LAGO Evergreen Credit Posts Strong Q3 Investment Income

TL;DR

**LAGO Evergreen Credit is showing solid early growth with strong investment income and asset expansion, making it a compelling, albeit private, credit play.**

AI Summary

LAGO Evergreen Credit reported total investment income of $4,654,870 for the three months ended September 30, 2025, and $8,350,659 for the period from March 3, 2025, through September 30, 2025. Net investment income for the quarter was $2,643,779, contributing to a net increase in net assets from operations of $2,814,398. The company's total assets stood at $143,501,995 as of September 30, 2025, with total liabilities at $45,546,670. Investments in non-controlled/non-affiliated entities totaled $122,070,120 at fair value. Key expenses included interest expense of $495,206, Base Management Fees of $376,581, and Income Incentive Fees of $472,428 for the quarter. The company issued 495,706 common shares during the quarter, increasing total outstanding shares to 3,869,487, and declared distributions of $2,631,251 to shareholders. The net asset value per share was $25.31 as of September 30, 2025.

Why It Matters

LAGO Evergreen Credit's robust investment income of $4.65 million for the quarter signals strong performance in its debt and warrant investments, which is crucial for investor confidence in this non-publicly traded entity. The significant increase in net assets from operations, reaching $5.78 million since March 2025, demonstrates effective capital deployment and management by LAGO Asset Management, LLC. For employees, this indicates a stable and growing platform, while customers of the portfolio companies benefit from continued financing. In a competitive landscape, LAGO's ability to generate substantial income and manage liabilities, including a $41.14 million line of credit, positions it as a notable player in the private credit market.

Risk Assessment

Risk Level: medium — The company's risk level is medium due to its significant exposure to illiquid private investments, with $122,070,120 in non-controlled/non-affiliated investments, representing a substantial portion of its $143,501,995 total assets. Additionally, the company relies on a $41,136,013 line of credit, which introduces interest rate risk and refinancing risk, as highlighted in the forward-looking statements regarding 'the use of borrowed money' and 'adequacy, availability, and pricing of the Company's financing sources'.

Analyst Insight

Investors should closely monitor LAGO Evergreen Credit's future filings for continued growth in net investment income and stability in its portfolio valuations. Given its private nature, potential investors should conduct thorough due diligence on LAGO Asset Management, LLC's track record and the specific underlying assets, especially considering the illiquidity and concentration risks.

Financial Highlights

debt To Equity

0.46

revenue

$4,654,870

operating Margin

56.8%

total Assets

$143,501,995

total Debt

$41,136,013

net Income

$2,643,779

eps

$N/A

gross Margin

N/A

cash Position

$19,949,157

revenue Growth

+N/A%

Revenue Breakdown

Key Numbers

• $4.65M — Total Investment Income (For the three months ended September 30, 2025, indicating strong revenue generation.)
• $2.81M — Net Increase in Net Assets from Operations (For the three months ended September 30, 2025, showing operational profitability.)
• $143.50M — Total Assets (As of September 30, 2025, reflecting the company's growing asset base.)
• $45.55M — Total Liabilities (As of September 30, 2025, providing insight into the company's leverage.)
• $122.07M — Investments (Fair Value) (Representing the core of the company's asset base and investment strategy.)
• $25.31 — Net Asset Value Per Share (As of September 30, 2025, a key metric for shareholder value.)
• 3,869,487 — Shares Outstanding (As of September 30, 2025, reflecting the company's equity base.)
• $41.14M — Line of Credit (Net borrowings as of September 30, 2025, indicating financing activity.)
• $2.63M — Distributions Declared (For the three months ended September 30, 2025, showing return to shareholders.)
• $495,206 — Interest Expense (For the three months ended September 30, 2025, a significant operational cost.)

