Quarterly Report for Quarter Ending June 30, 2024 (Form 10-Q)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the Quarterly Period ended June 30, 2024

☐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)

84-2200473

(I.R.S. Employer Identification No.)

450 Park Avenue

New York, NY10022

(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 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, a smaller reporting company or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

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

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

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

The issuer had 169,101.0 shares of common stock, $0.001 par value per share, outstanding as of August 12, 2024.

MUZINICH BDC, INC.

Form 10-Q for the Quarter Ended June 30, 2024

TABLE OF CONTENTS

	Index		Page No.
PART I.	FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements		1
	Consolidated Statements of Assets and Liabilities as of June 30, 2024 (Unaudited) and December 31, 2023		1
	Consolidated Statements of Operations for the three and six months ended June 30, 2024 and 2023 (Unaudited)		2
	Consolidated Statements of Changes in Net Assets for the three and six months ended June 30, 2024 and 2023 (Unaudited)		3
	Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023 (Unaudited)		4
	Consolidated Schedules of Investments as of June 30, 2024 (Unaudited) and December 31, 2023		5-6
	Notes to Consolidated Financial Statements (Unaudited)		7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		34
Item 4.	Controls and Procedures		34
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings		35
Item 1A.	Risk Factors		35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		35
Item 3.	Defaults Upon Senior Securities		35
Item 4.	Mine Safety Disclosures		35
Item 5.	Other Information		35
Item 6.	Exhibits		36
SIGNATURES		37

PART I.

Item 1. Consolidated Financial Statements

Muzinich BDC, Inc.

Consolidated Statements of Assets and Liabilities

		As of June 30, 2024 (Unaudited)			As of December 31, 2023
Assets:
Non-controlled/non-affiliated investments, at fair value (amortized cost of $232,920,547 and $235,516,880, respectively)		$	228,781,555			$	233,886,915
Affiliated investments, at fair value (amortized cost of $29,033,355 and $28,826,816, respectively)			29,239,187				30,202,458
Cash and cash equivalents			3,607,082				2,832,679
Receivables:
Interest and other			95,648				688,711
Total Assets		$	261,723,472			$	267,610,763
Liabilities:
Credit facility (Note 9)			83,600,000				89,000,000
Management fees payable			432,793				443,075
Professional fees payable			482,813				371,613
Income taxes and penalties			-				548,796
Accrued other general and administrative expenses			117,658				75,808
Total Liabilities		$	84,633,264			$	90,439,292
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 June 30, 2024 and December 31, 2023		$	-			$	-
Common Shares, $0.001 par value; 500,000 shares authorized, 169,101.0 shares issued and outstanding as of June 30, 2024; and 500,000 shares authorized, 169,101.0 shares issued and outstanding as of December 31, 2023			169				169
Additional paid-in capital			177,006,868				177,006,868
Total distributable (accumulated) earnings (losses)			83,171				164,434
Total Net Assets		$	177,090,208			$	177,171,471
Total Liabilities and Net Assets		$	261,723,472			$	267,610,763
Net Asset Value Per Share		$	1,047.25			$	1,047.73

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

Muzinich BDC, Inc.

Consolidated Statements of Operations

		For the six months ended June 30, 2024 (Unaudited)			For the three months ended June 30, 2024 (Unaudited)			For the six months ended June 30, 2023 (Unaudited)			For the three months ended June 30, 2023 (Unaudited)
Investment Income
Investment income from non-controlled/non-affiliated investments and cash equivalents:
Interest income		$	9,333,707			$	4,488,239			$	6,838,949			$	3,861,380
Commitment fees			-				-				-				-
Total investment income from non-controlled/non-affiliated investments and cash equivalents:			9,333,707				4,488,239				6,838,949				3,861,380
Investment income from affiliated investments and cash equivalents:
Interest income			1,874,846				938,250				701,549				547,096
Total investment income from affiliated investments and cash equivalents:			1,874,846				938,250				701,549				547,096
Total Investment Income			11,208,553				5,426,489				7,540,498				4,408,476
Expenses:
Management fees			866,651				432,793				650,804				365,227
Professional fees			488,309				292,227				322,593				163,519
Directors' fees and expenses			90,000				45,000				90,000				45,000
Interest expense			532,206				235,252				-				-
Other general and administrative expenses			183,689				127,628				537,294				232,247
Total Expenses			2,160,855				1,132,900				1,600,691				805,993
Net Investment Income			9,047,698				4,293,589				5,939,807				3,602,483
Net Realized gains/(losses) and unrealized appreciation/(depreciation) on investments
Net realized gains (losses):
Non-controlled/non-affiliated investments			-				-				-				-
Affiliated investments			-				-				-				-
Total net realized gains/(losses)			-				-				-				-
Net change in unrealized appreciation/(depreciation):
Non-controlled/non-affiliated investments			(2,509,027	)			1,422,568				(1,328,875	)			(1,200,283	)
Affiliated investments			(1,169,810	)			(829,392	)			835,138				863,270
Total net change in unrealized appreciation/(depreciation)			(3,678,837	)			593,176				(493,737	)			(337,013	)
Total net realized gains/(losses) and unrealized appreciation/(depreciation) on investments			(3,678,837	)			593,176				(493,737	)			(337,013	)
Net Increase (Decrease) in Net Assets Resulting from Operations		$	5,368,861			$	4,886,765			$	5,446,070			$	3,265,470
Basic and diluted net investment income (loss) per common share		$	53.50			$	25.39			$	47.75			$	26.23
Basic and diluted net increase (decrease) in net assets resulting from operations per common share		$	31.75			$	28.90			$	43.78			$	23.77
Weighted Average Common Shares Outstanding - Basic and Diluted (See Note 10)			169,101.0				169,101.0				124,397.4				137,349.3

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

Muzinich BDC, Inc.

Consolidated Statements of Changes in Net Assets

		For the six months ended June 30, 2024 (Unaudited)			For the three months ended June 30, 2024 (Unaudited)			For the six months ended June 30, 2023 (Unaudited)			For the three months ended June 30, 2023 (Unaudited)
Increase (Decrease) in Net Assets Resulting from Operations:
Net investment income		$	9,047,698			$	4,293,589			$	5,939,807			$	3,602,483
Total net realized gains/(losses)			-				-				-				-
Total net change in unrealized depreciation			(3,678,837	)			593,176				(493,737	)			(337,013	)
Net Increase in Net Assets Resulting from Operations			5,368,861				4,886,765				5,446,070				3,265,470
Decrease in Net Assets Resulting from Stockholder Distributions
Dividends and distributions to stockholders			(5,450,124	)			(5,450,124	)			(2,474,532	)			(2,474,532	)
Net Decrease in Net Assets Resulting from Stockholder Distributions			(5,450,124	)			(5,450,124	)			(2,474,532	)			(2,474,532	)
Increase in Net Assets Resulting from Capital Share Transactions
Issuance of common shares			-				-				56,000,000				14,000,000
Net Increase in Net Assets Resulting from Capital Share Transactions			-				-				56,000,000				14,000,000
Total Increase/(Decrease) in Net Assets			(81,263	)			(563,359	)			58,971,538				14,790,938
Net Assets, Beginning of period			177,171,471				177,653,567				101,713,087				145,893,687
Net Assets, End of period		$	177,090,208			$	177,090,208			$	160,684,625			$	160,684,625
Net asset value per share		$	1,047.25			$	1,047.25			$	1,074.34			$	1,074.34
Common shares outstanding at the end of the period			169,101.0				169,101.0				149,566.1				149,566.1

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

Muzinich BDC, Inc.

