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Item 1A. Risk Factors

2024-02-29 compared with 2023-03-13 · 1569 added, 1869 removed, 196 unchanged (95% of the section changed)

Investing in our Shares involves a number

of significant risks.

Before you invest in our Shares, you should be aware of various risks, including those described below.

set out below are not the only risks we face.

Additional risks and uncertainties not presently known to us or not presently deemed material

by us may also impair our operations and performance.

If any of the following events occur, our business, financial condition, results

of operations and cash flows could be materially and adversely affected.

In such case, our NAV could decline, and you may lose all or

part of your investment.

The risk factors described below are the principal risk factors associated with an investment in us as well

as those factors generally associated with an investment company with investment objectives, investment policies, capital structure or

trading markets similar to ours.

SUMMARY OF RISK FACTORS

Investing in our Shares involves a number

of significant risks.

You should carefully consider information found in the section entitled “Item 1A.

Risk Factors” and

elsewhere in this annual report on Form 10-K.

Some of the risks involved in investing in our Shares include:

● We are subject to all of the business risks and uncertainties associated

with any business with a limited operating history, including the risk that we will not achieve

our investment objective and that the value of our Shares could decline substantially.

are an “emerging growth company” under the JOBS Act, and we cannot be certain

if the reduced disclosure requirements applicable to emerging growth companies will make

our Shares less attractive to investors.

● We finance our investments with borrowed money.

Our inability to access

leverage in a timely fashion may inhibit our ability to make timely investments.

● Regulations

governing our operation as a BDC affect our ability to, and the way in which we, raise additional

As a BDC, the necessity of raising additional capital exposes us to risks, including

the typical risks associated with leverage.

is no public market for our Shares, nor can we give any assurance that one will develop in

may not complete a liquidity event within a specific time period, if at all, and, as a result,

investment in our Shares is not suitable if you require short-term liquidity with respect

to your investment in us.

you will be unable to sell your Shares until we complete a liquidity event, you will be unable

to reduce your exposure in a market downturn.

generally will not control the business operations of our portfolio companies and, due to

the illiquid nature of our holdings in our portfolio companies, we may not be able to dispose

of our interests in our portfolio companies.

collateral securing our first-lien debt may decrease in value over time, may be difficult

to value, and may become subordinated to the claims of other creditors.

investments in second-lien and subordinate loans generally will be subordinated to senior

loans and will either have junior security interests or be unsecured, which may result in

greater risk and loss of principal.

of the loans in which we may invest may be “covenant-lite” loans, which may have

a greater risk of loss as compared to investments in or exposure to loans with financial

maintenance covenants.

investment strategy focused primarily on privately held companies presents certain challenges,

including the lack of available information about these companies.

is no public market or active secondary market for many of the investments that we intend

to make and hold and as a result, these investments may be deemed illiquid.

portfolio may be concentrated in a limited number of portfolio companies and industries,

which will subject us to a risk of significant loss if any of these companies defaults on

its obligations under any of its debt instruments or if there is a downturn in a particular

may make investments in highly levered companies.

Price declines in the corporate leveraged

loan market may adversely affect the fair value of our portfolio, reducing our net asset

value through increased net unrealized depreciation and the incurrence of realized losses.

amount of any distributions we may make on our Shares is uncertain.

We may not be able to

pay you distributions, or be able to sustain distributions at any particular level, and our

distributions per share, if any, may not grow over time, and our distributions per share

may be reduced.

the extent original issue discount (“OID”), and payment-in-kind (“PIK”),

interest income constitute a portion of our income, we will be exposed to risks associated

with the deferred receipt of the cash representing such income.

Advisor and its affiliates, including our officers and some of our directors, may face conflicts

of interest caused by compensation arrangements with us and our affiliates, which could result

in increased risk-taking by us.

business model depends to a significant extent upon strong referral relationships with private

equity sponsors, financial intermediaries, direct lending institutions and other counterparties

that are active in our markets.

Any inability of the Advisor to maintain or develop these

relationships, or the failure of these relationships to generate investment opportunities,

could adversely affect our business.

Advisor may frequently be required to make investment analyses and decisions on an expedited

basis in order to take advantage of investment opportunities, and our Advisor may not have

knowledge of all circumstances that could impact an investment by the Company.

management and incentive fee structure may create incentives for the Advisor that are not

fully aligned with the interests of our stockholders and may induce the Advisor to make speculative

we do not invest a sufficient portion of our assets in qualifying assets, we could fail to

qualify as a BDC or be precluded from investing according to our current business strategy.

to comply with the Sarbanes-Oxley Act will involve significant expenditures, and non-compliance with

the Sarbanes-Oxley Act would adversely affect us and the value of our Shares.

are highly dependent on information systems, and systems failures could significantly disrupt

our business, which may, in turn, negatively affect the value of our Shares and our ability

to pay distributions.

Investing in our shares

of common stock involves a number of significant risks.

Before you invest in our shares of common stock, you should be aware of various

risks, including those described below.

The risks set out below are not the only risks we face.

Additional risks and uncertainties not

presently known to us or not presently deemed material by us may also impair our operations and performance.

If any of the following events

occur, our business, financial condition, results of operations and cash flows could be materially and adversely affected.

In such case,

our NAV could decline, and you may lose all or part of your investment.

The risk factors described below are the principal risk factors

associated with an investment in us as well as those factors generally associated with an investment company with investment objectives,

investment policies, capital structure or trading markets similar to ours.

Summary of Principal Risk Factors

Investing in our shares of

common stock involves a number of significant risks.

You should carefully consider information found in the section entitled “Risk

Factors” and elsewhere in this annual report on Form 10-K.

Some of the risks involved in investing in our shares of common stock

Principal Risks Relating to Our Business

and Structure

have a limited operating history and may not replicate the historical results achieved by other entities managed by members of the Advisor’s

investment committee, the Advisor or its affiliates.

● We use leverage pursuant to borrowings under credit facilities and

issuances of senior unsecured notes to finance our investments and changes in interest rates will affect our cost of capital and net investment

depend upon our Advisor and Administrator for our success and upon their access to the investment professionals and partners of Kayne

Anderson and its affiliates.

Any inability of the Advisor or the Administrator to maintain or develop these relationships, or the failure

of these relationships to generate investment opportunities, could adversely affect our business.

financial condition, results of operations and cash flows depend on our ability to manage our business and future growth effectively.

are significant potential conflicts of interest that could affect our investment returns, including conflicts related to obligations

the Advisor’s investment committee, the Advisor or its affiliates have to other clients and conflicts related to fees and expenses

of such other clients.

generally may make investments that could give rise to a conflict of interest and our ability to enter into transactions with our affiliates

will be restricted.

operate in a highly competitive market for investment opportunities, which could reduce returns and result in losses.

will be subject to corporate-level income tax if we are unable to qualify as a RIC.

● We finance our investments with borrowings under credit facilities

and issuances of senior unsecured notes, which will magnify the potential for gain or loss on amounts invested and may increase the risk

of investing in us.

● Adverse developments in the credit markets may impair our ability to

enter into new credit facilities or our ability to issue senior unsecured notes.

majority of our portfolio investments are recorded at fair value as determined in good faith by our Advisor and, as a result, there may

be uncertainty as to the value of our portfolio investments.

Board may change our investment objective, operating policies and strategies without prior notice or stockholder approval, and we may

temporarily deviate from our regular investment strategy.

to comply with the Exchange Act and the Sarbanes-Oxley Act will involve significant expenditures, and non-compliance would adversely

affect us and the value of our shares of common stock.

are highly dependent on information systems, and systems failures could significantly disrupt our business, which may, in turn, negatively

affect the value of our shares of common stock and our ability to pay distributions.

● We and our portfolio companies and service providers may be subject

to cybersecurity risks and our business could be adversely affected by changes to data protection laws and regulations.

Principal Risks Relating to Our Investments

interest rates could affect the value of our investments and make it more difficult for portfolio companies to make periodic payments

on their loans.

business is dependent on bank relationships and recent strain on the banking system may adversely impact us.

invest in highly leveraged companies, which could cause us to lose all or a part of our investment in those companies.

lack of liquidity in our investments may adversely affect our business.

prospective portfolio companies may prepay loans, which may reduce our yields if capital returned cannot be invested in transactions

with equal or greater expected yields.

Our prospective portfolio companies may be unable to repay or refinance outstanding principal on their loas at or prior to maturity.

portfolio may be concentrated in a limited number of portfolio companies and industries, which will subject us to a risk of significant

loss if any of these companies defaults on its obligations under any of its debt instruments or if there is a downturn in a particular

is no assurance that portfolio company management will be able to operate their companies in accordance with our expectations.

Risks Relating to Our Common Stock

● There is no public market for our shares of common stock, and we cannot

assure you that a market for our shares of common stock will develop in the future.

extended periods of capital market disruption and instability, there is a risk that you may not receive distributions or that our distributions

may not grow over time and a portion of our distributions may be a return of capital.

stockholders may experience dilution in their ownership percentage.

Risks Relating to Our Business and Structure

We have a limited operating history.

We commenced operations in February 2021.

We are subject to all of the business risks and uncertainties associated with any new business, including the risk that we will not achieve

our investment objective, that we will not qualify or maintain our qualification to be treated as a RIC, and that the value of your investment

could decline substantially.

The 1940 Act and the Code impose numerous

constraints on the operations of BDCs and RICs that do not apply to certain of the other investment vehicles managed by our Advisor and

its affiliates.

We have a limited operating history and

may not replicate the historical results achieved by other entities managed by members of the Advisor’s investment committee, the

Advisor or its affiliates.

We commenced operations in

February 2021.

We are subject to all of the business risks and uncertainties associated with any new business, including the risk that

we will not achieve our investment objective, that we will not qualify or maintain our qualification to be treated as a RIC, and that

the value of your investment could decline substantially.

The 1940 Act and the Code

impose numerous constraints on the operations of BDCs and RICs that do not apply to certain other investment vehicles managed by our Advisor

and its affiliates.

BDCs are required, for example, to invest at least 70% of their total assets primarily in securities of U.S.

2 unchanged sentences

in one year or less from the date of investment.

Moreover, qualification for taxation as a RIC requires satisfaction of source-of-income, asset

diversification and distribution requirements.

Moreover, qualification for taxation as a RIC requires satisfaction of source-of-income,

asset diversification and distribution requirements.

Our Advisor has a limited operating history under these constraints, which may hinder

our ability to take advantage of attractive investment opportunities and to achieve our investment objective.

Pandemics and other local, national,

and international public health emergencies, including outbreaks of infectious diseases such as SARS, H1N1/09 Flu, the Avian Flu, Ebola

and the novel coronavirus (“COVID-19”) pandemic, can result in market volatility and disruption, and any similar future emergencies

may materially and adversely impact economic production and activity in ways that cannot be predicted, all of which could result in substantial

investment losses.

Most recently, COVID-19 caused a worldwide

public health emergency, significantly diminished and disrupted global economic production and activity of all kinds, and contributed

to both volatility and a severe decline in financial markets.

The full extent of the impact of COVID-19

(and of the resulting precipitous decline and disruption in economic and commercial activity across many of the world’s economies)

on global economic conditions, and on the operations, financial condition, and performance of any particular market, industry or business,

is impossible to predict, and additional economic disruptions and market volatility may occur as new variants appear and spread.

and potential additional materially adverse effects, including further global, regional and local economic downturns (including recessions)

of indeterminate duration and severity, are possible.

Any other public health emergency could have

a significant adverse impact on our investments and result in significant investment losses.

Global economic, political and market

conditions, including uncertainty about the financial stability of the United States, could have a significant adverse effect on our business,

financial condition and results of operations.

The current worldwide financial markets situation,

as well as various social and political tensions in the United States and around the world (including wars and other forms of conflict,

terrorist acts, security operations and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes and global health

epidemics), may contribute to increased market volatility, may have long term effects on the United States and worldwide financial markets,

and may cause economic uncertainties or deterioration in the United States and worldwide.

For example, the COVID-19 pandemic adversely

impacted global commercial activity and contributed to significant volatility in financial markets.

In addition, the large-scale invasion of Ukraine

by Russia, and resulting market volatility, could adversely affect our business, financial condition or results of operations.

to the conflict between Russia and Ukraine, the U.S.

and other countries have imposed sanctions or other restrictive actions against Russia.

The ongoing conflict and the rapidly evolving measures in response could be expected to have a negative impact on the economy and business

activity globally and could have a material adverse effect on our portfolio companies and our business, financial condition, cash flows

Furthermore, our investments

may differ from those of existing accounts that are or have been managed by members of the Advisor’s investment committee, the Advisor

or affiliates of the Advisor.

We cannot assure you that we will replicate the historical results achieved for other KAPC funds managed

by members of the Advisor’s investment committee, and we caution you that our investment returns could be substantially lower than

the returns achieved by them in prior periods.

Additionally, all or a portion of the prior results may have been achieved in particular

market conditions, which may never be repeated.

Moreover, current or future market volatility and regulatory uncertainty may have an adverse

impact on our future performance.

We use leverage pursuant to borrowings under

credit facilities and issuances of senior unsecured notes to finance our investments and changes in interest rates will affect our cost

of capital and net investment income.

We use leverage pursuant to borrowings under credit

facilities and issuances of senior unsecured notes and intend to further borrow under credit facilities and/or issue senior unsecured

notes in the future in order to finance our investments.

As a result, our net investment income will depend, in part, upon the difference

between the rate at which we borrow under credit facilities and senior unsecured notes and the rate at which we invest these funds.

addition, we anticipate that many of our debt investments and borrowings under credit facilities will have floating interest rates that

reset on a periodic basis, and many of our investments will be subject to interest rate floors.

As a result, a significant change in market

interest rates could have a material adverse effect on our net investment income.

See “ Risks Relating to Our Investments—Rising

interest rates could affect the value of our investments and make it more difficult for portfolio companies to make periodic payments

on their loans .”

In periods of rising interest

rates, our cost of funds will increase because we expect that the interest rates on the majority of amounts we borrow will be floating,

which could reduce our net investment income to the extent any of our debt investments have fixed interest rates.

We may use interest

rate risk management techniques in an effort to limit our exposure to interest rate fluctuations.

Such techniques may include various

interest rate hedging activities to the extent permitted by the 1940 Act and applicable commodities laws.

These activities may limit

our ability to benefit from lower interest rates with respect to hedged borrowings.

Adverse developments resulting from changes in interest

rates or hedging transactions could have a material adverse effect on our business, financial condition and results of operations.

“ Risks Relating to Our Investments—We may be subject to risks under hedging transactions and our ability to enter into

transactions involving derivatives and financial commitment transactions may be limited.

Downgrades of the U.S.

credit rating, impending

automatic spending cuts or government shutdowns could negatively impact our liquidity, financial condition and earnings.

debt ceiling and budget deficit concerns

have increased the possibility of credit-rating downgrades or a recession in the United States.

Although U.S.

lawmakers passed legislation

to raise the federal debt ceiling on multiple occasions, including, most recently, in June 2023, ratings agencies have lowered, and threatened

to lower the long-term sovereign credit rating on the United States.

The legislation suspends the debt ceiling through early 2025 unless

Congress takes legislative action to further extend or defer it.

The impact of the increased

debt ceiling and/or downgrades to the U.S.

government’s sovereign credit rating or its perceived creditworthiness could adversely

affect the U.S.

and global financial markets and economic conditions.

Absent further quantitative easing by the U.S.

Federal Reserve,

these developments could cause interest rates and borrowing costs to rise, which may negatively impact our ability to access the debt

markets on favorable terms.

In addition, disagreement over the federal budget has caused the U.S.

federal government to shut down for

periods of time.

Continued adverse political and economic conditions could have a material adverse effect on our business, financial condition

and results of operations.

The severity and duration of the conflict and its impact on global economic and market conditions are impossible

In addition, sanctions could also result in Russia taking counter measures or retaliatory actions which could adversely impact

our business or the business of our portfolio companies, including, but not limited to, cyberattacks targeting private companies, individuals

or other infrastructure upon which our business and the business of our portfolio companies rely.

In addition, the political reunification of

China and Taiwan, over which China continues to claim sovereignty, is a highly complex issue that has included threats of invasion by

Any escalation of hostility between China and/or Taiwan would likely have a significant adverse impact not only on the value of

investments in both countries, but also on economies and financial markets globally.

We do not currently have portfolio investments with exposure to China,

Taiwan, Russia or Ukraine.

We intend to use debt to finance our

investments and changes in interest rates will affect our cost of capital and net investment income.

In addition, the interest rates

that extend beyond June 2023 might be subject to change based on recent regulatory changes.

We intend to borrow money or issue debt securities or preferred stock

to make investments.

As a result, our net investment income will depend, in part, upon the difference between the rate at which we borrow

funds or pay interest or distributions on such debt securities or preferred stock and the rate at which we invest these funds.

we anticipate that many of our debt investments and borrowings will have floating interest rates that reset on a periodic basis, and many

of our investments will be subject to interest rate floors.

As a result, a significant change in market interest rates could have a material

adverse effect on our net investment income.

During calendar 2022, the Federal Reserve raised the federal funds rate seven times and has

signaled that further increases will likely happen in 2023 in an effort to control inflation.

In periods of rising interest rates, our

cost of funds will increase because we expect that the interest rates on the majority of amounts we borrow will be floating, which could

reduce our net investment income to the extent any of our debt investments have fixed interest rates.

We may use interest rate risk management

techniques in an effort to limit our exposure to interest rate fluctuations.

Such techniques may include various interest rate hedging

activities to the extent permitted by the 1940 Act and applicable commodities laws.

These activities may limit our ability to benefit

from lower interest rates with respect to hedged borrowings.

Adverse developments resulting from changes in interest rates or hedging

transactions could have a material adverse effect on our business, financial condition and results of operations.

You should also be aware that a rise in the

general level of interest rates typically will lead to higher interest rates applicable to our debt investments, which may increase the

amount of incentive fees payable to our Advisor.

Also, an increase in interest rates available to investors could make an investment

in our Shares less attractive if we are not able to increase our distribution rate, which could reduce the value of our Shares.

The United Kingdom’s Financial Conduct Authority (“FCA”),

which regulates LIBOR, announced that certain LIBOR tenors in certain currencies ceased to be provided at the end of 2021 with all remaining

tenors ceasing to be published after June 30, 2023.

It is expected that market participants will transition to the use of different alternatives

reference or benchmark rates.

Regulators have encouraged the development and adoption of alternative rates such as the Secured Overnight

Financing Rate (“SOFR”).

The alternative reference rates that have

replaced LIBOR in our credit arrangements and other financial instruments may not yield the same or similar economic results as LIBOR

over the life of such transactions.

The London Interbank Offered

Rate (“LIBOR”) is an index rate that historically was widely used in lending transactions and was a common reference rate

for setting the floating interest rate on private loans.

LIBOR was typically the reference rate used in floating-rate loans extended to

our portfolio companies.

The ICE Benchmark Administration

(“IBA”) (the entity that is responsible for calculating LIBOR) ceased providing overnight, one, three, six and twelve months

USD LIBOR tenors on June 30, 2023.

In addition, the United Kingdom’s Financial Conduct Authority (“FCA”), which oversees the

IBA, now prohibits entities supervised by the FCA from using LIBOR, including USD LIBOR, except in very limited circumstances.

In the United States, the

SOFR is the preferred alternative rate for LIBOR.

SOFR is a measure of the cost of borrowing cash overnight, collateralized by U.S.

Treasury securities,

and is based on directly observable U.S.

securities, and is based on directly observable U.S.

Treasury-backed repurchase transactions.

Although SOFR appears to be the preferred

replacement rate for U.S.

dollar LIBOR, at this time, whether or not SOFR maintains market traction as a LIBOR replacement remains a question

and the future of LIBOR at this time is uncertain.

At this time, it is not possible to predict the effect of any such changes, any establishment

of alternative reference rates or any other reforms to LIBOR that may be enacted.

The elimination of LIBOR or any other changes or reforms

to the determination or supervision of LIBOR could have an adverse impact on the market for or value of any LIBOR-linked securities, loans,

and other financial obligations or extensions of credit held by or due to us or on our overall financial condition or results of operations.

In addition, if LIBOR ceases to exist, we may need to renegotiate the credit agreements extending beyond the LIBOR phase out date with

our portfolio companies that utilize LIBOR as a factor in determining the interest rate, in order to replace LIBOR with the new standard

that is established, which may have an adverse effect on our overall financial condition or results of operations.

Following the replacement

of LIBOR, some or all of these credit agreements may bear interest a lower interest rate, which could have an adverse impact on our results

of operations.

Moreover, if LIBOR ceases to exist, we may need to renegotiate certain terms of our credit facilities.

If we are unable

to do so, amounts drawn under our credit facilities may bear interest at a higher rate, which would increase the cost of our borrowings

and, in turn, affect our results of operations.

There remains uncertainty regarding the future

utilization of LIBOR and the nature of any replacement rate.

As such, the potential effect of a transition away from LIBOR on us or the

financial instruments in which we invest can be difficult to ascertain, and they may vary depending on factors that include, but

are not limited to:

(i) existing fallback or termination provisions in individual contracts and (ii) whether, how, and when

industry participants develop and adopt new reference rates and fallbacks for both legacy and new products and instruments.

Additionally, if as currently expected LIBOR

ceases to exist, we may need to renegotiate the credit agreements extending beyond June 30, 2023, with our credit facility lenders and

our portfolio companies that utilize LIBOR as a factor in determining the interest rate to replace LIBOR with SOFR or other alternative

reference rates, which could require us to incur significant time and expense and may subject us to disputes or litigation over the appropriateness

or comparability to the relevant replacement reference index.

The transition from LIBOR to SOFR or other alternative reference rates may

also introduce operational risks in our accounting, financial reporting, loan servicing, liability management and other aspects of our

We are in the process of transitioning our investments and our borrowings from LIBOR to SOFR and we do not expect that the transition

will have a material impact on our business, financial condition or results of operations.

Rising interest rates

could affect the value of our investments and make it more difficult for portfolio companies to make periodic payments on their loans.

Interest rate risk refers to

the risk of market changes in interest rates.

Interest rate changes affect the value of debt.

In general, rising interest rates will negatively

impact the price of fixed rate debt, and falling interest rates will have a positive effect on price.

Adjustable-rate debt also reacts

to interest rate changes in a similar manner, although generally to a lesser degree.

Interest rate sensitivity is generally larger and

less predictable in debt with uncertain payment or prepayment schedules.

Further, rising interest rates make it more difficult for borrowers

to repay debt, which could increase the risk of payment defaults.

Any failure of one or more portfolio companies to repay or refinance

its debt at or prior to maturity or the inability of one or more portfolio companies to make ongoing payments following an increase in

contractual interest rates could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Risks associated with rising interest rates are heightened given that the U.S.

Federal Reserve has begun to sharply raise interest rates

from historically low levels and has signaled an intention to continue doing so until current inflation levels align with its long-term

inflation target.

Other central banks globally have begun implementing similar rate increases.

A wide variety of factors can cause interest

rates to rise (e.g., central bank monetary policies, inflation rates, or general economic conditions).

Government intervention

in the credit markets could adversely affect our business.

The central banks and, in particular,

Federal Reserve, have taken unprecedented steps since the financial crises of 2008-2009 and the COVID-19 global pandemic and

in response to inflationary pressures.

It is impossible to predict if, how, and to what extent the United States and other governments

would further intervene in the credit markets.

Such intervention is often prompted by politically sensitive issues involving family homes,

student loans, real estate speculation, credit card receivables, pandemics, etc., and could, as a result, be contrary to what we would

predict from an “economically rational” perspective.

On the other hand, recent governmental

intervention could mean that the willingness of governmental bodies to take additional extraordinary action is diminished.

in the event of near-term major market disruptions, like those caused by the COVID-19 pandemic, there might be only limited additional

government intervention, resulting in correspondingly greater market dislocation and materially greater market risk.

We depend upon our Advisor for our

success and upon their access to the investment professionals and partners of Kayne Anderson and its affiliates.

Our portfolio is subject to management risk

because it is actively managed.

Our Advisor applies investment techniques and risk analyses in making investment decisions for us, but

there can be no guarantee that they will produce the desired results.

We depend upon Kayne Anderson’s key

personnel for our future success and upon their access to certain individuals and investment opportunities to execute on our investment

In particular, we depend on the diligence, skill and network of business contacts of our portfolio managers, who evaluate,

negotiate, structure, close and monitor our investments.

These individuals manage a number of investment vehicles on behalf of Kayne

Anderson and, as a result, do not devote all of their time to managing us, which could negatively impact our performance.

these individuals do not have long-term employment contracts with Kayne Anderson, although they do have equity interests and other financial

incentives to remain with Kayne Anderson.

We also depend on the senior management of Kayne Anderson.

The departure of any of our portfolio

managers or the senior management of Kayne Anderson could have a material adverse effect on our ability to achieve our investment objective.

In addition, we can offer no assurance that our Advisor will remain our investment advisor or that we will continue to have access to

Kayne Anderson’s industry contacts and deal flow.

Our business model depends to a significant

extent upon strong referral relationships with private equity sponsors, financial intermediaries, direct lending institutions and other

counterparties that are active in our markets.

Any inability of the Advisor to maintain or develop these relationships, or the failure

of these relationships to generate investment opportunities, could adversely affect our business.

We depend upon the Advisor’s and its

affiliates relationships with private equity sponsors, financial intermediaries, direct lending institutions and other counterparties

that are active in our markets, and we intend to rely to a significant extent upon these relationships to provide us with potential investment

opportunities.

If the Advisor fails to maintain such relationships, or to develop new relationships with other sources of investment

opportunities, we will not be able to grow our investment portfolio.

In addition, individuals with whom the principals of the Advisor

and its affiliates have relationships are not obligated to provide us with investment opportunities, and, therefore, we can offer no

assurance that these relationships will generate investment opportunities for us in the future.

We may not replicate the historical

results achieved by other entities managed or sponsored by members of the Advisor’s investment committee, or by the Advisor’s

or its affiliates.

Our investments may differ from those of

existing accounts that are or have been sponsored or managed by members of the Advisor’s investment committee, the Advisor or affiliates

of the Advisor.

