UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
Commission File Number:
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
| (Address of principal executive offices) | (Zip Code) |
(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 | None | 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
preceding 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. ☒
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). ☐
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 | ☐ |
| ☒ | 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
As of August 6, 2025, the
registrant had
Table of Contents
i
Forward-Looking Statements
This quarterly report on Form 10-Q contains forward-looking statements that involve substantial known and unknown risks, uncertainties and other factors. Undue reliance should not be placed on such statements. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about the company, current and prospective portfolio investments, the industry, beliefs and assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “will,” “may,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “should,” “targets,” “projects,” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond control of Kayne DL 2021, Inc. (“the Company”) and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including:
| ● | future operating results; |
| ● | business prospects and the prospects of portfolio companies in which we invest; | |
| ● | the ability of our portfolio companies to achieve their objectives; |
| ● | changes in political, economic or industry conditions, the interest rate environment or conditions affecting the financial and capital markets; |
| ● | the ability of KA Credit Advisors II, LLC (our “Advisor”) to locate suitable investments and to monitor and administer investments; |
| ● | the ability of the Advisor and its affiliates to attract and retain highly talented professionals; |
| ● | risks associated with possible disruptions in our operations, the operations of our portfolio companies or the economy generally, including disruptions due to terrorism, war or other geopolitical conflict, natural disasters, pandemics or cybersecurity incidents; | |
| ● | the adequacy of our cash resources, financing sources and working capital; |
| ● | the timing of cash flows, distributions and dividends, if any, from the operations of the companies in which the Company invests; |
| ● | the ability to maintain qualification as a business development company (“BDC”) and as a regulated investment company (“RIC”) under the Internal Revenue Code of 1986, as amended (the “Code”); |
| ● | the use of borrowings under our credit facility to finance a portion of the Company’s investments; |
| ● | the adequacy, availability and pricing of financing sources and working capital for the Company; |
| ● | actual or potential conflicts of interest with the Advisor and its affiliates; |
| ● | contractual arrangements and relationships with third parties; |
| ● | the risks associated with an economic downturn, increased inflation, political instability, tariffs and trade policy instability, supply chain issues, interest rate volatility, loss of key personnel, and the illiquid nature of investments of the Company; and |
| ● | the risks, uncertainties and other factors the Company identifies under “Item 1A. Risk Factors” and elsewhere in this quarterly report on Form 10-Q, as well as in the Company’s annual report on Form 10-K for the year ended December 31, 2024. |
We have based the forward-looking statements included in this report on information available to us on the date of this report. We assume no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Although we undertake no obligation to revise or update any forward-looking statements, you are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the United States Securities and Exchange Commission (the “SEC”), including annual reports on Form 10-K, registration statements on Form 10, quarterly reports on Form 10-Q and current reports on Form 8-K.
ii
PART I—FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements.
Kayne DL 2021, Inc.
Consolidated Statements of Assets and Liabilities
(amounts in 000’s, except share and per
share amounts)
| June 30, 2025 (Unaudited) | December 31, 2024 | |||||||
| Assets: | ||||||||
| Investments, at fair value: | ||||||||
| Long-term investments (amortized cost of $ | $ | $ | ||||||
| Investments in money market funds (amortized cost of $ | ||||||||
| Cash | ||||||||
| Receivable for principal payments on investments | ||||||||
| Interest receivable | ||||||||
| Prepaid expenses and other assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities: | ||||||||
| Unamortized Subscription Credit Facility issuance costs | $ | ( | ) | $ | ( | ) | ||
| Distributions payable | ||||||||
| Management fee payable | ||||||||
| Accrued expenses and other liabilities | ||||||||
| Total Liabilities | $ | $ | ||||||
| Commitments and contingencies (Note 8) | ||||||||
| Net Assets: | ||||||||
| Common Shares, $ | $ | $ | ||||||
| Additional paid-in capital | ||||||||
| Total distributable earnings (deficit) | ||||||||
| Total Net Assets | $ | $ | ||||||
| Total Liabilities and Net Assets | $ | $ | ||||||
| Net Asset Value Per Common Share | $ | $ | ||||||
See accompanying notes to consolidated financial statements.
1
Kayne DL 2021, Inc.
Consolidated Statements of Operations
(amounts in 000’s, except share and per share amounts)
(Unaudited)
For the
three months ended | For the
six months ended | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Income: | ||||||||||||||||
| Investment income from investments: | ||||||||||||||||
| Interest income | $ | $ | $ | $ | ||||||||||||
| Dividend income | ||||||||||||||||
| Total Investment Income | ||||||||||||||||
| Expenses: | ||||||||||||||||
| Interest expense | ||||||||||||||||
| Management fees | ||||||||||||||||
| Professional fees | ||||||||||||||||
| Directors fees | ||||||||||||||||
| Other general and administrative expenses | ||||||||||||||||
| Total Expenses | ||||||||||||||||
| Net Investment Income (Loss) | ||||||||||||||||
| Realized and unrealized gains (losses) on investments | ||||||||||||||||
| Net realized gains (losses): | ||||||||||||||||
| Investments | ||||||||||||||||
| Total net realized gains (losses) | ||||||||||||||||
| Net change in unrealized gains (losses): | ||||||||||||||||
| Investments | ( | ) | ( | ) | ( | ) | ||||||||||
| Total net change in unrealized gains (losses) | ( | ) | ( | ) | ( | ) | ||||||||||
| Total realized and unrealized gains (losses) | ( | ) | ( | ) | ( | ) | ||||||||||
| Net Increase in Net Assets Resulting from Operations | $ | $ | $ | $ | ||||||||||||
| Per Common Share Data: | ||||||||||||||||
| Basic and diluted net investment income per common share | $ | $ | $ | $ | ||||||||||||
| Basic and diluted net increase in net assets resulting from operations | $ | $ | $ | $ | ||||||||||||
| Weighted Average Common Shares Outstanding - Basic and Diluted | ||||||||||||||||
See accompanying notes to consolidated financial statements.
2
Kayne DL 2021, Inc.
Consolidated Statements of Changes in Net Assets
(amounts in 000’s)
(Unaudited)
| For the three months ended June 30, | For the six
months ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Increase (Decrease) in Net Assets Resulting from Operations: | ||||||||||||||||
| Net investment income (loss) | $ | $ | $ | $ | ||||||||||||
| Net realized gains (losses) on investments | ||||||||||||||||
| Net change in unrealized gains (losses) on investments | ( | ) | ( | ) | ( | ) | ||||||||||
| Net Increase in Net Assets Resulting from Operations | ||||||||||||||||
| Decrease in Net Assets Resulting from Stockholder Dividends | ||||||||||||||||
| Dividends to stockholders | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net Decrease in Net Assets Resulting from Stockholder Dividends | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Increase in Net Assets Resulting from Capital Share Transactions | ||||||||||||||||
| Issuance of common shares | ||||||||||||||||
| Reinvestment of dividends | ||||||||||||||||
| Net Increase in Net Assets Resulting from Capital Share Transactions | ||||||||||||||||
| Total Increase in Net Assets | ||||||||||||||||
| Net Assets, Beginning of Period | ||||||||||||||||
| Net Assets, End of Period | $ | $ | $ | $ | ||||||||||||
See accompanying notes to consolidated financial statements.
3
Kayne DL 2021, Inc.
Consolidated Statements of Cash Flows
(amounts in 000’s)
(Unaudited)
For the six months ended | ||||||||
| 2025 | 2024 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net increase (decrease) in net assets resulting from operations | $ | $ | ||||||
| Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash used in operating activities: | ||||||||
| Net change in unrealized (gains)/losses on investments | ( | ) | ||||||
| Net accretion of discount on investments | ( | ) | ( | ) | ||||
| Sales (purchases) of investments in money market funds, net | ||||||||
| Purchases of portfolio investments | ( | ) | ( | ) | ||||
| Proceeds from sales of investments and principal repayments | ||||||||
| Paid-in-kind interest from portfolio investments | ( | ) | ( | ) | ||||
| Amortization of deferred financing cost | ||||||||
| Increase/(decrease) in operating assets and liabilities: | ||||||||
| (Increase)/decrease in interest and dividends receivable | ( | ) | ( | ) | ||||
| (Increase)/decrease in receivable for principal payments on investments | ( | ) | ( | ) | ||||
| (Increase)/decrease in prepaid expenses and other assets | ||||||||
| Increase/(decrease) in management fees payable | ||||||||
| Increase/(decrease) in excise tax payable | ( | ) | ||||||
| Increase/(decrease) in accrued other general and administrative expenses | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Borrowings/(payments) on Subscription Credit Facility, net | ||||||||
| Payments of debt issuance costs | ( | ) | ( | ) | ||||
| Dividends paid in cash | ( | ) | ( | ) | ||||
| Proceeds from issuance of common shares | ||||||||
| Net cash provided by financing activities | ||||||||
| Net increase (decrease) in cash | ( | ) | ( | ) | ||||
| Cash, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
| Supplemental and Non-Cash Information: | ||||||||
| Interest paid during the period | $ | $ | ||||||
| Non-cash financing activities not included herein consisted of reinvestment of dividends | $ | $ | ||||||
See accompanying notes to consolidated financial statements.
4
Kayne DL 2021, Inc.
Consolidated Schedule of Investments
As of June 30, 2025
(amounts in 000’s, except number of shares, units)
(Unaudited)
| Maturity | Principal/ | Amortized | Fair | Percentage | ||||||||||||||||||||||||||||||||
| Portfolio Company(1) | Footnotes | Investment | Interest Rate | Spread | PIK Rate | Reference(2) | Date | Par | Cost(3)(4) | Value | of Net Assets | |||||||||||||||||||||||||
| Debt Investments | ||||||||||||||||||||||||||||||||||||
| Aerospace & defense | ||||||||||||||||||||||||||||||||||||
| Fastener Distribution Holdings, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| Vitesse Systems Parent, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
| Automobile components | ||||||||||||||||||||||||||||||||||||
| Speedstar Holding LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| WAM CR Acquisition, Inc. (Wolverine) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
| Biotechnology | ||||||||||||||||||||||||||||||||||||
| Alcami Corporation | First lien senior secured delayed draw loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
5
Kayne DL 2021, Inc.
Consolidated Schedule of Investments
As of June 30, 2025
(amounts in 000’s, except number of shares, units)
(Unaudited)
| Maturity | Principal / | Amortized | Fair | Percentage of | ||||||||||||||||||||||||||||||||
| Portfolio Company(1) | Footnotes | Investment | Interest Rate | Spread | PIK Rate | Reference(2) | Date | Par | Cost(3)(4) | Value | Net Assets | |||||||||||||||||||||||||
| Building products | ||||||||||||||||||||||||||||||||||||
| Ruff Roofers Buyer, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| US Anchors Group, Inc. (Mechanical Plastics Corp.) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
| Chemicals | ||||||||||||||||||||||||||||||||||||
| TL Atlas Merger Sub Corp. (Zep) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
| Commercial services & supplies | ||||||||||||||||||||||||||||||||||||
| Advanced Environmental Monitoring Intermediate, Inc. | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| Allentown, LLC | First lien senior secured loan | % | % | % | % | |||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | % | ||||||||||||||||||||||||||||||||
| American Equipment Holdings LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
6
Kayne DL 2021, Inc.
Consolidated Schedule of Investments
As of June 30, 2025
(amounts in 000’s, except number of shares, units)
(Unaudited)
| Maturity | Principal / | Amortized | Fair | Percentage of | ||||||||||||||||||||||||||||||||
| Portfolio Company(1) | Footnotes | Investment | Interest Rate | Spread | PIK Rate | Reference(2) | Date | Par | Cost(3)(4) | Value | Net Assets | |||||||||||||||||||||||||
| Bloomington Holdco, LLC (BW Fusion) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| BLP Buyer, Inc. (Bishop Lifting Products) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| Connect America.Com, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| Diverzify Intermediate LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| Superior Intermediate LLC (Landmark Structures) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| Tapco Buyer LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
| Containers & packaging | ||||||||||||||||||||||||||||||||||||
| Carton Packaging Buyer, Inc. (Century Box) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| Drew Foam Companies Inc. | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| FCA, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
7
Kayne DL 2021, Inc.
Consolidated Schedule of Investments
As of June 30, 2025
(amounts in 000’s, except number of shares, units)
(Unaudited)
| Maturity | Principal / | Amortized | Fair | Percentage of | ||||||||||||||||||||||||||||||||
| Portfolio Company(1) | Footnotes | Investment | Interest Rate | Spread | PIK Rate | Reference(2) | Date | Par | Cost(3)(4) | Value | Net Assets | |||||||||||||||||||||||||
| Monza Purchaser, LLC (Smyth) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| The Robinette Company | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| WCHG Buyer, Inc. (Handgards) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
| Diversified telecommunication services | ||||||||||||||||||||||||||||||||||||
| Network Connex (f/k/a NTI Connect, LLC) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| Food products | ||||||||||||||||||||||||||||||||||||
| BR PJK Produce, LLC (Keany) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| CCFF Buyer, LLC (California Custom Fruits & Flavors, LLC) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| City Line Distributors LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
8
Kayne DL 2021, Inc.
