# EDGAR Filing Document

**Accession Number:** 0001849089
**File Stem:** 0001628280-26-020991
**Filing Date:** 2026-3
**Character Count:** 710719
**Document Hash:** 28db28a1eb90be7381f2ea1937190112
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001628280-26-020991.hdr.sgml**: 20260325

**ACCESSION NUMBER**: 0001628280-26-020991

**CONFORMED SUBMISSION TYPE**: 10-K

**PUBLIC DOCUMENT COUNT**: 98

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260325

**DATE AS OF CHANGE**: 20260325

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Lafayette Square USA, Inc.
- **CENTRAL INDEX KEY:** 0001849089

**ORGANIZATION NAME:**
- **EIN:** 000000000
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 814-01427
- **FILM NUMBER:** 26791453

**BUSINESS ADDRESS:**
- **STREET 1:** 175 SW 7TH STREET
- **STREET 2:** UNIT 2307
- **CITY:** MIAMI
- **STATE:** FL
- **BUSINESS PHONE:** 7866880975

**MAIL ADDRESS:**
- **STREET 1:** 175 SW 7TH STREET
- **STREET 2:** UNIT 2307
- **CITY:** MIAMI
- **STATE:** FL

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Lafayette Square Empire BDC, Inc.
- **DATE OF NAME CHANGE:** 20211101

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Lafayette Square Empire BDC, LLC
- **DATE OF NAME CHANGE:** 20210303

?xml version='1.0' encoding='ASCII'? ls-20251231

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, DC 20549**

**FORM 10-K**

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

For the Fiscal Year Ended December 31, 2025

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

For the transition period from______ to______

Commission File Number 814-01427

**LAFAYETTE SQUARE USA, INC.**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Delaware** | **87-2807075** |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |

---

175 SW 7th St, Unit 2307

Miami, FL 33130

(Address of principal executive offices)

(786) 753-7096

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol** | **Name of each exchange on which** <br>**registered**<br>|

---

Securities registered pursuant to Section 12(g) of the Securities Exchange Act of 1934:

Common Stock, par value $0.001 per share

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes

☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the

Securities Act. Yes ☐ No ☒

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 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 has filed a report on and attestation to its management's assessment of the

effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act. (15 U.S.C.

7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Exchange Act, indicate by check mark whether the financial

statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of

incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period

pursuant to §240.10D-1(b). ☐

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 March 25, 2026, there was no established public market for the registrant's common shares.

As of March 25, 2026 the Registrant had 27,868,733 shares of common stock, $0.001 par value per share, outstanding.

**DOCUMENTS INCORPORATED BY REFERENCE**

Portions of the registrant's definitive proxy statement for use in connection with its 2026 Annual Meeting of Stockholders,

which is to be filed no later than 120 days after December 31, 2025, are incorporated by reference into Part III of this

Annual Report on Form 10-K.

---

| | | |
|:---|:---|:---|
|  |  | **Page** |
| [PART I](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_145) | [PART I](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_145) |  |
| Item 1. | [Business](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_148) | [3](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_145) |
| Item 1A. | [Risk Factors](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_151) | [20](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_151) |
| Item 1B. | [Unresolved Staff Comments](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_154) | [54](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_154) |
| Item 1C. | [Cybersecurity](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_157) | [55](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_157) |
| Item 2. | [Properties](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_160) | [56](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_160) |
| Item 3. | [Legal Proceedings](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_163) | [56](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_163) |
| Item 4. | [Mine Safety Disclosures](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_169) | [57](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_169) |
| [PART II](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_166) |  |  |
| Item 5. | [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_172)<br>[Securities](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_172)<br>| [57](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_172) |
| Item 6. | [Reserved](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_175) | [59](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_175) |
| Item 7. | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_178) | [59](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_178) |
| Item 7A. | [Quantitative and Qualitative Disclosures About Market Risk](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_106) | [82](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_106) |
| Item 8. | [Consolidated Financial Statements and Supplementary Data](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_181) | [84](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_181) |
| Item 9. | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_187) | [140](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_187) |
| Item 9A. | [Controls and Procedures](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_112) | [140](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_112) |
| Item 9B. | [Other Information](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_190) | [140](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_190) |
| Item 9C. | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_193) | [140](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_193) |
| [PART III](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_196) |  |  |
| Item 10. | [Directors, Executive Officers and Corporate Governance](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_199) | [141](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_199) |
| Item 11. | [Executive Compensation](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_202) | [141](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_202) |
| Item 12. | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_205) | [141](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_205) |
| Item 13. | [Certain Relationships and Related Transactions, and Director Independence](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_208) | [141](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_208) |
| Item 14. | [Principal Accountant Fees and Services](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_211) | [141](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_211) |
| [PART IV](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_214) |  |  |
| Item 15. | [Exhibits and Financial Statement Schedules](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_217) | [141](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_217) |
| Item 16. | [Form 10-K Summary](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_220) | [143](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_220) |
|  | [Signatures](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_139) | [144](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_139) |

---

**Lafayette Square USA, Inc.**

**Cautionary Statement Regarding Forward-Looking Statements**

This report contains forward-looking statements that involve substantial risks and uncertainties. Such statements involve

known and unknown risks, uncertainties and other factors and undue reliance should not be placed thereon. These forward-

looking statements are not historical facts, but rather are based on current expectations, estimates and projections about

Lafayette Square USA, Inc., together with its consolidated subsidiaries ("we," "us," "our," or the "Company"), our

prospective portfolio investments, our industry, our beliefs and opinions, and our assumptions. Words such as

"anticipates," "expects," "intends," "plans," "will," "may," "continue," "believes," "seeks," "estimates," "would," "could,"

"should," "targets," "projects," "outlook," "potential," "predicts" 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 our control and difficult to predict and could cause

actual results to differ materially from those expressed or forecasted in the forward-looking statements, including without

limitation:

• our business prospects and the prospects of the companies in which we may invest;

• our ability to raise sufficient capital to execute our investment strategy;

• heightened global political and economic uncertainty caused by war, social unrest and political tension;

• the impact of economic recessions or downturns could harm our operating results;

• U.S. trade policy developments, tariffs and other trade restrictions;

• price inflation and changes in the general interest rate environment, which could adversely affect the operating

results of our portfolio companies and impact their ability to pay interest and principal on our loans;

• changes in the general interest rate environment;

• general economic and political trends and other external factors, including the impact of any future pandemic or

epidemic;

• the demand from middle market businesses for capital investment and managerial assistance;

• our ability to create and preserve jobs and stimulate the economy;

• the ability of our portfolio companies to achieve their objectives;

• our expected financing arrangements and expected investments;

• the adequacy of our cash resources, financing sources and working capital;

• the timing and amount of cash flows, distributions and dividends, if any, from our portfolio companies;

• our contractual arrangements and relationships with third parties;

• actual and potential conflicts of interest with LS BDC Adviser, LLC (the "Adviser") or any of its affiliates;

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

• our use of financial leverage;

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

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

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

• the effect of changes to tax legislation and our tax position;

• the impact of information technology system failures, data security breaches, data privacy compliance, network

disruptions, and cybersecurity attacks;

• the ability of our subsidiaries to maintain their small business investment companies licenses from the Small

Business Administration (the "SBA"), like the license for a small business investment company ("SBIC")

currently held by Lafayette Square SBIC, LP and the license for a specialized small business investment company

("SSBIC") currently held by Lafayette Square SSBIC, LP, and the potential benefits from having such licenses;

• our ability to adhere to and meet our goals, including our 2030 Goals (as defined in this report);

• our ability to deploy at least 51% of our invested capital in Working Class Areas;

• our ability to improve the retention, well-being, and productivity of employees in our portfolio companies;

• our ability to enhance the risk-adjusted financial returns of our portfolio companies;

• our ability to encourage our portfolio companies to adopt Managerial Assistance Recommendations;

• our ability to reduce employee turnover and increase median income of employees within our portfolio

companies;

• our ability to encourage and increase participation in medical care benefits and retirement benefits by employees

within our portfolio companies;

• the likelihood that the federal government will expand its partnerships with the private sector, including through

programs aligned with our 2030 Goals; and

• our ability to qualify for and maintain our qualification as a regulated investment company (a "RIC") and as a

business development company (a "BDC").

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. As a result, the forward-looking statements based on those assumptions

also could be inaccurate. In light of these and other uncertainties, the inclusion of any projection or forward-looking

statement in this report should not be regarded as a representation by us that our plans and objectives will be achieved.

Moreover, we assume no duty and do not undertake to update the forward-looking statements, except as required by

applicable law. Because we are an investment company, the forward-looking statements and projections contained in this

report are excluded from the safe harbor protection provided by Section 21E under the U.S. Securities Exchange Act of

1934 Act, as amended (the "Exchange Act").

![](ls-20251231_g1.gif)

<sup>1</sup> We define "Working Class", based on the definition of low- to moderate- income (LMI) under the CRA (defined below),

as an individual, family or household, whose income is less than 80% of the Area Median Income as reported by the

Federal Financial Institutions Examination Council at https://www.ffiec.gov/Medianincome.htm.

**PART I**

**ITEM 1. BUSINESS**

**OVERVIEW**

Lafayette Square USA, Inc. (together with its subsidiaries, where applicable, the "Company," which may also be referred

to as "we," "us" or "our") is an externally managed, non-diversified, closed-end investment company that has elected to

be regulated as a business development company ("BDC") under the Investment Company Act of 1940, as amended (the

"1940 Act") and that has elected to be treated as a regulated investment company ("RIC") under Subchapter M of the U.S.

Internal Revenue Code of 1986, as amended (the "IRC") for the tax year ended December 31, 2025.

We focus on lending to middle market businesses located in, or employing working class ("Working Class"<sup>1</sup>) American

communities, with the goal of helping those businesses to enhance their returns while creating and preserving jobs and

stimulating economic growth across the United States. Our investment strategy is informed by longstanding federal

regulatory frameworks, most notably the Small Business Investment Act of 1958 (the "Investment Act"), which was

designed to mobilize private capital in support of small business and job creation; the Community Reinvestment Act of

1977 (the "CRA"), which was designed to encourage investment and lending in low- and moderate-income

neighborhoods and the Small Business Investment Incentive Act of 1980 (the "Incentive Act"), which created the BDC

regulatory framework to expand access to capital for small and developing businesses, low-and moderate-income

neighborhoods. Drawing on these regulatory frameworks, we have established a set of measurable, time-bound objectives

we refer to as our "Goal2030<sup>™</sup>," which guide our capital allocation, portfolio construction, and engagement with portfolio

companies. We believe our regional focus and disciplined approach to underwriting, portfolio construction and risk

management enable us to achieve favorable risk-adjusted returns while reducing the risk of loss of shareholder capital and

supporting economic opportunity in communities we invest in across the United States.

Our investment strategy is concentrated on non-sponsored middle market businesses, a segment of the market that we

believe may offer attractive relative pricing, stronger structural protections, and enhanced lender influence compared to

sponsor-backed transactions. We also provide significant managerial assistance to our portfolio companies, including

organizational and financial guidance. As part of that effort, the Adviser may introduce portfolio companies to Worker

Solutions, LLC ("Worker Solutions<sup>®</sup>"), a controlled portfolio company that operates an independent platform advising

clients on human capital practices and facilitating introductions to third-party employee benefit service providers.

We also believe that our focus on LMI communities and our SBIC licensing may support favorable consideration under

the CRA, for investors that are regulated depository institutions, as described further under "Regulation as a Small

Business Investment Company" and "Item 1A. Risk Factors."

In addition, we benefit from participation in certain government-licensed financing programs that we believe are not

widely held across the private credit market, specifically, long-term, fixed-rate leverage through SBA-guaranteed

debentures and government-backed credit guarantees through our participation in the U.S. Department of Agriculture's

OneRD Guarantee Loan Program ("OneRD"), each discussed in more detail under "Spread Generation Through Balance

Sheet Construction — Liabilities" below.

Our government licensing extends beyond financing programs. We have formed Lafayette Square RBIC, LP ("LS RBIC

LP"), a wholly owned subsidiary licensed by the U.S. Department of Agriculture (the "USDA") as a Rural Business

Investment Company ("RBIC") under the Consolidated Farm and Rural Development Act, which enables us to make debt

and equity investments in eligible rural businesses subject to USDA oversight and regulatory requirements. LS RBIC

![](ls-20251231_g2.gif)

<sup>2</sup> "Working Class Areas" refers to low- and moderate- income ("LMI") areas, Empowerment Zones, as defined in the Empowerment

Zones and Enterprise Communities Act of 1993, as amended ("Empowerment Zones"), Opportunity Zones, as defined in the U.S. Tax

Cut and Jobs Act of 2017 ("Opportunity Zones"), and/or areas targeted by a government entity for redevelopment or to revitalize or

stabilize designated disaster areas. LMI is defined under applicable CRA regulation as an individual income that is less than 80% of the

area median income ("AMI") or a median family income that is less than 80% in a census tract as reported by the Federal Financial

Institutions Examination Council at https://www.ffiec.gov/Medianincome.htm [ffiec.gov] (or such other industry recognized source as

may be determined by the Adviser) and (ii) a census tract, if it is identified as low-to-moderate income by the Federal Financial

Institutions Examination Council at https://geomap.ffiec.gov/ffiecgeomap/ (or such other industry recognized source as may be

determined by the Adviser). AMI is defined as the median family income for the metropolitan statistical area or metropolitan division,

if applicable, or if the person or census tract is located outside of a metropolitan statistical area, the statewide non-metropolitan median

family income.

<sup>3</sup> We define non-sponsored businesses as companies that are not substantially owned and managed by asset management

firms that raise committed third-party capital to take controlling stakes in portfolio companies.

<sup>4</sup> We define middle market businesses as companies having annual revenues between $10 million and $1 billion and

annual earnings before interest, taxes, depreciation, and amortization ("EBITDA") of between $10 million and $100

million, although we may invest in larger or smaller companies.

LP's focus on rural businesses, many of which overlap with Working Class Areas<sup>2</sup> central to our investment strategy,

further supports our Goal2030™ objectives, as described below.

Our investment objective is to generate favorable risk-adjusted returns, including current income and to a lesser extent,

capital appreciation, principally from investments in "non-sponsored"<sup>3</sup> middle market businesses<sup>4</sup>. We aim to build a

geographically diverse portfolio by investing at least 5% of our assets in businesses that are primarily headquartered and/

or have a significant operating presence in each of ten identified regions across the United States (the "Target Regions").

In furtherance of Goal2030<sup>™</sup>, and consistent with the objectives of the CRA and the Investment Act, we also seek to

invest a substantial portion of our assets in companies that are located in Working Class Areas (as defined below) or that

are Substantial Employers of Working Class People (as defined below). We invest primarily in first and second lien loans

and, to a lesser extent, in subordinated and mezzanine loans and equity and equity-like securities, including common

stock, preferred stock, and warrants. We may also invest in other community development and public welfare instruments

identified as qualifying for CRA credit (defined below) under the Office of Comptroller of Currency ("OCC") and/or

Federal Reserve Board ("FRB") guidance. We also maintain a Prohibited Investments policy that restricts the Company

from investing in certain categories of companies and securities, as described under "Prohibited Investments" below.

**Spread Generation Through Balance Sheet Construction** 

We believe our ability to generate an attractive net interest margin ("NIM") is driven by the deliberate construction of

both sides of our balance sheet. On the liability side, we benefit from access to diversified, efficient, and in certain cases

government-supported sources of leverage. On the asset side, we deploy capital into directly originated, non-sponsored

middle market investments that we believe offer favorable pricing, strong structural protections, and enhanced risk-

adjusted returns. Together, we believe this approach is designed to produce a durable spread between the yield on our

investments and our overall cost of capital.

*Liabilities: Diversified and Efficient Sources of Leverage Informing Our Cost of Capital*

We benefit from access to a diversified set of financing sources. While we utilize revolving credit facilities and unsecured

note issuances similar to many other BDCs, we also have access to U.S. Small Business Administration ("SBA")-

guaranteed debentures through two SBIC licenses, which provide a differentiated source of long-term financing, and we

have been approved as a non-regulated lender under the U.S. Department of Agriculture's OneRD Guarantee Loan

Program ("OneRD"), providing access to government-backed credit guarantees for eligible investments. These financing

arrangements provide us with flexibility across funding sources and maturities. We believe this diversified capital

structure enhances balance sheet stability, supports portfolio growth, and may improve risk-adjusted returns for

shareholders.

Through our wholly owned subsidiaries, Lafayette Square SBIC, LP ("LS SBIC LP") and Lafayette Square SSBIC, LP

("LS SSBIC LP," and together with LS SBIC LP, the "LS SBICs"), we have access to SBA-guaranteed debentures under

the Small Business Investment Company ("SBIC") program. LS SBIC LP received its SBIC license from the SBA on

February 1, 2024, and LS SSBIC LP received its Specialized Small Business Investment Company ("SSBIC") license on

September 12, 2024. Under the SBA's debenture program, each licensed SBIC may be eligible to issue up to $175 million

of SBA-guaranteed debentures, subject to SBA approval. These debentures have ten-year maturities and fixed interest

rates tied to the U.S. 10-Year Treasury rate. We believe this program provides access to long-duration, fixed-rate funding

at attractive spreads relative to market alternatives, which is not generally available to other BDCs that do not hold these

licenses. The SBIC program is subject to regulatory requirements and investment restrictions, including limitations on

eligible portfolio companies and ownership levels.

In addition to SBA debentures, we have access to bank and capital markets financing. As discussed above, we are party to

a $300 million syndicated senior secured revolving credit facility with ING Capital LLC serving as administrative agent,

which includes a sustainability-linked pricing mechanism under which the applicable interest rate may be reduced based

on our performance against specified Goal2030<sup>™</sup>goals. We have also accessed the unsecured capital markets through the

issuance of $65 million of 7.00% senior unsecured notes in a private placement with qualified institutional investors. We

believe that the combination of a diversified institutional investor base, a syndicated revolving credit facility, and

unsecured note issuance reflects continued institutional support for the Company and enhances our financing flexibility.

We also recently obtained access to the OneRD program, which provides government-backed credit support for qualifying

investments. While the OneRD program does not provide direct funding, the associated guarantees may enhance credit

quality and support more efficient financing structures. We believe that, together with SBA-guaranteed debentures, bank

financing, and unsecured notes, access to the OneRD program further diversifies our funding sources and may contribute

to lower overall funding costs and improved balance sheet durability over time.

*Assets: Yield Generation Through Direct Origination and Differentiated Portfolio Construction*

On the asset side of our balance sheet, we deploy capital through a direct origination strategy focused primarily on non-

sponsored middle market businesses. We believe this approach allows us to invest in attractively priced assets with strong

structural protections while maintaining direct lender-borrower relationships that support disciplined underwriting and

ongoing risk management.

We primarily target established businesses with strong and sustainable free cash flow profiles that we believe are capable

of supporting debt service through a range of economic conditions. Target borrowers generally generate annual revenues

between $10 million and $1 billion and EBITDA between $10 million and $100 million, operate across a variety of

industries, and maintain meaningful equity ownership by management. We seek to invest in capital structures that we

believe are appropriately leveraged on a cash flow basis, provide adequate interest and fixed-charge coverage, and are

supported by meaningful owner equity contributions.

The Company has no employees and does not itself conduct investment activities. All origination, underwriting,

structuring, and portfolio monitoring activities described below are conducted by the Adviser on the Company's behalf

pursuant to the Investment Advisory Agreement. References to investment activities in this section reflect activities

undertaken by the Adviser.

Our origination efforts are concentrated on non-sponsored businesses, which we define as companies that are not

substantially owned or controlled by asset management firms that raise committed third-party capital to acquire portfolio

companies. We believe this segment of the market is often less competitive than sponsored lending, allowing for more

favorable pricing, tighter documentation, and enhanced lender protections. Our investments are typically structured with

senior secured positions, financial covenants, reporting requirements, amortization features, and other realization

mechanisms designed to preserve capital and identify potential deterioration in credit quality at an early stage.

Our investment process incorporates a disciplined approach to portfolio construction and risk management. We seek to

diversify across industries, sub-industries, and geographies within our Target Regions, and each investment is subject to

systematic underwriting, rigorous due diligence, and Investment Committee approval. Post-investment, we employ a

dynamic monitoring framework supported by data analytics and automated reporting to track portfolio performance and

key risk indicators.

We generally expect to hold investments until they are refinanced or repaid by portfolio company borrowers, consistent

with an originate-to-hold strategy. To support exit timing and optionality, we structure investments with realization

features such as required amortization, cash flow sweeps, mandatory prepayments upon specified events, and stated

maturities. From time to time, we may participate in club loans or syndicated transactions and may serve as agent with

respect to such investments.

We generate revenue primarily from interest and fee income derived from debt investments and, to a lesser extent, from

capital gains, if any. Our debt investments typically bear floating interest rates tied to reference rates such as SOFR or the

U.S. Prime Rate, plus a spread, and generally have principal amounts of up to $50 million. While these instruments are

typically not rated, if rated, we believe they would generally be considered below investment grade.

![](ls-20251231_g3.gif)

<sup>5</sup> Reflects debt transactions in which Lafayette Square serves as administrative agent and lead lender. Transactions in which the

Company participates as a secondary lender are excluded, as the Company does not serve in an administrative agent capacity in such

transactions and therefore has limited ability to offer managerial assistance directly.

<sup>6</sup> The percentage reported for the period ending December 31, 2025 reflects a change in methodology that accounts for a portion of the

increase from the prior period. In previous periods, both debt and equity investments were included in the denominator of this

calculation. Beginning with the current period, the denominator includes only debt investments where Lafayette Square acts as lead

agent, as the lead agent role relates specifically to debt investments. The numerator reflects the number of such portfolio companies that

have adopted Managerial Assistance Recommendations. Under the prior methodology, the figure for this period would have been 55%.

<sup>7</sup> The Q4 2024 figure reported in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (44%) has

been corrected to 52%.The correction reflects two adjustments: (i) one portfolio company that had adopted Managerial Assistance

Recommendations in 2024 was not confirmed in time for inclusion in the numerator at the time of filing, and (ii) two portfolio

companies were incorrectly classified as lead agent transactions, affecting the denominator. The corrected figure has been calculated

using the same methodology applied at the time of original reporting.

We believe that the combination of direct origination, disciplined asset selection, robust structural protections, and active

portfolio monitoring supports attractive asset yields while preserving capital and contributes to a durable spread relative to

our cost of funds.

**Our Portfolio**

We currently invest in businesses that are primarily domiciled, headquartered and/or have a significant operating presence

in eight of the ten Target Regions, with a goal to invest at least 5% of our assets in each Target Region over time. We are

highly focused on constructing a diverse investment portfolio with broad diversification by company, industry sectors, and

position size. While we seek to achieve these targets, the composition of our investment portfolio may vary from time to

time due to various factors, such as market conditions and the availability of attractive investment opportunities. The table

that follows provides an overview of key metrics related to our current portfolio. These metrics are explained in detail in

the remainder of this document:

---

| | | |
|:---|:---|:---|
| | **<u>December 31, 2025</u>** | **<u>December 31, 2024</u>** |
| Total Assets (in millions) | $1003 | $771 |
| Portfolio Companies | 54 | 34 |
| Weighted Average EBITDA (in millions) | $20.0 | $22.2 |
| Weighted Average Yield (Fair Value) | 10.6% | 11.4% |
| Weighted Average Remaining Term | 3.3 years | 3.4 years |
| Managerial Assistance Recommendation Adoption (Lead Agent <br>Only)<sup>5</sup><br>| 69%<sup>6</sup> | 52%<sup>7</sup> |
| Debt investments with financial covenants (% of loans) | 100% | 100% |
| Average Interest Coverage Ratio on first lien loans | 2.6x | 2.4x |
| Average Net leverage ratio on debt investments | 3.6x | 3.7x |
| Distribution Rate | 9.4% | 8.9% |
| Distributions Declared (in millions) - Inception to Date | $72.4 | $37.7 |
| Total Incentives Provided to Borrowers for Managerial <br>Assistance Recommendation - Inception to Date<br>| $356999 | $265934 |

---

Our portfolio construction reflects a deliberate emphasis on structural protection, geographic and industry diversification,

and conservative leverage. We require financial maintenance covenants on our debt investments, and our portfolio is

comprised primarily of first lien senior secured loans with floating rate structures and interest rate floors. For a detailed

discussion of portfolio credit performance, including interest coverage, leverage, non-accrual rates, and loss experience,

see "Item 7. *Management's Discussion and Analysis of Financial Condition and Results of Operations — Portfolio* 

*Performance*."

**Managerial Assistance**

We offer significant managerial assistance to our portfolio companies, in traditional forms consistent with our peer firms,

including organizational and financial guidance delivered by Lafayette Square employees. As part of that effort, the

![](ls-20251231_g4.gif)

<sup>8</sup> Jobs employing Working Class People.

<sup>9</sup> "Substantial Employment" means more than 50% of the portfolio company's workforce, measured by W-2 forms or 1099 forms filed

by workers with the Internal Revenue Service.

Adviser may from time to time introduce portfolio companies to Worker Solutions<sup>®</sup>, a controlled portfolio company that

operates as an independent platform coordinating with the human resources and personnel departments of our portfolio

companies and, to a lesser extent, other clients to identify and recommend appropriate third-party services or human

resources policy changes that may enhance employee well-being. Worker Solutions<sup>®</sup> maintains its own client

relationships and service delivery operations and is not involved in the Company's investment activities.

Encouraging adoption of third-party employee benefit services or human resources policy changes (each a "Managerial

Assistance Recommendation") is a core component of Goal2030™ and reflects our belief that workforce stability and

economic mobility are integral to long-term enterprise value. Managerial Assistance Recommendations include traditional

employee benefits, such as health insurance and retirement, and supplemental employee benefits, such as services

focusing on the alleviation of financial insecurity and economic mobility issues. Portfolio companies may adopt

Managerial Assistance Recommendations independently, through engagement with Worker Solutions<sup>®</sup>, or through other

resources. Based on our analysis, we believe adoption of Managerial Assistance Recommendations has the potential to

positively affect employee well-being and enhance the risk-adjusted financial returns of portfolio companies, including by

increasing employee retention, morale, and productivity. Through arrangements with third-party service providers

("Third-Party Service Providers"), Worker Solutions<sup>®</sup> seeks to negotiate discounted pricing and standardized data delivery

terms for services adopted by its clients. Companies engaging with Worker Solutions<sup>®</sup> typically bear the cost of any

adopted services, and negotiated discounts may partially offset those costs.

Certain of the Company's debt investments include pricing provisions that provide for interest rate adjustments based on a

portfolio company's adoption of Managerial Assistance Recommendations. These adjustments may include interest rate

reductions ranging from 5 basis points for the adoption of a single Managerial Assistance Recommendation to 25 basis

points for the adoption of two or more Managerial Assistance Recommendations. Portfolio companies retain full

discretion regarding whether to pursue any such initiatives. The applicable interest rate adjustments are not conditioned on

the use of any particular platform or provider.

**Goal2030**<sup>™</sup>

We have established a series of important goals with respect to the portfolio companies in which we invest, which we

refer to as "Goal2030<sup>™"</sup>. These include (1) increasing employment opportunities by assisting our portfolio companies in

creating and/or retaining 100,000 Working Class Jobs<sup>8</sup> and 150,000 jobs overall; (2) incentivizing at least 50% of our

borrowers to adopt Managerial Assistance Recommendations and (3) encouraging economic growth in Working Class

Areas by investing at least 50% of our assets in companies that are either located in Working Class Areas or are

Substantial Employers<sup>9</sup> of Working Class People.

In support of Goal2030<sup>™</sup>, we have structured our senior secured revolving credit facility to incorporate pricing incentives

tied to progress toward these goals. Under this credit facility, our applicable interest rate margin is subject to adjustment

based on our performance against specified Goal2030<sup>™</sup>related key performance indicators, including potential interest

rate step-downs and the forfeiture of such reductions if the applicable benchmarks are not met. For the year ended

December 31, 2025, we realized interest rate step-downs of approximately $36,679 during the period from January

through April 2025, reflecting our performance against the applicable benchmarks for the prior year as verified by an

independent third-party auditor. Following completion of the annual benchmark review for the year ended December 31,

2024, we did not meet the applicable benchmarks and our interest rate margin was adjusted upward by 0.05%, resulting in

additional interest expense of approximately $55,565 for the remainder of the year, for a net increase in interest expense

of approximately $18,886 attributable to this pricing mechanism for the year ended December 31, 2025. In addition, we

may offer interest rate step-downs to portfolio companies that adopt Managerial Assistance Recommendations, whether

independently or through engagement with Worker Solutions<sup>®</sup> or other resources, and for the year ended December 31,

2025, such step-downs resulted in aggregate interest savings to portfolio companies of approximately $356,999.

We have also formed Lafayette Square RBIC, LP ("LS RBIC LP"), a wholly owned subsidiary licensed by the U.S.

Department of Agriculture (the "USDA") as a Rural Business Investment Company ("RBIC") under the Consolidated

Farm and Rural Development Act. LS RBIC LP is authorized to make debt and equity investments in eligible rural

businesses, subject to ongoing oversight and regulatory requirements administered by the USDA. LS RBIC LP further

supports Goal2030™ by enabling targeted investment in eligible rural businesses, many of which are located in or overlap

![](ls-20251231_g5.gif)

<sup>10</sup> Includes all portfolio companies that have adopted Managerial Assistance Recommendations since the inception of the

BDC.

with Working Class Areas as defined under our investment strategy. We believe this capability extends our ability to

direct capital to underserved communities that have historically had limited access to institutional financing, consistent

with the objectives of Goal2030™.

We monitor and track progress toward Goal2030<sup>™</sup> using information provided by our portfolio companies and other data

sources. Detailed information regarding our progress, methodologies, and related metrics is included in "—Tracking

Progress Towards Goal2030<sup>™</sup>" below.

**Tracking Progress Towards Goal2030**<sup>™</sup>

To measure our progress towards these goals, we track the locations of our portfolio companies and the Working Class

status of their employees. We rely on information provided by our portfolio companies to track these metrics. We cannot

guarantee the accuracy of the information provided to us by our portfolio companies, and the metrics used by different

portfolio companies to calculate such information varies significantly. However, based on our analysis, we believe that

deployment of our capital and the adoption of Managerial Assistance Recommendations for our portfolio companies can

improve the lives of their employees as reflected through a variety of statistical measures.

The table below sets forth our cumulative progress towards reaching Goal2030<sup>™</sup> as of December 31, 2025:

---

| | | |
|:---|:---|:---|
| **Company Goal2030**<sup>™</sup> **Goal** | **December 31, 2025** | **December 31, 2024** |
| Help businesses create / retain <br>150,000 jobs (with 100,000 being <br>Working Class Jobs)<br>| 31,230 total employees<br>16,587 Working Class People employees<br>| 21,143 total employees<br>9,611 Working Class People employees<br>|
| 50% borrowers adopting Managerial <br>Assistance Recommendations<br>| 68.9% of the transactions (lead agent)<br>39.0% of our overall Portfolio <br>Companies<sup>10</sup><br>| 52.2% of the transactions (lead agent)<br>34.3% of our overall Portfolio <br>Companies<br>|
| 50% borrowers either located in <br>Working Class Areas or are <br>Substantial Employers of Working <br>Class People<br>| 59.7% of the transactions (lead agent)<br>54.7% of our overall Portfolio <br>Companies<br>| 51.6% of the transactions (lead agent)<br>51.1% of our overall Portfolio <br>Companies<br>|

---

We also track human capital outcomes across our portfolio companies, including employee turnover and participation in

medical care and retirement benefits. Detailed human capital metrics and related data are available on our website at

www.lafayettesquarebdc.com/results.

**Our Investment Adviser**

The Company is externally managed by LS BDC Adviser, LLC (the "Adviser") pursuant to an investment advisory and

management agreement between the Company and the Adviser, dated April 26, 2021 and renewed by the Board most

recently in May 2025 (the "Investment Advisory Agreement"). The Adviser was organized in February 2021 as a

Delaware limited liability company, is registered as an investment adviser under the Investment Advisers Act of 1940, as

amended ("Advisers Act") and is a wholly owned subsidiary of Lafayette Square Holding Company, LLC (together with

its controlled subsidiaries, including the Adviser and LS Administration, LLC, "Lafayette Square"). The Adviser oversees

the management of the Company's activities and is responsible for making investment decisions with respect to the

Company's portfolio.

The Adviser is obligated to allocate investment opportunities among the Company and its other clients fairly and

equitably over time in accordance with the Adviser's allocation policy. However, we can offer no assurance that such

opportunities will be allocated to us fairly or equitably in the short-term or over time. See *"Item 13. Certain Relationships* 

*and Related Transactions, and Director Independence"* below. We have received exemptive relief from the SEC that

permits us to co-invest with certain of our affiliates, subject to the conditions of such exemptive order. We believe that

such co-investment relief affords us additional investment opportunities in a wide range of companies.

We currently do not have any employees and our investment activities are managed by the Adviser. The Adviser is

responsible for sourcing potential investments, conducting research and due diligence on prospective investments and

equity sponsors, analyzing investment opportunities, structuring our investments, and monitoring our investments on an

ongoing basis. Under the Investment Advisory Agreement, we pay the Adviser a base management fee and an incentive

fee for its services. See "*Item 1. Business — Investment Advisory Agreement*" for a discussion of the base management fee

and incentive fee payable by the Company to the Adviser and the risk factor entitled "*Our management and incentive fee* 

*structure may create incentives for the Adviser that are not fully aligned with the interests of our stockholders and may* 

*induce the Adviser to make speculative investments*."

The investment decisions of the Company are managed by the Adviser's Investment Committee, which currently includes

Damien Dwin, Phil Daniele, and Nicole Pereira, although such membership may change at any time without notice to

shareholders. Mr. Dwin and Mr. Daniele are currently considered "Key Persons" under the Company's constituent

documents.

*Damien Dwin*

Damien Dwin is the founder and Chief Executive Officer of Lafayette Square. Previously, Mr. Dwin served as Co-

Founder and Co-CEO of Brightwood Capital Advisors from its founding in 2010 to October 2020.

Mr. Dwin began his career as a trader with Goldman Sachs, New York and London, where he earned the Michael P.

Mortara Award for Innovation. After leaving Goldman Sachs, Mr. Dwin was the Co-Founder and Head of the North

American Special Opportunities business at Credit Suisse, a position he held until 2010. Mr. Dwin also served on the Vice

President Selection Committee and led the Fixed Income Division Credit Training Program.

Mr. Dwin serves on the non-profit boards of Lincoln Center for the Performing Arts, Children's Hospital of Philadelphia,

Studio Museum in Harlem, National Trust for Historic Preservation, Boys' Club of New York, and Vera Institute of

Justice. He is a Council Member of the Smithsonian National Museum of African American History and Culture. He

received a B.S./B.A. from Georgetown University.

*Phil Daniele*

Phil Daniele is the Chief Risk Officer at Lafayette Square. With over 37 years of experience, Mr. Daniele was the former

Chief Risk Officer at Brightwood Capital and served on Brightwood's Executive and Valuation Committees. Prior to

Brightwood, he was the Chief Credit Officer for the Americas at Credit Suisse. He was responsible for approving all

credit extensions in the Americas portfolio including corporates, financial institutions, hedge funds and private clients.

Previously, Mr. Daniele served as Head of Corporate Credit Americas, which included the Credit Suisse Leveraged

Finance business. He began his career at CIT Factoring in 1984.

Mr. Daniele is a Board Member of Flames Neighborhood Youth Association ("Flames") and has been actively involved

with that nonprofit since 1979. Flames is a Brooklyn based organization primarily dedicated to the improvement of the

lives of African American youth and the betterment of interracial relationships in the communities that the organization

serves. Additionally, he is a Board Member of Soul of the Peruvian Andes, a nonprofit whose mission is providing

healthcare and education support to the impoverished villages of the Andes Mountains in Peru.

Originally from Brooklyn, New York, Mr. Daniele holds a B.B.A., Accounting, and an M.B.A., Finance, from Pace

University.

*Nicole Pereira*

Nicole Pereira is a Managing Director at Lafayette Square, with over twelve years of experience in middle market private

credit as an investor, portfolio manager, and restructuring manager. Prior to joining Lafayette Square, Nicole was a

Director on the credit team at Brightwood Capital Advisors, where she managed a portfolio of $2 billion, worked on deal

teams investing throughout the capital structure, managed over a dozen workouts/restructurings across various industries,

and acted as a board representative on behalf of the firm. She started her career at Citigroup in the middle market lending

group and graduated from Citigroup's credit training program.

Originally from Long Island, NY, Nicole holds a BBA from Hofstra University.

**Our Administrator**

LS Administration, LLC (the "Administrator"), which is also a wholly owned subsidiary of Lafayette Square, has entered

into an administration agreement (the "Administration Agreement") with the Company and a staffing agreement (the

"Staffing Agreement") with the Adviser. As the Company has no employees, the Administrator makes experienced

investment professionals available to the Adviser and provides access to the senior investment personnel of Lafayette

Square and its affiliates as well as the services of a full complement of investment professionals of Lafayette Square. The

Administrator also commits the members of the Adviser's Investment Committee to serve in that capacity. The Adviser

capitalizes on the significant deal origination, credit underwriting, due diligence, investment structuring, execution,

portfolio management, and monitoring experience of Lafayette Square's professionals.

For this work, the Company pays no compensation directly to any interested director or executive officer of the Company,

but it does reimburse the Administrator for the Company's allocable portion of certain expenses incurred by the

Administrator in performing its obligations under the Administration Agreement, including the Company's allocable

portion of the cost of its Chief Financial Officer and Chief Compliance Officer and their respective staffs. Additionally,

the Administrator performs certain required administrative services, which include coordinating or providing assistance in

accounting, legal, compliance, operations, investor relations, technology, and loan agency services (including any third

party service providers related to the foregoing), as well as maintaining the financial records that the Company is required

to maintain and preparing reports for the Company's shareholders and reports filed with the SEC. The Administrator will

be reimbursed at cost for certain expenses that it or the Adviser incur on our behalf. The Administrator reserves the right

to waive all or part of any reimbursements due from the Company at its sole discretion. See *"Item 1. Business–* 

*Administration Agreements"* below for a discussion of the expenses (subject to the review and approval of our

independent directors) for which we expect to reimburse to the Administrator.

**Investment Process**

The Adviser is responsible for the origination, underwriting, structuring, and monitoring of our investments. The Adviser

generally organizes its investment process around the following stages:

(i) Origination;

(ii) Initial Screening;

(iii) Broad Screening and Preliminary Due Diligence;

(iv) Comprehensive Due Diligence & Structuring;

(v) Investment Committee Approval;

(vi) Closing;

(vii) Portfolio Monitoring;

(viii) Risk Management; and

(ix) Valuation (as described in more detail in "*Item 1. Business — Valuation Procedures"*).

In addition, each prospective investment is evaluated for consistency with the Company's Prohibited Investments policy.

Opportunities that fall within a prohibited category are declined regardless of their risk-return profile.

The investment team and Investment Committee are responsible for stages i-vi, and the portfolio monitoring team is

responsible for stages vii-ix, in each case as further described below. The format of the Investment Process, and its

application to any particular deal(s), may change in the future without notice to shareholders.

*Origination*

The Adviser's origination process is primarily focused on directly sourcing investment opportunities through proactive,

relationship-driven engagement with middle-market businesses. The Adviser generally seeks to originate transactions

through proprietary or selectively marketed processes rather than auctions or broadly marketed transactions. Direct

origination enables the Adviser to engage with company management and owners at an early stage, evaluate business

fundamentals and alignment of interests, and, where appropriate, negotiate transaction terms that emphasize risk reduction

and early identification of potential credit deterioration.

Origination efforts are led by senior investment professionals with regional coverage and longstanding relationships

across the Adviser's target geographies. The Adviser also utilizes place-based analytics and data tools that integrate

demographic, economic, and labor market information to supplement company-level analysis during origination and

underwriting.

