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Item 7. Management’s Discussion and Analysis

2026-03-02 compared with 2025-03-03 · 252 added, 246 removed, 347 unchanged (59% of the section changed)

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that commenced operations on February 5, 2021.

We are an externally managed, closed-end, non-diversified management investment company

that has elected to be regulated as a BDC under the 1940 Act, as amended.

Following our initial public offering (“IPO”), our common stock began

trading on the New York Stock Exchange (“NYSE”) under the ticker symbol “KBDC” on May 22, 2024.

We are an externally

managed, closed-end, non-diversified management investment company that has elected to be regulated as a BDC under the

1940 Act, as amended.

In addition, for U.S.

federal income tax purposes, we intend

to qualify, annually, as a RIC under Subchapter M of the Code.

On May 24, 2024, we completed our initial public

offering (“IPO”), issuing 6,000,000 shares of our common stock at a public offering price of $16.63 per share.

of underwriting fees and offering expenses, we received net cash proceeds, before offering expenses, of $92.4 million.

The Company’s

common stock began trading on the New York Stock Exchange (“NYSE”) under the ticker symbol “KBDC” on May 22, 2024.

Our investment activities are managed by KA Credit Advisors, LLC (the

“Advisor”), an indirect controlled subsidiary of Kayne Anderson Capital Advisors, L.P.

(“Kayne Anderson”), and

the Advisor operates within Kayne Anderson’s middle market private credit platform (“KAPC” or “Kayne Anderson

federal income tax purposes, we intend to qualify, annually, as a RIC under Subchapter M of

Our investment activities are managed by KA Credit

Advisors, LLC (the “Advisor”), an indirect controlled subsidiary of Kayne Anderson Capital Advisors, L.P.

(“Kayne Anderson”),

and the Advisor operates within Kayne Anderson’s middle market private credit platform (“KAPC” or “Kayne Anderson

Private Credit”).

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split-lien loans.

Our investment decisions are made on a case-by-case basis.

We expect the remainder of our portfolio to be invested in

second-lien loans, subordinated debt or equity securities (including those purchased in conjunction with other credit investments).

expect that a majority of these debt investments will be made in core middle market companies and will generally have stated maturities

of three to six years.

We expect that the loans in which we principally invest will be to companies that are located in the United States.

We determine the location of a company as being in the United States by (i) such company being organized under the laws

of one of the states in the United States;

or (ii) during its most recent fiscal year, such company derived at least 50%

of its revenues or profits from goods produced or sold, investments made, or services performed in the United States or has at least

50% of its assets in the United States.

Advisor executes on our investment objective by (1) accessing the established loan sourcing channels developed by KAPC, which includes

an extensive network of private equity firms, other middle market lenders, financial advisors, intermediaries and management teams, (2)

selecting investments within our middle market company focus, (3) implementing KAPC’s underwriting process and (4) drawing upon

its experience and resources and the broader Kayne Anderson network.

KAPC was established in 2011 and manages (directly and through affiliates)

assets under management (“AUM”) of approximately $7.1 billion related to middle market private credit as of December 31,

We expect the remainder of our portfolio to be invested in second-lien loans, subordinated debt or equity securities

(including those purchased in conjunction with other credit investments).

We expect that a majority of these debt investments will be

made in core middle market companies and will generally have stated maturities of three to six years.

We expect that the loans in which

we principally invest will be to companies that are located in the United States.

We determine the location of a company as being

in the United States by (i) such company being organized under the laws of one of the states in the United States;

or (ii) during

its most recent fiscal year, such company derived at least 50% of its revenues or profits from goods produced or sold, investments

made, or services performed in the United States or has at least 50% of its assets in the United States.

The Advisor executes on our investment objective

by (1) accessing the established loan sourcing channels developed by KAPC, which includes an extensive network of private equity firms,

other middle market lenders, financial advisors, intermediaries and management teams, (2) selecting investments within our middle market

company focus, (3) implementing KAPC’s underwriting process and (4) drawing upon its experience and resources and the broader Kayne

Anderson network.

KAPC was established in 2011 and manages (directly and through affiliates) assets under management (“AUM”)

of approximately $7.3 billion related to middle market private credit as of December 31, 2025.

Recent Developments

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The total dividend was $27.2 million and, of this amount,

$3.9 million was DRIP.

On February 5, 2025, we and KABDCF II entered

into an amendment of our Revolving Funding Facility II (as defined below).

