Tate Capital 10Q 2024 Q2 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

For the quarterly period ended June 30, 2024


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

Commission file number: 814-01603

Kennedy Lewis Capital Company

(Exact name of registrant as specified in its charter)

Delaware

88-6117755

(State or Other Jurisdiction of

Incorporation or Organization)

(IRS Employer

Identification No.)

225 Liberty St. Suite 4210

10281

New York, New York

(Address of Principal Executive Offices)

(Zip Code)

(212) 782-3842

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading

Symbol(s)

Name of Each Exchange

on Which Registered

None

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☐

		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There were 16,514,981 issued and outstanding shares of the issuer’s common stock, $.01 par value per share, on August 13, 2024.

Kennedy Lewis Capital Company

Quarterly Report on Form 10-Q

TABLE OF CONTENTS


			Page
PART I—FINANCIAL INFORMATION			2
	Item 1.	Financial Statements	2
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	43
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	56
	Item 4.	Controls and Procedures	56
PART II—OTHER INFORMATION			57
	Item 1.	Legal Proceedings	57
	Item 1A.	Risk Factors	57
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	57
	Item 3.	Defaults Upon Senior Securities	57
	Item 4.	Mine Safety Disclosures	57
	Item 5.	Other Information	57
	Item 6.	Exhibits	58
SIGNATURES			59

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Kennedy Lewis Capital Company

Consolidated Statements of Assets and Liabilities


	June 30, 2024 (Unaudited)		December 31, 2023
Assets
Investments at fair value
Non-controlled/non-affiliated investments (cost of $521,404,138 and $345,223,315 at June 30, 2024 and December 31, 2023, respectively)	$	527,636,502	$	352,378,520
Cash and cash equivalents		47,916,240		25,181,139
Restricted cash and cash equivalents		51,420,644		47,844,154
Interest and fee receivable from non-controlled/non-affiliated investments		5,488,833		3,241,015
Deferred financing costs (net of $824,031 and $480,842 in amortized expense at June 30, 2024 and December 31, 2023, respectively)		2,621,060		2,964,249
Deferred offering costs (net of $1,150,921 and $851,065 in amortized expense at June 30, 2024 and December 31, 2023, respectively)		976,699		565,386
Receivable for investments sold		8,313,916		4,150,568
Due from Advisor		235,171		810,355
Derivative assets at fair value (Note 5)		11,637		—
Other assets		78,092		45,157
Total assets	$	644,698,794	$	437,180,543

Liabilities
Credit Facility (Note 5)		255,000,000		195,000,000
Payable for investments purchased		42,805,221		7,489,135
Distribution Payable		—		6,039,749
Interest and credit facility fees payable		3,825,355		3,051,780
Accrued capital gains incentive fee payable		1,053,891		1,090,162
Management fees payable		899,508		690,008
Income incentive fee payable		1,017,122		652,362
Due to Advisor and affiliates		271,256		309,817
Offering costs payable		145,282		216,950
Accrued expenses and other liabilities		1,445,355		1,024,660
Total liabilities	$	306,462,990	$	215,564,623

Commitments and contingencies (Note 7)

Net Assets
Common shares, $0.01 par value (16,514,981 and 10,785,268 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively)		165,150		107,853
Additional paid in capital		331,953,181		213,932,059
Distributable earnings (loss)		6,117,473		7,576,008
Total net assets	$	338,235,804	$	221,615,920
Total liabilities and net assets	$	644,698,794	$	437,180,543
Net asset value per share	$	20.48	$	20.55

The accompanying notes are an integral part of these consolidated financial statements.

Kennedy Lewis Capital Company

Consolidated Statements of Operations

(Unaudited)


	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2024			2023			2024			2023
Investment income:
From non-controlled/non-affiliated investments:
Interest income	$	15,928,451		$	4,691,444		$	28,517,979		$	5,673,927
Dividend income		467,467			—			934,934			—
Fee income		34,392			3,279			90,003			3,279
Total investment income		16,430,310			4,694,723			29,542,916			5,677,206

Expenses:
Interest and debt fee expense		5,703,127			528,514			11,003,701			528,514
Management fees		899,154			655,300			1,615,906			866,349
Income incentive fee		1,017,122			—			1,709,772			—
Capital gain incentive fees		(68,141	)		317,514			72,984			317,514
Professional fees		622,133			534,712			1,222,284			947,456
Amortization of continuous offering costs		405,078			155,670			704,934			246,317
Administrative services expense		266,874			216,233			533,748			350,658
Amortization of deferred financing costs		171,595			133,881			343,189			133,881
Directors’ fees and expenses		99,999			100,000			199,998			166,667
Organization costs		—			32,938			—			218,472
Other expenses		131,047			155,469			246,652			176,741
Total expenses		9,247,988			2,830,231			17,653,168			3,952,569
Expenses waived by the Advisor (Note 3)		(235,171	)		(691,769	)		(886,946	)		(691,769	)
Management fee waiver		—			—			—			(128,140	)
Net expenses		9,012,817			2,138,462			16,766,222			3,132,660
Net investment income		7,417,493			2,556,261			12,776,694			2,544,546

Realized and unrealized gain (loss):
Net change in unrealized appreciation (depreciation):
Non-controlled/non-affiliated investments		(1,150,688	)		3,307,416			(912,836	)		2,336,337
Derivative instruments (Note 5)		11,637			—			11,637			—
Foreign currency and other transactions		(10,005	)		—			(10,005	)		—
Net change in unrealized appreciation (depreciation)		(1,149,056	)		3,307,416			(911,204	)		2,336,337
Realized gain (loss):
Non-controlled/non-affiliated investments		612,080			90,376			1,658,790			203,776
Foreign currency and other transactions		(1,621	)		—			(1,621	)		—
Net realized gain (loss)		610,459			90,376			1,657,169			203,776
Net realized and unrealized gain (loss)		(538,597	)		3,397,792			745,965			2,540,113
Net increase (decrease) in net assets resulting from operations	$	6,878,896		$	5,954,053		$	13,522,659		$	5,084,659

The accompanying notes are an integral part of these consolidated financial statements.

Kennedy Lewis Capital Company

Consolidated Statements of Changes in Net Assets

(Unaudited)


	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2024			2023			2024			2023
Operations:
Net investment income	$	7,417,493		$	2,556,261		$	12,776,694		$	2,544,546
Net realized gain (loss)		610,459			90,376			1,657,169			203,776
Net change in unrealized appreciation (depreciation)		(1,149,056	)		3,307,416			(911,204	)		2,336,337
Net increase (decrease) in net assets resulting from operations		6,878,896			5,954,053			13,522,659			5,084,659

Capital transactions:
Proceeds from shares sold		97,359,157			1,320,000			104,522,157			208,177,000
Distribution of earnings		(8,136,028	)		(3,139,941	)		(14,550,475	)		(3,139,941	)
Reinvestments of distributions		5,361,226			3,037,048			13,125,543			3,037,048
Net increase (decrease) from share transactions		94,584,355			1,217,107			103,097,225			208,074,107
Total increase (decrease) in net assets		101,463,251			7,171,160			116,619,884			213,158,766
Net Assets, beginning of period		236,772,553			205,997,606			221,615,920			10,000
Net Assets, end of period	$	338,235,804		$	213,168,766		$	338,235,804		$	213,168,766

Capital Share activity:
Shares sold		4,744,273			66,456			5,090,775			10,469,550
Shares issued from the reinvestment of dividends		263,981			155,348			638,938			155,348
Net increase in shares outstanding		5,008,254			221,804			5,729,713			10,624,898

The accompanying notes are an integral part of these consolidated financial statements.

Kennedy Lewis Capital Company

Consolidated Statements of Cash Flows

(Unaudited)


	For the Six Months Ended June 30,
	2024			2023
Cash flows from operating activities:
Net increase (decrease) in net assets resulting from operations	$	13,522,659		$	5,084,659
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Net change unrealized (appreciation) depreciation on investments		912,836			(2,336,337	)
Net change unrealized (appreciation) depreciation on derivative investments		(11,637	)		—
Net change unrealized (appreciation) depreciation on foreign currency and other transactions		10,005			—
Net realized (gain) loss on investments		(1,658,790	)		(203,776	)
Net realized (gain) loss on foreign currency and other transactions		1,621			—
Payment-in-kind interest capitalized		(2,157,753	)		(1,505,341	)
Net accretion of discount and amortization of premium		(3,174,036	)		(257,263	)
Amortization of deferred financing costs		343,189			133,881
Amortization of offering costs		704,934			246,317
Purchases of investments		(304,246,026	)		(303,557,803	)
Proceeds from sale of investments and principal repayments		135,054,161			54,570,476
Changes in operating assets and liabilities:
Interest receivable		(2,247,818	)		(1,616,559	)
Deferred offering costs		(1,187,914	)		(142,705	)
Receivable for investments sold		(4,163,348	)		(11,098,829	)
Due from Advisor		575,184			(95,207	)
Other assets		(32,935	)		(42,081	)
Payable for investments purchased		35,316,086			40,902,266
Due to Advisor and affiliates		(38,561	)		(920,015	)
Management fee payable		209,500			655,299
Income incentive fee payable		364,760		—
Capital gains incentive fee payable		(36,271	)		317,514
Interest and credit facility fees payable		773,575			528,514
Accrued expenses and other liabilities		420,695			741,466
Net cash provided by (used in) operating activities		(130,745,884	)		(218,595,524	)

Cash flows from financing activities:
Proceeds from Secured Credit Facility		60,000,000			13,500,000
Deferred financing costs paid		—			(1,195,091	)
Dividends paid in cash		(7,464,682	)		(102,893	)
Proceeds from issuance of common shares		104,522,157			208,177,000
Net cash provided by (used in) financing activities		157,057,475			220,379,016
Net increase (decrease) in cash and cash equivalents		26,311,591			1,783,492
Cash, cash equivalents and restricted cash, beginning of period		73,025,293			10,000
Cash, cash equivalents and restricted cash, end of period		99,336,884			1,793,492

Supplemental information and non-cash activities:
Cash paid for interest		10,230,126			—
Reinvestment of distributions		13,125,543			3,037,048
Accrued but unpaid deferred offering cost		145,282			216,950

The accompanying notes are an integral part of these consolidated financial statements.

Kennedy Lewis Capital Company

Consolidated Schedule of Investments

June 30, 2024

(Unaudited)


Portfolio Company(1)	Reference Rate and Spread(2)	Interest Rate(2)			Maturity Date	Par Amount/ Units(3)		Amortized Cost			Fair Value		Percentage of Net Assets
Investments—non-controlled/non-affiliated(4) Equity Investments
Commercial Services & Supplies
KKR Tinder TFC Aggregator L.P. (5)							14,792,309	$	14,792,309		$	15,871,933		4.70
Total Commercial Services & Supplies								$	14,792,309		$	15,871,933		4.70	%
Total Equity Investments								$	14,792,309		$	15,871,933		4.70	%

First and Second Lien Debt Aerospace & Defense
Cassavant Holdings, LLC (5)(12)	8.00%/7.00% PIK		15.00	%	6/23/2028		20,504,872		20,185,496			19,947,138		5.90
Total Aerospace & Defense								$	20,185,496		$	19,947,138		5.90	%

Air Freight & Logistics
Inmar, Inc. (12)	S+5.50%		10.84	%	5/1/2026		2,970,000		2,947,200			2,971,485		0.88
LaserShip, Inc. (12)	S+4.50%		10.10	%	5/7/2028		1,000,408		920,289			847,015		0.25
Total Air Freight & Logistics								$	3,867,489		$	3,818,500		1.13	%

Automobile Components
BBB Industries LLC (12)	S+5.25%		10.69	%	7/25/2029		3,944,937		3,780,665			3,812,506		1.13
First Brands Group, LLC (7)(12)	S+5.00%		10.59	%	3/30/2027		1,980,643		1,927,596			1,965,174		0.58
Power Stop, LLC (7)	S+4.75%		10.20	%	1/26/2029		1,994,831		1,975,034			1,943,305		0.57
Total Automobile Components								$	7,683,295		$	7,720,985		2.28	%

Automobiles
Square German BidCo GmbH (5)(8)(10)(12)	EURIBOR+7.50%		11.20	%	6/27/2029		17,681,400		17,372,501			17,361,971		5.13
IXS Holdings, Inc.	S+4.25%		9.70	%	3/5/2027		2,073,309		2,015,981			2,010,778		0.59
Total Automobiles								$	19,388,482		$	19,372,749		5.72	%

Biotechnology
Star Parent, Inc. (12)	S+3.75%		9.08	%	9/27/2030		1,995,000		1,967,535			1,992,047		0.59
Total Biotechnology								$	1,967,535		$	1,992,047		0.59	%

Building Products
Recess Holdings, Inc. (12)	S+4.50%		9.84	%	3/29/2027		3,000,000		2,957,067			3,016,260		0.89
Trulite Holding Corp (5)(12)	S+6.00%		11.34	%	3/1/2030		1,987,500		1,949,384			1,917,938		0.57
Total Building Products								$	4,906,451		$	4,934,198		1.46	%

Chemicals
Arc Falcon I Inc (7)	S+3.50%		8.94	%	9/30/2028		997,446		994,952			993,346		0.29
IRIS Holdings Inc. (7)	S+4.75%		10.18	%	6/28/2028		1,994,924		1,905,152			1,877,722		0.56
LSF11 A5 Holdco LLC (5)(8)(12)	S+3.50%		8.96	%	10/15/2028		3,959,872		3,902,652			3,949,973		1.17
Total Chemicals								$	6,802,756		$	6,821,041		2.02	%

Commercial Services & Supplies
Ankura Consulting Group, LLC (7)	S+4.25%		9.56	%	3/17/2028		1,396,500		1,396,500			1,398,246		0.41
AVSC Holding Corp. (12)	S+3.00%/.25% PIK		8.94	%	3/3/2025		3,955,882		3,893,950			3,919,053		1.16
Brand Industrial Services Inc (12)	S+4.50%		9.83	%	8/1/2030		1,655,025		1,619,008			1,659,626		0.49
Eagle Parent Corp. (12)	S+4.25%		9.58	%	4/2/2029		2,962,121		2,933,066			2,874,857		0.85
Heritage-Crystal Clean, Inc. (12)	S+4.50%		9.83	%	10/17/2030		995,000		971,901			995,826		0.29
J-O Building Company LLC (5)(12)	S+6.75%		12.05	%	5/25/2028		12,791,860		12,630,804			12,983,738		3.85
The Action Environmental Group, Inc. (5)(6)(7)	S+4.00%		—		10/24/2030		324,000		—			1,620		0.00
The Action Environmental Group, Inc. (5)(7)	S+4.00%		9.33	%	10/24/2030		243,000		243,000			244,215		0.07
The Action Environmental Group, Inc. (5)(6)(12)	S+4.00%		0.00	%	10/24/2030		130,435		(1,800	)		652		0.00
The Action Environmental Group, Inc. (5)(12)	S+4.00%		9.33	%	10/24/2030		867,391		855,420			871,728		0.26
Total Commercial Services & Supplies								$	24,541,849		$	24,949,561		7.38	%

The accompanying notes are an integral part of these consolidated financial statements

Kennedy Lewis Capital Company

Consolidated Schedule of Investments (continued)

June 30, 2024

(Unaudited)


Portfolio Company(1)	Reference Rate and Spread(2)	Interest Rate(2)			Maturity Date	Par Amount/ Units(3)		Amortized Cost			Fair Value			Percentage of Net Assets
Construction & Engineering
BP Loenbro Holdings Inc (5)	S+6.00%		—		2/1/2029		1,834,862		(12,624	)		(14,679	)		0.00
BP Loenbro Holdings Inc (5)	S+6.00%		—		2/1/2029		1,834,862		983,926			994,495			0.29
BP Loenbro Holdings Inc (5)(12)	S+6.00%		11.43	%	2/1/2029		16,228,211		16,000,118			16,098,385			4.76
Brock Holdings III, Inc. (5)(12)	S+6.00%		11.33	%	5/2/2030		2,666,667		2,614,453			2,680,000			0.79
Brown & Settle, Inc (5)(7)(12)	S+7.50%		12.84	%	4/12/2029		24,630,769		24,213,966			24,214,509			7.16
MEI Buyer LLC (5)(6)	S+5.00%		—		6/29/2029		2,409,639		(30,153	)		(63,253	)		(0.02	)
MEI Buyer LLC (5)(6)	S+5.00%		—		6/29/2029		2,650,602		(66,067	)		(69,578	)		(0.02	)
MEI Buyer LLC (5)(12)	S+5.00%		10.34	%	6/29/2029		15,107,524		14,709,801			14,710,196			4.35
Total Construction & Engineering								$	58,413,420		$	58,550,075			17.31	%

Construction Materials
Cornerstone Building Brands, Inc. (12)	S+4.50%		9.83	%	5/2/2031		1,500,000		1,492,620			1,487,505			0.44
Total Construction Materials								$	1,492,620		$	1,487,505			0.44	%

Containers, Packaging & Glass
Tank Holding Corp. (12)	S+5.75%		11.19	%	3/31/2028		989,899		964,828			970,101			0.29
Tank Holding Corp. (6)(12)	S+6.00%		11.44	%	3/31/2028		1,632,297		710,934			703,184			0.21
Tank Holding Corp. (12)	S+6.00%		11.44	%	3/31/2028		3,772,749		3,691,015			3,706,726			1.10
Total Containers, Packaging & Glass								$	5,366,777		$	5,380,011			1.60	%

Distributors
American Auto Auction Group, LLC (12)	S+5.00%		10.48	%	12/30/2027		1,969,646		1,882,997			1,964,230			0.58
Aramsco, Inc. (6)(12)	S+4.75%		—		10/10/2030		222,772		—			(278	)		0.00
Aramsco, Inc. (12)	S+4.75%		10.08	%	10/10/2030		1,274,035		1,250,394			1,272,442			0.38
BCPE Empire Holdings, Inc. (12)	S+4.75%		9.34	%	12/11/2028		3,970,050		3,951,209			3,968,065			1.17
Total Distributors								$	7,084,600		$	7,204,459			2.13	%

Diversified Consumer Services
AMCP Clean Acquisition Company, LLC (12)	S+5.00%		10.34	%	6/15/2028		997,500		983,458			993,759			0.29
Spring Education Group, Inc. (12)	S+4.00%		9.33	%	10/4/2030		1,985,013		1,961,885			1,992,039			0.59
Total Diversified Consumer Services								$	2,945,343		$	2,985,798			0.88	%

Electric Utilities
Carroll County Energy, LLC (5)(7)	S+4.00%		9.33	%	6/24/2031		2,500,000		2,475,000			2,493,750			0.74
Cricket Valley Energy Center (5)(7)(12)	S+3.90%		9.23	%	6/30/2025		12,700,740		11,973,700			11,925,995			3.53
Hamilton Projects Acquiror, LLC	S+3.75%		9.09	%	5/22/2031		1,500,000		1,496,281			1,508,040			0.45
Kestrel Acquisition LLC (12)	S+4.25%		9.71	%	6/2/2025		1,988,072		1,984,520			1,981,730			0.59
Lackawanna Energy Center LLC (12)	S+5.00%		10.34	%	8/3/2029		4,079,577		3,971,250			4,105,074			1.21
Lackawanna Energy Center LLC (12)	S+5.00%		10.34	%	8/6/2029		889,518		865,898			895,077			0.26
Oregon Clean Energy, LLC (7)	S+4.00%		9.32	%	6/26/2030		5,000,000		4,975,000			5,012,500			1.48
Revere Power, LLC (7)	S+4.25%		9.73	%	3/27/2026		3,794,484		3,486,444			3,464,364			1.02
Revere Power, LLC (7)	S+4.25%		9.73	%	3/27/2026		333,059		306,022			304,083			0.09
Total Electric Utilities								$	31,534,115		$	31,690,613			9.37	%

Electrical Equipment
Voltagrid LLC (5)(6)	S+6.50%		—		2/28/2029		3,453,750		(53,612	)		(104,131	)		(0.03	)
Voltagrid LLC (5)(12)	S+6.50%		11.93	%	2/28/2029		34,364,813		33,058,559			33,328,713			9.85
Total Electrical Equipment								$	33,004,947		$	33,224,582			9.82	%

Energy Equipment & Services
Gravity Water Midstream LLC (5)(12)	S+6.90%		12.23	%	4/11/2029		29,183,673		28,617,441			28,600,000			8.46
Total Energy Equipment & Services								$	28,617,441		$	28,600,000			8.46	%

Gas Utilities
Parkway Generation, LLC	S+4.75%		10.34	%	2/18/2029		115,960		112,797			115,728			0.03
Parkway Generation, LLC (12)	S+4.75%		10.34	%	2/18/2029		870,679		846,898			868,938			0.26
Total Gas Utilities								$	959,695		$	984,666			0.29	%

Ground Transportation
Odyssey Logistics & Technology Corporation (12)	S+4.50%		9.84	%	10/12/2027		992,500		976,343			989,810			0.29
Total Ground Transportation								$	976,343		$	989,810			0.29	%

Health Care Equipment & Supplies
NMN Holdings III Corp. (12)	S+3.50%		8.96	%	11/13/2025		1,633,866		1,564,631			1,609,358			0.48
Total Health Care Equipment & Supplies								$	1,564,631		$	1,609,358			0.48	%

Kennedy Lewis Capital Company

Consolidated Schedule of Investments (continued)

June 30, 2024

(Unaudited)

The accompanying notes are an integral part of these consolidated financial statements.


