Net Investment Income for the three and six months ended September 30, 2012, was $3.5 million and $6.7 million, or $0.16 and $0.31 per share, respectively.

Net Decrease in Net Assets Resulting From Operations for the three and six months ended September 30, 2012, was $0.4 million and $3.4 million, or $0.02 and $0.15 per share, respectively.

New Investment: In July 2012, the Company invested $22.5 million in a new control investment, Ginsey Holdings, Inc. (“Ginsey”), through a combination of debt and equity. Ginsey, headquartered in Bellmawr, New Jersey, designs and markets a broad line of branded juvenile and adult bath products. In August 2012, $5.0 million of the debt was participated to a third-party.

New Investment: In July 2012, the Company invested $21.3 million in a new control investment, Drew Foam Companies, Inc. (“Drew Foam”), through a combination of debt and equity. Drew Foam, headquartered in Monticello, Arkansas, is an expanded polystyrene foam molder and fabricator for a variety of applications in construction and packaging. In September 2012, $4.3 million of the debt and the line of credit was refinanced with a third-party.

Recurring Distributions: The Company paid monthly cash distributions to preferred and common stockholders of $0.1484375 per preferred share and $0.05 per common share, respectively, for each of July, August and September 2012.

Co-Investment Order: In July 2012, the Securities and Exchange Commission granted the Company relief sought in an exemptive application that expands its ability to co-invest in portfolio companies with certain affiliated investment funds, subject to compliance with certain conditions. The Company believes this expanded ability to co-invest will enhance its ability to further its investment strategy and objectives.

Approval of Revision to Investment Objectives and Strategies: On September 21, 2012, the Company’s Board of Directors approved revisions to its investment objectives and strategies, effective January 1, 2013. The Company believes that the revised investment objectives and strategies will allow it greater flexibility in growing its portfolio and maintaining its commitment of value to stockholders

Common Stock Offering: In October 2012, the Company completed a public offering of its common stock, resulting in net proceeds to the Company of $28.3 million, which was used to repay borrowings under its line of credit.

Line of Credit Extension: In October 2012, the Company entered into an agreement to extend the maturity date on its line of credit (the “Facility”) by one year. As a result of the new agreement, the Facility is now scheduled to mature on October 25, 2015, and, if not renewed or extended by that date, all principal and interest will be due and payable on or before October 25, 2016. All other terms of the Company’s Facility remained the same.

Distributions Declared: In October 2012, the Company’s Board of Directors declared the following monthly cash distributions:

Record Date

October 22, 2012

November 19, 2012

December 19, 2012

For the Three Months Ended:

Net investment income

Net (decrease) increase in net assets resulting from operations

Weighted average yield on interest-bearing investments

Total dollars invested

Total dollars repaid

For the Six Months Ended:

Net investment income

Net (decrease) increase in net assets resulting from operations

Weighted average yield on interest-bearing investments

Total dollars invested

Total dollars repaid

As of:

Fair value as a percent of cost

Net asset value per share

Number of portfolio companies

Total assets at fair value

ASSETS

Investments at fair value

Control investments (Cost of $245,475 and $186,743, respectively)

Affiliate investments (Cost of $61,473 and $70,015, respectively)

Non-Control/Non-Affiliate investments (Cost of $10,083 and $9,637, respectively)

Total investments at fair value (Cost of $317,031 and $266,395, respectively)

Cash and cash equivalents

Restricted cash

Interest receivable

Due from custodian

Deferred financing costs

Other assets

TOTAL ASSETS

LIABILITIES

Borrowings:

Short-term loan at fair value (Cost of $71,525 and $76,005, respectively)

Line of credit at fair value (Cost of $56,000 and $0, respectively)

Secured borrowing (Cost of $5,000 and $0, respectively)

Total borrowings (Cost of $132,525 and $76,005, respectively)

Mandatorily redeemable preferred stock, $0.001 par value per share, $25 liquidation preference per share; 1,610,000 shares authorized, 1,600,000 shares issued and outstanding at September 30 and March 31, 2012