Consolidated Schedule of Investments
As of June 30, 2025
(amounts in 000’s, except number of shares, units)
(Unaudited)
| Maturity | Principal / | Amortized | Fair | Percentage of | ||||||||||||||||||||||||||||||||
| Portfolio Company(1) | Footnotes | Investment | Interest Rate | Spread | PIK Rate | Reference(2) | Date | Par | Cost(3)(4) | Value | Net Assets | |||||||||||||||||||||||||
| Gulf Pacific Acquisition, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| IF&P Foods, LLC (FreshEdge) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| J&K Ingredients, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| ML Buyer, LLC (Mama Lycha Foods, LLC) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| Siegel Egg Co., LLC | (5) (6) | First lien senior secured loan | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | |||||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | |||||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | |||||||||||||||||||||||||||||||||||
| Worldwide Produce Acquisition, LLC | First lien senior secured delayed draw loan | % | % | % | % | |||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | % | ||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
9
Kayne DL 2021, Inc.
Consolidated Schedule of Investments
As of June 30, 2025
(amounts in 000’s, except number of shares, units)
(Unaudited)
| Maturity | Principal / | Amortized | Fair | Percentage of | ||||||||||||||||||||||||||||||||
| Portfolio Company(1) | Footnotes | Investment | Interest Rate | Spread | PIK Rate | Reference(2) | Date | Par | Cost(3)(4) | Value | Net Assets | |||||||||||||||||||||||||
| Health care providers & services | ||||||||||||||||||||||||||||||||||||
| Aegis Toxicology Sciences Corporation | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| Brightview, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| Guardian Dentistry Practice Management, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| Guided Practice Solutions: Dental, LLC (GPS) | First lien senior secured delayed draw loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| Light Wave Dental Management, LLC | First lien senior secured revolving loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| MVP VIP Borrower, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| NMA Holdings, LLC (Neuromonitoring Associates) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| Redwood MSO, LLC (Smile Partners) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| Refocus Management Services, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| Salt Dental Collective LLC | First lien senior secured delayed draw loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
10
Kayne DL 2021, Inc.
Consolidated Schedule of Investments
As of June 30, 2025
(amounts in 000’s, except number of shares, units)
(Unaudited)
| Maturity | Principal / | Amortized | Fair | Percentage of | ||||||||||||||||||||||||||||||||
| Portfolio Company(1) | Footnotes | Investment | Interest Rate | Spread | PIK Rate | Reference(2) | Date | Par | Cost(3)(4) | Value | Net Assets | |||||||||||||||||||||||||
| Health care equipment & supplies | ||||||||||||||||||||||||||||||||||||
| ECS Opco 1, LLC (Spectrum Vascular) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| LSL Industries, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
| Household durables | ||||||||||||||||||||||||||||||||||||
| Curio Brands, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| Del-Air Heating, Air Conditioning & Refrigeration, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
| Household products | ||||||||||||||||||||||||||||||||||||
| CREO Group Inc. (HMS Manufacturing) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
| Insurance | ||||||||||||||||||||||||||||||||||||
| Allcat Claims Service, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
| IT services | ||||||||||||||||||||||||||||||||||||
| Improving Acquisition LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
11
Kayne DL 2021, Inc.
Consolidated Schedule of Investments
As of June 30, 2025
(amounts in 000’s, except number of shares, units)
(Unaudited)
| Maturity | Principal / | Amortized | Fair | Percentage of | ||||||||||||||||||||||||||||||||
| Portfolio Company(1) | Footnotes | Investment | Interest Rate | Spread | PIK Rate | Reference(2) | Date | Par | Cost(3)(4) | Value | Net Assets | |||||||||||||||||||||||||
| Leisure products | ||||||||||||||||||||||||||||||||||||
| MacNeill Pride Group Corp. | First lien senior secured delayed draw loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| Olibre Borrower LLC (Revelyst) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| Pixel Intermediate, LLC | (7) | First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| Spinrite Inc. | (7) | First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| VENUplus, Inc. (f/k/a CTM Group, Inc.) | First lien senior secured loan | % | % | % | % | |||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
| Machinery | ||||||||||||||||||||||||||||||||||||
| MRC Keystone Acquisition LLC (Automated Handing Solutions) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| CMT Intermediate Holdings, LLC (Capital Machine Technologies) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| LEM Buyer, Inc. (CFS Technologies Intermediate, Inc.) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| Luxium Solutions, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| PVI Holdings, Inc | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| RMH Systems, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
12
Kayne DL 2021, Inc.
Consolidated Schedule of Investments
As of June 30, 2025
(amounts in 000’s, except number of shares, units)
(Unaudited)
| Maturity | Principal / | Amortized | Fair | Percentage of | ||||||||||||||||||||||||||||||||
| Portfolio Company(1) | Footnotes | Investment | Interest Rate | Spread | PIK Rate | Reference(2) | Date | Par | Cost(3)(4) | Value | Net Assets | |||||||||||||||||||||||||
| Personal care products | ||||||||||||||||||||||||||||||||||||
| PH Beauty Holdings III, Inc. | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| Phoenix YW Buyer, Inc. (Elida Beauty) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| Silk Holdings III Corp. (Suave) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
| Professional services | ||||||||||||||||||||||||||||||||||||
| DISA Holdings Corp. | First lien senior secured delayed draw loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| Envirotech Services, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| CI (MG) Group, LLC (Mariani Premier Group) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
13
Kayne DL 2021, Inc.
Consolidated Schedule of Investments
As of June 30, 2025
(amounts in 000’s, except number of shares, units)
(Unaudited)
| Maturity | Principal / | Amortized | Fair | Percentage of | ||||||||||||||||||||||||||||||||
| Portfolio Company(1) | Footnotes | Investment | Interest Rate | Spread | PIK Rate | Reference(2) | Date | Par | Cost(3)(4) | Value | Net Assets | |||||||||||||||||||||||||
| Textiles, apparel & luxury goods | ||||||||||||||||||||||||||||||||||||
| American Soccer Company, Incorporated (SCORE) | First lien senior secured loan | % | % | % | % | |||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | % | ||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
| Trading companies & distributors | ||||||||||||||||||||||||||||||||||||
| AIDC IntermediateCo 2, LLC (Peak Technologies) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| BCDI Meteor Acquisition, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| CGI Automated Manufacturing, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| Dusk Acquisition II Corporation (Motors & Armatures, Inc. – MARS) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| Energy Acquisition LP (Electrical Components International, Inc. - ECI) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| Engineered Fastener Company, LLC (EFC International) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| Genuine Cable Group, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| I.D. Images Acquisition, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
14
Kayne DL 2021, Inc.
Consolidated Schedule of Investments
As of June 30, 2025
(amounts in 000’s, except number of shares, units)
(Unaudited)
| Maturity | Principal / | Amortized | Fair | Percentage of | ||||||||||||||||||||||||||||||||
| Portfolio Company(1) | Footnotes | Investment | Interest Rate | Spread | PIK Rate | Reference(2) | Date | Par | Cost(3)(4) | Value | Net Assets | |||||||||||||||||||||||||
| Krayden Holdings, Inc. | First lien senior secured delayed draw loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| Lakewood Acquisition Corporation (R&B Wholesale) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| OAO Acquisitions, Inc. (BearCom) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| TL Alpine Holding Corp. (Air Distribution Technologies Inc.) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| Workholding US Holdings, LLC (Forkardt Hardinge) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
| Wireless telecommunication services | ||||||||||||||||||||||||||||||||||||
| Centerline Communications, LLC | First lien senior secured loan | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | ||||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | ||||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
| Total Debt Investments | % | |||||||||||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
15
Kayne DL 2021, Inc.
Consolidated Schedule of Investments
As of June 30, 2025
(amounts in 000’s, except number of shares, units)
(Unaudited)
| Number of | Fair | Percentage of | ||||||||||||||||
| Shares | Cost | Value | Net Assets | |||||||||||||||
| Investments in Money Market Funds | ||||||||||||||||||
| Morgan Stanley Institutional Liquidity Fund, Institutional Class, | (8) | % | ||||||||||||||||
| Total Investments in Money Market Funds | % | |||||||||||||||||
| Total Investments | $ | $ | % | |||||||||||||||
| Liabilities in Excess of Other Assets | ( | ) | ( | )% | ||||||||||||||
| Net Assets | $ | % | ||||||||||||||||
| (1) |
| (2) |
| (3) |
| (4) |
| (5) |
| (6) |
| (7) |
| (8) |
See accompanying notes to consolidated financial statements.
16
Kayne DL 2021, Inc.
Consolidated Schedule of Investments
As of December 31, 2024
(amounts in 000’s)
| Portfolio Company(1) | Footnotes | Investment | Interest Rate | Spread | PIK Rate | Reference(2) | Maturity Date | Principal / Par | Amortized Cost(3)(4) | Fair Value | Percentage of Net Assets | |||||||||||||||||||||||||
| Debt Investments | ||||||||||||||||||||||||||||||||||||
| Aerospace & defense | ||||||||||||||||||||||||||||||||||||
| Basel U.S. Acquisition Co., Inc. (IAC) | (5) | First lien senior secured revolving loan | % | % | $ | $ | $ | % | ||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| Fastener Distribution Holdings, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| Vitesse Systems Parent, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
| Automobile components | ||||||||||||||||||||||||||||||||||||
| Speedstar Holding LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| Vehicle Accessories, Inc. | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| WAM CR Acquisition, Inc. (Wolverine) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
| Biotechnology | ||||||||||||||||||||||||||||||||||||
| Alcami Corporation (Alcami) | First lien senior secured delayed draw loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
17
Kayne DL 2021, Inc.
Consolidated Schedule of Investments
As of December 31, 2024
(amounts in 000’s)
| Portfolio Company(1) | Footnotes | Investment | Interest Rate | Spread | PIK Rate | Reference(2) | Maturity Date | Principal / Par | Amortized Cost(3)(4) | Fair Value | Percentage of Net Assets | |||||||||||||||||||||||||
| Building products | ||||||||||||||||||||||||||||||||||||
| Ruff Roofers Buyer, LLC | First lien senior secured loan | % | % | | | % | ||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| US Anchors Group, Inc. (Mechanical Plastics Corp.) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
| Commercial services & supplies | ||||||||||||||||||||||||||||||||||||
| Advanced Environmental Monitoring, Inc. | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| Allentown, LLC | First lien senior secured loan | % | % | % | % | |||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| American Equipment Holdings LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| Bloomington Holdco, LLC (BW Fusion) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
18
Kayne DL 2021, Inc.
Consolidated Schedule of Investments
As of December 31, 2024
(amounts in 000’s)
| Portfolio Company(1) | Footnotes | Investment | Interest Rate | Spread | PIK Rate | Reference(2) | Maturity Date | Principal/ Par | Amortized Cost(3)(4) | Fair Value | Percentage of Net Assets | |||||||||||||||||||||||||
| BLP Buyer, Inc. (Bishop Lifting Products) | First lien senior secured loan | % | % | | % | |||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| Connect America.com, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| Diverzify Intermediate LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| Superior Intermediate LLC (Landmark Structures) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| Tapco Buyer LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
| Containers & packaging | ||||||||||||||||||||||||||||||||||||
| Carton Packaging Buyer, Inc. (Century Box) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| Drew Foam Companies, Inc. | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| FCA, LLC (FCA Packaging) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
19
Kayne DL 2021, Inc.
Consolidated Schedule of Investments
As of December 31, 2024
(amounts in 000’s)
| Portfolio Company(1) | Footnotes | Investment | Interest Rate | Spread | PIK Rate | Reference(2) | Maturity Date | Principal / Par | Amortized Cost(3)(4) | Fair Value | Percentage of Net Assets | |||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| Innopak Industries, Inc. | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| The Robinette Company | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
| Diversified telecommunication services | ||||||||||||||||||||||||||||||||||||
| Network Connex (f/k/a NTI Connect, LLC) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| Food products | ||||||||||||||||||||||||||||||||||||
| BR PJK Produce, LLC (Keany) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| CCFF Buyer, LLC (California Custom Fruits & Flavors, LLC) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| City Line Distributors, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
20
Kayne DL 2021, Inc.
Consolidated Schedule of Investments
As of December 31, 2024
(amounts in 000’s)
| Portfolio Company(1) | Footnotes | Investment | Interest Rate | Spread | PIK Rate | Reference(2) | Maturity Date | Principal / Par | Amortized Cost(3)(4) | Fair Value | Percentage of Net Assets | |||||||||||||||||||||||||
| Gulf Pacific Holdings, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| IF&P Foods, LLC (FreshEdge) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| J&K Ingredients, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| ML Buyer, LLC (Mama Lycha Foods, LLC) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| Siegel Egg Co., LLC | First lien senior secured loan | % | % | % | % | |||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | % | ||||||||||||||||||||||||||||||||
| Worldwide Produce Acquisition, LLC | First lien senior secured delayed draw loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
21
Kayne DL 2021, Inc.