With the exception of our Formation Transaction, investors in our securities are not acquiring an interest in any accounts

that are sponsored or managed by members of the Advisor’s investment committee, the Advisor or affiliates of the Advisor.

to the requirements of the 1940 Act, we may consider co-investing in portfolio investments with other accounts sponsored or

managed by members of the Advisor’s investment committee, the Advisor or its affiliates.

Any such investments are subject to regulatory

limitations and approvals by directors who are not “interested persons,” as defined in the 1940 Act.

SOFR is published by the Federal Reserve

Bank of New York each U.S.

Government Securities Business Day, for transactions made on the immediately preceding U.S.

Government Securities

Business Day.

Alternative reference rates that may replace LIBOR, including SOFR for USD transactions, may not yield the same or similar

economic results as LIBOR over the lives of such transactions.

All of our loans that referenced LIBOR have been

amended to reference the forward-looking term rate published by CME Group Benchmark Administration Limited based on the secured overnight

financing rate (“CME Term SOFR”).

CME Term SOFR rates are forward-looking rates that are derived by compounding projected

overnight SOFR rates over one, three, and six months taking into account the values of multiple consecutive, executed, one-month and three-month

CME Group traded SOFR futures contracts and, in some cases, over-the-counter SOFR Overnight Indexed Swaps as an indicator of CME Term

SOFR reference rate values.

CME Term SOFR and the inputs on which it is based are derived from SOFR.

Because CME Term SOFR is a relatively

new market rate, there will likely be no established trading market for credit agreements or other financial instruments when they are

issued, and an established market may never develop or may not be liquid.

Market terms for instruments referencing CME Term SOFR rates

may be lower than those of later-issued CME Term SOFR indexed instruments.

Similarly, if CME Term SOFR does not prove to be widely used,

the trading price of instruments referencing CME Term SOFR may be lower than those of instruments indexed to indices that are more widely

There can be no guarantee

that SOFR will not be discontinued or fundamentally altered in a manner that is materially adverse to the interests of investors in loans

referencing SOFR.

If the manner in which SOFR or CME Term SOFR is calculated is changed, that change may result in a reduction of the

amount of interest payable on such loans and the trading prices of the SOFR Loans.

In addition, there can be no guarantee that loans referencing

SOFR or CME Term SOFR will continue to reference those rates until maturity or that, in the future, our loans will reference benchmark

rates other than CME Term SOFR.

Should any of these events occur, our loans, and the yield generated thereby, could be affected.

Specifically,

the anticipated yield on our loans may not be fully realized and our loans may be subject to increased pricing volatility and market risk.

We depend upon our Advisor and Administrator

for our success and upon their access to the investment professionals and partners of Kayne Anderson and its affiliates.

Any inability

of the Advisor or the Administrator to maintain or develop these relationships, or the failure of these relationships to generate investment

opportunities, could adversely affect our business.

Our portfolio is subject to

management risk because it is actively managed.

Our Advisor applies investment techniques and risk analyses in making investment decisions

for us, but there can be no guarantee that they will produce the desired results.

We depend upon, and intend to rely significantly on,

the Advisor’s and its affiliates’ relationships with private equity sponsors, financial intermediaries, direct lending institutions

and other counterparties that are active in our markets.

We do not have any internal

management capacity or employees.

We depend upon Kayne Anderson’s key personnel for our future success and upon their access to

certain individuals and investment opportunities to execute on our investment objective.

In particular, we depend on the diligence, skill

and network of business contacts of our portfolio managers, who evaluate, negotiate, structure, close and monitor our investments.

individuals manage a number of investment vehicles on behalf of Kayne Anderson and, as a result, do not devote all of their time to managing

us, which could negatively impact our performance.

Furthermore, these individuals do not have long-term employment contracts with Kayne

Anderson, although they do have equity interests and other financial incentives to remain with Kayne Anderson.

We also depend on the senior

management of Kayne Anderson.

The departure of any of our portfolio managers or the senior management of Kayne Anderson could have a material

adverse effect on our ability to achieve our investment objective.

In addition, we can offer no assurance that our Advisor will remain

our investment advisor or that we will continue to have access to Kayne Anderson’s industry contacts and deal flow.

This could have

a material adverse effect on our financial condition, results of operations and cash flows.

We depend on the diligence,

skill and network of business contacts of the professionals available to our Administrator to carry out the administrative functions necessary

for us to operate, including the ability to select and engage sub-administrators and third-party service providers.

We can offer no assurance,

however, that we will obtain such approvals or develop opportunities that comply with such limitations.

We also cannot assure you that

we will replicate the historical results achieved for other Kayne Anderson funds by members of the investment committee, and we caution

you that our investment returns could be substantially lower than the returns achieved by them in prior periods.

Additionally, all or

a portion of the prior results may have been achieved in particular market conditions which may never be repeated.

Moreover, current

or future market volatility and regulatory uncertainty may have an adverse impact on our future performance.

Our financial condition and results

of operation depend on our ability to manage future growth effectively.

Our ability to achieve our investment objective

depends on our ability to grow, which depends, in turn, on the Advisor’s ability to identify, invest in and monitor companies that

meet our investment selection criteria.

Accomplishing this result on a cost-effective basis is largely a function of the Advisor’s

structuring of the investment process, its ability to provide competent, attentive and efficient services to us and our access to financing

on acceptable terms.

The management team of the Advisor has substantial responsibilities under our Investment Management Agreement.

can offer no assurance that any current or future employees of the Advisor will contribute effectively to the work of, or remain associated

with, the Advisor.

We caution you that the principals of our Advisor or Administrator may also be called upon to provide and currently

do provide managerial assistance to portfolio companies and other investment vehicles, including other BDCs, which are managed by the

however, that the professionals of the Administrator will continue to provide administrative services to us.

Furthermore, if the Advisor

fails to maintain such relationships, or to develop new relationships with other sources of investment opportunities, we will not be able

to grow our investment portfolio.

This could have a material adverse effect on our financial condition, results of operations and cash

Our financial condition, results of operations

and cash flows depend on our ability to manage our business and future growth effectively.

Our ability to achieve our

investment objective depends on our ability to manage our business and grow, which depends, in turn, on the Advisor’s ability to

identify, invest in and monitor companies that meet our investment selection criteria.

Accomplishing this result on a cost-effective basis

is largely a function of the Advisor’s structuring of the investment process, its ability to provide competent, attentive and efficient

services to us and our access to financing on acceptable terms.

The management team of the Advisor has substantial responsibilities under

our Investment Advisor Agreement.

We can offer no assurance that any current or future employees of the Advisor will contribute effectively

to the work of, or remain associated with, the Advisor.

We caution you that the principals of our Advisor or Administrator may also be

called upon to provide and currently do provide managerial assistance to portfolio companies and other investment vehicles, including

other BDCs, which are managed by affiliates of the Advisor.

Such demands on their time may distract them or slow our rate of investment.

Any failure to manage our future growth effectively

could have a material adverse effect on our business, financial condition and results of operations.

The Advisor may frequently be required

to make investment analyses and decisions on an expedited basis in order to take advantage of investment opportunities, and our Advisor

may not have knowledge of all circumstances that could impact an investment by the Company.

Investment analyses and decisions by the

Advisor may frequently be required to be undertaken on an expedited basis to take advantage of investment opportunities, and the Advisor

may not have knowledge of all circumstances that could adversely affect an investment by us.

Moreover, there can be no assurance that

our due diligence processes will uncover all relevant facts that would be material to an investment decision.

Any failure to manage our future growth effectively could have a material adverse effect on our business, financial condition and results

of operations.

The Advisor may frequently be required to

make investment analyses and decisions on an expedited basis in order to take advantage of investment opportunities, and our Advisor may

not have knowledge of all circumstances that could impact an investment by the Company.

Investment analyses and decisions

by the Advisor may frequently be required to be undertaken on an expedited basis to take advantage of investment opportunities, and the

Advisor may not have knowledge of all circumstances that could adversely affect an investment by us.

Moreover, there can be no assurance

that our due diligence processes will uncover all relevant facts that would be material to an investment decision.

Before making an investment,

we will assess the strength of the underlying assets and other factors that we believe are material to the performance of the investment.

In making the assessment and otherwise conducting customary due diligence, we will rely on the resources available to it and, in some

In making the assessment and otherwise conducting customary due diligence, we will rely on the resources available to us and, in some

cases, an investigation by third parties.

This process is particularly important and highly subjective.

Our financial condition, results of

operations and cash flows depend on our ability to manage our business effectively.

Our ability to achieve our investment objective

depends on our ability to manage our business and to grow.

This depends, in turn, on the Advisor’s ability to identify, invest

in and monitor companies that meet our investment criteria.

The achievement of our investment objective on a cost-effective basis depends

upon the Advisor’s execution of our investment process, its ability to provide competent, attentive and efficient services to us

and, to a lesser extent, our access to financing on acceptable terms.

The Advisor has substantial responsibilities under the Investment

Advisory Agreement, as well as responsibilities in connection with the management of other accounts sponsored or managed by the Advisor,

members of the Advisor’s investment committee or Kayne Anderson and its affiliates.

The personnel of the Administrator and its

affiliates may be called upon to provide managerial assistance to our portfolio companies.

These activities may distract them or slow

our rate of investment.

Any failure to manage our business and our future growth effectively could have a material adverse effect on

our business, financial condition, results of operations and cash flows.

We may make investments in,

or loans to, companies which are not subject to public company reporting requirements including requirements regarding preparation of

financial statements and our portfolio companies may utilize divergent reporting standards that may make it difficult for the Advisor

to accurately assess the prior performance of a portfolio company.

We will, therefore, depend upon the compliance by investment companies

with their contractual reporting obligations.

As a result, the evaluation of potential investments and our ability to perform due diligence

on, and effectively monitor investments, may be impeded, and we may not realize the returns which we expect on any particular investment.

In the event of fraud by any company in which we invest or with respect to which we make a loan, we may suffer a partial or total loss

of the amounts invested in that company.

There are significant potential conflicts

of interest that could affect our investment returns.

As a result of our arrangements with the

Advisor and its affiliates and the Advisor’s investment committee, there may be times when the Advisor or such persons have interests

that differ from those of our stockholders, giving rise to a conflict of interest.

Conflicts related to obligations the

Advisor’s investment committee, the Advisor or its affiliates have to other clients and conflicts related to fees and expenses

of such other clients.

The members of the Advisor’s investment

committee serve or may serve as officers, directors or principals of entities that operate in the same or a related line of business

as we do or of accounts sponsored or managed by the Advisor or its affiliates.

The Advisor and its affiliates currently manage, and may

in the future have, other clients with similar or competing investment objectives.

In serving in these multiple capacities, they may

have obligations to other clients or investors in those entities, the fulfillment of which may not be in the best interests of us or

our stockholders.

Our investment objective may overlap with the investment objectives of such affiliated accounts.

For example, the Advisor

currently manages several private funds, some of which may seek additional capital from time to time, that are pursuing an investment

strategy similar to ours, and we may compete with these and other accounts sponsored or managed by the Advisor and its affiliates for

capital and investment opportunities.

As a result, those individuals may face conflicts in the allocation of investment opportunities

among us and other accounts advised by or affiliated with the Advisor.

Certain of these accounts may provide for higher management or

incentive fees, greater expense reimbursements or overhead allocations, or permit the Advisor and its affiliates to receive higher origination

and other transaction fees, all of which may contribute to this conflict of interest and create an incentive for the Advisor to favor

such other accounts.

For example, the 1940 Act restricts the Advisor and its affiliates from receiving more than a 1% fee in connection

with loans that we acquire, or originate, a limitation that does not exist for certain other accounts.

of interest that could affect our investment returns, including conflicts related to obligations the Advisor’s investment committee,

the Advisor or its affiliates have to other clients and conflicts related to fees and expenses of such other clients, the valuation process

for certain portfolio holdings of ours, other arrangements with the Advisor or its affiliates, and the Advisor’s recommendations

given to us may differ from those rendered to their other clients.

As a result of our arrangements

with the Advisor and its affiliates and the Advisor’s investment committee, there may be times when the Advisor or such persons

have interests that differ from those of our stockholders, giving rise to a conflict of interest.

In particular, the following

conflicts of interest may arise, among others:

members of the Advisor’s investment committee serve or may serve as officers, directors or principals of entities that operate

in the same or a related line of business as we do or of accounts sponsored or managed by the Advisor or its affiliates;

Advisor, its affiliates and its personnel may have obligations to other clients or investors in entities they manage, the fulfilment

of which may not be in the best interests of us or our stockholders;

investment objective may overlap with the investment objectives of such affiliated accounts;

of the Advisor’s other accounts may provide for higher management or incentive fees, greater expense reimbursements or overhead

allocations, or permit affiliates of the Advisor to receive origination and other transaction fees;

of Kayne Anderson and its affiliates may serve on the boards of directors of and advise companies which may compete with our portfolio

Moreover, these other funds, separate accounts and other vehicles managed by Kayne Anderson and its affiliates may pursue

investment opportunities that may also be suitable for us;

● the participation of the Advisor’s investment professionals in

our valuation process could result in a conflict of interest as the Advisor’s base management fee is based, in part, on our fair

market value of investments including assets purchased with borrowings under credit facilities and issuances of senior unsecured notes,

excluding cash, U.S.

government securities and commercial paper instruments maturing within one year of purchase, and our incentive fees

will be based, in part, on unrealized gains and losses.

Additionally, the incentive

fee payable by us to the Advisor may create an incentive for the Advisor to cause us to realize capital gains or losses that may not be

in the best interests of us or our stockholders.

Under the incentive fee structure, the Advisor benefits when we recognize capital gains

and, because the Advisor determines when an investment is sold, the Advisor controls the timing of the recognition of such capital gains.

Our Board is charged with protecting our stockholders’ interests by monitoring how the Advisor addresses these and other conflicts

of interest associated with its management services and compensation.

The part of the management

and incentive fees payable to Advisor that relates to our net investment income is computed and paid on income that may include interest

income that has been accrued but not yet received in cash, such as market discount, debt instruments with paid-in-kind (“PIK”)

interest, preferred stock with PIK dividends, zero coupon securities, and other deferred interest instruments and may create an incentive

for the Advisor to make investments on our behalf that are riskier or more speculative than would be the case in the absence of such compensation

arrangements.

This fee structure may be considered to give rise to a conflict of interest for the Advisor to the extent that it may encourage

the Advisor to favor debt financings that provide for deferred interest, rather than current cash payments of interest.

Under these investments,

we will accrue the interest over the life of the investment, but we will not receive the cash income from the investment until the end

Our net investment income used to calculate the income portion of our investment fee, however, includes accrued interest.

The Advisor may have an incentive to invest in deferred interest securities in circumstances where it would not have done so but for the

opportunity to continue to earn the fees even when the issuers of the deferred interest securities would not be able to make actual cash

payments to us on such securities.

This risk could be increased because the Advisor is not obligated to reimburse us for any fees received

even if we subsequently incur losses or never receive in cash the deferred income that was previously accrued.

The Advisor seeks to allocate

investment opportunities among eligible accounts in a manner that is fair and equitable over time and consistent with its allocation

However, we can offer no assurance that such opportunities will be allocated to us fairly or equitably in the short-term or over

time, and there can be no assurance that we will be able to participate in all investment opportunities that are suitable to us.

The Advisor’s investment professionals

are engaged in other investment activity on behalf of other clients.

Certain investment professionals who are

involved in our activities remain responsible for the investment activities of other clients and investment vehicles managed by the Advisor

and its affiliates, and they will devote time to the management of such investments and other newly created client portfolios (whether

in the form of funds, separate accounts or other vehicles), as well as their own investments.

In addition, in connection with the management

of investments for other funds, separate accounts and other vehicles, members of Kayne Anderson and its affiliates may serve on the boards

of directors of or advise companies which may compete with our portfolio investments.

Moreover, these other funds, separate accounts

and other vehicles managed by Kayne Anderson and its affiliates may pursue investment opportunities that may also be suitable for us.

investment opportunities among eligible accounts in a manner that is fair and equitable over time and consistent with its allocation policy.

However, we can offer no assurance that such opportunities will be allocated to us fairly or equitably in the short-term, and there can

be no assurance that we will be able to participate in all investment opportunities that are suitable to us.

The Advisor’s investment committee,

the Advisor or its affiliates may, from time to time, possess material non-public information, limiting our investment discretion.

Principals of the Advisor and its affiliates

and members of the Advisor’s investment committee may serve as directors of, or in a similar capacity with, companies in which

we invest, the securities of which are purchased or sold on our behalf.

Principals of the Advisor

and its affiliates and members of the Advisor’s investment committee may serve as directors of, or in a similar capacity with, companies

in which we invest, the securities of which are purchased or sold on our behalf.

In the event that material nonpublic information is obtained

with respect to such companies, or we become subject to trading restrictions under the internal trading policies of those companies or

as a result of applicable law or regulations, we could be prohibited for a period of time from purchasing or selling the securities of

such companies, and this prohibition may have an adverse effect on us.

Our management and

incentive fee structure may create incentives for the Advisor that are not fully aligned with the interests of our stockholders and may

induce the Advisor to make speculative investments.

In the course of our investing activities,

we pay management and incentive fees to the Advisor.

The base management fee is based on the fair market value of investments including,

in each case, assets purchased with borrowed funds or other forms of leverage, but excluding cash, U.S.

government securities and commercial

paper instruments maturing within one year of purchase, and the incentive fee is computed and paid on income, which also includes leverage.

As a result, investors in our Shares will invest on a “gross” basis and receive distributions on a “net” basis

after expenses, resulting in a lower rate of return than one might achieve through direct investments.

Because these fees are based on

our fair market value of investments, the Advisor benefits when we incur debt or use leverage.

Under certain circumstances, the use of

leverage may increase the likelihood of default, which would disfavor or our stockholders.

Additionally, the incentive fee payable by

us to the Advisor may create an incentive for the Advisor to cause us to realize capital gains or losses that may not be in the best

interests of us or our stockholders.

Under the incentive fee structure, the Advisor benefits when we recognize capital gains and, because

the Advisor determines when an investment is sold, the Advisor controls the timing of the recognition of such capital gains.

of Directors is charged with protecting our stockholders’ interests by monitoring how the Advisor addresses these and other conflicts

of interest associated with its management services and compensation.

The part of the management and incentive

fees payable to Advisor that relates to our net investment income is computed and paid on income that may include interest income that

has been accrued but not yet received in cash, such as market discount, debt instruments with PIK interest, preferred stock with PIK

dividends, zero coupon securities, and other deferred interest instruments and may create an incentive for the Advisor to make investments

on our behalf that are riskier or more speculative than would be the case in the absence of such compensation arrangement.

This fee structure

may be considered to give rise to a conflict of interest for the Advisor to the extent that it may encourage the Advisor to favor debt

financings that provide for deferred interest, rather than current cash payments of interest.

Under these investments, we will accrue

the interest over the life of the investment, but we will not receive the cash income from the investment until the end of the term.

Our net investment income used to calculate the income portion of our investment fee, however, includes accrued interest.

may have an incentive to invest in deferred interest securities in circumstances where it would not have done so but for the opportunity

to continue to earn the fees even when the issuers of the deferred interest securities would not be able to make actual cash payments

to us on such securities.

This risk could be increased because the Advisor is not obligated to reimburse us for any fees received even

if we subsequently incur losses or never receive in cash the deferred income that was previously accrued.

The valuation process for certain of

our portfolio holdings creates a conflict of interest.

The majority of our portfolio investments

are expected to be made in the form of securities that are not publicly traded and for which no market quotations are readily available.

As a result, our Board of Directors will determine the fair value of these securities in good faith.

In addition, in connection with

that determination, investment professionals from the Advisor may provide our Board of Directors with portfolio company valuations based

upon the most recent portfolio company financial statements available and projected financial results of each portfolio company.

participation of the Advisor’s investment professionals in our valuation process could result in a conflict of interest as the

Advisor’s base management fee is based, in part, on our fair market value of investments including assets purchased with borrowed

funds or other forms of leverage, excluding cash, U.S.

government securities and commercial paper instruments maturing within one year

of purchase, and our incentive fees will be based, in part, on unrealized gains and losses.

Conflicts related to other arrangements

with the Advisor or its affiliates.

We have entered into a license agreement

with the Advisor under which the Advisor has granted us a non-exclusive, royalty-free license to use the name “Kayne

Anderson.” In addition, we reimburse the Administrator for its costs and expenses incurred in performing its obligations under

the Administration Agreement, including our allocable portion of office facilities, overhead, and compensation paid to or compensatory

distributions received by our officers (including our Chief Compliance Officer and Chief Financial Officer) and their respective staff

who provide services to us.

As we reimburse the Administrator for its expenses, we will indirectly bear such cost.

These arrangements

create conflicts of interest that our Board of Directors must monitor.

Investment Advisory Agreement and the Administration Agreement were not negotiated on an arm’s-length basis and may not

be as favorable to us as if they had been negotiated with an unaffiliated third party.

as a result of applicable law or regulations (for example, the antifraud provisions for the federal securities laws), we could be prohibited

for a period of time from purchasing or selling the securities of such companies, and this prohibition may have an adverse effect on us.

The Investment Advisory Agreement and the

Administration Agreement were negotiated between related parties.

Consequently, their terms, including fees payable to the Advisor, may

not be as favorable to us as if they had been negotiated with an unaffiliated third party.

For example, certain accounts managed by the

Advisor have lower management, incentive or other fees than those charged under the Investment Advisory Agreement and/or a reduced ability

to recover expenses and overhead than may be recovered by the Administrator under the Administration Agreement.

In addition, we may choose

not to enforce, or to enforce less vigorously, our rights and remedies under these agreements because of our desire to maintain our ongoing

relationship with the Advisor, the Administrator and their respective affiliates.

Any such decision, however, would breach our fiduciary

obligations to our stockholders.

We generally may make investments that

could give rise to a conflict of interest and our ability to enter into transactions with our affiliates will be restricted.

We, along with our Advisor and certain of

its affiliates, have obtained exemptive relief from the SEC to permit us to invest alongside certain entities and accounts advised by

the Advisor and its affiliates subject to certain conditions.

We intend to invest alongside our Advisor’s and/or its affiliates’

other clients, in certain circumstances where doing so is consistent with applicable law and SEC staff interpretations, guidance and exemptive

relief orders.

Pursuant to such exemptive relief, and subject to certain conditions, we are permitted to co-investment in the

same security with our affiliates in a manner that is consistent with our investment objective, investment strategy, regulatory consideration

and other relevant factors.

If opportunities arise that would otherwise be appropriate for us and an affiliate to purchase different securities

in the same issuer, our Advisor will need to decide which account will proceed with such investment.

Our Advisor’s investment allocation

policy incorporates the conditions of exemptive relief to seek to ensure that investment opportunities are allocated in a manner that

is fair and equitable.

However, although the Advisor endeavors to fairly allocate investment opportunities in the long-run, we

can offer no assurance that investment opportunities will be allocated to us fairly or equitably in the short-term or over time.

We do not expect to invest in, or hold securities

of, companies that are controlled by our affiliates’ other clients.

However, our affiliates’ other clients may invest in,

and gain control over, one of our portfolio companies.

If our affiliates’ other client or clients gain control over one of our

portfolio companies, this may create conflicts of interest and subject us to certain restrictions under the 1940 Act.

As a result of

these conflicts and restrictions our Advisor may be unable to implement our investment strategies as effectively as they could have in

the absence of such conflicts or restrictions.

For example, as a result of a conflict or restriction, our Advisor may be unable to engage

in certain transactions that they would otherwise pursue.

In order to avoid these conflicts and restrictions, our Advisor may choose

to exit these investments prematurely and, as a result, we may forgo positive returns associated with such investments.

to the extent that another client holds a different class of securities than us as a result of such transactions, our interests may not

Administration Agreement were not negotiated on an arm’s-length basis and may not be as favorable to us as if they had been negotiated

with an unaffiliated third party.

The Investment Advisory Agreement

and the Administration Agreement were negotiated between related parties.

Consequently, their terms, including fees payable to the Advisor,

may not be as favorable to us as if they had been negotiated with an unaffiliated third party.

For example, certain accounts managed by

the Advisor have lower management, incentive or other fees than those charged under the Investment Advisory Agreement and/or a reduced

ability to recover expenses and overhead than may be recovered by the Administrator under the Administration Agreement.

In addition, we

may choose not to enforce, or to enforce less vigorously, our rights and remedies under these agreements because of our desire to maintain

our ongoing relationship with the Advisor, the Administrator and their respective affiliates.

Any such decision, however, would breach

our fiduciary obligations to our stockholders.

We generally may make investments that could

give rise to a conflict of interest and our ability to enter into transactions with our affiliates will be restricted.

We, along with our Advisor

and certain of its affiliates, have obtained exemptive relief from the SEC to permit us to invest alongside certain entities and accounts

advised by the Advisor and its affiliates subject to certain conditions.

Pursuant to such exemptive

relief, and subject to certain conditions, we are permitted to co-invest in the same security with our affiliates in a manner that is

consistent with our investment objective, investment strategy, regulatory consideration and other relevant factors.

If opportunities arise

that would otherwise be appropriate for us and an affiliate to purchase different securities in the same issuer, our Advisor will need

to decide which account will proceed with such investment.

Our Advisor’s investment allocation policy incorporates the conditions

of exemptive relief to seek to ensure that investment opportunities are allocated in a manner that is fair and equitable.

However, although

the Advisor endeavors to fairly allocate investment opportunities in the long-run, we can offer no assurance that investment opportunities

will be allocated to us fairly or equitably in the short-term.

We do not expect to invest

in, or hold securities of, companies that are controlled by our affiliates’ other clients.

If our affiliates’ other client

or clients gain control over one of our portfolio companies, this may create conflicts of interest and subject us to certain restrictions

under the 1940 Act.

As a result of these conflicts and restrictions our Advisor may be unable to implement our investment strategies as

effectively as they could have in the absence of such conflicts or restrictions.

For example, as a result of a conflict or restriction,

our Advisor may be unable to engage in certain transactions that they would otherwise pursue.

In order to avoid these conflicts and restrictions,

our Advisor may choose to exit these investments prematurely and, as a result, we may forgo positive returns associated with such investments.

In addition, to the extent that another client holds a different class of securities than us as a result of such transactions, our interests

may not be aligned.

Our ability to enter into transactions with our affiliates may be restricted.

