UNITED
STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549



FORM
10-K



(Mark
One)



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



For
        the Fiscal Period Ended December 31, 2019



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



Commission
File Number: 814-01314



Muzinich
BDC, Inc.

(Exact
name of registrant as specified in its charter)



Delaware

(State
of Incorporation)



450
Park Avenue

New
York, NY 10022

(Address
of principal executive offices)



(212)
888-3413

(Registrant’s
telephone number, including area code)



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



|Title
    of each class |  | TradingSymbol |  | Name
of each exchangeon which registered
|----------------------- |  | ------------- |  | ----------------------------------------
|None                    |  | None          |  | None                                    



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

Common
Stock, par value $0.001 per share

(Title
of class)



Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act Yes ☐ No ☒



Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act Yes ☐ No ☒



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. Yes ☒ No ☐



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



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



|Large accelerated filer ☐ | Accelerated filer ☐        
|------------------------- | ---------------------------
|Non-accelerated filer ☒   | Smaller reporting company ☐
|Emerging growth company ☒ |                            



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



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



The
issuer had 399,879 shares of common stock, $0.001 par value per share, outstanding as of March 27, 2020.
















MUZINICH BDC, INC.



FORM 10-K FOR THE PERIOD ENDED DECEMBER
31, 2019

TABLE OF CONTENTS



|           | Index                                                                                           |    | Page No.
|---------- | ----------------------------------------------------------------------------------------------- | -- | --------
|PART I.    |                                                                                                 |    |         
|Item 1.    | Business                                                                                        |    | 1       
|Item 1A.   | Risk Factors                                                                                    |    | 19      
|Item 1B.   | Unresolved Staff Comments                                                                       |    | 39      
|Item 2.    | Properties                                                                                      |    | 39      
|Item 3.    | Legal Proceedings                                                                               |    | 39      
|Item 4.    | Mine Safety Disclosures                                                                         |    | 39      
|PART II.   |                                                                                                 |    |         
|Item 5.    | Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters |    | 40      
|Item 6.    | Selected Financial Data                                                                         |    | 42      
|Item 7.    | Management’s Discussion and Analysis of Financial Condition and Results of Operations           |    | 42      
|Item 7A.   | Quantitative and Qualitative Disclosures About Market Risk                                      |    | 42      
|Item 8.    | Financial Statements and Supplementary Data                                                     |    | F-1     
|Item 9.    | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure            |    | 53      
|Item 9A.   | Controls and Procedures                                                                         |    | 53      
|Item 9B.   | Other Information                                                                               |    | 53      
|PART III.  |                                                                                                 |    |         
|Item 10.   | Directors, Executive Officers and Corporate Governance                                          |    | 54      
|Item 11.   | Executive Compensation                                                                          |    | 56      
|Item 12.   | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters  |    | 57      
|Item 13.   | Certain Relationships and Related Transactions, and Director Independence                       |    | 58      
|Item 14.   | Principal Accounting Fees and Services                                                          |    | 62      
|PART IV.   |                                                                                                 |    |         
|Item 15.   | Exhibits and Financial Statement Schedules                                                      |    | 63      
|Signatures |                                                                                                 | 64



i







PART
I.



Item
1. Business



The
Company – Muzinich BDC, Inc.



Muzinich
BDC, Inc. (the “Company,” “we,” “our” or “us”) is a corporation formed on May
29, 2019 under the laws of the State of Delaware. We are structured as an externally managed, non-diversified, closed-end management
investment company that has filed an election to be regulated as a BDC under the Investment Company Act of 1940, as amended (the
“Investment Company Act”). We intend to elect to be treated, and intend to qualify annually thereafter, as a regulated
investment company (a “RIC”) under Subchapter M of the Code for U.S. federal income tax purposes. As a BDC and a RIC,
we will be required to comply with certain regulatory requirements.



We
have conducted and expect to conduct private offerings (“Private Offerings”) of our common stock to investors in reliance
on exemptions from the registration requirements of the U.S. Securities Act of 1933, as amended (the “Securities Act”).
The shares of common stock were and will be offered and sold during Private Offerings (i) in the United States under the exemption
provided by Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder, and other exemptions of
similar import in the laws of the states and jurisdictions where the offering will be made, and (ii) outside of the United States
in accordance with Regulation S of the Securities Act. Within the United States, shares of common stock are being offered solely
to investors that are “accredited investors” as defined in Rule 501(a) of Regulation D promulgated under the Securities
Act who represent that (i) if a natural person (including participants in individual retirement accounts), they have (a) an individual
net worth, or joint net worth with their spouse, in excess of $1 million excluding the value of such individual’s primary
residence, or (b) an income (exclusive of any income attributable to their spouse) in excess of $200,000 in each of the two most
recent years, or joint income with their spouse in excess of $300,000 in each of the two most recent years, and have a reasonable
expectation of reaching the same income level in the current year; or (ii) if an entity, including a corporation, foundation,
endowment, partnership, or limited liability company or trust, they have total assets in excess of $5 million and they were not
formed for the specific purpose of acquiring the securities offered (or each equity owner meets the accredited investor requirements
for an individual).



We
have entered and expect to enter into separate subscription agreements with a number of investors providing for the private placement
of the Company’s common stock pursuant to one or more closings in respect of Private Offerings. At each closing in respect
of any Private Offering, each investor will make a capital commitment to purchase shares of our common stock pursuant to a subscription
agreement entered into with the Company. Investors will be required to fund drawdowns to purchase shares of the Company’s
common stock up to the amount of their respective capital commitments on an as-needed basis with a minimum of ten business days’
prior notice to the investors. In addition to all legal remedies available to the Company, failure by an investor to purchase
additional common stock when requested by the Company will (following a cure period of ten business days) result in that investor
being subject to certain default provisions set forth in the subscription agreement. Defaulting investors may also forfeit their
right to participate in purchasing additional shares on any future drawdown date or otherwise participate in any future investments
in the Company. All purchases will generally be made pro rata in accordance with the investors’ capital commitments, at
a per-share price at least equal to the net asset value (“NAV”) per share of the Company’s common stock as of
the close of the last quarter preceding the drawdown date; such per-share price may be set above the NAV per share based on a
variety of factors, including without limitation the total amount of the Company’s organizational and other expenses (including
actual and/or accrued expenses, which may include any estimates thereof), in accordance with the limitations under Section 23
of the Investment Company Act. At the end of the period beginning on the initial closing in respect of a Private Offering (the
“Initial Closing”) and ending on the third anniversary thereof, which period may be extended by our Board of Directors
(“Board” or “Board of Directors”) for one year in its discretion (such period, including any such extension
thereof, the “Commitment Period”), investors will be released from any further obligation to fund drawdowns, except
to the extent necessary to (i) pay Company expenses, including management fees, any amounts that may become due under any borrowings
or other financings or similar obligations and any other liabilities, contingent or otherwise, in each case to the extent they
relate to the Commitment Period, (ii) complete investments in any transactions for which there are binding written agreements
as of the end of the Commitment Period (including investments that are funded in phases), (iii) fund follow-on investments made
in existing portfolio companies, (iv) seek to maintain or protect the value of, or cover expenses related to, investments (including,
without limitation, through currency hedging transactions), (v) fund obligations under any Company guarantee or indemnity made
during the Commitment Period and/or (vi) fund any defaulted commitments. Proceeds realized by the Company from the sale or repayment
of any investment (as opposed to investment income) during the Commitment Period (but not in excess of the cost of any such investment),
may be retained and reinvested by the Company; provided that such additional amounts reinvested will not, in the aggregate, exceed
the Company’s total capital commitments. Any amounts so reinvested will not reduce a stockholder’s unfunded capital
commitments. No investor will be permitted to sell, assign, transfer or otherwise dispose of its shares or capital commitment
unless the Adviser provides its prior written consent and the transfer is otherwise made in accordance with applicable law. See
“Item 8. Financial Statements and Supplementary Data – Notes to Financial Statements – 8. Net Assets”
for further information on common stock issuances.



1







Our
investment objective is to generate current income and, to a lesser extent, capital appreciation through investments in secured
debt, including first lien, second lien and unitranche debt, as well as unsecured debt, including mezzanine debt and, to a lesser
extent, in equity instruments of private companies. We intend to invest primarily in privately owned U.S. middle-market companies
that require capital for growth, acquisitions, recapitalizations, refinancings and leveraged buyouts. We will seek to partner
with strong management teams executing long-term growth strategies that have credit worthy businesses. We may also from time to
time invest in larger or smaller or non-U.S. companies. In this Form 10-K, we generally use the term “middle-market”
to refer to companies with earnings before interest expense, income tax expense, depreciation and amortization, or “EBITDA,”
generally between $5 million and $25 million annually. We use the term “unitranche” to generally refer to debt instruments
that combine characteristics of first lien senior secured loans as well as second lien and subordinated loans. Unitranche loans
typically include covenants prohibiting or significantly restricting the ability of an issuer to grant liens that would create
a security interest senior to the lien created in connection with the unitranche loan. We use the term “mezzanine”
to refer to a loan that ranks senior only to a borrower’s equity securities and ranks junior in right of payment to all
of such borrower’s other indebtedness. We expect to invest in both primary origination investments as well as open-market
secondary purchases. We expect to source our primary origination investments through our Adviser’s (as defined below) and
its affiliates’ network of relationships with financial intermediaries (including regional banks), private equity investment
firms, lawyers, accountants, experienced senior management teams and other middle-market lenders. We may seek investment opportunities
where we are the sole investor in an investment, and also may seek opportunities where we invest alongside one or more other investors.
We expect to invest across a number of different industries. We expect to build a portfolio of approximately 15 to 20 investments,
with no more than 10% of our assets invested in any one investment and no more than 20% of our assets invested in a single industry
(not including investments in cash or cash equivalents, including, for instance, U.S. government securities and investment grade
debt instruments maturing within one year). From time to time, certain of our investments may be made with the intent of maintaining
compliance with diversification and other requirements applicable to us, and such investments may cause us to be invested in a
larger number of investments than we might otherwise have invested. Our investments are typically expected to have maturities
between 3 and 8 years and to generally range in size between $10 and $35 million, though this expected investment size may grow
if our capital base grows and may shrink if our capital base shrinks. Our Adviser seeks to employ a disciplined and selective
investment approach that has a strong focus on investments that are determined by our Adviser to have attractive credit qualities.
We seek to avoid deeply cyclical businesses, start-ups or turn-around situations, as well as specialized industries such as real
estate, regulated financial services, commodities, oil & gas extraction, firearms and gaming, and businesses with significant
technology risk.



The
Adviser – Muzinich BDC Adviser, LLC



The
Company’s investment activities are managed by Muzinich BDC Adviser, LLC (the “Adviser”), an affiliate of Muzinich
& Co., Inc. (“Muzinich & Co.”, and together with the Adviser and their other affiliates, collectively “Muzinich”).
Our Adviser is an investment adviser registered with the SEC under the Investment Advisers Act of 1940, as amended (the “Advisers
Act”). The Adviser is responsible for originating prospective investments, conducting research and due diligence investigations
on potential investments, analyzing investment opportunities, negotiating and structuring our investments and monitoring our investments
and portfolio companies on an ongoing basis. More information regarding the Adviser and its business activities can be found on
its registration under Form ADV located on the Investment Adviser Registration Depository website of the SEC. Subject to the supervision
of our Board of Directors, our Adviser manages our day-to-day operations and provides us with investment advisory and management
services and certain administrative services.



Our
Adviser has entered into a Resource Sharing Agreement (the “Resource Sharing Agreement”) with Muzinich & Co.,
pursuant to which Muzinich & Co. provides the Adviser with experienced investment professionals and services so as to enable
the Adviser to fulfill its obligations under the Investment Management Agreement (as defined below). Through the Resource Sharing
Agreement, our Adviser draws on the significant deal origination, credit underwriting, due diligence, investment structuring,
execution, portfolio management and monitoring, and operational experience of Muzinich & Co.’s investment professionals.
The Resource Sharing Agreement may be terminated by either party on 60 days’ notice, which if terminated may have a material
adverse consequence on the Company’s operations.



2







The
Board of Directors



Our
Board of Directors has ultimate authority as to our investments, but it delegates authority to our Adviser to select and monitor
our investments, subject to the supervision of the Board. Pursuant to our Certificate of Incorporation, (the “Certificate
of Incorporation”), the number of directors of the Company will be fixed from time to time by the Board. A majority of the
Board will at all times consist of directors who are not “interested persons” of the Company, of our Adviser or of
any its respective affiliates, as defined in the Investment Company Act (the “Independent Directors”). Under our Certificate
of Incorporation, our Board of Directors is divided into three classes. Each class of directors will generally hold office for
a three-year term. However, the initial members of the three classes have initial terms of one, two, and three years, respectively.
As a result, only one class of directors will be up for election at each annual meeting. At each annual meeting of our stockholders
following our adoption of a classified board, the successors to the class of directors whose terms expire at such meeting will
be elected to hold office for a term expiring at the annual meeting of stockholders held in the third year following the year
of their election.



Investment
Management Agreement



We
have entered into an Investment Management Agreement with the Adviser (the “Investment Management Agreement”), under
which the Adviser:



| | ● | determines
                                         the composition of our portfolio, the nature and timing of the changes to our portfolio
                                         and the manner of implementing such changes;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | identifies,
                                         evaluates and negotiates the structure of the investments we make (including performing
                                         due diligence on our prospective portfolio companies);
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | determines
                                         the assets we will originate, purchase, retain or sell;
| | - | -----------------------------------------------------------------------------------------------------------



| | ● | closely
                                         monitors and administers the investments we make, including the exercise of any rights
                                         in our capacity as a lender; and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | provides
                                         us with such other investment advice, research and related services as we may, from time
                                         to time, require.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
Adviser’s services under the Investment Management Agreement are not exclusive, and it is free to furnish similar or other
services to others so long as its services to us are not impaired.



The
Investment Management Agreement has been approved by our Board.



Compensation
of Adviser



Management
Fee. Pursuant to the Investment Management Agreement, our Adviser will accrue, on a quarterly basis in arrears, a management
fee (the “Management Fee”) equal to 0.25% (i.e., 1.00% annually) of the average of the Company’s NAV (excluding
uninvested cash and cash equivalents, which are defined for these purposes as money market funds, U.S. government securities and
investment grade debt instruments maturing within one year of purchase of such instrument by the Company) at the end of the then-current
calendar quarter and the Company’s NAV at the end of the prior calendar quarter. For the avoidance of doubt, the Management
Fee payable in respect of the Company’s first quarter (i.e., the period beginning on the initial drawdown date and ending
on the last day of the quarter in which the initial drawdown date occurred) will be equal to 0.25% of the average of the Company’s
NAV at the end of such quarter. The Management Fee for any partial quarter will be appropriately prorated.



Management
Fees are generally expected to be paid using available funds quarterly, in which case these payments will not reduce unfunded
capital commitments. However, we may draw down unfunded capital commitments in order to pay Management Fees, and any such draw
down amounts would reduce unfunded capital commitments.



Incentive
Fee. Pursuant to the Investment Management Agreement, we will pay an incentive fee (the “Incentive Fee”) to the
Adviser. The Incentive Fee will not be released to the Adviser until the liquidation of the Company’s portfolio. The Incentive
Fee will accrue as a liability on the Company’s statement of assets and liabilities throughout the life of the Company,
and the Company may set aside assets in anticipation of paying it. However, the Company does not intend to actually pay out the
Incentive Fee to the Adviser until the end of the life of the Company.



In
order to determine the size of the Incentive Fee, the Company will refer to the incentive fee calculation methodology described
below (the “Incentive Fee Calculation Methodology”).



For
the avoidance of doubt, the Incentive Fee Calculation Methodology is not intended to describe the Company’s actual operations
with respect to the making of distributions—and the Incentive Fee Calculation Methodology does not limit the Company’s
ability to make distributions to stockholders over the life of the Company (other than the Company’s actual payment of the
Incentive Fee upon liquidation of the Company). Rather, the Incentive Fee Calculation Methodology is a tool whose sole purpose
is to calculate the size of the Incentive Fee.



3







To
calculate the size of the Incentive Fee, the Company will refer to (1) the amounts and timing of stockholders’ contributions
to the Company, and (2) the amounts and timing of the Company’s distributions, and will analyze those contributions and
distributions under the Incentive Fee Calculation Methodology. The Incentive Fee will equal the total amount of distributions
that would be made to the Adviser under paragraphs (c) and (d) of the Incentive Fee Calculation Methodology.



The
Incentive Fee Calculation Methodology is:

(a)
First, the Company will make distributions to its stockholders until stockholders have received 100% of Contributed Capital
(as defined below).



(b)
Second, the Company will make distributions to its stockholders until stockholders have received a 7% return per annum,
compounded annually, on their capital contributions, from the date each capital contribution is made through the date such
capital has been returned.



(c)
Third, the Company will make distributions to the Adviser under this paragraph (c) until it has received 12.5% of the total
amount distributed by the Company under paragraph (b) and this paragraph (c).



(d)
Thereafter, any additional amounts that the Company distributes will be paid 87.5% to stockholders and 12.5% to the
Adviser.



Notwithstanding
anything to the contrary herein, in no event will an amount be paid with respect to the Incentive Fee to the extent it would exceed
the limitations set forth in Section 205(b)(3) of the Advisers Act.



“Contributed
Capital” is the aggregate amount of capital contributions that have been made by all stockholders in respect of their shares
of common stock to the Company. All distributions (or deemed distributions), including investment income (i.e. proceeds received
in respect of interest payments, dividends and fees) and proceeds attributable to the repayment or disposition of any investment,
to stockholders will be considered a return of Contributed Capital. Unreturned Contributed Capital equals aggregate Contributed
Capital minus cumulative distributions but is never less than zero.



The
term “distribution” includes all distributions of the Company’s assets including in respect of proceeds from
the full or partial realization of the Company’s investments and income from investing activities and may include amounts
treated as return of capital, ordinary income and capital gains for accounting, tax and/or other purposes.



Administration
Agreement and Fund Accounting Agreement



We
have also entered into an administration servicing agreement (the “Administration Agreement”) with U.S. Bancorp Fund
Services, LLC (“U.S. Bank,” or the “Administrator”), pursuant to which U.S. Bank provides the administrative
and recordkeeping services necessary for us to operate. In addition, we have entered into a fund accounting servicing agreement
(the “Fund Accounting Agreement”) with U.S. Bank, pursuant to which U.S. Bank provides accounting services with respect
to the company. We will reimburse U.S. Bank for all reasonable costs and expenses incurred by U.S. Bank in providing these services,
as provided by the Administration Agreement and Fund Accounting Agreement, respectively.



The
Administration Agreement has been approved by our Board.



General
Portfolio Composition and Investment Strategy



As
noted above, we expect to invest in both primary origination investments as well as open-market secondary purchases. We expect
to source our primary origination investments through Muzinich’s network of relationships with financial intermediaries
(including regional banks), private equity investment firms, lawyers, accountants, experienced senior management teams and other
middle-market lenders. We may seek investment opportunities where we are the sole investor in an investment, and also may seek
opportunities where we invest alongside one or more other investors. We expect to invest across a number of different industries.
We expect to build a portfolio of approximately 15 to 20 investments, with no more than 10% of our assets invested in any one
investment and no more than 20% of our assets invested in a single industry (not including cash or cash equivalents, including,
for instance, U.S. government securities and investment grade debt instruments maturing within one year). From time to time, certain
of our investments may be made with the intent of maintaining compliance with diversification and other requirements applicable
to us, and such investments may cause us to be invested in a larger number of investments than we might otherwise have invested.
Our investments are typically expected to have maturities between 3 and 8 years and to generally range in size between $10 and
$35 million, though this expected investment size may grow if our capital base grows and may shrink if our capital base shrinks.
Our Adviser seeks to employ a disciplined and selective investment approach that has a strong focus on investments that are determined
by our Adviser to have attractive credit qualities. We seek to avoid deeply cyclical businesses, start-ups or turn-around situations,
as well as specialized industries such as real estate, regulated financial services, commodities, oil & gas extraction, firearms
and gaming, and businesses with significant technology risk.



4







Market
Opportunity



We
believe that current market conditions and certain regulatory changes have combined to create an attractive investment environment
for us. Specifically:



| | ● | Declining
                                         Number of Traditional Financing Sources: A recent trend within the banking sector has
                                         seen the combination of local and regional banks into larger, money center banks. Local
                                         and regional banks have historically focused on providing capital to middle-market companies,
                                         whereas money center banks have historically focused on lending, and providing ancillary
                                         services, to large corporate clients to whom they can deploy larger amounts of capital
                                         more efficiently. We believe that this consolidation has resulted in fewer bank lenders
                                         willing to focus on lending to the U.S. middle-market, and reduced accordingly fewer
                                         financing options for the companies we target.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Limited
                                         Availability of Capital for Middle-Market Companies: We believe that regulatory changes
                                         have reduced the availability of capital to middle-market companies. Specifically, the
                                         implementation of various industry regulations and/or standards, including but not limited
                                         to the Basel III accord, the Dodd-Frank Wall Street Reform and Consumer Protection Act
                                         (the “Dodd-Frank Act”) and leveraged lending guidelines and regulations implemented
                                         by the Federal Reserve, has significantly increased the capital and liquidity requirements
                                         for banks, decreasing their capacity to originate and/or hold non-investment grade loans
                                         on their balance sheets. While the institutional leveraged loan and high-yield bond markets
                                         have enjoyed significant investor interest in the past several years, middle-market companies
                                         have been largely unable to access those markets as they tend to fail to meet the size
                                         and liquidity requirements imposed by the institutional investor community.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Broad
                                         Opportunity Set: With an estimated 200,000 middle-market companies seeking access to
                                         debt capital to support growth, there is significant opportunity to provide debt financing
                                         for high quality middle-market businesses in today’s market. The opportunity is
                                         further enhanced by the increased amount of capital invested in recent years in private
                                         equity as an asset class, because private equity firms tend to work in-tandem with debt
                                         financing providers to purchase and grow portfolio companies. In addition, we believe
                                         middle-market companies are increasingly looking abroad for growth opportunities. Accordingly,
                                         we believe that having the capabilities to support such endeavors will create additional
                                         opportunities for lenders.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Diligence
                                         and Monitoring Capabilities: Lending to middle-market companies requires in-depth due
                                         diligence, broad underwriting capabilities, and extensive ongoing monitoring. Due to
                                         the lack of publicly available information, lending to middle market companies tends
                                         to be labor intensive and informed by past transaction experience.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Premium
                                         Pricing: The reduced availability of credit to middle-market companies typically results
                                         in an increased interest rate, or pricing, of loans for middle-market borrowers. In addition,
                                         recent loans to middle-market companies have often included meaningful upfront fees and
                                         prepayment protections, both of which should enhance the profitability of new loans to
                                         lenders.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Competition



Our
primary competitors provide financing to middle-market companies and include other BDCs, commercial and investment banks, commercial
financing companies, collateralized loan obligations, private funds, including hedge funds, and, to the extent they provide an
alternative form of financing, private equity funds. Some of our existing and potential competitors are substantially larger and
have considerably greater financial, technical and marketing resources than we do. For example, some competitors may have a lower
cost of funds and access to funding sources that are not available to us. In addition, some of our competitors may have higher
risk tolerances or different risk assessments, which could allow them to consider a wider variety of investments and establish
more relationships than we can. Furthermore, many of our competitors are not subject to the regulatory restrictions that the Investment
Company Act imposes on us as a BDC.



We
expect to use the industry information of Muzinich’s investment professionals to which we have access to assess investment
risks and determine appropriate pricing for our investments in portfolio companies. In addition, we believe that the relationships
of the senior managers of our Adviser enable us to learn about, and compete effectively for, financing opportunities with attractive
middle-market companies in the industries in which we seek to invest.



5







Monitoring



We
view active portfolio monitoring as a vital part of our investment process and are committed to a value-oriented philosophy implemented
by our Adviser. Our Adviser seeks to minimize the risk of capital loss while also striving for capital appreciation. Generally,
we seek to draw on our Adviser’s and its affiliates’ experience and access to market information to identify investment
opportunities and to structure investments.



Our
Adviser has a number of methods of evaluating and monitoring the performance and fair value of our investments. Our Adviser’s
private debt investment team intends to review the financial statements and/or financial projections on such frequency as they
are made available by our portfolio companies and to assess the success of our portfolio companies in adhering to their business
plans and in complying with their contractual covenants. Our Adviser further intends to contact management of our portfolio companies
and, if appropriate, the financial or strategic sponsor to enhance our understanding of their financial position, requirements
and/or accomplishments. Furthermore, our Adviser may seek to attend and participate in the board meetings of our portfolio companies.



Fees
and Expenses



All
investment professionals and staff of the Adviser, when and to the extent engaged in providing us investment advisory and management
services, and the base compensation, bonus and benefits, and the routine overhead expenses, of such personnel allocable to such
services, is provided and paid for by the Adviser and its affiliates.



We
bear all other costs and expenses of our operations, administration and transactions, including, but not limited to, those relating
to:



| | ● | our
    initial organization costs and operating costs incurred prior to the commencement of our operations;
| | - | ------------------------------------------------------------------------------------------------------------



| | ● | calculating
    individual asset values and our price per share equal to the NAV (including the cost and expenses of any independent valuation
    firms);
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | out-of-pocket
    expenses, including travel expense, incurred by the Adviser, or members of Muzinich, or payable to third parties, performing
    due diligence on prospective portfolio companies and, if necessary, enforcing our rights;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | costs
    of research and market data;
| | - | --------------------------------------



| | ● | costs
    of the offering or effecting any sales of, or repurchases of, our common stock and other securities, if any;
| | - | ----------------------------------------------------------------------------------------------------------------------



| | ● | the
    Management Fee and any Incentive Fee;
| | - | ---------------------------------------------



| | ● | certain
    costs and expenses relating to distributions paid on our shares;
| | - | ----------------------------------------------------------------------------



| | ● | administration
    fees payable under our Administration Agreement;
| | - | -------------------------------------------------------------------



| | ● | costs
    relating to the engagement of our chief compliance officer;
| | - | ---------------------------------------------------------------------



| | ● | debt
    service and other costs of borrowings or other financing arrangements;
| | - | -------------------------------------------------------------------------------



| | ● | direct
    costs incurred by the Adviser or its affiliates in providing managerial assistance to portfolio companies;
| | - | ---------------------------------------------------------------------------------------------------------------------



| | ● | amounts
    payable to third parties relating to, or associated with, making or holding investments;
| | - | ----------------------------------------------------------------------------------------------------



| | ● | transfer
    agent and custodial fees;
| | - | --------------------------------------



| | ● | costs
    of hedging;
| | - | ---------------------



| | ● | commissions
    and other compensation payable to brokers or dealers;
| | - | ---------------------------------------------------------------------



| | ● | federal,
    state and local taxes;
| | - | -----------------------------------



6







| | ● | Independent
    Director fees and expenses, including certain travel expenses;
| | - | ------------------------------------------------------------------------------



| | ● | costs
    of preparing financial statements and maintaining books and records and filing reports or other documents with the SEC (or
    other regulatory bodies), and costs associated with other reporting and/or compliance obligations under applicable federal
    and/or state laws, including registration and listing fees, and the compensation of professionals responsible for the preparation
    of any of the foregoing;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | the
    costs of any reports, proxy statements or other notices to our stockholders (including printing and mailing costs), the costs
    of any stockholders’ meetings and the compensation of investor relations personnel responsible for the preparation of
    the foregoing and related matters;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | our
    fidelity bond;
| | - | ----------------------



| | ● | directors
    and officers/errors and omissions liability insurance, and any other insurance premiums;
| | - | ------------------------------------------------------------------------------------------------------



| | ● | extraordinary
    expenses (such as litigation or indemnification payments);
| | - | ----------------------------------------------------------------------------



| | ● | direct
    costs and expenses of administration;
| | - | ------------------------------------------------



| | ● | fees
    and expenses associated with audits, accounting, tax advisors and outside legal and consulting costs;
| | - | --------------------------------------------------------------------------------------------------------------



| | ● | costs
    incurred in connection with the formation or maintenance of entities or vehicles to hold our assets for tax or other purposes;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------



| | ● | costs
    of winding up; and
| | - | ----------------------------



| | ● | all
    other expenses reasonably incurred by us in connection with making investments and administering our business.
| | - | ----------------------------------------------------------------------------------------------------------------------



From
time to time, the Adviser or its affiliates may pay amounts owed by us to third-party providers of goods or services. We will
subsequently reimburse the Adviser for such amounts paid on our behalf. There is no contractual cap on the reasonable costs and
expenses for which the Adviser will be reimbursed. All of the expenses discussed above will ultimately be borne by our stockholders.



Capital
Resources and Borrowings



We
anticipate cash to be generated from drawdowns in respect of capital committed by investors in the Initial Closing and subsequent
closings in respect of Private Offerings, and cash flows from operations. Furthermore, we expect to borrow funds to make additional
investments. This is known as “leverage” and may cause us to be more volatile than if we had not been leveraged. This
is because leverage tends to exaggerate the effect of any increase or decrease in the value of our net assets. Additionally, we
will be permitted, under specified conditions, to issue multiple classes of indebtedness and one class of stock senior to our
common stock if our asset coverage, as defined in the Investment Company Act, is at least equal to 150% immediately after each
such issuance (e.g., 150% asset coverage means that for every $100 of net assets, the Company may raise $200 from borrowing and
issuing senior securities). On August 14, 2019, the Company’s initial shareholder approved the adoption of the 150% threshold
pursuant to Section 61(a)(2) of the Investment Company Act and such election became effective the following day. Furthermore,
while any indebtedness and senior securities remain outstanding, we must make provisions to prohibit any distribution to our stockholders
or the repurchase of such securities or shares unless we meet the applicable asset coverage ratios at the time of the distribution
or repurchase. In connection with borrowings, our lenders may require us to pledge assets, investor commitments to fund capital
calls and/or the proceeds of those capital calls, thereby allowing the lender to call for capital contributions upon the occurrence
of an event of default under such financing arrangement. In addition, the lenders may ask us to comply with positive or negative
covenants that could have an effect on our operations.



The
use of leverage also involves significant risks. Certain trading practices and transactions, which may include, among others,
reverse repurchase agreements and the use of when-issued, delayed delivery or forward commitment transactions, may be considered
to be borrowings or involve leverage and thus are also subject to Investment Company Act restrictions. In accordance with applicable
SEC staff guidance and interpretations, when we engage in such transactions, instead of maintaining asset coverage in the amounts
set forth above, we may segregate or earmark liquid assets, or enter into an offsetting position, in an amount at least equal
to our exposure, on a mark-to-market basis, as calculated pursuant to requirements of the SEC. Short-term credits necessary for
the settlement of securities transactions and arrangements with respect to securities lending will not be considered to be borrowings
for these purposes. Practices and investments that may involve leverage but are not considered to be borrowings are not subject
to the asset coverage requirement, and we will not otherwise segregate or earmark liquid assets or enter in offsetting positions.
These investments may include certain investments or instruments that have embedded leverage, which may increase the risk of loss
from such investments, but are not considered to be borrowings.



7







The
Company may also borrow money to purchase assets in order to comply with certain regulatory requirements for RICs, including the
Diversification Tests (as defined below). The amount of leverage that we employ will depend on our Adviser’s and our Board
of Directors’ assessment of market conditions and other factors at the time of any proposed borrowing, and there can be
no assurance that we will use leverage or that our leveraging strategy will be successful during any period in which it is employed.



Private
Offerings



We
have conducted and will conduct Private Offerings of our common stock to investors in reliance on exemptions from the registration
requirements of the Securities Act. The shares of common stock will be offered and sold during Private Offerings (i) in the United
States under the exemption provided by Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder,
and other exemptions of similar import in the laws of the states and jurisdictions where the offering will be made, and (ii) outside
of the United States in accordance with Regulation S of the Securities Act. Within the United States, shares of common stock are
being offered solely to investors that are “accredited investors” as defined in Rule 501(a) of Regulation D promulgated
under the Securities Act who represent that (i) if a natural person (including participants in individual retirement accounts),
they have (a) an individual net worth, or joint net worth with their spouse, in excess of $1 million excluding the value of such
individual’s primary residence, or (b) an income (exclusive of any income attributable to their spouse) in excess of $200,000
in each of the two most recent years, or joint income with their spouse in excess of $300,000 in each of the two most recent years,
and have a reasonable expectation of reaching the same income level in the current year; or (ii) if an entity, including a corporation,
foundation, endowment, partnership, or limited liability company or trust, they have total assets in excess of $5 million and
they were not formed for the specific purpose of acquiring the securities offered (or each equity owner meets the accredited investor
requirements for an individual).



We
have entered and will enter into separate subscription agreements with a number of investors providing for the private placement
of the Company’s common stock pursuant to one or more closings in respect of Private Offerings. At each closing in respect
of any Private Offering, each investor will make a capital commitment to purchase shares of our common stock pursuant to a subscription
agreement entered into with the Company. Investors will be required to fund drawdowns to purchase shares of the Company’s
common stock up to the amount of their respective capital commitments on an as-needed basis with a minimum of ten business days’
prior notice to the investors. In addition to all legal remedies available to the Company, failure by an investor to purchase
additional common stock when requested by the Company will (following a cure period of ten business days) result in that investor
being subject to certain default provisions set forth in the subscription agreement. Defaulting investors may also forfeit their
right to participate in purchasing additional shares on any future drawdown date or otherwise participate in any future investments
in the Company.



After
the Initial Closing, we expect to hold additional closings that may occur from time to time as determined by us. In the event
that we enter subscription agreements with one or more investors after the initial drawdown, each such investor will be required
to make purchases of shares of common stock (each, a “Catch-up Purchase”) on one or more dates to be determined by
us. The aggregate purchase price of the Catch-up Purchases will be equal to an amount necessary to ensure that, upon payment of
the aggregate purchase price, such investor will have contributed the same percentage of its capital commitment to us as all investors
whose subscriptions were accepted at previous closings. Catch-up Purchases will be made at a per-share price as determined by
our Board of Directors (including any committee thereof) as of the end of the most recent calendar quarter or such other date
determined by our Board of Directors prior to the date of the applicable drawdown notice. The per-share price shall be at least
equal to the NAV per share of our common stock in accordance with the limitations under Section 23 of the Investment Company Act.
The Board may set the per-share price above the net asset value per share based on a variety of factors, including without limitation
the total amount of the Company’s organizational and other expenses (including actual and/or accrued expenses, which may
include any estimates thereof).