Consolidated Schedule of Investments
As of December 31, 2024
(amounts in 000’s)
| Portfolio Company(1) | Footnotes | Investment | Interest Rate | Spread | PIK Rate | Reference(2) | Maturity Date | Principal / Par | Amortized Cost(3)(4) | Fair Value | Percentage of Net Assets | |||||||||||||||||||||||||
| Health care providers & services | ||||||||||||||||||||||||||||||||||||
| Brightview, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| Guardian Dentistry Partners, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| Guided Practice Solutions: Dental, LLC (GPS) | First lien senior secured delayed draw loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| Light Wave Dental Management LLC | First lien senior secured revolving loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| MVP VIP Borrower, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| NMA Holdings, LLC (Neuromonitoring Associates) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
22
Kayne DL 2021, Inc.
Consolidated Schedule of Investments
As of December 31, 2024
(amounts in 000’s)
| Portfolio Company(1) | Footnotes | Investment | Interest Rate | Spread | PIK Rate | Reference(2) | Maturity Date | Principal / Par | Amortized Cost(3)(4) | Fair Value | Percentage of Net Assets | |||||||||||||||||||||||||
| Redwood MSO, LLC (Smile Partners) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| Refocus Management Services, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| Salt Dental Collective, LLC | First lien senior secured delayed draw loan | % | % | % | ||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
| Health care equipment & supplies | ||||||||||||||||||||||||||||||||||||
| LSL Industries, LLC (LSL Healthcare) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
| Insurance | ||||||||||||||||||||||||||||||||||||
| Allcat Claims Service, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
23
Kayne DL 2021, Inc.
Consolidated Schedule of Investments
As of December 31, 2024
(amounts in 000’s)
| Portfolio Company(1) | Footnotes | Investment | Interest Rate | Spread | PIK Rate | Reference(2) | Maturity Date | Principal / Par | Amortized Cost(3)(4) | Fair Value | Percentage of Net Assets | |||||||||||||||||||||||||
| IT services | ||||||||||||||||||||||||||||||||||||
| Improving Acquisition LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
| Leisure products | ||||||||||||||||||||||||||||||||||||
| MacNeill Pride Group Corp. | First lien senior secured delayed draw loan | % | % | % | % | |||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| Pixel Intermediate, LLC | (5) | First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| Spinrite, Inc. | (5) | First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| VENUplus, Inc. (f/k/a CTM Group, Inc.) | First lien senior secured loan | % | % | % | % | |||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
| Machinery | ||||||||||||||||||||||||||||||||||||
| MRC Keystone Acquisition LLC (Automated Handing Solutions) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| Luxium Solutions, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| PVI Holdings, Inc | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
24
Kayne DL 2021, Inc.
Consolidated Schedule of Investments
As of December 31, 2024
(amounts in 000’s)
| Portfolio Company(1) | Footnotes | Investment | Interest Rate | Spread | PIK Rate | Reference(2) | Maturity Date | Principal / Par | Amortized Cost(3)(4) | Fair Value | Percentage of Net Assets | |||||||||||||||||||||||||
| Personal care products | ||||||||||||||||||||||||||||||||||||
| Phoenix YW Buyer, Inc. (Elida Beauty) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| Silk Holdings III Corp. (Suave) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
| Professional services | ||||||||||||||||||||||||||||||||||||
| DISA Holdings Corp. (DISA) | First lien senior secured delayed draw loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| Envirotech Services, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
| Textiles, apparel & luxury goods | ||||||||||||||||||||||||||||||||||||
| American Soccer Company, Incorporated (SCORE) | First lien senior secured loan | % | % | % | % | |||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | % | ||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
25
Kayne DL 2021, Inc.
Consolidated Schedule of Investments
As of December 31, 2024
(amounts in 000’s)
| Portfolio Company(1) | Footnotes | Investment | Interest Rate | Spread | PIK Rate | Reference(2) | Maturity Date | Principal / Par | Amortized Cost(3)(4) | Fair Value | Percentage of Net Assets | |||||||||||||||||||||||||
| Trading companies & distributors | ||||||||||||||||||||||||||||||||||||
| AIDC Intermediate Co 2, LLC (Peak Technologies) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| TL Alpine Holding Corp. (Air Distribution Technologies Inc.) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| BCDI Meteor Acquisition, LLC (Meteor) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| CGI Automated Manufacturing, LLC | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | % | % | |||||||||||||||||||||||||||||||||
| Dusk Acquisition II Corporation (Motors & Armatures, Inc. – MARS) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | % | % | |||||||||||||||||||||||||||||||||
| Energy Acquisition LP (Electrical Components International, Inc. - ECI) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | % | % | |||||||||||||||||||||||||||||||||
| Engineered Fastener Company, LLC (EFC International) | First lien senior secured loan | % | % | % | ||||||||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
26
Kayne DL 2021, Inc.
Consolidated Schedule of Investments
As of December 31, 2024
(amounts in 000’s)
| Portfolio Company(1) | Footnotes | Investment | Interest Rate | Spread | PIK Rate | Reference(2) | Maturity Date | Principal / Par | Amortized Cost(3)(4) | Fair Value | Percentage of Net Assets | |||||||||||||||||||||||||
| Genuine Cable Group, LLC | First lien senior secured loan | % | 5.75 | % | % | |||||||||||||||||||||||||||||||
| First lien senior secured loan | % | 5.75 | % | % | ||||||||||||||||||||||||||||||||
| I.D. Images Acquisition, LLC | First lien senior secured loan | % | 5.75 | % | % | |||||||||||||||||||||||||||||||
| First lien senior secured loan | % | 5.75 | % | % | ||||||||||||||||||||||||||||||||
| Krayden Holdings, Inc. | First lien senior secured delayed draw loan | % | 4.75 | % | % | |||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | 4.75 | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured loan | % | 4.75 | % | % | ||||||||||||||||||||||||||||||||
| OAO Acquisitions, Inc. (BearCom) | First lien senior secured loan | % | 5.50 | % | % | |||||||||||||||||||||||||||||||
| First lien senior secured loan | % | 5.50 | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | 5.50 | % | % | ||||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | 5.50 | % | % | ||||||||||||||||||||||||||||||||
| Workholding US Holdings, LLC (Forkardt Hardinge) | First lien senior secured loan | % | 5.50 | % | % | |||||||||||||||||||||||||||||||
| First lien senior secured revolving loan | % | 5.50 | % | % | ||||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
| Wireless telecommunication services | ||||||||||||||||||||||||||||||||||||
| Centerline Communications, LLC | First lien senior secured loan | % | 6.00 | % | % | % | ||||||||||||||||||||||||||||||
| First lien senior secured delayed draw loan | % | 6.00 | % | % | % | |||||||||||||||||||||||||||||||
| First lien senior secured loan | % | 6.00 | % | % | % | |||||||||||||||||||||||||||||||
| % | ||||||||||||||||||||||||||||||||||||
| Total Debt Investments | % | |||||||||||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
27
Kayne DL 2021, Inc.
Consolidated Schedule of Investments
As of December 31, 2024
(amounts in 000’s)
| Number of | Fair | Percentage | ||||||||||||||||
| Portfolio Company(1) | Footnotes | Shares | Cost | Value | of Net Assets | |||||||||||||
| Short-Term Investments | ||||||||||||||||||
| Morgan Stanley Institutional Liquidity Fund, Institutional Class, | (6) | % | ||||||||||||||||
| Total Short-Term Investments | % | |||||||||||||||||
| Total Investments | $ | $ | % | |||||||||||||||
| - | ||||||||||||||||||
| Liabilities in Excess of Other Assets | ( | ) | ( | )% | ||||||||||||||
| Net Assets | $ | % | ||||||||||||||||
| (1) |
| (2) | Unless otherwise noted, all loans contain a variable rate structure, that may be subject to an interest rate floor. Variable rate loans bear interest at a rate that may be determined by reference to either the Secured Overnight Financing Rate (“SOFR”) (which can include one-(M), three-(Q) or six-month (S) SOFR), or an alternate base rate (which can include the Federal Funds Effective Rate or the Prime Rate). |
| (3) | The amortized cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method. |
| (4) | As of December 31, 2024, the tax cost of the Company’s investments approximates their amortized cost. |
| (5) | Non-qualifying investment as defined by Section 55(a) of the Investment Company Act of 1940. 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, 2024, 4.3% of the Company’s total assets were in non-qualifying investments. |
| (6) |
See accompanying notes to consolidated financial statements.
28
Kayne DL 2021, Inc.
Notes to Consolidated Financial Statements
(amounts in 000s, except for shares and per share data)
(Unaudited)
Note 1. Organization
Organization
Kayne DL 2021, Inc. (the “Company”) is an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, for U.S. federal income tax purposes, the Company intends to qualify as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).
The Company is a Delaware corporation formed to make investments in middle-market companies and commenced operations on December 16, 2021.
The Company is managed by KA Credit Advisors II, LLC (the “Advisor”), an indirect controlled subsidiary of Kayne Anderson Capital Advisors, L.P. (“Kayne Anderson”), a prominent alternative investment management firm. The Advisor operates within Kayne Anderson’s middle market private credit platform (“KAPC” or “Kayne Anderson Private Credit”). The Advisor is registered with the United States Securities and Exchange Commission (the “SEC”) under the Investment Advisory Act of 1940, as amended. Subject to the overall supervision of the Company’s board of directors (the “Board”), the Advisor is responsible for originating prospective investments, conducting research and due diligence investigations on potential investments, analyzing investment opportunities, negotiating and structuring investments, determining the value of the investments and monitoring its investments and portfolio companies on an ongoing basis. The Board consists of five directors, four of whom are independent (including the Board’s chairperson).
The Company’s investment objective is to generate current income and, to a lesser extent, capital appreciation primarily through debt investments in middle-market companies.
As of June 30, 2025, the Company has entered into
subscription agreements with investors for an aggregate capital commitment of $
The Company conducts private offerings of its Common Stock to investors in reliance on exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). At the closing of any private offering, each investor will make a capital commitment (a “Capital Commitment”) to purchase shares of its common stock pursuant to a subscription agreement entered into with the Company. Investors will be required to fund drawdowns to purchase shares up to the amount of their respective Capital Commitments each time the Company delivers a notice to the investors. The Company commenced its loan origination and investment activities on December 16, 2021 contemporaneously with the initial drawdown from investors in the private offering.
29
Kayne DL 2021, Inc.
Notes to Consolidated Financial Statements
(amounts in 000s, except for shares and per share data)
(Unaudited)
Note 2. Significant Accounting Policies
A. Basis of Presentation—the accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company is an investment company and follows accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 946 — “Financial Services — Investment Companies.” In the opinion of management, all adjustments, which are of a normal recurring nature, considered necessary for the fair statement of the financial statements for the periods presented, have been included.
B. Consolidation—As provided under Regulation S-X and ASC Topic 946 – “Financial Services – Investment Companies”, the Company will generally not consolidate its investment in a company other than a wholly-owned investment company or controlled operating company whose business consists of providing services to the Company.
Accordingly, the Company consolidated the accounts of KDL Corp, LLC in its consolidated financial statements. KDL Corp, LLC is a Delaware LLC that has elected to be treated as a corporation for U.S. tax purposes and was formed to facilitate compliance with the requirements to be treated as a RIC under the Code by holding (directly or indirectly through a subsidiary) equity or equity related investments in portfolio companies organized as limited liability companies or limited partnerships. As of June 30, 2025, KDL Corp, LLC held investments.
C. Use of Estimates—the preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of income and expenses during the period. Actual results could differ materially from those estimates.
D. Cash and Cash Equivalents—cash and cash equivalents include short-term, liquid investments with an original maturity of three months or less and include money market fund accounts. Cash equivalents, which are the Company’s investments in money market fund accounts, are presented on the Company’s consolidated schedule of investments, and within investments on the Company’s consolidated statement of assets and liabilities.
E. Investment Valuation, Fair Value—the Company conducts the valuation of its investments consistent with GAAP and the 1940 Act. The Company’s investments will be valued no less frequently than quarterly, in accordance with the terms of Topic 820 of the Financial Accounting Standards Board’s Accounting Standards Codification, Fair Value Measurement and Disclosures (“ASC 820”).
Pursuant to Rule 2a-5 under the 1940 Act, the Board of Directors has designated the Advisor as the “valuation designee” to perform fair value determinations of the Company’s portfolio holdings, subject to oversight by and periodic reporting to the Board. The valuation designee performs fair valuation of the Company’s portfolio holdings in accordance with the Advisor’s Valuation Program, as approved by the Board.
30
Kayne DL 2021, Inc.
Notes to Consolidated Financial Statements
(amounts in 000s, except for shares and per share data)
(Unaudited)
Traded Investments (Level 1 or Level 2)
Investments for which market quotations are readily available will typically be valued at those market quotations. Traded investments such as corporate bonds, preferred stock, bank notes, broadly syndicated loans or loan participations are valued by using the bid price provided by an independent pricing service, by an independent broker, the agent bank, syndicate bank or principal market maker. When price quotes for investments are not available, or such prices are stale or do not represent fair value in the judgment of the Company’s Advisor, fair market value will be determined using the Advisor’s valuation process for investments that are privately issued or otherwise restricted as to resale.
