UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)



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

For the quarterly period ended March 31, 2017



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

For the transition period from to

Commission File Number: 000-55351

Griffin-Benefit Street Partners BDC Corp.

(Exact name of Registrant as specified in its charter)



Maryland	47-0995168
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

Griffin Capital Plaza, 1520 E. Grand Avenue, El Segundo, California 90245

(Address of principal executive offices)

(310) 469-6100

(Registrant’s telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer” “smaller reporting company,” and "E-G-C" or an emerging growth company in Rule 12b-2 of the Exchange Act. (Check one):



Large Accelerated Filer	¨	Accelerated Filer	¨
Non-Accelerated Filer	ý (Do not check if a smaller reporting company)	Smaller reporting company	¨
Emerging Growth Company	ý

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ý

As of May 10, 2017, the Registrant had 4,563,196 shares of common stock, $0.001 par value, outstanding.

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GRIFFIN-BENEFIT STREET PARTNERS BDC CORP.

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	Page No.
PART I. FINANCIAL INFORMATION
Cautionary Note Regarding Forward-Looking Statements	1
Item 1. Financial Statements	2
Statements of Assets and Liabilities as of March 31, 2017 (Unaudited) and December 31, 2016	2
Statements of Operations for the Three Months Ended March 31, 2017 and 2016 (Unaudited)	3
Statements of Changes in Net Assets for the Three Months Ended March 31, 2017 and 2016 (Unaudited)	4
Statements of Cash Flows for the Three Months Ended March 31, 2017 and 2016 (Unaudited)	5
Schedules of Investments as of March 31, 2017 (Unaudited) and December 31, 2016	6
Notes to Financial Statements (Unaudited)	12
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3. Quantitative and Qualitative Disclosures About Market Risk	49
Item 4. Controls and Procedures	50
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	50
Item 1A. Risk Factors	50
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	50
Item 3. Defaults Upon Senior Securities	50
Item 4. Mine Safety Disclosures	50
Item 5. Other Information	51
Item 6. Exhibits	52
Signatures	53

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PART I. FINANCIAL INFORMATION

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Form 10-Q of Griffin-Benefit Street Partners BDC Corp., other than historical facts, may be considered forward-looking statements. Such forward-looking statements include, in particular, statements about our plans, strategies, and prospects and are subject to risks, uncertainties, and other factors. Such statements are based on a number of assumptions involving judgments with respect to, among other things, future economic, competitive, and market conditions, all of which are difficult or impossible to predict accurately. To the extent that our assumptions differ from actual results, our ability to meet such forward-looking statements, including our ability to generate positive cash flow from operations and provide distributions to stockholders, and our ability to find suitable investments, may be significantly hindered. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this report is filed with the Securities and Exchange Commission ("SEC"). We cannot guarantee the accuracy of any such forward-looking statements contained in this Form 10-Q, and we do not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable securities laws and regulations.

See the risk factors identified in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2016 as filed with the SEC on March 31, 2017 for a discussion of some, although not all, of the risks and uncertainties that could cause actual results to differ materially from those presented in our forward-looking statements.

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Item 1. Financial Statements

GRIFFIN-BENEFIT STREET PARTNERS BDC CORP.

STATEMENTS OF ASSETS AND LIABILITIES



	March 31, 2017			December 31, 2016
ASSETS	(Unaudited)
Investments at fair value (amortized cost of $35,098,087 and $36,194,877, respectively)	$	35,458,409		$	36,642,373
Cash and cash equivalents	6,071,293			7,451,353
Interest receivable from investments	296,067			393,183
Prepaid expenses	110,785			155,533
Due from affiliates	240,208			127,354
Receivable for unsettled trades	25,707			—
Accounts receivable	20,136			64,219
Total assets	$	42,222,605		$	44,834,015
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued liabilities	$	120,583		$	213,210
Management and incentive fees payable to affiliate	334,761			267,690
Due to affiliates	1,188,248			1,187,149
Distributions payable	290,704			289,852
Directors fees payable	42,000			153,000
Unsettled trades payable	980,000			3,440,000
Discount for unfunded commitments	—			14,160
Total liabilities	2,956,296			5,565,061
Commitments and contingencies (Note 6)
Stockholders' equity:
Preferred stock $0.001 par value; 50,000,000 shares authorized; no shares issued or outstanding as of March 31, 2017 and December 31, 2016, respectively	$	—		$	—
Common stock $0.001 par value; 450,000,000 shares authorized; 4,563,196 and 4,563,196 shares issued and outstanding as of March 31, 2017 and December 31, 2016, respectively	4,563			4,563
Capital in excess of par value	41,548,641			41,548,641
Distributions	(4,699,289		)	(3,855,311		)
Accumulated net investment income	1,633,088			888,806
Accumulated net realized gain from investments	396,983			226,597
Accumulated net unrealized appreciation on investments	360,322			447,496
Accumulated net unrealized appreciation on unfunded investments	22,001			8,162
Total stockholders' equity	39,266,309			39,268,954
Total liabilities and stockholders' equity	$	42,222,605		$	44,834,015
Net asset value per share	$	8.61		$	8.61

The accompanying notes are an integral part of these statements.

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GRIFFIN-BENEFIT STREET PARTNERS BDC CORP.

STATEMENTS OF OPERATIONS

(Unaudited)



	For the Three Months Ended March 31,
	2017			2016
Investment income:
Interest from investments	$	914,696		$	503,403
Total investment income	914,696			503,403
Operating expenses:
Base management fees	177,783			103,108
Incentive fees	16,642			—
Organizational costs	—			7,322
General & administrative	73,439			78,452
Amortization of offering costs	—			1,288,646
Professional fees	53,937			109,469
Insurance expense	43,321			49,091
Directors fees	45,500			43,470
Total expenses before reimbursement	410,622			1,679,558
Expense reimbursement (Note 5)	(240,208		)	(1,343,307		)
Total expenses, net of reimbursement	170,414			336,251
Net investment income	744,282			167,152
Realized and unrealized gain on investments:
Net realized gain from investments	170,386			29,322
Net change in unrealized appreciation (depreciation) on investments	(87,174		)	16,980
Net change in unrealized appreciation on unfunded investments	13,839			—
Net gain on investments	97,051			46,302
Net increase in net assets resulting from operations	$	841,333		$	213,454
Per share information - basic and diluted
Net increase in net assets per share resulting from operations - basic and diluted	$	0.18		$	0.05
Weighted average common stock outstanding - basic and diluted	4,563,196			3,927,271

The accompanying notes are an integral part of these statements.

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GRIFFIN-BENEFIT STREET PARTNERS BDC CORP.

STATEMENTS OF CHANGES IN NET ASSETS

(Unaudited)



	For the Three Months Ended March 31,
	2017			2016
Operations:
Net investment income	$	744,282		$	167,152
Net realized gain from investments	170,386			29,322
Net unrealized appreciation (depreciation) on investments	(87,174		)	16,980
Net change in unrealized appreciation on unfunded investments	13,839			—
Net increase in net assets resulting from operations	841,333			213,454
Stockholder distributions:
Distributions reinvested	—			(228,346		)
Distributions from investment income and realized gains	(843,978		)	(504,184		)
Net decrease in net assets resulting from stockholder distributions	(843,978		)	(732,530		)
Capital share transactions:
Issuance of common stock, net of discounts and offering costs	—			13,178,673
Distribution support contribution	—			199,806
Reinvestment of stockholder distributions	—			228,346
Net increase in net assets from capital share transactions	—			13,606,825
Total increase (decrease) in net assets	(2,645		)	13,087,749
Net assets at beginning of period	39,268,954			26,201,365
Net assets at end of period	$	39,266,309		$	39,289,114
Net asset value per common share	$	8.61		$	8.61
Common stock outstanding at end of period	4,563,196			4,563,196
Distributions in excess of net investment income at end of period	$	(3,066,201	)	$	(1,283,490	)

The accompanying notes are an integral part of these statements.

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GRIFFIN-BENEFIT STREET PARTNERS BDC CORP.

STATEMENTS OF CASH FLOWS

(Unaudited)



	For the Three Months Ended March 31,
	2017			2016
Operating Activities:
Net increase in net assets resulting from operations	$	841,333		$	213,454
Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:
Paid-in-kind interest income	(51,328		)	(5,499		)
Net accretion of discount on investments	(56,602		)	(27,228		)
Principal repayments of investments	4,824,601			1,875,090
Purchase of investments	(3,449,495		)	(6,920,120		)
Net realized loss from investments	(170,386		)	(29,322		)
Net change in unrealized (appreciation) depreciation on investments	87,174			(16,980		)
Amortization of offering costs	—			1,288,646
(Increase) decrease in operating assets:
Interest receivable from investments	97,116			(73,658		)
Prepaid expenses	44,748			45,203
Due from affiliates	(112,854		)	(513,580		)
Accounts receivable	44,083			—
Receivable for unsettled trades	(25,707		)	—

Increase (decrease) in operating liabilities:
Accounts payable and accrued liabilities	(92,627		)	(29,803		)
Management and incentive fees payable to affiliate	67,071			8,784
Due to affiliates	1,099			(781,374		)
Directors fees payable	(111,000		)	3,962
Unsettled trades payable	(2,460,000		)	(943,000		)
Discount for unfunded commitments	(14,160		)	—
Net cash used in operating activities	(536,934		)	(5,905,425		)
Financing activities:
Issuance of common stock, net of discounts and offering costs	—			13,133,476
Distribution support contribution	—			199,806
Distributions paid to stockholders	(843,126		)	(297,976		)
Offering costs paid	—			(285,637		)
Net cash provided by (used in) financing activities	(843,126		)	12,749,669
Net increase (decrease) in cash and cash equivalents	(1,380,060		)	6,844,244
Cash and cash equivalents, beginning of period	7,451,353			9,577,910
Cash and cash equivalents, end of period	$	6,071,293		$	16,422,154
Supplemental disclosure of non-cash operating transactions:
Paid-in-kind interest income	$	51,328		$	5,499
Supplemental disclosure of non-cash financing transactions:
Distributions declared and payable	$	290,704		$	288,199
Distribution paid through DRP share issuances	$	—		$	228,346

The accompanying notes are an integral part of these statements.

