CorEnergy Infrastructure Trust, Inc. - Quarter Report: 2007 August (Form 10-Q)

tto10q83107.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended August 31, 2007

o 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: 001-33292

TORTOISE CAPITAL RESOURCES CORPORATION

(Exact name of registrant as specified in its charter)

MARYLAND		20-3431375
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

10801 MASTIN BOULEVARD, SUITE 222

OVERLAND PARK, KANSAS 66210

(Address of principal executive office) (Zip Code)

(913) 981-1020

(Registrant’s telephone number, including area code)

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 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 x No o.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check One):

PART I.		FINANCIAL INFORMATION

Item 1.		Financial Statements

		Statements of Assets and Liabilities as of August 31, 2007 (unaudited) and November 30, 2006
		Schedules of Investments as of August 31, 2007 (unaudited) and November 30, 2006
		Statements of Operations for the three and nine months ended August 31, 2007 (unaudited), the three months ended August 31, 2006 (unaudited) and the period from December 8, 2005 (Commencement of Operations) through August 31, 2006 (unaudited)
		Statements of Changes in Net Assets for the nine months ended August 31, 2007 (unaudited), the period from December 8, 2005 (Commencement of Operations) through August 31, 2006 (unaudited) and the period from December 8, 2005 (Commencement of Operations) through November 30, 2006
		Statements of Cash Flows for the nine months ended August 31, 2007 (unaudited) and the period from December 8, 2005 (Commencement of Operations) through August 31, 2006 (unaudited)
		Financial Highlights for the nine months ended August 31, 2007 (unaudited), the period from December 8, 2005 (Commencement of Operations) through August 31, 2006 (unaudited) and the period from December 8, 2005 (Commencement of Operations) through November 30, 2006
		Notes to Financial Statements (unaudited)

Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3.		Quantitative and Qualitative Disclosure About Market Risk

Item 4.		Controls and Procedures

PART II.		OTHER INFORMATION

Item 1.		Legal Proceedings

Item 1A.		Risk Factors

Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.		Defaults Upon Senior Securities

Item 4.		Submission of Matters to a Vote of Security Holders

Item 5.		Other Information

Item 6.		Exhibits

SIGNATURES

Tortoise Capital Resources Corporation
STATEMENTS OF ASSETS & LIABILITIES

	August 31, 2007			November 30, 2006
	(Unaudited)
Assets
Investments at value, non-affiliated (cost $33,145,714 and $21,867,831, respectively)	$	39,179,233		$	22,196,689
Investments at value, affiliated (cost $91,633,045 and $14,828,825, respectively)		93,648,840			14,828,825
Investments at value, control (cost $20,713,593 and $5,550,000, respectively)		21,503,255			5,550,000
Total investments (cost $145,492,352 and $42,246,656, respectively)		154,331,328			42,575,514
Distribution receivable from affiliated investment		66,667			-
Interest receivable from control investments		143,277			43,983
Other receivable from affiliate		-			44,487
Dividends receivable		1,849			24,262
Prepaid expenses and other assets		138,297			244,766
Total assets		154,681,418			42,933,012

Liabilities
Management fees payable to Adviser		517,455			112,765
Accrued capital gain incentive fees payable to Adviser (Note 4)		1,325,846			-
Payable for investments purchased		3,836,237			-
Dividend payable on common shares		1,591,484			-
Short-term borrowings		22,500,000			-
Accrued expenses and other liabilities		378,947			155,303
Current tax liability		-			86,386
Deferred tax liability		2,747,064			250,156
Total liabilities		32,897,033			604,610
Net assets applicable to common stockholders	$	121,784,385		$	42,328,402

Net Assets Applicable to Common Stockholders Consist of
Warrants, no par value; 945,774 issued and outstanding
at August 31, 2007 and 772,124 issued and outstanding at
November 30, 2006 (5,000,000 authorized)	$	1,370,957		$	1,104,137
Capital stock, $0.001 par value; 8,842,330 shares issued and
outstanding at August 31, 2007 and 3,088,596 issued and outstanding
at November 30, 2006 (100,000,000 shares authorized)		8,842			3,089
Additional paid-in capital		117,043,347			41,018,413
Accumulated net investment loss, net of deferred tax benefit		(2,126,300	)		-
Accumulated realized gain (loss), net of deferred tax expense		7,595			(906	)
Net unrealized appreciation of investments, net of deferred tax expense		5,479,944			203,669
Net assets applicable to common stockholders	$	121,784,385		$	42,328,402