*Initial Screening*

During the initial screening stage, the Adviser evaluates whether a prospective investment opportunity is consistent with

the Company's investment strategy and risk parameters before committing significant resources to due diligence. Each

opportunity is assigned to a deal team, typically consisting of a senior and a junior investment professional, which

prepares a preliminary assessment summarizing the company's business model, financial profile, ownership structure, and

proposed transaction terms. This assessment also includes an initial evaluation of credit risk, alignment of interests, and

key structural considerations, as well as the identification of potential risk factors and mitigants.

As part of this process, the Adviser conducts an initial review of available financial information, management-provided

materials, and relevant third-party data to assess the company's ability to generate sustainable cash flow and service debt

under various operating scenarios. The deal team also considers qualitative factors, such as industry dynamics,

competitive positioning, regulatory considerations, and management experience. Opportunities that do not meet the

Adviser's initial risk-return thresholds or strategic criteria are declined at this stage, while those that are deemed

potentially suitable advance to broader screening and preliminary due diligence.

*Broad Screening and Preliminary Due Diligence*

Investment opportunities that advance beyond the initial screening stage are presented to the broader investment team,

portfolio management and the Chief Risk Officer for further review. At this stage, the Adviser evaluates the opportunity at

a higher level to determine whether it merits the allocation of additional diligence resources. This review focuses on the

overall risk-return profile, potential structural considerations, and consistency with portfolio construction objectives.

If the broader team and the Chief Risk Officer determine that an opportunity warrants further evaluation, the Adviser may

seek to negotiate preliminary transaction terms and, where appropriate, exclusivity with the prospective borrower. The

opportunity then advances to a more targeted preliminary due diligence phase, which is designed to identify and prioritize

transaction-specific risks and define the scope of comprehensive due diligence. Opportunities may be declined at this

stage if material concerns are identified or if the risk-return profile is no longer viewed as compelling.

*Comprehensive Due Diligence & Structuring*

During the comprehensive due diligence and structuring stage, the deal team, led by a senior underwriter, conducts an in-

depth evaluation of the prospective investment and prepares a full investment analysis designed to validate underwriting

assumptions and assess transaction-specific risks. The due diligence process is designed to assess both upside potential

and downside risks, including the sustainability of cash flows under stress scenarios and potential recovery outcomes in

adverse conditions.

As part of this process, the Adviser may engage third-party consultants and advisors, including accounting, legal, industry,

and other specialists, to assist in evaluating the business, testing key underwriting assumptions, and assessing transaction-

specific risks. Where appropriate, the Adviser may seek to structure transactions such that certain due diligence costs are

borne by the portfolio company. Due diligence typically includes, among other things:

• review of the transaction rationale, sources and uses of funds and proposed structure;

• qualitative and quantitative assessment of the company's business model and its competitive and industry

dynamics;

• analysis on the defensibility of the company's business model and its competitive and industry dynamics;

• analysis of competitive and industry dynamics;

• comprehensive financial review of management-prepared and third-party financial information including, in most

cases, a quality of earnings report;

• meetings with management and owners;

• sensitivity testing of company financial projections under various operating scenarios;

• valuation analysis using transaction comparables, publicly traded comparables, and discounted cash flow

methodologies;

• calls with key customers and, where appropriate, independent expert advisors; and

• legal and compliance diligence, including review of loan documentation with outside counsel and completion of

reference and background checks.

Based on the results of this due diligence, the Adviser seeks to structure investments to achieve attractive risk-adjusted

returns while emphasizing downside risk reduction. Findings from due diligence directly inform transaction structuring,

including pricing, covenant packages, collateral requirements, and other protective provisions. Investment structures may

include:

• cash interest and upfront fees designed to provide current income and, in certain cases, a return of capital;

• contractual amortization;

• comprehensive collateral packages, typically including a first-priority lien on substantially all assets and the

equity interests of the borrower;

• transaction-specific rights, covenants, and remedies; and

• conditions precedent to closing.

*Investment Committee Approval*

Following completion of comprehensive due diligence and structuring, the deal team presents a detailed investment

memorandum to the Investment Committee. The Investment Committee reviews the proposed transaction, including the

underwriting analysis, risk-return profile, structural terms, and consistency with the Company's investment strategy and

portfolio construction objectives. Based on this review and the Investment Committee's collective experience and

judgment, the Investment Committee determines whether to approve, modify, or decline the proposed investment.

*Closing*

Upon Investment Committee approval, the deal team works towards closing and funding the investment. If there are any

material changes to the investment that occur following Investment Committee approval, the deal team must notify the

Investment Committee and seek its consent to proceed. As part of the closing process, key transaction data are recorded in

the Company's systems, and following closing, the deal team prepares a closing memorandum documenting the final

terms of the investment.

*Portfolio Monitoring and Risk Management* 

Ongoing monitoring and risk management of each portfolio investment is conducted by our Adviser's portfolio

monitoring team under the supervision of the Chief Risk Officer. The portfolio monitoring team is organizationally

distinct and separate from the Adviser's origination and underwriting teams, and is responsible for post-investment

oversight, including ongoing investment monitoring, valuation, and risk management activities. The primary

responsibilities of the portfolio monitoring team include:

• ongoing monitoring of portfolio company performance following investment;

• performing quarterly valuations of portfolio investments, in coordination with third-party valuation agents;

• maintaining and updating internal and external investment ratings;

• overseeing BDC-level portfolio monitoring and risk aggregation; and

• leading amendment, "work out," or restructurings processes, as necessary.

The portfolio monitoring team monitors the financial and operational trends of each portfolio company to assess

performance relative to its respective business plan and to evaluate the appropriate course of action with respect to the

Company's investment. Monitoring activities may include periodic communication with portfolio company management

and, where applicable, financial or strategic sponsors; review of monthly, quarterly, and annual financial statements and

projections; assessment of compliance with financial covenants and key operating metrics; comparison of performance to

industry benchmarks or portfolio comparables, if available; and attendance at board meetings and lender calls. Portfolio

companies are generally required to provide periodic reporting, including quarterly financial reporting packages with

compliance certificates and annual audited financial statements prepared in accordance with generally accepted

accounting principles. The Adviser uses this information, together with ongoing analysis, to identify emerging risks and

determine whether additional action is warranted.

As part of the monitoring process, our Adviser employs an internal investment rating system to assess the risk profile of

each portfolio investment. Investments are rated on a scale of 1 to 5 and are reviewed no less frequently than quarterly.

These ratings are primarily intended to reflect changes in risk relative to the Company's initial cost basis at origination or

acquisition and may also take into account factors such as portfolio company performance, capital structure position,

collateral coverage, and other relevant considerations. These internal risk ratings do not constitute ratings of investments

by a nationally recognized statistical rating organization. The rating scale is as follows:

Investment Rating Scale

1. Involves the least amount of risk to our initial cost basis. The investment is performing above expectations,

and the trends and risk factors since origination or acquisition are generally favorable, which may include the performance

of the portfolio company or a potential exit.

2. Involves an acceptable level of risk that is similar to the risk at the time of origination or acquisition. The

investment is generally performing as expected and risk factors are neutral to favorable. All new investments are initially

assigned a rating of 2.

3. Involves an investment performing below expectations, indicating increased risk since origination or

acquisition. For debt investments, the borrower could be out of compliance with debt covenants; however loan payments

are generally not past due.

4. Involves an investment performing materially below expectations, indicating that the investment's risk has

increased materially since origination or acquisition. For debt investments, covenant noncompliance is common and loan

payments may be past due (but generally not more than 120 days past due)

5. Involves an investment performing substantially below expectations and indicates that the investment's risk

has increased substantially since origination or acquisition. Full recovery of the Company's investment is not anticipated.

Most or all of the debt covenants are out of compliance and payments are substantially delinquent. Investments rated 5 are

not anticipated to be repaid in full and generally written down the amount the Adviser estimates may be recovered.

The Adviser monitors and, when appropriate, changes the internal risk rating assigned to each investment as part of its

ongoing monitoring and valuation processes overseen and maintained by the portfolio monitoring team. There can be no

assurance that these ratings accurately predict future performance or recovery outcomes.

**Prohibited Investments**

We will not invest in (i) any company involved in the production chain and manufacturing of small arms and light

weapons (i.e., handguns and assault weapons, including ammunition and other key components) for civilian customers,

and any retailer of small arms and light weapons for civilian customers if such sales represent more than 15% of such

company's revenues; (ii) any manufacturer or producer of cigarettes or other tobacco products, including products related

to vaping and tobacco growing; (iii) any company that has cannabis as its primary business activity (defined as generating

more than 50% of such company's revenues); (iv) any company that has a primary business purpose of, or has derived at

least 50% of its annual income for the prior five years from direct engagement activities in, the thermal coal or oil sector

(which includes, but is not limited to, exploration, extraction, refining, processing, power and heat generation, storage,

transportation, and/or distribution), provided that any company that previously derived at least 50% of its annual income

from such activities but has made active steps in the year prior to investment toward reducing such activities below 50%

of its annual income as part of a corporate activity shift shall not be prohibited; (v) any company directly involved in shale

gas extraction; (vi) any company owning or operating prisons or detention centers for immigrants and refugees, any

company guarding inmates, and any company providing services to inmates if prison activity represents more than 15% of

such company's revenues; (vii) any company engaged in the production or publishing of pornographic content and any

company engaged in telecommunications or hosting of content if pornography-related activity represents more than 15%

of such company's revenues; or (viii) any company involved in the reprocessing and storage of nuclear waste.

**Private Offering**

We have raised capital through private offerings of shares of our common stock to accredited investors. Our Private

Offering is currently conducted in reliance on Rule 506(c) of Regulation D under the Securities Act, which permits offers

and sales of securities to verified accredited investors. Prior to 2025, the Private Offering was conducted in reliance on

Rule 506(b) of Regulation D. Investors make capital commitments that are funded over time in accordance with the terms

of applicable subscription agreements and subject to oversight by the Company's board of directors ("Board").

Prior to the occurrence of a liquidity event, there is no public market for our shares and transfers of our common stock are

generally restricted. We may continue to conduct additional private offerings or accept additional capital commitments

from time to time, subject to market conditions, investor concentration limits, and applicable regulatory requirements.

Proceeds from these offerings are used to fund investments consistent with our investment strategy and to support our

operations and capital structure.

**Capital Commitments, Closings and Drawdowns**

Since our initial closing in December 2021, we have held multiple closings in connection with our private offerings and

may continue to do so in the future. Capital commitments are subject to acceptance by the Company and may be limited

based on investor concentration considerations.

Investors fund their capital commitments through drawdowns made from time to time in accordance with the terms of

their subscription agreements. The issuance price of shares is determined by the Company's Board in accordance with

applicable requirements under the 1940 Act. Investors admitted after the commencement of drawdowns may be required

to fund additional amounts in order to align their contributed capital with that of earlier investors.

Subscription agreements include customary default provisions in the event an investor fails to fund a required capital

contribution following applicable notice and cure periods. In addition, under certain financing arrangements, we may

pledge our right to make capital calls as collateral, which could result in investors being required to fund capital

commitments upon the occurrence of specified events.

**Term and Liquidity**

The Company has a perpetual term. Subject to market conditions and approval by the Board, we may pursue a liquidity

event in the future, which could include an exchange listing or a strategic transaction.

If a liquidity event has not occurred within a specified period following the completion of our offering stage, the board

may, subject to applicable approvals and regulatory requirements, pursue an orderly wind-down or liquidation of the

Company. Prior to a liquidity event, transfers of our common stock are generally restricted.

**Investment Advisory Agreement and Fee Structure**

The Adviser manages our day-to-day operations and provides investment advisory services pursuant to the Investment

Advisory Agreement and subject to the oversight of our Board. The Investment Advisory Agreement is reviewed and

approved annually by the Board, including a majority of the independent directors.

The Adviser is compensated through a base management fee and an incentive fee tied to investment performance, in each

case calculated in accordance with the terms of the Investment Advisory Agreement and applicable regulatory

requirements. The fee structure is designed to align the interests of the Adviser with those of our stockholders, although it

may create incentives for the Adviser to make certain investment decisions. The calculation and payment mechanics of

these fees are described in Item 7. *Management's Discussion and Analysis of Financial Condition and Results of* 

*Operations* and in the notes to our consolidated financial statements.

We also reimburse the Adviser for certain expenses incurred on our behalf, as described in the Investment Advisory

Agreement. For additional detail regarding advisory fees, expense reimbursements, and related conflicts of interest, see

"*Item 13. Certain Relationships and Related Transactions*" and the risk factors entitled "*Our management and incentive* 

*fee structure may create incentives for the Adviser that are not fully aligned with the interests of our stockholders*" and

"*There are significant potential conflicts of interest that could affect our investment returns*."

**Administration Agreements**

Pursuant to the Administration Agreement, our Administrator provides, or oversees the provision of, administrative and

operational services necessary for our operations, including accounting, compliance, financial reporting, investor

relations, technology, and other back-office functions. The Administrator also assists with the preparation of reports to

stockholders and filings with the SEC and oversees the payment of our expenses.

Under the Administration Agreement, we reimburse the Administrator for its allocable share of costs and expenses

incurred in performing its obligations, including personnel-related expenses and other overhead. The Administration

Agreement may be terminated by either party without penalty upon 60 days' written notice. The Administrator may, at its

discretion, waive reimbursement of all or a portion of these expenses.

The Administration Agreement provides for customary indemnification of the Administrator and its affiliates, except in

cases of willful misfeasance, bad faith, gross negligence, or reckless disregard of duties.

In addition, certain administrative services are provided pursuant to a sub-administration agreement with SS&C

Technologies, Inc. ("SS&C"), under which SS&C performs specified accounting, compliance, operational, and reporting

functions. We reimburse SS&C for costs incurred on our behalf.

**Valuation Procedures** 

Pursuant to the Rule 2a-5 under the 1940 Act, the Board has chosen to designate the Adviser as the Valuation Designee to

perform fair value determinations relating to the value of the assets for which market quotations are not readily available,

subject to the Board's oversight. We value our investments at fair value in accordance with U.S. generally accepted

accounting principles ("GAAP") and the requirements under the 1940 Act including Rule 2a-5. Fair value is determined

in good faith by our Board, based on valuation methodologies and procedures adopted by the Company and overseen by

the Audit Committee.

Because a significant portion of our investments are illiquid and not publicly traded, their fair value is not readily

ascertainable and requires the application of judgment. In determining fair value, we consider a variety of factors, as

applicable, including the portfolio company's financial performance, enterprise value, cash flow, capital structure, market

conditions, comparable public company and transaction multiples, the nature and value of any collateral, and overall

credit market conditions.

We engage independent third-party valuation firms to assist in the valuation of our investments for which market

quotations are not readily available or are deemed unreliable. While we consider the input of these firms, the Adviser is

responsible for preparing valuation recommendations and our Board retains ultimate responsibility for determining the

fair value of our investments in good faith.

For additional detail regarding our valuation methodologies, processes, and the inherent risks associated with valuing

illiquid investments, see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of

Operations — Valuation of Investments" and the risk factor entitled "Our portfolio investments are illiquid and their fair

value is difficult to determine, which may cause our net asset value to be inaccurate."

**Regulation as a Business Development Company** 

*General* 

We have elected to be regulated as a BDC under the 1940 Act. A BDC is a closed-end investment company designed to

facilitate capital formation for U.S.-based small and middle-market companies and is subject to a regulatory framework

that imposes, among other things, requirements relating to portfolio composition, leverage, governance, and disclosure.

As a BDC, at least 70% of our total assets must consist of "qualifying assets," which generally include privately

negotiated investments in eligible U.S. portfolio companies and certain related assets, as defined in the 1940 Act. In

addition, we are subject to statutory limitations on the issuance of senior securities, including asset coverage requirements

applicable to borrowings and other forms of leverage.

We have also elected to be treated as a Regulated Investment Company ("RIC") under the U.S. Internal Revenue Code.

Provided that we continue to satisfy applicable income, asset diversification, and distribution requirements, we generally

will not be subject to U.S. federal income tax on income and gains that we distribute to our stockholders. See "*Item 1.* 

*Business — Certain U.S. Federal Income Tax Considerations*" for additional information.

The 1940 Act also imposes restrictions on transactions between us and certain affiliated persons, requires that a majority

of our Board directors be independent, and subjects us to ongoing reporting, examination, and compliance obligations

administered by the U.S. Securities and Exchange Commission ("SEC"). Our operations are subject to periodic

examination by the SEC for compliance with applicable securities laws and regulations.

Compliance with the 1940 Act and related regulatory requirements may limit our operational flexibility and affect our

investment activities, capital structure, and ability to raise additional capital. These regulatory constraints may expose us

to risks that could adversely affect our business and results of operations. See "*Item 1A. Risk Factors — Risks Related to* 

*Our Regulation as a Business Development Company.*"

*Code of Ethics* 

We and our Adviser have adopted a code of ethics ("Code of Ethics") pursuant to Rule 17j-1 under the 1940 Act that

establishes procedures for personal investments and restricts certain personal securities transactions. Personnel subject to

the joint Code of Ethics may invest in securities for their personal investment accounts, including securities that may be

purchased or held by us, so long as such investments are made in accordance with the Code of Ethics' requirements. Our

Code of Ethics is available on our website at www.lafayettesquarebdc.com.

*Proxy Voting Policies and Procedures*

We have delegated our proxy voting responsibility to our Adviser. A summary of the Proxy Voting Policies and

Procedures of our Adviser are set forth below. These policies and procedures will be reviewed periodically by our Adviser

and, subsequent to our election to be regulated as a BDC, our non-interested directors, and, accordingly, are subject to

change. For purposes of these Proxy Voting Policies and Procedures described below, "we" "our" and "us" refers to our

Adviser.

An investment adviser registered under the Advisers Act has a fiduciary duty to act solely in the best interests of its

clients. As part of this duty, we recognize that we must vote our securities in a timely manner free of conflicts of interest

and in our best interests and the best interests of our stockholders.

These policies and procedures for voting proxies for our investment advisory clients are intended to comply with Section

206 of, and Rule 206(4)-6 under, the Advisers Act.

We will vote proxies relating to our portfolio securities in what we believe to be the best interest of our stockholders. To

ensure that our vote is not the product of a conflict of interest, we will require that: (1) anyone involved in the decision

making process disclose to our Chief Compliance Officer any potential conflict that he or she is aware of and any contact

that he or she has had with any interested party regarding a proxy vote; and (2) employees involved in the decision

making process or vote administration are prohibited from revealing how we intend to vote on a proposal in order to

reduce any attempted influence from interested parties.

A copy of our policies and procedures with respect to the voting of proxies relating to our portfolio securities is available

without charge, upon request. Stockholders may obtain information regarding how we voted proxies by making a written

request for proxy voting information to: Lafayette Square USA, Inc. c/o Lafayette Square, PO Box 25250, PMB 13941,

Miami, Florida 33102, Attn: Chief Compliance Officer.

*Privacy Principles* 

The Adviser has established policies with respect to nonpublic personal information provided to it with respect to

individuals who are investors in the Company, which policies also apply to the Administrator. We have adopted the

privacy policies of the Adviser as applicable to us.

We and the Adviser each recognizes the importance of maintaining the privacy of any nonpublic personal information it

receives with respect to each investor. In the course of providing management services to us, the Adviser collects

nonpublic personal information about investors from Subscription Agreements and the certificates and exhibits thereto

that each investor submits. We and the Adviser may also collect nonpublic personal information about each investor from

conversations and correspondence between each investor and us or the Adviser, both prior to and during the course of

each investor's investment in the Company.

We and the Adviser each treat all of the nonpublic personal information it receives with respect to each investor as

confidential. We and the Adviser restrict access to such information to those employees, affiliates and agents who need to

know the information in order for us and the Adviser to determine whether each investor meets the regulatory

requirements for an investment in the Company and, in the case of the Adviser, to provide ongoing management services

to us. The Adviser maintains physical, electronic, and procedural safeguards to comply with U.S. federal standards to

guard each investor's nonpublic personal information.

The Adviser does not disclose any nonpublic personal information about any investor to any third parties, other than the

Adviser's agents, representatives and/or affiliates, or as permitted or required by law. Among other things, the law permits

the Adviser to disclose such information for purposes of making investments on our behalf, complying with anti-money

laundering laws, preparing tax returns and reports for each investor and determining whether each investor meets the

regulatory requirements for investing in us.

**Regulation as a Small Business Investment Company** 

Certain of our wholly owned subsidiaries are licensed by the SBA as SBICs. These licenses permit the SBIC subsidiaries

to obtain long-term, fixed-rate financing through the issuance of SBA-guaranteed debentures, subject to compliance with

applicable SBA regulations.

SBIC-licensed subsidiaries may invest in eligible U.S. small businesses, as defined by SBA regulations, through debt and

equity investments and may provide managerial and advisory assistance in connection with such investments. SBA

regulations impose limitations on, among other things, the size and nature of eligible portfolio companies, concentration

of investments, permitted fees and expenses, and the use of leverage.

The SBIC subsidiaries are subject to ongoing examination, supervision, and enforcement authority of the SBA. Receipt of

an SBIC license does not assure that SBA-guaranteed debenture financing will be available, which remains subject to

continued regulatory compliance and SBA approval. In the event of a liquidation or default, the SBA, as guarantor of the

debentures, would have priority over the assets of the applicable SBIC subsidiary.

We have received exemptive relief from the SEC permitting the exclusion of SBA-guaranteed debentures issued by our

SBIC subsidiaries from the definition of "senior securities" for purposes of the asset coverage requirements under the

1940 Act, subject to compliance with applicable conditions.

We believe that the SBIC program may also provide benefits to certain of our investors that are regulated depository

institutions. Federal bank supervisory agencies have historically given favorable consideration under the CRA, to

qualified investments by depository institutions in SBIC-licensed entities focused on providing capital to small businesses

and promoting economic development in low-and moderate-income communities. Given our SBIC subsidiaries' focus on

lending to eligible small businesses located in, or employing residents of, such communities, we believe our SBIC

structure may support favorable CRA consideration for regulated depository institution investors. However, investment in

the Company has not been designated as CRA-eligible by any federal bank supervisory agency, and the availability and

extent of CRA credit for any particular investor depends on the policies and determinations of the investor's primary

federal banking regulator during periodic examinations. For transactions in which we serve as lead agent, we generally

seek to obtain from our borrowers data designed to assist regulated depository institution investors in substantiating CRA

eligibility with their banking regulators, but we can offer no assurance that any investment in the Company or its

subsidiaries will be treated as CRA-qualifying. See "Item 1A. Risk Factors — Insured depository institution shareholders

that are subject to regulatory examination for CRA compliance may fail to obtain favorable regulatory consideration of

their investment under the CRA."

See "*Item 7. Management's Discussion And Analysis Of Financial Condition And Results Of Operations — Financial* 

*Condition, Liquidity and Capital Resources*" for additional information on the financing arrangements of our SBIC

subsidiaries.

**Regulation as a Rural Business Investment Company**

One of our wholly owned subsidiaries is licensed by the U.S. Department of Agriculture ("USDA") as a Rural Business

Investment Company ("RBIC"). This license subjects the subsidiary to the regulatory framework of the Rural Business

Investment Program, including ongoing oversight, reporting, and compliance obligations administered by the USDA.

As an RBIC, the subsidiary may make debt and equity investments in eligible rural businesses, as defined under the

Consolidated Farm and Rural Development Act and related USDA regulations. Eligible businesses must generally be

located in, or have substantial operations in, rural areas and meet program requirements regarding size, industry, and

economic development objectives. RBIC regulations impose limitations on the types of qualifying rural enterprises, the

structure and terms of permissible investments, portfolio diversification, conflicts of interest, and other operational

matters.

The RBIC subsidiary is subject to periodic examination, supervision, and enforcement authority of the USDA.

Compliance with RBIC regulations remains a condition of maintaining the license and continuing to operate under the

program.

**JOBS Act** 

We currently are and expect to remain an "emerging growth company," as defined in the Jumpstart Our Business Startups

Act (the "JOBS Act"), and may take advantage of certain reduced disclosure and compliance requirements applicable to

emerging growth companies. We have elected not to avail ourselves of the extended transition period for adopting new or

revised accounting standards and are therefore subject to the same accounting standards as other public companies that are

not emerging growth companies.

We will remain an emerging growth company until the earliest of the events specified under the JOBS Act.

**Sarbanes-Oxley Act** 

The Sarbanes-Oxley Act ("SOX") imposes a variety of reporting, certification, and internal control requirements on

companies with securities registered under the Exchange Act. We are subject to these requirements, including

management's assessment of internal control over financial reporting, and, when applicable, auditor attestation

requirements.

We are continuing to evaluate and enhance our internal controls, policies, and procedures to maintain compliance with

applicable requirements under the SOX and related SEC rules.

**Commodity Exchange Act** 

The U.S. Commodity Futures Trading Commission (the "CFTC") and the SEC have issued final rules establishing that

certain swap transactions are subject to CFTC regulation. Engaging in such swap transactions may cause the Adviser,

acting on the Company's behalf, to fall within the definition of "commodity pool" under the Commodity Exchange Act

("CEA"), and related regulations promulgated by the CFTC. The Adviser has claimed an exclusion from the definition of

the term "commodity pool operator" under the CEA and the CFTC regulations in connection with its management of the

Company and, therefore, is not subject to CFTC registration or regulation under the CEA as a commodity pool operator

with respect to its management of the Company.

**Reporting Obligations** 

We are required to file our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and

amendments to those reports with the SEC. This information will be available from us at www.lafayettesquarebdc.com

and on the SEC's website at *www.sec.gov.* 

**Certain U.S. Federal Income Tax Considerations** 

The Company has elected to be treated, and intends to qualify annually, as a RIC under Subchapter M of the Internal

Revenue Code ("IRC"). If we qualify as a RIC and satisfy applicable distribution requirements, we generally will not pay

U.S. federal corporate income tax on income and gains that we distribute to stockholders.

To qualify as a RIC, we must meet certain requirements, including: (i) deriving at least 90% of our gross income each

taxable year from qualifying sources, (ii) satisfying specified asset diversification tests at the close of each quarter of the

taxable year, and (iii) distributing at least 90% of our investment company taxable income to stockholders for each taxable

year. We also intend to make distributions sufficient to avoid the nondeductible federal excise tax applicable to RICs,

although we may retain income or gains in certain circumstances.

The rules governing RIC qualification are complex and involve significant practical and technical considerations. If we

fail to qualify as a RIC for any taxable year and are unable to cure such failure, we would generally be subject to U.S.

federal corporate income tax, which could materially reduce the amounts available for distribution to stockholders.

This discussion is a general summary only and does not address all tax considerations that may be relevant to particular

investors. Prospective investors should consult their own tax advisors regarding the U.S. federal, state, local, and non-U.S.

tax consequences of an investment in our common stock.

**ITEM 1A. RISK FACTORS**

*Investing in shares of our Common Stock involves a number of significant risks. Before you invest in shares of our* 

*Common Stock, you should be aware of various risks, including those described below. The risks set out below are not the* 

*only risks we face. Additional risks and uncertainties not presently known to us or not presently deemed material by us may* 

*also impair our operations and performance. If any of the following events occur, our business, financial condition, results* 

*of operations and cash flows could be materially and adversely affected. In such case, our net asset value could decline,* 

*and you may lose all or part of your investment. The risk factors described below are the principal risk factors associated* 

*with an investment in us as well as those factors generally associated with an investment company with investment* 

*objectives, investment policies, capital structure or trading markets similar to ours.*

**SUMMARY OF RISK FACTORS** 

The following is a summary of the principal risk factors associated with an investment in us:

***<u>We are subject to risks and conflicts relating to our business and structure which may make it more difficult for you</u>*** 

***<u>to sell your shares of the Company or cause you to lose all or part of your investment:</u>***

• Operating as a BDC imposes numerous constraints and costs on us, reducing our operating flexibility. In addition, if

we fail to maintain our status as a BDC (including if we do not invest a sufficient amount in qualifying assets), we

might be regulated as a closed-end investment company, which would subject us to additional regulatory restrictions.

• Our investment strategy prioritizes lending to businesses in Working Class Areas and employing Working Class

People, which may limit available investment opportunities and result in the Company underperforming relative to

peers that do not maintain similar objectives.

• Our Prohibited Investments policy limits the universe of available investment opportunities, which may result in the

Company underperforming relative to peers that do not maintain similar restrictions.

• Our financial condition and results of operation depend on our ability to manage future growth effectively. We depend

upon our Adviser and Administrator (each as defined below) for our success and upon their access to the investment

professionals and partners of Lafayette Square and its affiliates.

• Each of the Adviser and the Administrator can resign on 60 days' notice, and we may not be able to find a suitable

replacement within that time, which could adversely affect our financial condition, business, and results of operations.

• There are significant potential conflicts of interest that could affect our investment returns, including conflicts related

to obligations that the Adviser or its affiliates have to, and fees paid by, other investment accounts.

• Our management and incentive fee structure may create incentives for the Adviser that are not fully aligned with the

interests of our stockholders and may induce the Adviser to make speculative investments.

• We will be subject to corporate-level income tax if we are unable to maintain qualification as a RIC under the IRC.

• We may have difficulty paying our required distributions if we recognize income before, or without, receiving cash

representing such income.

• If we are not treated as a "publicly offered regulated investment company," as defined in the IRC, U.S. stockholders

that are individuals, trusts or estates will be taxed as though they received a distribution of some of our expenses.

• We intend to finance a portion of our investments with borrowed money, which will magnify the potential for gain or

loss on amounts invested and may increase the risk of investing in us.

• We will be subject to risks associated with any credit facility, and any inability to renew or replace a credit facility

could adversely impact our liquidity and ability to find new investments or maintain distributions to our stockholders.

• Our Shareholders may fail to fund their Capital Commitments when due.

• Our reliance on Rule 506(c) of Regulation D permits general solicitation in connection with our Private Offering,

which subjects us to additional regulatory requirements and risks.

• Our Board may change our investment objective and operating policies without prior notice or stockholder approval.

• We do not currently have comprehensive documentation of our internal controls and have not yet tested our internal

controls in accordance with Section 404 of SOX, and failure to develop such controls in accordance with Section 404

could have a material adverse effect on our business and the value of our Common Stock.

• We depend on information systems, and systems failures could significantly disrupt our business, which may, in turn,

negatively affect the value of our Common Stock and our ability to pay distributions.

• The LS SBICs are subject to SBA regulations and risks associated with SBA-guaranteed debentures.

• We are subject to risks associated with artificial intelligence and machine learning technology.

***<u>We are subject to risks relating to our investments, which could cause you to lose all or part of your investment:</u>***

• We may invest in distressed or highly leveraged companies, which could be risky and may enter into bankruptcy

proceedings, causing you to lose all or part of your investment.

• Subordinated liens on collateral securing debt investments that we make in our portfolio companies may be subject to

control by senior creditors with first priority liens.

• Price declines and illiquidity in the corporate debt markets may adversely affect the fair value of our portfolio

investments, reducing our net asset value through increased net unrealized depreciation.

• We have not yet identified all of the portfolio company investments we will acquire, and there is no certainty how long

it will take to identify such investments or if we will be able to find a sufficient number of such businesses.

• Our portfolio may initially be concentrated in a limited number of portfolio companies and industries, which will

subject us to a risk of significant loss if any of these companies defaults on its obligations under any of its debt

instruments or if there is a downturn in a particular industry.

• Because we generally do not hold controlling equity interests in our portfolio companies, we cannot control such

companies or prevent decisions by their management that could decrease the value of our investments.

• The liability of each of the Adviser and the Administrator is limited, and we have agreed to indemnify each against

certain liabilities, which may lead them to act in a riskier manner than each would when acting for its own account.

• We may be subject to risks under hedging transactions.

• There can be no guarantee that our portfolio companies will adopt Managerial Assistance Recommendations or that

such recommendations will have their intended effect.

***<u>There are risks relating to your investment in our Common Stock:</u>***

• There is no public market for shares of our Common Stock, no ability for shareholders to redeem, and restrictions on

the ability of holders of our Common Stock to transfer.

• Our stockholders may experience dilution in their ownership percentage, including if they do not opt-in to our

dividend reinvestment plan.

• Our stockholders may receive shares of our Common Stock as distributions, which could result in adverse tax

consequences to them.

• We may, in the future, issue preferred stock, which could adversely affect the value of shares of Common Stock.

***<u>General risk factors:</u>*** 

***•***The impact of economic recessions or downturns may impair our portfolio companies and lead to defaults by our

portfolio companies, which could harm our operating results.

• Uncertainty about presidential administration initiatives could negatively impact our business, financial condition and

results of operations.

• Ongoing international events, including geopolitical conflicts and trade policy uncertainty, have increased global

political and economic uncertainty, which may have a material impact on the Company's portfolio and the value of

your investment in the Company.

• We are subject to risks associated with the current interest rate environment, and to the extent we use debt to finance

our investments, changes in interest rates will affect our cost of capital and net investment income.

• Terrorist attacks, acts of war, natural disasters, outbreaks, or pandemics may impact our portfolio companies and our

Adviser and harm our business, operating results, and financial condition.

• A shareholder may be subject to filing requirements and the short-swing profits rules under the Exchange Act as a

result of an investment in us.

Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also have a

material adverse effect on our business, financial condition and/or operating results. For a more detailed discussion of the

risks that you should consider prior to investing in our securities, see the section below entitled "Risk Factors."

**Risks Relating to Our Business and Structure** 

***Operating as a BDC imposes numerous constraints on us and significantly reduces our operating flexibility. In*** 

***addition, if we fail to maintain our status as a BDC (including if we do not invest a sufficient portion of our assets in*** 

***qualifying assets), we might be regulated as a closed-end investment company, which would subject us to additional*** 

***regulatory restrictions.*** 

The 1940 Act imposes numerous constraints on the operations of BDCs that do not apply to other investment vehicles

managed by our Adviser and its affiliates. BDCs are required, for example, to invest at least 70% of their total assets

primarily in "qualifying assets", such as securities of U.S. private or thinly traded public companies, cash, cash equivalents,

U.S. government securities, and other high-quality debt instruments that mature in one year or less from the date of

investment. These constraints and our Adviser's limited operating history under these constraints may hinder our ability to

take advantage of attractive investment opportunities and to achieve our investment objective. Furthermore, any failure to

comply with the requirements imposed on BDCs by the 1940 Act could cause the SEC to bring an enforcement action

against us and/or expose us to claims of private litigants.

We may be precluded from investing in what our Adviser believes are attractive investments if such investments are not

qualifying assets for purposes of the 1940 Act. If we do not invest a sufficient portion of our assets in qualifying assets, we

will be prohibited from making any additional investment that is not a qualifying asset and could be forced to forgo

attractive investment opportunities. Similarly, these rules could prevent us from making follow-on investments in existing

portfolio companies (which could result in the dilution of our position).

If we fail to maintain our status as a BDC, we might be regulated as a closed-end investment company that is required to

register under the 1940 Act, which would subject us to additional regulatory restrictions and significantly decrease our

operating flexibility. In addition, any such failure could cause an event of default under any outstanding indebtedness we

might have, which could have a material adverse effect on our business, financial condition or results of operations.

***Our investment strategy prioritizes lending to businesses in Working Class Areas and employing Working Class People,*** 

***which may limit available investment opportunities and result in the Company underperforming relative to peers that do*** 

***not maintain similar objectives.***

Our investment strategy is informed by Goal2030™ and is focused on lending to middle market businesses located in, or

employing, Working Class American communities, with the goal of creating and preserving jobs and stimulating economic

growth across the United States. In furtherance of this strategy, we seek to invest a substantial portion of our assets in

companies that are located in Working Class Areas or are Substantial Employers of Working Class People, and we aim to

invest at least 5% of our assets in each of our ten Target Regions. This focus limits the types, number, and geographic

distribution of investment opportunities available to us and, as a result, we may be unable to participate in transactions that

would otherwise meet our risk-return criteria. We may also base investment decisions in part on a prospective portfolio

company's alignment with Goal2030™ objectives, which may cause us to forgo opportunities that would have generated

greater returns. There is no guarantee that our investments will have their intended economic or social effects, and our

returns may be lower than those of other BDCs or private credit funds that do not maintain similar strategic objectives.

***Our Prohibited Investments policy limits the universe of available investment opportunities, which may result in the*** 

***Company underperforming relative to peers that do not maintain similar restrictions.***

We maintain a policy that prohibits investment in certain categories of companies and securities, including, among others,

companies involved in the production or retail of small arms and light weapons for civilian customers, tobacco and

cannabis companies, companies with significant involvement in thermal coal, oil, or shale gas extraction, companies

operating prisons or detention centers, companies involved in pornographic content, and companies involved in the

reprocessing and storage of nuclear waste (collectively, "Prohibited Investments"). While we believe these restrictions are

consistent with our investment strategy and the values of our institutional investor base, they reduce the number and types

of investment opportunities available to us. As a result, we may be unable to participate in transactions that would

otherwise meet our risk-return criteria, and our investment returns may be lower than those of other BDCs or private credit

funds that do not impose similar restrictions. In addition, the application of these restrictions requires judgment, and there

may be circumstances in which the classification of a prospective investment as a Prohibited Investment is uncertain, which

could result in the Company declining an otherwise attractive opportunity or, conversely, making an investment that is later

determined to be inconsistent with the policy. We can offer no assurance that our Prohibited Investments policy will not

adversely affect our ability to achieve our investment objective or that maintaining such restrictions will not have a material

adverse effect on our business, financial condition, or results of operations.

***Insured depository institution shareholders that are subject to regulatory examination for CRA compliance may fail to*** 

***obtain favorable regulatory consideration of their investment under the CRA.***

The CRA requires the three U.S. federal bank supervisory agencies (the FRB, the OCC, and the FDIC) to encourage certain

FDIC-insured financial institutions to help meet the credit needs of their local communities, including LMI neighborhoods,

consistent with the safe and sound operation of such institutions. Each agency operates under substantially similar rules and

regulatory guidance for evaluating and rating an institution's CRA performance. These rules vary according to an

institution's asset size and business strategy.

In October 2023, the three federal banking agencies issued a new unified set of CRA regulations (the "New CRA Final

Rule") that, among other changes, implemented a tiered framework with separate evaluations for retail lending, retail

services and products, community development financing, and community development services for banks with over $2

billion in total assets. Published in February 2024, the New CRA Final Rule requires banks to comply with most

provisions beginning on January 1, 2026, with certain other requirements becoming applicable on January 1, 2027. Until

these regulations become applicable, the current state of CRA regulations is unsettled, and may continue to be so even after

the new regulations are applicable. This is especially so in light of current, ongoing litigation, which has resulted in an

injunction of the New CRA Final Rule, as well as the change in the U.S. presidential administration. As such, this changing

state of laws, regulations or the interpretation of laws and regulations related to the CRA may result in a failure of insured

depository institution shareholders that are subject to regulatory examination for CRA compliance to obtain favorable

regulatory consideration of their investment under the CRA.

Investment in the Company is not currently deemed a CRA eligible investment by any of the U.S. federal bank supervisory

agencies, and the OCC declined to prospectively confirm that an investment in the Company would qualify as a CRA

activity when the Company sought clarity on the question from the OCC (which was prior to the adoption of the New CRA

Final Rule). Investments are not typically designated as CRA-qualifying by any governmental agency at the time of

issuance. The final determinations that investments are CRA-qualifying are made by the federal and, where applicable,

state bank supervisory agencies during their periodic examinations of financial institutions. We generally seek to obtain

certain data from our borrowers, both during the underwriting process and on an ongoing basis throughout the term of the

loan, that will allow an insured depository institution to apply for credit for the investment under the CRA with the

appropriate banking regulator. This data is expected to include statistics regarding the borrowers' composition and growth

as well as their impact on the communities where they operate, and who and from where such borrowers hire, as well as

other information that could be used to validate CRA eligibility such as the borrowers' employment of LMI workers and

the borrowers' locations and/or operations in Working Class Areas. This information is designed to be helpful in

substantiating the CRA eligibility of the investment. We can offer no assurance, however, that an investor in the Company

subject to CRA requirements will receive CRA credit for such investment, and insured depository institution investors

interested in applying for CRA credit must make their own assessment as to the likelihood that their banking regulator will

grant CRA credit. Whether investments in the Company will qualify in whole or in part for CRA credit will depend on the

composition of the Company's investment portfolio over time and other factors, including changing regulatory criteria for

granting CRA credit for particular categories of investments.