8







All
purchases will generally be made pro rata in accordance with the investors’ capital commitments, at a per-share price at
least equal to the NAV per share of the Company’s common stock as of the close of the last quarter preceding the drawdown
date; such per-share price may be set above the NAV per share based on a variety of factors, including without limitation the
total amount of the Company’s organizational and other expenses (including actual and/or accrued expenses, which may include
any estimates thereof), in accordance with the limitations under Section 23 of the Investment Company Act. At the end of the Commitment
Period, investors will be released from any further obligation to fund drawdowns, except to the extent necessary to (i) pay Company
expenses, including management fees, any amounts that may become due under any borrowings or other financings or similar obligations
and any other liabilities, contingent or otherwise, in each case to the extent they relate to the Commitment Period, (ii) complete
investments in any transactions for which there are binding written agreements as of the end of the Commitment Period (including
investments that are funded in phases), (iii) fund follow-on investments made in existing portfolio companies, (iv) seek to maintain
or protect the value of, or cover expenses related to, investments (including, without limitation, through currency hedging transactions),
(v) fund obligations under any Company guarantee or indemnity made during the Commitment Period and/or (vi) fund any defaulted
commitments. Proceeds realized by the Company from the sale or repayment of any investment (as opposed to investment income) during
the Commitment Period (but not in excess of the cost of any such investment), may be retained and reinvested by the Company; provided
that such additional amounts reinvested will not, in the aggregate, exceed the Company’s total capital commitments. Any
amounts so reinvested will not reduce a stockholder’s unfunded capital commitments. No investor will be permitted to sell,
assign, transfer or otherwise dispose of its shares or capital commitment unless the Adviser provides its prior written consent
and the transfer is otherwise made in accordance with applicable law.



Regulation
as a Private Business Development Company



We
have elected to be treated as a BDC under the Investment Company Act. As with other companies regulated by the Investment Company
Act, a BDC must adhere to certain substantive regulatory requirements. The Investment Company Act contains prohibitions and restrictions
relating to transactions between BDCs and their affiliates (including any investment advisers or sub-advisers), principal underwriters
and affiliates of those affiliates or underwriters and requires that a majority of the directors be persons other than “interested
persons,” as that term is defined in the Investment Company Act.



In
addition, the Investment Company Act provides that we may not change the nature of our business so as to cease to be, or to withdraw
our election as a BDC unless approved by a majority of our outstanding voting securities. A majority of the outstanding voting
securities of a company is defined under the Investment Company Act as the lesser of: (i) 67% or more of the voting securities
present at such meeting, if the holders of more than 50% of the outstanding voting securities of such company are present or represented
by proxy or (ii) more than 50% of the outstanding voting securities of such company.



Any
issuance of preferred stock must comply with the requirements of the Investment Company Act. The Investment Company Act requires,
among other things, that (1) immediately after issuance and before any dividend or other distribution is made with respect to
our common stock and before any purchase of common stock is made, such preferred stock together with all other senior securities
must not exceed an amount equal to 50% of our total assets after deducting the amount of such dividend, distribution or purchase
price, as the case may be, and (2) the holder of shares of preferred stock, if any are issued, must be entitled as a class to
elect two directors at all times and to elect a majority of the directors if dividends on such preferred stock are in arrears
by two full years or more.



Certain
other matters under the Investment Company Act require a separate class vote of the holders of any issued and outstanding preferred
stock. For example, holders of preferred stock would be entitled to vote separately as a class from the holders of common stock
on a proposal involving a plan of reorganization adversely affecting such securities.



We
may invest up to 100% of our assets in securities acquired directly from issuers in privately negotiated transactions. With respect
to such securities, we may, for the purpose of public resale, be deemed a “principal underwriter” as that term is
defined under the Securities Act. We may purchase or otherwise receive warrants which offer an opportunity (not a requirement)
to purchase common stock of a portfolio company in connection with an acquisition financing or other investments. Similarly, we
may acquire rights that obligate an issuer of acquired securities or their affiliates to repurchase the securities at certain
times, under certain circumstances.



We
do not intend to acquire securities issued by any investment company whereby our investment would exceed the limits imposed by
the Investment Company Act. Under those limits, we generally cannot acquire more than (i) 3% of the total outstanding voting stock
of any investment company, (ii) invest more than 5% of the value of our total assets in the securities of one investment company,
or (iii) invest more than 10% of the value of our total assets in the securities of investment companies in general. These limitations
do not apply where we (i) make investments through a subsidiary or (ii) acquire interests in a money market fund as long as we
do not pay a sales charge or service fee in connection with the purchase. With respect to the portion of our portfolio invested
in securities issued by investment companies, it should be noted that such investments might subject our stockholders to additional
expenses.



9







None
of our policies described above are fundamental and each such policy may be changed without stockholder approval, subject to any
limitations imposed by the Investment Company Act.



Private
funds that are excluded from the definition of “investment company” pursuant to either Section 3(c)(1) or 3(c)(7)
of the Investment Company Act are also subject to certain of the limits under the Investment Company Act noted above. Specifically,
such private funds generally may not acquire directly or through a controlled entity more than 3% of our total outstanding voting
stock (measured at the time of the acquisition). As a result, such private funds would be required to hold a smaller position
in our stock than if they were not subject to this restriction.



Qualifying
Assets



Under
the Investment Company Act, a BDC may not acquire any asset other than assets of the type listed in Section 55(a) of the Investment
Company Act, which are referred to as “qualifying assets,” unless, at the time the acquisition is made, qualifying
assets (not including certain assets specified in the Investment Company Act) represent at least 70% of the company’s total
assets. The principal categories of qualifying assets relevant to our proposed business are the following:



(1)
Securities purchased in transactions not involving any public offering from the issuer of such securities, which issuer (subject
to certain exceptions) is an eligible portfolio company (as defined below), or from any person who is, or has been during the
preceding thirteen months, an affiliated person of an eligible portfolio company, or from any other person, subject to such rules
and regulations as may be prescribed by the SEC.



(2)
Securities of any eligible portfolio company that we control.



(3)
Securities purchased in a private transaction from a U.S. issuer that is not an investment company or from an affiliated person
of the issuer, or in transactions incident thereto, if the issuer is in bankruptcy and subject to reorganization or if the issuer,
immediately prior to the purchase of its securities was unable to meet its obligations as they came due without material assistance
other than conventional lending or financing arrangements.



(4)
Securities of an eligible portfolio company purchased from any person in a private transaction if there is no ready market for
such securities and we already own at least 60% of the outstanding equity of the eligible portfolio company.



(5)
Securities received in exchange for or distributed on or with respect to securities described in (1) through (4) above, or pursuant
to the exercise of options, warrants or rights relating to such securities.



(6)
Cash, cash equivalents, U.S. Government securities or high-quality debt securities maturing in one year or less from the time
of investment.



An
“eligible portfolio company” is defined in the Investment Company Act as any issuer which:



(a)
is organized under the laws of, and has its principal place of business in, the United States;



(b)
is not an investment company (other than a small business investment company wholly owned by the BDC) or a company that would
be an investment company but for certain exclusions under the Investment Company Act; and



(c)
satisfies any of the following:



| | ● | does
not have any class of securities listed on a national securities exchange or has a class of securities listed on a national securities
exchange but has an aggregate market value of outstanding common equity of less than $250 million;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | is
controlled by a BDC or a group of companies including a BDC, and the BDC has an affiliated person who is a director of the eligible
portfolio company; or
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | is
a small and solvent company having total assets of not more than $4 million and capital and surplus of not less than $2 million.
| | - | -----------------------------------------------------------------------------------------------------------------------------------



10







Limitations
on Leverage



As
a BDC, we will be permitted, under specified conditions, to issue multiple classes of indebtedness and one class of stock senior
to our common stock if our asset coverage, as defined in the Investment Company Act, is at least equal to 150% immediately after
each such issuance (e.g., 150% asset coverage means that for every $100 of net assets, the Company may raise $200 from borrowing
and issuing senior securities). On August 14, 2019, the Company’s initial shareholder approved the adoption of the 150%
threshold pursuant to Section 61(a)(2) of the Investment Company Act and such election became effective the following day. The
amount of leverage that we will employ will depend on our Adviser’s and our Board of Directors’ assessments of market
conditions and other factors at the time of any proposed borrowing or issuance of senior securities.



Managerial
Assistance to Portfolio Companies



A
BDC must be organized and have its principal place of business in the United States and must be operated for the purpose of making
investments in the types of securities described in (1), (2) or (3) above under “Qualifying Assets.” However, in order
to count portfolio securities as qualifying assets for the purpose of the 70% test, the BDC must also either control the issuer
of the securities or offer to make available to the issuer of the securities (other than small and solvent companies described
above) significant managerial assistance; except that, where the BDC purchases such securities in conjunction with one or more
other persons acting together, one of the other persons in the group may make available such managerial assistance (as long as
the BDC does not make available significant managerial assistance solely in this fashion). Making available significant managerial
assistance means, among other things, any arrangement whereby the BDC, through its directors, officers or employees, offers to
provide, and, if accepted, does so provide, significant guidance and counsel concerning the management, operations or business
objectives and policies of a portfolio company. The offer to make available significant managerial assistance does not need to
be accepted.



Ongoing
Relationships with Portfolio Companies



We
view active portfolio monitoring as a vital part of our investment process and are committed to a value-oriented philosophy implemented
by our Adviser. Our Adviser seeks to minimize the risk of capital loss while also striving for capital appreciation. Generally,
we seek to draw on our Adviser’s and its affiliates’ experience and access to market information to identify investment
opportunities and to structure investments.



Our
Adviser has a number of methods of evaluating and monitoring the performance and fair value of our investments. Our Adviser’s
private debt investment team intends to review the financial statements and/or financial projections on such frequency as they
are made available by our portfolio companies and to assess the success of our portfolio companies in adhering to their business
plans and in complying with their contractual covenants. Our Adviser further intends to contact management of our portfolio companies
and, if appropriate, the financial or strategic sponsor to enhance our understanding of their financial position, requirements
and/or accomplishments. Furthermore, our Adviser may seek to attend and participate in the board meetings of our portfolio companies.



Valuation



In
accordance with the procedures adopted by our Board of Directors, the NAV per share of our outstanding shares of common stock
is determined at least quarterly by dividing the value of total assets minus liabilities by the total number of shares outstanding.



As
a BDC, we generally invest in illiquid securities including debt and equity investments of middle-market companies. Under procedures
adopted by our Board of Directors, market quotations are generally used to assess the value of our investments for which market
quotations are readily available. We obtain these market values from independent pricing services or at the bid prices obtained
from at least two broker/dealers if available, or otherwise from a principal market maker or a primary market dealer. If the Board
of Directors or its delegate has a bona fide reason to believe any such market quote does not reflect the fair value of an investment,
it may independently value such investments by using the valuation procedure that it uses with respect to assets for which market
quotations are not readily available.



We
expect that there will not be readily available market values for most, if not all, of the investments which are or will be in
our portfolio, and we will value such investments at fair value as determined in good faith by or under the direction of our Board
of Directors using a documented valuation policy, described below, and a consistently applied valuation process. The factors that
may be taken into account in pricing our investments at fair value include, as relevant, the nature and realizable value of any
collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flow, the markets in which
the portfolio company does business, comparison to publicly traded securities and other relevant factors. When an external event
such as a purchase transaction, public offering or subsequent equity sale occurs, we consider the pricing indicated by the external
event to corroborate or revise our valuation. Under current auditing standards, the notes to our financial statements refer to
the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on our financial statements.



11







With
respect to investments for which market quotations are not readily available, or for which market quotations are deemed not reflective
of the fair value, the valuation procedures adopted by our Board of Directors contemplate a multi-step valuation process each
quarter (or more frequently, as appropriate), as described below:



(1)
Our valuation process begins with each portfolio company or investment being initially valued by the investment professionals
of our Adviser responsible for the portfolio investment;



(2)
Preliminary valuation conclusions are then documented and discussed with the management of our Adviser;



(3)
Our Board of Directors also engages independent valuation firms to conduct independent appraisals of our investments for which
market quotations are not readily available or are readily available but deemed not reflective of the fair value of an investment.
The independent valuation firms review management’s preliminary valuations in light of its own independent assessment and
also in light of any market quotations obtained from an independent pricing service, broker, dealer or market maker. At least
a portion of our portfolio will be reviewed on a quarterly basis by third-party valuation firms and our entire portfolio will
be reviewed at least annually by third-party valuation firms;



(4)
The Audit Committee of our Board of Directors reviews the preliminary valuations of the Adviser and that of the independent valuation
firms and responds and supplements the valuation recommendations of the independent valuation firms to reflect any comments; and



(5)
Our Board of Directors discusses the valuations and determines the fair value of each of our investments in good faith, based
on the input of our Adviser, the independent valuation firms and the Audit Committee.





Fair
value, as defined under Topic 820 of the Financial Accounting Standards Board’s Accounting Standards Codification, as amended
(“ASC 820”), is the price that we would receive upon selling an investment or pay to transfer a liability in an orderly
transaction to a market participant in the principal or most advantageous market for the investment or liability. ASC 820 emphasizes
that valuation techniques maximize the use of observable market inputs and minimize the use of unobservable inputs. Inputs refer
broadly to the assumptions that market participants would use in pricing an asset or liability, including assumptions about risk.
Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing an
asset or liability based on market data obtained from sources independent of our Adviser. Unobservable inputs reflect the assumptions
market participants would use in pricing an asset or liability based on the best information available to us at the reporting
period date.



Temporary
Investments



As
a BDC, pending investment in other types of “qualifying assets,” as described above, our investments may consist of
cash, cash items, U.S. government securities or high-quality debt securities maturing in one year or less from the time of investment,
which we refer to, collectively, as temporary investments, so that 70% of our assets are qualifying assets. Typically, we will
invest in U.S. Treasury bills or in repurchase agreements, provided that such agreements are fully collateralized by cash or securities
issued by the U.S. Government or its agencies. A repurchase agreement involves the purchase by an investor, such as us, of a specified
security and the simultaneous agreement by the seller to repurchase it at an agreed-upon future date and at a price which is greater
than the purchase price by an amount that reflects an agreed-upon interest rate. There is no percentage restriction on the proportion
of our assets that may be invested in such repurchase agreements. However, if more than 25% of our total assets constitute repurchase
agreements from a single counterparty on the last day of each calendar quarter, we would generally not meet the asset diversification
requirements in order to qualify as a RIC for U.S. federal income tax purposes. Thus, we do not intend to enter into repurchase
agreements with a single counterparty in excess of this limit. The Adviser will monitor the creditworthiness of the counterparties
with which we enter into repurchase agreement transactions.



Indebtedness
and Senior Securities



As
a BDC, we are permitted, under specified conditions, to issue multiple classes of indebtedness and one class of stock senior to
our common stock if our asset coverage, as defined in the Investment Company Act, is at least equal to 150% immediately after
each such issuance (e.g., 150% asset coverage means that for every $100 of net assets, the Company may raise $200 from borrowing
and issuing senior securities). The amount of leverage that we will employ will depend on our Adviser’s and our Board of
Directors’ assessments of market conditions and other factors at the time of any proposed borrowing or issuance of senior
securities.



12







In
addition, except in limited circumstances, while any indebtedness and senior securities remain outstanding, except in limited
circumstances, we must make provisions to prohibit any distribution to our stockholders or the repurchase of such securities or
stock unless we meet the applicable asset coverage ratios at the time of the distribution or repurchase. We may also borrow amounts
up to 5% of the value of our total assets for temporary or emergency purposes without regard to asset coverage. For a discussion
of the risks associated with leverage, see “Item 1A. Risk Factors — Risks Relating to Our Business and Structure —
We may borrow money and enter into transactions, which magnify the potential for gain or loss and may increase the risk of investing
in us.”



Code
of Ethics



The
Company and the Adviser have each adopted a single code of ethics pursuant to Rule 17j-1 under the Investment Company Act and
Rule 204A-1 under the Advisers Act, respectively. These codes of ethics establish, among other things, procedures for personal
investments and restrict certain personal securities transactions, including transactions in securities that are held by us. Personnel
subject to each code may invest in securities for their personal investment accounts, so long as such investments are made in
accordance with the code’s requirements.



Compliance
Policies and Procedures



We
and our Adviser are each required to adopt and implement written policies and procedures reasonably designed to prevent violation
of the Federal securities laws, review these policies and procedures annually for their adequacy and the effectiveness of their
implementation, and designate a chief compliance officer to be responsible for administering the policies and procedures.



Sarbanes-Oxley
Act of 2002



The
Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) imposes a wide variety of regulatory requirements on publicly-held
companies and their insiders. As a BDC, we are required to have filed a registration statement under the Exchange Act. For example:



| | ● | pursuant
to Rule 13a-14 of the Exchange Act, our chief executive officer and chief financial officer will have to certify the accuracy
of the financial statements contained in our periodic reports;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | pursuant
to Item 307 of Regulation S-K, our periodic reports will have to disclose our conclusions about the effectiveness of our disclosure
controls and procedures;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | pursuant
to Rule 13a-15 of the Exchange Act, subject to certain assumptions, our management will in the future be required to prepare an
annual report regarding its assessment of our internal control over financial reporting and, depending on our accelerated filer
status, this report may be required to be audited by our independent registered public accounting firm; and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | pursuant
to Item 308 of Regulation S-K and Rule 13a-15 of the Exchange Act, our periodic reports must disclose whether there were significant
changes in our internal controls over financial reporting or in other factors that could significantly affect these controls subsequent
to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
Sarbanes-Oxley Act requires us to review our current policies and procedures to determine whether we comply with the Sarbanes-Oxley
Act and the regulations promulgated thereunder. We will continue to monitor our compliance with all regulations that are adopted
under the Sarbanes-Oxley Act and will take actions necessary to ensure that we are in compliance therewith.



Proxy
Voting Policies and Procedures



We
have delegated our proxy voting responsibility to our Adviser. The Proxy Voting Policies and Procedures of our Adviser are set
forth below. These guidelines will be reviewed periodically by our Adviser and our Independent Directors will receive a copy annually.
Accordingly, these guidelines are subject to change.



13







An
investment adviser registered under the Advisers Act has a fiduciary duty to act solely in the best interests of its clients.
As part of this duty, our Adviser recognizes that conflicts of interest may arise from time to time in relation to proxy voting
requirements. A conflict between our Adviser and any client can arise in a number of situations. The following non-exclusive examples
illustrate conflicts of interest that could arise:



| | ● | a
failure to vote in favor of a position supported by management may harm our relationship or our Adviser’s relationship with
the company;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------



| | ● | a
failure to vote in favor of a particular proposal may harm our relationship or our Adviser’s relationship with the proponent
of the proposal;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------



| | ● | a
failure to vote for or against a particular proposal may adversely affect a business or personal relationship, such as when an
officer of our Adviser has a spouse or other relative who serves as a director of the company, is employed by the company or otherwise
has an economic interest therein; or
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | conflicts
arising from investment positions held by other clients of our Adviser and/or its affiliates.
| | - | -------------------------------------------------------------------------------------------------------



These
policies and procedures for voting proxies are intended to comply with Section 206 of, and Rule 206(4)-6 under, the Advisers Act.



Our
Adviser intends to vote proxies or similar corporate actions in accordance with the best interests of our stockholders, taking
into account such factors as it deems relevant in its sole discretion.



Privacy
Principles



As
a BDC and its registered investment adviser, each of the Company and our Adviser, respectively, has adopted policies and procedures
to protect the “nonpublic personal information” (“NPI”) of investors. Each of the Company and our Adviser
takes seriously its responsibility to maintain the confidentiality of investor information. In the course of its capital raising,
asset management and related operational activities, each of the Company and our Adviser gains access to non-public information
about investors in the Company. Such information may include personal financial and account information, and data or analyses
derived from such non-public personal information (collectively referred to as “Confidential Investor Information”).



The
Company and our Adviser do not share Confidential Investor Information with any third parties, except in the following circumstances:



| | ● | As
necessary to provide the service that the investor requested or authorized, or to maintain and service the investor’s account.
The Company and/or our Adviser will require that any financial intermediary, agent or sub-contractor utilized by the Company and/or
our Adviser (such as brokers or fund administrators) comply with substantially similar standards for non-disclosure and protection
of Confidential Investor Information and use the information provided by the Company and/or our Adviser only for the performance
of the specific service requested by the Company and/or our Adviser.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | As
required by regulatory authorities or law enforcement officials who have jurisdiction over the Company and/or our Adviser, or
as otherwise required or permitted by any applicable law. In the event the Company and/or our Adviser is compelled to disclose
Confidential Investor Information, the Company and/or our Adviser, if permitted by law, may provide prompt notice to the affected
investors, so that the investors may have the opportunity to seek a protective order or other appropriate remedy. If no protective
order or other appropriate remedy is obtained and the Company and/or our Adviser is compelled to disclose Confidential Investor
Information, the Company and/or our Adviser shall disclose only such information, and only in such detail, to the extent legally
required as determined in its reasonable judgment.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | To
the extent reasonably necessary to prevent fraud, unauthorized transactions or liability.
| | - | --------------------------------------------------------------------------------------------



The
Company and our Adviser restrict access to Confidential Client Information to those personnel who need to know such information
to provide services to clients.



Reporting
Obligations



We
will furnish our stockholders with annual reports containing audited financial statements, quarterly reports, and such other reports
as we determine to be appropriate or as may be required by law. We are required to comply with all reporting, proxy solicitation
and other applicable requirements under the Exchange Act.



14







Because
we do not currently maintain a corporate website, we do not intend to make available on a website our annual reports on Form 10-K,
quarterly reports on Form 10-Q and our current reports on Form 8-K. We do, however, provide electronic or paper copies of our
filings free of charge upon request.



Stockholders
and the public may also read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 450 Fifth
Street, NW, Washington, DC 20549. The public may also obtain information on the operation of the Public Reference Room by calling
the SEC at 1-800-SEC-0330. The SEC also maintains a website (www.sec.gov) that contains such information.



Certain
U.S. Federal Income Tax Consequences



The
following discussion is a general summary of certain material U.S. federal income tax considerations applicable to us and an investment
in shares of our common stock. The discussion is based upon the Code, the regulations of the U.S. Department of Treasury promulgated
thereunder, which we refer to as the “Treasury regulations”, the legislative history of the Code, current administrative
interpretations and practices of the IRS (including administrative interpretations and practices of the IRS expressed in private
letter rulings which are binding on the IRS only with respect to the particular taxpayers that requested and received those rulings)
and judicial decisions, each as of the date of this Form 10-K and all of which are subject to change or differing interpretations,
possibly retroactively, which could affect the continuing validity of this discussion. We have not sought, and will not seek,
any ruling from the IRS regarding any matter discussed in this summary, and this summary is not binding on the IRS. Accordingly,
there can be no assurance that the IRS will not assert, and a court will not sustain, a position contrary to any of the tax consequences
discussed below.



You
should note that this summary does not purport to be a complete description of all the tax aspects affecting us or the beneficial
owners of shares of our common stock, which we refer to as “stockholders.” For example, this summary does not describe
all of the U.S. federal income tax consequences that may be relevant to certain types of stockholders subject to special treatment
under the U.S. federal income tax laws, including stockholders subject to the alternative minimum tax, tax-exempt organizations,
insurance companies, partnerships or other pass-through entities and their owners, Non-U.S. stockholders (as defined below) engaged
in a trade or business in the United States or entitled to claim the benefits of an applicable income tax treaty, persons who
have ceased to be U.S. citizens or to be taxed as residents of the United States, U.S. stockholders (as defined below) whose functional
currency is not the U.S. dollar, persons holding our common stock in connection with a hedging, straddle, conversion or other
integrated transaction, dealers in securities, traders in securities that elect to use a market-to-market method of accounting
for securities holdings, pension plans and trusts, and financial institutions. This summary assumes that our stockholders hold
shares of our common stock as capital assets for U.S. federal income tax purposes (generally, assets held for investment). This
summary does not discuss any aspects of U.S. estate or gift taxation, U.S. state or local taxation or non-U.S. taxation. It does
not discuss the special treatment under U.S. federal income tax laws that could result if we invest in tax-exempt securities or
certain other investment assets.



For
purposes of this discussion, a “U.S. stockholder” is a beneficial owner of shares of our common stock that is, for
U.S. federal income tax purposes:



| | ● | an
individual who is a citizen or resident of the United States;
| | - | ----------------------------------------------------------------



| | ● | a
corporation, or other entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the
laws of the United States or any state thereof, including, for this purpose, the District of Columbia;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | a
trust if (i) a court within the United States is able to exercise primary supervision over the administration of the trust and
one or more “United States persons” (as defined in the Code) have the authority to control all substantive decisions
of the trust, or (ii) the trust has in effect a valid election to be treated as a domestic trust for U.S. federal income tax purposes;
or
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | an
estate, the income of which is subject to U.S. federal income taxation regardless of its source.
| | - | ---------------------------------------------------------------------------------------------------



For
purposes of this discussion, a “Non-U.S. stockholder” is a beneficial owner of shares of our common stock that is
not a U.S. stockholder or a partnership (or an entity or arrangement treated as a partnership) for U.S. federal income tax purposes.



If
a partnership, or other entity or arrangement treated as a partnership for U.S. federal income tax purposes, holds shares of our
common stock, the U.S. federal income tax treatment of a partner in the partnership generally will depend on the status of the
partner, the activities of the partnership and certain determinations made at the partner level. A stockholder that is a partnership
holding shares of our common stock, and each partner in such a partnership, should consult his, her or its own tax adviser with
respect to the tax consequences of the purchase, ownership and disposition of shares of our common stock.



15







Tax
matters are very complicated and the tax consequences to each stockholder of the ownership and disposition of shares of our common
stock will depend on the facts of his, her or its particular situation. You should consult your own tax adviser regarding the
specific tax consequences of the ownership and disposition of shares of our common stock to you, including tax reporting requirements,
the applicability of U.S. federal, state and local tax laws and non-U.S. tax laws, eligibility for the benefits of any applicable
income tax treaty and the effect of any possible changes in the tax laws.



Election
to be Taxed as a RIC



We
have elected to be considered a BDC under the Investment Company Act. We intend to elect to be treated, and intend to qualify
annually, as a RIC under Subchapter M of the Code. As a RIC, we generally will not pay corporate-level U.S. federal income taxes
on any net ordinary income or capital gains that we timely distribute as dividends to our stockholders. Rather, dividends we distribute
generally will be taxable to our stockholders, and any net operating losses, foreign tax credits and other of our tax attributes
generally will not pass through to our stockholders, subject to special rules for certain items such as net capital gains and
qualified dividend income we recognize.



To
qualify as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements (as described
below). In addition, to qualify as a RIC, we must timely distribute to our stockholders at least 90% of our investment company
taxable income (determined without regard to the dividends paid deduction), which is generally our net ordinary income plus the
excess of realized net short-term capital gains over realized net long-term capital losses, if any, for each taxable year (the
“Annual Distribution Requirement”).



Taxation
as a RIC



If
we qualify as a RIC and satisfy the Annual Distribution Requirement, then we will not be subject to U.S. federal income tax on
the portion of our investment company taxable income and net capital gain (generally, net long-term capital gain in excess of
net short-term capital loss) that we timely distribute (or are deemed to timely distribute) to our stockholders. We will be subject
to U.S. federal income tax at the regular corporate rates on any income or capital gain not distributed (or deemed distributed)
to our stockholders.



We
generally will be subject to a 4% nondeductible U.S. federal excise tax on certain undistributed income unless we distribute in
a timely manner an amount at least equal to the sum of (1) 98% of our net ordinary income (taking into account certain deferrals
and elections) for each calendar year, (2) 98.2% of our capital gains in excess of capital losses (adjusted for certain ordinary
losses) for the one-year period ending October 31 in that calendar year and (3) any net ordinary income and capital gains in excess
of capital losses recognized, but not distributed, in preceding calendar years (the “Excise Tax Avoidance Requirement”).
We will not be subject to the U.S. federal excise tax on amounts on which we are required to pay U.S. federal income tax (such
as retained net capital gains). Depending upon the level of taxable income earned in a taxable year, we may choose to carry forward
taxable income for distribution in the following taxable year and pay the applicable U.S. federal excise tax.



In
order to qualify as a RIC for U.S. federal income tax purposes, we must, among other things:



| | ● | qualify
and have in effect an election to be treated as a BDC under the Investment Company Act at all times during each taxable year;
| | - | -------------------------------------------------------------------------------------------------------------------------------------



| | ● | derive
in each taxable year at least 90% of our gross income from dividends, interest, payments with respect to loans of certain securities,
gains from the sale of stock or other securities, net income derived from an interest in a “qualified publicly traded partnership”
(as defined in the Code), or other income derived with respect to our business of investing in such stock or securities (the “90%
Income Test”); and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | diversify
our holdings so that at the end of each quarter of the taxable year:
| | - | ------------------------------------------------------------------------------



| | ● | at
least 50% of the value of our assets consists of cash, cash items (including receivables), U.S. government securities, securities
of other RICs, and other securities if such other securities of any one issuer do not represent more than 5% of the value of our
assets or more than 10% of the outstanding voting securities of the issuer; and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | no
more than 25% of the value of our assets is invested in (a) the securities, other than U.S. government securities or securities
of other RICs, of one issuer or of two or more issuers that are controlled, as determined under applicable Code rules, by us and
that are engaged in the same or similar or related trades or businesses or (b) the securities of one or more qualified publicly
traded partnerships (the “Diversification Tests”).
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



16







For
U.S. federal income tax purposes, we will include in our taxable income certain amounts that we have not yet received in cash.
For example, if we hold debt instruments that are treated under applicable U.S. federal income tax rules as having original issue
discount (such as debt instruments with PIK interest or, in certain cases, that have increasing interest rates or are issued with
warrants), we must include in our taxable income in each taxable year a portion of the original issue discount that accrues over
the life of the obligation, regardless of whether we receive cash representing such income in the same taxable year. We may also
have to include in our taxable income other amounts that we have not yet received in cash, such as accruals on a contingent payment
debt instrument or deferred loan origination fees that are paid after origination of the loan or are paid in non-cash compensation
such as warrants or stock. Because such original issue discount or other amounts accrued will be included in our investment company
taxable income for the taxable year of accrual, we may be required to make distributions to our stockholders in order to satisfy
the Annual Distribution Requirement and/or the Excise Tax Avoidance Requirement, even though we will have not received any corresponding
cash payments. Accordingly, to enable us to make distributions to our stockholders that will be sufficient to enable us to satisfy
the Annual Distribution Requirement, we may need to sell some of our assets at times and/or at prices that we would not consider
advantageous, we may need to raise additional equity or debt capital or we may need to forego new investment opportunities or
otherwise take actions that are disadvantageous to our business (or be unable to take actions that are advantageous to our business).
If we are unable to obtain cash from other sources to enable us to satisfy the Annual Distribution Requirement, we may fail to
qualify for the U.S. federal income tax benefits allowable to RICs and, thus, become subject to a corporate-level U.S. federal
income tax (and any applicable state and local taxes).



Because
we expect to use debt financing, we may be prevented by financial covenants contained in our debt financing agreements from making
distributions to our stockholders in certain circumstances. In addition, under the Investment Company Act, we are generally not
permitted to make distributions to our stockholders while our debt obligations and other senior securities are outstanding unless
certain “asset coverage” tests are met. See “Item 1 Business — Indebtedness and Senior Securities.”
Limits on our distributions to our stockholders may prevent us from satisfying the Annual Distribution Requirement and, therefore,
may jeopardize our qualification for taxation as a RIC, or subject us to the 4% U.S. federal excise tax.



Although
we do not presently expect to do so, we may borrow funds and sell assets in order to make distributions to our stockholders that
are sufficient for us to satisfy the Annual Distribution Requirement. However, our ability to dispose of assets may be limited
by (1) the illiquid nature of our portfolio and/or (2) other requirements relating to our status as a RIC, including the Diversification
Tests. If we dispose of assets in order to meet the Annual Distribution Requirement or the Excise Tax Avoidance Requirement, we
may make such dispositions at times that, from an investment standpoint, are not advantageous. Alternatively, although we currently
do not intend to do so, to satisfy the Annual Distribution Requirement, we may declare a taxable dividend payable in our stock
or cash at the election of each stockholder. In such case, for U.S. federal income tax purposes, the amount of the dividend paid
in our common stock will generally be equal to the amount of cash that could have been received instead of our stock.



A
RIC is limited in its ability to deduct expenses in excess of its investment company taxable income. If our expenses in a given
taxable year exceed our investment company taxable income, we would incur a net operating loss for that taxable year. However,
a RIC is not permitted to carry forward net operating losses to subsequent taxable years and such net operating losses do not
pass through to its stockholders. In addition, expenses can be used only to offset investment company taxable income, not net
capital gain. A RIC may not use any net capital losses (that is, realized capital losses in excess of realized capital gains)
to offset the RIC’s investment company taxable income, but may carry forward such losses, and use them to offset future
capital gains, indefinitely. As a result of these limits on the deductibility of expenses and net capital losses, we may for tax
purposes have aggregate taxable income for several taxable years that we are required to distribute and that is taxable to our
stockholders even if such income is greater than the aggregate net income we actually earned during those taxable years. In addition,
if future capital gains are offset by carried forward capital losses, such future capital gains are not subject to any corporate-level
U.S. federal income tax, regardless of whether they are distributed to our stockholders. Accordingly, we do not expect to distribute
any such offsetting capital gains.



Distributions
we make to our stockholders may be made from our cash assets or by liquidation of our investments, if necessary. We may recognize
gains or losses from such liquidations. In the event we recognize net capital gains from such transactions, you may receive a
larger capital gain distribution than you would have received in the absence of such transactions.