Consolidated Statements of Cash Flows

		For the six months ended June 30, 2024 (Unaudited)			For the six months ended June 30, 2023 (Unaudited)
Cash Flows from Operating Activities:
Net increase (decrease) in net assets resulting from operations		$	5,368,861			$	5,446,070
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			3,678,837				493,737
Net realized (gains)/losses on investments			-				-
Net accretion of discount and amortization of premium on investments			(3,888,052	)			(2,465,337	)
Purchases and drawdowns of investments			(282,447,947	)			(247,935,043	)
Sales and maturities of and principal paydowns on investments			288,725,793				177,359,475
Changes in operating assets and liabilities:
Interest and other			593,063				11,042
Management fees payable			(10,282	)			52,715
Professional fees payable			111,200				18,960
Interest taxes and penalties			(548,796	)			-
Accrued other general and administrative expenses			41,850				17,655
Net cash provided by (used in) operating activities			11,624,527				(67,000,726	)
Cash Flows from Financing Activities:
Borrowings on credit facility			161,244,477				134,037,707
Payments on credit facility			(166,644,477	)			(118,770,308	)
Distributions paid in cash			(5,450,124	)			(4,324,630	)
Proceeds from issuance of common shares			-				56,000,000
Net cash provided by (used in) financing activities			(10,850,124	)			66,942,769
Net increase (decrease) in cash and cash equivalents			774,403				(57,957	)
Cash and cash equivalents, beginning of period			2,832,679				8,144,235
Cash and cash equivalents, end of period		$	3,607,082			$	8,086,278
Supplemental Information
Cash paid during the period for interest		$	444,136			$	-

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

Muzinich BDC, Inc.

Consolidated Schedule of Investments

As of June 30, 2024 (Unaudited)

Portfolio Company		Industry		Spread Above Index		Floor			Interest Rate/ Discount Rate			Paid in Kind 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 SOFR USD + 9.87%			1.14	%			16.16323	%			6.16323	%		11/23/2021		5/24/2027		$	13,925,116			$	13,723,811			$	13,529,988				7.6	%
3RC Blue Chip Group Holdings 2nd Lien Term Loan (3,4)		Packaged Foods & Meats		-			-				16.16323	%			6.16323	%		8/8/2023		5/24/2027			1,432,823				1,393,079				1,392,166				0.8	%
AGS Automotive Solutions 2nd Lien Term Loan (3,4,5)		Automotive		-			-				11.25000	%			N/A			7/11/2022		7/11/2027			10,366,325				10,190,618				10,478,575				5.9	%
Aqua Leisure Recreational Term Loan B (3,4)		Leisure Products		-			-				10.00000	%			10.00000	%		1/8/2021, 12/2/2021, 4/12/24 8		12/31/2028			21,745,077				21,342,549				18,745,815				10.6	%
TEAM NexBelt Investors, LLC Term Loan(3,4)		Apparel, Accessories & Luxury Goods		3 Month SOFR USD + 7.50%			3.00	%			13.05984	%			N/A			4/13/2022		4/13/2027			7,014,963				6,924,573				7,084,114				4.0	%
Quest Bidco LLC Term Loan(3,4)		Leisure Facilities		3 Month SOFR USD + 9.00%			1.00	%			14.55984	%			N/A			5/9/2022		5/9/2027			12,463,103				12,339,317				10,799,419				6.1	%
Quest Bidco LLC Term Loan(3,4)		Leisure Facilities		-			-				5.00000	%			5.00000	%		1/29/2024		1/29/2030			19,802				19,802				17,158				0.0	%
Macrosoft, Inc. Term Loan(3,4)		IT Consulting		3 Month SOFR USD + 7.25%			4.00	%			12.80984	%			N/A			5/31/2023		5/31/2028			14,812,500				14,562,246				14,835,288				8.4	%
Sayres and Associates (Vikings35) 2nd Lien Term Loan A (3,4)		Diversified Support Services		1 Month SOFR USD + 9.75%			4.00	%			15.17918	%			N/A			6/10/2021, 3/5/2024		6/10/2026			15,920,000				15,823,440				16,272,417				9.2	%
AGS Automotive Solutions Delayed Draw Term Loan (3,4,5)		Automotive		-			-				11.25000	%			0.25000	%		8/31/2022		7/11/2027			4,263,175				4,208,860				4,309,338				2.4	%
Montbleau Holdings, LLC Term Loan B(3,4)		Commercial Building Products		3 Month SOFR USD + 6.00%			7.00	%			13.00000	%			1.00000	%		3/27/2023		3/21/2028			8,020,222				7,889,199				8,132,853				4.6	%
Montbleau Holdings Term Loan C(3,4)		Commercial Building Products		3 Month SOFR USD + 6.00%			7.00	%			13.00000	%			1.00000	%		11/1/2023		3/21/2028			5,012,639				4,922,181				5,083,033				2.9	%
Total Senior Secured Loan Debt Investments																						$	114,995,745			$	113,339,675			$	110,680,164				62.5	%
Equity Investments - Common Stock
3RC Blue Chip Group Holdings Invesco LLC		Packaged Foods & Meats		N/A			N/A				N/A				N/A			11/23/2021		N/A		$	1,000			$	1,000,000			$	945,049				0.5	%
AGS Automotive Solutions Holdings - C/S A-1		Automotive		N/A			N/A				N/A				N/A			7/11/2022		N/A			750				998,258				654,880				0.4	%
AGS Automotive Solutions Holdings - C/S A-2		Automotive		N/A			N/A				N/A				N/A			10/27/2022		N/A			685				911,743				598,124				0.3	%
Macrosoft, Inc.		IT Consulting		N/A			N/A				N/A				N/A			5/31/2023		N/A			300,000				300,000				113,152				0.1	%
Montbleau Holdings, LLC		Commercial Building Products		N/A			N/A				N/A				N/A			3/27/2023		N/A			500,000				510,000				1,448,637				0.8	%
QUEST JVCO LIMITED - Class A		Leisure Facilities		N/A			N/A				N/A				N/A			5/9/2022		N/A			638,245				638,245				-				0.0	%
QUEST JVCO LIMITED - Loan Notes		Leisure Facilities		N/A			N/A				N/A				N/A			5/9/2022		N/A			111,755				111,755				-				0.0	%
TEAM NexBelt Investors, LLC Class A Units		Apparel, Accessories & Luxury Goods		N/A			N/A				N/A				N/A			4/13/2022		N/A			650,000				650,000				662,523				0.4	%
Total Common Stock																							2,202,435			$	5,120,001			$	4,422,365				2.5	%
Equity Investments - Preferred Stock
3RC Blue Chip Group Holdings Invesco LLC		Packaged Foods & Meats		N/A			N/A				N/A				N/A			8/8/2023		N/A		$	500			$	500,000			$	472,525				0.3	%
MPC Consolidation Preferred Stock - Class A		Health Care Equipment & Supplies		N/A			N/A				8.00000	%			N/A			3/30/2021		N/A			454,546				749,688				2,092,646				1.2	%
Recreational Products Preferred Stock		Leisure Products		N/A			N/A				8.00000	%			N/A			1/8/2021, 12/2/2021 8		N/A			2,083,596				2,125,354				20,836				0.0	%
Vikings35 Preferred Stock - Class A		Diversified Support Services		N/A			N/A				8.00000	%			N/A			6/10/2021, 6/12/2023, 3/4/2024		N/A			806,431				806,431				813,621				0.5	%
Total Preferred Stock																							3,345,073			$	4,181,473			$	3,399,628				2.0	%
Total Equity Investments																										$	9,301,472			$	7,821,993				4.5	%
Short-Term Investments
United States Treasury Bill (6,7)		N/A		N/A			N/A				5.22650	%			N/A			6/4/2024, 6/7/2024, 6/13/2024, 6/21/2024, 6/25/2024		7/5/2024		$	106,350,000			$	106,288,093			$	106,288,093				60.0	%
United States Treasury Bill (6,7)		N/A		N/A			N/A				5.21500	%			N/A			6/27/2024		7/16/2024		$	4,000,000			$	3,991,305			$	3,991,305				2.3	%
Total Short-Term Investments																						$	110,350,000			$	110,279,398			$	110,279,398				62.3	%
Total Non-Controlled/Non-Affiliated Investments																										$	232,920,547			$	228,781,555				129.3	%
Affiliated Investments(9)
Senior Secured Loan Debt Investments
Midwest Trading Group Acquisition, LLC Term Loan(3,4)		Computer & Electronics Retail		3 Month SOFR USD + 8.75%			4.00	%			14.04823	%			2.00000	%		3/3/2023		3/3/2028		$	15,220,095			$	14,989,434			$	14,809,101				8.4	%
Diamond Blade Warehouse Term Loan		Industrial Machinery		-			-				13.50000	%			1.50000	%		11/28/2023		11/28/2028			11,426,369				11,218,921				11,696,189				6.6	%
Total Senior Secured Loan Debt Investments																						$	26,646,464			$	26,208,355			$	26,505,290				15.0	%
Equity Investments - Common Stock
Midwest Trading Group Acquisition, LLC Class A-1		Computer & Electronics Retail		N/A			N/A				N/A				N/A			3/3/2023		N/A		$	500			$	250,000			$	35,111				0.0	%
Midwest Trading Group Acquisition, LLC Class C		Computer & Electronics Retail		N/A			N/A				N/A				N/A			3/3/2023		N/A			500				250,000			$	35,111				0.0	%
Total Equity Investments Common Stock																						$	1,000			$	500,000			$	70,222				0.0	%
Equity Investments - Preferred Stock
Diamond Blade Warehouse Preferred Stock - Class A		Industrial Machinery		N/A			N/A				8.00000	%			N/A			11/29/2023		N/A			1,095,044				2,325,000				2,663,675				1.5	%
Total Equity Investments - Preferred Stock																							1,095,044				2,325,000				2,663,675				1.5	%
Total Equity Investments																						$	1,096,044			$	2,825,000			$	2,733,897				1.5	%
Total Affiliated Investments																										$	29,033,355			$	29,239,187				16.5	%
Total Investments																										$	261,953,902			$	258,020,742				145.8	%
Liabilities in Excess of Other Assets																															(80,930,534	)			(45.8	)%
Net assets																														$	177,090,208				100.0	%