Portfolio Company(1)	Reference Rate and Spread(2)	Interest Rate(2)			Maturity Date	Par Amount/ Units(3)		Amortized Cost			Fair Value			Percentage of Net Assets
Health Care Providers & Services
ADMI Corp (7)(12)	S+5.75%		11.09	%	12/23/2027		1,990,000		1,990,000			1,999,114			0.59
Bulldog Purchaser Inc. (7)	S+4.25%		9.58	%	6/27/2031		3,000,000		2,985,000			3,011,250			0.89
Charlotte Buyer, Inc. (12)	S+5.25%		10.58	%	2/11/2028		2,446,360		2,392,231			2,450,813			0.72
Crisis Prevention Institute Inc (12)	S+4.75%		10.08	%	4/9/2031		1,583,333		1,575,577			1,584,648			0.47
Heartland Dental, LLC (12)	S+4.50%		9.84	%	4/28/2028		3,545,205		3,468,515			3,549,637			1.05
Help At Home, Inc.	S+5.00%		10.45	%	10/29/2027		994,916		990,398			996,160			0.29
Help At Home, Inc. (12)	S+5.00%		10.45	%	10/29/2027		110,894		109,453			111,032			0.03
Help At Home, Inc. (12)	S+5.00%		10.45	%	10/29/2027		876,355		864,994			877,450			0.26
Imagefirst Holdings, LLC (5)(6)(12)	S+4.25%		9.59	%	4/27/2028		665,000		651,824			663,338			0.20
Imagefirst Holdings, LLC (5)(12)	S+4.25%		9.58	%	4/27/2028		3,300,083		3,233,229			3,291,833			0.97
PetVet Care Centers, LLC (5)(6)	S+6.00%		0.00	%	11/15/2030		1,768,583		(16,096	)		(33,692	)		(0.01	)
PetVet Care Centers, LLC (5)(6)	S+6.00%		0.00	%	11/15/2029		1,768,583		(31,662	)		(33,073	)		(0.01	)
PetVet Care Centers, LLC (5)(12)	S+6.00%		11.34	%	11/15/2030		13,491,343		13,238,038			13,235,682			3.91
Team Services Group (12)	S+5.00%		10.58	%	12/20/2027		1,978,355		1,958,340			1,971,767			0.58
Team Services Group, LLC (5)(7)	S+5.25%		10.58	%	12/20/2027		2,000,000		1,960,000			1,965,000			0.58
Total Health Care Providers & Services								$	35,369,841		$	35,640,959			10.52	%

Health Care Technology
Covetrus, Inc. (12)	S+5.00%		10.33	%	10/13/2029		989,975		983,276			955,148			0.28
Total 'Health Care Technology								$	983,276		$	955,148			0.28	%

Hotels, Restaurants & Leisure
Ranger Holdco Spe LLC (5)	15.00% PIK		15.00	%	8/8/2028		19,149,115		18,105,078			20,571,894			6.08
Total Hotels, Restaurants & Leisure								$	18,105,078		$	20,571,894			6.08	%

Household Products
Journey Personal Care Corp. (7)	S+4.25%		9.71	%	3/1/2028		2,881,462		2,881,462			2,868,496			0.85
Kronos Acquisition Holdings Inc. (7)(12)	S+6.00%		11.49	%	12/22/2026		2,595,521		2,565,364			2,595,521			0.77
Staples, Inc.	S+5.75%		11.08	%	9/4/2029		5,000,000		4,802,302			4,567,500			1.35
Staples, Inc. (7)	S+5.00%		10.44	%	4/16/2026		3,900,000		3,885,375			3,862,326			1.14
Total Household Products								$	14,134,503		$	13,893,843			4.11	%

Independent Power and Renewable Electricity Producers
OSAKA Gas Michigan Power, LLC (5)(12)	S+6.00%		11.83	%	10/31/2030		26,160,634		24,992,880			24,983,406			7.39
Total 'Independent Power and Renewable Electricity Producers								$	24,992,880		$	24,983,406			7.39	%

Insurance
RSC Acquisition, Inc. (5)(12)	S+6.00%		11.07	%	11/1/2029		376,177		371,333			373,355			0.11
RSC Acquisition, Inc. (5)(6)(12)	S+6.00%		11.07	%	11/1/2029		1,616,429		1,302,295			1,317,877			0.39
Ryan, LLC (6)(12)	S+4.50%		0.00	%	11/14/2030		190,476		—			524			0.00
Total Insurance								$	1,673,628		$	1,691,756			0.50	%

IT Services
Indy US Bidco, LLC (7)	S+6.25%		11.59	%	3/6/2028		4,000,000		3,990,000			3,998,320			1.18
Neptune Bidco US Inc. (12)	S+5.00%		10.41	%	4/11/2029		5,247,000		4,879,432			4,929,976			1.46
Physician Partners LLC	S+4.00%		9.56	%	12/26/2028		987,374		941,908			706,249			0.21
Total IT Services								$	9,811,340		$	9,634,545			2.85	%

Leisure Products
Varsity Brands, Inc. (12)	S+5.00%		10.46	%	12/15/2026		1,972,469		1,897,857			1,988,742			0.59
Total Leisure Products								$	1,897,857		$	1,988,742			0.59	%

The accompanying notes are an integral part of these consolidated financial statements.

Kennedy Lewis Capital Company

Consolidated Schedule of Investments (continued)

June 30, 2024

(Unaudited)


Portfolio Company(1)	Reference Rate and Spread(2)	Interest Rate(2)			Maturity Date	Par Amount/ Units(3)		Amortized Cost		Fair Value		Percentage of Net Assets
Machinery
Arcline FM Holdings, LLC (12)	S+4.75%		10.35	%	6/23/2028		4,582,060		4,460,076		4,585,634		1.36
Bettcher Industries, Inc.	S+4.00%		9.34	%	12/14/2028		997,449		997,449		991,215		0.29
C&D Technologies, Inc	S+5.75%		11.21	%	12/20/2025		2,493,404		2,492,383		2,477,820		0.73
DS Parent Inc (7)(12)	S+5.50%		10.83	%	1/31/2031		2,000,000		1,903,674		1,991,260		0.59
Discovery Energy Holding Corp (12)	S+4.75%		10.08	%	5/1/2031		2,800,000		2,718,659		2,809,632		0.83
LSF12 Badger Bidco LLC (7)(12)	S+6.00%		11.34	%	8/30/2030		3,483,747		3,420,754		3,475,038		1.03
Total Machinery								$	15,992,995	$	16,330,599		4.83	%

Metals & Mining
Arsenal AIC Parent LLC (12)	S+3.75%		9.09	%	8/18/2030		2,977,538		2,950,365		2,991,681		0.88
Total Metals & Mining								$	2,950,365	$	2,991,681		0.88	%

Oil, Gas & Consumable Fuels
Limetree Bay Terminals, LLC (5)(12)	S+4.50%/1% PIK		10.82	%	12/11/2026		23,155,170		22,276,412		22,360,946		6.61
Limetree Bay Terminals, LLC (5)(12)	S+6.50%/2% PIK		13.82	%	2/12/2029		10,220,850		9,980,490		10,072,137		2.98
Total Oil, Gas & Consumable Fuels								$	32,256,902	$	32,433,083		9.59	%

Personal Care Products
KDC/One Development Corporation, Inc. (8)(9)(12)	S+4.50%		9.84	%	8/15/2028		3,990,000		3,886,039		3,995,825		1.18
Total Personal Care Products								$	3,886,039	$	3,995,825		1.18	%

Professional Services
GeoStabilization International, LLC (5)(7)(12)	S+5.25%		10.50	%	12/19/2028		1,995,000		1,977,057		1,999,988		0.59
Mckissock Investment Holdings LLC (7)(12)	S+5.00%		10.33	%	3/12/2029		2,487,500		2,430,879		2,492,177		0.74
Sales Performance International, LLC (5)(6)(12)	S+6.50%		—		8/24/2028		3,030,303		2,080,896		2,095,455		0.62
Sales Performance International, LLC (5)(12)	S+6.50%		11.82	%	8/24/2028		16,672,727		16,373,700		16,464,318		4.87
Teneo Holdings LLC (12)	S+4.75%		10.09	%	3/13/2031		1,330,000		1,317,030		1,331,663		0.39
Total Professional Services								$	24,179,562	$	24,383,601		7.21	%

Software
AQA Acquisition Holding, Inc. (12)	S+4.25%		9.84	%	3/3/2028		861,500		851,093		862,577		0.26
DS Admiral Bidco, LLC (5)(7)	S+4.25%		9.59	%	6/26/2031		4,000,000		3,960,000		3,960,000		1.17
DTI Holdco, Inc. (12)	S+4.75%		10.09	%	4/26/2029		1,477,444		1,431,343		1,481,965		0.44
Total Software								$	6,242,436	$	6,304,542		1.87	%

Specialty Retail
MED ParentCo LP (12)	S+4.00%		9.34	%	4/15/2031		1,800,000		1,791,180		1,797,588		0.53
Spencer Spirit IH LLC (5)(7)	S+5.50%		10.83	%	6/25/2031		1,000,000		992,500		997,500		0.29
Total Specialty Retail								$	2,783,680	$	2,795,088		0.82	%

Technology Hardware, Storage & Peripherals
Xplor T1, LLC (5)(7)	S+4.25%		9.60	%	6/24/2031		1,800,000		1,791,000		1,795,500		0.53
Total Technology Hardware, Storage & Peripherals								$	1,791,000	$	1,795,500		0.53	%

Textiles, Apparel & Luxury Goods
Champ Acquisition Corporation (12)	S+5.50%		11.10	%	12/19/2025		1,433,393		1,433,393		1,436,260		0.42
IBG Borrower LLC (5)(12)	S+6.00%		11.48	%	8/22/2029		9,812,500		9,721,766		9,787,969		2.89
Total Textiles, Apparel & Luxury Goods								$	11,155,159	$	11,224,229		3.31	%

Trading Companies & Distributors
DXP Enterprises, Inc. (12)	S+4.75%		10.16	%	10/11/2030		1,985,000		1,957,240		1,994,925		0.59
Fluid-Flow Products, Inc. (7)	S+4.75%		10.09	%	3/31/2028		598,458		596,975		598,009		0.18
Lincoln Metal Shop, Inc. (5)(12)	S+6.00%		11.48	%	6/24/2031		5,789,435		5,644,053		5,811,145		1.72
Lincoln Metal Shop, Inc. (5)(12)	S+6.00%		11.47	%	6/7/2027		22,569,534		22,220,941		22,654,170		6.70
Patriot Container Corp. (7)(12)	S+3.75%		9.19	%	3/20/2025		2,957,936		2,865,506		2,873,960		0.85
RelaDyne Inc. (12)	S+4.25%		9.59	%	12/22/2028		1,974,747		1,915,287		1,972,279		0.58
RelaDyne Inc. (12)	S+4.50%		9.84	%	12/22/2028		1,985,025		1,902,001		1,982,544		0.59
Total Trading Companies & Distributors								$	37,102,003	$	37,887,032		11.21	%

Total First and Second Lien Debt								$	506,611,829	$	511,764,569		151.30	%

Kennedy Lewis Capital Company

Consolidated Schedule of Investments (continued)

June 30, 2024

(Unaudited)


Total Investments—non-controlled/non- affiliated	$	521,404,138	$	527,636,502	156.00	%

Total Investments Portfolio	$	521,404,138	$	527,636,502	156.00	%

The accompanying notes are an integral part of these consolidated financial statements.

Kennedy Lewis Capital Company

Consolidated Schedule of Investments (continued)

June 30, 2024

(Unaudited)


Portfolio Company(1)	Amortized Cost		Fair Value			Percentage of Net Assets
Cash Equivalents
State Street Institutional Money Market Fund (11)		94,336,349		94,336,349			27.89
Total Cash Equivalents	$	94,336,349	$	94,336,349			27.89	%
Total Portfolio Investments and Cash Equivalents	$	615,740,487	$	621,972,851			183.89	%
Liabilities in excess of Other Assets			$	(283,737,047	)		(83.89	)%
Net Assets			$	338,235,804			100.00	%

(1)

Unless otherwise indicated, issuers of debt held by the Company are domiciled in the United States.

(2)

Represents the actual interest rate for partially or fully funded debt in effect as of the reporting date. Certain investments are subject to an interest rate floor. Variable rate loans bear interest at a rate that may be determined by the larger of the floor or the reference to either EURIBOR (“E”), SOFR including SOFR adjustment, if any, (“S”), SONIA (“SN”), or alternate base rate (commonly based on the U.S. Prime Rate (“P”), unless otherwise noted) at the borrower’s option, which reset periodically based on the terms of the credit agreement and S loans are typically indexed to 6 month, 3 month or 1 month E or S rates. As of June 30, 2024, rates for the 6 month, 3 month and 1 month E are 3.68%, 3.71%, and 3.632%, respectively. As of June 30, 2024, 6 month, 3 month and 1 month S are 5.25%, 5.32% and 5.34%, respectively.

(3)

The cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method in accordance with accounting principles generally accepted in the United States of America U.S. GAAP.

(4)

Unless otherwise indicated, issuers of debt investments held by the Company are denominated in dollars. All debt investments are income producing unless otherwise indicated.

(5)

Investments valued using unobservable inputs (Level 3). Fair value was determined in good faith by or under the direction of the Company’s Valuation Designee, under the supervision of the Board, pursuant to the Company’s valuation policy. See Note 4, Investments and Fair Value Measurements, for details.

(6)

Position or portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion, although the investment may be subject to unused commitment fees. Negative cost and fair values are the result of the commitment being valued below par. See Note 7, Commitments and Contingencies, for details.

(7)

Position or portion thereof is unsettled as of June 30, 2024.

(8)

The investment is not a qualifying asset under Section 55(a) of the Investment Company Act of 1940, as amended (the “1940 Act”). The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Company’s total assets. As of June 30, 2024, non-qualifying assets totaled 3.93% of the Company’s total assets.

(9)

The issuer of this investment is domiciled in Canada.

(10)

The issuer of this investment is domiciled in Germany.

(11)

The annualized seven-day yield as of June 30, 2024 is 5.00%.

(12)

Investment is pledged as collateral for the Secured Credit Facility. See Note 6, Borrowings, for details.

Additional Information

Foreign Currency Forward Contract

Counterparty

Currency Purchased

Currency Sold

Settlement Date

Unrealized Appreciation (Depreciation)

Goldman Sachs Bank USA

USD

17,497,288

EUR

16,211,250

11/22/2024

11,637

The accompanying notes are an integral part of these consolidated financial statements.

Kennedy Lewis Capital Company

Consolidated Schedule of Investments

December 31, 2023


Portfolio Company(1)	Reference Rate and Spread(2)	Interest Rate(2)			Maturity Date	Par Amount/ Units(3)		Amortized Cost			Fair Value		Percentage of Net Assets
Investments—non-controlled/non-affiliated(4) Equity Investments
Commercial Services & Supplies
KKR Tinder TFC Aggregator L.P. (5)							14,792,309	$	14,792,309		$	15,559,956		7.02
Total Commercial Services & Supplies								$	14,792,309		$	15,559,956		7.02	%
Total Equity Investments								$	14,792,309		$	15,559,956		7.02	%

First and Second Lien Debt Air Freight & Logistics
Inmar, Inc. (12)	S+5.50%		10.86	%	5/1/2026		2,985,000		2,956,521			2,942,702		1.33
LaserShip, Inc. (12)	S+4.50%		10.40	%	5/7/2028		2,008,116		1,805,022			1,839,092		0.83
Total Air Freight & Logistics								$	4,761,543		$	4,781,794		2.16	%

Automobile Components
BBB Industries LLC (12)	S+5.25%		10.71	%	7/25/2029		3,964,962		3,788,124			3,731,189		1.68
First Brands Group, LLC	S+5.00%		10.88	%	3/30/2027		1,989,950		1,935,542			1,971,304		0.89
Total Automobile Components								$	5,723,666		$	5,702,493		2.57	%

Automobiles
Holley Purchaser, Inc.	S+3.75%		9.22	%	11/28/2028		4,392,630		3,943,707			4,224,260		1.91
Total Automobiles								$	3,943,707		$	4,224,260		1.91	%

Biotechnology
Star Parent, Inc. (12)	S+4.00%		9.35	%	9/27/2030		5,000,000		4,927,218			4,935,400		2.23
Total Biotechnology								$	4,927,218		$	4,935,400		2.23	%

Building Products
Oscar AcquisitionCo, LLC (12)	S+4.50%		9.95	%	4/29/2029		1,738,072		1,691,987			1,718,518		0.78
Recess Holdings, Inc. (5)(12)	S+4.00%		9.39	%	3/29/2027		1,995,000		1,976,689			2,004,975		0.90
Total Building Products								$	3,668,676		$	3,723,493		1.68	%

Chemicals
Cyanco Intermediate 2 Corp. (12)	S+4.75%		10.11	%	7/10/2028		2,992,500		2,936,542			2,997,498		1.35
LSF11 A5 Holdco LLC (8)(12)	S+4.25%		9.71	%	10/15/2028		3,980,000		3,917,098			3,986,647		1.80
Windsor Holdings III, LLC (12)	S+4.50%		9.84	%	8/1/2030		1,995,000		1,980,625			2,005,593		0.90
Total Chemicals								$	8,834,265		$	8,989,738		4.05	%

Commercial Services & Supplies
AVSC Holding Corp.	S+3.00%/.25% PIK		8.96	%	3/3/2025		3,971,771		3,866,219			3,881,175		1.75
Brand Industrial Services Inc. (12)	S+5.50%		10.88	%	8/1/2030		1,995,000		1,918,230			1,980,756		0.89
Eagle Parent Corp. (12)	S+4.25%		9.64	%	4/2/2029		2,977,273		2,945,687			2,943,778		1.33
EnergySolutions, LLC (12)	S+4.00%		9.36	%	9/20/2030		997,500		985,417			995,505		0.45
Heritage-Crystal Clean, Inc.	S+5.00%		10.40	%	10/17/2030		1,000,000		975,516			1,000,000		0.45
J-O Building Company LLC (5)(12)	S+6.75%		12.14	%	5/25/2028		13,883,430		13,691,583			13,866,076		6.26
The Action Environmental Group, Inc. (5)	S+4.50%		9.88	%	10/24/2030		869,565		856,763			871,739		0.39
The Action Environmental Group, Inc. (5)(6)	S+4.50%		—		10/24/2030		130,435		(949	)		326		0.00
USA Debusk LLC (5)(12)	S+6.50%		11.96	%	9/8/2026		3,000,000		2,940,662			2,996,250		1.35
USA Debusk LLC (5)(12)	S+6.50%		11.96	%	9/8/2026		9,975,000		9,800,216			9,962,531		4.50
Total Commercial Services & Supplies								$	37,979,344		$	38,498,136		17.37	%

The accompanying notes are an integral part of these consolidated financial statements.