17







Failure
to Qualify as a RIC



If
we failed to satisfy the 90% Income Test for any taxable year or the Diversification Tests for any quarter of a taxable year,
we might nevertheless continue to qualify as a RIC for such taxable year if certain relief provisions of the Code applied (which
might, among other things, require us to pay certain corporate-level U.S. federal taxes or to dispose of certain assets). If we
failed to qualify for treatment as a RIC and such relief provisions did not apply to us, we would be subject to U.S. federal income
tax on all of our taxable income at regular corporate U.S. federal income tax rates (and we also would be subject to any applicable
state and local taxes), regardless of whether we make any distributions to our stockholders. We would not be able to deduct distributions
to our stockholders, nor would distributions to our stockholders be required to be made for U.S. federal income tax purposes.
Any distributions we make generally would be taxable to our U.S. stockholders as ordinary dividend income and, subject to certain
limitations under the Code, would be eligible for the 20% maximum rate applicable to individuals and other non-corporate U.S.
stockholders, to the extent of our current or accumulated earnings and profits. Subject to certain limitations under the Code,
U.S. stockholders that are corporations for U.S. federal income tax purposes would be eligible for the dividends-received deduction.
Distributions in excess of our current and accumulated earnings and profits would be treated first as a return of capital to the
extent of the stockholder’s adjusted tax basis, and any remaining distributions would be treated as a capital gain.



Subject
to a limited exception applicable to RICs that qualified as such under Subchapter M of the Code for at least one taxable year
prior to disqualification and that requalify as a RIC no later than the second taxable year following the non-qualifying taxable
year, we could be subject to U.S. federal income tax on any unrealized net built-in gains in the assets held by us during the
period in which we failed to qualify as a RIC that are recognized during the 5-year period after our requalification as a RIC,
unless we made a special election to pay corporate-level U.S. federal income tax on such net built-in gains at the time of our
requalification as a RIC. We may decide to be taxed as a regular corporation even if we would otherwise qualify as a RIC if we
determine that treatment as a corporation for a particular taxable year would be in our best interests.



Our
Investments — General



Certain
of our investment practices may be subject to special and complex U.S. federal income tax provisions that may, among other things,
(1) treat dividends that would otherwise constitute qualified dividend income as non-qualified dividend income, (2) disallow,
suspend or otherwise limit the allowance of certain losses or deductions, (3) convert lower-taxed long-term capital gain into
higher-taxed short-term capital gain or ordinary income, (4) convert an ordinary loss or a deduction into a capital loss (the
deductibility of which is more limited), (5) cause us to recognize income or gain without receipt of a corresponding cash payment,
(6) adversely affect the time as to when a purchase or sale of stock or securities is deemed to occur, (7) adversely alter the
characterization of certain complex financial transactions and (8) produce income that will not be qualifying income for purposes
of the 90% Income Test. We intend to monitor our transactions and may make certain tax elections to mitigate the potential adverse
effect of these provisions, but there can be no assurance that we will be eligible for any such tax elections or that any adverse
effects of these provisions will be mitigated.



Gain
or loss recognized by us from warrants or other securities acquired by us, as well as any loss attributable to the lapse of such
warrants, generally will be treated as capital gain or loss. Such gain or loss generally will be long-term or short-term depending
on how long we held a particular warrant or security.



A
portfolio company in which we invest may face financial difficulties that require us to work-out, modify or otherwise restructure
our investment in the portfolio company. Any such transaction could, depending upon the specific terms of the transaction, result
in unusable capital losses and future non-cash income. Any such transaction could also result in our receiving assets that give
rise to non-qualifying income for purposes of the 90% Income Test or otherwise would not count toward satisfying the Diversification
Requirements.



We
may invest a portion of our net assets in below investment grade instruments. Investments in these types of instruments may present
special tax issues for us. U.S. federal income tax rules are not entirely clear about issues such as when we may cease to accrue
interest, original issue discount or market discount, when and to what extent deductions may be taken for bad debts or worthless
instruments, how payments received on obligations in default should be allocated between principal and income and whether exchanges
of debt obligations in a bankruptcy or workout context are taxable. We will address these and other issues to the extent necessary
in order to seek to ensure that we distribute sufficient income to avoid any material U.S. federal income or excise tax.



18







Our
investment in non-U.S. securities may be subject to non-U.S. income, withholding and other taxes. In that case, our yield on those
securities would be decreased. Stockholders generally will not be entitled to claim a U.S. foreign tax credit or deduction with
respect to non-U.S. taxes paid by us.



If
we acquire shares in a “passive foreign investment company” (a “PFIC”), we may be subject to U.S. federal
income tax on a portion of any “excess distribution” received on, or any gain from the disposition of, such shares
even if we distribute such income as a taxable dividend to our stockholders. Additional charges in the nature of interest generally
will be imposed on us in respect of deferred taxes arising from any such excess distribution or gain. If we invest in the shares
of a PFIC and elect to treat the PFIC as a “qualified electing fund” under the Code (a “QEF”), in lieu
of the foregoing requirements, we will be required to include in income each taxable year our proportionate share of the ordinary
earnings and net capital gain of the QEF, even if such income is not distributed by the QEF. Alternatively, we may be able to
elect to mark-to-market our shares in a PFIC at the end of each taxable year (as well as certain other dates prescribed in the
Code); in this case, we will recognize as ordinary income any increase in the value of such shares, and as ordinary loss any decrease
in such value to the extent that any such decrease does not exceed prior increases in such value included in our income. Our ability
to make either election will depend on factors beyond our control, and are subject to restrictions which may limit the availability
of the benefit of these elections. Under either election, we may be required to recognize in a taxable year income in excess of
any distributions we receive from PFICs and any proceeds from dispositions of PFIC stock during that year, and such income will
nevertheless be subject to the Annual Distribution Requirement and will be taken into account for purposes of determining whether
we satisfy the Excise Tax Avoidance Requirement. See “— Taxation as a RIC” above.



Under
Section 988 of the Code, gains or losses attributable to fluctuations in exchange rates between the time we accrue income, expenses
or other liabilities denominated in a foreign currency and the time we actually collect such income or pay such expenses or liabilities
are generally treated as ordinary income or loss. Similarly, gains or losses on foreign currency-denominated forward, futures
and option contracts, as well as certain financial instruments, and the disposition of debt obligations denominated in a foreign
currency, to the extent attributable to fluctuations in exchange rates between the acquisition and disposition dates, are also
treated as ordinary income or loss.



Some
of the income that we might otherwise earn, such as fees for providing managerial assistance, certain fees earned with respect
to our investments, income recognized in a work-out or restructuring of a portfolio investment, or income recognized from an equity
investment in an operating partnership, may not satisfy the 90% Income Test. To manage the risk that such income might disqualify
us as a RIC for failure to satisfy the 90% Income Test, one or more subsidiary entities treated as U.S. corporations for U.S.
federal income tax purposes may be employed to earn such income and (if applicable) hold the related asset. Such subsidiary entities
will be required to pay U.S. federal income tax on their earnings, which ultimately will reduce the yield to our stockholders
on such fees and income.



Item
1A. Risk Factors



An
investment in our common stock involves certain risks relating to our structure and investment objective. The risks set forth
below are not the only risks we face, and we may face other risks that we have not yet identified, which we do not currently deem
material or which are not yet predictable. Before making an investment decision, you should carefully consider the following risk
factors, together with the other information contained in this Form 10-K. If any of the circumstances described in any of the
following risks occur, our business, financial condition and results of operations could be materially and adversely affected.
In such case, our NAV and the price per share of our common stock could decline significantly, and you may lose all or part of
your investment.



Risks
Relating to Our Business and Structure



We
are a new company and have little operating history.



We
were formed in May 2019. As a result of a short operating history, we are subject to all of the business risks and uncertainties
associated with any new business, including the risk that we will not achieve our investment objective and that the value of your
investment could decline substantially or your investment could become worthless. The results of any other funds or accounts managed
by our Adviser or any of its affiliates, which have or have had an investment program which is similar to, or different from,
our investment program may not be indicative of the results that we may achieve. We have and expect to have a different investment
portfolio and expect to employ different investment strategies and techniques from such other funds and accounts. Accordingly,
our results may differ from and are independent of the results obtained by such other funds and accounts.



19







We
anticipate that it could take some time to invest substantially all of the capital we have raised at the Initial Closing and may
raise at subsequent closings in respect of Private Offerings due to market conditions generally and the time necessary to identify,
evaluate, structure, negotiate and close suitable investments in private middle-market companies. During the start-up period,
we may invest proceeds from time to time in temporary investments, such as cash, cash items (including receivables), U.S. government
securities, securities of other RICs, and other securities if such other securities of any one issuer do not represent more than
5% of the value of our assets or more than 10% of the outstanding voting securities of the issuer, to comply with the RIC diversification
requirements. These investments are expected to earn yields substantially lower than the interest, dividend or other income that
we seek to receive from suitable portfolio investments. We may not be able to pay any significant dividends during this period,
and any such dividends may be substantially lower than the dividends we expect to pay when our portfolio is fully invested. We
will pay a management fee to our Adviser throughout this interim period irrespective of our performance. If the management fee
and our other expenses exceed the return on the temporary investments, our equity capital will be eroded.



We
are a non-diversified investment company within the meaning of the Investment Company Act, and therefore we are not limited with
respect to the proportion of our assets that may be invested in securities of a single issuer.



We
are classified as a non-diversified investment company within the meaning of the Investment Company Act, which means that we are
not limited by the Investment Company Act with respect to the proportion of our assets that we may invest in securities of a single
issuer. To the extent that we assume large positions in the securities of a small number of issuers, our NAV may fluctuate to
a greater extent than that of a diversified investment company as a result of changes in the financial condition or the market’s
assessment of the issuer. We may also be more susceptible to any single economic or regulatory occurrence than a diversified investment
company. Beyond our asset diversification requirements as a RIC under the Code, we do not have fixed guidelines for diversification,
and our investments could be concentrated in relatively few portfolio companies.



Our
Adviser and its management have no prior experience managing a BDC.



Although
Muzinich and its investment team are experienced in managing portfolios of assets in which we expect to invest, they have no prior
experience managing a portfolio that takes the form of a BDC, and the investment philosophy and techniques used by our Adviser
to manage a BDC may differ from those previously employed by Muzinich and its investment team in identifying and managing past
investments. Accordingly, we can offer no assurance that we will replicate the historical performance of other clients or other
entities or companies that Muzinich’s investment team or Muzinich advised in the past, and we caution you that our investment
returns could be substantially lower than the returns achieved by other clients of Muzinich.



Our
day-to-day investment operations are managed by the Adviser. Pursuant to its Resource Sharing Agreement with Muzinich & Co.,
our Adviser has access to Muzinich’s team of experienced investment professionals. Our Adviser may hire additional investment
professionals to provide services to us, based upon its needs.



Under
the Investment Company Act, BDCs are generally required to invest at least 70% of their total assets in securities of qualifying
U.S. private or thinly-traded public companies, cash, cash equivalents, U.S. government securities and other high-quality debt
investments that mature in one year or less from the time of investment. Our Adviser and its investment team have limited experience
in managing this type of portfolio, which may hinder their respective abilities to take advantage of attractive investment opportunities
and, as a result, achieve our investment objective.



We
are subjected to constraints that may significantly reduce our operating flexibility. If we fail to maintain our status as a BDC,
we might be regulated as a closed-end investment company, which would subject us to additional regulatory restrictions.



The
Investment Company Act imposes numerous constraints on the operations of BDCs. For example, as noted above, BDCs generally are
required to invest at least 70% of their total assets in securities of qualifying assets. Any failure to comply with the requirements
imposed on BDCs by the Investment Company Act could cause the SEC to bring an enforcement action against us and/or expose us to
claims of private litigants.



Our
Adviser believes that most of our portfolio company investments will constitute qualifying assets. However, we may be precluded
from investing in what our Adviser believes are attractive investments if such investments are not qualifying assets for purposes
of the Investment Company Act. If we do not invest a sufficient portion of our assets in qualifying assets, we will be prohibited
from making any additional investment that is not a qualifying asset and may not be able to take advantage of attractive investment
opportunities. Similarly, these rules could prevent us from making follow-on investments in existing portfolio companies, which
could result in the dilution of our position.



20







In
addition, if we fail to maintain our status as a BDC, we might be regulated as a closed-end investment company that is required
to register under the Investment Company Act, which would subject us to additional regulatory restrictions and significantly decrease
our operating flexibility.



These
constraints, along with the U.S. federal income tax requirements discussed below, may hinder our Adviser’s ability to take
advantage of attractive investment opportunities and to achieve our investment objective.



We
will be subject to corporate-level U.S. federal income tax on all of our income if we are unable to qualify as a RIC under Subchapter
M of the Code, which would have a material adverse effect on our financial performance.



Although
we intend to elect to be treated, and intend to qualify annually, as a RIC under Subchapter M of the Code, we cannot assure you
that we will be able to qualify for and maintain RIC status. To obtain and maintain RIC status and be relieved of U.S. federal
income taxes on income and gains distributed to our stockholders, we must meet the Annual Distribution Requirement, 90% Income
Test and Diversification Tests described below.



| | ● | The
Annual Distribution Requirement will be satisfied if we distribute to our stockholders on an annual basis at least 90% of our
investment company taxable income, for each taxable year. Because we expect to use debt financing, we expect to be subject to
an asset coverage ratio requirement under the Investment Company Act, and we expect to be subject to certain financial covenants
contained in our credit agreements and other debt financing agreements. This asset coverage ratio requirement and these financial
covenants could, under certain circumstances, restrict us from making distributions to our stockholders that are necessary for
us to satisfy the distribution requirement. If we are unable to obtain cash from other sources, and thus are unable to make sufficient
distributions to our stockholders, we could fail to qualify for RIC tax treatment and thus become subject to corporate-level U.S.
federal income tax (and any applicable U.S. state and local taxes).
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | The
90% Income Test requirement will be satisfied if at least 90% of our gross income for each taxable year is derived from dividends,
interest, gains from the sale of stock or securities or similar sources.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | The
Asset Diversification Tests will be satisfied if, at the end of each quarter of our taxable year, at least 50% of the value of
our assets consist of cash, cash items (including receivables), U.S. government securities, securities of other RICs, and other
acceptable securities, and no more than 25% of the value of our assets is invested in the securities (other than U.S. government
securities or securities of other RICs) of one issuer, or of two or more issuers that are controlled, as determined under applicable
Code rules, by us and that are engaged in the same or similar or related trades or businesses or of certain “qualified publicly
traded partnerships.” Failure to meet these requirements may result in our having to dispose of certain investments quickly
in order to prevent the loss of our RIC status. Because most of our investments will be in private companies, and therefore will
be relatively illiquid, any such dispositions could be made at disadvantageous prices and could result in substantial losses.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



If
we fail to qualify for or maintain our RIC tax status for any reason, and we do not qualify for certain relief provisions under
the Code, we would be subject to corporate-level U.S. federal income tax (and any applicable U.S. state and local taxes). In this
event, the resulting taxes could substantially reduce our net assets, the amount of our income available for distribution and
the amount of our distributions to our stockholders, which would have a material adverse effect on our financial performance.



We
will be dependent upon management personnel of Muzinich, and Muzinich’s ability to attract and retain talented personnel,
for our future success.



Pursuant
to the Resource Sharing Agreement between our Adviser and Muzinich & Co., Muzinich & Co. provides the Adviser with experienced
investment professionals and services so as to enable the Adviser to fulfill its obligations under the Investment Management Agreement.
Accordingly, we depend on the experience, diligence, skill and network of business contacts of Muzinich and its investment team.
Muzinich’s investment team, together with other investment professionals that our Adviser may retain in the future, will
identify, evaluate, negotiate, structure, close, monitor and manage our investments. Our future success may significantly depend
on the continued service and coordination of Muzinich’s senior investment professionals. If Muzinich was to lose the services
of these individuals, our Adviser’s ability to service us could be adversely affected and could have a material adverse
effect on our business, financial condition or results of operations. In addition, we cannot assure you that our Adviser will
remain our Adviser or that we will continue to have access to Muzinich or its investment professionals. Moreover, the Resource
Sharing Agreement may be terminated by either party on 60 days’ notice; the termination of the Resource Sharing Agreement
may have a material adverse consequence on the Company’s operations.



21







Additionally,
our ability to achieve our investment objective will depend on our Adviser’s ability to identify, invest in and monitor
companies that meet our investment criteria. To accomplish this on a cost-effective basis, our Adviser must provide competent,
attentive and efficient services to us. Our officers and the investment professionals of our Adviser have substantial responsibilities
in connection with their roles at Muzinich and with respect to other clients of Muzinich, as well as with respect to the Adviser’s
responsibilities under the Investment Management Agreement. We may also be called upon to provide significant managerial assistance
to certain of our portfolio companies. These demands on their time, which will increase as the number of investments grow, could
be substantial and may slow the rate of investment. Therefore, in order to grow, our Adviser (and its affiliates) may need to
hire, train, supervise, manage and retain new employees. However, we cannot assure you that they will be able to do so effectively.
Any failure to manage our future growth effectively could have a material adverse effect on our business, financial condition
and results of operations.



Furthermore,
our ability to grow requires that Muzinich attracts and retains new investment and administrative personnel in a competitive market.
Its ability to attract and retain personnel with the requisite credentials, experience and skills depends on several factors including,
but not limited to, its ability to offer competitive wages, benefits and professional growth opportunities. Many of the entities,
including other investment advisers and/or financial services companies, with which Muzinich competes for experienced personnel
have greater resources than it has.



Our
Adviser and its affiliates, officers, investment professionals and employees may have certain conflicts of interest.



Our
Adviser and its affiliates, officers, investment professionals and employees serve or may serve as investment advisers, officers,
directors or principals of entities or private funds that operate in the same or a related line of business as us and/or of private
funds managed by our Adviser or its affiliates. Accordingly, these individuals may have obligations to investors in those entities
or private funds, the fulfillment of which might not be in our best interests or the best interests of our stockholders. Moreover,
our Adviser has entered into a Resource Sharing Agreement with Muzinich & Co. whereby Muzinich & Co. provides our Adviser
with the resources — including the relevant individuals — necessary to fulfill its obligations under the Investment
Management Agreement. Although the Adviser and these individuals will devote as much time to the management of our investments
as they deem appropriate to perform their duties in accordance with the Investment Management Agreement and in accordance with
reasonable commercial standards, the investment professionals of the Adviser may have conflicts in allocating their time and services
among us and those entities or private funds. Our Adviser and its affiliates are not restricted from managing and/or forming additional
funds, from entering into investment advisory relationships or from engaging in certain other business activities, even though
such activities may involve substantial time and resources of our Adviser and its professional staff. These activities may be
viewed as creating a conflict of interest.



In
addition, we note that any investment vehicle and/or other account managed by the Adviser or its affiliates may have overlapping
investment objectives with our own and, accordingly, may invest in asset classes similar to those targeted by us. Furthermore,
pursuant to the Resource Sharing Arrangement, our Adviser relies upon Muzinich & Co. to provide it with resources so as to
enable it to fulfill its obligations under the Investment Management Agreement. As a result of the foregoing, our Adviser and/or
its affiliates may face conflicts in allocating investment opportunities between us and such other entities. Although our Adviser
and its affiliates will endeavor to allocate investment opportunities in a fair and equitable manner and consistent with applicable
allocation procedures, it is possible that, in the future, we may not be given the opportunity to participate in investments made
by other clients or entities managed by our Adviser or its affiliates. In any such case, if our Adviser forms other affiliates
in the future, we may co-invest on a concurrent basis with such other affiliates, subject to compliance with applicable regulations
and regulatory guidance, as well as applicable allocation procedures. In certain circumstances, negotiated co-investments may
be made only if we receive an order from the SEC permitting us to do so. There can be no assurance when any such order would be
obtained or that one will be obtained at all.



Our
ability to grow depends on our ability to raise additional capital.



We
will need to periodically access the capital markets to raise cash to fund new investments. We may be unable to raise substantial
capital, which could result in us being unable to structure our investment portfolio as anticipated. The returns achieved on these
investments may also be reduced as a result of allocating our expenses over a smaller asset base.



22







We
expect to use debt financing and issue additional securities to fund our growth, if any. Unfavorable economic or general market
conditions may increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend
credit to us. An inability to successfully access the capital markets could limit our ability to grow our business and fully execute
our business strategy and could decrease our earnings, if any. In addition, difficulty raising capital on favorable terms may
arise due to circumstances that are beyond our control, such as a protracted disruption in the credit markets, a severe decline
in the value of the U.S. dollar, a general economic downturn or any potential operational problem that affects us or our third-party
service providers, and could have a material adverse effect on our business, financial condition and results of operations.



In
addition, under specified conditions, we will be permitted to issue multiple classes of indebtedness and one class of stock senior
to our common stock if our asset coverage, as defined in the Investment Company Act, is at least equal to 150% immediately after
each such issuance (e.g., 150% asset coverage means that for every $100 of net assets, the Company may raise $200 from borrowing
and issuing senior securities). The amount of leverage that we will employ will depend on our Adviser’s and our Board of
Directors’ assessments of market conditions and other factors at the time of any proposed borrowing or issuance of senior
securities.



Furthermore,
additional equity capital may be difficult to raise because, subject to some limited exceptions, as a BDC, we are generally not
able to issue additional shares of our common stock at a price per share less than NAV without first obtaining approval for such
issuance from our stockholders and our Independent Directors. We cannot assure you that we will be able to obtain lines of credit,
issue additional securities or otherwise raise additional capital at all or on terms acceptable to us.



We
may borrow money and enter into transactions, which may magnify the potential for gain or loss and may increase the risk of investing
in us.



We
may borrow from and issue senior debt securities to banks, insurance companies and other lenders or investors as part of our investment
strategy. Holders of these senior securities will have fixed-dollar claims on our assets that are superior to the claims of our
common stockholders. If the value of our assets decreases, leveraging would cause NAV to decline more sharply than it otherwise
would have if we did not employ leverage. Similarly, any decrease in our income would cause net income to decline more sharply
than it would have had we not borrowed. Such a decline could negatively affect our ability to make common stock dividend payments.
Our ability to service any debt that we incur will depend largely on our financial performance and will be subject to prevailing
economic conditions and competitive pressures. There can be no assurance that we will use leverage or that our leveraging strategy
will be successful during any period in which it is employed.



Furthermore,
any credit agreement or other debt financing agreement into which we may enter may impose financial and operating covenants that
restrict our investment activities, our ability to call capital, remedies on default and similar matters. In connection with borrowings,
our lenders may also require us to pledge assets, investor commitments to fund capital calls and/or the proceeds of those capital
calls, thereby allowing the lender to call for capital contributions upon the occurrence of an event of default under such financing
arrangement. To the extent such an event of default does occur, stockholders could therefore be required to fund any shortfall
up to their remaining capital commitments, without regard to the underlying value of their investment.



Lastly,
we may be unable to obtain our desired leverage, which would, in turn, affect your return on investment.



We
operate in a highly competitive market for investment opportunities.



The
activity of identifying and completing the types of investment opportunities targeted by our Adviser is highly competitive and
involves a significant degree of uncertainty. A number of entities compete with us to make the types of investments that we make
in middle-market companies. We compete with other BDCs, commercial and investment banks, commercial financing companies, collateralized
loan obligations (“CLOs”), private funds, including hedge funds and, to the extent they provide an alternative form
of financing, private equity funds. Many of our competitors are more experienced, substantially larger and have considerably greater
financial, technical and marketing resources than we do. Some competitors may have a lower cost of funds and access to funding
sources that are not available to us. In addition, some of our competitors may have higher risk tolerances or different risk assessments,
which could allow them to consider a wider variety of investments and establish more relationships than us. Furthermore, certain
of our competitors are not subject to the regulatory restrictions that the Investment Company Act imposes on us as a BDC and that
the Code will impose on us as a RIC. We cannot assure you that the competitive pressures we face will not have a material adverse
effect on our business, financial condition and results of operations. Also, as a result of this competition, we may not be able
to secure attractive investment opportunities from time to time. Moreover, it is possible that competition for appropriate investment
opportunities may increase, thus further reducing the number of opportunities available to us.



23







We
do not seek to compete primarily based on the interest rates we offer, and our Adviser believes that some of our competitors may
make loans with interest rates that are comparable to or lower than the rates we offer. Rather, we seek to differentiate ourselves
from our competitors based on our reputation in the market, existing investment platform, the seasoned investment professionals
of our Adviser, our experience and focus on middle-market companies, disciplined investment philosophy, extensive industry focus
and relationships and flexible transaction structuring. We may, however, lose investment opportunities if we do not match our
competitors’ pricing, terms and structure. If we do match our competitors’ pricing, terms and structure, on the other
hand, we may experience decreased net interest income and increased risk of credit loss. As a result of operating in such a competitive
environment, we may make investments that are on less favorable terms than what we may have originally anticipated, which may
impact our return on these investments.



Furthermore,
our business model depends to a significant extent upon strong referral relationships to generate investment opportunities. We
depend upon Muzinich to maintain its relationships with financial intermediaries (including regional banks), private equity investment
firms, lawyers, accountants, experienced senior management teams and other middle-market lenders, and we expect to rely to a significant
extent upon these relationships to provide us with potential investment opportunities. If Muzinich fails to maintain such relationships,
or to develop new relationships with other sources of investment opportunities, we may not be able to grow our investment portfolio.
In addition, individuals with whom Muzinich has relationships are not obligated to provide us with investment opportunities, and
we can offer no assurance that these relationships will generate investment opportunities for us in the future.



Even
if the value of your investment declines, the management fee will still be payable.



Even
if the value of your investment declines, the management fee will still be payable. The management fee is calculated as a percentage
of average net assets calculated based on our net assets at the end of each of the two most recently completed calendar quarters
(excluding uninvested cash and cash equivalents, which are defined for these purposes as money market funds, U.S. government securities
and investment grade debt instruments maturing within one year of purchase of such instrument by the Company). Accordingly, the
management fee is payable regardless of whether the value of our net assets and/or your investment has decreased.



In
addition, the incentive fee payable by us to our Adviser may create an incentive for our Adviser to incur leverage or to make
certain investments that are riskier or more speculative than those that might have been made in the absence of such a compensation
arrangement. Our Adviser receives the incentive fee based on the return of our investment portfolio. As a result, our Adviser
may have an incentive to invest in more speculative securities than would otherwise be the case, which could result in higher
investment losses, particularly during economic downturns.



Certain
investors will be limited in their ability to make significant investments in us.



Private
funds that are excluded from the definition of “investment company” either pursuant to Section 3(c)(1) or 3(c)(7)
of the Investment Company Act generally are restricted from acquiring directly or through a controlled entity more than 3% of
our total outstanding voting stock (measured at the time of the acquisition). As a result, certain investors may be precluded
from acquiring additional shares, at a time that they might desire to do so.



Controlling
stockholders may exert influence over our management and affairs and control over votes requiring stockholder approval.



After
the Initial Closing, certain stockholders own a significant portion of our common stock. Therefore, these entities may be able
to exert influence over our management and policies and may have significant voting influence on votes requiring stockholder approval.
This concentration of ownership may also have the effect of delaying, preventing or deterring a change of control of us, could
deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of us and might ultimately
affect the market price of our common stock, should a market for our common stock develop.



We
may determine to fund a portion of our investments in the future with preferred stock, which would increase our risk profile and
magnify the potential for gain or loss.



Preferred
stock, which is a form of leverage, has the same risks to our common stockholders as borrowings because the dividends on any preferred
stock we issue must be cumulative. Payment of such dividends and repayment of the liquidation preference of such preferred stock
must take preference over any dividends or other payments to our common stockholders, and preferred stockholders are not subject
to any of our expenses or losses and are not entitled to participate in any income or appreciation in excess of their stated preference.



24







Our
Board of Directors may change our investment objective, operating policies and strategies without prior notice or stockholder
approval.



Our
Board of Directors has the authority to modify or waive certain of our operating policies and strategies without prior notice
and without stockholder approval. However, absent stockholder approval, we may not change the nature of our business so as to
cease to be, or withdraw our election as, a BDC. We cannot predict the effect any changes to our current operating policies and
strategies would have on our business, operating results and value of our stock. Nevertheless, the effects may adversely affect
our business and impact our ability to make distributions.



Our
Adviser can resign on 60 days’ notice, and the Resource Sharing Agreement may be terminated on 60 days’ notice. We
may not be able to find a suitable replacement within that time, which could adversely affect our financial condition, business
and results of operations.



Our
Adviser has the right, under the Investment Management Agreement, to resign at any time upon not less than 60 days’ written
notice, regardless of whether we have found a replacement. If our Adviser resigns, we may not be able to find a new external investment
adviser or hire internal management with similar expertise and ability to provide the same or equivalent services on acceptable
terms within 60 days, or at all. If we are unable to do so quickly, our operations are likely to experience a disruption, our
financial condition, business and results of operations as well as our ability to pay distributions (including dividends on our
preferred stock, if any) are likely to be adversely affected, and the market price of our common stock may decline. Moreover,
pursuant to the Resource Sharing Agreement, Muzinich & Co. provides the Adviser with experienced investment professionals
and services so as to enable our Adviser to fulfill its obligations under the Investment Management Agreement, and such Resource
Sharing Agreement may itself be terminated on 60 days’ notice. If Muzinich & Co. were to so terminate the Resource Sharing
Agreement, our Adviser may be required to seek to find an alternate means of fulfilling its obligations under the Investment Management
Agreement, or to resign.



Our
Adviser may act in a riskier manner on our behalf than it would when acting for its own account because its responsibilities and
liability to us are limited under the Investment Management Agreement.



Pursuant
to the Investment Management Agreement, our Adviser and its respective directors, stockholders, officers, employees or controlling
persons will not be liable to us for their acts under the Investment Management Agreement, absent willful misfeasance, bad faith
or gross negligence in the performance of their duties, or by reason of their reckless disregard of their obligations and duties
under the Investment Management Agreement. These protections may lead our Adviser to act in a riskier manner when acting on our
behalf than it would when acting for its own account.



Our
ability to enter into transactions with our affiliates will be restricted.



As
a BDC, we are prohibited under the Investment Company Act from knowingly participating in certain transactions with our affiliates
without, among other things, the prior approval of a majority of our Independent Directors who have no financial interest in the
transaction, or in some cases, the prior approval of the SEC. For example, any person that owns, directly or indirectly, 5% or
more of our outstanding voting securities is deemed our affiliate for purposes of the Investment Company Act and, if this is the
only reason such person is our affiliate, we are generally prohibited from buying any asset from or selling any asset (other than
our capital stock) to such affiliate, absent the prior approval of such directors. The Investment Company Act also prohibits “joint”
transactions with an affiliate, which could include joint investments in the same portfolio company, without approval of our Independent
Directors or in some cases the prior approval of the SEC. Moreover, except in certain limited circumstances, we are prohibited
from buying any asset from or selling any asset to a holder of more than 25% of our voting securities, absent prior approval of
the SEC. The analysis of whether a particular transaction constitutes a joint transaction requires a review of the relevant facts
and circumstances then existing.



We
expect to co-invest on a concurrent basis with accounts managed by our Adviser and/or its affiliates, unless doing so is impermissible
under existing regulatory guidance, applicable regulations and our allocation procedures. If our Adviser decides not to proceed
with an investment on our behalf, then the diligence expenses and related costs will be allocated between us and the other applicable
entities. In certain circumstances, negotiated co-investments may be made only if we receive an order from the SEC permitting
us to do so. We, our Adviser and Muzinich have submitted an exemptive application to the SEC to permit greater flexibility to
negotiate the terms of co-investments if our Board of Directors determines that it would be advantageous for us to co-invest with
other accounts managed by our Adviser or its affiliates in a manner consistent with our investment objective, positions, policies,
strategies and restrictions as well as regulatory requirements and other pertinent limitations. Any such order, if issued, would
be subject to certain terms and conditions and there can be no assurance that any such order will be granted by the SEC.



25







We
will be exposed to risks associated with changes in interest rates.



The
value of our investments may change in response to changes in interest rates. Our debt investments may be based on floating rates,
such as LIBOR, EURIBOR, the Federal Funds Rate or the Prime Rate. General interest rate fluctuations may have a substantial negative
impact on our investments, the value of our common stock and our rate of return on invested capital. A reduction in the interest
rates on new investments relative to interest rates on current investments could also have an adverse impact on our net interest
income. An increase in interest rates could decrease the value of any investments we hold which earn fixed interest rates, including
subordinated loans, senior and junior secured and unsecured debt securities and loans and high yield bonds, and also could increase
our interest expense, thereby decreasing our net income. Also, an increase in interest rates available to investors could make
investment in our common stock less attractive if we are not able to increase our dividend rate, which could reduce the value
of our common stock. The historically low interest rate environment increases the risk associated with rising interest rates,
including the potential for periods of volatility. We may face a heightened level of interest rate risk, since the U.S. Federal
Reserve Board has begun tapering its quantitative easing program and may begin to raise rates. The longer the duration of a fixed
income security, the more its value typically falls in response to an increase in interest rates.



Because
we intend to borrow money, and may issue preferred stock to finance investments, our net investment income will depend, in part,
upon the difference between the rate at which we borrow funds or pay dividends on preferred stock and the rate that our investments
yield. As a result, we can offer no assurance that a significant change in market interest rates will not have a material adverse
effect on our net investment income. In periods of rising interest rates, our cost of funds would increase except to the extent
we have issued fixed rate debt or preferred stock, which could reduce our net investment income.



You
should also be aware that a change in the general level of interest rates can be expected to lead to a change in the interest
rate we receive on many of our debt investments. Accordingly, a change in the interest rate could make it easier for us to meet
or exceed the performance threshold and may result in a substantial increase in the amount of incentive fees payable to our Adviser
with respect to ordinary income.



We
may be subject to risks associated with the discontinuance of LIBOR.



Our
investments, payment obligations and financing terms may be based on floating rates, such LIBOR, EURIBOR, the Federal Funds Rate,
the Prime Rate and other similar types of reference rates (each, a “Reference Rate”). On July 27, 2017, the Chief
Executive of the UK Financial Conduct Authority (“FCA”), which regulates LIBOR, announced that the FCA will no longer
persuade nor require banks to submit rates for the calculation of LIBOR and certain other Reference Rates after 2021. Such announcement
indicates that the continuation of LIBOR and other Reference Rates on the current basis cannot and will not be guaranteed after
2021. This announcement and any additional regulatory or market changes may have an adverse impact on the Company or its investments.