***Our financial condition and results of operation depend on our ability to manage future growth effectively.*** 

Our ability to achieve our investment objective depends on our ability to grow, which depends, in turn, on the Adviser's

ability to identify, invest in and monitor companies that meet our investment criteria. Accomplishing this result on a cost-

effective basis will depend on the Adviser's structuring of the investment process, its ability to provide competent,

attentive, and efficient services to us, and our access to financing on acceptable terms. The management team of the

Adviser has substantial responsibilities under our Investment Advisory Agreement. We can offer no assurance that any

current or future employees of the Adviser will contribute effectively to the work of, or remain associated with, the

Adviser. We caution you that the principals of our Adviser or Administrator will also be called upon to provide managerial

assistance to our portfolio companies and those of other investment vehicles which are managed by the Adviser. Such

demands on their time may distract them or slow our rate of investment. Any failure to manage our future growth

effectively could have a material adverse effect on our business, financial condition, and results of operations.

***We depend upon our Adviser and Administrator for our success and upon their access to the investment professionals*** 

***and partners of Lafayette Square and its affiliates.*** 

We do not have any internal management capacity or employees. We depend on the diligence, skill, and network of

business contacts of the senior investment professionals of our Adviser and Administrator to achieve our investment

objective. We expect that the Adviser will evaluate, negotiate, structure, close, and monitor our investments in accordance

with the terms of the Investment Advisory Agreement. We can offer no assurance, however, that the senior investment

professionals of the Adviser will continue to provide investment advice to us. The loss of any member of the Adviser's

Investment Committee or of other senior investment professionals of the Adviser and its affiliates would limit our ability to

achieve our investment objective and operate as we anticipate. In addition, we can offer no assurance that the resources,

relationships, and expertise of Lafayette Square will be available for every transaction or generally during the term of the

Company. This could have a material adverse effect on our financial condition, results of operations, and cash flows.

We depend on the diligence, skill, and network of business contacts of the professionals available to our Administrator to

carry out the administrative functions necessary for us to operate, including the ability to select and engage sub-

administrators and third-party service providers. We can offer no assurance, however, that the professionals of the

Administrator will continue to provide administrative services to us. In addition, we can offer no assurance that the

resources, relationships, and expertise of Lafayette Square will be available to the Administrator throughout the term of the

Company. This could have a material adverse effect on our financial condition, results of operations, and cash flows.

***We depend on the Adviser's key personnel in seeking to achieve our investment objectives.*** 

The Company does not have any internal management capacity or employees. Through staffing agreements, the Adviser

depends on the investment professionals of affiliates of Lafayette Square and such investment professionals' diligence,

skill, and network of business contacts. Our success will depend to a significant extent on the continued service and

coordination of senior management professionals of our Adviser pursuant to the staffing agreements. The diversion of time

by, or departure of, any of these individuals could have a material adverse effect on our ability to achieve our investment

objectives.

***The Adviser's personnel primarily work from home.***

The Adviser's personnel primarily work from home as a result of a technology-first business model, among other things. To

the extent that such personnel, as a result of working remotely, rely more heavily on technology systems for their business-

related communications and information sharing, the Adviser could be more vulnerable to cybersecurity incidents and

cyberattacks and could have more difficulty resuming normal operations in the event it is the target of such incident or

attack.

***The Adviser's dependence on technology.***

Our operations are highly dependent on technology which is comprised of proprietary software and systems that work with

third-party tools to strengthen origination, underwriting, and monitoring processes. There is a risk that software or other

technology malfunctions or programming inaccuracies may impair the performance of these systems. System impairment

may negatively impact one or more of such processes, which could impact performance, potentially materially.

***The Adviser may frequently be required to make investment analyses and decisions on an expedited basis in order to*** 

***take advantage of investment opportunities, and our Adviser may not have knowledge of all circumstances that could*** 

***impact an investment by the Company.*** 

Investment analyses and decisions by the Adviser may frequently be required to be undertaken on an expedited basis to

take advantage of investment opportunities. In such cases, the information available to the Adviser at the time of making an

investment decision may be limited. Therefore, we can offer no assurance that the Adviser will have knowledge of all

circumstances that may adversely affect a portfolio investment, and the Adviser may make portfolio investments which it

would not have made if more extensive due diligence had been undertaken. In addition, the Adviser may rely upon

independent consultants and advisors in connection with its evaluation of proposed investments, and we can offer no

assurance as to the accuracy or completeness of the information provided by such independent consultants and advisors or

to the Adviser's right of recourse against them in the event errors or omissions do occur.

***Each of the Adviser and the Administrator can resign on 60 days' notice, and we may not be able to find a suitable*** 

***replacement within that time, resulting in a disruption in our operations that could adversely affect our financial*** 

***condition, business, and results of operations.***

The Adviser has the right to resign under the Investment Advisory Agreement at any time upon not less than 60 days'

written notice, and the Administrator has the right to resign under the Administration Agreement at any time upon not less

than 60 days' written notice, in each case whether we have found a replacement or not. An affiliate of the Adviser is the

borrower under a credit facility and pledged its ownership interests in the Adviser as collateral for that facility. In the event

of a default under such credit facility, the foreclosure of these ownership interests would cause a change of control of the

Adviser, which would effect an automatic termination of the Investment Advisory Agreement. If the Adviser or

Administrator resigns or the Investment Advisory Agreement is terminated, we may not be able to find a new investment

adviser or administrator or hire internal management with similar expertise and ability to provide the same or equivalent

services on acceptable terms within 60 days, or at all. If we are unable to do so quickly, our operations are likely to

experience a disruption, our business, financial condition, results of operations and cash flows as well as our ability to pay

distributions are likely to be adversely affected, and the value of our shares may decline. In addition, the coordination of

our internal management and investment activities is likely to suffer if we are unable to identify and reach an agreement

with a single institution or group of executives having the expertise possessed by the Adviser or Administrator and their

respective affiliates. Even if we are able to retain comparable management, whether internal or external, the integration of

such management and their lack of familiarity with our investment objective may result in additional costs and time delays

that may adversely affect our business, financial condition, results of operations and cash flows.

***There are significant potential conflicts of interest that could affect our investment returns, including conflicts related*** 

***to obligations that the Adviser's Investment Committee, the Adviser or its affiliates have to other investment accounts*** 

***and conflicts related to fees and expenses of such other investment accounts.*** 

As a result of our arrangements with the Adviser and its affiliates and the Adviser's Investment Committee, there may be

times when the Adviser or such persons have interests that differ from those of our stockholders, giving rise to a conflict of

interest. Lafayette Square and/or the Adviser are expected to provide investment advisory services for other investment

funds, accounts, and other vehicles managed or advised by Lafayette Square or its affiliates ("Affiliated Investment

Accounts") with a wide variety of investment objectives that in some instances may overlap or conflict with the investment

objectives of the Company and present conflicts of interest. In addition, Lafayette Square may also, from time to time,

create new or successor Affiliated Investment Accounts that may compete with the Company and present similar conflicts

of interest. See "*Item 13. Certain Relationships and Related Transactions, and Director Independence*." In serving in these

multiple capacities, Lafayette Square, including the Adviser, the Investment Committee, and the investment team, may

have obligations to Other Clients, or investors in Affiliated Investment Accounts, the fulfillment of which may not be in the

best interests of us or our stockholders. Our investment objective may overlap with the investment objectives of certain

Affiliated Investment Accounts. As a result, the members of the Investment Committee may face conflicts in the allocation

of investment opportunities among us and other investment funds, programs, accounts, and businesses advised by or

affiliated with the Adviser. Certain Affiliated Investment Accounts may provide for higher management or incentive fees,

greater expense reimbursements or overhead allocations, or permit the Adviser and its affiliates to receive higher

origination and other transaction fees, all of which may contribute to this conflict of interest and create an incentive for the

Adviser to favor such other accounts. For example, the 1940 Act restricts the Adviser from receiving more than a 1% fee in

connection with loans that we acquire or "originate," a limitation that does not exist for certain other accounts.

Lafayette Square expects to invest on its own behalf and on behalf of its Affiliated Investment Accounts in a wide variety

of investment opportunities. Lafayette Square and, to the extent consistent with applicable law and/or exemptive relief and

the Adviser's allocation policies and procedures, its Affiliated Investment Accounts will be permitted to invest in

investment opportunities without making such opportunities available to the Company beforehand. Subject to the

requirements of an applicable exemptive relief, Lafayette Square may offer investments that fall into the investment

objectives of an Affiliated Investment Account to such account or make such investment on its own behalf, even though

such investment also falls within the investment objectives of the Company. The Company may invest in opportunities that

Lafayette Square and/or one or more Affiliated Investment Accounts have declined, and vice versa. These developments

may reduce the number of investment opportunities available to the Company and may create conflicts of interest in

allocating investment opportunities among the Adviser, the Company, and the Affiliated Investment Accounts. Lafayette

Square and its affiliates will allocate opportunities among one or more of the Company, other affiliated funds and such

Affiliated Investment Accounts in accordance with the terms of its allocation policies and procedures. Shareholders should

note that the conflicts inherent in making such allocation decisions may not always be resolved to the advantage of the

Company. We can offer no assurance that the Company will have an opportunity to participate in certain opportunities that

fall within the Company's investment objectives. To the extent the Company does not obtain a co-investment exemptive

order, or if the granting of such order is delayed, the Company may only be able to participate in certain negotiated

investment opportunities on a rotational basis.

It is possible that Lafayette Square or an Affiliated Investment Account will invest in a company that is or becomes a

competitor of a portfolio company of the Company. Such investment could create a conflict between the Company, on the

one hand, and Lafayette Square or the Affiliated Investment Account, on the other hand. In such a situation, Lafayette

Square may also have a conflict in the allocation of its own resources to the portfolio company. In addition, certain

Affiliated Investment Accounts will be focused primarily on investing in other funds, which may have strategies that

overlap and/or directly conflict and compete with the Company.

***The Adviser's investment professionals are engaged in other investment activities on behalf of Other Clients.*** 

Certain investment professionals who are involved in our activities remain responsible for the investment activities of other

Affiliated Investment Accounts managed by the Adviser and its affiliates, and they will devote time to the management of

such investments and other newly created Affiliated Investment Accounts (whether in the form of funds, separate accounts

or other vehicles), as well as their own investments. In addition, in connection with the management of investments for

other Affiliated Investment Accounts, members of Lafayette Square and its affiliates may serve on the boards of directors

of or advise companies that may compete with our portfolio investments. Moreover, these Affiliated Investment Accounts

managed by Lafayette Square and its affiliates may pursue investment opportunities that may also be suitable for us.

***The Adviser's Investment Committee, the Adviser or its affiliates may possess material non-public information, limiting***

***our investment discretion.*** 

Principals of the Adviser and its affiliates and members of the Adviser's Investment Committee may serve as directors of,

or in a similar capacity with, companies in which we invest, the securities of which are purchased or sold on our behalf. In

the event that material nonpublic information is obtained with respect to such companies, or we become subject to trading

restrictions under the internal trading policies of those companies or as a result of applicable law or regulations, we could

be prohibited for a period of time from purchasing or selling the securities of such companies, and this prohibition may

have an adverse effect on us.

***Our management and incentive fee structure may create incentives for the Adviser and Administrator that are not fully***

***aligned with the interests of our stockholders and may induce the Adviser to make speculative investments.*** 

In the course of our investing activities, we pay management and incentive fees to the Adviser. The base management fee is

based on our average gross assets, and the incentive fee is computed and paid on income, both of which include leverage.

As a result, our shareholders will invest on a "gross" basis and receive distributions on a "net" basis after expenses,

resulting in a lower rate of return than one might achieve through direct investments. Because these fees are based on our

average gross assets, the Adviser benefits when we incur debt or use leverage. Under certain circumstances, the use of

leverage may increase the likelihood of default on our debt, which would disfavor us or our stockholders.

Additionally, the incentive fee payable by us to the Adviser may create an incentive for the Adviser to cause us to realize

capital gains or losses that may not be in the best interests of us or our stockholders. Under the incentive fee structure, the

Adviser benefits when we recognize capital gains and, because the Adviser determines when an investment is sold, the

Adviser controls the timing of the recognition of such capital gains. Our Board is charged with protecting our stockholders'

interests by monitoring how the Adviser addresses these and other conflicts of interest associated with its management

services and compensation.

The part of the management and incentive fees payable to Adviser that relates to our net investment income is computed

and paid on income that may include interest income that has been accrued but not yet received in cash, such as a market

discount, debt instruments with Paid-in-Kind ("PIK") interest, preferred stock with PIK dividends, zero-coupon securities,

and other deferred interest instruments and may create an incentive for the Adviser to make investments on our behalf that

are riskier or more speculative than would be the case in the absence of such compensation arrangement. This fee structure

may be considered to give rise to a conflict of interest for the Adviser to the extent that it may encourage the Adviser to

favor debt financings that provide for deferred interest, rather than current cash payments of interest. Under these

investments, we will accrue the interest over the life of the investment, but we will not receive the cash income from the

investment until the end of the term. Our net investment income used to calculate the income portion of our investment fee,

however, includes accrued interest. The Adviser may have an incentive to invest in deferred interest securities in

circumstances where it would not have done so but for the opportunity to continue to earn the fees even when the issuers of

the deferred interest securities would not be able to make actual cash payments to us on such securities. This risk could be

increased because the Adviser is not obligated to reimburse us for any fees received even if we subsequently incur losses or

never receive in cash the deferred income that was previously accrued.

In addition, we pay to the Administrator our allocable portion of certain expenses incurred by the Administrator in

performing its obligations under the Administration Agreement, such as our allocable portion of the cost of our chief

financial officer and chief compliance officer. These arrangements create conflicts of interest that our Board must monitor.

***Our ability to enter into transactions with our affiliates will be restricted.*** 

We will be prohibited under the 1940 Act from participating in certain transactions with certain of our affiliates without the

prior approval of a majority of our independent directors and, in some cases, the SEC. Any person that owns, directly or

indirectly, 5% or more of our outstanding voting securities will be our affiliate for purposes of the 1940 Act. As such we

will generally be prohibited from buying or selling any securities from or to such affiliate on a principal basis, absent the

prior approval of our Board and, in some cases, the SEC. The 1940 Act also prohibits certain "joint" transactions with

certain of our affiliates, which in certain circumstances could include investments in the same portfolio company (whether

at the same or different times to the extent the transaction involves a joint investment), without prior approval of our Board

and, in some cases, the SEC. If a person acquires more than 25% of our voting securities, we will be prohibited from

buying or selling any security from or to such person or certain of that person's affiliates, or entering into prohibited joint

transactions with such persons, absent the prior approval of the SEC. Similar restrictions limit our ability to transact

business with our officers or directors or their affiliates.

The SEC has interpreted the BDC regulations governing transactions with affiliates to prohibit certain joint transactions

involving entities that share a common investment adviser. As a result of these restrictions, we may be prohibited from

buying or selling any security from or to any portfolio company that is controlled by a fund managed by the Adviser or

their respective affiliates without the prior approval of the SEC, which may limit the scope of investment opportunities that

would otherwise be available to us.

We may, however, invest alongside our Adviser's and/or its affiliates' other Clients in certain circumstances where doing

so is consistent with applicable law and SEC staff interpretations, guidance, and exemptive relief orders. However,

although the Adviser seeks to allocate investment opportunities fairly in the long-run, we can offer no assurance that

investment opportunities will be allocated to us fairly or equitably in the short-term or over time. We have applied for and

received exemptive relief to co-invest with affiliates of our Adviser in privately negotiated transactions.

In situations when co-investment with affiliates' other Clients is not permitted under the 1940 Act and related rules,

existing or future staff guidance, or the terms and conditions of exemptive relief granted to us by the SEC (as discussed

above), our Adviser will need to decide which client or clients will proceed with the investment. Generally, we will not be

entitled to make a co-investment in these circumstances and, to the extent that another client elects to proceed with the

investment, we will not be permitted to participate. Moreover, except in certain circumstances, we will not invest in any

issuer in which an affiliate's other client holds a controlling interest.

***Shares of our Common Stock are illiquid investments for which there is not a secondary market.*** 

We do not know at this time what circumstances will exist in the future, and therefore we do not know what factors our

Board will consider in contemplating an Exchange Listing or other Liquidity Event in the future. As a result, even if we do

complete a Liquidity Event to establish a secondary market for shares of our Common Stock, you may not receive a return

of all of your invested capital. If we do not successfully complete a Liquidity Event, liquidity for your shares of Common

Stock may be limited to participation in any repurchase offers that our Board may determine to conduct, which we do not

currently intend to conduct. In addition, in any repurchase offer, if the amount requested to be repurchased in any

repurchase offer exceeds the repurchase offer amount, repurchases of shares of Common Stock would generally be made

on a pro-rata basis (based on the number of shares of Common Stock put to us for repurchases), not on a first-come, first-

served basis.

Even if we undertake a Liquidity Event, we cannot assure you a public trading market will develop or, if one develops, that

such trading market can be sustained. Shares of companies offered in an initial public offering or a Liquidity Event often

trade at a discount to the initial offering price due to underwriting discounts and related offering expenses. In addition,

following a Liquidity Event, shareholders may be restricted from selling or disposing of their shares of Common Stock by

applicable securities laws, contractually by a lock-up agreement with the underwriters of a Liquidity Event and

contractually through restrictions contained in the subscription agreement in respect of shares of our Common Stock. Also,

shares of closed-end investment companies and BDCs frequently trade at a discount from their net asset value. This

characteristic of closed-end investment companies is separate and distinct from the risk that our net asset value per Share

may decline. We cannot predict whether shares of our Common Stock, if listed on a national securities exchange, will trade

at, above, or below net asset value.

***Our reliance on Rule 506(c) of Regulation D permits general solicitation in connection with our Private Offering and*** 

***subjects us to additional requirements and risks.***

We conduct our Private Offering in reliance on Rule 506(c) of Regulation D under the Securities Act, which permits us to

engage in general solicitation and general advertising in connection with the offer and sale of shares of our Common Stock,

provided that all purchasers are verified accredited investors. This exemption requires us to take reasonable steps to verify

the accredited investor status of each purchaser, which imposes additional compliance costs and operational burdens

beyond those associated with offerings conducted under Rule 506(b), under which we previously conducted our Private

Offering. If we fail to take reasonable verification steps with respect to any purchaser, or if a purchaser is later determined

not to have been an accredited investor at the time of purchase, we could lose the benefit of the Rule 506(c) exemption with

respect to that offering, which could result in a violation of Section 5 of the Securities Act and expose us to potential

rescission claims by investors, SEC enforcement action, and civil liability. We can offer no assurance that our verification

procedures will be sufficient in all cases or that our general solicitation activities will not expose us to regulatory risk or

litigation.

***We operate in a highly competitive market for investment opportunities, which could reduce returns and result in*** 

***losses.*** 

The business of identifying and structuring investments of the types contemplated by the Company is competitive and

involves a high degree of uncertainty. The Company will be competing for investments with other investment funds, as

well as more traditional lending institutions and private credit-focused competitors. Over the past several years, an

increasing number of funds have been formed, with investment objectives similar to, or overlapping with, those of the

Company (and many such existing funds have grown substantially in size). In addition, other firms and institutions are

seeking to capitalize on the perceived opportunities with vehicles, funds, and other products that are expected to compete

with the Company for investments. Other shareholders may make competing offers for investment opportunities that we

identify. Even after an agreement in principle has been reached with the Board or owners of an acquisition target,

consummating the transaction is subject to a myriad of uncertainties, only some of which are foreseeable or within the

control of the Adviser. Some of our competitors may have access to greater amounts of capital and to capital that may be

committed for longer periods of time or may have different return thresholds than the Company, and thus these competitors

may have advantages over the Company. In addition, issuers may prefer to take advantage of favorable high-yield markets

and issue subordinated debt in those markets, which could result in fewer credit investment opportunities for the Company.

In addition to competition from other shareholders, the availability of investment opportunities generally will be subject to

market conditions as well as, in many cases, the prevailing regulatory or political climate. There may also be insufficient or

inconsistent demand from middle market businesses for capital investment and managerial assistance. We can offer no

assurance that the Company will be successful in obtaining suitable investments, or that if we make such investments, the

objectives of the Company will be achieved.

***We will be subject to corporate-level income tax if we are unable to maintain qualification as a RIC.*** 

In order to maintain RIC tax treatment under the IRC, we must meet certain source-of-income, asset diversification, and

distribution requirements. The distribution requirement for a RIC is satisfied if we distribute to our stockholders

distributions for U.S. federal income tax purposes of an amount generally at least equal to 90% of our investment company

taxable income, which is generally our net ordinary income plus the excess of our net short-term capital gains in excess of

our net long-term capital losses, determined without regard to any deduction for distributions paid, to our stockholders on

an annual basis. We are subject, to the extent we use debt financing, to certain asset coverage ratio requirements under the

1940 Act and financial covenants under loan and credit agreements that could, under certain circumstances, restrict us from

making distributions necessary to qualify as a RIC. If we are unable to obtain cash from other sources, we may fail to be

subject to tax as a RIC, in which case we will be subject to corporate-level income tax. To maintain status as a RIC, we

must also meet certain asset diversification requirements at the end of each quarter of our taxable year. Failure to meet

these requirements may result in our having to dispose of certain investments quickly in order to continue to qualify as a

RIC. Because most of our investments are in private or thinly traded public companies, any such dispositions could be

made at disadvantageous prices and may result in substantial losses. If we fail to qualify as a RIC for any reason and

become subject to corporate-level income tax, the resulting corporate taxes could substantially reduce our net assets, the

amount of income available for distributions to stockholders, the amount of our distributions, and the amount of funds

available for new investments. Such a failure would have a material adverse effect on our stockholders and us. See "*Item 1.* 

*Material U.S. Federal Income Tax Considerations — Taxation as a RIC*."

***We will need to raise additional capital to grow because we must distribute most of our income.*** 

We will need additional capital to fund new investments and grow our portfolio of investments. We intend to access the

capital markets periodically to issue debt or equity securities (although we do not intend to issue preferred stock within one

year of the Effective Date) or borrow from financial institutions in order to obtain such additional capital. Unfavorable

economic conditions could increase our funding costs, limit our access to the capital markets, or result in a decision by

lenders not to extend credit to us. A reduction in the availability of new capital could limit our ability to grow. In addition,

we will be required to distribute each taxable year an amount at least equal to 90% of the sum of our net ordinary income

and net short-term capital gains in excess of net long-term capital losses, or investment company taxable income,

determined without regard to any deduction for distributions paid as distributions for U.S. federal income tax purposes, to

our stockholders to maintain our ability to be subject to tax as a RIC. As a result, these earnings are not available to fund

new investments. An inability to access the capital markets successfully could limit our ability to grow our business and

execute our business strategy fully and could decrease our earnings if any. This would have an adverse effect on the value

of our securities. If we are not able to raise capital and are at or near our targeted leverage ratios, we may receive smaller

allocations, if any, on new investment opportunities under the Adviser's allocation policies and procedures.

***We may have difficulty paying our required distributions if we recognize income before, or without, receiving cash*** 

***representing such income.*** 

For U.S. federal income tax purposes, we include in income certain amounts that we have not yet received in cash, such as

the accretion of Original Issue Discount ("OID"). This may arise if we receive warrants in connection with the making of a

loan and in other circumstances, or through contracted PIK interest, which represents contractual interest added to the loan

balance and due at the end of the loan term. Such OID, which could be significant relative to our overall investment

activities, or increases in loan balances as a result of contracted PIK arrangements, is included in our income before we

receive any corresponding cash payments. We also may be required to include in income certain other amounts that we do

not receive in cash.

That part of the incentive fee payable by us that relates to our net investment income is computed and paid on income that

may include interest that has been accrued but not yet received in cash, such as a market discount, debt instruments with

PIK interest, preferred stock with PIK dividends and zero-coupon securities. If a portfolio company defaults on a loan that

is structured to provide accrued interest, it is possible that accrued interest previously used in the calculation of the

incentive fee will become uncollectible, and the Adviser will have no obligation to refund any fees it received in respect of

such accrued income.

The higher interest rates of PIK loans reflect the payment deferral and increased credit risk associated with these

instruments, and PIK instruments generally represent a significantly higher credit risk than coupon loans. PIK loans may

have unreliable valuations because their continuing accruals require continuing judgments about the collectability of the

deferred payments and the value of any associated collateral. Market prices of zero-coupon or PIK securities are affected to

a greater extent by interest rate changes and may be more volatile than securities that pay interest periodically and in cash.

PIKs are usually less volatile than zero-coupon bonds, but more volatile than cash pay securities. Because original issue

discount income is accrued without any cash being received by us, required cash distributions may have to be paid from

offering proceeds or the sale of our assets without investors being given any notice of this fact. The deferral of PIK interest

increases the loan-to-value ratio, which is a measure of the riskiness of a loan. Even if the accounting conditions for income

accrual are met, the borrower could still default when our actual payment is due at the maturity of the loan.

Since in certain cases we may recognize income before or without receiving cash representing such income, we may have

difficulty meeting the requirement in a given taxable year to distribute to our stockholders distributions for U.S. federal

income tax purposes an amount at least equal to 90% of our investment company taxable income, determined without

regard to any deduction for distributions paid, to our stockholders to qualify and maintain our ability to be subject to tax as

a RIC. In such a case, we may have to sell some of our investments at times we would not consider advantageous, raise

additional debt or equity capital, or reduce new investment originations to meet these distribution requirements. If we are

not able to obtain such cash from other sources, we may fail to qualify as a RIC and thus be subject to corporate-level

income tax. See "*Item 1. Material U.S. Federal Income Tax Considerations — Taxation as a RIC."* 

***If we are not treated as a "publicly offered regulated investment company," as defined in the IRC, U.S. stockholders*** 

***that are individuals, trusts or estates will be taxed as though they received a distribution of some of our expenses.*** 

We do not expect to be treated initially as a "publicly offered regulated investment company." Until and unless we are

treated as a "publicly offered regulated investment company" as a result of either (1) shares of our Common Stock and our

preferred stock collectively being held by at least 500 persons at all times during a taxable year, (2) shares of our Common

Stock being continuously offered pursuant to a public offering (within the meaning of Section 4 under the Securities Act)

or (3) shares of our Common Stock being treated as regularly traded on an established securities market, each U.S.

stockholder that is an individual, trust or estate will be treated as having received a dividend for U.S. federal income tax

purposes from us in the amount of such U.S. stockholder's allocable share of the management and incentive fees paid to

our investment adviser and certain of our other expenses for the calendar year, and these fees and expenses will be treated

as miscellaneous itemized deductions of such U.S. stockholder. For taxable years beginning before 2026, miscellaneous

itemized deductions generally are not deductible by a U.S. stockholder that is an individual, trust, or estate. For taxable

years beginning in 2026 or later, miscellaneous itemized deductions generally are deductible by a U.S. stockholder that is

an individual, trust or estate only to the extent that the aggregate of such U.S. stockholder's miscellaneous itemized

deductions exceeds 2% of such U.S. stockholder's adjusted gross income for U.S. federal income tax purposes, are not

deductible for purposes of the alternative minimum tax and are subject to the overall limitation on itemized deductions

under IRC Section 68. See "*Item 1. Material U.S. Federal Income Tax Considerations — Taxation as a RIC."* 

***Regulations governing our operation as a BDC affect our ability to, and the way in which we, raise additional capital.*** 

***As a BDC, our need to raise additional capital (because we must distribute most of our income) exposes us to risks,*** 

***including the typical risks associated with leverage.*** 

We may issue debt securities or preferred stock and/or borrow money from banks or other financial institutions, which we

refer to collectively as "senior securities," up to the maximum amount permitted by the 1940 Act. Under the provisions of

the 1940 Act, we are currently permitted to issue "senior securities," including borrowing money from banks or other

financial institutions, only in amounts such that our asset coverage, as defined in the 1940 Act, equals at least 150%

(equivalent to $2 of debt outstanding for each $1 of equity) of total assets less all liabilities and indebtedness not

represented by senior securities, after each issuance of senior securities. If we fail to comply with certain disclosure

requirements, our asset coverage ratio under the 1940 Act would be 200%, which would decrease the amount of leverage

we are able to incur. If the value of our assets declines, we may be unable to satisfy the applicable asset coverage ratio. If

that happens, we may be required to sell a portion of our investments and, depending on the nature of our leverage, repay a

portion of our indebtedness at a time when such sales may be disadvantageous. Also, any amounts that we use to service

our indebtedness would not be available for distributions to holders of shares of our Common Stock. If we issue senior

securities, we will be exposed to typical risks associated with leverage, including an increased risk of loss.

In the absence of an event of default, no person or entity from which we borrow money has a veto right or voting power

over our ability to set policy, make investment decisions, or adopt investment strategies. If we issue preferred stock, which

is another form of leverage, the preferred stock would rank "senior" to Common Stock in our capital structure, preferred

stockholders would have separate voting rights on certain matters and might have other rights, preferences, or privileges

more favorable than those of our common stockholders, and the issuance of preferred stock could have the effect of

delaying, deferring or preventing a transaction or a change of control that might involve a premium price for holders of our

Common Stock or otherwise be in the best interest of our common stockholders. Holders of our Common Stock will

directly or indirectly bear all of the costs associated with offering and servicing any preferred stock that we issue. In

addition, any interests of preferred stockholders may not necessarily align with the interests of holders of our Common

Stock, and the rights of holders of shares of preferred stock to receive distributions would be senior to those of holders of

shares of Common Stock. We do not, however, anticipate issuing preferred stock in the next 12 months.

We are not generally able to issue and sell our Common Stock at a price below net asset value per share. We may,

however, sell our Common Stock, or warrants, options or rights to acquire our Common Stock, at a price below the then-

current net asset value per share of our Common Stock if our Board determines that such sale is in the best interests of us

and our stockholders, and if our stockholders approve such sale. In any such case, the price at which our securities are to be

issued and sold may not be less than a price that, in the determination of our Board, closely approximates the market value

of such securities (less any distributing commission or discount). If we raise additional funds by issuing Common Stock or

senior securities convertible into, or exchangeable for, our Common Stock, then the percentage ownership of our

stockholders at that time will decrease, and holders of our Common Stock might experience dilution.

***We intend to finance a portion of our investments with borrowed money, which will magnify the potential for gain or*** 

***loss on amounts invested and may increase the risk of investing in us.*** 

The use of leverage magnifies the potential for gain or loss on amounts invested. The use of leverage is generally

considered a speculative investment technique and increases the risks associated with investing in our securities. The

amount of leverage that we employ will be subject to the restrictions of the 1940 Act and the supervision of our Board. At

the time of any proposed borrowing, the amount of leverage we employ will also depend on our Adviser's assessment of

the market and other factors. We cannot assure you that we will be able to obtain credit at all or on terms acceptable to us.

For example, due to the interplay of the 1940 Act restrictions on principal and joint transactions and the U.S. risk retention

rules adopted pursuant to Section 941 of the Dodd-Frank Act, as a BDC, we are limited in our ability to enter into any

securitization transactions. We cannot assure you that the SEC or any other regulatory authority will modify such

regulations or provide administrative guidance that would give us greater flexibility to enter into securitizations. We may

issue senior debt securities to banks, insurance companies, and other lenders. Lenders of these senior securities will have

fixed dollar claims on our assets that are superior to the claims of our common stockholders, and we would expect such

lenders to seek recovery against our assets in the event of a default. We may pledge up to 100% of our assets, may grant a

security interest in all of our assets, and may pledge the right to make capital calls of stockholders under the terms of any

debt instruments we may enter into with lenders. Under the terms of any credit facility or debt instrument we enter into, we

are likely to be required to comply with certain financial and operational covenants. Failure to comply with such covenants

could result in a default under the applicable credit facility or debt instrument if we are unable to obtain a waiver from the

applicable lender or holder, and such lender or holder could accelerate repayment under such indebtedness and negatively

affect our business, financial condition, results of operations and cash flows. In addition, under the terms of any credit

facility or other debt instrument we enter into, we are likely to be required by its terms to use the net proceeds of any

investments that we sell to repay a portion of the amount borrowed under such facility or instrument before applying such

net proceeds to any other uses. If the value of our assets decreases, leveraging would cause our net asset value to decline

more sharply than it otherwise would have had we not leveraged, thereby magnifying losses or eliminating our equity stake

in a leveraged investment. Similarly, any decrease in our net investment income will cause our net income to decline more

sharply than it would have had we not borrowed. Such a decline would also negatively affect our ability to make

distributions on our Common Stock or any outstanding preferred stock. Our ability to service our debt depends largely on

our financial performance and is subject to prevailing economic conditions and competitive pressures. Our common

stockholders bear the burden of any increase in our expenses as a result of our use of leverage, including interest expenses

and any increase in the base management fee payable to the Adviser.

***We will be subject to risks associated with any credit facility.*** 

We anticipate that we or a direct subsidiary of ours may enter into one or more credit facilities, including subscription-

based and asset-based revolving credit facilities. Under any credit facility, we will be subject to a variety of risks, including

those set forth below.

***Our interests in any subsidiary that enters into a credit facility would be subordinated, and we may not receive cash on***

***our equity interests from any such subsidiary.*** 

We would consolidate the financial statements of any such subsidiary in our consolidated financial statements and treat the

indebtedness of any such subsidiary as our leverage. Our interests in any wholly-owned direct or indirect subsidiary of ours

would be subordinated in priority of payment to every other obligation of any such subsidiary and would be subject to

certain payment restrictions set forth in the credit facility. We would receive cash distributions on our equity interests in

any such subsidiary only if such a subsidiary had made all required cash interest payments to the lenders, and no default

exists under the credit facility. We cannot assure you that distributions on the assets held by any such subsidiary would be

sufficient to make any distributions to us or that such distributions would meet our expectations.

We would receive cash from any such subsidiary only to the extent that we would receive distributions on our equity

interests in such subsidiary. Any such subsidiary would be able to make distributions on its equity interests only to the

extent permitted by the payment priority provisions of the credit facility. We expect that the credit facility would generally

provide that payments on such interests may not be made on any payment date unless all amounts owing to the lenders and

other secured parties are paid in full. In addition, if such a subsidiary would not meet the borrowing base test set forth in

the credit facility documents, a default would occur. In the event of a default under the credit facility, cash would be

diverted from us to pay the lender and other secured parties until they are paid in full. In the event that we fail to receive

cash from such subsidiary, we would be unable to make distributions to our stockholders in amounts sufficient to maintain

our status as a RIC, or at all. We also could be forced to sell investments in portfolio companies at less than their fair value

in order to continue making such distributions.

Our equity interests in any such subsidiary would rank behind all of the secured and unsecured creditors, known or

unknown, of such subsidiary, including the lenders in the credit facility. Consequently, to the extent that the value of such

subsidiary's portfolio of loan investments would have been reduced as a result of conditions in the credit markets, defaulted

loans, capital gains, and losses on the underlying assets, prepayment, or changes in interest rates, the return on our

investment in such subsidiary could be reduced. Accordingly, our investment in such subsidiary may be subject to up to a

complete loss.

***Our ability to sell investments held by any subsidiary that enters into a credit facility would be limited.*** 

We expect that a credit facility would place significant restrictions on our ability, as servicer, to sell investments. As a

result, there may be times or circumstances during which we would be unable to sell investments or take other actions that

might be in our best interests.

***Any inability to renew, extend, or replace a credit facility could adversely impact our liquidity and ability to find new***

***investments or maintain distributions to our stockholders.*** 

There can be no assurance that we would be able to renew, extend, or replace any credit facility upon its maturity on terms

that are favorable to us, if at all. Our ability to renew, extend, or replace the credit facility would be constrained by then-

current economic conditions affecting the credit markets. In the event that we were not able to renew, extend or replace the

credit facility at the time of its maturity, this could have a material adverse effect on our liquidity and ability to fund new

investments, our ability to make distributions to our stockholders, and our ability to qualify as a RIC.

***Our Shareholders may fail to fund their Capital Commitments when due.*** 

We call only a limited amount of Capital Commitments from shareholders in the Private Offering of shares of our Common

Stock upon each drawdown notice. The timing of drawdowns may be difficult to predict, requiring each shareholder to

maintain sufficient liquidity until its Capital Commitments to purchase shares of Common Stock are fully funded. We may

not call a shareholder's entire Capital Commitment prior to the end of our Investment Period.

Although the Adviser will seek to manage our cash balances so that they are appropriate for our investments and other

obligations, the Adviser's ability to manage cash balances may be affected by changes in the timing of investment closings,

our access to leverage, defaults by our shareholders, late payments of drawdown purchases and other factors.

In addition, we can offer no assurance that all shareholders will satisfy their respective Capital Commitments. To the extent

that one or more shareholders does not satisfy its or their Capital Commitments when due or at all, there could be a

material adverse effect on our business, financial condition and results of operations, including an inability to fund our

investment obligations, make appropriate distributions to our stockholders or to satisfy applicable regulatory requirements

under the 1940 Act. If a shareholder fails to satisfy any part of its Capital Commitment when due, other stockholders who

have an outstanding Capital Commitment may be required to fund such Capital Commitment sooner than they otherwise

would have absent such default. We cannot assure you that we will recover the full amount of the Capital Commitment of

any defaulting shareholder.

***If we do not invest a sufficient portion of our assets in qualifying assets, we could fail to qualify as a BDC or be*** 

***precluded from investing according to our current business strategy.*** 

As a BDC, we may not acquire any assets other than "qualifying assets" unless, at the time of and after giving effect to

such acquisition, at least 70% of our total assets are qualifying assets. See "*Item 1. Regulation as a Business Development* 

*Company — Qualifying Assets*."

In the future, we believe that most of our investments will constitute qualifying assets. However, we may be precluded

from investing in what we believe are attractive investments if such investments are not qualifying assets for purposes of

the 1940 Act. If we do not invest a sufficient portion of our assets in qualifying assets, we could violate the 1940 Act

provisions applicable to BDCs. As a result of such violation, specific rules under the 1940 Act could prevent us, for

example, from making follow-on investments in existing portfolio companies (which could result in the dilution of our

position) or could require us to dispose of investments at inappropriate times in order to come into compliance with the

1940 Act. If we need to dispose of such investments quickly, it could be difficult to dispose of such investments on

favorable terms. We may not be able to find a buyer for such investments, and even if we do find a buyer, we may have to

sell the investments at a substantial loss. Any such outcomes would have a material adverse effect on our business,

financial condition, results of operations, and cash flows.

***Failure to qualify as a BDC would decrease our operating flexibility.*** 

If we do not maintain our status as a BDC, we would be subject to regulation as a registered closed-end investment

company under the 1940 Act. As a registered closed-end investment company, we would be subject to substantially more

regulatory restrictions under the 1940 Act, which would significantly decrease our operating flexibility.

***There may be uncertainty as to the value of our portfolio investments.*** 

The majority of our portfolio investments take the form of securities for which no market quotations are readily available.

The fair value of securities and other investments that are not publicly traded may not be readily determinable, and we

value these securities at fair value as determined by our Adviser's Valuation Committee, including to reflect significant

events affecting the value of our securities. Most, if not all, of our investments (other than cash and cash equivalents) are

classified as Level 3 under Accounting Standards Codification Topic 820 ("ASC 820") issued by the Financial Accounting

Standards Board ("FASB"). This means that our portfolio valuations are based on unobservable inputs and our own

assumptions about how market participants would price the asset or liability in question. Inputs into the determination of

the fair value of our portfolio investments require significant management judgment or estimation. Even if observable

market data are available, such information may be the result of consensus pricing information or broker quotes, which

may include a disclaimer that the broker would not be held to such a price in an actual transaction. The non-binding nature

of consensus pricing and/or quotes accompanied by disclaimers materially reduces the reliability of such information.

In connection with the determination of the fair value of our investments, investment professionals from the Adviser may

provide our Board with portfolio company valuations based upon the most recent portfolio company financial statements

available and projected financial results of each portfolio company. The participation of the Adviser's investment

professionals in our valuation process could result in a conflict of interest as the Adviser's base management fee is based,

in part, on our average adjusted gross assets, and our incentive fees will be based, in part, on unrealized losses.