Under the terms of the amendment, the lender increased its

commitment from $150 million to $250 million and decreased the interest rate on borrowings outstanding from 3-month term SOFR plus 2.70%

to 3-month term SOFR plus 2.25%.

Additionally, the maturity date of the facility was extended one year to December 22, 2029.

terms of the Revolving Funding Facility II remain substantially the same.

On February 13, 2025, we and KABDCF entered into

an amendment of our Revolving Funding Facility (as defined below).

Under the terms of the amendment, the lenders increased their commitments

from $600 million to $675 million and decreased the interest rate on borrowings outstanding from daily SOFR plus 2.375% - 2.50%, depending

upon the mix of loans, to daily SOFR plus 2.15%.

Additionally, the maturity date of the facility was extended to February 13, 2030.

other terms of the Revolving Funding Facility remain substantially the same.

On February 14, 2025, we reduced the size of our

Corporate Credit Facility from $475 million to $400 million.

This commitment reduction was done in conjunction with the $75 million increase

to our Revolving Funding Facility from $600 million to $675 million.

$0.2 million was DRIP which was fulfilled through open market purchases of common stock.

On February 12, 2026, our Board of Directors declared

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to our Dividend Reinvestment Plan, as amended.

On February 20, 2026, we and our wholly owned

special purposes financing subsidiary, Kayne Anderson BDC Financing, LLC (“KABDCF”), amended the Revolving Funding Facility.

Under the terms of the amendment, we extended the final maturity date to February 20, 2031 and reduced the interest rate on borrowings

from daily SOFR plus 2.15% to daily SOFR plus 1.95% per annum.

From January 1, 2026 to February 20, 2026, our agent repurchased 1,020,586

shares of common stock at an average price of $14.25 per share for a total amount of $14.5 million.

As of February 20, 2026, $45.4 million

remains for repurchase under our stock repurchase plan.

Portfolio and Investment Activity

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on prospective investments during the underwriting process and is involved in structuring the credit terms of our private middle market

Once an investment has been made, our Advisor closely monitors that portfolio investment and takes a proactive approach

to identify and address sector or company specific risks.

Once an investment has been made, our Advisor closely monitors that portfolio investment and takes a proactive approach to

identify and address sector or company specific risks.

The Advisor seeks to maintain a regular dialogue with portfolio company management

teams (as well as their owners, the majority of whom are private equity firms, where applicable), reviews detailed operating and financial

results on a regular basis (typically monthly or quarterly) and monitors current and projected liquidity needs, in addition to other

portfolio management activities.

results on a regular basis (typically monthly or quarterly) and monitors current and projected liquidity needs, in addition to other portfolio

management activities.

There are no assurances that we will achieve our investment objectives.

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of $287 million, and our portfolio consisted of 93.2% first lien senior secured loans, 4.9% subordinated debt and 1.9% equity investments.

As of December 31, 2024, we held investments

in broadly syndicated loans in 21 portfolio companies with an aggregate principal amount of $253 million.

Our investments in broadly

syndicated loans were made in anticipation of the receipt of proceeds from our final capital call and our IPO which closed during the

second quarter of 2024.

Prior to these investments, we had not held broadly syndicated loans since 2022.

Consistent with our strategy

at that time, we expect to rotate out of these investments over coming quarters to invest in private middle market loans consistent with

our principal strategy.

We have presented certain portfolio-related information below for our private middle market loans and broadly

syndicated loans separately and on a combined basis for ease of reference.

As of December 31, 2025, the weighted average remaining term of our debt investments was 3.1 years based on principal amount.

As of December 31, 2025, we held investments in

broadly syndicated loans in 5 portfolio companies with an aggregate principal amount of $47 million.

Our investments in broadly syndicated

loans were made in anticipation of the receipt of proceeds from our final capital call and our IPO which closed during the second quarter

We expect to rotate out of these investments over coming quarters to invest in private middle market loans consistent with our

principal strategy.

We have presented certain portfolio-related information below for our private middle market loans and broadly syndicated

loans separately and on a combined basis for ease of reference.

As of December 31, 2025, 95.7% of our debt investments

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Our weighted average yields for debt investments were as follows:

private middle market loans at fair value and amortized cost weighted

average yields were 11.1% and 11.3%, respectively

broadly syndicated loans at fair value and amortized cost weighted

average yields were 7.1% and 7.1%, respectively;

total debt investments at fair value and amortized cost weighted average yields were 10.6% and 10.7%, respectively

As of December 31, 2024, our portfolio was invested across 30 different

industries (Global Industry Classification “GICS”, Level 3 – Industry).

