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Item 1A. Risk Factors

2026-03-02 compared with 2025-03-03 · 927 added, 943 removed, 966 unchanged (66% of the section changed)

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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

have a limited operating history and our Advisor and its affiliates have limited experience advising BDCs 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.

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.

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 continue to qualify as a RIC.

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.

developments in the credit markets may impair our ability to enter into new credit facilities or our ability to issue senior unsecured

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 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.

of shares of our common stock by us under our open market repurchase program, including the Company Rule 10b5-1 Plan, may result

in the price of shares of our common stock being higher than the price that otherwise might exist in the open market and are subject

to our ability to finance such repurchases.

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 include:

Principal Risks Relating to Our Business

and Structure

We have a limited operating history and our Advisor and its affiliates have limited experience advising BDCs 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 income.

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

There 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.

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

We will be subject to corporate-level income tax if we are unable to continue 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.

The 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.

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 strategy.

Efforts to comply with the Exchange Act and the Sarbanes-Oxley Act involve significant expenditures, and non-compliance would adversely affect us and the value of our shares of common stock.

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.

Purchases of shares of our common stock by us under our open market repurchase program, including the Company Rule 10b5-1 Plan, may result in the price of shares of our common stock being higher than the price that otherwise might exist in the open market and are subject to our ability to finance such repurchases.

Principal Risks Relating to Our Investments

are subject to risks associated with the current interest rate environment, and 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.

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.

are subject to risks associated with our investments in unitranche secured loans and securities, including the potential loss of all

or part of such investments.

● Our investments in securities that are rated below investment

We are subject to risks associated with the current interest rate environment, and 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.

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

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

We are subject to risks associated with our investments in unitranche secured loans and securities, including the potential loss of all or part of such investments.

Our investments in securities that are rated below investment grade (i.e.

“junk bonds”) may be risky and we could lose all or part of our investments.

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

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

with equal or greater expected yields.

portfolio companies may be unable to repay or refinance outstanding principal on their loans 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.

investments in the Trading Companies & Distributors industry face considerable uncertainties including significant regulatory

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

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.

There 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

● Prior to the IPO, there has been 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 or remain active, or that

the market price of our shares of common stock will not decline at some point following the IPO.

Our share of common stock price may

be volatile and may fluctuate substantially.

of substantial amounts of our shares of common stock in the public market may have an adverse effect on the market price of our shares

of common stock.

and liquidity in our shares may be limited and our shares may trade below their NAV.

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.

We cannot assure you that a market for our shares of common stock will remain active, or that the market price of our shares of common stock will not decline.

Our common stock share price may be volatile and may fluctuate substantially.

Sales of substantial amounts of our shares of common stock in the public market may have an adverse effect on the market price of our shares of common stock.

Trading and liquidity in our shares may be limited and our shares may trade below their NAV.

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.

Our stockholders may experience dilution in their ownership percentage.

Risks Relating to Our Business and Structure

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 with private

investors as shareholders, and then we completed our IPO in 2024.

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.

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 with

private investors as shareholders, and then we completed our IPO in 2024.

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.

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

private or thinly traded public

companies, cash, cash equivalents, U.S.

government securities and other high-quality debt instruments that mature in one year or less

from the date of investment.

are required, for example, to invest at least 70% of their total assets be “qualifying assets”.

Qualifying assets generally

include securities of “eligible portfolio companies,” cash, cash equivalents, U.S.

government securities and high-quality

debt instruments maturing in one year or less from the time of investment.

Under the 1940 Act and the rules thereunder, “eligible

portfolio companies” include (1) private domestic operating companies, (2) public domestic operating companies whose securities

are not listed on a national securities exchange (e.g., the New York Stock Exchange) or registered under the Exchange Act, and (3) public

domestic operating companies having a market capitalization of less than $250 million.

The Fund may also invest up to 30% of its portfolio

in non-qualifying assets.

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.

We may offer, and provide upon request, significant managerial assistance to eligible portfolio companies.

Offering and providing upon request significant managerial assistance means, among other things, any arrangement whereby we, through our

trustees, officers or employees, offer to provide and, if accepted, do so provide, significant guidance and counsel concerning the management,

operations or business objectives and policies of an issuer through monitoring of issuer operations, selective participation in board

and management meetings, consulting with and advising an issuer’s or other organizational or financial guidance.

Our Advisor has

a limited operating history under these conditions, which may hinder our ability to take advantage of attractive investment opportunities

and to achieve our investment objective.

Furthermore, our investments may differ from those

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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.

Further 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

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.

disagreement over the federal budget has caused the U.S.

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

lawmakers passed legislation to raise the federal debt ceiling on multiple occasions, including, most recently, in July 2025, ratings

agencies have lowered or threatened to lower the long-term sovereign credit rating on the United States.

The impact of the increased debt ceiling and/or

downgrades to the U.S.

government’s sovereign credit rating or its perceived creditworthiness as well as potential government shutdowns

and uncertainty surrounding transfers of power could adversely affect the U.S.

and global financial markets and economic conditions.

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.

Continued adverse political and economic conditions could have a

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

We depend upon our Advisor and Administrator

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that are active in our markets.