The valuation for each portfolio investment for which a market quote is not readily available will be reviewed by an

independent valuation firm on a quarterly basis. Investments that have been completed within the past three months will be

fair valued approximating cost unless there has been a material event. The types of factors that the Adviser may take into

account in determining the fair value of our investments generally include, as appropriate, comparison to publicly traded

securities, including such factors as yield, maturity, and measures of credit quality, the enterprise value of a portfolio

company, the nature and realizable value of any collateral, the portfolio company's ability to make payments and its

earnings and discounted cash flow, the markets in which the portfolio company does business and other relevant factors.

Because such valuations, and particularly valuations of private securities and private companies, are inherently uncertain,

may fluctuate over short periods of time, and may be based on estimates, our determinations of fair value may differ

materially from the values that would have been used if a ready market for these securities existed. Our net asset value

could be adversely affected if our determinations regarding the fair value of our investments were materially higher than

the values that we ultimately realize upon the disposal of such securities.

The Adviser adjusts quarterly (or as otherwise may be required by the 1940 Act in connection with the issuance of our

shares) the valuation of our portfolio to reflect its determination of the fair value of each investment in our portfolio. Any

changes in fair value are recorded in the aggregate in our consolidated statement of operations as a net change in unrealized

appreciation or depreciation.

***Our Board may change our investment objective and operating policies without prior notice or stockholder approval.*** 

Our Board has the authority, except as otherwise provided in the 1940 Act, to modify or waive our investment objective

and certain of our operating policies and strategies without prior notice and without stockholder approval. However, absent

stockholder approval, we may not change the nature of our business so as to cease to be or withdraw our election as a BDC.

We cannot predict the effect any changes to our current investment objective, operating policies, and strategies would have

on our business, operating results, and the value of our Common Stock. Nevertheless, any such changes could adversely

affect our business and impair our ability to make distributions.

***Provisions of the Delaware General Corporation Law ("DGCL") and of our Charter and Bylaws could deter takeover*** 

***attempts and have an adverse effect on the price of shares of Common Stock.*** 

The DGCL contains provisions that may discourage, delay, or make more difficult a change in control of us or the removal

of our directors. Our Charter and Bylaws contain provisions that limit liability and provide for indemnification of our

directors and officers. These provisions and others which we may adopt also may have the effect of deterring hostile

takeovers or delaying changes in control or management. We are subject to Section 203 of the DGCL, the application of

which is subject to any applicable requirements of the 1940 Act. This section generally prohibits us from engaging in

mergers and other business combinations with stockholders that beneficially own 15% or more of our voting stock, either

individually or together with their affiliates, unless our directors or stockholders approve the business combination in the

prescribed manner. Our Board will adopt a resolution exempting from Section 203 of the DGCL any business combination

between us and any other person, subject to prior approval of such business combination by our Board, including approval

by a majority of our directors who are not "interested persons." If our Board does not adopt or adopts but later repeals such

resolution exempting business combinations, or if our Board does not approve a business combination, Section 203 of the

DGCL may discourage third parties from trying to acquire control of us and increase the difficulty of consummating such

an offer.

We have also adopted measures that may make it difficult for a third party to obtain control of us, including provisions of

our Charter that classify our Board in three classes serving staggered three-year terms, and provisions of our Charter

authorizing our Board to classify or reclassify shares of our preferred stock in one or more classes or series, to cause the

issuance of additional shares of our stock, and to amend our Charter, without stockholder approval, to increase or decrease

the number of shares of stock that we have authority to issue. These provisions, as well as other provisions we have

adopted in our Charter and Bylaws, may delay, defer or prevent a transaction or a change in control in circumstances that

could give our stockholders the opportunity to realize a premium of the net asset value of shares of our Common Stock.

***We do not currently have comprehensive documentation of our internal controls and have not yet tested our internal*** 

***controls in accordance with Section 404 of SOX, and failure by us to develop effective internal controls over financial*** 

***reporting in accordance with Section 404 could have a material adverse effect on our business and the value of our*** 

***Common Stock.*** 

We have not previously been required to maintain proper and effective internal control over financial reporting, including

the internal control evaluation and certification requirements of Section 404 of SOX. We will not be required to comply

with all of the requirements under Section 404 until we have been subject to the reporting requirements of the Exchange

Act for a specified period of time. Accordingly, our internal controls over financial reporting may not currently meet all of

the standards contemplated by Section 404 that we will eventually be required to meet. We are in the process of addressing

our internal controls over financial reporting and will establish formal procedures, policies, processes, and practices related

to financial reporting and to the identification of key financial reporting risks, assessment of their potential impact, and

linkage of those risks to specific areas and activities within our organization.

Our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control

over financial reporting until the year following our first annual report required to be filed with the SEC. Because we do

not currently have comprehensive documentation of our internal control and have not yet tested our internal control in

accordance with Section 404 of SOX, we cannot conclude, as required by Section 404, that we do not have a material

weakness in our internal control or a combination of significant deficiencies that could result in the conclusion that we have

a material weakness in our internal control. As a public entity, we will be required to complete our initial assessment in a

timely manner. If we are not able to implement the applicable requirements of Section 404 of SOX in a timely manner or

with adequate compliance, our operations, financial reporting, or financial results could be adversely affected. Matters

impacting our internal controls may cause us to be unable to report our financial information on a timely basis and thereby

subject us to adverse regulatory consequences, including sanctions by the SEC, and result in a breach of the covenants

under the agreements governing any of our financing arrangements. There could also be a negative reaction in the financial

markets due to a loss of shareholder confidence in us and the reliability of our consolidated financial statements.

Confidence in the reliability of our consolidated financial statements could also suffer if our independent registered public

accounting firm or we were to report a material weakness in our internal controls over financial reporting. This could

materially adversely affect us.

Our internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations,

including the possibility of human error, the circumvention or overriding of controls, or fraud. Even effective internal

controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements.

If we fail to maintain the adequacy of our internal controls, including any failure to implement required new or improved

controls, or if we experience difficulties in their implementation, our business and operating results could be harmed, and

we could fail to meet our financial reporting obligations.

***We depend on information systems, and systems failures could significantly disrupt our business, which may, in turn,*** 

***negatively affect the value of our Common Stock and our ability to pay distributions.*** 

The operations of the Company, the Adviser, the Administrator, and any third-party service provider to any of the

foregoing are susceptible to risks from cybersecurity attacks and incidents due to reliance on the secure processing, storage,

and transmission of confidential and other information in the relevant computer systems and networks. In particular,

cybersecurity incidents and cyber-attacks have been occurring globally at a more frequent and severe level and will likely

continue to increase in frequency in the future. These attacks could involve gaining unauthorized access to information

systems for purposes of misappropriating assets, stealing confidential information, corrupting data, or causing operational

disruption and result in disrupted operations, misstated or unreliable financial data, liability for stolen assets or information,

increased cybersecurity protection, and insurance costs, litigation, and damage to our business relationships, any of which

could have a material adverse effect on our business, financial condition and results of operations. We, the Adviser and the

Administrator, must each continuously monitor and innovate our cybersecurity to protect our technology and data from

corruption or unauthorized access. In addition, due to the use of third-party vendors, agents, exchanges, clearinghouses,

and other financial institutions and service providers, we, the Adviser, and the Administrator could be adversely impacted

if any of us are subject to a successful cyber-attack or another breach of our information. Although we, the Adviser and the

Administrator, have developed protocols, processes, internal controls, and other protective measures to help mitigate

cybersecurity risks and cyber intrusions, these measures, as well as our increased awareness of the nature and extent of the

risk of a cyber incident, may be ineffective and do not guarantee that a cyber incident will not occur or that our financial

results, operations or confidential information will not be negatively impacted by such an incident. If any of the foregoing

events occur, the confidential and other information of the Company, the Adviser, and the Administrator could be

compromised. Such events could also cause interruptions or malfunctions in the operations of the Company, the Adviser or

the Administrator, and in particular, the Adviser's investment activities on our behalf and the provision of administrative

services to us by the Administrator. The increased use of mobile and cloud technologies can heighten these and other

operational risks.

We, the Adviser and the Administrator currently or in the future are expected to routinely transmit and receive personal,

confidential, and proprietary information by email and other electronic means. We, the Adviser and the Administrator, have

discussed and worked with clients, vendors, service providers, counterparties, and other third parties to develop secure

transmission capabilities and protect against cyber-attacks. However, we, the Adviser, and the Administrator may not be

able to ensure secure capabilities with all of our clients, vendors, service providers, counterparties, and other third parties to

protect the confidentiality of the information.

In addition, the systems and technology resources used by us, our Adviser, our Administrator, and our and their respective

affiliates could be strained by extended periods of remote working by our Adviser, our Administrator, and their affiliate's

employees and such extended remote working could introduce operational risks, including heightened cybersecurity risk.

Remote working environments may be less secure and more susceptible to hacking attacks, including phishing and social

engineering attempts.

***Risks relating to compliance with the AIFMD.*** 

The European Union Directive on Alternative Investment Fund Managers (the "AIFMD" or the "Directive") regulates and

imposes regulatory obligations in respect of the marketing in the European Economic Area (the "EEA") by alternative

investment fund managers (each an "AIFM") (whether established in the EEA or elsewhere) of alternative investment

funds (each an "AIF") (whether established in the EEA or elsewhere). For these purposes, the Adviser is a non-EEA

AIFM, and we are a non-EEA AIF. Each European jurisdiction that has implemented the Directive has implemented a new

and, in most cases, a more restrictive private placement regime in connection with the implementation of the Directive.

The AIFMD could have an adverse effect on the Adviser and us by, among other things, increasing the regulatory burden

and costs of doing business in EEA member states. Except in limited circumstances, a non-EEA AIFM marketing its AIF

to prospective EEA investors will be required to satisfy extensive disclosure obligations, including periodic disclosures to

EEA regulators. The AIFMD could also limit the Adviser's operating flexibility and our investment opportunities.

There is little guidance and limited market practice that has developed in respect to the AIFMD. Many of the provisions of

the AIFMD require the adoption of delegated acts and regulatory technical standards, as well as the establishment of

guidelines. Some, but not all, EEA member states have published the relevant acts, standards, and guidelines. Where these

acts, standards, and guidelines have been implemented, their practical application is still uncertain. As such, it is difficult to

predict the precise impact of the AIFMD on the Adviser and us. Any regulatory changes arising from the transposition of

the AIFMD into national law that impair the ability of the Adviser to manage us or our investments, or limit the Adviser's

ability to market the Common Stock in the future, may materially adversely affect our ability to carry out our investment

approach and achieve our investment objectives.

The Adviser is not subject to the requirements of the Directive to have additional funds of its own and/or professional

indemnity insurance to cover potential liability risks arising from the professional negligence of the Adviser.

***We cannot guarantee our ability to maintain existing SBIC or RBIC licenses or eligibility under the USDA's OneRD*** 

***Guarantee Loan program.***

We cannot guarantee the ability of any of our subsidiaries (in existence now or which may be formed in the future) to

maintain SBIC licenses from the SBA, RBIC licenses from the USDA, or eligibility under the USDA' OneRD Guarantee

Loan program, nor can we anticipate changes in regulatory policies with respect to SBICs, RBICs, or OneRD.

***We will be subject to risks associated with any SBA-guaranteed debentures.***

We issue, as permitted under SBA regulations and through our wholly-owned subsidiaries, the LS SBICs, SBA-guaranteed

debentures to generate cash for funding new investments. To issue SBA-guaranteed debentures, we request commitments

for debt capital from the SBA. The LS SBICs may be exposed to any losses on its portfolio of loans; however, such

debentures are non-recourse to us. Receipt of an SBIC license does not assure that the LS SBICs will receive SBA-

guaranteed debenture funding, which is dependent upon the LS SBICs continuing to be in compliance with SBA regulations

and policies.

***The LS SBICs are licensed by the SBA and are subject to SBA regulations.***

Each of LS SBIC LP and LS SSBIC LP, our wholly-owned subsidiaries, received a license to operate as a SBIC under the

Investment Act and is subject to regulation and oversight regulated by the SBA. The SBA places certain limitations on the

financing terms of investments by SBICs in portfolio companies and regulates the types of financings and prohibits

investing in certain industries. Compliance with SBIC requirements may cause the LS SBICs to make investments at lower

rates in order to qualify investments under the SBA regulations.

Further, SBA regulations require that a licensed SBIC be periodically examined and audited by the SBA to determine its

compliance with the relevant regulations. If either of LS SBIC LP or LS SSBIC LP fails to comply with applicable

regulations, the SBA could, depending on the severity of the violation, limit or prohibit its use of debentures, declare any

outstanding debentures immediately due and payable, and/or limit it from making new investments. In addition, the SBA

could revoke or suspend either of LS SBIC LP or LS SSBIC LP's license for willful or repeated violation of, or willful or

repeated failure to observe, any provision of the Investment Act or any rule or regulation promulgated thereunder. These

actions by the SBA would, in turn, negatively affect us because the LS SBICs are our wholly-owned subsidiaries.

SBA-guaranteed debentures are non-recourse to us, have a 10-year maturity, and may be prepaid at any time without

penalty. The interest rate of SBA-guaranteed debentures is fixed at the time of issuance at a market-driven spread over 10-

year U.S. Treasury Notes. Leverage through SBA-guaranteed debentures is subject to required capitalization thresholds.

Current SBA regulations limit the amount that any single SBIC may borrow to a maximum of $175.0 million, which is up

to twice its regulatory capital, and a maximum of $350.0 million as part of a group of SBICs under common control;

however, there is no guarantee that we will receive such amounts.

The SBA also limits an SBIC's ability to invest idle funds to the following types of securities:

• direct obligations of, or obligations guaranteed as to principal and interest by, the U.S. government, which mature

within 15 months from the date of the investment;

• repurchase agreements with federally insured institutions with a maturity of seven days or less (and the securities

underlying the repurchase obligations must be direct obligations of or guaranteed by the federal government);

• mutual funds, securities or other instruments that exclusively consist of, or represent pooled assets of, investments

described in the first and second bulleted paragraphs above;

• certificates of deposit with a maturity of one year or less, issued by a federally insured institution;

• a deposit account in a federally insured institution that is subject to a withdrawal restriction of one year or less;

• a checking account in a federally insured institution; or

• a reasonable petty cash fund.

***Our ability to adhere to or meet our goals, including Goal2030***<sup>™</sup>***, and our ability to create and preserve jobs and*** 

***stimulate the economy may be limited.***

When setting our goals we sought guidance from outside regulatory frameworks, including the Investment Act, CRA, and

Incentive Act. We can offer no assurances that we will be able to adhere to or meet our goals, including Goal2030<sup>™</sup>, and

nor can we guarantee that such goals will have their intended consequences. While we will strive to (1) increase

employment opportunities, (2) provide significant managerial assistance to small and middle-market companies and (3)

encourage economic growth in Working Class Areas, we can offer no assurances that our goals and actions in pursuits of

these goals will have their intended effects.

***We are subject to risks associated with artificial intelligence and machine learning technology.***

Artificial intelligence, including machine learning and similar tools and technologies that collect, aggregate, analyze or

generate data or other materials, or collectively, AI, and its current and potential future applications including in the private

investment and financial industries, as well as the legal and regulatory frameworks within which AI operates, continue to

rapidly evolve.

Recent technological advances in AI pose risks to the Company, the Adviser, and our portfolio companies. The Company

and our portfolio companies could also be exposed to the risks of AI if third-party service providers or any counterparties,

whether or not known to the Company, also use AI in their business activities. We and our portfolio companies may not be

in a position to control the use of AI technology in third-party products or services.

Use of AI could include the input of confidential information in contravention of applicable policies, contractual or other

obligations or restrictions, resulting in such confidential information becoming partly accessible by other third-party AI

applications and users. While the Adviser does not currently use AI to make investment recommendations, the use of AI

could also exacerbate or create new and unpredictable risks to our business, the Adviser's business, and the business of our

portfolio companies, including by potentially significantly disrupting the markets in which we and our portfolio companies

operate or subjecting us, our portfolio companies and the Investment Adviser to increased competition and regulation,

which could materially and adversely affect business, financial condition or results of operations of us, our portfolio

companies and the Adviser. In addition, the use of AI by bad actors could heighten the sophistication and effectiveness of

cyber and security attacks experienced by our portfolio companies and the Adviser.

Independent of its context of use, AI technology is generally highly reliant on the collection and analysis of large amounts

of data, and it is not possible or practicable to incorporate all relevant data into the model that AI technology utilizes to

operate. Certain data in such models will inevitably contain a degree of inaccuracy and error and could otherwise be

inadequate or flawed, which would be likely to degrade the effectiveness of AI technology. To the extent that we or our

portfolio companies are exposed to the risks of AI use, any such inaccuracies or errors could have adverse impacts on the

Company or our investments.

AI technology and its applications, including in the private investment and financial sectors, continue to develop rapidly,

and it is impossible to predict the future risks that may arise from such developments.

**Risks Relating to Our Investments** 

***Economic recessions or downturns could impair our portfolio companies, and defaults by our portfolio companies will*** 

***harm our operating results.*** 

Many of our portfolio companies are susceptible to economic slowdowns or recessions and may be unable to repay our

loans during these periods. Therefore, our non-performing assets are likely to increase and the value of our portfolio is

likely to decrease during these periods. Adverse economic conditions may decrease the value of collateral securing some of

our loans and the value of our equity investments. Economic slowdowns or recessions could lead to financial losses in our

portfolio and a decrease in revenues, net income, and assets. Unfavorable economic conditions also could increase our

funding costs, limit our access to the capital markets, or result in a decision by lenders not to extend credit to us. These

events could prevent us from increasing our investments and harm our operating results.

A portfolio company's failure to satisfy financial or operating covenants imposed by other lenders or us could lead to

defaults and, potentially, termination of its loans and foreclosure on its assets, which could trigger cross-defaults under

other agreements and jeopardize our portfolio company's ability to meet its obligations under the debt securities that we

hold. We may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms with a

defaulting portfolio company. In addition, lenders in certain cases can be subject to lender liability claims for actions taken

by them when they become too involved in the borrower's business or exercise control over a borrower. It is possible that

we could become subject to a lender's liability claim, including as a result of actions taken if we render managerial

assistance to the borrower.

***Limitations of investment due diligence expose us to investment risk.*** 

Our due diligence may not reveal all of a portfolio company's liabilities and may not reveal other weaknesses in its

business. We can offer no assurance that our due diligence processes will uncover all relevant facts that would be material

to an investment decision. Before making an investment in, or a loan to, a company, our Adviser will assess the strength

and skills of the company's management and other factors that it believes are material to the performance of the

investment.

In making the assessment and otherwise conducting customary due diligence, our Adviser will rely on the resources

available to it and, in some cases, an investigation by third parties. This process is particularly important and highly

subjective with respect to newly organized entities because there may be little or no information publicly available about

the entities.

We may make investments in or loans to companies that are not subject to public company reporting requirements,

including requirements regarding the preparation of consolidated financial statements, and our portfolio companies may

utilize divergent reporting standards that may make it difficult for the Adviser to accurately assess the prior performance of

a portfolio company. We will, therefore, depend upon the compliance by investment companies with their contractual

reporting obligations. As a result, the evaluation of potential investments and our ability to perform due diligence on and

effectively monitor investments may be impeded, and we may not realize the returns which we expect on any particular

investment. In the event of fraud by any company in which we invest or with respect to which we make a loan, we may

suffer a partial or total loss of the amounts invested in that company.

***We may invest in distressed or highly leveraged companies, which could cause you to lose all or part of your*** 

***investment.*** 

We may make investments in restructurings that involve, or otherwise invest in, the debt securities of portfolio companies

that are experiencing or are expected to experience severe financial difficulties. These severe financial difficulties may

never be overcome and may cause such portfolio companies to become subject to bankruptcy proceedings. As such, these

investments could subject us to certain additional potential liabilities that may exceed the value of our original investment.

Under certain circumstances, payments to us may be reclaimed if any such payment or distribution is later determined to

have been a fraudulent conveyance, a preferential payment, or a similar transaction under the applicable bankruptcy and

insolvency laws. In addition, under certain circumstances, a lender that has inappropriately exercised control of the

management and policies of a debtor may have its claims subordinated or disallowed or may be found liable for damages

suffered by parties as a result of such actions.

We may also invest in highly leveraged companies. Investments in leveraged companies involves a number of significant

risks. Leveraged companies in which we invest may have limited financial resources and may be unable to meet their

obligations under their debt securities that we hold. Such developments may be accompanied by a deterioration in the value

of any collateral and a reduction in the likelihood of our realizing any guarantees that we may have obtained in connection

with our investment. Smaller leveraged companies also may have less predictable operating results and may require

substantial additional capital to support their operations, finance their expansion, or maintain their competitive position.

***Our debt investments may be risky, and we could lose all or part of our investments.*** 

The debt instruments in which we invest are typically not initially rated by any rating agency, but we believe that if such

investments were rated, they would be below investment grade (rated lower than "Baa3" by Moody's Investors Service,

lower than "BBB-" by Fitch Ratings or lower than "BBB-" by Standard & Poor's Ratings Services), which under the

guidelines established by these entities is an indication of having predominantly speculative characteristics with respect to

the issuer's capacity to pay interest and repay principal. Bonds that are rated below investment grade are sometimes

referred to as "high yield bonds" or "junk bonds." Therefore, our investments may result in an above-average amount of

risk and volatility or loss of principal.

***Defaults by our portfolio companies will harm our operating results.*** 

A portfolio company's failure to satisfy financial or operating covenants imposed by other lenders or us could lead to

defaults and, potentially, termination of its debt financing and foreclosure on its secured assets, which could trigger cross-

defaults under other agreements and jeopardize a portfolio company's ability to meet its obligations under the debt or

equity securities that we hold. We may incur expenses to the extent necessary to seek recovery upon default or to negotiate

new terms, which may include the waiver of certain financial covenants, with a defaulting portfolio company.

***We may hold the debt securities of leveraged companies that may, due to the significant volatility of such companies,*** 

***enter into bankruptcy proceedings.*** 

Leveraged companies may experience bankruptcy or similar financial distress. The bankruptcy process has a number of

significant inherent risks. Many events in a bankruptcy proceeding are the product of contested matters and adversary

proceedings and are beyond the control of the creditors. A bankruptcy filing by an issuer may adversely and permanently

affect the issuer. If the proceeding is converted to a liquidation, the value of the issuer may not equal the liquidation value

that was believed to exist at the time of the investment. The duration of a bankruptcy proceeding is also difficult to predict,

and a creditor's return on investment can be adversely affected by delays until the plan of reorganization or liquidation

ultimately becomes effective. The administrative costs of a bankruptcy proceeding are frequently high and would be paid

out of the debtor's estate prior to any return to creditors. Because the standards for the classification of claims under

bankruptcy law are vague, our influence with respect to the class of securities or other obligations we own may be lost by

increases in the number and amount of claims in the same class or by different classification and treatment. In the early

stages of the bankruptcy process, it is often difficult to estimate the extent of, or even to identify, any contingent claims that

might be made. In addition, certain claims that have priority by law (for example, claims for taxes) may be substantial.

Depending on the facts and circumstances of our investments and the extent of our involvement in the management of a

portfolio company, upon the bankruptcy of a portfolio company, a bankruptcy court may re-characterize our debt

investments as equity interests and subordinate all or a portion of our claim to that of other creditors. This could occur even

though we may have structured our investment as senior debt.

***Our investments in private and middle market portfolio companies are risky, and you could lose all or part of your*** 

***investment.*** 

Investments in private and middle market companies involve a number of significant risks. Generally, little public

information exists about these companies, and we rely on the ability of the Adviser's investment professionals to obtain

adequate information to evaluate the potential returns from investing in these companies. If the Adviser is unable to

uncover all material information about these companies, it may not make a fully informed investment decision, and we may

lose money on our investments. Middle market companies generally have less predictable operating results and may

require substantial additional capital to support their operations, finance expansion, or maintain their competitive position.

Middle market companies may have limited financial resources, may have difficulty accessing the capital markets to meet

future capital needs, and may be unable to meet their obligations under their debt securities that we hold, which may be

accompanied by a deterioration in the value of any collateral and a reduction in the likelihood of our realizing any

guarantees we may have obtained in connection with our investment. In addition, such companies typically have shorter

operating histories, narrower product lines, and smaller market shares than larger businesses, which tend to render them

more vulnerable to competitors' actions and market conditions, as well as general economic downturns. Additionally,

middle market companies are more likely to depend on the management talents and efforts of a small group of persons.

Therefore, the death, disability, resignation, or termination of one or more of these persons could have a material adverse

impact on our portfolio company and, in turn, on us. Middle market companies also may be parties to litigation and may be

engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence. In addition, our

executive officers, directors, and the Adviser may, in the ordinary course of business, be named as defendants in litigation

arising from our investments in the portfolio companies.

***Subordinated liens on collateral securing debt investments that we make in our portfolio companies may be subject to*** 

***control by senior creditors with first priority liens. If there is a default, the value of such collateral may not be sufficient*** 

***to repay in full both the first priority creditors and us.*** 

Certain debt investments that we make in portfolio companies will be secured on a second priority basis by the same

collateral securing the senior debt of such companies. The first priority liens on the collateral will secure the portfolio

company's obligations under any outstanding senior debt and may secure certain other future debt that may be permitted to

be incurred by the portfolio company under the agreements governing the debt. The holders of obligations secured by the

first priority liens on the collateral will generally control the liquidation of and be entitled to receive proceeds from any

realization of the collateral to repay their obligations in full before us. In addition, the value of the collateral in the event of

liquidation will depend on market and economic conditions, the availability of buyers, and other factors. We can offer no

assurance that the proceeds, if any, from the sale or sales of all of the collateral would be sufficient to satisfy the debt

obligations secured by the second priority liens after payment in full of all obligations secured by the first priority liens on

the collateral. If such proceeds are not sufficient to repay amounts outstanding under the debt obligations secured by the

second priority liens, then we, to the extent not repaid from the proceeds of the sale of the collateral, will only have an

unsecured claim against the portfolio company's remaining assets, if any. Similarly, investments in "last out" pieces of

tranched first-lien loans will be similar to second lien loans in that such investments will be junior in priority to the "first-

out" piece of the same tranched loan with respect to payment of principal, interest, and other amounts.

We may also make unsecured debt investments in portfolio companies, meaning that such investments will not benefit

from any interest in collateral of such companies. Liens on such portfolio companies' collateral, if any, will secure the

portfolio company's obligations under its outstanding secured debt and may secure certain future debt that is permitted to

be incurred by the portfolio company under its secured debt agreements. The holders of obligations secured by such liens

will generally control the liquidation of and be entitled to receive proceeds from any realization of such collateral to repay

their obligations in full before us. In addition, the value of such collateral in the event of liquidation will depend on market

and economic conditions, the availability of buyers, and other factors. We can offer no assurance that the proceeds, if any,

from sales of such collateral would be sufficient to satisfy our unsecured debt obligations after payment in full of all

secured debt obligations. If such proceeds were not sufficient to repay the outstanding secured debt obligations, then our

unsecured claims would rank equally with the unpaid portion of such secured creditors' claims against the portfolio

company's remaining assets, if any.

The rights we may have with respect to the collateral securing the debt investments we make in our portfolio companies

with senior debt outstanding, or first-out pieces of tranched first-lien debt, may also be limited pursuant to the terms of one

or more inter-creditor agreements that we enter into with the holders of senior debt. Under such an inter-creditor

agreement, at any time that obligations that have the benefit of the first priority liens are outstanding, any of the following

actions that may be taken in respect of the collateral will be at the direction of the holders of the obligations secured by the

first priority liens: the ability to cause the commencement of enforcement proceedings against the collateral; the ability to

control the conduct of such proceedings; the approval of amendments to collateral documents; releases of liens on the

collateral; and waivers of past defaults under collateral documents. We may not have the ability to control or direct such

actions, even if our rights are adversely affected.

***The lack of liquidity in our investments may adversely affect our business.*** 

Our investments will be illiquid in most cases, and we can offer no assurance that we will be able to realize on such

investments in a timely manner. A substantial portion of our investments in leveraged companies are and will be subject to

legal and other restrictions on resale or will otherwise be less liquid than more broadly traded public securities. The

illiquidity of these investments may make it difficult for us to sell such investments if the need arises. In addition, if we are

required to liquidate all or a portion of our portfolio quickly, we may realize significantly less than the value at which we

have previously recorded our investments. We may also face other restrictions on our ability to liquidate an investment in a

portfolio company to the extent that we, the Adviser, or any of its affiliates have material nonpublic information regarding

such portfolio company.

In addition, we generally expect to invest in securities, instruments, and assets that are not and are not expected to become

publicly traded. We will generally not be able to sell securities publicly unless the sale is registered under applicable

securities laws or unless an exemption from such registration requirements is available.

Investments may be illiquid and long-term. Illiquidity may result from the absence of an established or liquid market for

investments as well as legal and contractual restrictions on their resale by us. It is generally expected that we will hold

assets to maturity, and the amount of "discretionary sales" of investments generally will be limited. Our investment in

illiquid investments may restrict its ability to dispose of investments in a timely fashion and for a fair price. Furthermore,

we likely will be limited in our ability to sell investments because Lafayette Square and its affiliates may have material,

non-public information regarding the issuers of such loans or investments or as a result of other Lafayette Square policies.

This limited ability to sell investments could materially adversely affect our investment results. As a result, our exposure to

losses, including a potential loss of principal, as a result of which you could potentially lose all or a portion of your

investment in the Company, may be increased due to the illiquidity of our investments generally.

In certain cases, we may also be prohibited by contract from selling our investments for a period of time or otherwise be

restricted from disposing of our investments. Furthermore, certain types of investments expected to be made may require a

substantial length of time to realize a return or fully liquidate. We may exit some investments through distributions in kind

to the stockholders, after which such exit you will still bear the risks associated with holding the securities and must make

your own disposition decisions.

Given the nature of the investments contemplated by the Company, there is a material risk that we will be unable to realize

our investment objectives by sale or other disposition at attractive prices or will otherwise be unable to complete any exit

strategy. In particular, this risk could arise from changes in the financial condition or prospects of the portfolio company in

which the investment is made, changes in national or international economic conditions, changes in debt and equity capital

markets, and changes in laws, regulations, fiscal policies or political conditions of countries in which investments are

made.

In connection with the disposition of an investment in a portfolio company, we may be required to make representations

about the business and financial affairs of the portfolio company or may be responsible for the contents of disclosure

documents under applicable securities laws. We may also be required to indemnify the purchasers of such investment or

underwriters to the extent that any such representations or disclosure documents turn out to be incorrect, inaccurate, or

misleading. These arrangements may result in contingent liabilities, for which we may establish reserves or escrows.

However, we can offer no assurance that we will adequately reserve for our contingent liabilities and that such liabilities

will not have an adverse effect on us. Such contingent liabilities might ultimately have to be funded by proceeds, including

the return of capital, from our other investments.

***Price declines and illiquidity in the corporate debt markets may adversely affect the fair value of our portfolio*** 

***investments, reducing our net asset value through increased net unrealized depreciation.*** 

As a BDC, we are required to carry our investments at market value or, if no market value is ascertainable, at fair value as

determined by our Adviser. As part of the valuation process, our Adviser may take into account the following types of

factors, if relevant, in determining the fair value of our investments:

• a comparison of the portfolio company's securities to publicly traded securities;

• the enterprise value of the portfolio company;

• the nature and realizable value of any collateral;

• the portfolio company's ability to make payments and its earnings and discounted cash flow;

• the markets in which the portfolio company does business; and

• changes in the interest rate environment and the credit markets generally that may affect the price at which similar

investments may be made in the future and other relevant factors.

When an external event such as a purchase transaction, public offering, or subsequent equity sale occurs, we use the pricing

indicated by the external event to corroborate our valuation. We record decreases in the market values or fair values of our

investments as unrealized depreciation. Declines in prices and liquidity in the corporate debt markets may result in

significant net unrealized depreciation in our portfolio. The effect of all of these factors on our portfolio may reduce our net

asset value by increasing net unrealized depreciation in our portfolio. Depending on market conditions, we could incur

substantial realized losses and may suffer additional unrealized losses in future periods, which could have a material

adverse effect on our business, financial condition, results of operations, and cash flows.

***Our prospective portfolio companies may be unable to repay or refinance outstanding principal on their loans at or*** 

***prior to maturity, and rising interest rates may make it more difficult for portfolio companies to make periodic payments*** 

***on their loans.*** 

The portfolio companies in which we expect to invest may be unable to repay or refinance outstanding principal on their

loans at or prior to maturity. This risk and the risk of default is increased to the extent that the loan documents do not

require the portfolio companies to pay down the outstanding principal of such debt prior to maturity. In addition, if general

interest rates rise, there is a risk that our portfolio companies will be unable to pay escalating interest amounts, which could

result in a default under their loan documents with us. Rising interest rates could also cause portfolio companies to shift

cash from other productive uses to the payment of interest, which may have a material adverse effect on their business and

operations and could, over time, lead to increased defaults. Any failure of one or more portfolio companies to repay or

refinance its debt at or prior to maturity or the inability of one or more portfolio companies to make ongoing payments

following an increase in contractual interest rates could have a material adverse effect on our business, financial condition,

results of operations and cash flows.

***Our prospective portfolio companies may prepay loans, which may reduce our yields if capital returned to us cannot be*** 

***invested in transactions with equal or greater expected yields.*** 

The loans in our investment portfolio may be prepaid at any time, generally with little advance notice. Whether a loan is

prepaid will depend both on the continued positive performance of the portfolio company and the existence of favorable

financing market conditions that allow such a company the ability to replace existing financing with less expensive capital.

As market conditions change, we do not know when, and if, prepayment may be possible for each portfolio company. In

some cases, the prepayment of a loan may reduce our achievable yield if the capital returned to us cannot be invested in

transactions with equal or greater expected yields, which could have a material adverse effect on our business, financial

condition, and results of operations.

***Our investments in portfolio companies may expose us to environmental risks.*** 

We may invest in portfolio entities that are subject to changing and increasingly stringent environmental and health and

safety laws, regulations, and permit requirements and environmental costs that could place increasing financial burdens on

such portfolio entities. Required expenditures for environmental compliance may adversely impact investment returns on

portfolio entities. The imposition of new environmental and other laws, regulations, and initiatives could adversely affect

the business operations and financial stability of portfolio entities.

There can be no guarantee that all costs and risks regarding compliance with environmental laws and regulations can be

identified. New and more stringent environmental and health and safety laws, regulations and permit requirements, or

stricter interpretations of current laws or regulations could impose substantial additional costs on portfolio investment or

potential investments. Changes in federal environmental policy, including potential shifts in regulatory enforcement

priorities under the current administration, may create uncertainty regarding the scope and application of environmental

requirements applicable to our portfolio companies. In addition, state governments located in specific regions in which we

invest may impose more stringent environmental regulations than those required at the federal level. Compliance with such

current or future environmental requirements does not ensure that the operations of the portfolio investments will not cause

injury to the environment or to people under all circumstances or that the portfolio investments will not be required to incur

additional unforeseen environmental expenditures. Moreover, failure to comply with any such requirements could have a

material adverse effect on an investment, and we can offer no assurance that the portfolio investments will at all times

comply with all applicable environmental laws, regulations and permit requirements.

***We have not yet identified all of the portfolio company investments we will acquire, and there is no certainty how long it*** 

***will take to identify such investments or whether we will be able to find a sufficient number of such businesses to*** 

***meaningfully populate our portfolio.*** 

We have not yet identified all of the potential investments for our portfolio that we will acquire with the proceeds of any

sales of our securities or repayments of investments currently in our portfolio. Privately negotiated investments in illiquid

securities or private middle market companies require substantial due diligence and structuring (particularly to identify and

underwrite non-sponsored businesses), and we cannot assure you that we will achieve our anticipated investment pace or

be able to find a sufficient number of such businesses to meaningfully populate our portfolio. The Adviser selects all of our

investments, and our stockholders will have no input with respect to such investment decisions. These factors increase the

uncertainty, and thus the risk of investing in our securities. Until such appropriate investment opportunities can be found,

we may also invest the net proceeds in cash, cash equivalents, U.S. government securities, and high-quality debt

investments that mature in one year or less from the date of investment. We expect these temporary investments to earn

yields substantially lower than the income that we expect to receive in respect of our targeted investment types. As a result,

any distributions we make during this period may be substantially smaller than the distributions that we expect to pay when

our portfolio is fully invested.

***We are a non-diversified investment company within the meaning of the 1940 Act, and therefore we are not limited with*** 

***respect to the proportion of our assets that may be invested in securities of a single issuer.*** 

We are classified as a non-diversified investment company within the meaning of the 1940 Act, which means that we are

not limited by the 1940 Act with respect to the proportion of our assets that we may invest in securities of a single issuer.

To the extent that we assume large positions in the securities of a small number of issuers, our net asset value may fluctuate

to a greater extent than that of a diversified investment company as a result of changes in the financial condition or the

market's assessment of the issuer. We may also be more susceptible to any single economic or regulatory occurrence than a

diversified investment company. Beyond our asset diversification requirements as a RIC under the IRC, we do not have

fixed guidelines for diversification, and our investments could be concentrated in relatively few portfolio companies.

Although we are classified as a non-diversified investment company within the meaning of the 1940 Act, we maintain the

flexibility to operate as a diversified investment company. To the extent that we operate as a non-diversified investment

company, we may be subject to greater risk.

***Our portfolio may be concentrated in a limited number of portfolio companies and industries, which will subject us to a*** 

***risk of significant loss if any of these companies defaults on its obligations under any of its debt instruments or if there*** 

***is a downturn in a particular industry.*** 

Our portfolio may at times be concentrated in a limited number of portfolio companies and industries, including as a result

of our focus on non-sponsored middle market businesses in specific geographies and sectors. As a result, the aggregate

returns we realize may be significantly and adversely affected if a small number of investments perform poorly or if we

need to write down the value of any one investment. Additionally, while we are not targeting any specific industries, our

investments may be concentrated in relatively few industries. For example, although we may classify the industries of our

portfolio companies by end-market (such as health market or business services) and not by the products or services (such as

software) directed to those end-markets, some of our portfolio companies may principally provide software products or

services, which exposes us to downturns in that sector. As a result, a downturn in any particular industry in which we are

invested could also significantly impact the aggregate returns we realize.

***Our portfolio may lack geographic diversification across Target Regions.***

While our goal is to invest at least 5% of our assets in each of our Target Regions over time, achieving and maintaining

geographic diversification across all ten regions may be limited by geographically diverse manner due to general market

conditions, the time necessary to identify, evaluate, structure, negotiate and close suitable in-vestments in private middle

market companies, and the potential for allocations to other affiliated investment vehicles which focus their investments on

a specific region. As a result, at any point in time, we may invest a disproportionate amount in certain regions, and there

can be no assurance that we will achieve geographic diversification across all ten regions.

***Our failure to make follow-on investments in our portfolio companies could impair the value of our portfolio.*** 

Following an initial investment in a portfolio company, we may make additional investments in that portfolio company as

"follow-on" investments, in seeking to:

• increase or maintain in whole or in part our position as a creditor or equity ownership percentage in a portfolio

company;

• exercise warrants, options, or convertible securities that were acquired in the original or subsequent financing; or

• preserve or enhance the value of our investment.

We have the discretion to make follow-on investments, subject to the availability of capital resources, and certain

limitations on co-investment with affiliates under the 1940 Act. Failure on our part to make follow-on investments may, in

some circumstances, jeopardize the continued viability of a portfolio company and our initial investment, or may result in a

missed opportunity for us to increase our participation in a successful portfolio company. Even if we have sufficient capital

to make a desired follow-on investment, we may elect not to make a follow-on investment because we may not want to

increase our level of risk because we prefer other opportunities, or because of regulatory or other considerations. Our

ability to make follow-on investments may also be limited by the Adviser's allocation policies and procedures.