Net Asset Value per common share outstanding (net assets applicable
to common shares, divided by common shares outstanding)	$	13.77		$	13.70




See Accompanying Notes to the Financial Statements

Tortoise Capital Resources Corporation
SCHEDULES OF INVESTMENTS
August 31, 2007
(Unaudited)

Company	Energy Infrastructure Segment	Type of Investment	Cost		Value
Control Investments ⁽¹⁾
Mowood, LLC	Downstream	Equity Interest (100%) ⁽²⁾	$	1,500,000	$	1,590,786
		Subordinated Debt (12% Due 7/1/2016) ⁽²⁾		7,050,000		7,050,000
VantaCore Partners LP	Aggregate	Common Units (425,000) ⁽²⁾		8,413,593		9,112,469
		Subordinated Debt (10.90% Due 5/21/2014) ^{(2) (3)}		3,750,000		3,750,000
		Incentive Distribution Rights (789 units)^{(2) (6)}		-		-
Total Control Investments - 17.7% ⁽⁴⁾				20,713,593		21,503,255

Affiliated Investments ⁽⁵⁾
High Sierra Energy, LP	Midstream	Common Units (999,614) ⁽²⁾		24,054,618		27,279,466
International Resource Partners LP	Coal	Common Units (500,000) ⁽²⁾		9,960,000		10,000,000
LONESTAR Midstream Partners, LP	Midstream	Common Units (1,169,776) ^{(2) (6)}		23,395,520		23,395,520
LSMP GP, LP	Midstream	Incentive Distribution Rights (180 units) ^{(2) (7)}		549,142		549,142
Quest Midstream Partners, L.P.	Midstream	Common Units (945,946) ⁽²⁾		16,857,315		15,836,890
Millennium Midstream Partners, LP	Midstream	Class A Common Units (875,000) ⁽²⁾		16,797,880		16,587,822
		Incentive Distribution Rights (78 units) ^{(2) (7)}		18,570		-
Total Affiliated Investments -76.9% ⁽⁴⁾				91,633,045		93,648,840

Non-affiliated Investments
Abraxas Energy Partners, L.P.	Upstream	Common Units (450,181) ⁽²⁾		7,438,430		7,500,015
Eagle Rock Energy Partners, L.P.	Midstream	Common Units (659,071)		11,125,106		14,453,427
EV Energy Partners, L.P.	Upstream	Common Units (217,391) ⁽²⁾		7,456,512		7,499,555
Legacy Reserves LP	Upstream	Limited Partner Units (264,705)		3,973,539		6,143,803
High Sierra Energy GP, LLC	Midstream	Equity Interest (2.37%) ⁽²⁾		2,416,814		2,847,120
First American Government Obligations Fund	Short-term investment	Class Y		735,313		735,313
Total Non-affiliated Investments - 32.1% ⁽⁴⁾				33,145,714		39,179,233

Total Investments - 126.7%⁽⁴⁾			$	145,492,352	$	154,331,328

(1) Control investments are generally defined under the Investment Company Act of 1940 as companies in which
at least 25% of the voting securities are owned; see Note 7 to the financial statements for further disclosure.
(2) Fair valued securities have a total value of $132,998,785, which represents 109.2% of net assets applicable to common
stockholders. These securities are deemed to be restricted; see Note 6 to the financial statements for further disclosure.
(3) Security is a variable rate instrument. Interest rate is as of August 31, 2007.
(4) Calculated as a percentage of net assets applicable to common stockholders.
(5) Affiliated investments are generally defined under the Investment Company Act of 1940 as companies in which
at least 5% of the voting securities are owned. Affiliated investments in which at least 25% of the voting securities are
owned are generally defined as control investments as described in footnote 1; see Note 7 to the financial statements for further disclosure.
(6) Distributions are paid in kind.
(7) Currently non-income producing.




