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First lien senior secured term loan Interest Rate SOFR + 8.0% Maturity Date 12/23/20272025-06-300002043759us-gaap:SeriesAPreferredStockMemberck0002043759:MilkAndHoneyHoldingsLLCMemberus-gaap:SubsequentEventMember2025-07-1100020437592025-01-012025-06-300002043759ck0002043759:WarrantsFiveMember2025-06-300002043759Atlas Card Consumer Finance Delayed draw term loan2025-03-032025-06-300002043759us-gaap:WarrantMemberck0002043759:HealthAndWellnessMember2025-06-300002043759ck0002043759:RoqAdsIncMemberus-gaap:SeriesAPreferredStockMemberus-gaap:SubsequentEventMember2025-07-250002043759Investments - non-controlled/non-affiliated Warrant Investments Technology - Marketplace FanFixApp, LLC Warrants Investment Date 3/7/2025 Ordinary Shares Expiration Date 3/6/20352025-03-032025-06-300002043759us-gaap:AdditionalPaidInCapitalMember2025-04-012025-06-300002043759Investments - non-controlled/non-affiliated Debt Investments Consumer Finance Atlas Card Type of Investment First lien senior secured term loan Investment Rate SOFR + 6.0% Maturity Date 6/3/20282025-03-032025-06-300002043759Investments - non-controlled/non-affiliated Debt Investments Technology - Consumer Hearth Display, Inc. First lien senior secured term loan Interest Rate SOFR + 8.0% Maturity Date 9/12/20272025-03-032025-06-300002043759us-gaap:RetainedEarningsMember2025-06-300002043759ck0002043759:WarrantsTwoMember2025-04-012025-06-300002043759ck0002043759:Technology-MarketplaceMember2025-06-300002043759us-gaap:FoodAndBeverageMember2025-06-300002043759Investments - non-controlled/non-affiliated Warrant Investments Health & Wellness Happy Head, Inc. Warrants Investment Date 3/3/2025 Common Stock Expiration Date 9/30/20342025-03-032025-06-300002043759ck0002043759:DebtInvestmentsMemberck0002043759:ConsumerFinanceMember2025-06-300002043759us-gaap:FairValueInputsLevel2Memberus-gaap:WarrantMember2025-06-300002043759us-gaap:FairValueInputsLevel3Memberck0002043759:FirstLienSeniorSecuredTermLoanMember2025-06-300002043759ck0002043759:IncentiveFeeMember2025-04-012025-06-300002043759Investments - non-controlled/non-affiliated Debt Investments Technology - Consumer Hearth Display, Inc. First lien senior secured term loan Interest Rate SOFR + 8.0% Maturity Date 9/12/20272025-06-300002043759Galileo Learning LLC Education Delayed draw term loan2025-03-032025-06-300002043759ck0002043759:O2025M6DividendsMemberck0002043759:InvestmentAdviserMember2025-06-270002043759ck0002043759:FirstLienSeniorSecuredTermLoanOneMember2025-04-012025-06-300002043759ck0002043759:Technology-AerospaceMember2025-06-3000020437592025-03-030002043759Investments - non-controlled/non-affiliated Warrant Investments Technology - Aerospace Fortem Technologies, Inc. Warrants Investment Date 3/3/2025 Common Stock Expiration Date 10/22/20342025-03-032025-06-300002043759us-gaap:WarrantMemberck0002043759:Technology-HealthWellnessMember2025-06-300002043759Investments - non-controlled/non-affiliated Debt Investments Technology - Property Domuso Inc. Type of Investment Second lien senior secured term loan Investment Rate PSOFR + 7.0% Maturity Date 6/15/20292025-03-032025-06-300002043759ck0002043759:ThreeMonthsSecuredOvernightFinancingRateMember2025-06-300002043759us-gaap:FairValueInputsLevel3Memberus-gaap:WarrantMember2025-06-300002043759us-gaap:WarrantMemberck0002043759:DataProcessingMember2025-06-300002043759ck0002043759:FirstLienSeniorSecuredTermLoanMember2025-04-012025-06-30iso4217:USDxbrli:sharesxbrli:purexbrli:sharesiso4217:USD

U.S. 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, 2025

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

    

Commission file number: 000-56728

LAGO Evergreen Credit

(Exact name of registrant as specified in charter)


Delaware		33-1867642
(State or other jurisdiction of incorporation or registration)		(I.R.S. Employer Identification No.)

10 S. Wacker Drive, Suite 3540 Chicago, Illinois		60606
(Address of principal executive offices)		(Zip Code)

773-417-5246

(Registrant’s telephone number, including area code)

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


Title of Each Class	Trading Symbol(s)	Name of each exchange on which registered
None	N/A	N/A

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

Shares of beneficial interest, par value $0.01 per share

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 ☒

As of August 11, 2025, the registrant had 3,869,487 shares of common stock, $0.01 par value per share, outstanding.

Table of Contents


PART I. FINANCIAL INFORMATION		1

	Item 1. Financial Statements	1

	Consolidated Statement of Assets and Liabilities as of June 30, 2025 (unaudited)	1

	Consolidated Statements of Operations for the three months ended June 30, 2025 (unaudited) and for the period from March 3, 2025 (“Commencement of Operations”) through June 30, 2025 (unaudited)	2

	Consolidated Statements of Changes in Net Assets for the three months ended June 30, 2025 (unaudited) and for the period from March 3, 2025 (“Commencement of Operations”) through June 30, 2025 (unaudited)	3

	Consolidated Statement of Cash Flows for the period from March 3, 2025 (“Commencement of Operations”) through June 30, 2025 (unaudited)	4

	Consolidated Schedule of Investments as of June 30, 2025 (unaudited)	5

	Notes to Consolidated Financial Statements (unaudited)	9

	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	25

	Item 3. Quantitative and Qualitative Disclosures About Market Risk	40

	Item 4. Controls and Procedures	40


PART II. OTHER INFORMATION		41

	Item 1. Legal Proceedings	41

	Item 1A. Risk Factors	41

	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	41

	Item 3. Defaults Upon Senior Securities.	41

	Item 4. Mine Safety Disclosures.	41

	Item 5. Other Information.	41

	Item 6. Exhibits.	42

	SIGNATURES	43

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements that involve substantial known and unknown risks, uncertainties and other factors. Undue reliance should not be placed on such statements. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about LAGO Evergreen Credit (the “Company”, “we”, “us”, “our”), current and prospective portfolio investments, industry, beliefs and the Company’s assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “will,” “may,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “should,” “targets,” “projects,” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the Company’s control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including:

•

changes in political, economic or industry conditions;

•

the interest rate environment or conditions affecting the financial and capital markets;

•

the ability of LAGO Asset Management, LLC (the “Investment Adviser”) to locate suitable investments for the Company and to monitor and administer the Company’s investments;

•

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

•

risk associated with possible disruptions in the Company’s operations or the economy generally;

•

the timing of cash flows, if any, from the operations of the companies in which the Company invests;

•

the ability of the companies in which the Company invests to achieve their objectives;

•

the dependence of the Company’s future success on the general economy and its effect on the industries in which the Company invests;

•

the use of borrowed money to finance a portion of the Company’s investments;

•

the adequacy, availability, and pricing of the Company’s financing sources and working capital;

•

actual or potential conflicts of interest with the Investment Adviser and its affiliates;

•

contractual arrangements and relationships with third parties;

•

potential economic downturns, interest rate volatility, loss of key personnel, and the illiquid nature of investments;

•

the disruption of global shipping activities;

•

the impact of changing regulations and implementation of tariffs on goods;

•

the impact of geo-political conditions, including those arising out of the Russia-Ukraine war and the Israel-Hamas war, and the potential for volatility in energy prices and other commodities and their impact on the industries in which we invest; and

•

other risks, uncertainties, and other factors identified under “Item 1A. Risk Factors” and elsewhere in this Form 10-Q.

Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions also could be inaccurate. We have based the forward-looking statements included in this Quarterly Report on Form 10-Q on information available to us on the date of this Quarterly Report on Form 10-Q, and we assume no obligation to update any such forward-looking statements, unless we are required to do so by applicable law. However, you are advised to consult any additional disclosures that we may make directly to you or through reports that we may file in the future with the Securities and Exchange Commission, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

LAGO Evergreen Credit

Consolidated Statement of Assets and Liabilities


	June 30, 2025
	(unaudited)
Assets
Investments
Non-controlled / non-affiliated investments (cost of $75,313,593 at June 30, 2025)	$	76,388,664
Cash and cash equivalents		34,528,583
Interest receivable		859,966
Prepaid expenses and other assets		106,800
Total assets	$	111,884,013
Liabilities
Base Management Fees payable	$	247,544
Income Incentive fees payable		295,924
Capital Gains Incentive fees payable		215,014
Accrued Board of Trustees’ fees		38,000
Accrued audit and tax fees		147,999
Accrued expenses and other liabilities		207,679
Distribution payable		1,686,890
Line of credit, net of deferred financing costs		23,799,285
Total liabilities	$	26,638,335
Commitments and contingencies (Note 6)
Net assets
Common shares, par value $0.01 per share, unlimited shares authorized (3,373,781 shares issued and outstanding at June 30, 2025)		33,738
Paid-in-capital in excess of par value		84,317,279
Total distributable earnings (loss)		894,661
Total net assets		85,245,678
Total liabilities and net assets	$	111,884,013
Net asset value per share	$	25.27

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

LAGO Evergreen Credit

Consolidated Statements of Operations

(unaudited)


	For the Three Months Ended June 30, 2025		For the period March 3, 2025 (“Commencement of Operations”) through June 30, 2025
Investment income:
From non-controlled / non-affiliated investments:
Interest income	$	2,619,613	$	3,428,953
Other interest income		228,407		266,836
Total investment income		2,848,020		3,695,789
Expenses:
Interest expense		228,934		313,357
Base Management Fees		247,544		305,002
Income Incentive fees		295,924		370,164
Capital Gains Incentive fees		212,085		209,823
Professional fees		264,547		403,643
Board of Trustees’ fees		39,322		77,322
Administration fees		65,510		88,839
Other general and administrative expenses		29,335		39,851
Total expenses		1,383,201		1,808,001
Net investment income (loss)		1,464,819		1,887,788
Net realized and unrealized gain (loss) on investments:
Net change in unrealized gain (loss) on non-controlled / non-affiliated investments		1,086,380		1,075,071
Net realized and unrealized gain (loss) on investments		1,086,380		1,075,071
Net increase (decrease) in net assets resulting from operations	$	2,551,199	$	2,962,859

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

LAGO Evergreen Credit

Consolidated Statements of Changes in Net Assets

(unaudited)


	Common Shares
For the period March 3, 2025 (“Commencement of Operations”) through June 30, 2025	Shares		Par amount		Paid in capital in excess of par		Distributable earnings (losses)			Total net assets
Balance at March 3, 2025 (“Commencement of Operations”)		1,000	$	10	$	24,990	$	-		$	25,000
Issuance of shares related to Formation Transaction1		2,722,631		27,226		68,038,541		-			68,065,767
Net increase (decrease) in net assets resulting from operations:
Net investment income (loss)		-		-		-		1,887,788			1,887,788
Net change in unrealized gain (loss) on investments		-		-		-		1,075,071			1,075,071
Distributions declared to shareholders		-		-		-		(2,068,198	)		(2,068,198	)
Issuance of common shares		650,150		6,502		16,253,748					16,260,250
Total increase for the period from March 3, 2025 (“Commencement of Operations”) through June 30, 2025		3,372,781		33,728		16,253,748		894,661			17,154,911
Balance at June 30, 2025		3,373,781	$	33,738	$	84,317,279	$	894,661		$	85,245,678


	Common Shares
For the Three Months Ended June 30, 2025	Shares		Par amount		Paid in capital in excess of par		Distributable earnings (losses)			Total net assets
Balance at March 31, 2025		2,723,631	$	27,236	$	68,063,531	$	30,352		$	68,121,119
Net increase (decrease) in net assets resulting from operations:
Net investment income (loss)		-		-		-		1,464,819			1,464,819
Net change in unrealized gain (loss) on investments		-		-		-		1,086,380			1,086,380
Distributions declared to shareholders		-		-		-		(1,686,890	)		(1,686,890	)
Issuance of common shares		650,150		6,502		16,253,748		—			16,260,250
Total increase for the Three Months Ended June 30, 2025		650,150		6,502		16,253,748		864,309			17,124,559
Balance at June 30, 2025		3,373,781	$	33,738	$	84,317,279	$	894,661		$	85,245,678

1 See Note 1 – Organization for further information related to the Formation Transaction.

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

LAGO Evergreen Credit

Consolidated Statement of Cash Flows

(unaudited)


	For the period March 3, 2025 (“Commencement of Operations”) through June 30, 2025
Cash flows from operating activities:
Net increase (decrease) in net assets resulting from operations	$	2,962,859
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 (gain) loss on non-controlled / non-affiliated investments		(1,075,071	)
Paid-in-kind interest income		(10,566	)
Amortization of deferred loan fees		(140,573	)
Accretion of warrant discount		(538,406	)
Amortization of deferred financing costs		85,009
Payments for purchases of investments in portfolio companies		(34,800,000	)
Proceeds from loan repayments on investments in portfolio companies		1,118,750
Proceeds from deferred loan fees		469,500

Changes in operating assets and liabilities:
Cash received from Formation Transaction1		27,586,601
(Increase) decrease in interest receivable		(443,047	)
(Increase) decrease in prepaid expenses and other assets		(106,800	)
Increase (decrease) in Base Management Fees payable		67,589
Increase (decrease) in Income Incentive Fees payable		52,668
Increase (decrease) in Capital Gains Incentive Fees payable		209,822
Increase (decrease) in accrued audit and tax fees		73,999
Increase (decrease) in accrued Board of Trustees’ fees		38,000
Increase (decrease) in accrued expenses and other liabilities		192,679
Net cash provided by (used in) operating activities		(4,256,987	)

Cash flows from financing activities:
Payment of deferred financing costs		(1,285,724	)
Gross borrowings on line of credit		38,000,000
Repayments of line of credit		(13,000,000	)
Proceeds from issuance of common shares		16,260,250
Distribution paid		(1,213,956	)
Net cash provided by (used in) financing activities		38,760,570

Net change in cash and cash equivalents		34,503,583
Cash and cash equivalents, beginning of period		25,000
Cash and cash equivalents, end of period	$	34,528,583

Supplemental Disclosure of Cash-Flow Information
Distribution declared during the period	$	2,068,198
Cash paid for interest		161,128
Issuance of common shares in connection with the Formation Transaction1		68,065,767

1 On March 3, 2025, in connection with the Formation Transaction (as defined in Note 1 – Organization), the Company acquired net assets of $68,065,767 in exchange for common shares of the Company. For further details, refer to Note 1 – Organization and Note 8 – Net assets.

