Kohlberg Capital (KCAP) Receives Noncompliance Notice from Nasdaq

Kohlberg Capital Corporation (Nasdaq: KCAP) announces that, as anticipated, the Company received a letter on November 11, 2011 from the NASDAQ Stock Market notifying it that the Company is no longer in compliance with NASDAQ Listing Rule 5250(c)(1), Obligation to File Periodic Financial Reports, because its Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2011, which was filed with the Securities and Exchange Commission (the "SEC") on November 9, 2011, had not been reviewed by the Company's independent registered public accounting firm in accordance with Statement of Auditing Standards No. 100, as required by Rule 8-03 of Regulation S-X of the SEC, and did not include the certifications required under Section 906 of the Sarbanes-Oxley Act of 2002. As previously disclosed, the Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2011 did not contain separate summarized financial information of the Company's wholly-owned portfolio company, Katonah Debt Advisors, L.L.C. and related affiliates controlled by the Company (collectively, "KDA"), that may have been required to be included in such report in accordance with Rules 10-01, 4-08(g) and 1-02(bb) of Regulation S-X promulgated by the SEC. The Company is evaluating whether, in accordance with Rule 3-09 of Regulation S-X, separate financial statements of KDA are required to be filed with respect the fiscal year ended December 31, 2010 and separate summarized financial information of KDA is required to be filed with respect to the quarterly periods in fiscal 2011, including the quarterly period ended September 30, 2011. Because the evaluation requires the Company to perform the tests specified in Rule 1-02(w) of Regulation S-X using amounts determined under U.S. Generally Accepted Accounting Principles, the Company is required, in accordance with Accounting Standards Codification Topic 810 – Consolidation, to prepare financial statements of KDA for the fiscal year ended December 31, 2010 on a consolidated basis that includes the assets and liabilities of the collateralized loan obligation funds managed by KDA in order to perform the tests necessary to determine whether separate financial statements and separate summarized financial information of KDA are required to be filed and, if so, whether any of such financial statements are required to be audited. At this time, the evaluation has not been completed and is ongoing, and the Company has not reached any final conclusions.

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