Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

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 Annual Report on Form 10-K. Unless indicated otherwise, the "Company," "we," "us," and "our" refer to Muzinich Corporate Lending Income Fund, Inc., and the "Adviser" refers to Muzinich Direct Lending Adviser, LLC, an affiliate of Muzinich & Co.

Forward-Looking Statements

This Annual Report on Form 10-K contains forward-looking statements that involve substantial risks and uncertainties. Such statements are not historical facts and are based on current expectations, estimates, projections, opinions and/or our beliefs and/or those of Muzinich. You can identify these statements by the use of forward-looking terminology such as "may," "will," "should," "expect," "anticipate," "project," "estimate," "intend," "continue" or "believe" or the negatives thereof or other variations thereon or comparable terminology. You should read statements that contain these words carefully because they discuss our plans, strategies, prospects and expectations concerning our business, operating results, financial condition and other similar matters. We believe that it is important to communicate our future expectations to our investors. These forward-looking statements include, but are not limited to, information in this Form 10-K regarding general domestic and global economic conditions, our future financing plans, our ability to operate as a BDC and the expected performance of, and the yield on, our portfolio companies. In particular, there are forward-looking statements under "Management's Discussion and Analysis of Financial Condition and Results of Operations." There may be events in the future, however, that we are not able to predict accurately or control. The factors referenced under "Part I. Item 1A. Risk Factors," as well as any cautionary language in this Form 10-K, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. You should be aware that the occurrence of the events described in these risk factors and elsewhere in this Form 10-K could have a material adverse effect on our business, results of operation and financial position. Any forward-looking statement made by us in this Form 10-K speaks only as of the date on which we make it. Factors or events that could cause actual results to differ may emerge from time to time, and it is not possible to predict all of them. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

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

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our future operating results;

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our business prospects and the prospects of our portfolio companies;

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risk associated with possible disruptions in our operations or the economy generally, including as a result of ongoing geopolitical conflicts or trade activity, including the imposition of tariffs;

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changes in the general interest rate environment;

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general economic, political and industry trends and other external factors, including uncertainty surrounding the financial and political stability of the United States and other countries;

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our contractual arrangements and relationships with third parties;

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actual and potential conflicts of interest with our Adviser and its affiliates;

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

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the ability of our portfolio companies to achieve their objectives;

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the use of borrowed money to finance a portion of our investments;

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the adequacy of our cash resources and working capital;

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the timing and amount of cash flows, if any, from the operations of our portfolio companies;

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the ability of our Adviser to locate suitable investments for us and to monitor and administer our investments;

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the timing and manner in which we conduct an IPO and/or Exchange Listing of our Common Stock;

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the ability of our Adviser and its affiliates to attract and retain highly talented professionals;

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our ability to qualify and maintain our qualification as a BDC and as a RIC under the Code;

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the impact on our business of U.S. and international financial reform legislation, rules and regulations;

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the effect of changes in tax laws and regulations and interpretations thereof; and

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the risks, uncertainties and other factors we identify under "Part I, Item 1A. Risk Factors" and elsewhere in this Form 10-K.

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

Please note that under Section 27A(b)(2)(B) of the Securities Act and Section 21E(b)(2)(B) of the Exchange Act, the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 do not apply to forward-looking statements made in periodic reports we file under the Exchange Act because we are an investment company.

Overview

We were incorporated on July 5, 2023 under the laws of the State of Delaware. We were initially formed with the name Muzinich Direct Lending Income Fund, Inc., which we changed to Muzinich Corporate Lending Income Fund, Inc. on August 25, 2023. We are structured as an externally managed, non-diversified, closed-end management investment company that has elected to be regulated as a BDC under the 1940 Act. We have elected to be treated, qualify, and intend to continue to qualify annually as a RIC under subchapter M of the Code for U.S. federal income tax purposes. As such, we are required to comply with various regulatory requirements, such as the requirement to invest at least 70% of our assets in "qualifying assets," source of income limitations, asset diversification requirements, and the requirement to distribute annually at least 90% of our taxable income and tax-exempt interest.

As of December 31, 2025, we had capital commitments from investors in the amount of $94,500,000. As of December 31, 2025, we had equity capital in the amount of $94,831,623. See "Equity Activity" under "Financial Condition, Liquidity and Capital Resources" below for further details. We anticipate raising additional equity capital for investment purposes through drawdowns in respect of capital commitments made by investors pursuant to Private Offerings of our Common Stock.