The largest industries in our portfolio as of

December 31, 2024 were Trading Companies & Distributors, Commercial Services & Supplies, Food Products and Health Care Providers

& Services, which represented, as a percentage of our portfolio of long-term investments, 15.1%, 11.7%, 10.0% and 8.4%, respectively,

Excluding Non-Income Producing Debt Investments

Including Non-Income Producing Debt Investments

Amortized Cost

Private middle market loans

Broadly syndicated loans

Total debt investments

As of December 31, 2025, our portfolio was invested

across 26 different industries (Global Industry Classification “GICS”, Level 3 – Industry).

The largest industries in

our portfolio as of December 31, 2025 were Distributors, Commercial Services & Supplies, Health Care Providers & Services and

Food Products, which represented, as a percentage of our portfolio of long-term investments, 11.9%, 11.9%, 10.8% and 10.5%, respectively,

based on fair value.

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and median last twelve months (“LTM”) EBITDA of our portfolio companies were as follows:

private middle market loans were $58.1 million and $34.3 million, respectively, based on fair value 1

broadly syndicated loans were $2,138.3 million and $1,306.7 million, respectively, based on fair value;

total investments were $335.0 million and $39.6 million, respectively, based on fair value 1

As of December 31, 2024, the weighted average loan-to-enterprise-value

(“LTEV”) of our debt investments at the time of our initial investment was as follows:

private middle market loans was 43.0%, based on par 1

broadly syndicated loans was 34.0%, based on par

total investments was 41.8%, based on par 1 ;

LTEV represents the total par value of our debt investment relative to our estimate of the enterprise value of the underlying borrower

As of December 31, 2024, we had three debt investments on non-accrual

status, which represented 1.3% and 1.6% of total debt investments at fair value and cost, respectively.

middle market loans were $52.7 million and $39.8 million, respectively, based on fair value 1,2

syndicated loans were $1,768.7 million and $1,406.2 million, respectively, based on fair value;

investments were $95.1 million and $41.6 million, respectively, based on fair value 1,2

As of December 31, 2025, the weighted average

loan-to-enterprise-value (“LTEV”) of our debt investments at the time of our initial investment was as follows:

middle market loans was 43.5%, based on par 1,2

syndicated loans was 28.2%, based on par

investments was 43.1%, based on par 1,2 ;

represents the total par value of our debt investment relative to our estimate of the enterprise value of the underlying borrower

As of December 31, 2025, we had five debt investments

on non-accrual status, which represented 1.4% and 2.6% of total debt investments at fair value and cost, respectively.

As of December 31, 2025, our portfolio companies’

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quarter end or latest available information from the portfolio companies) were as follows:

private middle market loans were 4.3x and 3.0x, respectively, based on fair value 1

broadly syndicated loans were 3.2x and 4.2x, respectively, based on fair value;

total investments were 4.2x and 3.1x, respectively, based on fair value 1

middle market loans were 4.5x and 2.4x, respectively, based on fair value 1,2

syndicated loans were 2.5x and 4.7x, respectively, based on fair value;

investments were 4.5x and 2.4x, respectively, based on fair value 1,2

As of December 31, 2025, the percentage of our

debt investments including at least one financial maintenance covenant was as follows:

private middle market loans was 100.0% based on fair value 2

broadly syndicated loans was 0%, based on fair value;

total investments was 86.9%, based on fair value 2

Excludes investments on watch list, which represent 3.5% of the total fair value of debt investments as of December 31, 2024.

Excludes opportunistic deals, which represent 1.9% of the total fair value of debt investments as of December 31, 2024.

middle market loans was 100.0% based on fair value 1,2

syndicated loans was 0%, based on fair value;

investments was 97.5%, based on fair value 1,2

investments on watch list, which represent 5.1% of the total fair value of debt investments as of December 31, 2025.

2 Excludes opportunistic

debt investments of BC CS 2, L.P.

(Cuisine Solutions, Inc.), SGCP Partners, Inc.

(SG Credit), Texas Coffee Holdco LLC and M2S Group

Intermediate Holdings, Inc., which represent 7.4% of the total fair value of debt investments as of December 31, 2025.

Listed below are our top ten portfolio companies and industries represented

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Percentage of

Silk Holdings III Corp.

Personal care products

Dusk Acquisition II Corporation (Motors & Armatures, Inc.

Trading companies & distributors

SGCP Intermediate, Inc.

Financial services

BR PJK Produce, LLC (Keany)

Food products

M2S Group Intermediate Holdings, Inc.

