingent liabilities;
and

o customer and vendor interviews to assess both business prospects and
standard practices of the company.

TECHNOLOGY ASSESSMENT

o evaluation of intellectual property position;

o review of research and development milestones;

o analysis of core technology under development;

o assessment of collaborations and other technology validations; and

o assessment of market and growth potential.

Contemporaneous with our due diligence process, the investment team prepares a
detailed credit memorandum for presentation to the investment committee.

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INVESTMENT STRUCTURING

We seek to achieve a high level of current income by investing in debt
securities, consisting primarily of senior notes, senior subordinated notes and
junior subordinated notes, of technology-related companies. We also seek to
provide our stockholders with long-term capital growth through the appreciation
in the value of warrants or other equity instruments that we may receive when we
make loans.

In structuring our investments, we ascertain the asset quality as well as the
earnings quality of our prospective portfolio companies. Frequently, we obtain a
senior secured position and thus receive a perfected, first priority security
interest in substantially all of our portfolio companies' assets, which entitles
us to a preferred position on payments in the event of liquidation, and in many
cases a pledge of the equity by the equity owners. In addition, we structure
loan covenants to assist in the management of risk. Our loan documents
ordinarily include affirmative covenants that require the portfolio company to
take specific actions such as periodic financial reporting, notification of
material events and compliance with laws, restrictive covenants that prevent
portfolio companies from taking a range of significant actions such as incurring
additional indebtedness or making acquisitions without our consent, covenants
requiring the portfolio company to maintain or achieve specified financial
ratios such as debt to cash flow, interest coverage and operating covenants
requiring them to maintain certain operational benchmarks such as minimum
revenue or minimum cash flow. Our loan documents also contain customary events
of default such as non-payment, breach of covenant, insolvency and change of
control.

Senior Debt

The senior debt in which we invest generally holds a senior position in the
capital structure of a portfolio company. Such debt may include loans that hold
the most senior position, loans that hold an equal ranking with other senior
debt, or loans that are, in the judgment of our investment adviser, in the
category of senior debt. A senior position in the borrower's capital structure
generally gives the holder of the senior debt a claim on some or all of the
borrower's assets that is senior to that of subordinated debt, preferred stock
and common stock in the event the borrower defaults or becomes bankrupt. The
senior debt in which we invest may be wholly or partially secured by collateral,
or may be unsecured.

SENIOR SUBORDINATED DEBT

Senior subordinated debt is subordinated in its rights to receive its principal
and interest payments from the borrower to the rights of the holders of senior
debt. As a result, senior subordinated debt is riskier than senior debt.
Although such loans are sometimes secured by significant collateral, we
principally rely on the borrower's cash flow for repayment. Additionally, we
often receive warrants to acquire shares of stock in borrowers in connection
with these loans.

JUNIOR SUBORDINATED DEBT

Structurally, junior subordinated debt is subordinate in priority of payment to
senior debt (and is often unsecured), but is senior in priority to equity.
Junior subordinated debt often has elements of both debt and equity instruments,
having the fixed returns associated with senior debt while also providing the
opportunity to participate in the future growth potential of a company through
an equity component, typically in the form of warrants. Due to its higher risk
profile and less restrictive covenants, loans associated with junior
subordinated debt financing generally earn a higher return than senior debt or
senior subordinated debt instruments.

ONGOING RELATIONSHIPS WITH PORTFOLIO COMPANIES

MONITORING

We monitor the financial trends of each portfolio company to assess the
appropriate course of action for each company and to evaluate overall portfolio
quality. We closely monitor the status and performance of each individual
company on at least a quarterly and, in most cases, a monthly basis.

We have several methods of evaluating and monitoring the performance of our debt
and equity positions, including but not limited to the following:

o assessment of business development success, including product
development, profitability and the portfolio company's overall
adherence to its business plan;

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o periodic and regular contact with portfolio company management to
discuss financial position, requirements and accomplishments;

o periodic formal update interviews with portfolio company management
and, if appropriate, the financial or strategic sponsor;

o attendance at and participation in board meetings; and

o review of monthly and quarterly financial statements and financial
projections for portfolio companies.

MANAGERIAL ASSISTANCE

As a business development company, we are required to offer, and in some cases
may provide and be paid for, significant managerial assistance to portfolio
companies. This assistance typically involves monitoring the operations of
portfolio companies, participating in their board and management meetings,
consulting with and advising their officers and providing other organizational
and financial guidance.

COMPETITION

Our primary competitors to provide financing to technology-related companies
include private equity and venture capital funds, other equity and non-equity
based investment funds and investment banks and other sources of financing,
including traditional financial services companies such as commercial banks and
specialty finance companies. Many of these entities have greater financial and
managerial resources than we will have. For additional information concerning
the competitive risks we face, see "Risk factors -- We operate in a highly
competitive market for investment opportunities."

EMPLOYEES

We have no employees. Our day-to-day investment operations are managed by our
investment adviser. In addition, we reimburse BDC Partners for an allocable
portion of expenses incurred by it in performing its obligations under the
administration agreement, including a portion of the rent and the compensation
of our chief financial officer and vice president of corporate development and
other administrative support personnel. See "Management -- Investment Advisory
Agreement."

LEGAL PROCEEDINGS

Although we may, from time to time, be involved in litigation arising out of our
operations in the normal course of business, we are not a party to any pending
material legal proceedings.

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PORTFOLIO COMPANIES

The following table sets forth certain information as of October 20, 2004,
regarding each portfolio company in which we had a debt or equity investment.
The general terms of our loans and other investments are described in "Business
-- Investment Process -- Investment Structuring." We offer to make available
significant managerial assistance to our portfolio companies. We may receive
rights to observe the meetings of our portfolio companies' board of directors.
Other than these investments, our only relationships with our portfolio
companies are the managerial assistance we may separately provide to our
portfolio companies, which services would be ancillary to our investments.

COST FAIR VALUE (2)
NAME AND ADDRESS OF PERCENTAGE -------------------------
PORTFOLIO COMPANY (1) INDUSTRY INVESTMENT OF CLASS HELD (IN THOUSANDS)
---------------------------------------------------------------------------------------------------------------------------------

Questia Media, Inc. digital media senior secured notes (3)(4) -- $ 8,411 $ 8,411
24 Greenway Plaza
Suite 1000A
Houston, TX 77406

MortgageIT, Inc. financial services senior secured notes -- 15,000 15,000
33 Maiden Lane
6th Floor
New York, NY 10038

Advanced Aesthetics Institute medical services senior secured notes -- 10,000 10,000
575 North Flager Drive
P-300 warrants to purchase
West Palm Beach, FL 33401 common stock 3.0% -- --

The Endurance International webhosting senior secured notes -- 7,000 (5)
Group
70 Blanchard Road warrants to purchase
Burlington, MA 01803 convertible preferred stock (8) 1.50% -- --

DirectRevenue, LLC internet advertising senior secured notes -- 6,700 (5)
107 Grand Street
3rd Floor warrants to purchase
New York, NY 10013 common stock 1.00% -- --

Avue Technologies software senior secured notes -- 2,500 (5)
Corporation
1145 Broadway Plaza warrants to purchase
Suite 800 common stock 1.00% -- --
Tacoma, WA 98402

Trenstar Inc. logistics technology senior secured notes (3) -- 15,000 (5)
5613 DTC Parkway
Greenwood Village, CO warrants to purchase (8)
80111 convertible preferred stock 1.75% -- --

3001, Inc. geospatial imaging senior unsecured notes -- 10,000 (5)
600 Cities Service Highway preferred stock (7) 34.9% 2,000 (5)
Sulphur, LA 70664 common stock (7) 11.5% 1,000 (5)

TOTAL INVESTMENTS: $77,611 $ 77,611(6)

(1) We do not "control" and are not an "affiliate" of any of our portfolio
companies, each as defined in the 1940 Act. In general, under the 1940 Act,
we would "control" a portfolio company if we owned 25% or more of its
voting securities and would be an "affiliate" of a portfolio company if we
owned 5% or more of its voting securities.

(2) Fair value is determined in good faith by our board of directors.

(3) Investment includes payment-in-kind interest.

(4) Transaction also includes a commitment to fund additional investments over
the next two years.

(5) Because these investments were made subsequent to the quarter ended June
30, 2004, our board of directors has not yet determined the fair value of
these investments.

(6) This total includes the investments for which our board of directors has
not yet determined the fair value. See note 5 above. Such investments are
included at cost.

(7) Preferred stock and common stock are indirectly held through limited
liability company interests.

(8) Expressed as a percentage of common stock outstanding.

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Set forth below is a brief description of each of our portfolio companies.

3001, INC.

Our investment in 3001 consists of $10 million in senior notes, $2 million in
preferred stock and $1 million in common stock.

3001 is a leading single-source provider of geospatial data production and
analysis, including airborne imaging, surveying, mapping, and Geographic
Information Systems (GIS). 3001 maintains its leadership position in mapping and
remote sensing technologies by developing, adapting and commercializing new
technologies and software to reveal new information about the earth, to increase
mapping accuracy, and to accelerate the speed of production.

ADVANCED AESTHETICS INSTITUTE

Our investment in Advanced Aesthetics consists of $10 million in senior notes
and warrants to purchase common stock.

Advanced Aesthetics has created and is expanding the industry's first
integrated, branded source for aesthetics-improvement services and products that
provide predictable results inside a trusted, high service environment. Advanced
Aesthetics utilizes credentialed cosmetic medical practitioners that deliver
protocol-driven procedures that are overseen by a market leading team of
cosmetic medical thought leaders and Johns Hopkins Medicine. In addition,
Advanced Aesthetics is the first aesthetic services provider with the ability to
track and document treatment outcomes. Advanced Aesthetics uses a host of mature
and evolving technologies for measuring the efficacy of skin care, surgical and
dental interventions, which includes detailed analysis of skin quality, facial
feature symmetry and the potential for dental improvements.

AVUE TECHNOLOGIES CORPORATION

Our investment in Avue consists of $7.5 million in senior notes and warrants to
purchase common stock, of which $2.5 million was made available to Avue at
closing with the remaining $5 million available to be drawn down as the company
meets certain financial milestones.

Avue is the recognized market leader and technology innovator in public sector
workforce management. The company provides the public sector with integrated
technology and service solutions that dramatically increase organization-wide
management effectiveness, workforce productivity, and manager and worker
satisfaction.

DIRECT REVENUE, LLC

Our investment in Direct Revenue consists of $6.7 million in senior notes and
warrants to purchase common stock.

DirectRevenue provides a suite of technology solutions that enable marketers to
deliver highly targeted contextual advertisements to consumers and enables
providers of software, services and content to offer free, ad-supported versions
of their products.

MORTGAGEIT, INC.

Our investment in MortgageIT consists of $15 million in senior notes.

MortgageIT is a full-service residential mortgage bank offering a broad array of
home mortgage products through an extensive nationwide network of both retail
and wholesale offices as well as through MortgageIT's Internet operations.
MortgageIT conducts business through its IPI Skyscraper, MIT Lending and
MortgageIT.com operations.

QUESTIA MEDIA, INC.

Our investment in Questia consists of $10 million in senior notes, of which $8
million was made available to Questia at closing with the remaining $2 million
available to be drawn down as the company meets certain financial milestones.

Questia provides unlimited access to the full content of an extensive collection
of books, journal, magazine and newspaper articles, as well as a wide range of
tools, including highlighter, markup, automatic footnotes and bibliography
builder. For students and researchers worldwide, the Questia service enables
them to efficiently research and compose papers at any time, from any computer
with Internet connectivity.

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THE ENDURANCE INTERNATIONAL GROUP

Our investment in Endurance consists of $10 million in senior notes and warrants
to purchase convertible preferred stock, of which $7 million was made available
to Endurance at closing with the remaining $3 million available to be drawn down
as the company meets certain financial milestones.

Endurance is a leading provider of shared website hosting and other online
services for small and medium-sized businesses. Endurance currently manages a
number of website hosting properties, each of which is a provider of web
services to a targeted segment of the small business community.

TRENSTAR, INC.

Our investment in TrenStar consists of $15 million in senior notes and warrants
to purchase common convertible preferred stock.

TrenStar's supply chain technology and services heritage has evolved into a
pioneering radio frequency identification ("RFID")-enabled, "pay-per-use" model
of mobile asset management designed to reduce transportation and operating costs
for companies invested in containers that move raw materials, work-in-progress
and finished goods through the supply chain. TrenStar's three-part asset
management, logistics services and supply chain technology solutions,
integrating RFID and container tracking software, is offered to qualified
clients for no up front cost. TrenStar and its affiliates focus on brewing,
beverage, food, synthetic rubber, air cargo, healthcare and other
asset-intensive industries.

DETERMINATION OF NET ASSET VALUE

We determine the net asset value of our investment portfolio each quarter.

Portfolio investments for which market prices are available are valued at those
prices. However, all of our portfolio investments were acquired in privately
negotiated transactions and have no readily available market values. As a
result, our board of directors determines in good faith the fair value of all of
our portfolio investments based upon the recommendation of its valuation
committee. The valuation committee utilizes the services of Houlihan Lokey
Howard & Zukin in arriving at the fair value of these investments; however our
board of directors retains ultimate authority as to the appropriate valuation of
each investment. No single standard for determining fair value in good faith
exists since fair value depends upon circumstances of each individual case. In
general, fair value is the amount that we might reasonably expect to receive
upon the current sale of the security.

In making the good faith determination of the fair value of our investments, we
start with the cost basis of the investment, which includes the amortized
original issue discount, stated interest and PIK interest, if any. Due to the
uncertainty inherent in the valuation process, such estimates of fair value may
differ significantly from the values that would have been obtained had a ready
market for the investment existed, and the differences could be material.
Additionally, changes in the market environment and other events that may occur
over the life of the investments may cause the gains or losses ultimately
realized on these investments to be different than the valuations currently
assigned.

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MANAGEMENT

Certain information, as of October 20, 2004, with respect to each of the
directors, is set forth below, including their names, ages, a brief description
of their recent business experience, including present occupations and
employment, certain directorships that they hold, and the year in which each of
them became a director of TICC. The business address of each director listed
below is 8 Sound Shore Drive, Greenwich, Connecticut 06830.

INDEPENDENT DIRECTORS

The following directors are not "interested persons" of TICC as defined in the
1940 Act.

NAME AND YEAR FIRST ELECTED DIRECTOR AGE BACKGROUND INFORMATION
---------------------------------------------------------------------------------------------------------

Steven P. Novak (2003) ............... 55 Mr. Novak currently serves as president of Palladio
Capital Management, LLC and as the principal and
managing member of the general partner of Palladio
Partners, LP, an equities hedge fund that commenced
operations in July 2002. Prior to founding Palladio, Mr.
Novak was a managing director of C.E. Unterberg, Towbin
from February 1993 through December 2001. Mr. Novak
serves on the board of directors of CyberSource
Corporation.

G. Peter O'Brien (2003) .............. 59 Mr. O'Brien is currently a member of the board of
trustees of Colgate University and President of the
board of directors of Hill House, Inc., a congregate
care facility for low income elderly residents in
Riverside, Connecticut. Mr. O'Brien retired as a
managing director of Merrill Lynch & Co. in 1999 after
working in the equity capital markets area since he
joined Merrill Lynch & Co. in 1971. Mr. O'Brien serves
on the board of directors of the Legg Mason family of
mutual funds, the Royce funds and the Renaissance IPO
Plus Aftermarket Fund.

Tonia L. Pankopf (2003) .............. 36 Ms. Pankopf has been a senior analyst and managing
director at Palladio Capital Management since January of
2004. She was a private consultant from July 2003
through December 2003. She previously served as an
analyst with P.A.W. Capital Partners, LP from 2001 to
July 2003. Ms. Pankopf was a senior analyst and vice
president at Goldman, Sachs & Co. from 1999 to 2001 and
at Merrill Lynch & Co. from 1998 to 1999.

INTERESTED DIRECTORS

Messrs. Cohen and Royce are "interested persons" of TICC as defined in the 1940
Act. Mr. Cohen is an interested person of TICC due to his position as chief
executive officer and president of TICC and TIM, TICC's investment adviser, and
as the managing member of BDC Partners, the managing member of TIM. Mr. Royce is
an interested person of TICC due to his relationship with Royce & Associates,
LLC.

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NAME AND YEAR FIRST ELECTED DIRECTOR AGE BACKGROUND INFORMATION
---------------------------------------------------------------------------------------------------------

Jonathan H. Cohen (2003) ............. 39 Mr. Cohen is chief executive officer and president of
TICC and its investment adviser, TIM, and the managing
member of BDC Partners. Mr. Cohen is also a principal of
JHC Capital Management, a registered investment adviser
that serves as the sub-adviser to the Royce Technology
Value Fund, and was previously a principal of Privet
Financial Securities, LLC, a registered broker-dealer.
Prior to founding JHC Capital Management in 2001, Mr.
Cohen managed technology research groups at Wit
SoundView from 1999 to 2001. He has also managed
securities research groups at Merrill Lynch & Co. from
1998 to 1999.

Charles M. Royce (2003) .............. 65 Mr. Royce became president and chief investment officer
(in 1972) and a member of the board of managers (in
2001) of Royce & Associates, LLC (which term, as used in
this proxy statement, includes its corporate
predecessor). He also manages or co-manages ten of Royce
& Associates' open- and closed-end registered funds. Mr.
Royce serves on the board of directors of The Royce
Funds.

INFORMATION ABOUT EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS

The following information, as of October 20, 2004, pertains to our executive
officers who are not directors of TICC. Certain of our executive officers serve
as directors of, or on the board of managers of, certain of our portfolio
companies.