We do not have any internal management capacity or

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.

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

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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.

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

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 the professionals

of the Administrator will continue to provide administrative services to us.

This could have a material adverse effect on our financial

condition, results of operations and cash flows.

Conflicts of interest are expected to arise in allocating management time, services or functions.

ability to access professionals and resources within Kayne Anderson for our benefit is expected to be limited at times.

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.

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

This could have a material adverse

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

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 and grow our business, 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

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.

Our ability to achieve our investment objective

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

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 us and, in some cases, an investigation

by third parties.

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 us and, in some

cases, an investigation by third parties.

This process is particularly important and highly subjective.

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in that company.

There are significant potential conflicts of

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

There 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, the valuation process

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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.

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 that may compete with our portfolio

Moreover, 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;

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.

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, 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;

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

certain 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;

members of Kayne Anderson and its affiliates may serve on the boards of directors of and advise companies that may compete with our portfolio investments.

Moreover, 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

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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 of

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

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 part of the 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 of the term.

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

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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.

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 (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 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 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.

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 (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 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

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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, 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

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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 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.

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”

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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 returns.

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 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.

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

not match our competitors’ pricing, terms and structure.

However, if we match our competitors’ pricing, terms and structure,

we may experience decreased net interest income, lower yields and increased risk of credit loss.

Although our Advisor allocates opportunities

in accordance with its allocation policy, allocations to other accounts managed or sponsored by our Advisor or its affiliates reduce the

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

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 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

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.

Beginning in 2024, competition for the types of

investments we make has driven interest rate spreads lower on our investments and has increased pressure from portfolio companies to pay

interest in-kind instead of in cash.

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 if we do not match our competitors’ pricing, terms and

However, if we match our competitors’ pricing, terms and structure, we may experience decreased net interest income,

lower yields and increased risk of credit loss.

Although our Advisor allocates opportunities in accordance with its allocation policy,

allocations to other accounts managed or sponsored by our Advisor or its affiliates reduce the amount and frequency of opportunities available

to us and may not be in the best interests of us and our stockholders.

The competitive pressures we face may have a material

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

We have elected, and intend to qualify annually thereafter,

to be treated for U.S.

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;

however, 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, as a RIC under the Code,

we must meet certain source-of-income, asset diversification and distribution requirements.

The distribution requirement for a RIC is

satisfied if we distribute to our stockholders dividends for U.S.

federal income tax purposes of an amount generally at least equal to

the sum of 90% of our investment company taxable income, which is generally our net ordinary income plus the excess of our net short-term

however, 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, as a RIC under the

Code, we must meet certain source-of-income, asset diversification and distribution requirements.

The distribution requirement for a RIC

is satisfied if we distribute to our stockholders dividends for U.S.

federal income tax purposes of an amount generally at least equal

to the sum of 90% of our investment company taxable income, which is generally our net ordinary income plus the excess of our net short-term

capital gains in excess of our net long-term capital losses, determined without regard to any deduction for dividends paid, and 90% of

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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 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

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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 original issue discount (“OID”).

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

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 original issue discount (“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.

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

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;

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;

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;

instruments may have unreliable valuations because the accruals require judgments about ultimate collectability of the deferred payments

and the value of the associated collateral;

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

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;

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.

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.

We expect to invest in debt securities that are

rated below investment grade by rating agencies or that would be rated below investment grade if they were rated.

Investments in these

types of instruments may present special tax issues for us.

federal income tax rules are not entirely clear about issues such as

when we may cease to accrue interest, original issue discount or market discount, when and to what extent deductions may be taken for

bad debts or worthless instruments, how payments received on obligations in default should be allocated between principal and income and

whether exchanges of debt obligations in a bankruptcy or workout context are taxable.

These and other issues will be addressed by us,

to the extent necessary, to preserve our status as a RIC and to distribute sufficient income to not become subject to U.S.

federal income

Part of the incentive fee payable by us that relates

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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

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.

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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.

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

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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.

As defined in the 1940 Act, a 150% asset coverage means that for every $100 of net assets we hold, we can raise $200 from borrowing and

issuing 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,

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we 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

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.

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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.

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, 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 and the

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.

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, 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”),

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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).

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 of our investments

to repay some debt when it is disadvantageous to do so.

This could have a material adverse effect on our operations, and we may not be

able to make distributions in amounts sufficient to maintain our status as a RIC, or at all.

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

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.

This could have a material adverse effect on our operations,

and we may not be able to make distributions in amounts sufficient to maintain our status as a RIC, or at all.

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.

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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:

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”) were issued under a note purchase agreement, dated June 29,

In addition, our floating rate Series C Notes due June 2028 (the “Series C Notes”), 5.80% Series D Notes due June 2028

(the “Series D Notes”) and 6.15% Series E Notes due October 2030 (the “Series E Notes”) were issued under a note

purchase agreement, dated September 9, 2025.

Collectively, all of these “Notes” were used under two separate note purchase

agreements (each a “Note Purchase Agreement” or, collectively, the “Note Purchase Agreements”).

The Note Purchase

Agreements contain 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

In addition, the Note Purchase Agreements contain 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.

under the Credit Facilities and the Note Purchase Agreements 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.

