11. DISTRIBUTIONS

Distributions from net investment income and net realized capital gains are determined in accordance with U.S. federal tax regulations, which may materially differ from amounts determined in accordance with GAAP. These book-to-tax differences are either temporary or permanent in nature. To the extent these differences are permanent, they are reclassified to undistributed net investment income, accumulated net realized gain or paid-in-capital, as appropriate. Distributions from net realized capital gains, if any, are normally declared and paid annually, but the Company may make distributions on a more frequent basis to comply with the distribution requirements for RICs under the Code.

Distributions to shareholders are recorded on the ex-dividend date. The amount to be paid out as a dividend is determined by the board of trustees each quarter and is generally based upon the earnings estimated by management. The Company generally intends to make monthly distributions in such amounts as determined by the Company’s board of trustees in its discretion.

The Company has adopted an “opt out” DRIP that will provide for reinvestment of its dividends and other distributions (net of applicable withholding tax) on behalf of its shareholders, unless a shareholder elects to receive cash. As a result, if the board of trustees authorizes, and the Company declares, a cash dividend or other distribution, then its shareholders who have not ‘opted out’ of the DRIP will have their cash distribution automatically reinvested in additional Common Shares, rather than receiving a cash distribution.