Subject to the overall supervision of our Board of Directors and in accordance with the 1940 Act, the Adviser manages our day-to-day operations and provides investment advisory services to us. The Adviser is registered with the SEC as an investment adviser under the Advisers Act and manages our investment activities pursuant to the Advisory Agreement. Additionally, the Adviser has entered into the Resource Sharing Agreement with Muzinich & Co., pursuant to which Muzinich & Co. makes certain personnel and resources available to the Adviser to provide certain investment advisory services to us under the Advisory Agreement. Under the Advisory Agreement, we pay the Adviser fees for investment management services consisting of a Base Management Fee and Incentive Fee. See "Part I, Item 1. Business - Advisory Agreement - Compensation of the Adviser" for more information regarding this fee structure.

We have also entered into the Administration Agreement with the Administrator, pursuant to which the Administrator provides the administrative and recordkeeping services necessary for us to operate. In addition, we have entered into the Fund Accounting Agreement with U.S. Bank, pursuant to which U.S. Bank provides accounting services to us. We will reimburse U.S. Bank for all reasonable costs and expenses incurred by U.S. Bank in providing these services, as provided by the Administration Agreement and Fund Accounting Agreement, respectively.

The Board has ultimate authority as to our investments, but it has delegated authority to the Adviser to select and monitor our investments under the Advisory Agreement, subject to the supervision of the Board. A majority of the Board will at all times consist of members who Independent Directors.

Private Offerings and Liquidity Events

We are a non-exchange traded, perpetual-life BDC, which is a BDC whose shares are not listed for trading on a stock exchange or other securities market. We use the term "perpetual-life BDC" to describe an investment vehicle of indefinite duration, whose shares are intended to be sold by the BDC on a continuous basis at a price generally equal to the BDC's NAV per share. We reserve the right to issue shares of our Common Stock at a price above the then-calculated NAV per share based on a variety of factors, including without limitation the total amount of our organizational and other expenses (including actual and/or accrued expenses, which may include any estimates thereof). We may not sell any Common Stock below NAV per share, except pursuant to Section 23(b) or Section 63(2) of the 1940 Act.

In our perpetual-life structure, we may, subject to the Adviser's commercially reasonable judgment and the Board's sole discretion, offer to repurchase our stockholders' Common Stock on a quarterly basis beginning in the first full calendar quarter following the second anniversary of the Initial Closing Date, but we are not obligated to offer to repurchase Common Stock in any quarter in our discretion. Quarterly repurchases, if any, will be limited to 5% of our Common Stock outstanding (either by number of shares or aggregate NAV), as determined by the Board in its discretion. Any repurchase program will be subject to our available cash, compliance with the RIC qualification and diversification rules, the 1940 Act, and Rule 13e-4 of the Exchange Act. The Board will have discretion to commence, amend, or suspend any share repurchase program if it deems such action to be in the best interests of stockholders. At this time, our Board has not authorized repurchase offers or the commencement of the share repurchase program. We will continue to evaluate the appropriateness of making repurchase offers in light of market conditions and other relevant factors. We believe that our perpetual nature will enable us to execute a patient and opportunistic strategy and be able to invest across different market environments. A perpetual-life structure may reduce the risk of us being a forced seller of assets in market downturns compared to non-perpetual funds.

We have conducted and expect to conduct further Private Offerings of our Common Stock to investors in reliance on exemptions from the registration requirements of the Securities Act. Common Stock will be offered and sold during Private Offerings (i) in the United States under the exemption provided by Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder, and other exemptions of similar import in the laws of the states and jurisdictions where the offering will be made, and (ii) outside of the United States in accordance with Regulation S of the Securities Act. Within the United States, shares of Common Stock are being offered solely to investors that are "accredited investors," as defined in Rule 501(a) of Regulation D.

We seek to raise equity capital through private placements on a continuous basis through one or more Closings at which we accept funds from investors in connection with such investors' purchases of shares of Common Stock. The Initial Closing occurred on January 19, 2024. Each Subsequent Closing will generally occur on a quarterly basis on the first day of each quarter (based on the NAV per share as determined as of the previous day (i.e., the last day of the preceding quarter) or on a date as determined by the Adviser in its sole discretion).

The Board may, in its sole discretion, cause us to conduct a "Liquidity Event," which is defined as including (1) an IPO or Exchange Listing, or (2) a Sale Transaction. A "Sale Transaction" means (a) the sale of all or substantially all of our assets to, or other liquidity event with, another entity or (b) a transaction or series of transactions, including by way of merger, consolidation, recapitalization, reorganization, or sale of stock, in each case for consideration of either cash and/or publicly listed securities of the acquirer. A Sale Transaction also may include a sale, merger or other transaction with one or more affiliated investment companies managed by the Adviser. We do not anticipate seeking stockholder approval to engage in a Liquidity Event, unless stockholder consent is required by applicable law. The decision to cause us to conduct a Liquidity Event will take into consideration factors such as prevailing market conditions at the time and our portfolio composition. Our ability to commence and consummate a Liquidity Event is not assured, and will depend on a variety of factors, including the size and composition of our portfolio and prevailing market conditions at the time.