SOFR - Secured Overnight Interest Rate.

(1)	The amortized cost represents the original cost adjusted for the accretion of discounts and amortization of 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 June 30, 2024. 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 SOFR 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.

(9)	As defined in the 1940 Act, the Company is deemed to be an "affiliate person" of the portfolio company as the Company owns between 5% or more, up to 25% (inclusive), of the portfolio company's voting securities (Note 4).

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

Muzinich BDC, Inc.

Schedule of Investments

As of December 31, 2023

Portfolio Company		Industry		Spread Above Index		Floor			Interest Rate/ Discount Rate			Paid in Kind 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 SOFR USD + 9.87%			1.14	%			16.25980	%			6.25982	%		11/23/2021		5/24/2027			13,566,039			$	13,346,145			$	13,607,240				7.7	%
3RC Blue Chip Group Holdings 2nd Lien Term Loan (3,4)		Packaged Foods & Meats		-			-				16.25980	%			6.25982	%		8/8/2023		5/24/2027			1,462,367				1,432,333				1,466,809				0.8	%
AGS Automotive Solutions 2nd Lien Term Loan (3,4,5)		Automotive		-			-				11.25000	%			N/A			7/11/2022		7/11/2027			10,432,599				10,231,337				10,641,641				6.0	%
MP Consolidation, LLC Senior Subordinate Term Loan		Health Care Equipment & Supplies		-			-				11.00000	%			N/A			3/30/2021		3/30/2026			3,750,000				3,716,361				3,753,814				2.1	%
Aqua Leisure Recreational Term Loan B (3,4)		Leisure Products		3 Month LIBOR USD + 10.75%			1.00	%			16.40640	%			N/A			1/8/2021, 12/2/2021, 3/31/2022 8		6/1/2027			15,816,667				15,682,023				14,036,181				7.9	%
TEAM NexBelt Investors, LLC Term Loan		Apparel, Accessories & Luxury Goods		3 Month LIBOR USD + 7.50%			3.00	%			11.65640	%			N/A			4/13/2022		4/13/2027			7,321,727				7,214,960				7,432,470				4.2	%
Quest Bidco LLC Term Loan		Leisure Facilities		3 Month SOFR USD + 9.00%			1.00	%			16.39480	%			N/A			5/9/2022		5/9/2027			12,083,313				11,937,274				10,317,226				5.8	%
Macrosoft, Inc. Term Loan		IT Consulting		3 Month SOFR USD + 7.25%			4.00	%			12.59810	%			N/A			5/31/2023		5/31/2028			14,887,500				14,614,786				14,654,619				8.3	%
Sayres and Associates (Vikings35) 2nd Lien Term Loan A (3,4)		Diversified Support Services		1 Month SOFR USD + 9.75%			4.00	%			15.19281	%			N/A			6/10/2021		6/10/2026			13,895,000				13,766,966				14,173,423				8.0	%
AGS Automotive Solutions Delayed Draw Term Loan (3,4,5)		Automotive		-			-				11.25000	%			0.25000	%		8/31/2022		7/11/2027			4,271,376				4,203,194				4,356,963				2.5	%
Sayres and Associates (Vikings35) 2nd Lien Term Loan B (3,4)		Diversified Support Services		1 Month SOFR USD + 9.25%			6.00	%			15.25000	%			N/A			6/12/2023		6/10/2026			5,503,515				5,399,415				5,613,792				3.2	%
Montbleau Holdings, LLC Term Loan B		Commercial Building Products		3 Month SOFR USD + 5.00%			7.00	%			12.00000	%			N/A			3/27/2023		3/21/2028			8,000,000				7,857,562				8,054,417				4.5	%
Montbleau Holdings Term Loan C		Commercial Building Products		3 Month SOFR USD + 5.00%			7.00	%			12.00000	%			N/A			11/1/2023		3/21/2028			5,000,000				4,902,425				5,034,010				2.8	%
Total Senior Secured Loan Debt Investments																						$	115,990,103			$	114,304,781			$	113,142,605				63.8	%
Equity Investments - Common Stock
3RC Blue Chip Group Holdings Invesco LLC		Packaged Foods & Meats		N/A			N/A				N/A				N/A			11/23/2021		N/A			1,000			$	1,000,000			$	1,034,473				0.6	%
AGS Automotive Solutions Holdings - C/S A-1		Automotive		N/A			N/A				N/A				N/A			7/11/2022		N/A			750				1,000,001				758,102				0.4	%
AGS Automotive Solutions Holdings - C/S A-2		Automotive		N/A			N/A				N/A				N/A			10/27/2022		N/A			685				910,000				692,399				0.4	%
Macrosoft, Inc.		IT Consulting		N/A			N/A				N/A				N/A			5/31/2023		N/A			300,000				300,000				176,042				0.1	%
Montbleau Holdings, LLC		Commercial Building Products		N/A			N/A				N/A				N/A			3/27/2023		N/A			500,000				510,000				1,857,579				1.0	%
QUEST JVCO LIMITED - Class A		Leisure Facilities		N/A			N/A				N/A				N/A			5/9/2022		N/A			638,245				638,245				20,474				0.0	%
QUEST JVCO LIMITED - Loan Notes		Leisure Facilities		N/A			N/A				N/A				N/A			5/9/2022		N/A			111,755				111,755				3,585				0.0	%
TEAM NexBelt Investors, LLC Term Loan		Apparel, Accessories & Luxury Goods		N/A			N/A				N/A				N/A			4/13/2022		N/A			650,000				650,000				916,053				0.5	%
Total Common Stock																							3,201,435			$	5,120,001			$	5,458,707				3.0	%
Equity Investments - Preferred Stock
3RC Blue Chip Group Holdings Invesco LLC		Packaged Foods & Meats		N/A			N/A				N/A				N/A			11/23/2021		N/A			500			$	500,000			$	517,236				0.4	%
MPC Consolidation Preferred Stock - Class A		Health Care Equipment & Supplies		N/A			N/A				8.00000	%			N/A			3/30/2021		N/A			454,546			$	749,687			$	1,822,580				1.0	%
Ocular Partners HoldCo, LLC		Health Care Technology		N/A			N/A				N/A				N/A			2/7/2020		N/A			1,000,000				-				157,118				0.1	%
Recreational Products Preferred Stock		Leisure Products		N/A			N/A				8.00000	%			N/A			1/8/2021, 12/2/2021 9		N/A			2,083,596				2,125,354				193,001				0.1	%
Vikings35 Preferred Stock - Class A		Diversified Support Services		N/A			N/A				8.00000	%			N/A			6/10/2021, 6/12/2023		N/A			538,348				538,348				416,959				0.2	%
Total Preferred Stock																							4,576,490			$	3,913,389			$	3,106,894				1.8	%
Total Equity Investments																										$	9,033,390			$	8,565,601				4.8	%
Short-Term Investments
United States Treasury Bill (6,7)		N/A		N/A			N/A				5.31000	%			N/A			11/22/2023, 11/28/2023, 12/11/2023, 12/14/2024, 12/21/2023, 12/26/2023, 12/29/2023		1/4/2024		$	90,250,000			$	90,210,654			$	90,210,654				50.9	%
United States Treasury Bill (6,7)		N/A		N/A			N/A				5.31000	%			N/A			12/19/2023		1/11/2024		$	22,000,000			$	21,968,055			$	21,968,055				12.4	%
Total Short-Term Investments																						$	112,250,000			$	112,178,709			$	112,178,709				63.3	%
Total Non-Controlled/Non-Affiliated Investments																										$	235,516,880			$	233,886,915				131.9	%
Affiliated Investments (9)
Senior Secured Loan Debt Investments
Midwest Trading Group Acquisition, LLC Term Loan		Computer & Electronics Retail		3 Month SOFR USD + 8.75%			4.00	%			14.14480	%			N/A			3/3/2023		3/3/2028			15,141,798			$	14,885,291			$	15,313,821				8.6	%
Diamond Blade Warehouse Term Loan		Industrial Machinery		-			-				13.50000	%			1.50000	%		11/28/2023		11/28/2028			11,340,101				11,116,525				11,098,500				6.3	%
Total Senior Secured Loan Debt Investments																						$	26,481,899			$	26,001,816			$	26,412,321				14.9	%
Equity Investments - Common Stock
Midwest Trading Group Acquisition, LLC Class A-1		Computer & Electronics Retail		N/A			N/A				N/A				N/A			3/3/2023		N/A			500			$	250,000			$	270,069				0.2	%
Midwest Trading Group Acquisition, LLC Class C		Computer & Electronics Retail		N/A			N/A				N/A				N/A			3/3/2023		N/A			500				250,000				270,069				0.2	%
Equity Investments - Preferred Stock
Diamond Blade Warehouse Preferred Stock - Class A		Industrial Machinery		N/A			N/A				8.00000	%			N/A			11/29/2023		N/A			1,095,044				2,325,000				3,250,000				1.8	%
Total Equity Investments																						$	1,096,044			$	2,825,000			$	3,790,137				2.2	%
Total Affiliated Investments																										$	28,826,816			$	30,202,458			17.1	%
Total Investments																										$	264,343,696			$	264,089,373				149.0	%
Liabilities in Excess of Other Assets																															(86,917,902	)			(49.0	)%
Net assets																														$	177,171,471				100.0	%