***Because we generally do not hold controlling equity interests in our portfolio companies, we may not be able to control*** 

***our portfolio companies or to prevent decisions by management of our portfolio companies that could decrease the*** 

***value of our investments.*** 

To the extent that we do not hold controlling equity interests in portfolio companies, we will have a limited ability to

protect our position in such portfolio companies. We may also co-invest with third parties through partnerships, joint

ventures, or other entities. Such investments may involve risks in connection with such third-party involvement, including

the possibility that a third-party co-investor may have economic or business interests or goals that are inconsistent with

ours or may be in a position to take (or block) action in a manner contrary to our investment objective. In those

circumstances where such third parties involve a management group, such third parties may receive compensation

arrangements relating to such investments, including incentive compensation arrangements.

***We can offer no assurance that portfolio company management will be able to operate their companies in accordance*** 

***with our expectations.*** 

The day-to-day operations of each portfolio company in which we invest will be the responsibility of that portfolio

company's management team. Although we will be responsible for monitoring the performance of each investment and

generally intend to invest in portfolio companies operated by strong management, we can offer no assurance that the

existing management team, or any successor, will be able to operate any such portfolio company in accordance with our

expectations. We can offer no assurance that a portfolio company will be successful in retaining key members of its

management team, the loss of whom could have a material adverse effect on us. Although we generally intend to invest in

companies with strong management teams and defensible market positions, we can offer no assurance that the existing

management of such companies will continue to operate a company successfully.

***Our portfolio companies may incur debt that ranks equally with, or senior to, our investments in such companies, and*** 

***such portfolio companies may not generate sufficient cash flow to service their debt obligations to us.*** 

We may invest a portion of our capital in second lien and subordinated loans issued by our portfolio companies. Our

portfolio companies may have, or be permitted to incur, other debt that ranks equally with, or senior to, the debt securities

in which we invest. Such subordinated investments are subject to a greater risk of default than senior obligations as a result

of adverse changes in the financial condition of the obligor or in general economic conditions. If we make a subordinated

investment in a portfolio company, the portfolio company may be highly leveraged, and its relatively high debt-to-equity

ratio may create increased risks that its operations might not generate sufficient cash flow to service all of its debt

obligations. By their terms, such debt instruments may provide that the holders are entitled to receive payment of interest or

principal on or before the dates on which we are entitled to receive payments in respect of the securities in which we invest.

These debt instruments would usually prohibit the portfolio companies from paying interest on or repaying our investments

in the event of and during the continuance of a default under such debt. Also, in the event of insolvency, liquidation,

dissolution, reorganization, or bankruptcy of a portfolio company, holders of securities ranking senior to our investment in

that portfolio company would typically be entitled to receive payment in full before we receive any distribution in respect

of our investment. After repaying senior creditors, the portfolio company may not have any remaining assets to use for

repaying its obligation to us where we are the junior creditor. In the case of debt ranking equally with debt securities in

which we invest, we would have to share any distributions on an equal and ratable basis with other creditors holding such

debt in the event of an insolvency, liquidation, dissolution, reorganization, or bankruptcy of the relevant portfolio

company.

Additionally, certain loans that we make to portfolio companies may be secured on a second priority basis by the same

collateral securing the senior secured debt of such companies. The first priority liens on the collateral will secure the

portfolio company's obligations under any outstanding senior debt and may secure certain other future debt that may be

permitted to be incurred by the portfolio company under the agreements governing the loans. The holders of obligations

secured by first priority liens on the collateral will generally control the liquidation of and be entitled to receive proceeds

from any realization of the collateral to repay their obligations in full before us. In addition, the value of the collateral in the

event of liquidation will depend on market and economic conditions, the availability of buyers, and other factors. Similarly,

investments in "last out" pieces of tranched first-lien loans will be similar to second lien loans in that such investments will

be junior in priority to the "first-out" piece of the same tranched first-lien loan with respect to payment of principal,

interest, and other amounts. We can offer no assurance that the proceeds, if any, from sales of all of the collateral would be

sufficient to satisfy the loan obligations secured by the second priority liens or the "last out" pieces of the tranched first-lien

loans after payment in full of all obligations secured by the first priority liens on the collateral. If such proceeds were not

sufficient to repay amounts outstanding under the loan obligations secured by the second priority liens or the "last out"

pieces of unitranche loans, then we, to the extent not repaid from the proceeds of the sale of the collateral, will only have an

unsecured claim against the portfolio company's remaining assets, if any.

We may make unsecured loans to portfolio companies, meaning that such loans will not benefit from any interest in

collateral of such companies. Liens on a portfolio company's collateral, if any, will secure the portfolio company's

obligations under its outstanding secured debt and may secure certain future debt that is permitted to be incurred by the

portfolio company under its secured loan agreements. The holders of obligations secured by such liens will generally

control the liquidation of and be entitled to receive proceeds from any realization of such collateral to repay their

obligations in full before us. In addition, the value of such collateral in the event of liquidation will depend on market and

economic conditions, the availability of buyers, and other factors. We can offer no assurance that the proceeds, if any, from

sales of such collateral would be sufficient to satisfy our unsecured loan obligations after payment in full of all loans

secured by collateral. If such proceeds were not sufficient to repay the outstanding secured loan obligations, then our

unsecured claims would rank equally with the unpaid portion of such secured creditors' claims against the portfolio

company's remaining assets, if any.

The rights we may have with respect to the collateral securing any junior priority loans, including any "last out" pieces of

tranched first-lien loans, we make to our portfolio companies may also be limited pursuant to the terms of one or more

intercreditor agreements that we enter into (or the absence of an intercreditor agreement) with the holders of senior debt.

Under a typical intercreditor agreement, at any time that obligations that have the benefit of the first priority liens are

outstanding, any of the following actions that may be taken in respect of the collateral will be at the direction of the holders

of the obligations secured by the first priority liens:

• the ability to cause the commencement of enforcement proceedings against the collateral;

• the ability to control the conduct of such proceedings;

• the approval of amendments to collateral documents;

• releases of liens on the collateral; and

• waivers of past defaults under collateral documents.

• we may not have the ability to control or direct such actions, even if our rights as junior lenders are adversely

affected.

***The liability of each of the Adviser and the Administrator is limited, and we have agreed to indemnify each against*** 

***certain liabilities, which may lead them to act in a riskier manner on our behalf than each would when acting for its*** 

***own account.*** 

Under the Investment Advisory Agreement, the Adviser does not assume any responsibility to us other than to render the

services called for under that agreement, and it is not responsible for any action of our Board in following or declining to

follow the Adviser's advice or recommendations. Under the terms of the Investment Advisory Agreement, the Adviser, its

officers, members, personnel, and any person controlling or controlled by the Adviser are not liable to us, any subsidiary of

ours, our directors, our stockholders, or any subsidiary's stockholders or partners for acts or omissions performed in

accordance with and pursuant to the Investment Advisory Agreement, except those resulting from acts constituting gross

negligence, willful misconduct, bad faith or reckless disregard of the Adviser's duties under the Investment Advisory

Agreement. In addition, we have agreed to indemnify the Adviser and each of its officers, directors, members, managers,

and employees from and against any claims or liabilities, including reasonable legal fees and other expenses, reasonably

incurred, arising out of or in connection with our business and operations or any action taken or omitted on our behalf

pursuant to authority granted by the Investment Advisory Agreement, except where attributable to gross negligence, willful

misconduct, bad faith or reckless disregard of such person's duties under the Investment Advisory Agreement. Under the

Administration Agreement, the Administrator and certain specified parties providing administrative services pursuant to

that agreement are not liable to our stockholders for or us, and we have agreed to indemnify them for any claims or losses

arising out of the good faith performance of their duties or obligations under the Administration Agreement, except those

liabilities resulting primarily attributable to gross negligence, willful misconduct, bad faith or reckless disregard of the

Administrator's duties under the Administration Agreement. These protections may lead the Adviser or the Administrator

to act in a riskier manner when acting on our behalf than it would when acting for its own account.

***We may be subject to risks under hedging transactions.*** 

We may engage in hedging transactions to the limited extent such transactions are permitted under the 1940 Act and

applicable commodities laws. Engaging in hedging transactions would entail additional risks to our stockholders. We

could, for example, use instruments such as interest rate swaps, caps, collars, and floors. In each such case, we generally

would seek to hedge against fluctuations of the relative values of our portfolio positions from changes in market interest

rates. Hedging against a decline in the values of our portfolio positions would not eliminate the possibility of fluctuations

in the values of such positions or prevent losses if the values of the positions declined. However, such hedging could

establish other positions designed to gain from those same developments, thereby offsetting the decline in the value of such

portfolio positions. Such hedging transactions could also limit the opportunity for gain if the values of the underlying

portfolio positions increased. Moreover, it might not be possible to hedge against an interest rate fluctuation that was so

generally anticipated that we would not be able to enter into a hedging transaction at an acceptable price. The use of a

hedging transaction could involve counterparty credit risk.

The success of any hedging transactions we may enter into will depend on our ability to correctly predict movements in

interest rates. Therefore, while we may enter into hedging transactions to seek to reduce interest rate risks, unanticipated

changes in interest rates could result in poorer overall investment performance than if we had not engaged in any such

hedging transactions. In addition, the degree of correlation between price movements of the instruments used in a hedging

strategy and price movements in the portfolio positions being hedged could vary. Moreover, for a variety of reasons, we

might not seek to (or be able to) establish a perfect correlation between the hedging instruments and the portfolio holdings

being hedged. Any such imperfect correlation could prevent us from achieving the intended hedge and expose us to the risk

of loss. Our ability to engage in hedging transactions may also be adversely affected by rules adopted by the CFTC.

***We may not realize gains from our equity investments.*** 

When we invest in unitranche, second lien, and subordinated loans, we may acquire warrants or other equity securities of

portfolio companies as well. We may also invest in equity securities directly. To the extent we hold equity investments, we

will seek to dispose of them and realize gains upon our disposition of them. However, the equity interests we receive may

not appreciate in value and may decline in value. As a result, we may not be able to realize gains from our equity interests,

and any gains that we do realize on the disposition of any equity interests may not be sufficient to offset any other losses

we experience.

***We may be subject to risks to the extent we provide substantial managerial assistance to our portfolio companies.*** 

To the extent we participate substantially in the conduct of the management of certain of our portfolio companies, such as

designating directors to serve on the boards of directors of certain portfolio companies, such designation of representatives

and other measures contemplated could expose our assets to claims by a portfolio company in which we invest, its security-

holders and its creditors, including claims that we are a controlling person and thus are liable for securities laws violations

of a portfolio company. These measures also could result in certain liabilities in the event of the bankruptcy or

reorganization of a portfolio company, could result in claims against us if a designated director violates their fiduciary or

other duties to a portfolio company or fail to exercise appropriate levels of care under applicable corporate or securities

laws, environmental laws or other legal principles, and could expose us to claims that we have interfered in management to

the detriment of a portfolio company.

***There can be no guarantee that our portfolio companies will adopt Managerial Assistance Recommendations or that*** 

***such recommendations will have their intended effect.***

Our portfolio companies retain full discretion regarding whether to adopt Managerial Assistance Recommendations, and

there can be no assurance that a sufficient number of portfolio companies will choose to do so. Even where such

recommendations are adopted, we cannot guarantee that they will improve employee well-being, retention, or productivity,

or that they will have a positive effect on the financial performance of the portfolio company. If portfolio companies fail to

adopt Managerial Assistance Recommendations at levels sufficient to meet our Goal2030™ benchmarks, we may forfeit

interest rate step-downs under our senior secured revolving credit facility, which could increase our cost of capital and

adversely affect our results of operations and returns to stockholders.

**Risks Relating to Our Common Stock** 

***There is no public market for shares of our Common Stock, and we do not expect there to be a market for our shares.*** 

There is no existing trading market for shares of our Common Stock, and no market for our shares may develop in the

future. If developed, any such market may not be sustained. In the absence of a trading market, holders of shares of our

Common Stock may be unable to liquidate an investment in our shares.

The shares of our Common Stock have not been registered under the Securities Act or any state securities laws and, unless

so registered, may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the

registration requirements of the Securities Act and applicable state securities laws.

***There are restrictions on the ability of holders of our Common Stock to transfer shares in excess of the restrictions*** 

***typically associated with a private offering of securities under Regulation D and other exemptions from registration*** 

***under the Securities Act, and these restrictions could limit the liquidity of an investment in shares of our Common Stock*** 

***and the price at which holders may be able to sell the shares.*** 

We are relying on an exemption from registration under the Securities Act and state securities laws in offering shares of our

Common Stock pursuant to the Subscription Agreements. As such, absent an effective Registration Statement covering our

Common Stock, such shares may be resold only in transactions that are exempt from the registration requirements of the

Securities Act and with our prior consent. Our Common Stock will have limited transferability, which could delay, defer or

prevent a transaction or a change of control of the Company that might involve a premium price for our securities or

otherwise be in the best interest of our stockholders.

***During periods of capital markets disruption and economic uncertainty, there is a risk that you may not receive*** 

***distributions or that our distributions may not grow over time, and a portion of our distributions may be a return of*** 

***capital.*** 

We intend to make periodic distributions to our stockholders out of assets legally available for distribution. We cannot

assure you that we will achieve investment results that will allow us to make a specified level of cash distributions or year-

to-year increases in cash distributions. Our ability to pay distributions might be adversely affected by the impact of one or

more of the risk factors described in this Registration Statement, especially if there are reduced cash flows to us from our

portfolio companies, which could reduce cash available for distribution to our stockholders. Due to the asset coverage test

applicable to us under the 1940 Act as a BDC, we may be limited in our ability to make distributions. To the extent we

make distributions to stockholders that include a return of capital, such a portion of the distribution essentially constitutes a

return of the stockholder's investment. Although such return of capital may not be taxable, such distributions may increase

a shareholder's tax liability for capital gains upon the future sale of our Common Stock. A return of capital distribution

may cause a stockholder to recognize a capital gain from the sale of our Common Stock even if the stockholder sells its

shares for less than the original purchase price.

***Investing in our Common Stock may involve an above-average degree of risk.*** 

The investments we make in accordance with our investment objective may result in a higher amount of risk than

alternative investment options and a higher risk of volatility or loss of principal. Our investments in portfolio companies

involve higher levels of risk, and therefore, an investment in our shares may not be suitable for someone with lower risk

tolerance. In addition, our Common Stock is intended for long-term shareholders who can accept the risks of investing

primarily in illiquid loans and other debt or debt-like instruments and should not be treated as a trading vehicle.

***Our stockholders may experience dilution in their ownership percentage.*** 

Our stockholders do not have preemptive rights to any shares of our Common Stock we issue in the future. To the extent

that we issue additional equity interests at or below net asset value, your percentage ownership interest in us may be

diluted. In addition, depending upon the terms and pricing of any future sales of Common Stock and the value of our

investments, you may also experience dilution in the book value and fair value of your shares.

Under the 1940 Act, we generally are prohibited from issuing or selling shares of our Common Stock at a price below net

asset value per share, which may be a disadvantage as compared with certain public companies. We may, however, sell

shares of our Common Stock, or warrants, options, or rights to acquire shares of our Common Stock, at a price below the

current net asset value of shares of our Common Stock if our Board determines that such sale is in our best interests and the

best interests of our stockholders, and our stockholders, including a majority of those stockholders that are not affiliated

with us, approve such sale. In any such case, the price at which our securities are to be issued and sold may not be less than

a price that, in the determination of our Board, closely approximates the fair value of such securities (less any distributing

commission or discount). If we raise additional funds by issuing shares of our Common Stock or senior securities

convertible into, or exchangeable for, shares of our Common Stock, then the percentage ownership of our stockholders at

that time will decrease, and you will experience dilution.

Purchases of Common Stock pursuant to the Subscription Agreements will generally be made pro-rata in accordance with

the remaining capital commitments of all shareholders. However, we may request capital contributions on a non-pro rata

basis in accordance with the terms of the Subscription Agreement. To the extent a shareholder is required to purchase less

than its pro-rata share of a drawdown of subscriber capital commitments, such stockholders will experience dilution in their

percentage ownership of the Company.

In the event that we enter into a Subscription Agreement with one or more shareholders after the Initial Drawdown, each

such shareholder will be required to make Catch-up Purchases on one or more dates to be determined by us. Each Catch-up

Purchase will dilute the ownership percentage of all shareholders whose subscriptions were accepted at previous closings.

As a result, each subsequent closing after the Initial Closing will result in existing stockholders in the Company

experiencing dilution as a result of Catch-up Purchases.

***Our stockholders will experience dilution in their ownership percentage if they do not opt-in to our dividend*** 

***reinvestment plan.*** 

We have an "opt-out" DRIP pursuant to which all distributions declared will be payable in shares of our Common Stock

unless stockholders elect to receive their distributions in cash. As a result, our stockholders that do "opt-out" to our DRIP

will experience dilution in their ownership percentage of our Common Stock over time. See "*Item 9 – Market Price of and* 

*Dividends on the Registrant's Common Equity and Related Stockholder Matters–Distribution Policy" and "—Dividend* 

*Reinvestment Plan*" for a description of our dividend policy and obligations.

***Our stockholders may receive shares of our Common Stock as distributions, which could result in adverse tax*** 

***consequences to them.*** 

In order to satisfy the annual distribution requirement applicable to RICs, we will have the ability to declare a large portion

of a dividend in shares of our Common Stock instead of in cash. Revenue Procedures issued by the IRS allow a publicly

offered regulated investment company (as defined above) to distribute its own stock as a dividend for the purpose of

fulfilling its distribution requirements if certain conditions are satisfied. As long as a portion of such dividend is paid in

cash (which portion may be as low as 10% of such dividend, for distributions declared by June 30, 2022, and 20% of such

dividends, for distributions declared on or after July 1, 2022) and certain requirements are met, the entire distribution will

be treated as a dividend for U.S. federal income tax purposes. As a result, a stockholder generally would be subject to tax

on 100% of the fair market value of the dividend on the date the dividend is received by the stockholder in the same

manner as a cash dividend, even though most of the dividend was paid in shares of our Common Stock. We currently do

not intend to pay distributions in shares of our Common Stock.

***We may, in the future, determine to issue preferred stock, which could adversely affect the value of shares of Common*** 

***Stock.*** 

The issuance of preferred stock with dividend or conversion rights, liquidation preferences, or other economic terms

favorable to the holders of preferred stock could make an investment in shares of Common Stock less attractive. In

addition, the distributions on any preferred stock we issue must be cumulative. Payment of distributions and repayment of

the liquidation preference of preferred stock must take preference over any distributions or other payments to holders of

Common Stock, and holders of preferred stock are not subject to any of our expenses or losses and are not entitled to

participate in any income or appreciation in excess of their stated preference (other than convertible preferred stock that

converts into shares of Common Stock). In addition, under the 1940 Act, the preferred stock would constitute a "senior

security" for purposes of the 150% asset coverage test.

***Shareholders will not have any redemption rights in respect of the Common Stock, and there is no meaningful liquidity*** 

***risk to manage.*** 

To the extent required by laws implementing the Directive in any relevant EEA member state, the information in respect of

the Company required to be disclosed pursuant to Article 23(4) and (5) of the Directive will be made available to each

investor as follows:

a) Any new arrangements for managing our liquidity, without undue delay in a disclosure notice delivered to each

investor.

b) Our current risk profile and the risk management systems employed by the Adviser to manage those risks, in each

annual report.

c) Any changes to the maximum level of leverage which the Adviser may employ on our behalf as well as any right

of the reuse of collateral or any guarantee granted under the leveraging arrangement, without undue delay in a

disclosure notice delivered to each investor. Please note, we do not intend to employ collateral and asset reuse

arrangements.

d) The total amount of leverage employed by us, in each annual report.

**General Risk Factors** 

***Political, social and economic uncertainty, including uncertainty related to global pandemics, creates and exacerbates*** 

***risks.*** 

Social, political, economic and other conditions and events will occur that create uncertainty and have significant impacts

on issuers, industries, governments and other systems, including the financial markets, to which the Company and its

investments are exposed. In addition, global economies and financial markets are increasingly interconnected, and political,

economic and other conditions and events in one country, region, or financial market may adversely impact issuers in a

different country, region or financial market. Furthermore, the occurrence of, among other events, natural or man-made

disasters, severe weather or geological events, fires, floods, earthquakes, outbreaks of disease (such as COVID-19, avian

influenza or H1N1/09), epidemics, pandemics, malicious acts, cyber-attacks, terrorist acts or the occurrence of climate

change, may also adversely impact our performance from time to time. Such events may result in, and have resulted in,

closing borders, securities exchange closures, health screenings, healthcare service delays, quarantines, cancellations,

supply chain disruptions, lower consumer demand, market volatility and general uncertainty. We may be negatively

impacted if the value of our portfolio company holdings were harmed by such political or economic conditions or events.

Moreover, such negative political and economic conditions may disrupt the processes necessary for our operations. This

may create widespread business continuity issues for us and our portfolio companies and heightened cybersecurity,

information security and operational risks as a result of, among other things, remote work arrangements.

Outbreaks such as the severe acute respiratory syndrome, avian influenza, H1N1/09, and, most recently, the coronavirus

(COVID-19), or other similarly infectious diseases may have material adverse impacts on the Company, the Adviser, their

respective affiliates and portfolio companies. Actual pandemics, or fear of pandemics, can trigger market disruptions or

economic turn-downs with the consequences described above. The Adviser cannot predict the likelihood of disease

outbreaks occurring in the future nor how such outbreaks may affect the Company's investments.

The outbreak of disease epidemics may result in the closure of the Adviser's and/or a portfolio company's offices or other

businesses, including office buildings, retail stores and other commercial venues and could also result in (a) the lack of

availability or price volatility of raw materials or component parts necessary to a portfolio company's business which may

adversely affect the ability of a portfolio company to perform its obligations, (b) disruption of regional or global trade

markets and/or the availability of capital, (c) the availability of leverage, including an inability to obtain indebtedness at all

or to the Company's desired degree, and less favorable timing of repayment and other terms with respect to such leverage,

(d) trade or travel restrictions which impact a portfolio company's business and/or (e) a general economic decline and have

an adverse impact on the Company's value, the Company's investments, or the Company's ability to make new

investments. If a future pandemic occurs (including a recurrence of COVID-19) during a period when the Company

expects to be harvesting its investments, the Company may not achieve its investment objective or may not be able to

realize its investments within the Company's term.

***Ongoing international events, including geopolitical conflicts and trade policy uncertainty, have increased global*** 

***political and economic uncertainty, which may have a material impact on the Company's portfolio and the value of your*** 

***investment in the Company.***

The ongoing war between Russia and Ukraine and associated sanctions placed on certain Russian entities and individuals

by the United States and other countries, continue to contribute to global political and economic uncertainty. Although US-

mediated peace negotiations are underway, the conflict remains unresolved and continues to affect global energy markets,

supply chains, and inflation. There is also the ongoing risk of retaliatory actions by Russia against countries that have

enacted sanctions, including cyberattacks against financial and governmental institutions, which could result in business

disruptions and further economic turbulence.

In the Middle East, although Israel and Hamas entered into a US-brokered ceasefire framework in October 2025, the

situation remains fragile, with ongoing hostilities and significant uncertainty regarding the durability and implementation

of the agreement. Broader regional instability, including ongoing tensions between Israel and Iran and other state and non-

state actors in the region, continues to pose risks to global markets.

In particular, escalating tensions between the United States and Iran present a distinct set of risks that could materially

affect the Company's portfolio. Iran is a significant producer of oil, and any further escalation — including military

conflict, sanctions, or disruption to regional shipping routes such as the Strait of Hormuz — could cause significant

increases in energy prices, exacerbate inflationary pressures, and contribute to broader market volatility. Rising energy

costs could adversely affect the operating costs and profit margins of our portfolio companies, particularly those in

transportation, manufacturing, and other energy-sensitive industries, and could impair their ability to service their debt

obligations to us.

In addition, changes in U.S. trade policy, including the imposition or threat of tariffs and the renegotiation of trade

agreements, have introduced additional uncertainty into global markets and may adversely affect portfolio companies that

rely on cross-border supply chains or are sensitive to shifts in trade flows.

Although the Company has no direct exposure to Russia, Ukraine, or the Middle East, the broader consequences of these

and other geopolitical events — including their effects on oil and other energy prices, inflation, interest rates, capital

markets, and general economic conditions — may have a material adverse impact on the Company's portfolio and the value

of your investment in the Company*.***

***Uncertainty about presidential administration initiatives could negatively impact our business, financial condition and***

***results of operations.***

There is significant uncertainty with respect to legislation, regulation and government policy at the federal level, as well as

at the state and local levels. Recent events, including the 2024 U.S. presidential election, have created a climate of

heightened uncertainty and introduced new and difficult-to-quantify macroeconomic and political risks with potentially far-

reaching implications. The presidential administration's changes to U.S. policy may impact, among other things, the U.S.

and global economy, international trade and relations, unemployment, immigration, taxes, healthcare, the U.S. regulatory

environment, inflation and other areas. Although we cannot predict the impact, if any, of these changes to our business,

they could adversely affect our business, financial condition, operating results and cash flows. Until we know what policy

changes are made and how those changes impact our business and the business of our competitors over the long term, we

will not know if, overall, we will benefit from them or be negatively affected by them.

***Inflation may adversely affect the business, results of operations and financial condition of our portfolio companies.***

The United States is currently experiencing an inflationary environment, and certain of our portfolio companies are in

industries that may be impacted by inflation. If such portfolio companies are unable to pass any increases in their costs of

operations along to their customers, it could adversely affect their operating results and impact their ability to pay interest

and principal on our loans, particularly if interest rates rise in response to inflation. In addition, any projected future

decreases in our portfolio companies' operating results due to inflation could adversely impact the fair value of those

investments. Any decreases in the fair value of our investments could result in future realized or unrealized losses and

therefore reduce our net assets resulting from operations.

***The impact of economic recessions or downturns may impair our portfolio companies and lead to defaults by our*** 

***portfolio companies, which could harm our operating results.***

Our portfolio companies may be susceptible to economic downturns or recessions and may be unable to repay our loans

during these periods. During these periods our non-performing assets may increase and the value of our portfolio may

decrease if we are required to write down the values of our investments. Adverse economic conditions may also decrease

the value of collateral securing some of our loans. Economic slowdowns or recessions could lead to financial losses in our

portfolio investments and a decrease in revenues, net income and assets. A prolonged reduction in interest rates due to

economic downturns or recessions will reduce our gross investment income and could result in a decrease in our net

investment income if such decreases in SOFR are not offset by a corresponding increase in the spread over SOFR that we

earn on any portfolio investments, a decrease in our operating expenses, including with respect to our income incentive fee,

or a decrease in the interest rate of our floating interest rate liabilities tied to SOFR. Unfavorable economic conditions also

could increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend

credit to us. These events could prevent us from increasing investments and harm our operating results.

***We are subject to risks associated with the current interest rate environment, and to the extent we use debt to finance*** 

***our investments, changes in interest rates will affect our cost of capital and net investment income.*** 

To the extent we borrow money or issue debt securities or preferred stock to make investments, our net investment income

will depend, in part, upon the difference between the rate at which we borrow funds or pay interest or distributions on such

debt securities or preferred stock and the rate at which we invest these funds. In addition, we anticipate that many of our

debt investments and borrowings will have floating interest rates that reset on a periodic basis, and many of our

investments will be subject to interest rate floors. As a result, a significant change in market interest rates could have a

material adverse effect on our net investment income. Rising interest rates on floating-rate loans we make to portfolio

companies could drive an increase in defaults or accelerated refinancings. Some portfolio companies may be unable to

refinance into fixed-rate loans or repay outstanding amounts, leading to a gradual decline in the credit quality of our

portfolio. In periods of rising interest rates, our cost of funds will increase because we expect that the interest rates on the

majority of amounts we borrow will be floating. This change could reduce our net investment income to the extent any debt

investments have fixed interest rates. We may use interest rate risk management techniques in an effort to limit our

exposure to interest rate fluctuations. Such techniques may include various interest rate hedging activities to the extent

permitted by the 1940 Act and applicable commodities laws. These activities may limit our ability to benefit from lower

interest rates with respect to hedged borrowings. Adverse developments resulting from changes in interest rates or hedging

transactions could have a material adverse effect on our business, financial condition, and results of operations.

You should also be aware that a rise in the general level of interest rates typically will lead to higher interest rates

applicable to our debt investments, which may increase the amount of incentive fees payable to our Adviser. Also, an

increase in interest rates available to shareholders could make an investment in shares of our Common Stock less attractive

if we are not able to increase our distribution rate, which could reduce the value of shares of our Common Stock.

A changing interest rate environment magnifies the Company's susceptibility to interest rate risk and may adversely affect

the Company by diminishing yield and impacting performance. It is difficult to accurately predict the pace at which the

FRB will increase or decrease interest rates, or the timing, frequency or magnitude of any increases or decreases, and the

evaluation of macroeconomic and other conditions could cause a change in approach in the future. Any such changes could

be sudden and unpredictable. Certain economic conditions and market environments will expose fixed-income and debt

instruments to heightened volatility and reduced liquidity, which can negatively impact the Company's performance or

otherwise adversely impact the Company.

***We may be the target of litigation.*** 

We may be the target of securities litigation in the future, particularly if the value of shares of our Common Stock

fluctuates significantly. We could also generally be subject to litigation, including derivative actions by our stockholders.

Any litigation could result in substantial costs and divert management's attention and resources from our business and

cause a material adverse effect on our business, financial condition and results of operations.

***We may experience fluctuations in our quarterly operating results.*** 

We could experience fluctuations in our quarterly operating results due to a number of factors, including the interest rate

payable on the debt securities we acquire, the default rate on such securities, the number and size of investments we

originate or acquire, the level of our expenses, variations in and the timing of the recognition of realized and unrealized

gains or losses, the degree to which we encounter competition in our markets and general economic conditions. In light of

these factors, results for any period should not be relied upon as being indicative of our performance in future periods.

***New or modified laws or regulations governing our operations may adversely affect our business.*** 

Our portfolio companies and we are subject to regulation by-laws at the U.S. federal, state, and local levels. These laws and

regulations, as well as their interpretation, may change from time to time, including as the result of interpretive guidance or

other directives from the U.S. President and others in the executive branch, and new laws, regulations, and interpretations

may also come into effect. Any such new or changed laws or regulations could have a material adverse effect on our

business. The effects of such laws and regulations on the financial services industry will depend, in large part, upon the

extent to which regulators exercise the authority granted to them and the approaches taken in implementing regulations.

The current regulatory environment reflects a shift in priorities under the current administration, and changes in regulatory

policy, including potential deregulation or re-regulation across financial services sectors, may affect the competitive

landscape and our operations in ways that are difficult to predict.

Future legislative and regulatory proposals directed at the financial services industry that are proposed or pending in the

U.S. Congress may negatively impact the operations, cash flows or financial condition of us or our portfolio companies,

impose additional costs on our portfolio companies or us, intensify the regulatory supervision of us or our portfolio

companies or otherwise adversely affect our business or the business of our portfolio companies. Laws that apply to us,

either now or in the future, are often highly complex and may include licensing requirements. The licensing process can be

lengthy and can be expected to subject us to increased regulatory oversight. Failure, even if unintentional, to comply fully

with applicable laws may result in sanctions, fines, or limitations on the ability of the Company or the Adviser to do

business in the relevant jurisdiction or to procure required licenses in other jurisdictions, all of which could have a material

adverse effect on us. In addition, if we do not comply with applicable laws and regulations, we could lose any licenses that

we then hold for the conduct of our business and may be subject to civil fines and criminal penalties.

Additionally, changes to the laws and regulations governing our operations, including those associated with RICs, may

cause us to alter our investment strategy in order to avail ourselves of new or different opportunities or result in the

imposition of corporate-level taxes on us. Such changes could result in material differences to our strategies and plans and

may shift our investment focus from the areas of expertise of the Adviser to other types of investments in which the

Adviser may have little or no expertise or experience. Any such changes, if they occur, could have a material adverse effect

on our results of operations and the value of your investment. If we invest in commodity interests in the future, the Adviser

may determine not to use investment strategies that trigger additional regulation by CFTC or may determine to operate

subject to CFTC regulation, if applicable. If the Adviser or we were to operate subject to CFTC regulation, we may incur

additional expenses and would be subject to additional regulation.

In addition, certain regulations applicable to debt securitizations implementing credit risk retention requirements that have

taken effect in both the U.S. and in Europe may adversely affect or prevent us from entering into securitization

transactions. These risk retention rules will increase our cost of funds under, or may prevent us from completing, future

securitization transactions. In particular, the U.S. Risk Retention Rules require the sponsor (directly or through a majority-

owned affiliate) of a debt securitization, such as CLOs, in the absence of an exemption, to retain an economic interest in the

credit risk of the assets being securitized in the form of an eligible horizontal residual interest, an eligible vertical interest,

or a combination thereof, in accordance with the requirements of the U.S. Risk Retention Rules. Given the more attractive

financing costs associated with these types of debt securitizations as opposed to other types of financing available (such as

traditional senior secured facilities), this increases our financing costs, which increases the financing costs ultimately be

borne by our common stockholders.

Regulatory attention to the extension of credit outside of the traditional banking sector has continued to evolve, and it

remains possible that some portion of the non-bank financial sector will be subject to new or modified regulation. While it

cannot be known at this time whether any such regulation will be implemented or what form it may take, changes in the

regulation of non-bank credit extension — whether resulting in increased oversight or a relaxation of existing requirements

— could affect competitive dynamics in the private credit market and could impact our operations, cash flows or financial

condition, impose additional costs on us, intensify regulatory supervision of us or otherwise adversely affect our business,

financial condition and results of operations.

***Uncertainty resulting from the overall political climate could negatively impact our business, financial condition, and*** 

***results of operations.*** 

The current political climate has created uncertainty with respect to legal, tax, and regulatory regimes in which the

Company and its portfolio companies, as well as the Adviser, the Administrator, Lafayette Square, and their affiliates

operate. The current administration has signaled policy priorities that may affect, among other things, trade, taxation,

financial services regulation, immigration, and government spending. Any significant changes in economic or tax policy

and/or government programs could have a material adverse impact on the Company and on its investments. In addition,

political uncertainty at the state and local level, including with respect to policies affecting the industries and communities

in which our portfolio companies operate, could further affect our business, financial condition, and results of operations.

***We will incur significant costs as a result of being registered under the Exchange Act.*** 

We will incur legal, accounting, and other expenses, including costs associated with the periodic reporting requirements

applicable to a company whose securities are registered under the Exchange Act, as well as additional corporate

governance requirements, including requirements under SOX and other rules implemented by the SEC.

***Efforts to comply with SOX will involve significant expenditures, and non-compliance with SOX would adversely affect*** 

***us and the value of shares of our Common Stock.*** 

We are required to comply with certain requirements of the SOX and the related rules and regulations promulgated by the

SEC, but will not have to comply with certain requirements until we have been registered under the Exchange Act for a

specified period of time or cease to be an "emerging growth company." Because shares of our Common Stock are

registered under the Exchange Act, we are subject to SOX and the related rules and regulations promulgated by the SEC,

and our management is required to report on our internal control over financial reporting pursuant to Section 404 of SOX.

We are required to review on an annual basis, our internal control over financial reporting, and on a quarterly and annual

basis to evaluate and disclose changes in our internal control over financial reporting. As a result, we expect to incur

significant additional expenses that may negatively impact our financial performance and our ability to make distributions.

This process will also result in a diversion of management's time and attention. We do not know when our evaluation,

testing and remediation actions will be completed or its impact on our operations. In addition, we may be unable to ensure

that the process is effective or that our internal control over financial reporting is or will be effective. In the event that we

are unable to come into and maintain compliance with SOX and related rules, we and the value of our securities would be

adversely affected.

***Terrorist attacks, acts of war, natural disasters, outbreaks, or pandemics, such as the Coronavirus pandemic, may*** 

***impact our portfolio companies and our Adviser and harm our business, operating results, and financial condition.*** 

Terrorist acts, acts of war, natural disasters, disease outbreaks, pandemics, or other similar events may disrupt our

operations, as well as the operations of our portfolio companies and our Adviser. Such acts have created, and continue to

create, economic and political uncertainties and have contributed to recent global economic instability. Any of the above

factors, including sanctions, export controls, tariffs, trade wars and other governmental actions, could have a material

adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of

our common shares and/or debt securities to decline. In addition, future terrorist activities, military or security operations,

natural disasters, disease outbreaks, pandemics, or other similar events could weaken the domestic/global economies and

create additional uncertainties, which may negatively impact our portfolio companies and, in turn, could have a material

adverse impact on our business, operating results and financial condition.

***A shareholder may be subject to filing requirements under the Exchange Act as a result of an investment in us.*** 

Because our Common Stock is registered under the Exchange Act, ownership information for any person who beneficially

owns 5% or more of our Common Stock must be disclosed in a Schedule 13G or other filings with the SEC. Beneficial

ownership for these purposes is determined in accordance with the rules of the SEC and includes having voting or

investment power over the securities. Although we will provide in our quarterly consolidated financial statements the

amount of outstanding stock and the amount of the shareholder's stock, the responsibility for determining the filing

obligation and preparing the filing remains with the shareholder. In addition, owners of 10% or more of our Common Stock

are subject to reporting obligations under Section 16(a) of the Exchange Act.

***A shareholder may be subject to the short-swing profits rules under the Exchange Act as a result of an investment in*** 

***us.*** 

Persons with the right to appoint a director or who hold 10% or more of a class of our shares may be subject to Section

16(b) of the Exchange Act, which recaptures for the benefit of the issuer profits from the purchase and sale of registered

stock within a six-month period.

**ITEM 1B. Unresolved Staff Comments**

None.

**ITEM 1C. Cybersecurity**

Lafayette Square maintains a cybersecurity program which includes processes for assessing, identifying, and managing

material risks from cybersecurity threats in the form of unauthorized occurrences that could result in adverse effects on the

confidentiality, integrity, or availability of the Company's information systems (any such occurrence, a "Cybersecurity

Incident"). The Company's business is dependent on the communications and information systems of the Adviser and other

third-party service providers. The Adviser manages the Company's day-to-day operations and has implemented a

cybersecurity program that applies to the Company and its operations.

**Cybersecurity Program Overview**

The Adviser has instituted a cybersecurity program designed to identify, assess, and mitigate cyber risks applicable to the

Company. The cyber risk management program involves risk assessments, implementation of security measures, and

ongoing monitoring of systems and networks, including networks on which the Company relies. The Adviser actively

monitors the current threat landscape in an effort to identify material risks arising from new and evolving cybersecurity

threats, including material risks faced by the Company. The Adviser maintains a comprehensive information security

policy to manage risk which details procedures such as incident response, business continuity and disaster recovery

management plans, penetration testing and quarterly cybersecurity training for all employees.

The Company relies on the Adviser to engage external experts, including cybersecurity assessors, consultants, and auditors

to evaluate cybersecurity measures and risk management processes, including those applicable to the Company. The

Adviser has engaged a technology consultant to provide strategic oversight of the Company's technology infrastructure and

information security program. The Adviser has contracted with Salt Cybersecurity, LLC to serve as a virtual Chief

Information Security Officer ("vCISO") and perform an annual information security program risk assessment and gap

analysis based on the International Organization for Standardization (ISO) and International Electrotechnical Commission

(IEC) standard (ISO/IEC 27001:2013). In addition, our vCISO conducts due diligence on each vendor we utilize to assess

their levels of security when working with Lafayette Square data. The Adviser has also engaged a third-party cybersecurity

firm, AG1, Inc. (dba AgileBlue), to act as Lafayette Square's outsourced security operation center ("SOC") and provide

continuous monitoring of Lafayette Square issued devices for potential vulnerabilities with any threats escalated to the

Chief Administrative Officer.

**Management's Role in Cybersecurity Risk Management** 

The Company's management, including the Company's Chief Compliance Officer, is responsible for assessing and

managing material risks from cybersecurity threats. Lafayette Square's information security policy includes an incident

response plan which specifies procedures for elevating, remediating, monitoring and communicating about Cybersecurity

Incidents. A dedicated team of executive level leaders at the Adviser (the "Incident Response Team") including the Chief

Risk Officer, Chief People Officer, Chief Compliance Officer and led by the Chief Administrative Officer, with the support

of a technology consultant engaged by the Adviser, ensure Cybersecurity Incident containment, eradication, recovery and

notification that is integrated in Lafayette Square's overall risk management. If a Cybersecurity Incident is detected,

whether by way of penetration testing, a vulnerability scan conducted by the SOC, or otherwise, it will be reported to the

Chief Administrative Officer and the Adviser's technology consultant, who mobilize the Incident Response Team. The

Incident Response Team will prepare the communications including alerting the Board of any material risks and any

additional required reporting. The Chief Administrative Officer is designated as the leader of the Incident Response Team

and is designated to interface with key stakeholders including the Board.