Should the Board determine to cause us to conduct a Liquidity Event, each stockholder will be required to cooperate with us and take all actions, execute all documents and provide all consents as may be reasonably necessary or appropriate to consummate a Liquidity Event, it being understood that we may, subject to applicable Delaware law and the 1940 Act and without obtaining the consent of any stockholders, make modifications to our constitutive documents, capital structure and governance arrangements so long as, in the reasonable opinion of the Board, (x) the economic interests of our stockholders are not materially diminished or materially impaired, (y) such modifications are consistent with the requirements applicable to BDCs under the 1940 Act and (z) such modifications are not inconsistent with the provisions set forth in our Private Placement Memorandum.

Upon completion of any Liquidity Event, pre-existing stockholders may also be required to enter into a lock-up agreement with the underwriters of any Liquidity Event or otherwise for a period not to exceed 180 days (or such longer period as may be required or determined to be advisable by the underwriters of the IPO or otherwise based on prevailing market conditions and practice at the time).

Key Components of Our Results of Operations

Investments

Our level of investment activity will vary substantially from period to period depending on many factors, including the amount of debt available to middle-market companies, the general economic environment and the competitive environment for the type of investments we make.

Revenues

We expect to generate revenue 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 in which we invest typically is not 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 and lower than "BBB-" by Fitch or 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, such as PIK, 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 consulting fees. Certain of these fees may be capitalized and amortized as additional interest income over the life of the related loan.

Expenses

All investment professionals and staff of the Adviser, when and to the extent engaged in providing us with investment advisory and management services, and the base compensation, bonus and benefits, and the routine overhead expenses, of such personnel allocable to such services, is provided and paid for by the Adviser and its affiliates. We bear all other costs and expenses of our operations, administration and transactions, including, without limitation, those described in "Part I, Item 1. Business - Fees and Expenses."

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

Pursuant to the Fee Waiver Letter, on December 26, 2025, the Adviser voluntarily agreed to reduce the Base Management Fee from the annual rate of 1.25% of the value of our net assets to an annual rate of 0.95% of the value of our net assets for the fiscal quarters ended December 31, 2025 and ending March 31, 2026. We will recommence paying the Adviser a Base Management Fee that is consistent with the existing terms of the Advisory Agreement on April 1, 2026 unless the Adviser, in its sole discretion, decides to extend the term of the Fee Waiver Letter.

Portfolio Composition and Investment Activity

As of December 31, 2025, we had 67 debt investments, three equity investments and one warrant investment in 65 portfolio companies, along with one money market fund investment, with an aggregate fair value of approximately $94.3 million. As of December 31, 2024, we had 64 debt investments, two equity investments and one warrant investment in 63 portfolio companies, along with one money market fund investment, with an aggregate fair value of approximately $87.4 million. As of both December 31, 2025 and 2024, our debt investments consisted entirely of corporate bond investments and senior secured loans. As of December 31, 2025, we did not have any short-term investments. Short-term investments as of December 31, 2024 consisted of United States Treasury bills that expire within 120 days of purchase, with an aggregate fair value of approximately $7.9 million.

Our investment activity for the years ended December 31, 2025 and 2024 is presented below (information presented herein is at cost unless otherwise indicated):

		For the year ended December 31, 2025				For the year ended December 31, 2024
New investments:
Gross investment purchases		$	46,151,945			$	226,837,188
Less: sold investments			(42,192,313	)			(144,705,441	)
Total new investments		$	3,959,632			$	82,131,747
Principal/par/unit amount of investments funded:
Corporate bond investments		$	23,325,000			$	52,117,137
Senior secured loan debt investments			22,160,920				26,822,189
Equity investments			984,960				2,131,170
Warrant investments			177,759				64,153
Number of new investment commitments			36				133
Average new investment commitment amount		$	1,294,473			$	1,421,954
Weighted average maturity for new investment commitments			4.2 Years				3.9 Years
Percentage of new debt investment commitments at floating rates			71	%			51	%
Percentage of new debt investment commitments at fixed rates			29	%			49	%
Weighted average spread Secured Overnight Financing Rate ("SOFR") of new floating rate investment commitments			2.19	%			4.02	%

As of December 31, 2025 and 2024, our investments consisted of the following:

		December 31, 2025								December 31, 2024
		Amortized				Fair				Amortized				Fair
		Cost				Value				Cost				Value
Corporate Bond Investments		$	40,723,252			$	41,486,860			$	45,944,978			$	46,109,294
Senior Secured Loan Debt Instruments			42,778,592				43,344,626				26,786,017				26,919,498
Equity Investments - Preferred Stock			3,131,028				3,197,792				2,146,068				2,238,363
Short-Term Investments			-				-				7,946,245				7,949,600
Warrants			-				8,102				-				-
Total Investments		$	86,632,872			$	88,037,380			$	82,823,308			$	83,216,755

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 monitors 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 works closely with, as applicable, the lead equity sponsor, portfolio company management, consultants, advisers and other security holders to discuss financial positions, 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 Adviser will receive financial reports detailing operating performance, sales volumes, margins, cash flows, financial position and other key operating metrics on a quarterly basis from portfolio companies. The Adviser uses this data, combined with knowledge gained through due diligence of the portfolio company's customers, suppliers and competitors, as well as market research and other methods, to conduct an ongoing assessment of the portfolio company's operating performance and prospects.

Results of Operations

Our operating results for the years ended December 31, 2025 and 2024 and for the period from September 8, 2023 (commencement of operations) to December 31, 2023 were as follows:

		For the year ended December 31, 2025				For the year ended December 31, 2024				For the period from September 8, 2023 (commencement of operations) to December 31, 2023
Total investment income		$	7,836,476			$	6,117,957			$	-
Total net expenses			2,439,314				3,791,410				-
Net investment income			5,397,162				2,326,547				-
Total net realized gains/(losses)			(78,308	)			130,555				-
Total net change in unrealized appreciation/(depreciation)			1,011,061				393,447				-
Total net realized gains/(losses) and unrealized appreciation/(depreciation) on investment			932,753				524,002				-
Net increase (decrease) in net assets resulting from operations		$	6,329,915			$	2,850,549			$	-

Net assets resulting from operations increased from $2,850,549 for the year ended December 31, 2024 to $6,329,915 for the year ended December 31, 2025, primarily due to increased deployment of funds, which contributed approximately $3.0 million of additional net investment income, and an increase of approximately $600,000 in net realized gains and unrealized appreciation on our investment portfolio. Net assets resulting from operations increased from $0 for the period from September 8, 2023 (commencement of operations) to December 31, 2023 to $2,850,549 for the year ended December 31, 2024, primarily due to increased deployment of funds.

Investment Income

Investment income for the years ended December 31, 2025 and 2024 and for the period from September 8, 2023 (commencement of operations) to December 31, 2023 was as follows:

		For the year ended December 31, 2025				For the year ended December 31, 2024				For the period from September 8, 2023 (commencement of operations) to December 31, 2023
Interest income from non-controlled/non-affiliated investments and cash equivalents		$	7,602,309			$	6,104,173			$	-
Income from non-controlled/non-affiliated PIK interest			234,167				13,784				-
Total investment income		$	7,836,476			$	6,117,957			$	-

Investment income increased from $6,117,957 for the year ended December 31, 2024 to $7,836,476 for the year ended December 31, 2025, primarily due to increased deployment of funds. Investment income increased from $0 for the period from September 8, 2023 (commencement of operations) to December 31, 2023 to $6,117,957 for the year ended December 31, 2024, primarily due to an increase in interest income as a result of investment activity subsequent to the period ended December 31, 2023.

Expenses

Operating expenses for the years ended December 31, 2025 and 2024 and for the period from September 8, 2023 (commencement of operations) to December 31, 2023 were as follows:

		For the year ended December 31, 2025				For the year ended December 31, 2024				For the period from September 8, 2023 (commencement of operations) to December 31, 2023
Management Fees		$	1,194,752			$	856,238			$	-
Other operating expenses			1,317,844				2,935,172				-
Waiver of base management fees			(73,282	)			-				-
Total net expenses		$	2,439,314			$	3,791,410			$	-

Total expenses decreased from $3,791,410 for the year ended December 31, 2024 to $2,439,314 for the year ended December 31, 2025, primarily due to a decrease in professional fees and the reclassification of purchased accrued interest expense during the year, partially offset by an increase in Base Management Fee and Incentive Fee expenses resulting from higher net assets and net income driven by the deployment of uninvested funds from the prior year. Total expenses increased from $0 for the period from September 8, 2023 (commencement of operations) to December 31, 2023 to $3,791,410 for the year ended December 31, 2024, primarily due to an increase in Base Management Fees as a result of further investment activity compared to the period ended December 31, 2023.