In
advance of 2021, regulators and market participants will work together to identify or develop successor Reference Rates. Additionally,
prior to 2021, it is expected that market participants will focus on the transition mechanisms by which the Reference Rates in
existing contracts or instruments may be amended, whether through marketwide protocols, fallback contractual provisions, bespoke
negotiations or amendments or otherwise. Nonetheless, the termination of certain Reference Rates presents risks to the Company.
At this time, it is not possible to completely identify or predict the effect of any such changes, any establishment of alternative
Reference Rates or any other reforms to Reference Rates that may be enacted in the UK or elsewhere. The elimination of a Reference
Rate or any other changes or reforms to the determination or supervision of Reference Rates could have an adverse impact on the
market for or value of any securities or payments linked to those Reference Rates and other financial obligations held by the
Company or on its overall financial condition or results of operations. In addition, any substitute Reference Rate and any pricing
adjustments imposed by a regulator or by counterparties or otherwise may adversely affect the Company’s performance and/or
NAV.



26







We
may form one or more CLOs, which may subject us to certain structured financing risks.



To
finance investments, we may securitize certain of our investments, including through the formation of one or more CLOs, while
retaining all or most of the exposure to the performance of these investments. This would involve contributing a pool of assets
to a special purpose entity, and selling debt interests in such entity on a non-recourse or limited-recourse basis to purchasers
and retaining a debt and/or equity interest in the special purpose entity. Any interest in any such CLO held by us will be considered
a “non-qualifying asset” for purposes of Section 55 of the Investment Company Act.



If
we create a CLO, we will depend in part on distributions from the CLO’s assets out of its earnings and cash flows to enable
us to make distributions to our stockholders. The ability of a CLO to make distributions or pay dividends will be subject to various
limitations, including the terms and covenants of the debt it issues. For example, tests based on interest coverage or other financial
ratios or other criteria may restrict the CLO’s ability to pay us as holder of a CLO’s debt and/or equity interests.
There is no assurance any such performance tests will be satisfied. Also, a CLO may take actions that delay distributions in order
to preserve ratings and to keep the cost of present and future financings lower or the CLO may be obligated to retain cash or
other assets to satisfy over-collateralization requirements commonly provided for holders of the CLO’s debt. As a result,
there may be a lag, which could be significant, between the repayment or other realization on a loan or other assets in, and the
distribution of cash out of, a CLO, or cash flow may be completely restricted for the life of the CLO. If we do not receive cash
flow from any such CLO that is necessary to satisfy the annual distribution requirement for maintaining our RIC status, and we
are unable to obtain cash from other sources necessary to satisfy this requirement, we could fail to maintain our qualification
as a RIC, which would have a material adverse effect on our financial performance.



In
addition, a decline in the credit quality of loans in a CLO due to poor operating results of the relevant borrower, declines in
the value of loan collateral or increases in defaults, among other things, may force a CLO to sell certain assets at a loss, reducing
their earnings and, in turn, cash potentially available for distribution to us for distribution to our stockholders.



To
the extent that any losses are incurred by the CLO in respect of any collateral, such losses will be borne first by us as owner
of equity interests. Finally, any equity interests that we retain in a CLO will not be secured by the assets of the CLO and we
will rank behind all creditors of the CLO.



Certain
provisions of our Certificate of Incorporation and bylaws, the Delaware General Corporation Law (“DGCL”) as well as
other aspects of our structure could deter takeover attempts and have an adverse impact on the price of our common stock.



Our
Certificate of Incorporation and bylaws as well as the DGCL contain certain provisions that may have the effect of discouraging
a third-party from making an acquisition proposal for us.



In
addition, we will have, at any point in time in which our common stock is registered under Section 12(b) or Section 12(g) of the
Exchange Act, provisions comparable to those of Section 203 of the DGCL (other than with respect to the Adviser and its affiliates
and certain of its or their respective direct or indirect transferees and any group as to which such persons are a party). These
provisions generally will prohibit us from engaging in mergers, business combinations and certain other types of transactions
with “interested stockholders” (generally defined as persons or entities that beneficially own 15% or more of our
voting stock), other than the exempt parties as described above, for a period of three years following the date the person became
an interested stockholder unless, prior to such stockholder becoming an interested stockholder, our Board of Directors has approved
the “business combination” that would otherwise be restricted or the transaction that resulted in the interested stockholder
becoming an interested stockholder or the subsequent transaction with the interested stockholder has been approved by our Board
of Directors and 66 2/3% of our outstanding voting stock (other than voting stock owned by the interested stockholder). Such provisions
may discourage third parties from trying to acquire control of us and increase the difficulty of consummating such an offer.



These
anti-takeover provisions may inhibit a change of control in circumstances that could give the holders of our common stock the
opportunity to realize a premium over the market price for the common stock. In addition, certain aspects of our structure may
have the effect of discouraging a third party from making an acquisition proposal for us.



27







Changes
in laws or regulations governing our operations or the operations of our portfolio companies, changes in the interpretation thereof
or newly enacted laws or regulations, and any failure by us or our portfolio companies to comply with these laws or regulations,
could necessitate changes to certain of our or our portfolio companies’ business practices, negatively impact our or our
portfolio companies’ operations, cash flows or financial condition of us or our portfolio companies, impose additional costs
on us or our portfolio companies or otherwise adversely affect our business or the business of our portfolio companies.



We
and our portfolio companies are subject to regulation by laws and regulations at the local, state, federal and, in some cases,
foreign levels. These laws and regulations, as well as their interpretation, are likely to change from time to time, and new laws
and regulations may be enacted. Accordingly, any change in these laws or regulations, changes in their interpretation, or newly
enacted laws or regulations and any failure by us or our portfolio companies to comply with these laws or regulations, could require
changes to certain of our or our portfolio companies’ business practices, negatively impact our or our portfolio companies’
operations, cash flows or financial condition, impose additional costs on us or our portfolio companies or otherwise adversely
affect our business or the business of our portfolio companies. In addition to the legal, tax and regulatory changes that are
expected to occur, there may be unanticipated changes. The legal, tax and regulatory environment for BDCs, investment advisers,
and the instruments that they utilize (including, without limitation, derivative instruments) is continuously evolving.



The
Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) impacts many aspects of the financial
services industry. Many of the provisions of the Dodd-Frank Act have been implemented, while others will still require final rulemaking
by regulatory authorities. While the full impact of the Dodd-Frank Act on us and our portfolio companies may not be known for
an extended period of time, the Dodd-Frank Act, including current rules and regulations and proposed rules implementing its provisions
and the interpretation of those rules, along with other legislative and regulatory proposals directed at the financial services
industry that are proposed or pending in the U.S. Congress, may negatively impact the operations, cash flows or financial condition
of us and our portfolio companies, impose additional costs on us and our portfolio companies, intensify the regulatory supervision
of us and our portfolio companies or otherwise adversely affect our business or the business of our portfolio companies.



Over
the last several years, there also has been an increase in regulatory attention to the extension of credit outside of the traditional
banking sector, raising the possibility that some portion of the non-bank financial sector will be subject to new regulation.
While it cannot be known at this time whether any regulation will be implemented or what form it will take, increased regulation
of non-bank credit extension could negatively impact our operations, cash flows or financial condition, impose additional costs
on us, intensify the regulatory supervision of us or otherwise adversely affect our business.



The
capital markets may experience periods of disruption and instability. Such market conditions may materially and adversely affect
debt and equity capital markets in the United States, which may have a negative impact on our business and operations.



From
time to time, capital markets may experience periods of disruption and instability. For example, from 2008 to 2009, the global
capital markets were unstable as evidenced by the lack of liquidity in the debt capital markets, significant write-offs in the
financial services sector, the repricing of credit risk in the broadly syndicated credit market and the failure of major financial
institutions. Despite actions of the U.S. federal government and various foreign governments, these events contributed to worsening
general economic conditions that materially and adversely impacted the broader financial and credit markets and reduced the availability
of debt and equity capital for the market as a whole and financial services firms in particular. While market conditions have
improved since this disruption, there have been periods of volatility and there can be no assurance that adverse market conditions
will not repeat themselves in the future. If such adverse and volatile market conditions occur, we and other companies in the
financial services sector may have to access, if available, alternative markets for debt and equity capital in order to grow.
Equity capital may be particularly difficult to raise during periods of adverse or volatile market conditions because, subject
to some limited exceptions, as a BDC, we are generally not able to issue additional shares of our common stock at a price less
than NAV per share without first obtaining approval for such issuance from our stockholders and our Independent Directors.



Moreover,
the re-appearance of market conditions similar to those experienced from 2008 through 2009 for any substantial length of time
could make it difficult for us to borrow money or for us to extend the maturity of or refinance any indebtedness we may have under
similar terms and any failure to do so could have a material adverse effect on our business.



During
periods of volatility and dislocation in the capital markets, many BDCs have faced, and may in the future face, a challenging
environment in which to raise or access capital. In addition, periods of volatility and disruption have caused in recent years,
and in the future may cause, a negative effects on the valuations of BDCs’ investments and on the potential for liquidity
events involving such investments. While most of our investments are not expected to be publicly traded, applicable accounting
standards require us to assume as part of our valuation process that our investments are sold in a principal market to market
participants (even if we plan on holding an investment through its maturity). As a result, volatility in the capital markets can
adversely affect our investment valuations. Further, the illiquidity of our investments may make it difficult for us to sell such
investments to access capital if required. As a result, we could realize significantly less than the value at which we have recorded
our investments if we were required to sell them for liquidity purposes. In addition, a prolonged period of market illiquidity
may cause us to reduce the volume of loans and debt securities we originate and/or fund and adversely affect the value of our
portfolio investments, which could have a material and adverse effect on our business, financial condition, results of operations
and cash flows. An inability to raise or access capital could have a material adverse impact on our business, financial condition
or results of operations.



28







Commodity
Futures Trading Commission rulemaking may have a negative impact on us and our Adviser.



The
Commodity Futures Trading Commission (the “CFTC”) and the SEC have issued final rules establishing that certain swap
transactions will be subject to CFTC regulation. Our Adviser has claimed no-action relief from CFTC regulation as a commodity
pool operator (“CPO”) pursuant to CFTC Letter No. 12-40, dated December 4, 2012, for an operator of a BDC that (1)
has elected to be treated as a BDC under section 54 of the Investment Company Act with the SEC and continues to be regulated by
the SEC as a BDC, and (2) will not be, and has not been, marketing participations to the public as or in a commodity pool or otherwise
as or in a vehicle for trading in the commodity futures, commodity options or swaps markets, and either (3) (a) uses commodity
futures, commodity options contracts or swaps, solely for bona fide hedging purposes within the meaning and intent of sections
1.3(z)(1) and 151.5 of the Regulations of the CFTC (the “CFTC Regulations”), provided, however, that in addition,
with respect to positions in commodity futures, commodity option contracts or swaps which do not come within the meaning and intent
thereof, the aggregate initial margin and premiums required to establish such positions do not exceed 5% of the liquidation value
of the BDC’s portfolio, taking into account unrealized profits and unrealized losses on any such positions it has entered
into, and, provided further that in the case of an option that is in-the-money at the time of purchase, the in-the-money amount,
as defined in CFTC Regulation section 190.01(x), may be excluded in computing such 5% or (b) the aggregate net notional value
of commodity futures, commodity options or swaps positions not used solely for bona fide hedging purposes within the meaning and
intent of CFTC Regulation section 1.3(z)(1) and 151.5, determined at the time the most recent position was established, does not
exceed 100% of the liquidation value of the BDC’s portfolio, after taking into account unrealized profits and unrealized
losses on any such positions into which it has entered. Our use of derivatives may also be limited by the requirements of the
Code, for qualification as a RIC for U.S. federal income tax purposes. In the event that our Adviser is required to register as
a CPO, our disclosure and operations would need to comply with all applicable CFTC regulations. Compliance with these additional
registration and regulatory requirements would increase operational expenses. Other potentially adverse regulatory initiatives
could also develop.



We
are susceptible to cyber security risks that may result in financial losses or violations of privacy law.



We
and our service providers are susceptible to cyber security risks that include, among other things, theft, unauthorized monitoring,
release, misuse, loss, destruction or corruption of confidential and highly restricted data; denial of service attacks; unauthorized
access to relevant systems, compromises to networks or devices that we and our service providers use to service our operations;
or operational disruption or failures in the physical infrastructure or operating systems that support us and our service providers.
Cyber-attacks against or security breakdowns of us or our service providers may adversely impact us and stockholders, potentially
resulting in, among other things, financial losses; the inability to process transactions; violations of applicable privacy and
other laws; regulatory fines, penalties, reputational damage, reimbursement or other compensation costs; and/or additional compliance
costs. We may incur additional costs for cyber security risk management and remediation purposes. In addition, cyber security
risks may also impact the portfolio companies in which we invest, which may cause our investment to lose value. There can be no
assurance that we or our service providers will not suffer losses relating to cyber-attacks or other information security breaches
in the future.



The
current COVID-19 crisis may have a negative impact on us and our Adviser



The
global public health crisis which arose from the outbreak of the novel coronavirus disease (known as COVID-19) has recently caused
considerable volatility and disruption in financial markets. It is unknown what the impact will be on the global economy but the
uncertainty and instability from COVID-19 for a prolonged period could have an adverse impact on the Company’s business,
opportunities, operations, financial condition and cash flows and there can be no assurance that the risks associated with COVID-19
will not alter significantly the attractiveness of an investment in the Company including as a result of the potential for capital
losses and general uncertainty. The operational and financial performance of the portfolio companies in which the Company makes
investments in depends on future developments, including the duration and spread of the outbreak, and such uncertainty may in
turn impact the valuation of our investments. Key service providers of the Company with critical operational relationships have
business continuity plans and crisis management procedures in place which are designed to mitigate certain risks to the ongoing
operations of its clients such as the Company, however, there can be no assurance that such plans and procedures will be effective.



Risks
Related to Our Portfolio Company Investments



Our
investments are very risky and highly speculative.



We
will invest primarily in secured debt, including first lien, second lien and unitranche debt, unsecured debt, including mezzanine
debt and, to a lesser extent, in equity instruments of private companies.



29







Secured
Debt. When we make a secured debt investment, we generally take a security interest in the available assets of the portfolio
company, including the equity interests of any subsidiaries, which we expect to help mitigate the risk that we will not be repaid.
However, there is a risk that the collateral securing our debt investment may decrease in value over time, may be difficult to
sell in a timely manner, may be difficult to appraise, and may fluctuate in value based upon the success of the business and market
conditions, including as a result of the inability of the portfolio company to raise additional capital. In some circumstances,
our lien could be subordinated to claims of other creditors, such as trade creditors. In addition, deterioration in a portfolio
company’s financial condition and prospects, including its inability to raise additional capital, may be accompanied by
deterioration in the value of the collateral for the debt investment. Additionally, unitranche debt is similar to second lien
and subordinated notes in that they typically permit borrowers to incur indebtedness evidenced by such debt that represents a
larger percentage of the borrower’s total capitalization than would a senior secured first lien loan and are priced at interest
rates that more closely approximate the average of the pricing available to second lien debt instruments and first lien debt instruments.
Unitranche debt typically pays a higher rate of interest than traditional senior debt instruments, but also poses greater risk
associated with a lesser amount of asset coverage. Consequently, the fact that our debt is secured does not guarantee that we
will receive principal and interest payments according to the debt investment’s terms, or at all, or that we will be able
to collect on the loan, in full or at all, should we be forced to enforce our remedies.



Unsecured
Debt, Including Mezzanine Debt. Our unsecured debt investments, including mezzanine debt investments, generally will be subordinated
to senior debt that will rank senior to our investment in the event of an insolvency. Mezzanine debt may be issued with or without
registration rights. This may result in an above average amount of risk and loss of principal.



Covenant-Lite
Loans. A significant number of leveraged loans in the market may consist of loans that do not contain financial maintenance
covenants (“Covenant-Lite Loans”). Although the Company does not intend to invest in Covenant-Lite Loans as part of
its principal investment strategy, it is possible that such loans may comprise a portion of the Company’s portfolio. Such
loans do not require the borrower to maintain debt service or other financial ratios. Ownership of Covenant-Lite Loans may expose
the Company to different risks, including with respect to liquidity, price volatility, ability to restructure loans, credit risks
and less protective loan documentation, than is the case with loans that contain financial maintenance covenants.



Equity
Investments. When we invest in secured debt or unsecured debt, including mezzanine debt, we may acquire equity securities
from the company in which we make the investment. In addition, we may invest in the equity securities of portfolio companies independent
of any debt investment. Our goal is ultimately to dispose of such equity interests and realize gains upon our disposition of such
interests. However, the equity interests we hold may not appreciate in value and, in fact, may decline in value. The value of
equity securities may fall due to general market and economic conditions, perceptions regarding the markets in which the issuers
of the equity securities participate, or factors relating to the specific issuers. Accordingly, we may not be able to realize
gains from our equity interests, and any gains that we do realize on the disposition of any equity interests may not be sufficient
to offset any other losses we experience.



Investing
in middle-market companies involves a number of significant risks.



Investing
in middle-market companies involves a number of significant risks, including:



| | ● | such
companies may have limited financial resources, shorter operating histories, narrower product lines, smaller market shares than
larger companies and tend to be more vulnerable to competitors’ actions and market conditions, as well as general economic
downturns;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | such
companies may be unable to meet their obligations under their debt securities that we hold, which may be accompanied by a deterioration
in the value of any collateral and a reduction in the likelihood of us realizing any guarantees we may have obtained in connection
with our investment;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | such
companies are more likely to depend on the management talents and efforts of a small group of persons; therefore, the death, disability,
resignation or termination of one or more of these persons could have a material adverse impact on our portfolio company and,
in turn, on us;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | such
companies may have less predictable operating results, may from time to time be parties to litigation, may be engaged in rapidly
changing businesses with products subject to a substantial risk of obsolescence, and may require substantial additional capital
to support their operations, finance expansion or maintain their competitive position; and
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | such
companies may have difficulty accessing the capital markets to meet future capital needs, which may limit their ability to grow
or to repay their outstanding indebtedness upon maturity.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



30







We
will incur credit risk when we loan money or commit to loan money to a portfolio company.



We
will be exposed to credit risk, which is the risk that the value of our investments may change in response to the credit ratings
of our portfolio securities or other instruments. The quality of our portfolio will have a significant impact on our earnings.
Credit risk is a component part of our valuation of our secured floating rate loans and other investments we may purchase. Generally,
investment risk and price volatility increase as a security or instrument’s credit rating declines. Increased delinquencies
and default rates would impact our results of operations. Deterioration in the credit quality of our portfolio could have a material
adverse effect on our business, financial condition and results of operations. High yield bonds, loans and other types of high
yield debt securities or other instruments have greater credit risk than higher quality debt securities or other instruments because
the companies that issue them are not as financially strong as companies with investment grade ratings and may be highly leveraged.



The
value of our portfolio securities may not have a readily available market price and, in such a case, we will value these securities
at fair value as determined in good faith under procedures adopted by our Board of Directors, which valuation is inherently subjective
and may not reflect what we may actually realize for the sale of the investment.



The
majority of our investments are expected to be in debt instruments that do not have readily ascertainable market prices. The fair
value of assets that are not publicly traded or whose market prices are not readily available will be determined in good faith
under procedures adopted by our Board of Directors. Our Board of Directors is expected to utilize the services of independent
third-party valuation firms in periodically verifying the fair value of any securities. Investment professionals from our Adviser
will prepare portfolio company valuations using sources and/or proprietary models depending on the availability of information
on our assets and the type of asset being valued, all in accordance with our valuation policy. The participation of our Adviser
in our valuation process could result in a conflict of interest, since the management fee is based in part on our gross assets
and also because our Adviser is receiving a performance-based incentive fee.



Because
fair valuations, and particularly fair valuations of private securities and private companies, are inherently uncertain, the value
of our investments may fluctuate over short periods of time and are often based to a large extent on estimates, comparisons and
qualitative evaluations of private information. Therefore, it could make it more difficult for investors to value accurately our
investments and could lead to undervaluation or overvaluation of our common stock. In addition, the valuation of these types of
securities may result in substantial write-downs and earnings volatility.



Our
NAV as of a particular date may be materially greater than or less than the value that would be realized if our assets were to
be liquidated as of such date. For example, if we were required to sell a certain asset or all or a substantial portion of its
assets on a particular date, the actual price that we would realize upon the disposition of such asset or assets could be materially
less than the value of such asset or assets as reflected in our NAV. Volatile market conditions could also cause reduced liquidity
in the market for certain assets, which could result in liquidation values that are materially less than the values of such assets
as reflected in our NAV.



The
lack of liquidity in our investments may adversely affect our business.



Various
restrictions render our investments relatively illiquid, which may adversely affect our business. As we generally make investments
in private companies, substantially all of these investments are subject to legal and other restrictions on resale or are otherwise
less liquid than publicly traded securities. The illiquidity of our investments may make it difficult for us to sell such investments
if the need arises. Therefore, if we are required to or desire to liquidate all or a portion of our portfolio quickly, we could
realize significantly less than the value at which we have recorded our investments.



Our
portfolio may be focused in a limited number of portfolio companies, which will subject us to a risk of significant loss if any
of these companies default on their obligations under any of their debt instruments or if there is a downturn in a particular
industry.



We
are classified as a non-diversified investment company within the meaning of the Investment Company Act, which means that we are
not limited by the Investment Company Act with respect to the proportion of our assets that we may invest in securities of a single
issuer, excluding limitations on investments in other investment companies. The risks of investing in us may be intensified because
we may invest in a limited number of portfolio companies. To the extent that we assume large positions in the securities of a
small number of issuers or industries, our NAV may fluctuate to a greater extent than that of a diversified investment company
as a result of changes in the financial condition or the market’s assessment of the issuer or industry. We may also be more
susceptible to any single economic or regulatory occurrence than a diversified investment company. In addition, the aggregate
returns we realize may be significantly adversely affected if a small number of investments perform poorly or if we need to write
down the value of any one investment. Additionally, a downturn in any particular industry in which we are invested could significantly
affect our aggregate returns.



31







Loan
prepayments may affect our ability to invest and reinvest available funds in appropriate investments.



Loans
may be prepayable, in whole or in part, at any time at the option of the obligor thereof at par plus accrued unpaid interest and
prepayment premiums or breakage fees, if any. Prepayments on loans may be caused by a variety of factors and are difficult to
predict. Consequently, there exists a risk that loans purchased at a price greater than par may experience a capital loss as a
result of such a prepayment. In addition, principal proceeds and prepayment premiums or breakage fees, if any, received upon any
prepayment are subject to reinvestment risk, and if market spreads have decreased, the interest proceeds that we will earn from
reinvestment may be less.



When
we are a debt or minority equity investor in a portfolio company, we are often not in a position to exert influence on the entity.



We
offer to make available managerial assistance to our portfolio companies. However, when we make debt or minority equity investments,
we are often subject to the risk that a portfolio company may make business decisions with which we disagree and the other equity
holders and management of such company may take risks or otherwise act in ways that do not serve our interests. As a result, a
portfolio company may make decisions that could decrease the value of our investment.



Our
failure to make follow-on investments in our portfolio companies could impair the value of our portfolio.



Following
an initial investment in a portfolio company, we may make additional investments in that portfolio company as “follow-on”
investments, in order to:



| | ● | increase
or maintain in whole or in part our equity ownership percentage;
| | - | -------------------------------------------------------------------------



| | ● | exercise
warrants, options or convertible securities that were acquired in the original or subsequent financing; or
| | - | -------------------------------------------------------------------------------------------------------------------



| | ● | attempt
to preserve or enhance the value of our investment.
| | - | -----------------------------------------------------------



We
will have the discretion to make follow-on investments, subject to potential contractual limitations or the availability of capital
resources. The failure to make follow-on investments may, in some circumstances, jeopardize the continued viability of a portfolio
company and our initial investment, or may result in a missed opportunity for us to increase our participation in a successful
operation. Even if we have sufficient capital to make a desired follow-on investment, we may elect not to make a follow-on investment
because we may not want to increase our concentration of risk, because we prefer other opportunities, or because we are inhibited
by compliance with BDC requirements or compliance with other requirements to maintain our status as a RIC.



Economic
recessions or downturns could impair our portfolio companies and harm our operating results.



Our
portfolio companies may be more susceptible to economic downturns or recessions than more established companies and may be unable
to repay our loans during these periods. Therefore, during these periods our non-performing assets may increase and the value
of our portfolio may decrease if we are required to write down the values of our investments. Adverse economic conditions may
also decrease the value of collateral securing some of our loans and the value of our equity investments. Economic slowdowns or
recessions could lead to financial losses in our portfolio and a decrease in revenues, net income and assets. Unfavorable economic
conditions also could increase our funding costs, limit our access to the capital markets or result in a decision by lenders not
to extend credit to us. These events could prevent us from increasing investments and harm our operating results.



A
portfolio company’s failure to satisfy financial or operating covenants imposed by us or other lenders could lead to defaults
and, potentially, accelerate the time when loans are due and foreclosure on its assets representing collateral for its obligations,
which could trigger cross defaults under other agreements and jeopardize our portfolio company’s ability to meet its obligations
under the debt that we hold and the value of any equity securities we own. We may incur additional expenses to the extent necessary
to seek recovery upon default or to negotiate new terms with a defaulting portfolio company.



32







Our
debt investments may be risky and we could lose all or part of our investment.



The
debt in which we invest is typically not initially rated by any rating agency, but we believe that if such investments were rated,
they would be below investment grade (rated lower than “Baa3” by Moody’s, lower than “BBB-” by Fitch
or by S&P). Such investments are generally referred to as “junk bonds,” “high yield” or “leveraged
loans.” Securities in these lower rating categories (or unrated securities but deemed to be of comparable quality) are subject
to greater risk of loss of principal and interest than higher-rated securities and are generally considered to be speculative
with respect to the issuer’s ability to pay interest and repay principal. They are also generally considered to be subject
to greater risk than securities with higher ratings in the case of deterioration of general economic conditions. High yield securities
are generally more volatile and may or may not be subordinated to certain other outstanding securities and obligations of the
issuer, which may be secured by substantially all of the issuer’s assets. High yield securities may also not be protected
by financial covenants or limitations on additional indebtedness. We also may invest in assets other than first and second lien
and mezzanine debt investments, including high-yield securities, U.S. government securities, structured securities and certain
direct equity investments. These investments entail additional risks that could adversely affect our investment returns.



By
originating loans to companies that are experiencing significant financial or business difficulties, we may be exposed to distressed
lending risks.



As
part of our lending activities, we may originate loans to companies that are experiencing significant financial or business difficulties,
including companies involved in bankruptcy or other reorganization and liquidation proceedings. Although the terms of such financing
may result in significant financial returns to us, they involve a substantial degree of risk. The level of analytical sophistication,
both financial and legal, necessary for successful financing to companies experiencing significant business and financial difficulties
is unusually high. There is no assurance that we will correctly evaluate the value of the assets collateralizing our loans or
the prospects for a successful reorganization or similar action. During an economic downturn or a period of rising interest rates,
such companies may experience stress that would adversely affect their ability to service their principal and interest payment
obligations, to meet their projected business goals or to obtain additional financing. In any reorganization or liquidation proceeding
relating to a company that we fund, we may lose all or part of the amounts advanced to the borrower or may be required to accept
collateral with a value less than the amount of the loan advanced by us to the borrower.



We
may be exposed to special risks associated with bankruptcy cases.



Many
of the events within a bankruptcy case are adversarial and often beyond the control of the creditors. While creditors generally
are afforded an opportunity to object to significant actions, there can be no assurance that a bankruptcy court would not approve
actions that may be contrary to our interests. A bankruptcy filing of a portfolio company may adversely and permanently affect
the market position and operations of the company. Furthermore, there are instances where creditors can lose their ranking and
priority if they are considered to have taken over management of a borrower.



The
reorganization of a company can involve substantial legal, professional and administrative costs to a lender and the borrower;
it is subject to unpredictable and lengthy delays; and during the process a company’s competitive position may erode, key
management may depart and a company may not be able to invest its capital adequately. In some cases, the debtor company may not
be able to reorganize and may be required to liquidate assets. The debt of companies in a financial reorganization will, in most
cases, not pay current interest, may not accrue interest during reorganization and may be adversely affected by an erosion of
the issuer’s fundamental value.



We
may participate on committees formed by creditors to negotiate with debtors with respect to restructuring issues. There can be
no assurance that our participation would yield favorable results, and such participation may subject us to additional duties,
and trading restrictions. We may also receive illiquid securities in connection with a workout or bankruptcy proceeding.



In
addition, lenders can be subject to lender liability claims for actions taken by them where they become too involved in the borrower’s
business or exercise control over the borrower. For example, we could become subject to a lender’s liability claim, if,
among other things, the borrower requests significant managerial assistance from us and we provide such assistance as contemplated
by the Investment Company Act.



33







We
will have broad discretion over the use of proceeds of the funds we raise from investors and will use proceeds in part to satisfy
operating expenses.



There
can be no assurance that we will be able to locate a sufficient number of suitable investment opportunities to allow us to successfully
deploy capital that we raise from investors in a timeframe that will permit investors to earn above-market returns. To the extent
we are unable to invest substantially all of the capital we raise within our contemplated timeframe, our investment income, and
in turn our results of operations, will likely be materially and adversely affected. See “Item 1A. Risk Factors —
Risks Relating to Our Business and Structure — We are a new company and have little operating history.”



We
will have significant flexibility in applying the proceeds of the funds we raise from investors and may use the net proceeds in
ways with which stockholders may not agree, or for purposes other than those contemplated at the time of the capital raising.
We will also pay operating expenses, and may pay other expenses such as due diligence expenses of potential new investments, from
net proceeds. Our ability to achieve our investment objective may be limited to the extent that net proceeds of the funds we raise
from investors, pending full investment by us in portfolio companies, are used to pay operating expenses.



Declines
in market prices and liquidity in the corporate debt markets can result in significant net unrealized depreciation of our portfolio.



As
a BDC, we are required to carry our investments at market value or, if no market value is ascertainable, at fair value as determined
in good faith under procedures adopted by our Board of Directors. We may take into account the following types of factors, if
relevant, in determining the fair value of our investments: the enterprise value of a portfolio company (the entire value of the
portfolio company to a market participant, including the sum of the values of debt and equity securities used to capitalize the
enterprise at a point in time), the nature and realizable value of any collateral, the portfolio company’s ability to make
payments and its earnings and discounted cash flow, the markets in which the portfolio company does business, a comparison of
the portfolio company’s securities to similar publicly traded securities, and other relevant factors. When an external event
such as a purchase transaction, public offering or subsequent equity sale occurs, we use the pricing indicated by the external
event to corroborate or revise our valuation. While most of our investments are not publicly traded, applicable accounting standards
require us to assume as part of our valuation process that our investments are sold in a principal market to market participants
(even if we plan on holding an investment through its maturity). As a result, volatility in the capital markets can also adversely
affect our investment valuations. Decreases in the market values or fair values of our investments are recorded as unrealized
depreciation. The effect of all of these factors on our portfolio can reduce our NAV by increasing net unrealized depreciation
in our portfolio. Depending on market conditions, we could incur substantial realized losses and may suffer unrealized losses,
which could have a material adverse impact on our business, financial condition and results of operations.



Our
portfolio companies may incur debt or issue equity securities that rank equally with, or senior to, our investments in such companies.



Our
portfolio companies may have, or may be permitted to incur, other debt, or issue other equity securities that rank equally with,
or senior to, our investments. By their terms, such instruments may provide that the holders are entitled to receive payment of
dividends, interest or principal on or before the dates on which we are entitled to receive payments in respect of our investments.
These debt instruments would usually prohibit the portfolio companies from paying interest on or repaying our investments in the
event and during the continuance of a default under such debt. Also, in the event of insolvency, liquidation, dissolution, reorganization
or bankruptcy of a portfolio company, holders of securities ranking senior to our investment in that portfolio company typically
are entitled to receive payment in full before we receive any distribution in respect of our investment. After repaying such holders,
the portfolio company may not have any remaining assets to use for repaying its obligation to us. In the case of securities ranking
equally with our investments, we would have to share on an equal basis any distributions with other security holders in the event
of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant portfolio company.



The
rights we may have with respect to the collateral securing any junior priority loans we make to our portfolio companies may also
be limited pursuant to the terms of one or more intercreditor agreements that we enter into with the holders of senior debt. Under
such an intercreditor agreement, at any time that senior obligations are outstanding, we may forfeit certain rights with respect
to the collateral to the holders of the senior obligations. These rights may include the right to commence enforcement proceedings
against the collateral, the right to control the conduct of such enforcement proceedings, the right to approve amendments to collateral
documents, the right to release liens on the collateral and the right to waive past defaults under collateral documents. We may
not have the ability to control or direct such actions, even if our rights as junior lenders are adversely affected.



34







Our
portfolio companies may be highly leveraged.



Borrowings
by our portfolio companies are not subject to the limitations on borrowings set forth in the Investment Company Act. Accordingly,
some of our portfolio companies may be highly leveraged, which may have adverse consequences to these companies and to us as an
investor. These companies may be subject to restrictive financial and operating covenants and the leverage may impair these companies’
ability to finance their future operations and capital needs. As a result, these companies’ flexibility to respond to changing
business and economic conditions and to take advantage of business opportunities may be limited. Further, a leveraged company’s
income and net assets will tend to increase or decrease at a greater rate than if borrowed money were not used.



Our
investments in non-U.S. companies may involve significant risks in addition to the risks inherent in U.S. investments.



Our
investment strategy contemplates investments in securities of non-U.S. companies, including companies located in emerging market
countries, to the extent permissible under the Investment Company Act. Our non-U.S. investments are not considered eligible investments
or qualifying assets, as defined under Section 55(a) of the Investment Company Act and therefore are limited with all other non-qualifying
assets to no more than 30% of our assets. Investing in non-U.S. companies may expose us to additional risks not typically associated
with investing in U.S. companies. The legal remedies for investors may be more limited than the remedies available in the United
States. These risks include changes in exchange control regulations, political and social instability, expropriation, imposition
of non-U.S. taxes (potentially at confiscatory levels), less liquid markets, less available information than is generally the
case in the United States, higher transaction costs, less government supervision of exchanges, brokers and issuers, less developed
bankruptcy laws, difficulty in enforcing contractual obligations, lack of uniform accounting and auditing standards and greater
price volatility. There can be no assurance that collateral located in a non-U.S. jurisdiction securing a loan could be readily
liquidated or would satisfy the borrower’s obligation in the event of non-payment of scheduled interest or principal payments.
The risks of investing in emerging market countries are greater than risks associated with investments in foreign developed companies.