*See Accompanying Notes to the Financial Statements*

Tortoise Capital Resources Corporation
STATEMENTS OF OPERATIONS (Unaudited)

	For the three months ended			For the three months ended			For the nine months ended			Period from December 8, 2005 ⁽¹⁾ through
	August 31, 2007			August 31, 2006			August 31, 2007			August 31, 2006
Investment Income
Distributions received from investments
Non-affiliated investments	$	532,992		$	350,993		$	1,228,864		$	350,993
Affiliated investments		1,328,533			-			2,661,815			-
Control investments		148,080			-			148,080			-
Total distributions received from investments		2,009,605			350,993			4,038,759			350,993
Less return of capital on distributions
Non-affiliated investments		(400,584	)		(297,054	)		(1,289,732	)		(297,054	)
Affiliated investments		(1,065,404	)		-			(2,140,454	)		-
Control investments		(86,407	)		-			(86,407	)		-
Net distributions from investments		457,210			53,939			522,166			53,939
Dividends from money market mutual funds		38,726			263,085			620,385			1,014,086
Interest income from control investments		306,738			131,100			597,614			131,100
Total Investment Income		802,674			448,124			1,740,165			1,199,125

Expenses
Base management fees		512,894			163,364			1,360,973			469,527
Capital gain incentive fees (Note 4)		(170,648	)		-			1,325,846			-
Professional fees		187,014			61,701			401,862			145,298
Directors' fees		25,205			12,929			73,578			56,672
Administrator fees		24,193			-			54,929			-
Reports to stockholders		10,083			-			26,388			15,810
Fund accounting fees		9,294			6,599			23,571			19,008
Stock transfer agent fees		3,180			3,680			10,460			13,689
Custodian fees and expenses		3,044			1,615			8,189			5,053
Registration fees		14,686			-			22,749			-
Other expenses		16,944			486			34,936			11,335
Total Expenses before Interest Expense,
Preferred Stock Dividends and Loss on Redemption of Preferred Stock		635,889			250,374			3,343,481			736,392
Interest expense		229,692			-			347,402			-
Preferred stock dividends		-			-			228,750			-
Loss on redemption of preferred stock		-			-			731,713			-
Total Interest Expense, Preferred Stock Dividends
and Loss on Redemption of Preferred Stock		229,692			-			1,307,865			-
Total Expenses		865,581			250,374			4,651,346			736,392
Net Investment Income (Loss), before Income Taxes		(62,907	)		197,750			(2,911,181	)		462,733
Current tax benefit (expense)		42,732			(59,732	)		42,732			(155,687	)
Deferred tax benefit (expense)		(5,109	)		11,904			742,149			11,904
Total tax benefit (expense)		37,623			(47,828	)		784,881			(143,783	)
Net Investment Income (Loss)		(25,284	)		149,922			(2,126,300	)		318,950

Realized and Unrealized Gain (Loss) on Investments
Net realized gain on investments, before deferred tax expense		-			-			13,712			-
Deferred tax expense		-			-			(5,211	)		-
Net Realized Gain on Investments		-			-			8,501			-
Net unrealized appreciation (depreciation) of non-affiliated investments		(1,821,769	)		297,054			5,686,094			297,054
Net unrealized appreciation of affiliated investments		68,414			-			2,034,365			-
Net unrealized appreciation of control investments		615,708			-			789,662			-
Net unrealized appreciation (depreciation), before deferred taxes		(1,137,647	)		297,054			8,510,121			297,054
Deferred tax benefit (expense)		432,306			(115,851	)		(3,233,846	)		(115,851	)
Net unrealized appreciation (depreciation) of investments		(705,341	)		181,203			5,276,275			181,203
Net Realized and Unrealized Gain (Loss) on Investments		(705,341	)		181,203			5,284,776			181,203

Net Increase (Decrease) in Net Assets Applicable to Common Stockholders
Resulting from Operations	$	(730,625	)	$	331,125		$	3,158,476		$	500,153

Net Increase (Decrease) in Net Assets Applicable to Common Stockholders
Resulting from Operations Per Common Share
Basic and diluted	$	(0.08	)	$	0.11		$	0.43		$	0.16

Weighted Average Shares of Common Stock Outstanding:
Basic and diluted		8,840,487			3,088,596			7,387,780			3,088,596


⁽¹⁾ Commencement of Operations.