**Board Oversight of Cybersecurity Risks**

The Board provides strategic oversight on cybersecurity matters, including risks associated with cybersecurity threats. The

Board receives periodic updates from the Adviser regarding the overall state of the Adviser's cybersecurity program,

information on the current threat landscape, and risks from cybersecurity threats and cybersecurity incidents impacting the

Company.

**Assessment of Cybersecurity Risk**

The potential impact of risks from cybersecurity threats on the Company are assessed on an ongoing basis, and how such

risks could materially affect the Company's business strategy, operational results, and financial condition are regularly

evaluated. See "*Item 1.A Risk Factors – We depend on information systems, and systems failures could significantly disrupt* 

*our business, which may, in turn, negatively affect the value of our Common Stock and our ability to pay distributions.*" for

more details on how cybersecurity threats are reasonably likely to materially affect the Company including its business

strategy, results of operations, or financial condition. During the reporting period, the Company has not identified any risks

from cybersecurity threats, including as a result of previous cybersecurity incidents, that the Company believes have

materially affected, or are reasonably likely to materially affect, the Company, including its business strategy, operational

results, and financial condition.

**ITEM 2. PROPERTIES**

Our headquarters are located at 175 SW 7th Street, Suite 2307, Miami, Florida 33130 and are provided by our

Administrator. We believe that our office facilities are suitable and adequate for our business as it is contemplated to be

conducted. We do not own any real estate or other physical properties materially important to our operations.

**ITEM 3. LEGAL PROCEEDINGS**

Neither we nor our Adviser or Administrator is currently subject to any material legal proceedings, nor, to our knowledge,

is any material legal proceeding that would affect our business threatened against us, or against our Adviser or

Administrator.

From time to time, we, our Adviser or Administrator may be a party to certain legal proceedings in the ordinary course of

business, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies.

While the outcome of these legal proceedings cannot be predicted with certainty, we do not expect that these proceedings

will have a material effect upon our financial condition or results of operations. Our businesses are also subject to extensive

regulation, which may result in regulatory proceedings against us.

**PART II**

**ITEM 4. MINE SAFETY DISCLOSURES**

Not applicable.

**ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND** 

**ISSUER PURCHASES OF EQUITY SECURITIES**

**Market Information** 

Until the completion of a Liquidity Event, if any, our outstanding shares of Common Stock will be offered and sold in

private offerings exempt from registration under the Securities Act under Section 4(a)(2) and Regulation D. There is no

public market for shares of our Common Stock currently, nor can we give any assurance that one will develop.

Because shares of Common Stock are being acquired by investors in one or more transactions "not involving a public

offering," they are "restricted securities" and may be required to be held indefinitely. Shares of our Common Stock may

not be sold, transferred, assigned, pledged or otherwise disposed of unless (1) our consent is granted, and (2) the shares of

Common Stock are registered under applicable securities laws or specifically exempted from registration (in which case the

stockholder may, at our option, be required to provide us with a legal opinion, in form and substance satisfactory to us, that

registration is not required). Accordingly, an investor must be willing to bear the economic risk of investment in the shares

of Common Stock until we are liquidated. No sale, transfer, assignment, pledge or other disposition, whether voluntary or

involuntary, of shares of Common Stock may be made except by registration of the transfer on our books. Each transferee

will be required to execute an instrument agreeing to be bound by these restrictions and the other restrictions imposed on

the shares of Common Stock and to execute such other instruments or certifications as are reasonably required by us.

**Holders** 

As of March 25, 2026, we had 161 stockholders of record.

**Distribution Policy** 

To the extent that we have income available, we intend to make quarterly distributions to our stockholders. We first elected

to be taxed as a RIC under Subchapter M of the IRC for our taxable year ending December 31, 2023. To maintain our RIC

tax status, we intend to distribute at least 90% of our investment company taxable income (as defined by the IRC, which

generally includes net ordinary income and net short-term taxable gains) to our stockholders in respect of each taxable year

and to distribute net capital gains (that is, net long-term capital gains in excess of net short-term capital losses), if any, at

least annually out of the assets legally available for such distributions as well as satisfy other applicable requirements under

the IRC. See "*Item 1. Business — "Certain U.S. Federal Income Tax Considerations*."

We may be subject to a nondeductible 4% U.S. federal excise tax if we do not distribute (or are treated as distributing) in

each calendar year an amount at least equal to the sum of:

• 98% of our net ordinary income, excluding certain ordinary gains and losses, recognized during a calendar year;

• 98.2% of our capital gain net income, adjusted for certain ordinary gains and losses, recognized for the twelve-

month period ending on October 31 of such calendar year; and

• 100% of any income or gains recognized, but not distributed, in preceding years.

We can be expected to incur in the future, such excise tax on a portion of our income and gains. While we intend to

distribute income and capital gains to minimize exposure to the 4% excise tax, we may not be able to, or may not choose

to, distribute amounts sufficient to avoid the imposition of the tax entirely. In that event, we will be liable for the tax only

on the amount by which we do not meet the foregoing distribution requirement. *See "ITEM 1A. RISK FACTORS - Risks* 

*Related to U.S. Federal Income Tax - We will be subject to U.S federal income tax at corporate rates if we are unable to* 

*qualify and maintain our tax treatment as a RIC under Subchapter M of the IRC or if we make investments through taxable* 

*subsidiaries."*

We cannot assure you that we will achieve results that will permit us to pay any cash distributions and we will be

prohibited from making distributions if doing so would cause us to fail to maintain the asset coverage ratios stipulated by

the 1940 Act.

**Dividend Reinvestment Plan** 

We have adopted an "opt out" dividend reinvestment plan ("DRIP") pursuant to which we will reinvest all Distributions

declared by our Board on behalf of investors who do not elect to receive their Distributions in cash as described below. As

a result, if our Board declares a Distribution, then stockholders who have not elected to "opt out" of the DRIP will have

their Distributions automatically reinvested in additional Shares, as described below. The timing and amount of any future

Distributions to stockholders are subject to applicable legal restrictions and the sole discretion of the Board.

No action will be required on the part of a stockholder to have its Distributions reinvested in Shares. A registered

stockholder will be able to elect to receive an entire Distribution in cash by notifying SS&C Global Investor & Distribution

Solutions, Inc., the DRIP administrator (the "Plan Administrator"), in writing, so that notice is received by the Plan

Administrator no later than 10 days prior to the record date for a Distribution. Those stockholders whose shares are held by

a broker or other financial intermediary may be able to receive Distributions in cash by notifying their broker or other

financial intermediary of their election. Administrator will set up an account for shares acquired through the DRIP for each

stockholder who has not elected to receive Distributions in cash.

Prior to a Liquidity Event, we will use newly issued shares of Common Stock to implement the DRIP, with such shares to

be issued at a per-share price as determined by our Board (including any committee thereof), which price will be

determined prior to the issuance of shares of Common Stock and in accordance with the limitations under Section 23 of the

1940 Act. The number of shares of Common Stock to be issued to a stockholder is determined by dividing the total dollar

amount of the distribution payable to such stockholder by the price per share of Common Stock. The number of shares to

be outstanding after giving effect to the payment of a distribution cannot be established until the value per share at which

additional shares of Common Stock will be issued has been determined, and the elections of our stockholders have been

tabulated.

There will be no brokerage or other charges to stockholders who participate in the plan. The DRIP administrator's fees

under the plan will be paid by us. Following a Liquidity Event, if a participant elects to sell part or all of his, her or its

shares of Common Stock held by the plan administrator and have the proceeds remitted to the participant, such request

must first be submitted to the participant's broker, who will coordinate with the plan administrator and is authorized to

deduct a per-share brokerage commission from the sale proceeds.

Stockholders who elect to receive distributions in the form of shares of Common Stock are generally subject to the same

U.S. federal, state, and local tax consequences as are stockholders who receive their distributions in cash. However, since a

participating stockholder's cash distributions would be reinvested in Shares, such stockholder will not receive cash with

which to pay applicable taxes on reinvested distributions. A stockholder's basis for determining gain or loss upon the sale

of shares of Common Stock received in a distribution from us will generally be equal to the cash that would have been

received if the stockholder had received the distribution in cash. Any shares of Common Stock received in a distribution

will have a new holding period for tax purposes commencing on the day following the day on which such shares are

credited to the U.S. holder's account.

We may terminate or suspend the DRIP upon notice by filing on a current report on Form 8-K, posting upon the

Company's website, or upon notice in writing mailed to each participant at least 30 days prior to any record date for the

payment of any distribution by us.

The following table summarizes the distributions declared on shares of the Company's common stock and shares

distributed pursuant to the DRIP to stockholders who had not opted out of the DRIP:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Date Declared** | **Record Date** | **Payment Date** | **Amount** | **Amount Per** <br>**Share**<br>| **DRIP Shares** <br>**Issued**<br>|
| March 25, 2025 | March 25, 2025 | May 6, 2025 | $8393 | $0.35 | 197026 |
| June 27, 2025 | June 27, 2025 | August 1, 2025 | $8503 | $0.35 | 201788 |
| September 26, 2025 | September 26, 2025 | October 24, 2025 | $8573 | $0.35 | 205205 |
| December 19, 2025 | December 17, 2025 | January 7, 2026 | $9239 | $0.35 |  |

---

**Unregistered Sales of Equity Securities**

All sales of unregistered securities during the year ended December 31, 2025 were reported in our current reports on Form

8-K filed with the SEC.

**ITEM 6. RESERVED**

**ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF** 

**OPERATIONS**

**(dollar amounts in thousands, except per share data, unless otherwise indicated)** 

*The following discussion and other parts of this report contain forward-looking information that involves risks and* 

*uncertainties. References to "we," "us," "our," and the "Company," means Lafayette Square USA, Inc., unless otherwise* 

*specified. The discussion and analysis contained in this section refers to our financial condition, results of operations and* 

*cash flows. The information contained in this section should be read in conjunction with the consolidated financial* 

*statements and notes thereto appearing elsewhere in this report. Please see "Cautionary Statement Regarding Forward-*

*Looking Statements" for a discussion of the uncertainties, risks and assumptions associated with this discussion and* 

*analysis. Our actual results could differ materially from those anticipated by such forward-looking information due to* 

*factors discussed under "Cautionary Statements Regarding Forward-Looking Statements" appearing elsewhere in this* 

*report.*

**Overview**

Lafayette Square USA, Inc. is an externally managed, closed-end, non-diversified management investment company that

provides capital to middle market businesses located in or employing Working Class American communities. We generate

revenue primarily through interest income on debt investments and, to a lesser extent, capital gains and fee income. We are

externally managed by LS BDC Adviser, LLC (the "Adviser") and have elected to be regulated as a business development

company under the Investment Company Act of 1940, as amended, and to be treated as a regulated investment company

under Subchapter M of the IRC.

**Investment Objective and Strategy**

Our investment objective is to generate favorable risk-adjusted returns, consisting primarily of current income and, to a

lesser extent, capital appreciation. We invest primarily in first and second lien senior secured loans and, to a lesser extent,

in subordinated and mezzanine loans and equity and equity-like securities, including common stock, preferred stock and

warrants. Our debt investments typically bear floating interest rates and generally include financial maintenance covenants

and comprehensive collateral packages.

We focus on non-sponsored middle market companies with annual revenues between $10 million and $1 billion and

EBITDA between $10 million and $100 million, although we may invest in larger or smaller companies. We originate

investments primarily through direct engagement with business owners and management teams, supported by data and

analytics technology that integrates company-level information with place-based socioeconomic data to identify investment

opportunities, support underwriting decisions, and monitor portfolio performance. We also may purchase interests in loans

or other instruments through secondary market transactions.

**Key Components of Operations**

***Expenses***

We expect our primary annual operating expenses to include advisory fees and the reimbursement of expenses under our

Investment Advisory Agreement and our Administration Agreement, respectively. We also bear other expenses, which

include:

• our initial organization costs and operating costs incurred prior to the filing of our election to be regulated as a

BDC (in connection with our formation and the initial closing of the private offering of shares of our Common

Stock);

• the costs associated with our private offering and any subsequent offerings of our securities;

• calculating individual asset values and our net asset value (including the cost and expenses of third-party valuation

services);

• out-of-pocket expenses, including travel expenses, incurred by the Adviser, or members of its investment team, or

payable to third parties, performing due diligence on prospective portfolio companies, dead deal or broken deal

expenses and, if necessary, enforcing our rights;

• certain costs and expenses relating to distributions paid by us;

• administration and related expenses payable under the Administration Agreement;

• fees and expenses associated with marketing efforts, including attendance at investment conferences and similar

events

• debt service and other costs of borrowings or other financing arrangements;

• the allocated costs incurred in connection with providing services to employees of portfolio companies (of the

type described in *Item I. "Business—Investment Strategy"*);

• amounts payable to third parties relating to, or associated with, making or holding investments;

• transfer agent and custodial fees;

• costs of hedging;

• commissions and other compensation payable to brokers or dealers;

• federal and state registration fees;

• any stock exchange listing fees and fees payable to rating agencies;

• the cost of effecting any sales and repurchases of our Common Stock and other securities;

• U.S. federal, state and local taxes;

• independent director fees and expenses;

• costs of preparing consolidated financial statements and maintaining books and records, costs of preparing tax

returns, costs of compliance with SOX, and attestation and costs of filing reports or other documents with the SEC

(or other regulatory bodies) and other reporting and compliance costs, including registration and listing fees, and

the compensation of professionals responsible for the preparation or review of the foregoing;

• the costs of any reports, proxy statements or other notices to our stockholders (including printing and mailing

costs), the costs of any stockholders' meetings and the compensation of investor relations personnel responsible

for the preparation of the foregoing and related matters;

• the costs of specialty and custom software expense for monitoring risk, compliance and overall investments;

• our fidelity bond;

• any necessary insurance premiums;

• extraordinary expenses (such as litigation or indemnification payments or amounts payable pursuant to any

agreement to provide indemnification entered into by the Company);

• direct fees and expenses associated with independent audits, agency, consulting and legal costs; costs of winding

up;

and other expenses incurred by either the Administrator or us in connection with administering our business, including

payments under the Administration Agreement based upon our allocable portion of the compensation paid to our Chief

Financial Officer and Chief Compliance Officer and their respective staffs. We also include the cost of providing

managerial assistance upon request to portfolio companies, and reimbursements of third-party expenses incurred by the

Administrator in carrying out its administrative services, including providing assistance in accounting, legal, compliance,

operations, technology, internal audit, investor relations, and loan agency services (including any internal and third party

service providers and/or software solutions related to the foregoing), and being responsible for the financial records that

we are required to maintain and preparing reports to our stockholders and reports filed with the SEC. In addition, our

Administrator assists us in determining and publishing our net asset value, overseeing the preparation and filing of our tax

returns and the printing and dissemination of reports to our stockholders, our internal control assessment under the

Sarbanes-Oxley Act, and generally overseeing the payment of our expenses and the performance of administrative and

professional services rendered to us by others. We expect our general and administrative expenses to be relatively stable or

to decline as a percentage of total assets during periods of asset growth and to increase proportionally when our asset value

declines.

On December 30, 2021, we entered into an expense support and conditional reimbursement agreement (the "Expense

Support Agreement") with the Adviser. The Adviser may elect to pay certain of our expenses on our behalf (each, an

"Expense Payment"), provided that no portion of the payment will be used to pay any of our interest expense or

shareholder servicing and/or distribution fees. Any Expense Payment that the Adviser has committed to pay must be paid

by the Adviser to us in any combination of cash or other immediately available funds no later than 45 days after such

commitment was made in writing, and/or offset against amounts due from us to the Adviser or its affiliates. Our obligation

to make a Reimbursement Payment will automatically become a liability of ours on the last business day of the applicable

calendar quarter, except to the extent the Adviser has waived its right to receive such payment for the applicable quarter.

As of December 31, 2025 and December 31, 2024, we had no Unreimbursed Expense Payable under the Expense Support

Agreement.

***Leverage***

The amount of leverage we use in any period depends on a number of factors, including cash on-hand available for

investing, the cost of financing and general economic and market conditions. Prior to the Small Business Credit

Availability Act being signed into law, a BDC generally was not permitted to incur indebtedness unless immediately after

such borrowing it has an asset coverage for total borrowings of at least 200%. The Small Business Credit Availability Act,

signed into law on March 23, 2018, contains a provision that grants a BDC the option, subject to certain conditions and

disclosure obligations, to reduce the asset coverage requirement to 150%. In April 2021, our Board and initial stockholder

approved the reduced asset coverage ratio.

On September 30, 2024, we received an exemptive relief from the SEC to permit us to exclude the debt of the LS SBICs

that are guaranteed by the SBA from the 150% asset coverage ratio we are required to maintain under the 1940 Act. With

this exemptive relief, we have increased capacity to fund up to $175.0 million (the maximum amount of SBA-guaranteed

debentures an SBIC may currently have outstanding once certain conditions have been met) of investments in each LS

SBIC with SBA-guaranteed debentures in addition to being able to fund investments with borrowings up to the maximum

amount of debt that the 150% asset coverage ratio limitation would allow us to incur.

**Portfolio and Investment Activity**

The following table summarizes our portfolio and investment activity during the years ended December 31, 2025,

December 31, 2024 and December 31, 2023 (information presented herein is at amortized cost in thousands, except per

share data, unless otherwise indicated):

---

| | | | |
|:---|:---|:---|:---|
| | **For the year ended** <br>**December 31, 2025**<br>| **For the year ended** <br>**December 31, 2024**<br>| **For the year ended**<br>**December 31, 2023**<br>|
| Total Investments, beginning of period | $556863 | $271523 | $84545 |
| New investments purchased | 458081 | 347622 | 190068 |
| Net accretion of discount on investments | 2468 | 1374 | 406 |
| Net realized gains (losses) on investments | 203 | 98 |  |
| Investments sold or repaid | (227174) | (63754) | (3496) |
| **Total Investments, end of period** | $790441 | $556863 | $271523 |
| Portfolio companies, at beginning of period | 34 | 19 | 5 |
| Number of new portfolio companies | 24 | 16 | 14 |
| Number of exited portfolio companies | (4) | (1) |  |
| **Portfolio companies, at end of period** | 54 | 34 | 19 |

---

As of December 31, 2025 and December 31, 2024, the Company's investments consisted of the following (dollar amounts

in thousands, except per share data, unless otherwise indicated):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  | **Amortized Cost** | **Amortized Cost** | **Fair Value** | **Fair Value** |
| Subordinated debt | $690548 | 87.4% | $689683 | 87.4% |
| Equity | 48364 | 6.1% | 47880 | 6.1% |
| Preferred equity | 46604 | 5.9% | 46713 | 5.9% |
| Subordinated debt | 3425 | 0.4% | 3437 | 0.4% |
| Convertible note | 1500 | 0.2% | 1500 | 0.2% |
| Warrants |  | —% |  | —% |
| **Total** | $790441 | 100.0% | $789213 | 100.0% |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Amortized Cost** | **Amortized Cost** | **Fair Value** | **Fair Value** |
| First lien senior secured loans | $540064 | 97.0% | $540195 | 96.9% |
| Equity | 11909 | 2.1% | 12028 | 2.2% |
| Subordinated debt | 1738 | 0.3% | 1712 | 0.3% |
| Preferred equity | 1652 | 0.3% | 1652 | 0.3% |
| Convertible note | 1500 | 0.3% | 1500 | 0.3% |
| Warrants |  | —% |  | —% |
| **Total**  | $556863 | 100.0% | $557087 | 100.0% |

---

The tables below describe investments by industry composition based on fair value as of December 31, 2025 and

December 31, 2024 (dollar amounts in thousands, except per share data, unless otherwise indicated):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  | **Amortized Cost** | **Amortized Cost** | **Fair Value**  | **Fair Value**  |
| Professional Services | $81543 | 10.3% | $82156 | 10.4% |
| Commercial Services & Supplies | 72767 | 9.3% | 72927 | 9.2% |
| Hotels, Restaurants & Leisure | 65740 | 8.3% | 65974 | 8.4% |
| Construction & Engineering | 55085 | 7.0% | 55241 | 7.0% |
| Specialized Consumer Services | 54727 | 6.9% | 55080 | 7.0% |
| Road & Rail | 52124 | 6.6% | 45140 | 5.7% |
| Media | 35757 | 4.5% | 39346 | 5.0% |
| Diversified Financial Services | 37532 | 4.7% | 37788 | 4.8% |
| Health Care Providers & Services | 37589 | 4.8% | 37723 | 4.8% |
| IT Services | 36875 | 4.7% | 37222 | 4.7% |
| Independent Power & Renewable | 36338 | 4.6% | 36499 | 4.6% |
| Transportation Infrastructure | 31671 | 4.0% | 31994 | 4.1% |
| Real Estate Management & Development | 27486 | 3.5% | 26934 | 3.4% |
| Health Care Equipment & Services | 23210 | 2.9% | 22990 | 2.9% |
| Diversified Consumer Services | 22028 | 2.8% | 22127 | 2.8% |
| Aerospace & Defense | 19657 | 2.5% | 19512 | 2.5% |
| Insurance | 18000 | 2.3% | 18000 | 2.3% |
| Food Products | 16924 | 2.1% | 16966 | 2.1% |
| Diversified Telecommunication Services | 15872 | 2.0% | 15870 | 2.0% |
| Electrical Equipment | 12441 | 1.6% | 12538 | 1.6% |
| Gas Utilities | 10661 | 1.3% | 10675 | 1.4% |
| Food & Staples Retailing | 9888 | 1.3% | 9986 | 1.3% |
| Health Care Distributors | 7802 | 1.0% | 7842 | 1.0% |
| Diversified Real Estate Activities | 4343 | 0.5% | 4286 | 0.5% |
| Water Utilities | 3381 | 0.4% | 3397 | 0.4% |
| Human Resource & Employment <br>Services<br>| 1000 | 0.1% | 1000 | 0.1% |
| **Total**  | $790441 | 100.0% | $789213 | 100.0% |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Amortized Cost** | **Amortized Cost** | **Fair Value** | **Fair Value** |
| Commercial Services & Supplies | $66606 | 12.0% | $66901 | 12.1% |
| Professional Services | 57752 | 10.4% | 58135 | 10.4% |
| Specialized Consumer Services | 39897 | 7.2% | 40288 | 7.2% |
| Road & Rail | 41613 | 7.5% | 39900 | 7.2% |
| Interactive Media & Services | 34011 | 6.1% | 34293 | 6.2% |
| IT Services | 33807 | 6.1% | 33820 | 6.1% |
| Media | 34140 | 6.1% | 32725 | 5.9% |
| Diversified Financial Services | 28388 | 5.1% | 28492 | 5.1% |
| Transportation Infrastructure | 26252 | 4.7% | 26530 | 4.8% |
| Water Utilities | 23112 | 4.2% | 23454 | 4.2% |
| Health Care Equipment & Services | 19702 | 3.5% | 19949 | 3.6% |
| Application Software | 18288 | 3.3% | 18400 | 3.3% |
| Health Care Providers & Services | 17595 | 3.2% | 17768 | 3.2% |
| Construction & Engineering | 17427 | 3.1% | 17428 | 3.1% |
| Pharmaceuticals | 16278 | 2.9% | 16426 | 2.9% |
| Aerospace & Defense | 16069 | 2.9% | 16108 | 2.9% |
| Electric Utilities | 12286 | 2.2% | 12500 | 2.2% |
| Restaurants | 11714 | 2.1% | 11783 | 2.1% |
| Hotels, Restaurants & Leisure | 10688 | 1.9% | 10877 | 2.0% |
| Gas Utilities | 10737 | 1.9% | 10787 | 1.9% |
| Real Estate Management & Development | 9184 | 1.6% | 9182 | 1.6% |
| Independent Power & Renewable | 8388 | 1.5% | 8388 | 1.5% |
| Diversified Consumer Services | 2459 | 0.4% | 2459 | 0.4% |
| Food & Staples Retailing | 470 | 0.1% | 494 | 0.1% |
| **Total** | $556863 | 100.0% | $557087 | 100.0% |

---

Certain portfolio companies have been reclassified to updated GICS industry categories in the current year. The December

31, 2024 industry presentation has not been restated to reflect these reclassifications and therefore may not be directly

comparable to the December 31, 2025 presentation.

The weighted average yields at amortized cost and fair value of our portfolio as of December 31, 2025 and December 31,

2024 were as follows (dollar amount in thousands, except per share data, unless otherwise indicated):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2024** | **December 31, 2024** |
|  | **Amortized Cost** | **Fair Value** | **Amortized Cost** | **Fair Value** |
| First lien senior secured loans | 11.0% | 11.0% | 11.3% | 11.3% |
| Subordinated debt | 14.2% | 14.1% | 14.0% | 14.2% |
| Bonds | —% | —% | 12.3% | 12.3% |
| Convertible note | 10.0% | 10.0% | 10.0% | 10.0% |
| **Weighted Average Yield**<sup>(1)</sup> | 10.5% | 10.6% | 11.4% | 11.4% |

---

(1) The weighted average yield of our portfolio does not represent the total return to our stockholders.

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
| Number of portfolio companies | 54 | 34 |
| Percentage of performing debt bearing a floating rate <sup>(1)</sup> | 85.4% | 95.5% |
| Percentage of performing debt bearing a fixed rate <sup>(1)(2)</sup> | 14.6% | 4.5% |
| Weighted average spread over SOFR of all accruing floating rate <br>investments | 6.5% | 6.7% |
| Weighted average EBITDA (in millions) <sup>(3)</sup> | $20.0 | $22.2 |
| Weighted average leverage (net debt/EBITDA)<sup>(4)</sup> | 3.6x | 3.7x |
| Weighted average interest coverage<sup>(4)</sup> | 2.6x | 2.4x |

---

(1) Measured as a percentage of total portfolio investments at fair value. Excludes equity-like investments and debt

investments, if any, placed on non-accrual.

(2) Includes equity-like investments with coupon-bearing and income-generating structure notes and preferred stock

investments, if applicable.

(3) Figures are based on portfolio company financial statements available to the Company at period end.

(4) Net debt includes debt that ranks both senior and equally with the tranche of debt owned by us but excludes debt

that is legally and contractually subordinated in right of payment to debt owned by us. Weighted average net debt to

EBITDA is weighted based on the fair value of our debt investments, excluding investments where net debt to

EBITDA may not be the appropriate measure of credit risk. Weighted average interest coverage is weighted based on

the fair value of our performing debt investments, excluding investments where interest coverage may not be the

appropriate measure of credit risk.

During the year ended December 31, 2025, we received aggregate proceeds of $75.9 million from the full repayment of

five portfolio company debt investments. Four of these repayments represented full exits from the respective portfolio

companies. In connection with the repayment of Global K9 Companies LLC, the Company continues to hold an equity

position through IVM GK9 Holdings LLC. In connection with these repayments, we received aggregate prepayment fees

of approximately $0.4 million and recognized net realized gains of approximately $0.2 million. The following table

summarizes our investment dispositions during the periods presented:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Portfolio Company** | **Region** | **Industry** | **Payoff** <br>**Date**<br>| **Cash** <br>**proceeds**<br>| **Realized G/L** |
| **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** |
| Global K9 Companies LLC | Southeast | Commercial Services & <br>Supplies<br>| 2/12/2025 | $22434 |  |
| Dartpoints Operating Company LLC | Gulf Coast | IT Services | 4/24/2025 | $3489 | $51 |
| Cafe Zupas, L.C. | Four Corners | Hotels, Restaurants & <br>Leisure<br>| 6/4/2025 | $11733 |  |
| H.W. Lochner Inc. | Great Lakes | Transportation <br>Infrastructure<br>| 7/23/2025 | $7654 | $119 |
| M&S Acquisition Corporation | Far West | Professional Services | 12/23/2025 | $30567 |  |
| **Total** |  |  |  | **$75877** | **$170**<sup>(1)</sup> |
| **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** |
| Critical Nurse Staffing, LLC | Four Corners | Health Care Services | 12/30/2024 | $14034 |  |

---

All investment dispositions during the years ended December 31, 2025, and 2024 consisted of full repayments of first lien

senior secured floating-rate debt investments, with the exception of Global K9 Companies LLC, for which the term loan

was repaid while an equity position is retained. No dispositions during either period resulted from credit deterioration or

distressed sales.The exited investments spanned six industries across five geographic regions, reflecting the diversification

of the portfolio. There were no investment dispositions during the year ended December 31, 2023.

Portfolio turnover, calculated as the lesser of purchases or dispositions divided by the average fair value of the investment

portfolio, was approximately 24% for the year ended December 31, 2025.

(1) Reflects net realized gains from full position exits only and does not include realized gains or losses from other

portfolio activity, including scheduled principal paydowns and other investment transactions. See Note 4 to the

consolidated financial statements for total net realized gains (losses) on investments.

Subsequent to December 31, 2025, on March 9, 2026, TCFIII OWL Buyer LLC repaid in full its outstanding first lien

senior secured term loans, with aggregate repayments of approximately $10.7 million.

Ongoing monitoring and risk management of each asset is conducted by the Adviser's Portfolio Monitoring team under the

supervision of our Chief Risk Officer. The Portfolio Monitoring team is separate and distinct from the Adviser's

investment team, and has as its primary responsibilities to:

• formally monitor portfolio companies post-investment on an ongoing basis;

• perform quarterly valuations of all assets in partnership with third-party valuation agent(s);

• maintain and update internal and external asset ratings;

• oversee BDC-level monitoring; and

• lead amendment, "work out," and restructurings processes.

Portfolio Monitoring monitors the financial trends of each portfolio company to determine if it is meeting its respective

business plan and to assess the appropriate course of action with respect to investments in each portfolio company.

Portfolio Monitoring has several methods of evaluating and monitoring the performance and fair value of our investments,

which may include the following:

• periodic and regular contact with portfolio company management and, if appropriate, the financial or strategic

sponsor, to discuss financial position, requirements and variants from approved budgets and internal projections;

• assessment of performance relative to business plan and key operating metrics and compliance with financial

covenants;

• assessment of performance relative to industry benchmarks or portfolio comparables, if any;

• attendance at and participation in board meetings and lender calls; and

• review of monthly, quarterly and annual audited financial statements and financial projections of portfolio

companies.

As part of the monitoring process, our Adviser employs an investment rating system to categorize our investments. In

addition to various risk management and monitoring tools, our Adviser rates the credit risk of all investments on a scale of

1 to 5 no less frequently than quarterly. This system is intended primarily to reflect the underlying risk of a portfolio

investment relative to our initial cost basis in respect of such portfolio investment (i.e., at the time of origination or

acquisition), although it may also take into account the performance of the portfolio company's business, the collateral

coverage of the investment and other relevant factors. The rating system is as follows:

---

| | |
|:---|:---|
| **<u>Investment Rating</u>** | **<u>Description</u>** |
| 1 | Involves the least amount of risk to our initial cost basis. The borrower is performing above <br>expectations, and the trends and risk factors for this investment since the time of origination <br>or acquisition are generally favorable which may include the performance of the portfolio <br>company or a potential exit.<br>|
| 2 | Involves an acceptable level of risk that is similar to the risk at the time of origination or <br>acquisition. The borrower is generally performing as expected and the risk factors are neutral <br>to favorable. All investments or acquired investments in new portfolio companies are initially <br>assessed a rating of 2.<br>|
| 3 | Involves a borrower performing below expectations and indicates that the loan's risk has <br>increased since origination or acquisition. The borrower could be out of compliance with debt <br>covenants; however loan payments are generally not past due.<br>|
| 4 | Involves a borrower performing materially below expectations and indicates that the loan's <br>risk has increased materially since origination or acquisition. In addition to the borrower <br>being generally out of compliance with debt covenants, loan payments may be past due (but <br>generally not more than 120 days past due)<br>|
| 5 | Involves a borrower performing substantially below expectations and indicates that the loan's <br>risk has increased substantially since origination or acquisition. Most or all of the debt <br>covenants are out of compliance and payments are substantially delinquent. Loans rated 5 are <br>not anticipated to be repaid in full and we will reduce the fair market value of the loan to the <br>amount we anticipate will be recovered.<br>|

---

The following table shows the distribution of the Company's investments on the 1 to 5 internal risk rating scale as of

December 31, 2025 and December 31, 2024 (dollar amounts in thousands, except per share data, unless otherwise

indicated):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2025** | **December 31, 2024** | **December 31, 2024** |
| <br>**Investment Rating** | **Investments at** <br>**Fair Value**<br>| **Percentage of** <br>**Total Investments**<br>| **Investments at** <br>**Fair Value**<br>| **Percentage of** <br>**Total Investments**<br>|
| 1 | $— | —% | $— | —% |
| 2 | 703603 | 89.2% | 483968 | 86.9% |
| 3 | 40470 | 5.1% | 73119 | 13.1% |
| 4 | 45140 | 5.7% |  |  |
| 5 |  |  |  |  |
| **Total** | $789213 | 100.0% | $557087 | 100.0% |

---

**Results of Operations**

The following diagram illustrates the composition of the Company's investment income, operating expenses, and resulting

net investment income for the year ended December 2025 and December 31, 2024

![Letter - 25 (1).jpg](ls-20251231_g6.jpg)

(1) Rounding

![Letter - 24.jpg](ls-20251231_g7.jpg)

The following table represents the operating results for the years ended December 31, 2025, December 31, 2024 and

December 31, 2023 (dollar amounts in thousands, except per share data, unless otherwise indicated):

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended** <br>**December 31, 2025**<br>| **For the year ended** <br>**December 31, 2024**<br>| **For the year ended**<br>**December 31, 2023**<br>|
| Total investment income | $84650 | $56234 | $20751 |
| Total expenses, including expense support <br>reimbursement<br>| 49130 | 26647 | 12038 |
| Net investment income (loss) | 35520 | 29587 | 8713 |
| Net realized gains (losses) on investments | 203 | 98 |  |
| Net change in unrealized gains (losses) | (1452) | (1846) | 2272 |
| **Net increase (decrease) in net assets resulting** <br>**from operations**<br>| $34271 | $27839 | $10985 |

---

***Investment Income***

The composition of the Company's investment income was as follows (dollar amounts in thousands, except per share data,

unless otherwise indicated):

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended** <br>**December 31, 2025**<br>| **For the year ended** <br>**December 31, 2024**<br>| **For the year ended**<br>**December 31, 2023**<br>|
| **Investment income** |  |  |  |
| Interest income | $78261 | $51417 | $18567 |
| Fee income | 1892 | 1135 | 70 |
| Interest from cash and cash equivalents | 4497 | 3682 | 2114 |
| **Total investment income** | $84650 | $56234 | $20751 |

---

The increase in total investment income from $56.2 million for the year ended December 31, 2024 to $84.7 million for the

year ended December 31, 2025 was primarily driven by our deployment of capital and growth in average invested balance

over the period. New investments during the year consisted primarily of directly originated, first lien senior secured loans

to non-sponsored middle market borrowers across our Target Regions, consistent with our investment strategy. The growth

in investment income was partially offset by a 20 basis point compression in the weighted average spread over SOFR,

reflecting broader private credit market conditions during the period.

*Expenses*

The following table summarizes the Company's expenses for the years ended December 31, 2025, December 31, 2024 and

December 31, 2023 (dollar amounts in thousands, except per share data, unless otherwise indicated):

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended** <br>**December 31, 2025**<br>| **For the year ended** <br>**December 31, 2024**<br>| **For the year ended**<br>**December 31, 2023**<br>|
| Interest and financing expenses | $29229 | $10255 | $2049 |
| Management fee | 6617 | 4136 | 1640 |
| Incentive fee | 6259 | 5272 | 1615 |
| General and administrative expenses | 2285 | 1831 | 1441 |
| Administrative services fee | 1800 | 2048 | 1485 |
| Professional fees | 1574 | 1082 | 584 |
| Legal fees | 645 | 1042 | 838 |
| Directors' fees | 320 | 348 | 320 |
| Income tax expense | 262 | 371 |  |
| Organizational costs | 139 | 46 | 332 |
| Placement fees |  | 216 | 1131 |
| Offering expenses |  |  | 151 |
| **Total expenses** | $49130 | $26647 | $11586 |
| Expense support reimbursement |  |  | 452 |
| **Total expenses, including expense support** <br>**reimbursement**<br>| $49130 | $26647 | $12038 |

---

Total expenses before expense support increased to $49.1 million for the year ended December 31, 2025 from $26.6

million for the year ended December 31, 2024. The Company did not receive expense support from the Adviser during the

year ended December 31, 2025 or December 31, 2024.

Interest and financing expenses increased to $29.2 million for the year ended December 31, 2025 compared to $10.3

million for the year ended December 31, 2024 primarily due to an expansion of funding sources from SBA-guaranteed

debentures, the ING Credit Facility, Notes, and Repurchase Obligations.

The increase in management fees for the year ended December 31, 2025 when compared to the year ended December 31,

2024 was driven by our deployment of capital and an increase in average gross assets.

Incentive fees increased to $6.3 million for the year ended December 31, 2025 when compared to $5.3 million for the year

ended December 31, 2024 due to the increase in Net Investment Income. Refer to Note 6 Investment Advisory Agreement

of the Form 10-K for a discussion of how the incentive fee is calculated.

The decrease in administrative services fee to $1.8 million for the year ended December 31, 2025 as compared to $2.0

million for the year ended December 31, 2024 was due to a decrease in the Company's allocable portion of overhead

compensation, rent, office services and equipment, under the Company's Administration Agreement.

General and administrative expenses, legal fees, professional fees and placement fees increased to $4.5 million during the

year ended December 31, 2025 as compared to $4.2 million for the year ended December 31, 2024 primarily driven by the

continued expansion of our investment portfolio and related operational infrastructure, in connection with independent

audit services, external legal services, third-party valuation services for our portfolio, insurance premiums, accounting,

financial preparation and reporting services, and fees paid to the placement agent for the additional commitment closes and

capital draws.

The increase in organizational costs to $139 thousand for the year ended December 31, 2025 as compared to $46 thousand

for the year ended December 31, 2024 was primarily related to the formation of certain subsidiaries of the Company. Refer

to Note 1 of the Form 10-K on details regarding organizational costs.

**Financial Condition, Liquidity and Capital Resources**

We generate cash primarily from the proceeds of any private placements of our Common Stock, from interest payments

and fees earned on our investments, and from principal repayments and proceeds from sales of our investments. Our

primary uses of cash include investments in portfolio companies, payments of our expenses and cash distributions to our

stockholders. From time to time, we may explore opportunities to enter into significant corporate control transactions

which, if consummated, could use a material amount of cash and/or require material incremental financing.

***Contractual Obligations***

We have entered into the Investment Advisory Agreement with our Adviser. Our Adviser agreed to serve as our investment

adviser in accordance with the terms of our Investment Advisory Agreement. Payments under our Investment Advisory

Agreement in each reporting period consist of the base management fee equal to a percentage of the value of our gross

assets as well as an incentive fee based on our performance.

Under the Investment Advisory Agreement, the Adviser manages the day-to-day operations of, and provides investment

advisory services to, the Company. The Board approved the renewal of the Investment Advisory Agreement on May 8,

2025. The Adviser is a registered investment adviser with the SEC. The Adviser receives fees for providing services,

consisting of two components, a base management fee and an incentive fee.

We define a "Liquidity Event" as any of: (1) a quotation or listing of our common stock on a national securities exchange,

including an initial public offering or (2) a Sale Transaction. A "Sale Transaction" means (a) the sale of all or substantially

all of our capital stock or assets to, or another liquidity event with, another entity or (b) a transaction or series of

transactions, including by way of merger, consolidation, recapitalization, reorganization, or sale of stock in each case for

consideration of either cash and/or publicly listed securities of the acquirer. Potential acquirers could include entities that

are not BDCs that are advised by the Adviser or its affiliates.