The Company may also invest, to a lesser extent, in equity securities purchased in conjunction with debt investments. While the Company anticipates these equity securities to be issued by privately held companies, the Company may hold equity securities that are publicly traded. Equity securities listed on any exchange other than the NASDAQ Stock Market, Inc. (“NASDAQ”) are valued, except as indicated below, at the last sale price on the business day as of which such value is being determined. If there has been no sale on such day, the securities are valued at the mean of the most recent bid and ask prices on such day. Securities admitted to trade on the NASDAQ are valued at the NASDAQ official closing price. Equity securities traded on more than one securities exchange are valued at the last sale price on the business day as of which such value is being determined at the close of the exchange representing the principal market for such securities. Equity securities traded in the over-the-counter market, but excluding securities admitted to trading on the NASDAQ, are valued at the closing bid prices.
Non-Traded Investments (Level 3)
Investments that are privately issued or otherwise restricted as to resale, as well as any security for which (a) reliable market quotations are not available in the judgment of the Company’s Advisor, or (b) the independent pricing service or independent broker does not provide prices or provides a price that in the judgment of the Company’s Advisor is stale or does not represent fair value, shall each be valued in a manner that most fairly reflects fair value of the security on the valuation date. The Company expects that a significant majority of its investments will be Level 3 investments. Unless otherwise determined by the Advisor, the following valuation process is used for the Company’s Level 3 investments:
| ● | Valuation Designee. The applicable investments will be valued no less frequently than quarterly by the Advisor, with new investments valued at the time such investment was made. The value of each Level 3 investment will be initially reviewed by the persons responsible for such portfolio company or investment. The Advisor will use a standardized template designed to approximate fair market value based on observable market inputs, updated credit statistics and unobservable inputs to determine a preliminary value. The Advisor will specify the titles of the persons responsible for determining the fair value of Company investments, including by specifying the particular functions for which they are responsible, and will reasonably segregate fair value determinations from the portfolio management of the Company such that the portfolio manager(s) may not determine, or effectively determine by exerting substantial influence on, the fair values ascribed to portfolio investments. |
| ● | Valuation Firm. Quarterly, a third-party valuation firm engaged by the Advisor reviews the valuation methodologies and calculations employed for each of the Company’s investments that the Advisor has placed on the “watch list” and approximately |
| ● | Oversight. The Board has appointed the Advisor as the valuation designee for the Company for purposes of making determinations of fair value as permitted by Rule 2a-5 under the 1940 Act. The Audit Committee shall aid the Board in overseeing the Advisor’s fair valuation of securities that are not publicly traded or for which current market values are not readily available. The Audit Committee shall meet quarterly to review the fair value determinations, processes and written reports of the Advisor as part of the Board’s oversight responsibilities. |
31
Kayne DL 2021, Inc.
Notes to Consolidated Financial Statements
(amounts in 000s, except for shares and per share data)
(Unaudited)
Determination of fair value involves subjective judgments and estimates. Accordingly, the notes to the Company’s financial statements express the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on the Company’s financial statements.
F. Interest Income Recognition—Interest
income is recorded on an accrual basis and includes the accretion of discounts, amortization of premiums and payment-in-kind (“PIK”)
interest. Discounts from and premiums to par value on investments purchased are accreted/amortized into interest income over the life
of the respective security using the effective yield method. To the extent loans contain PIK provisions, PIK interest, computed at the
contractual rate specified in each applicable agreement, is accrued and recorded as interest income and added to the principal balance
of the loan. PIK interest income added to the principal balance is generally collected upon repayment of the outstanding principal. The
Company does not accrue PIK interest if, in the opinion of the Advisor, the portfolio company valuation indicates that the PIK interest
is not likely to be collectible. If the Company believes PIK is not expected to be realized, the investment generating PIK will be placed
on non-accrual status. When a PIK investment is placed on non-accrual status, the accrued, uncapitalized interest is generally reversed
through PIK interest income. Previously capitalized PIK interest is not reversed when an investment is placed on non-accrual status. To
maintain the Company’s status as a RIC, this non-cash source of income must be paid out to stockholders in the form of dividends
for the year the income was earned, even though the Company has not yet collected the cash. The amortized cost of investments represents
the original cost adjusted for any accretion of discounts, amortization of premiums and PIK interest. For the six months ended June 30,
2025 and 2024, the Company had $
Loans are generally placed on non-accrual status
when it has been determined that a significant impairment in the financial condition and ability of the borrower to repay principal and
interest has occurred and is expected to continue such that it is probable the collectability of full amount of the loan (principal and
interest) is doubtful. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status. If cash payments
are received subsequent to a loan being placed on non-accrual status, these payments will first be applied to previously accrued but uncollected
interest, then to recover the principal. Additionally, any original issue discount and market discount are no longer accreted to interest
income as of the date the loan is placed on non-accrual status. Non-accrual loans are restored to accrual status when past due principal
and interest are paid or there is no longer a reasonable doubt that such principal or interest will be collected in full and, in the Company’s
judgment, principal and interest are likely to remain current. The Company may make exceptions to this policy if the loan has sufficient
collateral value (i.e., typically measured as enterprise value of the portfolio company) or is in the process of collection. As of June
30, 2025, the Company had one investment on non-accrual status, which comprised
G. Debt Issuance Costs – Costs incurred by the Company related to the issuance of its debt (credit facilities) are capitalized and amortized over the period the debt is outstanding. The Company has classified the costs incurred to issue its credit facilities as a deduction from the carrying value of the credit facilities on the Statement of Assets and Liabilities. For the purpose of calculating the Company’s asset coverage ratios pursuant to the 1940 Act, deferred issuance costs are not deducted from the carrying value of debt or preferred stock.
H. Dividends to Common Stockholders—Dividends to common stockholders are recorded on the record date. The amount to be paid out as a dividend is determined by the Company’s board of directors each quarter and is generally based upon the earnings estimated by management and considers the level of undistributed taxable income carried forward from the prior year for distribution in the current year. Net realized capital gains, if any, are generally distributed, although the Company may decide to retain such capital gains for investment.
I. Income Taxes – it is the Company’s intention to continue to be treated as and to qualify each year for special tax treatment afforded a RIC under the Code. As long as the Company meets certain requirements that govern its sources of income, diversification of assets and timely distribution of earnings to stockholders, the Company will not be subject to U.S. federal income tax.
32
Kayne DL 2021, Inc.
Notes to Consolidated Financial Statements
(amounts in 000s, except for shares and per share data)
(Unaudited)
The Company must pay distributions equal to
All RICs are subject to a non-deductible
The Company evaluates tax positions taken or expected to be taken in the course of preparing its 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, on-going analyses of tax laws, regulations and interpretations thereof.
J. Commitments and Contingencies – in the normal course of business, the Company may enter 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. Currently, no such claims exist or are expected to arise and, accordingly, the Company has not accrued any liability in connection with such indemnifications.
Note 3. Agreements and Related Party Transactions
A. Administration Agreement—on December 16, 2021, the Company entered into an Administration Agreement with its Advisor, which serves as its Administrator and provides or oversees the performance of its required administrative services and professional services rendered by others, which include (but are not limited to), accounting, payment of our expenses, legal, compliance, operations, technology and investor relations, preparation and filing of its tax returns, and preparation of financial reports provided to its stockholders and filed with the SEC. On February 19, 2025, the Board approved an additional one-year term of the Administration Agreement through March 15, 2026.
The Company reimburses the Administrator for its costs and expenses incurred in performing its obligations under the Administration Agreement. As the Company reimburses the Administrator for its expenses, the Company indirectly bears such cost. The Administration Agreement may be terminated by either party with 60 days’ written notice.
33
Kayne DL 2021, Inc.
Notes to Consolidated Financial Statements
(amounts in 000s, except for shares and per share data)
(Unaudited)
B. Investment Advisory Agreement – on December 16, 2021, the Company entered into an Investment Advisory Agreement with its Advisor. Pursuant to the Investment Advisory Agreement with its Advisor, the Company will pay its Advisor a management fee for investment advisory and management services. The Investment Advisory Agreement may be terminated by either party with 60 days’ written notice. On February 19, 2025, the Board approved an additional one-year term of the Investment Advisory Agreement through March 15, 2026.
Management Fee
The management fee is calculated at an annual
rate of
The management fee is payable quarterly in arrears
and calculated based on the average of the Company’s fair market value of investments, at the end of the two most recently completed
calendar quarters, including, in each case, assets purchased with borrowings under credit facilities, but excluding cash, U.S. government
securities and commercial paper instruments maturing within
For the three months ended June 30, 2025 and 2024,
the Company incurred management fees of $
For the six months ended June 30, 2025 and 2024,
the Company incurred management fees of $
C. Other – Kayne Anderson, an affiliate
of the Advisor, made an equity contributions of $
Note 4. Investments
The following table presents the composition of the Company’s investment portfolio at amortized cost and fair value as of June 30, 2025 and December 31, 2024.
| June 30, 2025 | December 31, 2024 | |||||||||||||||
| Amortized | Fair | Amortized | Fair | |||||||||||||
| Cost | Value | Cost | Value | |||||||||||||
| First-lien senior secured debt investments | $ | $ | $ | $ | ||||||||||||
| Investments in money market funds | ||||||||||||||||
| Total Investments | $ | $ | $ | $ | ||||||||||||
As of June 30, 2025 and December 31, 2024, $
The Company uses Global Industry Classification Standards (GICS), Level 3 – Industry, for classifying the industry groupings of its portfolio companies.
34
Kayne DL 2021, Inc.
Notes to Consolidated Financial Statements
(amounts in 000s, except for shares and per share data)
(Unaudited)
The industry composition of long-term investments based on fair value as of June 30, 2025 and December 31, 2024 was as follows:
| June 30, 2025 | December 31, 2024 | |||||||
| Trading companies & distributors | % | % | ||||||
| Health care providers & services | % | % | ||||||
| Commercial services & supplies | % | % | ||||||
| Food products | % | % | ||||||
| Containers & packaging | % | % | ||||||
| Leisure products | % | % | ||||||
| Professional services | % | % | ||||||
| Machinery | % | % | ||||||
| Personal care products | % | % | ||||||
| Aerospace & defense | % | % | ||||||
| Building products | % | % | ||||||
| Household products | % | % | ||||||
| Automobile components | % | % | ||||||
| Chemicals | % | % | ||||||
| IT services | % | % | ||||||
| Household durables | % | % | ||||||
| Biotechnology | % | % | ||||||
| Wireless telecommunication services | % | % | ||||||
| Health care equipment & supplies | % | % | ||||||
| Textiles, apparel & luxury goods | % | % | ||||||
| Diversified telecommunication services | % | % | ||||||
| Insurance | % | % | ||||||
| % | % | |||||||
35
Kayne DL 2021, Inc.
Notes to Consolidated Financial Statements
(amounts in 000s, except for shares and per share data)
(Unaudited)
Note 5. Fair Value
The Fair Value Measurement Topic of the FASB Accounting Standards Codification (ASC 820) defines fair value as the price at which an orderly transaction to sell an asset or to transfer a liability would take place between market participants under current market conditions at the measurement date. As required by ASC 820, the Company has performed an analysis of all investments measured at fair value to determine the significance and character of all inputs to their fair value determination. Inputs are the assumptions, along with considerations of risk, that a market participant would use to value an asset or a liability. In general, observable inputs are based on market data that is readily available, regularly distributed and verifiable that the Company obtains from independent, third-party sources. Unobservable inputs are developed by the Company based on its own assumptions of how market participants would value an asset or a liability.
The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into the following three broad categories.
| Level 1 | — | Valuations based on quoted unadjusted prices for identical instruments in active markets traded on a national exchange to which the Company has access at the date of measurement. |
| Level 2 | — | Valuations based on quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists or instances where prices vary substantially over time or among brokered market makers. |
| Level 3 | — | Model derived valuations in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are those inputs that reflect the Company’s own assumptions that market participants would use to price the asset or liability based on the best available information. |
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given financial instrument is based on the lowest level of input that is significant to the fair value measurement. Assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.
| Fair Value Hierarchy as of June 30, 2025 | ||||||||||||||||
| Investments: | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| First-lien senior secured debt investments | $ | $ | $ | $ | ||||||||||||
| Investments in money market funds | ||||||||||||||||
| Total Investments | $ | $ | $ | $ | ||||||||||||
| Fair Value Hierarchy as of December 31, 2024 | ||||||||||||||||
| Investments: | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| First-lien senior secured debt investments | $ | $ | $ | $ | ||||||||||||
| Investments in money market funds | ||||||||||||||||
| Total Investments | $ | $ | $ | $ | ||||||||||||
36
Kayne DL 2021, Inc.