CREO Group Inc.

(HMS Manufacturing)

Household products

WCHG Buyer, Inc.

Containers & packaging

American Equipment Holdings LLC

Commercial services & supplies

Vitesse Systems Parent, LLC

Aerospace & defense

M2S Group Intermediate Holdings, Inc.

Containers & packaging

Carton Packaging Buyer, Inc.

(Century Box)

Containers & packaging

IF&P Foods, LLC (FreshEdge)

Food products

AIDC Intermediate Co 2, LLC (Peak Technologies)

Trading companies & distributors

Genuine Cable Group, LLC

Trading companies & distributors

BLP Buyer, Inc.

(Bishop Lifting Products)

Commercial services & supplies

Improving Acquisition LLC

Our investment activity for the years ended December 31, 2024 and 2023

is presented below (information presented herein is at par value unless otherwise indicated).

Our investment activity for the years ended December

31, 2025 and 2024 is presented below (information presented herein is at par value unless otherwise indicated).

For the years ended

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Broadly syndicated loans

Preferred equity investments

Common equity investments

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investments by industry composition based on fair value as of December 31, 2025 and 2024:

Trading companies & distributors

Commercial services & supplies

Food products

Health care providers & services

Food products

Containers & packaging

Professional services

Financial services (1)

Aerospace & defense

Personal care products

Automobile components

Leisure products

Building products

Household products

Textiles, apparel & luxury goods

Automobile components

Building products

Wireless telecommunication services

Personal care products

Health care equipment & supplies

Household durables

Diversified consumer services

Specialty retail

Biotechnology

Pharmaceuticals

Diversified telecommunication services

Wireless telecommunication services

Health care equipment & supplies

Hotels, restaurants & leisure

Household durables

Household products

Diversified consumer services

Construction materials

Biotechnology

Semiconductors & semiconductor equipment

Electrical equipment

Diversified consumer services

Capital markets

the Company’s debt and equity investment in SGCP Partners, Inc .

(SG Credit), through investments in SGCP Intermediate, Inc.

and SGCP Holdings, LLC, an asset based lending platform company, where the Company has a minority investment.

Results of Operations

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Net change in unrealized gains (losses) on investments

Deferred income tax expense

Net increase (decrease) in net assets resulting from operations

Income tax (expense) benefit on unrealized appreciation/depreciation on investments

Net increase (decrease) in net assets resulting from

Investment Income

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For the years ended December 31, 2025 and 2024, we had $9.1 million and $2.7 million, respectively, of PIK interest included in interest

As of December 31, 2024, we had three debt investments on non-accrual status.

As of December 31, 2023, we had one debt investment

As of December 31, 2025, we had five debt investments on non-accrual status.

As of December 31, 2024, we had three debt investment

on non-accrual status.

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Total expenses

Management fee waiver (Note 3)

Management fee waiver

Incentive fee waiver (Note 3)

Net Realized Gains (Losses) on Investments

During the year ended December 31, 2024, we had

realized gains of $0.5 million on our investments.

I n November 2023, we completed a restructure

of our investment in Arborworks Acquisition LLC whereby the existing term loan and revolver were restructured to a new term loan and preferred

and common equity.

The Company recognized a $10.7 million realized loss due to the debt restructure.

During the years ended December 31, 2025 and 2024,

we had realized losses of $0.1 million and realized gains of $0.5 million, respectively, on our investments.

Net Unrealized Gains (Losses) on Investments

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Net change in unrealized gains (losses) on investments

For these years ended December 31, 2024 and 2023,

the top five largest contributors to the change in unrealized gains and change in unrealized losses on investments are presented in the

following tables.

For the years ended December 31, 2025 and 2024, we had a deferred income tax expense of $1.6 million and $0.7 million, respectively, related

to our net unrealized gain on our investments in KABDC Corp, LLC, a wholly owned subsidiary, that has elected to be treated as a corporation

tax purposes.

In addition, as of December 31, 2025 and 2024, our net deferred tax liability of $2.3 million and $0.7 million,

respectively, is included in accrued expenses and other liabilities of our Consolidated Statement of Assets and Liabilities.

For the years ended December 31, 2025 and 2024, the top five largest

contributors to the change in unrealized gains and change in unrealized losses on investments are presented in the following tables.

For the year ended

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Arborworks Acquisition, LLC

M2S Group Intermediate Holdings, Inc.