LIBOR - London Interbank Offered Rate

SOFR - Secured Overnight Financing Rate.

(1)	The amortized cost represents the original cost adjusted for the accretion of discounts and amortization of 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, 2023. 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 SOFR or (iii) the Certificate of Deposit rate. Bank loans, while exempt from registration, under the Securities Act of 1933, as amended 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. On 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.

(9)	As defined in the Investment Company Act of 1940, as amended, the Company is deemed to be an "affiliate person" of the portfolio company as the Company owns between 5% or more, up to 25% (inclusive), of the portfolio company's voting securities (Note 4).

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

Muzinich BDC, Inc.

Notes to Consolidated Financial Statements (Unaudited)

1.	Organization

Muzinich BDC, Inc. (the "Company," "we," "our," or "us") 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 Securities and Exchange Commission ("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 our board of directors (the "Board" or 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") was scheduled to 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. On August 9, 2022, the Board of Directors approved the extension of the Commitment Period by one year, to August 23, 2023. 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.

In December 2023, the Company established a wholly-owned subsidiary named Muzinich BDC Holdings LLC ("Subsidiary"). The Subsidiary holds/will hold equity or equity-like investments in partnerships. Going forward, all intercompany balances will be eliminated in consolidation, and the Company will consolidate the Subsidiary for accounting purposes but the Subsidiary will not be consolidated for U.S. federal income tax purposes and may incur U.S. federal income tax expense as a result.

Fiscal Year End

The Company's fiscal year ends on December 31.

2.	Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The accompanying consolidated financial statements of the Company and related financial information have been prepared pursuant to the requirements for reporting on Form 10-Q 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").

Use of Estimates

U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of increases and decreases in net assets from operations during the reported periods. The Company believes the estimates and assumptions underlying the consolidated financial statements are reasonable and supportable based on the information available as of June 30, 2024 and December 31, 2023, however macroeconomic, geopolitical and other events may have an impact on the global economy generally, and the Company's business in particular, making any estimates and assumptions as of June 30, 2024 and December 31, 2023 inherently less certain than they would be absent the current and potential impacts of such circumstances. 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.

Offering Costs

Offering costs have been recorded as a reduction to paid-in capital. For the three and six months ended June 30, 2024 and 2023, the Company did not incur further offering costs.

Company Common Stock Share Valuation

In accordance with U.S. GAAP, the net asset value ("NAV") 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, we 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. 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.

We expect that there will not be readily available market values for many 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 the Adviser, under the oversight of the Board, under our Adviser's valuation policy and process described below. The factors that may be taken into account in pricing our investments at fair value generally include, as appropriate, comparisons of financial ratios of the portfolio companies that issued such private equity securities to peer companies that are public, 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 and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, the Adviser considers the pricing indicated by the external event to corroborate or revise our valuation. Under current auditing standards, the notes to our consolidated financial statements refer to the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on our consolidated financial statements.

With respect to investments for which market quotations are not readily available, the Adviser fair values such investments pursuant to Rule 2a-5 under the 1940 Act. Pursuant to Rule 2a-5, the Board has designated the Adviser to perform the fair valuation determinations, subject to Board oversight, pursuant to valuation procedures approved by the Board of Directors which follow 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 and the "Portfolio Committee" of the Adviser;

(2)

Preliminary valuation conclusions are then documented and discussed with the Company's senior management and that of our Adviser;

(3)

At least once annually, the valuation for each portfolio investment will be reviewed by an independent valuation firm;

(4)

In following these approaches, the types of factors that are taken into account in fair value pricing investments include, as relevant, but are not limited to: comparison to publicly-traded securities, including such factors as yield, maturity and measures of credit quality; the enterprise value of a portfolio company; the nature and realizable value of any collateral; the portfolio company's ability to make payments and its earnings and discounted cash flow; and the markets in which the portfolio company does business;

(5)

The Audit Committee of our Board of Directors reviews the valuations of the Adviser on a quarterly basis; and

(6)

Our Board of Directors oversees the Company's valuation process and in support of this oversight the Adviser provides periodic reports to the Board on valuation matters.

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

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

Interest and Dividend Income Recognition

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

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

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

Other Income

From time to time, the Company may receive fees for services provided to portfolio companies. These fees 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 statements 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 Consolidated Financial Statements when the deal origination costs are incurred, such deal origination costs will be reported on the Consolidated 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 security and currency translations

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.