Notes to Consolidated Financial Statements
(amounts in 000s, except for shares and per share data)
(Unaudited)
The following tables present changes in the fair value of investments for which Level 3 inputs were used to determine the fair value as of and for the three and six months ended June 30, 2025 and 2024, respectively.
| First-lien | ||||
| senior secured | ||||
| For the three months ended June 30, 2025 | debt investments | |||
| Fair value, beginning of period | $ | |||
| Purchases of investments | ||||
| Proceeds from sales of investments and principal repayments | ( | ) | ||
| Net change in unrealized gain (loss) | ( | ) | ||
| Net realized gain (loss) | ||||
| Net accretion of discount on investments | ||||
| PIK interest | ||||
| Transfers into (out of) Level 3 | ||||
| Fair value, end of period | $ | |||
| First-lien | ||||
| senior secured | ||||
| For the three months ended June 30, 2024 | debt investments | |||
| Fair value, beginning of period | $ | |||
| Purchases of investments | ||||
| Proceeds from sales of investments and principal repayments | ( | ) | ||
| Net change in unrealized gain (loss) | ( | ) | ||
| Net realized gain (loss) | ||||
| Net accretion of discount on investments | ||||
| PIK interest | ||||
| Transfers into (out of) Level 3 | ||||
| Fair value, end of period | $ | |||
| First-lien | ||||
| senior secured | ||||
| For the six months ended June 30, 2025 | debt investments | |||
| Fair value, beginning of period | $ | |||
| Purchases of investments | ||||
| Proceeds from sales of investments and principal repayments | ( | ) | ||
| Net change in unrealized gain (loss) | ( | ) | ||
| Net realized gain (loss) | ||||
| Net accretion of discount on investments | ||||
| PIK interest | ||||
| Transfers into (out of) Level 3 | ||||
| Fair value, end of period | $ | |||
| First-lien | ||||
| senior secured | ||||
| For the six months ended June 30, 2024 | debt investments | |||
| Fair value, beginning of period | $ | |||
| Purchases of investments | ||||
| Proceeds from principal payments and sales of investments | ( | ) | ||
| Net change in unrealized gain (loss) | ||||
| Net realized gain (loss) | ||||
| Net accretion of discount on investments | ||||
| PIK interest | ||||
| Transfers into (out of) Level 3 | ||||
| Fair value, end of period | $ | |||
37
Kayne DL 2021, Inc.
Notes to Consolidated Financial Statements
(amounts in 000s, except for shares and per share data)
(Unaudited)
For the three and six months ended June 30, 2025 and 2024, the Company did not recognize any transfers to or from Level 3. The increase in unrealized gain (loss) relates to investments that were held during the period. The Company includes these unrealized gains and losses on the Statement of Operations – Net Change in Unrealized Gains (Losses).
Valuation Techniques and Unobservable Inputs
Non-traded debt investments are typically valued using either a market yield analysis or an enterprise value analysis. For debt investments that are not considered to be credit impaired, the Advisor uses a market yield analysis to determine fair value. If the debt investment is considered to be credit impaired (which is determined by performing an enterprise value analysis), the Advisor will use the enterprise value analysis or a liquidation basis analysis to determine fair value.
To determine fair value using a market yield analysis, the Advisor discounts the contractual cash flows of each investment at an appropriate discount rate (the market yield). To determine the estimated market yield for its debt investments, the Advisor analyzes changes in the risk/reward (measured by yields and leverage) of middle market indices as compared to changes in risk/reward for the underlying investment and estimates the appropriate discount rate for such debt investment. In this context, the discount rate and fair market value of the investment is impacted by the structure and pricing of the security relative to current market yields for similar investments in similar businesses as well as the financial performance of such business. In performing this analysis, the Advisor considers data sources including, but not limited to: (i) industry publications, such as S&P Global’s High-End Middle Market Lending Review; Thomson Reuter’s Refinitiv Middle Market Monthly Stats; CapitalIQ; Pitchbook News; The Lead Left, and other data sources; (ii) comparable investments reviewed or completed by affiliates of the Advisor, and (iii) information obtained and provided by the Advisor’s independent valuation managers.
To determine if a debt investment is credit impaired, the Advisor estimates the enterprise value of the business and compares such estimate to the outstanding indebtedness of such business. The Advisor utilizes the following valuation methodologies to determine the estimated enterprise value of the company: (i) analysis of valuations of publicly traded companies in a similar line of business (“public company comparable analysis”), (ii) analysis of valuations of M&A transaction valuations for companies in a similar line of business (“precedent transaction analysis”), (iii) discounted cash flows (“DCF analysis”) and (iv) other valuation methodologies.
In determining the non-traded debt investment valuations, the following factors are considered, where relevant: the nature and realizable value of any collateral; the company’s ability to make interest payments, amortization payments (if any) and other fixed charges; call features, put features and other relevant terms of the debt security; the company’s historical and projected financial results; the markets in which the company does business; changes in the interest rate environment and the credit markets generally that may affect the price at which similar investments may be valued; and other relevant factors.
38
Kayne DL 2021, Inc.
Notes to Consolidated Financial Statements
(amounts in 000s, except for shares and per share data)
(Unaudited)
Equity investments in private companies are typically valued using one of or a combination of the following valuation techniques: (i) public company comparable analysis, (ii) precedent transaction analysis and (iii) DCF analysis.
Under all of these valuation techniques, the Advisor estimates operating results of the companies in which it invests, including earnings before interest expense, income tax expense, depreciation and amortization (“EBITDA”) and free cash flow. These estimates utilize unobservable inputs such as historical operating results, which may be unaudited, and projected operating results, which will be based on operating assumptions for such company. Investment performance data utilized will be the most recently available as of the measurement date which in many cases may reflect up to a one quarter lag in information. These estimates will be sensitive to changes in assumptions specific to such company as well as general assumptions for the industry. Other unobservable inputs utilized in the valuation techniques outlined above include: discounts for lack of marketability, selection of publicly traded companies, selection of similar precedent transactions, selected ranges for valuation multiples and expected required rates of return (discount rates).
Quantitative Table for Valuation Techniques
| As of June 30, 2025 | ||||||||||||||
| Valuation | Unobservable | Weighted | ||||||||||||
| Fair Value | Technique | Input | Range | Average | ||||||||||
| First-lien senior secured debt investments | $ | % | ||||||||||||
| As of December 31, 2024 | ||||||||||||||
| Valuation | Unobservable | Weighted | ||||||||||||
| Fair Value | Technique | Input | Range | Average | ||||||||||
| First-lien senior secured debt investments | $ | % | ||||||||||||
Note 6. Debt
As of June 30, 2025, the Company has a senior secured revolving credit
facility (the “Subscription Credit Facility”), that has a total commitment of $
| June 30, 2025 | ||||||||||||
| Aggregate Principal Committed | Outstanding Principal | Amount Available(1) | ||||||||||
| Subscription Credit Facility | $ | $ | $ | |||||||||
| Total debt | $ | $ | $ | |||||||||
39
Kayne DL 2021, Inc.
Notes to Consolidated Financial Statements
(amounts in 000s, except for shares and per share data)
(Unaudited)
| December 31, 2024 | ||||||||||||
| Aggregate Principal Committed | Outstanding Principal | Amount Available(1) | ||||||||||
| Subscription Credit Facility | $ | $ | $ | |||||||||
| Total debt | $ | $ | $ | |||||||||
| (1) |
For the six months ended June 30, 2025 and 2024,
the weighted average interest rate of borrowings outstanding was
As of June 30, 2025, the Company did have
any amounts outstanding under the Subscription Credit Facility. As of June 30, 2024, the Company had $
Note 7. Common Stock and Share Transactions
As of June 30, 2025, the Company had
Common Stock Issuances
The following tables summarize the number of common stock shares issued and aggregate proceeds received from such issuances related to the Company’s capital call notices pursuant to subscription agreements with investors for the six months ended June 30, 2025 and 2024, respectively.
| For the six months ended June 30, 2025 | ||||||||||||
| Offering | Aggregate | |||||||||||
| price per | Common stock | offering | ||||||||||
| Common stock issue date | share | shares issued | amount | |||||||||
| February 13, 2025 | $ | $ | ||||||||||
| April 30, 2025 | ||||||||||||
| Total common stock issued | $ | |||||||||||
| For the six months ended June 30, 2024 | ||||||||||||
| Offering | Aggregate | |||||||||||
| price per | Common stock | offering | ||||||||||
| Common stock issue date | share | shares issued | amount | |||||||||
| February 15, 2024 | $ | $ | ||||||||||
| Total common stock issued | $ | |||||||||||
As of June 30, 2025, the Company had subscription
agreements with investors for an aggregate capital commitment of $
Dividends and Dividend Reinvestment
The following tables summarize the dividends declared and payable by the Company for the six months ended June 30, 2025 and 2024, respectively. See Note 12 – Subsequent Events.
| For the six months ended June 30, 2025 | ||||||||
| Dividend | Dividend | Dividend | ||||||
| record | payment | per | ||||||
| Dividend declaration date | date | date | share | |||||
| February 19, 2025 | $ | |||||||
| May 1, 2025 | ||||||||
| Total dividends declared | $ | |||||||
40
Kayne DL 2021, Inc.
Notes to Consolidated Financial Statements
(amounts in 000s, except for shares and per share data)
(Unaudited)
| For the six months ended June 30, 2024 | ||||||||
| Dividend | Dividend | Dividend | ||||||
| record | payment | per | ||||||
| Dividend declaration date | date | date | share | |||||
| March 6, 2024 | $ | |||||||
| May 8, 2024 | ||||||||
| Total dividends declared | $ | |||||||
The following tables summarize the amounts received and shares of common stock issued to shareholders pursuant to the Company’s dividend reinvestment plan (“DRIP”) for the six months ended June 30, 2025 and 2024, respectively. See Note 12 – Subsequent Events.
| For the six months ended June 30, 2025 | ||||||||||
| Dividend | DRIP | |||||||||
| payment | shares | DRIP | ||||||||
| Dividend record date | date | issued | value | |||||||
| December 31, 2024 | $ | |||||||||
| March 31, 2025 | ||||||||||
| $ | ||||||||||
For the dividend with a record date of June 30,
2025 and paid on July 16, 2025, there were
| For the six months ended June 30, 2024 | ||||||||||
| Dividend | DRIP | |||||||||
| payment | shares | DRIP | ||||||||
| Dividend record date | date | issued | value | |||||||
| December 29, 2023 | $ | |||||||||
| March 29, 2024 | ||||||||||
| $ | ||||||||||
For the dividend declared on
Note 8. Commitments and Contingencies
The Company had an aggregate of $
The Company’s unfunded revolving commitments are generally available on a borrower’s demand and may remain outstanding until the maturity date of the underlying senior secured loan. The Company’s unfunded delayed draw term loan commitments are generally subject to the satisfaction of certain financial and nonfinancial covenants and certain operational metrics. The commitment period for unfunded delayed draw term loan commitments may be shorter than the maturity date if drawn or funded.
41
Kayne DL 2021, Inc.
Notes to Consolidated Financial Statements
(amounts in 000s, except for shares and per share data)
(Unaudited)
A summary of the composition of the unfunded commitments as of June 30, 2025 and December 31, 2024 is shown in the table below.
| As of | As of | |||||||
| June 30, 2025 | December 31, 2024 | |||||||
| Aegis Toxicology Sciences Corporation | $ | $ | ||||||
| Alcami Corporation | ||||||||
| Allcat Claims Service, LLC | ||||||||
| Allentown, LLC | ||||||||
| American Equipment Holdings LLC | ||||||||
| American Soccer Company, Incorporated (SCORE) | ||||||||
| Basel U.S. Acquisition Co., Inc. (IAC) | ||||||||
| Bloomington Holdco, LLC (BW Fusion) | ||||||||
| BLP Buyer, Inc. (Bishop Lifting Products) | ||||||||
| Carton Packaging Buyer, Inc. (Century Box) | ||||||||
| CCFF Buyer, LLC (California Custom Fruits & Flavors, LLC) | ||||||||
| CGI Automated Manufacturing, LLC | ||||||||
| CI (MG) Group, LLC (Mariani Premier Group) | ||||||||
| City Line Distributors LLC | ||||||||
| CMT Intermediate Holdings, LLC (Capital Machine Technologies) | ||||||||
| CREO Group Inc. (HMS Manufacturing) | ||||||||
| Curio Brands, LLC | ||||||||
| Del-Air Heating, Air Conditioning & Refrigeration, LLC | ||||||||
| DISA Holdings Corp. | ||||||||
| Diverzify Intermediate, LLC | ||||||||
| ECS Opco 1, LLC (Spectrum Vascular) | ||||||||
| Energy Acquisition LP (Electrical Components International, Inc. - ECI) | ||||||||
| Envirotech Services, LLC | ||||||||
| Fastener Distribution Holdings, LLC | ||||||||
| Guardian Dentistry Practice Management, LLC | ||||||||
| Gulf Pacific Acquisition, LLC | ||||||||
| IF&P Foods, LLC (FreshEdge) | ||||||||
| Improving Acquisition LLC | ||||||||
| Krayden Holdings, Inc. | ||||||||
| Lakewood Acquisition Corporation (R&B Wholesale) | ||||||||
| LEM Buyer, Inc. (CFS Technologies Intermediate, Inc.) | ||||||||
| Light Wave Dental Management, LLC | ||||||||
| LSL Industries, LLC | ||||||||
| MacNeill Pride Group | ||||||||
| ML Buyer, LLC (Mama Lycha Foods, LLC) | ||||||||
| Monza Purchaser, LLC (Smyth) | ||||||||
| MRC Keystone Acquisition LLC (Automated Handing Solutions) | ||||||||
| NMA Holdings, LLC (Neuromonitoring Associates) | ||||||||
| OAO Acquisitions, Inc. (BearCom) | ||||||||
| Phoenix YW Buyer, Inc. (Elida Beauty) | ||||||||
| Pixel Intermediate, LLC | ||||||||
| Redwood MSO, LLC (Smile Partners) | ||||||||
| Refocus Management Services, LLC | ||||||||
| RMH Systems, LLC | ||||||||
| The Robinette Company | ||||||||
| Ruff Roofers Buyer, LLC | ||||||||
| Siegel Egg Co., LLC | ||||||||
| Speedstar Holding LLC | ||||||||
| Spinrite, Inc. | ||||||||
| Superior Intermediate LLC (Landmark Structures) | ||||||||
| Tapco Buyer LLC | ||||||||
| TL Atlas Merger Sub Corp (Zep) | ||||||||
| US Anchors Group, Inc. (Mechanical Plastics Corp.) | ||||||||
| Vehicle Accessories, Inc. | ||||||||
| Workholding US Holdings, LLC (Forkardt Hardinge) | ||||||||
| Worldwide Produce Acquisition, LLC | ||||||||
| Total unfunded commitments | $ | $ | ||||||
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, 2025 and December 31, 2024, management was not aware of any material pending or threatened litigation that would require accounting recognition or financial statement disclosure.