Credit Facilities and the Note Purchase Agreements 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 through Series E 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, many commercial

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growth of our investments on acceptable economic terms, or at all, and one or more of our credit facilities could be accelerated by the

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 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.

Turmoil such as that experienced by the U.S.

and global financial markets

as a result of the COVID-19 pandemic, and such as that which markets endured during the global financial crisis of 2008, illustrates the

risk that the financial markets can experience uncertainty, volatility and instability, potentially for protracted periods of time.

and the global credit markets have experienced substantial volatility, disruption, liquidity shortages and to some extent financial instability.

Global financial markets have experienced considerable and prolonged declines in the valuations of equity and debt securities and periodic

acute contraction in the availability of credit.

There can be no assurances that conditions in the global financial markets will not worsen

and/or adversely affect one or more of our investments (including with respect to performing under or refinancing their existing obligations),

our access to capital or leverage, our ability to effectively deploy our capital or realize investments on favorable terms or our overall

The success of the our activities will be affected

by the continued economic volatility as well as general economic and market conditions, such as interest rates, availability of credit,

credit defaults, inflation rates, economic uncertainty, changes in applicable laws and regulations (including laws relating to taxation

of the our investments), trade barriers, consumer spending patterns, currency exchange controls, continued technology disruption, tax

reform or other significant policy changes as well as national and international political, environmental and socioeconomic circumstances

(including wars, terrorist acts, security operations or public health considerations).

In particular, conditions in the credit markets

may have a significant impact on our business.

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

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

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and cash flows.

The 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

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,

The 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.

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.

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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.

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.

will value these instruments in accordance with valuation procedures adopted by our Advisor.

We will value these instruments in accordance with valuation procedures adopted by our Advisor.

We intend to use the services of an independent

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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.

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 of the rules

implementing its provisions and any future rules that may be adopted, along with other legislative and regulatory proposals directed at

the financial services industry or affecting taxation that may be proposed in the future, may negatively impact the operations, cash flows

or financial condition of us or our portfolio companies, impose additional costs on us or our portfolio companies, intensify the regulatory

supervision of us or our portfolio companies or otherwise adversely affect our business or the business of our portfolio companies.

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

directed at the financial services industry or affecting taxation that may be proposed in the future, may negatively impact the operations,

cash flows or financial condition of us or our portfolio companies, impose additional costs on us or our portfolio companies, intensify

the regulatory supervision of us or our portfolio companies or otherwise adversely affect our business or the business of our portfolio

In addition, the central banks and, in particular,

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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 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, and amendments to the liquidity leverage ratio and supplementary leverage ratio requirements.

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 federal government 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.

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, and 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 federal government 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

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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 without prior notice

and without stockholder approval.

However, absent stockholder approval, we may not change the nature of our business so as to cease to

be, or withdraw our election as, a BDC.

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 without prior

notice and without stockholder approval.

However, absent stockholder approval, we may not change the nature of our business so as to cease

to be, or withdraw our election as, a BDC.

We cannot predict the effect any changes to our current investment objective, operating policies

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adversely affect our business and impair our ability to make distributions.

The Advisor can resign on 60 days’ notice,

and we may not be able to find a suitable replacement within that time, resulting in a disruption in our operations that could 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 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.

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 cash flows.

The Advisor can resign on 60 days’

notice, and we may not be able to find a suitable replacement within that time, resulting in a disruption in our operations that could

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 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.

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 cash flows.

We incur significant costs as a result of being registered under

the Exchange Act.

We 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

Efforts to comply with the Exchange Act and

the Sarbanes-Oxley Act will involve significant expenditures, and non-compliance will adversely affect us and the value of our shares

of common stock.

We 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 Exchange Act

and the Sarbanes-Oxley Act will involve significant expenditures, and non-compliance will adversely affect us and the value of our

shares of common stock.

As a public entity, we are subject to the reporting

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reporting, which are discussed below.

We have implemented procedures,

processes, policies and practices for the purpose of addressing such standards and requirements applicable to public companies.

Our management

will be required to report on our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act.

will 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 annual expenses

related to these steps and, among other things, directors’ and officers’ liability insurance, director fees, reporting requirements

We have implemented procedures, processes, policies

and practices for the purpose of addressing such standards and requirements applicable to public companies.

Our management will be required

to report on our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act.

We will 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 annual expenses related

to these steps and, among other things, directors’ and officers’ liability insurance, director fees, reporting requirements

of the SEC, expenses associated with corporate governance requirements, transfer agent fees, additional administrative expenses payable

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adversely affected.

Our independent registered public

accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting until the date we

are no longer an emerging growth company under the JOBS Act.

Because we do not currently have comprehensive documentation of our internal

control and have not yet tested our internal control in accordance with Section 404 of the Sarbanes-Oxley Act, we cannot conclude,

as required by Section 404, that we do not have a material weakness in our internal control or a combination of significant deficiencies

that could result in the conclusion that we have a material weakness in our internal control.

If we are not able to implement the applicable

requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner or with adequate compliance, our operations, financial reporting

or financial results could be adversely affected.