American Soccer Company, Incorporated (SCORE)

CCFF Buyer, LLC (California Custom Fruits & Flavors, LLC)

WAM CR Acquisition, Inc.

SGCP Intermediate, Inc.

NMA Holdings, LLC (Neuromonitoring Associates)

Lakewood Acquisition Corporation (R&B Wholesale)

TL Atlas Merger Sub Corp.

Other portfolio companies unrealized gains

Other portfolio companies unrealized (losses)

LSL Industries, LLC (LSL Healthcare)

Gulf Pacific Holdings, LLC

TG Parent Newco LLC (Trademark Global LLC)

American Soccer Company, Incorporated (SCORE)

Siegel Egg Co., LLC

Trademark Global LLC (1)

Sundance Holdings Group, LLC

Total Change in Unrealized Gain (Loss), net

(1) Portfolio company is non-controlled affiliated investment.

For the year ended

December 31, 2024

($ in millions)

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Arborworks Acquisition LLC

BLP Buyer, Inc.

(Bishop Lifting Products)

Silk Holdings III Corp.

Engineered Fastener Company, LLC (EFC International)

Vitesse Systems Parent, LLC

M2S Group Intermediate Holdings, Inc.

American Soccer Company, Incorporated (SCORE)

CCFF Buyer, LLC (California Custom Fruits & Flavors, LLC)

WAM CR Acquisition, Inc.

Other portfolio companies unrealized gains

Other portfolio companies unrealized (losses)

Trademark Global LLC

LSL Industries, LLC (LSL Healthcare)

Gulf Pacific Holdings, LLC

Siegel Egg Co., LLC

American Soccer Company, Incorporated (SCORE)

Centerline Communications, LLC

Trademark Global LLC

Sundance Holdings Group, LLC

Total Change in Unrealized Gain (Loss), net

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(and any preferred stock that we may issue in the future) of at least 150%.

If this ratio declines below 150%, we cannot incur additional

leverage and could be required to sell a portion of our investments to repay some leverage when it is disadvantageous to do so.

December 31, 2024 and December 31, 2023, our asset coverage ratios were 238% and 198%, respectively.

We currently intend to target asset

coverage of 200% to 180% (which equates to a debt-to-equity ratio of 1.0x to 1.25x) but may alter this target based

on market conditions.

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 this ratio declines below 150%,

we cannot incur additional leverage and could be required to sell a portion of our investments to repay some leverage when it is disadvantageous

As of December 31, 2025 and December 31, 2024, our asset coverage ratios were 198% and 238%, respectively.

We currently intend

to target asset coverage of 200% to 180% (which equates to a debt-to-equity ratio of 1.0x to 1.25x) but may alter

this target based on market conditions.

Over the next twelve months, we expect that cash

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our ongoing operations as well as financing activities.

As of December 31, 2024, we had $75 million Notes

outstanding, $783 million borrowed under our credit facilities and cash and cash equivalents of $71.1 million (including short-term investments).

As of that date, we had $442 million of undrawn commitments available on our credit facilities (subject to borrowing base restrictions

and other conditions).

As of February 21, 2025, we had $75 million Notes outstanding, $882.5 million borrowed under our credit facilities

and cash and cash equivalents of $12.3 million (including short-term investments).

IPO and Capital Contributions

On May 24, 2024, we completed our IPO, issuing 6,000,000 shares

of our common stock at a public offering price of $16.63 per share.

Net of underwriting fees and offering expenses, we received net cash

proceeds, of $92.4 million.

The Company’s common stock began trading on the New York Stock Exchange (“NYSE”) under the

ticker symbol “KBDC” on May 22, 2024.

On April 2, 2024, we issued 16,232,415 shares

of our common stock related to capital called at an aggregate purchase price of $269.9 million.

Following the final close on April 2,

2024, we had called all of our capital relating to our $1,046.9 million in existing subscription agreements that we had entered into with

investors through a private offering, and we do not have any remaining undrawn capital commitments.

As of December 31, 2025, we had $275 million Notes outstanding, $855

million borrowed under our credit facilities and cash and cash equivalents of $43.4 million (including investments in money market funds,

but excluding deposits for investments).

As of that date, we had $545 million of undrawn commitments available on our credit facilities

(subject to borrowing base restrictions and other conditions).

As of February 20, 2026, we had $275 million Notes outstanding, $851.5

million borrowed under our credit facilities and cash and cash equivalents of $13.3 million (including investments in money market funds).