Key Players & Entities

• LAGO Evergreen Credit (company) — Registrant
• LAGO Asset Management, LLC (company) — Investment Adviser
• $4,654,870 (dollar_amount) — Total investment income for the three months ended September 30, 2025
• $8,350,659 (dollar_amount) — Total investment income from March 3, 2025, through September 30, 2025
• $2,814,398 (dollar_amount) — Net increase in net assets resulting from operations for the three months ended September 30, 2025
• $143,501,995 (dollar_amount) — Total assets as of September 30, 2025
• $45,546,670 (dollar_amount) — Total liabilities as of September 30, 2025
• $122,070,120 (dollar_amount) — Fair value of non-controlled / non-affiliated investments as of September 30, 2025
• $25.31 (dollar_amount) — Net asset value per share as of September 30, 2025
• SEC (regulator) — U.S. Securities and Exchange Commission

FAQ

Risk Factors

• Leverage and Debt Obligations [high — financial]: The company utilizes a line of credit, with $41,136,013 outstanding as of September 30, 2025. Significant interest expense of $495,206 for the quarter indicates the cost of this leverage, which can impact net investment income and overall profitability.
• Incentive Fee Structure [medium — financial]: The company pays Income Incentive Fees ($472,428 for the quarter) and Capital Gains Incentive Fees ($34,123 for the quarter). This fee structure, tied to performance, can increase expenses significantly during periods of strong investment gains, potentially reducing distributable earnings.
• Investment Valuation and Unrealized Losses [medium — market]: The company's investments are valued at fair value, with $122,070,120 in non-controlled/non-affiliated investments as of September 30, 2025. A net change in unrealized gain of $170,619 for the quarter indicates market fluctuations can impact net assets, and potential unrealized losses could negatively affect shareholder value.
• Operational Expenses [medium — operational]: Total expenses for the quarter were $2,011,091, including significant amounts for professional fees ($433,676) and base management fees ($376,581). High operational costs can erode net investment income and require careful management.
• Compliance and Reporting [low — regulatory]: As a credit investment company, LAGO Evergreen Credit is subject to various financial regulations. Ensuring compliance with reporting requirements and investment guidelines is crucial to avoid penalties and maintain investor confidence.

Industry Context

LAGO Evergreen Credit operates within the credit investment sector, which is characterized by its reliance on interest income and capital appreciation from debt instruments. The industry is sensitive to interest rate changes, credit market conditions, and regulatory oversight. Companies in this space often employ leverage to enhance returns, which also amplifies risk.

Regulatory Implications

As a financial entity, LAGO Evergreen Credit is subject to regulations governing investment companies and credit providers. Compliance with reporting standards, capital requirements, and investor protection rules is paramount. Any changes in regulatory frameworks could impact operational costs and investment strategies.

What Investors Should Do

1. Monitor interest expense and leverage levels.
2. Analyze the drivers of net investment income.
3. Evaluate the impact of incentive fees on net income.
4. Assess the fair value of the investment portfolio.

Key Dates

• 2025-09-30: End of Quarter Reporting — Provides a snapshot of the company's financial position, including total assets of $143.50M, total liabilities of $45.55M, and NAV per share of $25.31.
• 2025-03-03: Commencement of Operations — Marks the beginning of the reporting period for the consolidated statements, allowing for year-to-date performance analysis.

Glossary

Net investment income (loss)

The income generated from a company's investments after deducting all operating expenses, excluding realized and unrealized gains or losses on investments. (This is a key profitability metric for LAGO Evergreen Credit, showing $2,643,779 for the quarter.)

Net realized and unrealized gain (loss) on investments

The total change in the value of a company's investment portfolio during a period, including profits or losses from sales (realized) and changes in market value (unrealized). (Contributed $170,619 to the net increase in assets for the quarter, indicating positive market performance on investments.)

Net asset value per share (NAV per share)

The value of a company's assets minus its liabilities, divided by the number of outstanding shares. (A crucial indicator of shareholder value, reported at $25.31 as of September 30, 2025.)

Non-controlled / non-affiliated investments

Investments in entities where the company does not have control or significant influence, typically accounted for at fair value. (These investments form the core asset base of LAGO Evergreen Credit, totaling $122,070,120 at fair value.)

Line of credit

A flexible loan that allows a borrower to draw funds up to a certain limit, repay them, and then borrow them again. (LAGO Evergreen Credit has a significant outstanding balance of $41,136,013 on its line of credit, indicating substantial use of leverage.)