NAME AGE BACKGROUND INFORMATION
---------------------------------------------------------------------------------------------------------

Saul B. Rosenthal .................... 36 Mr. Rosenthal is chief operating officer, treasurer and
corporate secretary of TICC and its investment adviser,
TIM, and a member of BDC Partners. Mr. Rosenthal was
previously president of Privet Financial Securities,
LLC, a registered broker-dealer and financial consultant
to small to medium-sized private and public technology
companies. Mr. Rosenthal led the private financing/public
company effort at SoundView Technology Group from 2000
to 2002, where he co-founded SoundView's Private Equity
Group. Previously, Mr. Rosenthal was a vice president
and co-founder of the Private Equity Group at Wit
Capital from 1998 to 2000.

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NAME AGE BACKGROUND INFORMATION
---------------------------------------------------------------------------------------------------------

Patrick F. Conroy .................... 47 Mr. Conroy is the chief financial officer and chief
compliance officer of TICC, TIM and BDC Partners. He
joined TICC in December 2003, and was previously a
consultant on financial reporting and compliance
matters, as well as an adjunct professor of accounting
and finance at St. Thomas Aquinas College. Mr. Conroy
was the chief financial officer of New York Mercantile
Exchange from 1993 to 2003. He is a certified public
accountant.

Lee D. Stern ......................... 52 Mr. Stern is an executive vice president of TICC and the
chief transaction officer of TIM and BDC Partners. He
has over 20 years of financial and investment experience
in leveraged finance and in financing technology
companies. Prior to joining TICC, Mr. Stern was a member
of Hill Street Capital, our former sub-adviser, and was
previously a partner of Thomas Weisel Partners and its
predecessor, NationsBanc Montgomery, from 1997 to 2000.

COMMITTEES OF THE BOARD OF DIRECTORS

Our board of directors has established an audit committee and a valuation
committee. During 2003, the board of directors of TICC held 4 board meetings and
1 committee meeting. All directors attended at least 75% of the aggregate number
of meetings of the board and the committees on which they served. TICC requires
each director to make a diligent effort to attend all board and committee
meetings, as well as each annual meeting of stockholders.

THE AUDIT COMMITTEE

The audit committee operates pursuant to a charter approved by our board of
directors. The charter sets forth the responsibilities of the audit committee.
The audit committee's responsibilities include recommending the selection of the
independent registered public accounting firm for TICC, reviewing with such
independent registered public accounting firm the planning, scope and results of
their audit of TICC's financial statements, pre-approving the fees for services
performed, reviewing with the independent registered public accounting firm the
adequacy of internal control systems, reviewing TICC's annual financial
statements and periodic filings, and receiving TICC's audit reports and
financial statements. The audit committee is presently composed of three
persons, including Messrs. Novak and O'Brien and Ms. Pankopf, all of whom are
considered independent under the rules of the Nasdaq National Market. Our board
of directors has determined that Mr. Novak is an "audit committee financial
expert" as that term is defined under Item 401 of Regulation S-K of the
Securities Exchange Act of 1934. Mr. Novak meets the current independence and
experience requirements of Rule 10A-3 of the Exchange Act and, in addition, is
not an "interested person" of TICC as that term is defined in Section 2(a)(19)
of the 1940 Act. The audit committee met once during 2003.

THE NOMINATING COMMITTEE

TICC does not have a nominating committee. A majority of the independent
directors of the board of directors, in accordance with the Nasdaq National
Market listing standards, recommends candidates for election as directors. TICC
does not currently have a charter or written policy with regard to the
nomination process or stockholder recommendations. The absence of such a policy
does not mean, however, that a stockholder recommendation would not have been
considered had one been received.

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In evaluating director nominees, the independent members of the board of
directors consider the following factors:

o the appropriate size and composition of TICC's board of directors;

o whether or not the person is an "interested person" of TICC as defined
in Section 2(a)(19) of the 1940 Act;

o the needs of TICC with respect to the particular talents and
experience of its directors;

o the knowledge, skills and experience of nominees in light of
prevailing business conditions and the knowledge, skills and
experience already possessed by other members of the board of
directors;

o familiarity with national and international business matters;

o experience with accounting rules and practices;

o appreciation of the relationship of TICC's business to the changing
needs of society;

o the desire to balance the considerable benefit of continuity with the
periodic injection of the fresh perspective provided by new members;
and

o all applicable laws, rules, regulations, and listing standards.

Our board of director's goal is to assemble a board of directors that brings to
TICC a variety of perspectives and skills derived from high quality business and
professional experience.

Other than the foregoing there are no stated minimum criteria for director
nominees, although the independent members of the board of directors may also
consider such other factors as they may deem are in the best interests of TICC
and its stockholders. The board of directors also believes it appropriate for
certain key members of TICC's management to participate as members of the board
of directors.

The independent members of the board of directors identify nominees by first
evaluating the current members of the board of directors willing to continue in
service. Current members of the board of directors with skills and experience
that are relevant to TICC's business and who are willing to continue in service
are considered for re-nomination, balancing the value of continuity of service
by existing members of the board of directors with that of obtaining a new
perspective. If any member of the board of directors does not wish to continue
in service or if the board of directors decides not to re-nominate a member for
re-election, the independent members of the board of directors identify the
desired skills and experience of a new nominee in light of the criteria above.
The entire board of directors is polled for suggestions as to individuals
meeting the above criteria. Research may also be performed to identify qualified
individuals. To date, TICC has not engaged third parties to identify or evaluate
or assist in identifying potential nominees although TICC reserves the right in
the future to retain a third party search firm, if necessary.

THE VALUATION COMMITTEE

The valuation committee establishes guidelines and makes recommendations to our
board of directors regarding the valuation of our loans and investments. The
valuation committee is presently composed of Messrs. Novak and O'Brien and Ms.
Pankopf. The valuation committee did not meet during 2003.

THE COMPENSATION COMMITTEE

TICC does not have a compensation committee because our executive officers do
not receive any direct compensation from TICC.

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COMPENSATION

The following table sets forth, as of December 31, 2003, the compensation we
paid to our directors and executive officers. Except as set forth in such table,
no other compensation was paid to any directors (including those who also serve
as executive officers) by TICC.

COMPENSATION TABLE

PENSION OR
RETIREMENT
BENEFITS
AGGREGATE ACCRUED AS TOTAL
COMPENSATION PART OF COMPENSATION
FROM TICC'S PAID TO
NAME AND POSITION TICC EXPENSES(1) DIRECTORS(2)
------------------------------------------------------------ --------------- ------------- -------------

INTERESTED DIRECTORS
Jonathan H. Cohen .......................................... $ -- None $ --
Charles M. Royce ........................................... -- None --
INDEPENDENT DIRECTORS
Steven P. Novak ............................................ -- None --
G. Peter O'Brien ........................................... -- None --
Tonia L. Pankopf ........................................... -- None --
EXECUTIVE OFFICERS
Patrick F. Conroy, Chief Financial Officer ................. -- (3) None --
Saul B. Rosenthal, Chief Operating Officer, Treasurer
and Corporate Secretary .................................. -- (4) None --
Lee D. Stern, Executive Vice President and Chief
Transaction Officer ...................................... -- (4) None --

(1) We do not have a bonus, profit sharing or retirement plan, and directors do
not receive any pension or retirement benefits.

(2) Consists only of directors' fees paid by TICC during 2003. The directors
have waived all of their fees for 2003.

(3) We hired a chief financial officer after the completion of our initial
public offering; however, he did not receive any compensation from us in
2003. The compensation of our chief financial officer is paid by BDC
Partners, subject to reimbursement by us of an allocable portion of such
compensation for services rendered by him to TICC. For the fiscal year
ending December 31, 2004, we estimate that the amount of such reimbursement
will be approximately $180,000.

(4) With the exception of our chief financial officer, none of our executive
officers receives compensation from TICC.

COMPENSATION OF DIRECTORS

The directors have waived all of their fees for the year 2003. Beginning in
2004, the independent directors receive an annual fee of $35,000 and receive
$2,000 plus reimbursement of reasonable out-of-pocket expenses incurred in
connection with attending each board meeting. No additional fees are paid in
connection with attending committee meetings. No compensation is paid to
directors who are interested persons of TICC as defined in the 1940 Act.

INVESTMENT ADVISORY AGREEMENT

MANAGEMENT SERVICES

TIM serves as our investment adviser. TIM is a recently formed investment
adviser that is registered as an investment adviser under the Advisers Act.
Subject to the overall supervision of our board of directors, TIM manages the
day-to-day operations of, and provides investment advisory services to, TICC.
Under the terms of the investment advisory agreement, TIM:

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

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

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

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o determines what securities we will purchase, retain or sell.

TIM's services under the investment advisory agreement are not exclusive, and it
is free to furnish similar services to other entities so long as its services to
us are not impaired. However, TIM has agreed that, during the term of the
investment advisory agreement, it will not serve as investment adviser to any
other public or private entity that utilizes a principal investment strategy of
providing debt financing to technology-related companies.

MANAGEMENT FEE

We pay TIM a fee for investment advisory services consisting of two components
-- a base management fee and an incentive fee.

The base management fee is calculated at an annual rate of 2.00%. For services
rendered under the investment advisory agreement, the base management fee will
be payable quarterly in arrears, and will be calculated based on the average
value of our gross assets at the end of the two most recently completed calendar
quarters, and appropriately adjusted for any share issuances, repurchases or
redemptions during the current calendar quarter. Base management fees for any
partial month or quarter will be appropriately pro rated. TIM has further agreed
not to terminate or modify this waiver agreement without the prior consent of
our board of directors, including the separate consent of a majority of our
independent directors.

The incentive fee has two parts, as follows: One part is calculated and payable
quarterly in arrears based on our pre-incentive fee net investment income for
the immediately preceding calendar quarter. For this purpose, pre-incentive fee
net investment income means interest income, dividend income and any other
income earned during the calendar quarter, minus our operating expenses for the
quarter (including the base management fee and any interest expense and
dividends paid on any issued and outstanding preferred stock, but excluding the
incentive fee). Pre-incentive fee net investment income includes any consulting
or other fees that we receive from portfolio companies, but does not include any
net realized capital gains. Pre-incentive fee net investment income, expressed
as a rate of return on the value of our net assets at the end of the immediately
preceding calendar quarter, will be compared to one-fourth of the applicable
annual "hurdle rate." TIM is entitled to 20.0% of the excess (if any) of our
pre-incentive fee net investment income for the quarter over one-fourth of the
applicable annual hurdle rate. The annual hurdle for the period from the closing
of our initial public offering through and including December 31, 2004 is 8.27%,
which is equal to the interest rate payable, at the beginning of the period, on
the most recently issued five-year U.S. Treasury Notes plus 5.0%. For each
calendar year commencing on or after January 1, 2005, the annual hurdle rate
will be determined as of the immediately preceding December 31st by adding 5.0%
to the interest rate then payable on the most recently issued five-year U.S.
Treasury Notes, up to a maximum annual hurdle rate of 10.0%. The calculations
will be appropriately pro rated for any period of less than three months and
adjusted for any share issuances, redemptions or repurchases during the current
quarter.

The second part of the incentive fee will be determined and payable in arrears
as of the end of each calendar year (or upon termination of the investment
advisory agreement, as of the termination date), commencing on December 31,
2004, and will equal 20.0% of our realized capital gains for the calendar year,
if any, computed net of all realized capital losses and unrealized capital
depreciation for such year; provided that the incentive fee as of December 31,
2004 will be calculated for a period of longer than twelve calendar months to
take into account any realized capital gains, realized capital losses and
unrealized capital losses for the period ended December 31, 2003.

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EXAMPLES OF INCENTIVE FEE CALCULATION

Total Incentive Fee = income related portion of incentive fee plus capital gains
portion of incentive fee

EXAMPLE 1: INCOME-RELATED PORTION OF INCENTIVE FEE:(1)

ALTERNATIVE 1:

Assumptions
Investment income (including interest, dividends, fees, etc.) = 8%
Hurdle rate = 8.27%
Management fee = 2%(2)
Other expenses (legal, accounting, custodian, transfer agent, etc.) = 1%
Pre-incentive fee net investment income
(investment income - (management fee + other expenses)) = 5%

PRE-INCENTIVE FEE NET INVESTMENT INCOME DOES NOT EXCEED HURDLE RATE, THEREFORE
THERE IS NO INCENTIVE FEE.

ALTERNATIVE 2:

Assumptions
Investment income (including interest, dividends, fees, etc.) = 12%
Hurdle rate = 8.27%
Management fee = 2%(2)
Other expenses (legal, accounting, custodian, transfer agent, etc.) = 1%
Pre-incentive fee net investment income
(investment income - (management fee + other expenses)) = 9%

Incentive Fee = 20% x (12% - (8.27 + 2% + 1%))
= 20% x (12% - 11.27%)
= 20% x .73%
= .146%

(1) For purposes of this example, these calculations are shown on an annual
basis and the hypothetical amount of returns shown are based on a
percentage of our total net assets and assumes no leverage.

(2) Based on average gross assets, but assumes no leverage.

EXAMPLE 2: CAPITAL GAINS PORTION OF INCENTIVE FEE:(1)

Assumptions
Year 1 = no net realized capital gains or losses
Year 2 = 6% net realized capital gains, 1% unrealized capital losses and 0%
unrealized gains
Year 3 = 12% net realized capital gains, 2% unrealized capital losses and 2%
unrealized gains
Capital gains incentive fee = 20% x (net realized capital gains for year less
unrealized capital losses for the period)

Year 1 incentive fee = 20% x (0)
= 0
= no incentive fee

Year 2 incentive fee = 20% x (6% - 1%)
= 20% x (5%)
= 1%

Year 3 incentive fee = 20% x (12% - 2%)
= 20% x (10%)
= 2%

(1) The hypothetical amount of returns shown are based on a percentage of our
total net assets and assumes no leverage.

TOTAL INCENTIVE FEE

To determine the total incentive fee, you must add the income-related portion of
the incentive fee with the capital gains portion of the incentive fee. For
example, if the income-related portion of the incentive fee is 0.146% as set

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forth in Alternative 2 to the first example above and the capital gains portion
of the incentive fee is 2.0% as set forth in Year 3 to the second example above,
the total incentive fee would be 2.146% as a percentage of our total gross
assets (assuming no leverage). These amounts are based on the hypothetical
amounts reflected in the above examples, and the actual amount for either
portion of the incentive fee may differ.

PAYMENT OF OUR EXPENSES

All personnel of our investment adviser when and to the extent engaged in
providing investment advisory services, and the compensation and expenses of
such personnel allocable to such services, will be provided and paid for by BDC
Partners, the investment adviser's managing member. We are responsible for all
other costs and expenses of our operations and transactions, including (without
limitation) the cost of calculating our net asset value; the cost of effecting
sales and repurchases of shares of our common stock and other securities;
investment advisory fees; fees payable to third parties relating to, or
associated with, making investments (in each case subject to approval of our
board of directors); transfer agent and custodial fees; federal and state
registration fees; any exchange listing fees; federal, state and local taxes;
independent directors' fees and expenses; brokerage commissions; costs of proxy
statements, stockholders' reports and notices; fidelity bond, directors and
officers/errors and omissions liability insurance and other insurance premiums;
direct costs such as printing, mailing, long distance telephone, staff,
independent audits and outside legal costs and all other expenses incurred by
either BDC Partners or us in connection with administering our business,
including payments under the administration agreement that will be based upon
our allocable portion of overhead and other expenses incurred by BDC Partners in
performing its obligations under the administration agreement, including a
portion of the rent and the compensation of our chief financial officer, vice
president of corporate development and other administrative support personnel.

DURATION AND TERMINATION

The investment advisory agreement was initially approved by our board of
directors on August 1, 2003 and again, as amended, on October 28, 2003. On June
17, 2004, our shareholders approved an amendment to our investment advisory
agreement that changed our base fee from 2.0% of net assets to 2.0% of gross
assets. The portion of the investment advisory fee payable subsequent to that
date was calculated in accordance with the terms of that amendment.

Unless earlier terminated as described below, the investment advisory agreement,
as amended, will remain in effect for a period of two years from the date it was
amended and will remain in effect from year to year thereafter if approved
annually by our board of directors or by the affirmative vote of the holders of
a majority of our outstanding voting securities, including, in either case,
approval by a majority of our directors who are not interested persons. The
investment advisory agreement will automatically terminate in the event of its
assignment. The investment advisory agreement may be terminated by either party
without penalty upon not more than 60 days' written notice to the other. See
"Risk Factors -- Risks relating to our business and structure -- We are
dependent upon TIM's key management personnel for our future success,
particularly Jonathan H. Cohen, Saul B. Rosenthal and Lee D. Stern."

INDEMNIFICATION

The investment advisory agreement provides that, absent willful misfeasance, bad
faith or gross negligence in the performance of its duties or by reason of the
reckless disregard of its duties and obligations, TIM and its officers,
managers, agents, employees, controlling persons, members and any other person
or entity affiliated with it, including without limitation BDC Partners, are
entitled to indemnification from TICC for any damages, liabilities, costs and
expenses (including reasonable attorneys' fees and amounts reasonably paid in
settlement) arising from the rendering of TIM's services under the investment
advisory agreement or otherwise as an investment adviser of TICC.

ORGANIZATION OF THE INVESTMENT ADVISER

TIM is a Delaware limited liability company that is registered as an investment
adviser under the Advisers Act. BDC Partners, a Delaware limited liability
company, is its managing member and provides the investment adviser with all
personnel necessary to manage our day-to-day operations and provide the services
under the investment advisory agreement. BDC Partners has no investment advisory
operations separate from serving as the managing member of TIM. The principal
address of TIM and BDC Partners is 8 Sound Shore Drive, Greenwich, Connecticut
06830.