In situations where co-investment with

affiliates’ other clients is not permitted under the 1940 Act and related rules, existing or future staff guidance, or the terms

and conditions of exemptive relief that have been granted to our Advisor and its affiliates by the SEC, our Advisor will need to decide

which client or clients will proceed with the investment.

In situations where co-investment

with affiliates’ other clients is not permitted under the 1940 Act and related rules, existing or future staff guidance, or the

terms and conditions of exemptive relief that have been granted to our Advisor and its affiliates by the SEC, our Advisor will need to

decide which client or clients will proceed with the investment.

Generally, we will not have an entitlement to make a co-investment in

3 unchanged sentences

These restrictions may limit the scope of investment opportunities that would otherwise be available to us.

We will be prohibited under the 1940 Act

from participating in certain transactions with certain of our affiliates without the prior approval of a majority of our independent

directors and, in some cases, the SEC.

Any person that owns, directly or indirectly, 5% or more of our outstanding voting securities

will be our affiliate for purposes of the 1940 Act, and we will generally be prohibited from buying or selling any securities from or

to such affiliate on a principal basis, absent the prior approval of our Board of Directors and, in some cases, the SEC.

also prohibits certain “joint” transactions with certain of our affiliates, which in certain circumstances could include

investments in the same portfolio company (whether at the same or different times to the extent the transaction involves a joint investment),

without prior approval of our Board of Directors and, in some cases, the SEC.

If a person acquires more than 25% of our voting securities,

we will be prohibited from buying or selling any security from or to such person or certain of that person’s affiliates, or entering

into prohibited joint transactions with such persons, absent the prior approval of the SEC.

Similar restrictions limit our ability to

transact business with our officers or directors or their affiliates.

The SEC has interpreted the BDC regulations

governing transactions with affiliates to prohibit certain “joint transactions” involving entities that share a common investment

As a result of these restrictions, we may be prohibited from buying or selling any security from or to any portfolio company

that is controlled by a fund managed by the Advisor or their respective affiliates except under certain circumstances or without the

prior approval of the SEC, which may limit the scope of investment opportunities that would otherwise be available to us.

The recommendations given to us by

our Advisor may differ from those rendered to their other clients.

Our Advisor and its affiliates may give advice

and recommend securities to other clients which may differ from advice given to, or securities recommended or bought for, us even though

such other clients’ investment objectives may be similar to ours.

Our Shares are illiquid investments

for which there is not a secondary market.

We do not know at this time what circumstances

will exist in the future and therefore we do not know what factors our Board of Directors will consider in contemplating an Exchange

Listing or other Liquidity Event in the future.

As a result, even if we do complete a Liquidity Event, you may not receive a return of

all of your invested capital.

If we do not successfully complete a Liquidity Event, liquidity for your Shares may be limited to participation

in a tender offer, which we do not currently intend to conduct.

Even if we undertake an Exchange Listing,

we cannot assure you a public trading market will develop or, if one develops, that such trading market can be sustained.

Shares of companies

offered in an initial public offering often trade at a discount to the initial offering price due to underwriting discounts and related

offering expenses.

Also, shares of closed-end investment companies and BDCs frequently trade at a discount from their NAV.

This characteristic of closed-end investment companies is separate and distinct from the risk that our NAV per Share may decline.

We cannot predict whether our Shares, if listed on a national securities exchange, will trade at, above or below NAV.

We operate in a highly competitive

market for investment opportunities, which could reduce returns and result in losses.

There will be competition for investments

from numerous other potential investors, many of which will have significant financial resources.

As a result, there can be no guarantee

that a sufficient quantity of suitable investment opportunities for us will be found, that investments on favorable terms can be negotiated,

or that we will be able to fully realize the value of our investments.

Competition for investments may have the effect of increasing

our costs and expenses or otherwise decreasing returns generated on underlying investments, thereby reducing our investment returns.

A number of entities compete with us to make

the types of investments that we plan to make.

We will compete with public and private funds, commercial and investment banks, commercial

financing companies and, to the extent they provide an alternative form of financing, private equity and hedge funds.

Many of our competitors

are substantially larger and have considerably greater financial, technical and marketing resources than we do.

For example, we believe

some of our competitors may have access to funding sources that are not available to us.

In addition, some of our competitors may have

higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of investments and establish

more relationships than we do.

Furthermore, many of our competitors are not subject to the regulatory restrictions that the 1940 Act

imposes on us as a BDC or the source of income, asset diversification and distribution requirements we must satisfy to qualify and maintain

our qualification as a RIC.

As a result of this competition, we may from time to time not be able to take advantage of attractive investment

opportunities, and we may not be able to identify and make investments that are consistent with our investment objective.

With respect to the investments we make,

we do not seek to compete based primarily on the interest rates we offer, and we believe that some of our competitors may make loans

with interest rates that will be lower than the rates we offer.

We will be prohibited under

the 1940 Act from participating in certain transactions with certain affiliates of ours without the prior approval of a majority of our

independent directors and, in some cases, the SEC.

Any person that owns, directly or indirectly, 5% or more of our outstanding voting

securities will be our affiliate for purposes of the 1940 Act, and we will generally be prohibited from buying or selling any securities

from or to such affiliate on a principal basis, absent the prior approval of our Board and, in some cases, the SEC.

The 1940 Act also

prohibits certain “joint” transactions with certain affiliates of ours, which in certain circumstances could include investments

in the same portfolio company (whether at the same or different times to the extent the transaction involves a joint investment), without

prior approval of our Board and, in some cases, the SEC.

If a person acquires more than 25% of our voting securities, we will be prohibited

from buying or selling any security from or to such person or certain of that person’s affiliates, or entering into prohibited joint

transactions with such persons, absent the prior approval of the SEC.

Similar restrictions limit our ability to transact business with

our officers or directors or their affiliates.

The SEC has interpreted the

BDC regulations governing transactions with affiliates to prohibit certain “joint transactions” involving entities that share

a common investment advisor.

As a result of these restrictions, we may be prohibited from buying or selling any security from or to any

portfolio company that is controlled by a fund managed by the Advisor or their respective affiliates except under certain circumstances

or without the prior approval of the SEC, which may limit the scope of investment opportunities that would otherwise be available to us.

We operate in a highly competitive market

for investment opportunities, which could reduce returns and result in losses.

There will be competition

for investments from numerous other potential investors, many of which will have significant financial resources.

As a result, there can

be no guarantee that a sufficient quantity of suitable investment opportunities for us will be found, that investments on favorable terms

can be negotiated, or that we will be able to fully realize the value of our investments.

Competition for investments may have the effect

of increasing our costs and expenses or otherwise decreasing returns generated on underlying investments, thereby reducing our investment

A number of entities compete

with us to make the types of investments that we plan to make in middle market companies, including BDCs, traditional commercial banks,

private investment funds, regional banking institutions, small business investment companies, investment banks and insurance companies.

Additionally, with increased competition for investment opportunities, alternative investment vehicles such as hedge funds may seek to

invest in areas they have not traditionally invested in or from which they had withdrawn during the economic downturn, including investing

in middle market companies.

We will compete with public and private funds, commercial and investment banks, commercial financing companies

and, to the extent they provide an alternative form of financing, private equity and hedge funds.

Many of our competitors are substantially

larger and have considerably greater financial, technical and marketing resources than we do.

For example, we believe some of our competitors

may have access to funding sources that are not available to us.

In addition, some of our competitors may have higher risk tolerances

or different risk assessments, which could allow them to consider a wider variety of investments and establish more relationships than

Furthermore, many of our competitors are not subject to the regulatory restrictions that the 1940 Act imposes on us as a BDC or

the source of income, asset diversification and distribution requirements we must satisfy to qualify and maintain our qualification as

As a result of this competition, we may from time to time not be able to take advantage of attractive investment opportunities,

and we may not be able to identify and make investments that are consistent with our investment objective.

With respect to the investments

we make, we do not seek to compete based primarily on the interest rates we offer, and we believe that some of our competitors may make

loans with interest rates that will be lower than the rates we offer.

With respect to all investments, we may lose some investment opportunities

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reduce the amount and frequency of opportunities available to us and may not be in the best interests of us and our stockholders.

We will be subject to corporate-level

income tax if we are unable to qualify as a RIC.

The competitive pressures

we face may have a material adverse effect on our business, financial condition and results of operations.

We will be subject to corporate-level income

tax if we are unable to qualify as a RIC.

We have elected, and intend

to qualify annually thereafter, to be treated for U.S.

federal income tax purposes as a RIC under Subchapter M of the Code;

no assurance can be given that we will be able to qualify for and maintain RIC tax treatment.

In order to qualify, and maintain qualification,

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paid, and 90% of our net tax-exempt interest income, if any, to our stockholders on an annual basis.

We are subject, to the

extent we use debt financing, to certain asset coverage ratio requirements under the 1940 Act and financial covenants under loan and

credit agreements that could, under certain circumstances, restrict us from making distributions necessary to qualify as a RIC.

are unable to obtain cash from other sources, we may fail to be subject to tax as a RIC and, thus, may be subject to corporate-level

To qualify as a RIC, we must also meet certain asset diversification requirements at the end of each quarter of our taxable

Failure to meet these requirements may result in our having to dispose of certain investments quickly in order to prevent the loss

of our qualification as a RIC.

Because a significant portion of our investments are in private or thinly traded public companies, any

such dispositions could be made at disadvantageous prices and may result in substantial losses.

If we fail to qualify as a RIC for any

reason and become subject to corporate-level income tax, the resulting corporate taxes could substantially reduce our net assets, the

amount of income available for distributions to stockholders and the amount of our distributions and the amount of funds available for

new investments.

Such a failure would have a material adverse effect on us and our stockholders.

See “ Item 1.

Material U.S.

Federal Income Tax Considerations — Taxation as a RIC .”

We may be subject to risks that may

arise in connection with the rules under ERISA related to investment by ERISA Plans.

We intend to operate so that we will be an

appropriate investment for employee benefit plans subject to Employee Retirement Income Security Act of 1974, as amended (“ERISA”).

We will use reasonable efforts to conduct the Company’s affairs so that the assets of the Company will not be deemed to be “plan

assets” for purposes of ERISA.

In this regard, prior to the completion of an Exchange Listing, we may be operated as an annual

“venture capital operating company,” under the ERISA rules in order to avoid our assets being treated as “plan assets”

for purposes of ERISA.

Accordingly, there may be constraints on our ability to make or dispose of investments at optimal times (or to

make certain investments at all).

We may need to raise additional capital

to grow because we must distribute most of our income.

We may need additional capital to fund new

investments and grow our portfolio of investments.

We intend to access the capital markets periodically to issue debt or equity securities

or borrow from financial institutions in order to obtain such additional capital.

Unfavorable economic conditions could increase our

funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us.

A reduction in

the availability of new capital could limit our ability to grow.

In addition, we will be required to distribute each taxable year an

amount at least equal to the sum of 90% of the sum of our net ordinary income and net short-term capital gains in excess of net long-term

capital losses, or investment company taxable income, determined without regard to any deduction for dividends paid as dividends for

federal income tax purposes, and 90% of our net tax-exempt interest income, if any, to our stockholders to maintain our

ability to be subject to tax as a RIC.

As a result, these earnings are not available to fund new investments.

An inability to access

the capital markets successfully could limit our ability to grow our business and execute our business strategy fully and could decrease

our earnings, if any, which may have an adverse effect on the value of our securities.

If we are not able to raise capital and are at

or near our targeted leverage ratios, we may receive smaller allocations, if any, on new investment opportunities under the Advisor’s

allocation policy.

We are subject, to the extent we

use debt financing, to certain asset coverage ratio requirements under the 1940 Act and financial covenants under loan and credit agreements

that could, under certain circumstances, restrict us from making distributions necessary to qualify as a RIC.

If we are unable to obtain

cash from other sources, we may fail to be subject to tax as a RIC and, thus, may be subject to corporate-level income tax.

as a RIC, we must also meet certain asset diversification requirements at the end of each quarter of our taxable year.

Failure to meet

these requirements may result in our having to dispose of certain investments quickly in order to prevent the loss of our qualification

Because a significant portion of our investments are in private or thinly traded public companies, any such dispositions could

be made at disadvantageous prices and may result in substantial losses.

If we fail to qualify as a RIC for any reason and become subject

to corporate-level income tax, the resulting corporate taxes could substantially reduce our net assets, the amount of income available

for distributions to stockholders and the amount of our distributions and the amount of funds available for new investments.

Such a failure

would have a material adverse effect on us and our stockholders.

We may be subject to risks that may arise

in connection with the rules under ERISA related to investment by ERISA Plans.

We intend to operate so that

we will be an appropriate investment for employee benefit plans subject to Employee Retirement Income Security Act of 1974, as amended

We will use reasonable efforts to conduct the Company’s affairs so that the assets of the Company will not

be deemed to be “plan assets” for purposes of ERISA.

Accordingly, there may be constraints on our ability to make or dispose

of investments at optimal times (or to make certain investments at all).

We may have difficulty paying our required

distributions if we recognize income before, or without, receiving cash representing such income.

federal income tax purposes, we

include in income certain amounts that we have not yet received in cash, such as the accretion of OID.

This may arise if we receive warrants

in connection with the making of a loan and in other circumstances, or through contracted PIK interest, which represents contractual

interest added to the loan balance and due at the end of the loan term.

Such OID, which could be significant relative to our overall

investment activities or increases in loan balances as a result of contracted PIK arrangements, is included in income before we receive

any corresponding cash payments.

We also may be required to include in income certain other amounts that we do not receive in cash.

may be also subject to the following risks associated with PIK and OID investments:

● The interest payments deferred

on a PIK loan are subject to the risk that the borrower may default when the deferred payments are due in cash at the maturity of the

● The interest rates on PIK loans

are higher to reflect the time-value of money on deferred interest payments and the higher credit risk of borrowers who may need to defer

interest payments;

● Market prices of OID instruments

are more volatile because they are affected to a greater extent by interest rate changes than instruments that pay interest periodically

● PIK instruments may have unreliable

valuations because the accruals require judgments about ultimate collectability of the deferred payments and the value of the associated

● Use of PIK and OID securities

may provide certain benefits to our Advisor including increasing management fees.

● We may be required under the

tax laws to make distributions of OID income to stockholders without receiving any cash.

Such required cash distributions may have to

be paid from borrowings, offering proceeds or the sale of our assets;

● The required recognition of

OID, including PIK, interest for U.S.

federal income tax purposes may have a negative impact on liquidity, because it represents a non-cash component

of our taxable income that must, nevertheless, be distributed in cash to investors to avoid it being subject to corporate level taxation.

That part of the incentive fee payable by

us that relates to our net investment income is computed and paid on income that may include interest that has been accrued but not yet

received in cash, such as market discount, debt instruments with PIK interest, preferred stock with PIK dividends and zero coupon securities.

If a portfolio company defaults on a loan that is structured to provide accrued interest, it is possible that accrued interest previously

used in the calculation of the incentive fee will become uncollectible, and the Advisor will have no obligation to refund any fees it

received in respect of such accrued income.

Since in certain cases we may recognize income

before or without receiving cash representing such income, we may have difficulty meeting the requirement in a given taxable year to

distribute to our stockholders dividends for U.S.

federal income tax purposes an amount at least equal to the sum of 90% of our investment

company taxable income, determined without regard to any deduction for dividends paid, and 90% of our net tax-exempt interest

income, if any, to our stockholders to qualify and maintain our ability to be subject to tax as a RIC.

In such a case, we may have to

sell some of our investments at times we would not consider advantageous, raise additional debt or equity capital or reduce new investment

originations to meet these distribution requirements.

If we are not able to obtain such cash from other sources, we may fail to qualify

as a RIC and thus be subject to corporate-level income tax.

See “ Item 1.

Business — Material U.S.

Federal Income Tax Considerations

— Taxation as a RIC .”

If we are not treated as a “publicly

offered regulated investment company,” as defined in the Code, U.S.

stockholders that are individuals, trusts or estates will be

taxed as though they received a distribution of some of our expenses.

We do not expect to be treated initially

as a “publicly offered regulated investment company.” Until and unless we are treated as a “publicly offered regulated

investment company” as a result of either (1) our Shares and our preferred stock collectively being held by at least 500 persons

at all times during a taxable year, (2) our Shares being continuously offered pursuant to a public offering (within the meaning

of Section 4 of the Securities Act) or (3) our Shares being treated as regularly traded on an established securities market,

stockholder that is an individual, trust or estate will be treated as having received a dividend for U.S.

federal income tax

purposes from us in the amount of such U.S.

stockholder’s allocable share of the management and incentive fees paid to our investment

advisor and certain of our other expenses for the calendar year, and these fees and expenses will be treated as miscellaneous itemized

deductions of such U.S.

Miscellaneous itemized deductions are generally not deductible by a U.S.

stockholder that is an

individual, trust or estate through 2025 and beginning in 2026 generally are deductible by a U.S.

stockholder that is an individual,

trust or estate only to the extent that the aggregate of such U.S.

stockholder’s miscellaneous itemized deductions exceeds 2% of

stockholder’s adjusted gross income for U.S.

federal income tax purposes, are not deductible for purposes of the alternative

minimum tax and are subject to the overall limitation on itemized deductions under the Code.

See “ Item 1.

Business — Material

Federal Income Tax Considerations — Taxation of U.S.

Stockholders .”

Regulations governing our operation

as a BDC affect our ability to, and the way in which we, raise additional capital.

As a BDC, the necessity of raising additional capital

exposes us to risks, including the typical risks associated with leverage.

We may issue debt securities or preferred

stock and/or borrow money from banks or other financial institutions, which we refer to collectively as “senior securities,”

up to the maximum amount permitted by the 1940 Act.

Under the provisions of the 1940 Act, we are currently permitted to issue “senior

securities,” including borrowing money from banks or other financial institutions, only in amounts such that our asset coverage,

as defined in the 1940 Act, equals at least 150% of gross assets less all liabilities and indebtedness not represented by senior securities,

after each issuance of senior securities, if certain requirements are met.

If we fail to comply with certain disclosure requirements,

our asset coverage ratio under the 1940 Act would be 200%, which would decrease the amount of leverage we are able to incur.

Nevertheless, if the value of our assets

declines, we may be unable to satisfy this ratio.

If that happens, we may be required to sell a portion of our investments and, depending

on the nature of our leverage, repay a portion of our indebtedness at a time when such sales may be disadvantageous.

Also, any amounts

that we use to service our indebtedness would not be available for distributions to holders of our Shares.

If we issue senior securities,

we will be exposed to typical risks associated with leverage, including an increased risk of loss.

In addition, if the value of the Company’s

assets decreases, leverage will cause the Company’s net asset value to decline more sharply than it otherwise would have without

leverage or with lower leverage.

Similarly, any decrease in the Company’s revenue would cause its net income to decline more sharply

than it would have if the Company had not borrowed or had borrowed less.

In the absence of an event of default, no

person or entity from which we borrow money has a veto right or voting power over our ability to set policy, make investment decisions

or adopt investment strategies.

If we issue preferred stock, which is another form of leverage, the preferred stock would rank “senior”

to Common Stock in our capital structure, preferred stockholders would have separate voting rights on certain matters and might have

other rights, preferences or privileges more favorable than those of our common stockholders, and the issuance of preferred stock could

have the effect of delaying, deferring or preventing a transaction or a change of control that might involve a premium price for holders

of our Common Stock or otherwise be in the best interest of our common stockholders.

Holders of our Common Stock will directly or indirectly

bear all of the costs associated with offering and servicing any preferred stock that we issue.

In addition, any interests of preferred

stockholders may not necessarily align with the interests of holders of our Shares and the rights of holders of shares of preferred stock

to receive distributions would be senior to those of holders of Shares.

We do not, however, anticipate issuing preferred stock in the

next 12 months.

We are not generally able to issue and sell

our Common Stock at a price below NAV per share.

We may, however, sell our Common Stock, or warrants, options or rights to acquire our

Common Stock, at a price below the then-current NAV per share of our Common Stock if our Board of Directors determines that such sale

is in the best interests of us and our stockholders, and if our stockholders approve such sale.

In any such case, the price at which

our securities are to be issued and sold may not be less than a price that, in the determination of our Board of Directors, closely approximates

the market value of such securities (less any distributing commission or discount).

If we raise additional funds by issuing Common Stock

or senior securities convertible into, or exchangeable for, our Common Stock, then the percentage ownership of our stockholders at that

time will decrease, and holders of our Common Stock might experience dilution.

We intend to finance our investments

with borrowed money, which will magnify the potential for gain or loss on amounts invested and may increase the risk of investing in

The use of leverage magnifies the potential

for gain or loss on amounts invested.

The use of leverage is generally considered a speculative investment technique and increases the

risks associated with investing in our securities.

The amount of leverage that we employ will depend on the Advisor’s and our Board

of Directors’ assessment of market and other factors at the time of any proposed borrowing.

We cannot assure you that we will be

able to obtain credit at all or on terms acceptable to us.

For example, due to the interplay of the 1940 Act restrictions on principal

and joint transactions and the U.S.

risk retention rules adopted pursuant to Section 941 of Dodd-Frank, as a BDC we are currently

unable to enter into any securitization transactions.

We cannot assure you that the SEC or any other regulatory authority will modify

such regulations or provide administrative guidance that would permit us to enter into securitizations, whether on a timely basis or

purposes, we include in income certain amounts that we have not yet received in cash, such as the accretion of original issue discount

This may arise if we receive warrants in connection with the making of a loan and in other circumstances, or through

contracted PIK interest, which represents contractual interest added to the loan balance and due at the end of the loan term.

which could be significant relative to our overall investment activities or increases in loan balances as a result of contracted PIK arrangements,

is included in income before we receive any corresponding cash payments.

We also may be required to include in income certain other amounts

that we do not receive in cash.

We may be also subject to the following risks associated with PIK and OID investments:

The interest payments deferred on a PIK loan are subject to the risk that the borrower may default when the deferred payments are due in cash at the maturity of the loan;

The interest rates on PIK loans are higher to reflect the time-value of money on deferred interest payments and the higher credit risk of borrowers who may need to defer interest payments;

Market prices of OID instruments are more volatile because they are affected to a greater extent by interest rate changes than instruments that pay interest periodically in cash;

PIK instruments may have unreliable valuations because the accruals require judgments about ultimate collectability of the deferred payments and the value of the associated collateral;

Use of PIK and OID securities may provide certain benefits to our Advisor including increasing management fees.

We may be required under the tax laws to make distributions of OID income to stockholders without receiving any cash.

Such required cash distributions may have to be paid from borrowings, offering proceeds or the sale of our assets;

The required recognition of OID, including PIK, interest for U.S.

federal income tax purposes may have a negative impact on liquidity, because it represents a non-cash component of our taxable income that must, nevertheless, be distributed in cash to investors to avoid it being subject to corporate level taxation.

Part of the incentive fee

payable by us that relates to our net investment income is computed and paid on income that may include interest that has been accrued

but not yet received in cash, such as market discount, debt instruments with PIK interest, preferred stock with PIK dividends and zero

coupon securities.

If a portfolio company defaults on a loan that is structured to provide accrued interest, it is possible that accrued

interest previously used in the calculation of the incentive fee will become uncollectible, and the Advisor will have no obligation to

refund any fees it received in respect of such accrued income.

Since in certain cases we may

recognize income before or without receiving cash representing such income, we may have difficulty meeting the requirement in a given

taxable year to distribute to our stockholders dividends for U.S.

federal income tax purposes an amount at least equal to the sum of

90% of our investment company taxable income, determined without regard to any deduction for dividends paid, and 90% of our net tax-exempt

interest income, if any, to our stockholders to qualify and maintain our ability to be subject to tax as a RIC.

In such a case, we may

have to sell some of our investments at times we would not consider advantageous, raise additional debt or equity capital or reduce new

investment originations to meet these distribution requirements.

If we are not able to obtain such cash from other sources, we may fail

to qualify as a RIC and thus be subject to corporate-level income tax.

Regulations governing our operation as a

BDC affect our ability to, and the way in which we, raise additional capital.

As a BDC, the necessity of raising additional capital exposes

us to risks, including the typical risks associated with leverage.

We intend to further borrow under credit facilities

and/or issue senior unsecured notes and, may issue preferred stock in the future (although we do not anticipate issuing preferred stock

in the next 12 months), which we refer to collectively as “senior securities,” up to the maximum amount permitted by the 1940

Under the provisions of the 1940 Act, we are currently permitted to issue “senior securities,” including borrowing money

from banks or other financial institutions, only in amounts such that our asset coverage, as defined in the 1940 Act, equals at least

150% of gross assets less all liabilities and indebtedness not represented by senior securities, after each issuance of senior securities.

If we fail to comply with certain disclosure requirements, our asset coverage ratio under the 1940 Act would be 200%, which would decrease

the amount of leverage we are able to incur.

Nevertheless, if the value of our assets declines,

we may be unable to satisfy this ratio.

If that happens, we may be required to sell a portion of our investments and, depending on the

nature of our leverage, repay a portion of our indebtedness at a time when such sales may be disadvantageous.

Also, any amounts that we

use to service our indebtedness would not be available for distributions to holders of our shares of common stock.

If we issue senior

securities, we will be exposed to typical risks associated with leverage, including an increased risk of loss.

In addition, if the value

of the Company’s assets decreases, leverage will cause the Company’s net asset value to decline more sharply than it otherwise

would have without leverage or with lower leverage.

Similarly, any decrease in the Company’s revenue would cause its net income

to decline more sharply than it would have if the Company had not borrowed or had borrowed less under the credit facilities.

In the absence of an event

of default, no person or entity from which we borrow money has a veto right or voting power over our ability to set policy, make investment

decisions or adopt investment strategies.

If we issue preferred stock, which is another form of leverage, the preferred stock would rank

“senior” to common stock in our capital structure, preferred stockholders would have separate voting rights on certain matters

and might have other rights, preferences or privileges more favorable than those of our common stockholders, and the issuance of preferred

stock could have the effect of delaying, deferring or preventing a transaction or a change of control that might involve a premium price

for holders of our common stock or otherwise be in the best interest of our common stockholders.

Holders of our common stock will directly

or indirectly bear all of the costs associated with offering and servicing any preferred stock that we issue.