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

LAGO Evergreen Credit

Consolidated Schedule of Investments

June 30, 2025

(unaudited)


Investments (a)	Type of Investment (b)	Interest Rate (d)	Maturity Date	Principal Amount (e)		Cost		Fair Value (f)		% of Net Assets
Investments – non-controlled / non-affiliated
Debt Investments
Application Software
SE Ranking	Second lien senior secured term loan	SOFR + 7.5%	11/30/2028	$	6,000,000	$	5,883,581	$	5,883,581
Sub-total: Application Software					6,000,000		5,883,581		5,883,581		6.90	%
Consumer Finance
Atlas Card	First lien senior secured term loan	SOFR + 6.0%	6/3/2028		2,000,000		1,983,982		1,983,982
Sub-total: Consumer Finance					2,000,000		1,983,982		1,983,982		2.33	%
Data Processing
Capacity (AI Software)	First lien senior secured term loan	PRIME + 6.5% (1.0% PIK)	6/13/2029		8,403,967		6,636,860		6,636,860
Sub-total: Data Processing					8,403,967		6,636,860		6,636,860		7.79	%
Education
Galileo Learning, LLC	First lien senior secured term loan	SOFR + 8.0%	11/25/2027		6,000,000		5,862,234		5,862,234
Sub-total: Education					6,000,000		5,862,234		5,862,234		6.88	%
Food & Beverage
Organixx	First lien senior secured term loan	SOFR + 7.0%	1/31/2027		3,000,000		2,976,250		3,039,900
Sub-total: Food & Beverage					3,000,000		2,976,250		3,039,900		3.57	%
Health & Wellness
Happy Head, Inc.	First lien senior secured term loan	SOFR + 8.5%	9/30/2026		4,000,000		3,810,287		3,810,287
Youth Opportunity Investments, LLC	First lien senior secured term loan	SOFR + 7.75%	9/18/2026		8,421,875		7,261,101		7,626,008
Sub-total: Health & Wellness					12,421,875		11,071,388		11,436,295		13.42	%
Technology - Aerospace
Fortem Technologies, Inc.	First lien senior secured term loan	SOFR + 9.0%	10/22/2027		3,600,000		3,542,479		3,542,479
Sub-total: Technology – Aerospace					3,600,000		3,542,479		3,542,479		4.16	%
Technology - Business
Everywhere Communications, Inc.	First lien senior secured term loan	SOFR + 8.0%	12/23/2027		3,000,000		2,751,696		2,751,696
Roq.Ad, Inc.	First lien senior secured term loan	SOFR + 7.25%	2/27/2029		5,504,672		5,405,227		5,405,227
Tulip.IO, Inc. (j)	First lien senior secured term loan	PRIME + 4.0% (2.0% PIK)	11/4/2028		1,008,361		1,008,361		1,008,361
Sub-total: Technology – Business					9,513,033		9,165,284		9,165,284		10.75	%
Technology - Consumer
Hearth Display, Inc.	First lien senior secured term loan	SOFR + 8.0%	9/12/2027		6,000,000		4,977,019		4,977,019
Sub-total: Technology - Consumer					6,000,000		4,977,019		4,977,019		5.84	%
Technology – Health & Wellness
Predictive Fitness, Inc.	First lien senior secured term loan	SOFR + 8.5%	2/25/2028		3,000,000		2,669,464		2,669,464
Sub-total: Technology – Health & Wellness					3,000,000		2,669,464		2,669,464		3.13	%
Technology - Marketplace
FanFixApp, LLC	First lien senior secured term loan	SOFR + 8.0%	3/6/2028		13,000,000		11,812,668		11,812,668
Sub-total: Technology – Marketplace					13,000,000		11,812,668		11,812,668		13.86	%
Technology - Property
Domuso Inc.	Second lien senior secured term loan	SOFR + 7.0%	6/15/2029		2,400,000		2,219,415		2,219,415
Sub-total: Technology – Property					2,400,000		2,219,415		2,219,415		2.60	%

LAGO Evergreen Credit

Consolidated Schedule of Investments

June 30, 2025

(unaudited)

     Investments (a)

     Type of Investment (b)

     Interest Rate (d)

     Maturity Date

     Principal Amount (e)

     Cost

     Fair Value (f)

     % of Net Assets

Total: Debt Investments

75,338,875

68,800,624

69,229,181

81.21

LAGO Evergreen Credit

Consolidated Schedule of Investments

June 30, 2025

(unaudited)


Investments (a)	Type of Investment (b)	Investment Date (c)	Shares		Series	Strike Price		Expiration Date	Cost		Fair Value (f)		% of Net Assets
Investments – non-controlled / non-affiliated
Warrant Investments
Application Software
SE Ranking	Warrants	6/3/2025		32	Common Stock	$	1,290.8900	6/3/2035	$	58,144	$	58,144
Sub-total: Application Software										58,144		58,144		0.07	%
Consumer Finance
Atlas Card	Warrants	6/3/2025		9,584	Series B-2 Preferred Stock	$	4.1824	6/3/2035		6,429		6,429
Sub-total: Consumer Finance										6,429		6,429		0.01	%
Data Processing
Capacity (AI Software)	Warrants	6/13/2025	(i)		Series D Common Shares	$	0.0100	6/13/2035		1,620,218		1,620,218
Sub-total: Data Processing										1,620,218		1,620,218		1.90	%
Education
Galileo Learning, LLC	Warrants	3/3/2025		60	Common units	$	0.0001	11/25/2034		52,008		44,616
Sub-total: Education										52,008		44,616		0.05	%
Health & Wellness
Happy Head, Inc.	Warrants	3/3/2025		71,522	Common stock	$	0.001	9/30/2034		196,874		290,737
Youth Opportunity Investments, LLC	Warrants	3/3/2025	(g)		Common units	$	0.001	(g)		1,543,000		2,121,625
Sub-total: Health & Wellness										1,739,874		2,412,362		2.83	%
Technology - Aerospace
Fortem Technologies, Inc.	Warrants	3/3/2025		409,527	Common stock	$	0.61	10/22/2034		24,667		47,096
Sub-total: Technology – Aerospace										24,667		47,096		0.06	%
Technology - Business
Everywhere Communications, Inc.	Warrants	3/3/2025		31,169	Series A-1 Preferred shares	$	0.0001	12/23/2034		240,300		264,781
Roq.Ad, Inc.	Warrants	3/3/2025		194,987	Series A-1 Preferred stock	$	1.2914	2/27/2035		83,115		83,115
Sub-total: Technology – Business										323,415		347,896		0.41	%
Technology - Consumer
Hearth Display, Inc.	Warrants	3/3/2025	(h)		Series Seed-1 Preferred Stock	$	0.0001	9/12/2034		1,051,213		985,721
Sub-total: Technology - Consumer										1,051,213		985,721		1.16	%
Technology – Health & Wellness
Predictive Fitness, Inc.	Warrants	3/3/2025		243,515	Series Seed-5 Preferred Stock	$	0.0001	2/25/2035		313,800		313,800
Sub-total: Technology – Health & Wellness										313,800		313,800		0.37	%
Technology - Marketplace
FanFixApp, LLC	Warrants	3/7/2025		52,802	Ordinary Shares	$	0.0001	3/6/2035		1,164,801		1,164,801
Sub-total: Technology – Marketplace										1,164,801		1,164,801		1.37	%
Technology - Property
Domuso Inc.	Warrants	5/30/2025		239,603	Series B-2 Preferred Stock	$	0.3100	5/30/2035		158,400		158,400
Sub-total: Technology – Property										158,400		158,400		0.19	%