Senior Unsecured Notes

As of December 31, 2024, we have $75 million of

senior unsecured notes outstanding, with $25 million of 8.65% Series A Notes due June 2027 (the “Series A Notes”) and $50

million of 8.74% Series B Notes due June 2028 (the “Series B Notes”, and collectively with the Series A Notes, the “Notes”).

As of December 31, 2025, we have $275 million

of senior unsecured notes outstanding, with $25 million of 8.65% Series A Notes due June 2027 (the “Series A Notes”), $50

million of 8.74% Series B Notes due June 2028 (the “Series B Notes”, $40 million of floating rate Series C Notes with an interest

rate of SOFR plus 2.32% per annum due June 2028 (the “Series C Notes”), $60 million of 5.80% Series D Notes due June 2028

(the “Series D Notes”) and $100 million of 6.15% Series E Notes due October 2030 (the “Series E Notes”).

to all of these series of senior unsecured notes as, collectively, the “Notes”.

In connection with the Series D and Series E Notes,

we entered into interest rate swaps to more closely align the interest rates of our liabilities with our investment portfolio, which consists

of predominantly floating rate loans.

Under the interest rate swap agreement related to the Series D Notes, we receive a fixed interest

rate of 5.80% per annum and pay a floating interest rate of SOFR plus 2.37% per annum on the $60 million of the Series D Notes.

the interest rate swap agreement related to the Series E Notes, we receive a fixed interest rate of 6.15% per annum and pay a floating

interest rate of SOFR plus 2.6565% per annum on the $100 million of the Series E Notes.

We designated each interest rate swap as the hedging

instrument in a qualifying hedge accounting relationship.

Credit Facilities

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to a senior secured revolving credit facility (the “Corporate Credit Facility”), that has a total commitment of $475 million.

with a maturity date of November 22, 2029.

The facility’s commitment termination date and the final maturity date are November 22,

2028 and November 22, 2029, respectively.

The Corporate Credit Facility also provided for a feature that allows us, under certain circumstances,

to increase the overall size of the Corporate Credit Facility to a maximum of $600 million.

The interest rate on the Corporate Credit

Facility is equal to Term SOFR (a forward-looking rate based on SOFR futures) plus an applicable spread of 2.10% per annum or an “alternate

base rate” (as defined in the agreements governing the Corporate Credit Facility) plus an applicable spread of 1.00%.

required to pay a commitment fee of 0.375% per annum on any unused portion of the Corporate Credit Facility.

The facility’s commitment termination date and the final maturity date are November 22, 2028 and November 22, 2029, respectively.

The Corporate Credit Facility also provides for a feature that allows us, under certain circumstances, to increase the overall size of

the Corporate Credit Facility to a maximum of $600 million.

The interest rate on the Corporate Credit Facility is equal to Term SOFR (a

forward-looking rate based on SOFR futures) plus an applicable spread of 2.10% per annum or an “alternate base rate” (as defined

in the agreements governing the Corporate Credit Facility) plus an applicable spread of 1.00%.

We are also required to pay a commitment

fee of 0.375% per annum on any unused portion of the Corporate Credit Facility.

Revolving Funding Facility:

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The Revolving

Funding Facility is secured by all of the assets held by, and the membership interest in, KABDCF.

The end of the reinvestment period is

April 2, 2027 and the maturity date is February 13, 2030.

The interest rate on the Revolving Funding Facility is daily SOFR plus 2.15%

KABDCF is also required to pay a commitment fee

of between 0.50% and 1.50% per annum depending on the size of the unused portion of the Revolving Funding Facility.

Funding Facility is secured by all of the assets held by KABDCF, and we have agreed that it will not grant or allow a lien on the membership

interest of KABDCF.

The end of the reinvestment period is February 20, 2029, and the maturity date is February 20, 2031.

rate on the Revolving Funding Facility is daily SOFR plus 1.95% per annum.

KABDCF is also required to pay a commitment fee of between

0.50% and 1.50% per annum depending on the size of the unused portion of the Revolving Funding Facility.

Revolving Funding Facility II:

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Off-Balance Sheet Arrangements

As of December 31, 2024 and 2023, we had an aggregate

$186.3 million and $147.9 million, respectively, of unfunded commitments to provide debt financing to our portfolio companies.

Such commitments

are generally subject to the satisfaction of certain financial and nonfinancial covenants and involve, to varying degrees, elements of

credit risk in excess of the amount recognized in our financial statements.

Other than contractual commitments and other legal contingencies

incurred in the normal course of our business, we do not have any other off-balance sheet financings or liabilities.