Financial Condition, Liquidity and Capital Resources

We generate and expect to continue to generate cash from (1) future offerings of our Common Stock or offerings of preferred stock, (2) cash flows from operations and (3) borrowings from banks or other lenders. We may seek to enter into a credit facility or other financing arrangements on market terms; however, we cannot assure you we will be able to do so. Our primary uses of cash will be for (i) investments in portfolio companies and other investments to comply with certain portfolio diversification requirements, (ii) paying our operating expenses (including fees payable to our Adviser), (iii) debt service of any borrowings and (iv) cash distributions to the holders of our common stock.

Equity Activity

We have the authority to issue 1,000,000 shares of Common Stock at a $0.001 per share par value. Additionally, we have the authority to issue 15,000 shares of preferred stock at a $0.001 per share par value; however, we have not issued any preferred stock to date.

During the year ended December 31, 2025, we had the following Common Stock issuances (exclusive of shares of Common Stock issued under the DRP, as described below):

Date		Shares issued and sold				Aggregate purchase price
January 2, 2025			2,482.09			$	2,500,000

During the year ended December 31, 2024, we had the following Common Stock issuances (exclusive of shares of Common Stock issued under the DRP, as described below):

Date		Shares issued and sold				Aggregate purchase price
January 1, 2024			72,000.00			$	72,000,000
October 1, 2024			19,710.45			$	20,000,000

For information regarding our equity activity during the fiscal period from September 8, 2023 (commencement of operations) to December 31, 2023, please see "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Financial Condition, Liquidity, and Capital Resources - Equity Activity" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on March 28, 2025 (the "FY 2024 Form 10-K").

Borrowings

We expect to borrow funds to make investments. This is known as "leverage" and may cause our financial results 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 are permitted, under specified conditions, to issue multiple classes of indebtedness and one class of stock senior to our common stock if our asset coverage, as defined in the 1940 Act, is at least equal to 150% immediately after each such issuance (e.g., for every $100 of net assets, we may raise $200 from borrowing and issuing senior securities). 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 unless we meet the applicable asset coverage ratio requirements 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 affirmative or negative covenants that could have an effect on our operations.

The use of leverage involves significant risks. In addition to the volatility risks discussed above, 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 "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 "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 ratio requirement. These investments may include certain instruments that have embedded leverage, which may increase the risk of loss from such investments but are not considered to be borrowings.

We may also borrow money to purchase assets in order to comply with certain regulatory requirements for RICs, including diversification requirements.

The amount of leverage that we employ will depend on our Adviser's and our Board's 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.

Contractual Obligations

As of December 31, 2025, we had the following unfunded commitments to provide debt financing to our portfolio companies:

		Expiration Date		As of December 31, 2025
Carolina Center for Autism Services, LLC Delayed Draw Term Loan		11/21/2026			898,605
Total unfunded commitments				$	898,605

As of December 31, 2024, we had the following unfunded commitments to provide debt financing to our portfolio companies:

		Expiration Date		As of December 31, 2024
Carolina Center for Autism Services, LLC Delayed Draw Term Loan		11/21/2026			2,310,698
Total unfunded commitments				$	2,310,698

We have entered into certain contracts under which we have material future commitments. We have entered into the Advisory Agreement with the Adviser, under which the Adviser: determines the securities and other assets that we will purchase, retain or sell; determines the composition of our portfolio, the nature and timing of the changes therein and the manner of implementing such changes; identifies, evaluates and negotiates investments we make and/or the structure thereof (including, without limitation, performing due diligence with respect to any instrument and/or company in which we may invest); buys, sells, exchanges, redeems, holds, converts or otherwise deals with and/or executes transactions with respect to, any kind of security or other property in which we may invest; services and monitors our investments, including, without limitation, by exercising or refraining from exercising any right conveyed by a particular investment to buy, sell, subscribe for, exchange or redeem an investment; exercises or refrains from exercising any governance or ownership right conferred by a particular investment; enters into any foreign exchange and/or derivative transactions; and provides us with such other investment advisory, research and related services as we may, from time to time, reasonably require for the investment of our funds and/or which the Adviser reasonably considers to be necessary, desirable or incidental to carrying out the services under the Advisory Agreement. Under the Advisory Agreement, we pay the Adviser fees for investment management services consisting of a Base Management Fee and Incentive Fee. The Incentive Fee consists of two components that are independent of each other, with the result that one component may be payable even if the other is not. A portion of the Incentive Fee is based on a percentage of our income and a portion is based on a percentage of our capital gains.

In addition, we have entered into the Administration Agreement, pursuant to which the Administrator provides the administrative and recordkeeping services necessary for us to operate. We have also entered into the Fund Accounting Agreement with U.S. Bank, pursuant to which U.S. Bank provides us with accounting services.