*See Accompanying Notes to the Financial Statements*

Tortoise Capital Resources Corporation
STATEMENTS OF CHANGES IN NET ASSETS

	For the nine months ended			Period from December 8, 2005 ⁽¹⁾ through			Period from December 8, 2005 ⁽¹⁾through
	August 31, 2007			August 31, 2006			November 30, 2006
	(Unaudited)			(Unaudited)

Operations
Net investment income (loss)	$	(2,126,300	)	$	318,950		$	733,276
Net realized gain (loss) on investments		8,501			-			(906	)
Net unrealized appreciation on investments		5,276,275			181,203			203,669
Net increase in net assets applicable to common stockholders resulting from operations		3,158,476			500,153			936,039

Dividends and Distributions to Common Stockholders
Net investment income		-			(224,893	)		(639,220	)
Return of capital		(3,314,379	)		(207,511	)		(410,903	)
Total dividends and distributions to common stockholders		(3,314,379	)		(432,404	)		(1,050,123	)

Capital Share Transactions
Proceeds from private offerings of 3,066,667 common shares		-			44,895,868			44,895,868
Proceeds from issuances of 772,124 warrants		-			1,104,137			1,104,137
Proceeds from initial public offering of 5,740,000 common shares		86,100,000			-			-
Proceeds from issuance of 185,000 warrants		283,050			-			-
Proceeds from exercise of 11,350 warrants		170,250			-			-
Underwriting discounts and offering expenses associated with the issuance of
common shares		(6,983,951	)		(3,769,372	)		(3,769,373	)
Issuance of 2,384 common shares from reinvestment of dividend distributions to stockholders		42,537			-			-
Net increase in net assets, applicable to common stockholders, from capital share transactions		79,611,886			42,230,633			42,230,632
Total increase in net assets applicable to common stockholders		79,455,983			42,298,382			42,116,548

Net Assets
Beginning of period		42,328,402			211,854			211,854
End of period	$	121,784,385		$	42,510,236		$	42,328,402
Accumulated net investment income (loss) net of deferred tax expense (benefit), at end of period	$	(2,126,300	)	$	-		$	-

⁽¹⁾ Commencement of Operations.




*See Accompanying Notes to the Financial Statements*

Tortoise Capital Resources Corporation
STATEMENT OF CASH FLOWS (Unaudited)
	For the nine months ended August 31, 2007			Period from December 8, 2005 ⁽¹⁾ through August 31, 2006
Cash Flows From Operating Activities
Distributions received from investments	$	3,972,092		$	350,993
Interest and dividend income received		1,141,118			1,009,772
Purchases of long-term investments		(107,608,442	)		(23,549,991	)
Proceeds from sales of long-term investments		-			1,000,000
Proceeds (purchases) of short-term investments, net		4,696,101			(20,649,152	)
Interest expense paid		(193,127	)		-
Preferred stock dividends		(228,750	)		-
Current tax expense paid		(19,362	)		-
Operating expenses paid		(1,634,910	)		(698,165	)
Net cash used in operating activities		(99,875,280	)		(42,536,543	)
Cash Flows from Financing Activities
Issuance of common stock (including warrant exercises)		86,270,250			46,000,005
Common stock issuance costs		(6,765,958	)		(3,769,372	)
Issuance of preferred stock		18,216,950			-
Redemption of preferred stock		(18,870,000	)		-
Preferred stock issuance costs		(78,654	)		-
Issuance of warrants		283,050			-
Advances from revolving line of credit		36,500,000			-
Repayments on revolving line of credit		(14,000,000	)		-
Dividends paid to common stockholders		(1,680,358	)		-
Net cash provided by financing activities		99,875,280			42,230,633
Net decrease in cash		-			(305,910	)
Cash--beginning of period		-			305,910
Cash--end of period	$	-		$	-


