1377936--5/23/2008--GSC_INVESTMENT

related topics

{investment, property, distribution}

{loan, real, estate}

{tax, income, asset}

{debt, indebtedness, cash}

{stock, price, operating}

{acquisition, growth, future}

{cost, contract, operation}

{loss, insurance, financial}

{provision, law, control}

{regulation, change, law}

{personnel, key, retain}

{operation, international, foreign}

{interest, director, officer}

{condition, economic, financial}

{stock, price, share}

Our ability to grow will depend on our ability to raise capital. Our financial condition and results of operation depend on our ability to manage future growth effectively. There are conflicts of interest in our relationship with our investment adviser and/or GSC Group that could cause them to make decisions that are not in the best interests of our stockholders. Our investment adviser s base compensation may cause it to increase our leverage contrary to our interest. We may compete with investment vehicles of GSC Group for access to GSC Group. We are dependent upon our investment adviser s key personnel for our future success and upon their access to GSC Group s investment professionals. Our investment adviser s incentive compensation may cause it to pursue a high risk investment strategy. We are exposed to risks associated with changes in interest rates. We may experience fluctuations in our quarterly results. Our investment adviser s liability is limited under the investment advisory and management agreement and we will indemnify our investment adviser against certain liabilities, which may lead our investment adviser to act in a riskier manner on our behalf than it would when acting for its own account. We may be obligated to pay our investment adviser incentive compensation even if we incur a net loss, regardless of the market value of our common stock. Changes in laws or regulations governing our operations, or changes in the interpretation thereof, and any failure by us to comply with laws or regulations governing our operations may adversely affect our business. Risks related to our operation as a BDC Our investment adviser has limited experience in managing a BDC. A failure on our part to maintain our qualification as a BDC would significantly reduce our operating flexibility. We will be subject to corporate-level income tax if we fail to qualify as a RIC. Regulations governing our operation as a BDC will affect our ability to raise additional capital. Our common stock may trade at a discount to our net asset value per share. As a BDC, we may have difficulty paying our required distributions if we recognize income before or without receiving cash in respect of such income. If our primary investments are deemed not to be qualifying assets, we could fail to qualify as a BDC or be precluded from investing according to our current business plan. There is a risk that you may not receive distributions or that our distributions may not grow over time. The floating interest rate features of any indebtedness incurred by us could adversely affect us if interest rates rise. Risks related to our investments Our investments may be risky, and you could lose all or part of your investment. Economic recessions or downturns could impair our portfolio companies and harm our operating results. The debt securities in which we invest are subject to credit risk and prepayment risk. The lack of liquidity in our investments may adversely affect our business. Our investment in GSCIC CLO constitutes a leveraged investment in a portfolio of predominantly senior secured first lien term loans and is subject to additional risks and volatility. Available information about privately held companies is limited. When we are a debt or minority equity investor in a portfolio company, we may not be in a position to control the entity, and its management may make decisions that could decrease the value of our investment. Our portfolio companies may incur debt or issue equity securities that rank equally with, or senior to, our investments in such companies. There may be circumstances where our debt investments could be subordinated to claims of other creditors or we could be subject to lender liability claims. Investments in equity securities involve a substantial degree of risk. Our investments in foreign debt, including that of emerging market issuers, may involve significant risks in addition to the risks inherent in U.S. investments. We may expose ourselves to risks if we engage in hedging transactions. Our board of directors may change our operating policies and strategies without prior notice or stockholder approval, the effects of which may be adverse. Risks related to an investment in our shares Investing in our common stock may involve an above average degree of risk. The market price of our common stock may fluctuate significantly. Provisions of our governing documents and the Maryland General Corporation Law could deter takeover attempts and have an adverse impact on the price of our common stock.

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1377936--5/23/2008--GSC_INVESTMENT_CORP.