Critical Accounting Policies

Valuation of Portfolio Securities

In accordance with procedures adopted by our Board of Directors, the NAV per share of our Common Stock is determined at least quarterly by dividing the value of our total assets minus liabilities by the total number of shares of our Common Stock outstanding. There is no guarantee that the NAV per share will be equal to the offering price of our Common Stock at any Closing, as we reserve the right to issue shares of Common Stock at a price above the then-current NAV per share based on a variety of factors, including, without limitation, the total amount of our organizational and other expenses (including actual and/or accrued expenses, which may include any estimates thereof).

As a BDC, we generally invest in illiquid securities, including debt and equity securities of middle-market companies. A readily available market quotation is not expected to exist for most, if not all, of the investments in our portfolio. Consistent with Rule 2a-5 under the 1940 Act, the Board has designated the Adviser as our "Valuation Designee," and the Adviser determines the fair value for investments where market quotations are not readily available in accordance with the valuation policies and procedures approved by the Board ("Valuation Policy"), subject to oversight by the Board, as set forth below:

1.

each portfolio company or investment is 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 our senior management and that of our Adviser;

3.

at least once annually, the valuation for each portfolio investment is reviewed by an independent valuation firm;

4.

in following these approaches, the types of factors that are taken into account in determining the fair value of such 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 reviews the valuations of the Adviser on a quarterly basis; and

6.

our Board oversees our valuation process and in support of this oversight the Adviser provides periodic reports to the Board on valuation matters.

The factors that the Adviser may take into account in determining the fair value of our investments 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 the 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 the consolidated financial statements.

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

PIK Interest

We currently hold PIK investments and expect to hold in the future some investments in our portfolio that contain PIK interest provisions. PIK interest, which is computed at the contractual rate specified in each loan agreement, is added to the principal balance of the loan, rather than being paid to us in cash, and is recorded as interest income. Thus, the actual collection of PIK interest may be deferred until the time of debt principal repayment. PIK interest, which is a non-cash source of income, is included in our taxable income, and therefore affects the amount we are required to distribute to our stockholders to maintain our qualification as a RIC for U.S. federal income tax purposes, even though we have not yet collected the cash. Generally, when current cash interest and/or principal payments on a loan become past due, or if we otherwise do not expect the borrower to be able to service its debt and other obligations, we will place the investment on non-accrual status and will generally cease recognizing PIK interest income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. We write off any accrued and uncollected PIK interest when we determine that the PIK interest is no longer collectible.

Dividends

We intend to pay quarterly distributions to our stockholders out of assets legally available for distribution. All dividends and distributions will be subject to lawfully available funds therefore, and no assurance can be given that we will be able to declare distributions in future periods. During the year ended December 31, 2025, we declared the following distributions:

Record Date		Payment Date		Distribution Rate per Share				Distribution Paid
March 21, 2025		April 3, 2025		$	3.52			$	331,664
May 13, 2025		May 20, 2025		$	13.06			$	1,232,669
August 7, 2025		August 19, 2025		$	14.43			$	1,363,479
November 7, 2025		November 19, 2025		$	14.32			$	1,354,745
December 29, 2025		January 16, 2026		$	10.94			$	1,035,781

During the year ended December 31, 2024, we declared the following distributions:

Record Date		Payment Date		Distribution Rate per Share				Distribution Paid
May 9, 2024		May 20, 2024		$	8.23			$	592,568
August 8, 2024		August 19, 2024		$	9.59			$	690,727
November 7, 2024		November 21, 2024		$	4.70			$	431,296
December 27, 2024		January 9, 2025		$	9.14			$	839,075

We did not declare any distributions during the period from September 8, 2023 (commencement of operations) to December 31, 2023.

We have elected to be treated, qualify, and intend to qualify annually to be subject to taxation 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 the sum of (i) our investment company taxable income for that taxable year as dividends (without regard to the deduction for dividends paid) and (ii) our net tax-exempt income. We intend to timely distribute to our stockholders substantially all of our annual taxable income for each taxable year. However, 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. In such a case, we would be subject to U.S. federal income tax and possibly U.S. federal excise tax on such retained amounts. 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) certain undistributed amounts from previous years on which we paid no 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.

In addition, we have adopted a DRP, pursuant to which we reinvest all cash dividends and other distributions declared by the Board on behalf of our stockholders who do not elect to receive their dividends or other distributions in cash as provided by the DRP. As a result, if the Board authorizes, and we declare, a cash dividend or other distribution, our stockholders who have not opted out of our DRP will have their cash dividends or other distributions automatically reinvested in additional shares of Common Stock, rather than receiving the cash dividend or other distribution. If a stockholder elects to opt out of the DRP, it will receive any cash dividends or other distributions we declare in cash.