Reconciliation of net increase in net assets applicable to common stockholders
resulting from operations to net cash used in operating activities
Net increase in net assets applicable to common stockholders resulting from operations	$	3,158,476		$	500,153
Adjustments to reconcile net increase in net assets applicable to common stockholders
resulting from operations to net cash used in operating activities
Purchases of long-term investments		(111,444,679	)		(23,549,991	)
Return of capital on distributions received		3,516,593			297,054
Proceeds from sales of long-term investments					1,000,000
Proceeds (purchases) of short-term investments, net		4,696,101			(20,649,152	)
Accrued capital gain incentive fees payable to Adviser		1,325,846			-
Deferred income tax expense		2,496,908			103,947
Realized gains on investments		(13,712	)		-
Amortization of issuance costs		2,110			-
Loss on redemption of preferred stock		731,713			-
Net unrealized appreciation of investments		(8,510,121	)		(297,054	)
Changes in operating assets and liabilities
Increase in interest, dividend and distribution receivable		(143,548	)		(135,414	)
Increase in prepaid expenses and other assets		(22,997	)		(98,156	)
Increase (decrease) in current tax liability		(86,386	)		155,687
Increase in management fees payable to Adviser		404,690			108,987
Increase in payable for investments purchased		3,836,237			-
Increase in accrued expenses and other liabilities		177,489			27,396
Total adjustments		(103,033,756	)		(43,036,696	)
Net cash used in operating activities	$	(99,875,280	)	$	(42,536,543	)
Non-Cash Financing Activities
Reinvestment of distributions by common stockholders in additional common shares	$	42,537		$	-


⁽¹⁾ Commencement of Operations.




*See Accompanying Notes to the Financial Statements*

Tortoise Capital Resources Corporation
FINANCIAL HIGHLIGHTS

	For the nine months ended			Period from December 8, 2005 ⁽¹⁾ through			Period from December 8, 2005 ⁽¹⁾ through
	August 31, 2007			August 31, 2006			November 30, 2006
	(Unaudited)			(Unaudited)

Per Common Share Data ⁽²⁾
Net Asset Value, beginning of period	$	13.70		$	-		$	-
Initial offering price		-			15.00			15.00
Premium less underwriting discounts and offering costs on initial public
offering of common shares ⁽³⁾		0.01			-			-
Underwriting discounts and offering costs on issuance of common shares		-			(1.22	)		(1.22	)
Income from Investment Operations:
Net investment income (loss) ⁽⁴⁾		(0.24	)		0.07			0.21
Net realized and unrealized gain on investments ⁽⁴⁾		0.74			0.05			0.05
Total increase from investment operations		0.50			0.12			0.26
Less Dividends and Distributions to Common Stockholders:
Net investment income		-			(0.07	)		(0.21	)
Return of capital		(0.44	)		(0.07	)		(0.13	)
Total dividends and distributions to common stockholders		(0.44	)		(0.14	)		(0.34	)
Net Asset Value, end of period	$	13.77		$	13.76		$	13.70
Per common share market value, end of period ⁽⁵⁾	$	14.45		N/A			N/A
Total Investment Return, including capital gain incentive fees, based on net asset value ⁽⁶⁾		3.38	%		(7.33	)%		(6.39	)%
Total Investment Return, excluding capital gain incentive fees, based on net asset value ⁽⁶⁾		4.51	%		(7.33	)%		(6.39	)%
Total Investment Return, based on market value ⁽⁷⁾		(1.62	)%	N/A			N/A
Supplemental Data and Ratios
Net assets applicable to common stockholders, end of period (000's)	$	121,784		$	42,510		$	42,328
Ratio of expenses (including current and deferred income tax expense
and capital gain incentive fees) to average net assets: ^{(8) (9) (10)}		9.16	%		3.24	%		3.64	%
Ratio of expenses (excluding current and deferred income tax expense)
to average net assets: ^{(8) (11)}		6.00	%		2.39	%		2.40	%
Ratio of expenses (excluding current and deferred income tax expense
and capital gain incentive fees) to average net assets: ^{(8) (11) (12)}		4.29	%		2.39	%		2.40	%
Ratio of net investment income (loss) to average net assets before current
and deferred income tax expense and capital gain incentive fees: ^{(8) (11) (12)}		(2.04	)%		1.50	%		2.71	%
Ratio of net investment income (loss) to average net assets before current
and deferred income tax expense : ^{(8) (10) (11)}		(3.75	)%		1.50	%		2.71	%
Ratio of net investment income (loss) to average net assets after current
and deferred income tax expense and capital gain incentive fees: ^{(8) (9) (10)}		(6.91	)%		6.50	%		1.47	%
Portfolio turnover rate ^{(8) (13)}		0.00	%		6.38	%		9.51	%