In addition, any interests

of preferred stockholders may not necessarily align with the interests of holders of our shares of common stock, and the rights of holders

of shares of preferred stock to receive distributions would be senior to those of holders of shares of common stock.

We do not, however,

anticipate issuing preferred stock in the next 12 months.

We are not generally able

to issue and sell our shares of common stock at a price below NAV per share.

We may, however, sell our shares of common stock, or warrants,

options or rights to acquire our shares of common stock, at a price below the then-current NAV per share of our common stock if our Board

determines that such sale is in the best interests of us and our stockholders, and if our stockholders approve such sale.

case, the price at which our securities are to be issued and sold may not be less than a price that, in the determination of our Board,

closely approximates the market value of such securities (less any distributing commission or discount).

If we raise additional funds

by issuing common stock or senior securities convertible into, or exchangeable for, our common stock, then the percentage ownership of

our stockholders at that time will decrease, and holders of our common stock might experience dilution.

We finance our investments with borrowings

under credit facilities and issuances of senior unsecured notes, which will magnify the potential for gain or loss on amounts invested

and may increase the risk of investing in us.

The use of leverage magnifies the potential for

gain or loss on amounts invested.

The use of leverage is generally considered a speculative investment technique and increases the risks

associated with investing in our securities.

The amount of leverage that we employ will depend on the Advisor’s and our Board’s

assessment of market and other factors at the time of any proposed borrowing.

We cannot assure you that we will be able to obtain credit

at all or on terms acceptable to us.

For example, due to the interplay of the 1940 Act restrictions on principal and joint transactions

risk retention rules adopted pursuant to Section 941 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”),

as a BDC we are currently unable to enter into any securitization transactions.

We cannot assure you that the SEC or any other regulatory

authority will modify such regulations or provide administrative guidance that would permit us to enter into securitizations, whether

on a timely basis or at all.

We may issue senior debt securities to banks, insurance companies and other lenders.

Lenders of these senior securities will

have fixed dollar claims on our assets that are superior to the claims of our common stockholders, and we would expect such lenders to

seek recovery against our assets in the event of a default.

We may pledge up to 100% of our assets and may grant a security interest

in all of our assets under the terms of any debt instruments we may enter into with lenders.

In addition, under the terms of any credit

facility or other debt instrument we enter into, we are likely to be required by its terms to use the net proceeds of any investments

that we sell to repay a portion of the amount borrowed under such facility or instrument before applying such net proceeds to any other

If the value of our assets decreases, leveraging would cause our NAV to decline more sharply than it otherwise would have had we

not leveraged, thereby magnifying losses or eliminating our equity stake in a leveraged investment.

Similarly, any decrease in our net

investment income will cause our net income to decline more sharply than it would have had we not borrowed.

Such a decline would also

negatively affect our ability to make distributions on our Common Stock or any outstanding preferred stock.

Our ability to service our

debt depends largely on our financial performance and is subject to prevailing economic conditions and competitive pressures.

stockholders bear the burden of any increase in our expenses as a result of our use of leverage, including interest expenses and any

increase in the base management fee payable to the Advisor.

As a BDC, we generally are required to meet

a coverage ratio of total assets to total borrowings and other senior securities, which include our borrowings and any preferred stock

that we may issue in the future.

Lenders of these senior

securities will have fixed dollar claims on our assets that are superior to the claims of our common stockholders, and we would expect

such lenders to seek recovery against our assets in the event of a default.

We may pledge up to 100% of our assets and may grant a security

interest in all of our assets under the terms of any debt instruments we may enter into with lenders.

In addition, under the terms of

our credit facilities or future credit facilities we enter into, we are likely to be required by its terms to use the net proceeds of

any investments that we sell to repay a portion of the amount borrowed under such facility or instrument before applying such net proceeds

to any other uses.

If the value of our assets decreases, leveraging would cause our NAV to decline more sharply than it otherwise would

have had we not leveraged, thereby magnifying losses or eliminating our equity stake in a leveraged investment.

Similarly, any decrease

in our net investment income will cause our net income to decline more sharply than it would have had we not borrowed.

Such a decline

would also negatively affect our ability to make distributions on our common stock or any outstanding preferred stock.

Our ability to

service our debt depends largely on our financial performance and is subject to prevailing economic conditions and competitive pressures.

Our common stockholders bear the burden of any increase in our expenses as a result of our use of leverage, including interest expenses

and any increase in the base management fee payable to the Advisor.

As a BDC, we generally are required to meet a

coverage ratio of total assets to total borrowings and other senior securities, which include our borrowings under our credit facilities

and issuances of senior unsecured notes and any preferred stock that we may issue in the future (although we do not anticipate issuing

preferred stock in the next 12 months).

The current asset coverage ratio applicable to the Company is 150%.

If this ratio were to decline below

the then applicable minimum asset coverage ratio, we would be unable to incur additional debt and could be required to sell a portion

If this ratio were to decline

below the then applicable minimum asset coverage ratio, we would be unable to incur additional debt and could be required to sell a portion

of our investments to repay some debt when it is disadvantageous to do so.

1 unchanged sentence

and we may not be able to make distributions in amounts sufficient to maintain our status as a RIC, or at all.

Investors in our Shares may fail to

fund their Capital Commitments when due.

We call only a limited amount of Capital

Commitments from investors in the private offering of our Shares upon each drawdown notice.

The timing of drawdowns may be difficult

to predict, requiring each investor to maintain sufficient liquidity until its Capital Commitments to purchase Shares are fully funded.

We may not call an investor’s entire Capital Commitment prior to the expiration of such investor’s commitment period.

Although the Advisor will seek to manage

our cash balances so that they are not significantly larger than needed for our investments and other obligations, the Advisor’s

ability to manage cash balances may be affected by changes in the timing of investment closings, our access to leverage, defaults by

investors in our Shares, late payments of drawdown purchases and other factors.

In addition, there is no assurance that all

investors will satisfy their respective Capital Commitments.

To the extent that one or more investors does not satisfy its or their Capital

Commitments when due or at all, there could be a material adverse effect on our business, financial condition and results of operations,

including an inability to fund our investment obligations, make appropriate distributions to our stockholders or to continue to satisfy

applicable regulatory requirements under the 1940 Act.

If an investor fails to satisfy any part of its Capital Commitment when due, other

stockholders who have an outstanding Capital Commitment may be required to fund such Capital Commitment sooner than they otherwise would

have absent such default.

We cannot assure you that we will recover the full amount of the Capital Commitment of any defaulting investor.

Our ability to invest in public companies

may be limited in certain circumstances.

To maintain our status as a BDC, we are not

permitted to acquire any assets other than “qualifying assets” specified in the 1940 Act unless, at the time the acquisition

is made, at least 70% of our total assets are qualifying assets (with certain limited exceptions).

Subject to certain exceptions for follow-on investments

and investments in distressed companies, an investment in an issuer that has outstanding securities listed on a national securities exchange

may be treated as qualifying assets only if such issuer has a common equity market capitalization that is less than $250.0 million

at the time of such investment.

While we currently have no intention

to do so, our ability to enter into transactions involving derivatives and financial commitment transactions may be limited.

Recently, the SEC adopted a rulemaking regarding

the ability of a BDC (or a registered investment company) to use derivatives and other transactions that create future payment or delivery

Under the newly adopted rules, BDCs that use derivatives will be subject to a value-at-risk (“VaR”)

leverage limit, a derivatives risk management program and testing requirements and requirements related to board reporting.

requirements will apply unless the BDC qualifies as a “limited derivatives user,” as defined under the adopted rules.

the new rule, a BDC may enter into an unfunded commitment agreement that is not a derivatives transaction, such as an agreement to provide

financing to a portfolio company, if the BDC has, among other things, a reasonable belief, at the time it enters into such an agreement,

that it will have sufficient cash and cash equivalents to meet its obligations with respect to all of its unfunded commitment agreements,

in each case as it becomes due.

Collectively, these requirements may limit our ability to use derivatives and/or enter into certain other

financial contracts.

In August 2022, Rule 18f-4 under the Investment

Company Act, regarding the ability of a BDC (or a registered investment company) to use derivatives and other transactions that create

future payment or delivery obligations (except reverse repurchase agreements and similar financing transactions), became effective.

the new rule, BDCs that make significant use of derivatives are required to operate subject to a value-at-risk leverage limit, adopt

a derivatives risk management program and appoint a derivatives risk manager, and comply with various testing and board reporting requirements.

These new requirements apply unless the BDC qualifies as a “limited derivatives user,” as defined under the adopted rules.

Under the new rule, a BDC may enter into an unfunded commitment agreement that is not a derivatives transaction, such as an agreement

to provide financing to a portfolio company, if the BDC has, among other things, a reasonable belief, at the time it enters into such

an agreement, that it will have sufficient cash and cash equivalents to meet its obligations with respect to all of its unfunded commitment

agreements, in each case as it becomes due.

We currently operate as a “limited derivatives user” which may limit our ability

to use derivatives and/or enter into certain other financial contracts.

Adverse developments in the credit

markets may impair our ability to enter into new debt financing arrangements.

Following the passage of the Dodd-Frank Act

in 2010, many commercial banks and other financial institutions stopped lending or significantly curtailed their lending activity.

addition, in an effort to stem losses and reduce their exposure to segments of the economy deemed to be high risk, some financial institutions

limited routine refinancing and loan modification transactions and even reviewed the terms of existing facilities to identify bases for

accelerating the maturity of existing lending facilities.

To the extent these circumstances arise again in the future, it may be difficult

for us to finance the growth of our investments on acceptable economic terms, or at all and one or more of our leverage facilities could

be accelerated by the lenders.

Provisions in our credit facilities and

our senior unsecured notes contain various covenants, which, if not complied with, could accelerate our repayment obligations under such

facilities, thereby materially and adversely affecting our liquidity, financial condition, results of operations and ability to pay distributions.

Our Credit Facilities (as defined herein) are

backed by all or a portion of our loans and securities on which the lenders have a security interest.

We may pledge up to 100% of our

assets and may grant a security interest in all of our assets under the terms of any debt instrument we enter into with the lenders pursuant

to our Credit Facilities.

We expect that any security interests we grant will be set forth in a pledge and security agreement or other

collateral arrangement and evidenced by the filing of financing statements by the agent for the lenders.

In addition, we expect that the

custodian for our securities serving as collateral for such loan would include in its electronic systems notices indicating the existence

of such security interests and, following notice of occurrence of an event of default, if any, and during its continuance, will only accept

transfer instructions with respect to any such securities from the lender or its designee.

If we default under the terms of our Credit

Facilities, the agent for the applicable lenders would be able to assume control of the timing of disposition of any or all of our assets

securing such debt, which would have a material adverse effect on our business, financial condition, results of operations and cash flows.

In addition, any security interests and/or negative

covenants contained in our Credit Facilities limit our ability to create liens on assets to secure additional debt and make it difficult

for us to restructure or refinance indebtedness at or prior to maturity.

If our borrowing base under a credit facility decreases, we may

be required to secure additional assets in an amount sufficient to cure any borrowing base deficiency.

In the event that all of our assets

are secured at the time of such a borrowing base deficiency, we could be required to repay indebtedness under our Credit Facilities or

make deposits to a collection account, either of which could have a material adverse impact on our ability to fund future investments

and to make distributions.

We have made customary representations and warranties and are required to comply with various covenants, reporting

requirements (including requirements relating to portfolio performance, required minimum portfolio yield and limitations on delinquencies

and charge-offs) and other customary requirements for similar credit facilities.

Our 8.65% Series A Notes due June 2027 (the “Series

A Notes”) and 8.74% Series B Notes due June 2028 (the “Series B Notes”, and collectively with the Series A Notes, the

“Notes”) were issued under a note purchase agreement, dated June 29, 2023 (the “Note Purchase Agreement”).

Note Purchase Agreement contains certain representations and warranties, and various covenants and reporting requirements customary for

agreements of this type, including, without limitation, information reporting, maintenance of our status as a BDC within the meaning of

the 1940 Act, and certain restrictions with respect to transactions with affiliates, fundamental changes, changes of line of business

and permitted liens.

In addition, the Note Purchase Agreement contains the following financial covenants, which are measured as of each

fiscal quarter-end:

(a) maintaining a minimum shareholders’ equity and (b) maintaining a minimum asset coverage ratio.

Our continued compliance with the covenants contained

under the Credit Facilities and the Note Purchase Agreement depends on many factors, some of which are beyond our control, and there can

be no assurances that we will continue to comply with such covenants.

Our failure to satisfy the respective covenants could result in

foreclosure by the lenders under the applicable credit facility or governing instrument or acceleration by the applicable lenders or noteholders,

which would accelerate our repayment obligations under the relevant agreement and thereby have a material adverse effect on our business,

liquidity, financial condition, results of operations and ability to pay distributions to our stockholders.

Because the Credit Facilities

and the Note Purchase Agreement have, and any future credit facilities and documents governing the issuance of senior unsecured notes

will likely have, customary cross-default provisions, if the indebtedness under the Credit Facilities or represented by the Series A Notes

or the Series B Notes or under any future credit facility or senior unsecured note, is accelerated, we may be unable to repay or finance

the amounts due.

Adverse developments in the credit markets

may impair our ability to enter into new credit facilities or our ability to issue senior unsecured notes.

Following the passage of Dodd-Frank 2010, many

commercial banks and other financial institutions stopped lending or significantly curtailed their lending activity.

In addition, in an

effort to stem losses and reduce their exposure to segments of the economy deemed to be high risk, some financial institutions limited

routine refinancing and loan modification transactions and even reviewed the terms of existing facilities to identify bases for accelerating

the maturity of existing lending facilities.

To the extent these circumstances arise again in the future, it may be difficult for us to

finance the growth of our investments on acceptable economic terms, or at all, and one or more of our credit facilities could be accelerated

by the lenders.

If we do not invest a sufficient portion

of our assets in qualifying assets, we could fail to qualify as a BDC or be precluded from investing according to our current business

As a BDC, we may not acquire any assets other

than “qualifying assets” unless, at the time of and after giving effect to such acquisition, at least 70% of our total assets

are qualifying assets.

See “ Item 1.

Business — Regulation as a Business Development Company — Qualifying Assets .”

In the future, we believe that most of our

investments will constitute qualifying assets.

However, we may be precluded from investing in what we believe are attractive investments

if such investments are not qualifying assets for purposes of the 1940 Act.

If we do not invest a sufficient portion of our assets in

qualifying assets, we could violate the 1940 Act provisions applicable to BDCs.

As a result of such violation, specific rules under the

1940 Act could prevent us, for example, from making follow-on investments in existing portfolio companies (which could result

in the dilution of our position) or could require us to dispose of investments at inappropriate times in order to come into compliance

with the 1940 Act.

If we need to dispose of such investments quickly, it could be difficult to dispose of such investments on favorable

We may not be able to find a buyer for such investments and, even if we do find a buyer, we may have to sell the investments at

a substantial loss.

Any such outcomes would have a material adverse effect on our business, financial condition, results of operations

and cash flows.

Failure to qualify as a BDC would decrease

our operating flexibility.

If we do not maintain our status as a BDC,

we would be subject to regulation as a registered closed-end investment company under the 1940 Act.

As a registered closed-end investment

company, we would be subject to substantially more regulatory restrictions under the 1940 Act which would significantly decrease our

operating flexibility.

strategy and such failure would decrease our operating flexibility.

As a BDC, we may not acquire

any assets other than “qualifying assets” unless, at the time of and after giving effect to such acquisition, at least 70%

of our total assets are qualifying assets.

In the future, we believe

that most of our investments will constitute qualifying assets.

However, we may be precluded from investing in what we believe are attractive

investments if such investments are not qualifying assets for purposes of the 1940 Act.

If we do not invest a sufficient portion of our

assets in qualifying assets, we could violate the 1940 Act provisions applicable to BDCs.

As a result of such violation, specific rules

under the 1940 Act would significantly decrease our operating flexibility and could prevent us, for example, from making follow-on investments

in existing portfolio companies (which could result in the dilution of our position) or could require us to dispose of investments at

inappropriate times in order to come into compliance with the 1940 Act.

If we need to dispose of such investments quickly, it could be

difficult to dispose of such investments on favorable terms.

We may not be able to find a buyer for such investments and, even if we do

find a buyer, we may have to sell the investments at a substantial loss.

Any such outcomes would have a material adverse effect on our

business, financial condition, results of operations and cash flows.

The majority of our portfolio investments

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portfolio investments.

The majority of our portfolio investments

take the form of securities for which no market quotations are readily available.

The fair value of securities and other investments that

are not publicly traded may not be readily determinable, and we value these securities at fair value as determined in good faith by our

Advisor, including to reflect significant events affecting the value of our securities.

As discussed in more detail under “ Item

—Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies

– Investment Valuation ,” most, if not all, of our investments (other than cash and cash equivalents) are classified as

Level 3 under ASC Topic 820.

This means that our portfolio valuations are based on unobservable inputs and our own assumptions about

how market participants would price the asset or liability in question.

Inputs into the determination of fair value of our portfolio investments

require significant management judgment or estimation.

Even if observable market data are available, such information may be the result

of consensus pricing information or broker quotes, which may include a disclaimer that the broker would not be held to such a price in

an actual transaction.

The non-binding nature of consensus pricing and/or quotes accompanied by disclaimers materially reduces

the reliability of such information.

Our Level 3 investments will typically consist of instruments

for which a liquid trading market does not exist.

The fair value of these instruments may not be readily determinable.

We will value these

instruments in accordance with valuation procedures adopted by our Advisor.

We intend to use the services of an independent valuation

firm to review the fair value of certain instruments prepared by our Advisor.

At least once annually, the valuation for each portfolio

investment for which a market quote is not readily available will be reviewed by an independent valuation firm.

The types of factors that

the Advisor may consider in fair value pricing of our investments include, where relevant:

the nature and realizable value of any collateral;

the company’s ability to make interest payments, amortization payments (if any) and other fixed charges;

the company’s historical

and projected financial results;

The majority of our portfolio

investments take the form of securities for which no market quotations are readily available.

The fair value of securities and other investments

that are not publicly traded may not be readily determinable, and we value these securities at fair value as determined in good faith

by our Advisor, including to reflect significant events affecting the value of our securities.

As discussed in more detail under “ Management’s

Discussion and Analysis of Financial Condition and Results of Operations – Contractual Obligations -- Investment Valuation ,”

most, if not all, of our investments (other than cash and cash equivalents) are classified as Level 3 under ASC Topic 820.

that our portfolio valuations are based on unobservable inputs and our own assumptions about how market participants would price the asset

or liability in question.

Inputs into the determination of fair value of our portfolio investments require significant management judgment

or estimation.

Even if observable market data are available, such information may be the result of consensus pricing information or broker

quotes, which may include a disclaimer that the broker would not be held to such a price in an actual transaction.

The non-binding nature

of consensus pricing and/or quotes accompanied by disclaimers materially reduces the reliability of such information.

Our Level 3 investments will

typically consist of instruments for which a liquid trading market does not exist.

The fair value of these instruments may not be readily

determinable.

We will value these instruments in accordance with valuation procedures adopted by our Advisor.

We intend to use the services

of an independent valuation firm to review the fair value of certain instruments prepared by our Advisor.

At least once annually, the

valuation for each portfolio investment for which a market quote is not readily available will be reviewed by an independent valuation

The types of factors that the Advisor may consider in fair value pricing of our investments include, where relevant:

and realizable value of any collateral;

the company’s ability to make interest payments, amortization payments (if any) and other

fixed charges;

the company’s historical and projected financial results;

the markets in which the company does business;

the estimated enterprise value of the company based on

comparisons to publicly-traded securities, on discounted cash flows and other valuation methodologies;

changes in the interest rate environments

and the credit markets generally that may affect the price at which similar investments may be made;

the estimated

enterprise value of the company based on comparisons to publicly-traded securities, on discounted cash flows and other valuation methodologies;

changes in the interest rate environments and the credit markets generally that may affect the price at which similar investments may

and other relevant factors.

such valuations, and particularly valuations of non-traded instruments and private companies, are inherently uncertain, they

may fluctuate over short periods of time and may be based on estimates.

The determination of fair value by our Advisor may differ materially

from the values that would have been used if a liquid trading market for these instruments existed.

Our net asset value (“NAV”)

could be adversely affected if the determinations regarding the fair value of our investments were materially higher than the values that

we ultimately realize upon the disposal of such investments.

We adjust quarterly (or as otherwise may be required by the 1940 Act

in connection with the issuance of our shares) the valuation of our portfolio to reflect our Advisor’s determination of the fair

value of each investment in our portfolio.

Any changes in fair value are recorded in our consolidated statement of operations as net change

in unrealized appreciation or depreciation.

In December 2020, the SEC adopted new Rule 2a-5 under

the 1940 Act.

The new rule is intended to modernize valuation practices for registered funds, including business development companies.

Pursuant to Rule 2a-5 and effective September 1, 2022, the Board of Directors designated the Advisor as the “valuation designee”

to perform fair value determination of our portfolio holdings, subject to oversight by and periodic reporting to the Board.

The valuation

designee will perform fair valuation of our portfolio holdings in accordance with our Valuation Program, as approved by the Board.

Advisor’s internal valuation process did not materially change as a result of Rule 2a-5.

New or modified laws or regulations

governing our operations may adversely affect our business.

We and our portfolio companies are subject

to regulation by laws at the U.S.

Because such valuations, and particularly valuations of non-traded instruments and private companies,

are inherently uncertain, they may fluctuate over short periods of time and may be based on estimates.

The determination of fair value

by our Advisor may differ materially from the values that would have been used if a liquid trading market for these instruments existed.

Our NAV could be adversely affected if the determinations regarding the fair value of our investments were materially higher than the

values that we ultimately realize upon the disposal of such investments.

We adjust quarterly (or as

otherwise may be required by the 1940 Act in connection with the issuance of our shares) the valuation of our portfolio to reflect our

Advisor’s determination of the fair value of each investment in our portfolio.

Any changes in fair value are recorded in our consolidated

statement of operations as net change in unrealized appreciation or depreciation.

New or modified laws or regulations governing

our operations and government intervention in the credit markets generally may adversely affect our business.

We and our portfolio companies

are subject to regulation by laws at the U.S.

federal, state and local levels.

These laws and regulations, as well as their interpretation, may change

from time to time, including as the result of interpretive guidance or other directives from the U.S.

President and others in the executive

branch, and new laws, regulations and interpretations may also come into effect.

Any such new or changed laws or regulations could have

a material adverse effect on our business.

In particular, Dodd-Frank has impacted many aspects of the financial services industry, and

it requires the development and adoption of many implementing regulations over several years.

The SEC has adopted final rules for over

60 mandatory rulemaking provisions under Dodd-Frank, with several additional rules proposed but not yet adopted.

While the ultimate impact

of Dodd-Frank on us and our portfolio companies may not be known for an extended period of time, Dodd-Frank, including the interpretation

These laws and regulations, as well as their interpretation,

may change from time to time, including as the result of interpretive guidance or other directives from the U.S.

President and others

in the executive branch, and new laws, regulations and interpretations may also come into effect.

Any such new or changed laws or regulations

could have a material adverse effect on our business.

In particular, Dodd-Frank has impacted many aspects of the financial services industry,

and it requires the development and adoption of many implementing regulations over several years.

The SEC has adopted final rules for

over 60 mandatory rulemaking provisions under Dodd-Frank, with several additional rules proposed but not yet adopted.

While the ultimate

impact of Dodd-Frank on us and our portfolio companies may not be known for an extended period of time, Dodd-Frank, including the interpretation

of the rules implementing its provisions and any future rules that may be adopted, along with other legislative and regulatory proposals

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the regulatory supervision of us or our portfolio companies or otherwise adversely affect our business or the business of our portfolio

In addition, if we do not comply with applicable laws and regulations, we could lose any licenses that we then hold for the

conduct of our business and may be subject to civil fines and criminal penalties.

Additionally, changes to the laws and regulations

governing our operations, including those associated with RICs, may cause us to alter our investment strategy in order to avail ourselves

of new or different opportunities or result in the imposition of corporate-level taxes on us.

Such changes could result in material differences

to our strategies and plans and may shift our investment focus from the areas of expertise of the Advisor to other types of investments

in which the Advisor may have little or no expertise or experience.

Any such changes, if they occur, could have a material adverse effect

on our results of operations and the value of your investment.

If we invest in commodity interests in the future, the Advisor may determine

not to use investment strategies that trigger additional regulation by the U.S.

Commodity Futures Trading Commission, or CFTC, or may

determine to operate subject to CFTC regulation, if applicable.

If we or the Advisor were to operate subject to CFTC regulation, we may

incur additional expenses and would be subject to additional regulation.

In addition, certain regulations applicable

to debt securitizations implementing credit risk retention requirements that have taken effect in both the U.S.

and in Europe may adversely

affect or prevent us from entering into any future securitization transaction.

The impact of these risk retention rules on the loan securitization

market are uncertain, and such rules may cause an increase in our cost of funds under or may prevent us from completing any future securitization

transactions.

In addition, the central banks

and, in particular, the U.S.

Federal Reserve, have taken unprecedented steps since the financial crises of 2008-2009, the COVID-19 global

pandemic and in response to inflationary pressures.

On the other hand, recent governmental intervention could mean that the willingness

of governmental bodies to take additional extraordinary action is diminished.

It is impossible to predict if, how, and to what extent

the United States and other governments would further intervene in credit markets.

As a result, in the event of near-term major market

disruptions, like those caused by the COVID-19 pandemic, there might be only limited additional government intervention, resulting in

correspondingly greater market dislocation and materially greater market risk.

Additionally, changes to the

laws and regulations governing our operations, including those associated with RICs, may cause us to alter our investment strategy in

order to avail ourselves of new or different opportunities or result in the imposition of corporate-level taxes on us.

Such changes could

result in material differences to our strategies and plans and may shift our investment focus from the areas of expertise of the Advisor

to other types of investments in which the Advisor may have little or no expertise or experience.

Any such changes, if they occur, could

have a material adverse effect on our results of operations and the value of your investment.

If we invest in commodity interests in the

future, the Advisor may determine not to use investment strategies that trigger additional regulation by the U.S.

Commodity Futures Trading

Commission (the “CFTC”), or may determine to operate subject to CFTC regulation, if applicable.