Kennedy Lewis Capital Company

Consolidated Schedule of Investments (continued)

December 31, 2023


Portfolio Company(1)	Reference Rate and Spread(2)	Interest Rate(2)			Maturity Date	Par Amount/ Units(3)		Amortized Cost			Fair Value			Percentage of Net Assets
Construction & Engineering
MEI Buyer LLC (5)(12)	S+6.50%		11.86	%	6/29/2029		15,183,633		14,751,482			14,752,721			6.66
MEI Buyer LLC (5)(6)(12)	S+6.50%		—		6/29/2029		2,650,602		(23,232	)		(26,952	)		(0.01	)
MEI Buyer LLC (5)(6)(12)	S+6.50%		—		6/29/2029		2,409,639		(33,525	)		(48,313	)		(0.02	)
Total Construction & Engineering								$	14,694,725		$	14,677,456			6.63	%

Containers, Packaging & Glass
Pretium Packaging, LLC	S+4.60%		9.99	%	10/2/2028		1,860,170		1,656,502			1,444,738			0.65
Pretium Packaging, LLC (12)	S+5.00%		10.39	%	10/2/2028		498,028		485,969			487,136			0.22
Tank Holding Corp. (5)(12)	S+5.75%		11.21	%	3/31/2028		994,950		967,159			950,177			0.43
Tank Holding Corp. (5)(12)	S+6.00%		11.46	%	3/31/2028		3,791,852		3,701,274			3,630,698			1.64
Tank Holding Corp. (5)(6)(12)	S+6.00%		11.46	%	3/31/2028		1,635,981		530,856			480,337			0.22
Total Containers, Packaging & Glass								$	7,341,760		$	6,993,086			3.16	%

Distributors
American Auto Auction Group, LLC (12)	S+5.00%		10.50	%	12/30/2027		1,979,747		1,882,903			1,941,795			0.88
Aramsco, Inc (12)	S+4.75%		10.10	%	10/10/2030		2,554,455		2,504,437			2,549,142			1.15
Aramsco, Inc (6)(12)	S+4.75%		—		10/10/2030		445,545		—			(927	)		0.00
BCPE Empire Holdings, Inc. (12)	S+4.75%		10.11	%	12/11/2028		3,980,000		3,959,431			3,986,965			1.80
PAI Holdco, Inc. (12)	S+3.75%		9.39	%	10/28/2027		1,488,520		1,420,416			1,385,261			0.63
Total Distributors								$	9,767,187		$	9,862,236			4.46	%

Diversified Consumer Services
AMCP Clean Acquisition Company, LLC	S+4.40%		9.79	%	6/16/2025		2,769,264		2,635,484			2,592,142			1.17
Spring Education Group, Inc. (12)	S+4.50%		9.85	%	10/4/2030		4,000,000		3,950,776			4,009,000			1.81
Total Diversified Consumer Services								$	6,586,260		$	6,601,142			2.98	%

Electric Utilities
Cricket Valley Energy Center (5)(7)(12)	S+3.90%		9.25	%	6/30/2025		2,966,340		2,729,032			2,765,074			1.25
Generation Bridge Northeast, LLC (12)	S+4.25%		9.61	%	8/22/2029		2,937,057		2,908,829			2,945,633			1.33
Lackawanna Energy Center LLC (12)	S+5.00%		10.36	%	8/3/2029		4,100,181		3,983,506			4,045,525			1.83
Lackawanna Energy Center LLC (12)	S+5.00%		10.36	%	8/6/2029		889,518		864,204			877,660			0.40
Potomac Energy Center, LLC (5)	S+6.00%		11.61	%	11/12/2026		12,513,956		11,764,326			11,811,458			5.33
St. Joseph Energy Center, LLC (5)(12)	S+4.25%		9.71	%	10/5/2028		2,966,613		2,881,518			2,914,697			1.32
Total Electric Utilities								$	25,131,415		$	25,360,047			11.46	%

Electronic Equipment, Instruments & Components
TGG TS Acquisition Company (12)	S+6.50%		11.97	%	12/14/2025		1,163,697		1,162,703			1,114,240			0.50
Total Electronic Equipment, Instruments & Components								$	1,162,703		$	1,114,240			0.50	%

Energy Equipment & Services
Epic Crude Services, LP (12)	S+5.00%		10.93	%	3/2/2026		4,976,857		4,800,437			4,951,973			2.23
Total Energy Equipment & Services								$	4,800,437		$	4,951,973			2.23	%

Gas Utilities
Parkway Generation, LLC	S+4.75%		10.39	%	2/18/2029		991,093		961,834			951,271			0.43
Total Gas Utilities								$	961,834		$	951,271			0.43	%

Ground Transportation
Carriage Purchaser, Inc. (12)	S+4.25%		9.72	%	10/2/2028		1,489,828		1,464,945			1,459,108			0.66
Odyssey Logistics & Technology Corporation (12)	S+4.50%		9.86	%	10/12/2027		997,500		979,241			987,944			0.45
Total Ground Transportation								$	2,444,186		$	2,447,052			1.11	%

The accompanying notes are an integral part of these consolidated financial statements.

Kennedy Lewis Capital Company

Consolidated Schedule of Investments (continued)

December 31, 2023


Portfolio Company(1)	Reference Rate and Spread(2)	Interest Rate(2)			Maturity Date	Par Amount/ Units(3)		Amortized Cost			Fair Value			Percentage of Net Assets
Health Care Equipment & Supplies
NMN Holdings III Corp. (5)	S+3.50%		8.97	%	11/13/2025		3,141,804		2,916,393			3,086,823			1.39
Total Health Care Equipment & Supplies								$	2,916,393		$	3,086,823			1.39	%

Health Care Providers & Services
Charlotte Buyer, Inc. (12)	S+5.25%		10.61	%	2/11/2028		2,458,778		2,398,398			2,466,622			1.11
Heartland Dental, LLC (12)	S+5.00%		10.36	%	4/28/2028		2,560,524		2,475,494			2,551,332			1.15
Help At Home, Inc.	S+5.00%		10.46	%	10/29/2027		992,349		979,161			981,810			0.44
Imagefirst Holdings, LLC (12)	S+5.00%		10.72	%	4/27/2028		3,316,667		3,242,402			3,300,083			1.49
Imagefirst Holdings, LLC (6)(12)	S+5.00%		—		4/27/2028		666,667		(14,593	)		(3,333	)		0.00
Pediatric Associates Holding Company, LLC (12)	S+4.50%		9.97	%	12/29/2028		995,000		958,313			960,175			0.43
PetVet Care Centers, LLC (5)(12)	S+6.00%		11.36	%	11/15/2030		13,559,139		13,291,418			13,291,418			6.00
PetVet Care Centers, LLC (5)(6)(12)	S+6.00%		—		11/15/2029		1,768,583		(34,430	)		(34,430	)		(0.02	)
PetVet Care Centers, LLC (5)(6)(12)	S+6.00%		—		11/15/2030		1,768,583		(17,354	)		(17,354	)		(0.01	)
Southern Veterinary Partners, LLC (12)	S+4.00%		9.47	%	10/5/2027		1,492,308		1,485,297			1,485,965			0.67
Team Services Group (12)	S+5.00%		10.88	%	12/20/2027		988,579		971,239			979,316			0.44
Total Health Care Providers & Services								$	25,735,345		$	25,961,604			11.70	%

Health Care Technology
Covetrus, Inc. (12)	S+5.00%		10.35	%	10/13/2029		994,987		987,788			993,127			0.45
Total Health Care Technology								$	987,788		$	993,127			0.45	%

Hotels, Restaurants & Leisure
Fertitta Entertainment, LLC (12)	S+4.00%		9.36	%	1/27/2029		992,424		976,722			992,216			0.45
Ranger Holdco Spe LLC (5)	15.00% PIK		15.00	%	8/8/2028		17,775,581		16,498,048			19,050,076			8.60
Total Hotels, Restaurants & Leisure								$	17,474,770		$	20,042,292			9.05	%

Household Products
American Greetings Corporation (12)	S+6.00%		11.35	%	4/6/2028		1,481,269		1,457,513			1,483,743			0.67
Journey Personal Care Corp. (7)	S+4.25%		9.72	%	3/1/2028		5,006,986		4,649,291			4,927,725			2.22
Kronos Acquisition Holdings Inc. (12)	S+6.00%		11.54	%	12/22/2026		2,608,832		2,573,424			2,610,476			1.18
Staples, Inc.	L+4.50%		9.96	%	9/12/2024		997,389		993,762			996,142			0.45
Staples, Inc. (12)	L+5.00%		10.46	%	4/16/2026		994,792		948,840			939,700			0.42
Wellness Merger Sub, Inc. (12)	S+6.00%		11.61	%	6/30/2026		3,925,000		3,726,426			3,840,769			1.73
Total Household Products								$	14,349,256		$	14,798,555			6.67	%

Independent Power and Renewable Electricity Producers
Invenergy Thermal Operating I LLC (12)	S+4.50%		9.92	%	8/14/2029		2,807,143		2,752,178			2,803,634			1.27
Total Independent Power and Renewable Electricity Producers								$	2,752,178		$	2,803,634			1.27	%

Insurance
Acrisure, LLC (12)	S+4.50%		9.89	%	11/6/2030		4,979,950		4,895,009			4,984,083			2.25
Amynta Agency Borrower Inc. (12)	S+4.25%		9.61	%	2/28/2028		3,980,025		3,872,922			3,979,468			1.80
RSC Acquisition, Inc. (5)	S+6.00%		11.35	%	11/1/2029		250,000		246,576			247,500			0.11
RSC Acquisition, Inc. (5)(6)	S+6.00%		11.39	%	11/1/2029		1,750,000		88,311			93,928			0.04
Ryan, LLC	S+4.50%		9.86	%	11/14/2030		1,809,524		1,773,798			1,813,487			0.82
Ryan, LLC (6)	S+4.50%		—		11/14/2030		190,476		—			417			0.00
Total Insurance								$	10,876,616		$	11,118,883			5.02	%

The accompanying notes are an integral part of these consolidated financial statements.

Kennedy Lewis Capital Company

Consolidated Schedule of Investments (continued)

December 31, 2023


Portfolio Company(1)	Reference Rate and Spread(2)	Interest Rate(2)			Maturity Date	Par Amount/ Units(3)		Amortized Cost		Fair Value		Percentage of Net Assets
IT Services
Endure Digital Inc. (12)	S+3.50%		9.42	%	2/10/2028		989,848		907,221		966,032		0.44
Neptune Bidco US Inc. (12)	S+5.00%		10.51	%	4/11/2029		5,273,500		4,876,118		4,805,477		2.17
Nielsen Consumer Inc. (8)(12)	S+6.25%		11.61	%	3/6/2028		3,980,000		3,576,958		3,887,465		1.75
Physician Partners LLC (12)	S+4.00%		9.53	%	12/26/2028		992,424		942,802		935,360		0.42
TouchTunes Interactive Networks, Inc. (12)	S+5.00%		10.35	%	4/2/2029		2,230,496		2,228,284		2,208,748		1.00
Total IT Services								$	12,531,383	$	12,803,082		5.78	%

Leisure Products
Varsity Brands, Inc. (12)	S+5.00%		10.47	%	12/15/2026		1,982,481		1,894,763		1,968,445		0.89
Total Leisure Products								$	1,894,763	$	1,968,445		0.89	%

Machinery
Arcline FM Holdings, LLC (12)	S+4.75%		10.36	%	6/23/2028		3,608,118		3,493,046		3,601,371		1.63
Arcline FM Holdings, LLC (5)	S+5.25%		10.86	%	6/23/2028		997,500		977,937		997,500		0.45
Crosby US Acquisition Corp. (8)(12)	S+4.75%		10.21	%	6/26/2026		618,262		605,879		618,522		0.28
DS Parent Inc. (7)	S+5.50%		10.81	%	12/13/2030		3,000,000		2,850,000		2,857,500		1.29
Gloves Buyer, Inc. (5)(12)	S+5.00%		10.47	%	12/29/2027		1,995,000		1,923,179		1,960,088		0.88
LSF12 Badger Bidco LLC (12)	S+6.00%		11.36	%	8/30/2030		3,000,000		2,934,606		2,985,000		1.35
Total Machinery								$	12,784,647	$	13,019,981		5.88	%

Metals & Mining
Arsenal AIC Parent LLC (12)	S+4.50%		9.86	%	8/18/2030		2,992,500		2,963,608		3,000,909		1.35
Total Metals & Mining								$	2,963,608	$	3,000,909		1.35	%

Personal Care Products
KDC/one Development Corporation, Inc. (9)(12)	S+5.00%		10.36	%	8/15/2028		4,000,000		3,885,951		3,954,000		1.78
Total Personal Care Products								$	3,885,951	$	3,954,000		1.78	%

Professional Services
GeoStabilization International, LLC (12)	S+5.25%		10.80	%	12/19/2028		2,000,000		1,980,493		1,985,000		0.90
Mckissock Investment Holdings LLC	S+5.00%		10.38	%	3/12/2029		2,500,000		2,438,535		2,492,700		1.12
Sales Performance International, LLC (5)(12)	S+6.50%		11.88	%	8/24/2028		16,884,848		16,554,921		16,554,921		7.47
Sales Performance International, LLC (5)(6)(12)	S+6.50%		11.69	%	8/24/2028		3,030,303		1,274,596		1,274,596		0.58
Total Professional Services								$	22,248,545	$	22,307,217		10.07	%

Software
AQA Acquisition Holding, Inc. (12)	S+4.25%		9.89	%	3/3/2028		865,941		854,327		863,992		0.39
DTI Holdco, Inc. (12)	S+4.75%		10.13	%	4/26/2029		1,484,962		1,435,033		1,465,346		0.66
Particle Investments S.a.r.l. (8)(10)	L+5.25%		10.72	%	5/24/2027		989,080		983,761		984,135		0.44
Renaissance Holding Corp. (12)	S+4.75%		10.11	%	4/5/2030		4,920,617		4,796,646		4,932,230		2.23
Simon & Schuster Inc.	S+4.00%		9.39	%	10/30/2030		2,000,000		1,987,774		2,005,000		0.90
Ultimate Software Group Inc. (12)	S+4.50%		9.99	%	5/4/2026		1,990,000		1,948,747		1,994,975		0.90
Total Software								$	12,006,288	$	12,245,678		5.52	%

Textiles, Apparel & Luxury Goods
Champ Acquisition Corporation (12)	S+5.50%		11.11	%	12/19/2025		1,481,690		1,481,690		1,485,395		0.67
IBG Borrower LLC (5)(12)	S+6.00%		11.50	%	8/22/2029		9,937,500		9,839,190		9,839,190		4.44
Total Textiles, Apparel & Luxury Goods								$	11,320,880	$	11,324,585		5.11	%

The accompanying notes are an integral part of these consolidated financial statements.

Kennedy Lewis Capital Company

Consolidated Schedule of Investments (continued)

December 31, 2023


Portfolio Company(1)	Reference Rate and Spread(2)	Interest Rate(2)			Maturity Date	Par Amount/ Units(3)		Amortized Cost		Fair Value			Percentage of Net Assets
Trading Companies & Distributors
DXP Enterprises, Inc. (5)(12)	S+4.75%		10.29	%	10/11/2030		1,995,000		1,965,563		1,999,988			0.90
FCG Acquisitions Inc. (12)	S+4.75%		10.11	%	3/31/2028		1,636,067		1,602,979		1,631,813			0.74
Lincoln Metal Shop, Inc. (5)(12)	S+6.00%		11.51	%	6/7/2027		23,171,389		22,764,069		23,142,424			10.44
Patriot Container Corp. (12)	S+3.75%		9.21	%	3/20/2025		2,973,712		2,821,296		2,842,988			1.28
RelaDyne Inc. (12)	S+4.25%		9.61	%	12/22/2028		1,984,848		1,919,948		1,973,694			0.89
RelaDyne Inc. (12)	S+5.00%		10.36	%	12/22/2028		1,990,000		1,899,814		1,985,025			0.90
Total Trading Companies & Distributors								$	32,973,669	$	33,575,932			15.15	%

Total First and Second Lien Debt								$	330,431,006	$	336,818,564			151.98	%

Total Investments—non-controlled/non- affiliated								$	345,223,315	$	352,378,520			159.00	%

Total Investments Portfolio								$	345,223,315	$	352,378,520			159.00	%

Cash Equivalents
State Street Institutional Money Market Fund (10)									69,473,744		69,473,744			31.35
Total Cash Equivalents								$	69,473,744	$	69,473,744			31.35	%
Total Portfolio Investments and Cash Equivalents								$	414,697,059	$	421,852,264			190.35	%
Liabilities in excess of Other Assets										$	(200,236,344	)		(90.35	)%
Net Assets										$	221,615,920			100.00	%

(1)

Unless otherwise indicated, issuers of debt held by the Company are domiciled in the United States.

(2)

Represents the actual interest rate for partially or fully funded debt in effect as of the reporting date. PIK represents payment-in-kind interest that is accrued and recorded as interest income at the contractual rates, increases the loan principal on the respective capitalization dates, and is generally due at maturity. Certain investments are subject to an interest rate floor. Variable rate loans bear interest at a rate that may be determined by the larger of the floor or the reference to either LIBOR (“L”), SOFR including SOFR adjustment, if any, (“S”), SONIA (“SN”), or alternate base rate (commonly based on the U.S. Prime Rate (“P”), unless otherwise noted) at the borrower’s option, which reset periodically based on the terms of the credit agreement and S loans are typically indexed to 6 month, 3 month or 1 month L or S rates. As of December 31, 2023, rates for the 6 month, 3 month and 1 month L are 5.59%, 5.59%, and 5.47%, respectively. As of December 31, 2023, 6 month, 3 month and 1 month S are 5.16%, 5.33% and 5.35%, respectively.

(3)

(4)

Unless otherwise indicated, issuers of debt investments held by the Company are denominated in dollars. All debt investments are income producing unless otherwise indicated.

(5)

(6)

(7)

Position or portion thereof unsettled as of December 31, 2023.

(8)

The investment is not a qualifying asset under Section 55(a) of the 1940 Act. The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Company’s total assets. As of December 31, 2023, non-qualifying assets totaled 2.17% of the Company’s total assets.

(9)

The issuer of this investment is domiciled in Canada.

(10)

The issuer of this investment is domiciled in Luxembourg.

(11)

The annualized seven-day yield as of December 31, 2023 is 5.07%.

(12)

Investment is pledged as collateral for the Secured Credit Facility. See Note 6, Borrowings, for details.

The accompanying notes are an integral part of these consolidated financial statements.

Notes to the Consolidated Financial Statements

Note 1. Organization

Organization

Kennedy Lewis Capital Company, (the “Company”), is a Delaware statutory trust structured as an externally managed, diversified closed-end management investment company. The Company has elected to be treated as a business development company (a “BDC”) under the U.S. Investment Company Act of 1940, as amended (the “1940 Act”). In addition, the Company intends to elect to be treated as a regulated investment company (a “RIC”) for U.S. federal income tax purposes under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).