The purchase price for shares of Common Stock purchased under our DRP will be determined using a purchase price determined as of the Purchase Date. Shares of Common Stock issued pursuant to our DRP will have the same voting rights as the shares of Common Stock offered pursuant to the Private Offerings.

The following table reflects the shares issued under the DRP to participants during the year ended December 31, 2025:

Record Date		Issuance Date		Shares Issued
December 27, 2024		January 9, 2025			72.57
March 21, 2025		April 3, 2025			28.26
May 13, 2025		May 20, 2025			104.04
August 7, 2025		August 19, 2025			115.84
November 7, 2025		November 19, 2025			116.57

The following table reflects the shares issued under the DRP to participants during the year ended December 31, 2024:

Record Date		Issuance Date		Shares Issued
May 9, 2024		May 20, 2024			24.72
August 8, 2024		August 19, 2024			28.92
November 7, 2024		November 21, 2024			37.14

We did not issue any shares under the DRP during the period from September 8, 2023 (commencement of operations) to December 31, 2023.

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 our Consolidated Statements of Operations.

Compensation of the Adviser

Under the Advisory Agreement, we pay the Adviser fees for investment management services consisting of the Base Management Fee and the Incentive Fee. The Base Management Fee and Incentive Fee for any partial quarter will be appropriately prorated (based on the number of days actually elapsed relative to the total number of days in such quarter).

Base Management Fee

The Base Management Fee is payable quarterly in arrears at an annual rate of 1.25% of the value of our net assets as of the beginning of the first calendar day of the applicable quarter. Such amount shall be appropriately adjusted (based on the number of days actually elapsed relative to the total number of days in such calendar quarter) for any share issuances or repurchases we make during a calendar quarter. The Base Management Fee for any partial quarter shall be appropriately prorated (based on the number of days actually elapsed relative to the total number of days in such quarter). For purposes of the Advisory Agreement, net assets means our total assets less liabilities determined on a consolidated basis in accordance with U.S. GAAP.

Pursuant to the Fee Waiver Letter, on December 26, 2025, the Adviser voluntarily agreed to reduce the Base Management Fee from the annual rate of 1.25% of the value of our net assets to an annual rate of 0.95% of the value of our net assets for the fiscal quarters ended December 31, 2025 and ending March 31, 2026. We will recommence paying the Adviser a Base Management Fee that is consistent with the existing terms of the Advisory Agreement on April 1, 2026 unless the Adviser, in its sole discretion, decides to extend the term of the Fee Waiver Letter.

For the years ended December 31, 2025 and 2024 and for the period from September 8, 2023 (commencement of operations) to December 31, 2023, we incurred Base Management Fees of $1,194,752, $856,238, and $0, respectively. During those periods, the Adviser voluntarily waived $73,282, $0, and $0, respectively, of such Base Management Fees.

Incentive Fee

The Incentive Fee consists of two components that are independent of each other, with the result that one component may be payable even if the other is not. A portion of the Incentive Fee is based on a percentage of our income and a portion is based on a percentage of our capital gains, each as described below.

Incentive Fee Based on Income

The portion based on our income is based on Pre-Incentive Fee Net Investment Income Returns. "Pre-Incentive Fee Net Investment Income Returns" means, as the context requires, either the dollar value of, or percentage rate of return on the value of our net assets at the end of the immediately preceding quarter from, interest income, dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that we receive from portfolio companies) accrued during the calendar quarter, minus our operating expenses accrued for the quarter (including the Base Management Fee, fees and expenses payable under the Administration Agreement, and any interest expense or fees on any credit facilities or outstanding debt and dividends paid on any issued and outstanding preferred shares, but excluding the Incentive Fee).

Pre-Incentive Fee Net Investment Income Returns include, in the case of investments with a deferred interest feature (such as OID, debt instruments with PIK interest and zero-coupon securities), accrued income that we have not yet received in cash. Pre-Incentive Fee Net Investment Income Returns do not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.

Pre-Incentive Fee Net Investment Income Returns, expressed as a rate of return on the value of our net assets at the end of the immediately preceding quarter, is compared to a "hurdle rate" of return of 1.75% per quarter.