If we or the Advisor were

to operate subject to CFTC regulation, we may incur additional expenses and would be subject to additional regulation.

In addition, certain regulations

applicable to debt securitizations implementing credit risk retention requirements that have taken effect in both the U.S.

and in Europe

may adversely affect or prevent us from entering into any future securitization transaction.

The impact of these risk retention rules

on the loan securitization market are uncertain, and such rules may cause an increase in our cost of funds under or may prevent us from

completing any future securitization transactions.

On October 21, 2014, U.S.

risk retention rules adopted pursuant to Section 941 of Dodd-Frank, or the U.S.

Retention Rules, were issued.

Risk Retention Rules require the sponsor (directly or through a majority-owned affiliate) of a

debt securitization subject to such rules, such as collateralized loan obligations, in the absence of an exemption, to retain an economic

interest in the credit risk of the assets being securitized in the form of an eligible horizontal residual interest, an eligible vertical

interest, or a combination thereof, in accordance with the requirements of the U.S.

Risk Retention Rules.

risk retention rules adopted pursuant to Section 941 of Dodd-Frank,

Risk Retention Rules, were issued.

Risk Retention Rules require the sponsor (directly or through a majority-owned

affiliate) of a debt securitization subject to such rules, such as collateralized loan obligations, in the absence of an exemption, to

retain an economic interest in the credit risk of the assets being securitized in the form of an eligible horizontal residual interest,

an eligible vertical interest, or a combination thereof, in accordance with the requirements of the U.S.

Risk Retention Rules.

became effective December 24, 2016.

Given the more attractive financing costs associated with these types of debt securitization

as opposed to other types of financing available (such as traditional senior secured facilities), this would, in turn, increase our financing

Risk Retention Rules became effective December 24, 2016.

Given the more attractive financing costs associated with these types of debt

securitization as opposed to other types of financing available (such as traditional senior secured facilities), this would, in turn,

increase our financing costs.

Any associated increase in financing costs would ultimately be borne by our common stockholders.

On May 24, 2018, the Economic Growth,

Regulatory Relief, and Consumer Protection Act was enacted, which left the architecture and core features of Dodd-Frank intact but significantly

recalibrated applicability thresholds, revised various post-crisis regulatory requirements, and provided targeted regulatory relief to

certain financial institutions.

Among the most significant of its amendments to Dodd-Frank were a substantial increase in the $50 billion

asset threshold to $250 billion for automatic regulation of BHCs as “systemically important financial institutions” an

exemption from the Volcker Rule for insured depository institutions with less than $10 billion in consolidated assets and lower levels

of trading assets and liabilities, as well as amendments to the liquidity leverage ratio and supplementary leverage ratio requirements.

In addition, effective October 1, 2020, the Federal Reserve, SEC and other federal agencies modified their regulations under the Volcker

Rule to loosen the restrictions on financial institutions.

The effects of these and any further rules or regulations that may be enacted

by the Biden administration or future administrations, are and could be complex and far-reaching, and the change and any future

laws or regulations or changes thereto could negatively impact our operations, cash flows or financial condition, impose additional costs

on us, intensify the regulatory supervision of us or otherwise adversely affect our business, financial condition and results of operations.

Over the last several years, there also has

been an increase in regulatory attention to the extension of credit outside of the traditional banking sector, raising the possibility

that some portion of the non-bank financial sector will be subject to new regulation.

While it cannot be known at this time

whether any regulation will be implemented or what form it will take, increased regulation of non-bank credit extension could

negatively impact our operations, cash flows or financial condition, impose additional costs on us, intensify the regulatory supervision

of us or otherwise adversely affect our business, financial condition and results of operations.

Political uncertainty could adversely

affect our business.

markets could experience political uncertainty and/or

change that subjects investments to heightened risks, including, for instance, risks related to elections in the U.S., the large-scale

invasion of Ukraine by Russia that began in February 2022, heightened tensions between China and Taiwan, or the effect on world leaders

and governments of global health pandemics, such as the COVID-19 pandemic.

These heightened risks could also include:

increased risk of

default (by both government and private issuers);

greater social, trade, economic and political instability (including the risk of war

or terrorist activity);

greater governmental involvement in the economy;

greater governmental supervision and regulation of the securities

markets and market participants resulting in increased expenses related to compliance;

greater fluctuations in currency exchange rates;

controls or restrictions on foreign investment and/or trade, capital controls and limitations on repatriation of invested capital and

on the ability to exchange currencies;

inability to purchase and sell investments or otherwise settle security or derivative transactions

(i.e., a market freeze);

unavailability of currency hedging techniques;

and slower clearance.

During times of political uncertainty and/or

change, global markets often become more volatile.

There could also be a lower level of monitoring and regulation of markets while a country

is experiencing political uncertainty and/or change, and the activities of investors in such markets and enforcement of existing regulations

could become more limited.

Markets experiencing political uncertainty and/or change could have substantial, and in some periods extremely

high, rates of inflation for many years.

Inflation and rapid fluctuations in inflation rates typically have negative effects on such countries’

economies and markets.

Tax laws could change materially, and any changes in tax laws could have an unpredictable effect on us, our investments

and our investors.

There can be no assurance that political changes will not cause us or our investors to suffer losses.

We do not currently

have portfolio investments with exposure to China, Taiwan, Russia or Ukraine.

Our Board of Directors may change our

investment objective, operating policies and strategies without prior notice or stockholder approval.

Our Board of Directors has the authority,

On May 24, 2018, the Economic

Growth, Regulatory Relief, and Consumer Protection Act was enacted, which left the architecture and core features of Dodd-Frank intact

but significantly recalibrated applicability thresholds, revised various post-crisis regulatory requirements, and provided targeted regulatory

relief to certain financial institutions.

Among the most significant of its amendments to Dodd-Frank were a substantial increase in the

$50 billion asset threshold to $250 billion for automatic regulation of bank holding companies (“BHCs”) as “systemically

important financial institutions” an exemption from the Volcker Rule for insured depository institutions with less than $10 billion

in consolidated assets and lower levels of trading assets and liabilities, as well as amendments to the liquidity leverage ratio and supplementary

leverage ratio requirements.

In addition, effective October 1, 2020, the U.S.

Federal Reserve, SEC and other federal agencies modified

their regulations under the Volcker Rule to loosen the restrictions on financial institutions.

The effects of these and any further rules

or regulations that may be enacted by the Biden administration or future administrations, are and could be complex and far-reaching, and

the change and any future laws or regulations or changes thereto could negatively impact our operations, cash flows or financial condition,

impose additional costs on us, intensify the regulatory supervision of us or otherwise adversely affect our business, financial condition

and results of operations.

Over the last several years,

there also has been an increase in regulatory attention to the extension of credit outside of the traditional banking sector, raising

the possibility that some portion of the non-bank financial sector will be subject to new regulation.

While it cannot be known at this

time whether any regulation will be implemented or what form it will take, increased regulation of non-bank credit extension could negatively

impact our operations, cash flows or financial condition, impose additional costs on us, intensify the regulatory supervision of us or

otherwise adversely affect our business, financial condition and results of operations.

Ongoing implementation of,

or changes in, including changes in interpretation or enforcement of, laws and regulations could impose greater costs on us and on financial

services companies and impact the value of assets we hold and our business, financial condition and results of operations.

uncertainty regarding legislation and regulations affecting the financial services industry or taxation could also adversely impact our

business or the business of our portfolio companies.

If we do not comply with applicable laws and regulations, we could lose any licenses

that we then hold for the conduct of our business and may be subject to civil fines and criminal penalties.

Our Board may change our investment objective,

operating policies and strategies without prior notice or stockholder approval, and we may temporarily deviate from our regular investment

Our Board has the authority,

except as otherwise provided in the 1940 Act, to modify or waive our investment objective and certain of our operating policies and strategies

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any such changes could adversely affect our business and impair our ability to make distributions.

Provisions of the DGCL and of our charter

and bylaws could deter takeover attempts and have an adverse effect on the price of our Shares.

The General Corporation Law of the State

of Delaware, as amended (the “DGCL”), contains provisions that may discourage, delay or make more difficult a change in control

of us or the removal of our directors.

Our charter and bylaws will contain provisions that limit liability and provide for indemnification

of our directors and officers.

These provisions and others which we may adopt also may have the effect of deterring hostile takeovers

or delaying changes in control or management.

We will be subject to Section 203 of the DGCL, the application of which is subject

to any applicable requirements of the 1940 Act.

This section generally prohibits us from engaging in mergers and other business combinations

with stockholders that beneficially own 15% or more of our voting stock, either individually or together with their affiliates, unless

our directors or stockholders approve the business combination in the prescribed manner.

Our Board of Directors will adopt a resolution

exempting from Section 203 of the DGCL any business combination between us and any other person, subject to prior approval of such

business combination by our Board of Directors, including approval by a majority of our directors who are not “interested persons.”

If our Board of Directors does not adopt, or adopts but later repeals such resolution exempting business combinations, or if our Board

of Directors does not approve a business combination, Section 203 of the DGCL may discourage third parties from trying to acquire

control of us and increase the difficulty of consummating such an offer.

We also will adopt measures that may make

it difficult for a third party to obtain control of us, including provisions of our charter that classify our Board of Directors in three

classes serving staggered three-year terms, and provisions of our charter authorizing our Board to classify or reclassify shares of our

preferred stock in one or more classes or series, to cause the issuance of additional shares of our stock, and to amend our charter,

without stockholder approval, to increase or decrease the number of shares of stock that we have authority to issue.

These provisions,

as well as other provisions in our charter and bylaws, may delay, defer or prevent a transaction or a change in control in circumstances

that could give our stockholders the opportunity to realize a premium of the NAV of our Shares.

The Advisor can resign on 60 days’

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adversely affect our financial condition, business and results of operations.

The Advisor has the right to resign under

the Investment Advisory Agreement at any time upon not less than 60 days’ written notice, whether we have found a replacement or

If the Advisor resigns, we may not be able to find a new investment advisor or hire internal management with similar expertise and

ability to provide the same or equivalent services on acceptable terms within 60 days, or at all.

If we are unable to do so quickly,

our operations are likely to experience a disruption, our business, financial condition, results of operations and cash flows as well

as our ability to pay distributions are likely to be adversely affected and the value of our shares may decline.

In addition, the coordination

of our internal management and investment activities is likely to suffer if we are unable to identify and reach an agreement with a single

institution or group of executives having the expertise possessed by the Advisor and its affiliates.

Even if we are able to retain comparable

management, whether internal or external, the integration of such management and their lack of familiarity with our investment objective

may result in additional costs and time delays that may adversely affect our business, financial condition, results of operations and

The Administrator can resign on 60

days’ notice, and we may not be able to find a suitable replacement, resulting in a disruption in our operations that could adversely

affect our financial condition, business and results of operations.

The Administrator has the right to resign

under the Administration Agreement at any time upon not less than 60 days’ written notice, whether we have found a replacement

If the Administrator resigns, we may not be able to find a new administrator or hire internal management with similar expertise

and ability to provide the same or equivalent services on acceptable terms, or at all.

If we are unable to do so quickly, our operations

are likely to experience a disruption, our financial condition, business and results of operations as well as our ability to pay distributions

are likely to be adversely affected and the value of our shares may decline.

In addition, the coordination of our internal management

and administrative activities is likely to suffer if we are unable to identify and reach an agreement with a service provider or individuals

with the expertise possessed by the Administrator.

Even if we are able to retain a comparable service provider or individuals to perform

such services, whether internal or external, their integration into our business and lack of familiarity with our investment objective

may result in additional costs and time delays that may adversely affect our business, financial condition, results of operations and

We are an “emerging growth company,”

and we do not know if such status will make our shares less attractive to investors.

We are an “emerging growth company,”

as defined in the JOBS Act, until the earliest of:

last day of the fiscal year ending after the fifth anniversary of any initial public offer

year in which our total annual gross revenues first exceed $1.07 billion;

date on which we have, during the prior three-year period, issued more than $1.0 billion

in non-convertible debt;

last day of a fiscal year in which we (1) have an aggregate worldwide market value of

our Shares held by non-affiliates of $700 million or more, computed at the

end of each fiscal year as of the last business day of our most recently completed second

fiscal quarter, and (2) have been a reporting company under the Exchange Act for at

least one year (and filed at least one annual report under the Exchange Act).

we are still evaluating the JOBS Act, we may take advantage of some or all of the reduced regulatory and disclosure requirements permitted

by the JOBS Act and, as a result, some investors may consider our Shares less attractive.

We will incur significant costs as

a result of being registered under the Exchange Act.

The Advisor has the right

to resign under the Investment Advisory Agreement at any time upon not less than 60 days’ written notice, whether we have found

a replacement or not.

If the Advisor resigns, we may not be able to find a new investment advisor or hire internal management with similar

expertise and ability to provide the same or equivalent services on acceptable terms within 60 days, or at all.

If we are unable to do

so quickly, our operations are likely to experience a disruption, our business, financial condition, results of operations and cash flows

as well as our ability to pay distributions are likely to be adversely affected and the value of our shares may decline.

the coordination of our internal management and investment activities is likely to suffer if we are unable to identify and reach an agreement

with a single institution or group of executives having the expertise possessed by the Advisor and its affiliates.

Even if we are able

to retain comparable management, whether internal or external, the integration of such management and their lack of familiarity with our

investment objective may result in additional costs and time delays that may adversely affect our business, financial condition, results

of operations and cash flows.

We will incur significant costs as a

result of being registered under the Exchange Act.

We will incur legal, accounting and other

expenses, including costs associated with the periodic reporting requirements applicable to a company whose securities are registered

under the Exchange Act, as well as additional corporate governance requirements, including requirements under the Sarbanes-Oxley Act

and other rules implemented by the SEC.

Efforts to comply with the Sarbanes-Oxley

Act will involve significant expenditures, and non-compliance with the Sarbanes-Oxley Act would adversely affect us and the

value of our Shares.

under the Exchange Act, as well as additional corporate governance requirements, including requirements under the Sarbanes-Oxley Act and

other rules implemented by the SEC.

to comply with the Sarbanes-Oxley Act will involve significant expenditures, and non-compliance with the Sarbanes-Oxley Act would

adversely affect us and the value of our shares of common stock.

We are required to comply with certain requirements

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until we have been registered under the Exchange Act for a specified period of time or cease to be an “emerging growth company.”

Upon registering our Shares under the Exchange

Act, we will be subject to the Sarbanes-Oxley Act and the related rules and regulations promulgated by the SEC, and our management will

be required to report on our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act.

be required to review on an annual basis our internal control over financial reporting, and on a quarterly and annual basis to evaluate

and disclose changes in our internal control over financial reporting.

As a result, we expect to incur significant additional expenses

that may negatively impact our financial performance and our ability to make distributions.

This process will also result in a diversion

of management’s time and attention.

We do not know when our evaluation, testing and remediation actions will be completed or its

impact on our operations.

In addition, we may be unable to ensure that the process is effective or that our internal control over financial

reporting is or will be effective.

In the event that we are unable to come into and maintain compliance with the Sarbanes-Oxley Act and

related rules, we and the value of our securities would be adversely affected.

We are highly dependent on information

systems, and systems failures could significantly disrupt our business, which may, in turn, negatively affect the value of our Shares

and our ability to pay distributions.

Our business depends on the communications

and information systems of our Advisor and its affiliates.

These systems are subject to potential attacks, including through adverse

events that threaten the confidentiality, integrity or availability of our information resources (i.e., cyber incidents).

Cyber hacking

could also cause significant disruption and harm to the companies in which we invest.

government has issued warnings that certain

essential assets, specifically those related to energy and infrastructure, including exploration and production facilities, pipelines

and transmission and distribution facilities, might be specific targets of terrorist activity.

Additionally, digital and network technologies

(collectively, “cyber networks”) might be at risk of cyberattacks that could potentially seek unauthorized access to digital

systems for purposes such as misappropriating sensitive information, corrupting data or causing operational disruption.

might potentially be carried out by persons using techniques that could range from efforts to electronically circumvent network security

or overwhelm websites to intelligence gathering and social engineering functions aimed at obtaining information necessary to gain access.

These attacks could involve gaining unauthorized access to our information systems for purposes of misappropriating assets, stealing

confidential information, corrupting data or causing operational disruption and result in disrupted operations, misstated or unreliable

financial data, liability for stolen assets or information, increased cybersecurity protection and insurance costs, litigation and damage

to our business relationships, any of which could, in turn, have a material adverse effect on our operating results and negatively affect

the value of our securities and our ability to pay distributions to our stockholders.

As our reliance on technology has increased, so

have the risks posed to our information systems, both internal and those provided by the Advisor and third-party service providers.

We and many of our third-party service providers currently have work

from home policies.

Such a policy of remote working could strain our technology resources and introduce operational risks, including heightened

cybersecurity risks and other risks described above.

Remote working environments may be less secure and more susceptible to hacking

attacks, including phishing and social engineering attempts that seek to exploit the remote work environments.

Upon registering our shares of common stock under the Exchange Act,

we will be subject to the Sarbanes-Oxley Act and the related rules and regulations promulgated by the SEC, and our management will be

required to report on our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act.

required to review on an annual basis our internal control over financial reporting, and on a quarterly and annual basis to evaluate and

disclose changes in our internal control over financial reporting.

As a result, we expect to incur significant additional expenses that

may negatively impact our financial performance and our ability to make distributions.

This process will also result in a diversion of

management’s time and attention.

We do not know when our evaluation, testing and remediation actions will be completed or its impact

on our operations.

In addition, we may be unable to ensure that the process is effective or that our internal control over financial reporting

is or will be effective.

In the event that we are unable to come into and maintain compliance with the Sarbanes-Oxley Act and related

rules, we and the value of our securities would be adversely affected.

We are highly dependent on information systems,

and cybersecurity risks and cyber incidents may adversely affect our business or the business of our portfolio companies, which may, in

turn, negatively affect the value of our shares of common stock and our ability to pay distributions.

Our business depends on the

communications and information systems of our Advisor and its affiliates, our portfolio companies and third-party service providers.

systems are subject to potential cybersecurity attacks and incidents, including through adverse events that threaten the confidentiality,

integrity or availability of our information resources.

Cyber hacking could also cause significant disruption and harm to the companies

in which we invest.

Additionally, digital and network technologies (collectively, “cyber networks”) might be at risk of cyberattacks

that could potentially seek unauthorized access to digital systems for purposes such as misappropriating sensitive information, corrupting

data or causing operational disruption.

Cyberattacks might potentially be carried out by persons using techniques that could range from

efforts to electronically circumvent network security or overwhelm websites to intelligence gathering and social engineering functions

aimed at obtaining information necessary to gain access.

These attacks could involve gaining unauthorized access to our information systems

for purposes of misappropriating assets, stealing confidential information, corrupting data or causing operational disruption and result

in disrupted operations, misstated or unreliable financial data, liability for stolen assets or information, increased cybersecurity protection

and insurance costs, litigation and damage to our business relationships, any of which could, in turn, have a material adverse effect

on our operating results and negatively affect the value of our securities and our ability to pay distributions to our stockholders.

As our reliance on technology

has increased, so have the risks posed to our information systems, both internal and those provided by the Advisor and third-party service

In addition, we and the Advisor currently or in the future are expected to routinely transmit and receive personal, confidential

and proprietary information by email and other electronic means.

We and the Advisor may not be able to ensure secure capabilities with

all of our clients, vendors, service providers, counterparties and other third parties to protect the confidentiality of the information.

In addition, we, the Advisor

and many of our third-party service providers currently have work from home policies.

Such a policy of remote working could strain our

technology resources and introduce operational risks, including heightened cybersecurity risks and other risks described above.

working environments may be less secure and more susceptible to hacking attacks, including phishing and social engineering attempts.

is no assurance that any efforts to mitigate cybersecurity risks undertaken by us or our Advisor will be effective.

Network, system, application

and data breaches as a result of cybersecurity risks or cyber incidents could result in operational disruptions or information misappropriation

that could have a material adverse effect on our business, results of operations and financial condition of us and of our portfolio companies.

There may be trademark risk, as we do not

own the Kayne Anderson name.

We do not own the Kayne Anderson

name, but we are permitted to use it as part of our corporate name pursuant to a license agreement with the Advisor.

Use of the name by

other parties or the termination of the license agreement may harm our business.

Risks Relating to Our Investments

Economic recessions or downturns could

impair our portfolio companies and defaults by our portfolio companies will harm our operating results.

Many of our portfolio companies in which

we may invest are susceptible to economic slowdowns or recessions and may experience declines in revenue, and in turn, declines in cash

flows during these periods and be unable to repay our loans during these periods.

Therefore, the value of our portfolio is likely to

decrease during these periods and the portion of our investments that are considered to be non-performing is likely to increase.

Adverse economic conditions may decrease the value of collateral securing some of our loans and the value of our equity investments.

Economic slowdowns or recessions could lead to financial losses in our portfolio and a decrease in revenues, net income and assets.

economic conditions also could increase our funding costs, limit our access to the capital markets or result in a decision by lenders

not to extend credit to us.

These events could prevent us from increasing our investments and harm our operating results.

A portfolio company’s failure to satisfy

financial or operating covenants imposed by us or other lenders could lead to defaults and, potentially, termination of its loans and

foreclosure on its assets, which could trigger cross-defaults under other agreements and jeopardize our portfolio company’s ability

to meet its obligations under the debt securities that we hold.

We may incur expenses to the extent necessary to seek recovery upon default

or to negotiate new terms with a defaulting portfolio company.

In addition, lenders in certain cases can be subject to lender liability

claims for actions taken by them when they become too involved in the borrower’s business or exercise control over a borrower.

It is possible that we could become subject to a lender’s liability claim, including as a result of actions taken if we render

managerial assistance to the borrower.

Higher levels of inflation can reduce our returns and the value

of our investments.

During any period of higher-than-normal levels of inflation, such as

the current inflationary environment, interest rates typically increase.

Higher interest rates will increase the cost of our borrowings

and reduce returns to stockholders (including resulting in lower dividend payments by us).

Further, in response to rising risk-free interest

rates, market participants could require higher rates of interest on the types of loans and credit investments that we own, which would

decrease the value of those investments.

In an effort to control inflation, the Federal Open Market Committee,

the committee within the Federal Reserve that sets domestic monetary policy, raised the target range for the federal funds rate seven

times in calendar year 2022 to a current range of 4.25% to 4.50%.

The Federal Reserve has signaled that further increases will likely

happen in 2023.

Rising rates generally have a negative impact on income-oriented investments such as those in which we invest and could

be adversely impacted by these actions.

There is no assurance that the actions being taken by the Federal Reserve will improve the outlook

for long-term inflation or whether they might result in a recession.

A recession could lead to declined employment, global demand destruction

and/or business failures, which may result in a decline in the value of our portfolio.

In addition, increased interest rates could increase

our cost of borrowing and reduce the return on leverage to common shareholders.

Rising interest rates could affect the value

of our investments and make it more difficult for portfolio companies to make periodic payments on their loans.

Interest rate risk refers

to the risk of market changes in interest rates.

Interest rate changes affect the value of debt.

In general, rising interest rates will

negatively impact the price of fixed rate debt, and falling interest rates will have a positive effect on price.

Adjustable-rate debt

also reacts to interest rate changes in a similar manner, although generally to a lesser degree.

Interest rate sensitivity is generally

larger and less predictable in debt with uncertain payment or prepayment schedules.

Further, rising interest rates make it more difficult

for borrowers to repay debt, which could increase the risk of payment defaults.

Any failure of one or more portfolio companies to repay

or refinance its debt at or prior to maturity or the inability of one or more portfolio companies to make ongoing payments following an

increase in contractual interest rates could have a material adverse effect on our business, financial condition, results of operations

and cash flows.

During any period of higher-than-normal

levels of inflation, such as the current inflationary environment, interest rates typically increase.

Higher interest rates will increase

the cost of our borrowings and may reduce returns to stockholders (including resulting in lower dividend payments by us).

response to rising risk-free interest rates, market participants could require higher rates of interest on the types of loans and credit

investments that we own, which would decrease the value of those investments.

In an effort to control inflation, the Federal

Open Market Committee, the committee within the U.S.

Federal Reserve that sets domestic monetary policy, raised the target range for the

federal funds rate eleven times since March 2022 and to a current range of 5.25% to 5.50% as of January 2024.

Federal Reserve

has signaled that further increases could continue to happen.

Rising rates generally have a negative impact on income-oriented investments

such as those in which we invest and could be adversely impacted by these actions.

There is no assurance that the actions being taken

Federal Reserve will improve the outlook for long-term inflation or whether they might result in a recession.

could lead to declined employment, global demand destruction and/or business failures, which may result in a decline in the value of our

In addition, increased interest rates could increase our cost of borrowing and reduce the return on leverage to common stockholders.

Our business is dependent on bank relationships

and recent strain on the banking system may adversely impact us.

The financial markets recently

have encountered volatility associated with concerns about the balance sheets of banks, especially small and regional banks, which may

have significant losses associated with investments that make it difficult to fund demands to withdraw deposits and other liquidity needs.

Although the federal government has announced measures to assist these banks and protect depositors, some banks have already been impacted

and others may be materially and adversely impacted.

Our business is dependent on bank relationships and we are proactively monitoring

the financial health of such bank relationships.

Continued strain on the banking system may adversely impact our business, financial condition

and results of operations.

To the extent that our portfolio companies work with banks that are negatively impacted by the foregoing, such

portfolio companies’ ability to access their own cash, cash equivalents and investments may be threatened.

In addition, such affected

portfolio companies may not be able to enter into new banking arrangements or credit facilities or receive the benefits of their existing

banking arrangements or facilities.

Any such developments could harm our business, financial condition, and operating results, and prevent

us from fully implementing our investment plan.

Continued strain on the banking system may adversely impact our business, financial condition

and results of operations.

Limitations of investment due diligence

expose us to investment risk.

Our due diligence may not reveal all of a

portfolio company’s liabilities and may not reveal other weaknesses in its business.

We can offer no assurance that our due diligence

processes will uncover all relevant facts that would be material to an investment decision.

Before making an investment in, or a loan

to, a company, the Advisor will assess the strength and skills of a company’s management and other factors that it believes are

material to the performance of the investment.

In making the assessment and otherwise conducting

customary due diligence, the Advisor will rely on the resources available to it and, in some cases, an investigation by third parties.