The Company is externally managed by Kennedy Lewis Capital Holdings LLC (the “Advisor”), a Delaware limited liability company that is registered with the U.S. Securities and Exchange Commission (the “SEC”) as an investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”) pursuant to an investment advisory agreement between the Company and the Advisor (as amended, the “Advisory Agreement”). Kennedy Lewis Management LP (“Kennedy Lewis Management,” and together with Kennedy Lewis Capital Holdings LLC and its affiliates, “Kennedy Lewis”) is registered with the SEC as an investment adviser under the Advisers Act. The Advisor has entered into a resource sharing agreement (“Resource Sharing Agreement”) with Kennedy Lewis Management, pursuant to which Kennedy Lewis Management makes certain personnel and resources available to the Advisor to provide certain investment advisory services to the Company. Kennedy Lewis Management serves as the Company’s administrator (in such capacity, the “Administrator”) pursuant to an administration agreement (the “Administration Agreement”).

The Company has been established to invest primarily in debt or other debt-like securities across the capital structure of middle market companies located in the United States and, selectively, in other North American countries and in Europe, with the ability to consider investments focused on other geographic markets. The Company generally defines middle market companies as those having enterprise values between $300 million and $3 billion. The Company’s investment objectives are to maximize the total return to its holders of common shares of beneficial interest, par value $0.01 (“Common Shares”) (each a “shareholder”) in the form of current income and, to a lesser extent, capital appreciation. The Company employs a strategy to provide capital to middle market companies, with a focus on direct originations in private, first lien, senior secured, performing credits. The Company expects to generate returns primarily from interest income and fees from senior secured loans, with some capital appreciation through nominal equity co-investments.

Subject to the supervision of the Company’s Board of Trustees (the “Board”), a majority of which are trustees who are not “interested persons” as defined in Section 2(a)(19) of the 1940 Act (“Independent Trustees”), the Advisor manages the Company’s day-to-day operations and provides the Company with investment advisory and management services.

Fiscal Year End

The Company was formed on February 10, 2022, and commenced operations on February 1, 2023. Its fiscal year ends on December 31.

Note 2. Significant Accounting Policies

Industry Reclassification

During the quarter ended March 31, 2024, the Company changed the investment industry classification from those provided by Moody's to those provided by S&P. The Consolidated Schedule of Investments as of December 31, 2023, as well as the industry composition of investments based on fair value as of December 31, 2023 disclosed in Note 4 - Investments and Fair Value Measurements, have been reclassified to conform to the classifications used to prepare the consolidated financial statements as of and for the period ended June 30, 2024.

Basis of Presentation

The Company’s consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The Company is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial Services – Investment Companies. These consolidated financial statements reflect adjustments that in the opinion of management are necessary for the fair statement of the consolidated financial statements presented herein.

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Changes in the economic environment, financial markets, and other metrics used in determining these estimates could cause actual results to differ from the estimates used, and the differences could be material.

Consolidation

In accordance with U.S. GAAP guidance on consolidation, the Company will generally not consolidate its investment in a portfolio company other than an investment company subsidiary or a controlled operating company whose business consists of providing services to the Company. Accordingly, the Company consolidated the accounts of the Company’s wholly-owned subsidiary, KLCC SPV GS1 LLC, in its consolidated financial statements. All intercompany balances and transactions have been eliminated in consolidation.

Cash, Cash Equivalents and Restricted Cash

Cash consists of deposits held at a custodian bank. Cash equivalents consists of money market investments with original maturities of three months that are readily convertible to cash and are classified as Level 1 investments. Cash and cash equivalents are held at major financial institutions and, at times, may exceed the insured limits under applicable law. Cash and cash equivalents are carried at cost, which approximates fair value. As of June 30, 2024 and December 31, 2023, we had $50,780,644 and $47,844,154 of restricted cash and cash equivalents related to collateral held for the Secured Credit Facility (as defined below) and presented in the statements of assets and liabilities. This is further discussed in Note 6. As of June 30, 2024 we had $640,000 of restricted cash and cash equivalents related to collateral held to meet the requirements of our ISDA Master Agreement (as defined below). This is further discussed in Note 5.

Realized and Unrealized Gains/Losses

Interest and Dividend Income

Interest and dividend income is recorded on an accrual basis. Interest income includes the accretion of discounts and amortizations of premiums. The amortized cost of debt investments represents the original cost, including fees received that are deemed to be an adjustment to yield, adjusted for the accretion of discounts and amortization of premiums, if any. Discounts from and premiums to par value on debt investments purchased are accreted/amortized into interest income over the life of the respective security using the effective interest method. Upon prepayment of a loan or debt security, any prepayment premiums, unamortized fees and unamortized discounts are recorded as interest income.

Fee Income

In the general course of its business, the Company receives certain fees, which are non-recurring in nature. Such fees include loan prepayment penalties, structuring fees and loan waiver amendment fees, and commitment fees, and are recorded as fee income in investment income when earned.

PIK Income

Certain investments may have contractual payment-in-kind (“PIK”) interest. PIK represents accrued interest that is added to the principal amount of the investment on the interest payment date rather than being paid in cash and generally becomes due at maturity or upon the investment being called by the issuer. PIK is recorded as interest income. Because the Company intends to elect to be treated as a RIC for U.S. federal income purposes under Subchapter M of the Code, this non-cash source of income must be paid out to shareholders in the form of distributions, even though the Company has not yet collected the cash.

Non-Accrual Loans

Loans or debt securities are placed on non-accrual status when there is reasonable doubt that principal or interest will be collected. Accrued interest generally is reversed when a loan or debt security is placed on non-accrual status. Interest payments received on non-accrual loans or debt securities may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans and debt securities are restored to accrual status when past due principal and interest are paid and, in management’s judgment, principal and interest payments are likely to remain current. The Company may make exceptions to this treatment if a loan has sufficient collateral value and is in the process of collection. As of June 30, 2024 and December 31, 2023, there were no loans placed on non-accrual status.

Deferred Financing Costs

Deferred financing costs represent fees and other direct costs incurred in connection with the Company’s borrowings. These amounts are capitalized and amortized over the contractual term of the borrowing.

Receivable for Investments Sold and Payable for Investments Purchased

Receivable for investments sold and payable for investments purchased represent unsettled investments.

Derivative Instruments

The Company recognizes all derivative instruments as assets or liabilities at fair value in its Consolidated Statements of Assets and Liabilities as Derivative assets at fair value and Derivative liabilities at fair value, respectively.

In the normal course of business, the Company has commitments and risks resulting from its investment transactions, which may include those involving derivative instruments. Derivative instruments are measured in terms of the notional contract amount and derive their value based upon one or more underlying instruments. While the notional amount gives some indication of the Company’s derivative activity, it generally is not exchanged, but is only used as the basis on which interest and other payments are exchanged. Derivative instruments are subject to various risks similar to non-derivative instruments including market, credit, liquidity, and operational risks. The Company manages these risks on an aggregate basis as part of its risk management process.

From time to time, the Company may enter into forward currency contracts which is an obligation between two parties to purchase or sell a specific currency for an agreed-upon price at a future date. The Company enters into derivative financial instruments in the normal course of business to achieve certain risk management objectives, including managing its foreign currency risk exposures on its portfolio holdings. The use of forward currency contracts does not eliminate fluctuations in the price of the underlying debt the Company has, but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the exchange rates on the contract date and reporting date and are recorded as net change in unrealized appreciation (depreciation). The fair value of the foreign currency forwards are included as Derivative assets at fair value or Derivative liabilities at fair value on the Company's Consolidated Statements of Assets and Liabilities. Changes in the fair value of the foreign currency forwards are presented in Net realized gains (losses) and Net change in unrealized appreciation (depreciation) in the Consolidated Statements of Operations.

Foreign Currency Transactions

Amounts denominated in foreign currencies are translated into U.S. dollars on the following basis: (i) investments and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based upon currency exchange rates effective on the last business day of the period; and (ii) purchases and sales of investments, income, and expenses denominated in foreign currencies are translated into U.S. dollars based upon currency exchange rates prevailing on the transaction dates.

The Company includes net changes in fair values on investments held resulting from foreign exchange rate fluctuations in net change in unrealized from foreign currency and other transactions in the Consolidated Statements of Operations, if any.

Foreign securities and currency transactions may involve certain considerations and risks not typically associated with investing in U.S. companies and U.S. government securities. These risks include, but are not limited to, currency fluctuations and revaluations and future adverse political, social and economic developments, which could cause investments in foreign markets to be less liquid and prices more volatile than those of comparable U.S. companies or U.S. government securities.

Valuation of Portfolio Investments

In accordance with Rule 2a-5 under the 1940 Act, the Board has designated the Advisor as the Company’s “Valuation Designee”. The Advisor has established a Valuation Committee that is responsible for determining in good faith the fair value of the Company’s investments in instances where there is no readily available market quotation. A readily available market quotation is not expected to exist for most of the investments in the Company’s portfolio, and the Company values these portfolio investments at fair value as determined in good faith by the Valuation Designee. Investments for which market quotations are readily available may be priced by independent pricing services. The Company has retained an external, independent valuation firm to provide data and valuation analyses on the Company’s portfolio companies.

The Advisor values the Company’s investments based on the type of financial instrument as outlined below:

Securities that are listed on a securities, commodities or futures exchange or market (including such securities when traded in the after‐hours market), will be valued (i) at their last sales prices on the date of determination on the primary exchange on which such securities were traded on such date, or (ii) at their last sales prices on the consolidated tape if such securities on the primary exchange on which such securities were traded on such date were reported on the consolidated tape, or (iii) in the event that the date of determination is not a date upon which an exchange was open for trading, on the date on which such exchange was previously open but not more than 10 days prior to the date of determination.

Securities that are not listed on an exchange but are traded over‐the‐counter will be valued at representative “bid” quotations if held long and representative “asked” quotations if held short, unless included in the NASDAQ National Market System, in which case they will be valued based upon their last sales prices (if such prices are available); provided that if the last sales price of a security does not fall between the last “bid” and “asked” price for such security on such date, the Advisor will value such security at the mean between the last “bid” and “asked” price for such security on such date. Securities not denominated in U.S. dollars will be translated into U.S. dollars at prevailing exchange rates as the Advisor may reasonably determine. All other investments will be assigned such value as the Advisor may reasonably determine. When available, quotations from brokers or pricing services will be considered in the valuation process. For example, the Advisor will utilize indicative prices from brokers or pricing services to determine the fair value of bonds and bank debt and may internally validate the quotes obtained or utilize the mean of the bid (if long) and ask (if short) quotes obtained. For these quotes to be considered for valuation purposes they must be sent directly from the brokers to the Advisor. If quotations are not readily available through pricing services or brokers for a security, financial instrument or other property, the Advisor will determine its value in such a manner as the Advisor, in its sole discretion, reasonably determines. This is generally achieved by engaging a third‐party valuation firm to value such securities and provide a range of values for each position. The Advisor will then mark the position within that range.

The determination of fair value generally considers factors such as comparisons to public companies, comparable transactions, markets in which a company does business, the nature and realizable value of any collateral, discounted cash flows, earnings and ability to make payments, and market yields. If an event such as a purchase, sale, or public offering occurs, the Advisor may consider the pricing indicated by such event to corroborate its internal valuation.

FASB ASC Topic 820: Fair Value Measurements and Disclosures (“ASC 820”) specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. ASC 820 also provides guidance regarding a fair value hierarchy, which prioritizes information used to measure fair value and the effect of fair value measurements on earnings and provides for enhanced disclosures determined by the level of information used in the valuation.

The Company classifies the inputs used to measure fair values into the following hierarchy:

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Level 1—Valuations are based on quoted prices in active markets for identical assets or liabilities that are accessible to the Company at the measurement date.

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Level 2—Valuations are based on similar assets or liabilities in active markets, or quoted prices identical or similar assets or liabilities in markets that are not active or for which all significant inputs are observable, either directly or indirectly and model-based valuation techniques for which all significant inputs are observable.

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Level 3—Valuations are based on inputs that are unobservable and significant to the overall fair value measurement. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models incorporating significant unobservable inputs, such as discounted cash flow models and other similar valuation techniques. The valuation of Level 3 assets and liabilities generally requires significant management judgment due to the inability to observe inputs to valuation.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of observable input that is significant to the fair value measurement. The Advisor’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and it considers factors specific to the investment.

Transfers between levels, if any, are recognized at the beginning of the period in which the transfer occurs. In addition to using the above inputs in investment valuations, the Advisor applies the valuation policy approved by the Board that is consistent with ASC 820. Consistent with the valuation policy, the Advisor evaluates the source of inputs, including any markets in which its investments are trading (or any markets in which securities with similar attributes are trading), in determining fair value. When a security is valued based on prices provided by reputable dealers or pricing services (that is, broker quotes), the Advisor subjects those prices to various additional criteria in making the determination as to whether a particular investment would qualify for treatment as a Level 2 or Level 3 investment. For example, the Advisor reviews pricing provided by dealers or pricing services in order to determine if observable market information is being used, versus unobservable inputs. Some additional factors considered include the number of prices obtained as well as an assessment as to their quality, such as the depth of the relevant market relative to the size of the Company’s position.

Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Additionally, the fair value of such investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that may ultimately be realized. Further, such investments are generally less liquid than publicly traded securities and may be subject to contractual and other restrictions on resale. If the Company were required to liquidate a portfolio investment in a forced or liquidation sale, it could realize amounts that are different from the amounts presented and such differences could be material.

In addition, changes in the market environment, including the impact of changes in broader market indices and credit spreads, and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the unrealized gains or losses reflected herein.

Organization and Offering Costs

Organizational costs to establish the Company are charged to expense as incurred. These expenses consist primarily of legal fees and other costs of organizing the Company.

Offering costs in connection with the offering of Common Shares of the Company are capitalized as a deferred charge and amortized to expense on a straight-line basis over 12 months. Initial offering costs were amortized beginning February 1, 2023, the commencement of operations.

Under the Advisory Agreement and the Administration Agreement, the Company, either directly or through reimbursements to the Advisor or its affiliates, is responsible for its organization and offering costs. For the three months ended June 30, 2024 and June 30, 2023, the Advisor did not incur organization and offering costs on behalf of the Company. For the six months ended June 30, 2024 and June 30, 2023, the Advisor and its affiliates incurred organization and offering costs of $0 and $328,240, respectively, on behalf of the Company.

Income Taxes

The Company intends to elect to be treated as a RIC. So long as the Company maintains its status as a RIC, it generally will not pay corporate-level U.S. federal income taxes on any ordinary income or capital gains that it timely distributes to its shareholders as dividends. Rather, any tax liability related to income earned and distributed would represent obligations of the Company’s investors and would not be reflected in the consolidated financial statements of the Company.

The Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to determine whether the tax positions are “more likely than not” to be sustained by the applicable tax authority. Tax positions not deemed to meet the “more likely than not” threshold are reserved and recorded as a tax benefit or expense in the current year. All penalties and interest associated with income taxes are included in income tax expense. Conclusions regarding tax positions are subject to review and may be adjusted at a later date based on factors including, but not limited to, ongoing analyses of tax laws, regulations and interpretations thereof. The Company did not record any tax provision in the current period. To qualify for and maintain qualification as a RIC, the Company must, among other things, meet certain source of income and asset diversification requirements. In addition, to qualify for RIC tax treatment, the Company must timely distribute to its shareholders, for each taxable year, at least 90% of its “investment company taxable income” for that year, which is generally its ordinary income plus the excess, if any, of its realized net short-term capital gains over its realized net long-term capital losses.

In addition, based on the excise tax distribution requirements, the Company is subject to a 4% nondeductible federal excise tax on undistributed income unless the Company distributes in a timely manner in each taxable year an amount at least equal to the sum of (1) 98% of its ordinary income for the calendar year, (2) 98.2% of capital gain net income (both long-term and short-term) for the one-year period ending October 31 in that calendar year and (3) any income realized, but not distributed, in prior years. For this purpose, however, any ordinary income or capital gain net income retained by the Company that is subject to corporate income tax is considered to have been distributed.

Note 3. Related Party Transactions

Administration Agreement

Under the Administration Agreement, the Administrator furnishes the Company with office facilities and equipment and provides the Company with clerical, bookkeeping, recordkeeping and other administrative services at such facilities. The Administrator also performs, or oversees the performance of, the Company’s required administrative services, which include responsibility for the financial and other records that the Company is required to maintain and preparing reports to its shareholders and reports and other materials filed with the SEC. In addition, the Administrator assists the Company in determining and publishing its net asset value, oversees the preparation and filing of its tax returns and the printing and dissemination of reports and other materials to its shareholders, and generally oversees the payment of its expenses and the performance of administrative and professional services rendered to the Company by others. Under the Administration Agreement, the Administrator also provides managerial assistance on the Company’s behalf to those portfolio companies that have accepted the Company’s offer to provide such assistance. The Administrator has retained State Street Bank and Trust Company (“State Street”), a Massachusetts trust company, as a sub-administrator to perform any or all of its obligations under the Administration Agreement.

Payments under the Administration Agreement are equal to an amount based upon the Company’s allocable portion (subject to the review of the Board) of the Administrator’s overhead in performing its obligations under the Administration Agreement, including rent, the fees and expenses associated with performing compliance functions and the Company’s allocable portion of the cost of the Company’s Chief Financial Officer and their staff as well as State Street’s fees.

Advisory Agreement

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determines the composition of the Company’s portfolio, the nature and timing of the changes to its portfolio and the manner of implementing such changes;

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identifies, evaluates and negotiates the structure of the investments the Company makes;

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executes, closes, services and monitors the investments the Company makes;

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determines the securities and other assets that the Company purchases, retains or sells;

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performs due diligence on prospective portfolio companies; and

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provides the Company with such other investment advisory, research and related services as the Company may, from time to time, reasonably require for the investment of its funds.

Under the Advisory Agreement, the Company pays the Advisor fees for investment management services consisting of a base management fee (the “Base Management Fee”) and an incentive fee (the “Incentive Fee”).

Base Management Fee

The Company pays the Advisor a management fee equal to an annual rate of 1.25% of the average of the Company’s net assets, at the end of the two most recently completed quarters. Subsequent to any initial public offering (“IPO”) or other listing of the Common Shares on a national securities exchange (“Exchange Listing”), the Company will pay the Advisor a base management fee calculated at an annual rate of 1.25% of the Company’s average gross assets at the end of the two most recently completed quarters. The management fee is payable quarterly in arrears. For the three months ended June 30, 2024 and June 30, 2023, the management fee was $899,154 and $655,300, respectively. At the Advisor’s discretion, no management fee was waived during the three months ended June 30, 2024 and June 30, 2023, respectively. For the six months ended June 30, 2024 and June 30, 2023, the management fee was $1,615,906 and $866,349, respectively. At the Advisor’s discretion, $0 and $128,140 of the management fee was waived during the six months ended June 30, 2024 and June 30, 2023, respectively. For the six months ended June 30, 2024 and June 30, 2023, the management fee, net of waivers was $1,615,906 and $738,209, respectively.

Incentive Fee

The Incentive Fee consists of two components that are independent of each other, with the result that one component may be payable even if the other is not. A portion of the Incentive Fee is based on a percentage of income and a portion is based on a percentage of capital gains, each as described below.

