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 Year Ended December 31, 2021



☐ 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 |  | Trading Symbol |  | Name of each exchange on 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control
over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm
that prepared or issued its audit report. ☐



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 91,894.6 shares of common stock,
$0.001 par value per share, outstanding as of March 30, 2022.




















|           | MUZINICH BDC, INC.                                                                              |  |         
|---------- | ----------------------------------------------------------------------------------------------- |  | --------
|           |                                                                                                 |  |         
|           | FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2021                                                  |  |         
|           | TABLE OF CONTENTS                                                                               |  |         
|           |                                                                                                 |  |         
|           | Index                                                                                           |  | Page No.
|PART I.    |                                                                                                 |  | 1       
|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.   |                                                                                                 |  | 40      
|Item 5.    | Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters |  | 40      
|Item 6.    | [Reserved]                                                                                      |  | 42      
|Item 7.    | Management’s Discussion and Analysis of Financial Condition and Results of Operations           |  | 43      
|Item 7A.   | Quantitative and Qualitative Disclosures About Market Risk                                      |  | 54      
|Item 8.    | Financial Statements and Supplementary Data                                                     |  | F-1     
|Item 9.    | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure            |  | 55      
|Item 9A.   | Controls and Procedures                                                                         |  | 55      
|Item 9B.   | Other Information                                                                               |  | 55      
|Item 9C.   | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections                             |  | 55      
|PART III.  |                                                                                                 |  | 56      
|Item 10.   | Directors, Executive Officers and Corporate Governance                                          |  | 56      
|Item 11.   | Executive Compensation                                                                          |  | 58      
|Item 12.   | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters  |  | 59      
|Item 13.   | Certain Relationships and Related Transactions, and Director Independence                       |  | 60      
|Item 14.   | Principal Accounting Fees and Services                                                          |  | 64      
|PART IV.   |                                                                                                 |  | 65      
|Item 15.   | Exhibits and Financial Statement Schedules                                                      |  | 65      
|Signatures |                                                                                                 |  | 66      





i







Summary of Risk Factors



Investing in the Company’s common stock involves
a high degree of risk. The following is only a summary of the principal risks that may materially affect our business. Please refer to
Item 1A for a complete discussion of the risk factors we face.



Risks Relating to Our Business and Structure



| | ● | We have a limited operating history.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ● | 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.                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ● | Our Adviser and its management have no prior experience managing a BDC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | ● | 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.                                                                                                                                                                                                                                                                                                                                                                                              
| | ● | 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.                                                                                                                                                                                                                                                                                                                                                                                                                          
| | ● | We will be dependent upon management personnel of Muzinich, and Muzinich’s ability to attract and
retain talented personnel, for our future success.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ● | Our Adviser and its affiliates, officers, investment professionals and employees may have certain conflicts
of interest.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ● | Our ability to grow depends on our ability to raise additional capital.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | ● | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ● | Controlling stockholders may exert influence over our management and affairs and control over votes requiring
stockholder approval.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ● | Our Board of Directors may change our investment objective, operating policies and strategies without
prior notice or stockholder approval.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ● | Our ability to enter into transactions with our affiliates will be restricted                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ● | We may be subject to risks associated with the discontinuance of LIBOR.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | ● | We may form one or more CLOs, which may subject us to certain structured financing risks.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | ● | 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.



Risks Related to Our Portfolio Company Investments



| | ● | Our investments are very risky and highly speculative.                                                                                                                                                                                                                                                                                                         
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ● | Investing in middle-market companies involves a number of significant risks.                                                                                                                                                                                                                                                                                   
| | ● | We will incur credit risk when we loan money or commit to loan money to a portfolio company.                                                                                                                                                                                                                                                                   
| | ● | 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 lack of liquidity in our investments may adversely affect our business                                                                                                                                                                                                                                                                                     
| | ● | 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.                                                                                    
| | ● | Loan prepayments may affect our ability to invest and reinvest available funds in appropriate investments.                                                                                                                                                                                                                                                     
| | ● | 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.                                                                                                                                                                                                                        
| | ● | Our failure to make follow-on investments in our portfolio companies could impair the value of our portfolio.                                                                                                                                                                                                                                                  
| | ● | Economic recessions or downturns could impair our portfolio companies and harm our operating results.                                                                                                                                                                                                                                                          
| | ● | Our debt investments may be risky and we could lose all or part of our investment.                                                                                                                                                                                                                                                                             





ii







| | ● | By originating loans to companies that are experiencing significant financial or business difficulties,
we may be exposed to distressed lending risks.  
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------
| | ● | 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.
| | ● | Declines in market prices and liquidity in the corporate debt markets can result in significant net unrealized
depreciation of our portfolio.           
| | ● | 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 be highly leveraged.                                                                                                        
| | ● | Our investments in non-U.S. companies may involve significant risks in addition to the risks inherent
in U.S. investments.                              



Risks Relating to the Offering and Ownership
of Our Common Stock



| | ● | Our common stock will be subject to significant transfer restrictions, and an investment in our common
stock generally will be illiquid.                                                                                                   
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ● | We will incur significant costs as a result of being subject to the Exchange Act.                                                                                                                                                          
| | ● | 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 may have difficulty paying our required distributions if we recognize taxable income before or without
receiving cash representing such income.                                                                                         
| | ● | Our stockholders may receive shares of our common stock as dividends, which could result in adverse tax
consequences to them.                                                                                                              
| | ● | 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.
| | ● | Non-U.S. stockholders may be subject to withholding of U.S. federal income tax on dividends we pay.                                                                                                                                        
| | ● | If the current period of capital market disruption and instability continues for an extended period of
time, there is a risk that our distributions may not grow over time and a portion of our distributions may be a return of capital.  



General Risk Factors



| | ● | We operate in a highly competitive market for investment opportunities.                                                                                                                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ● | We will be exposed to risks associated with changes in interest rates.                                                                                                                                                                                                                        
| | ● | The capital markets may experience periods of disruption, instability and uncertainty, including at present.
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.
| | ● | We are susceptible to cyber security risks that
    may result in financial losses or violations of privacy law.                                                                                                                                                                              
| | ● | The current COVID-19 crisis may have a negative impact on us and our Adviser.                                                                                                                                                                                                                 





iii







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 have elected to
be treated, and intend to qualify annually thereafter, as a regulated investment company (a “RIC”) under Subchapter M of the
Internal Revenue Code of 1986 (the “Code”) for U.S. federal income tax purposes. As a BDC and a RIC, we are 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.



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, which occurred on August 23, 2019 (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 have
invested and intend to further 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 have invested and expect to further invest in primary origination
investments, and we may also invest in 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), though our portfolio may be smaller if we are unable to raise additional capital. 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, tobacco, alcohol, cannabis,
pornography and gaming, and businesses with significant technology risk. While this approach is intended to manage certain risks associated
with these industries, it could also impact the Company’s performance by limiting the availability of potential investments.



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 held 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. 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, doing business as U.S. Bank Global Fund Services
(“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 have invested in primary origination
investments and expect to further 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), though our portfolio may be smaller if we are unable to raise additional capital. 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, tobacco, alcohol, cannabis,
pornography and gaming, and businesses with significant technology risk. While this approach is intended to manage certain risks associated
with these industries, it could also impact the Company’s performance by limiting the availability of potential investments.





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 a significant number of middle-market companies
seeking access to debt capital to support growth, there is substantial 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 (“CLOs”),
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 rights;
| | ● | costs of the offering or effecting any sales of, or repurchases
of, our common stock and other securities, if any;                                                                                                              
| | ● | 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;                                                                                                                                                                                                               





6







| | ● | 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, 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.



We have entered into a credit
facility, and may enter into a further credit facility or other debt arrangements, to partially fund our operations, and have incurred
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 therefore this statement concerning additional expenses is necessarily an estimate and may not match our actual results of
operations in the future.



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.





7







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, if 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 requirements. Accordingly, the Company has entered into a committed
facility agreement with BNP Paribas Prime Brokerage International, Limited (“BNP”) (the “Loan Agreement”) and
has engaged in borrowings under the Loan Agreement for this purpose. Although the Company expects to continue to be able to borrow under
the Loan Agreement as needed for this purpose, we are subject to the risk that BNP can terminate the Loan Agreement or that the amount
available to be borrowed thereunder will be insufficient to allow us to satisfy the applicable requirements.



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.



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.





8







Following the Initial Closing, we have held and
expect to hold further additional closings that may occur from time to time as determined by us. In connection with each subscription
agreement that we enter with 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).



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 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.





9







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. Subject to certain exemptive
rules, including Rule 12d1-4, which was recently adopted by the SEC, the Company may, subject to certain conditions, invest in other investment
companies in excess of such thresholds. 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.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------





10







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.                                                                                                           



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%
requirement described above under “Qualifying Assets”, 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.





11







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, 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.



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 an independent valuation firm 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 firm reviews 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. Each investment
in the entire portfolio will be reviewed by a third-party valuation firm at least annually;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | The Audit Committee of our Board of Directors reviews the preliminary valuations of the Adviser and the
“range of value” estimate supplied, at least once annually, by the independent valuation firm and determines the valuations
for recommendation to our Board of Directors; 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 respective independent valuation firm 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.





12







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.



In addition, except in limited circumstances, 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 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. For example:



| | ● | pursuant to Rule 13a-14 of the Exchange Act, our chief executive officer and chief financial officer must certify the accuracy of the financial statements contained in our periodic reports;                                                                                                                                                                                                                           
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ● | pursuant to Item 307 of Regulation S-K, our periodic reports must disclose our conclusions about the effectiveness of our disclosure controls and procedures;                                                                                                                                                                                                                                                           
| | ● | pursuant to Rule 13a-15 of the Exchange Act, our management must prepare an annual report regarding its assessment of our internal control over financial reporting; 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.





13







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 will
generally not own publicly traded equity securities and will primarily invest in securities that do not have voting rights. To the extent
that we invest in securities that do have voting rights, the Boardhas delegated our proxy voting responsibility to our Adviser.
The Proxy Voting Policies and Procedures of our Adviser are set forth below. This Policy is reviewed periodically by the Adviser and the
Company’s directors who are not “interested persons” and, accordingly, is subject to change.



Introduction



As an investment adviser registered under the
Advisers Act, the Adviser has a fiduciary duty to act in the Company’s best interests. As part of this duty, having accepted responsibility
to vote proxies for and respond to consent solicitations regarding Company portfolio holdings, the Adviser recognizes that it must act
in these regards in a timely manner, free of conflicts of interest, and in the Company’s best interests.



Process and Procedures



The Adviser votes proxies
relating to the Company’s portfolio securities in the best interest of the Company’s stockholders, taking into account such
factors as it deems relevant, in its sole good-faith discretion. The Adviser reviews, on a case-by-case basis, each proxy or consent solicitation
received to determine its impact on the pertinent portfolio interests held by the Company. In most cases the Adviser will vote in favor
of proposals that the Adviser believes are likely to increase the value of these interests. Although the Adviser generally votes against
proposals that may have a negative impact on any of the Company’s portfolio holdings, the Adviser may vote for such a proposal if
there exists compelling long-term reasons to do so.



The Adviser’s proxy voting decisions are made by the Adviser’s senior
Investment Team members. To ensure that the Adviser’s vote is not the product of a conflict of interest, the Adviser requires that
anyone involved in the decision-making process disclose to the Company’s Chief Compliance Officer any personal potential conflict
of interest that he or she is aware of and any contact that he or she has had with any interested party regarding a proxy vote. Personnel
involved in the decision-making or vote administration process are prohibited from revealing how the Adviser intends to vote on a proposal
in order to reduce any attempted influence from interested parties. Where conflicts of interest may be present, the Adviser discloses
such conflicts to the Company, including the Company’s independent directors, and may request guidance from the Company on how to
vote such proxies.



Proxy Voting Records



Company stockholders may obtain information without
charge about how the Adviser voted proxies by making a written request for proxy voting information addressed to: Muzinich BDC Adviser,
LLC, 450 Park Avenue, New York, NY 10022 -- Attention: Investor Relations.



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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            





14







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.



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;
| | - | ----------------------------------------------------------------





15







| | ● | 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.



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 have elected 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.





16







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 (together with the requirements described in the immediately preceding
bullet point, the “Diversification Tests”).



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
“Part I. 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.





17







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.



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.





18







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.



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.





19







Risks Relating to Our Business and Structure



We have a limited 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.



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 have elected 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  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.



The Company has in the past borrowed, and intends to continue to borrow,
to purchase assets in order to comply with certain regulatory requirements for RICs, including the Diversification Tests. Although the
Company expects to continue to be able to borrow under a loan agreement as needed for this purpose, we are subject to the risk that any
such loan agreement can be terminated by the lender and/or that the amount available to be borrowed thereunder will be insufficient to
allow us to satisfy the applicable requirements.



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 pursuant to the terms and conditions set forth in the exemptive order that we have obtained from the SEC.



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.



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.





23







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.



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.



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.





24







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 only be made pursuant to the terms and conditions set forth in the exemptive order that we have obtained from the SEC.



