Monroe Capital (MRCC) Risk Analysis

General Risk Factors General Risk Factors We may experience fluctuations in our quarterly operating results. We may experience fluctuations in our quarterly operating results. We could experience fluctuations in our quarterly operating results due to a number of factors, including our ability or inability to make investments in companies that meet our investment criteria, the interest rate payable to us on the debt securities we acquire, the default rate on such securities, the level of our expenses (including the cost of our indebtedness), variations in and the timing of the recognition of realized and unrealized gains or losses, the degree to which we encounter competition in our markets and general economic conditions. As a result of these factors, results for any period should not be relied upon as being indicative of performance in future periods. We could experience fluctuations in our quarterly operating results due to a number of factors, including our ability or inability to make investments in companies that meet our investment criteria, the interest rate payable to us on the debt securities we acquire, the default rate on such securities, the level of our expenses, including the cost of our indebtedness, variations in and the timing of the recognition of realized and unrealized gains or losses, the degree to which we encounter competition in our markets and general economic conditions. Changes in laws or regulations governing our operations may adversely affect our business or cause us to alter our business strategy. Efforts to comply with the Sarbanes-Oxley Act involve significant expenditures, and non-compliance with the Sarbanes-Oxley Act may adversely affect us and the market price of our securities. Terrorist attacks, acts of war, global health emergencies or natural disasters may affect any market for our common stock, impact the businesses in which we invest and harm our business, operating results and financial condition. The failure in cybersecurity systems, as well as the occurrence of events unanticipated in our disaster recovery systems and management continuity planning, could impair our ability to conduct business effectively. We, and our portfolio companies, depend heavily upon computer systems to perform necessary business functions. Despite the implementation of a variety of security measures, computer systems could be subject to cyber-attacks and unauthorized access, which could result in damage to our reputation, financial losses, litigation, increased costs, regulatory penalties and/or customer dissatisfaction or loss. A disaster or a disruption in the infrastructure that supports our business, including a disruption involving electronic communications or other services used by us or third parties with whom we conduct business, could have a material adverse impact on our ability to continue to operate our business without interruption. Third parties with which we do business may also be sources of cybersecurity or other technological risk. We outsource certain functions and these relationships allow for the storage and processing of our information, as well as client, counterparty, employee, and borrower information. Moreover, the increased use of mobile and cloud technologies due to the proliferation of remote work resulting from the COVID-19 pandemic could heighten these and other operational risks. We have implemented processes, procedures and internal controls to help mitigate cybersecurity risks and cyber intrusions, but these measures do not guarantee that a cyber-incident will not occur or that our financial results, operations or confidential information will not be negatively impacted. In addition, cybersecurity has become a top priority for regulators around the world, and new privacy and data protection laws may increase our compliance costs and risks. Breach of these laws could result in significant financial penalties for MC Advisors and/or us. We are subject to the Sarbanes-Oxley Act, and the related SEC rules require us to review and report on our internal controls, which may divert management’s time and incur additional expenses. Provisions of the Maryland General Corporation Law and our charter and bylaws could deter takeover attempts and have an adverse effect on the price of our common stock. Our common stock has not traded at or above net asset value since the second quarter of 2022, and if we sell common stock at a discount to our net asset value per share, stockholders who do not participate in such sale will experience immediate dilution. The issuance or sale by us of shares of our common stock at a price below net asset value poses a risk of dilution to our stockholders. Terrorist acts, acts of war, global health emergencies or natural disasters may disrupt our operations and adversely affect our business, operating results and financial condition. The failure in cybersecurity systems or breaches of data may lead to significant operational and reputational harm. Third-party failures or disruptions in outsourced services may also adversely affect our business. Changes in laws or regulations, including those affecting our status as a regulated entity, may force us to alter our investment strategy or incur additional costs. Efforts to comply with various regulatory requirements, including the Sarbanes-Oxley Act, may divert resources and negatively impact our profitability. Terrorist attacks, wars, health crises and natural disasters may further contribute to market volatility and uncertainty. Cybersecurity incidents and reliance on technology and third-party service providers may also expose us to operational risks. ... (all remaining text until the end of Item 1A)