Accounts payable and accrued expenses

Fees due to Adviser

Fee due to Administrator

Other liabilities

TOTAL LIABILITIES

Commitments and contingencies

NET ASSETS

ANALYSIS OF NET ASSETS

Common stock, $0.001 par value per share, 100,000,000 shares authorized and 22,080,133 shares issued and outstanding at September 30 and March 31, 2012

Capital in excess of par value

Cumulative net unrealized depreciation of investments

Cumulative net unrealized depreciation of other

Net investment income in excess of distributions

Accumulated net realized loss

TOTAL NET ASSETS

NET ASSET VALUE PER COMMON SHARE AT END OF PERIOD

INVESTMENT INCOME

Interest income

Control investments

Affiliate investments

Non-Control/Non-Affiliate investments

Cash and cash equivalents

Total interest income

Other income

Control investments

Affiliate investments

Non-Control/Non-Affiliate investments

Total other income

Total investment income

EXPENSES

Base management fee

Incentive fee

Administration fee

Interest expense on borrowings

Dividends on mandatorily redeemable preferred stock

Amortization of deferred financing fees

Professional fees

Other general and administrative expenses

Expenses before credits from Adviser

Credits to fees

Total expenses net of credits to fees

NET INVESTMENT INCOME

REALIZED AND UNREALIZED GAIN (LOSS)

Net realized gain (loss):

Control investments

Non-Control/Non-Affiliate investments

Other

Total net realized gain (loss)

Net unrealized (depreciation) appreciation:

Control investments

Affiliate investments

Non-Control/Non-Affiliate investments

Other

Total net unrealized (depreciation) appreciation

Net realized and unrealized (loss) gain

NET (DECREASE) INCREASE IN NET ASSETS RESULTING FROM OPERATIONS

NET (DECREASE) INCREASE IN NET ASSETS RESULTING FROM OPERATIONS PER COMMON SHARE

Basic and diluted

WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING:

Basic and diluted

Per Common Share Data

Net asset value at beginning of period^(A)

Net investment income^(B)

Realized gain (loss) on sale of investments and other^(B)

Net unrealized (depreciation) appreciation of investments and other^(B)

Total from investment operations^(B)

Cash distributions from net investment income^(B)(C)

Net asset value at end of period^(A)

Per share market value at beginning of period

Per share market value at end of period

Total return^(D)

Shares outstanding at end of period

Statement of Assets and Liabilities Data:

Net assets at end of period

Average net assets^(E)

Senior Securities Data^(F):

Total borrowings, at cost

Mandatorily redeemable preferred stock

Asset coverage ratio^(G)

Average coverage per unit^(H)

Ratios/Supplemental Data:

Ratio of expenses to average net assets^(I)(J)

Ratio of net expenses to average net assets^(I)(K)

Ratio of net investment income to average net assets^(I)

Based on actual common shares outstanding at the end of the corresponding period.

Based on weighted average per basic common share data.

Distributions are determined based on taxable income calculated in accordance with income tax regulations, which may differ from amounts determined under GAAP.

Total return equals the change in the market value of our common stock from the beginning of the period, taking into account dividends reinvested in accordance with the terms of the Company’s dividend reinvestment plan. Total return does not take into account distributions that may be characterized as a return of capital.

Calculated using the average balance of net assets at the end of each month of the reporting period.

The 1940 Act currently permits the Company to issue senior securities representing indebtedness and senior securities that are stock, to which the Company refers to as “senior securities.”

As a business development company, the Company is generally required to maintain an asset coverage ratio of at least 200% of total consolidated assets, less all liabilities and indebtedness not represented by senior securities, to the aggregate amount of senior securities. The Company’s mandatorily redeemable preferred stock is characterized as a senior security for purposes of the asset coverage ratio.

Asset coverage per unit is the asset coverage ratio expressed in terms of dollar amounts per one thousand dollars of indebtedness.

Amounts are annualized.

Ratio of expenses to average net assets is computed using expenses before credits from the Adviser.

Ratio of net expenses to average net assets is computed using total expenses net of credits from the Adviser.