Matters impacting our internal controls may cause us to be unable to report our financial

information on a timely basis and thereby subject us to adverse regulatory consequences, including sanctions by the SEC, and result in

a breach of the covenants under the agreements governing any of our financing arrangements.

There could also be a negative reaction in

the financial markets due to a loss of investor confidence in us and the reliability of our financial statements.

Confidence in the reliability

of our financial statements could also suffer if we or our independent registered public accounting firm were to report a material weakness

in our internal controls over financial reporting.

Our independent registered public accounting firm

will not be required to attest to the effectiveness of our internal control over financial reporting until the date we are no longer an

emerging growth company under the JOBS Act.

Because we do not currently have comprehensive documentation of our internal control and have

not yet tested our internal control in accordance with Section 404 of the Sarbanes-Oxley Act, we cannot conclude, as required by

Section 404, that we do not have a material weakness in our internal control or a combination of significant deficiencies that could

result in the conclusion that we have a material weakness in our internal control.

If we are not able to implement the applicable requirements

of Section 404 of the Sarbanes-Oxley Act in a timely manner or with adequate compliance, our operations, financial reporting or financial

results could be adversely affected.

Matters impacting our internal controls may cause us to be unable to report our financial information

on a timely basis and thereby subject us to adverse regulatory consequences, including sanctions by the SEC, and result in a breach of

the covenants under the agreements governing any of our financing arrangements.

There could also be a negative reaction in the financial

markets due to a loss of investor confidence in us and the reliability of our financial statements.

Confidence in the reliability of our

financial statements could also suffer if we or our independent registered public accounting firm were to report a material weakness in

our internal controls over financial reporting.

This could materially adversely affect us.

Our internal control over financial

reporting may not prevent or detect misstatements because of its inherent limitations, including the possibility of human error, the

circumvention or overriding of controls, or fraud.

Even effective internal controls can provide only reasonable assurance with respect

to the preparation and fair presentation of financial statements.

If we fail to maintain the adequacy of our internal controls, including

any failure to implement required new or improved controls, or if we experience difficulties in their implementation, our business and

operating results could be harmed and we could fail to meet our financial reporting obligations.

Our internal control over financial reporting

may not prevent or detect misstatements because of its inherent limitations, including the possibility of human error, the circumvention

or overriding of controls, or fraud.

Even effective internal controls can provide only reasonable assurance with respect to the preparation

and fair presentation of financial statements.

If we fail to maintain the adequacy of our internal controls, including any failure to

implement required new or improved controls, or if we experience difficulties in their implementation, our business and operating results

could be harmed and we could fail to meet our financial reporting obligations.

We are highly dependent on information systems,

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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.

These systems are subject to potential

cybersecurity attacks and incidents, including through adverse events that threaten the confidentiality, integrity or availability of

our information resources.

Our business depends on the communications and

information systems of our Advisor and its affiliates, our portfolio companies and third-party service providers.

These 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.

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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 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.

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.

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

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adverse effect on our business, results of operations and financial condition of us and of our portfolio companies.

Purchases of shares of our common

stock by us under our open market repurchase program, including the Company Rule 10b5-1 Plan, may result in the price of shares of

our common stock being higher than the price that otherwise might exist in the open market and are subject to our ability to finance such

Our Board has authorized us to repurchase

shares of our common stock through an open-market share repurchase program for up to $100 million in the aggregate of shares of our

common stock within one year of the closing of the IPO.

Pursuant to such authorization and concurrently with the closing of the IPO, we

entered into the Company 10b5-1 Plan to acquire up to $100 million in the aggregate of shares of our Common Stock, in accordance

with the guidelines specified in Rule 10b-18 and Rule 10b5-1 of the Exchange Act, and will otherwise be subject

to applicable law, including Regulation M, which may prohibit purchases under certain circumstances.

These activities may have the effect

of maintaining the market price of shares our Common Stock or retarding a decline in the market price of the shares of our Common Stock,

and, as a result, the price of our shares of Common Stock may be higher than the price that otherwise might exist in the open market.

In addition, we may further borrow

under credit facilities and/or issue senior unsecured notes in the future in order to finance repurchases of shares.

We can offer no assurance

that we will be successful in obtaining suitable debt investments to finance purchases under the Company 10b5-1 Plan.

Whether purchases

will be made under the Company 10b5-1 Plan and how much will be purchased at any time is uncertain, dependent on prevailing market prices,

Purchases of shares of our common stock

by us under our open market repurchase program, including the Company Rule 10b5-1 Plan, may result in the price of shares of our

common stock being higher than the price that otherwise might exist in the open market and are subject to our ability to finance such

On May 1, 2025, the Board of Directors of the

Company authorized an amendment to the Company 10b5-1 Plan to extend the expiration to May 24, 2026.

Under the amended and restated plan

(effective May 25, 2025), the Company may repurchase up to $100 million of our Common Stock, in accordance with the guidelines specified

in Rule 10b-18 and Rule 10b5-1 of the Exchange Act, and will otherwise be subject to applicable law, including

Regulation M, which may prohibit purchases under certain circumstances.