LAGO Evergreen Credit

Consolidated Schedule of Investments

June 30, 2025

(unaudited)


Investments (a)	Type of Investment (b)	Investment Date (c)	Shares	Series	Strike Price	Expiration Date		Cost		Fair Value (f)		% of Net Assets
Total: Warrant Investments									6,512,969		7,159,483		8.40	%
Total Investments								$	75,313,593	$	76,388,664		89.61	%

				Interest Rate		Units		Cost		Fair Value		% of Net Assets
Cash Equivalents
First American Treasury Obligations Fund				4.24%			7,657,468	$	7,657,468	$	7,657,468		8.98	%
Total Cash Equivalents									7,657,468		7,657,468		8.98	%
Total Investments and Cash Equivalents								$	82,971,061	$	84,046,132		98.59	%

All investments are domiciled in the United States unless otherwise noted. The Company generally acquires its investments in private transactions exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”). These investments are generally subject to certain limitations on resale and are deemed to be “restricted securities” under the Securities Act.

All debt investments are income producing. Warrant investments are associated with funded debt and are non-income producing.

Investment date represents the date of initial investment date, either purchases or funding, not adjusted for modifications or amendments, if any. For assets purchased from the Legacy Fund as part of the Formation Transaction (both terms as defined in Note 1 - Organization), the investment date is March 3, 2025, the date of the Formation Transaction.

The 1-month Secured Overnight Financing Rate (the “SOFR”) 30-day average reference rate was 4.32% as of June 30, 2025. The 3-month SOFR 30-day average reference rate was 4.34% as of June 30, 2025. The Prime Rate was 7.50% as of June 30, 2025.

Principal is net of repayments.

These investments were valued using unobservable inputs and are considered Level 3 investments.

The Company has been issued warrants to purchase 1.011% of fully diluted shares. The expiration date is defined in the warrant agreement as any time prior to certain sale transactions, which generally includes any liquidation events.

The Company has been issued warrants to purchase 5.0% of fully diluted shares.

The Company has been issued warrants to purchase 0.36% of fully diluted shares as of December 31, 2025.

As of June 30, 2025, the Company has one foreign domiciled portfolio company, Tulip.IO, Inc., based in Canada. In total, foreign domiciled portfolio investments represent 1.2% of total net asset value based on fair value.

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

LAGO Evergreen Credit

Notes to Consolidated Financial Statements

(unaudited)

Note 1. Organization

LAGO Evergreen Credit (the “Company”) is an externally managed, non-diversified closed-end management investment company that has elected to be regulated as a business development company (a “BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, for tax purposes, the Company qualifies and intends to elect to be taxed as a regulated investment company (“RIC”) under Subchapter M of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). The Company was formed as a Delaware statutory trust on October 30, 2024, and filed its initial registration statement on Form 10 on March 3, 2025 as subsequently amended on April 17, 2025 and May 2, 2025.

The Company is managed by LAGO Asset Management, LLC (the “Investment Adviser”), a Delaware limited liability company and a registered investment adviser under the Investment Advisers Act of 1940, as amended. The Company entered into an investment advisory agreement (the “Investment Advisory Agreement”) with the Investment Adviser in which the Investment Adviser, subject to the overall supervision of the Company’s Board of Trustees (the "Board"), manages the day-to-day operations of, and provides investment advisory services to the Company. The Investment Adviser oversees the Company and is responsible for making investment decisions with respect to the Company’s portfolio.

The Company’s investment objective is to maximize the total return generated from its portfolio, which the Company expects to include current income from its debt investments as well as capital appreciation from equity and equity-related investments such as warrants. The Company’s focus will be primarily on floating rate senior secured term loan investments and, to a lesser extent, other types of junior loans and equity-related securities, such as convertible notes, warrants, and preferred or common stock. The Company’s secured loans are expected to be collateralized with security interests in the assets of the borrowers, which the Company expects will typically take the form of first-priority liens on some or all of the assets of the borrower. To the extent that another lender to the portfolio company retains the first-priority lien on some or all of the assets of the borrower, such as when another lender provides a revolving credit facility, the Company may structure its loan as a second-priority lien on any such encumbered assets and seek the opportunity to structure a first-lien on any unencumbered assets, such as intellectual property. The Company’s position as a secured lender and, in particular in the case where the Company is the sole, first lien lender, enables it to exert influence over the borrower with respect to access to management, monitoring performance, and increasing the likelihood of positive outcomes in the event that the borrower underperforms or becomes distressed. In connection with the Company's lending activities, the Company expects to frequently receive “equity kickers” in the form of warrants and rights-to-invest equity in its borrowers, which have the potential to enhance returns above that typically generated from portfolios consisting solely of credit positions. The Company expects a majority of its warrants to be structured with a “cashless exercise” feature which does not require additional capital investment to benefit from any upside appreciation. The Company has adopted a policy to invest at least 80% of its assets in “credit,” which the Company defines as debt investments made in exchange for regular interest payments, under Section 59 and Rule 35d-1 under the 1940 Act.

Subject to the approval of the Board, the Company is conducting a continuous and perpetual private offering (the “Private Offering”) of its shares of common beneficial interests, par value of $0.01 per share (the “Shares”), in reliance on exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). The Shares are being offered solely to investors that are “accredited investors” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act. At each closing, an investor purchases Shares pursuant to a subscription agreement entered into with the Company. See Note 8 - Net Assets for additional information on the Company’s share activity.

The Company was initially capitalized on December 31, 2024 when the Investment Adviser purchased 1,000 Shares of the Company, at an offering price of $25.00 per share for an aggregate purchase price of $25,000. Other than the sale of Shares to the Investment Adviser, the Company had not commenced operations as of December 31, 2024.