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.



On March 5, 2021, the United Kingdom Financial
Conduct Authority (the “FCA”) announced that Reference Rate settings will either cease to be provided by any administrator,
or no longer be representative immediately after December 31, 2021 for all GBP, EUR, CHF and JPY LIBOR settings and one-week and two-month
USD LIBOR settings, and immediately after June 30, 2023 for the remaining USD LIBOR settings, including one-month and three-month USD
LIBOR (the “Announcement”). Concurrent with the Announcement, the Federal Reserve Board, the Office of the Comptroller of
the Currency and the Federal Deposit Insurance Corporation released a statement that (i) encouraged banks to cease entering into new contracts
that use U.S. dollar LIBOR as a reference rate as soon as practicable and in any event by December 31, 2021, (ii) indicated that new contracts
entered into before December 31, 2021 should either utilize a Reference Rate other than U.S. dollar LIBOR or have robust fallback language
that includes a clearly defined alternative reference rate after the discontinuation of U.S. dollar LIBOR and (iii) explained that extending
the publication of certain U.S. dollar LIBOR tenors until June 30, 2023 would allow most legacy U.S. dollar LIBOR contracts to mature
before LIBOR begins experiencing disruptions. Nonetheless, the termination of certain Reference Rates presents risks to the Company because
there is no assurance that the composition or characteristics of any alternative Reference Rate will be similar to or produce the same
value or economic equivalence as existing Reference Rates or that will have the same volume or liquidity.



At this time, it is not possible to completely
identify or predict the effect of any such changes, any establishment of viable 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.



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.





25







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.



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.



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.





26







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.



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.



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.



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.





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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.                                                                                                                                                                  



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.





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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.



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.





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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.



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.





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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.



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 “Part I. Item 1A. Risk Factors — Risks Relating to Our Business and Structure — We have
a limited 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.





31







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.



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.





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



Pursuant to our investment strategy, we may make
investments in securities of non-U.S. companies, including companies located in emerging market countries, to the extent permissible under
the Investment Company Act. Such non-U.S. investments would not be 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. For example, in response
to the conflict between Russia and Ukraine, the U.S. and other countries have imposed sanctions, embargoes, and other restrictive actions
against Russia. Sanctions, export controls, tariffs, trade wars and other governmental actions resulting from the conflict between Russian
and Ukraine could have a material adverse effect on business, financial condition, cash flows and results of operations and could cause
the market value of our investments to decline.



Any investments we may make 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.



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.





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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 the Offering and Ownership
of Our Common Stock



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.



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.





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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.



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).





35







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 in light of our being a public reporting company 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.



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.





36







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.



If the current period of capital market disruption
and instability continues for an extended period of time, there is a risk that our distributions may not grow over time and a portion
of our distributions may be a return of capital.



We intend to make 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. Our ability to pay distributions might be adversely
affected by the impact of one or more of the risk factors described in this Annual Report on Form 10-K, including the COVID-19 pandemic
described above. For example, if the temporary closure of many corporate offices, retail stores, and manufacturing facilities and factories
in the jurisdictions, including the United States, affected by the COVID-19 pandemic were to continue for an extended period of time it
could result in reduced cash flows to us from our existing portfolio companies, which could reduce cash available for distribution to
our stockholders. In addition, if market disruptions (including disruptions to the energy markets), sanctions, or embargoes in connection
with the conflict between Russian and Ukraine continue or worsen, it could result in reduced cash flows to us from our portfolio companies,
which could reduce cash available for distribution to our stockholders. If we are unable to satisfy the asset coverage test applicable
to us under the 1940 Act as a BDC we may be limited in our ability to make distributions. To the extent we make distributions to stockholders
that include a return of capital, such portion of the distribution essentially constitutes a return of the stockholder’s investment.
Although such return of capital may not be taxable, such distributions would generally decrease a stockholder’s basis in our common
stock and may therefore increase such stockholder’s tax liability for capital gains upon the future sale of such stock. A return
of capital distribution may cause a stockholder to recognize a capital gain from the sale of our common stock even if the stockholder
sells its shares for less than the original purchase price.



General Risk Factors



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, 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.





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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.



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.



The capital markets may experience periods
of disruption, instability and uncertainty, including at present. 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.





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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.



The U.S. capital markets have experienced extreme volatility and disruption
following the global outbreak of COVID-19. Some economists and major investment banks have expressed concern that the continued spread
of the virus globally could lead to a world-wide economic downturn.  In addition, the recent conflict between Russia and Ukraine,
and the resulting sanctions, embargoes, and other restrictive actions against Russia, have contributed to significant volatility, disruptions,
and uncertainty, which could also lead to an economic downturn. An economic downturn could be expected to have an adverse effect on our
business, financial condition, results of operations and cash flows. These events may limit our investment originations, limit our ability
to grow and have a material negative impact on our operating results and the fair values of our debt and equity investments.



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 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 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.



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”) offer 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.





40







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 an independent valuation firm 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 firm reviews 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. Each investment
in the entire portfolio will be reviewed by a third-party valuation firm at least annually;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | The Audit Committee of our Board of Directors reviews the preliminary valuations of the Adviser and the
“range of value” estimate supplied, at least once annually, by the independent valuation firm and determines the valuations
for recommendation to our Board of Directors; 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 respective independent valuation firm 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.





41







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 have elected 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 “Part I. Item 1. Business – 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.



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. Reserved







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,
or other external factors, including the current COVID-19 pandemic and conflict between Russia and Ukraine;
| | ● | our business prospects and the prospects of our prospective portfolio companies, including our and their
ability to achieve our respective objectives as a result of the current COVID-19 pandemic;                                                                                                                  
| | ● | 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”)                                                                                                                                                                                                                        



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.





43







COVID-19 Developments



The rapid spread of the COVID-19 pandemic, and
associated impacts on the U.S. and global economies, has negatively impacted, and is likely to continue to negatively impact, the business
operations of some of our portfolio companies. We cannot at this time fully predict the impact of COVID-19 on our business or the business
of our portfolio companies, its duration or magnitude or the extent to which it will negatively impact our portfolio companies’
operating results or our own results of operations or financial condition. We expect that certain of our portfolio companies will continue
to experience economic distress for the foreseeable future and may significantly limit business operations if subjected to prolonged economic
distress. These developments could result in a decrease in the value of our investments.



The adverse effects of COVID-19 may require us
to restructure certain of our investments, which could result in reductions to our investment income or in impairments on our investments.
In addition, disruptions in the capital markets have resulted in illiquidity in certain market areas. These market disruptions and illiquidity
are likely to have an adverse effect on our business, financial condition, results of operations and cash flows. Unfavorable economic
conditions caused by COVID-19 can also be expected to increase our funding costs and limit our access to the capital markets. These events
may impact our investment originations.



We will continue to carefully monitor the impact
of the COVID-19 pandemic on our business and the business of our portfolio companies. Because the full effects of the COVID-19 pandemic
are not capable of being known at this time, we cannot estimate the impacts of COVID-19 on our financial condition, results of operations
or cash flows.



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 has
elected to be treated as a regulated investment company for federal income tax purposes. As such, we are 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.



As of December 31, 2021, the Company has raised capital commitments
from investors in the amount of $151,000,000. As of December 31, 2021, the Company has equity capital in the amount of $94,131,696. 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 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.





44







Expenses



Primary expenses 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;                                                                                                                                                                                                                                                                                                    
| | ● | 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 have entered into a credit
facility, and may enter into a further credit facility or other debt arrangements, to partially fund our operations, and have incurred
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 therefore this statement concerning additional expenses is necessarily an estimate and may not match our actual results of
operations in the future.



Portfolio and Investment
Activity



As of December 31, 2021, the Company had seven
debt investments, six equity investments and one warrant position in seven portfolio companies with an aggregate fair value of approximately
$68.4 million. As of December 31, 2021, our debt investments consisted entirely of senior secured loans. Short-term investments as of
December 31, 2021 consisted of United States Treasury bills that will expire within sixty days of purchase, with an aggregate fair value
of approximately $51.5 million.



The Company’s investment activity for the
years ended December 31, 2021 and 2020 is presented below (information presented herein is at cost unless otherwise indicated).





|                                                                          |  | For the year 
ended
 December 31, 
2021 |            |   | For the year 
ended
 December  31, 
2020 |  
|------------------------------------------------------------------------- |  | --------------------------------------- | ---------- | - | ---------------------------------------- | -
|New investments:                                                          |  |                                         |            |   |                                          |  
|Gross investment purchases                                                |  | $                                       | 37,970,802 |   |                                          | $
|Less: sold investments                                                    |  |                                         | (1,011,690 | ) |                                          |  
|Total new investments                                                     |  | $                                       | 36,959,112 |   |                                          | $
|                                                                          |  |                                         |            |   |                                          |  
|Principal/par/units amount of investments funded:                         |  |                                         |            |   |                                          |  
|Term loan debt investments                                                |  | $                                       | 33,423,750 |   |                                          | $
|Equity investments                                                        |  |                                         | 4,750,000  |   |                                          |  
|Warrants                                                                  |  |                                         |            |   |                                          |  
|                                                                          |  |                                         |            |   |                                          |  
|Number of new investment commitments                                      |  |                                         | 4          |   |                                          |  
|Average new investment commitment amount                                  |  | $                                       | 9,239,778  |   |                                          | $
|Weighted average maturity for new investment commitments                  |  |                                         | 6.2 years  |   |                                          |  
|Percentage of new debt investment commitments at floating rates           |  |                                         | 75         | % |                                          |  
|Percentage of new debt investment commitments at fixed rates              |  |                                         | 25         | % |                                          |  
|Weighted average spread LIBOR of new floating rate investment commitments |  |                                         | 9.78       | % |                                          |  





As of December 31, 2021 and 2020, the Company’s investments consisted
of the following:



|                                      |  | December  31, 2021 |             |  | December  31, 2020 |  
|------------------------------------- |  | ------------------ | ----------- |  | ------------------ | -
|                                      |  | Amortized          |             |  | Fair               |  
|                                      |  | Cost               |             |  | Value              |  
|Senior Secured Loan Debt Instruments1 |  | $                  | 59,091,426  |  |                    | $
|Equity Investments - Common Stock     |  |                    | 1,000,000   |  |                    |  
|Equity Investments - Preferred Stock  |  |                    | 4,854,405   |  |                    |  
|Warrants                              |  |                    | 156,811     |  |                    |  
|Short-Term Investments                |  |                    | 51,499,761  |  |                    |  
|Total Investments                     |  | $                  | 116,602,403 |  |                    | $



| | 1 | Disclosed as First Lien Term Loan Debt Investments as of December
31, 2020.
| | - | ---------------------------------------------------------------------------



The Adviser believes that actively managing
an investment allows it to identify problems early and work with companies to develop constructive solutions when necessary. The
Adviser will monitor our portfolio with a focus toward anticipating negative credit events. In seeking to maintain portfolio company
performance and to help ensure a successful exit, the Adviser will work closely with, as applicable, the lead equity sponsor,
portfolio company management, consultants, advisers and other security holders to discuss financial position, compliance with
covenants, financial requirements and execution of the company’s business plan. In addition, the Adviser’s personnel may
occupy a seat or serve as an observer on a portfolio company’s board of directors or similar governing body.





46







Typically, the Company will receive financial
reports detailing operating performance, sales volumes, margins, cash flows, financial position and other key operating metrics, typically
on a quarterly basis from portfolio companies. The Company will use this data, combined with the knowledge gained through due diligence
of the company’s customers, suppliers, competitors, market research and other methods, to conduct an ongoing assessment of the portfolio
company’s operating performance and prospects.



Results of Operations



The following table represents
the operating results for the years ended December 31, 2021 and 2020:



|                                                                |  | For the year 
ended
 December  31,
 2021 |           |  | For the year 
ended
 December  30, 
2020 |  
|--------------------------------------------------------------- |  | ---------------------------------------- | --------- |  | ---------------------------------------- | -
|Total investment income                                         |  | $                                        | 5,977,893 |  |                                          | $
|Total expenses                                                  |  |                                          | 1,615,673 |  |                                          |  
|Net investment income (loss)                                    |  |                                          | 4,362,220 |  |                                          |  
|Total net realized gains (losses)                               |  |                                          | 24,966    |  |                                          |  
|Total net change in unrealized appreciation/(depreciation)      |  |                                          | 2,968,642 |  |                                          |  
|Total net realized and unrealized appreciation/(depreciation)   |  |                                          | 2,993,608 |  |                                          |  
|Net increase (decrease) in net assets resulting from operations |  | $                                        | 7,355,828 |  |                                          | $



Investment Income



Investment income for the years
ended December 31, 2021 and 2020 was as follows:



|                                                             |  | For the year
 ended
 December  31, 
2021 |           |  | For the year
 ended
 December  30, 
2020 |  
|------------------------------------------------------------ |  | ---------------------------------------- | --------- |  | ---------------------------------------- | -
|Interest from term loan debt instruments and preferred stock |  | $                                        | 5,864,391 |  |                                          | $
|Commitment fees                                              |  |                                          | 111,703   |  |                                          |  
|Interest from cash and cash equivalents                      |  |                                          | -         |  |                                          |  
|Interest from short-term investments                         |  |                                          | 1,799     |  |                                          |  
|Total investment income                                      |  | $                                        | 5,977,893 |  |                                          | $





Investment income increased from $1,844,745 for
the year ended December 31, 2020 to $5,977,893 for the year ended December 31, 2021, primarily due to an increase in interest income as
a result of further investment activity subsequent to the year ended December 31, 2020.