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GRIFFIN-BENEFIT STREET PARTNERS BDC CORP. SCHEDULE OF INVESTMENTS As of March 31, 2017 (Unaudited)


Portfolio Company (g)	Footnotes	Industry	Rate (b)	Index Rate (b)	LIBOR Floor		Maturity	Principal		Amortized Cost		Fair Value		% of Net Assets (e)

Senior Secured Loans - First Lien
Affinion Group		Business Services	L+525	3 Month LIBOR	1.50	%	4/30/2018	$	2,970,686	$	2,844,178	$	2,958,625	7.5	%
Alvogen Pharma US, Inc.		Pharmaceuticals	L+500	3 Month LIBOR	1.00	%	4/1/2022	1,823,112		1,785,823		1,807,925		4.6	%
Ardent Legacy		Health Facilities	L+550	3 Month LIBOR	1.00	%	8/4/2021	246,250		244,355		245,634		0.6	%
Asset International - TL	(d)	Business Services	L+850	3 Month LIBOR	1.00	%	5/15/2021	2,479,619		2,436,633		2,447,508		6.2	%
Asset International - DDTL	(d) (h)	Business Services	L+850	3 Month LIBOR	1.00	%	5/15/2021	338,000		202,800		201,508		0.5	%
Asset International - Revolver	(d) (h)	Business Services	L+850	3 Month LIBOR	1.00	%	5/15/2021	135,000		67,500		66,998		0.2	%
Bahakel Communications, Ltd.	(d) (h)	Media - Broadcast	L+750	1 Month LIBOR	1.00	%	7/29/2020	270,848		235,489		235,549		0.6	%
Bahakel Communications, Ltd. - Revolver	(d) (h)	Media - Broadcast	L+750	Unfunded	1.00	%	7/29/2020	14,000		—		—		—	%
Beaver Visitec International, Inc.		Healthcare - Products	L+500	3 Month LIBOR	1.00	%	8/21/2023	1,990,000		1,971,483		1,985,025		5.1	%
Centric Group		Business Services	L+675	1 Month LIBOR	1.00	%	1/31/2023	3,000,000		2,985,296		3,027,511		7.7	%
Deep Gulf Energy II, LLC	(d)	Energy - Exploration & Production	L+1300	1,2,3,6 Month LIBOR	1.50	%	9/30/2018	100,000		98,810		95,110		0.2	%
Inventure Foods, Inc.	(d)	Food - Wholesale	L+800	3 Month LIBOR	1.00	%	11/17/2020	829,065		812,570		831,751		2.1	%
Lightsquared	(c)	Telecom	L+875	3 Month LIBOR	1.00	%	6/15/2020	112,886		110,643		110,007		0.3	%
MyEyeDr	(d)	Health Facilities	L+625	3 Month LIBOR	1.00	%	8/14/2021	796,000		785,417		787,459		2.0	%
MyEyeDr - Term Loan	(d)	Health Facilities	L+625	3 Month LIBOR	1.00	%	8/14/2021	253,261		248,777		250,597		0.6	%
MyEyeDr - Delayed Draw	(d) (h)	Health Facilities	L+625	Unfunded	1.00	%	8/14/2021	1,200,000		—		—		—	%
MyEyeDr - Revolver	(d) (h)	Health Facilities	L+625	Unfunded	1.00	%	8/14/2021	43,000		—		—		—	%
Plano Molding Company, LLC	(d)	Consumer Products	L+750	3 Month LIBOR	1.00	%	5/12/2021	80,165		79,386		71,572		0.2	%
Premiere Global Services Inc.	(a) (f)	Telecom	L+650	1 Month LIBOR	1.00	%	12/8/2021	2,874,042		2,685,340		2,858,465		7.3	%
Rue21, Inc.		Retail	L+463	3 Month LIBOR	1.00	%	10/9/2020	788,541		726,908		148,246		0.4	%
Santek Waste Services, Inc. - Term Loan	(c) (d)	Environmental	L+1000	1 Month LIBOR	1.00	%	12/4/2020	708,748		691,163		701,654		1.8	%
Santek Waste Services, Inc. - DDTL	(c) (d) (h)	Environmental	L+1000	1 Month LIBOR	1.00	%	12/4/2020	252,187		150,699		154,161		0.4	%
Santek Waste Services, Inc. - Revolver	(d) (h)	Environmental	L+1000	Unfunded	1.00	%	12/4/2020	66,000		—		—		—	%
Solarwinds, Inc.	(a)	Technology	L+350	1 Month LIBOR	1.00	%	2/3/2023	1,082,831		1,029,496		1,082,290		2.8	%
TaxAct, Inc.	(a)	Software/Services	L+600	1 Month LIBOR	1.00	%	1/3/2023	520,984		487,352		522,938		1.3	%

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GRIFFIN-BENEFIT STREET PARTNERS BDC CORP. SCHEDULE OF INVESTMENTS (Continued) As of March 31, 2017 (Unaudited)


Portfolio Company (g)	Footnotes	Industry	Rate (b)		Index Rate (b)	LIBOR Floor		Maturity	Principal		Amortized Cost		Fair Value		% of Net Assets (e)

Tribune Publishing Company		Newspaper	L+475		1 Month LIBOR	1.00	%	8/4/2021	53,110		52,518		53,110		0.1	%
Veritas		Software/Services	L+562.5		3 Month LIBOR	1.00	%	1/27/2023	483,016		416,623		478,388		1.2	%
Victory Capital Management	(a)	Financial Services	L+750		3 Month LIBOR	1.00	%	10/29/2021	1,678,082		1,627,766		1,693,470		4.3	%
Vizient, Inc.		Healthcare	L+400		1 Month LIBOR	1.00	%	2/13/2023	1,319,779		1,282,954		1,329,678		3.4	%
Walgreens Infusion		Healthcare	L+500		2 Month LIBOR	1.00	%	4/7/2022	589,030		589,805		578,722		1.5	%
Total Senior Secured Loans - First Lien											$	24,649,784	$	24,723,901	62.9	%
Senior Secured Loans - Second Lien
Asurion Corporation		Business Services	L+750		1 Month LIBOR	1.00	%	3/3/2021	$	2,000,000	$	1,996,101	$	2,022,500	5.1	%
Cast & Crew Payroll, LLC		Business Services	L+775		3 Month LIBOR	1.00	%	8/12/2023	222,316		220,883		220,093		0.6	%
Cirque Du Soleil	(a) (g)	Entertainment	L+825		3 Month LIBOR	1.00	%	6/23/2023	1,817,918		1,791,552		1,799,739		4.6	%
Lightsquared	(c)	Telecom	L+1250		3 Month LIBOR	1.00	%	12/7/2020	1,292,282		1,201,800		1,012,025		2.6	%
Total Senior Secured Loans - Second Lien											$	5,210,336	$	5,054,357	12.9	%
Senior Secured Bonds
Covenant Surgical Partners		Health Facilities	8.75	%				8/1/2019	$	400,000	$	401,432	$	383,625	1.0	%
Hexion Inc.		Chemicals	10.00	%				4/15/2020	900,000		837,338		896,365		2.3	%
Radio One Inc.		Media - Broadcast	7.38	%				4/15/2022	500,000		484,300		522,500		1.3	%
Total Senior Secured Bonds											$	1,723,070	$	1,802,490	4.6	%
Senior Unsecured Debt
Cablevision	(a)	Cable	10.88	%				10/15/2025	$	1,000,000	$	1,033,129	$	1,197,500	3.0	%
Frontier Communications, Corp.	(a)	Telecom	8.88	%				9/15/2020	77,000		77,000		81,235		0.2	%
Frontier Communications, Corp.	(a)	Telecom	11.00	%				9/15/2025	494,000		482,396		477,945		1.2	%
Frontier Communications, Corp.	(a)	Telecom	10.50	%				9/15/2022	116,000		116,000		117,450		0.3	%
Monitronics International, Inc.	(a)	Business Services	9.13	%				4/1/2020	800,000		754,736		773,000		2.0	%
Presidio Holdings, Inc.		Technology	10.25	%				2/15/2023	1,095,000		1,043,139		1,209,975		3.1	%
Total Senior Unsecured Debt											$	3,506,400	$	3,857,105	9.8	%
Equity/Other
Santek Waste Services, Inc.	(d)	Environmental						N/A	NM*		$	8,497	$	20,556	0.1	%
Total Equity/Other											$	8,497	$	20,556	0.1	%
TOTAL INVESTMENTS											$	35,098,087	$	35,458,409	90.3	%

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____________________

(a) Indicates assets that the Company believes do not represent “qualifying assets” under Section 55(a) of the Investment Company Act of 1940, as amended. Qualifying assets must represent at least 70% of the Company’s total assets at the time of acquisition of any additional non-qualifying assets. As of March 31, 2017, 25.18% of the Company’s total assets were non-qualifying assets.

(b) The majority of the investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate (“LIBOR” or “L”) which reset daily, monthly, quarterly, or semiannually. For each investment the Company has provided the spread over LIBOR. The 1, 2, 3, and 6 month LIBOR rates were 0.98%, 1.03%, 1.15%, and 1.42% respectively, as of March 31, 2017. Certain investments are subject to a LIBOR interest rate floor.

(d) As there is no readily available market value for these investments, the fair value of these investments is determined in good faith by the Company's board of directors as required by the Investment Company Act of 1940, in conjunction with a nationally recognized valuation firm. (See Note 4, Fair Value of Financial Instruments, in the accompanying notes to the financial statements.)

(e) Percentages are based on the Company's net assets of $39,266,309 as of March 31, 2017.

(f) Position or portion thereof was unsettled as of March 31, 2017.

(g) All of the Company's investments are domiciled in the United States except for Cirque Du Soleil which is domiciled in Canada.

(h) All or a portion of this commitment was unfunded at March 31, 2017. As such, interest is earned only on the funded portion of this commitment. Refer to Note 6, Commitments and Contingencies, of the notes to the financial statements for additional detail.

The accompanying notes are an integral part of these statements.

GRIFFIN-BENEFIT STREET PARTNERS BDC CORP. SCHEDULE OF INVESTMENTS As of December 31, 2016


Portfolio Company (g)	Footnotes	Industry	Rate (b)	Index Rate (b)	LIBOR Floor		Maturity	Principal		Amortized Cost		Fair Value		% of Net Assets (e)

Senior Secured Loans - First Lien
AccentCare, Inc.		Healthcare	L+575	3 Month LIBOR	1.00	%	9/3/2021	$	195,000	$	191,814	$	189,150	0.5	%
Affinion Group	(f)	Business Services	L+525	3 Month LIBOR	1.50	%	4/30/2018	2,978,342		2,824,193		2,958,983		7.5	%
Alvogen Pharma US, Inc.	(f)	Pharmaceuticals	L+500	3 Month LIBOR	1.00	%	4/1/2022	1,848,317		1,809,270		1,783,626		4.6	%
Ardent Legacy		Health Facilities	L+550	3 Month LIBOR	1.00	%	8/4/2021	246,875		244,822		245,023		0.6	%
Asset International	(d)	Business Services	L+850	3 Month LIBOR	1.00	%	5/15/2021	2,495,413		2,449,904		2,461,550		6.3	%
Asset International - Delayed Draw	(d) (h)	Business Services	L+850	2 Month LIBOR	1.00	%	5/15/2021	338,000		202,800		201,433		0.5	%
Asset International - Revolver	(d) (h)	Business Services	P+775	Prime			5/15/2021	135,000		67,500		66,973		0.2	%
Bahakel Communications, Ltd.	(d) (h)	Media - Broadcast	L+750	1 Month LIBOR	1.00	%	7/29/2020	278,085		242,613		244,459		0.6	%

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GRIFFIN-BENEFIT STREET PARTNERS BDC CORP. SCHEDULE OF INVESTMENTS (Continued) As of December 31, 2016


Portfolio Company (g)	Footnotes	Industry	Rate (b)	Index Rate (b)	LIBOR Floor		Maturity	Principal		Amortized Cost		Fair Value		% of Net Assets (e)