As of December 31, 2025 and December 31, 2024,

we had an aggregate $287.5 million and $186.3 million, respectively, of unfunded commitments, including $171.1 million and $126.7 million,

respectively, of unfunded commitments on revolvers, to provide debt financing to our portfolio companies.

Such commitments are generally

subject to the satisfaction of certain financial and nonfinancial covenants and involve, to varying degrees, elements of credit risk in

excess of the amount recognized in our financial statements.

Other than contractual commitments and other legal contingencies incurred

in the normal course of our business, we do not have any other off-balance sheet financings or liabilities.

Critical Accounting Estimates

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determined by the Advisor, the following valuation process is used for our Level 3 investments:

Valuation Designee .

The applicable investments will be valued no less frequently than quarterly by the Advisor, with new investments valued at the time such investment was made.

The value of each Level 3 investment will be initially reviewed by the persons responsible for such portfolio company or investment.

The Advisor will use a standardized template designed to approximate fair market value based on observable market inputs, updated credit statistics and unobservable inputs to determine a preliminary value.

The Advisor will specify the titles of the persons responsible for determining the fair value of the Company’s investments, including by specifying the particular functions for which they are responsible, and will reasonably segregate fair value determinations from the portfolio management of the Company such that the portfolio manager(s) may not determine, or effectively determine by exerting substantial influence on, the fair values ascribed to portfolio investments.

Valuation Firm .

Quarterly, a third-party valuation firm engaged by the Advisor reviews the valuation methodologies and calculations employed for each of the Company’s investments that the Advisor has placed on the “watch list” and approximately 25% of the Company’s remaining investments.

The third-party valuation firm will review and independently value all of the Level 3 investments at least once per year, on a rolling twelve-month basis.

The quarterly report issued by the third-party valuation firm will provide positive assurance on the fair values of the investments reviewed.

The Board has appointed the Advisor as the valuation designee for the Company for purposes of making determinations of fair value as permitted by Rule 2a-5 under the 1940 Act.

The Audit Committee shall aid the Board in overseeing the Advisor’s fair valuation of securities that are not publicly traded or for which current market values are not readily available.

The Audit Committee shall meet quarterly to review the fair value determinations, processes and written reports of the Advisor as part of the Board’s oversight responsibilities.

The applicable investments will be valued no less frequently than quarterly by the Advisor, with new investments valued

at the time such investment was made.

The value of each Level 3 investment will be initially reviewed by the persons responsible for

such portfolio company or investment.

The Advisor will use a standardized template designed to approximate fair market value based on

observable market inputs, updated credit statistics and unobservable inputs to determine a preliminary value.

The Advisor will specify

the titles of the persons responsible for determining the fair value of the Company’s investments, including by specifying the

particular functions for which they are responsible, and will reasonably segregate fair value determinations from the portfolio management

of the Company such that the portfolio manager(s) may not determine, or effectively determine by exerting substantial influence on, the

fair values ascribed to portfolio investments.

Quarterly, a third-party valuation firm engaged by the Advisor reviews the valuation methodologies and calculations employed

for each of the Company’s investments that the Advisor has placed on the “watch list” and approximately 25% of the

Company’s remaining investments.

The third-party valuation firm will review and independently value all of the Level 3 investments

at least once per year, on a rolling twelve-month basis.

The quarterly report issued by the third-party valuation firm will provide positive

assurance on the fair values of the investments reviewed.

● Oversight .

The Board has appointed the Advisor as the valuation designee for the Company for purposes of making determinations of fair value as

permitted by Rule 2a-5 under the 1940 Act.

The Audit Committee shall aid the Board in overseeing the Advisor’s fair valuation of

securities that are not publicly traded or for which current market values are not readily available.

The Audit Committee shall meet

quarterly to review the fair value determinations, processes and written reports of the Advisor as part of the Board’s oversight

responsibilities.

Refer to Note 5 – Fair Value – for

14 unchanged sentences

On February 5,

2021, we entered into the Investment Advisory Agreement with our Advisor.

In addition, on March 6, 2024, the Board approved an amended

and restated investment advisory agreement (the “Amended Investment Advisory Agreement”) and a fee waiver agreement (the “Fee

Waiver Agreement”) between the Company and the Advisor, which became effective upon the completion of the initial public offering

of shares of common stock on May 24, 2024 (the “IPO Date”).