⁽¹⁾ Commencement of Operations.
⁽²⁾ Information presented relates to a share of common stock outstanding for the entire period.
⁽³⁾ Represents the premium on the initial public offering of $1.17 per share, less the underwriting discounts and offering costs of $1.16 per share.
⁽⁴⁾ The per common share data for the period from December 8, 2005 through August 31, 2006 and the period from December 8, 2005 through November 30, 2006
do not reflect the change in estimate of investment income and return of capital for the respective period. See Note 2D to the financial statements for further disclosure.
⁽⁵⁾ Per common share market value for the period from December 8, 2005 through August 31, 2006 and the period from December 8, 2005 through November 30, 2006
not applicable as shares were not publicly traded.
⁽⁶⁾ Not annualized for periods less than a year. Total investment return is calculated assuming a purchase of common stock at the initial offering price,
reinvestment of dividends at actual prices pursuant to the Company's dividend reinvestment plan or net asset value, as applicable, and a sale at net asset value, end of period.
Total investment return does not reflect brokerage commissions.
⁽⁷⁾ Not annualized for periods less than a year. Total investment return is calculated assuming a purchase of common stock at the initial public offering price,
reinvestment of dividends at actual prices pursuant to the Company's dividend reinvestment plan or market value, as applicable, and a sale at the current market price
on the last day of the period reported (excluding brokerage commissions). Total investment return on a market value basis is shown for the period from February 7, 2007
(the Company's initial public offering) through August 31, 2007. Total investment return does not reflect brokerage commissions.
⁽⁸⁾ Annualized for periods less than one full year.
⁽⁹⁾ For the nine months ended August 31, 2007, the Company accrued $42,732 in current income tax benefit and $2,496,908 in deferred income tax expense.
For the period from December 8, 2005 through August 31, 2006, the Company accrued $155,687 in current income tax expense, and $103,947 in net deferred income tax expense.
For the period from December 8, 2005 through November 30, 2006, the Company accrued $265,899 in current income tax expense, and $250,156 in net deferred income tax expense.
⁽¹⁰⁾ For the nine months ended August 31, 2007, the Company accrued $1,325,846 in capital gain incentive fees. There were no capital gain incentive fees accrued for the period from
December 8, 2005 through August 31, 2006 or the period from December 8, 2005 through November 30, 2006.
⁽¹¹⁾ The ratio excludes the impact of current and deferred income taxes.
⁽¹²⁾The ratio excludes the impact of capital gain incentive fees.
⁽¹³⁾There were no sales during the nine months ended August 31, 2007. The recognition of realized gains was related to a reclassification of the amount of
investment income and return of capital recognized based on the 2006 tax reporting information received from portfolio companies.
See Note 2D to the financial statements for further disclosure.




*See Accompanying Notes to the Financial Statements*

	August 31, 2007		November 30, 2006
Deferred tax assets:
Organization costs	$	29,843	$	31,532
Capital gain incentive fees		503,822		-
Net operating loss carryforwards		1,043,747		-
		1,577,412		31,532
Deferred tax liabilities:
Net unrealized gains on investment securities		3,358,813		124,967
Basis reduction of investment in MLPs		965,663		156,721
		4,324,476		281,688
Total net deferred tax liability	$	2,747,064	$	250,156

	For the three			For the three
	months ended			months ended
	August 31, 2007			August 31, 2006

Application of statutory income tax rate	$	(453,224	)	$	146,891
State income taxes, net of federal taxes		(46,594	)		16,788
Other, net		29,889			-
Total tax expense (benefit)	$	(469,929	)	$	163,679

	For the nine		For the period
	months ended		December 8, 2006 to
	August 31, 2007		August 31, 2006