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Royce & Associates, LLC, a Delaware limited liability company, is the investment
adviser's non-managing member. Royce has agreed to make Mr. Royce or certain
other portfolio managers available to the investment adviser to provide certain
consulting services without compensation. Royce is a wholly owned subsidiary of
Legg Mason, Inc.

INVESTMENT PERSONNEL

Our investment personnel currently consists of our executive officers, Jonathan
H. Cohen, Saul B. Rosenthal and Lee D. Stern, and four additional investment
professionals.

The following information, as of October 20, 2004, pertains to the investment
personnel of TIM who are not executive officers of TICC:

BRANKO KRMPOTIC. Mr. Krmpotic is a managing director of TIM. Previously, Mr.
Krmpotic was a principal and co-founder of the Bank of New York's Mezzanine
Group from 1998 to 2003, and prior to that was a Vice President in the High
Yield Group at the Bank of New York. Previously, Mr. Krmpotic was a Vice
President in the High Yield Group at NatWest Markets, and began his career in
the proprietary high yield trading group at NatWest Plc in New York.

DAVID J. GROSSMAN, PH.D. Dr. Grossman is a principal of TIM. Previously, Dr.
Grossman co-founded and developed the $100 million financial technology and
services venture capital fund at Toronto Dominion Bank, where, as a vice
president of the private equity group from 1999 to 2001 and an associate from
1997 to 1999, he also sourced, analyzed and made investments in a number of
telecommunications companies. During his tenure at Toronto Dominion Bank, Dr.
Grossman was involved with more than 20 investments and served on the board of
directors of six private companies. Previously, he was a management consultant
with A.T. Kearney, from 1994 to 1997, where he advised Fortune 500 companies on
strategic, cost reduction, activity-based costing and operations improvement
issues.

BARRY A. OSHEROW. Mr. Osherow is a vice president of TIM. He has nine years of
experience in financing companies. From 2002 to 2004, Mr. Osherow was vice
president of Privet Financial Securities, a registered broker-dealer and
financial consultant to small- to medium-sized private and public technology
companies. He was previously at SoundView Technology Group from 2000 to 2002,
where he was most recently employed as an associate in the Private Equity Group,
which he co-founded. Mr. Osherow was a founding employee of Wit Capital in 1996
(which merged with SoundView) and worked on developing several business units,
including brokerage, public relations, investor relations, equity sales and
marketing. Prior to Wit Capital, he was vice president of Spring Street Brewing
Company, where he was in charge of sales, marketing and merchandising. He began
his career at Lehman Brothers from 1994 to 1995.

MATTHEW D. BASS. Mr. Bass is a vice president of corporate development of TICC
and a vice president of TIM. Prior to joining TICC and TIM, he was an Associate
Director in the Investment Banking Division of UBS Securities LLC, where he
worked on mergers and acquisition, financing and general advisory assignments
for financial services companies.

ADMINISTRATION AGREEMENT

Pursuant to a separate administration agreement, BDC Partners furnishes us with
office facilities, equipment and clerical, bookkeeping and record keeping
services at such facilities. Under the administration agreement, BDC Partners
also performs, or oversees the performance of, our required administrative
services, which includes being responsible for the financial records which we
are required to maintain and preparing reports to our stockholders and reports
filed with the SEC. In addition, BDC Partners assists us in determining and
publishing our net asset value, overseeing the preparation and filing of our tax
returns and the printing and dissemination of reports to our stockholders, and
generally overseeing the payment of our expenses and the performance of
administrative and professional services rendered to us by others. Payments
under the administration agreement are based upon our allocable portion of
overhead and other expenses incurred by BDC Partners in performing its
obligations under the administration agreement, including a portion of the rent
and the compensation of our chief financial officer, vice president of corporate
development and other administrative support personnel. The administration
agreement may be terminated by either party without penalty upon 60 days'
written notice to the other party.

The administration agreement provides that, absent willful misfeasance, bad
faith or gross negligence in the performance of its duties or by reason of the
reckless disregard of its duties and obligations, BDC Partners and its

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officers, manager, agents, employees, controlling persons, members and any other
person or entity affiliated with it are entitled to indemnification from TICC
for any damages, liabilities, costs and expenses (including reasonable
attorneys' fees and amounts reasonably paid in settlement) arising from the
rendering of BDC Partners' services under the administration agreement or
otherwise as administrator for TICC.

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CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS

As a business development company, we have elected to be treated as a RIC under
Subchapter M of the Code, beginning with our 2003 taxable year. As a RIC, we
generally will not have to pay corporate-level federal income taxes on any
ordinary income or capital gains that we distribute to our stockholders as
dividends. To qualify as a RIC, we must, among other things, meet certain
source-of-income and asset diversification requirements (as described below). In
addition, we must distribute to our stockholders, for each taxable year, at
least 90% of our "investment company taxable income," which is generally our
ordinary income plus the excess of our net realized short-term capital gains
over our net realized long-term capital losses (the "Annual Distribution
Requirement").

TAXATION AS A REGULATED INVESTMENT COMPANY

If we:

o qualify as a RIC; and

o satisfy the Annual Distribution Requirement;

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

We will be subject to a 4% nondeductible federal excise tax on certain
undistributed income unless we distribute in a timely manner an amount at least
equal to the sum of (1) 98% of our ordinary income for each calendar year, (2)
98% of our capital gain net income for the one-year period ending October 31 in
that calendar year and (3) any income realized, but not distributed, in
preceding years (the "Excise Tax Avoidance Requirement"). We currently intend to
make sufficient distributions each taxable year to satisfy the Excise Tax
Avoidance Requirement.

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

o qualify as a business development company under the 1940 Act at all
times during each taxable year;

o derive in each taxable year at least 90% of our gross income from
dividends, interest, payments with respect to certain securities
loans, gains from the sale of stock or other securities, or other
income derived with respect to our business of investing in such stock
or securities; and

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

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

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

We may be required to recognize taxable income in circumstances in which we do
not receive cash. For example, if we hold debt obligations that are treated
under applicable tax rules as having original issue discount (such as debt
instruments with payment-in-kind interest or, in certain cases, increasing
interest rates or issued with warrants), we must include in income each year a
portion of the original issue discount that accrues over the life of the
obligation, regardless of whether cash representing such income is received by
us in the same taxable year. Because any original issue discount accrued will be
included in our investment company taxable income for the year of accrual, we
may be required to make a distribution to our stockholders in order to satisfy
the Annual Distribution Requirement, even though we will not have received any
corresponding cash amount.

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TAXATION OF U.S. STOCKHOLDERS

Distributions by us generally will be taxable to U.S. stockholders as ordinary
income or capital gains. Distributions of our "investment company taxable
income" (which is, generally, our ordinary income plus net short-term capital
gains in excess of net long-term capital losses) will be taxable as ordinary
income to U.S. stockholders to the extent of our current or accumulated earnings
and profits, whether paid in cash or reinvested in additional common stock.
Distributions of our net capital gains properly designated by us as "capital
gain dividends" will be taxable to a U.S. stockholder as long-term capital gains
regardless of the U.S. stockholder's holding period for his or her common stock
and regardless of whether paid in cash or reinvested in additional common stock.
Distributions in excess of our current and accumulated earnings and profits
first will reduce a U.S. stockholder's adjusted tax basis in such U.S.
stockholder's common stock and, after the adjusted basis is reduced to zero,
will constitute capital gains to such U.S. stockholder. For a summary of the tax
rates applicable to capital gains, including capital gain dividends, see the
discussion below.

Under the dividend reinvestment plan, if a U.S. stockholder owns shares of
common stock registered in its own name, the U.S. stockholder will have all cash
distributions automatically reinvested in additional shares of common stock
unless the U.S. stockholder opts out of our dividend reinvestment plan by
delivering a written notice to our dividend paying agent prior to the record
date of the next dividend or distribution. (We currently intend to pay only our
ordinary income distributions in cash.) See "Dividend Reinvestment Plan." Any
distributions reinvested under the plan will nevertheless remain taxable to the
U.S. stockholder. The U.S. stockholder will have an adjusted basis in the
additional common shares purchased through the plan equal to the amount of the
reinvested distribution. The additional shares will have a new holding period
commencing on the day following the day on which the shares are credited to the
U.S. stockholder's account.

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

We will be subject to the alternative minimum tax ("AMT"), but any items that
are treated differently for AMT purposes must be apportioned between us and our
stockholders and this may affect the stockholders' AMT liabilities. Although
regulations explaining the precise method of apportionment have not yet been
issued by the Internal Revenue Service, we intend in general to apportion these
items in the same proportion that dividends paid to each stockholder bear to our
taxable income (determined without regard to the dividends paid deduction),
unless we determine that a different method for a particular item is warranted
under the circumstances.

For purposes of determining (i) whether the 90% distribution requirement is
satisfied for any year and (ii) the amount of capital gains dividends paid for
that year, we may, under certain circumstances, elect to treat a dividend that
is paid during the following taxable year as if it had been paid during the
taxable year in question. If we make such an election, the U.S. stockholder will
still be treated as receiving the dividend in the taxable year in which the
distribution is made and any capital gain dividend will be treated as a capital
gain dividend to the U.S. stockholder. Any dividend declared by us in October,
November, or December of any calendar year, payable to stockholders of record on
a specified date in such a month and actually paid during January of the
following year, will be treated as if it had been received by our U.S.
stockholders on December 31 of the year in which the dividend was declared.

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You should consider the tax implications of buying common stock just prior to a
distribution. Even if the price of the common stock includes the amount of the
forthcoming distribution, you will be taxed upon receipt of the distribution and
will not be entitled to offset the distribution against the tax basis in your
common stock.

You may recognize taxable gain or loss if you sell or exchange your common
stock. The amount of the gain or loss will be measured by the difference between
your adjusted tax basis in your common stock and the amount of the proceeds you
receive in exchange for such stock. Any gain or loss arising from or, in the
case of distributions in excess of the sum of our current and accumulated
earnings and profits and your tax basis in the stock, treated as arising from
the sale or exchange of our common stock generally will be a capital gain or
loss. This capital gain or loss normally will be treated as a long-term capital
gain or loss if you have held your common stock for more than one year.
Otherwise, it will be classified as short-term capital gain or loss. However,
any capital loss arising from the sale or exchange of common stock held for six
months or less generally will be treated as a long-term capital loss to the
extent of the amount of capital gain dividends received, or treated as deemed
distributed, with respect to such stock and, for this purpose, the special rules
of Section 852(b)(4)(C) of the Internal Revenue Code generally apply in
determining the holding period of such stock.

In general, individual U.S. stockholders currently are subject to a maximum U.S.
federal income tax rate of 20% on their net long-term capital gain, i.e., the
excess of net long-term capital gain over net short-term capital loss for a
taxable year, including a long-term capital gain derived from an investment in
the common stock. Corporate U.S. stockholders currently are subject to U.S.
federal income tax on net capital gain at the maximum 35% rate also applied to
ordinary income. Tax rates imposed by states and local jurisdictions on capital
gain and ordinary income may differ.

We will send to each of our U.S. stockholders, as promptly as possible after the
end of each calendar year, a notice detailing, on a per share and per
distribution basis, the amounts includible in such U.S. stockholder's taxable
income for such year as ordinary income and as long-term capital gain. In
addition, the U.S. federal tax status of each year's distributions generally
will be reported to the Internal Revenue Service. Distributions may also be
subject to additional state, local, and foreign taxes depending on a U.S.
stockholder's particular situation. Dividends distributed by us generally will
not be eligible for the dividends-received deduction.

Backup withholding may apply to taxable distributions on the common stock with
respect to certain non-corporate U.S. stockholders. Such U.S. stockholders
generally will be subject to backup withholding unless the U.S. stockholder
provides its correct taxpayer identification number and certain other
information, certified under penalties of perjury, to the dividend paying agent,
or otherwise establishes an exemption from backup withholding. Any amount
withheld under backup withholding is allowed as a credit against the U.S.
stockholder's U.S. federal income tax liability, provided the proper information
is provided to the Internal Revenue Service.

TAXATION OF NON-U.S. PERSONS

For purposes of the following discussion, a "Non-U.S. Person" is a beneficial
owner of shares of stock that is not, for U.S. federal income tax purposes (i)
an individual who is a citizen or resident of the United States, (ii) a
corporation (or other entity treated as a corporation for U.S. federal income
tax purposes) created or organized in or under the laws of the United States,
any State or the District of Columbia or otherwise treated or taxed as a United
States corporation for U.S. federal income tax purposes, (iii) an estate the
income of which is subject to United States federal income taxation regardless
of its source, (iv) a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more United States persons have the authority to control all substantial
decisions of the trust, or (v) a certain electing trust. If a partnership holds
shares, the tax treatment of a partner will generally depend upon the status of
the partner and upon the activities of the partnership. Partners of partnerships
holding shares should consult their tax advisor as to whether they are Non-U.S.
Persons.

Whether an investment in our common stock is appropriate for a Non-U.S. person
will depend upon that person's particular circumstances. Non-U.S. persons should
consult their tax advisors before investing in our common stock.

Distributions of our "investment company taxable income" to stockholders that
are Non-U.S. Persons will be subject to withholding of U.S. federal income tax
at a 30% rate (or lower rate provided by an applicable treaty) to the extent of
our current and accumulated earnings and profits unless the distributions are
effectively connected

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with a U.S. trade or business of the Non-U.S. Persons, and, if an income tax
treaty applies, attributable to a permanent establishment in the United States,
in which case the distributions will be subject to U.S. federal income tax at
the ordinary income rates applicable to U.S. persons. In that case, we will not
have to withhold U.S. federal withholding tax if the Non-U.S. Person complies
with applicable certification and disclosure requirements. Special certification
requirements apply to a Non-U.S. Person that is a foreign partnership or a
foreign trust and such entities are urged to consult their own tax advisors.

Actual or deemed distributions of our net capital gains to a stockholder that is
a Non-U.S. Person, and gains realized by a Non-U.S. Person upon the sale or
redemption of our common stock, will not be subject to U.S. federal income tax
unless the distributions or gains, as the case may be, are effectively connected
with a U.S. trade or business of the Non-U.S. Person and, if an income tax
treaty applies, are attributable to a permanent establishment maintained by the
Non-U.S. Person in the United States, or, in the case of an individual, the
Non-U.S. Person was present in the U.S. for 183 days or more during the taxable
year and certain other conditions are met.

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

Under our dividend reinvestment plan, if a Non-U.S. Person owns shares of common
stock registered in its own name, the Non-U.S. Person will have all cash
distributions automatically reinvested in additional shares of common stock
unless it opts out of our dividend reinvestment plan by delivering a written
notice to our dividend paying agent prior to the record date of the next
dividend or distribution. See "Dividend Reinvestment Plan." If the distribution
is a distribution of our "investment company taxable income" and it is not
effectively connected with a U.S. trade or business of the Non-U.S. Person (or,
if a treaty applies, it is not attributable to a permanent establishment), the
amount distributed (to the extent of our current and accumulated earnings and
profits) will be subject to withholding of U.S. federal income tax at a 30% rate
(or lower rate provided by an applicable treaty) and only the net after-tax
amount will be reinvested in common shares. If the distribution is effectively
connected with a U.S. trade or business of the Non-U.S. Person, generally the
full amount of the distribution will be reinvested in the plan and will
nevertheless be subject to U.S. federal income tax at the ordinary income rates
applicable to U.S. persons. The Non-U.S. Person will have an adjusted basis in
the additional common shares purchased through the plan equal to the amount
reinvested. The additional shares will have a new holding period commencing on
the day following the day on which the shares are credited to the Non-U.S.
Person's account.

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

NON-U.S. PERSONS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE U.S.
FEDERAL INCOME TAX AND WITHHOLDING TAX, AND STATE, LOCAL, AND FOREIGN TAX,
CONSEQUENCES OF AN INVESTMENT IN OUR COMMON STOCK.

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REGULATION AS A BUSINESS DEVELOPMENT COMPANY

GENERAL

A business development company is regulated by the 1940 Act. A business
development company must be organized in the United States for the purpose of
investing in or lending to primarily private companies and making managerial
assistance available to them. A business development company may use capital
provided by public stockholders and from other sources to invest in long-term,
private investments in businesses. A business development company provides
stockholders the ability to retain the liquidity of a publicly traded stock,
while sharing in the possible benefits, if any, of investing in primarily
privately owned companies.

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

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

As a business development company, we are required to meet a coverage ratio of
the value of total assets to total senior securities, which include all of our
borrowings and any preferred stock we may issue in the future, of at least 200%.
We may also be prohibited under the 1940 Act from knowingly participating in
certain transactions with our affiliates without the prior approval of our
directors who are not interested persons and, in some cases, prior approval by
the SEC.

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

QUALIFYING ASSETS

As a business development company, we may not acquire any asset other than
"qualifying assets" unless, at the time we make the acquisition, the value of
our qualifying assets represent at least 70% of the value of our total assets.
The principal categories of qualifying assets relevant to our business are:

o Securities of an eligible portfolio company that are purchased in
transactions not involving any public offering. An eligible portfolio
company is defined under the 1940 Act to include any issuer that:

o is organized and has its principal place of business in the U.S.,

o is not an investment company or a company operating pursuant to
certain exemptions under the 1940 Act, other than a small
business investment company wholly owned by a business
development company; and

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REGULATION AS A BUSINESS DEVELOPMENT COMPANY
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o does not have any class of publicly traded securities with
respect to which a broker may extend margin credit;

o Securities received in exchange for or distributed with respect to
securities described in the bullet above or pursuant to the exercise
of options, warrants, or rights relating to those securities; and

o Cash, cash items, government securities, or high quality debt
securities (as defined in the 1940 Act), maturing in one year or less
from the time of investment.