Income-Based Incentive Fee. The portion based on the Company’s income is based on Pre-Incentive Fee Net Investment Income Returns. “Pre-Incentive Fee Net Investment Income Returns” means, as the context requires, either the dollar value of, or percentage rate of return on the value of net assets at the end of the immediate preceding quarter from interest income, dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that are received from portfolio companies) accrued during the calendar quarter, minus operating expenses accrued for the quarter (including the management fee, expenses payable under the Administration Agreement entered into between the Company and the Administrator, and any interest expense or fees on any credit facilities or outstanding debt and dividends paid on any issued and outstanding preferred shares, but excluding the Incentive Fee and any shareholder servicing and/or distribution fees). Pre-Incentive Fee Net Investment Income Returns include, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with interest and zero coupon securities), accrued income that has not yet been received in cash. Pre-Incentive Fee Net Investment Income Returns do not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. The impact of expense support payments and recoupments are also excluded from Pre-Incentive Fee Net Investment Income Returns. Pre-Incentive Fee Net Investment Income Returns, expressed as a rate of return on the value of the Company’s net assets at the end of the immediate preceding quarter, is compared to a “hurdle rate” of return of 1.25% per quarter (5.0% annualized).

The Company pays the Advisor an Income Based Incentive Fee quarterly in arrears with respect to the Company’s Pre-Incentive Fee Net Investment Income Returns in each calendar quarter as follows:

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No incentive fee based on Pre-Incentive Fee Net Investment Income Returns in any calendar quarter in which Pre-Incentive Fee Net Investment Income Returns do not exceed the hurdle rate of 1.25% per quarter (5.0% annualized);

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100% of the dollar amount of Pre-Incentive Fee Net Investment Income Returns with respect to that portion of such Pre-Incentive Fee Net Investment Income Returns, if any, that exceeds the hurdle rate until the Advisor has received 12.5% of the total Pre-Incentive Fee Net Investment Income Returns for that calendar quarter. The Company refers to this portion of the Pre-Incentive Fee Net Investment Income Returns (which exceeds the hurdle rate) as the “catch-up.” This “catch-up” is meant to provide the Advisor an Incentive Fee of 12.5% on all Pre-Incentive Fee Net Investment Income Returns when that amount equals 1.43% in a calendar quarter (5.72% annualized), which is the rate at which the catch-up is achieved.

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12.5% of the dollar amount of all Pre-Incentive Fee Net Investment Income Returns, if any, that exceed a rate of return of 1.43%.

These calculations are prorated for any period of less than three months, including the first quarter the Company commenced operations, and are adjusted for any share issuances or repurchases during the relevant quarter.

For the three months ended June 30, 2024 and June 30, 2023, income-based incentive fees were $1,017,122 and $0, respectively. For the six months ended June 30, 2024 and June 30, 2023, income-based incentive fees were $1,709,772 and $0, respectively.

Capital Gains Incentive Fee. The second part of the Incentive Fee is determined and payable in arrears as of the end of each calendar year in an amount equal to 12.5% of cumulative realized capital gains from inception through the end of such calendar, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid Incentive Fee on capital gains as calculated in accordance with U.S. GAAP (the “Capital Gains Incentive Fee”). Subsequent to any IPO or Exchange Listing, the Company will pay the Advisor the Income Incentive Fee and Capital Gains Incentive Fee described above except that all of the 12.5% figures referenced therein will be increased to 15.0%.

In accordance with GAAP, the Company accrues a hypothetical capital gains incentive fee based upon the cumulative realized capital gains and realized capital losses and the cumulative unrealized capital appreciation and unrealized capital depreciation on investments held at the end of each period. Actual amounts paid to the Advisor are consistent with the Advisory Agreement and are based only on actual realized capital gains computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis from inception through the end of each calendar year as if the entire portfolio was sold at fair value. For the three months ended June 30, 2024 and June 30, 2023, the Company accrued capital gains incentive fees of $(68,141) and $317,514, respectively. For the six months ended June 30, 2024 and June 30, 2023, the Company accrued capital gains incentive fees of $72,984 and $317,514, respectively, of which none was currently payable on such date under the Advisory Agreement.

SEC Exemptive Relief

As a BDC, the Company is subject to certain regulatory restrictions in making its investments. For example, BDCs generally are not permitted to co-invest with certain affiliated entities in transactions originated by the BDC or its affiliates in the absence of an exemptive order from the SEC. However, BDCs are permitted to, and may, simultaneously co-invest in transactions where price and quantity are the only negotiated terms. On March 6, 2023, the SEC issued an order (the “Co-Investment Order”) granting the Company’s application for exemptive relief to co-invest, subject to the satisfaction of certain conditions, in certain private placement transactions, with other funds managed by the Advisor or its affiliates. Under the terms of the Co-Investment Order, in order for the Company to participate in a co-investment transaction, a “required majority” (as defined in Section 57(o) of the 1940 Act) of the Company’s Independent Trustees must conclude that (i) the terms of the proposed transaction, including the consideration to be paid, are reasonable and fair to the Company and its shareholders and do not involve overreaching with respect of the Company or its shareholders on the part of any person concerned, and (ii) the proposed transaction is consistent with the interests of the Company’s shareholders and is consistent with the Company’s investment objectives and strategies and certain criteria established by the Board.

On June 18, 2024, the SEC issued an order (the “Multi-Class Order”) granting the Company’s application for exemptive relief from sections 18(a)(2), 18(c), 18(i) and 61(a) under the 1940 Act. Under the terms of the Multi-Class Order, the Company is permitted to offer multiple classes of its Common Shares with varying sales loads and asset-based distribution and/or service fees.

Expense Support and Conditional Reimbursement Agreement

The Company has entered into an expense support and conditional reimbursement agreement (as amended, the “Expense Support Agreement”) with the Advisor, pursuant to which the Advisor has contractually agreed to pay Other Operating Expenses (as defined below) of the Company on the Company’s behalf (each such payment, a “Required Expense Payment” such that Other Operating Expenses of the Company do not exceed 1.00% (on an annualized basis) of the Company’s applicable quarter-end net asset value. “Other Operating Expenses” include the Company’s organizational and offering expenses (including the Company’s allocable portion of compensation and overhead (including rent, office equipment and utilities) and other expenses incurred by the Administrator in performing its administrative obligations under the Administration Agreement, excluding Base Management Fees and Incentive Fees owed to the Advisor and any interest expenses owed by the Company.

At such times as the Advisor determines, the Advisor may elect to pay certain additional expenses of the Company on the Company’s behalf (each such payment, a “Voluntary Expense Payment” and together with a Required Expense Payment, the “Expense Payments”). In making a Voluntary Expense Payment, the Advisor will designate, as it deems necessary or advisable, what type of expense it is paying (including, whether it is paying organizational or offering expenses).

Following any calendar quarter in which Available Operating Funds (as defined below) exceed the cumulative distributions accrued to the Company’s shareholders based on distributions declared with respect to record dates occurring in such calendar quarter (the amount of such excess referred to in the Expense Support Agreement as “Excess Operating Funds”), the Company will pay such Excess Operating Funds, or a portion thereof, to the Advisor until such time as all Expense Payments made by the Advisor to the Company within three years prior to the last business day of such calendar quarter have been reimbursed. Any payments required to be made by the Company under the Expense Support Agreement are referred to as a “Reimbursement Payment.” “Available Operating Funds” means the sum of (i) the Company’s net investment company taxable income (including net short-term capital gains

reduced by net long-term capital losses), (ii) the Company’s net capital gains (including the excess of net long-term capital gains over net short-term capital losses) and (iii) dividends and other distributions paid to the Company on account of investments in portfolio companies (to the extent such amounts listed in clause (iii) are not included under clauses (i) and (ii) above).

The amount of the Reimbursement Payment for any calendar quarter will equal the lesser of (i) the Excess Operating Funds in such quarter and (ii) the aggregate amount of all Expense Payments made by the Advisor to the Company within three years prior to the last business day of such calendar quarter that have not been previously reimbursed by the Company to the Advisor; provided that the Advisor may waive its right to receive all or a portion of any Reimbursement Payment in any particular calendar quarter, in which case such waived amount will remain unreimbursed Expense Payments reimbursable in future quarters pursuant to the terms of the Expense Support Agreement.

No Reimbursement Payment for any quarter shall be made if: (1) the Effective Rate of Distributions Per Share (as defined below) declared by the Company at the time of such Reimbursement Payment is less than the Effective Rate of Distributions Per Share at the time the Expense Payment was made to which such Reimbursement Payment relates, (2) the Company’s Operating Expense Ratio at the time of such Reimbursement Payment is greater than the Operating Expense Ratio at the time the Expense Payment was made to which such Reimbursement Payment relate, or (3) the Company’s Other Operating Expenses at the time of such Reimbursement Payment exceeds 1.00% of the Company’s applicable quarter-end net asset value. The Effective Rate of Distributions Per Share means the annualized rate, based on a 365-day year, of regular cash distributions per share exclusive of returns of capital and declared special dividends or special distributions, if any. The Company’s Operating Expense Ratio is calculated by dividing Operating Expenses (i.e. the Company’s operating costs and expenses incurred, as determined in accordance with generally accepted accounting principles), less organizational and offering expenses, Base Management Fees and Incentive Fees owed to the Advisor, shareholder servicing and/or distribution fees, and interest expense, by the Company’s net assets.

The Company’s obligation to make a Reimbursement Payment will automatically become a liability of the Company on the last business day of the applicable calendar quarter, except to the extent the Advisor has waived its right to receive such payment for the applicable quarter. The Reimbursement Payment for any calendar quarter will be paid by the Company to the Advisor in any combination of cash or other immediately available funds as promptly as possible following such calendar quarter and in no event later than 45 days after the end of such calendar quarter. All Reimbursement Payments shall be deemed to relate to the earliest unreimbursed Expense Payments made by the Advisor to the Company within three years prior to the last business day of the calendar quarter in which such Reimbursement Payments obligation is accrued.

For the three months ended June 30, 2024 and June 30, 2023, the Advisor provided $235,171 and $691,769 of expense support, respectively. For the six months ended June 30, 2024 and June 30, 2023, the Advisor provided $886,946 and $691,769 of expense support, respectively.

The Company did not have any obligation to make a Reimbursement Payment as of June 30, 2024 or June 30, 2023 under the Expense Support and Conditional Reimbursement Agreement. The cumulative amount incurred from formation that is subject to future potential reimbursement is $3,782,758.

As of June 30, 2024, the total amount owed to the Company from the Advisor pursuant to the Expense Support and Conditional Reimbursement Agreement is included in Due from Advisor in the Statement of Assets and Liabilities.

Either the Company or the Advisor may terminate the Expense Support Agreement at any time, with or without notice, without the payment of any penalty, provided that any Expense Payments that have not been reimbursed by the Company to the Advisor will remain the obligation of the Company following any such termination, subject to the terms of the Expense Support Agreement.

Note 4. Investments and Fair Value Measurements

The composition of the Company’s investment portfolio at cost and fair value as of June 30, 2024 and December 31, 2023 were as follows:


	June 30, 2024							December 31, 2023
	Amortized Cost		Fair Value		% of Total Investments at Fair Value			Amortized Cost		Fair Value		% of Total Investments at Fair Value
First lien debt	$	488,506,751	$	491,192,675		93.09	%	$	313,932,958	$	317,768,488		90.18	%
Second lien debt		18,105,078		20,571,894		3.90	%		16,498,048		19,050,076		5.41	%
Equity		14,792,309		15,871,933		3.01	%		14,792,309		15,559,956		4.41	%
Total investments	$	521,404,138	$	527,636,502		100.00	%	$	345,223,315	$	352,378,520		100.00	%

The industry composition of investments based on fair value as of June 30, 2024 and December 31, 2023 were as follows:


	June 30, 2024			December 31, 2023
Construction & Engineering		11.09	%		4.17	%
Commercial Services & Supplies		7.74			15.33
Trading Companies & Distributors		7.18			9.52
Health Care Providers & Services		6.75			7.37
Electrical Equipment		6.30			—
Oil, Gas & Consumable Fuels		6.15			—
Electric Utilities		6.01			7.20
Energy Equipment & Services		5.42			1.41
Independent Power and Renewable Electricity Producers		4.73			0.80
Professional Services		4.62			6.33
Hotels, Restaurants & Leisure		3.90			5.69
Aerospace & Defense		3.78			—
Automobiles		3.67			1.20
Machinery		3.10			3.69
Household Products		2.63			4.20
Textiles, Apparel & Luxury Goods		2.13			3.21
IT Services		1.83			3.63
Automobile Components		1.46			1.62
Distributors		1.37			2.80
Chemicals		1.29			2.55
Containers & Packaging		1.02			1.98
Building Products		0.94			1.06
Personal Care Products		0.76			1.12
Diversified		0.75			—
Air Freight & Logistics		0.72			1.36
Metals & Mining		0.57			0.85
Diversified Consumer Services		0.57			1.87
Specialty Retail		0.53			—
Software		0.44			3.48
Biotechnology		0.38			1.40
Leisure Products		0.38			0.56
Technology Hardware, Storage & Peripherals		0.34			—
Insurance		0.32			3.16
Health Care Equipment & Supplies		0.31			0.88
Construction Materials		0.28			—
Ground Transportation		0.18			0.69
Gas Utilities		0.19			0.27
Health Care Technology		0.17			0.28
Electronic Equipment, Instruments & Components		—			0.32
Total		100.00	%		100.00	%

The geographic composition of investments at cost and fair value as of June 30, 2024 and December 31, 2023 were as follows:


	June 30, 2024										December 31, 2023
	Amortized Cost		Fair Value		% of Total Investments at Fair Value			Fair Value as % of Net Assets			Amortized Cost		Fair Value		% of Total Investments at Fair Value			Fair Value as % of Net Assets
United States	$	500,145,598	$	506,278,706		95.95	%		149.69	%	$	340,353,603	$	347,440,385		98.60	%		156.78	%
Canada		3,886,039		3,995,825		0.76	%		1.18	%		3,885,951		3,954,000		1.12	%		1.78	%
Germany		17,372,501		17,361,971		3.29	%		5.13	%		—		—		—			—
Luxembourg		—		—		—			—			983,761		984,135		0.28	%		0.44	%
Total	$	521,404,138	$	527,636,502		100.00	%		156.00	%	$	345,223,315	$	352,378,520		100.00	%		159.00	%

The following tables present the fair value hierarchy of the Company’s investment portfolio as of June 30, 2024 and December 31, 2023:


	June 30, 2024
Assets	Level 1		Level 2		Level 3		Total
First Lien Debt	$	—	$	155,356,443	$	335,836,232	$	491,192,675
Second Lien Debt		—		—		20,571,894		20,571,894
Subtotal	$	—	$	155,356,443	$	356,408,126	$	511,764,569
Investment measured at net asset value(1)								15,871,933
Total investments							$	527,636,502


	December 31, 2023
Assets	Level 1		Level 2		Level 3		Total
First Lien Debt	$	—	$	179,350,279	$	138,418,209	$	317,768,488
Second Lien Debt	—		—			19,050,076		19,050,076
Subtotal	$	—	$	179,350,279	$	157,468,285	$	336,818,564
Investment measured at net asset value(1)								15,559,956
Total investments							$	352,378,520

(1) The Company, as a practical expedient, estimates the fair value of its investment in KKR Tinder TFC Aggregator L.P. using the net asset value of the Company’s members’ interest in the entity. As such, the fair value has not been classified within the fair value hierarchy.

The following tables present changes in the fair value of investments for which Level 3 inputs were used to determine the fair value for the three and six months ended June 30, 2024 and June 30, 2023, respectively:


	First Lien Debt			Second Lien Debt			Total
Balance as of March 31, 2024	$	215,939,500		$	19,803,414		$	235,742,914
Purchases of investments		140,921,962			—			140,921,962
Proceeds from principal pre-payments and sales of investments		(31,046,387	)		—			(31,046,387	)
Payment-in-kind		465,108			692,137			1,157,245
Net accretion of discount on investments		835,950			119,644			955,594
Net realized gain (loss)		282,797			—			282,797
Net change in unrealized appreciation/(depreciation)		171,879			(43,301	)		128,578
Transfers into Level 3		9,255,423			—			9,255,423
Transfers out of Level 3		(990,000	)		—			(990,000	)
Balance as of June 30, 2024	$	335,836,232		$	20,571,894		$	356,408,126

Net change in unrealized appreciation (depreciation) on Level 3 investments still held at the end of the period	$	171,879		$	(43,301	)	$	128,578


	First Lien Debt			Second Lien Debt			Total
Balance as of December 31, 2023	$	138,418,209		$	19,050,076		$	157,468,285
Purchases of investments		239,317,012			—			239,317,012
Proceeds from principal pre-payments and sales of investments		(36,529,551	)		—			(36,529,551	)
Payment-in-kind		766,126			1,373,534			2,139,660
Net accretion of discount on investments		1,257,980			233,496			1,491,476
Net realized gain (loss)		300,109			—			300,109
Net change in unrealized appreciation/(depreciation)		520,025			(85,212	)		434,813
Transfers into Level 3		1,981,667			—			1,981,667
Transfers out of Level 3		(10,195,345	)		—			(10,195,345	)
Balance as of June 30, 2024	$	335,836,232		$	20,571,894		$	356,408,126

Net change in unrealized appreciation (depreciation) on Level 3 investments still held at the end of the period	$	520,025		$	(85,212	)	$	434,813

Level 2 investments are valued using prices obtained from pricing services. The Company had $8,265,423 and $8,213,678 transfers between levels on a net basis during the three and six months ended June 30, 2024, respectively.


	First Lien Debt			Second Lien Debt		Total
Balance as of March 31, 2023	$	—		$	—	$	—
Purchases of investments		59,279,599			13,500,000		72,779,599
Proceeds from principal pre-payments and sales of investments		(325,927	)		—		(325,927	)
Payment-in-kind		—			1,500,000		1,500,000
Net accretion of discount on investments		15,365			4,322		19,687
Net change in unrealized appreciation/(depreciation)		(8,971	)		2,650,678		2,641,707
Transfers into Level 3		—			—		—
Transfers out of Level 3		—			—		—
Balance as of June 30, 2023	$	58,960,066		$	17,655,000	$	76,615,066

Net change in unrealized appreciation (depreciation) on Level 3 investments still held at the end of the period	$	(8,971	)	$	2,650,678	$	2,641,707


	First Lien Debt			Second Lien Debt		Total
Balance as of February 1, 2023 (commencement of operations)	$	—		$	—	$	—
Purchases of investments		59,279,599			13,500,000		72,779,599
Proceeds from principal pre-payments and sales of investments		(325,927	)		—		(325,927	)
Payment-in-kind		—			1,500,000		1,500,000
Net accretion of discount on investments		15,365			4,322		19,687
Net change in unrealized appreciation/(depreciation)		(8,971	)		2,650,678		2,641,707
Transfers into Level 3		—			—		—
Transfers out of Level 3		—			—		—
Balance as of June 30, 2023	$	58,960,066		$	17,655,000	$	76,615,066

Net change in unrealized appreciation (depreciation) on Level 3 investments still held at the end of the period	$	(8,971	)	$	2,650,678	$	2,641,707

The Company had no transfers between levels during the three months ended June 30, 2023 and the period from February 1, 2023 (commencement of operations) to June 30, 2023.

The valuation techniques and significant unobservable inputs used in the valuation of Level 3 investments as of June 30, 2024 and December 31, 2023 were as follows:


Investment Type	Fair Value as of June 30, 2024		Valuation Technique	Unobservable Input	Range	Weighted Average (2)
Second Lien Debt	$	20,571,894	Discounted cash flow	Discount rate	15.5%	15.5%
First Lien Debt		289,949,995	Discounted cash flow	Discount rate	10.15% - 15.00%	12.06%
		28,524,266	Market quotations	Broker quoted price	96.5.00 - 100.50		99.43
		17,361,971	Transactional Value (1)	N/A	N/A	N/A
	$	356,408,126

(1)

Fair value was determined based on transaction pricing or recent acquisition or sale as the best measure of fair value with no material changes in operations of the related portfolio companies since the transaction date.