Application of statutory income tax rate	$	1,863,266	$	265,926
State income taxes, net of federal taxes		225,934		30,391
Preferred dividends		86,925		-
Loss on redemption of preferred stock		278,051		-
Change in deferred tax valuation allowance		-		(36,683	)
Total tax expense	$	2,454,176	$	259,634

Midstream	66%
Upstream	14%
Coal/Aggregate	14%
Downstream	6%
Total	100%

Record Date	Payment Date	Amount
August 21, 2007	September 4, 2007	$0.18
May 22, 2007	June 1, 2007	$0.16
January 31, 2007	February 7, 2007	$0.10

	Total	Fiscal 2007	Fiscal 2008	Fiscal 2009	Fiscal 2010	Fiscal 2011	After 2011
	(in millions)
Secured revolving credit facility ⁽¹⁾	$22.5	$22.5	-
Purchase commitment ⁽²⁾	$ 3.8	$ 2.6	$ 1.2
	$26.3	$25.1	$1.2

August 31, 2007 Investment Security		Equity Interest, Units or Principal Amount	Acquisition Dates	Acquisition Cost	Value Per Unit	Percent of Net Assets
Abraxas Energy Partners, L.P.	Common Units	450,181	5/25/07	$7,500,015	$16.66	6.2%
EV Energy Partners, L.P.	Common Units	217,391	6/1/07	7,499,990	34.50	6.2
High Sierra Energy, LP	Common Units	999,614	11/2/06, 6/15/07	24,828,836	27.29	22.3
High Sierra Energy GP, LLC	Equity Interest	2.37%	11/2/06, 5/1/07	2,421,186	N/A	2.3
International Resource Partners LP	Class A Common Units	500,000	6/12/07	10,000,000	20.00	8.2
LONESTAR Midstream Partners, LP	Class A Common Units	1,169,776	7/27/07	23,395,520	20.00	19.2
LSMP GP, LP	GP LP Units	180	7/27/07	549,142	3,050.79	0.5
Millennium Midstream Partners, LP	Class A Common Units	875,000	12/28/06	17,481,430	18.96	13.6
Millennium Midstream Partners, LP	Incentive Distribution Rights	78	12/28/06	18,570	-	-
Mowood, LLC	Equity Interest	100%	6/5/06, 5/4/07	1,500,000	N/A	1.3
Mowood, LLC	Subordinated Debt	$7,050,000	6/5/06, 5/4/07, 6/29/07	7,050,000	N/A	5.8
Quest Midstream Partners, L.P.	Common Units	945,946	12/22/06	17,500,001	16.74	13.0
VantaCore Partners LP	Common Units	425,000	5/21/07	8,500,000	21.44	7.5
VantaCore Partners LP	Incentive Distribution Rights	789	5/21/07	-	-	-
VantaCore Partners LP	Subordinated Debt	$3,750,000	5/21/07	3,750,000	N/A	3.1
				$131,994,690		109.2%

November 30, 2006 Investment Security		Equity Interest, Units or Principal Amount	Acquisition Date	Acquisition Cost	Value Per Unit	Percent of Net Assets
Eagle Rock Energy Partners, L.P.	Common Units	474,071	3/27/06	$12,058,401	$18.00	20.1%
High Sierra Energy, LP	Common Units	633,179	11/2/06	14,828,825	23.42	35.0
High Sierra Energy GP, LLC	Option to Purchase Equity Interest	3%	11/2/06	171,186	N/A	0.4
Legacy Reserves LP	Limited Partner Units	264,705	3/14/06	4,499,985	17.25	10.8
Mowood, LLC	Equity Interest	100%	6/5/06	1,000,000	N/A	2.4
Mowood, LLC	Subordinated Debt	$4,550,000	6/5/06	4,550,000	N/A	10.8
				$37,108,397		79.5%