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 consolidated 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.

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 one-year period ending on October 31 of 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 consolidated 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.

For the tax year ended December 31, 2022, the Company was unable to satisfy the requirement that a RIC must derive at least 90% of its annual gross income from "qualifying income." As a result, the Company paid tax expenses on the income generated from the Company's ownership percentage in the assets from which the nonqualifying income was derived during the tax year ended December 31, 2022 in the amount of $548,796, which included $21,839 in penalties (the "Section 851(i) Tax Liability").The Adviser reimbursed the Company in full for payment of the Section 851(i) Tax Liability. In December 2023, the Company established a wholly-owned subsidiary named Muzinich BDC Holdings, LLC ("Subsidiary"). The Subsidiary holds equity or equity-like investments in partnerships. Going forward, all intercompany balances will be eliminated in consolidation, and the Company will consolidate the Subsidiary for accounting purposes but the Subsidiary will not be consolidated for U.S. federal income tax purposes and may incur U.S. federal income tax expense as a result.

The Company does not consider the Section 851(i) Tax Liability due on the income generated from the Company's ownership percentage in assets from which the nonqualifying income was derived during the tax year ended December 31, 2022 to be an uncertain tax position. 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 federal tax years 2020, 2021, 2022 and 2023 remain subject to examination by the Internal Revenue Service and the State of Delaware.

Distributions and Components of Net Assets on a Tax Basis

For the six month period ended June 30, 2024, the Company declared the following distribution.

Record Date		Payable Date		Distribution Rate per Share			Distribution Paid
May 9, 2024		May 20, 2024		$	32.23			$	5,450,124

As of December 31, 2023, the Company's components of total distributable (accumulated) earnings (losses) on a tax basis were as follows:

		Year Ended December 31, 2023
Undistributed Ordinary Income-net		$	667,340
Total Undistributed Earnings		$	667,340
Capital Loss Carryforward
Perpetual Long-Term		$	(424,674	)
Perpetual Short-Term		$	(101,203	)
Timing Differences (Organizational Costs/Other)			(316,413	)
Unrealized Earnings (Losses)-net			339,384
Total Accumulated Earnings (Losses)-net		$	164,434

As of December 31, 2023, the costs of investments for the Company for tax purposes was $263,749,989.

		Year Ended December 31, 2023
Tax cost		$	263,749,989
Gross unrealized appreciation on investments			6,986,440
Gross unrealized depreciation on investments			(6,647,056	)
Total investments at fair value		$	264,089,373

The difference between GAAP-basis and tax basis unrealized gains (losses) is attributable primarily to differences in the tax treatment of partnership investments.

For the six months ended June 30, 2024, the Company did not reclassify any amounts, as any reclassifications are determined at year end.

The difference between the Company's U.S. GAAP basis total distributable earnings and its tax basis total distributable earnings as of December 31, 2023, was primarily due to a reclassification of a non-deductible excise tax to additional paid in capital. For the year ended December 31, 2023, the Company reclassified for book purposes amounts arising from permanent book/tax differences as follows:

		For the Year Ended December 31, 2023
Additional paid-in capital		$	(20,164	)
Total distributable earnings		$	20,164

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 Fees

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 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 three and six months ended June 30, 2024 and 2023, the Company incurred Management Fees of $432,793, $866,651, $365,227, and $650,804, respectively.

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.

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. The Board of Directors most recently approved the renewal of the Investment Management Agreement at a meeting held on July 25, 2024.

For the three and six months ended June 30, 2024 and 2023, 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 draws 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 six months ended June 30, 2024 and 2023, 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 June 30, 2024 and 2023, the total costs reimbursable to Muzinich were $385 and $0, respectively, and are disclosed within Professional fees payable and Accrued other general and administrative expenses on the Consolidated Statements of Assets and Liabilities.

Shares held by Affiliated Accounts

As of June 30, 2024, certain entities affiliated with the Adviser held shares of the Company. Muzinich U.S. Private Debt SCSp held 107,138.5 shares of the Company, approximately 63.4% of outstanding shares of the Company, and Muzinich held 1,832.5 shares of the Company, approximately 1.1% of outstanding shares of the Company.

Investments in Affiliates

Affiliated companies are those that are "affiliated persons" as defined in section 2(a)(3) of the 1940 Act. They include, among other entities, issuers of 5% or more of whose outstanding voting securities are held by the Company. For the six months ended June 30, 2024, the Company had the following transactions with affiliated companies:

Senior Secured Loan Debt		Par Value June 30, 2024			Fair Value December 31, 2023			Acquisitions			Dispositions			Amortization			Realized Gain (Loss)			Change in Unrealized Appreciation/ Depreciation			Fair Value June 30, 2024			Interest Income
Midwest Trading Group Acquisition, LLC Term Loan		$	15,220,095			$	15,313,821			$	-			$	-			$	24,375			$	-			$	(529,095	)		$	14,809,101			$	1,089,881
Diamond Blade Warehouse Term Loan		$	11,426,369			$	11,098,500			$	-			$	-			$	16,128			$	-			$	581,561			$	11,696,189			$	784,965
Total																						$	-			$	52,466			$	26,505,290			$	1,874,846

Equity Investments - Common Stock		Shares June 30, 2024			Fair Value December 31, 2023			Acquisitions			Dispositions			Realized Gain (Loss)			Change in Unrealized Appreciation/ Depreciation			Fair Value June 30, 2024			Dividend Income
Midwest Trading Group Acquisition, LLC Class A-1			500			$	270,069			$	-			$	-			$	-			$	(234,958	)		$	35,111			$	-
Midwest Trading Group Acquisition, LLC Class C			500			$	270,069			$	-			$	-			$	-			$	(234,958	)		$	35,111			$	-
Total																		$	-			$	(469,916	)		$	70,222			$	-

Equity Investments - Preferred Stock		Shares June 30, 2024			Fair Value December 31, 2023			Acquisitions			Dispositions			Realized Gain (Loss)			Change in Unrealized Appreciation/ Depreciation			Fair Value June 30, 2024
Diamond Blade Warehouse			1,095,044			$	3,250,000			$	-			$	-			$	-			$	(586,325	)		$	2,663,675
Total																		$	-			$	(586,325	)		$	2,663,675

5.	Commitments and Contingencies

As of June 30, 2024, the Company had no unfunded commitments to provide debt financing to its portfolio companies. As of June 30, 2024, there were no capital calls or draw requests made by the portfolio companies. Any 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 Consolidated Statement of Assets and Liabilities and are not reflected in the Company's Consolidated Statement of Assets and Liabilities.

As of June 30, 2024, 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 June 30, 2024 and December 31, 2023.

		June 30, 2024			December 31, 2023
		Amortized			Fair			Amortized			Fair
		Cost			Value			Cost			Value
Senior Secured Loan Debt Instruments		$	139,548,030			$	137,185,454			$	140,306,597			$	139,554,926
Equity Investments - Common Stock			5,620,001				4,492,587				5,620,001				5,998,844
Equity Investments - Preferred Stock			6,506,473				6,063,303				6,238,389				6,356,894
Short-Term Investments			110,279,398				110,279,398				112,178,709				112,178,709
Total Investments		$	261,953,902			$	258,020,742			$	264,343,696			$	264,089,373

100% of the investments held as of June 30, 2024 and December 31, 2023 were within the United States. The industry composition of investments based on fair value, as a percentage of net assets, as of June 30, 2024 and December 31, 2023 was as follows (the following table does not include short-term investments):

		June 30, 2024			December 31, 2023
Leisure Products			10.6	%			8.0	%
Diversified Support Services			9.6	%			11.4	%
Packaged Foods & Meats			9.2	%			9.5	%
Automotive			9.1	%			9.3	%
IT Consulting			8.4	%			8.4	%
Computer & Electronics Retail			8.4	%			8.9	%
Commercial Building Products			8.3	%			8.4	%
Industrial Machinery			8.1	%			8.1	%
Leisure Facilities			6.1	%			5.8	%
Apparel, Accessories & Luxury Goods			4.4	%			4.7	%
Health Care Equipment & Supplies			1.2	%			3.1	%
Health Care Technology			0.0	%			0.1	%
Total			83.4	%			85.7	%

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 the Adviser'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 June 30, 2024 and December 31, 2023.