From
time to time, certain of the companies in which we expect to invest may operate in, or have dealings with, countries subject to
sanctions or embargoes imposed by the U.S. Government and the United Nations and/or countries identified by the U.S. Government
as state sponsors of terrorism. A company may suffer damage to its reputation if it is identified as such a company and, as an
investor in such companies, we will be indirectly subject to those risks. Economic sanctions could, among other things, effectively
restrict or eliminate our ability to purchase or sell securities or groups of securities for a substantial period of time, and
may make our investments in such securities harder to value.



Our
investments that are denominated in a non-U.S. currency will be subject to the risk that the value of a particular currency will
change in relation to the U.S. dollar. Among the factors that may affect currency values are trade balances, the effects of the
monetary policies of the United States, foreign governments, central banks or supranational entities, the level of short-term
interest rates, differences in relative values of similar assets in different currencies, the imposition of currency controls,
long-term opportunities for investment and capital appreciation and political developments. The economies of certain emerging
market countries can be significantly affected by currency devaluations. We may, but are not required to, employ hedging techniques
to attempt to minimize these risks, but we cannot assure you that such strategies will be effective or without risk to us.



We
may invest in instruments with a deferred interest feature.



We
may invest in instruments with a deferred interest feature (such as original issue discount, debt instruments with PIK interest
or zero coupon securities). The risks presented by investments in PIK securities may include, but are not limited to, that (i)
higher interest rates on PIK securities reflect the payment deferral and increased credit risk associated with such instruments
and that such investments generally represent a significantly higher credit risk than coupon loans; (ii) even if accounting conditions
were met, the borrower could still default when our actual collection is supposed to occur at the maturity of the obligation;
(iii) such securities may have unreliable valuations because their continuing accruals require continuing judgments about the
collectability of the deferred payments and the value of any associated collateral; and (iv) PIK interest has the effect of generating
investment income and increasing the Incentive Fees payable at a compounding rate. In addition, the deferral of PIK interest also
reduces the loan-to-value ratio at a compounding rate.



We
may expose ourselves to risks if we engage in hedging transactions.



We
may enter into hedging transactions, which may expose us to risks associated with such transactions. Such hedging may utilize
instruments such as forward contracts, currency options, credit default, interest rate and currency swaps, as well as options
thereon, caps, collars and floors to seek to hedge against fluctuations in the relative values of our portfolio positions from
changes in currency exchange rates and market interest rates. Credit default swaps carry specific risks including, but not limited
to, high levels of leverage, the possibility that premiums are paid for credit default swaps which expire worthless, wide bid/offer
spreads and documentation risks. The use of hedging instruments may also entail counterparty risk and may involve commissions
or other transaction costs.



35







Hedging
against a decline in the values of our portfolio positions does not eliminate the possibility of fluctuations in the values of
such positions or prevent losses if the values of such positions decline. However, such hedging can establish other positions
designed to gain from those same developments, thereby offsetting the decline in the value of such portfolio positions. Such hedging
transactions may also limit the opportunity for gain if the values of the underlying portfolio positions should increase. Moreover,
it may not be possible to hedge against an exchange rate or interest rate fluctuation that is so generally anticipated that we
are not able to enter into a hedging transaction at an acceptable price.



Currency
hedging involves risks, including counterparty risk, illiquidity and, to the extent the view as to certain market movements is
incorrect, the risk that the use of hedging could result in losses greater than if they had not been used. In addition, in certain
countries in which we may invest, currency hedging opportunities may not be available. The use of currency transactions can result
in us incurring losses because of the imposition of exchange controls, suspension of settlements or the inability of us to deliver
or receive a specified currency.



The
success of any hedging transactions we may enter into will depend on our ability to correctly predict movements in currencies
and interest rates. Therefore, while we may enter into such transactions to seek to reduce currency exchange rate and interest
rate risks, unanticipated changes in currency exchange rates or interest rates may result in poorer overall investment performance
than if we had not engaged in any such hedging transactions. In addition, the degree of correlation between price movements of
the instruments used in a hedging strategy and price movements in the portfolio positions being hedged may vary. Moreover, for
a variety of reasons, we may not seek to (or be able to) establish a perfect correlation between such hedging instruments and
the portfolio holdings being hedged. Any such imperfect correlation may prevent us from achieving the intended hedge and expose
us to risk of loss. In addition, it may not be possible to hedge fully or perfectly against currency fluctuations affecting the
value of securities denominated in non-U.S. currencies because the value of those securities is likely to fluctuate as a result
of factors not related to currency fluctuations.



Risks
Relating to this Offering and Our Common Stock



Investing
in our common stock involves a high degree of risk.



The
investments we make in accordance with our investment objective may result in a higher amount of risk than alternative investment
options and volatility or loss of principal. As a result, there is a risk that you may lose all or a portion of your money by
investing in us. Our investments in portfolio companies may be highly speculative and aggressive, and therefore, an investment
in our common stock may not be suitable for someone with lower risk tolerance.



We
may experience fluctuations in our quarterly results.



We
could experience fluctuations in our quarterly operating results due to a number of factors, including interest rates payable
on debt investments we make, default rates on such investments, the level of our expenses, variations in and the timing of the
recognition of realized and unrealized gains or losses, the degree to which we encounter competition in certain markets and general
economic conditions. As a result of these factors, results for any period should not be relied upon as being indicative of performance
in future periods.



Investors
in closings after the Initial Closing could receive fewer shares of common stock than anticipated.



The
purchase price per share of our common stock in connection with any closing after the Initial Closing will be greater than or
equal to our then-calculated NAV per share as of the close of the last quarter preceding the applicable drawdown date; such per-share
price may be set above the NAV per share based on a variety of factors, including without limitation the total amount of the Company’s
organizational and other expenses (including actual and/or accrued expenses, which may include any estimates thereof), in accordance
with the limitations under Section 23 under the Investment Company Act (which generally prohibits the Company from issuing shares
at a price below the then-current NAV of the shares as determined within 48 hours, excluding Sundays and holidays, of such issuance,
subject to certain exceptions). As a result, the purchase price for shares purchased in connection with any closing after the
Initial Closing may be higher than the previously disclosed NAV per share or price per share, and therefore an investor may receive
a smaller number of shares than if it had purchased shares in connection with a prior closing.



36







Our
common stock will be subject to significant transfer restrictions, and an investment in our common stock generally will be illiquid.



Each
investor in our common stock must be prepared to bear the economic risk of an investment in our common stock for an indefinite
period. Shares of our common stock are subject to the restrictions on transfer described herein and as set forth in our Certificate
of Incorporation. In addition, an investment in our common stock is not freely transferable under the securities laws. Further,
purchasers of shares of our common stock prior to any IPO and/or listing (including purchasers in Initial Closing) will not be
permitted to transfer their shares without our prior written consent until a date to be established by us following our IPO and/or
listing. If an IPO and/or listing does not occur, our common stockholders will be prohibited from transferring their shares without
our prior written consent.



We
have no obligation to conduct an IPO and/or listing and can offer no assurances as to whether or when we may conduct an IPO and/or
listing. Further, pre-listing stockholders are not expected to be able to sell their common stock until some time after our listing.
Even if we consummate an IPO and/or listing, we can offer no assurances as to the price our shares of common stock will be offered
in our IPO and/or listing, and they could be sold below the price of this offering.



Shares
of our common stock have not been registered under the Securities Act and, therefore, under the securities laws, cannot be sold
unless such shares are subsequently registered under the Securities Act or an exemption from such registration is available. Shares
of our common stock are illiquid assets for which there is not a secondary market and there is no guarantee that a secondary market
will develop in the future. An investment in our common stock is therefore suitable only for certain sophisticated investors that
can bear the risks associated with the illiquidity of their common stock.



In
the event of any liquidation, dissolution or winding up of our affairs, our common stockholders would receive any remaining net
assets only after payment or provision or payment of our debts and other liabilities and subject to the prior rights of any outstanding
preferred stock. During the wind down, we may begin liquidating all or a portion of our portfolio. During the wind-down period
we may deviate from our investment strategy of investing in secured debt, including first lien, second lien and unitranche debt,
unsecured debt, including mezzanine debt and, to a lesser extent, in equity instruments of private companies. It is expected that
stockholders will receive cash in any liquidating distribution. However, if on the date of termination and dissolution, we own
instruments for which no market exists or instruments are trading at depressed prices, such instruments may be placed in a liquidating
trust. Stockholders generally will realize capital gain or loss in an amount equal to the difference between the amount of cash
or other property received (including any property deemed received by reason of its being placed in a liquidated trust) and the
stockholder’s adjusted tax basis in our common stock for U.S. federal income tax purposes.



We
will incur significant costs as a result of being subject to the Exchange Act.



Companies
incur legal, accounting and other expenses, including costs associated with the periodic reporting requirements applicable to
a company whose securities are registered under the Exchange Act, as well as additional corporate governance requirements, including
requirements under the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), and other rules implemented by the SEC.
Accordingly, as a result of our common stock being registered under the Exchange Act, we will incur significant additional costs.



37







We
may not be able to pay you distributions on our common stock, our distributions to you may not grow over time and a portion of
our distributions to you may be a return of capital for U.S. federal income tax purposes.



We
intend to pay quarterly distributions to our stockholders out of assets legally available for distribution. We cannot assure you
that we will achieve investment results that will allow us to make a specified level of cash distributions or year-to-year increases
in cash distributions. If we are unable to satisfy the asset coverage test applicable to us as a BDC, or if we violate certain
covenants under our credit agreements and other debt financing agreements, our ability to pay distributions to our stockholders
could be limited. All distributions will be paid at the discretion of our Board of Directors and will depend on our earnings,
financial condition, maintenance of our RIC status, compliance with applicable BDC regulations, compliance with covenants under
our credit agreements and other debt financing agreements, and such other factors as our Board of Directors may deem relevant
from time to time. The distributions we pay to our stockholders in a year may exceed our taxable income for that year and, accordingly,
a portion of such distributions may constitute a return of capital for U.S. federal income tax purposes.



We
may have difficulty paying our required distributions if we recognize taxable income before or without receiving cash representing
such income.



For
U.S. federal income tax purposes, we will include in our taxable income certain amounts that we have not yet received in cash,
such as original issue discount or accruals on a contingent payment debt instrument, which may occur if we receive warrants in
connection with the origination of a loan or possibly in other circumstances or contracted PIK interest, which generally represents
contractual interest added to the loan balance and due at the end of the loan term. Such original issue discount and PIK interest
will be included in our taxable income before we receive any corresponding cash payments. We also may be required to include in
our taxable income certain other amounts that we will not receive in cash.



Because
in certain cases we may recognize taxable income before or without receiving cash representing such income, we may have difficulty
making distributions to our stockholders that will be sufficient to enable us to meet the Annual Distribution Requirement necessary
for us to be subject to tax as a RIC. Accordingly, we may need to sell some of our assets at times and/or at prices that we would
not consider advantageous, we may need to raise additional equity or debt capital, or we may need to forego new investment opportunities
or otherwise take actions that are disadvantageous to our business (or be unable to take actions that are advantageous to our
business) to enable us to make distributions to our stockholders that will be sufficient to enable us to meet the Annual Distribution
Requirement. If we are unable to obtain cash from other sources to meet the Annual Distribution Requirement, we may fail to qualify
for the U.S. federal income tax benefits allowable to RICs and, thus, become subject to a corporate-level U.S. federal income
tax (and any applicable U.S. state and local taxes).



Beneficial
owners of our equity securities may be subject to certain regulatory requirements and filing requirements based on their ownership
percentages.



A
beneficial owner, either directly or indirectly, of more than 25% of our voting securities is presumed to control us under the
Investment Company Act. Control of us would also arise under the Investment Company Act if a person has the power to exercise
a controlling influence over our management or policies, unless that power is solely the result of an official position with us.
Certain events beyond an investor’s control may result in an increase in the percentage of such investor’s beneficial
ownership of our shares, including the repurchase by us of shares from other stockholders. In the event you are or become a person
that controls us, you and certain of your affiliated persons will be subject to, among other things, prohibitions or restrictions
on engaging in certain transactions with us and certain of our affiliated persons.



A
beneficial owner of a large number of our equity securities may also become subject to public reporting obligations when we become
a public reporting company under the Exchange Act. When our common stock becomes registered under the Exchange Act, ownership
information for any person that beneficially owns more than 5% of our common stock will have to be disclosed in a Schedule 13G
or other filings with the SEC. Beneficial ownership for these purposes is determined in accordance with the rules of the SEC,
and includes having voting or investment power over the securities. Although we will provide you with quarterly statements that
state the amount of outstanding stock you own, the responsibility for determining the filing obligation and preparing the filing
remains with the investor.



You
may be subject to the short-swing profits rules under the Exchange Act as a result of your investment in us.



When
our common stock becomes registered under the Exchange Act, persons with the right to appoint a director or who beneficially own
more than 10% of our common stock may be subject to Section 16(b) of the Exchange Act, which recaptures for our benefit profits
from the purchase and sale of registered stock within a six-month period.



Our
stockholders may receive shares of our common stock as dividends, which could result in adverse tax consequences to them.



In
order to satisfy the annual distribution requirement applicable to RICs, we will have the ability to declare a large portion of
a dividend in shares of our common stock instead of in cash. As long as a portion of such dividend is paid in cash and certain
requirements are met, the entire distribution will generally be treated as a dividend for U.S. federal income tax purposes. In
such case, for U.S. federal income tax purposes, the amount of the dividend paid in our common stock will generally be equal to
the amount of cash that could have been received instead of our stock, even though most of the dividend was paid in shares of
our common stock. We currently do not intend to pay dividends in shares of our common stock.



38







If
we are not treated as a “publicly offered regulated investment company,” as defined in the Code, U.S. stockholders
that are individuals, trusts or estates will be taxed as though they received a distribution of some of our expenses.



We
will be treated as a “publicly offered regulated investment company” (within the meaning of Section 67 of the Code)
if either (i) shares of our common stock and our preferred stock collectively are held by at least 500 persons at all times during
a taxable year, (ii) shares of our common stock are treated as regularly traded on an established securities market or (iii) shares
of our common stock are continuously offered pursuant to a public offering (within the meaning of section 4 of the Securities
Act). We cannot assure you that we will be treated as a publicly offered regulated investment company for all taxable years. If
we are not treated as a publicly offered regulated investment company for any calendar year, each U.S. stockholder that is an
individual, trust or estate will be treated as having received a dividend from us in the amount of such U.S. stockholder’s
allocable share of the management and incentive fees paid to our Adviser and certain of our other expenses for the calendar year,
and these fees and expenses will be treated as miscellaneous itemized deductions of such U.S. stockholder. For taxable years beginning
before 2026, miscellaneous itemized deductions generally are not deductible by a U.S. stockholder that is an individual, trust
or estate. For taxable years beginning in 2026 or later, miscellaneous itemized deductions generally are deductible by a U.S.
stockholder that is an individual, trust or estate only to the extent that the aggregate of such U.S. stockholder’s miscellaneous
itemized deductions exceeds 2% of such U.S. stockholder’s adjusted gross income for U.S. federal income tax purposes, are
not deductible for purposes of the alternative minimum tax and are subject to the overall limitation on itemized deductions under
the Code.



Non-U.S.
stockholders may be subject to withholding of U.S. federal income tax on dividends we pay.



Subject
to the discussion below, distributions of our investment company taxable income to a non-U.S. stockholder that are not effectively
connected with the non-U.S. stockholder’s conduct of a trade or business within the United States will be subject to withholding
of U.S. federal income tax at a 30% rate (or lower rate provided by an applicable income tax treaty) to the extent of our current
or accumulated earnings and profits.



Certain
properly designated dividends are generally exempt from withholding of U.S. federal income tax where they are paid in respect
of a RIC’s (i) “qualified net interest income” (generally, its U.S.-source interest income, other than certain
contingent interest and interest from obligations of a corporation or partnership in which the RIC or the non-U.S. stockholder
are at least a 10% stockholder, reduced by expenses that are allocable to such income) or (ii) “qualified short-term capital
gains” (generally, the excess of the RIC’s net short-term capital gain over the RIC’s long-term capital loss
for such taxable year), and certain other requirements are satisfied.



No
assurance can be given as to whether any of our distributions will be eligible for this exemption from withholding of U.S. federal
income tax or, if eligible, will be designated as such by us. In the case of common stock held through an intermediary, the intermediary
may withhold U.S. federal income tax even if we designate the payment as a dividend derived from qualified net interest income
or qualified short-term capital gain. Also, because our common stock will be subject to significant transfer restrictions, and
an investment in our common stock will generally be illiquid, non-U.S. stockholders whose distributions on our common stock are
subject to withholding of U.S. federal income tax may not be able to transfer their shares of our common stock easily or quickly
or at all.



Item
1B. Unresolved Staff Comments



None.



Item
2. Properties



We
do not own any real estate or other properties materially important to our operations. Our principal executive offices are located
at 450 Park Avenue, New York, New York 10022. We believe that our office facilities are suitable and adequate for our business
as it is contemplated to be conducted.



Item
3. Legal Proceedings



Neither
we nor the Adviser are currently subject to any material legal proceedings, nor, to our knowledge, are any material legal proceedings
threatened against us or the Adviser. From time to time, we or the Adviser 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. Our business is also subject to extensive regulation, which may result in regulatory proceedings against us. While
the outcome of these legal or regulatory 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.



Item
4. Mine Safety Disclosures



Not
applicable.



39







PART
II.



Item
5. Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters



Market
Information



Our
common stock offered in Private Offerings has not been registered under the Securities Act or the securities laws of any other
jurisdiction. Accordingly, we and Muzinich Capital LLC (the “Placement Agent”) are offering our common stock only
(1) to “accredited investors” (as defined in Rule 501 under the Securities Act) and (2) outside the United States
in compliance with Regulation S, in reliance upon exemptions from the registration requirements of the Securities Act.



Each
purchaser of our common stock will be required to complete and deliver to the Placement Agent and us, prior to the acceptance
of any order, a subscription agreement substantiating the purchaser’s investor status and including other limitations on
resales and transfers of our common stock.



Purchasers
of shares of our common stock will not be permitted to transfer their shares without our prior written consent until a date to
be established by us. While we expect not to unreasonably withhold our prior written consent to transfers by our common stockholders,
we may withhold our consent if any such transfer would have adverse tax, regulatory or other consequences. Additionally, to the
extent we approve any transfers or the foregoing restriction lapses, investors will be subject to restrictions on resale and transfer
associated with securities sold pursuant to Regulation D, Regulation S and other exemptions from registration under the Securities
Act. Unless and until our common stock were to become registered under the Securities Act, it may be transferred only in transactions
that are exempt from registration under the Securities Act and the applicable securities laws of other jurisdictions.



Any
transfers of shares of our common stock in violation of the foregoing provisions will be void, and any intended recipient of our
common stock will acquire no rights in such shares and will not be treated as our stockholder for any purpose.



Holders



Please
see “Item 12. Security Ownership of Certain Beneficial Owners and Management” for disclosure regarding the holders
of the Company’s common stock.



Valuation
of Portfolio Securities



In
accordance with the procedures adopted by our Board of Directors, the NAV per share of our outstanding shares of common stock
is determined at least quarterly by dividing the value of total assets minus liabilities by the total number of shares outstanding.



As
a BDC, we generally invest in illiquid securities including debt and equity investments of middle-market companies. Under procedures
adopted by our Board of Directors market quotations are generally used to assess the value of our investments for which market
quotations are readily available. We obtain these market values from independent pricing services or at the bid prices obtained
from at least two broker/dealers if available, otherwise by a principal market maker or a primary market dealer. If the Board
of Directors or its delegate has a bona fide reason to believe any such market quote does not reflect the fair value of an investment,
it may independently value such investments by using the valuation procedure that it uses with respect to assets for which market
quotations are not readily available.



We
expect that there will not be readily available market values for most, if not all, of the investments which are or will be in
our portfolio, and we will value such investments at fair value as determined in good faith by or under the direction of our Board
of Directors using a documented valuation policy, described below, and a consistently applied valuation process. The factors that
may be taken into account in pricing our investments at fair value include, as relevant, the nature and realizable value of any
collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flow, the markets in which
the portfolio company does business, comparison to publicly traded securities and other relevant factors. When an external event
such as a purchase transaction, public offering or subsequent equity sale occurs, we consider the pricing indicated by the external
event to corroborate or revise our valuation. Under current auditing standards, the notes to our financial statements refer to
the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on our financial statements.



40







With
respect to investments for which market quotations are not readily available, or for which market quotations are deemed not reflective
of the fair value, the valuation procedures adopted by our Board of Directors contemplates a multi-step valuation process each
quarter (or more frequently, as appropriate), as described below:



|(1) | Our
                                         valuation process begins with each portfolio company or investment being initially valued
                                         by the investment professionals of our Adviser responsible for the portfolio investment;
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | Preliminary
                                         valuation conclusions are then documented and discussed with the management of our Adviser;
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------



|(3) | Our
                                         Board of Directors also engages independent valuation firms to conduct independent appraisals
                                         of our investments for which market quotations are not readily available or are readily
                                         available but deemed not reflective of the fair value of an investment. The independent
                                         valuation firms review management’s preliminary valuations in light of its own
                                         independent assessment and also in light of any market quotations obtained from an independent
                                         pricing service, broker, dealer or market maker. At least a portion of our portfolio
                                         will be reviewed on a quarterly basis by third-party valuation firms and our entire portfolio
                                         will be reviewed at least annually by third-party valuation firms;
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(4) | The
                                         Audit Committee of our Board of Directors reviews the preliminary valuations of the Adviser
                                         and that of the independent valuation firms and responds and supplements the valuation
                                         recommendations of the independent valuation firms to reflect any comments; and
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(5) | Our
                                         Board of Directors discusses the valuations and determines the fair value of each of
                                         our investments in good faith, based on the input of our Adviser, the independent valuation
                                         firms and the Audit Committee.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Fair
value, as defined under ASC 820, is the price that we would receive upon selling an investment or pay to transfer a liability
in an orderly transaction to a market participant in the principal or most advantageous market for the investment or liability.
ASC 820 emphasizes that valuation techniques maximize the use of observable market inputs and minimize the use of unobservable
inputs. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability, including
assumptions about risk. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants
would use in pricing an asset or liability based on market data obtained from sources independent of our Adviser. Unobservable
inputs reflect the assumptions market participants would use in pricing an asset or liability based on the best information available
to us at the reporting period date.



Dividends



We
intend to pay quarterly distributions to our stockholders out of assets legally available for distribution. All dividends and
distributions will be subject to lawfully available funds therefore, and no assurance can be given that we will be able to declare
such an initial distribution or distributions in future periods.



We
intend to elect to be treated, and intend to qualify annually, to be subject to tax as a RIC under Subchapter M of the Code. To
obtain and maintain our ability to be subject to tax as a RIC, we must, among other things, timely distribute to our stockholders
at least 90% of our investment company taxable income for each taxable year. We intend to timely distribute to our stockholders
substantially all of our annual taxable income for each taxable year, except that we may retain certain net capital gains (i.e.,
realized net long-term capital gains in excess of realized net short-term capital losses) for reinvestment and, depending upon
the level of taxable income earned in a taxable year, we may choose to carry forward taxable income for distribution in the following
taxable year and pay any applicable U.S. federal excise tax. We generally will be required to pay such U.S. federal excise tax
if our distributions in respect of a calendar year do not exceed the sum of (1) 98% of our net ordinary income (taking into account
certain deferrals and elections) for the calendar year, (2) 98.2% of our capital gains in excess of capital losses (adjusted for
certain ordinary losses) for the one-year period ending on October 31 of the calendar year and (3) any net ordinary income and
capital gains in excess of capital losses for preceding calendar years that were not distributed during such calendar years and
on which we did not pay any U.S. federal income tax. If we retain net capital gains, we may treat such amounts as deemed distributions
to our stockholders. In that case, you will be treated as if you had received an actual distribution of the capital gains we retained
and then you reinvested the net after-tax proceeds in our common stock. In general, you also will be eligible to claim a tax credit
(or, in certain circumstances, obtain a tax refund) equal to your allocable share of the tax we paid on the capital gains deemed
distributed to you. The distributions we pay to our stockholders in a taxable year may exceed our taxable income for that taxable
year and, accordingly, a portion of such distributions may constitute a return of capital for U.S. federal income tax purposes.
The specific tax characteristics of our distributions will be reported to stockholders after the end of the calendar year. Please
refer to “Certain U.S. Federal Income Tax Consequences” for further information regarding the tax treatment of our
distributions and the tax consequences of our retention of net capital gains.



41







Reports
to Stockholders



We
plan to furnish our stockholders with an annual report for each fiscal year ending December 31 containing financial statements
audited by our independent public accounting firm. Additionally, we intend to continue to comply with the periodic reporting requirements
of the Exchange Act.



Item
6. Selected Financial Data



The
following selected financial and other data for the period August 7, 2019 (commencement of operations) through December 31, 2019
is derived from our audited financial statements. The selected financial information and other data presented below should be
read in conjunction with the information contained in “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” in Part II, Item 7 of this Form 10-K and with the audited financial statements and the notes
thereto included in Part II, Item 8 of this Form 10-K.



|                                                     |  | For the Period  August 7, 2019  (commencement of
     operations) through  December 31, 2019 |           
|---------------------------------------------------- |  | -------------------------------------------------------------------------------------------- | ----------
|Total Investment Income                              |  | $                                                                                            | 1,308     
|Total Expenses                                       |  |                                                                                              | 685,927   
|Net Investment Loss                                  |  |                                                                                              | (684,619  
|Net Decrease in Net Assets Resulting from Operations |  | $                                                                                            | (684,619  
|                                                     |  |                                                                                              |           
|Per share information - basic and diluted            |  |                                                                                              |           
|Net Investment Loss                                  |  | $                                                                                            | (10.26    
|Net Decrease in Net Assets Resulting from Operations |  | $                                                                                            | (10.26    
|                                                     |  |                                                                                              |           
|Balance sheet data:                                  |  |                                                                                              |           
|Total assets                                         |  | $                                                                                            | 40,014,183
|Net assets                                           |  | $                                                                                            | 39,260,678
|                                                     |  |                                                                                              |           
|Other data:                                          |  |                                                                                              |           
|Total return based on net asset value                |  |                                                                                              | (1.82     



42







Item
7. 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 Annual Report on Form 10-K. Unless indicated otherwise, the “Company,” “we,”
“us,” and “our” refer to Muzinich BDC, Inc., and the “Adviser” refers to Muzinich BDC Adviser,
LLC, an affiliate of Muzinich & Co., Inc. (together with the Adviser and their other affiliates, collectively, “Muzinich”).



Forward-Looking
Statements



This
Annual Report on Form 10-K contains forward-looking statements that involve substantial risks and uncertainties. Such statements
are not historical facts and are based on current expectations, estimates, projections, opinions and/or beliefs of the Company
and/or Muzinich. You can identify these statements by the use of forward-looking terminology such as “may,” “will,”
“should,” “expect,” “anticipate,” “project,” “estimate,” “intend,”
“continue” or “believe” or the negatives thereof or other variations thereon or comparable terminology.
You should read statements that contain these words carefully because they discuss our plans, strategies, prospects and expectations
concerning our business, operating results, financial condition and other similar matters. We believe that it is important to
communicate our future expectations to our investors. These forward-looking statements include, but are not limited to, information
in this Form 10-K regarding general domestic and global economic conditions, our future financing plans, our ability to operate
as a BDC and the expected performance of, and the yield on, our portfolio companies. In particular, there are forward-looking
statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” There
may be events in the future, however, that we are not able to predict accurately or control. The factors referenced under “Part
I Item 1A. Risk Factors,” as well as any cautionary language in this Form 10-K, provide examples of risks, uncertainties
and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements.
You should be aware that the occurrence of the events described in these risk factors and elsewhere in this Form 10-K could have
a material adverse effect on our business, results of operation and financial position. Any forward-looking statement made by
us in this Form 10-K speaks only as of the date on which we make it. Factors or events that could cause actual results to differ
may emerge from time to time, and it is not possible to predict all of them. We undertake 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.



The
following factors are among those that may cause actual results to differ materially from our forward-looking statements:



| | ● | our
                                         future operating results;
| | - | ----------------------------------------------------------------------



| | ● | changes
                                         in political, economic or industry conditions, the interest rate environment or conditions
                                         affecting the financial and capital markets, which could result in changes to the value
                                         of our assets;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | our
                                         business prospects and the prospects of our prospective portfolio companies;
| | - | -------------------------------------------------------------------------------------------------------------------------



| | ● | the
                                         impact of investments that we expect to make;
| | - | ------------------------------------------------------------------------------------------



| | ● | the
                                         impact of increased competition;
| | - | -----------------------------------------------------------------------------



| | ● | our
                                         contractual arrangements and relationships with third parties;
| | - | -----------------------------------------------------------------------------------------------------------



| | ● | the
                                         dependence of our future success on the general economy and its impact on the industries
                                         in which we invest;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | the
                                         ability of our prospective portfolio companies to achieve their objectives;
| | - | ------------------------------------------------------------------------------------------------------------------------



| | ● | the
                                         relative and absolute performance of our Adviser;
| | - | ----------------------------------------------------------------------------------------------



| | ● | the
                                         ability of our Adviser and its affiliates to attract and retain talented professionals;
| | - | ------------------------------------------------------------------------------------------------------------------------------------



| | ● | our
                                         expected financings and investments;
| | - | ---------------------------------------------------------------------------------



| | ● | our
                                         ability to pay dividends or make distributions;
| | - | --------------------------------------------------------------------------------------------



| | ● | the
                                         adequacy of our cash resources and working capital;
| | - | ------------------------------------------------------------------------------------------------



| | ● | the
                                         timing of cash flows, if any, from the operations of our prospective portfolio companies;
| | - | --------------------------------------------------------------------------------------------------------------------------------------



| | ● | the
                                         impact of future acquisitions and divestitures;
| | - | --------------------------------------------------------------------------------------------



| | ● | the
                                         timing and manner in which we conduct an initial public offering (“IPO”)
                                         and/or listing, if at all;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | the
                                         timing and manner in which we conduct any share repurchase offers; and
| | - | -------------------------------------------------------------------------------------------------------------------



| | ● | our
                                         regulatory structure and tax status as a BDC and a regulated investment company (a “RIC”)
| | - | --------------------------------------------------------------------------------------------------------------------------------------



43







Although
we believe that the assumptions on which these forward-looking statements are based are reasonable, some of those assumptions
are based on the work of third parties and any of those assumptions could prove to be inaccurate; as a result, the forward-looking
statements based on those assumptions also could prove to be inaccurate. In light of these and other uncertainties, the inclusion
of a projection or forward-looking statement in this Form 10-K should not be regarded as a representation by us that our plans
and objectives will be achieved. These risks and uncertainties include those referenced in the section entitled “Part I
Item 1A. Risk Factors” and elsewhere in this Form 10-K. You should not place undue reliance on these forward-looking statements,
which apply only as of the date of this Form 10-K. We do not undertake any obligation to update or revise any forward-looking
statements or any other information contained herein, except as required by applicable law.



The
safe harbor provisions of Section 21E of the Exchange Act, which preclude civil liability for certain forward-looking statements,
do not apply to the forward-looking statements in this Form 10-K because we are an investment company.



Overview



We
were incorporated under the laws of the State of Delaware on May 29, 2019. The Company has elected to be treated as a BDC under
the Investment Company Act, and intends to elect to be treated as a regulated investment company for federal income tax purposes.
As such, we will be required to comply with various regulatory requirements, such as the requirement to invest at least 70% of
our assets in “qualifying assets,” source of income limitations, asset diversification requirements, and the requirement
to distribute annually at least 90% of our taxable income and tax-exempt interest.



The
Company commenced operations on August 7, 2019; however, for the fiscal period ended December 31, 2019, the Company did not commence
investment activities. As of December 31, 2019, the Company has raised equity capital in the amount of $39,987,875. See “Equity
Activity” under “Financial Condition, Liquidity and Capital Resources” below for further details. Management
anticipates raising additional equity capital for investment purposes through drawdowns in respect of capital commitments made
by investors pursuant to Private Offerings.



Revenues



We
plan to generate revenues in the form of interest income from the debt securities we hold and dividends and capital appreciation
on either direct equity investments or equity interests obtained in connection with originating loans, such as options, warrants
or conversion rights. We expect most of the debt securities we will hold will be floating rate in nature. The debt we invest in
will typically not be rated by any rating agency, but if it were, it is likely that such debt would be below investment grade
(rated lower than “Baa3” by Moody’s Investors Service, Inc. (“Moody’s”) and lower than “BBB-”
by Fitch Ratings, Inc. (“Fitch”) or Standard & Poor’s Rating Group, a division of The McGraw-Hill Companies,
Inc. (“S&P”)), which is an indication of having predominantly speculative characteristics with respect to the
issuer’s capacity to pay interest and repay principal. We intend to structure our debt investments with interest payable
quarterly, semi-annually or annually, but we may structure certain investments with terms to provide for longer interest payment
periods or to allow interest to be paid by adding amounts due to the principal balance of the loan, resulting in deferred cash
receipts. In addition, we may also generate revenue in the form of commitment, loan origination, structuring or diligence fees,
fees for providing managerial assistance to our portfolio companies, and possibly consulting fees. Certain of these fees may be
capitalized and amortized as additional interest income over the life of the related loan.