(2)

Unobservable inputs were weighted by the relative fair value of investments.


Investment Type	Fair Value as of December 31, 2023		Valuation Technique	Unobservable Input	Range	Weighted Average (2)
Second Lien Debt	$	19,050,076	Discounted cash flow	Discount rate	15.50%	15.50%
First Lien Debt		79,221,269	Discounted cash flow	Discount rate	9.86% - 13.44%	10.95%
		18,288,599	Market quotations	Broker quoted price	95.75 - 100.50		98.35
		40,908,341	Transactional Value(1)	N/A	N/A	N/A
	$	157,468,285

(1)

(2)

Unobservable inputs were weighted by the relative fair value of investments.

Note 5. Derivatives

The Company enters into derivative financial instruments in the normal course of business to achieve certain risk management objectives, including managing its foreign currency risk exposures on its portfolio holdings.

The fair value of foreign currency contracts are included within Derivative assets at fair value and Derivative liabilities at fair value, respectively, in the Consolidated Statements of Assets and Liabilities.

The table below presents the aggregate notional amount and fair value of the Company’s derivative financial instruments as of June 30, 2024:


	June 30, 2024
Derivative Assets	Level 1		Level 2		Level 3		Total Fair Value		Notional
Foreign currency forward contract	$	—	$	11,637	$	—	$	11,637	$	17,497,288
Total Derivatives assets at fair value	$	—	$	11,637	$	—	$	11,637	$	17,497,288
Cash collateral received								—

Derivative Liabilities
Foreign currency forward contract	$	—	$	—	$	—	$	—	$	—
Total Derivatives liabilities at fair value	$	—	$	—	$	—	$	—	$	—
Cash collateral posted							$	640,000

The Company had not entered into any derivative financial instruments as of December 31, 2023.

In the table above:

•

The fair value of derivatives assets and derivative liabilities is presented on a gross basis.

•

The notional amount represents the absolute value amount of all outstanding derivative contracts.

•

All foreign currency derivatives are not designated in hedge relationships.

•

The Company has not applied counterparty netting or collateral netting; as such, the amounts of cash collateral received and posted are not offset against the derivative assets and derivative liabilities in the Consolidated Statements of Assets and Liabilities.

The table below presents the impact to the Consolidated Statements of Operations from derivative assets and liabilities not designated in a qualifying hedge accounting relationship for the three and six month periods ended June 30, 2024 and June 30, 2023, respectively. The unrealized gains and losses on the derivative assets and derivative liabilities not designated in a qualifying hedge accounting relationship are included within Net change in unrealized appreciation (depreciation) on Derivative instruments in the Consolidated Statements of Operations. The realized gains and losses on the derivative assets and derivative liabilities not designated in a qualifying hedge accounting relationship are included within Foreign currency and other transactions in the Consolidated Statements of Operations.


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2024		2023		2024		2023
Unrealized gain (loss)
Foreign currency forward contract	$	11,637	$	—	$	11,637	$	—
Total Unrealized gain (loss)	$	11,637	$	—	$	11,637	$	—
Realized gain (loss)
Foreign currency forward contract	$	—	$	—	$	—	$	—
Total Realized gain (loss)	$	—	$	—	$	—	$	—

In order to better define its contractual rights and to secure rights that will help the Company mitigate its counterparty risk, the Company entered into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”). An ISDA Master Agreement is a bilateral agreement between the

Company and a counterparty that governs OTC derivatives, including foreign currency forward contracts, and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of a default (close-out netting) or similar event, including the bankruptcy or insolvency of the counterparty.

Note 6. Borrowing

On April 20, 2023, KLCC SPV GS1 LLC, a Delaware limited liability company and newly formed subsidiary of the Company, entered into a credit agreement with Goldman Sachs Bank USA (the “Secured Credit Facility”). The maximum principal amount of the Secured Credit Facility as of June 30, 2024 is $300 million, which can be drawn in U.S. dollars subject to certain conditions. The maturity date of the Secured Credit Facility is May 1, 2028.

Amounts drawn under the Secured Credit Facility will bear interest at Term SOFR plus a margin. Advances used to finance the purchase or origination of loans under the Secured Credit Facility initially bear interest at Term SOFR plus a spread of (i) if the percentage of loans that are broadly syndicated loans (“BSL”) is 60% or higher on each day during such interest period, 3.25%, (ii) if the percentage of loans that are BSL is less than 60% during any day during such interest period but higher than 30% on each day during such interest period, 3.35% and (iii) in relation to either (A) any period in the 18 months following the closing of the Secured Credit Facility during which the percentage of loans that are BSL is less than 30% on any day during such interest period or (B) any interest period that occurs more than 18 months following the closing of the Secured Credit Facility, 3.50%. In addition, under the Secured Credit Facility, KLCC SPV GS1 LLC is required to utilize a minimum percentage of the financing commitments (such amount, the “Minimum Utilization Amount”), with unused amounts below such Minimum Utilization Amount accruing a fee (“Minimum Utilization Fee”). On November 14, 2023, the Periods and Target Utilization Percentages set forth in the Minimum Utilization Payment Table in the Secured Credit Facility were amended. Such amendments were not material to the Company’s financial statements. As of June 30, 2024, there were no unused amounts subject to the Minimum Utilization Fee. Additionally, KLCC SPV GS1 LLC is required to pay non-utilization fees (“Non-Utilization Fees”), on an amount equal to the excess (if any) of (x) the Adjusted Maximum Facility Amount in effect on such day over (y) the greater of the Minimum Utilization Amount and the Loan Amount on such day at a rate of 1.00% per annum. Each defined term without definition in this paragraph shall have the meaning ascribed to such term in the Secured Credit Facility.

The Secured Credit Facility contains customary covenants, including certain limitations on the activities of KLCC SPV GS1 LLC, including limitations on incurrence of incremental indebtedness, and customary events of default. The Secured Credit Facility is secured by a perfected first priority security interest in the assets of KLCC SPV GS1 LLC and on any payments received by KLCC SPV GS1 LLC in respect of those assets. Assets pledged to the lenders under the Secured Credit Facility will not be available to pay the other debts of the Company. As of June 30, 2024, the Company was in compliance with all covenants and other requirements under the Secured Credit Facility.

The estimated fair value of the Secured Credit Facility approximated the principal value of $255,000,000 on the consolidated statement of assets and liabilities as of June 30, 2024 and is categorized as Level III under the ASC 820 fair value hierarchy.

Borrowings of KLCC SPV GS1 LLC are considered borrowings of the Company for purposes of complying with the asset coverage requirements under the 1940 Act.

The following tables summarize the average debt outstanding and the interest rates on the Secured Credit Facility for the three and six months ended June 30, 2024 and June 30, 2023, respectively:


	For the Three Months Ended June 30,
	2024			2023
Average Debt Outstanding	$	255,000,000		$	1,616,667
Effective Interest Rate		9.24	%		8.49	%
Weighted Average Interest Rate (1)		8.79	%		8.49	%

(1)

The calculation of weighted average interest rate does not include minimum utilization fees, non-utilization fees or the amortization of deferred financing costs.


	For the Six Months Ended June 30,
	2024			2023
Average Debt Outstanding	$	238,556,019		$	1,616,667
Effective Interest Rate		9.54	%		8.49	%
Weighted Average Interest Rate (1)		8.80	%		8.49	%

(1)

The calculation of weighted average interest rate does not include minimum utilization fees, non-utilization fees or the amortization of deferred financing costs.

For the three and six months ended June 30, 2024 and June 30, 2023, the components of interest expense related to the Secured Credit Facility were as follows:


	For the Three Months Ended June 30,
	2024		2023
Borrowing interest expense	$	5,589,377	$	22,875
Minimum utilization fee		—		—
Non-utilization fees		113,750		505,639
Amortization of deferred financing costs		171,595		133,881
Total interest and debt financing expense	$	5,874,722	$	662,395


	For the Six Months Ended June 30,
	2024		2023
Borrowing interest expense	$	10,462,158	$	22,875
Minimum utilization fee		261,056		—
Non-utilization fees		280,486		505,639
Amortization of deferred financing costs		343,189		133,881
Total interest and debt financing expense	$	11,346,889	$	662,395

Note 7: Commitments and Contingencies

In the normal course of business, the Company enters into contracts that provide a variety of general indemnifications. Any exposure to the Company under these arrangements could involve future claims that may be made against the Company. As of June 30, 2024, no such claims exist or are expected to arise and, accordingly, the Company has not accrued any liability in connection with such indemnifications.

From time to time, the Company may become a party to certain legal proceedings incidental to the normal course of its business. As of June 30, 2024, management is not aware of any pending or threatened material litigation.

The Company may, from time to time, enter into commitments to fund investments. As of June 30, 2024 and December 31, 2023, the Company had the following outstanding commitments to fund investments in current portfolio companies:


	June 30, 2024		December 31, 2023
Unfunded delayed draw term loan commitments	$	11,521,493	$	8,336,031
Unfunded revolver obligations		6,141,844		6,067,963
Total Unfunded	$	17,663,337	$	14,403,994

The Consolidated Schedule of Investments include certain delayed draw and revolving loan facilities with unfunded balances at June 30, 2024 and December 31, 2023, as follows:


Issuer	Commitment Type	Commitment Expiration Date	Unfunded Commitment		Fair Value as of June 30, 2024
The Action Environmental Group, Inc.	Delayed Draw Term Loan	10/24/2030		324,000		1,620
The Action Environmental Group, Inc.	Delayed Draw Term Loan	10/24/2030		130,435		652
Aramsco, Inc.	Delayed Draw Term Loan	10/10/2030		222,772		(278	)
BP Loenbro Holdings Inc	Delayed Draw Term Loan	2/1/2029		1,834,862		(14,679	)
BP Loenbro Holdings Inc	Revolver	2/1/2029		825,688		(6,606	)
MEI Buyer LLC	Delayed Draw Term Loan	6/29/2029		2,409,639		(63,253	)
MEI Buyer LLC	Revolver	6/29/2029		2,650,602		(69,578	)
PetVet Care Centers, LLC	Delayed Draw Term Loan	11/15/2029		1,768,583		(33,692	)
PetVet Care Centers, LLC	Revolver	11/15/2030		1,768,583		(33,073	)
RSC Acquisition, Inc.	Delayed Draw Term Loan	11/1/2029		286,429		(2,148	)
Ryan, LLC	Delayed Draw Term Loan	11/14/2030		190,476		524
Sales Performance International, LLC	Delayed Draw Term Loan	8/24/2028		896,970		(11,212	)
Tank Holding Corp.	Delayed Draw Term Loan	3/31/2028		900,548		(15,760	)
Voltagrid LLC	Delayed Draw Term Loan	2/28/2029		3,453,750		(104,131	)
Total Unfunded Balances			$	17,663,337	$	(351,614	)


Issuer	Commitment Type	Commitment Expiration Date	Unfunded Commitment		Fair Value as of December 31, 2023
Aramsco, Inc.	Delayed Draw Term Loan	10/10/2030		445,545		(927	)
Imagefirst Holdings, LLC	Delayed Draw Term Loan	4/27/2028		666,667		(3,333	)
MEI Buyer LLC	Delayed Draw Term Loan	6/29/2029		2,409,639		(48,313	)
MEI Buyer LLC	Revolver	6/29/2029		2,602,410		(73,778	)
PetVet Care Centers, LLC	Delayed Draw Term Loan	11/15/2029		1,768,583		(17,354	)
PetVet Care Centers, LLC	Revolver	11/15/2030		1,768,583		(34,430	)
RSC Acquisition Inc	Delayed Draw Term Loan	11/1/2029		1,638,571		(16,386	)
Ryan LLC	Delayed Draw Term Loan	11/14/2030		190,476		417
Sales Performance International, LLC	Revolver	8/24/2028		1,696,970		(32,893	)
Tank Holding Corp	Delayed Draw Term Loan	3/31/2028		1,086,115		(46,160	)
The Action Environmental Group	Delayed Draw Term Loan	10/24/2030		130,435		326
Total Unfunded Balances			$	14,403,994	$	(272,831	)

Note 8. Net Assets

Subscriptions

The Company is a non-exchange traded, perpetual-life BDC, which is a BDC whose shares are not listed for trading on a stock exchange or other securities market. We previously offered our Common Shares (the “Private Offering”), pursuant to the terms set forth in the Company’s Confidential Private Placement Memorandum and subscription agreements that we entered into with investors in connection with the Private Offering (each, a “Subscription Agreement”). The Common Shares in the Private Offering were sold under the exemption provided by Section 4(a)(2) of the Securities Act of 1933 as amended (the “Securities Act”) only to investors that are “accredited investors” in accordance with Rule 506 of Regulation D promulgated under the Securities Act, and other exemptions of similar import in the laws of the states and jurisdictions where the Private Offering was made.

Under the Private Offering, the Company raised equity capital through one or more closings (“Closings”) at which the Company accepted funds from investors in connection with such investors’ purchases of Common Shares (the first such Closing the “Initial Closing”). The Initial Closing occurred on February 1, 2023 (the “Initial Closing Date”). Each Closing generally occurred on a monthly basis on the first calendar day of the month or on a date as determined by the Company or the Advisor in its sole discretion. In exchange for its subscription amount, each investor

received an amount of Common Shares equal to its subscription amount divided by the applicable price per Common Share (“Price Per Common Share”). The Price Per Common Share means the Company’s then-calculated net asset value per Share determined by the Company as of a date within 48 hours of the Closing Date, which was determined in accordance with the limitations under Section 23 of the 1940 Act. The Company may set the Price Per Common Share above the then-calculated net asset value per Common Share based on a variety of factors, including the total amount of the Company’s organizational and other expenses. The Company’s final Closing under the Private Offering occurred on June 1, 2024.

On June 24, 2024, the Company received a notice of effectiveness related to the Company’s registration statement on Form N-2 (as amended, the “N-2 Registration Statement”). Pursuant to the N-2 Registration Statement and the Multi-Class Order, the Company intends to publicly offer up to $2,000,000,000 of its Class S, Class D, and Class I Common Shares (the “Public Offering”). As of June 30, 2024, the Company had not accepted any subscriptions in the Public Offering.

For the six months ended June 30, 2024 and June 30, 2023, related parties purchased 326,554 Common Shares of the Company for aggregate proceeds of $6,750,000 and 40,100 Common Shares of the Company for aggregate proceeds of $802,000, respectively.

Certain third-party investors make their investment in the Company through certain affiliated feeder entities specifically designed to invest in the Company. As of June 30, 2024, and December 31, 2023, 9,303,198 and 6,465,480 shares were owned by these affiliated feeder entities, respectively.

The following tables summarize the total Common Shares issued and proceeds received under the Private Offering during the six months ended June 30, 2024 and June 30, 2023, respectively:


Date of Closing	Common Shares Issued		NAV per Common Share		Subscription Price Per Common Share		Proceeds Received
January 1, 2024		94,983	$	20.53	$	20.53	$	1,950,000
February 1, 2024		241,313	$	20.72	$	20.72	$	5,000,000
March 1, 2024		10,206	$	20.87	$	20.87	$	213,000
April 1, 2024		46,433	$	20.56	$	20.56	$	954,657
May 1, 2024		2,417,953	$	20.72	$	20.72	$	50,100,000
June 1, 2024		2,279,887	$	20.31	$	20.31	$	46,304,500
Totals		5,090,775					$	104,522,157


Date of Closing	Common Shares Issued		NAV per Common Share		Subscription Price Per Common Share		Proceeds Received
December 31, 2022		500	$	20.00	$	20.00	$	10,000
February 1, 2023		4,037,850	$	20.00	$	20.00	$	80,757,000
March 1, 2023		50,251	$	19.80	$	19.90	$	1,000,000
March 31, 2023		6,314,993	$	19.78	$	19.81	$	125,100,000
May 1, 2023		62,877	$	19.87	$	19.88	$	1,250,000
June 1, 2023		3,579	$	19.55	$	19.56	$	70,000
		10,470,050					$	208,187,000

Repurchases

No investor has the right to require the Company to redeem his, her or its Common Shares. Subject to market conditions and the Advisor’s commercially reasonable judgment, the Company intends from time to time to offer to repurchase Common Shares pursuant to written tenders by shareholders as further described herein. The Advisor expects that, generally, it will cause the Company to offer to repurchase Common Shares from shareholders quarterly, with such repurchases to occur as of each March 31, June 30, September 30 and December 31 or the next business day, as applicable. Subject to market conditions, the Advisor will in its commercially reasonable judgment cause the Company to repurchase Common Shares from shareholders on a quarterly basis in an amount not to exceed 5.0% of

the Company’s net asset value; provided, however, that the Advisor, subject to the Board’s discretion and approval, shall cause the Company to repurchase Common Shares from shareholders in an amount at least equal to 10.0% of the Company’s net asset value in respect of the fourth calendar quarter of each of the eighth and tenth calendar years following the Initial Closing Date. The Advisor may in its commercially reasonable judgment seek to provide liquidity to shareholders through one or more methods, including conducting periodic tender offers or winding down the Company.

Prior to any Liquidity Event (as defined below), and subject to market conditions and the Advisor’s commercially reasonable judgment, the Company intends to offer quarterly repurchases, with the first quarterly repurchase offer having commenced on the first business day of the second quarter of 2023. A “Liquidity Event” is defined as including (1) an IPO or Exchange Listing, or (2) a Sale Transaction. A “Sale Transaction” means (a) the sale of all or substantially all of the Company’s assets to, or other liquidity event with, another entity or (b) a transaction or series of transactions, including by way of merger, consolidation, recapitalization, reorganization, or sale of stock in each case for consideration of either cash and/or publicly listed securities of the acquirer. Thereafter, each repurchase offer will generally commence approximately 90 days prior to the applicable quarter-end repurchase date. With respect to any such repurchase offer, investors tendering shares must do so by a date specified in the notice describing the terms of the repurchase offer.

There is no minimum portion of a shareholder’s Common Shares which must be repurchased in any repurchase offer. The Company has no obligation to repurchase Common Shares at any time; any such repurchases will only be made at such times, in such amounts and on such terms as may be determined by the Advisor, in its sole discretion. In determining whether the Company should offer to repurchase Common Shares, the Advisor will consider the timing of such an offer, as well as a variety of operational, business and economic factors.

If a quarterly repurchase offer is oversubscribed by shareholders who tender Common Shares, the Company will repurchase a pro rata portion by value of the Common Shares tendered by each shareholder, extend the repurchase offer, or take any other action with respect to the repurchase offer permitted by applicable law. The Company also has the right to repurchase all of a shareholder’s Common Shares at any time if the aggregate value of such shareholder’s Common Shares is, at the time of such compulsory repurchase, less than the required minimum account balance applicable for the Company. In addition, the Company has the right to repurchase Common Shares if the Company determines that the repurchase is in the best interest of the Company or upon the occurrence of certain events specified in the Subscription Agreement.

Repurchases will generally be paid in cash. Any shareholder that submits a repurchase request in excess of $25 million may elect to receive its repurchase proceeds in kind by checking the corresponding box on the tender offer form. The Company will seek to distribute a pro rata slice of the entire portfolio to such shareholder to the extent practicable.

On March 1, 2024, the Company commenced its quarterly tender offer to purchase up to 5.0% of the Company’s Common Shares outstanding as of December 31, 2023 (539,263 Common Shares) that are tendered by Shareholders by 11:59 p.m., Eastern Time, on March 29, 2024 and not withdrawn. No shareholders tendered by the deadline.

On May 30, 2024, the Company commenced its quarterly tender offer to purchase up to 5.0% of the Company’s Common Shares outstanding as of March 31, 2024 (575,336 Common Shares) that are tendered by Shareholders by 11:59 p.m., Eastern Time, on June 28, 2024 and not withdrawn. No shareholders tendered by the deadline.