These activities may have the effect of maintaining the market

price of shares our Common Stock or retarding a decline in the market price of the shares of our Common Stock, and, as a result, the price

of our shares of Common Stock may be higher than the price that otherwise might exist in the open market.

In addition, we may further borrow under credit

facilities and/or issue senior unsecured notes in the future in order to finance repurchases of shares.

We can offer no assurance that

we will be successful in obtaining suitable debt investments to finance purchases under the Company 10b5-1 Plan.

Whether purchases will

be made under the Company 10b5-1 Plan and how much will be purchased at any time is uncertain, dependent on prevailing market prices,

trading volumes and our ability to finance repurchases, all of which we cannot predict.

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.

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

We are subject to risks associated with the

current interest rate environment, and 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.

We are subject to risks associated with

the current interest rate environment, and 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.

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

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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).

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).

Further, in response

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In an effort to control inflation, the U.S.

Reserve Board (the “Fed”) has sharply raised interest rates in recent years, and they remain near their highest levels in

over twenty years.

Other central banks globally have implemented 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).

Although recently both the Fed

and other central banks globally have begun lowering rates, there is no certainty that further reductions will occur.

There is no assurance

that the actions being taken by the Fed 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 stockholders.

Reserve Board (the “Fed”) has sharply raised interest rates in recent years.

Other central banks globally have implemented

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).

Although recently both the Fed and other central banks globally have begun lowering rates, there is no

certainty that further reductions will occur.

There is no assurance that the actions being taken by the Fed 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 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.

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.

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

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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.

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

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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.

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

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Bonds 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.

We are subject to risks associated with our

investments in unitranche secured loans and securities, including the potential loss of all or part of such investments.

We invest in unitranche secured

loans, which are a combination of senior secured and junior secured debt in the same facility.

Unitranche secured loans provide all of

the debt needed to finance a leveraged buyout or other corporate transaction, both senior and junior, but generally in a first-lien position,

while the borrower generally pays a blended, uniform interest rate rather than different rates for different tranches.

Unitranche secured

debt generally requires payments of both principal and interest throughout the life of the loan.

Generally, we expect these securities

to carry a blended yield that is between senior secured and junior debt interest rates.

Unitranche secured loans provide a number of advantages

for borrowers, including the following:

simplified documentation, greater certainty of execution and reduced decision-making complexity

throughout the life of the loan.

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.

We are subject to risks associated with

our investments in unitranche secured loans and securities, including the potential loss of all or part of such investments.

We invest in unitranche secured loans, which are

a combination of senior secured and junior secured debt in the same facility.

Unitranche secured loans provide all of the debt needed

to finance a leveraged buyout or other corporate transaction, both senior and junior, but generally in a first-lien position, while the

borrower generally pays a blended, uniform interest rate rather than different rates for different tranches.

Unitranche secured debt generally

requires payments of both principal and interest throughout the life of the loan.

Generally, we expect these securities to carry a blended

yield that is between senior secured and junior debt interest rates.

Unitranche secured loans provide a number of advantages for borrowers,

including the following:

simplified documentation, greater certainty of execution and reduced decision-making complexity throughout the

life of the loan.

In some cases, a portion of the total interest may accrue or be paid in kind.

Because unitranche secured

loans combine characteristics of senior and junior financing, unitranche secured loans have risks similar to the risks associated with

senior secured and second-lien loans and junior debt in varying degrees according to the combination of loan characteristics of the unitranche

secured loan.

Our investments in securities that are rated

below investment grade (i.e.

Because unitranche secured loans combine

characteristics of senior and junior financing, unitranche secured loans have risks similar to the risks associated with senior secured

and second-lien loans and junior debt in varying degrees according to the combination of loan characteristics of the unitranche secured

Our investments in securities that are rated below investment

“junk bonds”) may be risky and we could lose all or part of our investments.

We invest in securities that

are rated below investment grade by rating agencies or that would be rated below investment grade if they were rated.

Below investment

grade securities, which are often referred to as “junk,” have predominantly speculative characteristics with respect to the

issuer’s capacity to pay interest and repay principal.

We invest in securities that are rated below investment

grade by rating agencies or that would be rated below investment grade if they were rated.

Below investment grade securities, which are

often referred to as “junk,” have predominantly speculative characteristics with respect to the issuer’s capacity to

pay interest and repay principal.

They may also be difficult to value and illiquid.

The major risks of below

investment grade securities include:

Below investment grade securities

may be issued by less creditworthy issuers.

Issuers of below investment grade securities may have a larger amount of outstanding debt

relative to their assets than issuers of investment grade securities.

In the event of an issuer’s bankruptcy, claims of other creditors

may have priority over the claims of holders of below investment grade securities, leaving few or no assets available to repay holders

of below investment grade securities.

Prices of below investment grade

securities are subject to extreme price fluctuations.

Adverse changes in an issuer’s industry and general economic conditions may

have a greater impact on the prices of below investment grade securities than on other higher-rated fixed-income securities.

Issuers of below investment

grade securities may be unable to meet their interest or principal payment obligations because of an economic downturn, specific issuer

developments, or the unavailability of additional financing.

Below investment grade securities

frequently have redemption features that permit an issuer to repurchase the security from us before it matures.