Expenses



Primary
expenses will include those related to:



| | ● | our
                                         initial organization costs and operating costs incurred prior to the commencement of
                                         our operations;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | calculating
                                         individual asset values and our price per share equal to the NAV (including the cost
                                         and expenses of any independent valuation firms);
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | out-of-pocket
                                         expenses, including travel expense, incurred by the Adviser, or members of Muzinich,
                                         or payable to third parties, performing due diligence on prospective portfolio companies
                                         and, if necessary, enforcing rights;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | costs
                                         of the offering or effecting any sales of, or repurchases of, our common stock and other
                                         securities, if any;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



44







| | ● | costs
                                         of research and market data;
| | - | ---------------------------------------------------------------------------



| | ● | the
                                         Management Fee and any Incentive Fee;
| | - | ----------------------------------------------------------------------------------



| | ● | certain
                                         costs and expenses relating to distributions paid on our shares;
| | - | -----------------------------------------------------------------------------------------------------------------



| | ● | administration
                                         fees payable under our Administration Agreement;
| | - | --------------------------------------------------------------------------------------------------------



| | ● | costs
                                         relating to the engagement of our chief compliance officer;
| | - | ----------------------------------------------------------------------------------------------------------



| | ● | debt
                                         service and other costs of borrowings or other financing arrangements;
| | - | --------------------------------------------------------------------------------------------------------------------



| | ● | direct
                                         costs incurred by the Adviser or its affiliates in providing managerial assistance to
                                         portfolio companies;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | amounts
                                         payable to third parties relating to, or associated with, making or holding investments;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------



| | ● | transfer
                                         agent and custodial fees;
| | - | ---------------------------------------------------------------------------



| | ● | costs
                                         of hedging;
| | - | ----------------------------------------------------------



| | ● | commissions
                                         and other compensation payable to brokers or dealers;
| | - | ----------------------------------------------------------------------------------------------------------



| | ● | federal,
                                         state and local taxes;
| | - | ------------------------------------------------------------------------



| | ● | Independent
                                         Director fees and expenses, including certain travel expenses;
| | - | -------------------------------------------------------------------------------------------------------------------



| | ● | costs
                                         of preparing financial statements and maintaining books and records and filing reports
                                         or other documents with the SEC (or other regulatory bodies), and costs associated with
                                         other reporting and/or compliance obligations under applicable federal and/or state laws,
                                         including registration and listing fees, and the compensation of professionals responsible
                                         for the preparation of any of the foregoing;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | the
                                         costs of any reports, proxy statements or other notices to our stockholders (including
                                         printing and mailing costs), the costs of any stockholders’ meetings and the compensation
                                         of investor relations personnel responsible for the preparation of the foregoing and
                                         related matters;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | our
                                         fidelity bond;
| | - | -----------------------------------------------------------



| | ● | directors
                                         and officers/errors and omissions liability insurance, and any other insurance premiums;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------



| | ● | extraordinary
                                         expenses (such as litigation or indemnification payments);
| | - | -----------------------------------------------------------------------------------------------------------------



| | ● | direct
                                         costs and expenses of administration;
| | - | -------------------------------------------------------------------------------------



| | ● | fees
                                         and expenses associated with audits, accounting, tax advisors and outside legal and consulting
                                         costs;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | costs
                                         incurred in connection with the formation or maintenance of entities or vehicles to hold
                                         our assets for tax or other purposes;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | costs
                                         of winding up; and
| | - | -----------------------------------------------------------------



| | ● | all
                                         other expenses reasonably incurred by us in connection with making investments and administering
                                         our business.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



From
time to time, our Adviser or its affiliates may pay amounts owed by us to third-party providers of goods or services. We will
subsequently reimburse our Adviser for such amounts paid on our behalf. There is no contractual cap on the amount of reasonable
costs and expenses for which our Adviser will be reimbursed.



45







We
may also enter into a credit facility or other debt arrangements to partially fund our operations, and could incur costs and expenses
including commitment, origination, legal and/or structuring fees and the related interest costs associated with any amounts borrowed.



We
have had limited operating history and have not commenced investment activity, and therefore this statement concerning additional
expenses is necessarily an estimate and may not match our actual results of operations in the future.



Results
of Operations



The
following table represents the operating results for the fiscal period ended December 31, 2019:



|                                                     |  | For the Period  August 7, 2019  (commencement of
     operations) through  December 31, 2019 |         
|---------------------------------------------------- |  | -------------------------------------------------------------------------------------------- | --------
|Total Investment Income                              |  | $                                                                                            | 1,308   
|Total Expenses                                       |  |                                                                                              | 685,927 
|Net Investment Loss                                  |  |                                                                                              | (684,619
|Net Decrease in Net Assets Resulting from Operations |  | $                                                                                            | (684,619



Investment
Income



Investment
income for the fiscal period ended December 31, 2019 was as follows:



|                                        |  | For the Period  August 7, 2019  (commencement of
     operations) through  December 31, 2019 |      
|--------------------------------------- |  | -------------------------------------------------------------------------------------------- | -----
|Interest from cash and cash equivalents |  | $                                                                                            | 1,308
|Total investment income                 |  | $                                                                                            | 1,308



Expenses



Operating
expenses for the fiscal period ended December 31, 2019 was as follows:



|                         |  | For the Period  August 7, 2019  (commencement of
     operations) through  December 31, 2019 |        
|------------------------ |  | -------------------------------------------------------------------------------------------- | -------
|Other operating expenses |  | $                                                                                            | 297,818
|Net expenses             |  | $                                                                                            | 297,818



46







Capital
Resources and Borrowings



We
anticipate further cash to be generated from drawdowns in respect of capital committed by investors in Private Offerings, and
cash flows from operations. Furthermore, we expect to borrow funds to make additional investments. This is known as “leverage”
and may cause us to be more volatile than if we had not been leveraged. This is because leverage tends to exaggerate the effect
of any increase or decrease in the value of our net assets. Additionally, we will be permitted, under specified conditions, to
issue multiple classes of indebtedness and one class of stock senior to our common stock if our asset coverage, as defined in
the Investment Company Act, is at least equal to 150% immediately after each such issuance (e.g., 150% asset coverage means that
for every $100 of net assets, the Company may raise $200 from borrowing and issuing senior securities). On August 14, 2019, the
Company’s initial shareholder approved the adoption of the 150% threshold pursuant to Section 61(a)(2) of the Investment
Company Act and such election became effective the following day. Furthermore, while any indebtedness and senior securities remain
outstanding, we must make provisions to prohibit any distribution to our stockholders or the repurchase of such securities or
shares unless we meet the applicable asset coverage ratios at the time of the distribution or repurchase. In connection with borrowings,
our lenders may require us to pledge assets, investor commitments to fund capital calls and/or the proceeds of those capital calls,
thereby allowing the lender to call for capital contributions upon the occurrence of an event of default under such financing
arrangement. In addition, the lenders may ask us to comply with positive or negative covenants that could have an effect on our
operations.



The
use of leverage also involves significant risks. Certain trading practices and transactions, which may include, among others,
reverse repurchase agreements and the use of when-issued, delayed delivery or forward commitment transactions, may be considered
to be borrowings or involve leverage and thus are also subject to Investment Company Act restrictions. In accordance with applicable
SEC staff guidance and interpretations, when we engage in such transactions, instead of maintaining asset coverage in the amounts
set forth above, we may segregate or earmark liquid assets, or enter into an offsetting position, in an amount at least equal
to our exposure, on a mark-to-market basis, as calculated pursuant to requirements of the SEC. Short-term credits necessary for
the settlement of securities transactions and arrangements with respect to securities lending will not be considered to be borrowings
for these purposes. Practices and investments that may involve leverage but are not considered to be borrowings are not subject
to the asset coverage requirement, and we will not otherwise segregate or earmark liquid assets or enter in offsetting positions.
These investments may include certain investments or instruments that have embedded leverage, which may increase the risk of loss
from such investments, but are not considered to be borrowings.



The
Company may also borrow money to purchase assets in order to comply with certain regulatory requirements for RICs, including diversification
testing. The amount of leverage that we employ will depend on our Adviser’s and our Board of Directors’ assessment
of market conditions and other factors at the time of any proposed borrowing, and there can be no assurance that we will use leverage
or that our leveraging strategy will be successful during any period in which it is employed.



Regulation
as a Private Business Development Company



We
have filed an election to be treated as a BDC under the Investment Company Act. As with other companies regulated by the Investment
Company Act, a BDC must adhere to certain substantive regulatory requirements. The Investment Company Act contains prohibitions
and restrictions relating to transactions between BDCs and their affiliates (including any investment advisers or sub-advisers),
principal underwriters and affiliates of those affiliates or underwriters and requires that a majority of the directors be persons
other than “interested persons,” as that term is defined in the Investment Company Act.



In
addition, the Investment Company Act provides that we may not change the nature of our business so as to cease to be, or to withdraw
our election as a BDC unless approved by a majority of our outstanding voting securities. A majority of the outstanding voting
securities of a company is defined under the Investment Company Act as the lesser of: (i) 67% or more of the voting securities
present at such meeting, if the holders of more than 50% of the outstanding voting securities of such company are present or represented
by proxy or (ii) more than 50% of the outstanding voting securities of such company.



Any
issuance of preferred stock must comply with the requirements of the Investment Company Act. The Investment Company Act requires,
among other things, that (1) immediately after issuance and before any dividend or other distribution is made with respect to
our common stock and before any purchase of common stock is made, such preferred stock together with all other senior securities
must not exceed an amount equal to 50% of our total assets after deducting the amount of such dividend, distribution or purchase
price, as the case may be, and (2) the holder of shares of preferred stock, if any are issued, must be entitled as a class to
elect two directors at all times and to elect a majority of the directors if dividends on such preferred stock are in arrears
by two full years or more.



Certain
other matters under the Investment Company Act require a separate class vote of the holders of any issued and outstanding preferred
stock. For example, holders of preferred stock would be entitled to vote separately as a class from the holders of common stock
on a proposal involving a plan of reorganization adversely affecting such securities.



47







We
may invest up to 100% of our assets in securities acquired directly from issuers in privately negotiated transactions. With respect
to such securities, we may, for the purpose of public resale, be deemed a “principal underwriter” as that term is
defined under the Securities Act. We may purchase or otherwise receive warrants which offer an opportunity (not a requirement)
to purchase common stock of a portfolio company in connection with an acquisition financing or other investments. Similarly, we
may acquire rights that obligate an issuer of acquired securities or their affiliates to repurchase the securities at certain
times, under certain circumstances.



We
do not intend to acquire securities issued by any investment company whereby our investment would exceed the limits imposed by
the Investment Company Act. Under those limits, we generally cannot acquire more than (i) 3% of the total outstanding voting stock
of any investment company, (ii) invest more than 5% of the value of our total assets in the securities of one investment company,
or (iii) invest more than 10% of the value of our total assets in the securities of investment companies in general. These limitations
do not apply where we (i) make investments through a subsidiary or (ii) acquire interests in a money market fund as long as we
do not pay a sales charge or service fee in connection with the purchase. With respect to the portion of our portfolio invested
in securities issued by investment companies, it should be noted that such investments might subject our stockholders to additional
expenses.



None
of our policies described above are fundamental and each such policy may be changed without stockholder approval, subject to any
limitations imposed by the Investment Company Act.



Private
funds that are excluded from the definition of “investment company” pursuant to either Section 3(c)(1) or 3(c)(7)
of the Investment Company Act are also subject to certain of the limits under the Investment Company Act noted above. Specifically,
such private funds generally may not acquire directly or through a controlled entity more than 3% of our total outstanding voting
stock (measured at the time of the acquisition). As a result, such private funds would be required to hold a smaller position
in our stock than if they were not subject to this restriction.



Qualifying
Assets



Under
the Investment Company Act, a BDC may not acquire any asset other than assets of the type listed in Section 55(a) of the Investment
Company Act, which are referred to as “qualifying assets,” unless, at the time the acquisition is made, qualifying
assets (not including certain assets specified in the Investment Company Act) represent at least 70% of the company’s total
assets. The principal categories of qualifying assets relevant to our proposed business are the following:



| | (1) | Securities
                                         purchased in transactions not involving any public offering from the issuer of such securities,
                                         which issuer (subject to certain exceptions) is an eligible portfolio company (as defined
                                         below), or from any person who is, or has been during the preceding thirteen months,
                                         an affiliated person of an eligible portfolio company, or from any other person, subject
                                         to such rules and regulations as may be prescribed by the SEC.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Securities
                                         of any eligible portfolio company that we control.
| | --- | ------------------------------------------------------------------------------------------------------



| | (3) | Securities
                                         purchased in a private transaction from a U.S. issuer that is not an investment company
                                         or from an affiliated person of the issuer, or in transactions incident thereto, if the
                                         issuer is in bankruptcy and subject to reorganization or if the issuer, immediately prior
                                         to the purchase of its securities was unable to meet its obligations as they came due
                                         without material assistance other than conventional lending or financing arrangements.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | Securities
                                         of an eligible portfolio company purchased from any person in a private transaction if
                                         there is no ready market for such securities and we already own at least 60% of the outstanding
                                         equity of the eligible portfolio company.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | Securities
                                         received in exchange for or distributed on or with respect to securities described in
                                         (1) through (4) above, or pursuant to the exercise of options, warrants or rights relating
                                         to such securities.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (6) | Cash,
                                         cash equivalents, U.S. Government securities or high-quality debt securities maturing
                                         in one year or less from the time of investment.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



An
“eligible portfolio company” is defined in the Investment Company Act as any issuer which:



| | (a) | is
                                         organized under the laws of, and has its principal place of business in, the United States;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------



48







| | (b) | is
                                         not an investment company (other than a small business investment company wholly owned
                                         by the BDC) or a company that would be an investment company but for certain exclusions
                                         under the Investment Company Act; and
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | satisfies
                                         any of the following:
| | --- | ------------------------------------------------------------------------



| | ● | does
                                         not have any class of securities listed on a national securities exchange or has a class
                                         of securities listed on a national securities exchange but has an aggregate market value
                                         of outstanding common equity of less than $250 million;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | is
                                         controlled by a BDC or a group of companies including a BDC, and the BDC has an affiliated
                                         person who is a director of the eligible portfolio company; or
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | is
                                         a small and solvent company having total assets of not more than $4 million and capital
                                         and surplus of not less than $2 million.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Hedging



We
may, but are not required to, enter into interest rate, foreign exchange or other derivative agreements to hedge interest rate,
currency, credit or other risks, but we do not generally intend to enter into any such derivative agreements for speculative purposes.
Any derivative agreements entered into for speculative purposes are not expected to be material to the Company’s business
or results of operations. These hedging activities, which will be in compliance with applicable legal and regulatory requirements,
may include the use of futures, options and forward contracts. We will bear the costs incurred in connection with entering into,
administering and settling any such derivative contracts. There can be no assurance any hedging strategy we employ will be successful.



Financial
Condition, Liquidity and Capital Resources



As
the Company has not yet commenced investment operations, there have been no substantial transactions to date. We expect to generate
cash from (1) future offerings of our common or preferred stock, (2) cash flows from operations and (3) borrowings from banks
or other lenders. We will seek to enter into any bank debt, credit facility or other financing arrangements on at least customary
market terms; however, we cannot assure you we will be able to do so. The Company’s primary uses of cash will be for (i)
investments in portfolio companies and other investments to comply with certain portfolio diversification requirements, (ii) the
cost of operations (including paying the Adviser), (iii) debt service of any borrowings and (iv) cash distributions to the holders
of our stock.



Equity
Activity.The Company has the authority to issue 5,000,000 shares of common stock at a $0.001 per share par value. Additionally,
the Company has the authority to issue 150,000 shares of preferred stock at a $0.001 per share par value.



In
conjunction with the Company’s formation, the Company issued and sold 10 Shares to Muzinich & Co., Inc., an affiliate
of the Adviser for an aggregate purchase price of $1,000. During the fiscal period ended December 31, 2019, the Company had further
common stock issuances, as detailed in the following table. These issuances of the shares of common stock were exempt from the
registration requirements of the U.S. Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) and
Rule 506(b) of Regulation D thereof.



|Date               |  | Shares issued and sold |         |  | Aggregate purchase price |  
|------------------ |  | ---------------------- | ------- |  | ------------------------ | -
|September 25, 2019 |  |                        | 9,000   |  |                          | $
|November 20, 2019  |  |                        | 70,869  |  |                          | $
|December 13, 2019  |  |                        | 120,000 |  |                          | $
|December 30, 2019  |  |                        | 200,000 |  |                          | $



Contractual
Obligations. As of December 31, 2019, the Company has not commenced investment operations.



49







We
have entered into certain contracts under which we have material future commitments. We have entered into the Investment Management
Agreement with the Adviser under which the Adviser will: determine the composition of our portfolio, the nature and timing of
the changes to our portfolio and the manner of implementing such changes; identify, evaluate and negotiate the structure of the
investments we make (including performing due diligence on our prospective portfolio companies); determine the assets we will
originate, purchase, retain or sell; closely monitor and administer the investments we make, including the exercise of any rights
in our capacity as a lender; and provide us with such other investment advice, research and related services as we may, from time
to time, require. For these services, we will pay the Adviser the Management Fees and Incentive Fees described under the heading
“Compensation of Adviser” below.



We
have also entered into an administration servicing agreement (the “Administration Agreement”) with U.S. Bancorp Fund
Services, LLC (“U.S. Bank” or the “Administrator”), pursuant to which the Administrator will provide the
administrative and recordkeeping purposes services necessary for us to operate. In addition, we have entered into a fund accounting
servicing agreement with U.S. Bank, pursuant to which U.S. Bank will provide accounting services with respect to the Company.



Critical
Accounting Policies



Valuation
of Portfolio Securities



In
accordance with the procedures adopted by our Board of Directors, the NAV per share of our outstanding shares of common stock
is determined at least quarterly by dividing the value of total assets minus liabilities by the total number of shares outstanding.



As
a BDC, we will generally invest in illiquid securities including debt and equity investments of middle-market companies. Under
procedures adopted by our Board of Directors market quotations are generally used to assess the value of our investments for which
market quotations are readily available. We obtain these market values from independent pricing services or at the bid prices
obtained from at least two broker/dealers if available, otherwise by a principal market maker or a primary market dealer. If the
Board of Directors or its delegate has a bona fide reason to believe any such market quote does not reflect the fair value of
an investment, it may independently value such investments by using the valuation procedure that it uses with respect to assets
for which market quotations are not readily available.



We
expect that there will not be readily available market values for most, if not all, of the investments which are or will be in
our portfolio, and we will value such investments at fair value as determined in good faith by or under the direction of our Board
of Directors using a documented valuation policy, described below, and a consistently applied valuation process. The factors that
may be taken into account in pricing our investments at fair value include, as relevant, the nature and realizable value of any
collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flow, the markets in which
the portfolio company does business, comparison to publicly traded securities and other relevant factors. When an external event
such as a purchase transaction, public offering or subsequent equity sale occurs, we consider the pricing indicated by the external
event to corroborate or revise our valuation. Under current auditing standards, the notes to our financial statements refer to
the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on our financial statements.



With
respect to investments for which market quotations are not readily available, or for which market quotations are deemed not reflective
of the fair value, the valuation procedures adopted by our Board of Directors contemplates a multi-step valuation process each
quarter (or more frequently, as appropriate), as described below:



| | (1) | Our
                                         valuation process begins with each portfolio company or investment being initially valued
                                         by the investment professionals of our Adviser responsible for the portfolio investment;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Preliminary
                                         valuation conclusions are then documented and discussed with the management of our Adviser;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Our
                                         Board of Directors also engages independent valuation firms to conduct independent appraisals
                                         of our investments for which market quotations are not readily available or are readily
                                         available but deemed not reflective of the fair value of an investment. The independent
                                         valuation firms review management’s preliminary valuations in light of its own
                                         independent assessment and also in light of any market quotations obtained from an independent
                                         pricing service, broker, dealer or market maker. At least a portion of our portfolio
                                         will be reviewed on a quarterly basis by third-party valuation firms and our entire portfolio
                                         will be reviewed at least annually by third-party valuation firms;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



50







| | (4) | The
                                         Audit Committee of our Board of Directors reviews the preliminary valuations of the Adviser
                                         and that of the independent valuation firms and responds and supplements the valuation
                                         recommendations of the independent valuation firms to reflect any comments; and
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | Our
                                         Board of Directors discusses the valuations and determines the fair value of each of
                                         our investments in good faith, based on the input of our Adviser, the independent valuation
                                         firms and the Audit Committee.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Fair
value, as defined under ASC 820, is the price that we would receive upon selling an investment or pay to transfer a liability
in an orderly transaction to a market participant in the principal or most advantageous market for the investment or liability.
ASC 820 emphasizes that valuation techniques maximize the use of observable market inputs and minimize the use of unobservable
inputs. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability, including
assumptions about risk. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants
would use in pricing an asset or liability based on market data obtained from sources independent of our Adviser. Unobservable
inputs reflect the assumptions market participants would use in pricing an asset or liability based on the best information available
to us at the reporting period date.



Dividends



We
intend to pay quarterly distributions to our stockholders out of assets legally available for distribution. All dividends and
distributions will be subject to lawfully available funds therefor, and no assurance can be given that we will be able to declare
such an initial distribution or distributions in future periods.



We
have elected to be a BDC under the Investment Company Act. We also intend to elect to be treated, and intend to qualify annually,
to be subject to tax as a RIC under Subchapter M of the Code. To obtain and maintain our ability to be subject to tax as a RIC,
we must, among other things, timely distribute to our stockholders at least 90% of our investment company taxable income for each
taxable year. We intend to timely distribute to our stockholders substantially all of our annual taxable income for each taxable
year, except that we may retain certain net capital gains (i.e., realized net long-term capital gains in excess of realized net
short-term capital losses) for reinvestment and, depending upon the level of taxable income earned in a taxable year, we may choose
to carry forward taxable income for distribution in the following taxable year and pay any applicable U.S. federal excise tax.
We generally will be required to pay such U.S. federal excise tax if our distributions in respect of a calendar year do not exceed
the sum of (1) 98% of our net ordinary income (taking into account certain deferrals and elections) for the calendar year, (2)
98.2% of our capital gains in excess of capital losses (adjusted for certain ordinary losses) for the one-year period ending on
October 31 of the calendar year and (3) any net ordinary income and capital gains in excess of capital losses for preceding calendar
years that were not distributed during such calendar years and on which we did not pay any U.S. federal income tax. If we retain
net capital gains, we may treat such amounts as deemed distributions to our stockholders. In that case, you will be treated as
if you had received an actual distribution of the capital gains we retained and then you reinvested the net after-tax proceeds
in our common stock. In general, you also will be eligible to claim a tax credit (or, in certain circumstances, obtain a tax refund)
equal to your allocable share of the tax we paid on the capital gains deemed distributed to you. The distributions we pay to our
stockholders in a taxable year may exceed our taxable income for that taxable year and, accordingly, a portion of such distributions
may constitute a return of capital for U.S. federal income tax purposes. The specific tax characteristics of our distributions
will be reported to stockholders after the end of the calendar year.



Security
Transactions, Realized/Unrealized Gains or Losses, and Income Recognition.



Security
transactions are recorded on a trade-date basis. We measure realized gains or losses from the repayment or sale of investments
using the specific identification method. The amortized cost basis of investments represents the original cost adjusted for the
accretion/amortization of discounts and premiums and upfront loan origination fees. We report changes in fair value of investments
that are measured at fair value as a component of net change in unrealized appreciation (depreciation) on investments in the statement
of operations.



Compensation
of Adviser



Management
Fee. Pursuant to the Investment Management Agreement, our Adviser will accrue, on a quarterly basis in arrears, a management
fee (the “Management Fee”) equal to 0.25% (i.e., 1.00% annually) of the average of the Company’s NAV (excluding
uninvested cash and cash equivalents, which are defined for these purposes as money market funds, U.S. government securities and
investment grade debt instruments maturing within one year of purchase of such instrument by the Company) at the end of the then-current
calendar quarter and the Company’s NAV at the end of the prior calendar quarter. For the avoidance of doubt, the Management
Fee payable in respect of the Company’s first quarter (i.e., the period beginning on the initial drawdown date and ending
on the last day of the quarter in which the initial drawdown date occurred) will be equal to 0.25% of the average of the Company’s
NAV at the end of such quarter. For the period ended December 31, 2019 the Company did not incur Management Fees or Incentive
Fees. The Management Fee for any partial quarter will be appropriately prorated.



51







Management
Fees are generally expected to be paid using available funds quarterly, in which case these payments will not reduce unfunded
capital commitments. However, we may draw down unfunded capital commitments in order to pay Management Fees, and any such draw
down amounts would reduce unfunded capital commitments.



Incentive
Fee.Pursuant to the Investment Management Agreement, we will pay an incentive fee (the “Incentive Fee”) to the
Adviser. The Incentive Fee will not be released to the Adviser until the liquidation of the Company’s portfolio. The Incentive
Fee will accrue as a liability on the Company’s statement of assets and liabilities throughout the life of the Company,
and the Company may set aside assets in anticipation of paying it. However, the Company does not intend to actually pay out the
Incentive Fee to the Adviser until the end of the life of the Company.



In
order to determine the size of the Incentive Fee, the Company will refer to the incentive fee calculation methodology described
below (the “Incentive Fee Calculation Methodology”).



For
the avoidance of doubt, the Incentive Fee Calculation Methodology is not intended to describe the Company’s actual operations
with respect to the making of distributions—and the Incentive Fee Calculation Methodology does not limit the Company’s
ability to make distributions to stockholders over the life of the Company (other than the Company’s actual payment of the
Incentive Fee upon liquidation of the Company). Rather, the Incentive Fee Calculation Methodology is a tool whose sole purpose
is to calculate the size of the Incentive Fee.



To
calculate the size of the Incentive Fee, the Company will refer to (1) the amounts and timing of stockholders’ contributions
to the Company, and (2) the amounts and timing of the Company’s distributions, and will analyze those contributions and
distributions under the Incentive Fee Calculation Methodology. The Incentive Fee will equal the total amount of distributions
that would be made to the Adviser under paragraphs (c) and (d) of the Incentive Fee Calculation Methodology.



The
Incentive Fee Calculation Methodology is:



| | (a) | First,
                                         the Company will make distributions to its stockholders until stockholders have received
                                         100% of Contributed Capital (as defined below).
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | Second,
                                         the Company will make distributions to its stockholders until stockholders have received
                                         a 7% return per annum, compounded annually, on their capital contributions, from the
                                         date each capital contribution is made through the date such capital has been returned.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | Third,
                                         the Company will make distributions to the Adviser under this paragraph (c) until it
                                         has received 12.5% of the total amount distributed by the Company under paragraph (b)
                                         and this paragraph (c).
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | Thereafter,
                                         any additional amounts that the Company distributes will be paid 87.5% to stockholders
                                         and 12.5% to the Adviser.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Notwithstanding
anything to the contrary herein, in no event will an amount be paid with respect to the Incentive Fee to the extent it would exceed
the limitations set forth in Section 205(b)(3) of the Advisers Act.



“Contributed
Capital” is the aggregate amount of capital contributions that have been made by all stockholders in respect of their shares
of common stock to the Company. All distributions (or deemed distributions), including investment income (i.e. proceeds received
in respect of interest payments, dividends and fees) and proceeds attributable to the repayment or disposition of any investment,
to stockholders will be considered a return of Contributed Capital. Unreturned Contributed Capital equals aggregate Contributed
Capital minus cumulative distributions but is never less than zero.



The
term “distribution” includes all distributions of the Company’s assets including in respect of proceeds from
the full or partial realization of the Company’s investments and income from investing activities and may include amounts
treated as return of capital, ordinary income and capital gains for accounting, tax and/or other purposes.



Item
7A. Quantitative and Qualitative Disclosures about Market Risk



We
are subject to financial market risks, including changes in interest rates. We plan to invest primarily in illiquid debt and equity
securities of private companies. Most of our investments will not have a readily available market price, and we will value these
investments at fair value as determined in good faith by the Board in accordance with our valuation policy. 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.



In
addition, any investments we make that are denominated in a foreign currency will be subject to risks associated with changes
in currency exchange rates. These risks include the possibility of significant fluctuations in the foreign currency markets, the
imposition or modification of foreign exchange controls and potential illiquidity in the secondary market. These risks will vary
depending upon the currency or currencies involved.



52







Item
8. Financial Statements and Supplementary Data



Index
to Consolidated Financial Statements



|                                                                                 | Page
|-------------------------------------------------------------------------------- | ----
|Report of Independent Registered Public Accounting Firm                          | F-2 
|Statement of Assets and Liabilities as of December 31, 2019                      | F-3 
|Statement of Operations for the Fiscal Period ended December 31, 2019            | F-4 
|Statement of Changes in Net Assets for the Fiscal Period ended December 31, 2019 | F-5 
|Statement of Cash Flows for the Fiscal Period ended December 31, 2019            | F-6 
|Schedule of Investments as of December 31, 2019                                  | F-7 
|Notes to Financial Statements                                                    | F-8 



F-1







REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To
the Shareholders and Board of Directors of Muzinich BDC, Inc.



Opinion
on the Financial Statements and Financial Highlights



We
have audited the accompanying statements of assets and liabilities of Muzinich BDC, Inc. (“the Company”), including
the schedule of investments as of December 31, 2019, the related statements of operations, cash flows, changes in net assets for
the period then ended, and the financial highlights for the period from August 7, 2019 (commencement of operations) through December
31, 2019, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material
respects, the financial position of the Company as of December 31, 2019, and the results of its operations, changes in net assets,
and cash flows for the period then ended, and the financial highlights for the period from August 7, 2019 (commencement of operations)
through December 31, 2019 in conformity with accounting principles generally accepted in the United States of America.



Basis
for Opinion



These
financial statements and financial highlights are the responsibility of the Company’s management. Our responsibility is to express
an opinion on the Company’s financial statements and financial highlights based on our audits. We are a public accounting firm
registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with
respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities
and Exchange Commission and the PCAOB.



We
conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement,
whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control
over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting
but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion.



Our
audit included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights,
whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a
test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audit also
included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements and financial highlights. Our procedures included confirmation of investments owned as
of December 31, 2019, by correspondence with the custodian. We believe that our audit provides a reasonable basis for our opinion.



/s/
Deloitte & Touche, LLP

New
York, New York

March
27, 2020



We
have served as the Company’s auditor since 2019.



F-2







Muzinich BDC, Inc.

Statement of Assets and Liabilities

As of December 31, 2019



|Assets:                                                                                              |  |   |           
|---------------------------------------------------------------------------------------------------- |  | - | ----------
|Cash and cash equivalents                                                                            |  |   | 40,012,875
|Receivables:                                                                                         |  |   |           
|Interest                                                                                             |  |   | 1,308     
|Total Assets                                                                                         |  | $ | 40,014,183
|                                                                                                     |  |   |           
|Liabilities:                                                                                         |  |   |           
|Organizational and offering fees payable (1)                                                         |  |   | 430,688   
|Professional fees payable (1)                                                                        |  |   | 197,926   
|Accrued other general and administrative expenses (1)                                                |  |   | 124,891   
|Total Liabilities                                                                                    |  | $ | 753,505   
|                                                                                                     |  |   |           
|Commitments and Contingencies (Note 5)                                                               |  |   | -         
|                                                                                                     |  |   |           
|Net Assets:                                                                                          |  |   |           
|Preferred Shares, $0.001 par value; 150,000 shares authorized;  0 shares issued and outstanding      |  | $ | -         
|Common Shares, $0.001 par value; 5,000,000 shares authorized;  399,879 shares issued and outstanding |  |   | 400       
|Additional paid-in capital                                                                           |  |   | 39,637,606
|Total accumulated losses                                                                             |  |   | (377,328  
|Total Net Assets                                                                                     |  | $ | 39,260,678
|Total Liabilities and Net Assets                                                                     |  | $ | 40,014,183
|Net Asset Value Per Share                                                                            |  | $ | 98.18     



| | (1) | The balance includes payables due to Muzinich. Please
see Note 4.
| | --- | -----------------------------------------------------------------



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



F-3







Muzinich BDC, Inc.

Statement of Operations



|                                                                                        |  | For the Period
 August 7, 
2019  (commencement
 of operations)  through
 December 31,
 2019 |         
|--------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------- | --------
|                                                                                        |  |                                                                                             |         
|Income                                                                                  |  |                                                                                             |         
|Income from cash and cash equivalents:                                                  |  |                                                                                             |         
|Interest
    income                                                                     |  | $                                                                                           | 1,308   
|Total income from cash and cash equivalents                                             |  |                                                                                             | 1,308   
|Total Investment Income                                                                 |  |                                                                                             | 1,308   
|                                                                                        |  |                                                                                             |         
|Expenses:                                                                               |  |                                                                                             |         
|Organizational fees (Note 2)                                                            |  |                                                                                             | 388,109 
|Professional fees                                                                       |  |                                                                                             | 134,244 
|Directors’ fees and expenses                                                            |  |                                                                                             | 63,683  
|Other general and administrative expenses                                               |  |                                                                                             | 99,891  
|Total Expenses                                                                          |  |                                                                                             | 685,927 
|Net Investment Loss                                                                     |  |                                                                                             | (684,619
|Net Decrease in Net Assets Resulting from Operations                                    |  | $                                                                                           | (684,619
|Basic and diluted net investment loss per common share                                  |  | $                                                                                           | (10.26  
|Basic and diluted net decrease in net assets resulting from operations per common share |  | $                                                                                           | (10.26  
|Weighted Average Common Shares Outstanding - Basic and Diluted (See Note 9)             |  |                                                                                             | 66,729  



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



F-4







Muzinich BDC, Inc.

Statement of Changes in Net
Assets



|                                                                     |  | For the Period  August 7, 
2019  (commencement
 of operations)  through  December 31,
 2019 |           
|-------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------- | ----------
|Decrease in Net Assets Resulting from Operations:                    |  |                                                                                             |           
|Net investment income (loss)                                         |  | $                                                                                           | (684,619  
|Net Decrease in Net Assets Resulting from Operations                 |  |                                                                                             | (684,619  
|                                                                     |  |                                                                                             |           
|Increase in Net Assets Resulting from Capital Share Transactions     |  |                                                                                             |           
|Issuance of common shares                                            |  |                                                                                             | 39,945,297
|Net Increase in Net Assets Resulting from Capital Share Transactions |  |                                                                                             | 39,945,297
|Total Increase in Net Assets                                         |  |                                                                                             | 39,260,678
|Net Assets, Beginning of Period                                      |  |                                                                                             | -         
|Net Assets, End of Period                                            |  | $                                                                                           | 39,260,678
|Net asset value per share                                            |  | $                                                                                           | 98.18     
|Common shares outstanding at the end of the period                   |  |                                                                                             | 399,879   



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



F-5







Muzinich BDC, Inc.