Bahakel Communications, Ltd. - Revolver	(d) (h)	Media - Broadcast	L+750	Unfunded	1.00	%	7/29/2020	14,000		—		—		—	%
Beaver Visitec International, Inc.		Healthcare - Products	L+500	1 Month LIBOR	1.00	%	8/21/2023	1,995,000		1,975,531		1,990,013		5.1	%
Centric Group	(d)	Business Services	L+675	1 Month LIBOR	1.00	%	10/14/2022	3,000,000		2,941,802		3,071,160		7.8	%
Deep Gulf Energy II, LLC	(d)	Energy - Exploration & Production	L+1300	1,2,5,6 Month LIBOR	1.50	%	9/30/2018	100,000		98,592		95,320		0.2	%
Inventure Foods, Inc.	(d)	Food - Wholesale	L+800	3 Month LIBOR	1.00	%	11/17/2020	990,000		972,998		992,930		2.5	%
Lightsquared	(c)	Telecom	L+875	3 Month LIBOR	1.00	%	6/15/2020	110,200		107,787		102,486		0.3	%
MyEyeDr	(d)	Health Facilities	L+625	1 Month LIBOR	1.00	%	8/14/2021	798,000		786,902		789,038		2.0	%
MyEyeDr	(d)	Health Facilities	L+625	3 Month LIBOR	1.00	%	8/14/2021	253,904		249,184		251,108		0.6	%
MyEyeDr - Delayed Draw	(d) (h)	Health Facilities	L+625	Unfunded	1.00	%	8/14/2021	1,200,000		—		—		—	%
MyEyeDr - Revolver	(d) (h)	Health Facilities	L+625	Unfunded	1.00	%	8/14/2021	43,000		—		—		—	%
Plano Molding Company, LLC	(d)	Consumer Products	L+700	3 Month LIBOR	1.00	%	5/12/2021	80,367		79,685		78,076		0.2	%
Premiere Global Services Inc.	(a) (f)	Telecom	L+650	3 Month LIBOR	1.00	%	12/8/2021	2,911,959		2,714,248		2,833,714		7.2	%
Rue21, Inc.		Retail	L+463	3 Month LIBOR	1.00	%	10/9/2020	788,541		723,021		302,871		0.8	%
Santek Waste Services, Inc.	(c) (d)	Environmental	L+1000	3 Month LIBOR	1.00	%	12/4/2020	707,663		688,976		694,996		1.8	%
Santek Waste Services, Inc. - Delayed Draw	(c) (d) (h)	Environmental	L+1000	1 and 3 Month LIBOR	1.00	%	12/4/2020	251,102		130,735		132,849		0.3	%
Santek Waste Services, Inc. - Revolver	(d) (h)	Environmental	L+1000	Unfunded	1.00	%	12/4/2020	66,000		—		—		—	%
Solarwinds, Inc.	(a)	Technology	L+450	3 Month LIBOR	1.00	%	2/3/2023	1,085,545		1,036,668		1,097,953		2.8	%
TaxAct, Inc.	(a)	Software/Services	L+600	1 Month LIBOR	1.00	%	1/3/2023	610,161		569,292		611,687		1.6	%
Tribune Publishing Company		Newspaper	L+475	1 Month LIBOR	1.00	%	8/4/2021	61,869		61,131		61,637		0.2	%
Veritas		Software/Services	L+562.5	3 Month LIBOR	1.00	%	1/27/2023	484,235		415,482		446,707		1.1	%
Victory Capital Management	(a)	Financial Services	L+750	3 Month LIBOR	1.00	%	10/29/2021	1,702,055		1,653,705		1,722,275		4.4	%
Vizient, Inc.		Healthcare	L+400	1 Month LIBOR	1.00	%	2/13/2023	1,319,779		1,281,421		1,337,517		3.4	%
Walgreens Infusion		Healthcare	L+500	3 Month LIBOR	1.00	%	4/7/2022	590,525		591,334		565,428		1.4	%
Total Senior Secured Loans - First Lien										$	25,111,410	$	25,328,962	64.5	%
Senior Secured Loans - Second Lien
AccentCare, Inc.		Healthcare	L+950	3 Month LIBOR	1.00	%	9/3/2022	$	200,000	$	196,966	$	194,000	0.5	%

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GRIFFIN-BENEFIT STREET PARTNERS BDC CORP. SCHEDULE OF INVESTMENTS (Continued) As of December 31, 2016


Portfolio Company (g)	Footnotes	Industry	Rate (b)		Index Rate (b)	LIBOR Floor		Maturity	Principal		Amortized Cost		Fair Value		% of Net Assets (e)

Asurion Corporation		Business Services	L+750		1 Month LIBOR	1.00	%	3/3/2021	2,000,000		1,995,413		2,031,260		5.2	%
Cast & Crew Payroll, LLC		Business Services	L+775		3 Month LIBOR	1.00	%	8/12/2023	300,000		297,923		283,500		0.7	%
Cirque Du Soleil	(a) (g)	Entertainment	L+825		3 Month LIBOR	1.00	%	6/23/2023	1,369,918		1,344,565		1,332,246		3.4	%
Lightsquared	(c)	Telecom	L+1250		3 Month LIBOR	1.00	%	12/7/2020	1,276,092		1,178,587		881,307		2.2	%
Total Senior Secured Loans - Second Lien											$	5,013,454	$	4,722,313	12.0	%
Senior Secured Bonds
Covenant Surgical Partners		Health Facilities	8.75	%				8/1/2019	$	400,000	$	401,569	$	387,000	1.0	%
Hexion, Inc.		Chemicals	10.00	%				4/15/2020	900,000		833,561		886,500		2.2	%
Radio One, Inc.		Media - Broadcast	7.38	%				4/15/2022	500,000		483,689		493,750		1.3	%
Total Senior Secured Bonds											$	1,718,819	$	1,767,250	4.5	%
Senior Unsecured Debt
Cablevision	(a)	Cable	10.88	%				10/15/2025	$	1,000,000	$	1,033,729	$	1,186,250	3.0	%
Frontier Communications, Corp.	(a)	Telecom	8.88	%				9/15/2020	77,000		77,000		82,005		0.2	%
Frontier Communications, Corp.	(a)	Telecom	10.50	%				9/15/2022	116,000		116,000		121,480		0.3	%
Frontier Communications, Corp.	(a)	Telecom	11.00	%				9/15/2025	494,000		482,198		508,820		1.3	%
Monitronics International, Inc.	(a)	Business Services	9.13	%				4/1/2020	800,000		751,708		755,410		1.9	%
Presidio Holdings, Inc.		Technology	10.25	%				2/15/2023	1,950,000		1,882,062		2,149,875		5.5	%
Total Senior Unsecured Debt											$	4,342,697	$	4,803,840	12.2	%
Equity/Other
Santek Waste Services, Inc.	(d)	Environmental	0.00%					N/A	NM*		$	8,497	$	20,008	0.1	%
Total Equity/Other											$	8,497	$	20,008	0.1	%
TOTAL INVESTMENTS	(e)										$	36,194,877	$	36,642,373	93.3	%

____________________

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(a) Indicates assets that the Company believes do not represent “qualifying assets” under Section 55(a) of the Investment Company Act of 1940, as amended. Qualifying assets must represent at least 70% of the Company’s total assets at the time of acquisition of any additional non-qualifying assets. As of December 31, 2016, 22.95% of the Company’s total assets were non-qualifying assets.

(b) The majority of the investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate (“LIBOR” or “L”), or Prime Rate ("Prime" or "P") which reset daily, monthly, quarterly, or semiannually. For each investment the Company has provided the spread over LIBOR and Prime. The 1, 2, 3, 5, 6 month LIBOR rates and Prime rate were 0.77%, 0.82%, 1.00%, 0.37%, 1.32% and 3.75%, respectively, as of December 31, 2016. Certain investments are subject to a LIBOR or Prime interest rate floor.

(e) Percentages are based on the Company's net assets of $39,268,954 as of December 31, 2016.

(f) Position or portion thereof was unsettled as of December 31, 2016.

(g) All of the Company's investments are domiciled in the United States except for Cirque Du Soleil which is domiciled in Canada.

(h) All or a portion of this commitment was unfunded at December 31, 2016. As such, interest is earned only on the funded portion of this commitment. Refer to Note 6, Commitments and Contingencies, of the notes to the financial statements for additional detail.

*Not meaningful

The accompanying notes are an integral part of these statements.

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GRIFFIN-BENEFIT STREET PARTNERS BDC CORP.

NOTES TO FINANCIAL STATEMENTS

As of March 31, 2017

(Unaudited)

Note 1. Organization

Griffin-Benefit Street Partners BDC Corp., a Maryland corporation (the "Company"), was formed on May 27, 2014 under the Maryland General Corporation Law. The Company was organized as an externally managed, non-diversified closed-end management investment company and has elected to be regulated as a business development company, or BDC, under the Investment Company Act of 1940, as amended, or the 1940 Act. The Company has elected to be treated for federal income tax purposes as a regulated investment company, or RIC, under Subchapter M of the Internal Revenue Code of 1986. The Company's year-end is December 31.

The Company has invested substantially all of the proceeds the Company raised from the offering of its shares, net of expenses, in private U.S. middle-market companies in accordance with the Company's investment objectives.

The Company is externally managed by Griffin Capital BDC Advisor, LLC ("GBA" or "Adviser"), a Delaware limited liability company. GBA is indirectly owned by Griffin Capital Company, LLC ("Griffin Capital") and Randy Anderson, the Company's Executive Vice President who directly holds a 5% interest in GBA. Kevin A. Shields, Chairman of the Board of Directors and President of the Company, controls the sole stockholder of Griffin Capital. GBA is a registered investment adviser under the Investment Advisers Act of 1940, as amended (the "Advisers Act"). GBA oversees the management of the Company's activities and is responsible for making investment decisions with respect to, and providing day-to-day management and administration of, the Company's investment portfolio under the terms of an advisory agreement between the Company and GBA. The Company and GBA have engaged Benefit Street Partners L.L.C. ("Benefit Street" or "Sub-Adviser"), a Delaware limited liability company and an affiliate of Providence Equity Partners L.L.C. ("Providence"), to act as the Company's Sub-Adviser. Benefit Street is a registered investment adviser under the Advisers Act and assists GBA with the management of the activities and operations of the Company pursuant to a sub-advisory agreement by and among the Company, GBA, and Benefit Street.

The Company entered into a dealer manager agreement with Griffin Capital Securities, LLC, formerly Griffin Capital Securities, Inc. ("GCS" or the "Dealer Manager"), and an administration agreement with Griffin Capital BDC Administrator, LLC ("Griffin Capital BDC Administrator"), both of which are indirect subsidiaries of Griffin Capital.

On January 20, 2015, the Company began offering on a continuous basis up to $1.5 billion in shares of common stock at an initial offering price of $10.00 per share (the "Offering"). On May 1, 2015, the Company raised the minimum offering requirement of $2.5 million as a result of separate investments of $1.25 million from an affiliate of Griffin Capital and from Benefit Street. As a result of achieving the minimum offering requirement, the Company commenced operations. On July 25, 2014 and July 28, 2014, pursuant to a private placement, each of GBA and Benefit Street, respectively, contributed $100,000 to purchase 11,111 shares of the Company's common stock at $9.00 per share, which represents the initial public offering price of $10.00 per share, net of selling commissions and dealer manager fees. Neither GBA nor Benefit Street will tender these shares for repurchase as long as it remains the Adviser or Sub-Adviser, respectively. On December 23, 2015, the Company decreased its public offering price from $10.00 per share to $9.80 per share, in accordance with its pricing policy.

On March 15, 2016, the Company's board of directors determined that it is in the Company's and the stockholders’ best interest to suspend the Offering. The board of directors’ determination was based on the Adviser's belief that market conditions and the Company's current structure are not conducive to continuing the Offering, and that the board of directors consider an alternative fund structure to reduce the Company's exposure to potential federal and state regulatory challenges and unfavorable market conditions that non-traded BDCs faced in the fourth quarter of 2015 and first quarter of 2016.

On March 29, 2017, the Company's board of directors approved the entry into the Agreement and Plan of Reorganization (the “Agreement”) with Griffin Institutional Access Credit Fund, a Delaware statutory trust (“GIA Credit Fund”), pursuant to which, subject to shareholder approval and the satisfaction or waiver of certain conditions, the Company will transfer all of its assets to GIA Credit Fund in exchange for shares of GIA Credit Fund (“Reorganization Shares”) and the assumption by GIA Credit Fund of all of the Company's liabilities (the “Reorganization”). The Company executed the Agreement on May 5, 2017.