If the issuer redeems

below investment grade securities, we may have to invest the proceeds in securities with lower yields and may lose income.

Below investment grade securities

may be less liquid than higher-rated fixed-income securities, even under normal economic conditions.

There are fewer dealers in the below

investment grade securities market, and there may be significant differences in the prices quoted by the dealers.

Judgment may play a

greater role in valuing these securities and we may be unable to sell these securities at an advantageous time or price.

We may incur expenses to the extent necessary to seek

recovery upon default or to negotiate new terms with a defaulting issuer.

The major risks of below investment grade securities

Below investment grade securities may be issued

by less creditworthy issuers.

Issuers of below investment grade securities may have a larger amount of outstanding debt relative to their

assets than issuers of investment grade securities.

In the event of an issuer’s bankruptcy, claims of other creditors may have priority

over the claims of holders of below investment grade securities, leaving few or no assets available to repay holders of below investment

grade securities.

Prices of below investment grade securities are

subject to extreme price fluctuations.

Adverse changes in an issuer’s industry and general economic conditions may have a greater

impact on the prices of below investment grade securities than on other higher-rated fixed-income securities.

Issuers of below investment grade securities may

be unable to meet their interest or principal payment obligations because of an economic downturn, specific issuer developments, or the

unavailability of additional financing.

Below investment grade securities frequently have

redemption features that permit an issuer to repurchase the security from us before it matures.

If the issuer redeems below investment

grade securities, we may have to invest the proceeds in securities with lower yields and may lose income.

Below investment grade securities may be less

liquid than higher-rated fixed-income securities, even under normal economic conditions.

There are fewer dealers in the below investment

grade securities market, and there may be significant differences in the prices quoted by the dealers.

Judgment may play a greater role

in valuing these securities and we may be unable to sell these securities at an advantageous time or price.

We may incur expenses to the extent necessary

to seek recovery upon default or to negotiate new terms with a defaulting issuer.

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

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.

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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

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.

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

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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 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.

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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.

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.

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

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.

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,

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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

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 we may be responsible for the contents of disclosure documents under applicable securities laws.

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of capital, from our other investments.

Our 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 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

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financing with less expensive capital.

As market conditions change, we do not know when, and if, prepayment may be possible for each portfolio

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

Our 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 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 are 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

Prepayment rates are influenced by changes in interest rates and a variety of economic, geographic

and other factors beyond our control.

Therefore, the frequency at which prepayments (including voluntary prepayments by borrowers and

liquidations due to defaults and insolvency) occur in respect of our investments can adversely impact us and prepayment rates cannot be

predicted with certainty, making it impossible to insulate us from prepayment or other such risks.

As market conditions change, we do

not know when, and if, prepayment may be possible for each portfolio company.

Early prepayments give rise to increased reinvestment risk,

including, for example, that when the prevailing level of interest rates falls, we could be unable to reinvest cash in a new investment

with an expected rate of return at least equal to that of the investment prepaid.

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 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 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 are 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.

Our investments in portfolio companies may

expose us to environmental risks.

We may invest in companies engaged in the ownership

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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.

As a result, the aggregate returns we realize may be significantly and adversely affected if a

small number of investments perform poorly or if we need to write down the value of any one investment.

Additionally, while we are not

targeting any specific industries, our investments may be concentrated in relatively few industries.

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.

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 financing;

or enhance the value of our investment.

Our portfolio may be concentrated in a limited

number of portfolio companies and industries.

As a result, the aggregate returns we realize may be significantly and adversely affected

if a small number of investments perform poorly or if we need to write down the value of any one investment.

Additionally, while we are

not targeting any specific industries, our investments may be concentrated in relatively few industries.

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.

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:

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,

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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.

circumstances where such third parties involve a management group, such third parties may receive compensation arrangements relating to

such investments, including incentive compensation arrangements.

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.

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.

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.

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

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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.

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

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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.

We may not have the ability to control or direct such

actions, even if our rights as junior lenders are adversely affected.

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.

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

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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

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.

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or decrease the amount of leverage currently available to us under the 1940 Act, which may be materially adverse to us and our stockholders.

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 or prevent

losses if the values of the positions declined.

However, such hedging could establish other positions designed to gain from those same

developments, thereby offsetting the decline in the value of such portfolio positions.

Such hedging transactions could also limit the

opportunity for gain if the values of the underlying portfolio positions increased.

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 or

prevent losses if the values of the positions declined.

However, such hedging could establish other positions designed to gain from those

same developments, thereby offsetting the decline in the value of such portfolio positions.

Such hedging transactions could also limit

the opportunity for gain if the values of the underlying portfolio positions increased.

Moreover, it might not be possible to hedge against

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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.

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

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engage in hedging transactions may also be adversely affected by rules adopted by the CFTC.

We may not realize gains from our equity investments.

When we invest in loans, we may acquire warrants or

other equity securities of portfolio companies as well.

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.

We may also invest in equity securities directly.

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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.

If the value 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.

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

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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.

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

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which may result in losses.

We are subject to risks associated with our

investment and trading of liquid credit (i.e., broadly syndicated loans).

