LAGO Evergreen Credit Expands Portfolio with New Tech, Health Investments

TL;DR

**LAGO Evergreen Credit is betting big on tech and health, signaling aggressive growth that could pay off if their portfolio companies perform.**

AI Summary

LAGO Evergreen Credit reported a net increase in investments for the quarter ended June 30, 2025, with significant activity in both debt and warrant investments. The company made a new debt investment of $10,000,000 in Tulip.IO, Inc. as a first lien senior secured term loan with an interest rate of PRIME + 4.0% (2.0% PIK) and a maturity date of November 4, 2028. Additionally, LAGO Evergreen Credit acquired warrants in Domuso Inc. on May 30, 2025, for Series B-2 Preferred Stock, and in Youth Opportunity Investments, LLC on March 3, 2025, for Common Units. The company also saw a $1,000,000 increase in its second lien senior secured term loan to Organixx, bringing the total to $11,000,000. New delayed draw term loans were extended to Galileo Learning LLC for $1,000,000, Happy Head Inc. for $1,000,000, and Roq.Ad Inc. for $1,000,000. The strategic outlook appears focused on expanding its portfolio in technology and health & wellness sectors, while managing existing debt obligations and warrant positions.

Why It Matters

LAGO Evergreen Credit's aggressive expansion into technology and health & wellness through new debt and warrant investments signals a clear growth strategy, potentially boosting future revenue streams for investors. This move could intensify competition in the venture debt space, impacting other lenders and the valuation of early-stage companies. For employees and customers of the portfolio companies like Tulip.IO and Domuso, these investments provide crucial capital for growth and innovation. The focus on sectors like Health & Wellness and Technology reflects broader market trends, making LAGO Evergreen Credit a bellwether for private credit activity in these areas.

Risk Assessment

Risk Level: medium — The risk level is medium due to significant exposure to private companies through debt and warrant investments, which inherently carry higher risk than public market investments. For example, the $10,000,000 first lien senior secured term loan to Tulip.IO, Inc. and various delayed draw term loans to companies like Galileo Learning LLC and Happy Head Inc. are illiquid and subject to the specific performance of these private entities. While some are senior secured, the nature of these investments means a higher potential for default compared to more established, publicly traded debt.

Analyst Insight

Investors should closely monitor the performance of LAGO Evergreen Credit's key portfolio companies, particularly Tulip.IO, Inc. and Organixx, as their success will directly impact the fund's returns. Evaluate the company's ability to manage its illiquid private credit portfolio and assess the overall health of the technology and health & wellness sectors for potential headwinds or tailwinds.

Key Numbers

• $10.0M — New Debt Investment (LAGO Evergreen Credit's investment in Tulip.IO, Inc. as a first lien senior secured term loan.)
• $1.0M — Increased Debt Investment (Increase in the second lien senior secured term loan to Organixx, bringing the total to $11.0M.)
• PRIME + 4.0% — Interest Rate (Interest rate for the Tulip.IO, Inc. debt investment, including 2.0% PIK.)
• 11/4/2028 — Maturity Date (Maturity date for the Tulip.IO, Inc. first lien senior secured term loan.)
• $1.0M — Delayed Draw Term Loan (New delayed draw term loan extended to Galileo Learning LLC.)
• $1.0M — Delayed Draw Term Loan (New delayed draw term loan extended to Happy Head Inc.)
• $1.0M — Delayed Draw Term Loan (New delayed draw term loan extended to Roq.Ad Inc.)

Key Players & Entities

• LAGO Evergreen Credit (company) — filer of the 10-Q
• Tulip.IO, Inc. (company) — recipient of a $10,000,000 first lien senior secured term loan
• Domuso Inc. (company) — company in which LAGO Evergreen Credit acquired warrants for Series B-2 Preferred Stock
• Youth Opportunity Investments, LLC (company) — company in which LAGO Evergreen Credit acquired warrants for Common Units
• Organixx (company) — recipient of a $1,000,000 increase in second lien senior secured term loan
• Galileo Learning LLC (company) — recipient of a $1,000,000 delayed draw term loan
• Happy Head Inc. (company) — recipient of a $1,000,000 delayed draw term loan
• Roq.Ad Inc. (company) — recipient of a $1,000,000 delayed draw term loan
• $10,000,000 (dollar_amount) — new debt investment in Tulip.IO, Inc.
• $1,000,000 (dollar_amount) — increase in second lien senior secured term loan to Organixx

FAQ

Industry Context

LAGO Evergreen Credit operates within the credit investment sector, focusing on providing debt financing and acquiring warrants in non-controlled, non-affiliated companies. The company's recent activity shows a strategic emphasis on the technology and health & wellness sectors, aligning with broader market trends favoring growth in these areas. The competitive landscape likely involves other specialized credit funds and private equity firms vying for similar investment opportunities.