SIGNIFICANT MANAGERIAL ASSISTANCE

To include certain securities described above as qualifying assets for the
purpose of the 70% test, a business development company must offer to make
available to the issuer of those securities significant managerial assistance
such as providing guidance and counsel concerning the management, operations, or
business objectives and policies of a portfolio company. We will offer to
provide managerial assistance to portfolio companies.

INVESTMENT CONCENTRATION

We intend to concentrate in the technology sector and to invest, under normal
circumstances, at least 80% of the value of our net assets (including the amount
of any borrowings for investment purposes) in technology-related companies. This
80% policy is not a fundamental policy and therefore may be changed without the
approval of our stockholders. However, we may not change or modify this policy
unless we provide our stockholders with at least 60 days' prior notice.

CODE OF ETHICS

As required by the 1940 Act, we maintain a code of ethics that establishes
procedures for personal investments and restricts certain transactions by our
personnel. Our code of ethics generally does not permit investments by our
employees in securities that may be purchased or held by us. You may read and
copy the code of ethics at the SEC's Public Reference Room in Washington, D.C.
You may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-202-942-8090. In addition, the code of ethics is available
on the EDGAR Database on the SEC's Internet site at http://www.sec.gov. You may
obtain copies of the code of ethics, after paying a duplicating fee, by
electronic request at the following Email address: publicinfo@sec.gov, or by
writing the SEC's Public Reference Section, Washington, D.C. 20549.

COMPLIANCE POLICIES AND PROCEDURES

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

SARBANES-OXLEY ACT OF 2002

On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002.
The Sarbanes-Oxley Act imposes a wide variety of new regulatory requirements on
publicly-held companies and their insiders. Many of these requirements affect
us. For example:

o Our chief executive officer and chief financial officer must certify
the accuracy of the financial statements contained in our periodic
reports;

o Our periodic reports must disclose our conclusions about the
effectiveness of our disclosure controls and procedures; and

o Our periodic reports must disclose whether there were significant
changes in our internal controls or in other factors that could
significantly affect these controls subsequent to the date of their
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

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

FUNDAMENTAL INVESTMENT POLICIES

The restrictions identified as fundamental below, along with our investment
objective of seeking to maximize total return, are our only fundamental
policies. Fundamental policies may not be changed without the approval of the
holders of a majority of our outstanding voting securities, as defined in the
1940 Act. The percentage restrictions set forth below, apply at the time a
transaction is effected, and a subsequent change in a percentage resulting from
market fluctuations or any cause will not require us to dispose of portfolio
securities or to take other action to satisfy the percentage restriction.

As a matter of fundamental policy, we will not: (1) act as an underwriter of
securities of other issuers (except to the extent that we may be deemed an
"underwriter" of securities we purchase that must be registered under the
Securities Act before they may be offered or sold to the public); (2) purchase
or sell real estate or interests in real estate or real estate investment trusts
(except that we may (A) purchase and sell real estate or interests in real
estate in connection with the orderly liquidation of investments, or in
connection with foreclosure on collateral, (B) own the securities of companies
that are in the business of buying, selling or developing real estate or (C)
finance the purchase of real estate by our portfolio companies); (3) sell
securities short (except with regard to managing the risks associated with
publicly-traded securities issued by our portfolio companies); (4) purchase
securities on margin (except to the extent that we may purchase securities with
borrowed money); or (5) engage in the purchase or sale of commodities or
commodity contracts, including futures contracts (except where necessary in
working out distressed loan or investment situations or in hedging the risks
associated with interest rate fluctuations), and, in such cases, only after all
necessary registrations (or exemptions from registration) with the Commodity
Futures Trading Commission have been obtained.

We may invest up to 100% of our assets in securities acquired directly from
issuers in privately negotiated transactions. With respect to such securities,
we may, for the purpose of public resale, be deemed an "underwriter" as that
term is defined in the Securities Act. Our intention is to not write (sell) or
buy put or call options to manage risks associated with the publicly-traded
securities of our portfolio companies, except that we may enter into hedging
transactions to manage the risks associated with interest rate fluctuations,
and, in such cases, only after all necessary registrations (or exemptions from
registration) with the Commodity Futures Trading Commission have been obtained.
However, we may purchase or otherwise receive warrants to purchase the common
stock of our portfolio companies in connection with acquisition financing or
other investment. Similarly, in connection with an acquisition, we may acquire
rights to require the issuers of acquired securities or their affiliates to
repurchase them under certain circumstances. We also do not intend to acquire
securities issued by any investment company that exceed the limits imposed by
the 1940 Act. Under these limits, unless otherwise permitted by the 1940 Act, we
currently cannot acquire more than 3% of the voting securities of any registered
investment company, invest more than 5% of the value of our total assets in the
securities of one investment company or invest, in the aggregate, in excess of
10% of the value of our total assets in the securities of one or more investment
companies. With regard to that portion of our portfolio invested in securities
issued by investment companies, it should be noted that such investments might
subject our stockholders to additional expenses.

PROXY VOTING

We have delegated our proxy voting responsibility to our investment adviser,
TIM. The Proxy Voting Policies and Procedures of TIM are set forth below. (The
guidelines are reviewed periodically by TIM and our non-interested directors,
and, accordingly, are subject to change. For purposes of these Proxy Voting
Policies and Procedures described below, "we" "our" and "us" refers to TIM).

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REGULATION AS A BUSINESS DEVELOPMENT COMPANY
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INTRODUCTION

As an investment adviser registered under the Advisers Act, we have a fiduciary
duty to act solely in the best interests of our clients. As part of this duty,
we recognize that we must vote client securities in a timely manner free of
conflicts of interest and in the best interests of our clients.

These policies and procedures for voting proxies for our investment advisory
clients are intended to comply with Section 206 of, and Rule 206(4)-6 under, the
Advisers Act.

PROXY POLICIES

These policies are designed to be responsive to the wide range of subjects that
may be the subject of a proxy vote. These policies are not exhaustive due to the
variety of proxy voting issues that we may be required to consider. In general,
we will vote proxies in accordance with these guidelines unless: (1) we have
determined to consider the matter on a case-by-case basis (as is stated in these
guidelines), (2) the subject matter of the vote is not covered by these
guidelines, (3) a material conflict of interest is present, or (4) we might find
it necessary to vote contrary to our general guidelines to maximize shareholder
value and vote in our clients' best interests. In such cases, a decision on how
to vote will be made by the Proxy Voting Committee (as described below). In
reviewing proxy issues, we will apply the following general policies:

ELECTIONS OF DIRECTORS

In general, we will vote in favor of the management-proposed slate of directors.
If there is a proxy fight for seats on the board or we determine that there are
other compelling reasons for withholding votes for directors, the Proxy Voting
Committee will determine the appropriate vote on the matter. We believe that
directors have a duty to respond to shareholder actions that have received
significant shareholder support. We may withhold votes for directors that fail
to act on key issues such as failure to implement proposals to declassify
boards, failure to implement a majority vote requirement, failure to submit a
rights plan to a shareholder vote and failure to act on tender offers where a
majority of shareholders have tendered their shares. Finally, we may withhold
votes for directors of non-U.S. issuers where there is insufficient information
about the nominees disclosed in the proxy statement.

APPOINTMENT OF AUDITORS

We believe that the company remains in the best position to choose the auditors
and will generally support management's recommendation.

CHANGES IN CAPITAL STRUCTURE

Changes in a company's charter, articles of incorporation or by-laws may be
required by state or federal regulation. In general, we will cast our votes in
accordance with the company's management on such proposals. However, the Proxy
Voting Committee will review and analyze on a case-by-case basis any proposals
regarding changes in corporate structure that are not required by state or
federal regulation.

CORPORATE RESTRUCTURINGS, MERGERS AND ACQUISITIONS

We believe proxy votes dealing with corporate reorganizations are an extension
of the investment decision. Accordingly, the Proxy Voting Committee will analyze
such proposals on a case-by-case basis.

PROPOSALS AFFECTING SHAREHOLDER RIGHTS

We will generally vote in favor of proposals that give shareholders a greater
voice in the affairs of the company and oppose any measure that seeks to limit
those rights. However, when analyzing such proposals we will weigh the financial
impact of the proposal against the impairment of shareholder rights.

CORPORATE GOVERNANCE

We recognize the importance of good corporate governance in ensuring that
management and the board of directors fulfill their obligations to the
shareholders. We favor proposals promoting transparency and accountability
within a company.

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ANTI-TAKEOVER MEASURES

The Proxy Voting Committee will evaluate, on a case-by-case basis, proposals
regarding anti-takeover measures to determine the measure's likely effect on
shareholder value dilution.

STOCK SPLITS

We will generally vote with management on stock split matters.

LIMITED LIABILITY OF DIRECTORS

We will generally vote with management on matters that would affect the limited
liability of directors.

SOCIAL AND CORPORATE RESPONSIBILITY

The Proxy Voting Committee may review and analyze on a case-by-case basis
proposals relating to social, political and environmental issues to determine
whether they will have a financial impact on shareholder value. We may abstain
from voting on social proposals that do not have a readily determinable
financial impact on shareholder value.

PROXY VOTING PROCEDURES

We will generally vote proxies in accordance with these guidelines. In
circumstances in which (1) we have determined to consider the matter on a
case-by-case basis (as is stated in these guidelines), (2) the subject matter of
the vote is not covered by these guidelines, (3) a material conflict of interest
is present, or (4) we might find it necessary to vote contrary to our general
guidelines to maximize shareholder value and vote in our clients' best
interests, the Proxy Voting Committee will vote the proxy.

PROXY VOTING COMMITTEE

We have formed a proxy voting committee to establish general proxy policies and
consider specific proxy voting matters as necessary. In addition, members of the
committee may contact management and interested shareholder groups as necessary
to discuss proxy issues. Members of the committee will include relevant senior
personnel. The committee may also evaluate proxies where we face a potential
conflict of interest (as discussed below). Finally, the committee monitors
adherence to guidelines, and reviews the policies contained in this statement
from time to time.

CONFLICTS OF INTEREST

We recognize that there may be a potential conflict of interest when we vote a
proxy solicited by an issuer that is our advisory client or a client or customer
of one of our affiliates or with whom we have another business or personal
relationship that may affect how we vote on the issuer's proxy. We believe that
adherence to these policies and procedures ensures that proxies are voted with
only our clients' best interests in mind. To ensure that our votes are not the
product of a conflict of interests, we require that: (i) anyone involved in the
decision making process (including members of the Proxy Voting Committee)
disclose to the chairman of the Proxy Voting Committee any potential conflict
that he or she is aware of and any contact that he or she has had with any
interested party regarding a proxy vote; and (ii) employees involved in the
decision making process or vote administration are prohibited from revealing how
we intend to vote on a proposal in order to reduce any attempted influence from
interested parties.

PROXY VOTING

Each account's custodian will forward all relevant proxy materials to us, either
electronically or in physical form to the address of record that we have
provided to the custodian.

PROXY RECORDKEEPING

We must retain the following documents pertaining to proxy voting:

o copies of our proxy voting polices and procedures;

o copies of all proxy statements;

o records of all votes cast by us;

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REGULATION AS A BUSINESS DEVELOPMENT COMPANY
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o copies of all documents created by us that were material to making a
decision how to vote proxies or that memorializes the basis for that
decision; and

o copies of all written client requests for information with regard to
how we voted proxies on behalf of the client as well as any written
responses provided.

All of the above-referenced records will be maintained and preserved for a
period of not less than five years from the end of the fiscal year during which
the last entry was made. The first two years of records must be maintained at
our office.

PROXY VOTING RECORDS

Clients may obtain information about how we voted proxies on their behalf by
making a written request for proxy voting information to: Chief Compliance
Officer, Technology Investment Management, LLC, 8 Sound Shore Drive, Suite 255,
Greenwich, CT 06830.

DIVIDEND REINVESTMENT PLAN

We have adopted a distribution reinvestment plan, through which all dividends
are paid to stockholders in the form of additional shares of our common stock,
unless a stockholder elects to receive cash as provided below. In this way, a
stockholder can maintain an undiluted investment in us and still allow us to pay
out the required distributable income.

No action is required on the part of a registered stockholder to receive a
distribution in shares of our common stock. A registered stockholder may elect
to receive an entire distribution in cash by notifying Equiserve, Inc. and
Equiserve Trust Company, N.A., the plan administrator and our transfer agent and
registrar, in writing so that such notice is received by the plan administrator
no later than 10 days prior to the record date for distributions to
stockholders. The plan administrator will set up an account for shares acquired
through the plan for each stockholder who has not elected to receive
distributions in cash and hold such shares in non-certificated form. Upon
request by a participant, received in writing not less than 10 days prior to the
record date, the plan administrator will, instead of crediting shares to the
participant's account, issue a certificate registered in the participant's name
for the number of whole shares of our common stock and a check for any
fractional share.

Those stockholders whose shares are held by a broker or other financial
intermediary may receive distributions in cash by notifying their broker or
other financial intermediary of their election.

We use only newly-issued shares to implement the plan, whether our shares are
trading at a premium or at a discount to net asset value. The number of shares
to be issued to a stockholder is determined by dividing the total dollar amount
of the distribution payable to such stockholder by the market price per share of
our common stock at the close of regular trading on the Nasdaq National Market
on the valuation date for such distribution. Market price per share on that date
will be the closing price for such shares on the Nasdaq National Market or, if
no sale is reported for such day, at the average of their
electronically-reported bid and asked prices. The number of shares of our common
stock to be outstanding after giving effect to payment of the distribution
cannot be established until the value per share at which additional shares will
be issued has been determined and elections of our stockholders have been
tabulated.

There is no charge to stockholders for receiving their distributions in the form
of additional shares of our common stock. The plan administrator's fees for
handling distributions in stock are paid by us. There are no brokerage charges
with respect to shares we have issued directly as a result of distributions
payable in stock. If a participant elects by written or telephonic notice to the
plan administrator to have the plan administrator sell part or all of the shares
held by the plan administrator in the participant's account and remit the
proceeds to the participant, the plan administrator is authorized to deduct a
$2.50 transaction fee plus brokerage commissions from the proceeds.

Stockholders who receive distributions in the form of stock are subject to the
same federal, state and local tax consequences as are stockholders who elect to
receive their distributions in cash. A stockholder's basis for determining gain
or loss upon the sale of stock received in a distribution from us will be equal
to the total dollar amount of the distribution payable to the stockholder.

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DIVIDEND REINVESTMENT PLAN
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The plan may be terminated by us upon notice in writing mailed to each
participant at least 30 days prior to any record date for the payment of any
dividend or distribution by us. All correspondence concerning the plan should be
directed to the plan administrator by mail at 150 Royal Street, Canton, MA 02021
or by phone at 1-800-426-5523.

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

The following table sets forth, as of October 20, 2004, the beneficial ownership
of each of our directors and executive officers, and each person known to us to
beneficially own 5% or more of the outstanding shares of our common stock, and
our executive officers and directors as a group.

Beneficial ownership is determined in accordance with the rules of the SEC and
includes voting or investment power with respect to the securities.

Unless otherwise indicated, we believe that each beneficial owner set forth in
the table has sole voting and investment power and has the same address as us.
Our address is 8 Sound Shore Drive, Greenwich, Connecticut, 06830.

NUMBER OF
SHARES OWNED
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY PERCENTAGE OF CLASS(1)
----------------------------------------------------- -------------- -----------------------

INTERESTED DIRECTORS
Jonathan H. Cohen ................................... 139,100 1.37%
Charles M. Royce .................................... 69,967 *

INDEPENDENT DIRECTORS
Steven P. Novak ..................................... 2,013 *
G. Peter O'Brien .................................... 10,067 *
Tonia L. Pankopf .................................... 8,758 *

EXECUTIVE OFFICERS
Patrick F. Conroy ................................... 201 *
Saul B. Rosenthal ................................... 3,400 *
Lee D. Stern ........................................ 3,422 *
EXECUTIVE OFFICERS AND DIRECTORS AS A GROUP ......... 236,928 2.34%

* Represents less than one percent.

(1) Based on a total of 10,125,406 shares of our common stock issued and
outstanding on October 20, 2004.

Set forth below is the dollar range of equity securities beneficially owned by
each of our directors as of October 20, 2004:

DOLLAR RANGE OF EQUITY SECURITIES
NAME OF DIRECTOR BENEFICIALLY OWNED (1)(2)(3)
------------------------------------------------------ ----------------------------------

INTERESTED DIRECTORS
Jonathan H. Cohen(4) ................................. Over $100,000
Charles M. Royce(4) .................................. Over $100,000

INDEPENDENT DIRECTORS
Steven P. Novak ...................................... $10,001 - $50,000
G. Peter O'Brien ..................................... Over $100,000
Tonia L. Pankopf ..................................... Over $100,000

(1) Beneficial ownership has been determined in accordance with Rule
16a-1(a)(2) under the Securities Exchange Act of 1934.

(2) The dollar ranges are: None, $1-$10,000, $10,001-$50,000, $50,001-$100,000,
or Over $100,000.

(3) The dollar range of equity securities beneficially owned in us is based on
the closing price of $14.68 on October 20, 2004. on the Nasdaq Stock
Market.