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

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and any gains that we realize may not be sufficient to offset any other losses we experience.

Our investments in the Trading

Companies & Distributors industry face considerable uncertainties including significant regulatory challenges.

Our investments in portfolio companies that operate

in the Trading Companies & Distributors industry represent approximately 15.1% of our total portfolio as of December 31, 2024.

Portfolio companies in the Trading Companies & Distributors industry are subject to many risks, including the negative impact

of regulation, a competitive marketplace, decreased consumer demand and supply-chain disruptions.

In recent years, supply-chain disruptions

and global trade policies have had a negative impact on these industries and as Trading Companies & Distributors represent a

significant portion of our investments, such adverse business and/or economic conditions have also impacted our portfolio.

Adverse economic,

business, or regulatory developments affecting the Trading Companies & Distributors industry, including trade policies, treaties

and tariffs between the United States and other countries, could have a negative impact on the value of our investments in portfolio

companies operating in this industry, and therefore could negatively impact our business and results of operations.

Risks Relating to Our Common Stock

Prior to the IPO, there was

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 or

continue, or that the market price of our shares of common stock will not decline at some point following the IPO.

Our share of common

stock price may be volatile and may fluctuate substantially.

Our shares of common stock are listed

on the New York Stock Exchange under the symbol “KBDC.” We cannot assure you that a trading market will develop for our

shares of common stock or, if one develops, that the trading market can be sustained.

In addition, we cannot predict the prices at which

our shares of common stock will trade.

Shares of companies offered in an initial public offering often trade at a discount to the initial

offering price due to underwriting discounts and commissions and related offering expenses.

Also, shares of closed-end investment companies,

including BDCs, frequently trade at a discount from their net asset value and our shares may also be discounted in the market.

This characteristic

of closed-end investment companies is separate and distinct from the risk that our net asset value per share may decline.

We cannot predict

whether our shares of common stock will trade at, above or below net asset value.

The risk of loss associated with this characteristic

of closed-end management investment companies may be greater for investors expecting to sell shares of common stock purchased in this

offering soon after the IPO.

In addition, if our shares of common stock trade below its net asset value per share, we will generally not

be able to sell additional shares of common stock to the public at its market price without first obtaining the approval of a majority

of our stockholders (including a majority of our unaffiliated stockholders) and our independent directors for such issuance.

The market price and liquidity of

the market for our shares of common stock may be significantly affected by numerous factors, some of which are beyond our control and

may not be directly related to our operating performance.

We cannot assure you that a market for our

shares of common stock will continue, or that the market price of our shares of common stock will not decline.

Our share of common stock

price may be volatile and may fluctuate substantially.

Our shares of common stock are listed on the New York

Stock Exchange under the symbol “KBDC.” We cannot assure you that a trading market will be sustained.

In addition, we cannot

predict the prices at which our shares of common stock will trade.

Shares of companies offered in an initial public offering often trade

at a discount to the initial offering price due to underwriting discounts and commissions and related offering expenses.

of closed-end investment companies, including BDCs, frequently trade at a discount from their net asset value and our shares may also

be discounted in the market.

This characteristic of closed-end investment companies is separate and distinct from the risk that our net

asset value per share may decline.

We cannot predict whether our shares of common stock will trade at, above or below net asset value.

In addition, if our shares of common stock trade below its net asset value per share, we will generally not be able to sell additional

shares of common stock to the public at its market price without first obtaining the approval of a majority of our stockholders (including

a majority of our unaffiliated stockholders) and our independent directors for such issuance.

The market price and liquidity of the market for

our shares of common stock may be significantly affected by numerous factors, some of which are beyond our control and may not be directly

related to our operating performance.

These factors include:

● significant volatility in the market price and trading volume of securities of BDCs or other companies

in the sector in which we operate, which are not necessarily related to the operating performance of these companies;

significant volatility in the market price and trading volume of securities of BDCs or other companies in the sector in which we operate, which are not necessarily related to the operating performance of these companies;

changes in regulatory policies or tax guidelines, particularly with respect to RICs or BDCs;

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changes in the value of our portfolio of investments;

● any shortfall in revenue or net income or any increase in losses from levels expected by investors or

securities analysts;

any shortfall in revenue or net income or any increase in losses from levels expected by investors or securities analysts;

departure of key personnel from our Advisor;

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loss of a major funding source.

Sales of substantial amounts of

our shares of common stock in the public market may have an adverse effect on the market price of our shares of common stock.

Upon completion of the IPO, we had

71,116,459 shares of common stock outstanding.

The shares of common stock sold in the IPO are freely tradable without restriction or limitation

under the Securities Act.

Any shares purchased in the IPO

or owned by our affiliates, as defined in the Securities Act, are subject to the public information, manner of sale and volume limitations

of Rule 144 under the Securities Act.

The remaining shares of common stock outstanding upon the completion of the IPO are “restricted

securities” under the meaning of Rule 144 promulgated under the Securities Act and may only be sold if such sale is registered

under the Securities Act or exempt from registration, including the exemption under Rule 144.

In addition, shares owned by certain

of our stockholders are subject to lock-up restrictions.