Year-Over-Year Comparison

This 10-Q filing covers the period from March 3, 2025, through September 30, 2025, and does not provide comparative data from a prior year's 10-Q. Therefore, a year-over-year comparison of revenue growth, margin changes, or new risks cannot be made based on this filing alone.

Key Financial Figures

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

Filing Documents

• ck0002043759-20250930.htm (10-Q) — 3465KB
• ck0002043759-ex31_1.htm (EX-31.1) — 14KB
• ck0002043759-ex31_2.htm (EX-31.2) — 14KB
• ck0002043759-ex32_1.htm (EX-32.1) — 8KB
• ck0002043759-ex32_2.htm (EX-32.2) — 6KB
• 0001193125-25-266824.txt ( ) — 11182KB
• ck0002043759-20250930.xsd (EX-101.SCH) — 1059KB
• ck0002043759-20250930_htm.xml (XML) — 2214KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION 1

Financial Statements

Item 1. Financial Statements 1 Consolidated Statement of Assets and Liabilities as of September 30, 2025 (unaudited) 1 Consolidated Statements of Operations for the three months ended September 30, 2025 (unaudited) and for the period from March 3, 2025 ("Commencement of Operations") through September 30, 2025 (unaudited) 2 Consolidated Statements of Changes in Net Assets for the three months ended September 30, 2025 (unaudited) and for the period from March 3, 2025 ("Commencement of Operations") through September 30, 2025 (unaudited) 3 Consolidated Statement of Cash Flows for the period from March 3, 2025 ("Commencement of Operations") through September 30, 2025 (unaudited) 4 Consolidated Schedule of Investments as of September 30, 2025 (unaudited)

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 11

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 28

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 43

Controls and Procedures

Item 4. Controls and Procedures 43

OTHER INFORMATION

PART II. OTHER INFORMATION 45

Legal Proceedings

Item 1. Legal Proceedings 45

Risk Factors

Item 1A. Risk Factors 45

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 45

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities. 46

Mine Safety Disclosures

Item 4. Mine Safety Disclosures. 46

Other Information

Item 5. Other Information. 46

Exhibits

Item 6. Exhibits. 47

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, including the impact of a potential prolonged U.S. government shutdown; 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 i

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Ite m 1. Financial Statements LAGO Evergreen Credit Consolidated Stateme nt of Assets and Liabilities September 30, 2025 (unaudited) Assets Investments Non-controlled / non-affiliated investments (cost of $ 120,824,429 at September 30, 2025) $ 122,070,120 Cash and cash equivalents (restricted cash of $ 1,495,441 at September 30, 2025) 19,949,157 Interest receivable 1,391,261 Prepaid expenses and other assets 91,457 Total assets $ 143,501,995 Liabilities Line of credit (net of deferred financing costs of $ 1,136,215 at September 30, 2025) $ 41,136,013 Base Management Fees payable 376,581 Income Incentive Fees payable 472,428 Capital Gains Incentive Fees payable 249,138 Accrued Board of Trustees' fees 38,000 Accrued audit and tax fees 213,998 Organizational costs payable to Adviser 68,975 Offering costs payable to Adviser 31,025 Accrued interest 161,408 Accrued expenses and other liabilities 167,853 Distribution payable 2,631,251 Total liabilities $ 45,546,670 Commitments and contingencies (Note 6) Net assets Common shares, par value $ 0.01 per share, unlimited shares authorized ( 3,869,487 shares issued and outstanding at September 30, 2025) 38,695 Paid-in-capital in excess of par value 96,838,822 Total distributable earnings (loss) 1,077,808 Total net assets 97,955,325 Total liabilities and net assets $ 143,501,995 Net asset value per share $ 25.31 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 September 30, 2025 For the period March 3, 2025 ("Commencement of Operations") through September 30, 2025 Investment income: From non-controlled / non-affiliated investments: Interest income $ 4,567,700 $ 7,996,653 Other interest income 87,170

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