Regulatory Implications

As a financial entity, LAGO Evergreen Credit is subject to various financial regulations. The 10-Q filing itself is a requirement under the Securities Exchange Act of 1934. Specific investment activities, particularly those involving debt and equity instruments, may fall under regulations governing lending, securities, and investment funds, requiring ongoing compliance and reporting.

What Investors Should Do

1. Monitor the performance of new debt investments, particularly the Tulip.IO, Inc. loan, for adherence to repayment schedules and interest payments.
2. Evaluate the potential value and realization strategy for the acquired warrants in Domuso Inc. and Youth Opportunity Investments, LLC.
3. Track the utilization and performance of the new delayed draw term loans extended to Galileo Learning LLC, Happy Head Inc., and Roq.Ad Inc.
4. Analyze the impact of the increased $11,000,000 second lien loan to Organixx on the company's overall risk profile and potential returns.

Key Dates

• 2025-03-03: New debt investment in Tulip.IO, Inc. and acquisition of warrants in Youth Opportunity Investments, LLC. — Indicates expansion of debt and warrant portfolios in technology and health & wellness sectors.
• 2025-05-30: Acquisition of warrants in Domuso Inc. — Further diversification of warrant holdings, specifically in Series B-2 Preferred Stock.
• 2025-06-30: Quarter end reporting period for the 10-Q filing. — Provides the latest financial snapshot and operational updates for LAGO Evergreen Credit.

Glossary

PIK

Payment-in-Kind, meaning interest is paid in the form of additional debt or equity rather than cash. (Affects the actual yield and compounding of the debt investment in Tulip.IO, Inc.)

First lien senior secured term loan

A type of debt that has the highest priority claim on the borrower's assets in case of default. (Describes the senior secured nature of the $10,000,000 investment in Tulip.IO, Inc., indicating a lower risk profile for this specific debt.)

Second lien senior secured term loan

A debt instrument that ranks below first lien debt but still has a secured claim on the borrower's assets. (Context for the $1,000,000 increase in the loan to Organixx, bringing the total to $11,000,000.)

Warrants

A security that gives the holder the right, but not the obligation, to purchase a company's stock at a specific price before a certain date. (LAGO Evergreen Credit acquired warrants in Domuso Inc. and Youth Opportunity Investments, LLC, representing potential equity upside.)

Delayed Draw Term Loan

A loan facility that allows the borrower to draw funds incrementally over a specified period, up to a maximum amount. (Indicates new credit extensions to Galileo Learning LLC, Happy Head Inc., and Roq.Ad Inc., totaling $3,000,000.)

PRIME Rate

The prime lending rate, which is the interest rate that commercial banks charge their most creditworthy corporate customers. (Forms the base rate for the interest charged on the Tulip.IO, Inc. debt investment.)

Year-Over-Year Comparison

This 10-Q filing for the period ending June 30, 2025, details new investment activities including a $10 million debt investment in Tulip.IO, Inc. and the acquisition of warrants in Domuso Inc. and Youth Opportunity Investments, LLC. It also notes an increase in the Organixx loan to $11 million and new delayed draw term loans totaling $3 million. Without comparative data from the prior year's 10-Q, a direct quantitative comparison of revenue growth, margin changes, or shifts in risk factors is not possible from the provided text.

Key Financial Figures

• $0.01 — hares of beneficial interest, par value $0.01 per share Indicate by check mark whet

Filing Documents

• ck0002043759-20250630.htm (10-Q) — 2867KB
• ck0002043759-ex31_1.htm (EX-31.1) — 13KB
• ck0002043759-ex31_2.htm (EX-31.2) — 14KB
• ck0002043759-ex32_1.htm (EX-32.1) — 8KB
• ck0002043759-ex32_2.htm (EX-32.2) — 6KB
• 0000950170-25-106662.txt ( ) — 9503KB
• ck0002043759-20250630.xsd (EX-101.SCH) — 978KB
• ck0002043759-20250630_htm.xml (XML) — 1894KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION 1

Financial Statements

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)

Notes to Consolidated Financial Statements (unaudited) 9

Management's Discussion and Analysis of Financial Condition and Results of Operations

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

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 40

Controls and Procedures

Item 4. Controls and Procedures 40

OTHER INFORMATION

PART II. OTHER INFORMATION 41

Legal Proceedings

Item 1. Legal Proceedings 41

Risk Factors

Item 1A. Risk Factors 41

Unregistered Sales of Equity Securities and Use of Proceeds

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

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities. 41

Mine Safety Disclosures

Item 4. Mine Safety Disclosures. 41

Other Information

Item 5. Other Information. 41

Exhibits

Item 6. Exhibits. 42

FORWARD-LOOKING STATEMENTS

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 f

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Ite m 1. Financial Statements LAGO Evergreen Credit Consolidated Stateme nt 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. 1 LAGO Evergreen Credit Consolidate d 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 212,085 209,8

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View this 10-Q filing on SEC EDGAR