Expenses



Operating expenses for the years
ended December 31, 2021 and 2020 was as follows:



|                         |  | For the year 
ended
 December 31, 
2021 |           |  | For the year 
ended
 December 30, 
2020 |  
|------------------------ |  | --------------------------------------- | --------- |  | --------------------------------------- | -
|Management fees          |  | $                                       | 571,265   |  |                                         | $
|Other operating expenses |  |                                         | 1,044,408 |  |                                         |  
|Total expenses           |  | $                                       | 1,615,673 |  |                                         | $





47







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 requirements. Accordingly, the Company
has entered into a committed facility agreement with BNP Paribas Prime Brokerage International, Limited (“BNP”) (the “Loan
Agreement”) and has engaged in borrowings under the Loan Agreement for this purpose. Although the Company expects to continue to
be able to borrow under the Loan Agreement as needed for this purpose, we are subject to the risk that BNP can terminate the Loan Agreement
or that the amount available to be borrowed thereunder will be insufficient to allow us to satisfy the applicable requirements.



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.





48







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. Subject to certain exemptive
rules, including Rule 12d1-4, which was recently adopted by the SEC, the Company may, subject to certain conditions, invest in other investment
companies in excess of such thresholds. 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:



(7)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.



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



(9)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.



(10) 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.



(11) 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.



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





49







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



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



(e)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



(f)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



We generate and expect to continue 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 have entered into the Loan Agreement with BNP, and we may seek to enter into any further bank debt, credit facility or other
financing arrangements on 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 500,000 shares of common stock at a $0.001 per share par value. Additionally, the Company has the authority to
issue 15,000 shares of preferred stock at a $0.001 per share par value.



During the year ended December 31, 2021, 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 |  
|----------------- |  |  | ------------------------------ | ------ |  | -------------------------------- | -
|                  |  |  |                                |        |  |                                  |  
|March 10, 2021    |  |  |                                | 7,500  |  |                                  | $
|June 8, 2021      |  |  |                                | 4,210  |  |                                  | $
|June 9, 2021      |  |  |                                | 552    |  |                                  | $
|November 16, 2021 |  |  |                                | 33,645 |  |                                  | $





50







Contractual Obligations. 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, doing business as U.S. Bank Global Fund Services
(“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 an independent valuation firm 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 firm reviews 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. Each investment in the entire portfolio
will be reviewed by a third-party valuation firm at least annually;



(4)
The Audit Committee of our Board of Directors reviews the preliminary valuations of the Adviser and the “range of value”
estimate supplied, at least once annually, by the independent valuation firm and determines the valuations for recommendation to our
Board of Directors; 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 respective independent valuation firm and the Audit Committee.





51







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. On March 23, 2021, the Company declared a distribution of $3.24 per share, or $173,301, payable on
March 31, 2021. On May 11, 2021, the Company declared a distribution of $13.92 per share, or $744,551, payable on May 28, 2021. On August
10, 2021, the Company declared a distribution of $17.96 per share, or $1,046,166, payable on August 18, 2021. On November 11, 2021, the
Company declared a distribution of $22.12 per share, or $1,288,485, payable on November 19, 2021.



We have elected
to be a BDC under the Investment Company Act. We also have elected 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 Appreciation or Depreciation, 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.





52







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 years ended December 31, 2021 and 2020, the Company incurred
Management Fees of $571,265 and $160,548, respectively, and did not incur incentive fees.



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. As of December 31, 2021, no Incentive Fee has been accrued or is payable.



“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.





53







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.



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.



On March 5, 2021, the United Kingdom Financial
Conduct Authority (the “FCA”) announced that Reference Rate settings will either cease to be provided by any administrator,
or no longer be representative immediately after December 31, 2021 for all GBP, EUR, CHF and JPY LIBOR settings and one-week and two-month
USD LIBOR settings, and immediately after June 30, 2023 for the remaining USD LIBOR settings, including one-month and three-month USD
LIBOR (the “Announcement”). Concurrent with the Announcement, the Federal Reserve Board, the Office of the Comptroller of
the Currency and the Federal Deposit Insurance Corporation released a statement that (i) encouraged banks to cease entering into new contracts
that use U.S. dollar LIBOR as a reference rate as soon as practicable and in any event by December 31, 2021, (ii) indicated that new contracts
entered into before December 31, 2021 should either utilize a Reference Rate other than U.S. dollar LIBOR or have robust fallback language
that includes a clearly defined alternative reference rate after the discontinuation of U.S. dollar LIBOR and (iii) explained that extending
the publication of certain U.S. dollar LIBOR tenors until June 30, 2023 would allow most legacy U.S. dollar LIBOR contracts to mature
before Libor begins experiencing disruptions.



Nonetheless, the termination of certain Reference
Rates presents risks to the Company because there is no assurance that the composition or characteristics of any alternative Reference
Rate will be similar to or produce the same value or economic equivalence as existing Reference Rates or that will have the same volume
or liquidity. 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.



Interest Rate Risk



Based on our Statements of Assets and Liabilities
as of December 31, 2021, the following table shows the annualized impact on net investment income of hypothetical base rate changes in
interest rates (considering interest rate floors and ceilings for floating rate instruments assuming no changes in our investment and
borrowing structure).





|Basis Point Change |  |  | Interest
 Income |       |   | Interest
 Expense |  |     | Net
 Income | 
|------------------ |  |  | ---------------- | ----- | - | ----------------- |  | --- | ----------- | 
|-25 Basis Points   |  |  |                  | (42   | ) |                   |  | (20 | )           | 
|Base Interest Rate |  |  |                  | -     |   |                   |  | -   |             | 
|+100 Basis Points  |  |  |                  | 177   |   |                   |  | 245 |             | 
|+200 Basis Points  |  |  |                  | 802   |   |                   |  | 490 |             | 
|+300 Basis Points  |  |  |                  | 1,522 |   |                   |  | 735 |             | 



54







Item 8. Financial Statements and Supplementary Data



Index to Financial Statements



|                                                                                                |  | Page
|----------------------------------------------------------------------------------------------- |  | ----
|Report
    of Independent Registered Public Accounting Firm PCAOB ID No. 34                     |  | F-2 
|Statements of Assets and Liabilities as of December 31, 2021 and December 31, 2020              |  | F-3 
|Statements of Operations for the Years Ended December 31, 2021 and December 31, 2020            |  | F-4 
|Statements of Changes in Net Assets for the Years Ended December 31, 2021 and December 31, 2020 |  | F-5 
|Statements of Cash Flows for the Years Ended December 31, 2021 and December 31, 2020            |  | F-6 
|Schedules of Investments as of December 31, 2021 and December 31, 2020                          |  | F-7 
|Notes to Financial Statements                                                                   |  | F-9 



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 schedules of investments as of December 31, 2021
and 2020, the related statements of operations, cash flows, changes in net assets, and the financial highlights for the years ended December
31, 2021 and December 31, 2020, 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, 2021 and 2020, and the results of its operations, changes
in net assets, and cash flows and the financial highlights for the years ended December 31, 2021 and December 31, 2020 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 audits 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 audits 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 audits 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, 2021 and 2020, by correspondence with the custodian, loan agents,
and borrowers. We believe that our audits provide a reasonable basis for our opinion.



/s/ Deloitte & Touche, LLP

New York, New York

March 30, 2022



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



F-2






Muzinich BDC, Inc.

Statements of Assets and Liabilities



|Assets:                                                                                                                                                                                                                           |  | As of
    December 31,
    2021 |             |  | As of
    December 31,
    2020 | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------- | ----------- |  | ------------------------------- | 
|Non-controlled/non-affiliated investments, at fair value (amortized cost of $116,602,403 and $48,339,189, respectively)                                                                                                           |  | $                               | 119,870,351 |  |                                 | 
|Cash and cash equivalents                                                                                                                                                                                                         |  |                                 | 1,707,402   |  |                                 | 
|Receivables:                                                                                                                                                                                                                      |  |                                 |             |  |                                 | 
|Interest and other                                                                                                                                                                                                                |  |                                 | 838,084     |  |                                 | 
|Principal paydowns of investments                                                                                                                                                                                                 |  |                                 | 903,500     |  |                                 | 
|Total Assets                                                                                                                                                                                                                      |  | $                               | 123,319,337 |  |                                 | 
|                                                                                                                                                                                                                                  |  |                                 |             |  |                                 | 
|Liabilities:                                                                                                                                                                                                                      |  |                                 |             |  |                                 | 
|Credit facility (Note 9)                                                                                                                                                                                                          |  |                                 | 24,493,184  |  |                                 | 
|Management fee payable                                                                                                                                                                                                            |  |                                 | 189,364     |  |                                 | 
|Organizational and offering fees payable                                                                                                                                                                                          |  |                                 | -           |  |                                 | 
|Professional fees payable                                                                                                                                                                                                         |  |                                 | 174,739     |  |                                 | 
|Accrued other general and administrative expenses                                                                                                                                                                                 |  |                                 | 99,652      |  |                                 | 
|Total Liabilities                                                                                                                                                                                                                 |  | $                               | 24,956,939  |  |                                 | 
|                                                                                                                                                                                                                                  |  |                                 |             |  |                                 | 
|Commitments and Contingencies (Note 5)                                                                                                                                                                                            |  |                                 | -           |  |                                 | 
|                                                                                                                                                                                                                                  |  |                                 |             |  |                                 | 
|Net Assets:                                                                                                                                                                                                                       |  |                                 |             |  |                                 | 
|Preferred Shares, $0.001 par value; 15,000 shares authorized, and 0 shares issued
    and outstanding as of December 31, 2021 and December 31, 2020                                                                               |  | $                               | -           |  |                                 | 
|Common Shares, $0.001 par value; 500,000 shares authorized, 91,894.6 shares
    issued and outstanding as of December 31, 2021; and 500,000 shares authorized, 45,987.9 shares issued and outstanding as of December
    31, 2020 |  |                                 | 92          |  |                                 | 
|Additional paid-in capital                                                                                                                                                                                                        |  |                                 | 94,131,604  |  |                                 | 
|Total distributable (accumulated) earnings (losses)                                                                                                                                                                               |  |                                 | 4,230,702   |  |                                 | 
|Total Net Assets                                                                                                                                                                                                                  |  | $                               | 98,362,398  |  |                                 | 
|Total Liabilities and Net Assets                                                                                                                                                                                                  |  | $                               | 123,319,337 |  |                                 | 
|Net Asset Value Per Share                                                                                                                                                                                                         |  | $                               | 1,070.38    |  |                                 | 



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



F-3






Muzinich BDC, Inc.

Statements of Operations



|                                                                                                   |  | For the year 
ended
 December 31,
    
2021 |           |  | For the year 
ended
 December 31,
 2020 |  
|-------------------------------------------------------------------------------------------------- |  | ------------------------------------------- | --------- |  | --------------------------------------- | -
|Investment Income                                                                                  |  |                                             |           |  |                                         |  
|Investment income from non-controlled, non-affiliated investments and cash equivalents:            |  |                                             |           |  |                                         |  
|Interest income                                                                                    |  | $                                           | 5,866,190 |  |                                         | $
|Commitment fees                                                                                    |  |                                             | 111,703   |  |                                         |  
|Total investment income from non-controlled, non-affiliated investments and cash equivalents:      |  |                                             | 5,977,893 |  |                                         |  
|Total Investment Income                                                                            |  |                                             | 5,977,893 |  |                                         |  
|                                                                                                   |  |                                             |           |  |                                         |  
|Expenses:                                                                                          |  |                                             |           |  |                                         |  
|Management fees                                                                                    |  |                                             | 571,265   |  |                                         |  
|Professional fees                                                                                  |  |                                             | 566,112   |  |                                         |  
|Directors’ fees and expenses                                                                       |  |                                             | 150,000   |  |                                         |  
|Other general and administrative expenses                                                          |  |                                             | 328,296   |  |                                         |  
|Total Expenses                                                                                     |  |                                             | 1,615,673 |  |                                         |  
|Net Investment Income (Loss)                                                                       |  |                                             | 4,362,220 |  |                                         |  
|Realized gains/(losses) and unrealized appreciation/(depreciation) on investments                  |  |                                             |           |  |                                         |  
|Net realized gains (losses):                                                                       |  |                                             |           |  |                                         |  
|Non-controlled, non-affiliated investments                                                         |  |                                             | 24,966    |  |                                         |  
|Total net realized gains/(losses)                                                                  |  |                                             | 24,966    |  |                                         |  
|Net change in unrealized appreciation/(depreciation):                                              |  |                                             |           |  |                                         |  
|Non-controlled, non-affiliated investments                                                         |  |                                             | 2,968,642 |  |                                         |  
|Total net change in unrealized appreciation/(depreciation)                                         |  |                                             | 2,968,642 |  |                                         |  
|Total net realized gains/(losses) and unrealized appreciation/(depreciation) on investments        |  |                                             | 2,993,608 |  |                                         |  
|Net Increase (Decrease) in Net Assets Resulting from Operations                                    |  | $                                           | 7,355,828 |  |                                         | $
|Basic and diluted net investment income (loss) per common share                                    |  | $                                           | 73.90     |  |                                         | $
|Basic and diluted net increase (decrease) in net assets resulting from operations per common share |  | $                                           | 124.61    |  |                                         | $
|Weighted Average Common Shares Outstanding - Basic and Diluted (See Note 10)                       |  |                                             | 59,029.9  |  |                                         |  



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





F-4






Muzinich BDC, Inc.