On March 3, 2025, immediately prior to the Company’s election to be regulated as a BDC under the 1940 Act, the Company completed a series of transactions pursuant to which LAGO Evergreen Credit, LLC (the “Legacy Fund”) merged with and into the Company with the Company continuing as the surviving entity (the “Formation Transaction”). As a result of the Formation Transaction, the equity interests of the Legacy Fund held by LAGO Evergreen Credit-QP, LP and LAGO Evergreen Credit-AI, LP (the “Legacy Fund Members”) were converted into Shares. Immediately thereafter, such Shares were distributed to the limited partners of the Legacy Fund Members as part of the dissolution and liquidation of the Legacy Fund Members.

The Company commenced operations and investment activity on March 3, 2025 (“Commencement of Operations”) in connection with the Formation Transaction and its election to be regulated as a BDC under the 1940 Act.

Note 2. Significant Accounting Policies

The following is a summary of significant accounting policies consistently followed by the Company in the preparation of its consolidated financial statements.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”). The Company is an investment company and accordingly applies specific accounting and financial reporting requirements under Financial Accounting Standards Board (“FASB”) Accounting Standards Topic 946, Financial Services-Investment Companies, (“ASC Topic 946”) and pursuant to Regulation S-X.

Principles of Consolidation

Under ASC Topic 946 the Company is precluded from consolidating any entity other than an investment company or an operating company which provides substantially all of its services to benefit the Company. In accordance therewith, the Company has consolidated the results of its wholly owned subsidiaries which provide services to the Company in its consolidated financial statements. However, the Company has not consolidated the results of its subsidiaries in which the Company holds its portfolio investments. All intercompany account balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period and the accompanying notes thereto. Management believes that the estimates utilized in the preparation of these consolidated financial statements are reasonable and prudent. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. Management adjusts such estimates when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ from those estimates, and differences could be material.

Cash and cash equivalents

Cash and cash equivalents consist of demand deposits and highly liquid investments, such as money market funds, with original maturities of three months or less. Cash and cash equivalents are carried at cost, which approximates fair value. The Company deposits its cash and cash equivalents with high quality financial institutions. These deposits are guaranteed by the Federal Deposit Insurance Company up to an insurance limit. The Company sweeps excess cash into a money market treasury fund on a daily basis to reduce the risk that deposits at individual financial institutions exceed the Federal Deposit Insurance Company insurance limit. Cash equivalents in money market mutual funds are fair valued under the market approach through the use of quoted market prices in an active market, which is the net asset value ("NAV") of the funds, and are classified within Level 1 of the valuation hierarchy as further described below.

Income Taxes

The Company qualifies and intends to elect to be treated as a RIC under Subchapter M of the Code commencing with its taxable period ending on December 31, 2025, and thereafter intends to comply with the requirements to qualify and maintain its status as a RIC annually. So long as the Company maintains its status as a RIC, it generally will not have to pay corporate-level U.S. federal income taxes on any ordinary income or capital gains that it distributes at least annually to its shareholders. Any tax liability related to income earned and distributed by the Company would represent obligations of the Company’s shareholders and would not be reflected in the consolidated financial statements of the Company.

To qualify and be subject to tax as a RIC for U.S. federal income tax purposes, the Company will need to ensure that (among other things) it satisfies certain sources of income and asset diversification requirements and distributes to its shareholders annually an amount equal to at least 90% of its “investment company taxable income” for that year, which is generally its ordinary income plus the excess, if any, of its realized net short-term capital gains over its realized net long-term capital losses. The Company will be subject to a nondeductible excise tax for any undistributed income.

Under GAAP, the Company is subject to the provisions of ASC 740, “Income Taxes.” The Company evaluates tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether it is “more-likely-than-not” (i.e., greater than 50%) that each tax position will be sustained upon examination by a taxing authority based on the technical merits of the position. Tax positions not deemed to meet the more-likely-than-not threshold are recorded as a tax benefit or expense in the current period. The Company follows the authoritative guidance on accounting for uncertainty in income taxes and concluded it has no material uncertain tax positions to be recognized at this time. If applicable, the Company will recognize interest and penalties related to unrecognized tax benefits as income tax expense in the Company’s consolidated statement of operations. However, management’s conclusions regarding tax positions taken may be subject to review and adjustment at a later date based on factors including, but not limited to, examination by tax authorities, on-going analysis of and changes to tax laws, regulations and interpretations thereof.

The Organization for Economic Co-operation and Development (“OECD”) introduced a 15% global minimum tax under the Pillar Two Global Anti-Base Erosion (“GloBe”) model rules. Several OECD member countries have enacted tax legislation based on certain elements of these rules that became effective on January 1, 2024. Other jurisdictions have announced that they intend to implement these rules, but the rules remain subject to significant negotiation, potential change, and phase-in periods. The Company has concluded that it falls outside the scope of the Pillar Two rules but will continue to monitor potential future applicability and changes to these rules.

Organization and Offering Costs

Organization costs include, among other things, the cost of incorporating the Company and the cost of legal services and other fees pertaining to the Company’s organization, including the Company’s registration statement on Form 10. Organization costs are expensed as incurred.

Offering costs consist of costs incurred in connection with the offering of Shares of the Company, including legal fees, registration fees, and other costs pertaining to the preparation of the Company’s private placement memorandum and any related offering materials (and any amendments and related documents thereto) relating to the Private Offering. Offering costs are capitalized as a deferred charge and amortized to expense on a straight-line basis over 12 months.

See Note 3 - Agreements and Related Party Transactions for further information on the Company’s Expense Reimbursement Agreement with the Investment Adviser.

Valuation of Investments

Section 2(a)(41) of the 1940 Act requires the Company to value its assets as follows: (i) the third party price for securities for which a quotation is readily available; and (ii) for all other securities and assets, fair value, as determined in good faith by the Board.

The Company values its investments, upon which its NAV is based, in accordance with FASB ASC 820, Fair Value Measurements (“ASC 820”), which defines fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the applicable measurement date. ASC 820 also provides a framework for measuring fair value, establishes a fair value hierarchy based on the observability of inputs used to measure fair value, and prescribes disclosure requirements for fair value measurements.

Pursuant to Rule 2a-5 under the 1940 Act, the Board has designated the Investment Adviser as the valuation designee (the “Valuation Designee”) responsible for valuing all of the Company’s investments, including making fair valuation determinations as needed. The Investment Adviser has established a valuation committee (the “Valuation Committee”) to carry out the ongoing fair valuation responsibilities and has adopted policies and procedures to govern the fair valuation of the Company’s investments.

In calculating the value of total assets, the Valuation Designee values investments for which market quotations are readily available at such market quotations if they are deemed to represent fair value. Securities that are not publicly traded or whose market price is not readily available or whose market quotations are not deemed to represent fair value are valued at fair value as determined, in good faith, by the Valuation Designee. Market quotations may be deemed not to represent fair value in certain circumstances where the Valuation Designee reasonably believes that facts and circumstances applicable to an issuer, a seller or purchaser or the market for a particular security causes current market quotes not to reflect the fair value of the security. As the majority of the Company’s portfolio is made up of Level 3 assets under ASC 820, it is expected that market quotations will generally not be readily available. The Valuation Designee has engaged a third-party valuation firm to assist in the determination of fair value on a quarterly basis. The Valuation Designee and the independent valuation firm consider observable market inputs together with significant unobservable inputs in arriving at their valuation recommendations for such Level 3 categorized assets.