On February 19, 2025, the Board approved an additional one-year

term of the Investment Advisory Agreement from March 15, 2025 to March 15, 2026.

services rendered under the Investment Advisory Agreement, we pay a base management fee quarterly in arrears to our Advisor based on

the of the fair market value of our investments including, in each case, assets purchased with borrowings under our credit facilities

and issuances of senior unsecured notes, but excluding cash, U.S.

government securities and commercial paper instruments maturing within

one year of purchase.

We also pay an incentive fee on income and an incentive fee on capital gains to our Advisor.

The Amended Investment Advisory Agreement is materially

the same as the Investment Advisory Agreement except, following the IPO Date, the base management fee is calculated at an annual rate

of 1.00% and the incentive fee on income is subject to a twelve-quarter lookback quarterly hurdle rate of 1.50% as opposed to

a single quarter measurement and is subject to an Incentive Fee Cap based on our Cumulative Pre-Incentive Fee Net Return.

This lookback

feature provides that the Advisor’s income incentive fee may be reduced if our portfolio experiences aggregate write-downs or

net capital losses during the applicable Trailing Twelve Quarters.

Pursuant to the Fee Waiver Agreement, commencing on the IPO Date, the

Advisor implemented waivers of (i) the income incentive fee for three calendar quarters commencing the quarter the initial public

offering was completed and (ii) a portion of the base management fee for one year following the completion of the initial public

Amounts waived by the Advisor pursuant to the Fee Waiver Agreement are not subject to recoupment by the Advisor.

2021, we entered into an Investment Advisory Agreement with our Advisor.

On March 6, 2024, the Board approved an amended and restated

investment advisory agreement (the “Amended Investment Advisory Agreement”) between the Company and the Advisor, which became

effective upon the completion of the initial public offering of shares of common stock on May 24, 2024 (the “IPO Date”).

On February 12, 2026, the Board approved an additional one-year term of the Amended Investment Advisory Agreement through March 15, 2027.

For services rendered under the Amended Investment

Advisory Agreement, we pay a base management fee quarterly in arrears to our Advisor based on the of the fair market value of our investments

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

government securities

and commercial paper instruments maturing within one year of purchase.

We also pay an incentive fee on income and an incentive fee on

capital gains to our Advisor.

Under the Amended Investment Advisory Agreement,

following the IPO Date, the base management fee is calculated at an annual rate of 1.00% and the incentive fee on income is subject

to a twelve-quarter lookback quarterly hurdle rate of 1.50% as opposed to a single quarter measurement and is subject to an Incentive

Fee Cap based on our Cumulative Pre-Incentive Fee Net Return.

This lookback feature provides that the Advisor’s income incentive

fee may be reduced if our portfolio experiences aggregate write-downs or net capital losses during the applicable Trailing Twelve

Administration Agreement.

On February 5,

2021, we entered into the Administration Agreement with our Advisor, which serves as our Administrator and provides or oversees the performance

of its required administrative services and professional services rendered by others, which include (but are not limited to) accounting,

payment of our expenses, legal, compliance, operations, technology and investor relations, preparation and filing of its tax returns,

and preparation of financial reports provided to its stockholders and filed with the SEC.

On February 19, 2025, the Board approved an

additional one-year term of the Administration Agreement through March 15, 2026.

5, 2021, we entered into the Administration Agreement with our Advisor, which serves as our Administrator and provides or oversees the

performance of its required administrative services and professional services rendered by others, which include (but are not limited

to), accounting, payment of our expenses, legal, compliance, operations, technology and investor relations, preparation and filing of

our tax returns, and preparation of financial reports provided to its stockholders and filed with the SEC.

On February 12, 2026, the

Board approved an additional one-year term of the Administration Agreement through March 15, 2027.

We reimburse the Administrator for its costs and

3 unchanged sentences

As the Company reimburses the Administrator

for its expenses, such costs (including the costs of sub-administrators) will be ultimately borne by common stockholders.

for its expenses, such costs (including the costs of sub-administrators) are ultimately borne by common stockholders.

The Administrator

15 unchanged sentences

Non-Controlled, Affiliated Investment .

We hold Trademark Global LLC and TG Parent Newco LLC (Trademark Global LLC), both non-controlled, affiliated investments, as defined in

the 1940 Act.

We hold TG Parent Newco LLC (Trademark Global LLC) and SGCP Partners, Inc.

(SG Credit), which are non-controlled, affiliated investments,

as defined in the 1940 Act.

– Notes to Consolidated Financial Statements – Note 3.

Agreements and Related Party Transactions”

for further details.

Agreements and Related

Party Transactions” for further details.

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 7. Management’s Discussion and Analysis