Statements of Changes
in Net Assets



|                                                                                |  | For the year 
ended
 December 31,
 2021 |            |   | For the year 
ended
 December 31, 
2020 |  
|------------------------------------------------------------------------------- |  | --------------------------------------- | ---------- | - | --------------------------------------- | -
|                                                                                |  |                                         |            |   |                                         |  
|                                                                                |  |                                         |            |   |                                         |  
|Increase (Decrease) in Net Assets Resulting from Operations:                    |  |                                         |            |   |                                         |  
|Net investment income (loss)                                                    |  | $                                       | 4,362,220  |   |                                         | $
|Total net realized gains/(losses)                                               |  |                                         | 24,966     |   |                                         |  
|Total net change in unrealized appreciation/(depreciation)                      |  |                                         | 2,968,642  |   |                                         |  
|Net Increase (Decrease) in Net Assets Resulting from Operations                 |  |                                         | 7,355,828  |   |                                         |  
|                                                                                |  |                                         |            |   |                                         |  
|Decrease in Net Assets Resulting from Stockholder Distributions                 |  |                                         |            |   |                                         |  
|Dividends and distributions to stockholders                                     |  |                                         | (3,252,505 | ) |                                         |  
|Net Decrease in Net Assets Resulting from Stockholder Distributions             |  |                                         | (3,252,505 | ) |                                         |  
|                                                                                |  |                                         |            |   |                                         |  
|Increase (Decrease) in Net Assets Resulting from Capital Share Transactions     |  |                                         |            |   |                                         |  
|Issuance of common shares                                                       |  |                                         | 48,500,000 |   |                                         |  
|Net Increase (Decrease) in Net Assets Resulting from Capital Share Transactions |  |                                         | 48,500,000 |   |                                         |  
|Total Increase (Decrease) in Net Assets                                         |  |                                         | 52,603,323 |   |                                         |  
|Net Assets, Beginning of Period                                                 |  |                                         | 45,759,075 |   |                                         |  
|Net Assets, End of Period                                                       |  | $                                       | 98,362,398 |   |                                         | $
|Net asset value per share                                                       |  | $                                       | 1,070.38   |   |                                         | $
|Common shares outstanding at the end of the period                              |  |                                         | 91,894.6   |   |                                         |  



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





F-5






Muzinich BDC, Inc.

Statements of Cash Flows



|                                                                                                                                                     |  | For the year 
ended
 December 31,
 2021 |              |   | For the year 
ended
 December 31,
 2020 |  
|---------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------- | ------------ | - | --------------------------------------- | -
|Cash Flows from Operating Activities:                                                                                                                |  |                                         |              |   |                                         |  
|Net increase (decrease) in net assets resulting from operations                                                                                      |  | $                                       | 7,355,828    |   |                                         | $
|Adjustments to reconcile net increase (decrease) in net assets
    resulting from operations to net cash provided by (used in) operating activities: |  |                                         |              |   |                                         |  
|Net change in unrealized (appreciation)/depreciation on investments                                                                                  |  |                                         | (2,968,642   | ) |                                         |  
|Net realized (gains)/losses on investments                                                                                                           |  |                                         | (24,966      | ) |                                         |  
|Net accretion of discount on investments                                                                                                             |  |                                         | (502,710     | ) |                                         |  
|Purchases and drawdowns of investments                                                                                                               |  |                                         | (230,682,978 | ) |                                         |  
|Sales and maturities of and principal paydowns on investments                                                                                        |  |                                         | 162,947,440  |   |                                         |  
|Changes in operating assets and liabilities:                                                                                                         |  |                                         |              |   |                                         |  
|Interest and other receivables                                                                                                                       |  |                                         | (28,562      | ) |                                         |  
|Receivables from principal paydowns of investments                                                                                                   |  |                                         | (903,500     | ) |                                         |  
|Management fees payable                                                                                                                              |  |                                         | 28,816       |   |                                         |  
|Organizational and offering fees payable                                                                                                             |  |                                         | (430,688     | ) |                                         |  
|Professional fees payable                                                                                                                            |  |                                         | (687,040     | ) |                                         |  
|Accrued other general and administrative expenses                                                                                                    |  |                                         | (221,644     | ) |                                         |  
|Net cash provided by (used in) operating activities                                                                                                  |  |                                         | (66,118,646  | ) |                                         |  
|Cash Flows from Financing Activities:                                                                                                                |  |                                         |              |   |                                         |  
|Borrowings on credit facility                                                                                                                        |  |                                         | 144,157,528  |   |                                         |  
|Payments on credit facility                                                                                                                          |  |                                         | (136,664,344 | ) |                                         |  
|Distributions paid in cash                                                                                                                           |  |                                         | (3,252,505   | ) |                                         |  
|Proceeds from issuance of common shares                                                                                                              |  |                                         | 48,500,000   |   |                                         |  
|Net cash provided by (used in) financing activities                                                                                                  |  |                                         | 52,740,679   |   |                                         |  
|Net increase (decrease) in cash and cash equivalents                                                                                                 |  |                                         | (13,377,967  | ) |                                         |  
|Cash and cash equivalents, beginning of period                                                                                                       |  |                                         | 15,085,369   |   |                                         |  
|Cash and cash equivalents, end of period                                                                                                             |  | $                                       | 1,707,402    |   |                                         | $



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





F-6






Muzinich BDC, Inc.

Schedule of Investments

As of December 31, 2021



|Portfolio
    Company                                            |  | Industry                           |  | Spread
    Above Index |                                                                         |  | LIBOR Floor |       |  | Interest
    Rate |  |          | Acquisition
    Date |  |  | Maturity/
    Expiration
    Date                                 |  |  | Principal
    /Units |            |   | Cost
    (1) |   |            | Fair
    
    Value (2) |             |   | Percentage
    of Net Assets |  
|---------------------------------------------------------------- |  | ---------------------------------- |  | ---------------------- | ----------------------------------------------------------------------- |  | ----------- | ----- |  | ----------------- |  | -------- | -------------------- |  |  | ----------------------------------------------------------------- |  |  | -------------------- | ---------- | - | ------------ | - | ---------- | ----------------------- | ----------- | - | ---------------------------- | -
|Non-Controlled/Non-Affiliated Investments                        |  |                                    |  |                        |                                                                         |  |             |       |  |                   |  |          |                      |  |  |                                                                   |  |  |                      |            |   |              |   |            |                         |             |  
|Senior Secured Loan Debt Investments                             |  |                                    |  |                        |                                                                         |  |             |       |  |                   |  |          |                      |  |  |                                                                   |  |  |                      |            |   |              |   |            |                         |             |  
|3RC
    Blue Chip Group Holdings 2nd Lien Term Loan (3,4)        |  | Packaged Foods & Meats             |  |                        | 3
                                            Month LIBOR 
USD + 9.87%  |  |             | 1.13% |  |                   |  | 11.00000 | %                    |  |  | 11/23/2021                                                        |  |  |                      | 11/23/2029 |   |              | $ | 13,500,000 |                         |             | $ | 13,200,304                   |  
|Adaptive
    Spectrum Term Loan B1 (3,4)                         |  | Internet Services Infrastructure   |  |                        | 1
                                            Month LIBOR USD +9.50%    |  |             | 1.50% |  |                   |  | 11.00000 | %                    |  |  | 12/4/2020                                                         |  |  |                      | 6/30/2024  |   |              |   | 12,437,500 |                         |             |   | 12,144,946                   |  
|MP Consolidation, LLC Senior Subordinate
    Term Loan           |  | Health Care Equipment & Supplies   |  |                        | -                                                                       |  |             | -     |  |                   |  | 13.00000 | %                    |  |  | 3/30/2021                                                         |  |  |                      | 3/30/2026  |   |              |   | 5,250,000  |                         |             |   | 5,160,928                    |  
|Ocular
    Partners HoldCo, LLC (3,4,5)                          |  | Health Care Technology             |  |                        | 3
                                            Month LIBOR 
USD + 7.50%  |  |             | 1.00% |  |                   |  | 8.50000  | %                    |  |  | 2/7/2020                                                          |  |  |                      | 2/7/2025   |   |              |   | 7,585,000  |                         |             |   | 7,496,241                    |  
|Recreational
    Products Term Loan B-1 (3,4)                    |  | Leisure Products                   |  |                        | 3
                                            Month LIBOR 
USD + 10.75% |  |             | 1.00% |  |                   |  | 11.75000 | %                    |  |  | 1/8/2021,
                                            12/2/2021 8 |  |  |                      | 12/31/2025 |   |              |   | 12,468,750 |                         |             |   | 12,220,576                   |  
|Sayres
    and Associates (Vikings35) 2nd Lien Term Loan (3,4,5) |  | Diversified Support Services       |  |                        | 1
                                            Month LIBOR 
USD + 9.75%  |  |             | 1.25% |  |                   |  | 11.00000 | %                    |  |  | 6/10/2021                                                         |  |  |                      | 6/10/2026  |   |              |   | 4,975,000  |                         |             |   | 4,875,630                    |  
|Wireless
    Telecom Group, Inc. Term Loan B (3,4)               |  | Electronic Equipment & Instruments |  |                        | 3
                                            Month LIBOR 
USD + 9.25%  |  |             | 1.00% |  |                   |  | 10.25000 | %                    |  |  | 2/7/2020                                                          |  |  |                      | 2/7/2025   |   |              |   | 4,104,000  |                         |             |   | 3,992,801                    |  
|Total Senior Secured Loan Debt Investments                       |  |                                    |  |                        |                                                                         |  |             |       |  |                   |  |          |                      |  |  |                                                                   |  |  |                      |            | $ | 60,320,250   |   |            | $                       | 59,091,426  |   |                              | $
|Equity Investments - Common Stock                                |  |                                    |  |                        |                                                                         |  |             |       |  |                   |  |          |                      |  |  |                                                                   |  |  |                      |            |   |              |   |            |                         |             |   |                              |  
|3RC Blue Chip Group Holdings Invesco
    LLC                     |  | Packaged Foods & Meats             |  |                        | N/A                                                                     |  |             | N/A   |  |                   |  | N/A      |                      |  |  | 11/23/2021                                                        |  |  |                      | N/A        |   |              |   | 1,000      |                         |             | $ | 1,000,000                    |  
|                                                                 |  |                                    |  |                        |                                                                         |  |             |       |  |                   |  |          |                      |  |  |                                                                   |  |  |                      |            |   |              |   | 1,000,000  |                         |             | $ | 1,000,000                    |  
|Equity Investments - Preferred Stock                             |  |                                    |  |                        |                                                                         |  |             |       |  |                   |  |          |                      |  |  |                                                                   |  |  |                      |            |   |              |   |            |                         |             |   |                              |  
|MPC Consolidation Preferred Stock
    - Class A                  |  | Health Care Equipment & Supplies   |  |                        | N/A                                                                     |  |             | N/A   |  |                   |  | N/A      |                      |  |  | 3/30/2021                                                         |  |  |                      | N/A        |   |              |   | 750,000    |                         |             | $ | 749,688                      |  
|Ocular Partners HoldCo, LLC                                      |  | Health Care Technology             |  |                        | N/A                                                                     |  |             | N/A   |  |                   |  | N/A      |                      |  |  | 2/7/2020                                                          |  |  |                      | N/A        |   |              |   | 1,000,000  |                         |             |   | 1,000,000                    |  
|Recreational Products Preferred
    Stock                        |  | Leisure Products                   |  |                        | N/A                                                                     |  |             | N/A   |  |                   |  | N/A      |                      |  |  | 1/8/2021,
12/2/20218                                              |  |  |                      | N/A        |   |              |   | 2,000,000  |                         |             |   | 2,000,000                    |  
|Recreational Products Preferred
    Stock A1                     |  | Leisure Products                   |  |                        | N/A                                                                     |  |             | N/A   |  |                   |  | N/A      |                      |  |  | 1/8/2021                                                          |  |  |                      | N/A        |   |              |   | 859,115    |                         |             |   | 854,717                      |  
|Vikings35 Preferred Stock - Class
    A                          |  | Diversified Support Services       |  |                        | N/A                                                                     |  |             | N/A   |  |                   |  | N/A      |                      |  |  | 6/10/2021                                                         |  |  |                      | N/A        |   |              |   | 250,000    |                         |             |   | 250,000                      |  
|Total Equity Investments                                         |  |                                    |  |                        |                                                                         |  |             |       |  |                   |  |          |                      |  |  |                                                                   |  |  |                      |            |   | 4,859,115    |   |            | $                       | 4,854,405   |   |                              | $
|                                                                 |  |                                    |  |                        |                                                                         |  |             |       |  |                   |  |          |                      |  |  |                                                                   |  |  |                      |            |   |              |   |            |                         |             |   |                              |  
|Warrants                                                         |  |                                    |  |                        |                                                                         |  |             |       |  |                   |  |          |                      |  |  |                                                                   |  |  |                      |            |   |              |   |            |                         |             |   |                              |  
|Wireless Telecom Group, Inc. Warrants                            |  | Electronic Equipment & Instruments |  |                        | N/A                                                                     |  |             | N/A   |  |                   |  | N/A      |                      |  |  | 2/7/2020                                                          |  |  |                      | N/A        |   |              |   | 266,167    |                         |             | $ | 156,811                      |  
|Total Warrants                                                   |  |                                    |  |                        |                                                                         |  |             |       |  |                   |  |          |                      |  |  |                                                                   |  |  |                      |            |   | 266,167      |   |            | $                       | 156,811     |   |                              | $
|                                                                 |  |                                    |  |                        |                                                                         |  |             |       |  |                   |  |          |                      |  |  |                                                                   |  |  |                      |            |   |              |   |            |                         |             |   |                              |  
|Short-Term Investments                                           |  |                                    |  |                        |                                                                         |  |             |       |  |                   |  |          |                      |  |  |                                                                   |  |  |                      |            |   |              |   |            |                         |             |   |                              |  
|United
    States Treasury Bill (6,7)                            |  | N/A                                |  |                        | N/A                                                                     |  |             | N/A   |  |                   |  | N/A      |                      |  |  | 12/17/2021                                                        |  |  |                      | 1/4/2022   |   |              | $ | 24,000,000 |                         |             | $ | 23,999,990                   |  
|United
    States Treasury Bill (6,7)                            |  | N/A                                |  |                        | N/A                                                                     |  |             | N/A   |  |                   |  | N/A      |                      |  |  | 12/7/2021                                                         |  |  |                      | 1/13/2022  |   |              |   | 27,500,000 |                         |             |   | 27,499,771                   |  
|Total Short-Term Investments                                     |  |                                    |  |                        |                                                                         |  |             |       |  |                   |  |          |                      |  |  |                                                                   |  |  |                      |            | $ | 51,500,000   |   |            | $                       | 51,499,761  |   |                              | $
|                                                                 |  |                                    |  |                        |                                                                         |  |             |       |  |                   |  |          |                      |  |  |                                                                   |  |  |                      |            |   |              |   |            |                         |             |   |                              |  
|Total Non-Controlled/Non-Affiliated Investments                  |  |                                    |  |                        |                                                                         |  |             |       |  |                   |  |          |                      |  |  |                                                                   |  |  |                      |            | $ | 116,602,403  |   |            | $                       | 119,870,351 |   |                              |  
|Liabilities in Excess of Other Assets                            |  |                                    |  |                        |                                                                         |  |             |       |  |                   |  |          |                      |  |  |                                                                   |  |  |                      |            |   |              |   |            |                         |             |   |                              |  
|Net assets                                                       |  |                                    |  |                        |                                                                         |  |             |       |  |                   |  |          |                      |  |  |                                                                   |  |  |                      |            |   |              |   |            |                         |             |   |                              |  