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65

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CERTAIN RELATIONSHIPS AND TRANSACTIONS

We have entered into an investment advisory agreement with TIM. TIM is
controlled by BDC Partners, its managing member. In addition to BDC Partners,
TIM is owned by Royce & Associates as the non-managing member. BDC Partners, as
the managing member of TIM, manages the business and internal affairs of TIM. In
addition, BDC Partners provides us with office facilities and administrative
services pursuant to an administration agreement. Jonathan H. Cohen, our chief
executive officer and president, as well as a director, is the managing member
of and controls BDC Partners. Saul B. Rosenthal, our chief operating officer, is
also the chief operating officer of TIM and a member of BDC Partners.

Charles M. Royce, a director and the non-executive chairman of our board of
directors, is president and chief investment officer of Royce & Associates.
Royce & Associates, as the non-managing member of our investment adviser, does
not take part in the management or participate in the operations of TIM;
however, Royce & Associates has agreed to make Mr. Royce or certain other
portfolio managers available to TIM to provide certain consulting services
without compensation. Royce & Associates is a wholly owned subsidiary of Legg
Mason, Inc.

JHC Capital Management, a registered investment adviser owned by Mr. Cohen,
serves as the sub-adviser to the Royce Technology Value Fund. In addition, JHC
Capital Management has invested on behalf of certain of its discretionary
advisory clients in CyberSource Corporation, a public company engaged in the
business of processing online payments for electronic merchants listed on the
Nasdaq National Market. Mr. Novak, one of our independent directors, is also an
independent director of CyberSource Corporation. JHC Capital Management's
discretionary advisory clients own in the aggregate less than 5% of the
outstanding common stock (on a fully diluted basis) of CyberSource Corporation.

Saul B. Rosenthal, our chief operating officer, treasurer and corporate
secretary, holds less than a 0.02% limited partnership interest in Dawntreader
Fund II, a private equity partnership which owns less than 5% of MortgageIT,
Inc., one of our portfolio companies.

DESCRIPTION OF CAPITAL STOCK

The following description is based on relevant portions of the Maryland General
Corporation Law and on our charter and bylaws. This summary is not necessarily
complete, and we refer you to the Maryland General Corporation Law and our
charter and bylaws for a more detailed description of the provisions summarized
below.

CAPITAL STOCK

Our authorized capital stock consists of 100,000,000 shares of stock, par value
$.01 per share, all of which is initially designated as common stock. We have
listed our common stock on the Nasdaq National Market under the ticker symbol
"TICC." There are no outstanding options or warrants to purchase our stock. No
stock has been authorized for issuance under any equity compensation plans.
Under Maryland law, our stockholders generally are not personally liable for our
debts or obligations.

At October 20, 2004, there were 10,125,406 shares of common stock outstanding.
The following are our outstanding classes of securities as of October 20, 2004:

(4)
AMOUNT
(3) OUTSTANDING
(2) AMOUNT HELD BY EXCLUSIVE OF
(1) AMOUNT US OR FOR OUR AMOUNTS SHOWN
TITLE OF CLASS AUTHORIZED ACCOUNT UNDER (3)
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Common Stock 100,000,000 -- 10,125,406

Under our charter, our board of directors is authorized to classify and
reclassify any unissued shares of stock into other classes or series of stock
without obtaining stockholder approval. As permitted by the Maryland General
Corporation Law, our charter provides that the board of directors, without any
action by our stockholders, may amend the charter from time to time to increase
or decrease the aggregate number of shares of stock or the number of shares of
stock of any class or series that we have authority to issue.

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DESCRIPTION OF CAPITAL STOCK
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COMMON STOCK

All shares of our common stock have equal rights as to earnings, assets,
dividends and voting privileges and, when they are issued, will be duly
authorized, validly issued, fully paid and nonassessable. Distributions may be
paid to the holders of our common stock if, as and when authorized by our board
of directors and declared by us out of assets legally available therefor. Shares
of our common stock have no preemptive, conversion or redemption rights and are
freely transferable, except where their transfer is restricted by federal and
state securities laws or by contract. In the event of a liquidation, dissolution
or winding up of TICC, each share of our common stock would be entitled to share
ratably in all of our assets that are legally available for distribution after
we pay all debts and other liabilities and subject to any preferential rights of
holders of our preferred stock, if any preferred stock is outstanding at such
time. Each share of our common stock is entitled to one vote on all matters
submitted to a vote of stockholders, including the election of directors. Except
as provided with respect to any other class or series of stock, the holders of
our common stock will possess exclusive voting power. There is no cumulative
voting in the election of directors, which means that holders of a majority of
the outstanding shares of common stock will elect all of our directors, and
holders of less than a majority of such shares will be unable to elect any
director.

PREFERRED STOCK

Our charter authorizes our board of directors to classify and reclassify any
unissued shares of stock into other classes or series of stock, including
preferred stock. Prior to issuance of shares of each class or series, the board
of directors is required by Maryland law and by our charter to set the terms,
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends or other distributions, qualifications and terms or
conditions of redemption for each class or series. Thus, the board of directors
could authorize the issuance of shares of preferred stock with terms and
conditions which could have the effect of delaying, deferring or preventing a
transaction or a change in control that might involve a premium price for
holders of our common stock or otherwise be in their best interest. You should
note, however, that any issuance of preferred stock must comply with the
requirements of the 1940 Act. The 1940 Act requires, among other things, that
(1) immediately after issuance and before any dividend or other distribution is
made with respect to our common stock and before any purchase of common stock is
made, such preferred stock together with all other senior securities must not
exceed an amount equal to 50% of our total assets after deducting the amount of
such dividend, distribution or purchase price, as the case may be, and (2) the
holders of shares of preferred stock, if any are issued, must be entitled as a
class to elect two directors at all times and to elect a majority of the
directors if dividends on such preferred stock are in arrears by two years or
more. Certain matters under the 1940 Act require the separate vote of the
holders of any issued and outstanding preferred stock. For example, holders of
preferred stock would vote separately from the holders of common stock on a
proposal to cease operations as a business development company. We believe that
the availability for issuance of preferred stock will provide us with increased
flexibility in structuring future financings and acquisitions.

LIMITATION ON LIABILITY OF DIRECTORS AND OFFICERS; INDEMNIFICATION AND ADVANCE
OF EXPENSES

Maryland law permits a Maryland corporation to include in its charter a
provision limiting the liability of its directors and officers to the
corporation and its stockholders for money damages except for liability
resulting from (a) actual receipt of an improper benefit or profit in money,
property or services or (b) active and deliberate dishonesty established by a
final judgment and which is material to the cause of action. Our charter
contains such a provision which eliminates directors' and officers' liability to
the maximum extent permitted by Maryland law, subject to the requirements of the
1940 Act.

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DESCRIPTION OF CAPITAL STOCK
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while a director and at our request, serves or has served another corporation,
real estate investment trust, partnership, joint venture, trust, employee
benefit plan or other enterprise as a director, officer, partner or trustee and
who is made a party to the proceeding by reason of his service in that capacity
from and against any claim or liability to which that person may become subject
or which that person may incur by reason of his or her status as a present or
former director or officer and to pay or reimburse their reasonable expenses in
advance of final disposition of a proceeding. The charter and bylaws also permit
us to indemnify and advance expenses to any person who served a predecessor of
us in any of the capacities described above and any of our employees or agents
or any employees or agents of our predecessor. In accordance with the 1940 Act,
we will not indemnify any person for any liability to which such person would be
subject by reason of such person's willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office.

Maryland law requires a corporation (unless its charter provides otherwise,
which our charter does not) to indemnify a director or officer who has been
successful in the defense of any proceeding to which he or she is made a party
by reason of his or her service in that capacity. Maryland law permits a
corporation to indemnify its present and former directors and officers, among
others, against judgments, penalties, fines, settlements and reasonable expenses
actually incurred by them in connection with any proceeding to which they may be
made a party by reason of their service in those or other capacities unless it
is established that (a) the act or omission of the director or officer was
material to the matter giving rise to the proceeding and (1) was committed in
bad faith or (2) was the result of active and deliberate dishonesty, (b) the
director or officer actually received an improper personal benefit in money,
property or services or (c) in the case of any criminal proceeding, the director
or officer had reasonable cause to believe that the act or omission was
unlawful. However, under Maryland law, a Maryland corporation may not indemnify
for an adverse judgment in a suit by or in the right of the corporation or for a
judgment of liability on the basis that a personal benefit was improperly
received, unless in either case a court orders indemnification, and then only
for expenses. In addition, Maryland law permits a corporation to advance
reasonable expenses to a director or officer upon the corporation's receipt of
(a) a written affirmation by the director or officer of his or her good faith
belief that he or she has met the standard of conduct necessary for
indemnification by the corporation and (b) a written undertaking by him or her
or on his or her behalf to repay the amount paid or reimbursed by the
corporation if it is ultimately determined that the standard of conduct was not
met.

Our insurance policy does not currently provide coverage for claims, liabilities
and expenses that may arise out of activities that our present or former
directors or officers have performed for another entity at our request. There is
no assurance that such entities will in fact carry such insurance. However, we
note that we do not expect to request our present or former directors or
officers to serve another entity as a director, officer, partner or trustee
unless we can obtain insurance providing coverage for such persons for any
claims, liabilities or expenses that may arise out of their activities while
serving in such capacities.

PROVISIONS OF THE MARYLAND GENERAL CORPORATION LAW AND OUR CHARTER AND BYLAWS

The Maryland General Corporation Law and our charter and bylaws contain
provisions that could make it more difficult for a potential acquiror to acquire
us by means of a tender offer, proxy contest or otherwise. These provisions are
expected to discourage certain coercive takeover practices and inadequate
takeover bids and to encourage persons seeking to acquire control of us to
negotiate first with our board of directors. We believe that the benefits of
these provisions outweigh the potential disadvantages of discouraging any such
acquisition proposals because, among other things, the negotiation of such
proposals may improve their terms.

CLASSIFIED BOARD OF DIRECTORS

Our board of directors is divided into three classes of directors serving
staggered three-year terms. The initial terms of the first, second and third
classes expire in 2004, 2005 and 2006, respectively. Beginning in 2004, upon
expiration of their current terms, directors of each class will be elected to
serve for three-year terms and until their successors are duly elected and
qualify and each year one class of directors will be elected by the
stockholders. A classified board may render a change in control of us or removal
of our incumbent management more difficult. We believe, however, that the longer
time required to elect a majority of a classified board of directors will help
to ensure the continuity and stability of our management and policies.

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DESCRIPTION OF CAPITAL STOCK
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ELECTION OF DIRECTORS

Our charter and bylaws provide that the affirmative vote of the holders of a
majority of the outstanding shares of stock entitled to vote in the election of
directors will be required to elect a director. Pursuant to the charter, our
board of directors may amend the bylaws to alter the vote required to elect
directors.

NUMBER OF DIRECTORS; VACANCIES; REMOVAL

Our charter provides that the number of directors will be set only by the board
of directors in accordance with our bylaws. Our bylaws provide that a majority
of our entire board of directors may at any time increase or decrease the number
of directors. However, the number of directors may never be less than one nor
more than twelve. Except as may be provided by the board of directors in setting
the terms of any class or series of preferred stock, any and all vacancies on
the board of directors may be filled only by the affirmative vote of a majority
of the remaining directors in office, even if the remaining directors do not
constitute a quorum, and any director elected to fill a vacancy will serve for
the remainder of the full term of the directorship in which the vacancy occurred
and until a successor is elected and qualifies, subject to any applicable
requirements of the 1940 Act.

Under Maryland law, a director on a classified board may be removed only for
cause and then only by the affirmative vote of at least a majority of the votes
entitled to be cast in the election of directors.

ACTION BY STOCKHOLDERS

The Maryland General Corporation Law provides that stockholder action can be
taken only at an annual or special meeting of stockholders or by unanimous
consent in lieu of a meeting. These provisions, combined with the requirements
of our bylaws regarding the calling of a stockholder-requested special meeting
of stockholders discussed below, may have the effect of delaying consideration
of a stockholder proposal until the next annual meeting.

ADVANCE NOTICE PROVISIONS FOR STOCKHOLDER NOMINATIONS AND STOCKHOLDER PROPOSALS

Our bylaws provide that with respect to an annual meeting of stockholders,
nominations of persons for election to the board of directors and the proposal
of business to be considered by stockholders may be made only (1) pursuant to
our notice of the meeting, (2) by the board of directors or (3) by a stockholder
who is entitled to vote at the meeting and who has complied with the advance
notice procedures of the bylaws. With respect to special meetings of
stockholders, only the business specified in our notice of the meeting may be
brought before the meeting. Nominations of persons for election to the board of
directors at a special meeting may be made only (1) pursuant to our notice of
the meeting, (2) by the board of directors or (3) provided that the board of
directors has determined that directors will be elected at the meeting, by a
stockholder who is entitled to vote at the meeting and who has complied with the
advance notice provisions of the bylaws.

The purpose of requiring stockholders to give us advance notice of nominations
and other business is to afford our board of directors a meaningful opportunity
to consider the qualifications of the proposed nominees and the advisability of
any other proposed business and, to the extent deemed necessary or desirable by
our board of directors, to inform stockholders and make recommendations about
such qualifications or business, as well as to provide a more orderly procedure
for conducting meetings of stockholders. Although our bylaws do not give our
board of directors any power to disapprove stockholder nominations for the
election of directors or proposals recommending certain action, they may have
the effect of precluding a contest for the election of directors or the
consideration of stockholder proposals if proper procedures are not followed and
of discouraging or deterring a third party from conducting a solicitation of
proxies to elect its own slate of directors or to approve its own proposal
without regard to whether consideration of such nominees or proposals might be
harmful or beneficial to us and our stockholders.

CALLING OF SPECIAL MEETINGS OF STOCKHOLDERS

Our bylaws provide that special meetings of stockholders may be called by our
board of directors and certain of our officers. Additionally, our bylaws provide
that, subject to the satisfaction of certain procedural and informational
requirements by the stockholders requesting the meeting, a special meeting of
stockholders will be called by the secretary of the corporation upon the written
request of stockholders entitled to cast not less than a majority of all the
votes entitled to be cast at such meeting.

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DESCRIPTION OF CAPITAL STOCK
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APPROVAL OF EXTRAORDINARY CORPORATE ACTION; AMENDMENT OF CHARTER AND BYLAWS

Under Maryland law, a Maryland corporation generally cannot dissolve, amend its
charter, merge, sell all or substantially all of its assets, engage in a share
exchange or engage in similar transactions outside the ordinary course of
business, unless approved by the affirmative vote of stockholders entitled to
cast at least two-thirds of the votes entitled to be cast on the matter.
However, a Maryland corporation may provide in its charter for approval of these
matters by a lesser percentage, but not less than a majority of all of the votes
entitled to be cast on the matter. Under our charter, provided that at least 75%
of our directors then in office have approved and declared the action advisable
and submitted such action to the stockholders, our dissolution, an amendment to
our charter that requires stockholder approval, a merger, or a sale of all or
substantially all of our assets or a similar transaction outside the ordinary
course of business, must be approved by the affirmative vote of stockholders
entitled to cast at least a majority of the votes entitled to be cast on the
matter. If an extraordinary matter submitted to stockholders by the board of
directors is approved and advised by less than 75% of our directors, such matter
will require approval by the affirmative vote of stockholders entitled to cast
at least two-thirds of the votes entitled to be cast on the matter.

Our charter and bylaws provide that the board of directors will have the
exclusive power to make, alter, amend or repeal any provision of our bylaws.

NO APPRAISAL RIGHTS

Except with respect to appraisal rights arising in connection with the Control
Shares Act discussed below, as permitted by the Maryland General Corporation
Law, our charter provides that stockholders will not be entitled to exercise
appraisal rights.

CONTROL SHARE ACQUISITIONS

The Maryland General Corporation Law provides that control shares of a Maryland
corporation acquired in a control share acquisition have no voting rights except
to the extent approved by a vote of two-thirds of the votes entitled to be cast
on the matter (the "Control Share Act"). Shares owned by the acquiror, by
officers or by directors who are employees of the corporation are excluded from
shares entitled to vote on the matter. Control shares are voting shares of stock
which, if aggregated with all other shares of stock owned by the acquiror or in
respect of which the acquiror is able to exercise or direct the exercise of
voting power (except solely by virtue of a revocable proxy), would entitle the
acquiror to exercise voting power in electing directors within one of the
following ranges of voting power:

o one-tenth or more but less than one-third;

o one-third or more but less than a majority; or

o a majority or more of all voting power.

The requisite stockholder approval must be obtained each time an acquiror
crosses one of the thresholds of voting power set forth above. Control shares do
not include shares the acquiring person is then entitled to vote as a result of
having previously obtained stockholder approval. A control share acquisition
means the acquisition of control shares, subject to certain exceptions.

A person who has made or proposes to make a control share acquisition may compel
the board of directors of the corporation to call a special meeting of
stockholders to be held within 50 days of demand to consider the voting rights
of the shares. The right to compel the calling of a special meeting is subject
to the satisfaction of certain conditions, including an undertaking to pay the
expenses of the meeting. If no request for a meeting is made, the corporation
may itself present the question at any stockholders meeting.

If voting rights are not approved at the meeting or if the acquiring person does
not deliver an acquiring person statement as required by the statute, then the
corporation may repurchase for fair value any or all of the control shares,
except those for which voting rights have previously been approved. The right of
the corporation to repurchase control shares is subject to certain conditions
and limitations, including, as provided in our bylaws, compliance with the 1940
Act. Fair value is determined, without regard to the absence of voting rights
for the control shares, as of the date of the last control share acquisition by
the acquiror or of any meeting of stockholders at which the voting rights of the
shares are considered and not approved. If voting rights for control shares are
approved at a stockholders meeting and the acquiror becomes entitled to vote a
majority of the shares entitled to

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DESCRIPTION OF CAPITAL STOCK
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vote, all other stockholders may exercise appraisal rights. The fair value of
the shares as determined for purposes of appraisal rights may not be less than
the highest price per share paid by the acquiror in the control share
acquisition.