Pursuant to the terms and subject to the conditions set forth in the Agreement, GIA Credit Fund will issue Reorganization Shares with an aggregate net asset value equal to the aggregate value of the assets that it receives from the Company, less the liabilities it assumes from the Company. Shareholders will exchange the shares of the Company for Reorganization Shares, which will be distributed to our stockholders in proportion to their holdings.

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The Company and GIA Credit Fund have similar investment objectives, strategies, and restrictions. The Company's investment objective is to generate both current income and capital appreciation, while GIA Credit Fund’s investment objective is to generate a return comprised of both current income and capital appreciation with an emphasis on current income with low volatility and low correlation to the broader markets.

The consummation of the Reorganization is subject to certain customary closing conditions, including, among others, the approval of the Reorganization by the Company's stockholders, the absence of legal impediments to the consummation of the Reorganization, the absence of a material adverse effect on either the Company or GIA Credit Fund, and compliance by the Company and GIA Credit Fund with federal and state legal and regulatory requirements, including the effectiveness of the registration statement on Form N-14 that will be filed with the SEC and the receipt of tax opinions related to the tax-free nature of the transaction. In addition, the Reorganization Shares will be subject to an expense limitation agreement that will limit the total annual operating expenses of the Reorganization shares.

The Agreement may be terminated and abandoned with respect to the Reorganization by mutual agreement by the Company and GIA Credit Fund, or by either the Company or GIA Credit Fund in the event of a material breach of the Agreement or a failure of any conditions precedent. In the event of a termination, GIA Credit Fund’s adviser will bear all costs associated with the Reorganization.

Subject to stockholder approval, the Company's board of directors also approved the proposal to authorize the Company (as part of the Reorganization process) to withdraw the Company's election to be treated as a BDC under the 1940 Act. Once the BDC election is withdrawn, the Company will no longer be subject to the limitations imposed on BDCs under the 1940 Act.

There is no guarantee that the Reorganization will be consummated.

The Company will continue to operate as a non-traded BDC unless and until the stockholders approve the proposed plan of Reorganization.

As of March 15, 2016, the date the offering was suspended, the Company had issued 4,563,196 shares of common stock for gross proceeds of approximately $44.8 million, including shares purchased in the private placement and shares issued pursuant to the Company's DRP, which amounts remained unchanged as of March 31, 2017.

Note 2. Basis of Presentation and Summary of Significant Accounting Policies

The accompanying financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial reporting. The accompanying interim financial statements of the Company and related financial information have been prepared pursuant to the requirements for reporting on Form 10-Q and Articles 6 or 10 of Regulation S-X of the Securities Act of 1933. The Company has determined it meets the definition of an investment company and follows the accounting and reporting guidance in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946 — Financial Services — Investment Companies ("ASC Topic 946").

Use of Estimates

The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could materially differ from those estimates.

Cash and Cash Equivalents

The Company considers all short-term, highly liquid investments that are readily convertible to cash with a maturity of three months or less at the time of purchase to be cash equivalents. Cash equivalents may include cash and short-term investments. Short-term investments are stated at cost, which approximates fair value. There are no restrictions on the use of the Company's cash balance, as of March 31, 2017.

The Company maintains its cash accounts with major financial institutions. The cash balances consist of business checking accounts. These accounts are insured by the Federal Deposit Insurance Corporation up to $250,000 at each institution. The Company has not experienced any losses with respect to cash balances in excess of government provided insurance. Management believes there was no significant concentration of credit risk with respect to the cash balances as of March 31, 2017.

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Valuation of Portfolio Investments

Portfolio investments are reported on the statements of assets and liabilities at fair value. The Company performs an analysis of each investment to determine fair value in accordance with ASC Topic 820 - Fair Value Measurements and Disclosures ("ASC Topic 820").

ASC Topic 820 clarifies the definition of fair value and requires companies to expand their disclosure about the use of fair value to measure assets and liabilities in interim and annual periods subsequent to initial recognition. ASC Topic 820 defines fair value as the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 also establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include in summarized form:


•	Level 1: Quoted prices in active markets for identical assets or liabilities, accessible by the Company at the measurement date.


•	Level 2: Quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or other observable inputs other than quoted prices.


•	Level 3: Unobservable inputs for the asset or liability.

There is no single standard for determining fair value in good faith. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each asset while employing a valuation process that is consistently followed.

In making fair value determinations, the following guidelines are used:

Valuation Methods

The Company has established a valuation and pricing committee (the "Valuation and Pricing Committee"), which is responsible for determining the value of the assets on a quarterly basis, based upon inputs established by the Adviser. The Valuation and Pricing Committee is also responsible for engaging a third-party valuation specialist to provide value determinations for Level 3 assets. Values determined by a third-party valuation specialist must be reviewed and approved by the Valuation and Pricing Committee. If any of the Company's Level 3 designated assets are deemed to require additional monitoring, the independent third-party valuation specialist will assist in reviewing these assets.

The Company values all Level 2 assets by using inputs from an independent third-party pricing service that provide prevailing bid and ask prices that are screened for validity by the service from dealers on the date of the relevant period end. For investments for which the third-party pricing service is unable to obtain quoted prices, the Company intends to obtain bid and ask prices directly from dealers that make a market in such investments. To the extent that the Company holds investments for which no active secondary market exists, i.e. Level 3 assets, and, therefore, no bid and ask prices can be readily obtained, the independent third-party valuation service will be utilized to value such investments. The Company periodically benchmarks the bid and ask prices received from the third-party pricing service and valuations received from the third-party valuation service, as applicable, against the actual prices at which the Company purchases and sells investments. The Company believes that these prices are reliable indicators of fair value.

Investments where a market price is readily available:

Generally, the value of the Company's equity interests in public companies for which market quotations are readily available will be based upon the most recent closing public market price. If no sales of such interests occurred on the determination date, such interests shall be valued at the bid quote for long investments, and the last ask quote for investments sold but not yet purchased, obtained from third-party pricing services, including, where appropriate, multiple broker dealers, as determined by the Adviser.

Notwithstanding the foregoing, if in the reasonable judgment of the Adviser and Sub-Adviser, the price for any securities held by the Company and determined in the manner described above does not accurately reflect the fair value of such security, the Adviser and Sub-Adviser will value such security at the applicable bid or ask quotes obtained by broker dealers that make a market in the security, and report such change in the valuation to the board of directors or its designee as soon as practicable.

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Investments where a market price is not readily available:

Any securities or other assets that are not publicly traded or for which a market price is not otherwise readily available are valued at a price that reflects each such security's fair value. With respect to such investments, the investments will be reviewed and valued using one or more of the following types of analyses:


(i)	Market comparable statistics and public trading multiples discounted for illiquidity, minority ownership and other factors for companies with similar characteristics.


(ii)	Valuations implied by third-party investments in the applicable portfolio companies.


(iii)	Discounted cash flow analysis, including a terminal value or exit multiple.

Below is a description of factors that the Valuation and Pricing Committee, with the assistance of an independent third-party valuation specialist in certain circumstances, may consider when valuing the Company's equity and debt investments where a market price is not readily available:


•	the size and scope of a portfolio company and its specific strengths and weaknesses;


•	prevailing interest rates for like securities;


•	expected volatility in future interest rates;


•	leverage;


•	call features, put features and other relevant terms of the debt;


•	the borrower's ability to adequately service its debt;


•	the fair market value of the portfolio company in relation to the face amount of its outstanding debt;


•	the quality of collateral securing the Company's debt investments;


•	multiples of earnings before interest, tax, depreciation and amortization ("EBITDA"), cash flows, net income, revenues or, in some cases, book value or liquidation value;


•	the liquidity of the investment as determined by a pricing service; and


•	other factors deemed applicable.

All of these factors may be subject to adjustments based upon the particular circumstances of a portfolio company or the Company's actual investment position.

Credit default swaps and interest rate swaps will be valued at estimated fair value based on a pricing model that utilizes quoted inputs, including among other things, yield curves.

Unrealized appreciation and depreciation on total return swaps represents the change in fair value plus net accrued interest of the underlying reference assets.

Valuation Process

With respect to investments for which market quotations are not readily available, the Company will undertake a multi-step valuation process each quarter, as described below:


•	the quarterly valuation process will begin with each portfolio company or investment being identified by the investment professionals of the Adviser and Sub-Adviser and members of the Company's senior management team as investments that require the assistance of the independent third-party valuation specialist;


•	preliminary valuation calculations and conclusions will then be documented by the independent third-party valuation specialist and discussed with the investment professionals of the Adviser and Sub-Adviser and the relevant investment professionals of GBA, Benefit Street and the Company's senior management team;


•	designated members of the Valuation and Pricing Committee, or as delegated to the Adviser and Sub-Adviser, will review and comment on the preliminary valuation provided by the independent third-party valuation firm;

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•	the Valuation and Pricing Committee will meet with members of the Adviser's and Sub-Adviser's management teams and the independent third-party valuation specialist to discuss the results provided by the independent valuation firm; and


•	the board of directors will discuss the valuation and will determine the fair value of each investment in the Company's portfolio in good faith based on various statistical and other factors, including the input and recommendation of the Adviser and Sub-Adviser, the Valuation and Pricing Committee, and the third-party valuation specialist.

The board of directors is responsible for the valuation of the Company's portfolio investments at fair value as determined in good faith pursuant to consistently applied valuation procedures and valuation process.

Revenue Recognition

The Company records interest income on an accrual basis to the extent that the Company expects to collect such amounts. For loans and debt investments with contractual payment-in-kind, or PIK, interest that represents contractual interest accrued and added to the loan balance that generally becomes due at maturity, the Company does not accrue PIK interest if the portfolio company valuation indicates that such PIK interest is not collectible. The Company does not accrue a receivable for interest on loans and debt investments if it is determined that interest for such loans and debt investments is not collectible. Loans will be placed on non-accrual status when principal or interest payments are past due 30 days or more and/or when there is reasonable doubt that principal or interest will be collected. Upfront loan origination fees, original issue discount and market discount or premium are capitalized, and amortized as interest income using the effective yield method. Prepayment premiums on loans and debt investments are recorded as interest income.

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

The Company will measure realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, but considering unamortized upfront loan origination fees and prepayment penalties. Net change in unrealized appreciation or depreciation reflects the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation, when gains or losses are realized.

Organizational Costs

Organizational costs include, among other things, the cost of organizing as a Maryland corporation, including the cost of legal services and other fees pertaining to the organization of the Company. Until the Company achieved the minimum offering requirement in the Offering, all organizational costs were funded by Griffin Capital and its affiliates. On May 1, 2015, the Company raised the minimum offering requirement and became liable for the advanced organizational costs, subject to the terms of the expense support and conditional reimbursement agreement, as discussed in Note 5. Related Party Transactions. Organizational costs were expensed when the Company became liable, and are included on the statements of assets and liabilities as a component of due to affiliates. For the three months ended March 31, 2016 Griffin Capital and its affiliates incurred $7,322 of organizational costs. No organizational costs were incurred for the three months ended March 31, 2017.

Offering Costs

Offering costs include, among other things, legal fees and other costs pertaining to the preparation of the Company's registration statement in connection with the Offering. Until the Company achieved the minimum offering requirement, all offering costs were funded by Griffin Capital and its affiliates. On May 1, 2015, the Company raised the minimum offering requirement and became liable for the advanced offering costs, subject to the terms of the expense support and conditional reimbursement agreement, as discussed in Note 5. Related Party Transactions. Offering costs are capitalized and amortized over a twelve month period as an expense. The offering costs are subject to reimbursement by the Company and are included within due to affiliates on the statements of assets and liabilities. As a result of the suspension of the Offering, the Company wrote off approximately $0.7 million of unamortized deferred offering costs, as of March 15, 2016.