LIBOR - London Interbank Offered Rate

|(1) | The amortized cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Unless otherwise noted, significant unobservable inputs were used to determine fair value, and investments are considered Level 3 securities (Note 7).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(3) | Variable rate security; rate shown is the rate in effect on December 31, 2021. An index may have a negative rate. Interest rate may also be subject to a ceiling or floor.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|(4) | Bank loans generally pay interest at rates which are periodically determined by reference to a base lending rate plus a premium. All loans carry a variable rate of interest. These base lending rates are generally (i) the Prime Rate offered by one or more major United States banks, (ii) the lending rate offered by one or more European banks such as the LIBOR or (iii) the Certificate of Deposit rate. Bank loans, while exempt from registration, under the Securities Act of 1933, contain certain restrictions on resale and cannot be sold publicly. Floating rate bank loans often require prepayments from excess cash flow or permit the borrower to repay at its election. The degree to which borrowers repay, whether as a contractual requirement or at their election, cannot be predicted with accuracy.
|(5) | Please see Note 5 for details on unfunded commitments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(6) | These positions were held as collateral as part of a credit facility agreement. Please see Note 9 for further details.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(7) | Represents securities categorized as Level 2 assets under the definition of ASC 820 fair value hierarchy (Note 7).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(8) | Initial investment in Recreational Products on January 8 2021. December 2, 2021, additional Term Loan B financing completed to support an acquisition and refinanced the initial debt investment. As part of the new loan financing, the Company increased its investment in Preferred Stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   



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





F-7






Muzinich BDC, Inc.

Schedule of Investments

As of December 31, 2020



|Portfolio
    Company                              |  | Industry                           |  | Interest Rate                         |  | Acquisition Date |            | Maturity/
    Expiration Date |           | Principal /Units |            |   | Cost
    (1) |   |            | FairValue (2) |            |   | Percentage
    of Net Assets |  
|-------------------------------------------------- |  | ---------------------------------- |  | ------------------------------------- |  | ---------------- | ---------- | ----------------------------- | --------- | ---------------- | ---------- | - | ------------ | - | ---------- | ------------- | ---------- | - | ---------------------------- | -
|Non-Controlled/Non-Affiliated Investments          |  |                                    |  |                                       |  |                  |            |                               |           |                  |            |   |              |   |            |               |            |  
|First Lien Term Loan Debt Investments              |  |                                    |  |                                       |  |                  |            |                               |           |                  |            |   |              |   |            |               |            |  
|Adaptive
    Spectrum Term Loan B1 (3,4)           |  | Commercial Services                |  | 9.64388% (1 Month LIBOR 
USD + 9.50%) |  | 12/4/2020        |            | 11/30/2025                    |           | $                | 12,500,000 |   |              | $ | 12,130,769 |               |            | $ | 12,125,000                   |  
|Ocular
    Partners HoldCo, LLC (3,4,5)            |  | Healthcare Services                |  | 7.73838% (3 Month LIBOR 
USD + 7.50%) |  | 2/7/2020         |            | 2/7/2025                      |           |                  | 7,667,500  |   |              |   | 7,534,169  |               |            |   | 7,667,500                    |  
|Wireless
    Telecom Group, Inc. Term Loan B (3,4) |  | Electronic Equipment & Instruments |  | 7.48838% (3 Month LIBOR 
USD + 7.25%) |  | 2/7/2020         |            | 2/7/2025                      |           |                  | 8,316,000  |   |              |   | 8,018,087  |               |            |   | 7,984,448                    |  
|Total Term Loan Debt Investments                   |  |                                    |  |                                       |  | $                | 28,483,500 |                               |           | $                | 27,683,025 |   |              | $ | 27,776,948 |               |            |   | 60.7                         | %
|                                                   |  |                                    |  |                                       |  |                  |            |                               |           |                  |            |   |              |   |            |               |            |   |                              |  
|Equity Investments - Preferred Stock               |  |                                    |  |                                       |  |                  |            |                               |           |                  |            |   |              |   |            |               |            |   |                              |  
|Ocular Partners HoldCo, LLC                        |  | Healthcare Services                |  | N/A                                   |  | 2/7/2020         |            | N/A                           |           |                  | 1,000,000  |   |              | $ | 1,000,000  |               |            | $ | 1,127,079                    |  
|Total Equity Investments                           |  |                                    |  |                                       |  |                  |            |                               | 1,000,000 |                  |            | $ | 1,000,000    |   |            | $             | 1,127,079  |   |                              |  
|                                                   |  |                                    |  |                                       |  |                  |            |                               |           |                  |            |   |              |   |            |               |            |   |                              |  
|Warrants                                           |  |                                    |  |                                       |  |                  |            |                               |           |                  |            |   |              |   |            |               |            |   |                              |  
|Wireless Telecom Group, Inc. Warrants              |  | Electronic Equipment & Instruments |  | N/A                                   |  | 2/7/2020         |            | N/A                           |           |                  | 266,167    |   |              | $ | 156,812    |               |            | $ | 235,116                      |  
|Total Warrants                                     |  |                                    |  |                                       |  |                  |            |                               | 266,167   |                  |            | $ | 156,812      |   |            | $             | 235,116    |   |                              |  
|                                                   |  |                                    |  |                                       |  |                  |            |                               |           |                  |            |   |              |   |            |               |            |   |                              |  
|Short-Term Investments                             |  |                                    |  |                                       |  |                  |            |                               |           |                  |            |   |              |   |            |               |            |   |                              |  
|United
    States Treasury Bill (6)                |  | N/A                                |  | N/A                                   |  | 12/16/2020       |            | 1/14/2021                     |           | $                | 4,500,000  |   |              | $ | 4,499,902  |               |            | $ | 4,499,902                    |  
|United
    States Treasury Bill (6)                |  | N/A                                |  | N/A                                   |  | 12/21/2020       |            | 1/21/2021                     |           |                  | 15,000,000 |   |              |   | 14,999,450 |               |            |   | 14,999,450                   |  
|Total Short-Term
    Investments                   |  |                                    |  |                                       |  |                  |            |                               |           | $                | 19,500,000 |   |              | $ | 19,499,352 |               |            | $ | 19,499,352                   |  
|                                                   |  |                                    |  |                                       |  |                  |            |                               |           |                  |            |   |              |   |            |               |            |   |                              |  
|Total Non-Controlled/Non-Affiliated Investments    |  |                                    |  |                                       |  |                  |            |                               |           | $                | 48,339,189 |   |              | $ | 48,638,495 |               |            |   | 106.3                        | %
|Liabilities in Excess of Other Assets              |  |                                    |  |                                       |  |                  |            |                               |           |                  |            |   |              |   |            |               | (2,879,420 | ) |                              |  
|Net assets                                         |  |                                    |  |                                       |  |                  |            |                               |           |                  |            |   |              |   |            |               |            | $ | 45,759,075                   |  





LIBOR - London Interbank Offered Rate

|(1) | The amortized cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Unless otherwise noted, significant unobservable inputs were used to determine fair value, and investments are considered Level 3 securities (Note 7).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(3) | Variable rate security; rate shown is the rate in effect on December 31, 2020. An index may have a negative rate. Interest rate may also be subject to a ceiling or floor.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|(4) | Bank loans generally pay interest at rates which are periodically determined by reference to a base lending rate plus a premium. All loans carry a variable rate of interest. These base lending rates are generally (i) the Prime Rate offered by one or more major United States banks, (ii) the lending rate offered by one or more European banks such as the LIBOR or (iii) the Certificate of Deposit rate. Bank loans, while exempt from registration, under the Securities Act of 1933, contain certain restrictions on resale and cannot be sold publicly. Floating rate bank loans often require prepayments from excess cash flow or permit the borrower to repay at its election. The degree to which borrowers repay, whether as a contractual requirement or at their election, cannot be predicted with accuracy.
|(5) | Please see Note 5 for details on unfunded commitments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(6) | These positions were held as collateral as part of a credit facility agreement. Please see Note 9 for further details.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          



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





F-8






Muzinich BDC, Inc.

Notes to Financial Statements



| | 1. | 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 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”),
which occurred on August 23, 2019, subject to the Board of Directors’ right to extend the Commitment Period for up to one additional
year, in its discretion. The Company’s first drawdown was due on September 25, 2019. 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 or 10 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-9






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. In particular, the global public health crisis which arose from the outbreak of the novel coronavirus disease (known as COVID-19)
may affect these estimates, as the rapid development and fluidity of this situation precludes any prediction as to the ultimate adverse
impact of COVID-19 on economic and market conditions. The Company believes the estimates and assumptions underlying the financial statements
are reasonable and supportable based on the information available as of December 31, 2021 and December 31, 2020, however uncertainty over
the ultimate impact COVID-19 will have on the global economy generally, and the Company’s business in particular, makes any estimates
and assumptions as of December 31, 2021 and December 31, 2020 inherently less certain than they would be absent the current and potential
impacts of COVID-19. 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 with original maturities of
three months or less when purchased by the Company. The Company deposits its cash and cash equivalents with financial institutions and,
at times, may exceed the Federal Deposit Insurance Corporation insured limit.



Principal Paydowns



The Company may receive
principal repayments on its debt investments (“Paydowns”). Any unsettled Paydowns as of period end are reflected in the Statements
of Assets and Liabilities, and any realized gains or losses incurred from such Paydowns are reflected as interest income in the Statements
of Operations.