The Control Share Act does not apply (a) to shares acquired in a merger,
consolidation or share exchange if the corporation is a party to the transaction
or (b) to acquisitions approved or exempted by the charter or bylaws of the
corporation. Our bylaws contain a provision exempting from the Control Share Act
any and all acquisitions by any person of our shares of stock. There can be no
assurance that such provision will not be amended or eliminated at any time in
the future. However, we will amend our bylaws to be subject to the Control Share
Act only if the board of directors determines that it would be in our best
interests and if the SEC staff does not object to our determination that our
being subject to the Control Share Act does not conflict with the 1940 Act.

BUSINESS COMBINATIONS

Under Maryland law, "business combinations" between a Maryland corporation and
an interested stockholder or an affiliate of an interested stockholder are
prohibited for five years after the most recent date on which the interested
stockholder becomes an interested stockholder. These business combinations
include a merger, consolidation, share exchange or, in circumstances specified
in the statute, an asset transfer or issuance or reclassification of equity
securities. An interested stockholder is defined as:

o any person who beneficially owns 10% or more of the voting power of
the corporation's shares; or

o an affiliate or associate of the corporation who, at any time within
the two-year period prior to the date in question, was the beneficial
owner of 10% or more of the voting power of the then outstanding
voting stock of the corporation.

A person is not an interested stockholder under this statute if the board of
directors approved in advance the transaction by which he otherwise would have
become an interested stockholder. However, in approving a transaction, the board
of directors may provide that its approval is subject to compliance, at or after
the time of approval, with any terms and conditions determined by the board.

After the five-year prohibition, any business combination between the Maryland
corporation and an interested stockholder generally must be recommended by the
board of directors of the corporation and approved by the affirmative vote of at
least:

o 80% of the votes entitled to be cast by holders of outstanding shares
of voting stock of the corporation; and

o two-thirds of the votes entitled to be cast by holders of voting stock
of the corporation other than shares held by the interested
stockholder with whom or with whose affiliate the business combination
is to be effected or held by an affiliate or associate of the
interested stockholder.

These super-majority vote requirements do not apply if the corporation's common
stockholders receive a minimum price, as defined under Maryland law, for their
shares in the form of cash or other consideration in the same form as previously
paid by the interested stockholder for its shares.

The statute permits various exemptions from its provisions, including business
combinations that are exempted by the board of directors before the time that
the interested stockholder becomes an interested stockholder. Our board of
directors has adopted a resolution that any business combination between us and
any other person is exempted from the provisions of the Business Combination
Act, provided that the business combination is first approved by the board of
directors, including a majority of the directors who are not interested persons
as defined in the 1940 Act. This resolution, however, may be altered or repealed
in whole or in part at any time. If this resolution is repealed, or the board of
directors does not otherwise approve a business combination, the statute may
discourage others from trying to acquire control of us and increase the
difficulty of consummating any offer.

CONFLICT WITH 1940 ACT

Our bylaws provide that, if and to the extent that any provision of the Maryland
General Corporation Law, including the Control Share Act (if we amend our bylaws
to be subject to such Act) and the Business Combination Act, or any provision of
our charter or bylaws conflicts with any provision of the 1940 Act, the
applicable provision of the 1940 Act will control.

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LEGAL MATTERS

The legality of our shares of common stock offered by this prospectus will be
passed upon for us by Sutherland Asbill & Brennan LLP, Washington, D.C. Certain
legal matters will be passed upon for the deal manager by Clifford Chance US
LLP.

CUSTODIAN, TRANSFER AND DIVIDEND PAYING AGENT AND REGISTRAR

Our securities are held under a custody agreement by State Street Bank and Trust
Company. The address of the custodian is 225 Franklin Street, Boston, MA 02110.
EquiServe , Inc. EquiServe Trust Company, N.A. act as our transfer, dividend
paying and reinvestment plan agents and registrar. The principal business
address of our transfer agents is 150 Royal Street, Canton, MA 02021.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

PricewaterhouseCoopers LLP, an independent registered public accounting firm,
have audited our financial statements at December 31, 2003.

BROKERAGE ALLOCATION AND OTHER PRACTICES

Since we generally acquire and dispose of our investments in privately
negotiated transactions, we infrequently use brokers in the normal course of our
business. Subject to policies established by our board of directors, our
investment adviser is primarily responsible for the execution of the publicly
traded securities portion of our portfolio transactions and the allocation of
brokerage commissions. The investment adviser does not execute transactions
through any particular broker or dealer, but seeks to obtain the best net
results for TICC, taking into account such factors as price (including the
applicable brokerage commission or dealer spread), size of order, difficulty of
execution, and operational facilities of the firm and the firm's risk and skill
in positioning blocks of securities. While the investment adviser will generally
seek reasonably competitive trade execution costs, TICC will not necessarily pay
the lowest spread or commission available. Subject to applicable legal
requirements, the investment adviser may select a broker based partly upon
brokerage or research services provided to the investment adviser and TICC and
any other clients. In return for such services, we may pay a higher commission
than other brokers would charge if the investment adviser determines in good
faith that such commission is reasonable in relation to the services provided.

--------------------------------------------------------------------------------
72

--------------------------------------------------------------------------------

INDEX TO FINANCIAL STATEMENTS

AUDITED FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm ................... F-2
Balance Sheet as of December 31, 2003 ..................................... F-3
Statement of Operations for the period July 21, 2003 (inception)
through December 31, 2003 ............................................... F-4
Statements of Stockholders' Equity for the period July 21, 2003
(inception) through December 31, 2003 ................................... F-5
Statements of Cash Flows for the period July 21, 2003 (inception)
through December 31, 2003 ............................................... F-6
Notes to Financial Statements ............................................. F-7

UNAUDITED FINANCIAL STATEMENTS
Balance Sheets as of June 30, 2004 and December 31, 2003 .................. F-11
Schedule of Investments as of June 30, 2004 ............................... F-12
Statement of Operations for the six months ended June 30, 2004 ............ F-13
Statement of Stockholders' Equity for the six months ended
June 30, 2004 ........................................................... F-14
Statements of Cash Flows for the six months ended June 30, 2004 ........... F-15
Notes to Financial Statements (unaudited) ................................. F-16

--------------------------------------------------------------------------------
F-1

--------------------------------------------------------------------------------

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Technology Investment Capital Corp.

In our opinion, the accompanying balance sheet, and the related statements of
operations, of stockholders' equity and of cash flows present fairly, in all
material respects, the financial position of Technology Investment Capital Corp.
(the "Company") at December 31, 2003, and the results of its operations, changes
in stockholders' equity and cash flows for the period July 21, 2003 (inception)
through December 31, 2003, in conformity with accounting principles generally
accepted in the United States of America. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit. We conducted our audit
of these financial statements in accordance the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

Baltimore, Maryland
February 9, 2004

--------------------------------------------------------------------------------
F-2

--------------------------------------------------------------------------------

TECHNOLOGY INVESTMENT CAPITAL CORPORATION
BALANCE SHEET
AS OF DECEMBER 31, 2003

DECEMBER 31, 2003
-----------------
ASSETS
ASSETS
Cash and cash equivalents ................................... $138,228,765
Interest receivable ......................................... 23,667
Prepaid assets .............................................. 72,446
-------------
TOTAL ASSETS .................................................. $138,324,878
=============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accrued expenses ............................................ $ 335,810
Accrued offering expenses ................................... 19,441
-------------
Total Liabilities ......................................... 355,251
-------------
STOCKHOLDERS' EQUITY
Common stock, $0.01 par value, 100,000,000 shares
authorized, and 10,000,100 issued and outstanding,
respectively ............................................. 100,001
Capital in excess of par value .............................. 138,189,832
Accumulated net investment loss ............................. (320,206)
-------------
Total Stockholders' Equity ................................ 137,969,627
-------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .................... $138,324,878
=============

SEE ACCOMPANYING NOTES.

--------------------------------------------------------------------------------
F-3

--------------------------------------------------------------------------------

TECHNOLOGY INVESTMENT CAPITAL CORPORATION
STATEMENT OF OPERATIONS
FOR THE PERIOD JULY 21, 2003 (INCEPTION) THROUGH DECEMBER 31, 2003

INVESTMENT INCOME
Interest income ................................................. $ 114,282
-----------
Total Investment Income ......................................... 114,282
-----------
EXPENSES
Salaries and benefits ........................................... 27,119
Investment advisory fees ........................................ 259,138
Professional fees ............................................... 30,110
Insurance ....................................................... 7,920
Organizational expenses ......................................... 349,316
General and administrative ...................................... 18,504
-----------
Total Expenses .................................................. 692,107
-----------
NET INVESTMENT LOSS ............................................... (577,825)
===========
NET DECREASE IN STOCKHOLDERS' EQUITY RESULTING
FROM OPERATIONS ................................................. $ (577,825)
===========
Net decrease in stockholders' equity resulting from operations
per common share:

Basic and Diluted ............................................... $ (0.25)
Weighted average shares of common stock outstanding:
Basic and Diluted ............................................... 2,348,987

SEE ACCOMPANYING NOTES.

--------------------------------------------------------------------------------
F-4

--------------------------------------------------------------------------------

TECHNOLOGY INVESTMENT CAPITAL CORP.
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD JULY 21, 2003 (INCEPTION) THROUGH DECEMBER 31, 2003

COMMON STOCK CAPITAL IN TOTAL
--------------------------- EXCESS OF PAR UNDISTRIBUTED STOCKHOLDERS'
SHARES AMOUNT VALUE EARNINGS EQUITY
------------- ----------- --------------- --------------- ----------------

Balance at July 21, 2003
(Inception) ................. 100 $ 1 $ 1,499 -- $ 1,500
Issuance of Common Stock In
Public Offering (net of
underwriting costs and
offering costs of
$11,454,048) ................ 10,000,000 $100,000 138,445,952 -- 138,545,952
Net Decrease in Stockholders'
Equity Resulting from
Operations .................. -- -- -- $ (577,825) $ (577,825)
Reclassification for
permanentbook-tax
difference (1) .............. -- -- (257,619) 257,619 --
---------- -------- ------------ ---------- ------------
Balance at 12/31/03 ........... 10,000,100 $100,001 $138,189,832 $ (320,206) $137,969,627
========== ======== ============ ========== ============

(1) See Federal Income Tax note.

SEE ACCOMPANYING NOTES.

--------------------------------------------------------------------------------
F-5

--------------------------------------------------------------------------------

TECHNOLOGY INVESTMENT CAPITAL CORPORATION
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM JULY 21, 2003 (INCEPTION) THROUGH DECEMBER 31, 2003

CASH FLOWS FROM OPERATING ACTIVITIES
Net decrease in stockholders' equity resulting from
operations .................................................. $ (577,825)
Adjustments to reconcile net decrease in stockholders'
equity resulting from operations to net cash provided/used
by operating activities:
Increase in interest receivable ............................. (23,667)
Increase in prepaid assets .................................. (72,446)
Increase in accrued expenses and other liabilities .......... 355,251
------------

Net Cash Used by Operating Activities ......................... (318,687)
------------

CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from the issuance of common stock ................ 139,500,000
Offering costs from issuance of common stock .................. (954,048)
------------

Net Cash Provided by Financing Activities ..................... 138,545,952
------------

NET INCREASE IN CASH AND CASH EQUIVALENTS ....................... 138,227,265
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD .................. 1,500
------------
CASH AND CASH EQUIVALENTS, END OF PERIOD ........................ $138,228,765
============
NON-CASH FINANCING ACTIVITIES ................................... none

SEE ACCOMPANYING NOTES.

--------------------------------------------------------------------------------
F-6

--------------------------------------------------------------------------------

TECHNOLOGY INVESTMENT CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003

NOTE 1. ORGANIZATION

Technology Investment Capital Corporation ("TICC" or "Company") was incorporated
under the General Corporation Laws of the State of Maryland on July 21, 2003 as
a closed-end investment company. The Company has elected to be treated as a
business development company under the Investment Company Act of 1940, as
amended. In addition, the Company intends to elect to be treated for tax
purposes as a regulated investment company, or RIC, under the Internal Revenue
Code of 1986, as amended, beginning with its 2003 taxable year. The Company's
investment objective is to maximize its total return, principally by investing
in the debt and/or equity securities of technology-related companies.

TICC's investment activities are managed by Technology Investment Management,
LLC ("TIM" or "Adviser"), a registered investment adviser under the Investment
Advisers Act of 1940, as amended. BDC Partners, LLC ("BDC Partners") is the
managing member of the Adviser and serves as the administrator of TICC.

On November 26, 2003, the Company closed its initial public offering and sold
8,695,653 shares of its common stock at a price to the public of $15.00 per
share, less an underwriting discount of $1.05 per share and offering expenses of
$954,048. Certain of TICC's directors and officers and employees of BDC Partners
purchased shares at the public offering price net of the sales concession. On
December 10, 2003, the Company issued an additional 1,304,347 shares of its
common stock at the same price pursuant to the underwriters' overallotment. The
total net proceeds to the Company from the initial public offering, including
the exercise of the overallotment, were $138,545,952.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying financial statements include the accounts of the Company. There
are no related companies and no intercompany accounts to be eliminated.

USE OF ESTIMATES

The financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America that require
management to make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. Actual results may differ from
those estimates.

In the normal course of business, the Company may enter into contracts that
contain a variety of representations and provide indemnifications. The Company's
maximum exposure under these arrangements is unknown as this would involve
future claims that may be made against the Company that have not yet occurred.
However, the Company expects the risk of loss to be remote.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of demand deposits and highly liquid
investments with original maturities of three months or less. Cash and cash
equivalents are carried at cost or amortized cost which approximates fair value.

INVESTMENT VALUATION

The Company carries its investments at fair value, as determined in good faith
by the Board of Directors based upon the recommendation of its valuation
committee. The Company has retained an outside valuation firm to assist in the
valuation process; however the Board of Directors will retain ultimate authority
as to the appropriate valuation of each investment. At year-end, there were no
investments which required the valuation services of the outside valuation firm.

--------------------------------------------------------------------------------
F-7

--------------------------------------------------------------------------------

INTEREST INCOME RECOGNITION

Interest income is recorded on the accrual basis to the extent that such amounts
are expected to be collected.

FEDERAL INCOME TAXES

Because federal income tax regulations differ from accounting principles
generally accepted in the United States of America, distributions in accordance
with tax regulations may differ from net investment income and realized gains
recognized for financial reporting purposes. Differences may be permanent or
temporary. Permanent differences are reclassified among capital accounts in the
financial statement to reflect their tax character. Temporary differences arise
when certain items of income, expense, gain or loss are recognized at some time
in the future. Differences in classification may also result from the treatment
of short-term gains as ordinary income for tax purposes.

During the year ended December 31, 2003, the Company reclassified $257,619 from
net investment loss to capital in excess of par value, representing the portion
of net investment loss that will not be utilizable for tax purposes.

CONCENTRATION OF CREDIT RISK

The Company places its cash and cash equivalents with financial institutions
and, at times, cash held in checking accounts may exceed the Federal Deposit
Insurance Corporation insured limit.

NOTE 3. CASH AND CASH EQUIVALENTS

At December 31, 2003, cash and cash equivalents consisted of:

MARKET VALUE
------------
UBS Select Money Market Fund ..................................... $ 28,000,000
Euro Time Deposit (0.93%, due January 13, 2004)................... 10,000,000
U.S. Treasury Bill (0.82%, due January 22, 2004).................. 49,976,083
U.S. Treasury Bill (0.84%, due March 18, 2004).................... 49,910,167
------------
Total Cash Equivalents ........................................... 137,886,250
Cash ............................................................. 342,515
------------
Cash and Cash Equivalents ........................................ $138,228,765
============

NOTE 4. EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted net increase
(decrease) in stockholders' equity resulting from operations per share for the
period ended December 31, 2003:

Numerator for basic and diluted loss per share ..................... $ (577,825)
Denominator for basic and diluted weighted average shares .......... 2,348,987
Basic and diluted net decrease in stockholders' equity
resulting from operations per common share ....................... $ (0.25)

NOTE 5. RELATED PARTY TRANSACTIONS

TICC has entered into an investment advisory agreement with the Adviser, under
which the Adviser, subject to the overall supervision of TICC's board of
directors, manages the day-to-day operations of, and provides investment
advisory services to, TICC. For providing these services, the Adviser receives a
fee from TICC, consisting of two components: a base management fee and an
incentive fee. The base management fee is calculated at an annual rate of 2.00%.
For services rendered under the investment advisory agreement during the period
commencing from the closing of the Company's public share offering through and
including March 31, 2004, the base management fee is

--------------------------------------------------------------------------------
F-8

--------------------------------------------------------------------------------

payable monthly in arrears, and is calculated based on the initial value of
TICC's net assets upon closing of the stock offering. For services rendered
under the investment advisory agreement after March 31, 2004, the base
management fee will be payable quarterly in arrears, and will be calculated
based on the average value of TICC's net assets at the end of the two most
recently completed calendar quarters, and appropriately adjusted for any share
issuances, repurchases or redemptions during the current calendar quarter.