As part of the valuation process, the Valuation Designee takes into account relevant factors in determining the fair value of the Company’s investments, including, but not limited to:

•

the estimated enterprise value of a portfolio company (i.e., the total fair value of the portfolio company’s debt and equity);

•

the portfolio company’s ability to make payments based on its earnings and cash flow;

•

the nature and realizable value of any collateral or expected cash proceeds upon exit;

•

recent transactions of the portfolio company or peers;

•

the assessment of the portfolio company in adhering to its business plan, underwriting expectations, and financial projections;

•

the markets in which the portfolio company does business;

•

a comparison of the portfolio company’s securities to any similar publicly traded securities; and

•

overall changes in the interest rate environment and the credit markets that may affect the price at which similar investments may be made in the future; and

With respect to investments for which market quotations are not readily available or when such market quotations are deemed not to represent fair value, the Valuation Designee has approved a multi-step valuation process that will be performed on a quarterly basis, as described below:

(1)

each portfolio company or investment is initially valued by the investment professionals of the Valuation Designee responsible for the portfolio investment or through the use of the independent valuation firm;

(2)

preliminary valuation conclusions are then documented and discussed with the valuation committee of the Valuation Designee; and

(3)

the Valuation Designee discusses valuations and determines in good faith the fair value of each investment in the portfolio based on input of its valuation committee and the applicable independent valuation firm.

ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. ASC 820 also provides guidance regarding a fair value hierarchy, which prioritizes information used to measure fair value and the effect of fair value measurements on earnings and provides for enhanced disclosures determined by the level within the hierarchy of information used in the valuation. In accordance with ASC 820, these inputs are summarized in the three levels listed below:

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

Level 2 — Valuations are based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 — Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

Transfers between levels, if any, are recognized at the beginning of the period in which the transfer occurred. In addition to using the above inputs in investment valuations, the Valuation Designee applies the valuation policy approved by the Company’s Board that is consistent with ASC 820.

Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Additionally, the fair value of such investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that may ultimately be realized. Further, such investments are generally less liquid than publicly traded securities and may be subject to contractual and other restrictions on resale. If the Company was required to liquidate a portfolio investment in a forced or liquidation sale, it could realize amounts that are different from the amounts presented and such differences could be material.

In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the unrealized gains or losses reflected herein.

Net Realized Gain or Loss and Net Change in Unrealized Gain or Loss

Investment transactions are recorded on the trade date. The Company will measure net realized gains or losses as the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, including accrued interest, without regard to unrealized gains or losses previously recognized. Net change in unrealized gain or loss will reflect the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized gain or loss, when gains or losses are realized.

Revenue Recognition

Interest Income

The Company records interest income on an accrual basis to the extent that it expects to collect such amounts. It does not accrue as a receivable interest on loans and debt securities for accounting purposes if it has reason to doubt its ability to collect such interest.

Debt Investments on Non-Accrual Status

When a debt security becomes 90 days or more past due, or if management otherwise does not expect that principal, interest, and other obligations due will be collected in full, the Company will generally place the debt security on non-accrual status and cease recognizing interest income on that debt security until all principal and interest due has been paid or the Company believes the borrower has demonstrated the ability to repay its current and future contractual obligations. Any uncollected interest is reversed from income in the period that collection of the interest receivable is determined to be doubtful. However, the Company may make exceptions to this policy if the investment has sufficient collateral value and is in the process of collection.

As of June 30, 2025, no loans to portfolio companies were on non-accrual status.

Distributions

Distributions to shareholders are recorded on the record date. The amount of taxable income to be paid out as a distribution is determined by the Board each quarter and will depend on the Company's earnings, financial condition, maintenance of our tax treatment as a RIC, compliance with applicable BDC regulations and such factors as the Board may deem relevant from time to time.

Segment Reporting

In accordance with ASC Topic 280 – “Segment Reporting (ASC 280),” the Company has determined that it has a single operating and reporting segment. As a result, the Company’s segment accounting policies are the same as described herein and the Company does not have any intra-segment sales and transfers of assets.

The Company operates through a single operating and reporting segment with an investment objective to generate capital appreciation through investing primarily in a portfolio consisting of common and preferred equity investments, including convertible notes in U.S.-based portfolio companies. The Company’s chief operating decision maker (the “CODM”) is comprised of the Company’s Chief Executive Officer and Chief Financial Officer. The CODM makes operating decisions of the Company primarily based on the Company’s net increase (decrease) in net assets resulting from operations. The evaluation and assessment of this metric is used in implementing investment policy decisions, strategic initiatives, managing the Company’s portfolio, and assessing the performance of the portfolio. As the Company’s operations are comprised of a single reporting segment, the segment assets are reflected on the accompanying consolidated statement of assets and liabilities and the significant segment expenses are listed on the accompanying consolidated statement of operations.

Note 3. Agreements and Related Party Transactions

Investment Advisory Agreement

The Company entered into the Investment Advisory Agreement with the Investment Adviser in which the Investment Adviser, subject to the overall supervision of the Company’s Board, manages the day-to-day operations of, and provides investment advisory services to the Company. The Investment Advisory Agreement will be effective for an initial two-year term and thereafter will continue for successive annual periods provided that such continuance is specifically approved annually by a majority of the Board or by the holders of a majority of the Company’s outstanding voting securities and, in each case, a majority of the independent trustees. The Investment Advisory Agreement may be terminated by either party without penalty upon 60 days' written notice to the other party.

Pursuant to the Investment Advisory Agreement with the Investment Adviser, the Company pays the Investment Adviser a fee for its services under the Investment Advisory Agreement consisting of two components – a base management fee (“Base Management Fee”) and an incentive fee (the “Incentive Fee”). The cost of both the Base Management Fee and the Incentive Fee will ultimately be borne by the shareholders.

Base Management Fee:

The Company pays the Investment Adviser the Base Management Fee, quarterly in arrears, at an annual rate of 1.50% of the Company’s average adjusted gross assets. The average adjusted gross asset balance is the average of the Company’s total gross assets (including assets acquired with leverage but adjusted to exclude cash and cash equivalents) at the end of the two most recently completed calendar quarters.

The Company recorded the Base Management Fee expense of $247,544 for the three months ended June 30, 2025 and $305,002 for the period from the Commencement of Operations through June 30, 2025, for a total Base Management Fee payable of $247,544 as of June 30, 2025.

Incentive Fee:

Pursuant to the Investment Advisory Agreement, the Company also pays the Investment Adviser an Incentive Fee consisting of two parts: (i) an income incentive fee, determined and paid quarterly, based on pre-incentive fee net investment income of the Company (the “Income Incentive Fee”) and (ii) a capital gains incentive fee, determined and paid in arrears, based on net capital gains as of the end of each calendar year or upon the termination of the Investment Advisory Agreement (the “Capital Gains Incentive Fee”), which are described in more detail below.

Income Incentive Fee

The Income Incentive Fee will be calculated and payable quarterly in arrears and equals 15% of the Company’s pre-incentive fee net investment income for the immediately preceding calendar quarter, subject to a hurdle rate.