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. For the year ended December 31, 2021, the Company did not incur further organization
costs or 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. Short-term
investments that have maturities of less than 60 days, at time of purchase, are valued at amortized cost, which when combined with any
accrued interest, approximates market value.



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.





F-10






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 an independent valuation firm 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 firm reviews 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. Each investment in the portfolio will be reviewed by a third-party valuation firm at least annually;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (4) | The Audit Committee of the Board of Directors reviews the preliminary valuations of the Adviser and the “range-of-value” estimate supplied, at least once annually, by the independent valuation firm and determines valuations for recommendation to the Board of Directors; 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 respective independent valuation firm 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 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.





F-11






Other Income



From time to time, the Company may
receive fees for services provided to portfolio companies. These fees will generally only be available to the Company as a result of closing
investments, will normally be paid at the closing of the investments, are expected to be non-recurring and will be 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.



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.



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 appreciation (depreciation) 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 March 2020, the FASB issued Accounting
Standards Update (“ASU”) No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform
on Financial Reporting. The amendments provide optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships,
and other transactions affected by reference rate reform if certain criteria are met. The standard is effective upon issuance and can
be applied through December 31, 2022. Management is currently evaluating the impact of the optional guidance on the Company’s financial
statements and disclosures.



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



Taxation as a Regulated Investment
Company



The Company has elected 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-12






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



On March 23, 2021, the Company declared
a distribution of $3.24 per share, or $173,301, payable on March 31, 2021. On May 11, 2021, the Company declared a distribution of $13.92
per share, or $744,551.23, payable on May 28, 2021. On August 10, 2021, the Company declared a distribution of $17.96 per share, or $1,046,166.04,
payable on August 18, 2021. On November 11, 2021, the Company declared a distribution of $22.12 per share, or $1,288,485, payable on November
19, 2021.



The tax character of distributions
paid during the period ended December 31, 2021 was as follows:



|                            |  | Year Ended December 31, 2021 |          
|--------------------------- |  | ---------------------------- | ---------
|Distributions paid from:    |  |                              |          
|Ordinary Income             |  | $                            | 3,252,505
|Long Term Capital Gains (1) |  |                              | -        
|Total Distributions Paid    |  | $                            | 3,252,505



| | (1) | Designated as long-term capital gain dividend, pursuant to
Internal Revenue Code Section 852(b)(3).
| | --- | ---------------------------------------------------------------------------------------------------



The difference between the Company’s
U.S. GAAP-basis total distributable earnings and its tax-basis total distributable earnings as of December 31, 2021, was primarily due
to a reclassification of a non-deductible excise tax to additional paid-in capital. For the year ended December 31, 2021, the Company
reclassified for book purposes amounts arising from permanent book/tax differences as follows:



|                             |  | For the year 
ended
 December 31,
 2021 |       
|---------------------------- |  | --------------------------------------- | ------
|Additional paid-in capital   |  | $                                       | (6,310
|Total distributable earnings |  | $                                       | 6,310 



For the year ended December 31, 2020,
the Company did not reclassify any amounts.



| | 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). For the years ended
December 31, 2021 and 2020, the Company incurred Management Fees of $571,265 and $160,548, respectively.





F-13






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-14






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 years ended
December 31, 2021 and 2020, the Company did not incur 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 years
ended December 31, 2021 and 2020, Muzinich paid, on behalf of the Company, certain 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, 2021 and 2020, the total costs
reimbursable to Muzinich were $263 and $1,358,263, respectively, 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.



Shares held
by Affiliated Accounts



As of December 31, 2021, certain entities affiliated with the Adviser
held shares of the Company. Muzinich U.S. Private Debt, SCSp held 55,279.7 shares of the Company, approximately 60.2% of outstanding shares
of the Company, and Muzinich & Co., Inc. held 970.9 shares of the Company, approximately 1.1% of outstanding shares of the Company.



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



As of December 31,
2021, the Company had an aggregate of $16,250,000 of unfunded delayed draw term loan commitments to provide debt financing to its portfolio
companies. As of December 31, 2021, there were no capital calls or draw requests made by the portfolio companies to fund these commitments.
Such commitments are generally up to the Company’s discretion to approve or are subject to the satisfaction of certain financial
and nonfinancial covenants and involve, to varying degrees, elements of credit risk in excess of the amount recognized in the Company’s
Statement of Assets and Liabilities and are not reflected in the Company’s Statement of Assets and Liabilities.



A summary of the
composition of the unfunded commitments as of December 31, 2021 is shown in the table below:



|                                  |  | Expiration Date (1) |  | 12/31/2021 |           
|--------------------------------- |  | ------------------- |  | ---------- | ----------
|Ocular Partners HoldCo, LLC       |  | 2/7/2022            |  | $          | 9,250,000 
|Sayres and Associates (Vikings35) |  | 6/10/2023           |  | $          | 7,000,000 
|Total unfunded commitments        |  |                     |  | $          | 16,250,000





F-15






A summary of the
composition of the unfunded commitments as of December 31, 2020 is shown in the table below:



|                            |  | Expiration Date (1) |  | As of 
December 31, 
2020 |          
|--------------------------- |  | ------------------- |  | ------------------------- | ---------
|Ocular Partners HoldCo, LLC |  | 2/7/2022            |  | $                         | 9,250,000
|Total unfunded commitments  |  |                     |  | $                         | 9,250,000



| | (1) | Commitments are generally subject to borrowers meeting certain
criteria such as compliance with covenants and certain operational metrics. Borrowers use unfunded commitments for various event-driven
purposes. If such events do not occur, the commitment will expire. These amounts may remain outstanding until the commitment period of
an applicable loan expires, which may be shorter than its maturity.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



As of December 31,
2021, the Company 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 following table
presents the composition of the Company’s investment portfolio at amortized cost and fair value as of December 31, 2021 and December
31, 2020.



|                                      |  | December 31, 2021 |             |  | December 31, 2020 |  
|------------------------------------- |  | ----------------- | ----------- |  | ----------------- | -
|                                      |  | Amortized         |             |  | Fair              |  
|                                      |  | Cost              |             |  | Value             |  
|Senior Secured Loan Debt Instruments1 |  | $                 | 59,091,426  |  |                   | $
|Equity Investments - Common Stock     |  |                   | 1,000,000   |  |                   |  
|Equity Investments - Preferred Stock  |  |                   | 4,854,405   |  |                   |  
|Warrants                              |  |                   | 156,811     |  |                   |  
|Short-Term Investments                |  |                   | 51,499,761  |  |                   |  
|Total Investments                     |  | $                 | 116,602,403 |  |                   | $



| | 1 | Disclosed as First Lien Term Loan Debt Investments as of December
31, 2020.
| | - | ---------------------------------------------------------------------------



100% of the investments
held as of December 31, 2021 and December 31, 2020 were within the United States. The industry composition of investments based on fair
value, as a percentage of net assets, as of December 31, 2021 and December 31, 2020 was as follows (the following table does not include
short-term investments):



|                                   |  | December 31, 
2021 |      |   | December 31, 
2020 | 
|---------------------------------- |  | ------------------ | ---- | - | ------------------ | 
|Leisure Products                   |  |                    | 17.2 | % |                    | 
|Packaged Foods & Meats             |  |                    | 14.4 | % |                    | 
|Internet Services Infrastructure1  |  |                    | 12.4 | % |                    | 
|Health Care Technology2            |  |                    | 9.1  | % |                    | 
|Health Care Equipment & Supplies   |  |                    | 6.3  | % |                    | 
|Diversified Support Services       |  |                    | 5.5  | % |                    | 
|Electronic Equipment & Instruments |  |                    | 4.6  | % |                    | 
|Total                              |  |                    | 69.5 | % |                    | 



| | 1 | Disclosed as Commercial Services as of December 31, 2020.
| | - | ---------------------------------------------------------

| | 2 | Disclosed as Healthcare Services as of December 31, 2020.
| | - | ---------------------------------------------------------





F-16






|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.



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 tables
present the fair value hierarchy as of December 31, 2021 and December 31, 2020.



|Fair Value Hierarchy as of December 31, 2021
|--------------------------------------------
|Description                                 
|Senior Secured Loan Debt Instruments        
|Equity Investments - Common Stock           
|Equity Investments - Preferred Stock        
|Warrants                                    
|Short-Term Investments                      
|Total                                       



|Fair Value Hierarchy as of December 31, 2020
|--------------------------------------------
|Description                                 
|First Lien Term Loan Debt Investments       
|Equity Investments - Preferred Stock        
|Warrants                                    
|Short-Term Investments                      
|Cash Equivalents                            
|Total                                       



The following table
presents changes in the fair value of investments for which Level 3 inputs were used to determine the fair value as of and for the years
ended December 31, 2021 and 2020.





F-17






|Senior Secured Loan Debt Instruments1                         |  | For the year 
ended 
December 31, 
2021 |            |   | For the year 
ended 
December 31, 
2020 |  
|------------------------------------------------------------- |  | --------------------------------------- | ---------- | - | --------------------------------------- | -
|Fair value, beginning of period                               |  | $                                       | 27,776,948 |   |                                         | $
|Purchases of investments                                      |  |                                         | 36,484,563 |   |                                         |  
|Proceeds from principal pre-payments and sales of investments |  |                                         | (5,480,750 | ) |                                         |  
|Realized gain (loss)                                          |  |                                         | 15,058     |   |                                         |  
|Net change in unrealized appreciation/(depreciation)          |  |                                         | 864,948    |   |                                         |  
|Net accretion of discount on investments                      |  |                                         | 389,530    |   |                                         |  
|Transfers into (out of) Level 3                               |  |                                         | -          |   |                                         |  
|Fair value, end of period                                     |  | $                                       | 60,050,297 |   |                                         | $



|Equity Investments - Common Stock                             |  | For the year 
ended 
December 31, 
2021 |           |  | For the year
 ended 
December 31, 
2020 |  
|------------------------------------------------------------- |  | --------------------------------------- | --------- |  | --------------------------------------- | -
|Fair value, beginning of period                               |  | $                                       | -         |  |                                         | $
|Purchases of investments                                      |  |                                         | 1,000,000 |  |                                         |  
|Proceeds from principal pre-payments and sales of investments |  |                                         | -         |  |                                         |  
|Realized gain (loss)                                          |  |                                         | -         |  |                                         |  
|Net change in unrealized appreciation/(depreciation)          |  |                                         | -         |  |                                         |  
|Net accretion of discount on investments                      |  |                                         | -         |  |                                         |  
|Transfers into (out of) Level 3                               |  |                                         | -         |  |                                         |  
|Fair value, end of period                                     |  | $                                       | 1,000,000 |  |                                         | $



|Equity Investments - Preferred Stock                          |  | For the year 
ended 
December 31, 
2021 |            |   | For the year 
ended 
December 31, 
2020 |  
|------------------------------------------------------------- |  | --------------------------------------- | ---------- | - | --------------------------------------- | -
|Fair value, beginning of period                               |  | $                                       | 1,127,079  |   |                                         | $
|Purchases of investments                                      |  |                                         | 4,787,689  |   |                                         |  
|Proceeds from principal pre-payments and sales of investments |  |                                         | (1,011,689 | ) |                                         |  
|Realized gain (loss)                                          |  |                                         | 9,908      |   |                                         |  
|Net change in unrealized appreciation/(depreciation)          |  |                                         | 2,006,245  |   |                                         |  
|Net accretion of discount on investments                      |  |                                         | 68,497     |   |                                         |  
|Transfers into (out of) Level 3                               |  |                                         | -          |   |                                         |  
|Fair value, end of period                                     |  | $                                       | 6,987,729  |   |                                         | $



|Warrants                                                      |  | For the year 
ended 
December 31, 
2021 |         |  | For the year 
ended 
December 31, 
2020 |  
|------------------------------------------------------------- |  | --------------------------------------- | ------- |  | --------------------------------------- | -
|Fair value, beginning of period                               |  | $                                       | 235,116 |  |                                         | $
|Purchases of investments                                      |  |                                         | -       |  |                                         |  
|Proceeds from principal pre-payments and sales of investments |  |                                         | -       |  |                                         |  
|Net change in unrealized appreciation/(depreciation)          |  |                                         | 97,896  |  |                                         |  
|Net accretion of discount on investments                      |  |                                         | -       |  |                                         |  
|Transfers into (out of) Level 3                               |  |                                         | -       |  |                                         |  
|Fair value, end of period                                     |  | $                                       | 333,012 |  |                                         | $



| | 1 | Disclosed as First Lien Term Loan Debt Investments as of December
31, 2020.
| | - | ---------------------------------------------------------------------------







F-18






The following table
presents the net change in unrealized appreciation (depreciation) for the period relating to these Level 3 assets that were still held
by the Company at the end of the years ended December 31, 2021 and 2020.