The incentive fee has two parts, as follows: One part is calculated and payable
quarterly in arrears based on TICC's pre-incentive fee net investment income for
the immediately preceding calendar quarter. For this purpose, pre-incentive fee
net investment income means interest income, dividend income and any other
income earned during the calendar quarter, minus our operating expenses for the
quarter (including the base management fee and any interest expense and
dividends paid on any issued and outstanding preferred stock, but excluding the
incentive fee). Pre-incentive fee net investment income includes any consulting
or other fees that we receive from portfolio companies but does not include any
net realized capital gains. Pre-incentive fee net investment income, expressed
as a rate of return on the value of our net assets at the end of the immediately
preceding calendar quarter, will be compared to one-fourth of the applicable
annual "hurdle rate." TIM will be entitled to 20.0% of the excess (if any) of
our pre-incentive fee net investment income for the quarter over one-fourth of
the applicable annual hurdle rate. The annual hurdle for the period from the
closing of our initial public offering through and including December 31, 2004
is 8.27%, which is equal to the interest rate payable, at the beginning of the
period, on the most recently issued five-year U.S. Treasury Notes plus 5.0%. For
each calendar year commencing on or after January 1, 2005, the annual hurdle
rate will be determined as of the immediately preceding December 31st by adding
5.0% to the interest rate then payable on the most recently issued five-year
U.S. Treasury Notes, up to a maximum annual hurdle rate of 10.0%. The
calculations will be appropriately pro rated for any period of less than three
months and adjusted for any share issuances, redemptions or repurchases during
the current quarter.

The second part of the incentive fee will be determined and payable in arrears
as of the end of each calendar year (or upon termination of the investment
advisory agreement, as of the termination date), commencing on December 31,
2004, and will equal 20.0% of our net realized capital gains for the calendar
year less any net unrealized capital losses for such year; provided that the
incentive fee determined as of December 31, 2004 will be calculated for a period
of longer than twelve calendar months to take into account any net realized
capital gains and net unrealized capital losses for the period ending December
31, 2003.

TICC has also entered into an administration agreement with BDC Partners under
which BDC Partners will provide administrative services for TICC. For providing
these services, facilities and personnel, TICC will reimburse BDC Partners for
TICC's allocable portion of overhead and other expenses incurred by BDC Partners
in performing its obligations under the administration agreement, including
rent.

TIM is owned by BDC Partners, its managing member, and Royce & Associates, LLC
("Royce"). Jonathan H. Cohen, TICC's chief executive officer, and Saul B.
Rosenthal, TICC's chief operating officer, are the members of BDC Partners, and
Charles M. Royce, TICC's non-executive chairman, is the president of Royce. For
the period ended December 31, 2003, investment advisory fees charged by TIM were
$259,138. In addition, the Company accrued $24,660 as reimbursement for
compensation expenses paid by BDC Partners to employees for administrative
services rendered to TICC, pursuant to an administration agreement. In addition,
TICC reimbursed TIM and BDC Partners for organizational and offering expenses of
$332,600 which were advanced on behalf of TICC.

NOTE 6. SUBSEQUENT EVENTS

On January 28, 2004, the Company announced that it had closed its first
transaction, with Questia Media, Inc. The transaction involves $8,000,000 in 12%
notes, with a payment-in-kind feature of an additional 6% of the invested
amount. The notes mature in January 2009. The transaction also provides for TICC
to purchase an additional $2 million of senior notes as Questia Media achieves
certain milestones.

On February 2, 2004, the Company announced a cash dividend of $0.10 per share
payable April 5, 2004 to holders of record on March 15, 2004.

On February 27, 2004, the Company announced the engagement of Houlihan Lokey
Howard & Zukin, an independent valuation firm, and the termination of it
sub-advisory agreement with Hill Street Capital by mutual agreement.

--------------------------------------------------------------------------------
F-9

--------------------------------------------------------------------------------

NOTE 7. FINANCIAL HIGHLIGHTS

PERIOD
JULY 21, 2003
(INCEPTION)
THROUGH
DECEMBER 31, 2003
---------------------
PER SHARE DATA
Net asset value at beginning of period ............... $ 15.00
Offering costs and underwriters discount ............. (1.14)
Net investment loss .................................. (0.06)(1)
---------------

Net asset value at end of period ..................... $ 13.80
===============

Per share market value at beginning of period ........ $ 15.00 (2)
Per share market value at end of period .............. 15.55
Total return ......................................... 3.67%(3)
Shares outstanding at end of period .................. 10,000,100

RATIOS/SUPPLEMENTAL DATA
Net assets at end of period ('000s) .................. $ 137,970
Average net assets ('000s) ........................... 28,703
Ratio of expenses to average net assets .............. 2.4%*
Ratio of net investment loss to average net assets ... (2.0)%*

--------------
* Not annualized.

(1) Calculated in accordance with Securities and Exchange Commission Form N-2,
Part A, item 4.1.9.

(2) Represents initial public offering price.

(3) Total return equals the increase of the ending market value over the
beginning market value, plus distributions, divided by the beginning market
value. The return for 2003 has not been annualized.

NOTE 8. SELECTED QUARTERLY DATA (UNAUDITED)

PERIOD ENDED
DECEMBER 31, 2003
-----------------
Total Investment Income .................................. $ 114,282
Net Investment Loss ...................................... (577,825)
Net Decrease in Stockholders' Equity Resulting
from Operations ........................................ (577,825)
Basic loss per common share .............................. (0.25)
Diluted loss per common share ............................ (0.25)

--------------------------------------------------------------------------------
F-10

--------------------------------------------------------------------------------

TECHNOLOGY INVESTMENT CAPITAL CORP.
BALANCE SHEETS
AS OF JUNE 30, 2004 AND DECEMBER 31, 2003

JUNE 30, DECEMBER 31,
2004 2003
(UNAUDITED) (AUDITED)
--------------- ---------------

ASSETS
ASSETS
Investments at fair value (cost: $33,411,566 @ 6/30/04;
none @ 12/31/03) .......................................... $ 33,411,566 $ 0
Cash and cash equivalents ................................... 104,130,010 138,228,765
Interest receivable ......................................... 698,249 23,667
Prepaid assets .............................................. 45,657 72,446
------------ ------------
TOTAL ASSETS .................................................. $138,285,482 $138,324,878
============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accrued expenses ............................................ $ 878,336 335,810
Accrued offering expenses ................................... 0 19,441
------------ ------------
Total Liabilities ......................................... 878,336 355,251
------------ ------------
STOCKHOLDERS' EQUITY
Common stock, $0.01 par value, 100,000,000 shares authorized,
and 10,092,712 and 10,000,100 issued and outstanding,
respectively .............................................. 100,927 100,001
Capital in excess of par value .............................. 139,502,029 138,189,832
(Overdistributed) net investment income (loss) ............. (2,195,810) (320,206)
------------ ------------
Total Stockholders' Equity ............................... 137,407,146 137,969,627
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .................... $138,285,482 $138,324,878
============ ============

SEE ACCOMPANYING NOTES.

--------------------------------------------------------------------------------
F-11

--------------------------------------------------------------------------------

TECHNOLOGY INVESTMENT CAPITAL CORP.
SCHEDULE OF INVESTMENTS
JUNE 30, 2004
(UNAUDITED)

COMPANY(1) INDUSTRY INVESTMENT COST FAIR VALUE(2)
------------------------------ --------------------- -------------------- ------------ -------------

Questia Media, Inc. .......... digital media senior notes(3)(4) $ 8,411,566 $ 8,411,566
MortgageIT, Inc. ............. financial services senior notes 15,000,000 15,000,000
Advanced Aesthetics
Institute ................... medical services senior notes 10,000,000 10,000,000
warrants to purchase
common stock -- --
----------- -----------
Total investments ............ $33,411,566 $33,411,566
=========== ===========

-----------
(1) We do not "control" and are not an "affiliate" of any of our portfolio
companies, each as defined in the Investment Company Act of 1940 (the "'40
Act"). In general, under the '40 Act, we would "control" a portfolio
company if we owned 25% or more of its voting securities and would be an
"affiliate" of a portfolio company if we owned 5% or more of its voting
securities.

(2) Fair value is determined in good faith by the Board of Directors of the
Company.

(3) Investment includes payment-in-kind interest.

(4) Transaction also includes a commitment for additional notes over two years.

--------------------------------------------------------------------------------
F-12

--------------------------------------------------------------------------------

TECHNOLOGY INVESTMENT CAPITAL CORP.
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2004
(UNAUDITED)

SIX MONTHS ENDED
JUNE 30, 2004
-----------------
INVESTMENT INCOME
Interest income ......................................... $ 1,626,645
Other fees .............................................. 530,000
------------
Total Investment Income ............................... 2,156,645
------------
EXPENSES
Salaries and benefits ................................... 98,138
Investment advisory fees ................................ 1,378,949
Professional fees ....................................... 201,894
Insurance ............................................... 40,040
Directors' fees ......................................... 70,500
General and administrative .............................. 137,662
------------
Total Expenses ........................................ 1,927,183
------------
NET INVESTMENT INCOME ..................................... $ 229,462
============
NET INCREASE IN STOCKHOLDERS' EQUITY RESULTING FROM
OPERATIONS .............................................. $ 229,462
============
Net increase in stockholders' equity resulting from
Operations per common share:
Basic and Diluted ......................................... $ 0.02
Weighted average shares of common stock outstanding:
Basic and Diluted ......................................... 10,022,279

SEE ACCOMPANYING NOTES.

--------------------------------------------------------------------------------
F-13

--------------------------------------------------------------------------------

TECHNOLOGY INVESTMENT CAPITAL CORP.
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2004
(UNAUDITED)

COMMON STOCK CAPITAL (OVER)/UNDERDIST. TOTAL
-------------------------- IN EXCESS OF NET INVESTMENT STOCKHOLDERS'
SHARES AMOUNT PAR VALUE INCOME EQUITY
------------ ------------ ---------------- ------------------- ----------------

Balance at 12/31/03 .................. 10,000,100 $ 100,001 $ 138,189,832 $ (320,206) $ 137,969,627
Net Increase in Stockholders' Equity
Resulting from Operations .......... -- -- -- 229,462 229,462
Shares issued in connection with
dividend reinvestment .............. 92,612 926 1,312,197 -- 1,313,123
Dividends declared ................... -- -- -- (2,105,066) (2,105,066)
---------- --------- ------------- ------------ -------------
Balance at 06/30/04 .................. 10,092,712 $ 100,927 $ 139,502,029 $ (2,195,810) $ 137,407,146
========== ========= ============= ============ =============

SEE ACCOMPANYING NOTES

--------------------------------------------------------------------------------
F-14

--------------------------------------------------------------------------------

TECHNOLOGY INVESTMENT CAPITAL CORP.
STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2004
(UNAUDITED)

CASH FLOWS FROM OPERATING ACTIVITIES
Net increase in stockholders' equity resulting from operations .. $ 229,462
Adjustments to reconcile net increase in stockholders' equity
resulting from operations to net cash provided/used
by operating activities:
Increase in interest receivable ............................... (674,582)
Decrease in prepaid assets .................................... 26,789
Increase in investments due to PIK interest ................... (411,566)
Increase in accrued expenses and other liabilities ............ 523,085
-------------
Net Cash Used by Operating Activities ........................... (306,812)
-------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments ....................................... (33,000,000)
-------------
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid ................................................ (791,943)
-------------
NET INCREASE IN CASH AND CASH EQUIVALENTS ....................... (34,098,755)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD .................. 138,228,765
-------------
CASH AND CASH EQUIVALENTS, END OF PERIOD ........................ $ 104,130,010
=============
NON-CASH FINANCING ACTIVITIES
Shares issued in connection with dividend reinvestment plan ..... $ 1,313,123
=============

SEE ACCOMPANYING NOTES

--------------------------------------------------------------------------------
F-15

--------------------------------------------------------------------------------

TECHNOLOGY INVESTMENT CAPITAL CORP.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004
(UNAUDITED)

NOTE 1. UNAUDITED INTERIM FINANCIAL STATEMENTS

Interim financial statements of Technology Investment Capital Corp. ("TICC" or
"Company") are prepared in accordance with generally accepted accounting
principles ("GAAP") for interim financial information and pursuant to the
requirements for reporting on Form 10-Q and Article 10 of Regulation S-X.
Accordingly, certain disclosures accompanying annual financial statements
prepared in accordance with GAAP are omitted. In the opinion of management, all
adjustments, consisting solely of normal recurring accruals, necessary for the
fair presentation of financial statements for the interim periods have been
included. The current period's results of operations are not necessarily
indicative of results that may be achieved for the year. The interim financial
statements and notes thereto should be read in conjunction with the financial
statements and notes thereto included in the Company's Form 10-K for the year
ended December 31, 2003, as filed with the Securities and Exchange Commission.

NOTE 2. ORGANIZATION

TICC was incorporated under the General Corporation Laws of the State of
Maryland on July 21, 2003 as a closed-end investment company. The Company has
elected to be treated as a business development company under the Investment
Company Act of 1940, as amended (the "1940 Act"). In addition, the Company has
elected to be treated for tax purposes as a regulated investment company, or
RIC, under the Internal Revenue Code of 1986, as amended. The Company's
investment objective is to maximize its total return, principally by investing
in the debt and/or equity securities of technology-related companies.

TICC's investment activities are managed by Technology Investment Management,
LLC, ("TIM"), a registered investment adviser under the Investment Advisers Act
of 1940, as amended. BDC Partners, LLC ("BDC") is the managing member of the
Adviser and serves as the administrator of TICC.

NOTE 3. INVESTMENT VALUATION

The Company carries its investments at fair value, as determined in good faith
by the Board of Directors. Securities that are publicly traded are valued at the
closing price on the valuation date. Debt and equity securities that are not
publicly traded are valued at fair value as determined in good faith by the
Board of Directors. Beginning in March 2004, the Company engaged an independent
valuation firm to perform independent valuations of its investments. The Board
of Directors uses the recommended valuations as prepared by the independent
valuation firm as a component of the foundation for the final fair value
determination. In making such determination, the Board of Directors values
non-convertible debt securities at cost plus amortized original issue discount
plus payment-in-kind ("PIK") interest, if any, unless factors lead to a
determination of a lesser or greater valuation. Due to the uncertainty inherent
in the valuation process, such determination of fair value may differ
significantly from the values that would have resulted had a ready market for
the securities existed, and the differences could be material. Additionally,
changes in the market environment and other events that may occur over the life
of the investments may cause the amounts ultimately realized on these
investments to be different from the valuation currently assigned.

--------------------------------------------------------------------------------
F-16

--------------------------------------------------------------------------------

NOTE 4. EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted net increase
in stockholders' equity resulting from operations per share for the six months
ended June 30, 2004:

SIX MONTHS ENDED
JUNE 30, 2004
(UNAUDITED)
-----------------
Numerator for basic and diluted earnings per share .......... $ 229,462
Denominator for basic and diluted weighted average shares ... 10,022,279
Basic and diluted net increase in stockholders' equity
resulting from operations per common share ................ $ 0.02

NOTE 5. RELATED PARTY TRANSACTIONS

The Company's investment activities are managed by its investment adviser,
Technology Investment Management, LLC ("TIM") pursuant to an investment advisory
agreement. TIM is owned by BDC Partners, LLC, its managing member, and Royce &
Associates, LLC. Jonathan Cohen, our chief executive officer, and Saul
Rosenthal, our chief operating officer, are the members of BDC Partners, and
Charles Royce, our non-executive chairman, is the president of Royce &
Associates. For the six months ended June 30, 2004, TICC incurred investment
advisory fees of $1,379,000; $690,000 was payable to TIM at the end of the
quarter. Pursuant to the terms of its administration agreement with BDC
Partners, TICC incurred $98,000 in compensation expenses for employees allocated
to the administrative activities of TICC and $5,910 for reimbursement of
facility costs allocated to TICC, for the six months ended June 30, 2004. At
June 30, 2004, $0 remained payable to BDC Partners for compensation expense and
facility costs.

NOTE 6. DIVIDENDS

The Company intends to operate so as to qualify to be taxed as a RIC under the
Internal Revenue Code and, as such, would not be subject to federal income tax
on the portion of its taxable income and gains distributed to stockholders. To
qualify as a RIC, the Company is required, among other requirements, to
distribute at least 90% of its investment company taxable income, as defined by
the Code. The amount to be paid out as a dividend is determined by the Board of
Directors each quarter and is based upon the annual earnings estimated by the
management of the Company.

On April 5, 2004, the Company paid a dividend of $0.10 per share. On June 30,
2004, the Company paid a dividend of $0.11 per share to stockholders of record
as of June 10, 2004. On August 5, 2004, the Company announced a dividend of
$0.11 per share for the third quarter.

The Company has a dividend reinvestment plan under which all net investment
income dividends and capital gain distributions are paid to stockholders in the
form of additional shares unless a stockholder elects to receive cash.

NOTE 7. NET ASSET VALUE PER SHARE

The Company's net asset value per share at June 30, 2004 was $13.61, and at
December 31, 2003 was $13.80.

NOTE 8. PAYMENT IN KIND INTEREST

The Company has loans in its portfolio which contain a payment-in-kind ("PIK")
provision. The PIK interest is added to the principal balance of the loan and
recorded as income. To maintain the Company's status as a RIC (as discussed in
Note 6, above), this non-cash source of income must be paid out to stockholders
in the form of dividends, even though the Company has not yet collected the
cash. For the six months ended June 30, 2004, the Company recorded PIK income of
$411,566, and a corresponding increase in the cost of the investment. The
Company does not have any original issue discount income.

NOTE 9. OTHER FEES

For the six months ended June 30, 2004, other fees totaled $530,000. These fees
include closing fees associated with investments in portfolio companies. Such
fees are normally paid at the closing of the Company's investments and are
generally non-recurring.