Income Taxes

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The Company has elected to be treated, for tax purposes, as a RIC, which requires it, among other obligations, in each fiscal year, to distribute at least 90% of the sum of (i) investment company taxable income, which is generally the Company's ordinary income plus the excess of realized net short-term capital gains over realized net long-term capital losses, determined without regard to the deduction for dividends and distributions paid and (ii) net tax exempt interest income, which is the excess of the Company's gross tax exempt interest income over certain disallowed deductions, (the "Annual Distribution Requirement"). If the Company qualifies as a RIC and meets the Annual Distribution Requirement, the Company generally will not be subject to U.S. federal income tax on investment company taxable income and net capital gains that are distributed to the Company's stockholders as dividends. To the extent that the Company retains net capital gains or any investment company taxable income, the Company will be subject to U.S. federal income tax. The Company may choose to retain net capital gains or any investment company taxable income, and pay the associated federal corporate income tax, including the federal excise tax described below.

Amounts not distributed on a timely basis in accordance with a calendar year distribution requirement are subject to a nondeductible 4.0% U.S. federal excise tax payable by the Company. To avoid this tax, the Company must distribute (or be deemed to have distributed) during each calendar year an amount equal to the sum of: (1) at least 98.0% of the Company's ordinary income (not taking into account any capital gains or losses) for the calendar year; (2) at least 98.2% of the amount by which the Company's capital gains exceed capital losses (adjusted for certain ordinary losses) for a one-year period generally ending on October 31 of the calendar year (unless an election is made to use the Company's taxable year); and (3) income realized, but not distributed, in preceding years (the "Excise Tax Avoidance Requirement").

While the Company intends to distribute any income and capital gains in the manner necessary to minimize imposition of the 4.0% federal excise tax, sufficient amounts of taxable income and capital gains may not be distributed to avoid entirely the imposition of the tax. In that event, the Company will be liable for the tax only on the amount by which the Company did not meet the foregoing distribution requirement.

Because federal income tax regulations differ from U.S. GAAP, 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 statements 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.

Beginning with the taxable year ended December 31, 2015, the Company has elected to be taxed as a RIC. The determination of any permanent or temporary differences, as well as the tax basis of distributable earnings/(deficit), tax character of distributions paid, and tax basis of investments cost and unrealized appreciation/depreciation will not be known until the completion of the tax return. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the statements of operations. There were no interest or penalties due to material uncertain income tax positions at March 31, 2017 or December 31, 2016.

Recently Issued Accounting Pronouncements

In August 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-15, Statement of Cash Flows (“ASU No. 2016-15”), intended to reduce diversity in practice in certain classifications on the statement of cash flows. This guidance addresses eight types of cash flows, including clarifying how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows, as well as requiring an accounting policy election for classification of distributions received from equity method investees using either the cumulative earnings or nature of distributions approach, among others. Transition will generally be on a retrospective basis. ASU No. 2016-15 is effective for fiscal years and interim periods beginning after December 15, 2017. Early adoption is permitted, provided that all amendments within the guidance are adopted in the same period. The Company is currently evaluating the impact of adopting this new guidance on its financial statements.

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In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). ASU 2016-01 retains many current requirements for the classification and measurement of financial instruments; however, it significantly revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. ASU 2016-01 also amends certain disclosure requirements associated with the fair value of financial instruments. This guidance is effective for annual and interim periods beginning after December 15, 2017, and early adoption is not permitted for public business entities. The Company is currently evaluating the impact these changes will have on the Company’s financial statements and disclosures.

In August, 2014, the FASB released ASU 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40) (“ASU 2014-15”). ASU 2014-15 requires the Company to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within the one year period subsequent to the date that the financial statements are issued or within the one year period subsequent the date that the financial statements are available to be issued. ASU 2014-15 becomes effective for fiscal periods ending after December 15, 2016; however, early adoption is permitted. The Company adopted ASU 2014-15 as of December 31, 2016. The adoption did not have an impact on the Company’s financial position or result of operations.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU No. 2014-09"). ASU No. 2014-09 replaces substantially all industry-specific revenue recognition requirements and converges areas under this topic with International Financial Reporting Standards. ASU No. 2014-09 implements a five-step process for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. ASU No. 2014-09 also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenues and cash flows from contracts with customers. Other major provisions in ASU No. 2014-09 include capitalizing and amortizing certain contract costs, ensuring the time value of money is considered in the applicable transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. ASU No. 2014-09 was originally effective for reporting periods beginning after December 31, 2016. On April 1, 2015, the FASB voted to defer the effective date of ASU No. 2014-09 by one year, to annual reporting periods beginning after December 15, 2017. On July 9, 2015, the FASB affirmed its proposal to defer the effective date to annual reporting periods beginning after December 15, 2017, although entities may elect to adopt the standard as of the original effective date. The Company is currently evaluating the impact these changes will have on the Company’s financial statements and disclosures.

Note 3. Investments

The following table shows the composition of the investment portfolio, at amortized cost and fair value as of March 31, 2017 (with corresponding percentage of total portfolio investments):



	As of March 31, 2017
	Investments at Amortized Cost		Percentage of Amortized Cost		Investments at Fair Value		Percentage of Fair Value
Senior Secured Loans - First Lien	$	24,649,784	70.2	%	$	24,723,901	69.7	%
Senior Secured Loans - Second Lien	5,210,336		14.8		5,054,357		14.3
Senior Secured Bonds	1,723,070		5.0		1,802,490		5.1
Senior Unsecured Debt	3,506,400		10.0		3,857,105		10.8
Equity/Other	8,497		NM ⁽¹⁾		20,556		0.1
Total	$	35,098,087	100.0	%	$	35,458,409	100.0	%

__________________

⁽¹⁾ Not meaningful.

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The following table shows the composition of the investment portfolio, at amortized cost and fair value as of December 31, 2016 (with corresponding percentage of total portfolio investments):



	As of December 31, 2016
	Investments at Amortized Cost		Percentage of Amortized Cost		Investments at Fair Value		Percentage of Fair Value
Senior Secured Loans - First Lien	$	25,111,410	69.4	%	$	25,328,962	69.1	%
Senior Secured Loans - Second Lien	5,013,454		13.9		4,722,313		12.9
Senior Secured Bonds	1,718,819		4.7		1,767,250		4.8
Senior Unsecured Debt	4,342,697		12.0		4,803,840		13.1
Equity/Other	8,497		NM ⁽¹⁾		20,008		0.1
Total	$	36,194,877	100.0	%	$	36,642,373	100.0	%

__________________

⁽¹⁾ Not meaningful.

The following table shows the composition by industry grouping based on fair value as of March 31, 2017:



	As of March 31, 2017
	Investments at Fair Value		Percentage of Total Portfolio
Business Services	$	11,717,743	33.0	%
Telecom	4,657,127		13.1
Technology	2,292,265		6.5
Healthcare - Products	1,985,025		5.6
Healthcare	1,908,400		5.4
Pharmaceuticals	1,807,925		5.1
Entertainment	1,799,739		5.1
Financial Services	1,693,470		4.8
Health Facilities	1,667,315		4.7
Cable	1,197,500		3.4
Software/Services	1,001,326		2.8
Chemicals	896,365		2.5
Environmental	876,371		2.5
Food - Wholesale	831,751		2.3
Media - Broadcast	758,049		2.1
Retail	148,246		0.4
Energy - Exploration & Production	95,110		0.3
Consumer Products	71,572		0.2
Newspaper	53,110		0.2
Total	$	35,458,409	100.0	%

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The following table shows the composition by industry grouping based on fair value as of December 31, 2016:



	As of December 31, 2016
	Investments at Fair Value		Percentage of Total Portfolio
Business Services	$	11,830,269	32.3	%
Healthcare	4,529,812		12.4
Food - Wholesale	3,247,828		8.9
Telecom	2,286,095		6.2
Entertainment	1,990,013		5.4
Cable	1,783,626		4.9
Software/Services	1,722,275		4.7
Health Facilities	1,672,169		4.6
Directories & Publishing	1,332,246		3.6
Chemicals	1,186,250		3.2
Media - Broadcast	1,058,394		2.9
Environmental	992,930		2.7
Retail	886,500		2.4
Railroads	847,853		2.3
Technology	738,209		2.0
Pharmaceuticals	302,871		0.8
Consumer Products	95,320		0.3
Energy - Exploration & Production	78,076		0.2
Newspaper	61,637		0.2
Total	$	36,642,373	100.0	%

The Company does not "control" and is not an "affiliate" of any of its portfolio companies, each as defined in the 1940 Act. In general, under the 1940 Act, the Company would be presumed to "control" a portfolio company or issuer if the Company owned more than 25% of its voting securities and would be an "affiliate" of a portfolio company or issuer if the Company owned between 5% and 25% of its voting securities.

As of March 31, 2017 and December 31, 2016, there were no delinquent investments or investments on non-accrual status.

Note 4. Fair Value of Financial Instruments

Accounting guidance establishes a hierarchal disclosure framework which prioritizes and ranks the level of market price observability of inputs used in measuring investments at fair value. Market price observability is affected by a number of factors, including the type of investment and the characteristics specific to the investment. Investments with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

The Company determines fair value based on quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. This alternative approach also reflects the contractual terms of the derivatives, if any, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The guidance defines three levels of inputs that may be used to measure fair value:



•	Level 1—Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date.



•	Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability.

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•	Level 3—Unobservable inputs that reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques.

The Company evaluates the source of inputs, including any markets in which the Company's investments are trading, in determining fair value. Due to the inherent uncertainty in the valuation process, the estimate of fair value of the Company’s investment portfolio as of March 31, 2017 may differ significantly from values that would have been used had a readily available market for the securities existed.

The following table presents fair value measurements of investments, by major class, as of March 31, 2017, according to the fair value hierarchy:



	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
Senior Secured Loans - First Lien	$	—	$	18,880,034	$	5,843,867	$	24,723,901
Senior Secured Loans - Second Lien	—		5,054,357		—		5,054,357
Senior Secured Bonds	—		1,802,490		—		1,802,490
Senior Unsecured Debt	—		3,857,105		—		3,857,105
Equity/Other	—		—		20,556		20,556
Total	$	—	$	29,593,986	$	5,864,423	$	35,458,409

The following table presents fair value measurements of investments, by major class, as of December 31, 2016, according to the fair value hierarchy:



	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
Senior Secured Loans - First Lien	$	—	$	16,249,070	$	9,079,892	$	25,328,962
Senior Secured Loans - Second Lien	—		4,722,313		—		4,722,313
Senior Secured Bonds	—		1,767,250		—		1,767,250
Senior Unsecured Debt	—		4,803,840		—		4,803,840
Equity/Other	—		—		20,008		20,008
Total	$	—	$	27,542,473	$	9,099,900	$	36,642,373

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The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the three months ended March 31, 2017:



	Senior Secured Loans - First Lien			Senior Secured Loans - Second Lien		Senior Secured Bonds		Equity/Other		Total
Balance as of December 31, 2016	$	9,079,892		$	—	$	—	$	20,008	$	9,099,900
Net change in unrealized appreciation (depreciation) on investments	(4,220		)	—		—		548		(3,672		)
Purchases and other adjustments to cost⁽¹⁾	26,776			—		—		—		26,776
Sales and repayments ⁽¹⁾	(3,262,249		)	—		—		—		(3,262,249		)
Net realized gain from investments	3,668			—		—		—		3,668
Balance as of March 31, 2017	$	5,843,867		$	—	$	—	$	20,556	$	5,864,423

_______________________

⁽¹⁾ Purchases represent the acquisition of new investments at cost. Sales and repayments represent principal payments received during the year.