|Net Change in Unrealized Appreciation/(Depreciation) |  | For the year 
ended 
December 31, 
2021 |           |  | For the year 
ended 
December 31, 
2020 |  
|---------------------------------------------------- |  | --------------------------------------- | --------- |  | --------------------------------------- | -
|Senior Secured Loan Debt Instruments1                |  | $                                       | 864,948   |  |                                         | $
|Equity Investments - Common Stock                    |  | $                                       | -         |  |                                         | $
|Equity Investments - Preferred Stock                 |  |                                         | 2,006,245 |  |                                         |  
|Warrants                                             |  |                                         | 97,896    |  |                                         |  
|Total                                                |  | $                                       | 2,969,089 |  |                                         | $



| | 1 | Disclosed as First Lien Term Loan Debt Investments as of December
31, 2020.
| | - | ---------------------------------------------------------------------------



The following tables
present quantitative information about the significant unobservable inputs of the Company’s Level 3 investments as of December 31,
2021 and December 31, 2020. The tables are not intended to be all-inclusive but instead capture the significant unobservable inputs relevant
to the Company’s determination of fair value.



|                                     |  | Fair Value 
December 31, 
2021 |            |  | Valuation
Technique |                           | Unobservable
Input |                  | Range/Input |  |               | Weighted 
Average
Inputs | 
|------------------------------------ |  | ------------------------------ | ---------- |  | ------------------- | ------------------------- | ------------------ | ---------------- | ----------- |  | ------------- | ------------------------ | 
|Senior Secured Loan Debt Instruments |  | $                              | 60,050,297 |  |                     | Discounted cash flow      |                    | Discount rate    |             |  | 6.17% - 22.50 | %                        | 
|Equity Investments - Common Stock    |  | $                              | 1,000,000  |  |                     | Recent Transaction Price* |                    | N/A              |             |  | N/A           |                          | 
|Equity Investments - Preferred Stock |  |                                | 6,987,729  |  |                     | Market approach           |                    | EBITDA multiples |             |  | 3.67x - 8.93  | x                        | 
|Warrants                             |  |                                | 333,012    |  |                     | Option model              |                    | Volatility       |             |  | 61.51         | %                        | 
|Total                                |  | $                              | 68,371,038 |  |                     |                           |                    |                  |             |  |               |                          | 



| | * | Transaction price consists of securities recently purchased. The
Company determined that there was no change to the valuation based on the underlying assumptions used at the closing of such transactions.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                      |  | Fair Value
 December 31, 
2020 |            |  | Valuation
Technique |                           | Unobservable 
Input |                  | Range/Input |  |            | Weighted 
Average
 Inputs | 
|------------------------------------- |  | ------------------------------ | ---------- |  | ------------------- | ------------------------- | ------------------- | ---------------- | ----------- |  | ---------- | ------------------------- | 
|First Lien Term Loan Debt Investments |  | $                              | 15,651,948 |  |                     | Discounted cash flow      |                     | Discount rate    |             |  | 9.1% - 9.6 | %                         | 
|First Lien Term Loan Debt Investments |  |                                | 12,125,000 |  |                     | Recent Transaction Price* |                     | N/A              |             |  | N/A        |                           | 
|Equity Investments - Preferred Stock  |  |                                | 1,127,079  |  |                     | Market approach           |                     | EBITDA multiples |             |  | 9.0        | x                         | 
|Warrants                              |  |                                | 235,116    |  |                     | Option model              |                     | Volatility       |             |  | 53.74      | %                         | 
|Total                                 |  | $                              | 29,139,143 |  |                     |                           |                     |                  |             |  |            |                           | 



| | * | Transaction price consists of securities recently purchased. The
Company determined that there was no change to the valuation based on the underlying assumptions used at the closing of such transactions.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





F-19






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



Common Stock Issuances



For the year ended December 31, 2021,
the Company had the following common stock issuances.



|Date              |  | Shares  issued  and sold |        |  | Aggregate  purchase  price |  
|----------------- |  | ------------------------ | ------ |  | -------------------------- | -
|March 10, 2021    |  |                          | 7,500  |  |                            | $
|June 8, 2021      |  |                          | 4,210  |  |                            | $
|June 9, 2021      |  |                          | 552    |  |                            | $
|November 16, 2021 |  |                          | 33,645 |  |                            | $



For the year ended December 31, 2020,
the Company had the following common stock issuances.



|Date              |  | Shares  issued  and sold |       |  | Aggregate  purchase  price |  
|----------------- |  | ------------------------ | ----- |  | -------------------------- | -
|December 22, 2020 |  |                          | 6,000 |  |                            | $



Distributions



For the year ended December 31, 2021, the Company declared
the following distributions.



|Record Date       |  | Payable Date      |  | Distribution 
Rate 
per Share |       |  | Distribution 
Paid |  
|----------------- |  | ----------------- |  | ----------------------------- | ----- |  | ------------------ | -
|March 23, 2021    |  | March 31, 2021    |  | $                             | 3.24  |  |                    | $
|May 11, 2021      |  | May 28, 2021      |  | $                             | 13.92 |  |                    | $
|August 10, 2021   |  | August 18, 2021   |  | $                             | 17.96 |  |                    | $
|November 11, 2021 |  | November 19, 2021 |  | $                             | 22.12 |  |                    | $



For the year ended December 31, 2020, the Company declared
the following distributions.



|Record Date       |  | Payable Date      |  | Distribution 
Rate 
per Share |      |   | Distribution 
Paid |  
|----------------- |  | ----------------- |  | ----------------------------- | ---- | - | ------------------ | -
|July 10, 2020     |  | July 15, 2020     |  | $                             | 0.50 | 1 |                    | $
|October 15, 2020  |  | October 23, 2020  |  | $                             | 5.00 |   |                    | $
|November 12, 2020 |  | November 19, 2020 |  | $                             | 5.00 |   |                    | $



| | 1 | This per share amount is prior to a reverse stock split effective
as of September 11, 2020 and has not been adjusted to reflect that transaction.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------



Transfer of Shares



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. continued to own 14,662.635 shares of common stock in the Company. On June 1, 2020, a seller
transferred 1,066.317 shares of common stock to Muzinich & Co., Inc. for aggregate consideration of $106,631.70. After the transfer
Muzinich & Co., Inc. continued to own 15,728.952 shares of common stock in the Company. On June 23, 2020, Muzinich & Co., Inc.
transferred 8,774.897 of its shares of the Company’s common stock to certain purchasers for aggregate consideration of $877,489.70.
After the transfer Muzinich & Co., Inc. continued to own 6,954.055 shares of common stock in the Company. All share amounts discussed
in this paragraph are prior to the reverse stock split discussed below and have not been adjusted to reflect that transaction.



There were no transfers of shares for the year ended December
31, 2021.





F-20






Reverse Stock Split



On September 11, 2020, Muzinich BDC,
Inc. filed a Certificate of Amendment (the “Certificate of Amendment”) to the Company’s Certificate of Incorporation,
as amended with the Secretary of State of the State of Delaware to effect a 1-for-10 reverse stock split (the “Reverse Stock Split”),
effective as of September 11, 2020, of the outstanding shares of the Company’s common stock, par value $0.001 per share (the “Common
Stock”) and to reduce the number of authorized shares of Common Stock and authorized shares of the Company’s preferred stock,
par value $0.001 per share (the “Preferred Stock”) by the same ratio (the “Authorized Share Reduction”). The Certificate
of Amendment was approved by the Company’s shareholders at the Company’s 2020 Annual Meeting of Stockholders (the “Annual
Meeting”) held on September 8, 2020.



As a result of the Reverse Stock Split,
the number of outstanding shares of Common Stock was proportionately decreased from 399,879 shares to 39,987.9 shares. The Authorized
Share Reduction reduced the number of shares of Common Stock that the Company is authorized to issue from 5,000,000 to 500,000 and reduced
the number of shares of Preferred Stock that the Company is authorized to issue from 150,000 to 15,000. The Reverse Stock Split and Authorized
Share Reduction did not change the par value of the Common Stock or Preferred Stock.



|9. | Borrowings from Credit Facility
|-- | -------------------------------



In accordance with the 1940 Act, with
certain limitations, the Company is allowed to borrow amounts such that its asset coverage, as defined in the 1940 Act, is at least 150%
after such borrowing. As of December 31, 2021 and December 31, 2020, the Company’s asset coverage ratio was 502% and 369%, respectively.



On December 14, 2020, the Company entered into a committed facility
agreement with BNP Paribas Prime Brokerage International, Limited (“BNP”) (the “Loan Agreement”). The maximum
financing available under the Loan Agreement from time to time is $100,000,000 (the “Maximum Commitment Financing”). Amounts
borrowed under the Loan Agreement may be used to acquire portfolio investments, subject to the collateral posting and other requirements
under the Loan Agreement. The Loan Agreement will accrue interest at a rate per annum equal to (i) Overnight Bank Funding Rate plus an
applicable margin of 0.45% with respect to borrowings that use U.S. Treasury securities as collateral, and (ii) 1-month LIBOR plus an
applicable margin of 1.15%, with respect to borrowings supported by other permitted collateral. BNP has the right to modify these interest
rates upon 29 days’ prior notice. Effective February 24, 2021, the Loan Agreement was amended to state that the cash financing made
available by BNP would be in an amount up to an amount notified by the Company to BNP in writing from time to time (the “Approved
Commitment Financing”), not to exceed the Maximum Commitment Financing. As of the effective date of the amendment, the Approved
Commitment Financing was set at $0. Effective March 11, 2021, the Loan Agreement was amended to provide that the Approved Commitment Financing
would be set at $49,000,000. Effective May 3, 2021, the Loan Agreement was amended to provide that the Approved Commitment Financing would
be set at $0. Effective June 1, 2021, the Loan Agreement was amended to provide that the Approved Commitment Financing would be set at
$49,000,000. Effective August 17, 2021, the Loan Agreement was amended to provide that the Approved Commitment Financing would be set
at $0. Effective August 31, 2021, the Loan Agreement was amended to provide that the Approved Commitment Financing would be set at $50,000,000.
Effective November 2, 2021, the Loan Agreement was amended to provide that the Approved Commitment Financing would be set at $0. Effective
December 2, 2021, the Loan Agreement was amended to provide that the Approved Commitment Financing would be set at $50,000,000.



BNP may terminate the loan agreement
and/or require amounts outstanding under the Loan Agreement to be repaid on at least 29 days’ prior notice. Furthermore, amounts
outstanding under the Loan Agreement can be declared due and payable upon certain defaults and termination events specified thereunder.



As of December 31, 2021 and December
31, 2020, credit facility activity was as follows:



|                                                    |  | December 31, 
2021 |            |   | December 31, 
2020 |  
|--------------------------------------------------- |  | ------------------ | ---------- | - | ------------------ | -
|Outstanding balance                                 |  | $                  | 24,493,184 |   |                    | $
|Average balance during the period when in use       |  | $                  | 29,365,418 |   |                    |  
|Average interest rate during the period when in use |  |                    | 0.52       | % |                    |  
|Interest expenses incurred during the period        |  | $                  | 66,759     |   |                    | $
|Financing expenses incurred during the period       |  | $                  | -          |   |                    | $



NM - not meaningful



As of December 31, 2021 and December
31, 2020, the carrying amount of the Company’s borrowings under the Loan Agreement approximated their fair value. The outstanding
balances in the above table were the Company’s amortized cost which approximated fair value. As of December 31, 2021 and December
31, 2020, the Company was in compliance with all covenants and other requirements.





F-21






|10. | Earnings Per Share
|--- | ------------------



In accordance with
the provisions of ASC Topic 260, Earnings per Share(“ASC 260”), basic and diluted net increase in net assets resulting
from operations per common share is computed by dividing the net increase 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, 2021, there were no dilutive shares.