--------------------------------------------------------------------------------
F-17

--------------------------------------------------------------------------------

The 1940 Act requires that a business development company make available
managerial assistance to its portfolio companies. The Company may receive fee
income for managerial assistance it renders to portfolio companies in connection
with its investments. For the six months ended June 30, 2004, the Company
received no fee income for managerial assistance.

NOTE 10. FINANCIAL HIGHLIGHTS

SIX MONTHS ENDED
JUNE 30, 2004
(UNAUDITED)
-----------------
PER SHARE DATA(1)
Net asset value at beginning of period .................. $ 13.80
Net investment income(2) ................................ 0.02
Distributions from net investment income ................ (0.21)
-------------
Net asset value at end of period ........................ $ 13.61
=============

Per share market value at beginning of period ........... $ 15.55
Per share market value at end of period ................. 13.51
Total return(3)(4) ...................................... (11.8)%
Shares outstanding at end of period ..................... 10,092,712

RATIOS/SUPPLEMENTAL DATA
Net assets at end of period ............................. $137,407,146
Average net assets ...................................... 137,776,019
Ratio of expenses to average net assets annualized ...... 2.80%
Ratio of net investment income to average net assets
-- annualized ......................................... 0.33%

-------------
(1) Basic per share data.

(2) Represents per share net investment income for the period.

(3) Calculated using weighted average share method.

(4) Total return equals the decrease of the ending market value plus dividends
divided by the beginning market value.

NOTE 11. CASH AND CASH EQUIVALENTS

At June 30, 2004 and December 31, 2003, respectively, cash and cash equivalents
consisted of:

JUNE 30, 2004 DECEMBER 31, 2003
(UNAUDITED) (AUDITED)
--------------- ------------------

UBS Select Money Market Fund ........................ $ 3,459,372 $ 28,000,000
Eurodollar Time Deposit (due 7/8/04 and 1/31/04) .... 20,000,000 10,000,000
U.S. Treasury Bill (due 7/8/04 and 1/22/04) ......... 49,991,347 49,976,083
U.S. Treasury Bill (due 3/18/04) .................... -- 49,910,167
Federal Home Loan Bank discount note (due 7/21/04) .. 29,980,833 --
------------- -------------
Total Cash Equivalents ............................. 103,431,552 137,886,250
Cash ............................................... 698,458 342,515
------------- -------------
Cash and Cash Equivalents .......................... $ 104,130,010 $ 138,228,765
============= =============

--------------------------------------------------------------------------------
F-18

--------------------------------------------------------------------------------

NOTE 12. COMMITMENTS

As part of the Company's investment in the senior notes of Questia Media, Inc.,
a commitment for an additional purchase of $2 million in senior notes, over the
two-year period ending January 28, 2006, was issued. The fulfillment of this
commitment is contingent on the achievement of agreed-upon financial milestones.

NOTE 13. SUBSEQUENT EVENTS

On July 26, 2004, the Company announced that it had completed a $10 million debt
transaction with The Endurance International Group. Endurance, a portfolio
company of Audax Group, is a leading provider of shared website hosting and
other online services for small and medium businesses. Endurance currently
manages a number of website hosting properties, each of which is a provider of
web services to a targeted segment of the small business community. Endurance's
business strategy has been to add to its economies of scale through the
acquisition of website hosting assets. TICC's investment in Endurance consists
of $7 million of senior secured notes with warrants and a commitment for an
additional $3 million of senior notes with warrants as Endurance achieves
certain milestones.

On August 5, 2004, the Company announced a cash dividend of $0.11 per share to
holders of record on September 10, 2004, payable on September 30, 2004.

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F-19

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PART C--OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

1. Financial Statements:

The following financial statements of Technology Investment Capital Corp.
are included in Part A "Information Required in a Prospectus" of the
Registration Statement:

TECHNOLOGY INVESTMENT CAPITAL CORP.

INDEX TO FINANCIAL STATEMENTS

AUDITED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm .................. F-2
Balance Sheet as of December 31, 2003 .................................... F-3
Statement of Operations for the period July 21, 2003 (inception)
through December 31, 2003 .............................................. F-4
Statements of Stockholders' Equity for the period July 21, 2003
(inception) through December 31, 2003 .................................. F-5
Statements of Cash Flows for the period July 21, 2003 (inception)
through December 31, 2003 .............................................. F-6
Notes to Financial Statements ............................................ F-7

UNAUDITED FINANCIAL STATEMENTS

Balance Sheets as of June 30, 2004 and December 31, 2003 ................ F-11
Schedule of Investments as of June 30, 2004 ............................. F-12
Statements of Operations for the six months ended June 30, 2004 ......... F-13
Statement of Stockholders' Equity for the six months
ended June 30, 2004 ................................................... F-14
Statements of Cash Flows for the six months ended June 30, 2004 ......... F-15
Notes to Financial Statements (unaudited) ............................... F-16

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C-1

PART C--OTHER INFORMATION
--------------------------------------------------------------------------------

2. Exhibits

EXHIBIT
NUMBER DESCRIPTION
------------ -------------------------------------------------------------------
a. Articles of Incorporation (Incorporated by reference to the
Registrant's Registration Statement on Form N-2 (File No.
333-109055) filed on September 23, 2003).

b. Amended and Restated Bylaws (Incorporated by reference to
Pre-Effective Amendment No. 2 to the Registrant's Registration
Statement on Form N-2 (File No. 333-109055) filed on November 19,
2003).

d. Form of Share Certificate (Incorporated by reference to the
Registrant's Registration Statement on Form N-2 (File No.
333-109055) filed on September 23, 2003).

d.1** Form of Subscription Certificate

d.2** Form of Notice of Guaranteed Delivery and Form of Beneficial Owner
Certification Form

d.3** Subscription Agent Agreement

d.4** Information Agent Agreement

e. Dividend Reinvestment Plan (Incorporated by reference to
Pre-Effective Amendment No. 1 to the Registrant's Registration
Statement on Form N-2 (File No. 333-109055) filed on November 6,
2003).

g. Form of Amended and Restated Investment Advisory Agreement between
Registrant and Technology Investment Management, LLC (Incorporated
by reference to Appendix B to the Registrant's Definitive Proxy
Materials on Schedule 14A (File No. 000-50398) filed on May 18,
2004).

h.** Form of Dealer Manager Agreement between the Registrant and UBS
Securities LLC

j. Custodian Agreement between Registrant and State Street Bank and
Trust Company (Incorporated by reference to Pre-Effective Amendment
No. 2 to the Registrant's Registration Statement on Form N-2 (File
No. 333-109055) filed on November 19, 2003).

k.1 Administration Agreement between Registrant and BDC Partners, LLC
(Incorporated by reference to Pre-Effective Amendment No. 2 to the
Registrant's Registration Statement on Form N-2 (File No.
333-109055) filed on November 19, 2003).

k.2 Transfer Agency and Service Agreement among Registrant, EquiServe
Trust Company, N.A. and EquiServe, Inc. (Incorporated by reference
to Pre-Effective Amendment No. 2 to the Registrant's Registration
Statement on Form N-2 (File No. 333-109055) filed on November 19,
2003).

l.** Opinion of Sutherland Asbill & Brennan LLP.

n.1** Consent of Sutherland Asbill & Brennan LLP (Incorporated by
reference to exhibit l hereto).

n.2* Consent of PricewaterhouseCoopers LLP.

r. Code of Ethics (Incorporated by reference to Pre-Effective
Amendment No. 1 to the Registrant's Registration Statement on Form
N-2 (Filed No. 333-109055) filed on November 6, 2003.

------------
* Filed herewith.

** To be filed by pre-effective amendment.

ITEM 25. MARKETING ARRANGEMENTS

The information contained under the heading "The Offer" on page 18 of the
prospectus is incorporated herein by this reference, and any information
concerning underwriters will be contained in the accompanying prospectus
supplement, if any.

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C-2

PART C--OTHER INFORMATION
--------------------------------------------------------------------------------

ITEM 26. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

SEC registration fee ................................................. $6,969
Nasdaq National Market listing fee ................................... *
Printing and postage ................................................. *
Legal fees and expenses .............................................. *
Accounting fees and expenses ......................................... *
NASD fees ............................................................ *
Reimbursement of dealer manager expenses ............................. *
Subscription agent fee and expenses .................................. *
Information agent fees and expenses .................................. *
Miscellaneous ........................................................ *
Total .............................................................. *
======

---------
Note: All listed amounts are estimates.

* To be filed by amendment

ITEM 27. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL

Not applicable.

ITEM 28. NUMBER OF HOLDERS OF SECURITIES

The following table sets forth the approximate number of record holders of
TICC's capital stock as of October 20, 2004:

NUMBER OF
TITLE OF CLASS RECORD HOLDERS
------------------------------------------------------ ---------------
Common Stock, par value $0.01 per share 91

ITEM 29. INDEMNIFICATION

Reference is made to Section 2-418 of the Maryland General Corporation Law,
Article VIII of the Registrant's Articles of Incorporation, Article XI of the
Registrant's Bylaws, the Investment Advisory Agreement and Administration
Agreement.

Our charter authorizes us, to the maximum extent permitted by Maryland law and
subject to the requirements of the 1940 Act, to indemnify any present or former
director or officer or any individual who, while a director and at our request,
serves or has served another corporation, real estate investment trust,
partnership, joint venture, trust, employee benefit plan or other enterprise as
a director, officer, partner or trustee, from and against any claim or liability
to which that person may become subject or which that person may incur by reason
of his or her status as a present or former director or officer and to pay or
reimburse their reasonable expenses in advance of final disposition of a
proceeding. Our bylaws obligate us, to the maximum extent permitted by Maryland
law and subject to the requirements of the 1940 Act, to indemnify any present or
former director or officer or any individual who, while a director and at our
request, serves or has served another corporation, real estate investment trust,
partnership, joint venture, trust, employee benefit plan or other enterprise as
a director, officer, partner or trustee and who is made a party to the
proceeding by reason of his service in that capacity from and against any claim
or liability to which that person may become subject or which that person may
incur by reason of his or her status as a present or former director or officer
and to pay or reimburse their reasonable expenses in advance of final

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C-3

PART C--OTHER INFORMATION
--------------------------------------------------------------------------------

disposition of a proceeding. The charter and bylaws also permit us to indemnify
and advance expenses to any person who served a predecessor of us in any of the
capacities described above and any of our employees or agents or any employees
or agents of our predecessor. In accordance with the 1940 Act, we will not
indemnify any person for any liability to which such person would be subject by
reason of such person's willfull misfeasence, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office.

The Investment Advisory Agreement provides that, absent willful misfeasance, bad
faith or gross negligence in the performance of its duties or by reason of the
reckless disregard of its duties and obligations, Technology Investment
Management, LLC (the "Adviser") and its officers, managers, agents, employees,
controlling persons, members and any other person or entity affiliated with it
are entitled to indemnification from the Registrant for any damages,
liabilities, costs and expenses (including reasonable attorneys' fees and
amounts reasonably paid in settlement) arising from the rendering of the
Adviser's services under the Investment Advisory Agreement or otherwise as an
investment adviser of the Registrant.

The Administration Agreement provides that, absent willful misfeasance, bad
faith or gross negligence in the performance of its duties or by reason of the
reckless disregard of its duties and obligations, BDC Partners, LLC and its
officers, manager, agents, employees, controlling persons, members and any other
person or entity affiliated with it are entitled to indemnification from the
Registrant for any damages, liabilities, costs and expenses (including
reasonable attorneys' fees and amounts reasonably paid in settlement) arising
from the rendering of BDC Partners, LLC's services under the Administration
Agreement or otherwise as administrator for the Registrant.

The law also provides for comparable indemnification for corporate officers and
agents.

Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

ITEM 30. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

A description of any other business, profession, vocation, or employment of a
substantial nature in which the Adviser, and each managing director, director or
executive officer of the Adviser, is or has been during the past two fiscal
years, engaged in for his or her own account or in the capacity of director,
officer, employee, partner or trustee,

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C-4

PART C--OTHER INFORMATION
--------------------------------------------------------------------------------

is set forth in Part A of this Registration Statement in the sections entitled
"Management -- Directors and Executive Officers" and "-- Investment advisory
agreement -- Investment personnel." Additional information regarding the Adviser
and its officers and directors is set forth in its Form ADV, as filed with the
Securities and Exchange Commission (SEC File No. 801-62278), and is incorporated
herein by reference.

ITEM 31. LOCATION OF ACCOUNTS AND RECORDS

All accounts, books, and other documents required to be maintained by Section
31(a) of the Investment Company Act of 1940, and the rules thereunder are
maintained at the offices of:

(1) the Registrant, Technology Investment Capital Corp., 8 Sound Shore Drive,
Suite 255, Greenwich, CT 06830;

(2) the Transfer Agent, EquiServe Trust Company, N.A. and EquiServe, Inc., 150
Royal Street, Canton, MA 02021;

(3) the Custodian, State Street Bank and Trust Company, 225 Franklin Street,
Boston, MA 02110; and

(4) the Adviser, Technology Investment Management, LLC, 8 Sound Shore Drive,
Suite 255, Greenwich, CT 06830.

ITEM 32. MANAGEMENT SERVICES

Not applicable.

ITEM 33. UNDERTAKINGS

(1) Registrant undertakes to suspend the offering of the shares of common stock
covered hereby until it amends its prospectus contained herein if (a)
subsequent to the effective date of this Registration Statement, its net
asset value per share of common stock declines more than 10% from its net
asset value per share of common stock declines more than 10% from its net
asset value per share of common stock as of the effective date of this
Registration Statement, or (b) its net asset value per share of common
stock increases to an amount greater than its net proceeds as stated in the
prospectus contained herein.

(2) Not applicable.

(3) Not applicable.

(4) Not applicable.

(5) Registrant undertakes that:

(a) For purposes of determining any liability under the Securities Act of
1933, as amended, the information omitted from the form of prospectus
filed as part of the Registration Statement in reliance upon Rule 430A
and contained in the form of prospectus filed by the Registrant
pursuant to Rule 497(h) under the Securities Act of 1933, as amended,
shall be deemed to be part of this Registration Statement as of the
time it was declared effective.

(b) For purposes of determining any liability under the Securities Act of
1933, as amended, each post-effective amendment that contains a form
of prospectus shall be deemed to a new registration statement relating
to the securities at that time shall be deemed to be the initial bona
fide offering thereof.

(6) Not applicable.

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C-5

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Township of Greenwich, in the
State of Connecticut, on October 21, 2004.

Technology Investment Capital Corp.

By: /s/ Jonathan H. Cohen
---------------------
JONATHAN H. COHEN
CHIEF EXECUTIVE OFFICER,
PRESIDENT AND DIRECTOR

POWER OF ATTORNEY

The undersigned directors and officers of Technology Investment Capital
Corp. hereby constitute and appoint Jonathan H. Cohen and Saul B. Rosenthal and
each of them with full power to act without the other and with full power of
substitution and resubstitution, our true and lawful attorneys-in-fact with full
power to execute in our name and behalf in the capacities indicated below this
Registration Statement on Form N-2 and any and all amendments thereto, including
post-effective amendments to this Registration Statement and to sign any and all
additional registration statements relating to the same offering of securities
as this Registration Statement that are filed pursuant to Rule 462(b) of the
Securities Act of 1933, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission and thereby ratify and confirm that all such attorneys-in-fact, or
any of them, or their substitutes shall lawfully do or cause to be done by
virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated. This document may be executed by the
signatories hereto on any number of counterparts, all of which shall constitute
one and the same instrument.

SIGNATURE TITLE DATE
--------- ----- ----

/s/ Jonathan H. Cohen Chief Executive Officer, President and October 21, 2004
----------------------- Director (Principal Executive Officer)
Jonathan H. Cohen

/s/ Steven P. Novak Director October 21, 2004
-----------------------
Steven P. Novak

/s/ G. Peter O'Brien Director October 21, 2004
-----------------------
G. Peter O'Brien

/s/ Tonia L. Pankopf Director October 21, 2004
-----------------------
Tonia L. Pankopf

/s/ Charles M. Royce Chairman of the Board and Director October 21, 2004
-----------------------
Charles M. Royce

/s/ Patrick F. Conroy Chief Financial Officer and Chief October 21, 2004
----------------------- Compliance Officer (Principal
Patrick F. Conroy Financial and Accounting Officer)

--------------------------------------------------------------------------------

EXHIBIT INDEX
-------------

b. Amended and Restated Bylaws (Incorporated by reference to
Pre-Effective Amendment No. 2 to the Registrant's Registration
Statement on Form N-2 (File No. 333-109055) filed on November 19,
2003).

d. Form of Share Certificate (Incorporated by reference to the
Registrant's Registration Statement on Form N-2 (File No.
333-109055) filed on September 23, 2003).

d.1** Form of Subscription Certificate

d.2** Form of Notice of Guaranteed Delivery and Form of Beneficial Owner
Certification Form

d.3** Subscription Agent Agreement

d.4** Information Agent Agreement

e. Dividend Reinvestment Plan (Incorporated by reference to
Pre-Effective Amendment No. 1 to the Registrant's Registration
Statement on Form N-2 (File No. 333-109055) filed on November 6,
2003).

h.** Form of Dealer Manager Agreement between the Registrant and UBS
Securities LLC

l.** Opinion of Sutherland Asbill & Brennan LLP.

n.1** Consent of Sutherland Asbill & Brennan LLP (Incorporated by
reference to exhibit l hereto).

n.2* Consent of PricewaterhouseCoopers LLP.

r. Code of Ethics (Incorporated by reference to Pre-Effective
Amendment No. 1 to the Registrant's Registration Statement on Form
N-2 (Filed No. 333-109055) filed on November 6, 2003.

------------
* Filed herewith.

** To be filed by pre-effective amendment.

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