42
Kayne DL 2021, Inc.
Notes to Consolidated Financial Statements
(amounts in 000s, except for shares and per share data)
(Unaudited)
Note 9. Earnings Per Share
In accordance with the provisions of ASC Topic 260, Earnings per Share (“ASC 260”), basic earnings per share is computed by dividing earnings available to common stockholders by the weighted average number of shares outstanding during the period. Other potentially dilutive common shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis. As of June 30, 2025 and 2024, there were dilutive shares.
The following table sets forth the computation of basic and diluted earnings per share of common stock for the three and six months ended June 30, 2025 and 2024.
| For the three months ended | For the six months ended | |||||||||||||||
| June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | |||||||||||||
| Net increase (decrease) in net assets resulting from operations | $ | $ | $ | $ | ||||||||||||
| Weighted average shares of common stock outstanding - basic and diluted | ||||||||||||||||
| Earnings (loss) per share of common stock - basic and diluted | $ | $ | $ | $ | ||||||||||||
Note 10. Financial Highlights
The following per share of common stock data has been derived from information provided in the unaudited financial statements. The following is a schedule of financial highlights for the six months ended June 30, 2025 and 2024.
| For the six months ended June 30, | ||||||||
| (amounts in thousands, except share and per share amounts) | ||||||||
| 2025 | 2024 | |||||||
| Per Common Share Operating Performance (1) | ||||||||
| Net Asset Value, Beginning of Period | $ | $ | ||||||
| Results of Operations: | ||||||||
| Net Investment Income (loss) | ||||||||
| Net Realized and Unrealized Gain (Loss) on Investments(2) | ( | ) | ||||||
| Net Increase (Decrease) in Net Assets Resulting from Operations | ||||||||
| Dividends to Common Stockholders | ||||||||
| Dividends from Net Investment Income | ( | ) | ( | ) | ||||
| Net Decrease in Net Assets Resulting from Dividends | ( | ) | ( | ) | ||||
| Net Asset Value, End of Period | $ | $ | ||||||
| Shares Outstanding, End of Period | ||||||||
| Ratio/Supplemental Data | ||||||||
| Net assets, end of period | $ | $ | ||||||
| Weighted-average shares outstanding | ||||||||
| Total Return(3) | % | % | ||||||
| Portfolio turnover | % | % | ||||||
| Ratio of operating expenses to average net assets(4) | % | % | ||||||
| Ratio of net investment income (loss) to average net assets(4) | % | % | ||||||
| (1) |
43
Kayne DL 2021, Inc.
Notes to Consolidated Financial Statements
(amounts in 000s, except for shares and per share data)
(Unaudited)
| (2) |
| (3) | |
| (4) |
|
Note 11. Segment Reporting
Note 12. Subsequent Events
The Company management has evaluated subsequent events through the date of issuance of the financial statements included herein. There have been no subsequent events that require recognition or disclosure in these financial statements except as described below.
On July 16, 2025, the Company paid a dividend
of $
On August 5, 2025, the Board of Directors of the Company
declared a dividend to common stockholders in the amount of $
44
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 our financial statements and related notes and other financial information appearing elsewhere in this Quarterly Report on Form 10-Q. Except as otherwise specified, references to “we,” “us,” “our,” or the “Company” refer to Kayne DL 2021, Inc.
Investment Objective, Principal Strategy and Investment Structure
Kayne DL 2021, Inc. is a Delaware corporation formed to make investments in middle-market companies and commenced operations on December 16, 2021. We are an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a BDC under the 1940 Act, as amended. In addition, for U.S. federal income tax purposes, we intend to qualify, annually, as a RIC under Subchapter M of the Code.
Our investment activities are managed by KA Credit Advisors II, LLC (the “Advisor”), an indirect controlled subsidiary of Kayne Anderson Capital Advisors, L.P. (“Kayne Anderson”), and the Advisor operates within Kayne Anderson’s middle market private credit platform (“KAPC” or “Kayne Anderson Private Credit”). The Advisor is an investment advisor registered with the United States Securities and Exchange Commission (the “SEC”) under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). In accordance with the Advisers Act, our Advisor is responsible for originating prospective investments, conducting research and due diligence investigations on potential investments, analyzing investment opportunities, negotiating and structuring investments, and monitoring our investments and portfolio companies on an ongoing basis. The Advisor benefits from the scale and resources of Kayne Anderson and specifically KAPC.
Our investment objective is to generate current income and, to a lesser extent, capital appreciation. We intend to have nearly all of our debt investments in private middle market companies. We use “private” to refer to companies that are not traded on a securities exchange and define “middle market companies” as companies that, in general, generate between $10 million and $150 million of annual earnings before interest, taxes, depreciation and amortization, or EBITDA. Further, we refer to companies that generate between $10 million and $50 million of annual EBITDA as “core middle market companies” and companies that generate between $50 million and $150 million of annual EBITDA as “upper middle market companies.” We typically adjust EBITDA for non-recurring and/or normalizing items to assess the financial performance of our borrowers over time.
We intend to achieve our investment objective by investing primarily in first lien senior secured loans, with a secondary focus on unitranche and split-lien loans to middle market companies. Under normal market conditions, we expect at least 90% of our portfolio (including investments purchased with proceeds from borrowings under credit facilities) to be invested in first lien senior secured, unitranche and split-lien loans. Our investment decisions are made on a case-by-case basis. We expect that a majority of these debt investments will be made in core middle market companies and will generally have stated maturities of three to six years. We expect that the loans in which we principally invest will be to companies that are located in the United States. We determine the location of a company as being in the United States by (i) such company being organized under the laws of one of the states in the United States; or (ii) during its most recent fiscal year, such company derived at least 50% of its revenues or profits from goods produced or sold, investments made, or services performed in the United States or has at least 50% of its assets in the United States.
The Advisor executes on our investment objective by (1) accessing the established loan sourcing channels developed by KAPC, which includes an extensive network of private equity firms, other middle market lenders, financial advisors, intermediaries and management teams, (2) selecting investments within our middle market company focus, (3) implementing KAPC’s underwriting process and (4) drawing upon its experience and resources and the broader Kayne Anderson network. KAPC was established in 2011 and manages (directly and through affiliates) assets under management (“AUM”) of approximately $7.2 billion related to middle market private credit as of June 30, 2025.
45
Recent Developments
On July 16, 2025, we paid a dividend of $118 per share to each common stockholder of record as of June 30, 2025. The total distribution was $7.3 million and $1.1 million was reinvested into the Company through the issuance of 206 shares of common stock.
On August 5, 2025, our Board of Directors declared a dividend to common stockholders in the amount of $125 per share. The dividend of $125 per share will be paid on October 16, 2025 to stockholders of record as of the close of business on September 30, 2025, payable in cash or shares of our common stock pursuant to our Dividend Reinvestment Plan, as amended.
Portfolio and Investment Activity
Our portfolio is currently comprised of a broad mix of loans, with diversity among investment size and industry focus. The Advisor’s team of professionals conducts due diligence on prospective investments during the underwriting process and is involved in structuring the credit terms of our private middle market investments. Once an investment has been made, our Advisor closely monitors that portfolio investment and takes a proactive approach to identify and address sector or company specific risks. The Advisor seeks to maintain a regular dialogue with portfolio company management teams (as well as their owners, the majority of whom are private equity firms, where applicable), reviews detailed operating and financial results on a regular basis (typically monthly or quarterly) and monitors current and projected liquidity needs, in addition to other portfolio management activities. There are no assurances that we will achieve our investment objectives.
As of June 30, 2025, we had investments in 82 portfolio companies with an aggregate fair value of approximately $316.4 million, and unfunded commitments to these portfolio companies of $43.5 million, and our portfolio consisted of 100% first lien senior secured loans.
As of June 30, 2025, 100% of our debt investments had floating interest rates. Our weighted average yields for debt investments at fair value and amortized cost were 10.7% and 10.8%, respectively.
As of June 30, 2025, our portfolio was invested across 22 different industries (Global Industry Classification “GICS”, Level 3 – Industry). The largest industries in our portfolio as of June 30, 2025 were Trading Companies & Distributors, Health Care Providers & Services, Commercial Services & Supplies and Food Products, which represented, as a percentage of our portfolio of long-term investments, 19.5%, 12.4%, 10.7% and 10.0% respectively, based on fair value. We are generalist investors and the industries in which our portfolio companies operate may change over time.
As of June 30, 2025, our average position size based on commitment (at the portfolio company level) was $4.4 million.
As of June 30, 2025, the weighted average and median last twelve months (“LTM”) EBITDA of our portfolio companies were $56.0 million and $39.9 million, respectively, based on fair value1.
As of June 30, 2025, the weighted average loan-to-enterprise-value (“LTEV”) of our debt investments at the time of our initial investment was 42.8%, based on par1. LTEV represents the total par value of our debt investment relative to our estimate of the enterprise value of the underlying borrower.
| 1 | Excludes investments on watch list, which represent 1.8% of the total fair value of debt investments as of June 30, 2025. |
46
As of June 30, 2025, we had one debt investment on non-accrual status, which represented 0.7% and 1.0% of total debt investments at fair value and cost, respectively.
As of June 30, 2025, our portfolio companies’ weighted average leverage ratio and weighted average interest coverage ratio (the calculation of which is based on the most recent quarter end or latest available information from the portfolio companies) was of 4.3x and 2.4x, respectively, based on fair value1.
As of June 30, 2025, the percentage of our debt investments including at least one financial maintenance covenant was 100% based on fair value.
Our investment activity for the three months ended June 30, 2025 and 2024 is presented below (information presented herein is at par value unless otherwise indicated).
| For the three months ended June 30, | ||||||||
| 2025 ($ in millions) | 2024 ($ in millions) | |||||||
| New investments: | ||||||||
| Gross new investments commitments | $ | 22.3 | $ | 28.0 | ||||
| Less: investment commitments sold down, exited or repaid(1) | (6.9 | ) | (2.8 | ) | ||||
| Net investment commitments | $ | 15.4 | $ | 25.2 | ||||
| Principal amount of investments funded: | ||||||||
| Private credit investments | $ | 22.0 | $ | 28.1 | ||||
| Liquid credit investments | - | - | ||||||
| Total principal amount of investments funded | $ | 22.0 | $ | 28.1 | ||||
| Principal amount of investments sold / repaid: | ||||||||
| Private credit investments | $ | (8.7 | ) | $ | (2.0 | ) | ||
| Liquid credit investments | - | - | ||||||
| Total principal amount of investments sold or repaid | $ | (8.7 | ) | $ | (2.0 | ) | ||
| Number of new investment commitments | 9 | 17 | ||||||
| Average new investment commitment amount | $ | 2.5 | $ | 1.6 | ||||
| Weighted average maturity for new investment commitments(2) | 5.3 years | 4.1 years | ||||||
| Percentage of new debt investment commitments at floating rates | 100.0 | % | 100.0 | % | ||||
| Percentage of new debt investment commitments at fixed rates | 0.0 | % | 0.0 | % | ||||
| Weighted average interest rate of new investment commitments(3) | 9.8 | % | 11.3 | % | ||||
| Weighted average interest rate on investment sold or paid down(4) | 9.7 | % | 11.6 | % | ||||
| (1) | Does not include repayments on revolving loans, which may be redrawn. |
| (2) | For undrawn delayed draw term loans, the maturity date used is that of the associated term loan. |
| (3) | Based on the rate in effect at June 30, 2025 per our Consolidated Schedule of Investments for new commitments entered into during the quarter. |
| (4) | Based on the underlying rate if still held at June 30, 2025. For those investments sold or paid down in full during the year, based on the rate in effect at the time of sale or paid down. |
| 1 | Excludes investments on watch list, which represent 1.8% of the total fair value of debt investments as of June 30, 2025. |
47
Portfolio Internal Performance Ratings
In general, we employ a strategy designed to ensure early detection of potential issues at underlying borrowers, including monthly financial reviews internal tracking memoranda, weekly “watch list” discussions and other like activities. We have designed a risk rating system to aid in our portfolio management efforts where each investment is rated level 1-9, where Level 1 is the “least risky” and Level 9 is the “most risky.” This risk-rating system is quantitative in nature and aggregates criteria such as LTEV, leverage levels and fixed charge coverage ratios (“FCCR”) (each measured at point-in-time and as relates to levels at the close of the investment).
The table below sets forth our fair value of debt investments and number of portfolio companies, including percentage of each total, that are on watch list as of June 30, 2025 and December 31, 2024.
| As of June 30, 2025 | As of December 31, 2024 | |||||||||||||||||||||||||||||
| Fair Value ($ in millions) |
% | Number of Companies |
% | Fair Value ($ in millions) |
% | Number of Companies |
% | |||||||||||||||||||||||
| $ | 5.7 | 1.8 | % | 2 | 2.4 | % | $ | 5.8 | 2.2 | % | 2 | 2.9 | % | |||||||||||||||||
We use Global Industry Classification Standards (GICS), Level 3 – Industry, for classifying the industry groupings of our portfolio companies. The table below describes long-term investments by industry composition based on fair value as of June 30, 2025 and December 31, 2024.
| June 30, 2025 | December 31, 2024 | |||||||
| Trading companies & distributors | 19.5 | % | 20.9 | % | ||||
| Health care providers & services | 12.4 | % | 12.3 | % | ||||
| Commercial services & supplies | 10.7 | % | 13.1 | % | ||||
| Food products | 10.0 | % | 12.2 | % | ||||
| Containers & packaging | 7.8 | % | 7.2 | % | ||||
| Leisure products | 5.3 | % | 4.2 | % | ||||
| Professional services | 4.8 | % | 4.1 | % | ||||
| Machinery | 4.7 | % | 2.8 | % | ||||
| Personal care products | 4.4 | % | 3.0 | % | ||||
| Aerospace & defense | 3.4 | % | 6.0 | % | ||||
| Building products | 2.3 | % | 2.0 | % | ||||
| Household products | 2.1 | % | - | % | ||||
| Automobile components | 2.0 | % | 3.9 | % | ||||
| Chemicals | 1.9 | % | - | % | ||||
| IT services | 1.6 | % | 1.8 | % | ||||
| Household durables | 1.4 | % | - | % | ||||
| Biotechnology | 1.3 | % | 1.7 | % | ||||
| Wireless telecommunication services | 1.1 | % | 1.3 | % | ||||
| Health care equipment & supplies | 1.0 | % | 0.6 | % | ||||
| Textiles, apparel & luxury goods | 0.9 | % | 1.0 | % | ||||
| Diversified telecommunication services | 0.8 | % | 1.0 | % | ||||
| Insurance | 0.6 | % | 0.9 | % | ||||
| 100.0 | % | 100.0 | % | |||||
Results of Operations
For the three and six months ended June 30, 2025 and 2024, our total investment income was derived from our portfolio of investments.
48
The following table represents the operating results for the three and six months ended June 30, 2025 and 2024.
| For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| ($ in millions) | ($ in millions) | ($ in millions) | ($ in millions) | |||||||||||||
| Total investment income | $ | 8.70 | $ | 6.79 | $ | 16.63 | $ | 13.14 | ||||||||
| Less: Net expenses | (0.90 | ) | (0.68 | ) | (1.76 | ) | (1.32 | ) | ||||||||
| Net investment income | 7.80 | 6.11 | 14.87 | 11.82 | ||||||||||||
| Net realized gains (losses) on investments | - | - | - | - | ||||||||||||
| Net change in unrealized gains (losses) on investments | (0.13 | ) | (0.07 | ) | (0.07 | ) | 0.76 | |||||||||
| Net increase (decrease) in net assets resulting from operations | $ | 7.67 | $ | 6.04 | $ | 14.80 | $ | 12.58 | ||||||||
Investment Income
Investment income for the three and six months ended June 30, 2025 totaled $8.7 million and $16.6 million, respectively, and consisted primarily of interest income on our debt investments. Investment income for the three and six months ended June 30, 2024 totaled $6.8 million and $13.1 million, respectively, and consisted primarily of interest income on our debt investments. For the three and six months ended June 30, 2025, we had $0.3 million and $0.3 million, respectively, of PIK interest included in interest income. For the three and six months ended June 30, 2024, we had $0.02 million and $0.03 million, respectively, of PIK interest included in interest income. As of June 30, 2025, we had one debt investment on non-accrual status. As of June 30, 2024, all debt investments were income producing, and there were no loans on non-accrual status.
Expenses
Operating expenses for the three and six months ended June 30, 2025 and 2024 were as follows:
| For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| ($ in millions) | ($ in millions) | ($ in millions) | ($ in millions) | |||||||||||||
| Interest and debt financing expenses | $ | 0.06 | $ | 0.04 | $ | 0.10 | $ | 0.09 | ||||||||
| Management fees | 0.58 | 0.40 | 1.10 | 0.75 | ||||||||||||
| Other operating expenses | 0.22 | 0.20 | 0.48 | 0.40 | ||||||||||||
| Directors fees | 0.04 | 0.04 | 0.08 | 0.08 | ||||||||||||
| Total expenses | $ | 0.90 | $ | 0.68 | $ | 1.76 | $ | 1.32 | ||||||||
Net Unrealized Gains (Losses) on Investments
We fair value our portfolio investments quarterly and any changes in fair value are recorded as unrealized gains or losses. During the three and six months ended June 30, 2025 and 2024, net unrealized gains (losses) on our investment portfolio were comprised of the following:
| For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| ($ in millions) | ($ in millions) | ($ in millions) | ($ in millions) | |||||||||||||
| Unrealized gains on investments | $ | 0.74 | $ | 0.78 | $ | 1.79 | $ | 1.53 | ||||||||
| Unrealized (losses) on investments | (0.87 | ) | (0.85 | ) | (1.86 | ) | (0.77 | ) | ||||||||
| Net change in unrealized gains (losses) on investments | $ | (0.13 | ) | $ | (0.07 | ) | $ | (0.07 | ) | $ | 0.76 | |||||
49
For the three-month periods ended June 30, 2025 and 2024, the top five largest contributors to the change in unrealized gains and the top five largest contributors to the change in unrealized losses on investments, and the remaining unrealized gains and losses from other portfolio companies, are presented in the following tables.
| For the three months ended | ||||
| June 30, 2025 | ||||
| ($ in millions) | ||||
| Portfolio Company | ||||
| Aegis Toxicology Sciences Corporation | $ | 0.12 | ||
| Olibre Borrower LLC (Revelyst) | 0.09 | |||
| TL Atlas Merger Sub Corp. (Zep) | 0.07 | |||
| Lakewood Acquisition Corporation (R&B Wholesale) | 0.05 | |||
| LEM Buyer, Inc. (CFS Technologies Intermediate, Inc.) | 0.05 | |||
| Other portfolio companies unrealized gains | 0.36 | |||
| Other portfolio companies unrealized (losses) | (0.39 | ) | ||
| Genuine Cable Group, LLC | (0.03 | ) | ||
| J&K Ingredients, LLC | (0.03 | ) | ||
| MRC Keystone Acquisition LLC (Automated Handing Solutions) | (0.03 | ) | ||
| Basel U.S. Acquisition Co., Inc. (IAC) | (0.17 | ) | ||
| Siegel Egg Co., LLC | (0.22 | ) | ||
| Total Change in Unrealized Gain (Loss), net | $ | (0.13 | ) | |
| For the three months ended | ||||
| June 30, 2024 | ||||
| ($ in millions) | ||||
| Portfolio Company | ||||
| Energy Acquisition LP (Electrical Components International – ECI) | $ | 0.10 | ||
| Silk Holdings III Corp. (Suave) | 0.09 | |||
| Phoenix YW Buyer, Inc. (Elida Beauty) | 0.07 | |||
| The Robinette Company | 0.07 | |||
| Innopak Industries, Inc. | 0.05 | |||
| Other portfolio companies unrealized gains | 0.40 | |||
| Other portfolio companies unrealized (losses) | (0.41 | ) | ||
| BLP Buyer, Inc. (Bishop Lifting Products) | (0.04 | ) | ||
| BCDI Meteor Acquisition, LLC (Meteor) | (0.05 | ) | ||
| Basel U.S. Acquisition Co., Inc. (IAC) | (0.07 | ) | ||
| Siegel Egg Co., LLC | (0.13 | ) | ||
| Engineered Fastener Company, LLC (EFC International) | (0.15 | ) | ||
| Total Change in Unrealized Gain (Loss), net | $ | (0.07 | ) | |
50
For the six-month periods ended June 30, 2025 and 2024, the top five largest contributors to the change in unrealized gains and the top five largest contributors to the change in unrealized losses on investments, and the remaining unrealized gains and losses from other portfolio companies, are presented in the following tables.
| For the six months ended | ||||
| June 30, 2025 | ||||
| ($ in millions) | ||||
| Portfolio Company | ||||
| Olibre Borrower LLC (Revelyst) | $ | 0.21 | ||
| Lakewood Acquisition Corporation (R&B Wholesale) | 0.18 | |||
| Monza Purchaser, LLC (Smyth) | 0.15 | |||
| CREO Group Inc. (HMS Manufacturing) | 0.13 | |||
| Aegis Toxicology Sciences Corporation | 0.12 | |||
| Other portfolio companies unrealized gains | 1.00 | |||
| Other portfolio companies unrealized (losses) | (0.92 | ) | ||
| Alcami Corporation | (0.05 | ) | ||
| Innopak Industries, Inc. | (0.09 | ) | ||
| Centerline Communications, LLC | (0.09 | ) | ||
| Basel U.S. Acquisition Co., Inc. (IAC) | (0.17 | ) | ||
| Siegel Egg Co., LLC | (0.54 | ) | ||
| Total Change in Unrealized Gain (Loss), net | $ | (0.07 | ) | |
| For the six months ended | ||||
| June 30, 2024 | ||||
| ($ in millions) | ||||
| Portfolio Company | ||||
| Envirotech Services, LLC | $ | 0.15 | ||
| CCFF Buyer, LLC (California Custom Fruits & Flavors, LLC) | 0.14 | |||
| Pixel Intermediate, LLC | 0.12 | |||
| MVP VIP Borrower, LLC | 0.12 | |||
| Refocus Management Services, LLC | 0.12 | |||
| Other portfolio companies unrealized gains | 0.88 | |||
| Other portfolio companies unrealized (losses) | (0.36 | ) | ||
| Gulf Pacific Holdings | (0.04 | ) | ||
| Basel U.S. Acquisition Co., Inc. (IAC) | (0.06 | ) | ||
| Engineered Fastener Company, LLC (EFC International) | (0.07 | ) | ||
| Universal Marine Medical Supply International, LLC (Unimed) | (0.09 | ) | ||
| Siegel Egg Co., LLC | (0.15 | ) | ||
| Total Change in Unrealized Gain (Loss), net | $ | 0.76 | ||
Financial Condition, Liquidity and Capital Resources
Our liquidity and capital resources are generated primarily from the net proceeds of any offering of our shares of common stock and from cash flows from interest and fees earned from our investments and principal repayments and proceeds from sales of our investments. Our primary use of cash is for investments in portfolio companies, payments of our expenses and payment of cash distributions to our stockholders.
In accordance with the 1940 Act, we are required to meet a coverage ratio of total assets (less total liabilities other than indebtedness) to total borrowings and other senior securities (and any preferred stock that we may issue in the future) of at least 150%. If this ratio declines below 150%, we cannot incur additional leverage and could be required to sell a portion of our investments to repay some leverage when it is disadvantageous to do so. As of June 30, 2025 and December 31, 2024, respectively, we did not have any borrowings outstanding under our subscription credit facility. We do not routinely use leverage, and there are many days when there are no borrowings outstanding under our subscription credit facility.
Over the next twelve months, we expect that cash and cash equivalents, taken together with our available capacity under our credit facilities, will be sufficient to conduct anticipated investment activities. Beyond twelve months, we expect that our cash and liquidity needs will continue to be met by cash generated from our ongoing operations as well as financing activities.
51
As of June 30, 2025, we did not have any borrowings outstanding under our subscription credit facility and had cash and cash equivalents of $13.4 million (including investments in money market funds). We do not routinely use leverage, and there are many days when there are no borrowings outstanding under our subscription credit facility. As of August 6, 2025, we did not have any borrowings outstanding under our subscription credit facility and had cash and cash equivalents of $1.5 million (including investments in money market funds).
Capital Contributions
During the six months ended June 30, 2025 and 2024, we issued and sold 9,514 and 4,710 shares of our common stock related to capital called at an aggregate purchase price of $50 million and $25 million, respectively. As of August 6, 2025, we had aggregate capital commitments of $353.5 million and undrawn capital commitments from investors of $60.5 million ($293 million or 82.9% funded).
Credit Facility
Subscription Credit Facility. We are party to a senior secured revolving credit facility (the “Subscription Credit Facility”) that has a total commitment of $25 million and a maturity date of February 20, 2026. The Subscription Credit Facility permits us to borrow up to $25 million, subject to availability under the borrowing base which is calculated based on the unused capital commitments of the investors meeting various eligibility requirements. The interest rate on the Subscription Credit Facility is equal to SOFR plus an applicable spread of 2.25% per annum with no floor. We are also required to pay a commitment fee of 0.25% per annum on any unused portion of the Subscription Credit Facility.
Contractual Obligations
We did not have any indebtedness outstanding under our Subscription Credit Facility as of June 30, 2025.
Off-Balance Sheet Arrangements
As of June 30, 2025 and December 31, 2024, we had an aggregate $43.5 million and $31.8 million, respectively, of unfunded commitments, including $26.6 million and $19.5 million, respectively, of unfunded commitments on revolvers, to provide debt financing to our portfolio companies. Such commitments are generally subject to the satisfaction of certain financial and nonfinancial covenants and involve, to varying degrees, elements of credit risk in excess of the amount recognized in our financial statements. Other than contractual commitments and other legal contingencies incurred in the normal course of our business, we do not have any other off-balance sheet financings or liabilities.
Critical Accounting Estimates
The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Changes in the economic environment, financial markets and any other parameters used in determining such estimates could cause actual results to differ. Our critical accounting policies, including those relating to the valuation of our investment portfolio, are described below. The critical accounting policies should be read in conjunction with our risk factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and in this Quarterly Report. See Note 2 to our consolidated financial statements for the six months ended June 30, 2025, for more information on our critical accounting policies.
Investment Valuation
Traded Investments (Level 1 or Level 2)
Investments for which market quotations are readily available will typically be valued at those market quotations. Traded investments such as corporate bonds, preferred stock, bank notes, loans or loan participations are valued by using the bid price provided by an independent pricing service, by an independent broker, the agent bank, syndicate bank or principal market maker. When price quotes for investments are not available, or such prices are stale or do not represent fair value in the judgment of our Advisor, fair market value will be determined using our Advisor’s valuation process for investments that are privately issued or otherwise restricted as to resale.
Infrequently, we may also invest, to a lesser extent, in equity securities purchased in conjunction with debt investments. While we anticipate these equity securities to be issued by privately held companies, we may hold equity securities that are publicly traded. Equity securities listed on any exchange other than the NASDAQ Stock Market, Inc. (“NASDAQ”) are valued, except as indicated below, at the last sale price on the business day as of which such value is being determined. If there has been no sale on such day, the securities are valued at the mean of the most recent bid and ask prices on such day. Securities admitted to trade on the NASDAQ are valued at the NASDAQ official closing price. Equity securities traded on more than one securities exchange are valued at the last sale price on the business day as of which such value is being determined at the close of the exchange representing the principal market for such securities. Equity securities traded in the over-the-counter market, but excluding securities admitted to trading on the NASDAQ, are valued at the closing bid prices.
52
Non-Traded Investments (Level 3)
Investments that are privately issued or otherwise restricted as to resale, as well as any security for which (a) reliable market quotations are not available in the judgment of our Advisor, or (b) the independent pricing service or independent broker does not provide prices or provides a price that in the judgment of our Advisor is stale or does not represent fair value, shall each be valued in a manner that most fairly reflects fair value of the security on the valuation date. We expect that a significant majority of our investments will be Level 3 investments. Unless otherwise determined by the Advisor, the following valuation process is used for our Level 3 investments:
| ● | Valuation Designee. The applicable investments will be valued no less frequently than quarterly by the Advisor, with new investments valued at the time such investment was made. The value of each Level 3 investment will be initially reviewed by the persons responsible for such portfolio company or investment. The Advisor will use a standardized template designed to approximate fair market value based on observable market inputs, updated credit statistics and unobservable inputs to determine a preliminary value. The Advisor will specify the titles of the persons responsible for determining the fair value of Company investments, including by specifying the particular functions for which they are responsible, and will reasonably segregate fair value determinations from the portfolio management of the Company such that the portfolio manager(s) may not determine, or effectively determine by exerting substantial influence on, the fair values ascribed to portfolio investments. |
| ● | Valuation Firm. Quarterly, a third-party valuation firm engaged by the Advisor reviews the valuation methodologies and calculations employed for each of the Company’s investments that the Advisor has placed on the “watch list” and approximately 25% of the Company’s remaining investments. The third-party valuation firm will review and independently value all of the Level 3 investments at least once per year, on a rolling twelve-month basis. The quarterly report issued by the third-party valuation firm will provide positive assurance on the fair values of the investments reviewed. |
| ● | Oversight. The Board has appointed the Advisor as the valuation designee for the Company for purposes of making determinations of fair value as permitted by Rule 2a-5 under the 1940 Act. The Audit Committee shall aid the Board in overseeing the Advisor’s fair valuation of securities that are not publicly traded or for which current market values are not readily available. The Audit Committee shall meet quarterly to review the fair value determinations, processes and written reports of the Advisor as part of the Board’s oversight responsibilities. |
Refer to Note 5 – Fair Value – for more information on the Company’s valuation process.
Revenue Recognition
We record interest income on an accrual basis to the extent that we expect to collect such amounts. For loans and debt securities with contractual PIK interest, which represents contractual interest accrued and added to the principal balance, we generally will not accrue PIK interest for accounting purposes if the portfolio company valuation indicates that such PIK interest is not collectible. We do not accrue as a receivable interest on loans and debt securities for accounting purposes if we have reason to doubt our ability to collect such interest. Original Issue Discounts (OIDs), market discounts or premiums are accreted or amortized using the effective interest method as interest income. We record prepayment premiums on loans and debt securities as interest income.
Related Party Transactions
Investment Advisory Agreement. On December 16, 2021, we entered into the Investment Advisory Agreement with our Advisor. On February 19, 2025, the Board approved an additional one-year term of the Investment Advisory Agreement through March 15, 2026. Our Advisor serves as our investment advisor in accordance with the terms of our Investment Advisory Agreement. Payments under our Investment Advisory Agreement in each reporting period consist of a management fee equal to a percentage of the fair market value of investments, including, in each case, assets purchased with borrowings under credit facilities, but excluding cash, U.S. government securities and commercial paper instruments maturing within one year of purchase.
For services rendered under the Investment Advisory Agreement, we pay a management fee quarterly in arrears to our Advisor based on the of the fair market value of our investments including, in each case, assets purchased with borrowings under credit facilities, but excluding cash, U.S. government securities and commercial paper instruments maturing within one year of purchase.
53
Administration Agreement. On December 16, 2021, we entered into an Administration Agreement with our Advisor, which serves as our Administrator, pursuant to which the Administrator furnishes us with administrative services necessary to conduct our day-to-day operations. On February 19, 2025, the Board approved an additional one-year term of the Administration Agreement through March 15, 2026.
The Administrator is reimbursed for administrative expenses it incurs on our behalf in performing its obligations. As we reimburse the Administrator for its expenses, we indirectly bear such cost. The Administrator engaged Ultimus Fund Solutions, LLC under a sub-administration agreement to assist the Administrator in performing certain of its administrative duties. The Administrator may enter into additional sub-administration agreements with third-parties to perform other administrative and professional services on behalf of the Administrator.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are subject to financial market risks, including valuation risk and changes in interest rates.
Valuation Risk. The majority of our investments are in instruments that do not have readily ascertainable market prices and the Adviser, as our valuation designee, will value these securities at fair value as determined in good faith under procedures approved by our Board of Directors. There is no single standard for determining fair value in good faith. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we may realize amounts that are different from the amounts presented and such differences could be material.
Interest Rate Risk. Interest rate sensitivity refers to the change in our earnings that may result from changes in the level of interest rates. Because we fund a portion of our investments with borrowings, our net investment income will be 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.
Assuming that the consolidated statement of assets and liabilities as of June 30, 2025 were to remain constant and that we took no actions to alter our existing interest rate sensitivity, the following table shows the annualized impact ($ in millions) of hypothetical base rate changes in interest rate (considering interest rate floors for floating rate instruments). We do not include investments on non-accrual status and classified as non-income producing as of June 30, 2025 in this calculation.
| Change in Interest Rates | Increase (Decrease) in Interest Income | Increase (Decrease) in Interest Expense | Net Increase (Decrease) in Net Investment Income | |||||||||
| Down 200 basis points | $ | (6.3 | ) | $ | (0.1 | ) | $ | (6.2 | ) | |||
| Down 100 basis points | $ | (3.1 | ) | $ | (0.0 | ) | $ | (3.1 | ) | |||
| Up 100 basis points | $ | 3.1 | $ | 0.0 | $ | 3.1 | ||||||
| Up 200 basis points | $ | 6.3 | $ | 0.1 | $ | 6.2 | ||||||
The data in the table is based on the Company’s current statement of assets and liabilities.
We may hedge against interest rate fluctuations by using standard hedging instruments such as futures, options and forward contracts subject to the requirements of the 1940 Act. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in benefits of lower interest rates with respect to our portfolio of investments with fixed interest rates.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
As of June 30, 2025 (the end of the period covered by this report), we, including our Co-Chief Executive Officers and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended). Based on that evaluation, our management, including the Co-Chief Executive Officers and Chief Financial Officer, concluded that our disclosure controls and procedures were effective and provided reasonable assurance that information required to be disclosed in our periodic United States Securities and Exchange Commission (the “SEC”) filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Co-Chief Executive Officers and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. However, in evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of such possible controls and procedures.
Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting 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.
54
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
Neither we nor our Advisor is currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us, or against our Advisor.
From time to time, we, or our Advisor, may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. While the outcome of these legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material effect upon our financial condition or results of operations.
From time to time, we are involved in various legal proceedings, lawsuits and claims incidental to the conduct of our business. Our businesses are also subject to extensive regulation, which may result in regulatory proceedings against us.
Item 1A. Risk Factors.
In addition to the other information set forth in this report, you should carefully consider the risk factors described below and in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which could materially affect our business, financial condition and/or operating results. The risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 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.
Changes to U.S. tariff and import/export regulations may have a negative effect on our portfolio companies and, in turn, on our performance.
There have been recent proposed changes to United States trade policies, treaties and tariffs, and, in the future, there may be additional significant changes. These and any future developments, and continued uncertainty surrounding trade policies, treaties and tariffs, may have a material adverse effect on global economic conditions, inflation and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the United States. Any of these factors could depress economic activity and restrict our portfolio companies’ access to suppliers or customers, increase their supply-chain costs and expenses.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
As set forth in the table below (dollars in thousands, except per share and share amounts), during the six months ended June 30, 2025, we issued and sold 9,514 shares of common stock at an aggregate offering amount of approximately $50 million. The issuance of the shares of common stock was exempt from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) and Rule 506(b) of Regulation D thereof and previously reported by us on our current reports on Form 8-K. The Company relied, in part, upon representations from the investors in the subscription agreements that each investor was an accredited investor as defined in Regulation D under the Securities Act. We did not engage in general solicitation or advertising, and did not offer securities to the public, in connection with such issuances and sales.
| Common stock issue date | Offering price per share | Common stock shares issued | Aggregate offering amount | |||||||||
| February 13, 2025 | $ | 5,259 | 4,754 | $ | 25,000 | |||||||
| April 30, 2025 | 5,252 | 4,760 | 25,000 | |||||||||
| 9,514 | $ | 50,000 | ||||||||||
Item 3. Default Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
55
Item 6. Exhibits.
The exhibits required by this item are set forth in the Exhibit Index attached hereto and are filed or incorporated as part of this Report.
| * | Filed herewith. |
| (1) | Incorporated by reference from the Company’s Amendment No. 1 to Form 10, as filed with the Securities and Exchange Commission on May 11, 2021. |
| (2) | Incorporated by reference from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, as filed with the Securities and Exchange Commission on August 15, 2022. |
| (3) | Incorporated by reference from the Company’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on March 3, 2022. |
| (4) | Incorporated by reference from the Company’s Form 10-K, as filed with the Securities and Exchange Commission on March 13, 2023. |
| (5) | Incorporated by reference from the Company’s Form 8-K, as filed with the Securities and Exchange Commission on February 28, 2024. |
| (6) | Incorporated by reference from the Company’s Form 8-K, as filed with the Securities and Exchange Commission on February 24, 2025. |
56
SIGNATURES
Pursuant to the requirements 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.
| Kayne DL 2021, Inc. | ||
| Date: August 11, 2025 | ||
| /s/ Douglas L. Goodwillie | ||
| Name: | Douglas L. Goodwillie | |
| Title: | Co-Chief Executive Officer | |
| (Co-Principal Executive Officer) | ||
| Date: August 11, 2025 | ||
| /s/ Kenneth B. Leonard | ||
| Name: | Kenneth B. Leonard | |
| Title: | Co-Chief Executive Officer | |
| (Co-Principal Executive Officer) | ||
| Date: August 11, 2025 | ||
| /s/ Terry A. Hart | ||
| Name: | Terry A. Hart | |
| Title: | Chief Financial Officer and Treasurer | |
| (Principal Financial and Accounting Officer) | ||
57