Distributions

The Company intends to make quarterly distributions to shareholders. Distributions from net investment income and net realized capital gains are determined in accordance with U.S. federal income tax regulations, which may differ from those amounts determined in accordance with GAAP. Distributions will be made to shareholders at such times and in such amounts as determined by the Board. The Company may pay distributions to its Shareholders in a year in excess of its net ordinary income and capital gains for that year and, accordingly, a portion of such distributions may constitute a return of capital for U.S. federal income tax purposes. The Company intends to timely distribute to its Shareholders substantially all of its annual taxable income for each year, except that the Company may

retain certain net capital gains for reinvestment and, depending upon the level of the Company’s taxable income earned in a year, the Company may choose to carry forward taxable income for distribution in the following year and pay any applicable tax. The specific tax characteristics of the Company’s distributions will be reported to Shareholders after the end of the calendar year. All distributions will be subject to available funds, and no assurance can be given that the Company will be able to declare such distributions in future periods.

In addition, the Company has adopted a dividend reinvestment plan (“DRP”), pursuant to which each shareholder will receive dividends in the form of additional Common Shares unless they notify the Company that they instead desire to receive cash or a combination of cash and Common Shares as set forth below. If a shareholder receives dividends in the form of Common Shares, dividend proceeds that otherwise would have been distributed in cash will be retained by the Company for reinvestment. Shareholders who receive dividends and other distributions in the form of Common Shares generally are subject to the same U.S. federal tax consequences as investors who elect to receive their distributions in cash; however, since their cash dividends will be reinvested, those investors will not receive cash with which to pay any applicable taxes on re-invested dividends. A shareholder may elect to receive dividends and other distributions in cash or a combination of cash and Common Shares by notifying the Company in the manner set forth in the shareholder’s Subscription Agreement at least 5 business days prior to the dividend or distribution declaration date fixed by the Board for such dividend. If such notice is received by the Company less than 5 business days prior to the relevant dividend or distribution declaration date, then that dividend will be paid in the form of Common Shares and any subsequent dividends will be paid in cash or a combination of cash and Common Shares.

The following tables summarize the distributions paid and Common Shares issued pursuant to the DRP for the six months ended June 30, 2024 and June 30, 2023, respectively:


Date Declared	Record Date	Payment Date	Amount Per Share		Distribution Declared		DRP Shares Issued		Value of DRP Shares Issued
May 13, 2024	May 13, 2024	June 26, 2024	$	0.58	$	8,136,028		263,981	$	5,361,226
March 26, 2024	March 26, 2024	March 28, 2024	$	0.57	$	6,414,447		195,395	$	4,077,919
December 29, 2023	December 31, 2023	January 30, 2024	$	0.04	$	431,411		12,826	$	263,317
November 10, 2023	December 31, 2023	January 30, 2024	$	0.52	$	5,608,339		166,736	$	3,423,081
					$	20,590,225			$	13,125,543

Of the total distributions paid during the three and six months ended June 30, 2024, $2,774,802 and $7,464,682 was distributed in cash, respectively. Of the total distributions paid for the six months ended June 30, 2024 $2,353,352 was payable as of December 31, 2023.


Date Declared	Record Date	Payment Date	Amount Per Share		Distribution Declared		DRP Shares Issued		Value of DRP Shares Issued
May 9, 2023	May 9, 2023	June 29, 2023	$	0.30	$	3,139,941		155,348	$	3,037,048

Of the total distributions paid during the three and six months ended June 30, 2023, $102,893 and $102,893 was distributed in cash, respectively.

The Company may fund its cash distributions to shareholders from any source of funds available to the Company, including but not limited to offering proceeds, net investment income from operations, capital gains proceeds from the sale of assets, dividends or other distributions paid to it on account of preferred and common equity investments in portfolio companies and expense support from the Advisor, which is subject to recoupment.

For the three and six months ended June 30, 2024, a portion of the Company’s distributions resulted from expense support from the Advisor, and future distributions may result from expense support from the Advisor, each of which is subject to repayment by the Company within three years from the date of payment. Shareholders should understand that any such distribution is not based solely on the Company’s investment performance, and can only be sustained if the Company achieves positive investment performance in future periods and/or the Advisor continues to provide expense support. Shareholders should also understand that the Company’s future repayments of expense

support will reduce the distributions that they would otherwise receive. There can be no assurance that the Company will achieve the performance necessary to sustain these distributions, or be able to pay distributions at all.

Sources of distributions, other than net investment income and realized gains on a GAAP basis, include required adjustments to GAAP net investment income in the current period to determine taxable income available for distributions. The following table presents the sources of distributions on a GAAP basis that the Company declared on its Common Shares for the six months ended June 30, 2024 and June 30, 2023, respectively:


	For the Six Months Ended June 30,
	2024				2023
	Per Share		Amount		Per Share		Amount
Net investment income		0.77	$	12,776,694		0.24	$	2,544,546
Net realized gains		0.10		1,657,169		0.02		180,229
Distributions in excess of net investment income		0.01		116,612		0.04		415,166
Total		0.88	$	14,550,475		0.30	$	3,139,941

Note 9. Financial Highlights

The following are financial highlights for the three months ended June 30, 2024 and June 30, 2023, respectively:


	For the Six Months Ended June 30,
	2024			2023
Per Share Data:
Net asset value, beginning of period	$	20.55		$	20.00
Results of operations:
Net investment income (loss)(1)		1.01			0.38
Net unrealized and realized gain (loss)(2)		0.07			(0.02	)
Net increase (decrease) in net assets resulting from operations		1.08			0.36
Distribution declared (3)		(1.15	)		(0.30	)
Total increase (decrease) in net assets		(0.07	)		0.06
Net asset value, end of period	$	20.48		$	20.06
Total return based on NAV (4)		5.26	%		1.80	%
Shares outstanding, end of period		16,514,981			10,625,397

Ratios and supplemental data:
Net assets, end of period	$	338,235,804		$	213,168,766
Weighted-average net assets		260,491,931			131,835,908
Weighted-average shares outstanding		12,650,659			6,638,018
Ratio of net expenses to average net assets (5)		13.20	%		5.33	%
Ratio of net expenses before voluntary waivers to average net assets(5)		13.20	%		5.42	%
Ratio of net investment income to average net assets (5)		9.61	%		4.26	%
Portfolio turnover(7)		31.41	%		35.00	%
Asset Coverage Ratio (6)		232.64	%		1679.00	%

(1)

The per share data was derived by using the weighted average shares outstanding during the period.

(2)

The amount shown for a Common Share outstanding does not correspond with the aggregate realized and unrealized gain (loss) on investments for the period due to the timing of capital share transactions of Common Shares in relation to fluctuating market values of investments of the Company.

(3)

Distributions are based on the number of shares outstanding on the date the distribution was declared.

(4)

Total return based on net asset value calculated as the change in Net Asset Value per share during the respective periods, assuming distributions, if any, are reinvested on the effects of the performance of the Company during the period. Total return is not annualized.

(5)

Annualized, with the exception of certain non-recurring expenses.

(6)

Asset coverage ratio is equal to (i) the sum of (A) net assets at end of period and (B) debt outstanding at end of period, divided by (ii) total debt outstanding at the end of the period.

(7)

The period ended June 30, 2023 was calculated from February 1, 2023 (commencement of operations) to June 30, 2023.

Note 10. Subsequent Events

The Company’s management has evaluated subsequent events through the date of issuance of these consolidated financial statements and has determined that there are no subsequent events outside the ordinary scope of business that require adjustment to, or disclosure in, the consolidated financial statements other than those disclosed below.

Subscriptions

Pursuant to the Public Offering, the Company received $51.9 million of net proceeds relating to the issuance of Class I Common Shares for subscriptions effective August 1, 2024.

Distributions

On August 12, 2024, the Board of Trustees declared a distribution of $0.56 per share for the third quarter of 2024, payable on September 26, 2024 to shareholders of record on August 12, 2024.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the accompanying consolidated financial statements of Kennedy Lewis Capital Company (“we”, “us”, “our” and the “Company”) and the notes thereto and other financial information included elsewhere in this Quarterly Report on Form 10-Q.

Forward Looking Statements

Statements contained in this Form 10-Q (including those relating to current and future market conditions and trends in respect thereof) that are not historical facts are based on current expectations, estimates, projections, opinions and/or beliefs of the Company, its advisor, Kennedy Lewis Capital Holdings LLC (in such capacity, the “Advisor”), a Delaware limited liability company that is registered with the Securities and Exchange Commission (“SEC”) as an investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), Kennedy Lewis Investment Management LLC and/or its affiliates (collectively, “Kennedy Lewis”). Any such forward-looking statements may involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” “target,” “goals,” “plan,” “forecast,” “project,” other variations on these words or comparable terminology, or the negative of these words. These forward-looking statements are based on assumptions that may be incorrect, and we cannot assure you that the projections included in these forward-looking statements will come to pass. Our actual results could differ materially from those expressed or implied by the forward-looking statements as a result of various factors, including the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as well as the risk factors set forth in the “Risk Factors” section of our registration statement on Form N-2 filed on June 18, 2024 (the “N-2 Registration Statement”) and elsewhere in this Quarterly Report on Form 10-Q. Other factors that could cause our actual results and financial condition to differ materially include, but are not limited to, changes in political, economic or industry conditions, the interest rate environment or conditions affecting the financial and capital markets, and future changes in laws or regulations and conditions in our operating areas.

We have based the forward-looking statements included in this Quarterly Report on Form 10-Q on information available to us on the date of this Quarterly Report on Form 10-Q, and we assume no obligation to update any such forward-looking statements, unless we are required to do so by applicable law. However, you are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the SEC.

In addition to factors previously disclosed in our SEC reports, including the factors discussed in the “Risk Factors” section of our N-2 Registration Statement and those identified elsewhere in this report, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance:

•

The Company is a new company with limited operating history.

•

The Company has elected to be regulated as a business development company (a “BDC”), under the Investment Company Act of 1940, as amended (the “1940 Act”), which imposes numerous restrictions on the activities of the Company, including restrictions on leverage and on the nature of its investments.

•

The Company intends to invest primarily in privately-held companies for which very little public information exists. Such companies are also generally more vulnerable to economic downturns and may experience substantial variations in operating results.

•

The privately-held companies and below-investment-grade securities in which the Company will invest will be difficult to value and are illiquid.

•

Defaults by portfolio companies will harm the Company’s operating results.

•

Investment in the Company is suitable only for sophisticated investors and requires the financial ability and willingness to accept the high risks and lack of liquidity inherent in an investment in the Company.

•

An investment in our common shares of beneficial interest (the “Common Shares”) is not suitable for you if you might need access to the money you invest in the foreseeable future.

•

You should not expect to be able to sell your Common Shares, regardless of how we perform. Because you may not be able to sell your shares, you will be unable to reduce your exposure on any market downturn.

•

Our Common Shares are not currently listed on an exchange and given that we have no current intention of pursuing any such listing, it is unlikely that a secondary trading market will develop for our Common Shares. The purchase of our Common Shares is intended to be a long-term investment.

•

Our distributions are not guaranteed, and if made, may be funded from sources other than cash flow from operations, including the sale of assets, borrowings, return of capital or offering proceeds. Although we generally expect to fund distributions from cash flow from operations, we have not established limits on the amounts we may pay from such sources.

•

Distributions may also be funded in significant part, directly or indirectly, from temporary waivers or expense reimbursements borne by the Advisor or its affiliates, that may be subject to reimbursement to the Advisor or its affiliates. The repayment of any amounts owed to our affiliates will reduce future distributions to which investors would otherwise be entitled.

•

We use and expect to continue to use leverage, which will magnify the potential for loss on amounts invested in us.

•

The Company is subject to risks associated with the current interest rate environment and to the extent the Company uses debt to finance its investments, changes in interest rates will affect the cost of capital and net investment income.

•

High interest rates and interest rate volatility, including volatility associated with the decommissioning of the London Interbank Offered Rate (“LIBOR”) and the transition to new floating rate benchmarks, including the Secured Overnight Financing Rate (“SOFR”) and the Euro Interbank Offered Rate ("EURIBOR"), may adversely affect the Company’s business and results of operations.

•

The Company depends upon Kennedy Lewis, the Advisor and Kennedy Lewis Management LP (in such capacity, the “Administrator”) for its success and upon their access to investment professionals.

•

The Company operates in a highly competitive market for investment opportunities.

•

The Company’s debt investments may be risky and could result in the loss of all or part of its investments.

•

There are restrictions on holders of the Common Shares.

•

There is a risk that investors may not receive distributions.

•

We have implemented a share repurchase program, but only a limited number of Common Shares will be eligible for repurchase and repurchases will be subject to available liquidity and other significant restrictions.

•

The Company is operating in a period of capital markets disruption and economic uncertainty.

•

The Company’s regulatory structure and tax status as a BDC and a regulated investment company (a “RIC”) could limit certain of the Company’s investments or negatively affect the Company’s investment returns.

•

Future changes in laws or regulations and conditions in the Company’s operating areas could have an adverse impact on the Company.

You should not place undue reliance on these forward-looking statements. The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligations to update any forward-looking statement to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q.

Overview

The Company is an externally managed, diversified closed-end management investment company that has elected to be regulated as a BDC under the 1940 Act and intends to elect to be treated for U.S. federal income tax purposes, as a RIC under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). The Company was formed on February 10, 2022 (the “Inception Date”) as a Delaware statutory trust. The Company commenced operations as a privately offered BDC on February 1, 2023.

The Company previously offered its Common Shares pursuant to the terms set forth in the Company’s Confidential Private Placement Memorandum and subscription agreements that it entered into with investors in connection with its private offering of Common Shares (the “Private Offering”) (each, a “Subscription Agreement”). The Common Shares in the Private Offering were sold under the exemption provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), only to investors that are “accredited investors” in accordance with Rule 506 of Regulation D promulgated under the Securities Act, and other exemptions of similar import in the laws of the states and jurisdictions where the Private Offering was made. The Company’s final Closing under the Private Offering occurred on June 1, 2024.

On June 24, 2024, the Company received a notice of effectiveness related to the Company’s N-2 Registration Statement. Pursuant to the N-2 Registration Statement and an exemptive order received from the SEC on June 18, 2024 (the “Multi-Class Order”), the Company intends to publicly offer up to $2,000,000,000 of its Class S, Class D, and Class I Common Shares (the “Public Offering”). As of June 30, 2024, the Company had not accepted any subscriptions in the Public Offering.

The Company is externally managed by the Advisor. The Advisor oversees the management of the Company’s activities and is responsible for making investment decisions with respect to the Company’s portfolio.

The Company’s investment objectives are to maximize the total return to its shareholders in the form of current income and, to a lesser extent, capital appreciation. The Company employs a strategy to provide capital to middle market companies, with a focus on direct originations in private, first lien, senior secured, performing credits.

Financial and Operating Highlights


	At June 30, 2024		At December 31, 2023
Investment Portfolio	$	527,636,502	$	352,378,520
Net assets	$	338,235,804	$	221,615,920
Debt	$	255,000,000	$	195,000,000
Net asset value per share	$	20.48	$	20.55


	Portfolio Activity for the Six Months Ended June 30,
	2024			2023
Purchases during the period	$	304,246,026		$	303,557,803
Sales and principal repayments during the period	$	135,054,161		$	54,570,476
Net investments during the period	$	169,191,865		$	248,987,327
Number of portfolio companies at end of period		93			83
Weighted average contractual interest rate of investment commitments based on par		11.38	%		10.53	%

Portfolio and Investment Activity

As of June 30, 2024 and December 31, 2023, our investments consisted of the following:


	June 30, 2024 Fair Value		Percentage of Total Investments at Fair Value			December 31, 2023 Fair Value		Percentage of Total Investments at Fair Value
First Lien	$	491,192,675		93.09	%	$	317,768,488		90.18	%
Second Lien		20,571,894		3.90	%		19,050,076		5.41	%
Equity		15,871,933		3.01	%		15,559,956		4.41	%
Total	$	527,636,502		100.00	%	$	352,378,520		100.00	%

As of June 30, 2024 and December 31, 2023, all investments were considered to be income-producing investments.

RESULTS OF OPERATIONS

Our operating results for the three and six months ended June 30, 2024 and June 30, 2023, were as follows:


	For the Three Months Ended June 30,					For the Six Months Ended June 30,
	2024			2023		2024			2023
Total investment income	$	16,430,310		$	4,694,723	$	29,542,916		$	5,677,206
Less: Net expenses		9,012,817			2,138,462		16,766,222			3,132,660
Net investment income (loss)		7,417,493			2,556,261		12,776,694			2,544,546
Net realized gains (losses)		610,459			90,376		1,657,169			203,776
Net change in unrealized appreciation (depreciation)		(1,149,056	)		3,307,416		(911,204	)		2,336,337
Net increase (decrease) in net assets resulting from operations	$	6,878,896		$	5,954,053	$	13,522,659		$	5,084,659
Net investment income (loss) per share	$	0.45		$	0.24	$	0.77		$	0.24
Net increase (decrease) in net assets resulting from operations per share	$	0.42		$	0.56	$	0.82		$	0.48

Investment Income

The composition of our investment income for three and six months ended June 30, 2024 and June 30, 2023 were as follows:


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2024		2023		2024		2023
Interest income	$	15,928,451	$	4,691,444	$	28,517,979	$	5,673,927
Dividend income		467,467		—		934,934		—
Fee income		34,392		3,279		90,003		3,279
Total investment income	$	16,430,310	$	4,694,723	$	29,542,916	$	5,677,206

Operating Expenses

The composition of our operating expenses for the three and six months ended June 30, 2024 and June 30, 2023 were as follows:


	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2024			2023			2024			2023
Interest and debt fee expense	$	5,703,127		$	528,514		$	11,003,701		$	528,514
Management fees		899,154			655,300			1,615,906			866,349
Income incentive fee		1,017,122			—			1,709,772			—
Capital gain incentive fees		(68,141	)		317,514			72,984			317,514
Professional fees		622,133			534,712			1,222,284			947,456
Amortization of continuous offering costs		405,078			155,670			704,934			246,317
Administrative services expense		266,874			216,233			533,748			350,658
Amortization of deferred financing costs		171,595			133,881			343,189			133,881
Directors’ fees and expenses		99,999			100,000			199,998			166,667
Organization costs		—			32,938			—			218,472
Other expenses		131,047			155,469			246,652			176,741
Total expenses		9,247,988			2,830,231			17,653,168			3,952,569
Expense waiver		(235,171	)		(691,769	)		(886,946	)		(691,769	)
Management fee waiver		—			—			—			(128,140	)
Net expenses	$	9,012,817		$	2,138,462		$	16,766,222		$	3,132,660

Net Realized Gains (Losses) and Net Change in Unrealized Gains (Losses) on Investments

Net realized gains (losses) and net change in unrealized gains (losses) on investments for the three and six months ended June 30, 2024 and June 30, 2023 were as follows:


	For the Three Months Ended June 30,					For the Six Months Ended June 30,
	2024			2023		2024			2023
Net realized gains (losses)	$	610,459		$	90,376	$	1,657,169		$	203,776
Net change in unrealized gains (losses) on investments		(1,149,056	)		3,307,416		(911,204	)		2,336,337
Net realized and unrealized gains (losses)	$	(538,597	)	$	3,397,792	$	745,965		$	2,540,113

Liquidity and Capital Resources

We generate cash from (1) funds from investors in connection with such investors’ purchases of Common Shares, (2) cash flows from investments and operations, and (3) borrowings from banks or other lenders. Subject to prevailing market conditions, we intend to grow our portfolio of assets by raising additional capital, including through the prudent use of leverage available to us.