Transfers between levels of the fair value hierarchy are reported at the beginning of the reporting period of which they occur. During the three months ended March 31, 2017, the Company recorded no transfers from Level 3 to Level 2 or from Level 2 to Level 3.

The net change in unrealized depreciation for the three months ended March 31, 2017 attributable to Level 3 investments still held at March 31, 2017 is $3,672 and is included in net change in unrealized appreciation (depreciation) on investments on the statements of operations.

The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the year ended December 31, 2016:



	Senior Secured Loans - First Lien			Senior Secured Loans - Second Lien			Senior Secured Bonds			Equity/Other		Total
Balance as of December 31, 2015	$	3,536,724		$	1,139,783		$	397,916		$	8,497	$	5,082,920
Net change in unrealized appreciation on investments	176,407			—			—			11,511		187,918
Purchases and other adjustments to cost⁽¹⁾	6,618,961			—			—			—		6,618,961
Sales and repayments ⁽¹⁾	(96,620		)	—			—			—		(96,620		)
Net realized gain from investments	1,309			—			—			—		1,309
Net transfers in and/or out	(1,156,889		)	(1,139,783		)	(397,916		)	—		(2,694,588		)
Balance as of December 31, 2016	$	9,079,892		$	—		$	—		$	20,008	$	9,099,900

_______________________

⁽¹⁾ Purchases represent the acquisition of new investments at cost. Sales and repayments represent principal payments received during the year.

Transfers between levels of the fair value hierarchy are reported at the beginning of the reporting period of which they occur. For the year ended December 31, 2016, the Company recorded $2.7 million in transfers from Level 3 to Level 2 due to an increase in observable inputs in market data. During the year ended December 31, 2016 the Company recorded no transfers from Level 2 to Level 3.

The net change in unrealized appreciation for the year ended December 31, 2016 attributable to Level 3 investments still held at December 31, 2016 is $0.9 million and is included in net change in unrealized appreciation (depreciation) on investments on the statements of operations.

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Significant Unobservable Inputs

The following table summarizes the significant unobservable inputs used by the Company's independent third-party valuation specialist to value the Level 3 investments as of March 31, 2017, which consisted of fifteen senior secured first lien loans and one equity investment. The table is not intended to be all-inclusive, but instead identifies the significant unobservable inputs relevant to the determination of fair values.



					Range
Asset Category	Fair Value		Primary Valuation Technique	Unobservable Inputs	Minimum		Maximum		Weighted Average
Senior Secured Loans - First Lien	$	5,843,867	Discounted Cash Flow Approach	Discount Rate	8.79	%	21.93	%	11.02	%
Equity/Other	$	20,556	Discounted Cash Flow Approach	Discount Rate	12.22	%	12.22	%	12.22	%

Significant increases or decreases in any of the above unobservable inputs in isolation would result in a significantly lower or higher fair value measurement for such assets.

The following table summarizes the significant unobservable inputs used by the Company's independent third-party valuation specialist to value the Level 3 investments as of December 31, 2016, which consisted of sixteen senior secured first lien loans and one equity investment. The table is not intended to be all-inclusive, but instead identifies the significant unobservable inputs relevant to the determination of fair values.



					Range
Asset Category	Fair Value		Primary Valuation Technique	Unobservable Inputs	Minimum		Maximum		Weighted Average
Senior Secured Loans - First Lien	$	9,079,892	Discounted Cash Flow Approach	Discount Rate	8.57	%	21.01	%	10.14	%
Equity/Other	$	20,008	Discounted Cash Flow Approach	Discount Rate	12.49	%	12.49	%	12.49	%

Significant increases or decreases in any of the above unobservable inputs in isolation would result in a significantly lower or higher fair value measurement for such assets.

Note 5. Related Party Transactions

The following table summarizes the offering, organizational, and operating costs incurred by, and fees earned by, the Adviser as of March 31, 2017 and December 31, 2016. These amounts are included in due to affiliates on the statements of assets and liabilities, net of certain due to affiliate amounts that were otherwise used as an offset against expense support amounts computed pursuant to the expense support and conditional reimbursement agreement, as discussed below.



	As of March 31, 2017			As of December 31, 2016
Organizational costs	$	451,428		$	451,428
Offering costs	2,144,372			2,144,372
General & administrative	163,967			163,792
Directors fees	117,192			117,192
Professional fees	222,909			221,985
Insurance and technology expenses	355,322			355,322
Base management fees earned	360,388			233,034
Total due to affiliates, before expense reimbursement	3,815,578			3,687,125
Expense reimbursement	(2,627,330		)	(2,499,976		)
Total due to affiliates, net of reimbursement	$	1,188,248		$	1,187,149

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The Company entered into an investment advisory agreement, dated January 16, 2015, with GBA (the "Investment Advisory Agreement"). Pursuant to the Investment Advisory Agreement, GBA will be paid a base management fee and certain incentive fees, if applicable. Additionally, GBA and the Company entered into an Investment Sub-Advisory Agreement, dated January 16, 2015, with Benefit Street (the "Investment Sub-Advisory Agreement"). The Investment Sub-Advisory Agreement provides, among other things, that Benefit Street shall receive 50.0% of all management and incentive fees payable to GBA under the Investment Advisory Agreement. The Company re-approved the Investment Advisory Agreement and the Investment Sub-Advisory Agreement on May 4, 2017 for a one-year term until May 7, 2018. See Note 11, Subsequent Events.

The Company also entered into an administration agreement, dated January 16, 2015, with Griffin Capital BDC Administrator (the "Administration Agreement") pursuant to which Griffin Capital BDC Administrator will be reimbursed for expenses necessary for the performance of services related to the Company's administration and operation, provided that such reimbursement will be the lower of Griffin Capital BDC Administrator's actual costs or the amount that the Company would be required to pay third-party service providers for comparable administrative services in the same geographic location, and provided further that such costs will be reasonably allocated to the Company on the basis of assets, revenues, time records or other reasonable methods. See Administrative Services section below.

The Company will settle the amounts due from affiliates, net of offsetting amounts due to affiliates, including management fees on a quarterly basis, in cash. See Expense Support and Conditional Reimbursement Agreement section below.

Base Management Fee

The base management fee will be calculated at an annual rate of 2.0% of the Company's gross assets, excluding cash and cash equivalents and other non-investment assets, and payable quarterly in arrears. The base management fee may or may not be taken in whole or in part at the discretion of GBA. All or any part of the base management fee not taken as to any quarter will be deferred without interest and may be taken in any such other quarter prior to the occurrence of a liquidity event as GBA may determine. Further, GBA may apply the management fee against any amount due from affiliates. For the three months ended March 31, 2017 and 2016 the Company incurred $0.2 million and $0.1 million in base management fees, respectively.

Incentive Fees on Income

The incentive fee on income is calculated and payable quarterly in arrears based upon the Company's "pre-incentive fee net investment income" for the immediately preceding quarter, and subject to a hurdle rate, measured quarterly and expressed as a rate of return on adjusted capital at the beginning of the most recently completed calendar quarter, of 1.75% (7.0% annualized), subject to a "catch up" feature, as defined. Incentive fee on income is payable in any calendar quarter in which pre-incentive fee net investment income does not exceed the hurdle rate of 1.75% on adjusted capital. For any calendar quarter in which pre-incentive fee net investment income is greater than the quarterly hurdle rate, but less than or equal to 2.1875%, the incentive fee on income will equal the amount of pre-incentive fee net investment income in excess of the quarterly hurdle rate. This portion of the incentive fee is referred to as the catch-up and provides an increasing fee, equal to 100% of the pre-incentive fee net investment income, between a 1.75% to a 2.1875% quarterly return on adjusted capital. For any calendar quarter in which the pre-incentive fee net investment income exceeds 2.1875% of adjusted capital, the incentive fee on income will equal 20.0% of pre-incentive fee net investment income. For purposes of this fee, adjusted capital will mean cumulative gross proceeds generated from issuances of the Company's common stock, including its DRP, reduced for distributions to investors that represent a return of capital and amounts paid for share repurchases pursuant to the Company's share repurchase program, if any. No incentive fees on income were incurred for the three months ended March 31, 2017 and March 31, 2016.

Incentive Fee on Capital Gains

An incentive fee on capital gains is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement) and will equal 20.0% of the Company's realized capital gains on a cumulative basis from inception, calculated as of the application period, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid incentive fees on capital gains. For the three months ended March 31, 2017, the Company accrued an incentive fee, based on net realized and unrealized gains, of approximately $0.1 million. No incentive fees on capital gains were incurred for the three months ended March 31, 2016.

In accordance with U.S. GAAP, the Company is required to include the aggregate unrealized appreciation on investments in the calculation and accrue a capital gains incentive fee as if such unrealized appreciation were realized, even though such unrealized appreciation is not permitted to be considered in calculating the fee actually payable under the Investment Advisory Agreement. As of both March 31, 2017 and December 31, 2016, a payable for incentive fees of $0.1

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million was included as a liability under the management and incentive fees payable to affiliate, on the statements of assets and liabilities. No accrual was recorded for the three months ended March 31, 2016.

Organizational and Offering Costs

The Company incurred organizational and offering costs (including reimbursement of costs incurred by Griffin Capital and its affiliates) of approximately 1.5% of the gross proceeds from the Offering. Until the Company achieved the minimum offering requirement in the Offering, all offering costs were funded by Griffin Capital and its affiliates. On May 1, 2015, the Company raised the minimum offering requirement and became liable, subject to the expense support and conditional reimbursement agreement, to reimburse Griffin Capital and its affiliates for these costs, if and when Griffin Capital and its affiliates submit such costs for reimbursement. From inception through March 31, 2017, Griffin Capital and its affiliates incurred offering and organizational costs of approximately $2.1 million and $0.5 million, respectively.

The decision to fund the organizational and offering costs and the decision to seek reimbursement for such costs is solely at the discretion of Griffin Capital. These costs are included as a component of due to affiliates on the statements of assets and liabilities and have been applied against amounts due from Griffin Capital and affiliates pursuant to the expense support and conditional reimbursement agreement. As a result, the Company may or may not be requested to reimburse any remaining costs funded by Griffin Capital.

Expense Support and Conditional Reimbursement Agreement

On March 25, 2015, the Company and GBA entered into an expense support and conditional reimbursement agreement (as amended, the "ESA"). On March 23, 2016, the Company and the Adviser executed the Amendment to the Expense Support and Conditional Reimbursement Agreement (the “Amended ESA”), which is effective for all reimbursement payments from the Company to the Adviser made on or after December 31, 2015. Pursuant to the Amended ESA, GBA has agreed to reimburse, or offset such reimbursement against amounts due to GBA, the Company for expenses in an amount that is sufficient to: (i) ensure that no portion of the Company’s distributions to stockholders will be paid from the Company’s Offering proceeds or borrowings, and/or (ii) reduce the Company’s operating expenses until the Company has achieved economies of scale sufficient to ensure that the Company bears a reasonable level of expense in relation to the Company’s investment income. Pursuant to the Amended ESA, the Company may have a conditional obligation to reimburse GBA for any amounts funded by GBA under such agreement, including certain organizational and offering costs that have been included in operating expense, if certain conditions are met. First, GBA will be entitled to receive reimbursement payments if, during any fiscal quarter occurring within three years of the date on which GBA funded such amount, the sum of the Company's net investment income for tax purposes, net capital gains and the amount of any dividends and other distributions paid to the Company on account of investments in portfolio companies (to the extent not included in net investment income or net capital gains for tax purposes) exceeds the distributions paid by the Company to stockholders. Second, the Company and GBA have agreed that the Company will make reimbursement payments only if: (i) the Company's current "operating expense ratio" is equal to or less than its operating expense ratio at the time the corresponding expense payment obligation was incurred by GBA, and (ii) the annualized rate of the Company's regular cash distributions to the Company's stockholders is equal to or greater than the annualized rate of the Company's regular cash distributions to the Company's stockholders at the time the corresponding expense payment was incurred by GBA. For this purpose, the “operating expense ratio” is defined as all expenses borne by the Company, except for organizational and offering expenses, base management and incentive fees owed to GBA, and interest expense, as a percentage of net assets. Finally, for organizational and offering costs that have been included in operating expenses, the Company will limit reimbursement of such expenses to the sum of: (i) all expense payments paid by GBA to the Company in cash and not previously reimbursed; (ii) non-organizational and offering costs included in operating expenses incurred by GBA and its affiliates and accrued as payables by the Company; and (iii) organizational and offering costs incurred by GBA and its affiliates and accrued as payables by the Company, up to a limit of 1.5% of gross proceeds raised. The Company will not record expense support payments as liabilities on the statements of assets and liabilities until the above conditions are met.