This process is particularly important and highly subjective with respect to newly organized entities because there may be little or

no information publicly available about the entities.

We may make investments in, or loans to,

companies which are not subject to public company reporting requirements including requirements regarding preparation of financial statements

and our portfolio companies may utilize divergent reporting standards that may make it difficult for the Advisor to accurately assess

the prior performance of a portfolio company.

We will, therefore, depend upon the compliance by investment companies with their contractual

reporting obligations.

As a result, the evaluation of potential investments and our ability to perform due diligence on, and effectively

monitor investments, may be impeded, and we may not realize the returns which we expect on any particular investment.

In the event of

fraud by any company in which we invest or with respect to which we make a loan, we may suffer a partial or total loss of the amounts

invested in that company.

Our debt investments may be risky and

we could lose all or part of our investments.

The debt that we invest in is typically not

initially rated by any rating agency, but we believe that if such investments were rated, they would be below investment grade (rated

lower than “Baa3” by Moody’s Investors Service, lower than “BBB-” by Fitch Ratings or lower than “BBB-” by

Standard & Poor’s Ratings Services), which under the guidelines established by these entities is an indication of having

predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal.

are rated below investment grade are sometimes referred to as “high yield bonds” or “junk bonds.” Therefore,

our investments may result in an above average amount of risk and volatility or loss of principal.

Defaults by our portfolio companies

will harm our operating results.

A portfolio company’s failure to satisfy

financial or operating covenants imposed by us or other lenders could lead to defaults and, potentially, termination of its loans and

foreclosure on its assets, which could trigger cross-defaults under other agreements and jeopardize such company’s ability to meet

its obligations under the debt securities that we hold.

We may incur expenses to the extent necessary to seek recovery upon default or

to negotiate new terms with a defaulting portfolio company.

In addition, lenders in certain cases can be subject to lender liability

claims for actions taken by them when they become too involved in the borrower’s business or exercise control over a borrower.

It is possible that we could become subject to a lender’s liability claim, including as a result of actions taken if we render

managerial assistance to the borrower.

Moreover, some of the loans in which we may invest may be “covenant-lite” loans.

use the term “covenant-lite” loans to refer generally to loans that do not have a complete set of financial maintenance covenants.

Generally, “covenant-lite” loans provide borrower companies more freedom to negatively impact lenders because their covenants

are incurrence-based, which means they are only tested and can only be breached following an affirmative action of the borrower, rather

than by a deterioration in the borrower’s financial condition.

Accordingly, to the extent we invest in “covenant-lite”

loans, we may have fewer rights against a borrower and may have a greater risk of loss on such investments as compared to investments

in or exposure to loans with financial maintenance covenants.

We may invest in highly leveraged companies,

which could cause you to lose all or part of your investment.

Investment in leveraged companies involves

a number of significant risks.

Leveraged companies in which we invest may have limited financial resources and may be unable to meet

their obligations under their debt securities that we hold.

Such developments may be accompanied by a deterioration in the value of any

collateral and a reduction in the likelihood of our realizing any guarantees that we may have obtained in connection with our investment.

Smaller leveraged companies also may have less predictable operating results and may require substantial additional capital to support

their operations, finance their expansion or maintain their competitive position.

We may hold the debt securities of

leveraged companies that may, due to the significant volatility of such companies, enter into bankruptcy proceedings.

Leveraged companies may experience bankruptcy

or similar financial distress.

The bankruptcy process has a number of significant inherent risks.

Many events in a bankruptcy proceeding

are the product of contested matters and adversary proceedings and are beyond the control of the creditors.

A bankruptcy filing by an

issuer may adversely and permanently affect the issuer.

If the proceeding is converted to a liquidation, the value of the issuer may

not equal the liquidation value that was believed to exist at the time of the investment.

The duration of a bankruptcy proceeding is

also difficult to predict, and a creditor’s return on investment can be adversely affected by delays until the plan of reorganization

or liquidation ultimately becomes effective.

The administrative costs of a bankruptcy proceeding are frequently high and would be paid

out of the debtor’s estate prior to any return to creditors.

Because the standards for classification of claims under bankruptcy

law are vague, our influence with respect to the class of securities or other obligations we own may be lost by increases in the number

and amount of claims in the same class or by different classification and treatment.

In the early stages of the bankruptcy process, it

is often difficult to estimate the extent of, or even to identify, any contingent claims that might be made.

In addition, certain claims

that have priority by law (for example, claims for taxes) may be substantial.

Depending on the facts and circumstances

of our investments and the extent of our involvement in the management of a portfolio company, upon the bankruptcy of a portfolio company,

a bankruptcy court may recharacterize our debt investments as equity interests and subordinate all or a portion of our claim to that

of other creditors.

This could occur even though we may have structured our investment as senior debt.

Our investments in private middle-market

companies are risky, and you could lose all or part of your investment.

Investment in private middle-market companies

Our due diligence may not

reveal all of a portfolio company’s liabilities and may not reveal other weaknesses in its business.

We can offer no assurance that

our due diligence processes will uncover all relevant facts that would be material to an investment decision.

Before making an investment

in, or a loan to, a company, the Advisor will assess the strength and skills of a company’s management and other factors that it

believes are material to the performance of the investment.

In making the assessment and

otherwise conducting customary due diligence, the Advisor will rely on the resources available to it and, in some cases, an investigation

by third parties.

This process is particularly important and highly subjective with respect to newly organized entities because there

may be little or no information publicly available about the entities.

We may make investments in,

or loans to, companies which are not subject to public company reporting requirements including requirements regarding preparation of

financial statements and our portfolio companies may utilize divergent reporting standards that may make it difficult for the Advisor

to accurately assess the prior performance of a portfolio company.

We will, therefore, depend upon the compliance by investment companies

with their contractual reporting obligations.

As a result, the evaluation of potential investments and our ability to perform due diligence

on, and effectively monitor investments, may be impeded, and we may not realize the returns which we expect on any particular investment.

In the event of fraud by any company in which we invest or with respect to which we make a loan, we may suffer a partial or total loss

of the amounts invested in that company.

We invest in highly leveraged companies,

which could cause us to lose all or a part of our investment in those companies.

Investment in leveraged companies

involves a number of significant risks.

Generally, little public information exists about these companies, and we rely on the ability

of the Advisor’s investment professionals to obtain adequate information to evaluate the potential returns from investing in these

If the Advisor is unable to uncover all material information about these companies, it may not make a fully informed investment

decision, and we may lose money on our investments.

Middle-market companies generally have less predictable operating results and may

require substantial additional capital to support their operations, finance expansion or maintain their competitive position.

Middle-market

companies may have limited financial resources, may have difficulty accessing the capital markets to meet future capital needs and may

be unable to meet their obligations under their debt securities that we hold, which may be accompanied by a deterioration in the value

of any collateral and a reduction in the likelihood of our realizing any guarantees we may have obtained in connection with our investment.

In addition, such companies typically have shorter operating histories, narrower product lines and smaller market shares than larger

businesses, which tend to render them more vulnerable to competitors’ actions and market conditions, as well as general economic

Additionally, middle-market companies are more likely to depend on the management talents and efforts of a small group of

Therefore, the death, disability, resignation or termination of one or more of these persons could have a material adverse impact

on our portfolio company and, in turn, on us.

Middle-market companies also may be parties to litigation and may be engaged in rapidly

changing businesses with products subject to a substantial risk of obsolescence.

In addition, our executive officers, directors and the

Advisor may, in the ordinary course of business, be named as defendants in litigation arising from our investments in the portfolio companies.

Subordinated liens on collateral securing

debt investments that we will make to our portfolio companies may be subject to control by senior creditors with first priority liens.

If there is a default, the value of the collateral may not be sufficient to repay in full both the first priority creditors and us.

Certain debt investments that we make in

portfolio companies will be secured on a second priority basis by the same collateral securing senior debt of such companies.

priority liens on the collateral will secure the portfolio company’s obligations under any outstanding senior debt and may secure

certain other future debt that may be permitted to be incurred by the portfolio company under the agreements governing the debt.

holders of obligations secured by the first priority liens on the collateral will generally control the liquidation of and be entitled

to receive proceeds from any realization of the collateral to repay their obligations in full before us.

In addition, the value of the

collateral in the event of liquidation will depend on market and economic conditions, the availability of buyers and other factors.

can be no assurance that the proceeds, if any, from the sale or sales of all of the collateral would be sufficient to satisfy the debt

obligations secured by the second priority liens after payment in full of all obligations secured by the first priority liens on the

If such proceeds are not sufficient to repay amounts outstanding under the debt obligations secured by the second priority

liens, then we, to the extent not repaid from the proceeds of the sale of the collateral, will only have an unsecured claim against the

portfolio company’s remaining assets, if any.

We may also make unsecured debt investments

in portfolio companies, meaning that such investments will not benefit from any interest in collateral of such companies.

Liens on such

portfolio companies’ collateral, if any, will secure the portfolio company’s obligations under its outstanding secured debt

and may secure certain future debt that is permitted to be incurred by the portfolio company under its secured debt agreements.

of obligations secured by such liens will generally control the liquidation of, and be entitled to receive proceeds from, any realization

of such collateral to repay their obligations in full before us.

In addition, the value of such collateral in the event of liquidation

will depend on market and economic conditions, the availability of buyers and other factors.

There can be no assurance that the proceeds,

if any, from sales of such collateral would be sufficient to satisfy our unsecured debt obligations after payment in full of all secured

debt obligations.

If such proceeds were not sufficient to repay the outstanding secured debt obligations, then our unsecured claims would

rank equally with the unpaid portion of such secured creditors’ claims against the portfolio company’s remaining assets,

The rights we may have with respect to the

collateral securing any junior priority loans we make in our portfolio companies may also be limited pursuant to the terms of one or

more intercreditor agreements that we enter into with the holders of senior debt.

Under such an intercreditor agreement, at any time

that senior obligations are outstanding, we may forfeit certain rights with respect to the collateral to the holders of these senior

These rights may include the right to commence enforcement proceedings against the collateral, the right to control the

conduct of such enforcement proceedings, the right to approve amendments to collateral documents, the right to release liens on the collateral

and the right to waive past defaults under collateral documents.

We may not have the ability to control or direct such actions, even

if as a result our rights as junior lenders are adversely affected.

The lack of liquidity in our investments

may adversely affect our business.

We may invest in companies that are experiencing

financial difficulties, which difficulties may never be overcome.

Our investments will be illiquid in most cases, and there can be no

assurance that we will be able to realize on such investments in a timely manner.

A substantial portion of our investments in leveraged

companies are and will be subject to legal and other restrictions on resale or will otherwise be less liquid than more broadly traded

public securities.

Leveraged companies in which we invest may have limited financial resources and may be unable

to meet their obligations under their debt securities that we hold.

Such developments may be accompanied by a deterioration in the value

of any collateral and a reduction in the likelihood of our realizing any guarantees that we may have obtained in connection with our investment.

In addition, leveraged companies may experience bankruptcy or similar financial distress that may adversely and permanently affect the

issuer, in addition to risks associated with the duration and administrative costs of bankruptcy proceedings.

Smaller leveraged companies

and middle market companies also may have less predictable operating results and may require substantial additional capital to support

their operations, finance their expansion or maintain their competitive position.

Middle market companies may have limited financial resources,

may have difficulty accessing the capital markets to meet future capital needs and may be unable to meet their obligations under their

debt securities that we hold, which may be accompanied by a deterioration in the value of any collateral and a reduction in the likelihood

of our realizing any guarantees we may have obtained in connection with our investment.

In addition, such companies typically have shorter

operating histories, narrower product lines and smaller market shares than larger businesses, which tend to render them more vulnerable

to competitors’ actions and market conditions, as well as general economic downturns.

Middle market companies are also more likely

to depend on the management talents and efforts of a small group of persons, and the death, disability, resignation or termination of

one or more of these persons could have a material adverse impact on our portfolio company and, in turn, on us.

The debt that we invest in

is typically not rated by any rating agency, but we believe that if such investments were rated, they would be below investment grade

(rated lower than “Baa3” by Moody’s Investors Service, lower than “BBB-” by Fitch Ratings or lower than

“BBB-” by Standard & Poor’s Ratings Services), which under the guidelines established by these entities is an indication

of having predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal.

that are rated below investment grade are sometimes referred to as “high yield bonds” or “junk bonds.” Therefore,

our investments will result in an above average amount of risk and volatility or loss of principal.

Defaults by our portfolio companies, including

defaults relating to collateral, will harm our operating results.

A portfolio company’s

failure to satisfy financial or operating covenants imposed by us or other lenders could lead to defaults and, potentially, termination

of its loans and foreclosure on its assets, which could trigger cross-defaults under other agreements and jeopardize such company’s

ability to meet its obligations under the debt securities that we hold.

We may incur expenses to the extent necessary to seek recovery

upon default or to negotiate new terms with a defaulting portfolio company.

In addition, lenders in certain cases can be subject to lender

liability claims for actions taken by them when they become too involved in the borrower’s business or exercise control over a borrower.

It is possible that we could become subject to a lender’s liability claim, including as a result of actions taken if we render managerial

assistance to the borrower.

Moreover, some of the loans in which we may invest may be “covenant-lite” loans.

We use the term

“covenant-lite” loans to refer generally to loans that do not have a complete set of financial maintenance covenants.

“covenant-lite” loans provide borrower companies more freedom to negatively impact lenders because their covenants are incurrence-based,

which means they are only tested and can only be breached following an affirmative action of the borrower, rather than by a deterioration

in the borrower’s financial condition.

Accordingly, to the extent we invest in “covenant-lite” loans, we may have fewer

rights against a borrower and may have a greater risk of loss on such investments as compared to investments in or exposure to loans with

financial maintenance covenants.

Certain debt investments that we make in portfolio

companies will be secured on a second priority basis by the same collateral securing senior debt of such companies.

The first priority

liens on the collateral will secure the portfolio company’s obligations under any outstanding senior debt and may secure certain

other future debt that may be permitted to be incurred by the portfolio company under the agreements governing the debt.

The holders of

obligations secured by the first priority liens on the collateral will generally control the liquidation of and be entitled to receive

proceeds from any realization of the collateral to repay their obligations in full before us.

In addition, the value of the collateral

in the event of liquidation will depend on market and economic conditions, the availability of buyers and other factors.

no assurance that the proceeds, if any, from the sale or sales of all of the collateral would be sufficient to satisfy the debt obligations

secured by the second priority liens after payment in full of all obligations secured by the first priority liens on the collateral.

such proceeds are not sufficient to repay amounts outstanding under the debt obligations secured by the second priority liens, then we,

to the extent not repaid from the proceeds of the sale of the collateral, will only have an unsecured claim against the portfolio company’s

remaining assets, if any.

We may also make unsecured debt investments in

portfolio companies in the form of borrowings under credit facilities or issuances of senior unsecured notes, meaning that such investments

will not benefit from any interest in collateral of such companies.

Liens on such portfolio companies’ collateral, if any, will

secure the portfolio company’s obligations under its outstanding secured debt and may secure certain future debt that is permitted

to be incurred by the portfolio company under its secured debt agreements.

The holders of obligations secured by such liens will generally

control the liquidation of, and be entitled to receive proceeds from, any realization of such collateral to repay their obligations in

full before us.

In addition, the value of such collateral in the event of liquidation will depend on market and economic conditions, the

availability of buyers and other factors.

There can be no assurance that the proceeds, if any, from sales of such collateral would be

sufficient to satisfy our unsecured debt obligations after payment in full of all secured debt obligations.

If such proceeds were not

sufficient to repay the outstanding secured debt obligations, then our unsecured claims would rank equally with the unpaid portion of

such secured creditors’ claims against the portfolio company’s remaining assets, if any.

The rights we may have with

respect to the collateral securing any junior priority loans we make in our portfolio companies may also be limited pursuant to the terms

of one or more intercreditor agreements that we enter into with the holders of senior debt.

Under such an intercreditor agreement, at

any time that senior obligations are outstanding, we may forfeit certain rights with respect to the collateral to the holders of these

senior obligations.

These rights may include the right to commence enforcement proceedings against the collateral, the right to control

the conduct of such enforcement proceedings, the right to approve amendments to collateral documents, the right to release liens on the

collateral and the right to waive past defaults under collateral documents.

We may not have the ability to control or direct such actions,

even if as a result our rights as junior lenders are adversely affected.

The lack of liquidity and price decline

in our investments may adversely affect our business, including by reducing our NAV through increased net unrealized depreciation.

We may invest in companies

that are experiencing financial difficulties, which difficulties may never be overcome.

Our investments will be illiquid in most cases,

and there can be no assurance that we will be able to realize on such investments in a timely manner.

A substantial portion of our investments

in leveraged companies are and will be subject to legal and other restrictions on resale or will otherwise be less liquid than more broadly

traded public securities.

The illiquidity of these investments may make it difficult for us to sell such investments if the need arises.

In addition, if we are required to liquidate

all or a portion of our portfolio quickly, we may realize significantly less than the value at which we have previously recorded our

As a BDC, we are required

to carry our investments at market value or, if no market value is ascertainable, at fair value as determined in good faith by our Advisor.

As part of the valuation process, we may take into account the following types of factors, if relevant, in determining the fair value

of our investments:

the enterprise value of the portfolio company;

the nature and realizable value of any collateral;

the company’s ability to make interest payments, amortization payments (if any) and other fixed charges;

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

the company’s historical and projected financial results;

the markets in which the portfolio company does business;

changes in the interest rate environment and the credit markets generally that may affect the price at which similar investments may be made in the future and other relevant factors.

In addition, if we are required

to liquidate all or a portion of our portfolio quickly, we may realize significantly less than the value at which we have previously recorded

our investments.

We may also face other restrictions on our ability to liquidate an investment in a portfolio company to the extent that

we, the Advisor or any of its affiliates have material nonpublic information regarding such portfolio company.

In addition, we generally expect to invest

in securities, instruments and assets that are not, and are not expected to become, publicly traded.

We will generally not be able to

sell securities publicly unless the sale is registered under applicable securities laws, or unless an exemption from such registration

requirements is available.

In certain cases, we may also be prohibited

by contract from selling an investment for a period of time or otherwise be restricted from disposing of the investment.

certain types of investments expected to be made may require a substantial length of time to realize a return or fully liquidate.

Price declines and illiquidity in the

corporate debt markets may adversely affect the fair value of our portfolio investments, reducing our NAV through increased net unrealized

depreciation.

As a BDC, we are required to carry our investments

at market value or, if no market value is ascertainable, at fair value as determined in good faith by our Advisor.

As part of the valuation

process, we may take into account the following types of factors, if relevant, in determining the fair value of our investments:

enterprise value of the portfolio company;

nature and realizable value of any collateral;

company’s ability to make interest payments, amortization payments (if any) and other

fixed charges;

features, put features and other relevant terms of the debt security;

company’s historical and projected financial results;

markets in which the portfolio company does business;

in the interest rate environment and the credit markets generally that may affect the price

at which similar investments may be made in the future and other relevant factors.

When an external event such as a purchase

transaction, public offering or subsequent equity sale occurs, we use the pricing indicated by the external event to corroborate our

In addition, we generally

expect to invest in securities, instruments and assets that are not, and are not expected to become, publicly traded.

We will generally

not be able to sell securities publicly unless the sale is registered under applicable securities laws, or unless an exemption from such

registration requirements is available.

In certain cases, we may also

be prohibited by contract from selling an investment for a period of time or otherwise be restricted from disposing of the investment.

Furthermore, certain types of investments expected to be made may require a substantial length of time to realize a return or fully liquidate.

When an external event such

as a purchase transaction, public offering or subsequent equity sale occurs, we use the pricing indicated by the external event to corroborate

our valuation.

We record decreases in the market values or fair values of our investments as unrealized depreciation.

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of these factors on our portfolio may reduce our NAV by increasing net unrealized depreciation in our portfolio.

Depending on market

conditions, we could incur substantial realized losses and may suffer additional unrealized losses in future periods, which could have

a material adverse effect on our business, financial condition, results of operations and cash flows.

Our prospective portfolio companies

may prepay loans, which may reduce our yields if capital returned cannot be invested in transactions with equal or greater expected yields.

The loans in our investment portfolio may

be prepaid at any time, generally with little advance notice.

Whether a loan is prepaid will depend both on the continued positive performance

of the portfolio company and the existence of favorable financing market conditions that allow such company the ability to replace existing

financing with less expensive capital.

As market conditions change, we do not know when, and if, prepayment may be possible for each

portfolio company.

In some cases, the prepayment of a loan may reduce our achievable yield if the capital returned cannot be invested

in transactions with equal or greater expected yields, which could have a material adverse effect on our business, financial condition

and results of operations.

Our investments in portfolio companies

may expose us to environmental risks.

We may invest in companies engaged in the

ownership (direct or indirect), operation, management or development of real properties that may contain hazardous or toxic substances,

and, therefore, may be potentially liable for removal or remediation costs, as well as certain other costs, including governmental fines

and liabilities for injuries to persons and property.

Depending on market conditions,

we could incur substantial realized losses and may suffer additional unrealized losses in future periods, which could have a material

adverse effect on our business, financial condition, results of operations and cash flows.

Further, in connection with the disposition of

an investment in a portfolio company, we may be required to make representations about the business and financial affairs of the portfolio

company, or may be responsible for the contents of disclosure documents under applicable securities laws.

We may also be required to indemnify

the purchasers of such investment or underwriters to the extent that any such representations or disclosure documents turn out to be incorrect,

inaccurate or misleading.

These arrangements may result in contingent liabilities, for which we may establish reserves or escrows.

we can offer no assurance that we will adequately reserve for our contingent liabilities and that such liabilities will not have an adverse

effect on us.

Such contingent liabilities might ultimately have to be funded by proceeds, including the return of capital, from our other

Our prospective portfolio companies may

prepay loans, which may reduce our yields if capital returned cannot be invested in transactions with equal or greater expected yields.

The loans in our investment

portfolio may be prepaid at any time, generally with little advance notice.

Whether a loan is prepaid will depend both on the continued

positive performance of the portfolio company and the existence of favorable financing market conditions that allow such company the ability

to replace existing financing with less expensive capital.

As market conditions change, we do not know when, and if, prepayment may be

possible for each portfolio company.

In some cases, the prepayment of a loan may reduce our achievable yield if the capital returned cannot

be invested in transactions with equal or greater expected yields, which could have a material adverse effect on our business, financial

condition and results of operations.

Our prospective portfolio companies may

be unable to repay or refinance outstanding principal on their loans at or prior to maturity.

We have a maturity policy between three to six

years for our debt investments.

The portfolio companies in which we expect to invest may be unable to repay or refinance outstanding principal

on their loans at or prior to maturity.

This risk and the risk of default is increased to the extent that the loan documents do not require

the portfolio companies to pay down the outstanding principal of such debt prior to maturity.

As a result, once our investments mature,

we will need to seek new investments for such capital.

Any failure of one or more portfolio companies

to repay or refinance its debt at or prior to maturity or the inability of one or more portfolio companies to make ongoing payments following

an increase in contractual interest rates could have a material adverse effect on our business, financial condition, results of operations

and cash flows.

Our investments in portfolio companies may

expose us to environmental risks.

We may invest in companies

engaged in the ownership (direct or indirect), operation, management or development of real properties that may contain hazardous or toxic

substances, and, therefore, may be potentially liable for removal or remediation costs, as well as certain other costs, including governmental

fines and liabilities for injuries to persons and property.

The existence of any such material environmental liability could have a material

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could suffer substantially.

There can be no guarantee that all costs

and risks regarding compliance with environmental laws and regulations can be identified.

New and more stringent environmental and health

and safety laws, regulations and permit requirements or stricter interpretations of current laws or regulations could impose substantial

additional costs on portfolio investment or potential investments.

There can be no guarantee

that all costs and risks regarding compliance with environmental laws and regulations can be identified.

New and more stringent environmental

and health and safety laws, regulations and permit requirements or stricter interpretations of current laws or regulations could impose

substantial additional costs on portfolio investment or potential investments.

Compliance with such current or future environmental requirements

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investments will at all times comply with all applicable environmental laws, regulations and permit requirements.

Our prospective portfolio companies

may be unable to repay or refinance outstanding principal on their loans at or prior to maturity, and rising interest rates may make

it more difficult for portfolio companies to make periodic payments on their loans.

The portfolio companies in which we expect

to invest may be unable to repay or refinance outstanding principal on their loans at or prior to maturity.

This risk and the risk of

default is increased to the extent that the loan documents do not require the portfolio companies to pay down the outstanding principal

of such debt prior to maturity.

In addition, if general interest rates rise, there is a risk that our portfolio companies will be unable

to pay escalating interest amounts, which could result in a default under their loan documents with us.

Rising interest rates could also

cause portfolio companies to shift cash from other productive uses to the payment of interest, which may have a material adverse effect

on their business and operations and could, over time, lead to increased defaults.

Any failure of one or more portfolio companies to

repay or refinance its debt at or prior to maturity or the inability of one or more portfolio companies to make ongoing payments following

an increase in contractual interest rates could have a material adverse effect on our business, financial condition, results of operations

and cash flows.

We have not yet identified all of the

portfolio company investments we will acquire.

While we have made significant progress investing

the proceeds of our Initial Capital Raise and associated leverage, we have not yet identified all potential investments for our portfolio

that we will acquire with the proceeds of sales of our securities or repayments of investments currently in our portfolio.

Privately negotiated

investments in illiquid securities or private middle-market companies require substantial due diligence and structuring, and we cannot

assure you that we will achieve our anticipated investment pace or that we will continue to identify sufficient suitable investment opportunities

to deploy all Capital Commitments successfully.

The Advisor selects all of our investments, and our stockholders will have no input with

respect to such investment decisions.

These factors increase the uncertainty, and thus the risk, of investing in our securities.

we seek to identify additional investment opportunities, we may also invest the net proceeds in cash, cash equivalents, U.S.

securities and high-quality debt investments that mature in one year or less from the date such investment.

We expect these temporary

investments to earn yields substantially lower than the income that we expect to receive in respect of our targeted investment types.

As a result, any distributions we make during this period may be substantially smaller than the distributions that we expect to pay when

our portfolio is fully invested.