Our primary uses of cash are for (1) investments in portfolio companies and other investments to comply with certain portfolio diversification requirements, (2) the cost of operations (including paying the Advisor and the Administrator), (3) debt service of any borrowings and (4) cash distributions to the Company’s shareholders.

Borrowings

We use borrowed funds, known as “leverage,” to make investments and to attempt to increase returns to our shareholders by reducing our overall cost of capital. As a BDC, we are limited in the amount of leverage we can incur under the 1940 Act. We are only allowed to borrow amounts such that our asset coverage, as defined in the 1940 Act, equals at least 150% after such borrowing. As of June 30, 2024, we had $255 million par value of outstanding borrowings and our asset coverage ratio of total assets to total borrowings was 232.64%, compliant with the minimum asset coverage level of 150% generally required for a BDC by the 1940 Act.

We expect to maintain adequate liquidity and compliance with regulatory and contractual asset coverage requirements.

Sale of Unregistered Securities

The following table shows the issuances of Common Shares under the Private Offering, which were made pursuant to Subscription Agreements entered into with participating investors during the six months ended June 30, 2024 and June 30, 2023:


Date of Issuance	Common Shares Issued		Subscription Price per Common Share		Aggregate Consideration
January 2, 2024		94,983		20.53		1,950,000
February 1, 2024		241,313		20.72		5,000,000
March 1, 2024		10,206		20.87		213,000
April 1, 2024		46,433		20.56		954,657
May 1, 2024		2,417,953		20.72		50,100,000
June 1, 2024		2,279,887		20.31		46,304,500
		5,090,775			$	104,522,157

December 31, 2022		500		20.00		10,000
February 1, 2023		4,037,850		20.00		80,757,000
March 1, 2023		50,251		19.90		1,000,000
March 31, 2023		6,314,993		19.81		125,100,000
May 1, 2023		62,877		19.88		1,250,000
June 1, 2023		3,579		19.56		70,000
		10,470,050			$	208,187,000

Distributions

Distributions to shareholders are recorded on the record date. The amount to be distributed, if any, is determined by the Board each quarter, and is generally based upon the earnings estimated by the Advisor. The Company intends to distribute net capital gains (i.e., net long-term capital gains in excess of net short-term capital losses), if any, at least annually out of the assets legally available for such distributions. However, the Company may decide in the future to retain such capital gains for investment, incur a corporate-level tax on such capital gains, and elect to treat such capital gains as deemed distributions to shareholders.

In addition, we have adopted a dividend reinvestment plan, pursuant to which each shareholder will receive dividends in the form of additional Common Shares unless they notify the Company that they instead desire to receive cash or a combination of cash and Common Shares as set forth below. If a shareholder receives dividends in the form of Common Shares, dividend proceeds that otherwise would have been distributed in cash will be retained by the Company for reinvestment. Shareholders who receive dividends and other distributions in the form of Common Shares generally are subject to the same U.S. federal tax consequences as investors who elect to receive their distributions in cash; however, since their cash dividends will be reinvested, those investors will not receive cash with which to pay any applicable taxes on re-invested dividends. A shareholder may elect to receive dividends and other distributions in cash or a combination of cash and Common Shares by notifying the Company in the manner set forth in the

shareholder’s Subscription Agreement at least 5 business days prior to the dividend or distribution declaration date fixed by the Board for such dividend. If such notice is received by the Company less than 5 business days prior to the relevant dividend or distribution declaration date, then that dividend will be paid in the form of Common Shares and any subsequent dividends will be paid in cash or a combination of cash and Common Shares.

On March 26, 2024, we declared a distribution of $0.57 per share, paid on March 28, 2024 to shareholders of record as of March 26, 2024. On May 13, 2024, we declared a distribution of $0.58 per share, paid on June 26, 2024 to shareholders of record as of May 13, 2024.

Taxation as a RIC

We intend to elect to be treated as a RIC under Subchapter M of the Code. As a RIC, we generally will not be subject to corporate-level U.S. federal income taxes on any net ordinary taxable income or capital gains that we distribute as dividends for U.S. federal income tax purposes to our shareholders. To qualify as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements. In addition, in order to maintain RIC tax treatment, we must timely distribute to our shareholders, for each tax year, an amount equal to at least 90% of our “investment company taxable income,” which includes, among other items, dividends, interest and the excess of any net short-term capital gains over net long-term capital losses and other taxable income other than any net capital gain reduced by deductible expenses.

Additionally, in order to avoid the imposition of a U.S. federal excise tax, we are required to distribute, in respect of each calendar year, dividends to our shareholders of an amount at least equal to the sum of 98% of our calendar year net ordinary income (not taking into account any capital gains or losses); 98.2% of our capital gain in excess of its capital losses (adjusted for certain ordinary losses) for a one-year period generally ending on October 31 of the calendar year; and any undistributed amounts from previous years on which we paid no U.S. federal income tax. If we fail to qualify as a RIC for any reason and become subject to corporate tax, the resulting corporate taxes could substantially reduce our net assets, the amount of income available for distribution and the amount of our distributions.

Related Party Transactions and Agreements

Administration Agreement

Kennedy Lewis Management LP serves as our administrator pursuant to an administration agreement (the “Administration Agreement”). Under the Administration Agreement, the Administrator furnishes the Company with office facilities and equipment and provides the Company with clerical, bookkeeping, recordkeeping and other administrative services at such facilities. The Administrator also performs, or oversees the performance of, the Company’s required administrative services, which include being responsible for the financial and other records that the Company is required to maintain and preparing reports to its shareholders and reports and other materials filed with the SEC. In addition, the Administrator assists the Company in determining and publishing its net asset value, oversees the preparation and filing of its tax returns and the printing and dissemination of reports and other materials to its shareholders, and generally oversees the payment of its expenses and the performance of administrative and professional services rendered to the Company by others. Under the Administration Agreement, the Administrator also provides managerial assistance on the Company’s behalf to those portfolio companies that have accepted the Company’s offer to provide such assistance. The Administrator has retained State Street Bank and Trust Company, a Massachusetts trust company, as a sub-administrator to perform any or all of its obligations under the Administration Agreement.

Advisory Agreement

Subject to the overall supervision of the Board and in accordance with the 1940 Act, the Advisor manages the Company’s day-to-day operations and provides investment advisory services to the Company, pursuant to an investment advisory agreement (as amended, the “Advisory Agreement”). Under the terms of the Advisory Agreement, the Advisor (i) determines the composition of the Company’s portfolio, the nature and timing of the changes to its portfolio and the manner of implementing such changes; (ii) identifies, evaluates and negotiates the structure of the investments the Company makes; (iii) executes, closes, services and monitors the investments the Company makes; (iv) determines the securities and other assets that the Company purchases, retains or sells; (v) performs due diligence on prospective portfolio companies; and (vi) provides the Company with such other investment advisory, research and related services as the Company may, from time to time, reasonably require for the investment of its funds. Under the Advisory Agreement, the Company pays the Advisor fees for investment management services consisting of the Base Management Fee and the Incentive Fee. See Note 3 to the consolidated financial statements—“Related Party Transactions” for additional information.

For the three months ended June 30, 2024 and June 30, 2023, the management fee was $899,154 and $655,300, respectively. At the Advisor’s discretion, no management fee was waived during the three months ended June 30, 2024 and June 30, 2023, respectively. For the six months ended June 30, 2024 and June 30, 2023, the management fee was $1,615,906 and $866,349, respectively. At the Advisor’s discretion, $0 and $128,140 of the management fee was waived during the six months ended June 30, 2024 and June 30, 2023, respectively. For the six months ended June 30, 2024 and June 30, 2023, the management fee, net of waivers was $1,615,906 and $738,209, respectively. For the three months ended June 30, 2024 and June 30, 2023, income-based incentive fees were $1,017,122 and $0, respectively. For the six months ended June 30, 2024 and June 30, 2023, income-based incentive fees were $1,709,772 and $0, respectively. For the three months ended June 30, 2024 and June 30, 2023, the Company accrued capital gains incentive fees of $(68,141) and $317,514, respectively. For the six months ended June 30, 2024 and June 30, 2023, the Company accrued capital gains incentive fees of $72,984 and $317,514, respectively, of which none was payable on such date under the Advisory Agreement.

SEC Exemptive Relief

As a BDC, the Company is subject to certain regulatory restrictions in making its investments. For example, BDCs generally are not permitted to co-invest with certain affiliated entities in transactions originated by the BDC or its affiliates in the absence of an exemptive order from the SEC. However, BDCs are permitted to, and may, simultaneously co-invest in transactions where price and quantity are the only negotiated terms. On March 6, 2023, the SEC issued an order (the “Co-Investment Order”) granting the Company’s application for exemptive relief to co-invest, subject to the satisfaction of certain conditions, in certain private placement transactions, with other funds managed by the Advisor or its affiliates. Under the terms of the Co-Investment Order, in order for the Company to participate in a co-investment transaction, a “required majority” (as defined in Section 57(o) of the 1940 Act) of the Company’s independent trustees must conclude that (i) the terms of the proposed transaction, including the consideration to be paid, are reasonable and fair to the Company and its shareholders and do not involve overreaching with respect of the Company or its shareholders on the part of any person concerned, and (ii) the proposed transaction is consistent with the interests of the Company’s shareholders and is consistent with the Company’s investment objectives and strategies and certain criteria established by the Board.

On June 18, 2024, the SEC issued the Multi-Class Order granting the Company’s application for exemptive relief from sections 18(a)(2), 18(c), 18(i) and 61(a) under the 1940 Act. Under the terms of the Multi-Class Order, the Company is permitted to offer multiple classes of its Common Shares with varying sales loads and asset-based distribution and/or service fees.

Expense Support and Conditional Reimbursement Agreement

The Company has entered into an Expense Support Agreement with the Advisor, pursuant to which the Advisor has contractually agreed to pay Other Operating Expenses (as defined below) of the Company on the Company’s behalf (each such payment, a “Required Expense Payment” such that Other Operating Expenses of the Company do not exceed 1.00% (on an annualized basis) of the Company’s applicable quarter-end net asset value. “Other Operating Expenses” include the Company’s organizational and offering expenses (including the Company’s allocable portion of compensation and overhead (including rent, office equipment and utilities) and other expenses incurred by the Administrator in performing its administrative obligations under the Administration Agreement,

excluding Base Management Fees and Incentive Fees owed to the Advisor and any interest expenses owed by the Company. See Note 3 to the consolidated financial statements—“Related Party Transactions” for additional information.

As of June 30, 2024, the total expense support provided by the Advisor since inception was $3,782,758.

Contractual Obligations

Other than payment of fees under the Advisory Agreement and Administration Agreement noted in the “Related Party Transactions and Agreements” section, we had no payment obligations for repayment of debt and other contractual obligations as of June 30, 2024. For additional information on the fees under the Advisory Agreement and Administration Agreement, see Note 3—“Related Party Transactions.”

Off-Balance Sheet Arrangements

From time-to-time we are a party to financial instruments with off-balance sheet risk in the normal course of business in order to meet the needs of our investment in portfolio companies. Such instruments include commitments to extend credit and may involve, in varying degrees, elements of credit risk in excess of amounts recognized on our balance sheet. Prior to extending such credit, we attempt to limit our credit risk by conducting extensive due diligence, obtaining collateral where necessary and negotiating appropriate financial covenants. As of June 30, 2024 and December 31, 2023, we had $11,521,493 and $8,336,031 in unfunded delayed draw term loan commitments and $6,141,844 and $6,067,963 in unfunded revolver commitments, respectively.

Commitments

In the ordinary course of business, we may enter into future funding commitments. We maintain sufficient financial resources to satisfy any unfunded commitments, including cash on hand and available borrowings to fund such unfunded commitments. Please refer to Note 6 in the notes to our consolidated financial statements—“Commitments and Contingencies” for further detail of these unfunded commitments.

Recent Developments

We have evaluated recent developments through the date of issuance of these consolidated financial statements and determined that there are no recent developments outside the ordinary scope of business that require adjustment to, or disclosure in, the consolidated financial statements.

Significant Accounting Estimates and Critical Accounting Policies

The Company’s consolidated financial statements have been prepared in accordance with U.S. GAAP. The Company is an investment company and accordingly follows the investment company accounting and reporting guidance of the FASB ASC Topic 946, Financial Services – Investment Companies. These consolidated financial statements reflect adjustments that in the opinion of management are necessary for the fair statement of the financial position and results of operations for the periods presented herein.

While our significant accounting policies are also described in Note 2 of the notes to our consolidated financial statements—“Significant Accounting Policies”, we believe the following accounting policies require the most significant judgment in the preparation of our consolidated financial statements.

Valuation of Portfolio Investments

The Advisor values the Company’s investments based on the type of financial instrument as outlined below:

Securities that are not listed on an exchange but are traded over‐the‐counter will be valued at representative “bid” quotations if held long and representative “asked” quotations if held short, unless included in the NASDAQ National Market System, in which case they will be valued based upon their last sales prices (if such prices are available); provided that if the last sales price of a security does not fall between the last “bid” and “asked” price for such security on such date, the Advisor will value such security at the mean between the last “bid” and “asked” price for such security on such date. Securities not denominated in U.S. dollars will be translated into U.S. dollars at prevailing exchange rates as the Advisor may reasonably determine. All other investments will be assigned such value as the Advisor may reasonably determine. When available, quotations from brokers or pricing services will be considered in the valuation process. For example, the Advisor will utilize indicative prices from brokers or pricing services to determine the fair value of bonds and bank debt and may internally validate the quotes obtained or utilize the mean of the bid (if long) and ask (if short) quotes obtained. For these quotes to be considered for valuation purposes they must be sent directly from the brokers to the Advisor. If quotations are not readily available through pricing services or brokers for a security, financial instrument or other property, the Advisor will determine its value in such manner as the Advisor, in its sole discretion, reasonably determines. This is generally achieved by engaging a third‐party valuation firm to value such securities and provide a range of values for each position. The Advisor will then mark the position within that range.

FASB ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. ASC 820 also provides guidance regarding a fair value hierarchy, which prioritizes information used to measure fair value and the effect of fair value measurements on earnings and provides for enhanced disclosures determined by the level of information used in the valuation.

The Company classifies the inputs used to measure fair values into the following hierarchy:

•

Level 1—Valuations are based on quoted prices in active markets for identical assets or liabilities that are accessible to the Company at the measurement date.

•

Investment Related Transactions, Revenue Recognition and Expenses

Investment transactions and the related revenue and expenses are recorded on a trade-date basis. Realized gains or losses are recorded upon the sale or liquidation of investments and are calculated as the difference between the net proceeds from the sale or liquidation, if any, and the cost basis of the investment using the specific identification method. Unrealized appreciation or depreciation reflects the difference between the fair value of the investments and the cost basis of the investments. Interest income is recorded on an accrual basis and includes the accretion of discounts and amortizations of premiums. Discounts from and premiums to par value on debt investments purchased are accreted/amortized into interest income over the life of the respective security using the effective interest method. Upon prepayment of a loan or debt security, any prepayment premiums, unamortized fees and unamortized discounts are recorded as interest income.

In the general course of its business, the Company receives certain fees from portfolio companies, which are non-recurring in nature. Such fees may include loan prepayment penalties, structuring fees and loan waiver amendment fees, and commitment fees, and are recorded as other income in investment income when earned.

Certain investments may have contractual payment-in-kind (“PIK”) interest. PIK represents accrued interest that is added to the principal amount of the investment on the interest payment date rather than being paid in cash and generally becomes due at maturity or upon the investment being called by the issuer. PIK is recorded as interest income. Because the Company intends to elect to be treated as a RIC for U.S. federal income purposes under Subchapter M of the Code, therefore, this non-cash source of income must be paid out to shareholders in the form of distributions, even though the Company has not yet collected the cash.

Receivable for investments sold and payable for investments purchased represent unsettled investments.

Foreign Currency Hedging

To the extent that we hold instruments denominated in currencies other than U.S. dollars, we may enter into transactions to offset the potential adverse effects of changes in currency exchange rates. In particular, we may use currency forward contracts and other currency-related derivatives to mitigate this risk.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are subject to certain financial market risks, such as interest rate fluctuations. Because we fund a portion of our investments with borrowings, our net investment income is affected by the difference between the rate at which we invest and the rate at which we borrow. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income. The U.S. Federal Reserve and other central banks have raised interest rates multiple times in recent years. As a result, key base interest rates, such as SOFR and EURIBOR, may fluctuate over time. As of June 30, 2024, 89.31% of investments at fair value represent floating-rate investments.

The following table estimates the potential changes in net cash flow generated from interest income and expenses, should interest rates increase or decrease by 100, 200 or 300 basis points. Assuming that the interim and unaudited Statement of Assets and Liabilities as of June 30, 2024 were to remain constant and that we took no actions to alter our interest rate sensitivity as of such date, the following table shows the annualized impact of hypothetical base rate changes in interest rates. Actual results could differ significantly from those estimated in the table.


Change in Interest Rates	Increase (Decrease) in Investment Income			Increase (Decrease) in Investment Expense			Increase (Decrease) in Net Investment Income
Up 300 basis points	$	14,400,395		$	7,650,000		$	6,750,395
Up 200 basis points		9,600,264			5,100,000			4,500,264
Up 100 basis points		4,800,132			2,550,000			2,250,132
Down 100 basis points		(4,800,132	)		(2,550,000	)		(2,250,132	)
Down 200 basis points		(9,600,264	)		(5,100,000	)		(4,500,264	)
Down 300 basis points		(14,400,395	)		(7,650,000	)		(6,750,395	)

Because we may borrow money to make investments, our net investment income may be dependent on the difference between the rate at which we borrow funds and the rate at which we invest these funds. In periods of increasing interest rates, our cost of funds would increase, which may reduce our net investment income. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “1934 Act”) we evaluated, under the supervision and with the participation of our management, including our President and our Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the 1934 Act) as of June 30, 2024. Based on the foregoing evaluation, our President and our Chief Financial Officer concluded that, as of June 30, 2024, our disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level that we would meet our disclosure obligations. Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures within the Company to disclose material information otherwise required to be set forth in the Company’s periodic reports.

Changes in internal control over financial reporting

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) under the 1934 Act) that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in the “Risk Factors” section of our N-2 Registration Statement, which could materially affect our business, financial condition and/or operating results. The risks described in our N-2 Registration Statement are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results.

There have been no material changes during the six months ended June 30, 2024 to the risk factors previously disclosed in the Item 1A “Risk Factors” section of our N-2 Registration Statement. If any of such risks actually occur, our business, financial condition or results of operations could be materially adversely affected. If that happens, the value of our securities could decline, and you may lose all or part of your investment.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Previously disclosed by the Company on its current reports on Form 8-K.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

During the fiscal quarter ended June 30, 2024, none of our trustees or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”

ITEM 6. EXHIBITS

The following exhibits are filed as part of this report, or hereby incorporated by reference to exhibits previously filed with the United States Securities and Exchange Commission:


Exhibit Number	Description of Document

31.1*	Certification of the President pursuant to Rule 13a-14 (a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*	Certification of the Chief Financial Officer pursuant to Rule 13a-14 (a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**	Certification of the President pursuant to 18 U.S. C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes- Oxley Act of 2002.

32.2**	Certification of the Chief Financial Officer pursuant to 18 U.S. C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

101.INS	Inline XBRL Instance Document-the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document

101.SCH	Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents

104	Cover page formatted as Inline XBRL and contained in Exhibit 101

* Filed herewith.

** Furnished herewith

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	Kennedy Lewis Capital Company

Date: August 13, 2024	By:	/s/ James Didden
	Name:	James Didden
	Title:	President

Date: August 13, 2024	By:	/s/ Anthony Pasqua
	Name:	Anthony Pasqua
	Title:	Chief Financial Officer

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Tate Capital 10-Q2024 Q2 Quarterly report

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