On March 6, 2017, GBA and Benefit Street entered into a letter agreement which revised the terms between the Adviser and Sub-Adviser. Under the letter agreement, Benefit Street will no longer have any obligation to share the expense or distribution support obligations pursuant to the Amended ESA. On March 29, 2017, the Company and the Adviser executed a Second Amendment to the Expense Support and Conditional Reimbursement Agreement (the "Second Amended ESA”, collectively with the agreements above, the "Amended ESA"), which is effective for all reimbursement payments from the Company to the Adviser on or after March 23, 2017.

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The Company or GBA may terminate the Amended ESA at any time. If the Company terminates the Investment Advisory Agreement with GBA, the Company will be required to repay GBA all reimbursements funded by GBA within three years of the date of termination, subject to the limitation that organizational and offering costs will only be 1.5% of gross proceeds. The specific amount of expenses reimbursed by GBA, if any, will be determined at the end of each quarter. The following table provides information regarding costs incurred by the Adviser pursuant to the Amended ESA as well as other information relating to the Company's ability to reimburse the Adviser for such costs:



Quarter Ended	Amount of Expense Payment Support	Amount Repaid to GBA	Operating Expense Ratio ⁽¹⁾		Annualized Distribution Rate ⁽²⁾		Eligible to be Repaid Through ⁽³⁾
June 30, 2015	815,023	—	6.87	%	7.50	%	June 30, 2018
September 30, 2015	726,058	—	4.23	%	7.50	%	September 30, 2018
December 31, 2015	530,618	—	3.61	%	7.50	%	December 31, 2018
March 31, 2016 ⁽⁴⁾	1,543,113	—	0.71	%	7.65	%	March 31, 2019
June 30, 2016 ⁽⁴⁾	455,606	—	0.74	%	7.65	%	June 30, 2019
September 30, 2016 ⁽⁴⁾	35,603	—	0.62	%	7.65	%	September 30, 2019
December 31, 2016⁽⁴⁾	127,354	—	1.21	%	7.65	%	December 31, 2019
March 31, 2017⁽⁵⁾	240,208	—	0.55	%	7.65	%	March 31, 2020

________________________


⁽¹⁾	"Operating Expense Ratio” is as of the date the expense support payment obligation was incurred by GBA and includes all expenses borne by the Company, except for organizational and offering expenses, base management and incentive fees owed to the Adviser, and interest expense, as a percentage of net assets.


⁽²⁾	"Annualized Distribution Rate" equals the annualized rate of distributions paid to the Company's stockholders based on the amount of the regular cash distribution paid immediately prior to the date the expense support payment obligation was incurred by GBA. “Annualized Distribution Rate” does not include special cash or stock distributions paid to stockholders.


⁽³⁾	If an expense support payment has not been reimbursed to the Adviser within three years of the end of the calendar quarter following the date such expense support payment was incurred, the Company’s obligation to pay such Expense Support Payment shall automatically terminate and be of no further effect.

⁽⁴⁾

Effective March 15, 2016, the Company's board of directors determined that it was in the Company's and stockholders' best interests to suspend the Offering and DRP. However, in the months of March through December, the board of directors maintained the amount of daily cash distributions payable to stockholders at $0.002049 per share (representing an annualized distribution rate of 7.5% based on share price of $10.00, or an annualized distribution rate of 7.65% based on a share price of $9.80).


⁽⁵⁾	In the months of January through March, the board of directors maintained the amount of daily cash distributions payable to stockholders at $0.002055 per share (representing an annualized distribution rate of 7.5% based on share price of $10.00, or an annualized distribution rate of 7.65% based on a share price of $9.80).

There can be no assurance that the Amended ESA will remain in effect or that GBA will reimburse any portion of the Company’s expenses in future quarters. Since inception, GBA has supported approximately $3.8 million of the Company's operating expenses, including organizational and offering expenses, and approximately $0.7 million of distribution support pursuant to the Amended ESA, as well as other additional support. For the three months ended March 31, 2017 and March 31, 2016, total support of $0.2 million and $1.3 million, respectively, is included on the statements of operations as an expense reimbursement. Approximately $0.2 million is reflected as a capital contribution on the statements of changes in net assets as distribution support for the three months ended March 31, 2016. No distribution support was contributed for the three months ended March 31, 2017. As of March 31, 2017, the Company does not believe it is probable that it will generate sufficient excess cash to reimburse GBA for these advances over the next three years, pursuant to the terms of the Amended ESA.

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Administrative Services

Griffin Capital BDC Administrator will provide the Company with general ledger accounting, fund accounting and investor relations and other administrative services pursuant to the Administration Agreement, under which the Griffin Capital BDC Administrator will also furnish the Company with administrative services necessary to conduct its day-to-day operations. The Griffin Capital BDC Administrator will be reimbursed for administrative expenses it incurs on the Company's behalf in performing its obligations. Such costs will be reasonably allocated to the Company on the basis of assets, revenues, time records or other reasonable methods. The Company will not reimburse the Griffin Capital BDC Administrator for any services for which it receives a separate fee or for rent, depreciation, utilities, capital equipment or other administrative items allocated to a person with a controlling interest in the Griffin Capital BDC Administrator. Pursuant to the Administration Agreement, the Griffin Capital BDC Administrator at its sole discretion, may contract with third-party service providers. The cost of the third-party service providers will be an obligation of the Griffin Capital BDC Administrator. The Company will not incur the costs from the Griffin Capital BDC Administrator and the third-party provider for similar services. As of March 31, 2017 and December 31, 2016, the Griffin Capital BDC Administrator waived reimbursement for the cost of any administrative services provided.

As of March 31, 2017 and March 31, 2016, GBA and Benefit Street had incurred certain expenses on behalf of the Company, including directors fees, insurance and technology expenses, professional fees and other general and administrative expenses, of approximately $0.9 million and $0.8 million, respectively. GBA and Benefit Street are entitled to reimbursement of these expenses, subject to the limitations imposed under the Amended ESA described above.

Dealer Manager Agreement

The Company executed a dealer manager agreement with the Dealer Manager on December 11, 2014, which entitled the Dealer Manager to receive a sales commission based upon gross proceeds from shares sold in the Offering, which was a 7.0% commission of gross proceeds. In addition, the Dealer Manager received a dealer manager fee up to 3.0% of gross proceeds from shares sold in the Offering. The Dealer Manager entered into participating dealer agreements with certain other broker-dealers authorizing them to sell shares of the Company in the Offering. Upon sale of shares of the Company by such broker-dealers, the Dealer Manager re-allowed all of the sales commissions paid in connection with sales made by these broker-dealers. The Dealer Manager may also re-allow to these broker-dealers a portion of the 3.0% dealer manager fee as marketing fees, reimbursement of certain costs and expenses of attending training and education meetings sponsored by the Dealer Manager, payment of attendance fees required for employees of the Dealer Manager or other affiliates to attend retail seminars and public seminars sponsored by these broker-dealers, or to defray other distribution-related expenses. From January 1, 2016 to March 15, 2016 (the date of the suspension of the Offering), the Company paid dealer manager fees of $0.4 million and sales commissions of $1.0 million. No other dealer manager fees were paid subsequent to the suspension of the Offering.

License Agreements

The Company has entered into a license agreement with Griffin Capital under which Griffin Capital has granted the Company a non-exclusive, royalty-free license to use the name "Griffin." The Company has also entered into a license agreement with Benefit Street under which Benefit Street has granted the Company a non-exclusive, royalty-free license to use the name "Benefit Street Partners." Under these agreements, the Company has a right to use the "Griffin" name for so long as GBA or one of its affiliates remains the Company's investment adviser and the "Benefit Street Partners" name for so long as Benefit Street or one of its affiliates remains the Company's investment Sub-Adviser. Other than with respect to these limited licenses, the Company has no legal right to the "Griffin" or "Benefit Street Partners" names.

Conflicts of Interest

The Company's executive officers and certain of the Company's directors and other finance professionals of Griffin Capital and their affiliates also serve as executives of GBA and Benefit Street. Mr. Shields controls the trust that is the sole member of Griffin Capital. In addition, the Company's executive officers and directors and the members of GBA and members of the investment committee of GBA serve or may serve as officers, directors or principals of entities that operate in the same, or related, line of business as the Company or of investment funds, accounts or other investment vehicles managed by the Company's affiliates. These investment funds, accounts or other investment vehicles may have investment objectives similar to the Company's investment objective. The Company may compete with entities managed by GBA and its affiliates for capital and investment opportunities. As a result, the Company may not be given the opportunity to participate in certain investments made by investment funds, accounts or other investment vehicles managed by GBA or its affiliates or by members of the investment committee. However, in order to fulfill its fiduciary duties to each of its clients, GBA intends to allocate investment opportunities in a manner that is fair and equitable over time and is consistent with GBA's allocation policy, investment objective and strategies so that the Company is not disadvantaged in relation to any other client.

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Benefit Street and its affiliates currently manage a number of investment accounts and private investment funds, including an adviser to a non-traded BDC, hedge funds, single investor funds, sector specific, asset class specific or geographically specific private investment funds with investment guidelines substantially similar in whole or in part to the Company's investment guidelines and intends to manage additional investment accounts and private investment funds. Certain funds managed by Providence may pursue investment opportunities similar to those that the Company intends to pursue. As a result, the Company may not be provided with the opportunity to fully invest in all investment opportunities available to Providence, Benefit Street, and the Company that would be suitable for the Company. To the extent that Providence or Benefit Street is presented with an investment opportunity that would be appropriate for the Company and another fund sub-advised or managed by Providence or Benefit Street, Benefit Street and/or Providence may be faced with a conflict.

As a result of the potential overlap in investment objectives between the Company and certain investment accounts and funds managed by Benefit Street and its affiliates, Benefit Street has adopted an allocation policy governing how such investment opportunities will be allocated. However, to the extent any funds managed by Providence or Benefit Street seek investment opportunities similar to the opportunities the Company seeks, the scope of opportunities otherwise available to the Company may be reduced or otherwise adversely affected.

Some of the material conflicts that GBA, Benefit Street or the Dealer Manager or its affiliates may face are (1) competing demand for time of GBA and Benefit Street's executive officers and other key personnel and affiliated entities; and (2) influence of the fee structure under GBA's agreement that could result in actions not necessarily in the long-term best interest of the stockholders.

In an order dated June 23, 2015, the SEC granted exemptive relief permitting the Company, subject to the satisfaction of certain conditions, to co-invest in certain privately negotiated investment transactions with certain affiliates of the Sub-Adviser. Among other things, the relief requires that our independent directors review and approve each initial co-investment. The Company believes this relief may also allow it to participate in larger investments, together with the Sub-Adviser’s co-investment affiliates, than would be available to it if it had not obtained such relief.