We are a non-diversified investment

company within the meaning of the 1940 Act, and therefore we are not limited with respect to the proportion of our assets that may be

invested in securities of a single issuer.

We are classified as a non-diversified investment

company within the meaning of the 1940 Act, which means that we are not limited by the 1940 Act with respect to the proportion of our

assets that we may invest in securities of a single issuer.

To the extent that we assume large positions in the securities of a small

number of issuers, our NAV may fluctuate to a greater extent than that of a diversified investment company as a result of changes in

the financial condition or the market’s assessment of the issuer.

We are a non-diversified investment company

within the meaning of the 1940 Act, and therefore we are not limited with respect to the proportion of our assets that may be invested

in securities of a single issuer.

We are classified as a non-diversified

investment company within the meaning of the 1940 Act, which means that we are not limited by the 1940 Act with respect to the proportion

of our assets that we may invest in securities of a single issuer.

To the extent that we assume large positions in the securities of a

small number of issuers, our NAV may fluctuate to a greater extent than that of a diversified investment company as a result of changes

in the financial condition or the market’s assessment of the issuer.

We may also be more susceptible to any single economic or regulatory

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fixed guidelines for diversification, and our investments could be concentrated in relatively few portfolio companies.

Our portfolio may be concentrated in

a limited number of portfolio companies and industries, which will subject us to a risk of significant loss if any of these companies

defaults on its obligations under any of its debt instruments or if there is a downturn in a particular industry.

Our portfolio may be concentrated in a limited

number of portfolio companies and industries, which will subject us to a risk of significant loss if any of these companies defaults on

its obligations under any of its debt instruments or if there is a downturn in a particular industry.

Our portfolio may be concentrated

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For example, although

we may classify the industries of our portfolio companies by end-market (such as health market or business services) and not

by the products or services (such as software) directed to those end-markets, some of our portfolio companies may principally

provide software products or services, which exposes us to downturns in that sector.

As a result, a downturn in any particular industry

in which we are invested could also significantly impact the aggregate returns we realize.

we may classify the industries of our portfolio companies by end-market (such as health market or business services) and not by the products

or services (such as software) directed to those end-markets, some of our portfolio companies may principally provide software products

or services, which exposes us to downturns in that sector.

As a result, a downturn in any particular industry in which we are invested

could also significantly impact the aggregate returns we realize.

Our failure to make follow-on investments

in our portfolio companies could impair the value of our portfolio.

Following an initial investment in a portfolio

company, we may make additional investments in that portfolio company as “follow-on” investments, in seeking to:

or maintain in whole or in part our position as a creditor or equity ownership percentage

in a portfolio company;

warrants, options or convertible securities that were acquired in the original or subsequent

or enhance the value of our investment.

We have discretion to make follow-on investments,

subject to the availability of capital resources.

Failure on our part to make follow-on investments may, in some circumstances,

jeopardize the continued viability of a portfolio company and our initial investment, or may result in a missed opportunity for us to

increase our participation in a successful portfolio company.

Even if we have sufficient capital to make a desired follow-on investment,

we may elect not to make a follow-on investment because we may not want to increase our level of risk, because we prefer other

Following an initial investment

in a portfolio company, we may make additional investments in that portfolio company as “follow-on” investments, in seeking

increase or maintain in whole or in part our position as a creditor or equity ownership percentage in a portfolio company;

exercise warrants, options or convertible securities that were acquired in the original or subsequent financing;

preserve or enhance the value of our investment.

We have discretion to make

follow-on investments, subject to the availability of capital resources.

Failure on our part to make follow-on investments may, in some

circumstances, jeopardize the continued viability of a portfolio company and our initial investment, or may result in a missed opportunity

for us to increase our participation in a successful portfolio company.

Even if we have sufficient capital to make a desired follow-on

investment, we may elect not to make a follow-on investment because we may not want to increase our level of risk, because we prefer other

opportunities or because of regulatory or other considerations.

Our ability to make follow-on investments may also be limited

by the Advisor’s allocation policy.

Our ability to make follow-on investments may also be limited by the Advisor’s

allocation policy.

Because we generally do not hold controlling

equity interests in our portfolio companies, we may not be able to exercise control over our portfolio companies or to prevent decisions

by management of our portfolio companies that could decrease the value of our investments.

To the extent that we do not hold controlling

equity interests in portfolio companies, we will have a limited ability to protect our position in such portfolio companies.

We may also co-invest with

third parties through partnerships, joint ventures or other entities.

Such investments may involve risks in connection with such third-party

involvement, including the possibility that a third-party co-investor may have economic or business interests or goals that

are inconsistent with ours or may be in a position to take (or block) action in a manner contrary to our investment objective.

circumstances where such third parties involve a management group, such third parties may receive compensation arrangements relating

by management of our portfolio companies that could decrease the value of our investments and there is no assurance that portfolio company

management will be able to operate their companies in accordance with our expectations.

To the extent that we do not

hold controlling equity interests in portfolio companies, we will have a limited ability to protect our position in such portfolio companies.

We may also co-invest with third parties through partnerships, joint ventures or other entities.

Such investments may involve risks in

connection with such third-party involvement, including the possibility that a third-party co-investor may have economic or business interests

or goals that are inconsistent with ours or may be in a position to take (or block) action in a manner contrary to our investment objective.

In those circumstances where such third parties involve a management group, such third parties may receive compensation arrangements relating

to such investments, including incentive compensation arrangements.

There is no assurance that portfolio

company management will be able to operate their companies in accordance with our expectations.

The day-to-day operations of each portfolio company in which

we invest will be the responsibility of that portfolio company’s management team.

Although we will be responsible for monitoring

the performance of each investment and generally intend to invest in portfolio companies operated by strong management, there can be no

assurance that the existing management team, or any successor, will be able to operate any such portfolio company in accordance with our

expectations.

There can be no assurance that a portfolio company will be successful in retaining key members of its management team, the

loss of whom could have a material adverse effect on us.

Although we generally intend to invest in companies with strong management, there

can be no assurance that the existing management of such companies will continue to operate a company successfully.

Our portfolio companies

may incur debt that ranks equally with, or senior to, our investments in such companies and such portfolio companies may not generate

sufficient cash flow to service their debt obligations to us.

We may invest a portion of our capital in

second lien and subordinated loans issued by our portfolio companies.

Our portfolio companies may have, or be permitted to incur, other

debt that ranks equally with, or senior to, the debt securities in which we invest.

Such subordinated investments are subject to greater

risk of default than senior obligations as a result of adverse changes in the financial condition of the obligor or in general economic

If we make a subordinated investment in a portfolio company, the portfolio company may be highly leveraged, and its relatively

high debt-to-equity ratio may create increased risks that its operations might not generate sufficient cash flow to service

all of its debt obligations.

By their terms, such debt instruments may provide that the holders are entitled to receive payment of interest

or principal on or before the dates on which we are entitled to receive payments in respect of the securities in which we invest.

debt instruments would usually prohibit the portfolio companies from paying interest on or repaying our investments in the event of and

during the continuance of a default under such debt.

Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy

of a portfolio company, holders of securities ranking senior to our investment in that portfolio company would typically be entitled

to receive payment in full before we receive any distribution in respect of our investment.

After repaying senior creditors, the portfolio

company may not have any remaining assets to use for repaying its obligation to us where we are junior creditor.

In the case of debt

ranking equally with debt securities in which we invest, we would have to share any distributions on an equal and ratable basis with

other creditors holding such debt in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant

portfolio company.

Additionally, certain loans that we make

to portfolio companies may be secured on a second priority basis by the same collateral securing senior secured debt of such companies.

The first priority liens on the collateral will secure the portfolio company’s obligations under any outstanding senior debt and

may secure certain other future debt that may be permitted to be incurred by the portfolio company under the agreements governing the

The holders of obligations secured by first priority liens on the collateral will generally control the liquidation of, and be

entitled to receive proceeds from, any realization of the collateral to repay their obligations in full before us.

In addition, the value

of the collateral in the event of liquidation will depend on market and economic conditions, the availability of buyers and other factors.

There can be no assurance that the proceeds, if any, from sales of all of the collateral would be sufficient to satisfy the loan obligations

secured by the second priority liens after payment in full of all obligations secured by the first priority liens on the collateral.

Furthermore, the day-to-day

operations of each portfolio company in which we invest will be the responsibility of that portfolio company’s management team.

Although we will be responsible for monitoring the performance of each investment and generally intend to invest in portfolio companies

operated by strong management, there can be no assurance that the existing management team, or any successor, will be able to operate

any such portfolio company in accordance with our expectations.

There can be no assurance that a portfolio company will be successful

in retaining key members of its management team, the loss of whom could have a material adverse effect on us.

Although we generally intend

to invest in companies with strong management, there can be no assurance that the existing management of such companies will continue

to operate a company successfully.

Our portfolio companies may incur debt that

ranks equally with, or senior to, our investments in such companies and such portfolio companies may not generate sufficient cash flow

to service their debt obligations to us.

We may invest a portion of

our capital in second lien and subordinated loans issued by our portfolio companies.

Our portfolio companies may have, or be permitted

to incur, other debt that ranks equally with, or senior to, the debt securities in which we invest.

Such subordinated investments are

subject to greater risk of default than senior obligations as a result of adverse changes in the financial condition of the obligor or

in general economic conditions.

If we make a subordinated investment in a portfolio company, the portfolio company may be highly leveraged,

and its relatively high debt-to-equity ratio may create increased risks that its operations might not generate sufficient cash flow to

service all of its debt obligations.

By their terms, such debt instruments may provide that the holders are entitled to receive payment

of interest or principal on or before the dates on which we are entitled to receive payments in respect of the securities in which we

These debt instruments would usually prohibit the portfolio companies from paying interest on or repaying our investments in the

event of and during the continuance of a default under such debt.

Also, in the event of insolvency, liquidation, dissolution, reorganization

or bankruptcy of a portfolio company, holders of securities ranking senior to our investment in that portfolio company would typically

be entitled to receive payment in full before we receive any distribution in respect of our investment.

After repaying senior creditors,

the portfolio company may not have any remaining assets to use for repaying its obligation to us where we are junior creditor.

case of debt ranking equally with debt securities in which we invest, we would have to share any distributions on an equal and ratable

basis with other creditors holding such debt in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of

the relevant portfolio company.

Additionally, certain loans

that we make to portfolio companies may be secured on a second priority basis by the same collateral securing senior secured debt of such

The first priority liens on the collateral will secure the portfolio company’s obligations under any outstanding senior

debt and may secure certain other future debt that may be permitted to be incurred by the portfolio company under the agreements governing

The holders of obligations secured by first priority liens on the collateral will generally control the liquidation of, and

be entitled to receive proceeds from, any realization of the collateral to repay their obligations in full before us.

In addition, the

value of the collateral in the event of liquidation will depend on market and economic conditions, the availability of buyers and other

There can be no assurance that the proceeds, if any, from sales of all of the collateral would be sufficient to satisfy the loan

obligations secured by the second priority liens after payment in full of all obligations secured by the first priority liens on the collateral.

If such proceeds were not sufficient to repay amounts outstanding under the loan obligations secured by the second priority liens, then

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company’s remaining assets, if any.

We may make unsecured loans to portfolio

companies, meaning that such loans will not benefit from any interest in collateral of such companies.

Liens on a portfolio company’s

collateral, if any, will secure the portfolio company’s obligations under its outstanding secured debt and may secure certain future

debt that is permitted to be incurred by the portfolio company under its secured loan agreements.

The holders of obligations secured

by such liens will generally control the liquidation of, and be entitled to receive proceeds from, any realization of such collateral

We may make unsecured loans

to portfolio companies, meaning that such loans will not benefit from any interest in collateral of such companies.

Liens on a portfolio

company’s collateral, if any, will secure the portfolio company’s obligations under its outstanding secured debt and may secure

certain future debt that is permitted to be incurred by the portfolio company under its secured loan agreements.

The holders of obligations

secured by such liens will generally control the liquidation of, and be entitled to receive proceeds from, any realization of such collateral

to repay their obligations in full before us.

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of such collateral would be sufficient to satisfy our unsecured loan obligations after payment in full of all loans secured by collateral.

If such proceeds were not sufficient to repay the outstanding secured loan obligations, then our unsecured claims would rank equally

with the unpaid portion of such secured creditors’ claims against the portfolio company’s remaining assets, if any.

The rights we may have with respect to the

collateral securing any junior priority loans we make to our portfolio companies may also be limited pursuant to the terms of one or

more intercreditor agreements that we enter into with the holders of senior debt.

Under a typical intercreditor agreement, at any time

that obligations that have the benefit of the first priority liens are outstanding, any of the following actions that may be taken in

respect of the collateral will be at the direction of the holders of the obligations secured by the first priority liens:

ability to cause the commencement of enforcement proceedings against the collateral;

ability to control the conduct of such proceedings;

approval of amendments to collateral documents;

of liens on the collateral;

of past defaults under collateral documents.

If such proceeds were not sufficient to repay the outstanding secured loan obligations, then our unsecured claims would rank equally with

the unpaid portion of such secured creditors’ claims against the portfolio company’s remaining assets, if any.

The rights we may have with

respect to the collateral securing any junior priority loans we make to our portfolio companies may also be limited pursuant to the terms

of one or more intercreditor agreements that we enter into with the holders of senior debt.

Under a typical intercreditor agreement, at

any time that obligations that have the benefit of the first priority liens are outstanding, any of the following actions that may be

taken in respect of the collateral will be at the direction of the holders of the obligations secured by the first priority liens:

the ability to cause the commencement of enforcement proceedings against the collateral;

the ability to control the conduct of such proceedings;

the approval of amendments to collateral documents;

releases of liens on the collateral;

waivers of past defaults under collateral documents.

We may not have the ability

to control or direct such actions, even if our rights as junior lenders are adversely affected.

The disposition of our investments

may result in contingent liabilities.

A significant portion of our investments

will involve private securities.

In connection with the disposition of an investment in private securities, we may be required to make

representations about the business and financial affairs of the portfolio company typical of those made in connection with the sale of

We may also be required to indemnify the purchasers of such investment to the extent that any such representations turn out

to be inaccurate or with respect to potential liabilities.

These arrangements may result in contingent liabilities that ultimately result

in funding obligations that we must satisfy through our return of distributions previously made to us.

The disposition of our investments may result

in contingent liabilities.

A significant portion of our

investments will involve private securities.

In connection with the disposition of an investment in private securities, we may be required

to make representations about the business and financial affairs of the portfolio company typical of those made in connection with the

sale of a business.

We may also be required to indemnify the purchasers of such investment to the extent that any such representations

turn out to be inaccurate or with respect to potential liabilities.

These arrangements may result in contingent liabilities that ultimately

result in funding obligations that we must satisfy through our return of distributions previously made to us.

The Advisor’s and Administrator’s

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on our behalf than it would when acting for its own account.

Under the Investment Advisory Agreement,

the Advisor does not assume any responsibility to us other than to render the services called for under that agreement, and it is not

responsible for any action of our Board of Directors in following or declining to follow the Advisor’s advice or recommendations.

Under the terms of the Investment Advisory Agreement, the Advisor, its officers, members, personnel and any person controlling or controlled

by the Advisor are not liable to us, any subsidiary of ours, our directors, our stockholders or any subsidiary’s stockholders or

partners for acts or omissions performed in accordance with and pursuant to the Investment Advisory Agreement, except those resulting

from acts constituting gross negligence, willful misconduct, bad faith or reckless disregard of the Advisor’s duties under the

Investment Advisory Agreement.

In addition, we have agreed to indemnify the Advisor and each of its officers, directors, members, managers

and employees from and against any claims or liabilities, including reasonable legal fees and other expenses reasonably incurred, arising

out of or in connection with our business and operations or any action taken or omitted on our behalf pursuant to authority granted by

the Investment Advisory Agreement, except where attributable to gross negligence, willful misconduct, bad faith or reckless disregard

of such person’s duties under the Investment Advisory Agreement.

Similarly, the Administrator and certain specified parties providing

administrative services pursuant to the relevant agreement are not liable to us or our stockholders for, and we have agreed to indemnify

them for, any claims or losses arising out of the good faith performance of their duties or obligations, except those liabilities resulting

primarily attributable to gross negligence, willful misconduct, bad faith or reckless disregard of the Administrator’s duties.

These protections may lead the Advisor or the Administrator to act in a riskier manner when acting on our behalf than it would when acting

for its own account.

Under the Investment Advisory Agreement, the Advisor

does not assume any responsibility to us other than to render the services called for under that agreement, and it is not responsible

for any action of our Board in following or declining to follow the Advisor’s advice or recommendations.

Under the terms of the

Investment Advisory Agreement, the Advisor, its officers, members, personnel and any person controlling or controlled by the Advisor are

not liable to us, any subsidiary of ours, our directors, our stockholders or any subsidiary’s stockholders or partners for acts

or omissions performed in accordance with and pursuant to the Investment Advisory Agreement, except those resulting from acts constituting

willful misfeasance, bad faith, gross negligence or reckless disregard of the Advisor’s duties under the Investment Advisory Agreement.

In addition, we have agreed to indemnify the Advisor and each of its officers, directors, members, managers and employees from and against

any claims or liabilities, including reasonable legal fees and other expenses reasonably incurred, arising out of or in connection with

our business and operations or any action taken or omitted on our behalf pursuant to authority granted by the Investment Advisory Agreement,

except where attributable to willful misfeasance, bad faith, gross negligence or reckless disregard of such person’s duties under

the Investment Advisory Agreement.

Similarly, the Administrator and certain specified parties providing administrative services pursuant

to the relevant agreement are not liable to us or our stockholders for, and we have agreed to indemnify them for, any claims or losses

arising out of the good faith performance of their duties or obligations, except where attributable to willful misfeasance, bad faith,

gross negligence or reckless disregard of the Administrator’s duties.

These protections may lead the Advisor or the Administrator

to act in a riskier manner when acting on our behalf than it would when acting for its own account.

We may be subject to risks under hedging

transactions.

We may engage in hedging transactions to

the limited extent such transactions are permitted under the 1940 Act and applicable commodities laws.

Engaging in hedging transactions

would entail additional risks to our stockholders.

We could, for example, use instruments such as interest rate swaps, caps, collars

In each such case, we generally would seek

to hedge against fluctuations of the relative values of our portfolio positions from changes in market interest rates.

Hedging against

a decline in the values of our portfolio positions would not eliminate the possibility of fluctuations in the values of such positions

transactions and our ability to enter into transactions involving derivatives and financial commitment transactions may be limited.

We may engage in hedging transactions in the form

of interest rate swaps, caps, collars and floors, intended to limit our exposure to interest rate fluctuations to the limited extent such

transactions are permitted under the 1940 Act and applicable commodities laws.

Engaging in hedging transactions would entail additional

risks to our stockholders.

In addition, we are subject to legislation that

may limit our ability to enter into such transactions.

For example, in August 2022, Rule 18f-4 under the 1940 Act, regarding the ability

of a BDC (or a registered investment company) to use derivatives and other transactions that create future payment or delivery obligations

(except reverse repurchase agreements and similar financing transactions), became effective.

Under the rule, BDCs that make significant

use of derivatives are required to operate subject to a value-at-risk leverage limit, adopt a derivatives risk management program and

appoint a derivatives risk manager, and comply with various testing and board reporting requirements.

These requirements apply unless

the BDC qualifies as a “limited derivatives user,” as defined under the adopted rules.

Under the rule, a BDC may enter into

an unfunded commitment agreement that is not a derivatives transaction, such as an agreement to provide financing to a portfolio company,

if the BDC has, among other things, a reasonable belief, at the time it enters into such an agreement, that it will have sufficient cash

and cash equivalents to meet its obligations with respect to all of its unfunded commitment agreements, in each case as it becomes due.

Though we do not engage in hedging transactions as a principal investment strategy, collectively, these requirements may limit our ability

to use derivatives and/or enter into certain other financial contracts.

In each such case, we generally

would seek to hedge against fluctuations of the relative values of our portfolio positions from changes in market interest rates.

against a decline in the values of our portfolio positions would not eliminate the possibility of fluctuations in the values of such positions

or prevent losses if the values of the positions declined.

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Use of a hedging transaction could involve counterparty credit risk.

The success of any hedging transactions we

may enter into will depend on our ability to correctly predict movements in interest rates.

Therefore, while we may enter into hedging

transactions to seek to reduce interest rate risks, unanticipated changes in interest rates could result in poorer overall investment

performance than if we had not engaged in any such hedging transactions.

In addition, the degree of correlation between price movements

of the instruments used in a hedging strategy and price movements in the portfolio positions being hedged could vary.

Moreover, for a

variety of reasons, we might not seek to (or be able to) establish a perfect correlation between the hedging instruments and the portfolio

holdings being hedged.

Any such imperfect correlation could prevent us from achieving the intended hedge and expose us to risk of loss.

The success of any hedging

transactions we may enter into will depend on our ability to correctly predict movements in interest rates.

Therefore, while we may enter

into hedging transactions to seek to reduce interest rate risks, unanticipated changes in interest rates could result in poorer overall

investment performance than if we had not engaged in any such hedging transactions.

In addition, the degree of correlation between price

movements of the instruments used in a hedging strategy and price movements in the portfolio positions being hedged could vary.

for a variety of reasons, we might not seek to (or be able to) establish a perfect correlation between the hedging instruments and the

portfolio holdings being hedged.

Any such imperfect correlation could prevent us from achieving the intended hedge and expose us to risk

Our ability to engage in hedging transactions may also be adversely affected by rules adopted by the CFTC.

We may not realize gains from our equity

When we invest in loans, we may acquire

warrants or other equity securities of portfolio companies as well.

When we invest in loans, we

may acquire warrants or other equity securities of portfolio companies as well.

We may also invest in equity securities directly.

To the extent we

hold equity investments, we will seek to dispose of them and realize gains upon our disposition of them.

However, the equity interests

we receive may not appreciate in value and may decline in value.

As a result, we may not be able to realize gains from our equity interests,

and any gains that we do realize on the disposition of any equity interests may not be sufficient to offset any other losses we experience.

To the extent that we borrow money, the potential

for gain or loss on amounts invested in us will be magnified and may increase the risk of investing in us.

Borrowed money may also adversely

affect the return on our assets, reduce cash available to service our debt or for distribution to our stockholders, and result in losses.

The use of borrowings,

also known as leverage, increases the volatility of investments by magnifying the potential for gain or loss on invested equity capital.

Since we use leverage to partially finance our investments, through borrowing from banks and other lenders, you will experience increased

risks of investing in our securities.

If the value of our assets decreases, leveraging will cause NAV to decline more sharply than it

otherwise would if we had not borrowed and employed leverage.

Similarly, any decrease in our income would cause net income to decline

more sharply than it would have if we had not borrowed and employed leverage.

Such a decline could negatively affect our ability to service

our debt or make distributions to our stockholders.

In addition, our stockholders will bear the burden of any increase in our expenses

as a result of our use of leverage, including interest expenses and any increase in the management or incentive fees payable to our Advisor.

The amount of leverage that we employ depends

on our Advisor’s and our Board of Directors’ assessment of market and other factors at the time of any proposed borrowing.

We can offer no assurance that leveraged financing will be available to us on favorable terms or at all.

However, to the extent that

we use leverage to finance our assets, our financing costs will reduce cash available for servicing our debt or distributions to stockholders.

Moreover, we may not be able to meet our financing obligations and, to the extent that we cannot, we risk the loss of some or all of

our assets to liquidation or sale to satisfy the obligations.

In such an event, we may be forced to sell assets at significantly depressed

prices due to market conditions or otherwise, which may result in losses.

If the ratio of our total assets to total

borrowings and other senior securities falls below the minimum asset coverage ratio applicable to the Company, which is currently 150%,

we cannot incur additional debt and could be required to sell a portion of our investments to repay some debt when it is disadvantageous

This could have a material adverse effect on our operations, and we may not be able to service our debt or make distributions.

extent we hold equity investments, we will seek to dispose of them and realize gains upon our disposition of them.

However, the equity

interests we receive may not appreciate in value and may decline in value.

As a result, we may not be able to realize gains from our equity

interests, and any gains that we do realize on the disposition of any equity interests may not be sufficient to offset any other losses

we experience.

To the extent that we borrow under credit facilities

and issue senior unsecured notes, the potential for gain or loss on amounts invested in us will be magnified and may increase the risk

of investing in us.

Borrowings under credit facilities and issuances of senior unsecured notes may also adversely affect the return on

our assets, reduce cash available to service our debt or for distribution to our stockholders, and result in losses.

The use of leverage in the form of borrowings

under credit facilities and issuances of senior unsecured notes increases the volatility of investments by magnifying the potential for

gain or loss on invested equity capital.

Since we use leverage in the form of borrowings under credit facilities and issuances of senior

unsecured notes to partially finance our investments, you will experience increased risks of investing in our securities.

of our assets decreases, leveraging will cause NAV to decline more sharply than it otherwise would if we had not borrowed under the credit

facilities and issued senior unsecured notes.

Similarly, any decrease in our income would cause net income to decline more sharply than

it would have if we had not borrowed under the credit facilities and issued senior unsecured notes.

Such a decline could negatively affect

our ability to service our debt or make distributions to our stockholders.

In addition, our stockholders will bear the burden of any increase

in our expenses as a result of our use of leverage, including interest expenses and any increase in the management or incentive fees payable

to our Advisor.

The amount of borrowings under credit facilities

and issuances of senior unsecured notes depends on our Advisor’s and our Board’s assessment of market and other factors at

the time of any proposed borrowing under credit facilities and issuances of senior unsecured notes.

We can offer no assurance that leveraged

financing will be available to us on favorable terms or at all.

However, to the extent that we use leverage to finance our assets, our

financing costs will reduce cash available for servicing our debt or distributions to stockholders.

Moreover, we may not be able to meet

our financing obligations and, to the extent that we cannot, we risk the loss of some or all of our assets to liquidation or sale to satisfy

the obligations.

In such an event, we may be forced to sell assets at significantly depressed prices due to market conditions or otherwise,

which may result in losses.

We are subject to risks associated with

our investment and trading of liquid credit (i.e., broadly syndicated loans).