	Units/ Equity Interest/ Principal Balance 11/30/06	Gross Additions	Gross Reductions	Gross Distributions	August 31, 2007
	Units/ Equity Interest/ Principal Balance 11/30/06	Gross Additions	Gross Reductions	Gross Distributions	Units/ Equity Interest/ Principal Balance	Value
High Sierra Energy, LP	633,179	$10,000,011	-	$1,032,291	999,614	$27,279,466
International Resource Partners LP	-	10,000,000	-	66,667	500,000	10,000,000
LONESTAR Midstream Partners, LP	-	23,395,520	-	-	1,169,776	23,395,520
LSMP GP, LP	-	549,142	-	-	180	549,142
Millennium Midstream Partners, LP Class A Common Units	-	17,481,430	-	759,500	875,000	16,587,822
Millennium Midstream Partners, LP Incentive Distribution Rights	-	18,570	-	-	78	-
Mowood, LLC Subordinated Debt	$4,550,000	2,500,000	-	-	$7,050,000	7,050,000
Mowood, LLC Equity Interest	100%	500,000	-	57,125	100%	1,590,786
Quest Midstream Partners, L.P.	-	17,500,001	-	803,357	945,946	15,836,890
VantaCore Partners LP Subordinated Debt	-	3,750,000	-	-	$3,750,000	3,750,000
VantaCore Partners LP Common Units	-	8,500,000	-	90,955	425,000	9,112,469
VantaCore Partners LP Incentive Distribution Rights	-	-	-	-	789	-
		$94,194,674	-	$2,809,895		$115,152,095

Shares at November 30, 2006			3,088,596
Shares sold through initial public offering			5,740,000
Shares issued through reinvestment of dividends			2,384
Shares issued upon exercise of warrants			11,350
Shares at August 31, 2007			8,842,330

Warrants at November 30, 2006	772,124
Warrants issued in December 2006	185,000
Warrants exercised	(11,350	)
Warrants at August 31, 2007	945,774

	For the three months ended August 31, 2007			For the three months ended August 31, 2006		For the nine months ended August 31, 2007		Period from December 8, 2005 (Commencement of Operations) through August 31, 2006

Net increase (decrease) in net assets applicable to common stockholders resulting from operations	$	(730,625	)	$	331,125	$	3,158,476	$	500,153
Basic weighted average shares		8,840,487			3,088,596		7,387,780		3,088,596
Average warrants outstanding		-			-		-		-
Diluted weighted average shares		8,840,487			3,088,596		7,387,780		3,088,596
Basic and diluted net increase (decrease) in net assets applicable to common stockholders resulting from operations per common share	$	(0.08	)	$	0.11	$	0.43	$	0.16

Distributable Cash Flow (unaudited)
	For the three months ended			For the nine months ended
	August 31, 2007			August 31, 2007
Total Distributions Received from Investments
Distributions received from equity investments	$	2,009,605		$	4,038,759
Interest income from debt investments		306,738			597,614
Dividend and interest income on short-term investments		38,726			620,385
Total from Investments		2,355,069			5,256,758

Operating Expenses Before Leverage Costs and Current Taxes
Advisory fees
Other operating expenses (excluding capital gain incentive fees)		293,643			656,662
		806,537			2,017,635
Distributable cash flow before leverage costs and current taxes		1,548,532			3,239,123
Leverage Costs		229,692			576,152
Distributable Cash Flow	$	1,318,840		$	2,662,971

DCF/GAAP Reconciliation
Adjustments to reconcile to Net Investment Income (Loss), before Income Taxes
Return of capital on distributions received from equity investments		(1,552,395	)		(3,516,593	)
Capital gain incentive fees		170,648			(1,325,846	)
Loss on redemption of preferred stock		-			(731,713	)
Net Investment Income (Loss), before Income Taxes	$	(62,907	)	$	(2,911,181	)

Exhibit		Description

4.1		Dividend Reinvestment Plan (as amended effective June 1, 2007), is filed herewith

10.1		First Amendment to Credit Agreement, dated as of July 18, 2007, by and among the Company and U.S. Bank, N.A. as a lender, agent and lead arranger, and Bank of Oklahoma, N.A., which is attached as Exhibit 10.1 to the Form 8-K filed on July 20, 2007, is hereby incorporated by reference as Exhibit 10.1

31.1		Certification by Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, is filed herewith

31.2	Cer	Certification by Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, is filed herewith

32.1		Certification by Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, is furnished herewith

	TORTOISE CAPITAL RESOURCES CORPORATION

Date: October 12, 2007	By:	/s/ Terry C. Matlack
		Terry C. Matlack
		Chief Financial Officer