Statement of Cash Flows



|                                                     |  | For the Period  August 7,
 2019  (commencement
 of operations)  through  December 31,
 2019 |           
|---------------------------------------------------- |  | ------------------------------------------------------------------------------------------- | ----------
|                                                     |  |                                                                                             |           
|Cash Flows from Operating Activities:                |  |                                                                                             |           
|Net decrease in net assets resulting from operations |  | $                                                                                           | (684,619  
|Changes in operating assets and liabilities:         |  |                                                                                             |           
|Interest receivable                                  |  |                                                                                             | (1,308    
|Organizational fees payable                          |  |                                                                                             | 388,110   
|Professional fees payable                            |  |                                                                                             | 197,926   
|Accrued other general and administrative expenses    |  |                                                                                             | 124,891   
|Net cash provided by operating activities            |  |                                                                                             | 25,000    
|Cash Flows from Financing Activities:                |  |                                                                                             |           
|Proceeds from issuance of common shares              |  |                                                                                             | 39,987,875
|Net cash provided by financing activities            |  |                                                                                             | 39,987,875
|Net increase in cash and cash equivalents            |  |                                                                                             | 40,012,875
|Cash and cash equivalents, beginning of period       |  |                                                                                             | -         
|Cash and cash equivalents, end of period             |  | $                                                                                           | 40,012,875



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



F-6







Muzinich BDC, Inc.

Schedule of Investments

As of December 31, 2019



|Portfolio Company                         |  | Industry |  |  | Interest Rate |  |  | Acquisition  Date |  |  | Maturity  Date |  |  | Principal /  Par |  |  | Amortized  Cost |  |  | Fair  Value |  |  | Percentage  of Net Assets | 
|----------------------------------------- |  | -------- |  |  | ------------- |  |  | ----------------- |  |  | -------------- |  |  | ---------------- |  |  | --------------- |  |  | ----------- |  |  | ------------------------- | 
|Other Assets in Excess of Liabilities (1) |  |          |  |  |               |  |  |                   |  |  |                |  |  |                  |  |  |                 |  |  |             |  |  |                           | 
|Net assets                                |  |          |  |  |               |  |  |                   |  |  |                |  |  |                  |  |  |                 |  |  |             |  |  |                           | 



| | (1) | The Company commenced operations on August 7, 2019. As
of December 31, 2019, the Company has not commenced investment activities.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------



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



F-7







Muzinich BDC, Inc.



Notes to Financial Statements












|1. | Organization and Basis of Presentation
|-- | --------------------------------------



Organization

Muzinich
BDC, Inc. (the “Company”) is a Delaware corporation formed on May 29, 2019. The Company is structured as an externally
managed, non-diversified, closed-end management investment company that has filed an election to be regulated as a business development
company (“BDC”) under the Investment Company Act of 1940, as amended (“the 1940 Act”). The Company was
formed primarily to generate current income and, to a lesser extent, capital appreciation through investments in secured debt,
including first lien, second lien and unitranche debt, as well as unsecured debt, including mezzanine debt and, to a lesser extent,
in equity instruments of private companies.



The
Company’s investment activities are managed by Muzinich BDC Adviser, LLC (the “Adviser”), an investment adviser
registered with the SEC under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). The Adviser is
responsible for originating prospective investments, conducting research and due diligence investigations on potential investments,
analyzing investment opportunities, negotiating and structuring the investments and monitoring the investments and portfolio companies
on an ongoing basis. Subject to the supervision of the Board of Directors, the Adviser manages the day-to-day operations and provides
the Company with investment advisory and management services and certain administrative services.



The
Company has entered into separate subscription agreements with a number of investors providing for the private placement of the
Company’s common stock pursuant to one or more closings in respect of private offerings (“Private Offerings”).
At each closing in respect of any Private Offering, each investor will make a capital commitment to purchase shares of common stock
pursuant to a subscription agreement entered into with the Company. Investors will be required to fund drawdowns to purchase shares
of the Company’s common stock up to the amount of their respective capital commitments on an as-needed basis with a minimum
of ten business days’ prior notice to the investors. The Company anticipates commencing investment activities during the
1st quarter of 2020.



The
commitment period (“Commitment Period”) shall last for three years from the date of the first closing in respect of
a Private Offering (the “Initial Closing”), subject to the Board of Directors’ right to extend the Commitment
Period for up to one additional year, in its discretion. The Company will terminate on the fifth anniversary of the termination
of the Commitment Period, subject to (i) the Adviser’s determination to extend the Company’s life for a maximum of
two consecutive one year periods or (ii) the Adviser’s determination to terminate the Company upon full realization of the
Company’s portfolio or if market opportunities are inadequate to support the Company’s ongoing operation.



Fiscal Year End

The
Company’s fiscal year ends on December 31.



|2. | Significant Accounting Policies
|-- | -------------------------------



Basis
of Presentation

The
accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United
States of America (“U.S. GAAP”). The accompanying financial statements of the Company and related financial information
have been prepared pursuant to the requirements for reporting on Form 10-K and Article 6 of Regulation S-X. The Company has determined
it meets the definition of an investment company and follows the accounting and reporting guidance in the Financial Accounting
Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946 — Financial Services
— Investment Companies (“ASC Topic 946”).





F-8







Use
of Estimates

U.S.
GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosures
of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases
in net assets from operations during the reported periods. Changes in the economic environment, financial markets and any other
parameters used in determining these estimates could cause actual results to differ materially.



Cash
and Cash Equivalents

Cash
and cash equivalents are defined as cash, money market funds, U.S. government securities and investment grade debt instruments
maturing within three months of purchase of such instrument by the Company.



Organization
and Offering Costs

Organizational
costs have been expensed as incurred. Organizational costs include start-up fees and expenses directly attributable to the formation
of the Company. Offering costs have been recorded as a reduction to paid-in capital. Both organization and offering costs incurred
are reimbursable to the Adviser, and therefore reflected as a payable as of December 31, 2019. For the fiscal period ended December
31, 2019, the Company incurred $388,109 in organization costs and $42,579 in offering costs.



Company
Common Stock Share Valuation

In
accordance with U.S. GAAP, the Net Asset Value per share of the outstanding shares of common stock is determined at least quarterly
by dividing the value of total assets minus liabilities by the total number of shares outstanding.



Valuation
of Portfolio Securities

As
a BDC, the Company will generally invest in illiquid securities including debt and equity investments of middle-market companies.
Under procedures adopted by the Board of Directors market quotations are generally used to assess the value of the investments
for which market quotations are readily available. The Company obtains these market values from independent pricing services or
at the bid prices obtained from at least two broker/dealers if available, or otherwise by a principal market maker or a primary
market dealer. If the Board of Directors or its delegate has a bona fide reason to believe any such market quote does not reflect
the fair value of an investment, it may independently value such investments by using the valuation procedure that it uses with
respect to assets for which market quotations are not readily available.



The
Company expects that there will not be readily available market values for most, if not all, of the investments which are or will
be in the portfolio, and the Company will value such investments at fair value as determined in good faith by or under the direction
of our Board of Directors using a documented valuation policy, described below, and a consistently applied valuation process. The
factors that may be taken into account in pricing the investments at fair value include, as relevant, the nature and realizable
value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flow, the
markets in which the portfolio company does business, comparison to publicly traded securities and other relevant factors. When
an external event such as a purchase transaction, public offering or subsequent equity sale occurs, the Company considers the pricing
indicated by the external event to corroborate or revise the valuation.



With
respect to investments for which market quotations are not readily available, or for which market quotations are deemed not reflective
of the fair value, the valuation procedures adopted by the Board of Directors contemplates a multi-step valuation process each
quarter (or more frequently, as appropriate), as described below:



| | (1) | The
valuation process begins with each portfolio company or investment being initially valued by the investment professionals of the
Adviser responsible for the portfolio investment;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Preliminary
valuation conclusions are then documented and discussed with the management of the Adviser;
| | --- | -------------------------------------------------------------------------------------------------------



| | (3) | The
Board of Directors also engages independent valuation firms to conduct independent appraisals of the investments for which market
quotations are not readily available or are readily available but deemed not reflective of the fair value of an investment. The
independent valuation firms review management’s preliminary valuations in light of its own independent assessment and also
in light of any market quotations obtained from an independent pricing service, broker, dealer or market maker. At least a portion
of the portfolio will be reviewed on a quarterly basis by third-party valuation firms and the entire portfolio will be reviewed
at least annually by third-party valuation firms;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | The
Audit Committee of the Board of Directors reviews the preliminary valuations of the Adviser and that of the independent valuation
firms and responds and supplements the valuation recommendations of the independent valuation firms to reflect any comments; and
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | The
Board of Directors discusses the valuations and determines the fair value of each of the investments in good faith, based on the
input of the Adviser, the independent valuation firms and the Audit Committee.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-9







Fair value, as defined under Topic 820 of the Financial Accounting Standards Board’s Accounting
Standards Codification, as amended (“ASC 820”), is the price that the Company would receive upon selling an investment
or pay to transfer a liability in an orderly transaction to a market participant in the principal or most advantageous market
for the investment or liability. ASC 820 emphasizes that valuation techniques maximize the use of observable market inputs and
minimize the use of unobservable inputs. Inputs refer broadly to the assumptions that market participants would use in pricing
an asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs reflect the
assumptions market participants would use in pricing an asset or liability based on market data obtained from sources independent
of the Adviser. Unobservable inputs reflect the assumptions market participants would use in pricing an asset or liability based
on the best information available at the reporting period date.



Net Realized Gains or Losses
and Net Change in Unrealized Appreciation or Depreciation

The Company measures realized
gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment,
without regard to unrealized appreciation or depreciation previously recognized, but considering unamortized upfront fees and
prepayment penalties. Net change in unrealized appreciation or depreciation reflects the change in portfolio investment values
during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation, when gains
or losses are realized.



Interest and Dividend Income Recognition

Interest income is recorded
on the accrual basis and includes amortization of premiums or accretion of discounts. Discounts and premiums to par value on securities
purchased are accreted and amortized, respectively, into interest income over the contractual life of the respective security
using the effective interest method. The amortized cost of investments represents the original cost adjusted for the amortization
of premiums or accretion of discounts, if any. Upon prepayment of a loan or debt security, any prepayment premiums, unamortized
upfront loan origination fees and unamortized discounts are recorded as interest income in the current period.



Loans are generally placed on
non-accrual status when there is reasonable doubt that principal or interest will be collected in full. Accrued interest is generally
reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income
or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to
accrual status when past due principal and interest is paid current and, in management’s judgment, are likely to remain current.
Management may make exceptions to this treatment and determine to not place a loan on non-accrual status if the loan has sufficient
collateral value and is in the process of collection.



Dividend income on preferred
equity securities is recorded on the accrual basis to the extent that such amounts are payable by the portfolio company and are
expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies
or on the ex- dividend date for publicly-traded portfolio companies.



Other Income

From time to time, the Company may receive fees for services
provided to portfolio companies. These fees are generally only available to the Company as a result of closing investments, are
normally paid at the closing of the investments, are generally non-recurring and are recognized as revenue when earned upon closing
of the investment. The services provided vary by investment, but can include closing work, diligence or other similar fees and
fees for providing managerial assistance to the Company’s portfolio companies. In addition, the Company may generate revenue
in the form of commitment, origination, structuring or diligence fees, monitoring fees and possibly consulting and performance-
based fees.





F-10







Deal Origination Costs

The Company records origination and other
expenses related to its investments as deferred financing costs. These expenses are deferred and amortized over the life of the
related investment. Deal origination costs are presented on the statement of assets and liabilities as a direct deduction from
the investment. In circumstances in which there is not an associated investment amount recorded in the financial statements when
the deal origination costs are incurred, such deal origination costs will be reported on the statement of assets and liabilities
as a liability until the investment is recorded. As of December 31, 2019, the balance of deferred financing costs was $25,000,
included in Accrued other general and administrative expenses, on the statement of assets and liabilities.



Distributions to Stockholders

Distributions to stockholders are recorded on the record date. The amount
to be distributed is determined by the Board of Directors and is generally based upon current and estimated net earnings. Net
realized long-term capital gains, if any, would be generally distributed at least annually, although the Company may decide to
retain such capital gains for investment.



Foreign Currency Translation

The Company’s books
and records are maintained in U.S. dollars. Any foreign currency amounts are translated into U.S. dollars on the following basis:



| | 1. | Fair value of investment securities, other assets and liabilities — at the exchange rates
prevailing at the end of the applicable period; and
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | Purchases and sales of investment securities, income and expenses — at the exchange rates
prevailing on the respective dates of such transactions.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------



Although net assets and fair
values are presented based on the applicable foreign exchange rates described above, the Company does not isolate that portion
of the results of operations due to changes in foreign exchange rates on investments, other assets and debt from the fluctuations
arising from changes in fair values of investments and liabilities held. Such fluctuations are included with the net realized gain
(loss) and net change in unrealized gain (loss) from investments and liabilities.



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



Recently Issued Accounting
Pronouncements

In August 2018, the
FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements
for Fair Value Measurement, which changes the fair value measurement disclosure requirements of Topic 820. The amendments in ASU
No. 2018-13 are the result of a broader disclosure project called FASB Concept Statement, Conceptual Framework for Financial Reporting—Chapter
8: Notes to Financial Statements. The objective and primary focus of the project are to improve the effectiveness of disclosures
in the notes to the financial statements by facilitating clear communication of the information required by GAAP that is most
important to users of the financial statements. ASU No. 2018-13 is effective for all entities for fiscal years beginning after
December 15, 2019, including interim periods therein. Early adoption is permitted for any eliminated or modified disclosures upon
issuance of ASU No. 2018-13. Management has adopted certain disclosures of ASU 2018-13 as permitted by the standard.



|3. | Income Taxes
|-- | ------------



Taxation as a Regulated Investment
Company

The Company intends
to elect to be treated for U.S. federal income tax purposes as a Regulated Investment Company (“RIC”) under Subchapter
M of the Internal Revenue Code of 1986, as amended (the “Code”). So long as the Company maintains its status as a
RIC, it generally will not pay corporate-level U.S. federal income taxes on any ordinary income or capital gains that it distributes
at least annually to its stockholders as dividends. Rather, any tax liability related to income distributed by the Company represents
obligations of the Company’s investors and will not be reflected in the financial statements of the Company. To qualify
as a RIC under Subchapter M of the Code, the Company must, among other things, meet certain source-of-income and asset diversification
requirements. In addition, to qualify for RIC tax treatment, the Company must distribute to its stockholders, for each taxable
year, at least 90% of its “investment company taxable income” for that year, which is generally its ordinary income
plus the excess of its realized net short-term capital gains over its realized net long-term capital losses.





F-11







In order for the Company not
to be subject to U.S. federal excise taxes, it must distribute annually an amount at least equal to the sum of (i) 98.0% of its
net ordinary income (taking into account certain deferrals and elections) for the calendar year, (ii) 98.2% of its capital gains
in excess of capital losses for the calendar year and (iii) any net ordinary income and capital gains in excess of capital losses
for preceding years that were not distributed during such years. The Company, at its discretion, may carry forward taxable income
in excess of calendar year dividends and pay a 4% nondeductible U.S. federal excise tax on this income.



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.



Although the Company files federal
and state tax returns, its major tax jurisdiction is federal. The Company’s inception-to-date federal tax years remain subject
to examination by the Internal Revenue Service and the State of Delaware.



Distributions and Components
of Net Assets on a Tax Basis

As of December 31,
2019, the Company has not commenced investment operations; therefore, the Company did not declare any distributions.



The difference between the Company’s
U.S. GAAP-basis total accumulated losses and its tax-basis total accumulated losses as of December 31, 2019, was primarily due
to a reclassification of the net investment loss for the fiscal period ended December 31, 2019 to additional paid-in capital. Due
to this reclassification, the U.S. GAAP-basis net investment loss for the fiscal period ended December 31, 2019 will not carry
forward. For the period August 7, 2019 (commencement of operations) through December 31, 2019, the Company reclassified for book
purposes amounts arising from permanent book/tax differences as follows:



|                           |  | For the period August 7, 
2019 (commencement of |         
|-------------------------- |  | ----------------------------------------------- | --------
|                           |  | operations) through December 31, 2019           |         
|Additional paid-in capital |  | $                                               | (307,291
|Total accumulated losses   |  |                                                 | 307,291 



|4. | Agreements and Related Party Transactions
|-- | -----------------------------------------



Investment Management Agreement

The Company entered into an Investment
Management Agreement (the “Investment Management Agreement”) with the Adviser, pursuant to which the Adviser manages
the Company’s investment program and related activities. The advisory service fees consist of a management fee and an incentive
fee. The cost of both the management fee and the incentive fee is ultimately borne by the Company’s stockholders.



Management Fee

Pursuant to the
Investment Management Agreement, the Company’s Adviser accrues, on a quarterly basis in arrears, a management fee (the “Management
Fee”) equal to 0.25% (i.e., 1.00% annually) of the average of the Company’s net asset value (“NAV”) (excluding
uninvested cash and cash equivalents, which are defined for these purposes as money market funds, U.S. government securities and
investment grade debt instruments maturing within one year of purchase of such instrument by the Company) at the end of the then-current
calendar quarter and the Company’s NAV at the end of the prior calendar quarter (excluding uninvested cash and cash equivalents).





F-12







Incentive Fee

Pursuant to the Investment Management Agreement, the
Company pays an incentive fee (the “Incentive Fee”) to the Adviser. The Incentive Fee will not be released to the
Adviser until the liquidation of the Company’s portfolio. However, the Incentive Fee will accrue throughout the Company’s
life; and the Company may set aside assets in anticipation of paying it. However, the Company does not intend to actually pay
out the Incentive Fee to the Adviser until the end of the life of the Company.



In order
to determine the size of the Incentive Fee, the Company will refer to the incentive fee calculation methodology described below
(the “Incentive Fee Calculation Methodology”).



For the avoidance
of doubt, the Incentive Fee Calculation Methodology is not intended to describe the Company’s actual operations with respect
to the making of distributions—and the Incentive Fee Calculation Methodology does not limit the Company’s ability to
make distributions to stockholders over the life of the Company (other than the Company’s actual payment of the Incentive
Fee upon liquidation of the Company). Rather, the Incentive Fee Calculation Methodology is a tool whose sole purpose is to calculate
the size of the Incentive Fee.



To calculate
the size of the Incentive Fee, the Company will refer to (1) the amounts and timing of stockholders’ contributions to the
Company, and (2) the amounts and timing of the Company’s distributions, and will analyze those contributions and distributions
under the Incentive Fee Calculation Methodology. The Incentive Fee will equal the total amount of distributions that would be made
to the Adviser under paragraphs (c) and (d) of the Incentive Fee Calculation Methodology.



The Incentive
Fee Calculation Methodology is:



(a) First,
the Company will make distributions to its stockholders until stockholders have received 100% of Contributed Capital (as defined
below).



(b) Second,
the Company will make distributions to its stockholders until stockholders have received a 7% return per annum, compounded annually,
on their capital contributions, from the date each capital contribution is made through the date such capital has been returned.



(c) Third,
the Company will make distributions to the Adviser under this paragraph (c) until it has received 12.5% of the total amount distributed
by the Company under paragraph (b) and this paragraph (c).



(d) Thereafter,
any additional amounts that the Company distributes will be paid 87.5% to stockholders and 12.5% to the Adviser.



Notwithstanding
anything to the contrary herein, in no event will an amount be paid with respect to the Incentive Fee to the extent it would exceed
the limitations set forth in Section 205(b)(3) of the Advisers Act.



“Contributed
Capital” is the aggregate amount of capital contributions that have been made by all stockholders in respect of their shares
of common stock to the Company. All distributions (or deemed distributions), including investment income (i.e. proceeds received
in respect of interest payments, dividends and fees) and proceeds attributable to the repayment or disposition of any investment,
to stockholders will be considered a return of Contributed Capital. Unreturned Contributed Capital equals aggregate Contributed
Capital minus cumulative distributions but is never less than zero.



The term
“distribution” includes all distributions of the Company’s assets including in respect of proceeds from the full
or partial realization of the Company’s investments and income from investing activities and may include amounts treated
as return of capital, ordinary income and capital gains for accounting, tax and/or other purposes.



If the Investment
Management Agreement is terminated prior to the termination of the Company (other than an instance in which the Adviser voluntarily
terminates the agreement), the Company will pay to the Adviser an Incentive Fee payment in connection with such termination (the
“Termination Incentive Fee Payment”). The Termination Incentive Fee Payment will be calculated as of the date the Investment
Management Agreement is terminated and will equal the amount of Incentive Fee that would be payable to the Adviser if (a) all Investments
were liquidated for their current value (but without taking into account any unrealized appreciation of any investment), and any
unamortized deferred investment-related fees would be deemed accelerated, (b) the proceeds from such liquidation were used to pay
all the Company’s outstanding liabilities, and (c) the remainder were distributed to stockholders and paid as Incentive Fee
in accordance with the Incentive Fee Calculation Methodology, subject to the limitations set forth in Section 205(b)(3) of the
Advisers Act. The Company will make the Termination Incentive Fee Payment in cash on or immediately following the date the Investment
Management Agreement is so terminated.





F-13







The Investment
Management Agreement will remain in full force and effect for two years initially, and will continue for periods of one year thereafter,
but only so long as such continuance is specifically approved at least annually by (a) the vote of a majority of the Independent
Directors and in accordance with the requirements of the 1940 Act and (b) by a vote of a majority of the Board of Directors or
of a majority of our outstanding voting securities. The Investment Management Agreement may, on 60 days’ written notice to
the other party, be terminated in its entirety at any time without the payment of any penalty, by the Company (following determination
by the Board of Directors or by vote of a majority of the outstanding voting stock), or by the Adviser. The Investment Management
Agreement shall automatically terminate in the event of its assignment.



For the period
ended December 31, 2019, the Company did not accrue Management Fees or Incentive Fees.



Resource
Sharing Agreement

The
Adviser has entered into a Resource Sharing Agreement (the “Resource Sharing Agreement”) with Muzinich & Co.,
Inc. (“Muzinich”) an affiliate of the Adviser, pursuant to which Muzinich provides the Adviser with experienced investment
professionals and services so as to enable the Adviser to fulfill its obligations under the Investment Management Agreement. Through
the Resource Sharing Agreement, the Adviser intends to draw on the significant deal origination, credit underwriting, due diligence,
investment structuring, execution, portfolio management and monitoring, and operational experience of Muzinich’s investment
professionals. The Resource Sharing Agreement may be terminated by either party on 60 days’ notice, which if terminated
may have a material adverse consequence on the Company’s operations.



Reimbursement of Certain Expenses

During the period ended December
31, 2019, Muzinich paid, on behalf of the Company, certain organizational, offering, and operating costs, that have been recorded
by the Company. The Company will reimburse Muzinich for the costs paid on the Company’s behalf. As of December 31, 2019,
the total costs reimbursable to Muzinich were $546,062, and are disclosed within Organization and offering fees payable, Professional
fees payable, and Accrued other general and administrative expenses on the Statement of Assets and Liabilities.



|5. | Commitments and Contingencies
|-- | -----------------------------



As of December
31, 2019, the Company did not have unfunded commitments and was not subject to any legal proceedings, although the Company may,
from time to time, be involved in litigation arising out of operations in the normal course of business or otherwise.



|6. | Investments
|-- | -----------



The Company
commenced operations on August 7, 2019; however, for the fiscal period ended December 31, 2019, the Company has not entered into
any investment activities.



|7. | Fair Value of Investments
|-- | -------------------------



Fair value
is defined as the price that the Company would receive upon selling an investment or paying to transfer a liability in an orderly
transaction to a market participant in the principal or most advantageous market for the investment. Accounting guidance emphasizes
that valuation techniques maximize the use of observable market inputs and minimize the use of unobservable inputs.



The valuation
hierarchical levels are based upon the transparency of the inputs to the valuation of the investment as of the measurement date.
The three levels are defined as follows:



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





F-14







Level 2
— Valuations based on inputs other than quoted prices in active markets included in Level 1, which are either directly or
indirectly observable at the measurement date. This category includes quoted prices for similar assets or liabilities in active
markets, quoted prices for identical or similar assets or liabilities in non-active markets including actionable bids from third
parties for privately held assets or liabilities, and observable inputs other than quoted prices such as yield curves and forward
currency rates that are entered directly into valuation models to determine the value of derivatives or other assets or liabilities.



Level 3
— Valuations based on inputs that are unobservable and where there is little, if any, market activity at the measurement
date.



The inputs
for the determination of fair value may require significant management judgment or estimation and are based upon management’s
assessment of the assumptions that market participants would use in pricing the assets or liabilities. These investments include
debt and equity investments in private companies or assets valued using the market or income approach and may involve pricing models
whose inputs require significant judgment or estimation because of the absence of any meaningful current market data for identical
or similar investments. The inputs in these valuations may include, but are not limited to, capitalization and discount rates,
earnings before interest, taxes, depreciation, and amortization (“EBITDA”) multiples. The information may also include
pricing information or broker quotes, which include a disclaimer that the broker would not be held to such a price in an actual
transaction. The non-binding nature of consensus pricing and/or quotes accompanied by disclaimer would result in classification
as Level 3 information, assuming no additional corroborating evidence.



Pricing inputs
and weightings applied to determine fair value require subjective determination. Accordingly, valuations do not necessarily represent
the amounts that may eventually be realized from sales or other dispositions of investments.



A financial
instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to
the fair value measurement.



The following table presents the fair value hierarchy as of December 31, 2019.



|Description      |  | Level 1 |           |  | Level 2 |   |   | Level 3 |  |   | Total | 
|---------------- |  | ------- | --------- |  | ------- | - | - | ------- |  | - | ----- | 
|Cash Equivalents |  | $       | 8,000,000 |  |         | $ | - |         |  | $ | -     | 
|Total            |  | $       | 8,000,000 |  |         | $ | - |         |  | $ | -     | 



|8. | Net Assets
|-- | ----------



Common Stock Issuances

On August 7, 2019, Muzinich & Co., Inc.,
an affiliate of the Adviser, committed to contribute $1,000 of capital to the Company. In exchange for this contribution, Muzinich
& Co., Inc. received 10 shares of common stock of the Company at $100 per share. For the period August 7, 2019 (commencement
of operations) through December 31, 2019, the Company had further common stock issuances, as detailed in the following table.



|Date               |  | Shares issued and sold |         |  | Aggregate purchase price |  
|------------------ |  | ---------------------- | ------- |  | ------------------------ | -
|September 25, 2019 |  |                        | 9,000   |  |                          | $
|November 20, 2019  |  |                        | 70,869  |  |                          | $
|December 13, 2019  |  |                        | 120,000 |  |                          | $
|December 30, 2019  |  |                        | 200,000 |  |                          | $



Distributions

For the period August 7, 2019 (commencement of operations)
through December 31, 2019, the Company did not declare distributions.



|9. | Earnings Per Share
|-- | ------------------



In accordance
with the provisions of ASC Topic 260, Earnings per Share(“ASC 260”), basic and diluted net decrease in net
assets resulting from operations per common share is computed by dividing the net decrease in net assets resulting from operations
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 December 31, 2019, there were
no dilutive shares.





F-15







The following
table sets forth the computation of basic and diluted earnings per common share for the period August 7, 2019 (commencement of
operations) through December 31, 2019:





|                                                                                            |  | For the Period August 7, 
2019 |         
|------------------------------------------------------------------------------------------- |  | ------------------------------ | --------
|                                                                                            |  | (commencement of operations)   |         
|                                                                                            |  | through December 31, 
2019     |         
|Net decrease in net assets resulting from operations                                        |  | $                              | (684,619
|Weighted average common shares of common stock outstanding - basic and diluted              |  |                                | 66,729  
|Basic and diluted net decrease in net assets
    resulting from operations per common share |  | $                              | (10.26  



|10. | Financial Highlights
|--- | --------------------



The following per common share
data has been derived from information provided in the financial statements. The following is a schedule of financial highlights
for the fiscal period from August 7, 2019 (commencement of operations) to December 31, 2019:



|                                                       |  | For the Period August 7, 
2019 (commencement of operations) through
    December 31, 2019 |           
|------------------------------------------------------ |  | ----------------------------------------------------------------------------------------- | ----------
|Per Common Share Operating Performance                 |  |                                                                                           |           
|Net Asset Value, Beginning of Period                   |  | $                                                                                         | 100.00    
|                                                       |  |                                                                                           |           
|Results of Operations:                                 |  |                                                                                           |           
|Net Operating Loss(1)                                  |  |                                                                                           | (1.71     
|Net Decrease in Net Assets Resulting from Operations   |  |                                                                                           | (1.71     
|                                                       |  |                                                                                           |           
|Capital Share Transactions                             |  |                                                                                           |           
|Issuance of Common Stock(2)                            |  |                                                                                           | (0.11     
|Net Decrease Resulting from Capital Share Transactions |  |                                                                                           | (0.11     
|                                                       |  |                                                                                           |           
|Net Asset Value, End of Period                         |  | $                                                                                         | 98.18     
|Shares Outstanding, End of Period                      |  |                                                                                           | 399,879   
|                                                       |  |                                                                                           |           
|Ratio/Supplemental Data                                |  |                                                                                           |           
|Net assets, end of period                              |  | $                                                                                         | 39,260,678
|Weighted-average shares outstanding(3)                 |  |                                                                                           | 66,729    
|Total Return(4)                                        |  |                                                                                           | (1.82     
|Portfolio turnover(5)                                  |  |                                                                                           | 0.00      
|Ratio of operating expenses to average net assets(6)   |  |                                                                                           | 8.54      
|Ratio of net operating loss to average net assets(6)   |  |                                                                                           | (8.51     



| | (1) | The per common share data was derived by using ending
shares outstanding.
| | --- | -------------------------------------------------------------------------



| | (2) | Represents offering costs charged to paid-in capital.
| | --- | -----------------------------------------------------



| | (3) | Calculated for the period September 25, 2019, the date
of the first external issuance of shares, through December 31, 2019.
| | --- | ---------------------------------------------------------------------------------------------------------------------------



| | (4) | Total return is based upon the change in net asset value
per share between the opening and ending net asset values per share and the issuance of common stock in the period. Total return
is not annualized.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | The Company commenced operations on August 7, 2019, with
the issuance of shares to the initial shareholder. As of December 31, 2019, the Company has not commenced investment activities.
Portfolio turnover is not annualized.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (6) | The ratios reflect an annualized amount. Non-recurring
expenses were not annualized. During the period, the Company incurred $388,109 of Organizational Expenses, which were deemed to
be non-recurring.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





F-16







|11. | Subsequent Events
|--- | -----------------



In preparing these financial
statements, the Company has evaluated events and transactions for potential recognition or disclosure through the date the financial
statements were issued. The Company has determined that there were no subsequent events that occurred during such period that would
require disclosure in this Form 10-K or would be required to be recognized in the financial statements as of December 31, 2019,
except as disclosed below.



On February 7, 2020, the Company
entered into a term loan with Ocular Partners HoldCo, LLC, with a commitment amount of $17,500,000.00. $8,250,000.00 of the commitment
amount is a funded term loan B-1 with an Original Issue Discount (“OID”) of $185,625.00 (2.25%), which bears an interest
rate of 7.50% plus 3-month LIBOR, and has an equity co-investment in Ocular Partners HoldCo, LLC of $1,000,000.00. The remaining
$9,250,000.00 of the commitment is unfunded and represents a delayed draw term loan B-1 that is valid for 24 months after closing.



On February 7, 2020, the Company
entered into a term loan with Wireless Telecom Group, Inc., with a commitment amount of $20,000,000.00. $8,400,000.00 of the commitment
amount is a funded term loan B with an OID of $210,000.00 (2.50%) and which bears an interest rate of 7.25% plus 3-month LIBOR.
The remaining $11,600,000.00 of the commitment is unfunded and represents a delayed draw term loan B that is valid for 90 days
after closing.



On March 18, 2020, Muzinich & Co., Inc. transferred 27,213.290 of its
shares of the Company’s common stock to certain purchasers for aggregate consideration of $2,721,329.00. After the transfer
Muzinich & Co., Inc. continues to own 14,662.635 shares of common stock in the Company.





The global public health crisis
which arose from the outbreak of the novel coronavirus disease (known as COVID-19) has caused considerable volatility and disruption
in financial markets. It is unknown what the impact will be on the global economy but the uncertainty and instability from COVID-19
for a prolonged period could have an adverse impact on Company’s business, opportunities, operations, financial condition
and cash flows.





F-17







Item
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure



There are not and have not been any disagreements between the
Company and its accountant on any matter of accounting principles, practices, or financial statement disclosure.



Item
9A. Controls and Procedures



(a) Evaluation of Disclosure Controls
and Procedures



As of December 31, 2019 (the end of the
period covered by this report), our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the
effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the 1934 Act).
Based on that evaluation, our management, including the Chief Executive Officer 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 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 Chief Executive Officer 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.



(b) Report of Management on Internal
Control over Financial Reporting



Management is responsible for establishing
and maintaining adequate internal control over financial reporting, and for performing an assessment of the effectiveness of internal
control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with U.S. GAAP. The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain
to assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with U.S. GAAP, and that receipts and expenditures of the Company are being made only in accordance
with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect
on the financial statements.



Management performed an assessment of the
effectiveness of the Company’s internal control over financial reporting as of December 31, 2019 based upon the criteria
in the 2013 Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Based on management’s assessment, management determined that the Company’s internal control over
financial reporting was effective as of December 31, 2019.



Due to the Company’s status as an
“emerging growth company” under the JOBS Act, the Company was not required to obtain an attestation report from the
Company’s independent registered public accounting firm on the Company’s internal control over financial reporting
as of December 31, 2019.



Item 9B. Other Information



Not applicable.



53







PART III.



Item
10. Directors, Executive Officers and Corporate Governance



Holders of our common stock will vote for the election of directors.
Under our Certificate of Incorporation, our Board of Directors will be divided into three classes. Each class of directors will
generally hold office for a three-year term. However, the initial members of the three classes will have initial terms of one,
two, and three years, respectively. As a result, only one class of directors will be up for election at each annual meeting. At
each annual meeting of our stockholders following our adoption of a classified board, the successors to the class of directors
whose terms expire at such meeting will be elected to hold office for a term expiring at the annual meeting of stockholders held
in the third year following the year of their election.



Each director will hold office for the term to which he or she
is elected or appointed and until his or her successor is duly elected and qualifies, or until his or her earlier death, resignation,
removal or disqualification.