Following the IPO and the expiration

of applicable lock-up periods, subject to applicable securities laws, sales of substantial amounts of our shares of common stock, or the

perception that such sales could occur, could adversely affect the prevailing market prices for our shares of common stock.

If this occurs,

it could impair our ability to raise additional capital through the sale of equity securities should we desire to do so.

We cannot predict

what effect, if any, future sales of securities, or the availability of securities for future sales, will have on the market price of

our shares of common stock prevailing from time to time.

Trading and liquidity in our shares

may be limited and our shares may trade below our NAV.

We cannot assure you that a public

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 of common stock will trade at, above or below NAV.

Sales of substantial amounts of our shares

of common stock in the public market may have an adverse effect on the market price of our shares of common stock.

Sales of substantial amounts of our shares of

common stock, or the perception that such sales could occur, could adversely affect the prevailing market prices for our shares of common

If this occurs, it could impair our ability to raise additional capital through the sale of equity securities should we desire

We cannot predict what effect, if any, future sales of securities, or the availability of securities for future sales, will

have on the market price of our shares of common stock prevailing from time to time.

Trading and liquidity in our shares may

be limited and our shares may trade below our NAV.

We cannot assure you that a public trading market

can be sustained.

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 of common stock will trade at, above or below NAV.

Certain provisions of the DGCL, our certificate

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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.

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.

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

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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.

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

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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

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 current NAV of our shares of common stock if our Board of Directors determines that such sale is in our best interests

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.

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 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

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stockholders that do not participate in our DRIP may experience dilution over time.

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 to them.

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.

Our stockholders may receive our shares

of Common Stock as dividends, which could result in adverse tax consequences to them.

In order to satisfy the annual distribution requirement

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pay dividends 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, liquidation preferences or other economic terms favorable to the holders of preferred stock could make an investment in shares

of Common Stock less attractive.

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, liquidation preferences or other economic terms favorable to the holders of preferred stock could make an investment

in shares of Common Stock less attractive.

In addition, the dividends on any preferred stock we issue must be cumulative.

Payment of dividends and

repayment of the liquidation preference of preferred stock must take preference over any distributions or other payments to holders of

Common Stock, and holders of preferred stock are not subject to any of our expenses or losses and are not entitled to participate in any

income or appreciation in excess of their stated preference (other than convertible preferred stock that converts into shares of Common

Payment of dividends

and repayment of the liquidation preference of preferred stock must take preference over any distributions or other payments to holders

of Common Stock, and holders of preferred stock are not subject to any of our expenses or losses and are not entitled to participate in

any income or appreciation in excess of their stated preference (other than convertible preferred stock that converts into shares of Common

In addition, under the 1940 Act, preferred stock would constitute a “senior security” for purposes of the 150% asset

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

For example, ongoing armed conflicts between Russia and Ukraine in

Europe and among Israel, Hamas and other militant groups in the Middle East, have caused and could continue to cause significant market

disruptions and volatility within the markets in Russia, Europe, the Middle East and the United States.

In addition, the current political

climate has intensified concerns about trade tariffs and a potential trade war between the United States and certain foreign countries,

including China, Mexico and Canada, among others.

These consequences may trigger a significant reduction in international trade, shortages

or oversupply of certain manufactured goods, substantial price increases or decreases of goods, inflationary pressures, and possible failure

of individual companies and/or large segments of the foreign export industry with a potentially negative impact on the value of our investments.

For example, ongoing armed conflicts between Russia

and Ukraine in Europe and among Israel, Iran, Hamas and other militant groups in the Middle East, have caused and could continue to cause

significant market disruptions and volatility within the markets in Russia, Europe, the Middle East and the United States.

the current political climate has intensified concerns about trade tariffs and a potential trade war between the United States and certain

foreign countries, including China, Mexico and Canada, among others.

These consequences may trigger a significant reduction in international

trade, shortages or oversupply of certain manufactured goods, substantial price increases or decreases of goods, inflationary pressures,

and possible failure of individual companies and/or large segments of the foreign export industry with a potentially negative impact on

the value of our investments.

In addition, the political reunification of China

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

We do not currently have portfolio investments with direct exposure to

the Middle East, China, Taiwan, Russia or Ukraine, but because of the increasing interconnectedness of global economies and financial

markets, events in these regions could negatively affect the value of our investments.

Political, social and economic uncertainty 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

We do not currently have portfolio investments

with direct exposure to the Middle East, China, Taiwan, Russia or Ukraine, but because of the increasing interconnectedness of global

economies and financial markets, events in these regions could negatively affect the value of our investments.

Political, social and economic uncertainty

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

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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.

A pandemic or global health crisis can be expected to also pose enhanced

operational risks.

For example, the employees of our Advisor could become sick or otherwise unable to perform their duties for an extended

period and extended public health restrictions and remote working arrangements can be expected to impact employee morale, integration

of new employees and preservation of Kayne Anderson’s culture.

Remote working environments could also be less secure and more susceptible

to hacking attacks, including phishing and social engineering attempts.

Moreover, our third-party service providers could be impacted

by an inability to perform due to pandemic-related restrictions or by failures of, or attacks on, their technology platforms.

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

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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

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.

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.

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