The Income Incentive Fee for each calendar quarter will be calculated as follows:

•

No Income Incentive Fee will be payable in any calendar quarter in which the Company’s Pre-Incentive Fee Net Investment Income Returns (as defined below) do not exceed a quarterly return to investors of 1.5% of the Company’s net asset value for that immediately preceding calendar quarter (the “Hurdle Rate”).

•

100% of the dollar amount of the Company’s Pre-Incentive Fee Net Investment Income Returns, if any, that exceed the Hurdle Rate, but are less than or equal to 1.76% of the Company’s net asset value for that immediately preceding calendar quarter (the “Catch-Up Rate”), will be payable to the Investment Adviser. The Catch-Up Rate is intended to provide an incentive fee of 15% on all of the Company’s Pre-Incentive Fee Net Investment Income Returns as if the Hurdle Rate did not apply when the Company’s pre-incentive fee net investment income exceeds 1.5% of the Company’s net asset value for that calendar quarter, measured as of the end of the immediately preceding calendar quarter.

•

15% of the dollar amount of the Company’s Pre-Incentive Fee Net Investment Income Returns, if any, that exceed the Catch-Up Rate, reflecting that once the Hurdle Rate is reached, 15% of all Pre-Incentive Fee Net Investment Income Returns thereafter are paid to the Investment Adviser.

“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 the Company’s 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 the Company receives from portfolio companies) accrued during the calendar quarter, minus the Company’s operating expenses accrued for the quarter (including the Base Management Fee, expenses payable under the Investment Advisory Agreement or Administration Agreement ), and any interest expense or fees on any credit facilities or outstanding debt and distributions 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 original issue discount, debt instruments with payment-in-kind (“PIK”) interest and zero coupon securities), accrued income that the Company has not yet received in cash. Pre-Incentive Fee Net Investment Income Returns do not include any expense support payments or any reimbursement by the Company of expense support payments, or any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.

The Company recorded an Income Incentive Fee expense of $295,924 for the three months ended June 30, 2025 and $370,164 for the period from the Commencement of Operations through June 30, 2025. The total Income Incentive Fee payable was $295,924 as of June 30, 2025.

Capital Gains Incentive Fee

The second component of the incentive fee, the Capital Gains Incentive Fee, is payable at the end of each calendar year in arrears and equals 20% of cumulative realized capital gains from the date of the Company’s election to be regulated as a BDC to the end of each calendar year, less cumulative net realized capital losses and unrealized capital depreciation, less the aggregate amount of any previously paid Capital Gains Incentive Fees. The Company will accrue quarterly, but will not pay, a Capital Gains Incentive Fee with respect to net unrealized appreciation. The Capital Gains Incentive Fee amount, or the calculations pertaining thereto, as appropriate, will account for any period less than a full calendar year.

In determining the Capital Gains Incentive Fee payable to the Investment Adviser, the Company will calculate the cumulative aggregate realized capital gains and cumulative aggregate realized capital losses since the Company’s inception, and the aggregate unrealized capital depreciation as of the date of the calculation, as applicable, with respect to each of the investments in the Company’s portfolio. For this purpose, cumulative aggregate realized capital gains, if any, equals the sum of the differences between the net sales price of each investment, when sold, and the original cost of such investment since the Company’s inception. Cumulative aggregate realized capital losses equals the sum of the amounts by which the net sales price of each investment, when sold, is less than the original cost of such investment since the Company’s inception. For the purposes of this calculation, “original cost” of the investment shall include cash deployed into the investment, excluding any capitalized PIK. “Net sales price” shall include cash proceeds generated from the investment, excluding any income recorded that is subject to the Income Incentive Fee as described above. Aggregate unrealized capital depreciation equals the sum of the difference, if negative, between the valuation of each investment as of the applicable calculation date and the original cost of such investment. At the end of the applicable year, the amount of capital gains that serves as the basis for the Company’s calculation of the Capital Gains Incentive Fee payable equals the cumulative aggregate realized capital gains less cumulative aggregate realized capital losses, less aggregate unrealized capital depreciation, with respect to the Company’s portfolio of investments. In no event will the Capital Gains Incentive Fee payable pursuant to the Investment Advisory Agreement be in excess of the amount permitted by the Investment Advisers Act of 1940, as amended, including Section 205 thereof.

The Company recorded a Capital Gains Incentive Fee expense of $212,085 and $209,823 for the three months ended June 30, 2025 and for the period from the Commencement of Operations through June 30, 2025, respectively. The total Capital Gains Incentive Fee payable was $215,014 as of June 30, 2025, which includes Capital Gains Incentive Fees payable acquired as part of the Formation Transaction.

Expense Support and Conditional Reimbursement Agreement

The Company entered into an expense support and conditional reimbursement agreement with the Investment Adviser (the “Expense Support Agreement”). The Expense Support Agreement provides that, at such times as the Investment Adviser determines, the Investment Adviser may pay certain expenses of the Company, provided that no portion of the payment will be used to pay any interest expense of the Company (each, an “Expense Payment”). Such Expense Payment will be made in any combination of cash or other immediately available funds no later than 45 days after a written commitment from the Investment Adviser to pay such expense, and/or by an offset against amounts due from the Company to the Investment Adviser or its affiliates related to expenses that are reimbursable by the Company pursuant to the Investment Advisory Agreement. Any payments required

to be made by the Company pursuant to the Expense Support Agreement is referred to as a “Reimbursement Payment.” The Company has agreed to reimburse the Investment Adviser for such expense payments when the Company has reached certain milestones of capital raised from external subscribers. Specifically, once $100 million of capital is raised by external subscribers (“Milestone 1”), the Company will be required to reimburse the Investment Adviser in an amount equal to the lesser of $100,000 or the total amount outstanding of the Expense Payment. Once $125 million of capital is raised by external subscribers (“Milestone 2”), the Company shall be required to reimburse the Investment Adviser in an additional amount equal to the lesser of $100,000 or the total remaining outstanding amount of the Expense Payment. Once $150 million of capital is raised by external subscribers (“Milestone 3”), the Company shall be required to reimburse the Investment Adviser in an amount equal to the lesser of $150,000 or the total remaining outstanding amount of the Expense Payment. Once $175 million of capital is raised by external subscribers (“Milestone 4”), the Company shall be required to reimburse the Investment Adviser in an amount equal to the lesser of $150,000 or the total remaining outstanding amount of the Expense Payment. In no event will the total amount reimbursed by the Company exceed $500,000.

As of June 30, 2025, the Investment Adviser has incurred $344,874 of organization costs and $155,126 of offering costs prior to the Commencement of Operations that will be payable by the Company when the Company has reached the milestones of capital raised from external subscribers as described above. As the Company has not reached Milestone 1 by raising capital of $100 million from external subscribers as of June 30, 2025, reimbursement of organization and offering costs was deemed not probable and therefore, is not recorded as a liability. No organizational and offering costs were incurred by the Company during the three months ended June 30, 2025 and the period from the Commencement of Operations through June 30, 2025.