The following table
sets forth the computation of basic and diluted earnings per common share for the years ended December 31, 2021 and 2020:



|                                                                |  | For the year 
ended 
December 31, 
2021 |           |  | For the year 
ended 
December 31, 
2020 |  
|--------------------------------------------------------------- |  | --------------------------------------- | --------- |  | --------------------------------------- | -
|Net increase (decrease) in net assets resulting from operations |  | $                                       | 7,355,828 |  |                                         | $
|Weighted average common shares of common                        |  |                                         |           |  |                                         |  
|stock outstanding - basic and diluted                           |  |                                         | 59,029.9  |  |                                         |  
|Basic and diluted net increase (decrease) in net assets         |  |                                         |           |  |                                         |  
|resulting from operations per common share                      |  | $                                       | 124.61    |  |                                         | $



|11. | 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 years
ended December 31, 2021 and 2020:



|Per Common Share Operating Performance                                 |  | For the year 
ended 
December 31, 
2021 |            |   | For the year 
ended 
December 31, 
2020 |  
|---------------------------------------------------------------------- |  | --------------------------------------- | ---------- | - | --------------------------------------- | -
|Net Asset Value, Beginning of Period                                   |  | $                                       | 995.02     |   |                                         | $
|                                                                       |  |                                         |            |   |                                         |  
|Results of Operations:                                                 |  |                                         |            |   |                                         |  
|Net Investment Income (Loss) (1)                                       |  |                                         | 73.90      |   |                                         |  
|Net Realized Gains/(Losses) and Unrealized Appreciation/(Depreciation) |  |                                         | 58.70      |   |                                         |  
|Net Increase (Decrease) in Net Assets Resulting from Operations        |  |                                         | 132.60     |   |                                         |  
|                                                                       |  |                                         |            |   |                                         |  
|Distributions to Common Stockholders                                   |  |                                         |            |   |                                         |  
|Distributions from Net Investment Income                               |  |                                         | (57.24     | ) |                                         |  
|Net Decrease in Net Assets Resulting from Distributions                |  |                                         | (57.24     | ) |                                         |  
|                                                                       |  |                                         |            |   |                                         |  
|Capital Share Transactions                                             |  |                                         |            |   |                                         |  
|Issuance of Common Stock                                               |  |                                         | -          |   |                                         |  
|Net Increase (Decrease) Resulting from Capital Share Transactions      |  |                                         | -          |   |                                         |  
|                                                                       |  |                                         |            |   |                                         |  
|Net Asset Value, End of Period                                         |  | $                                       | 1,070.38   |   |                                         | $
|                                                                       |  |                                         |            |   |                                         |  
|Shares Outstanding, End of Period                                      |  |                                         | 91,894.6   |   |                                         |  
|                                                                       |  |                                         |            |   |                                         |  
|Ratio/Supplemental Data                                                |  |                                         |            |   |                                         |  
|Net assets, end of period                                              |  | $                                       | 98,362,398 |   |                                         | $
|Weighted-average shares outstanding (2)                                |  |                                         | 59,029.9   |   |                                         |  
|Total Return (3)                                                       |  |                                         | 13.48      | % |                                         |  
|Portfolio turnover (4)                                                 |  |                                         | 2.91       | % |                                         |  
|Ratio of total expenses to average net assets                          |  |                                         | 2.51       | % |                                         |  
|Ratio of net investment income (loss) to average net assets            |  |                                         | 6.77       | % |                                         |  
|Asset coverage ratio                                                   |  |                                         | 501.59     | % |                                         |  



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

|(2) | Calculated for the years ended December 31, 2021 and 2020,
respectively.
|--- | ------------------------------------------------------------------------

|(3) | 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, and reflects reinvestment
of any distributions to common stockholders. Total return is not annualized and does not include a sales load.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Portfolio turnover is not an annualized amount.
|--- | -----------------------------------------------





F-22






|12. | 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, 2021, except as disclosed below.



On February 7, 2022, the unfunded commitment
of the Ocular Partners HoldCo, LLC term loan, amounting to $9,250,000 in par value, expired without having been funded.



Effective February 15, 2022, the Loan
Agreement was amended to provide that the Approved Commitment Financing would be set at $0.



On March 1, 2022, the Company was fully
repaid in respect of the Wireless Telecom Group, Inc. Term Loan B, for a total of $4,254,682.50.



Effective March 4, 2022, the Loan Agreement
was amended to provide that the Approved Commitment Financing would be set at $40,000,000.



Effective March 14, 2022, the Company
drew on the Loan Agreement, in the amount of $27,000,000.



On March 25, 2022, the Company accepted
an additional $3,852,275 capital commitment from an investor, subject to future drawdown notices.



On March 28, 2022, the Company declared
a distribution of $13.76 per share, or $1,264,470, payable on April 4, 2022.







F-23






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, 2021 (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, 2021 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, 2021.



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, 2021.



Item 9B. Other Information



Not applicable.



Item 9C. Disclosure Regarding Foreign Jurisdictions
that Prevent Inspections.



Not applicable.



55






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           |  | 66  |  | Independent Director                                                      |  | 2023              
|Eric W. Falkeis            |  | 47  |  | Independent Director                                                      |  | 2024              
|Steven J. Paggioli         |  | 71  |  | Independent Director                                                      |  | 2022              
|Interested Directors:      |  |     |  |                                                                           |  |                   
|Paul Fehre                 |  | 59  |  | Director, Chairperson of the Board, Chief Financial Officer and Treasurer |  | 2024              
|Jeffrey Youle              |  | 62  |  | Chief Executive Officer and President                                     |  | 2022              



Executive Officers who are not Directors



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



|Name          |  | Age |  | Position(s)
|------------- |  | --- |  | -----------
|Cheryl Rivkin |  | 51  |  | 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.



Interested 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.





56






Paul Fehre. Mr. Fehre was appointed as
our Chief Financial Officer and Treasurer in August 2019. 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



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.





57






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.









58






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 year ended December 31, 2021.



|Name               |  | Fees 
Earned (1) |        |  | Stock 
Awards (2) |   |   | All Other 
Compensation |  |   | Total | 
|------------------ |  | ---------------- | ------ |  | ----------------- | - | - | ----------------------- |  | - | ----- | 
|Kathleen T. Barr   |  | $                | 50,000 |  |                   | $ | - |                         |  | $ | -     | 
|Eric W. Falkeis    |  | $                | 50,000 |  |                   | $ | - |                         |  | $ | -     | 
|Steven J. Paggioli |  | $                | 50,000 |  |                   | $ | - |                         |  | $ | -     | 



| | (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 30,
2022, 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.



|Name and Address of Beneficial Owner                          |  | Number of 
Shares 
Owned 
Beneficially (1) |         |  | Percentage 
of Class (2) | 
|------------------------------------------------------------- |  | ------------------------------------------ | ------- |  | ------------------------ | 
|Interested Directors                                          |  |                                            |         |  |                          | 
|Jeffrey Youle                                                 |  |                                            | 128.369 |  |                          | 
|Paul Fehre                                                    |  |                                            | -       |  |                          | 
|Independent Directors                                         |  |                                            |         |  |                          | 
|Kathleen T. Barr                                              |  |                                            | -       |  |                          | 
|Eric W. Falkeis                                               |  |                                            | -       |  |                          | 
|Steven J. Paggioli                                            |  |                                            | -       |  |                          | 
|Executive Officers                                            |  |                                            |         |  |                          | 
|Cheryl Rivkin                                                 |  |                                            | -       |  |                          | 
|All executive officers and directors as a group (six persons) |  |                                            | 128.369 |  |                          | 



| | (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 91,894.6 Company’s shares issued and outstanding
on March 30, 2022.
| | --- | ---------------------------------------------------------------------------------------



Set forth below is the dollar range of equity
securities beneficially owned by each of our directors as of March 30, 2022. We are not part of a “family of investment companies,”
as that term is defined in the 1940 Act.



|Name of
    Director  |  | Dollar Range of Equity Securities Beneficially Owned (1)(2)
|--------------------- |  | -----------------------------------------------------------
|Interested Directors  |  |                                                            
|Jeffrey Youle         |  | 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.
| | --- | -------------------------------------------------------------------------------------------------





59






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.



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 obtained an exemptive order (the “Order”) from the SEC permitting 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, including the terms and conditions set forth in the
Order.



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.





60






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.



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.





61






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.



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.





62






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 Muzinich have received an exemptive order (the “Order”) from the
SEC permitting 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, including the terms
and conditions of the Order. 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 “Part I. 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.



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.





63






Item 14. Principal Accounting Fees and Services



Information about aggregate fees billed to us by our principal accountant,
Deloitte & Touche LLP (PCAOB ID No. 34) will be presented under the caption “Principal Accountant Fees and Services” in
our Proxy Statement and is incorporated herein by reference.



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 year ended December 31, 2021.



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.



|Service:           |  | For the year 
ended 
December 31, 
2021 |        
|------------------ |  | --------------------------------------- | -------
|Audit Fees         |  | $                                       | 196,000
|Audit-Related Fees |  |                                         | -      
|Tax Fees           |  |                                         | 16,000 
|All Other Fees     |  |                                         | -      
|Total Fees:        |  | $                                       | 212,000



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.



64






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 
|Statements of Assets and Liabilities as of December 31, 2021 and December 31, 2020              |  | F-3 
|Statements of Operations for the Years Ended December 31, 2021 and December 31, 2020            |  | F-4 
|Statements of Changes in Net Assets for the Years Ended December 31, 2021 and December 31, 2020 |  | F-5 
|Statements of Cash Flows for the Years Ended December 31, 2021 and December 31, 2020            |  | F-6 
|Schedules of Investments as of December 31, 2021 and December 31, 2020                          |  | F-7 
|Notes to Financial Statements                                                                   |  | F-9 



| | (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     |  | Certificate of Amendment of Amended and Restated Certificate of Incorporation (2)                                                                                                                        
|3.3     |  | Bylaws (1)                                                                                                                                                                                               
|4.1     |  | Form of Subscription Agreement (1)                                                                                                                                                                       
|4.2     |  | Description of Securities*                                                                                                                                                                               
|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)                                                                                                                                                                    
|10.5    |  | Loan Agreement with BNP Paribas Prime Brokerage International Limited(3)                                                                                                                                 
|10.6    |  | First Amendment to the Loan Agreement with BNP Paribas Prime Brokerage International Limited(3)                                                                                                          
|10.7    |  | Second Amendment to the Loan Agreement with BNP Paribas Prime Brokerage
International Limited(3)                                                                                                         
|10.8    |  | U.S. Prime Brokerage Agreement between the Company and BNP Paribas Prime Brokerage International Limited, on behalf of itself and as agent for the BNPP Entities (as defined in the Account Agreement)(3)
|10.9    |  | Third Amendment to the Loan Agreement with BNP Paribas Prime Brokerage International Limited*                                                                                                            
|10.10   |  | Fourth Amendment to the Loan Agreement with BNP Paribas Prime Brokerage International Limited*                                                                                                           
|10.11   |  | Fifth Amendment to the Loan Agreement with BNP Paribas Prime Brokerage International Limited*                                                                                                            
|10.12   |  | Sixth Amendment to the Loan Agreement with BNP Paribas Prime Brokerage International Limited*                                                                                                            
|10.13   |  | Seventh Amendment to the Loan Agreement with BNP Paribas Prime Brokerage International Limited*                                                                                                          
|10.14   |  | Eighth Amendment to the Loan Agreement with BNP Paribas Prime Brokerage International Limited*                                                                                                           
|10.15   |  | Ninth Amendment to the Loan Agreement with BNP Paribas Prime Brokerage International Limited*                                                                                                            
|10.16   |  | Tenth Amendment to the Loan Agreement with BNP Paribas Prime Brokerage International Limited*                                                                                                            
|14.1    |  | Code of Ethics(3)                                                                                                                                                                                        
|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*                                                                                                      
|101.INS |  | Inline XBRL Instance Document.                                                                                                                                                                           
|101.SCH |  | Inline XBRL Taxonomy Extension Schema Document.                                                                                                                                                          
|101.CAL |  | Inline XBRL Taxonomy Extension Calculation Linkbase Document.                                                                                                                                            
|101.DEF |  | Inline XBRL Taxonomy Extension Definition Linkbase Document.                                                                                                                                             
|101.LAB |  | Inline XBRL Taxonomy Extension Label Linkbase Document.                                                                                                                                                  
|101.PRE |  | Inline XBRL Taxonomy Extension Presentation Linkbase Document.                                                                                                                                           
|104     |  | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).                                                                                                                










|(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.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Previously filed as an exhibit to the Registrant’s Current
Report on Form 8-K filed with the SEC on September 16, 2020.                                            

|(3) | Previously filed as an exhibit to the Registrant’s Annual Report on Form 10-K filed with the SEC on March 31, 2021.
|--- | -------------------------------------------------------------------------------------------------------------------



| | * | Filed herewith.
| | - | ---------------



65






SIGNATURES



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



|                    | Muzinich BDC, Inc.
|------------------- | ------------------
|Date:March 30, 2022 |                   
|                    | By:               
|                    |                   
|                    |                   



|Date:March 30, 2022 |     |               
|------------------- | --- | --------------
|                    | By: | /s/ Paul Fehre
|                    |     | Name:         
|                    |     | Title:        



Pursuant to the requirements of the Securities Exchange Act of 1934,
this Annual Report on Form 10-K has been signed below by the following persons on behalf of the registrant and in the following capacities
on March 30, 2022.



|/s/ Paul Fehre                                                               |  | 
|---------------------------------------------------------------------------- |  | 
|Paul Fehre                                                                   | 
|Chairperson of the Board of Directors, Chief Financial Officer and Treasurer | 



|/s/ Jeffrey Youle                               |  | 
|----------------------------------------------- |  | 
|Jeffrey Youle                                   | 
|Director, Chief Executive Officer and President | 



|/s/ Kathleen T. Barr                                                |  | 
|------------------------------------------------------------------- |  | 
|Kathleen T. Barr                                                    | 
|Director and Chairperson of the Governance and Nominating Committee | 



|/s/ Eric W. Falkeis                             |  | 
|----------------------------------------------- |  | 
|Eric W. Falkeis                                 | 
|Director and Chairperson of the Audit Committee | 



|/s/ Steven J. Paggioli |  | 
|---------------------- |  | 
|Steven J. Paggioli     | 
|Director               | 





66