We will pay the Adviser an Incentive Fee quarterly in arrears with respect to our Pre-Incentive Fee Net Investment Income Returns in each calendar quarter as follows:

●

no incentive fee based on Pre-Incentive Fee Net Investment Income Returns in any calendar quarter in which our Pre-Incentive Fee Net Investment Income Returns do not exceed the hurdle rate of 1.75% per quarter ;

●

100% of the dollar amount of Pre-Incentive Fee Net Investment Income Returns with respect to that portion of such Pre-Incentive Fee Net Investment Income Returns, if any, that exceeds the hurdle rate until the Adviser has received 12.5% of the total Pre-Incentive Fee Net Investment Income Returns for that calendar quarter (we refer to this portion of the Pre-Incentive Fee Net Investment Income Returns (which exceeds the hurdle rate) as the "catch-up"); and

●

12.5% of the dollar amount of all Pre-Incentive Fee Net Investment Income Returns, if any, once the Adviser has received the full catch-up.

Incentive Fee Based on Capital Gains

The second component of the Incentive Fee, the Incentive Fee based on capital gains, is payable at the end of each calendar year in arrears. The amount payable equals:

●

12.5% of cumulative realized capital gains from inception through the end of such calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid Incentive Fee based on capital gains as calculated in accordance with U.S. GAAP.

Each year, the fee paid for the Incentive Fee Based on Capital Gains is net of the aggregate amount of any previously paid Incentive Fee Based on Capital Gains for all prior periods. We will accrue, but will not pay, an Incentive Fee Based on Capital Gains with respect to unrealized appreciation because an Incentive Fee based on capital gains would be owed to the Adviser if we were to sell the relevant investment and realize a capital gain.

For the years ended December 31, 2025 and 2024 and for the period from September 8, 2023 (commencement of operations) to December 31, 2023, we incurred Incentive Fees of $104,996, $74,854, and $0, respectively.

In the event the Advisory Agreement is terminated prior to our termination as a company (other than an instance in which the Adviser voluntarily terminates the Advisory Agreement), we will pay to the Adviser the Termination Incentive Fee Payment. The Termination Incentive Fee Payment will be calculated as of the date the Advisory Agreement is terminated and will equal the amount of Incentive Fee that would be payable to the Adviser if: (i) 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; (ii) the proceeds from such liquidation were used to pay all of our outstanding liabilities; and (iii) the remainder were distributed to stockholders and paid as Incentive Fee in accordance with the methodology described above, subject to the limitations set forth in Section 205(b)(3) of the Advisers Act. We will make the Termination Incentive Fee Payment in cash on or immediately following the date the Advisory Agreement is so terminated.

Recent Developments

Investment Activity

On January 30, 2026, we entered a term loan with Sisu Energy & Environmental, LLC, in the amount of $6,480,000, and a preferred equity co-investment in the amount of $648,000.

On February 26, 2026, we entered a term loan with Carolina Beverage Group, LLC, in the amount of $995,000.

Leadership Transition

On March 23, 2026, each of Jeffrey Youle, our Chief Executive Officer, and Paul Fehre, our Chief Financial Officer and Treasurer, informed the Board that they were stepping down as Chief Executive Officer and Chief Financial Officer and Treasurer, respectively, effective April 1, 2026. Neither Mr. Youle nor Mr. Fehre expressed any disagreement on any matter relating to our operations, policies or practices. Both of Messrs. Youle and Fehre will continue to serve as members of the Board and as Senior Adviser and Chief Operating Officer of Muzinich & Co., respectively, and Mr. Fehre will continue to serve as Chairperson of the Board.

Also on March 23, 2026, the Board approved resolutions effectuating a leadership transition plan for us. The Board appointed Cheryl Rivkin, our Secretary, to succeed Mr. Youle as Chief Executive Officer, effective April 1, 2026. In connection with the foregoing, Ms. Rivkin resigned from her position as Secretary, effective April 1, 2026. In addition, the Board appointed Jens Ernberg, Co-Head of U.S. Private Debt at Muzinich & Co., to serve as our President; Rocco DelGuercio, Director of Finance for Private Debt at Muzinich & Co., to succeed Mr. Fehre as our Chief Financial Officer and Treasurer; and Susan Cohen, a Manager on the Client Services Team at Muzinich & Co., to succeed Ms. Rivkin as our Secretary, each effective April 1, 2026.

There is no arrangement or understanding between any of Ms. Rivkin, Mr. Ernberg, Mr. DelGuercio, or Ms. Cohen and us or any other person or entity pursuant to which any of them were appointed to their respective positions, and there are no current or proposed transactions between us and any of Ms. Rivkin, Mr. Ernberg, Mr. DelGuercio, or Ms. Cohen, or any of their respective immediate family members, that would require disclosure under Item 404(a) of Regulation S-K.

For more information regarding the foregoing appointments, reference is made to the Current Report on Form 8-K we filed on March 25, 2026.