Administration Agreement

The Company has also entered into an administration agreement (the “Administration Agreement”) with BIP Capital, LLC (the “Administrator”) in which the Administrator provides certain administrative and fund accounting services to the Company, including fund accounting and financial reporting services, loan servicing, investor services, regulatory compliance services, tax reporting, audit support, technology and data management services and management of the Company’s third-party vendors. The Administrator may engage one or more third-party sub-administrators to perform, or assist the Administrator in the performance of, any of such services. For such services, the Investment Adviser has agreed to pay the Administrator a fee equal to fifteen percent (15%) of any Base Management Fees and/or incentive fees paid to the Investment Adviser by the Company. The cost of the fee paid to the Administrator will be borne entirely by the Investment Adviser and will not be borne by the Shareholders.

License Agreement

The Company has entered into the License Agreement with the Investment Adviser, pursuant to which it will be granted a non-exclusive, royalty-free license to use the name “LAGO” and the associated logo pursuant to a license agreement. Under this agreement, the Company has a right to use the LAGO name and logo for so long as LAGO Asset Management, LLC remains the Investment Adviser. Other than with respect to this limited license, the Company has no legal right to the “LAGO” name or logo.

Co-Investment Activity

The Company intends to co-invest from time to time, and intends to make co-investments with certain affiliates of the Investment Adviser, where doing so is consistent with the Company’s investment strategy as well as applicable law and SEC staff interpretations.

On April 23, 2025, the Company and the Investment Adviser received an exemptive order from the SEC (the “Order”) that permits it to co-invest with investment funds managed by the Investment Adviser and its affiliates where doing so is consistent with the Company’s investment strategy as well as applicable law (including the terms and conditions of the exemptive order issued by the SEC). Under the terms of the relief permitting the Company to co-invest with other funds managed by the Investment Adviser and its affiliates, a “required majority” (as defined in Section 57(o) of the 1940 Act) of the trustees who are not interested persons as defined in Section 2(a)(19) of the 1940 Act, must make certain conclusions in connection with a co-investment transaction, including (1) the terms of the proposed transaction, including the consideration to be paid, are reasonable and fair to the Company and its and do not involve overreaching of the Company or its shareholders on the part of any person concerned and (2) the transaction is consistent with the interests of its shareholders and is consistent with the Company’s investment objectives and strategies.

Note 4. Investments

In accordance with the provisions of the 1940 Act, the Company classifies investments by level of control. As defined in the 1940 Act, “Controlled Investments” are investments in those companies that the Company is deemed to “Control.” “Affiliated Investments” are investments in those companies that are “Affiliated Persons” of the Company, as defined in the 1940 Act, other than Control Investments. “Non-Controlled / Non-Affiliated Investments” are those that are neither Controlled Investments nor Affiliated Investments. Generally, under the 1940 Act, the Company is deemed to control a company in which it has invested if the Company owns more than 25.0% of the voting securities (i.e., securities with the right to elect directors) and/or has the power to exercise control over the management or policies of such portfolio company. Generally, under the 1940 Act, “Affiliated Investments” that are not otherwise “Controlled Investments” are defined as investments in which the Company owns at least 5.0%, up to 25.0% (inclusive), of the voting securities and does not have the power to exercise control over the management or policies of such portfolio company. Generally, under the 1940 Act, “Non-Controlled / Non-Affiliated Investments” are defined as investments in which the Company owns less than 5.0% of the voting securities of such portfolio company. All of the Company’s investments are deemed Non-Controlled / Non-Affiliated as of June 30, 2025.

The composition of the Company’s investment portfolio at cost and fair value was as follows:


	June 30, 2025
	Cost		Fair Value		% of Total Investments at Fair Value
First lien senior secured term loans	$	60,697,628	$	61,126,185		80.0	%
Second lien senior secured term loans		8,102,996		8,102,996		10.6	%
Warrants		6,512,969		7,159,483		9.4	%
Total	$	75,313,593	$	76,388,664		100.0	%

Refer to Note 5 – Fair Value Measurements for additional information on the fair value of the Company’s investments.

The industry composition of investments at fair value was as follows:


	June 30, 2025
	Cost		Fair Value		% of Total Investments at Fair Value
Application Software	$	5,941,725	$	5,941,725		7.8	%
Consumer Finance		1,990,411		1,990,411		2.6	%
Data Processing		8,257,078		8,257,078		10.8	%
Education		5,914,242		5,906,850		7.7	%
Food & Beverage		2,976,250		3,039,900		4.0	%
Health & Wellness		12,811,262		13,848,657		18.1	%
Technology – Aerospace		3,567,146		3,589,575		4.7	%
Technology – Business		9,488,699		9,513,180		12.5	%
Technology – Consumer		6,028,232		5,962,740		7.8	%
Technology – Health & Wellness		2,983,264		2,983,264		3.9	%
Technology – Marketplace		12,977,469		12,977,469		17.0	%
Technology – Property		2,377,815		2,377,815		3.1	%
Total	$	75,313,593	$	76,388,664		100.0	%

As of June 30, 2025 and for the three months then ended and for the period from the Commencement of Operations through June 30, 2025, the Company had the following portfolio companies that individually accounted for 10% or more of the Company’s aggregate total assets or investment income:


Portfolio Company	Percentage of Total Investment Income for Three Months Ended June 30, 2025			Percentage of Total Investment Income for period from the Commencement of Operations through June 30, 2025			Percentage of Total Assets as of June 30, 2025
Youth Opportunity Investments, LLC		19.5	%		20.2	%		8.7	%
FanFixApp, LLC		21.5	%		21.0	%		11.6	%

There were no transactions related to investments in controlled / affiliated or non-controlled / affiliated companies for the three months ended June 30, 2025 and for the period from the Commencement of Operations through June 30, 2025.

Note 5. Fair Value Measurements

The Company’s investments were categorized in the fair value hierarchy described in Note 2 – Significant Accounting Policies.

The Company’s investments measured at fair value by investment type on a recurring basis as of June 30, 2025 were as follows:


	June 30, 2025
	Level 1		Level 2		Level 3		Total
First lien senior secured term loans	$	-	$	-	$	61,126,185	$	61,126,185
Second lien senior secured term loans		-		-		8,102,996		8,102,996
Warrants		-		-		7,159,483		7,159,483
Total investments before cash equivalents	$	-	$	-	$	76,388,664	$	76,388,664
Money market treasury fund		7,657,468		-		-		7,657,468
Total investments after cash equivalents	$	7,657,468	$	-	$	76,388,664	$	84,046,132

The following tables provide a reconciliation of the beginning and ending balances for investments for which fair value was determined using Level 3 inputs:


	For the Three Months Ended June 30, 2025
	First lien senior secured term loans		Second lien senior secured term loans		Warrants		Total
Total fair value of investments in portfolio companies at March 31, 2025	$	50,344,414	$	-	$	3,961,525	$	54,305,939
Purchases of investments in portfolio companies		11,076,409		8,183,456		2,540,135		21,800,000
Paid-in-kind interest income		9,050		-		-		9,050
Proceeds from loan repayments on investments in portfolio companies

LAGO Evergreen Credit 10-Q