		Fair Value Hierarchy as of June 30, 2024
Description		Level 1			Level 2			Level 3			Total
Senior Secured Loan Debt Instruments		$	-			$	-			$	137,185,454			$	137,185,454
Equity Investments - Common Stock			-				-				4,492,587				4,492,587
Equity Investments - Preferred Stock			-				-				6,063,303				6,063,303
Short-Term Investments			-				110,279,398				-				110,279,398
Total		$	-			$	110,279,398			$	147,741,344			$	258,020,742

		Fair Value Hierarchy as of December 31, 2023
Description		Level 1			Level 2			Level 3			Total
Senior Secured Loan Debt Instruments		$	-			$	-			$	139,554,926			$	139,554,926
Equity Investments - Common Stock			-				-				5,998,844				5,998,844
Equity Investments - Preferred Stock			-				-				6,356,894				6,356,894
Short-Term Investments			-				112,178,709				-				112,178,709
Total		$	-			$	112,178,709			$	151,910,664			$	264,089,373

The following tables present changes in the fair value of investments for which Level 3 inputs were used to determine the fair value for the six months ended June 30, 2024 and 2023.

Senior Secured Loan Debt Instruments		For the six months ended June 30, 2024			For the six months ended June 30, 2023
Fair value, beginning of period		$	139,554,926			$	74,859,228
Purchases of investments			6,282,285				53,025,370
Proceeds from principal pre-payments and sales of investments			(10,066,840	)			(359,479	)
Net Realized gain (loss)			-				255,244
Net change in unrealized appreciation/(depreciation)			(1,610,906	)			482,213
Net accretion of discount on investments			3,025,989				-
Transfers into (out of) Level 3			-				-
Fair value, end of period		$	137,185,454			$	128,262,581

Equity Investments - Common Stock		For the six months ended June 30, 2024			For the six months ended June 30, 2023
Fair value, beginning of period		$	5,998,844			$	4,518,313
Purchases of investments			-				1,310,000
Proceeds from principal pre-payments and sales of investments			-				-
Net Realized gain (loss)			-				-
Net change in unrealized appreciation/(depreciation)			(1,506,257	)			684,413
Net Amortization of premium on investments			-				-
Transfers into (out of) Level 3			-				-
Fair value, end of period		$	4,492,587			$	6,512,726

Equity Investments - Preferred Stock		For the six months ended June 30, 2024			For the six months ended June 30, 2023
Fair value, beginning of period		$	6,356,894			$	4,463,601
Purchases of investments			268,083				288,348
Proceeds from principal pre-payments and sales of investments			(19,193	)			-
Net Realized gain (loss)			-				-
Net change in unrealized appreciation/(depreciation)			(561,674	)			(1,607,927	)
Net accretion of discount on investments			19,193
Transfers into (out of) Level 3			-				-
Fair value, end of period		$	6,063,303			$	3,144,022

Warrants		For the six months ended June 30, 2024			For the six months ended June 30, 2023
Fair value, beginning of period		$	-			$	248,788
Purchases of investments			-				-
Proceeds from principal pre-payments and sales of investments			-				-
Net change in unrealized appreciation/(depreciation)			-				(52,437	)
Net accretion of discount on investments			-				-
Transfers into (out of) Level 3			-				-
Fair value, end of period		$	-			$	196,351

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 as of the six months ended June 30, 2024 and 2023.

Net Change in Unrealized Appreciation/(Depreciation)		For the six months ended June 30, 2024			For the six months ended June 30, 2023
Senior Secured Loan Debt Instruments		$	(1,610,906	)		$	482,213
Equity Investments - Common Stock			(1,506,257	)			684,413
Equity Investments - Preferred Stock			(561,674	)			(1,607,927	)
Warrants			-				(52,437	)
Total		$	(3,678,837	)		$	(493,738	)

The following tables presents quantitative information about the significant unobservable inputs of the Company's Level 3 investments as of June 30, 2024 and December 31, 2023. The tables are not intended to be all-inclusive but instead capture the significant unobservable inputs relevant to the Adviser's determination of fair value.

		Fair Value June 30, 2024		Valuation Technique		Unobservable Input		Range/Input		Weighted Average Inputs
Senior Secured Loan Debt Instruments		$	137,185,455		Discounted cash flow		Discount rate			6.10% - 17.48%			9.22	%
Equity Investments - Common Stock		$	4,492,586		Market approach		EBITDA multiples			3.57x - 7.55x			6.72	x
Equity Investments - Preferred Stock		$	6,063,303		Market approach		EBITDA multiples			4.64x - 13.19x			5.56	x
Total		$	147,741,344

1)	Estimate of contractual earnout payments contingent upon achieving certain operating performance metrics of the underlying company.

Fair Value December 31, 2023

Valuation Technique

Unobservable Input

Range/Input

Weighted Average Inputs

Senior Secured Loan Debt Instruments

$

139,554,926

Discounted cash flow

Discount rate

6.03% - 17.07%

9.48

%

Equity Investments - Common Stock

$

5,998,844

Market approach

EBITDA multiples

3.50x - 7.58x

6.10

x

Equity Investments - Preferred Stock

$

3,250,000

Recent Transaction Price 1

N/A

N/A

N/A

Equity Investments - Preferred Stock

$

157,118

Estimated Contingent Payment 2

N/A

N/A

N/A

Equity Investments - Preferred Stock

$

2,949,776

Market approach

EBITDA multiples

5.07x - 5.79x

5.65

x

Total

$

151,910,664

1)	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.
2)	Estimate of contractual earnout payments contingent upon achieving certain operating performance metrics of the underlying company.

8.	Net Assets

Common Stock Issuances

For the six months ended June 30, 2024 the Company did not issue any common stock.

For the six months ended June 30, 2023, the Company had the following common stock issuances.

Date		Shares issued and sold			Aggregate purchase price
February 28, 2023			39,316.6			$	42,000,000
June 26, 2023			12,927.1			$	14,000,000

Distributions

For the six months ended June 30, 2024, the Company declared the following distribution.

Record Date		Payable Date			Distribution Rate per Share			Distribution Paid
May 9, 2024			May 20, 2024			$	32.23			$	5,450,124

For the six months ended June 30, 2023, the Company declared the following distribution.

Record Date		Payable Date			Distribution Rate per Share			Distribution Paid
May 11, 2023			May 19, 2023			$	18.11			$	2,474,533

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 June 30, 2024 and December 31, 2023, the Company's asset coverage ratio was 311.83% and 299.07%, 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 SOFR 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 September 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. Effective February 15, 2022, the Loan Agreement was amended to provide that the Approved Commitment Financing would be set at $0. Effective March 4, 2022, the Loan Agreement was amended to provide that the Approved Commitment Financing would be set at $40,000,000. Effective May 10, 2022, the Loan Agreement was amended to provide that the Approved Commitment Financing would be set at $0. Effective May 23, 2022, the Loan Agreement was amended to provide that the Approved Commitment Financing would be set at $55,000,000. Effective August 5, 2022, the Loan Agreement was amended to provide that the Approved Commitment Financing would be set at $0. Effective August 31, 2022, the Loan Agreement was amended to provide that the Approved Commitment Financing would be set at $60,000,000. Effective November 3, 2022, the Loan Agreement was amended to provide that the Approved Commitment Financing would be such amount as notified by the Company to BNP from time to time via electronic mail, which amount will become effective as of the first business day immediately following express confirmation thereof by BNP, except to the extent expressly indicated in such confirmation to take effect on the same business day. Effective November 29, 2022, the Approved Commitment Financing was set at $65,000,000. Effective January 23, 2023, the Approved Commitment Financing was set at $0. Effective March 10, 2023, the Approved Commitment Financing was set at $85,000,000. Effective April 12, 2023, the Approved Commitment Financing was set at $0. Effective May 25, 2023, the Approved Commitment Financing was set at $70,000,000. Effective August 2, 2023, the Approved Commitment Financing was set at $0. Effective September 14, 2023, the Approved Commitment Financing was set at $85,000,000. Effective October 6, 2023, the Approved Commitment Financing was set at $0. Effective December 6, 2023, the Approved Commitment Financing was set at $80,000,000. Effective December 22, 2023, the Approved Commitment Financing was set at $90,000,000. Effective January 4, 2024, the Approved Commitment Financing was set at $0. Effective March 5, 2024, the Approved Commitment Financing was set at $90,000,000. Effective April 6, 2024, the Approved Commitment Financing was set at $0. Effective June 5, 2024, the Approved Commitment Financing was set at $90,000,000.

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 and for the six month period ended June 30, 2024 and as of and for the year ended December 31, 2023, credit facility activity was as follows:

		June 30, 2024			December 31, 2023
Outstanding balance as of period end		$	83,600,000			$	89,000,000
Average balance during the period when in use		$	56,306,779			$	47,463,847
Average interest rate during the period when in use			5.77	%			5.40	%
Interest expenses incurred during the period		$	532,206			$	741,447
Financing expenses incurred during the period NM		$	-			$	-
NM - not meaningful

As of June 30, 2024 and December 31, 2023, the carrying amounts of the Company's borrowings under the Loan Agreement approximated their fair value (which would be classified as Level 2 in the ASC 820 hierarchy). The outstanding balances in the above table were the Company's amortized cost which approximated fair value. As of June 30, 2024 and December 31, 2023, the Company was in compliance with all covenants and other requirements.

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 June 30, 2024, there were no dilutive shares.

The following table sets forth the computation of basic and diluted earnings per common share for the three and six months ended June 30, 2024 and 2023:

		For the six months ended June 30, 2024			For the three months ended June 30, 2024			For the six months ended June 30, 2023			For the three months ended June 30, 2023
Net increase (decrease) in net assets resulting from operations		$	5,368,861			$	4,886,765			$	5,446,070			$	3,265,470
Weighted average common shares of common stock outstanding - basic and diluted			169,101.0				169,101.0				124,397.4				137,349.3
Basic and diluted net increase (decrease) in net assets resulting from operations per common share		$	31.75			$	28.90			$	43.78			$	23.77

11.	Financial Highlights

The following is a schedule of financial highlights for the six months ended June 30, 2024 and June 30, 2023. The per common share data has been derived from information provided in the consolidated financial statements.

		For the six months ended June 30, 2024			For the six months ended June 30, 2023
Per Common Share Operating Performance
Net Asset Value, Beginning of Period		$	1,047.73			$	1,045.12
Results of Operations:
Net Investment Income (Loss) (1)			53.50				47.75
Net Realized Gains/(Losses) and Unrealized Appreciation/(Depreciation)			(21.75	)			(0.42	)
Net Increase (Decrease) in Net Assets Resulting from Operations			31.75				47.33
Distributions to Common Stockholders
Distributions from Net Investment Income			(32.23	)			(18.11	)
Net Decrease in Net Assets Resulting from Distributions			(32.23	)			(18.11	)
Net Asset Value, End of Period		$	1,047.25			$	1,074.34
Shares Outstanding, End of Period			169,101.0				149,566.1
Ratios/Supplemental Data
Net assets, end of period		$	177,090,208			$	160,684,625
Weighted-average shares outstanding (2)			169,101.0				124,397.4
Total Return (3)			3.03	%			4.53	%
Portfolio turnover (4)			4.45	%			0.21	%
Ratio of total expenses to average net assets (5)			2.44	%			2.37	%
Ratio of net investment income (loss) to average net assets (5)			10.23	%			8.80	%
Asset coverage ratio			311.83	%			348.09	%

(1)	The per common share data was derived using weighted average shares outstanding.
(2)	Calculated for the six months ended June 30, 2024 and 2023, 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.
(5)	The ratios reflect an annualized amount.

12.	Subsequent Events

In preparing these consolidated financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through the date the consolidated 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-Q or would be required to be recognized in the consolidated financial statements as of June 30, 2024, except as disclosed below.

Effective July 8, 2024, the Approved Commitment Financing was set at $0.

On August 8, 2024, the Company declared a distribution of $25.35 per share, or $4,286,709, payable on August 19, 2024.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with our consolidated financial statements and related notes and other financial information appearing elsewhere in this Quarterly Report on Form 10-Q. 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 Quarterly Report on Form 10-Q 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-Q regarding general domestic and global economic conditions, our future financing plans, our ability to operate as a business development company ("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 II Item 1A. Risk Factors," as well as any cautionary language in this Form 10-Q, 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-Q 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-Q 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 conflicts between Russia and Ukraine and Israel and Hamas;

●

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 conflicts between Russia and Ukraine and Israel and Hamas;

●

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-Q 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 II Item 1A. Risk Factors" and elsewhere in this Form 10-Q. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Form 10-Q. 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.

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 of 1940, as amended (the "1940 Act"), and has elected to be treated as a RIC 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 June 30, 2024, the Company has capital commitments from investors in the amount of $205,000,000. As of June 30, 2024 the Company has additional paid in capital in the amount of $177,006,868. 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.

Expenses

The Company anticipates that all investment professionals and staff of the Adviser, when and to the extent engaged in providing investment advisory and management services, and the base compensation, bonus and benefits, and the routine overhead expenses, of such personnel allocable to such services, will be provided and paid for by the Adviser and its affiliates.

The Company will bear all other costs and expenses of its operations, administration and transactions, including, without limitation, those described in "Item 1. Business - Fees and Expenses" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

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.

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 June 30, 2024, the Company had 14 debt investments totaling $137,185,454, and 15 equity investments totaling $10,555,890 across 10 portfolio companies with an aggregate fair value of approximately $148 million. As of June 30, 2024, our debt investments consisted entirely of senior secured loans. Short-term investments as of June 30, 2024 consisted of United States Treasury bills that will expire within sixty days of purchase, with an aggregate fair value of approximately $110 million.

The Company's investment activity for the six months ended June 30, 2024 and 2023 is presented below (information presented herein is at cost unless otherwise indicated).

		For the six months ended June 30, 2024			For the six months ended June 30, 2023
New investments:
Gross investment purchases		$	147,456,627			$	29,506,379
Less: sold investments			(141,946,704	)			(10,053,487	)
Total new investments		$	5,509,923			$	29,277,892
Principal/par/units amount of investments funded:
Term loan debt investments		$	6,282,285			$	28,689,544
Equity investments			268,083				588,348
Number of new investment commitments			3				2
Average new investment commitment amount		$	783,456			$	11,750,000
Weighted average maturity for new investment commitments			4.1 Years				6.35 Years
Percentage of new debt investment commitments at floating rates			100	%			100	%
Percentage of new debt investment commitments at fixed rates			0	%			0	%
Weighted average spread SOFR of new floating rate investment commitments			9.25	%			7.45	%

As of June 30, 2024 and 2023, the Company's investments consisted of the following:

		June 30, 2024			June 30, 2023
								Percentage of Total									Percentage of Total
		Amortized			Fair			Investments at			Amortized			Fair			Investments at
		Cost			Value			Fair Value			Cost			Value			Fair Value
Senior secured loan debt instruments1		$	139,548,030			$	137,185,454				53.17	%		$	128,019,801				128,262,581				58.82	%
Equity investments - Common Stock			5,620,001				4,492,587				1.74	%			5,620,001				6,512,726				2.99	%
Equity investments - Preferred Stock			6,506,473				6,063,303				2.35	%			3,413,390				3,144,022				1.44	%
Warrants			-				-				0.00	%			156,811				196,351				0.09	%
Short-term investments			110,279,398				110,279,398				42.74	%			79,951,402				79,951,402				36.66	%
Total Investments		$	261,953,902			$	258,020,742				100.00	%		$	217,161,405			$	218,067,082				100.00	%

1	Disclosed as First Lien Term Loan Debt Investments as of September 30, 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 portfolio 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.

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 three and six months ended June 30, 2024 and 2023:

		For the six months ended June 30, 2024			For the three months ended June 30, 2024			For the six months ended June 30, 2023			For the three months ended June 30, 2023
Total investment income		$	11,208,553			$	5,426,489			$	7,540,498			$	4,408,476
Total expenses			2,160,855				1,132,900				1,600,691				805,993
Net investment income (loss)			9,047,698				4,293,589				5,939,807				3,602,483
Total net realized gains (losses)											-				-
Total net change in unrealized appreciation/(depreciation)			(3,678,837	)			593,176				(493,737	)			(337,013	)
Total net realized and unrealized appreciation/(depreciation)			(3,678,837	)			593,176				(493,737	)			(337,013	)
Net increase (decrease) in net assets resulting from operations		$	5,368,861			$	4,886,765			$	5,446,070			$	3,265,470

Investment Income

Investment income for the three and six months ended June 30, 2024 and 2023 was as follows:

		For the six months ended June 30, 2024			For the three months ended June 30, 2024			For the six months ended June 30, 2023			For the three months ended June 30, 2023
Interest from term loan debt instruments and preferred stock		$	11,208,553			$	5,426,489			$	7,538,656			$	4,406,634
Commitment fees
Interest from cash and cash equivalents			-				-				-				-
Interest from short-term investments			-				-				1,842				1,842
Total investment income		$	11,208,553			$	5,426,489			$	7,540,498			$	4,408,476

Investment income increased from $7,540,498 for the six months ended June 30, 2023 to $11,208,555 for the six months ended June 30, 2024, primarily due to an increase in interest income as a result of further investment activity subsequent to the six months ended June 30, 2023.

Expenses

Operating expenses for the three and six months ended June 30, 2024 and 2023 were as follows:

		For the six months ended June 30, 2024			For the three months ended June 30, 2024			For the six months ended June 30, 2023			For the three months ended June 30, 2023
Management fees		$	866,651			$	432,793			$	650,804			$	365,227
Other operating expenses			1,294,204				700,107				949,887				440,766
Expenses waived			-				-				-				-
Total expenses		$	2,160,855			$	1,132,900			$	1,600,691			$	805,993

Total expenses increased from $1,600,691 for the six months ended June 30, 2023 to $2,160,855 for the six months ended June 30, 2024, primarily due to an increase in management fees as a result of further investment activity subsequent to the six months ended June 30, 2023.

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 1940 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 1940 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 1940 Act restrictions. 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. 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.

In connection with its use of leverage, the Company intends to 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.

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 six months ended June 30, 2024, the Company had no common stock issuances.

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.

We expect that there will not be readily available market values for many 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 the Adviser, under the oversight of the Board, under the Adviser's valuation policy and process described below. The factors that may be taken into account in pricing our investments at fair value generally include, as appropriate, comparisons of financial ratios of the portfolio companies that issued such private equity securities to peer companies that are public, 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 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 consolidated financial statements refer to the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on our consolidated financial statements.

With respect to investments for which market quotations are not readily available, the Adviser fair values such investments pursuant to Rule 2a-5 under the 1940 Act. Pursuant to Rule 2a-5 under the 1940 Act, the Board has designated the Adviser to perform the fair valuation determinations, subject to Board oversight, pursuant to valuation procedures approved by the Board of Directors which follow 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 and the "Portfolio Committee" of the Adviser;

(2)

Preliminary valuation conclusions are then documented and discussed with the Company's senior management and that of our Adviser;

(3)

At least once annually, the valuation for each portfolio investment will be reviewed by an independent valuation firm.

(4)

In following these approaches, the types of factors that are taken into account in fair value pricing investments include, as relevant, but are not limited to: comparison to publicly-traded securities, including such factors as yield, maturity and measures of credit quality; the enterprise value of a portfolio company; the nature and realizable value of any collateral; the portfolio company's ability to make payments and its earning and discounted cash flow; and the markets in which the portfolio company does business;

(5)

The Audit Committee of our Board of Directors reviews the valuations of the Adviser on a quarterly basis; and

(6)

Our Board of Directors oversees the Company's valuation process and in support of this oversight the Adviser provides periodic reports to the Board on valuation matters.

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. For the six months ended June 30, 2024, the Company declared the following distribution.

Record Date		Payable Date			Distribution Rate per Share			Distribution Paid
May 9, 2024			May 20, 2024			$	32.23			$	5,450,124

We have elected to be a BDC under the 1940 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.

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 six months ended June 30, 2024 and 2023, the Company incurred Management Fees of $866,651 and $650,804, 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 June 30, 2024, 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.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are subject to financial market risks, including changes in interest rates. We 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 Adviser, overseen 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.

Interest Rate Risk

Based on our Consolidated Statement of Assets and Liabilities as of June 30, 2024, 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) in thousands.

Basis Point Change		Interest Income			Interest Expense			Net Income
-25 Basis Points			(292	)			(69	)			(223	)
Base Interest Rate			-				-				-
+100 Basis Points			1,168				275				893
+200 Basis Points			2,364				550				1,814
+300 Basis Points			3,613				825				2,788

This analysis is indicative of the potential impact on our investment income as of June 30, 2024, assuming an immediate and sustained change in interest rates as noted. In addition, this analysis does not adjust for potential changes in our portfolio or our borrowing facilities after June 30, 2024 nor does it take into account any changes in the credit performance of our loans that might occur should interest rates change.

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

As of June 30, 2024 (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 Exchange 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 by us in the reports that we file or submit under the Exchange Act 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 recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

(b) Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended June 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. 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, without limitation, proceedings relating to the enforcement of our rights under contracts with our portfolio companies. Our and the Adviser's business is also subject to extensive regulation, which may result in regulatory proceedings against us and/or the Adviser. The outcome of any legal or regulatory proceedings cannot be predicted with certainty, and there can be no assurance whether any such proceedings will have a material adverse effect on our or the Adviser's financial condition or results of operations in any future reporting period.

Item 1A. Risk Factors

You should carefully consider the risks referenced below and all other information contained in this Quarterly Report on Form 10-Q, including our interim consolidated financial statements and the related notes thereto, before making a decision to purchase our securities. Any such risks and uncertainties are not the only ones facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may have a material adverse effect on our business, financial condition and/or operating results, as well as the value of our securities.

In addition to the other information set forth in this report, you should carefully consider the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023 (filed with the SEC on March 29, 2024), which could materially affect our business, financial condition or operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Sales of Unregistered Equity Securities

Except as previously reported by the Company on its current reports on Form 8-K, the Company did not sell any securities during the period covered by this Quarterly Report on Form 10-Q that were not registered under the Securities Act.

Issuer Purchases of Equity Securities

We did not repurchase any of our equity securities during the three months ended June 30, 2024.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosure

Not applicable.

Item 5. Other Information

During the fiscal quarter ended June 30, 2024, none of our directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any non-Rule 10b5-1 trading arrangement.

Item 6. Exhibits

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)
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.
*	Filed herewith.
**	Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Muzinich BDC, Inc.
Date: August 12, 2024	By:	/s/ Jeffrey Youle
		Name:	Jeffrey Youle
		Title:	Chief Executive Officer

Date: August 12, 2024	By:	/s/ Paul Fehre
		Name:	Paul Fehre
		Title:	Chief Financial Officer

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