Note 6. Commitments and Contingencies

The Company’s investment portfolio may contain debt investments that are in the form of lines of credit and unfunded delayed draw commitments, which require the Company to provide funding when requested by portfolio companies in accordance with the terms of the underlying loan agreements. The par amounts of the unfunded commitments are not recognized by the Company until the commitment is funded. As of March 31, 2017 and December 31, 2016, the Company had approximately $1.7 million and $1.7 million, respectively, of unfunded commitments under loan and financing agreements as follows:



	March 31, 2017		December 31, 2016
MyEyeDr - Delayed Draw	$	1,200,000	$	1,200,000
MyEyeDr - Revolver	43,000		43,000
Santek Waste Services - Delayed Draw	98,869		117,987
Santek Waste Services - Revolver	66,000		66,000
Asset International - Delayed Draw	135,200		135,200
Asset International - Revolver	67,500		67,500
Bahakel Communications, Ltd.	34,500		34,500
Bahakel Communications, Ltd. - Revolver	14,000		14,000
Total Unfunded Commitments	1,659,069		1,678,187

The unrealized gain or loss on the discount associated with the unfunded commitments is recorded on the statements of assets and liabilities as discount for unfunded commitments and on the statements of operations as net change in unrealized appreciation on unfunded investments. As of and for the three months ended March 31, 2017, the discount for unfunded commitments and net change in unrealized appreciation on unfunded investments was $(61), which is reflected in accounts receivable on the statements of assets and liabilities, and $13,839, respectively.

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Distribution Reinvestment Plan

The Company had implemented a DRP that allowed stockholders to have distributions otherwise distributable to them invested in additional shares of common stock at up to 95.0% of the price that common stock is sold in the Offering at the weekly closing immediately following the distribution payment date. The plan became effective on April 1, 2015. On November 11, 2015, the Company’s board of directors voted to amend and restate the DRP such that the purchase price for shares of common stock pursuant to the DRP shall be 90% of the price that common stock is sold in the Offering at the weekly closing immediately following the distribution payment date. The amended and restated DRP became effective as of November 26, 2015. No sales commission or dealer manager fee was paid on shares sold through the DRP. For the three months ended March 31, 2016, the Company issued 25,951 shares under the DRP. Effective March 15, 2016, the Company suspended purchases pursuant to the DRP, in conjunction with the suspension of the Offering.

Share Repurchase Program

Although it has not made any determination at this time, the Company maintains the right to initiate a share repurchase program in the future which would offer to repurchase common stock on such terms as may be determined by the board of directors in its complete and absolute discretion unless, in the judgment of the independent directors of the board of directors, such repurchases would not be in the best interests of our stockholders or would violate applicable law. There can be no assurance that the Company will implement a share repurchase program.

Note 7. Common Stock

As of March 15, 2016, the Company had issued 4,563,196 shares of common stock outstanding which represents gross offering proceeds of approximately $44.8 million, including shares issued in the private placement and 60,369 shares issued pursuant to the DRP, which amount remained unchanged as of March 31, 2017.

On March 15, 2016, the Company’s board of directors determined that it is in the Company’s and its stockholders’ best interest to suspend the Offering. The board of directors’ determination was based on the Adviser's belief that market conditions, at the time, and the Company’s current structure are not conducive to continuing the Offering.

The Company's transfer agent ceased accepting subscriptions received on or after March 15, 2016, and issued refunds for all subscriptions received on or after March 4, 2016. The Company also sent written notification to its stockholders that the DRP was suspended, effective March 15, 2016.

Note 8. Per Share Information

Basic increase (decrease) in net assets resulting from operations per share is computed by dividing earnings available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Other potentially dilutive shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis. The Company had no potentially dilutive securities as of March 31, 2017 and March 31, 2016.

The following information sets forth the computation of the weighted average basic and diluted net increase (decrease) in net assets per share resulting from operations for the three months ended March 31, 2017 and March 31, 2016.



	For the Three Months Ended March 31,
	2017		2016
Basic and diluted
Net increase in net assets resulting from operations	$	841,333	$	213,454
Weighted average common stock outstanding	4,563,196		3,927,271
Net increase in net assets per share resulting from operations	$	0.18	$	0.05

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The table below shows changes in the Company's offering price and distribution rates since the commencement of the public offering.



Declaration Date		Public Offering Price	Effective Date	Daily Distribution Amount per Share		Annualized Distribution Rate
May 7, 2015	$	10.00	May 7, 2015	$	0.002055	7.50	%
May 27, 2015	$	10.00	June 1, 2015	$	0.002055	7.50	%
June 26, 2015	$	10.00	July 1, 2015	$	0.002055	7.50	%
July 29, 2015	$	10.00	August 1, 2015	$	0.002055	7.50	%
August 12, 2015	$	10.00	September 1, 2015	$	0.002055	7.50	%
September 28, 2015	$	10.00	October 1, 2015	$	0.002055	7.50	%
October 27, 2015	$	10.00	November 1, 2015	$	0.002055	7.50	%
November 11, 2015	$	10.00	December 1, 2015	$	0.002055	7.50	%	⁽¹⁾
December 21, 2015	$	9.80	January 1, 2016	$	0.002049	7.65	%
January 22, 2016	$	9.80	February 1, 2016	$	0.002049	7.65	%
February 29, 2016	$	9.80	March 1, 2016	$	0.002049	7.65	%	⁽²⁾
March 23, 2016	$	N/A	April 1, 2016	$	0.002049	7.65	%	⁽²⁾
April 28, 2016	$	N/A	May 1, 2016	$	0.002049	7.65	%	⁽²⁾
May 11, 2016	$	N/A	June 1, 2016	$	0.002049	7.65	%	⁽²⁾
June 27, 2016	$	N/A	July 1, 2016	$	0.002049	7.65	%	⁽²⁾
July 29, 2016	$	N/A	August 1, 2016	$	0.002049	7.65	%	⁽²⁾
August 11, 2016	$	N/A	September 1, 2016	$	0.002049	7.65	%	⁽²⁾
September 28, 2016	$	N/A	October 1, 2016	$	0.002049	7.65	%	⁽²⁾
October 28, 2016	$	N/A	November 1, 2016	$	0.002049	7.65	%	⁽²⁾
November 9, 2016	$	N/A	December 1, 2016	$	0.002049	7.65	%	⁽²⁾
December 13, 2016	$	N/A	January 1, 2017	$	0.002055	7.65	%	⁽³⁾
January 27, 2017	$	N/A	February 1, 2017	$	0.002055	7.65	%	⁽³⁾
February 27, 2017	$	N/A	March 1, 2017	$	0.002055	7.65	%	⁽³⁾
March 29, 2017	$	N/A	April 1, 2017	$	0.002055	7.65	%	⁽³⁾

__________________

⁽¹⁾ Effective December 23, 2015, the Company's board of directors determined to decrease the Company's public offering price from $10.00 per share to $9.80 per share. For the remainder of the month of December, the board of directors determined to maintain the amount of daily cash distributions payable to stockholders of $0.002055 per share (representing an annualized distribution rate of 7.5% based on a share price of $10.00, or an annualized distribution rate of 7.65% based on a share price of $9.80).

⁽²⁾Effective March 15, 2016, the Company's board of directors determined that it was in the Company's and stockholders' best interests to suspend the offering and DRP. In the months of March through December, the board of directors maintained the amount of daily cash distributions payable to stockholders at $0.002049 per share (representing an annualized distribution rate of 7.5% based on a share price of $10.00, or an annualized distribution rate of 7.65% based on a share price of $9.80).

⁽³⁾Effective January 1, 2017, the board of directors declared the amount of daily cash distributions payable to stockholders to be $0.002055 per share (representing an annualized distribution rate of 7.5% based on a share price of $10.00, or an annualized distribution rate of 7.65% based on a share price of $9.80). The board of directors maintained such rate through March 31, 2017.

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Note 9. Distributions

For the three months ended March 31, 2017, the Company had declared approximately $0.8 million in stockholder distributions. Approximately $0.8 million of these distributions were declared and paid or payable in cash and none were in shares issued pursuant to the DRP.



Record Date	Payment Date	Distributions Paid in Cash Accrued
January 31, 2017	February 1, 2017	$	290,703
February 28, 2017	March 1, 2017	262,571
March 31, 2017	April 1, 2017	290,704
		$	843,978

For the three months ended March 31, 2016, the Company had declared approximately $0.7 million in stockholder distributions. Approximately $0.5 million of these distributions were declared and paid or payable in cash and $0.2 million in shares issued pursuant to the DRP.



Record Date	Payment Date	Distributions Paid in Cash/Accrued		Distributions Paid Through the DRP			Total Distributions Paid/ Accrued
January 31, 2016	February 1, 2016	$	103,281	$	108,650		$	211,931
February 29, 2016	March 1, 2016	112,704		119,696			232,400
March 31, 2016	April 1, 2016	288,199		—		⁽¹⁾	288,199
		$	504,184	$	228,346		$	732,530

_____________________

⁽¹⁾ Effective March 15, 2016, the Company's board of directors determined that it was in the Company's and its stockholders' best interest to suspend the offering and the DRP. Beginning with the month of March, all distributions were paid in cash.

Distributions in excess of the Company's current and accumulated earnings and profits would generally be treated first as a return of capital to the extent of the stockholder’s tax basis, and any remaining distributions would be treated as a capital gain. The determination of the tax attributes of the Company's distributions is made annually as of the end of the Company's fiscal year based upon the Company's taxable income for the full year and distributions paid for the full year. Of the dividends declared during the three months ended March 31, 2017, 100% were distributions derived from the Company's current and accumulated earnings and profits, on a U.S. GAAP basis and not considered a return on capital. Of the dividends declared during the three months ended March 31. 2016, 100% were distributions derived from the Company's current and accumulated earnings and profits, on a U.S. GAAP basis and were not considered a return on capital. There can be no certainty to stockholders that this determination is representative of the tax attributes of our 2017 distributions to stockholders.

Shortly after the close of each calendar year, a statement on Form 1099-DIV identifying the source of the distribution (i.e., paid from ordinary income, paid from net capital gains on the sale of securities, and/or a return of paid-in-capital surplus which is a nontaxable distribution) is mailed to the Company's stockholders subject to information reporting. To the extent the Company's taxable earnings fall below the total amount of the Company's distributions for any taxable year, a portion of those distributions may be deemed a return of capital to the Company's stockholders.

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Note 10. Financial Highlights

The following is a schedule of financial highlights for the three months ended March 31, 2017 and 2016.



	For the Three Months Ended March 31,
	2017			2016
Per share data: ⁽¹⁾
Net asset value, beginning of period	$	8.61		$	8.61

Results of operations
Net investment income	0.16			0.04
Net realized gain from investments	0.04			0.01
Net change in unrealized appreciation (depreciation) on investments	(0.02		)	—
Net increase in net assets resulting from operations	0.18			0.05

Stockholder distributions ⁽²⁾
Distributions from investment income and realized gains	(0.18		)	(0.19		)
Net decrease in net assets resulting from stockholder distributions	(0.18		)	(0.19		)

Capital share transactions
Issuance of common stock ⁽³⁾	—			0.11
Net increase in net assets resulting from capital share transactions	—			0.11
Other ⁽⁴⁾	—			0.03
Net asset value, end of period	$	8.61		$	8.61

Shares outstanding at end of period	4,563,196			4,563,196
Weighted average shares at end of period	4,563,196			3,927,271
Total return ⁽⁹⁾	2.16		%	2.14		%
Ratio/Supplemental data:
Net assets, end of period	39,266,309			39,289,114
Ratio of net investment income (loss) to average net assets

Griffin-Benefit Street Partners BDC Corp. 10-Q