From time to time, we may invest in liquid credit (i.e., broadly syndicated

loans) that may be traded in public or institutional financial markets for which there is a more active market than some of our other

These investments may expose us to various risks, including with respect to liquidity, price volatility, interest rate risk,

ability to restructure in the event of distress, credit risks and less protective issuing documentation, than is the case with the loans

to middle market companies that comprise nearly all of our debt investments.

Certain of these instruments may

be fixed rate assets, thereby exposing us to interest rate risk in the valuation of such investments.

Additionally, the financial markets

in which these assets may be traded are subject to significant volatility (including due to macroeconomic conditions), which may impact

the value of such investments and our ability to sell such instruments without incurring losses.

The foregoing may result in volatility

in the valuation of our liquid credit investments, which would, in turn, impact our NAV.

Similarly, a sudden and significant increase

in market interest rates may increase the risk of payment defaults and cause a decline in the value of these investments and in our NAV.

We may sell our liquid credit investments from time to time in order to generate proceeds for use in our investment program, and we may

suffer losses in connection with any such sales, due to the foregoing factors.

We may not realize gains from our liquid credit investments

and any gains that we realize may not be sufficient to offset any other losses we experience.

Risks Relating to Our Common Stock

There is no public market for our Shares,

and we do not expect there to be a market for our Shares.

There is no existing trading market for our

Shares, and no market for our Shares may develop in the future.

There is no public market

for our shares of common stock, and no market for our shares of our common stock may develop in the future.

There is no existing trading market for our shares

of common stock, and no market for our shares of common stock may develop in the future.

If developed, any such market may not be sustained.

In the absence of

a trading market, holders of our Shares may be unable to liquidate an investment in our shares.

Our Shares have not been registered under

the Securities Act or any state securities laws and, unless so registered, may not be offered or sold except pursuant to an exemption

from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.

There are restrictions on the ability

of holders of our Common Stock to transfer shares in excess of the restrictions typically associated with a private offering of securities

In the absence of a trading market, holders of our shares of common stock may be unable to liquidate an investment in our shares.

There are restrictions on the ability of

holders of our Common Stock to transfer shares in excess of the restrictions typically associated with a private offering of securities

under Regulation D and other exemptions from registration under the Securities Act, and these additional restrictions could further limit

the liquidity of an investment in our Shares and the price at which holders may be able to sell the shares.

We are relying on an exemption from registration

under the Securities Act and state securities laws in offering our Shares pursuant to the Subscription Agreements.

As such, absent an

effective registration statement covering our Common Stock, such shares may be resold only in transactions that are exempt from the registration

the liquidity of an investment in our shares of common stock and the price at which holders may be able to sell the shares.

We are relying on an exemption from registration under the Securities

Act and state securities laws in offering our shares of common stock pursuant to the Subscription Agreements.

As such, absent an effective

registration statement covering our Common Stock, such shares may be resold only in transactions that are exempt from the registration

requirements of the Securities Act and with our prior consent.

Our Common Stock will have limited transferability which could delay,

defer or prevent a transaction or a change of control of the Company that might involve a premium price for our securities or otherwise

be in the best interest of our stockholders.

During extended periods of capital market

disruption and instability, there is a risk that you may not receive distributions or that our distributions may not grow over time and

a portion of our distributions may be a return of capital.

We intend to make periodic distributions to

our stockholders out of assets legally available for distribution.

We cannot assure you that we will achieve investment results that will

allow us to make a specified level of cash distributions or year-to-year increases in cash distributions.

Our ability to pay

distributions might be adversely affected by the impact of one or more of the risk factors described in this Annual Report on Form 10-K.

Due to the asset coverage test applicable to us under the 1940 Act as a BDC, we may be limited in our ability to make distributions.

we declare a distribution and if more stockholders opt to receive cash distributions rather than participate in our dividend reinvestment

plan (“DRIP”), we may be forced to sell some of our investments in order to make cash distribution payments.

To the extent

we make distributions to stockholders that include a return of capital, such portion of the distribution essentially constitutes a return

of the stockholder’s investment.

Although such return of capital may not be taxable, such distributions may increase an investor’s

tax liability for capital gains upon the future sale of our Common Stock.

A return of capital distribution may cause

a stockholder to recognize a capital gain from the sale of our Common Stock even if the stockholder sells its shares for less than the

original purchase price.

Investing in our Common Stock may involve

an above average degree of risk.

The investments we make in accordance with

our investment objective may result in a higher amount of risk than alternative investment options and a higher risk of volatility or

loss of principal.

Our investments in portfolio companies involve higher levels of risk, and therefore, an investment in our shares may

not be suitable for someone with lower risk tolerance.

In addition, our Common Stock is intended for long-term investors who can accept

the risks of investing primarily in illiquid loans and other debt or debt-like instruments and should not be treated as a trading vehicle.

Our stockholders may experience dilution

in their ownership percentage.

Our stockholders do not have preemptive rights

to any Shares we issue in the future.

To the extent that we issue additional equity interests at or below NAV your percentage ownership

interest in us may be diluted.

In addition, depending upon the terms and pricing of any future and the value of our investments, you

may also experience dilution in the book value and fair value of your Shares.

Under the 1940 Act, we generally are prohibited

from issuing or selling our Shares at a price below NAV per Share, which may be a disadvantage as compared with certain public companies.

We may, however, sell our Shares, or warrants, options, or rights to acquire our Shares, at a price below the current NAV of our Shares

if our Board of Directors determines that such sale is in our best interests and the best interests of our stockholders, and our stockholders,

including a majority of those stockholders that are not affiliated with us, approve such sale.

In any such case, the price at which our

securities are to be issued and sold may not be less than a price that, in the determination of our Board of Directors, closely approximates

the fair value of such securities (less any distributing commission or discount).

If we raise additional funds by issuing our Shares

or senior securities convertible into, or exchangeable for, our Shares, then the percentage ownership of our stockholders at that time

will decrease and you will experience dilution.

In the event that we enter into a Subscription

Agreement with one or more investors after the Initial Closing, each such investor will be required to make Catch-up Purchases

on one or more dates to be determined by us.

Each Catch-up Purchase will dilute the ownership percentage of all investors whose

subscriptions were accepted at previous closings.

As a result, each subsequent closing after the Initial Closing will result in existing

stockholders experiencing dilution as a result of Catch-up Purchases.

In addition, distributions declared in cash

payable to stockholders that are participants in our DRIP will generally be automatically reinvested in our Shares.

Our Common Stock has limited transferability which could delay, defer or

prevent a transaction or a change of control of the Company that might involve a premium price for our securities or otherwise be in the

best interest of our stockholders.

Certain provisions of the DGCL, our certificate of incorporation,

bylaws, and actions of our Board could deter takeover attempts and have an adverse impact on the value of common stock.

The General Corporation Law of the State of Delaware, as amended (the

“DGCL”), contains provisions that may discourage, delay or make more difficult a change in control of us or the removal of

our directors.

Our certificate of incorporation and bylaws contain provisions that limit liability and provide for indemnification of

our directors and officers.

These provisions and others which we may adopt also may have the effect of deterring hostile takeovers or

delaying changes in control or management.

We are subject to Section 203 of the DGCL, the application of which is subject to any applicable

requirements of the 1940 Act.

This section generally prohibits us from engaging in mergers and other business combinations with stockholders

that beneficially own 15% or more of our voting stock, either individually or together with their affiliates, unless our directors or

stockholders approve the business combination in the prescribed manner.

Section 203 of the DGCL may discourage third parties from trying

to acquire control of us and increase the difficulty of consummating such an offer.

We have also adopted measures that may make it difficult for a third

party to obtain control of us, including provisions of our certificate of incorporation that classify our Board of Directors in three

classes serving staggered three-year terms, and provisions of our certificate of incorporation authorizing our Board of Directors to classify

or reclassify shares of our preferred stock in one or more classes or series, and to cause the issuance of additional shares of our stock.

These provisions, as well as other provisions in our certificate of incorporation and bylaws, may delay, defer or prevent a transaction

or a change in control in circumstances that could give our stockholders the opportunity to realize a premium of the NAV of our shares

of common stock.

During extended periods of capital market disruption and instability,

there is a risk that you may not receive distributions or that our distributions may not grow over time and a portion of our distributions

may be a return of capital.

We intend to make periodic distributions to our stockholders out of

assets legally available for distribution.

We cannot assure you that we will achieve investment results that will allow us to make a specified

level of cash distributions or year-to-year increases in cash distributions.

Our ability to pay distributions might be adversely

affected by the impact of one or more of the risk factors described in this Annual Report on Form 10-K.

Due to the asset coverage

test applicable to us under the 1940 Act as a BDC, we may be limited in our ability to make distributions.

If we declare a distribution

and if more stockholders opt to receive cash distributions rather than participate in our dividend reinvestment plan (“DRIP”),

we may be forced to sell some of our investments in order to make cash distribution payments.

To the extent we make distributions to stockholders

that include a return of capital, such portion of the distribution essentially constitutes a return of the stockholder’s investment.

Although such return of capital may not be taxable, such distributions may increase an investor’s tax liability for capital gains

upon the future sale of our Common Stock.

A return of capital distribution may cause a stockholder to recognize

a capital gain from the sale of our Common Stock even if the stockholder sells its shares for less than the original purchase price.

Investing in our Common Stock may involve an above average degree

The investments we make in accordance with our investment objective

may result in a higher amount of risk than alternative investment options and a higher risk of volatility or loss of principal.

Our investments

in portfolio companies involve higher levels of risk, and therefore, an investment in our shares may not be suitable for someone with

lower risk tolerance.

In addition, our Common Stock is intended for long-term investors who can accept the risks of investing primarily

in illiquid loans and other debt or debt-like instruments and should not be treated as a trading vehicle.

A stockholder’s interest in us will be diluted if we issue

additional shares, which could reduce the overall value of an investment in us.

Our stockholders do not have preemptive rights to any shares of common

stock we issue in the future.

To the extent that we issue additional equity interests at or below NAV your percentage ownership interest

in us may be diluted.

In addition, depending upon the terms and pricing of any future and the value of our investments, you may also experience

dilution in the book value and fair value of your shares of common stock.

Under the 1940 Act, we generally are prohibited from issuing or selling

our shares of common stock at a price below NAV per share, which may be a disadvantage as compared with certain public companies.

however, sell our shares of common stock, or warrants, options, or rights to acquire our shares of common stock, at a price below the

current NAV of our shares of common stock if our Board of Directors determines that such sale is in our best interests and the best interests

of our stockholders, and our stockholders, including a majority of those stockholders that are not affiliated with us, approve such sale.

In any such case, the price at which our securities are to be issued and sold may not be less than a price that, in the determination

of our Board of Directors, closely approximates the fair value of such securities (less any distributing commission or discount).

raise additional funds by issuing our shares of common stock or senior securities convertible into, or exchangeable for, our shares of

common stock, then the percentage ownership of our stockholders at that time will decrease and you will experience dilution.

In the event that we enter into a Subscription Agreement with one or

more investors after the Initial Closing, each such investor will be required to make Catch-up Purchases on one or more dates

to be determined by us.

Each Catch-up Purchase will dilute the ownership percentage of all investors whose subscriptions were

accepted at previous closings.

As a result, each subsequent closing after the Initial Closing will result in existing stockholders experiencing

dilution as a result of Catch-up Purchases.

In addition, distributions declared in cash payable to stockholders

that are participants in our DRIP will generally be automatically reinvested in our shares of common stock.

As a result, stockholders

that do not participate in our DRIP may experience dilution over time.

Our stockholders may receive our Shares

as dividends, which could result in adverse tax consequences to them.

In order to satisfy the annual distribution

requirement applicable to RICs, we will have the ability to declare a large portion of a dividend in our Shares instead of in cash.

long as a portion of such dividend is paid in cash (which portion may be as low as 20% of such dividend) and certain requirements are

met, the entire distribution will be treated as a dividend for U.S.

We may be subject to risks that arise from newly enacted federal

tax legislation and our stockholders may receive our shares of Common Stock as dividends, which could result in adverse tax consequences

The Inflation Reduction Act of 2022, among other things, introduced

a 15% book minimum tax on larger corporations, a 1% excise tax on stock buybacks and increased investment in the Internal Revenue Service

(the “IRS”) to aid in the enforcement of tax laws.

The impact of such legislation, as well as federal tax legislation proposed

but not yet enacted, on us, our stockholders and entities in which we may invest is uncertain.

Prospective investors are urged to consult

their tax advisors regarding the effects of the new legislation on an investment in us.

In order to satisfy the annual distribution requirement applicable

to RICs, we will have the ability to declare a large portion of a dividend in our shares of common stock instead of in cash.

a portion of such dividend is paid in cash (which portion may be as low as 20% of such dividend) and certain requirements are met, the

entire distribution will be treated as a dividend for U.S.

federal income tax purposes.

As a result, a stockholder generally

would be subject to tax on 100% of the fair market value of the dividend on the date the dividend is received by the stockholder in the

same manner as a cash dividend, even though most of the dividend was paid in our Shares.

As a result, a stockholder generally would be

subject to tax on 100% of the fair market value of the dividend on the date the dividend is received by the stockholder in the same manner

as a cash dividend, even though most of the dividend was paid in our shares of common stock.

We currently do not intend to pay dividends

in our Shares.

We may in the future determine to issue

preferred stock, which could adversely affect the value of shares of Common Stock.

in our shares of common stock.

We may in the future determine to issue preferred stock, which

could adversely affect the value of shares of Common Stock.

The issuance of preferred stock with dividend or conversion rights,

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do not currently anticipate issuing preferred stock.

An investor may be subject to filing

requirements under the Exchange Act as a result of an investment in us.

Because our Common Stock is registered under

the Exchange Act, ownership information for any person who beneficially owns 5% or more of our Common Stock must be disclosed in a Schedule 13G

or other filings with the SEC.

Beneficial ownership for these purposes is determined in accordance with the rules of the SEC, and includes

having voting or investment power over the securities.

Although we will provide in our quarterly financial statements the amount of outstanding

stock and the amount of the investor’s stock, the responsibility for determining the filing obligation and preparing the filing

remains with the investor.

In addition, owners of 10% or more of our Common Stock are subject to reporting obligations under Section 16(a)

of the Exchange Act.

An investor may be subject to the short-swing

profits rules under the Exchange Act as a result of an investment in us.

Persons with the right to appoint a director

or who hold 10% or more of a class of our shares may be subject to Section 16(b) of the Exchange Act, which recaptures for the benefit

of the issuer profits from the purchase and sale of registered stock within a six-month period.

General Risk Factors

Global economic, political and market conditions,

including uncertainty about the financial stability of the United States, could have a significant adverse effect on our business, financial

condition and results of operations.

The current worldwide financial

markets situation, as well as various social and political tensions in the United States and around the world (including wars and other

forms of conflict, terrorist acts, security operations and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes

and global health epidemics), may contribute to increased market volatility, may have long term effects on the United States and worldwide

financial markets, and may cause economic uncertainties or deterioration in the United States and worldwide.

For example, the COVID-19

pandemic adversely impacted global commercial activity and contributed to significant volatility in financial markets.

In addition, the large-scale

invasion of Ukraine by Russia, and resulting market volatility, could adversely affect our business, financial condition or results of

In response to the conflict between Russia and Ukraine, the U.S.

and other countries have imposed sanctions or other restrictive

actions against Russia.

The ongoing conflict and the rapidly evolving measures in response could be expected to have a negative impact

on the economy and business activity globally and could have a material adverse effect on our portfolio companies and our business, financial

condition, cash flows and results of operations.

The severity and duration of the conflict and its impact on global economic and market

conditions are impossible to predict.

In addition, sanctions could also result in Russia taking counter measures or retaliatory actions

which could adversely impact our business or the business of our portfolio companies, including, but not limited to, cyberattacks targeting

private companies, individuals or other infrastructure upon which our business and the business of our portfolio companies rely.

In addition, the political

reunification of China and Taiwan, over which China continues to claim sovereignty, is a highly complex issue that has included threats

of invasion by China.

Any escalation of hostility between China and/or Taiwan would likely have a significant adverse impact not only

on the value of investments in both countries, but also on economies and financial markets globally.

In addition, the recent outbreak of hostilities in the Middle East

and escalating tensions in the region may create volatility and disruption of global markets.

We do not currently have portfolio investments with direct exposure

to the Middle East, China, Taiwan, Russia or Ukraine.

Political, social and economic uncertainty,

including uncertainty related to the COVID-19 pandemic, creates and exacerbates risks.

Social, political, economic and other conditions and events (such as

natural disasters, epidemics and pandemics, terrorism, conflicts and social unrest) will occur that create uncertainty and have significant

impacts on issuers, industries, governments and other systems, including the financial markets, to which companies and their investments

As global systems, economies and financial markets are increasingly interconnected, events that once had only local impact

are now more likely to have regional or even global effects.

Events that occur in one country, region or financial market will, more frequently,

adversely impact issuers in other countries, regions or markets, including in established markets such as the U.S.

Such risks include

the large-scale invasion of Ukraine by Russia that began in February 2022, heightened tensions between China and Taiwan, or the effect

on world leaders and governments of global health pandemics, such as the COVID-19 pandemic.

These impacts can be exacerbated by failures

of governments and societies to adequately respond to an emerging event or threat.

We do not currently have portfolio investments with

exposure to China, Taiwan, Russia or Ukraine

Uncertainty can result in or coincide with,

among other things:

Social, political, economic and other conditions

and events (such as natural disasters, epidemics and pandemics, terrorism, conflicts and social unrest) will occur that create uncertainty

and have significant impacts on issuers, industries, governments and other systems, including the financial markets, to which companies

and their investments are exposed.

As global systems, economies and financial markets are increasingly interconnected, events that once

had only local impact are now more likely to have regional or even global effects.

Events that occur in one country, region or financial

market will, more frequently, adversely impact issuers in other countries, regions or markets, including in established markets such as

Such risks include the large-scale invasion of Ukraine by Russia that began in February 2022, heightened tensions between China

and Taiwan, the recent outbreak of hostilities in the Middle East, or the effect on world leaders and governments of global health pandemics,

such as the COVID-19 pandemic.

These impacts can be exacerbated by failures of governments and societies to adequately respond to an emerging

event or threat.

We do not currently have portfolio investments with direct exposure to the Middle East, China, Taiwan, Russia or Ukraine.

Uncertainty can result in

or coincide with, among other things:

increased volatility in the financial markets for securities, derivatives, loans, credit and currency;

in the reliability of market prices and difficulty in valuing assets (including portfolio company assets);

greater fluctuations in spreads

on debt investments and currency exchange rates;

a decrease in the reliability of market prices and difficulty in valuing assets (including portfolio company assets);

greater fluctuations

in spreads on debt investments and currency exchange rates;

increased risk of default (by both government and private obligors and issuers);

social, economic, and political instability;

further social, economic, and political instability;

nationalization of private enterprise;

greater governmental involvement in the economy or

in social factors that impact the economy;

changes to governmental regulation and supervision of the loan, securities, derivatives and

currency markets and market participants and decreased or revised monitoring of such markets by governments or self-regulatory organizations

greater governmental involvement in the economy

or in social factors that impact the economy;

changes to governmental regulation and supervision of the loan, securities, derivatives

and currency markets and market participants and decreased or revised monitoring of such markets by governments or self-regulatory organizations

and reduced enforcement of regulations;

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and/or enforcing legal judgments.

For example, the COVID-19 pandemic led to disruptions in local, regional,

national and global markets and economies.

For example, the COVID-19

pandemic led to disruptions in local, regional, national and global markets and economies.

With respect to the U.S.

credit markets (in particular for middle market loans), this outbreak

resulted in the following among other things:

(i) significant disruption to the businesses of many middle-market loan borrowers

including supply chains, demand and practical aspects of their operations, as well as lay-offs of employees;

(ii) increased

draws by borrowers on revolving lines of credit;

(iii) increased requests by borrowers for amendments and waivers of their credit

agreements to avoid default, increased defaults by such borrowers and/or increased difficulty in obtaining refinancing at the maturity

dates of their loans;

(iv) volatility and disruption of these markets including greater volatility in pricing and spreads and difficulty

in valuing loans during periods of increased volatility, and liquidity issues;

and (v) rapidly evolving proposals and/or actions

by state and federal governments to address problems experienced by the markets and by businesses and the economy in general which were

not necessarily adequate to address the problems faced by the loan market and middle market businesses.

credit markets (in

particular for middle market loans), this outbreak resulted in the following among other things:

(i) significant disruption to the businesses

of many middle market loan borrowers including supply chains, demand and practical aspects of their operations, as well as lay-offs of

(ii) increased draws by borrowers on revolving lines of credit;

(iii) increased requests by borrowers for amendments and waivers

of their credit agreements to avoid default, increased defaults by such borrowers and/or increased difficulty in obtaining refinancing

at the maturity dates of their loans;

(iv) volatility and disruption of these markets including greater volatility in pricing and spreads

and difficulty in valuing loans during periods of increased volatility, and liquidity issues;

and (v) rapidly evolving proposals and/or

actions by state and federal governments to address problems experienced by the markets and by businesses and the economy in general which

were not necessarily adequate to address the problems faced by the loan market and middle market businesses.

Although many of these conditions

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by us and returns to us, among other things.

Recurring COVID-19 outbreaks, including as a result of new variants of the virus,

have led to the re-introduction of public health restrictions in certain states in the United States and globally and could

continue to lead to the re-introduction of such restrictions elsewhere.

It is impossible to determine the scope of any future

outbreaks, how long any such outbreak, market disruption or uncertainties may last, the effect any governmental actions will have or the

full potential impact on us and our portfolio companies in which we invest.

Although it is impossible to predict the

precise nature and consequences of these events, or of any political or policy decisions and regulatory changes occasioned by emerging

events or uncertainty on applicable laws or regulations that impact us and our targeted investments, it is clear that these types of

events are impacting and will, for at least some time, continue to impact us and our targeted investments and, in certain instances,

Recurring COVID-19 outbreaks, including as a result of new variants of the virus, have led

to the re-introduction of public health restrictions in certain states in the United States and globally and could continue to lead to

the re-introduction of such restrictions elsewhere.

It is impossible to determine the scope of any future outbreaks, how long any such

outbreak, market disruption or uncertainties may last, the effect any governmental actions will have or the full potential impact on us

and our portfolio companies in which we invest.

Although it is impossible

to predict the precise nature and consequences of these events, or of any political or policy decisions and regulatory changes occasioned

by emerging events or uncertainty on applicable laws or regulations that impact us and our targeted investments, it is clear that these

types of events are impacting and will, for at least some time, continue to impact us and our targeted investments and, in certain instances,

the impact will be adverse and profound.

If public health uncertainties and market disruptions continue for

an extended period of time, loan delinquencies, loan non-accruals, problem assets, and bankruptcies may increase.

collateral for our loans may decline in value, which could cause loan losses to increase and the net worth and liquidity of loan guarantors

could decline, impairing their ability to honor commitments to us.

An increase in loan delinquencies and non-accruals or a decrease

in loan collateral and guarantor net worth could result in increased costs and reduced income which would have a material adverse effect

on our business, financial condition or results of operations.

We will also be negatively affected if the

operations and effectiveness of us or a portfolio company (or any of the key personnel or service providers of the foregoing) is compromised

or if necessary or beneficial systems and processes are disrupted.

We are subject to risks related to

corporate responsibility.

Our business faces increasing public scrutiny

related to environmental, social and governance (“ESG”) activities.

We risk damage to our brand and reputation if we fail

to act responsibly in a number of areas, such as environmental stewardship, corporate governance and transparency and considering ESG

factors in our investment processes.

Adverse incidents with respect to ESG activities could impact the value of our brand, the cost of

our operations and relationships with investors, all of which could adversely affect our business and results of operations.

If public health uncertainties

and market disruptions continue for an extended period of time, loan delinquencies, loan non-accruals, problem assets, and bankruptcies

may increase.

In addition, collateral for our loans may decline in value, which could cause loan losses to increase and the net worth

and liquidity of loan guarantors could decline, impairing their ability to honor commitments to us.

An increase in loan delinquencies

and non-accruals or a decrease in loan collateral and guarantor net worth could result in increased costs and reduced income which would

have a material adverse effect on our business, financial condition or results of operations.

We will also be negatively

affected if the operations and effectiveness of us or a portfolio company (or any of the key personnel or service providers of the foregoing)

is compromised or if necessary or beneficial systems and processes are disrupted.

We are subject to risks related to corporate

responsibility.

Our business faces increasing

public scrutiny related to environmental, social and governance (“ESG”) activities.

We risk damage to our brand and reputation

if we fail to act responsibly in a number of areas, such as environmental stewardship, corporate governance and transparency and considering

ESG factors in our investment processes.

Adverse incidents with respect to ESG activities could impact the value of our brand, the cost

of our operations and relationships with investors, all of which could adversely affect our business and results of operations.

Additionally,

new regulatory initiatives related to ESG could adversely affect our business.

There is also a growing regulatory interest across jurisdictions in

improving transparency regarding the definition, measurement and disclosure of ESG factors in order to allow investors to validate and

better understand sustainability claims.

In addition, in 2021 the SEC established an enforcement task force to look into ESG practices

and disclosures by public companies and investment managers and has started to bring enforcement actions based on ESG disclosures not

matching actual investment processes.

In addition, the SEC has announced that it is working on proposals

for mandatory disclosure of certain ESG-related matters, including with respect to corporate and fund carbon emissions, board diversity

and human capital management.

At this time, there is uncertainty regarding the scope of such proposals or when they would become effective

Compliance with any new laws or regulations increases our regulatory burden and could make compliance more difficult and

expensive, affect the manner in which we or our portfolio companies conduct our businesses and adversely affect our profitability.

We may be the target of litigation.

We may be the target of securities litigation

in the future, particularly if the value of our Shares fluctuates significantly.

We could also generally be subject to litigation, including

derivative actions by our stockholders.

Any litigation could result in substantial costs and divert management’s attention and

resources from our business and cause a material adverse effect on our business, financial condition and results of operations.

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 the interest rate payable on the debt securities we acquire, the default rate

on such securities, the number and size of investments we originate or acquire, the level of our expenses, 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.

In light of these factors, results for any period should not be relied upon as being indicative of our performance

in future periods.

UNRESOLVED STAFF

The headquarters of KA Credit Advisors, LLC is located at 811 Main

Street, 14 th Floor, Houston, TX 77002.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors