Note 10. Income Taxes

The Company has elected to be regulated as a BDC under the 1940 Act as of November 5, 2024. The Company has elected to be treated as a RIC for the year ended December 31, 2025 and intends to qualify each taxable year thereafter. As a RIC, the Company generally is not subject to corporate-level U.S. federal income taxes on any ordinary income or capital gains that it timely distributes as dividends for U.S. federal income tax purposes to its stockholders. To qualify to be treated as a RIC, the Company is required to meet certain source of income and asset diversification requirements, and to timely distribute dividends out of assets legally available for distributions to its stockholders of an amount generally equal to at least 90% of the sum of its net ordinary income and net short-term capital gains in excess of net long-term capital losses, if any, for each taxable year.

Taxable income differs from net increase (decrease) in net assets resulting from operations primarily due to: (1) unrealized appreciation (depreciation) on investments, as gains and losses are generally not included in taxable income until they are realized; (2) income or loss recognition on foreign currency transactions; (3) significant debt modifications; and (4) other non-deductible expenses.

The Company makes certain adjustments to the classification of net assets as a result of permanent book-to-tax differences, which include differences in the book and tax basis of certain assets and liabilities, and non-deductible expenses, among other items. To the extent these differences are permanent, they are charged or credited to paid in capital or accumulated net distributable earnings (losses), as appropriate. For the years ended December 31, 2025 and 2024, permanent differences were as follows:

During the years ended December 31, 2025 and 2024, permanent differences were principally related to non-deductible expenses.

The difference between U.S. GAAP-basis and tax basis unrealized gains (losses) is attributable primarily to net mark to market gains (losses) on foreign currency contracts, market discount, and significant modification of debt securities.

Capital losses are generally eligible to be carried forward indefinitely and retain their status as short-term or long-term in the manner originally incurred by the Company. The Company incurred capital losses for the years ended December 31, 2025 and 2024 as follows:

The tax character of distributions paid may differ from the character of distributions shown in the Statements of Changes in Net Assets due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during tax years ended December 31, 2025 and 2024 were as follows:

For the fiscal years ended December 31, 2025 and 2024, the Company designates 100% of dividends allowable pursuant to the Internal Revenue Code 163(j) as interest income eligible for income inclusion for corporate shareholders.

APCF Equity Holdings LLC, a wholly owned subsidiary formed in 2024, is a Delaware LLC which has elected to be treated as a corporation for U.S. tax purposes. As such, APCF Equity Holdings LLC is subject to U.S. federal, state, and local taxes. For the Company’s tax year ended December 31, 2025, APCF Equity Holdings LLC activity resulted in a provision for income taxes of $374, of which $342 is the deferred tax liability and $32 is the current year tax expense. For the Company’s tax year ended December 31, 2024, APCF Equity Holdings LLC activity did not result in a material provision for income taxes.

For the fiscal year ended December 31, 2025, the Company designates investment expenses of $5,158 under Treasury Regulation Section 1.67-2T(e).

Management has analyzed the Company’s tax positions taken, or to be taken, on federal income tax returns for all open tax years and has concluded that no provision for income tax is required in the Company’s financial statements. The Company’s federal and state tax returns are subject to examination by the Internal Revenue Service and state tax authorities for a period of three fiscal years after they are filed