Directors



The address for each director is c/o Muzinich BDC, Inc., 450
Park Avenue, New York, New York 10022. Information regarding the Board is as follows:



|Name                   |  | Age |  | Position(s)                                                                       |  | Expiration of Term
|---------------------- |  | --- |  | --------------------------------------------------------------------------------- |  | ------------------
|Independent Directors: |  |     |  |                                                                                   |  |                   
|Kathleen T. Barr       |  | 64  |  | Independent Director                                                              |  | 2020              
|Eric W. Falkeis        |  | 45  |  | Independent Director                                                              |  | 2021              
|Steven J. Paggioli     |  | 69  |  | Independent Director                                                              |  | 2022              
|Interested Directors:  |  |     |  |                                                                                   |  |                   
|Paul Fehre             |  | 56  |  | Director, Interim Chairperson of the Board, Chief Financial Officer and Treasurer |  | 2021              
|Eric A. Green          |  | 58  |  | Director                                                                          |  | 2022              



Executive Officers who are not Directors



Information regarding our executive officers who are not directors
is as follows:



|Name          |  | Age |  | Position(s)                          
|------------- |  | --- |  | -------------------------------------
|Jeffrey Youle |  | 60  |  | Chief Executive Officer and President
|Cheryl Rivkin |  | 49  |  | Secretary                            



Biographical Information



Directors



Our Board of Directors are divided into two groups—interested
directors and the Independent Directors. Interested directors are interested persons as defined in Section 2(a)(19) of the Investment
Company Act.





54







Interested Directors



Eric A. Green. From August 2019 until March 2020, Mr.
Green had served as our Chairperson of the Board, Chief Executive Officer and President. Mr. Green was also previously the Co-head
of Muzinich’s Global Private Markets group. He has over 30 years of experience investing debt and equity in middle-market
companies in the United States and Europe. Before joining Muzinich in 2012, he was a Managing Director of Cyrus Capital Partners.
Previously, Mr. Green held a number of senior positions in middle-market investing, including Senior Partner and Portfolio Manager
of FriedbergMilstein. He was also a Partner and Managing Director of JP Morgan Partners where he was Co-head of its $1 billion
mezzanine debt business. Prior to his role at JP Morgan Partners, he served as Managing Director of the Merchant Banking group
at BNP Paribas. He started his career at GE Company/GE Capital. Mr. Green graduated from Wabash College with a B.A. in Economics
and received an M.B.A. from the Stern School of Business at New York University.



Paul Fehre. Mr. Fehre was appointed as our Chief Financial
Officer and Treasurer in August 2019. In March 2020, Mr. Fehre was appointed Interim Chairperson of the
Board. Mr. Fehre currently serves as the Chief Operating Officer of Muzinich & Co., Inc. Prior
to joining Muzinich in 2014, Mr. Fehre was Managing Director and Head of Investment Operations for New York Life Investment Management,
where he spent 10 years leading the operations, technology delivery, marketing, client services, administration, and financial
functions supporting the Fixed Income Investors division of the firm. Previously, he managed product and project management functions
to support the Investor Services division at J.P. Morgan Chase. He also managed the corporate treasury and investment accounting
functions at CNA Financial. Mr. Fehre earned a B.S. in Finance and Accounting at Rider University. He holds the Chartered Financial
Analyst designation.



Independent Directors



Kathleen T. Barr. Ms. Barr has substantial registered
investment company experience, including her role as Vice Chair of the Governing Council for the Independent Directors Council
and its Executive Committee. She has executive experience as the former owner of a registered investment adviser (Productive Capital
Management, Inc.), the Chief Administrative Officer, Senior Vice President and Senior Managing Director of Allegiant Asset Management
Company (merged with PNC Capital Advisers LLC in 2009), and the Chief Administrative Officer, Chief Compliance Officer and Senior
Vice President of PNC Funds and PNC Advantage Funds (f/k/a Allegiant Funds). Ms. Barr also currently serves on the board of other
registered investment companies (William Blair Funds and Professionally Managed Portfolios) and the Board of Governors of the Investment
Company Institute. Ms. Barr holds a B.A. in Business Administration from the University of Pittsburgh.



Eric W. Falkeis. Mr. Falkeis has substantial experience
with registered investment companies and financial, accounting, investment and regulatory matters through his former positions
as Senior Vice President and Chief Financial Officer (and other positions) of U.S. Bancorp Fund Services, LLC, a full service provider
to registered investment companies and alternative investment products. Mr. Falkeis currently serves as Chief Executive Officer
of Tidal ETF Services LLC, and he has experience consulting with investment advisors regarding the legal structure of investment
companies, distribution channel analysis, marketing and actual distribution of those funds. Mr. Falkeis also has substantial managerial,
operational and risk oversight experience through his former positions as Chief Operating Officer and Trustee of the Direxion Funds
and the Direxion Exchange Traded Funds. Mr. Falkeis also currently serves on the board of Professionally Managed Portfolios. Mr.
Falkeis holds a Bachelor’s degree in Accounting from Marquette University and is a Certified Public Accountant.



Steven J. Paggioli. Mr. Paggioli has substantial investment
company and investment advisory experience, and he currently serves as an independent consultant on investment company and investment
advisory matters. He has held a number of senior positions with investment company and investment advisory organizations and related
businesses, including Executive Vice President, Director and Principal of the Wadsworth Group (fund administration, distribution
transfer agency and accounting services). He serves on the boards of several investment management companies and advisory firms.
He has served on various industry association and self-regulatory committees and formerly worked on the staff of the SEC. Mr. Paggioli
also currently serves on the boards of other registered investment companies (Professionally Managed Portfolios and AMG Funds),
in addition to serving on the Board of Governors of the Investment Company Institute and on the Governing Council of the Independent
Directors Council. Mr. Paggioli holds a B.A. in Political Science from the University of Connecticut and a J.D. from the University
of Connecticut School of Law.



Executive Officers who are not Directors



Jeffrey Youle. Mr. Youle was appointed as our Chief Executive
Officer and President in March 2020. Mr. Youle is Muzinich’s Head of US Private Debt and has over 30 years of experience
in originating, structuring and investing in private debt and equity of middle market companies. Prior to joining Muzinich, he
was a Managing General Partner of Global Leveraged Capital Management LLC, a firm he co-founded in 2005, and grew capital under
management to $1.1 billion, at its peak. Previously, he held a number of senior management positions during his 17 years with BNP
Paribas, including Head of US Corporate Investment Banking and Executive Committee member, Head of North America Acquisition Finance
& Loan Structuring, and Head of NY Merchant Banking, amongst other senior positions. Mr. Youle received his B.A. in Economics
from Albion College and his M.B.A. in Finance from The University of Michigan.



55









Cheryl Rivkin. Ms. Rivkin was appointed as our Secretary
in August, 2019. Ms. Rivkin currently serves as Muzinich’s Chief Administrative Officer & Director, Compliance. Prior
to joining Muzinich in 2003, Ms. Rivkin was a Vice President at GSC Partners, a US and U.K.-based investment adviser specializing
in corporate debt including distressed and mezzanine debt, as well as structured products. Previously, she served as a Director
for distressed debt and equity hedge fund investment adviser, Morgens, Waterfall, Vintiadis & Co., Inc. Ms. Rivkin earned a
B.A., magna cum laude and Phi Beta Kappa, from Mount Holyoke College where she was a Sarah Williston Scholar, and an M. Phil. in
Modern Middle Eastern Studies from Oxford University where she was a Marshall Scholar focusing on development economics and oil
policy.



Audit Committee



The members of the Audit Committee are Kathleen T. Barr, Eric
W. Falkeis and Steven J. Paggioli, each of whom meets the current independence and experience requirements of Rule 10A-3 of the
Exchange Act and none of whom would be an “interested person” of the Company as defined in Section 2(a)(19) of the
Investment Company Act. Mr. Falkeis serves as Chairperson of the Audit Committee. Our Board of Directors has determined that each
of Ms. Barr, Mr. Falkeis and Mr. Paggioli is an “audit committee financial expert” as defined under Item 407 of Regulation
S-K of the Securities Exchange Act of 1934. The Audit Committee will be responsible for overseeing matters relating to the appointment
and activities of our auditors, audit plans and procedures, various accounting and financial reporting issues and changes in accounting
policies, and reviewing the results and scope of the audit and other services provided by our independent public accountants. The
Audit Committee will also be responsible for aiding our Board of Directors in fair value pricing debt and equity securities that
are not publicly traded or for which current market values are not readily available.



Governance and Nominating Committee



The members of the Governance and Nominating Committee are Kathleen
T. Barr, Eric W. Falkeis and Steven J. Paggioli, none of whom would be an “interested person” as defined in Section
2(a)(19) of the Investment Company Act. Ms. Barr serves as the Chairperson of the Governance and Nominating Committee. The Governance
and Nominating Committee will be responsible for identifying, researching and nominating directors for election by our stockholders,
selecting nominees to fill vacancies on our Board of Directors or a committee of the Board of Directors, developing and recommending
to the Board of Directors a set of corporate governance principles and overseeing the evaluation of the Board of Directors and
our management. The Governance and Nominating Committee will consider nominees properly recommended by our stockholders.



Code of Ethics



The Company and the Adviser have each adopted a single code
of ethics pursuant to Rule 17j-1 under the Investment Company Act and Rule 204A-1 under the Advisers Act, respectively. These codes
of ethics establish, among other things, procedures for personal investments and restrict certain personal securities transactions,
including transactions in securities that are held by us. Personnel subject to each code may invest in securities for their personal
investment accounts, so long as such investments are made in accordance with the code’s requirements.



Item 11. Executive Compensation



Compensation of Executive Officers



We do not currently have any employees and do not expect to
have any employees, but we do have officers and directors. Each of our initial executive officers is an employee of our Adviser
and/or one of its affiliates. Our day-to-day investment operations will be managed by our Adviser. Most of the services necessary
for the origination and management of our investment portfolio will be provided by investment professionals employed by our Adviser
and/or its affiliates.



None of our executive officers will receive direct compensation
from us. Certain of our executive officers and other members of our Investment Team, through their ownership interest in or management
positions with our Adviser, may be entitled to a portion of any profits earned by our Adviser or its affiliates (including any
fees payable to our Adviser under the terms of our Investment Management Agreement, less expenses incurred by our Adviser in performing
its services under our Investment Management Agreement). Our Adviser or its affiliates may pay additional salaries, bonuses, and
individual performance awards and/or individual performance bonuses to our executive officers in addition to their ownership interest.



56







Compensation of Independent Directors



Each Independent Director will be compensated with an annual
fee of $50,000 for his or her services as one of our directors and as a member of the Audit Committee and Governance and Nominating
Committee. The Chairperson and Committee Chairs may receive additional compensation for their services. The Independent Directors
of the Board of Directors and each committee will also be reimbursed for travel and other expenses incurred in connection with
attending meetings. We may also pay the incidental costs of a director to attend training or other types of conferences relating
to the BDC industry. The following table sets forth compensation of the Company’s independent directors for the fiscal period
ended December 31, 2019.





|Name               |  | Fees
    
Earned (1) |        |  | Stock
    
Awards (2) |   |   | All Other
    Compensation |  |   | Total | 
|------------------ |  | -------------------- | ------ |  | --------------------- | - | - | -------------------------- |  | - | ----- | 
|Kathleen T. Barr   |  | $                    | 21,228 |  |                       | $ | - |                            |  | $ | -     | 
|Eric W. Falkeis    |  | $                    | 21,228 |  |                       | $ | - |                            |  | $ | -     | 
|Steven J. Paggioli |  | $                    | 21,228 |  |                       | $ | - |                            |  | $ | -     | 





| | (1) | No compensation is paid to our directors who are “interested
persons,” as such term is defined in Section 2(a)(19) of the 1940 Act.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------



| | (2) | We do not maintain a stock or option plan, non-equity
incentive plan or pension plan for our directors.
| | --- | -------------------------------------------------------------------------------------------------------



Item 12. Security Ownership of Certain
Beneficial Owners and Management and Related Stockholder Matters



The following table sets forth, as of March 27, 2020, the beneficial
ownership of each director and executive officer of the Company, and the executive officers and directors as a group.



Beneficial ownership is determined in accordance with the rules
of the SEC and includes voting or investment power with respect to the securities. Unless otherwise indicated, the Company believes
that each beneficial owner set forth in the table has sole voting and investment power and has the same address as the Company.
Our address is 450 Park Avenue, New York, New York 10022.





|                                                                |  | Number of Shares |           |  |              | 
|--------------------------------------------------------------- |  | ---------------- | --------- |  | ------------ | 
|                                                                |  | Owned            |           |  | Percentage   | 
|Name and Address of Beneficial Owner                            |  | Beneficially (1) |           |  | of Class (2) | 
|Interested Directors                                            |  |                  |           |  |              | 
|Eric A. Green                                                   |  |                  | 1,066.317 |  |              | 
|Paul Fehre                                                      |  |                  | -         |  |              | 
|Independent Directors                                           |  |                  |           |  |              | 
|Kathleen T. Barr                                                |  |                  | -         |  |              | 
|Eric W. Falkeis                                                 |  |                  | -         |  |              | 
|Steven J. Paggioli                                              |  |                  | -         |  |              | 
|Executive Officers                                              |  |                  |           |  |              | 
|Jeffrey Youle                                                   |  |                  | 1,066.317 |  |              | 
|Cheryl Rivkin                                                   |  |                  | -         |  |              | 
|All executive officers and directors as a group (seven persons) |  |                  | 2,132.634 |  |              | 





| | (1) | Beneficial ownership has been determined in accordance
with Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Based on a total of 399,878.750 Company’s shares
issued and outstanding on March 27, 2020.
| | --- | ------------------------------------------------------------------------------------------





57







Set forth below is the dollar range of equity securities beneficially
owned by each of our directors as of March 27, 2020. We are not part of a “family of investment companies,” as that
term is defined in the 1940 Act.





|                      |  | Dollar Range of Equity Securities
|--------------------- |  | ---------------------------------
|Name of Director      |  | Beneficially
    Owned (1)(2)    
|Interested Directors  |  |                                  
|Eric A. Green         |  | Over $100,000                    
|Paul Fehre            |  | None                             
|Independent Directors |  |                                  
|Kathleen T. Barr      |  | None                             
|Eric W. Falkeis       |  | None                             
|Steven J. Paggioli    |  | None                             



| | (1) | The dollar ranges are: None, $1-$10,000, $10,001-$50,000,
$50,001-$100,000, or Over $100,000.
| | --- | ---------------------------------------------------------------------------------------------



| | (2) | Beneficial ownership has been determined in accordance
with Rule 16a-1(a)(2) of the Exchange Act.
| | --- | -------------------------------------------------------------------------------------------------



Item 13. Certain Relationships and Related
Transactions, and Director Independence



Potential Conflicts of Interest



The following are descriptions of certain conflicts and potential
conflicts that may be associated with the financial or other interests that the Adviser may have in transactions effected by, with
and on behalf of the Company. They are not, and are not intended to be, a complete enumeration or explanation of all of the potential
conflicts of interest that may arise.



Our Adviser or its subsidiaries and affiliates and their respective
directors, members, officers, partners and employees (collectively, the “Parties”), including those involved in the
investment management of the Company, are or may be involved in other financial, investment and professional activities which may
cause a conflict of interest with the management of the Company and/or their respective roles with respect to the Company. In particular,
our Adviser and its affiliates may have proprietary interests in, or manage and advise, other accounts or funds which have investment
objectives similar or dissimilar to those of the Company and/or which engage in transactions in the same types of securities or
other instruments as the Company. Our Adviser is not obligated to buy or sell for the Company any security or other investment
that it or any of its affiliates may buy, sell or recommend for any other client or for its or any such affiliate’s own account.
As a result of conflicts of interest that may arise on account of the provision of investment advisory and other services to clients
other than the Company, our Adviser and its affiliates may have differing economic interests in respect of such activities and
may have conflicts of interest in allocating investment opportunities and time between the Company and other accounts.



Each of the Parties will use reasonable efforts to ensure that
the performance of its respective duties will not be impaired by any such involvement it may have and that any conflicts which
may arise will be resolved fairly.



From time to time, certain investment opportunities for the
Company (including opportunities to sell investments) may come to the attention of our Adviser by virtue of the fact that our Adviser,
or one of its clients or affiliated persons, is willing to sell or purchase such investment. In some circumstances, a potential
conflict of interest may arise because our Adviser or its affiliates may be acting for one or more clients, including the Company,
and for itself or on behalf of another client. Our Adviser has adopted and implemented policies and procedures, to which our Adviser
is subject, including brokerage and trade allocation policies and procedures which it believes address the conflicts associated
with managing multiple accounts of different types with similar and dissimilar investment objectives and guidelines. It is the
policy of our Adviser that investment decisions for the Company be made based on a consideration of its investment objective, policies,
and strategies, and that investment transactions be fairly allocated among its clients, including the Company.



58







Our Adviser expects to put in place a conflict resolution policy
that addresses the co-investment restrictions set forth under the Investment Company Act. Our Adviser will seek to ensure an equitable
allocation of investment opportunities when we are able to invest alongside other accounts managed by our Adviser and its affiliates.
When we invest alongside such other accounts as permitted, such investments will be made consistent with the Investment Company
Act, the related guidance of the SEC staff and any allocation policies adopted by our Adviser. It is our policy to base our determinations
as to the amount of capital available for investment on such factors as the amount of cash on hand, existing commitments and reserves,
if any, the targeted leverage level, the targeted asset mix and diversification requirements and other investment policies and
restrictions to be set by our Board of Directors, or imposed by applicable laws, rules, regulations or interpretations. We expect
that these determinations will be made similarly for other accounts. In situations where co-investment with other entities sponsored
or managed by our Adviser or its affiliates is not permitted or appropriate, such as when there is an opportunity to invest in
different securities of the same issuer, our Adviser and/or its affiliates, as applicable, will need to decide whether we or such
other entity or entities will proceed with the investment. Our Adviser and/or its affiliates, as applicable, will make these determinations
based on their respective policies and procedures. The Company, our Adviser and Muzinich have submitted an exemptive application
to the SEC to permit greater flexibility to negotiate the terms of co-investments if our Board of Directors determines that it
would be advantageous for us to co-invest with other accounts managed by our Adviser or its affiliates in a manner consistent with
our investment objective, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent
limitations. Any such order, if issued, would be subject to certain terms and conditions and there can be no assurance that any
such order will be granted by the SEC.



From time to time, Muzinich may, but is not obligated to, offer
co-investment opportunities to stockholders and/or other third parties, which it may select in its sole discretion, either directly
or through partnerships, joint ventures or other similar entities or arrangements. Any opportunity to participate in a co-investment
will be subject to the Adviser’s allocation policy and applicable regulatory requirements. There is no guarantee that stockholders
will be offered co-investment opportunities, and no stockholder has a right to participate in any co-investment opportunity. To
the extent co-investment opportunities arise, co-investment opportunities may, and likely would, be offered to some and not other
investors, in the sole discretion of the Adviser or its related persons and the Adviser has no obligation to offer a similar opportunity
to any other investor. In determining to offer any co-investment opportunity in a specific investment, the Adviser will generally
first determine the appropriate amount of such investment to be allocated to the Adviser’s clients, before allocating any
portion of such portfolio investment to one or more co-investors.



Our Adviser has adopted a Code of Ethics, which is designed
to identify and address certain conflicts of interest between personal investment activities and the interests of investment advisory
clients. The Code of Ethics permits access persons of our Adviser to engage in personal securities transactions, including with
respect to securities held by the Company, subject to certain requirements and restrictions. Among other things, the Code of Ethics
prohibits certain types of transactions absent prior approval and requires the quarterly and annual reporting of securities transactions
and annual reporting of holdings. Exceptions to certain provisions of the Code of Ethics may be granted in particular circumstances
after review by appropriate officers or compliance personnel.



Our Adviser or its affiliates may compensate one or more broker-dealers,
investment advisers, or other financial intermediaries for placing common stock of the Company, or for referrals and client servicing
including both one-time fees and ongoing fees based on a percentage of assets.



In the event of a conflict between the interests of the Company
and the interests of our Adviser, our Adviser shall make a determination in the best interests of the Company.



Prospective investors should understand that (i) the relationships
among the Company, our Adviser and its affiliates, and the other accounts managed by our Adviser and/or its affiliates, are complex
and dynamic and (ii) as our Adviser’s, its affiliates’, and the Company’s businesses change over time, our Adviser
and its affiliates may be subject, and the Company may be exposed, to new or additional conflicts of interest. There can be no
assurance that this Form 10-K addresses or anticipates every possible current or future conflict of interest that may arise or
that is or may be detrimental to the Company. Prospective investors should consult with their own advisors regarding the impact
that the conflicts of interest described in this Form 10-K may have on their investment in the Company.



Lack of Exclusivity



The personnel of our Adviser will devote as much of their time
to the activities of the Company as they deem necessary and appropriate. Our Adviser and its affiliates and their personnel are
not restricted from forming additional investment funds, entering into other investment advisory relationships or engaging in other
business activities, even if such activities may be in competition with the Company and/or may involve substantial time and resources
of our Adviser, its affiliates or their personnel. These activities could be viewed as creating a conflict of interest in that
the time and effort of our Adviser (including its investment team) and its affiliates or their personnel will not be devoted exclusively
to the business of the Company but will be allocated among the Company and the other advisees of our Adviser.



59







Cross Trades



When permitted by applicable law and the Adviser’s and
the Company’s policies, the Adviser, acting on the Company’s behalf, may enter into transactions in securities and
other instruments with or through other accounts managed by the Adviser or its affiliates, and may cause the Company to engage
in transactions with which the Adviser and/or its affiliates advise both sides of a transaction (each such transfer, a “Cross
Trade”). The Adviser may execute a Cross Trade for a variety of reasons, including, without limitation, tax purposes, liquidity
purposes, to rebalance the portfolios of the accounts or to reduce transaction costs that may arise in an open market transaction.
Before engaging in a Cross Trade, the Adviser must first determine that the trade is in the best interests of both of the accounts
involved and take steps to ensure that the transaction is consistent with the duty to obtain best execution for each such account.
There may be potential conflicts of interest or regulatory restrictions relating to these transactions which could limit the Adviser’s
ability to engage in these transactions for the Company.



Selection of Broker-Dealers



The Adviser has the authority to determine the broker-dealers
to be used in any securities transaction and has no obligation to deal with any particular broker-dealer in the execution of transactions
in portfolio securities. In placing orders for purchase and sale of securities and selecting brokers to effect these transactions,
the Adviser seeks prompt execution of orders at the most favorable prices reasonably obtainable and in doing so will consider a
number of factors, including, without limitation, the overall direct net economic result to the client (including commission or
spreads which may not be the lowest available but which ordinarily will not be higher than the generally prevailing competitive
range), the financial strength, reputation and stability of the broker, the efficiency with which the transaction is effected,
the ability to effect the transaction at all where a large block is involved, the availability of the broker to stand ready to
execute possibly difficult transactions in the future and other matters involved in the receipt of brokerage and research services.



Section 28(e) of the Exchange Act is a “safe harbor”
that permits an investment adviser to use commissions or “soft dollars” to obtain research and brokerage services that
provide lawful and appropriate assistance in the investment decision-making process. The Adviser does not intend to use “soft
dollars.” If in the future the Adviser chooses to use “soft dollars,” it will limit the use of “soft dollars”
to obtain research and brokerage services to services that constitute research and brokerage within the meaning of Section 28(e).
Under Section 28(e), the Adviser may pay a brokerage commission in excess of that which another broker-dealer might have charged
for the same transaction in recognition of research and brokerage-related services provided by the broker. Research services within
Section 28(e) may include, but are not limited to, research reports (including market research); certain financial newsletters
and trade journals; software providing analysis of securities portfolios; corporate governance research and rating services; attendance
at certain seminars and conferences; discussions with research analysts; meetings with corporate executives; consultants’
advice on portfolio strategy; data services (including services providing market data, company financial data and economic data);
advice from brokers on order execution; and certain proxy services. Brokerage services within Section 28(e) may include, but are
not limited to, services related to the execution, clearing and settlement of securities transactions and functions incidental
thereto (i.e., connectivity services between an investment adviser and a broker-dealer and other relevant parties such as custodians);
trading software operated by a broker-dealer to route orders; software that provides trade analytics and trading strategies; software
used to transmit orders; clearance and settlement in connection with a trade; electronic communication of allocation instructions;
routing settlement instructions; post trade matching of trade information; and services required by the SEC or a self-regulatory
organization such as comparison services, electronic confirms or trade affirmations.



Research and brokerage services obtained by the use of commissions
arising from the Company’s portfolio transactions may be used by the Adviser in its other investment activities and thus,
the Company may not necessarily, in any particular instance, be the direct or indirect beneficiary of the research or brokerage
services provided.





60







Aggregation (Bunching) of Trades



When appropriate, and subject to applicable law, the Adviser
may, but is not required to, aggregate client orders to achieve more efficient execution or to provide for equitable treatment
among accounts. When orders are aggregated (bunched), the Adviser generally seeks to allocate securities or other instruments pro-rata
subject to rounding the nearest round lot and tempered by available cash. At times, it is not possible to allocate pro rata after
the execution amount is known – for example when there is an Adviser and/or issuer imposed minimum lot size and a pro rata
method would result in the Company obtaining or selling no securities or other instruments. In addition to considerations of equity,
bunching avoids placing competing orders, improves order management, and may, because of larger order size, permit some degree
of price improvement or consistency relative to a series of individually placed orders.



Service Providers



The service providers to the Company may from time to time act
as director, manager, investment manager, prime broker, broker, custodian, registrar, administrator or dealer in relation to, or
otherwise be involved in, other investment funds that have similar objectives or investments as those held by the Company. It is
therefore possible that such service providers or their affiliated persons may, in the course of business, have potential conflicts
of interest with the Company. The Adviser will endeavor to ensure that such conflicts are resolved fairly. The Adviser will use
its best efforts to provide common stockholders with prior notice of any change to the Custodian and Administrator.



Co-Investment Opportunities



We expect to co-invest on a concurrent basis with certain accounts
managed by our Adviser and/or its affiliates, unless doing so is impermissible under existing regulatory guidance, applicable regulations
and our allocation procedures. In certain circumstances, negotiated co-investments may be made only if we receive an order from
the SEC permitting us to do so. We, our Adviser and certain of its affiliates have submitted an exemptive application to the SEC
to permit greater flexibility to negotiate the terms of co-investments if our Board of Directors determines that it would be advantageous
for us to co-invest with other accounts managed by our Adviser and/or its affiliates in a manner consistent with our investment
objective, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent limitations.
Any such order, if issued, would be subject to certain terms and conditions and there can be no assurance that any such order will
be granted by the SEC. Our fees payable to third parties relating to, or associated with, making investments and valuing potential
investments, including fees and expenses associated with performing due diligence reviews of prospective investments, that are
not consummated by us and our affiliates will be allocated between us and the affiliates on an equitable, proportional basis based
on the potential size of total investment.



Material Non-Public Information



Our senior management and other investment professionals from
our Adviser may serve as directors of, or in a similar capacity with, companies in which we invest or in which we are considering
making an investment. Through these and other relationships with a company, these individuals may obtain material, non-public information
that might restrict our ability to buy or sell securities of such company under the policies of the company or applicable law.



Investment Management Agreement



We are party to an Investment Management Agreement with our
Adviser pursuant to which we will pay our Adviser a fee for investment management services consisting of a base management fee
and an incentive fee. This fee structure may create an incentive for our Adviser to invest in certain types of securities. Additionally,
we rely on investment professionals from our Adviser to assist our Board of Directors with the valuation of our portfolio investments.



The management fee and incentive fee paid to our Adviser are
based on the value of our investments and there may be a conflict of interest when personnel of our Adviser are involved in the
valuation process for our portfolio investments. See also “Item 1. Business — Administration Agreement and Fund Accounting
Agreement.”



Placement Agent Agreement



We are party to a Placement Agent Agreement with Muzinich Capital
LLC (the “Placement Agent”) pursuant to which the Placement Agent provides certain services in connection with the
offering. The Placement Agent is an affiliate of the Adviser and these services will be provided on a fee-free basis.





61







Transfer Agent Servicing Agreement



We have entered into a transfer agent servicing agreement with
U.S. Bancorp Fund Services, LLC. (the “Transfer Agent Servicing Agreement”), pursuant to which U.S. Bancorp Fund Services,
LLC, as transfer agent, provides certain services in connection with the issuance of shares of our common stock. Under the terms
of the Transfer Agent Servicing Agreement, we indemnify and hold harmless the transfer agent, its affiliates and any agent under
certain circumstances and to the extent permitted by the Investment Company Act.



Director Independence



Pursuant to Section 56 of the 1940 Act, a majority of a
BDC’s board of directors must be comprised of persons who are not “interested persons,” as defined in Section 2(a)(19)
of the 1940 Act, of the Company or any of its affiliates.



Consistent with these considerations, after review of all relevant
transactions and relationships between each director, or any of his or her family members, and the Company, the Adviser, or of
any of their respective affiliates, the Board has determined that Ms. Barr and Messrs. Falkeis and Paggioli qualify as independent
directors. Each director who serves on the Audit Committee is an independent director for purposes of Rule 10A-3 under
the Exchange Act.



Item 14. Principal Accounting Fees and
Services



The Audit Committee and the independent directors of the board
of directors have selected Deloitte & Touche LLP (“Deloitte) to serve as the independent registered public accounting
firm for the Company for the fiscal period ending December 31, 2019.



Deloitte has advised us that neither the firm nor any present
member or associate of it has any material financial interest, direct or indirect, in the Company or its affiliates.



|                   |  | For the Period August
    7, |       
|------------------ |  | ---------------------------- | ------
|                   |  | 2019                         |       
|                   |  | (commencement of             |       
|                   |  | operations) through          |       
|Service:           |  | December
    31, 2019        |       
|Audit Fees         |  | $                            | 69,210
|Audit-Related Fees |  |                              | -     
|Tax Fees           |  |                              | 11,500
|All Other Fees     |  |                              | -     
|Total Fees:        |  | $                            | 80,710



Audit Fees: Audit fees consist of
fees billed for professional services rendered for quarterly reviews and services that are normally provided by Deloitte in connection
with statutory and regulatory filings.



Audit-Related Fees: Audit-related
services consist of fees billed for assurance and related services that are reasonably related to the performance of the audit
or review of our financial statements and are not reported under “Audit Fees.” These services include attest services
that are not required by statute or regulation and consultations concerning financial accounting and reporting standards.



Tax Services Fees: Tax services
fees consist of fees billed for professional tax services. These services also include assistance regarding federal, state, and
local tax compliance.



All Other Fees: Other fees would
include fees for products and services other than the services reported above.



Pre-Approval Policy: The Audit Committee
has established a pre-approval policy that describes the permitted audit, audit-related, tax and other services to be provided
by Deloitte, the Company’s independent registered public accounting firm. The policy requires that the Audit Committee pre-approve
the audit and non-audit services performed by the independent auditor in order to assure that the provision of such service does
not impair the auditor’s independence.



Any requests for audit, audit-related,
tax and other services that have not received general pre-approval must be submitted to the Audit Committee for specific pre-approval,
irrespective of the amount, and cannot commence until such approval has been granted. Normally, pre-approval is provided at regularly
scheduled meetings of the Audit Committee. However, the Audit Committee may delegate pre-approval authority to one or more of
its members. The member or members to whom such authority is delegated shall report any pre-approval decisions to the Audit Committee
at its next scheduled meeting. The Audit Committee does not delegate its responsibilities to pre-approve services performed by
the independent registered public accounting firm to management.

62







PART IV.



Item
15. Exhibits and Financial Statement Schedules



| | (a) | Financial Statements
| | --- | --------------------



| | (1) | The following financial statements are set forth in Item 8 of Part II:
| | --- | ----------------------------------------------------------------------



|                                                                                 | Page
|-------------------------------------------------------------------------------- | ----
|Report of Independent Registered Public Accounting Firm                          | F-2 
|Statement of Assets and Liabilities as of December 31, 2019                      | F-3 
|Statement of Operations for the fiscal period ended December 31, 2019            | F-4 
|Statement of Changes in Net Assets for the fiscal period ended December 31, 2019 | F-5 
|Statement of Cash Flows for the fiscal period ended December 31, 2019            | F-6 
|Schedule of Investments as of December 31, 2019                                  | F-7 
|Notes to Financial Statements                                                    | F-8 



| | (b) | Exhibits required to be filed by Item 601 of Regulation S-K
| | --- | -----------------------------------------------------------



Please note that the agreements included
as exhibits to this Form 10-K are included to provide information regarding their terms and are not intended to provide any other
factual or disclosure information about us or the other parties to the agreements. The agreements contain representations and warranties
by each of the parties to the applicable agreement that have been made solely for the benefit of the other parties to the applicable
agreement and may not describe the actual state of affairs as of the date they were made or at any other time.



The following exhibits
are filed as part of this report or hereby incorporated by reference to exhibits previously filed with the SEC:





|3.1  |  | Amended and Restated Certificate of Incorporation (1)                                                                   
|---- |  | ------------------------------------------------------------------------------------------------------------------------
|3.2  |  | Bylaws (1)                                                                                                              
|4.1  |  | Form of Subscription Agreement (1)                                                                                      
|10.1 |  | Investment Advisory Agreement between Muzinich BDC, Inc. and Muzinich BDC Adviser, LLC, as the  investment adviser (1)  
|10.2 |  | Administration Agreement between Muzinich BDC, Inc. and U.S. Bank, as the Administrator (1)                             
|10.3 |  | Custody Agreement between Muzinich BDC, Inc. and U.S. Bank National Association, as the custodian (1)                   
|10.4 |  | Form of Indemnification Agreement (1)                                                                                   
|21.1 |  | List of Subsidiaries – None                                                                                             
|31.1 |  | Certification
    of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended*
|31.2 |  | Certification
    of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended*
|32.1 |  | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*                     
|32.2 |  | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*                     












| | (1) | Previously filed as an exhibit to Amendment No. 2 to
the Registrant’s Registration Statement on Form 10 (File No. 000-56068) filed with the SEC on August 16, 2019.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



*Filed herewith.



63







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.



|                     | Muzinich BDC, Inc.
|-------------------- | ------------------
|Date: March 27, 2020
|                     | By:               
|                     | Name:             
|                     | Title:            



|Date: March 27, 2020 | By:    | /s/ Paul Fehre         
|-------------------- | ------ | -----------------------
|                     | Name:  | Paul Fehre             
|                     | Title: | Chief Financial Officer





64