*Base Management Fee*

The base management fee ("Management Fee") is payable quarterly in arrears beginning in the period during its initial

capital drawdown from its non-affiliated investors (the "Initial Drawdown") at an annual rate of (i) prior to a Liquidity

Event, 0.75%, and (ii) following a Liquidity Event, 1.0%, in each case of the average value of our gross assets (gross assets

equal the total assets of the Company as set forth on the Company's balance sheet) at the end of the two most recently

completed calendar quarters. No Management Fee is charged on committed but undrawn capital commitments.

For the years ended December 31, 2025, December 31, 2024 and December 31, 2023, the Company incurred Management

Fees of $6.6 million, $4.1 million and $1.6 million, respectively. As of December 31, 2025 and December 31, 2024, there

was $1.8 million and $1.4 million of Management Fee payable to the Adviser, respectively.

*Incentive Fee*

The Company also pays the Adviser an incentive fee consisting of two parts: (i) an incentive fee based on pre-incentive fee

net investment income (the "Income-Based Fee"), and (ii) the capital gains component of the incentive fee (the "Capital

Gains Fee"). For more information regarding the Income-Based Fee and the Capital Gains Fee, see Note 6 - Related Party

Agreements and Transactions.

For the years ended December 31, 2025, December 31, 2024 and December 31, 2023, the Company incurred Income-

Based Fee of $6.3 million, $5.3 million and $1.6 million, respectively. As of December 31, 2025 and December 31, 2024,

$1.5 million and $1.3 million, respectively, remained payable to the Adviser.

*Administration Agreement*

We have entered into an Administration Agreement with the Administrator pursuant to which the Administrator furnishes

us with administrative services necessary to conduct our day-to-day operations. The Administrator is reimbursed for

administrative expenses it incurs on our behalf in performing its obligations. Such costs are reasonably allocated to us on

the basis of assets, revenues, time records or other reasonable methods. We do not reimburse our Administrator for any

services for which it receives a separate fee.

If any of our contractual obligations discussed above were terminated, our costs may increase under any new agreements

that we enter into as replacements. We would also likely incur expenses in locating alternative parties to provide the

services we receive under our Investment Advisory Agreement and Administration Agreement.

For the years ended December 31, 2025 and December 31, 2024, our expenses were paid by a related party of the Adviser

and will be reimbursed by us. As of December 31, 2025 and December 31, 2024, the total amount owed to the affiliates of

the Adviser is included in the Due to Affiliate line item in the Consolidated Statements of Assets and Liabilities.

For the years ended December 31, 2025, December 31, 2024 and December 31, 2023, the Company incurred $1.8 million,

$2.0 million, and $1.5 million, respectively, in fees under the Administrative Agreement. These fees are included in

administrative service fees in the accompanying Consolidated Statements of Operations. As of December 31, 2025 and

December 31, 2024, $0 and $0, respectively, were unpaid and included in administrative services fee payable in the

accompanying Consolidated Statements of Assets and Liabilities. No administrative services fee was charged to the

Company prior to the Company's commencement of operations.

*Expense Support and Conditional Reimbursement Agreement*

On December 30, 2021, we entered into an expense support and conditional reimbursement agreement (the "Expense

Support Agreement") with the Adviser. The Adviser may elect to pay certain of our expenses on our behalf (each, an

"Expense Payment"), so long as no portion of the payment will be used to pay any interest expense or shareholder

servicing and/or distribution fees. Any Expense Payment that the Adviser has committed to pay must be paid by the

Adviser to us in any combination of cash or other immediately available funds no later than forty-five days after such

commitment was made in writing, and/or offset against amounts due from us to the Adviser or its affiliates.

Following any calendar quarter in which Available Operating Funds (as defined below) exceed the cumulative distributions

accrued to our shareholders based on distributions declared with respect to record dates occurring in such calendar quarter

(the amount of such excess being hereinafter referred to as "Excess Operating Funds"), we will pay such Excess Operating

Funds, or a portion thereof, to the Adviser until such time as all Expense Payments made by the Adviser to us within three

years prior to the last business day of such calendar quarter have been reimbursed. Any payments required to be made by

us will be referred to herein as a "Reimbursement Payment." "Available Operating Funds" means the sum of (i) our net

investment company taxable income (including net short-term capital gains reduced by net long-term capital losses), (ii)

our net capital gains (including the excess of net long-term capital gains over net short-term capital losses) and (iii)

dividends and other distributions paid to us on account of investments in portfolio companies (to the extent such amounts

listed in clause (iii) are not included under clauses (i) and (ii) above).

Our obligation to make a Reimbursement Payment shall automatically become a liability of ours on the last business day of

the applicable calendar quarter, except to the extent the Adviser has waived its right to receive such payment for the

applicable quarter.

As of December 31, 2025 and December 31, 2024, the Company has no Unreimbursed Expense Payable.

***Capital Resources and Borrowings***

As a BDC, we are permitted, under specified conditions, to issue multiple classes of indebtedness and one class of stock

senior to shares of our common stock if our asset coverage, as defined in the 1940 Act, is at least equal to 150%, subject to

receipt of certain approvals and compliance with certain disclosure requirements, immediately after each such issuance.

Section 61(a) of the 1940 Act reduces the asset coverage requirements applicable to BDCs from 200% to 150% so long as

the BDC meets certain disclosure requirements and obtains certain approvals. In April 2021, our Board and initial

stockholder approved the reduced asset coverage ratio. The reduced asset coverage requirements permit us to increase the

maximum amount of leverage that we are permitted to incur by reducing the asset coverage requirements applicable to us

from 200% to 150%. As defined in the 1940 Act, asset coverage of 150% means that for every $100 of net assets we hold,

we may raise $200 from borrowing and issuing senior securities as compared to $100 from borrowing and issuing senior

securities for every $100 of net assets under a 200% asset coverage requirement. In addition, while any senior securities

remain outstanding, we must make provisions to prohibit any distribution to our stockholders or the repurchase of such

securities or shares unless we meet the applicable asset coverage ratios at the time of the distribution or repurchase. As of

December 31, 2025 and December 31, 2024, the Company's asset coverage ratio based on the aggregate amount

outstanding of senior securities was 220.8% and 269.2%, respectively.

Our financing facilities consist of the following (dollar amounts in thousands, except per share data, unless otherwise

indicated):

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Aggregate**<br>**Principal** <br>**Amount** <br>**Available**<br>| **Principal** <br>**Amount** <br>**Outstanding**<br>| **Unused** <br>**Portion**<br>| **Aggregate**<br>**Principal** <br>**Amount** <br>**Available**<br>| **Principal** <br>**Amount** <br>**Outstanding**<br>| **Unused** <br>**Portion**<br>|
| Secured borrowings | $300000 | $276982 | $23018 | $225000 | $208232 | $16768 |
| SBA-Guaranteed <br>Debentures<br>| 290000 | 230000 | 60000 | 192505 | 192505 |  |
| Note payable | 65000 | 65000 |  |  |  |  |
| **Total** | $655000 | $571982 | $83018 | $417505 | $400737 | $16768 |

---

The following table summarizes the interest expense, non-usage fees and amortization of financing costs incurred on the

Company's total debt for the years ended December 31, 2025, December 31, 2024 and December 31, 2023 (dollar amounts

in thousands, except per share data, unless otherwise indicated):

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended** <br>**December 31, 2025**<br>| **For the year ended** <br>**December 31, 2024**<br>| **For the year ended**<br>**December 31, 2023**<br>|
| Interest expense | $27248 | $9328 | $1526 |
| Non-usage fee <sup>(1)</sup> | 168 | 92 | 82 |
| Amortization of deferred financing costs | 1813 | 835 | 441 |
| Weighted average stated interest rate | 6.07% | 6.40% | 7.08% |
| Weighted average outstanding balance | $449096 | $145828 | $21548 |

---

(1)Non-usage fee is applicable to the undrawn portion of the credit facilities.

The following chart compares the contractual maturity profile of the Company's investment portfolio against scheduled

debt maturities as of December 31, 2025.

![10-K SEC DataVis - 5a.jpg](ls-20251231_g8.jpg)

(1) Investment Maturities: Represents the aggregate fair value of the BDC's debt investments maturing in each period,

based on contractual maturity dates as set forth in the Consolidated Schedule of Investments. Actual maturities may differ

from contractual maturities due to prepayments, extensions, defaults, or other factors. Maturity profiles are subject to

change and should not be viewed as indicative of future cash flows or liquidity.

(2) Debt Maturities: Represents the aggregate principal amount of the BDC's outstanding borrowings maturing in each

period, including the ING revolving credit facility, SBA-guaranteed debentures, and senior unsecured notes. Actual

repayment timing may differ from contractual maturity due to refinancing activity, early repayment, or amendments to

existing facilities. Debt maturity profiles are subject to change and should not be viewed in isolation.

**Credit Facilities**

*ING Credit Facility*

On June 18, 2024, we entered into a Senior Secured Revolving Credit Agreement (as amended, restated, supplemented, or

otherwise modified from time to time, the "ING Credit Facility") with ING Capital, LLC, as Administrative Agent, Lead

Arranger, Bookrunner and Sustainability Structuring Agent.

On September 20, 2024, we entered into Amendment No. 1 to the Senior Secured Revolving Credit Agreement (the "First

Amendment") to the ING Credit Facility. The parties to the First Amendment include us, EverBank, N.A. as Lender, First-

Citizens Bank & Trust Company as Lender, Subsidiary Guarantors party thereto and ING Capital LLC, as Administrative

Agent. The First Amendment provides for, among other things, an upsize in the total commitments from lenders under the

credit facility from $75 million to $150 million.

On December 12, 2024, we entered into a joinder agreement (the "First Lender Joinder Agreement"), under the accordion

feature in the ING Credit Facility pursuant to which the aggregate commitments under such facility increased from $150

million to $175 million. The parties to the First Lender Joinder Agreement include us, BankUnited, N.A., as additional

Lender, the Subsidiary Guarantors party to such agreement and the Administrative Agent.

On December 20, 2024, we entered into a joinder agreement (the "Second Lender Joinder Agreement") under the

accordion feature in the ING Credit Facility, pursuant to which aggregate commitments under such facility increased from

$175 million to $225 million. The parties to the Second Lender Joinder Agreement include us, Customers Bank, as

additional Lender, the Subsidiary Guarantors party to such agreement and the Administrative Agent.

On March 20, 2025, we entered into a commitment increase agreement (the "First Commitment Increase Agreement")

under the accordion feature in the ING Credit Facility pursuant to which aggregate commitments under such facility

increased from $225 million to $250 million. The parties to the First Commitment Increase Agreement include us, ING

Capital LLC, as additional Lender, the Subsidiary Guarantors party to such agreement and the Administrative Agent.

On April 24, 2025, we entered into Amendment No. 2 to the Senior Secured Revolving Credit Agreement (the "Second

Amendment"), which amended the ING Credit Facility. The parties to the Second Amendment include us, the lenders party

to such agreement, Subsidiary Guarantors party to such amendment and ING Capital LLC, as Administrative Agent. The

Second Amendment provides for an increase of the accordion provision to permit increases in the total facility amount of

up to $300 million and permits us to enter into repurchase agreements in an aggregate nominal amount of up to $30

million.

On April 24, 2025, we entered into a waiver letter permitting us to enter into a repurchase agreement with Midcap

Financial Trust dated as of April 17, 2025.

On May 30, 2025, we entered into a joinder agreement (the "Third Lender Joinder Agreement") under the accordion

feature in the ING Credit Facility pursuant to which aggregate commitments under such facility increased from

$250 million to $275 million. The parties to the Third Lender Joinder Agreement include us, City National Bank, as

additional lender, the Subsidiary Guarantors party to such agreement and the Administrative Agent.

On October 30, 2025, we entered into a commitment increase agreement (the "Second Commitment Increase Agreement")

under the accordion feature in the ING Credit Facility pursuant to which aggregate commitments under such facility

increased from $275 million to $300 million. The parties to the Second Commitment Increase Agreement include the

Company, City National Bank, as Lender, the Subsidiary Guarantors party to such agreement and the Administrative

Agent.

As of December 31, 2025 and December 31, 2024, we had $277.0 million and $208.2 million, respectively, in outstanding

borrowings from the ING Credit Facility and availability as determined under the borrowing base of the ING Credit

Facility of $23 million.

The following table summarizes the interest expense, non-usage fees and amortization of financing costs incurred on the

ING Credit Facility for the years ended December 31, 2025, December 31, 2024 and December 31, 2023 (dollar amounts

in thousands, except per share data, unless otherwise indicated):

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended** <br>**December 31, 2025**<br>| **For the year ended** <br>**December 31, 2024**<br>| **For the year ended**<br>**December 31, 2023**<br>|
| Interest expense | $14879 | $3601 | $— |
| Non-usage fee <sup>(1)</sup> | 168 | 66 |  |
| Amortization of financing costs | 660 | 169 |  |
| Weighted average stated interest rate | 7.06% | 7.79% | —% |
| Weighted average outstanding balance | $210745 | $46226 | $— |

---

(1)Non-usage fee is applicable to the undrawn portion of the credit facilities.

*Subscription Facility* 

On February 2, 2022, we entered into a subscription-based credit agreement with Sumitomo Mitsui Banking Corporation,

which was amended on June 28, 2022, December 21, 2022, and February 1, 2024 (and as may be further amended,

modified or supplemented, the "Subscription Facility"). The Subscription Facility allowed us to borrow up to

$38.4 million, subject to certain restrictions, including availability under a borrowing base that was based upon unused

capital commitments made by investors in us. The amount of permissible borrowings under the Subscription Facility could

be increased to up to $1 billion with the consent of the lenders. The Subscription Facility bore interest at an annual rate of:

(i) with respect to reference rate loans, a reference rate for the period plus a margin equal to 2.50% (the "Applicable

Margin") and (ii) with respect to alternative rate loans, the greatest of (a) the administrative agent's prime rate, (b) Term

SOFR with a one-month term plus the Applicable Margin and (c) the federal funds rate plus 0.50%. Subject to certain

exceptions, the Subscription Facility was secured by a first lien security interest in our unfunded investor equity capital

commitments. The Subscription Facility included customary covenants, certain limitations on the incurrence of additional

indebtedness and liens, and other maintenance covenants, as well as usual and customary events of default for credit

facilities of this nature. The Subscription Facility matured on May 2, 2024 and, on such date, all of our obligations under

the Subscription Facility were terminated.

As of December 31, 2025 and December 31, 2024, the Company had no outstanding borrowings from the Subscription

Facility.

The following table summarizes the interest expense, non-usage fees and amortization of financing costs incurred on the

Subscription Facility for the years ended December 31, 2025, December 31, 2024 and December 31, 2023 (dollar amounts

in thousands, except per share data, unless otherwise indicated):

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended** <br>**December 31, 2025**<br>| **For the year ended** <br>**December 31, 2024**<br>| **For the year ended**<br>**December 31, 2023**<br>|
| Interest expense | $— | $492 | $584 |
| Non-usage fee <sup>(1)</sup> |  | 26 | 82 |
| Amortization of financing costs |  | 218 | 372 |
| Weighted average stated interest rate | —% | 7.83% | 7.19% |
| Weighted average outstanding balance | $— | $6286 | $8121 |

---

(1)Non-usage fee includes the portion of the facility agent fee applicable to the undrawn portion of the Subscription

Facility.

**SBA-Guaranteed Debentures**

The following illustration summarizes the Company's SBA-guaranteed debentures issued through its SBIC and SSBIC

subsidiaries, including outstanding balances, available capacity, and applicable interest rates, as of December 31, 2025.

![Frame 11723 1.jpg](ls-20251231_g9.jpg)

(1) Combined maximum capacity of $350M represents the aggregate licensed debenture limit across Lafayette Square

SBIC, LP and Lafayette Square SSBIC, LP. As of December 31, 2025, the Company has received SBA commitments of

$290.0M in aggregate, with $230.0M currently outstanding.

LS SBIC LP and LS SSBIC LP are able to borrow funds from the SBA against their regulatory capital (which

approximates equity capital in LS SBIC LP and LS SSBIC LP) that is paid in and is subject to customary regulatory

requirements, including periodic examination by the SBA. As of December 31, 2025 and December 31, 2024, LS SBIC LP

and LS SSBIC LP had a regulatory capital of $175.0 million and $110.0 million, respectively, and had $230.0 million and

$192.5 million, respectively, in SBA-guaranteed debentures outstanding. SBA debentures are non-recourse to us, have a

10-year maturity, and may be prepaid at any time without penalty. The interest rate on the SBA debentures is fixed at the

time of issuance, which is often referred to as pooling, at a market-driven spread over 10-year U.S. Treasury Notes. Current

SBA regulations limit the amount that each of LS SBIC LP and LS SSBIC LP may borrow to a maximum of

$175.0 million, which is up to twice its potential regulatory capital.

The SBA-guaranteed debentures incurred an upfront commitment fee of 1.00% on the total commitment amount and a

2.435% issuance discount on drawdowns. These amounts are amortized over the life of the SBA-guaranteed debentures. In

addition, an annual fee is charged on the SBA-guaranteed debentures which are amortized over the period.

The following table summarizes our SBA-guaranteed debentures as of December 31, 2025 (dollar amounts in thousands,

except per share data, unless otherwise indicated):

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Issuance Date** | **Maturity Date** | **Debenture Amount** | **Interest Rate** | **SBA Annual Charge** |
| September 15, 2023 | March 1, 2034 | $31000 | 5.04% | 0.047% |
| March 15, 2024 | September 1, 2034 | 5960 | 4.38% | 0.047% |
| June 14, 2024 | September 1, 2034 | 45540 | 4.38% | 0.129% |
| September 16, 2024 | March 1, 2035 | 82505 | 4.96% | 0.129% |
| December 12, 2024 | March 1, 2035 | 27500 | 4.96% | 0.347% |
| March 28, 2025 | September 1, 2035 | 9995 | 4.53% | 0.347% |
| June 27, 2025 | September 1, 2035 | $27500 | 4.53% | 0.347% |

---

The following table summarizes the interest expense and amortization of financing costs incurred on the SBA-guaranteed

debentures for the years ended December 31, 2025, December 31, 2024 and December 31, 2023 (dollar amounts in

thousands, except per share data, unless otherwise indicated):

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended** <br>**December 31, 2025**<br>| **For the year ended** <br>**December 31, 2024**<br>| **For the year ended**<br>**December 31, 2023**<br>|
| Interest expense | $10700 | $4610 | $566 |
| Non-usage fee |  |  |  |
| Amortization of financing costs | 1032 | 448 | 69 |
| Weighted average stated interest rate | 4.99% | 5.34% | 6.23% |
| Weighted average outstanding balance | $214309 | $86388 | $9088 |

---

(1)The Company's initial borrowing under the SBA Debentures program occurred on September 15, 2023.

**Unsecured Notes**

On August 19, 2025, we entered into a Note Purchase Agreement (the "Note Purchase Agreement") governing the issuance

of $65.0 million in aggregate principal amount of 7.00% Senior Notes (the "Notes") to qualified institutional investors in a

private placement.

The Notes were issued on August 19, 2025 and will mature on August 19, 2030 unless redeemed, purchased or prepaid

prior to such date by the Company in accordance with their terms. The Notes have a fixed annual interest rate of 7.00%.

Interest on the Notes is due semiannually. Interest payable on the Notes is subject to increase (up to a maximum increase of

2.00% above the stated rate for the Notes) in the event that, subject to certain exceptions, the Notes cease to have an

investment grade rating and the Company's minimum secured debt ratio exceeds certain thresholds.

The Notes are general unsecured obligations of the Company that rank at least pari passu, without preference or priority,

with all other unsecured and unsubordinated indebtedness of the Company. The Notes are guaranteed, on a senior

unsecured basis, by LS BDC Holdings, LLC (the "Guarantor"), a wholly owned subsidiary of the Company.

The Note Purchase Agreement contains customary terms and conditions for senior unsecured notes issued in a private

placement, including affirmative and negative covenants, such as maintenance of the Company's status as a business

development company within the meaning of the 1940 Act, a minimum consolidated net worth test and a minimum asset

coverage ratio. The Note Purchase Agreement also contains customary events of default with customary cure and notice

periods.

In addition, the Company is obligated to offer to repay the Notes at 100% of the principal amount of such Notes, together

with interest on such Notes accrued to, if certain change in control events occur.

The Notes were offered in reliance on Section 4(a)(2) under the Securities Act. The Notes have not and will not be

registered under the Securities Act or any state securities laws. Unless they are registered under the Securities Act, the

Notes may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject

to, the registration requirements of the Securities Act. We used the net proceeds from this offering for general corporate

purposes, including making investments.

As of December 31, 2025, the carrying amount of the Company's borrowings under the Notes approximated its fair value.

As of December 31, 2025, unamortized debt issuance costs of $1.6 million are being deferred and amortized over the

remaining term of the Notes. As of December 31, 2025, the Notes had an outstanding balance of $65.0 million.

The following table summarizes the interest expense, non-usage fees and amortization of financing costs incurred on the

Notes for the years ended December 31, 2025, December 31, 2024 and December 31, 2023 (dollar amounts in thousands,

except per share data, unless otherwise indicated):

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended** <br>**December 31, 2025**<br>| **For the year ended** <br>**December 31, 2024**<br>| **For the year ended**<br>**December 31, 2023**<br>|
| Interest expense | $1669 | $— | $— |
| Non-usage fee |  |  |  |
| Amortization of financing costs | 121 |  |  |
| Weighted average stated interest rate | 6.94% | —% | —% |
| Weighted average outstanding balance | $24041 | $— | $— |

---

**Repurchase Obligations**

In order to finance certain investment transactions, we may, from time to time, enter into repurchase agreements with

Macquarie US Trading LLC ("Macquarie"), whereby we sell to Macquarie an investment that Macquarie holds, and we

concurrently enter into an agreement to repurchase the same investment (any such obligation, a "Repurchase Obligation")

at an agreed-upon price at a future date, not to exceed 90-days from the date such investment was sold.

We entered into two repurchase agreements on May 1, 2024 which were collateralized by the Company's term loans to

each of Salt Dental Collective (the "Salt Repurchase Obligation") and Med Learning Group, LLC (the "MLG Repurchase

Obligation" and together with the Salt Repurchase Obligation, the "May 2024 Repurchase Obligations"). Interest under

each of the May 2024 Repurchase Obligations was calculated as (a) the product of the funded amount of the loan and (b)

the product of (i) the number of days the loan is outstanding (subject to number of minimum days per the agreement) and

(ii) daily fee rate. We maintain effective control over the security because we are entitled and obligated to repurchase the

security before its maturity. Therefore, the repurchase agreement is treated as a secured borrowing and not a sale.

On July 30, 2024 we repurchased our obligations under the MLG Repurchase Obligation and on October 2, 2024, we

repurchased our obligations under the Salt Dental Obligation.

As of December 31, 2025 and December 31, 2024, we had no outstanding borrowings from the May 2024 Repurchase

Obligations.

The following table summarizes the interest expense, non-usage fees and amortization of financing costs incurred on the

Repurchase Obligations for the years ended December 31, 2025, December 31, 2024 and December 31, 2023 (dollar

amounts in thousands, except per share data, unless otherwise indicated):

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended** <br>**December 31, 2025**<br>| **For the year ended** <br>**December 31, 2024**<br>| **For the year ended**<br>**December 31, 2023**<br>|
| Interest expense | $— | $625 | $376 |
| Non-usage fee |  |  |  |
| Amortization of financing costs |  |  |  |
| Weighted average stated interest rate | —% | 9.01% | 8.68% |
| Weighted average outstanding balance | $— | $6928 | $4339 |

---

***Off-Balance Sheet Arrangements***

We may become a party to financial instruments with off-balance sheet risk in the normal course of our business to meet

the financial needs of our portfolio companies. These instruments may include commitments to extend credit and involve,

to varying degrees, elements of liquidity and credit risk in excess of the amount recognized in the balance sheet. As of

December 31, 2025 and December 31, 2024, we were not party to any off-balance sheet arrangements.

**Recent Developments** 

On January 8, 2026, January 29, 2026, January 30, 2026, February 4, 2026, February 5, 2026, February 12, 2026, February

26, 2026, February 27, 2026, March 2, 2026, March 4, 2026, and March 12, 2026, the Company invested in a senior

secured first lien revolver credit facility in Rotolo Consultants Inc, with fundings totaling $6.6 million. This loan bears an

interest rate of 3M Term SOFR + 5.50%, and matures on January 31, 2031.

On January 15, 2026, the Company invested in a senior secured first lien term loan in Ally Medical Holdings, LLC,

totaling $14.9 million, bearing an interest rate of 3M Term SOFR + 7.00%, maturing on January 15, 2030.

On January 8, 2026, January 29, 2026, February 9, 2026, February 19, 2026, and February 26, 2026, the Company invested

in a senior secured first lien revolver credit facility in C Speed LLC, with fundings totaling $3.0 million. This loan bears an

interest rate of 3M Term SOFR + 5.90%, and matures on October 1, 2029.

On January 8, 2026 and February 6, 2026, the Company invested in a senior secured first lien term loan in Rock Gate

Capital, LLC totaling $2.8 million, bearing an interest rate of 3M Term SOFR + 6.75%, maturing on May 30, 2029.

On January 13, 2026, the Company invested in an equity holding in Studio Lafayette, LLC totaling $0.5 million.

On January 13, 2026 and February 11, 2026, the Company invested in a senior secured first lien delayed draw term loan of

Straine Dental Management, LLC with a funding of $0.2 million. This loan bears interest at an annual rate of 1M Term

SOFR + 7.42% and matures on November 25, 2030.

On January 14, 2026, February 27, 2026, and March 6, 2026, the Company invested in a senior secured first lien revolver

credit facility in Synergi LLC, with fundings totaling $0.4 million. This loan bears an interest rate of 3M Term SOFR +

7.45%, and matures on December 17, 2027.

On January 15, 2026 and February 17, 2026, the Company invested in a senior secured first lien delayed draw term loan of

DRS Imaging Services LLC with a funding of $4.3 million. This loan bears interest at an annual rate of 3M Term SOFR +

6.25% and matures on March 28, 2030.

On January 28, 2026, the Company invested in an equity holding in Lafayette Square SBLC, LLC totaling $0.5 million. On

March 16, 2026, Lafayette Square SBLC, LLC acquired an SBA 7(a) lending license and is authorized to originate SBA

7(a) loans, which provide government-guaranteed financing to eligible small businesses.

On January 28, 2026 and March 11, 2026, the Company invested in an equity holdings in Lafayette Square Technologies,

LLC totaling $1.5 million.

On January 29, 2026 and February 27, 2026, the Company invested in a senior secured first lien revolver credit facility in

Flatworld Intermediate Corporation, totaling $0.8 million, bearing an interest rate of 3M Term SOFR + 5.50%, maturing on

March 25, 2030.

On January 13, 2026, January 28, 2026, February 25, 2026 and March 11, 2026, the Company invested in a senior secured

first lien revolver credit facility in ZRG Partners LLC, with fundings totaling $1.3 million, bearing an interest rate of Prime

+ 5.00%, maturing on June 14, 2030. On March 11, 2026, the Company also funded a senior secured first lien delayed

draw term loan in ZRG Partners LLC totaling $1.0 million, bearing an interest rate of 3M Term SOFR + 6.00%, maturing

on June 14, 2030.

On January 30, 2026, the Company invested in an equity holding in Lafayette Square Mortgage Solutions, LLC totaling

$0.9 million.

On February 9, 2026, the Company invested in a senior secured first lien delayed draw term loan of truCurrent LLC with a

funding of $12.0 million. This loan bears an interest rate of 3M Term SOFR + 7.20%, maturing on February 12, 2029.

On March 3, 2026, the Company made an additional equity investment in NW1LS Co-Invest LP totaling $39 thousand.

On March 4, 2026, the Company invested in a senior secured first lien revolver credit facility in Trilon Group LLC, with a

funding of $0.2 million, bearing an interest rate of 3M Term SOFR + 4.50%, maturing on May 25, 2029.

On March 9, 2026, TCFIII OWL Buyer LLC repaid in full its outstanding senior secured first lien term loans, with

aggregate repayments totaling approximately $10.7 million.

On March 19, 2026, the Company invested in a senior secured first lien revolver credit facility in CentralBDC Enterprises,

LLC, with a funding of $0.3 million, bearing an interest rate of 3M Term SOFR + 5.25%, maturing on June 11, 2029.

On March 16, 2026, the Company issued a capital call notice to its investors in the amount of $21.0 million, with funding

due on March 27, 2026.

On March 24, 2026, the board of directors of the Company declared a regular distribution to stockholders in the amount of

$0.28 per share and a supplemental distribution in the amount of $0.05 per share, or approximately $9.2 million. The

distribution will paid on or about April 23, 2026 to stockholders of record as of March 24, 2026.

In addition, as of March 23, 2026, we had an investment backlog and pipeline of approximately $161.9 million and $555.5

million, respectively. For purposes of this Report, "investment backlog" includes transactions approved by the Adviser's

investment committee and/or for which we have issued a formal mandate, letter of intent or a term sheet. We therefore

believe such investments have a strong likelihood of closing. The term "investment pipeline" includes transactions where

initial due diligence has begun and/or analysis is in process, but we have issued no formal mandate, letter of intent or term

sheets to the prospective borrower. The consummation of any of the investments in our backlog and pipeline depends upon

one or more of the following occurring: satisfactory completion of our due diligence investigation of the prospective

portfolio company, our acceptance of the terms and structure of such investment and the negotiation, execution, and

delivery of satisfactory transaction documentation. In addition, we may sell all or a portion of these investments and certain

of these investments may result in the repayment of existing investments. We cannot make any assurances that we will

make any of these investments or that we will sell all or any portion of these investments.

**Critical Accounting Policies and Estimates**

The preparation of our consolidated financial statements and related disclosures in conformity with U.S. GAAP requires

management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and

expenses. Actual results could materially differ from those estimates. We have identified the following items as critical

accounting policies.

***Fair Value Measurements***

We value investments for which market quotations are readily available at their market quotations. However, a readily

available market value is not expected for many of the investments in our portfolio, and we value these portfolio

investments at fair value as determined in good faith by the Adviser and our valuation policy and process.

The valuation process is a multi-step endeavor, which includes the following:

• the quarterly valuation process commences with each portfolio company or investment being initially evaluated by

the investment professionals of the Adviser responsible for the monitoring of the portfolio investment;

• the Adviser's Valuation Committee reviews the valuations provided by the independent third-party valuation firm

(other than immaterial investments, which are internally valued quarterly unless otherwise deemed appropriate by

the Valuation Committee, and subsequently corroborated by an independent valuation firm on an annual basis)

and develops a valuation recommendation;

• the Adviser's Valuation Committee reviews each valuation recommendation to confirm they have been calculated

in accordance with our valuation policy and compares such valuations to the independent valuation firms'

valuation ranges to ensure the Adviser's valuations are reasonable;

• the Adviser's Valuation Committee then determines fair value marks for each of our portfolio investments; and

• the Board and Audit Committee periodically reviews the valuation process and provides oversight in accordance

with the requirements of Rule 2a-5 under the 1940 Act.

The Company applies Financial Accounting Standards Board Accounting Standards Codification 820, Fair Value

Measurement (ASC 820), as amended, which establishes a framework for measuring fair value in accordance with U.S.

GAAP and required disclosures of fair value measurements. ASC 820 determines fair value to be the price that would be

received for an investment in a current sale, which assumes an orderly transaction between market participants on the

measurement date. Market participants are defined as buyers and sellers in the principal or most advantageous market

(which may be a hypothetical market) that are independent, knowledgeable, and willing and able to transact. In accordance

with ASC 820, the Company considers its principal market to be the market that has the greatest volume and level of

activity. ASC 820 specifies a fair value hierarchy that prioritizes and ranks the level of observability of inputs used in

determination of fair value.

The three-tier hierarchy of inputs is summarized below.

• Level 1 - Quoted prices are available in active markets/exchanges for identical investments as of the reporting

date.

• Level 2 - Pricing inputs are observable inputs including, but not limited to, prices quoted for similar assets or

liabilities in active markets/exchanges or prices quoted for identical or similar assets or liabilities in markets that

are not active, and fair value is determined through the use of models or other valuation methodologies.

• Level 3 - Pricing inputs are unobservable for the investment and include activities where there is little, if any,

market activity for the investment. The inputs into determination of fair value require significant management

judgment and estimation.

***Investments***

Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the

net proceeds from the repayment or sale and the amortized cost basis of the investment using the specific identification

method without regard to unrealized appreciation or depreciation previously recognized, and includes investments charged

off during the period, net of recoveries. Net change in unrealized appreciation or depreciation on investments as presented

in the Consolidated Statements of Operations in Part I, Item 1 of this Form 10-K reflects the net change in the fair value of

investments, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are

realized.

***Revenue Recognition***

*Investment and Related Investment Income*

The Company records interest income, including amortization of premium and accretion of discount on the accrual basis to

the extent that such amounts are expected to be collected. The Company records amortized or accreted discounts or

premiums as interest income using the effective interest method or straight-line interest method, as applicable, and adjusted

only for material amendments or prepayments. Dividend income, which represents dividends from equity investments and

distributions from subsidiaries, if any, is recognized on an accrual basis to the extent that the Company expect to collect

such amount. PIK interest, computed at the contractual rate specified in each loan agreement, is periodically added to the

principal balance of the loan, rather than being paid to us in cash, and is recorded as interest income. Thus, the actual

collection of PIK interest may be deferred until the time of debt principal repayment. Origination fees received are

recorded as deferred income and recognized as investment income over the term of the loan. Upon prepayment of a loan,

any unamortized origination fees are recorded as investment income. The Company receives certain fees from portfolio

companies, which are non-recurring in nature. Such fees include loan prepayment penalties, structuring fees, covenant

waiver fees and loan amendment fees, and are recorded as investment income when earned.

*Non-accrual loans* 

A loan can be left on accrual status during the period the Company is pursuing repayment of the loan. Management reviews

all loans that become 90 days or more past due on principal and interest, or when there is reasonable doubt that principal or

interest will be collected, for possible placement on non-accrual status. When a loan is placed on non-accrual status, unpaid

interest credited to income is reversed. Additionally, any original issue discount and market discount are no longer accreted

to interest income as of the date the loan is placed on non-accrual status. Interest payments received on non-accrual loans

are recognized as income or applied to principal depending upon management's judgment. Non-accrual loans are restored

to accrual status when past due principal and interest is paid, and, in management's judgment, payments are likely to

remain current. As of December 31, 2025, we had one investment partially on non-accrual status. The non-accrual portion

of this investment represents 0.9% of total investments at fair value. As of December 31, 2024, there were no investments

on non-accrual status.

***Income Taxes*** 

The Company has elected to be treated as a RIC under Subchapter M of the IRC and intends to maintain such election in

future taxable years. However, there is no guarantee that the Company will qualify to make such an election for any future

taxable year. In order to qualify and be subject to tax as a RIC, among other things, the Company is required to meet

certain source of income and asset diversification requirements and timely distribute dividends for U.S. federal income tax

purposes to its stockholders of an amount at least equal to 90% of its investment company taxable income, as defined by

the IRC and determined without regard to any deduction for dividends paid, for each tax year. As a RIC, the Company

would intend to make the requisite distributions to its stockholders, which will generally relieve the Company from U.S.

federal income taxes with respect to all income distributed to its stockholders.

The Company is subject to a nondeductible 4% U.S. federal excise tax on its undistributed income, unless it timely

distributes (or is deemed to have timely distributed) an amount equal to the sum of (1) 98% of ordinary income for each

calendar year, (2) 98.2% of the amount by which capital gains exceeds capital losses (adjusted for certain ordinary losses)

for a one-year period ending on October 31 of the calendar year, and (3) any income and gains recognized, but not

distributed, from the previous years. While the Company intends to distribute any income and capital gains to avoid

imposition of this 4% U.S. federal excise tax, it may not be successful in avoiding entirely the imposition of this tax. In that

case, the Company will be liable for the tax only on the amount by which it does not meet the distribution requirement.

The Company accounts for income taxes in conformity with ASC Topic 740 - Income Taxes ("ASC Topic 740"). ASC

Topic 740 provides guidelines for how uncertain tax positions should be recognized, measured, presented and disclosed in

consolidated financial statements. ASC Topic 740 requires the evaluation of tax positions taken in the course of preparing

the Company's tax returns to determine whether the tax positions are "more-likely-than-not" to be sustained by the

applicable tax authority. Tax benefits of positions not deemed to meet the more-likely-than-not threshold would be

recorded as a tax expense or tax benefit in the current year. It is the Company's policy to recognize accrued interest and

penalties related to uncertain tax benefits in income tax expense. There were no material unrecognized net tax benefits or

unrecognized net tax liabilities related to uncertain income tax positions as of and through December 31, 2025 and

December 31, 2024.

**Item 7A. Quantitative and Qualitative Disclosures About Market Risk**

We are subject to financial market risks, most significantly changes in interest rates. Interest rate sensitivity refers to the

change in our earnings that may result from changes in the level of interest rates. Because we expect to fund a portion of

our investments with borrowings, our net investment income is expected to be affected by the difference between the rate at

which we invest and the rate at which we borrow. As a result, we can offer no assurance that a significant change in market

interest rates will not have a material adverse effect on our net investment income.

In addition, any investments we make that are denominated in a foreign currency will be subject to risks associated with

changes in currency exchange rates. These risks include the possibility of significant fluctuations in the foreign currency

markets, the imposition or modification of foreign exchange controls and potential illiquidity in the secondary market.

These risks will vary depending upon the currency or currencies involved.

The following table estimates the potential changes in net cash flow generated from interest income, should interest rates

increase or decrease by 100, 200 or 300 basis points. These hypothetical interest income calculations are based on a model

of the settled debt investments in our portfolio, held as of December 31, 2025, and are only adjusted for assumed changes

in the underlying base interest rates and the impact of that change on interest income. As of December 31, 2025,

approximately 85.4% of investments at fair value (excluding investments on non-accrual, unfunded debt investments and

non-bearing equity investments) represent floating-rate investments with a SOFR floor (including investments bearing a

prime interest rate contracts) and approximately 14.6% of investments at fair value represent non floating-rate investments.

Additionally, our ING Credit Facility is also subject to a floating interest rate and currently paid on a floating SOFR rates.

Interest expense is calculated based on outstanding secured borrowings as of December 31, 2025 and based on the terms of

our ING Credit Facility. Interest expense on our ING Credit Facility is calculated using the stated interest rate as of

December 31, 2025, adjusted for the hypothetical changes in rates, as shown below. Our pooled SBA debentures and the

Notes bear interest at fixed rates. We continue to finance a portion of our investments with borrowings and the interest

rates paid on our borrowings may impact significantly our net interest income.

We regularly measure exposure to interest rate risk. We assess interest rate risk and manage interest rate exposure on an

ongoing basis by comparing our interest rate sensitive assets to our interest rate sensitive liabilities. Based on that review,

we determine whether or not any hedging transactions are necessary to mitigate exposure to changes in interest rates.

Based on our Consolidated Statements of Assets and Liabilities as of December 31, 2025, the following table shows the

expected annual impact on net investment income of base rate changes in interest rates for our settled debt investments

(considering interest rate floors for variable rate instruments) and outstanding secured borrowings assuming no changes in

our investment and borrowing structure (dollar amounts in thousands, except per share data, unless otherwise indicated):

---

| | | | |
|:---|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
| <br>**Basis point increase (decrease)** | **Interest Income** | **Interest** <br>**Expense**<br>| **Net Interest** <br>**Income**<br>|
| Up 300 basis points | $20562 | $(8309) | $12253 |
| Up 200 basis points | $13708 | $(5540) | $8168 |
| Up 100 basis points | $6854 | $(2770) | $4084 |
| Down 100 basis points | $(6854) | $2770 | $(4084) |
| Down 200 basis points | $(13708) | $5540 | $(8168) |
| Down 300 basis points | $(18690) | $8309 | $(10381) |

---

We may hedge against interest rate and currency exchange rate fluctuations by using standard hedging instruments such as

futures, options, swaps and forward contracts and credit hedging contracts, such as credit default swaps, in each case,

subject to the requirements of the 1940 Act. While hedging activities may insulate us against adverse changes in interest

rates, they may also limit our ability to participate in benefits of lower interest rates with respect to our portfolio of

investment with fixed interest rates.

**ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA**

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
|  | **Page** |
| [Report of Independent Registered Public Accounting Firm](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_184) (PCAOB ID: 42) | [85](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_184) |
| Financial Statements: |  |
| [Consolidated Statements of Assets and Liabilities as of](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_19)December 31, 2025[and](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_19)December 31, 2024 | [86](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_19) |
| Consolidated [Statements of Operations for the](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_22)years ended December 31, 2025, December 31, 2024 and <br>December 31, 2023<br>| [87](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_22) |
| Consolidated [Statements of Changes in Net Assets for the](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_25)years ended December 31, 2025, December 31, <br>2024 and December 31, 2023<br>| [89](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_25) |
| Consolidated [Statements of Cash Flows for the](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_28)years ended December 31, 2025, December 31, 2024 and <br>December 31, 2023<br>| [91](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_28) |
| Consolidated[Schedules of Investments as of](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_31)December 31, 2025 and December 31, 2024 | [93](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_31) |
| [Notes to Consolidated Financial Statements](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_43) | [109](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_43) |

---

<u>[**Table of Contents**](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_7)</u>

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

**Report of Independent Registered Public Accounting Firm**

To the Shareholders and the Board of Directors of Lafayette Square USA, Inc.

**Opinion on the Financial Statements** 

We have audited the accompanying consolidated statements of assets and liabilities of Lafayette Square USA, Inc. (the

Company), including the consolidated schedules of investments, as of December 31, 2025 and 2024, the related

consolidated statements of operations, changes in net assets, and cash flows for each of the three years in the period ended

December 31, 2025, and the related notes (collectively referred to as the "consolidated financial statements"). In our

opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company

at December 31, 2025 and 2024, and the results of its operations, changes in its net assets, and its cash flows for each of the

three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion

on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public

Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the

Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and

Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and

perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement,

whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its

internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal

control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's

internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether

due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test

basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of

investments owned as of December 31, 2025 and 2024, by correspondence with the custodian, brokers, the underlying

portfolio companies and others. Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that

our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young LLP

We have served as the auditor of the Company since 2021.

Tysons, Virginia

March 25, 2026

<u>[**Table of Contents**](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_7)</u>

**Lafayette Square USA, Inc.**

**Consolidated Statements of Assets and Liabilities**

**(dollar amounts in thousands, except per share data or otherwise noted)**

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
| **Assets**  |  |  |
| Investments, at fair value:  |  |  |
| Non-controlled/non-affiliated investments at fair value (amortized cost of $737,077 and <br>$522,945 as of December 31, 2025 and December 31, 2024, respectively)<br>| $736333 | $522935 |
| Non-controlled/affiliated investments at fair value (amortized cost of $22,443 and <br>$29,349 as of December 31, 2025 and December 31, 2024, respectively)<br>| 22127 | 29583 |
| Controlled/affiliated investments at fair value (amortized cost of $30,921 and $4,569 as <br>of December 31, 2025 and December 31, 2024, respectively)<br>| 30753 | 4569 |
| Cash and cash equivalents | 199187 | 202452 |
| Deferred financing costs | 9575 | 8575 |
| Other assets | 2534 | 329 |
| Interest receivable | 2964 | 1848 |
| Due from affiliate |  | 260 |
| **Total assets** | $1003473 | $770551 |
| **Liabilities** |  |  |
| Secured borrowings (see Note 5) | $276982 | $208232 |
| SBA-guaranteed debentures (see Note 5) | 230000 | 192505 |
| Notes payable, net of deferred financing costs of $1,598 and $—, respectively (see <br>Note 5)<br>| 63402 |  |
| Distributions payable | 9239 | 7853 |
| Interest and financing payable | 7517 | 3044 |
| Management fee payable (see Note 6) | 1841 | 1375 |
| Incentive fee payable (see Note 6) | 1516 | 1578 |
| Accounts payable and accrued expenses | 1223 | 649 |
| Due to affiliate | 246 | 221 |
| Income tax payable | 178 | 171 |
| Deferred revenue payable |  | 2517 |
| **Total liabilities** | 592144 | 418145 |
| **Commitments and Contingencies (See Note 7)** |  |  |
| **Net assets** |  |  |
| Preferred stock, par value $0.001 per share (50,000,000 shares authorized, 0 shares <br>issued and outstanding as of December 31, 2025 and December 31, 2024)<br>|  |  |
| Common stock, par value $0.001 per share (450,000,000 shares authorized, 27,776,022 <br>and 23,797,438 shares issued and outstanding as of December 31, 2025 and <br>December 31, 2024, respectively)<br>| 28 | 24 |
| Paid-in capital in excess of par | 410747 | 351181 |
| Distributable earnings (losses) | 554 | 1201 |
| **Total net assets** | 411329 | 352406 |
| **Total liabilities and net assets** | $1003473 | $770551 |
| **Net asset value per common share** | $14.81 | $14.81 |

---

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

**Lafayette Square USA, Inc.**

**Consolidated Statements of Operations**

**(dollar amounts in thousands, except per share data or otherwise noted)**

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended** <br>**December 31, 2025**<br>| **For the year ended** <br>**December 31, 2024**<br>| **For the year ended**<br>**December 31, 2023**<br>|
| **Investment Income:**  |  |  |  |
| Interest income from non-controlled/non-affiliated <br>investments:<br>|  |  |  |
| Cash | $77234 | $48297 | $15440 |
| Fee income | 1892 | 1073 | 70 |
| Interest income from non-controlled/affiliated investments: |  |  |  |
| Cash | 953 | 3120 | 3127 |
| Fee income |  | 62 |  |
| Interest income from controlled/affiliated investments: |  |  |  |
| Cash | 74 |  |  |
| Interest from cash and cash equivalents | 4497 | 3682 | 2114 |
| **Total investment income** | 84650 | 56234 | 20751 |
| **Expenses:** |  |  |  |
| Interest and financing expenses (see Note 5) | $29229 | $10255 | $2049 |
| Management fee (see Note 6) | 6617 | 4136 | 1640 |
| Incentive fee (see Note 6) | 6259 | 5272 | 1615 |
| General and administrative expenses | 2285 | 1831 | 1441 |
| Administrative services fee (see Note 6) | 1800 | 2048 | 1485 |
| Professional fees | 1574 | 1082 | 584 |
| Legal fees | 645 | 1042 | 838 |
| Directors' fees | 320 | 348 | 320 |
| Income tax expense | 262 | 371 |  |
| Organizational costs (See Note 2) | 139 | 46 | 332 |
| Placement fees |  | 216 | 1131 |
| Offering expenses |  |  | 151 |
| **Total expenses** | 49130 | 26647 | 11586 |
| Expense support reimbursement (see Note 6) |  |  | 452 |
| **Total expenses, including expense support** <br>**reimbursement**<br>| 49130 | 26647 | 12038 |
| **Net investment income (loss)** | 35520 | 29587 | 8713 |
| **Net realized and unrealized gains (losses) on** <br>**investment transactions:**<br>|  |  |  |
| **Net realized gains (losses) on investments:** |  |  |  |
| Net realized gains (losses) on investments in non-<br>controlled/non-affiliated investments<br>| 203 | 98 |  |
| Total net realized gains (losses) on investments | 203 | 98 |  |
| **Net change in unrealized gains (losses) on investments:** |  |  |  |
| Net change in unrealized gains (losses) on investments in <br>non-controlled/non-affiliated investments<br>| (734) | (1910) | 2102 |
| Net change in unrealized gains (losses) on investments in <br>non-controlled/affiliated investments<br>| (550) | 64 | 170 |

---

<u>[**Table of Contents**](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_7)</u>

**Lafayette Square USA, Inc.**

**Consolidated Statements of Operations (continued)**

**(dollar amounts in thousands, except per share data or otherwise noted)**

---

| | | | |
|:---|:---|:---|:---|
| Net change in unrealized gains (losses) on investments in <br>controlled/affiliated investments<br>| (168) |  |  |
| Total net change in unrealized gains (losses) on <br>investments<br>| (1452) | (1846) | 2272 |
| **Net increase (decrease) in net assets resulting from** <br>**operations**<br>| $34271 | $27839 | $10985 |
| Weighted average common shares outstanding | 24809858 | 22531521 | 10910180 |
| Net investment income (loss) per common share (basic <br>and diluted)<br>| $1.43 | $1.31 | $0.80 |
| Earnings (loss) per common share (basic and diluted) | $1.38 | $1.24 | $1.01 |

---

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

**Lafayette Square USA, Inc.**

**Consolidated Statements of Changes in Net Assets**

**(dollar amounts in thousands, except per share data or otherwise noted)** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | | | |
|  | **Shares** | **Par Amount\*** | <br>**Paid in** <br>**Capital** <br>**Excess of Par**<br>| <br>**Distributable** <br>**Earnings** <br>**(Losses)**<br>| <br>**Total net** <br>**assets**<br>|
| **Balance, December 31, 2022** | 4916554 | $5 | $72610 | $(833) | $71782 |
| Capital transactions: |  |  |  |  |  |
| Issuance of common stock | 16472283 | 17 | 243906 |  | 243923 |
| Reinvestment of stockholder distributions | 113931 |  | 1688 |  | 1688 |
| Net increase in net assets from capital <br>transactions<br>| 16586214 | 17 | 245594 |  | 245611 |
| Net increase (decrease) in net assets <br>resulting from operations:<br>|  |  |  |  |  |
| Net investment income (loss) |  |  |  | 8713 | 8713 |
| Net realized gain (loss) |  |  |  |  |  |
| Net change in unrealized gain (losses) |  |  |  | 2272 | 2272 |
| Total increase (decrease) in net assets <br>resulting from operations<br>|  |  |  | 10985 | 10985 |
| Distributions to stockholders from: |  |  |  |  |  |
| Distributable earnings |  |  |  | (9139) | (9139) |
| Total distributions to stockholders |  |  |  | (9139) | (9139) |
| Tax reclassification of stockholders' equity <br>in accordance with US GAAP<br>|  |  | (527) | 527 |  |
| **Total increase (decrease) for the year** <br>**ended December 31, 2023**<br>| 16586214 | 17 | 245067 | 2373 | 247457 |
| **Balance, December 31, 2023** | 21502768 | $22 | $317677 | $1540 | $319239 |
|  | **Common Stock** | **Common Stock** |  |  |  |
|  | **Shares** | **Par** <br>**Amount\***<br>| **Paid in** <br>**Capital** <br>**Excess of Par**<br>| **Distributable** <br>**Earnings** <br>**(Losses)**<br>| **Total net** <br>**assets**<br>|
| **Balance, December 31, 2023** | 21502768 | $22 | $317677 | $1540 | $319239 |
| Capital transactions: |  |  |  |  |  |
| Issuance of common stock | 1760704 | 2 | 26222 |  | 26224 |
| Reinvestment of stockholder distributions | 533966 |  | 7630 |  | 7630 |
| Net increase in net assets from capital <br>transactions<br>| 2294670 | 2 | 33852 |  | 33854 |
| Net increase (decrease) in net assets <br>resulting from operations:<br>|  |  |  |  |  |
| Net investment income (loss) |  |  |  | 29587 | 29587 |
| Net realized gain (loss) |  |  |  | 98 | 98 |
| Net change in unrealized gain (losses) |  |  |  | (1846) | (1846) |
| Total increase (decrease) in net assets <br>resulting from operations<br>|  |  |  | 27839 | 27839 |
| Distributions to stockholders from: |  |  |  |  |  |
| Distributable earnings |  |  |  | (28526) | (28526) |
| Total distributions to stockholders |  |  |  | (28526) | (28526) |
| Tax reclassification of stockholders' equity <br>in accordance with US GAAP<br>|  |  | (348) | 348 |  |

---

<u>[**Table of Contents**](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_7)</u>

**Lafayette Square USA, Inc.**

**Consolidated Statements of Changes in Net Assets (continued)**

**(dollar amounts in thousands, except per share data or otherwise noted)** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Total increase (decrease) for the year** <br>**ended December 31, 2024**<br>| 2294670 | 2 | 33504 | (339) | 33167 |
| **Balance, December 31, 2024** | 23797438 | $24 | $351181 | $1201 | $352406 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | | | |
|  | **Shares** | **Par** <br>**Amount**<br>| <br>**Paid in** <br>**Capital** <br>**Excess of Par**<br>| <br>**Distributable** <br>**Earnings** <br>**(Losses)**<br>| <br>**Total net** <br>**assets**<br>|
| **Balance at December 31, 2024** | 23797438 | $24 | $351181 | $1201 | $352406 |
| Capital transactions: |  |  |  |  |  |
| Issuance of common stock | 3192122 | 3 | 47654 |  | 47657 |
| Reinvestment of stockholder distributions | 786462 | 1 | 11702 |  | 11703 |
| Net increase in net assets from capital <br>transactions<br>| 3978584 | 4 | 59356 |  | 59360 |
| Net increase (decrease) in net assets <br>resulting from operations:<br>|  |  |  |  |  |
| Net investment income (loss) |  |  |  | 35520 | 35520 |
| Net realized gain (loss) |  |  |  | 203 | 203 |
| Net change in unrealized gain (losses) |  |  |  | (1452) | (1452) |
| Total increase (decrease) in net assets <br>resulting from operations<br>|  |  |  | 34271 | 34271 |
| Distributions to stockholders from: |  |  |  |  |  |
| Distributable earnings |  |  |  | (34708) | (34708) |
| Total distributions to stockholders |  |  |  | (34708) | (34708) |
| **Total increase (decrease) for the year** <br>**ended December 31, 2025**<br>| 3978584 | 4 | 59566 | (647) | 58923 |
| **Balance, December 31, 2025** | 27776022 | $28 | $410747 | $554 | $411329 |

---

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

**Lafayette Square USA, Inc.**

**Consolidated Statements of Cash Flows**

**(dollar amounts in thousands, except per share data or otherwise noted)** 

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended** <br>**December 31, 2025**<br>| **For the year ended** <br>**December 31, 2024**<br>| **For the year ended**<br>**December 31, 2023**<br>|
| **Cash flows from operating activities**  |  |  |  |
| Net increase (decrease) in net assets resulting from operations | $34271 | $27839 | $10985 |
| Adjustments to reconcile net increase (decrease) in net assets resulting <br>from operations to net cash provided by (used in) operating activities:<br>|  |  |  |
| Net realized (gain) loss on investments | (203) | (98) |  |
| Net change in unrealized (gain) loss on investments | 1452 | 1846 | (2272) |
| Purchases of investments | (458081) | (347622) | (190068) |
| Net accretion of discount on investments | (2468) | (1374) | (406) |
| Proceeds from sales and repayments of investments | 227174 | 63754 | 3496 |
| Amortization of deferred financing costs | 1813 | 835 | 441 |
| Changes in operating assets and liabilities: |  |  |  |
| Interest receivable | (1116) | (887) | (871) |
| Due from affiliate | 260 | (260) |  |
| Deferred offering costs |  |  | 151 |
| Other assets | (2205) | 78 | (407) |
| Deferred revenue payable | (2517) | 2517 |  |
| Accounts payable and accrued expenses | 574 | (628) | 142 |
| Management fee payable | 466 | 770 | 438 |
| Incentive fee payable | (62) | 1013 | 565 |
| Administrative services fee payable |  | (885) | 335 |
| Interest and financing payable | 4473 | 2349 | 372 |
| Income tax payable | 7 | 171 |  |
| Due to affiliate | 25 | 98 | 3 |
| **Net cash provided by (used in) operating activities** | (196137) | (250484) | (177096) |
| **Cash flows from financing activities** |  |  |  |
| Proceeds from issuance of shares of common stock | 47657 | 26224 | 243923 |
| Distributions paid | (21619) | (16980) | (3514) |
| Proceeds from secured borrowings | 321250 | 383432 | 113948 |
| Repayments of secured borrowings | (252500) | (202700) | (117948) |
| Proceeds from Notes | 65000 |  |  |
| Proceeds from reverse repurchase agreement |  | 20355 |  |
| Repayments of reverse repurchase agreement |  | (20355) |  |
| Proceeds from SBA-guaranteed debentures | 37495 | 161505 | 31000 |
| Deferred financing costs paid | (4411) | (8316) | (1229) |
| **Net cash provided by (used in) financing activities** | 192872 | 343165 | 266180 |
| **Net increase (decrease) in cash and cash equivalents** | (3265) | 92681 | 89084 |
| **Cash and cash equivalents at beginning of period** | 202452 | 109771 | 20687 |
| **Cash and cash equivalents at end of period** | $199187 | $202452 | $109771 |

---

<u>[**Table of Contents**](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_7)</u>

**Lafayette Square USA, Inc.**

**Consolidated Statements of Cash Flows (continued)**

**(dollar amounts in thousands, except per share data or otherwise noted)** 

---

| | | | |
|:---|:---|:---|:---|
| **Supplemental information:** |  |  |  |
| Cash paid for interest | $22942 | $6858 | $784 |
| Shares issued from dividend reinvestment plan | $11703 | $7630 | $1688 |
| Income tax paid | $255 | $200 | $— |

---

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

**Lafayette Square USA, Inc.**

**Consolidated Schedule of Investments**

**December 31, 2025**

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Company (1)(3)(11)(13)** | **Footnotes** | **Investment Type** | **Reference**<br>**Rate and** <br>**Spread** | **Reference**<br>**Rate and** <br>**Spread** | **Interest**<br>**Rate**<br>| **Acquisition**<br>**Date**<br>| **Maturity**<br>**Date**<br>| **Par**<br>**Amount/**<br>**Shares (4)**<br>| **Amortized**<br>**Cost**<br>| **Fair**<br>**Value**<br>| **Percentage**<br>**of Net**<br>**Assets (5)**<br>|
| **Non-controlled/non-affiliated investments**  | **Non-controlled/non-affiliated investments**  | **Non-controlled/non-affiliated investments**  |  |  |  |  |  |  |  |  |  |
| **Aerospace & Defense** | **Aerospace & Defense** | **Aerospace & Defense** |  |  |  |  |  |  |  |  |  |
| C Speed LLC | (6)(7)(8)(12)<br>(23)<br>| First lien senior secured loan | S+ | 6.00% | 9.67% | 10/1/2024 | 10/1/2029 | $4700 | $4662 | $4630 | 1.1% |
| C Speed LLC | (6)(7)(12) | First lien senior secured loan | S+ | 6.00% | 9.67% | 10/1/2024 | 10/1/2029 | 15109 | 14995 | 14882 | 3.6% |
|  |  |  |  |  |  |  |  |  | 19657 | 19512 | 4.7% |
| **Commercial Services & Supplies** | **Commercial Services & Supplies** | **Commercial Services & Supplies** |  |  |  |  |  |  |  |  |  |
| Ironhorse Purchaser, LLC | (6)(7)(23) | First lien senior secured loan | S+ | 5.25% | 8.97% | 12/21/2023 | 9/30/2027 | 9773 | 9675 | 9773 | 2.4% |
| Rotolo Consultants, Inc. | (6)(7)(23) | First lien senior secured loan | S+ | 5.50% | 9.18% | 1/31/2025 | 1/31/2031 | 5246 | 5230 | 5246 | 1.3% |
| Rotolo Consultants, Inc. | (6)(7)(8)(23) | First lien senior secured loan | S+ | 5.50% | 9.18% | 1/31/2025 | 1/31/2031 | 3528 | 3478 | 3528 | 0.9% |
| Rotolo Consultants, Inc. | (6)(7)(23) | First lien senior secured loan | S+ | 5.50% | 9.18% | 1/31/2025 | 1/31/2031 | 20080 | 20062 | 20080 | 4.9% |
| TEC Services LLC | (6)(7)(8)(12) | First lien senior secured loan | S+ | 5.50% | —% | 1/9/2025 | 12/31/2029 |  |  |  | —% |
| TEC Services LLC | (6)(7)(8)(12) | First lien senior secured loan | S+ | 5.50% | —% | 1/9/2025 | 12/31/2029 |  |  |  | —% |
| TEC Services LLC | (6)(7)(12) | First lien senior secured loan | S+ | 5.50% | 9.27% | 1/9/2025 | 12/31/2029 | 9900 | 9900 | 9900 | 2.4% |
| Zero Waste Recycling LLC | (6)(7)(23) | First lien senior secured loan | S+ | 6.45% | 10.52% | 6/29/2022 | 5/15/2026 | 4927 | 5068 | 4927 | 1.2% |
| Zero Waste Recycling LLC | (6)(7)(23) | First lien senior secured loan | S+ | 6.45% | 10.53% | 6/29/2022 | 5/15/2026 | 12590 | 12590 | 12590 | 3.1% |
| ZWR Holdings, Inc. |  | Subordinated debt | 14.00% (Inc. <br>10.00% PIK) | 14.00% (Inc. <br>10.00% PIK) | 14.00% | 8/16/2021 | 2/12/2027 | 1883 | 1883 | 1883 | 0.5% |
| ZWR Holdings, Inc. |  | Warrants |  |  |  | 8/16/2021 | 2/16/2027 | 24953 |  |  | —% |
|  |  |  |  |  |  |  |  |  | 67886 | 67927 | 16.7% |
| **Construction & Engineering** | **Construction & Engineering** | **Construction & Engineering** |  |  |  |  |  |  |  |  |  |
| Ickler Electric Corporation | (6)(7)(12)(23) | First lien senior secured loan | S+ | 6.50% | 10.17% | 4/17/2025 | 4/17/2030 | 38308 | 37982 | 38273 | 9.3% |
| Ickler Electric Corporation | (12)(23) | Subordinated debt |  | 14.00% | 14.00% | 4/17/2025 | 10/17/2030 | 1557 | 1542 | 1554 | 0.4% |
| Ickler Electric Corporation | (12) | Warrants |  |  |  | 4/17/2025 | 4/17/2030 | 37608 |  |  | —% |
| Synergi, LLC | (6)(7)(23) | First lien senior secured loan | S+ | 7.45% | 11.39% | 12/19/2022 | 12/17/2027 | 15649 | 15582 | 15414 | 3.7% |
| Synergi, LLC | (6)(7)(8)(23) | First lien senior secured loan | S+ | 7.45% | —% | 12/19/2022 | 12/17/2027 |  | (15) |  | —% |
| Trilon Group, LLC | (6)(7)(8)(23) | First lien senior secured loan | S+ | 4.75% | —% | 3/24/2023 | 5/25/2029 |  | (6) |  | —% |
|  |  |  |  |  |  |  |  |  | 55085 | 55241 | 13.4% |
| **Diversified Consumer Services** | **Diversified Consumer Services** | **Diversified Consumer Services** |  |  |  |  |  |  |  |  |  |
| Med Learning Group, LLC | (6)(7)(23) | First lien senior secured loan | S+ | 5.75% | 9.42% | 3/26/2024 | 12/30/2027 | 15412 | 15325 | 15412 | 3.7% |
| Med Learning Group, LLC | (6)(7)(23) | First lien senior secured loan | S+ | 5.75% | 9.42% | 3/26/2024 | 12/30/2027 | 4256 | 4244 | 4256 | 1.0% |
|  |  |  |  |  |  |  |  |  | 19569 | 19668 | 4.7% |
| **Diversified Financial Services** | **Diversified Financial Services** | **Diversified Financial Services** |  |  |  |  |  |  |  |  |  |
| Core Capital Partners II-S LP | (6)(7)(8)(23) | First lien senior secured loan | S+ | 7.50% | 11.17% | 10/11/2024 | 10/11/2027 | 4343 | 4270 | 4343 | 1.1% |
| Core Capital Partners II-S LP | (6)(7)(23) | First lien senior secured loan | S+ | 7.50% | 11.17% | 10/11/2024 | 10/11/2027 | 28000 | 27817 | 28000 | 6.8% |
|  |  |  |  |  |  |  |  |  | 32087 | 32343 | 7.9% |

---

<u>[**Table of Contents**](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_7)</u>

**Lafayette Square USA, Inc.**

**Consolidated Schedule of Investments (continued)**

**December 31, 2025**

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Company (1)(3)(11)(13)** | **Footnotes** | **Investment Type** | **Reference**<br>**Rate and** <br>**Spread** | **Reference**<br>**Rate and** <br>**Spread** | **Interest**<br>**Rate**<br>| **Acquisition**<br>**Date**<br>| **Maturity**<br>**Date**<br>| **Par**<br>**Amount/**<br>**Shares (4)**<br>| **Amortized**<br>**Cost**<br>| **Fair**<br>**Value**<br>| **Percentage**<br>**of Net**<br>**Assets (5)**<br>|
| **Diversified Telecommunication Services** | **Diversified Telecommunication Services** | **Diversified Telecommunication Services** |  |  |  |  |  |  |  |  |  |
| Johnsoncomm LLC | (6)(7)(15)(23) | First lien senior secured loan | S+ | 6.90% | 10.58% | 1/31/2025 | 1/31/2030 | $16000 | $15872 | $15870 | 3.9% |
|  |  |  |  |  |  |  |  |  | 15872 | 15870 | 3.9% |
| **Electrical Equipment** | **Electrical Equipment** | **Electrical Equipment** |  |  |  |  |  |  |  |  |  |
| Electro Technical Industries, LLC | (6)(7)(8)(12) | First lien senior secured loan | S+ | 5.50% | —% | 3/31/2025 | 3/31/2030 |  | (14) |  | —% |
| Electro Technical Industries, LLC | (6)(7)(12) | First lien senior secured loan | S+ | 5.50% | 9.22% | 3/31/2025 | 3/31/2030 | 12538 | 12455 | 12538 | 3.0% |
|  |  |  |  |  |  |  |  |  | 12441 | 12538 | 3.0% |
| **Food & Staples Retailing** | **Food & Staples Retailing** | **Food & Staples Retailing** |  |  |  |  |  |  |  |  |  |
| Genuine Food Lab LLC | (6)(7)(8)(12) | First lien senior secured loan | S+ | 8.25% | —% | 6/06/2025 | 6/06/2030 |  | (20) |  | —% |
| Genuine Food Lab LLC | (6)(7)(12) | First lien senior secured loan | S+ | 8.25% | 11.93% | 6/06/2025 | 6/06/2030 | 10000 | 9908 | 9986 | 2.4% |
|  |  |  |  |  |  |  |  |  | 9888 | 9986 | 2.4% |
| **Food Products** | **Food Products** | **Food Products** |  |  |  |  |  |  |  |  |  |
| Capital City LLC | (6)(7)(8)(15) | First lien senior secured loan | S+ | 8.00% | 11.67% | 9/20/2024 | 9/20/2029 | 640 | 622 | 634 | 0.2% |
| Capital City LLC | (6)(7)(15) | First lien senior secured loan | S+ | 8.00% | 11.67% | 9/20/2024 | 9/20/2029 | 494 | 490 | 490 | 0.1% |
| OWP International LLC | (6)(7)(8)(12) | First lien senior secured loan | S+ | 5.75% | —% | 11/20/2025 | 11/20/2030 |  | (10) |  | —% |
| OWP International LLC | (6)(7)(8)(12) | First lien senior secured loan | S+ | 5.75% | 9.43% | 11/20/2025 | 11/20/2030 | 1000 | 971 | 990 | 0.2% |
| OWP International LLC | (6)(7)(12) | First lien senior secured loan | S+ | 5.75% | 9.43% | 11/20/2025 | 11/20/2030 | 15000 | 14851 | 14852 | 3.6% |
|  |  |  |  |  |  |  |  |  | 16924 | 16966 | 4.1% |
| **Gas Utilities** | **Gas Utilities** | **Gas Utilities** |  |  |  |  |  |  |  |  |  |
| TCFIII Owl Buyer LLC | (6)(7)(23) | First lien senior secured loan | S+ | 5.50% | 9.34% | 1/31/2023 | 4/17/2026 | 10675 | 10661 | 10675 | 2.6% |
|  |  |  |  |  |  |  |  |  | 10661 | 10675 | 2.6 |
| **Health Care Distributors** | **Health Care Distributors** | **Health Care Distributors** |  |  |  |  |  |  |  |  |  |
| Prime IV Hydration & Wellness Inc. | (6)(7)(8)(15) | First lien senior secured loan | S+ | 6.50% | —% | 11/25/2025 | 11/25/2030 |  | (39) |  | —% |
| Prime IV Hydration & Wellness Inc. | (6)(7)(15) | First lien senior secured loan | S+ | 6.50% | 10.17% | 11/25/2025 | 11/25/2030 | 8000 | 7841 | 7842 | 1.9% |
|  |  |  |  |  |  |  |  |  | **7802** | **7842** | **1.9** |
| **Health Care Equipment & Services** | **Health Care Equipment & Services** | **Health Care Equipment & Services** |  |  |  |  |  |  |  |  |  |
| MSPB MSO, LLC | (6)(7)(23) | First lien senior secured loan | S+ | 6.50% | 10.17% | 11/10/2023 | 11/10/2028 | 9863 | 9841 | 9715 | 2.4% |
| MSPB MSO, LLC | (6)(7)(8)(23) | First lien senior secured loan | S+ | 6.50% | 10.17% | 11/10/2023 | 11/10/2028 | 5086 | 5036 | 5009 | 1.2% |
| MSPB MSO, LLC | (6)(7)(23) | First lien senior secured loan | S+ | 6.50% | 10.17% | 11/10/2023 | 11/10/2028 | 8391 | 8333 | 8266 | 2.0% |
|  |  |  |  |  |  |  |  |  | 23210 | 22990 | 5.6% |
| **Health Care Providers & Services** | **Health Care Providers & Services** | **Health Care Providers & Services** |  |  |  |  |  |  |  |  |  |
| Salt Dental Collective LLC | (6)(7)(23) | First lien senior secured loan | S+ | 6.75% | 10.57% | 3/20/2023 | 2/15/2028 | 17587 | 17467 | 17587 | 4.4% |
| SMG Operating Company, LLC | (6)(7)(8)(23) | First lien senior secured loan | S+ | 5.00% | —% | 12/5/2025 | 12/5/2027 |  | (5) |  | —% |
| SMG Operating Company, LLC | (6)(7)(23) | First lien senior secured loan | S+ | 5.00% | 8.87% | 12/5/2025 | 12/5/2030 | 8500 | 8436 | 8436 | 2.1% |
| Straine Dental Management, LLC | (6)(7)(8)(23) | First lien senior secured loan | S+ | 7.42% | —% | 11/25/2025 | 11/25/2030 |  | (9) |  | —% |
| Straine Dental Management, LLC | (6)(7)(23) | First lien senior secured loan | S+ | 7.42% | 11.24% | 11/25/2025 | 11/25/2030 | 11759 | 11700 | 11700 | 2.8% |
|  |  |  |  |  |  |  |  |  | 37589 | 37723 | 9.3% |
| **Hotels, Restaurants & Leisure** | **Hotels, Restaurants & Leisure** | **Hotels, Restaurants & Leisure** |  |  |  |  |  |  |  |  |  |
| Aetius Holdings, LLC | (6)(7) | First lien senior secured loan | S+ | 7.00% | 10.93% | 1/25/2023 | 3/31/2026 | 909 | 907 | 907 | 0.2% |
| Dance Nation Holdings LLC | (6)(7) | First lien senior secured loan | S+ | 6.95% | 10.89% | 8/24/2023 | 8/24/2028 | 31625 | 31443 | 31625 | 7.8% |

---

<u>[**Table of Contents**](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_7)</u>

**Lafayette Square USA, Inc.**

**Consolidated Schedule of Investments (continued)**

**December 31, 2025**

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Company (1)(3)(11)(13)** | **Footnotes** | **Investment Type** | **Reference**<br>**Rate and** <br>**Spread** | **Reference**<br>**Rate and** <br>**Spread** | **Interest**<br>**Rate**<br>| **Acquisition**<br>**Date**<br>| **Maturity**<br>**Date**<br>| **Par**<br>**Amount/**<br>**Shares (4)**<br>| **Amortized**<br>**Cost**<br>| **Fair**<br>**Value**<br>| **Percentage**<br>**of Net**<br>**Assets (5)**<br>|
| Dance Nation Holdings LLC | (6)(7) | First lien senior secured loan | S+ | 6.95% | 10.89% | 8/24/2023 | 8/24/2028 | 4131 | 4112 | 4131 | 1.0% |
| Dance Nation Topco LLC |  | Preferred Equity |  |  |  | 8/24/2023 |  | 1652200 | 1652 | 1652 | 0.4% |
| LC Hospitality, LLC | (6)(7)(12) | First lien senior secured loan | S+ | 5.45% | 9.12% | 7/25/2024 | 7/25/2031 | $10387 | $10316 | $10218 | 2.5% |
| Liberty Lenwich Holdings LLC | (6)(7)(8)(15)<br>(23)<br>| First lien senior secured loan | S+ | 5.00% | —% | 2/28/2025 | 2/28/2030 |  | (13) |  | —% |
| Liberty Lenwich Holdings LLC | (6)(7)(15)(23) | First lien senior secured loan | S+ | 5.00% | 8.85% | 2/28/2025 | 2/28/2030 | 14441 | 14348 | 14441 | 3.5% |
| Liberty Lenwich Holdings LLC | (6)(7)(8)(15)<br>(23)<br>| First lien senior secured loan | S+ | 5.00% | —% | 2/28/2025 | 2/28/2030 |  | (25) |  | —% |
|  |  |  |  |  |  |  |  |  | 62740 | 62974 | 15.4% |
| **Independent Power & Renewable** | **Independent Power & Renewable** | **Independent Power & Renewable** |  |  |  |  |  |  |  |  |  |
| National Carbon<br>Technologies – California, LLC |  | First lien senior secured loan |  | 12.25% | 12.25% | 5/31/2024 | 5/31/2029 | 14000 | 13999 | 13999 | 3.4% |
| truCurrent LLC | (6)(7)(8) | First lien senior secured loan | S+ | 7.20% | 10.88% | 2/12/2024 | 2/12/2029 | 10000 | 9923 | 10000 | 2.4% |
| truCurrent LLC | (6)(7) | First lien senior secured loan | S+ | 7.20% | 10.88% | 2/12/2024 | 2/12/2029 | 12500 | 12416 | 12500 | 3.0% |
|  |  |  |  |  |  |  |  |  | 36338 | 36499 | 8.8% |
| **Insurance** | **Insurance** | **Insurance** |  |  |  |  |  |  |  |  |  |
| Arrowhead Capital Group LLC | (23) | Preferred equity |  |  |  | 2/28/2025 |  | 15000000 | 15000 | 15000 | 3.6% |
|  |  |  |  |  |  |  |  |  | 15000 | 15000 | 3.6% |
| **IT Services** | **IT Services** | **IT Services** |  |  |  |  |  |  |  |  |  |
| DRS Imaging Services LLC | (6)(7)(8)(12) | First lien senior secured loan | S+ | 6.25% | —% | 3/28/2025 | 3/28/2030 |  | (27) |  | —% |
| DRS Imaging Services LLC | (6)(7)(8)(12) | First lien senior secured loan | S+ | 6.25% | —% | 3/28/2025 | 3/28/2030 |  | (59) |  | —% |
| DRS Imaging Services LLC | (6)(7)(12) | First lien senior secured loan | S+ | 6.25% | 9.92% | 3/28/2025 | 3/28/2030 | 4614 | 4541 | 4578 | 1.1% |
| Xpect Solutions, LLC | (6)(7)(8)(12)<br>(23)<br>| First lien senior secured loan | S+ | 5.75% | 9.42% | 10/7/2024 | 10/7/2029 | 7425 | 7391 | 7425 | 1.8% |
| Xpect Solutions, LLC | (6)(7)(8)(12)<br>(23)<br>| First lien senior secured loan | S+ | 5.75% | —% | 10/7/2024 | 10/7/2029 |  | (15) |  | —% |
| Xpect Solutions, LLC | (6)(7)(12)(23) | First lien senior secured loan | S+ | 5.75% | 9.42% | 10/7/2024 | 10/7/2029 | 22219 | 22044 | 22219 | 5.4% |
|  |  |  |  |  |  |  |  |  | 33875 | 34222 | 8.3% |
| **Media** | **Media** | **Media** |  |  |  |  |  |  |  |  |  |
| Direct Digital Holdings, LLC | (6)(7) | First lien senior secured loan | S+ | 10.00% | 13.98% | 6/29/2022 | 12/3/2026 | 624 | 624 | 624 | 0.2% |
| Direct Digital Holdings, LLC | (6)(7) | First lien senior secured loan | S+ | 10.00% | 13.98% | 6/29/2022 | 12/3/2026 | 9315 | 5839 | 9315 | 2.3% |
| Direct Digital Holdings, LLC | (6)(7) | First lien senior secured loan | S+ | 10.00% | 13.98% | 6/29/2022 | 12/3/2026 | 493 | 493 | 493 | 0.1% |
| Direct Digital Holdings, LLC | (6)(7) | First lien senior secured loan | S+ | 10.00% | 13.98% | 9/8/2025 | 9/30/2026 | 3853 | 3849 | 3853 | 0.9% |
| Direct Digital Holdings, LLC |  | Preferred Equity |  |  |  | 8/8/2025 |  | 18058066 | 18058 | 16005 | 3.9% |
| Direct Digital Holdings, LLC |  | Preferred Equity |  |  |  | 10/14/2025 |  | 10218183 | 6894 | 9056 | 2.2% |
|  |  |  |  |  |  |  |  |  | 35757 | 39346 | 9.6% |
| **Professional Services** | **Professional Services** | **Professional Services** |  |  |  |  |  |  |  |  |  |
| CentralBDC Enterprises, LLC | (6)(7)(8)(12) | First lien senior secured loan | S+ | 5.25% | 8.93% | 6/25/2024 | 6/11/2029 | 2863 | 2853 | 2863 | 0.7% |
| CentralBDC Enterprises, LLC | (6)(7)(12) | First lien senior secured loan | S+ | 5.25% | 8.92% | 6/25/2024 | 6/11/2029 | 16589 | 16516 | 16589 | 4.0% |
| Flatworld Intermediate Corporation | (6)(7)(8)(23) | First lien senior secured loan | S+ | 5.50% | 9.18% | 3/25/2025 | 3/25/2030 | 300 | 236 | 300 | 0.1% |

---

<u>[**Table of Contents**](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_7)</u>

**Lafayette Square USA, Inc.**

**Consolidated Schedule of Investments (continued)**

**December 31, 2025**

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Company (1)(3)(11)(13)** | **Footnotes** | **Investment Type** | **Reference**<br>**Rate and** <br>**Spread** | **Reference**<br>**Rate and** <br>**Spread** | **Interest**<br>**Rate**<br>| **Acquisition**<br>**Date**<br>| **Maturity**<br>**Date**<br>| **Par**<br>**Amount/**<br>**Shares (4)**<br>| **Amortized**<br>**Cost**<br>| **Fair**<br>**Value**<br>| **Percentage**<br>**of Net**<br>**Assets (5)**<br>|
| Flatworld Intermediate Corporation | (6)(7)(23) | First lien senior secured loan | S+ | 5.50% | 9.18% | 3/25/2025 | 3/25/2030 | 39750 | 39386 | 39750 | 9.7% |
| Oakwell Holding LLC | (15) | Convertible Note |  | 10.00% | 10.00% | 12/23/2024 | 12/31/2028 | 1500 | 1500 | 1500 | 0.4% |
| ZRG Partners LLC | (6)(7)(8)(23) | First lien senior secured loan | S+ | 6.00% | 9.67% | 10/21/2024 | 6/14/2029 | 4431 | 4409 | 4431 | 1.1% |
| ZRG Partners LLC | (6)(7)(8)(23) | First lien senior secured loan | P+ | 5.00% | 11.75% | 10/21/2024 | 6/14/2029 | 1600 | 1585 | 1600 | 0.4% |
| ZRG Partners LLC | (6)(7)(23) | First lien senior secured loan | S+ | 6.00% | 9.73% | 10/21/2024 | 6/14/2029 | $11273 | $11208 | $11273 | 2.7% |
|  |  |  |  |  |  |  |  |  | 77693 | 78306 | 19.1% |
| **Real Estate Management & Development** | **Real Estate Management & Development** | **Real Estate Management & Development** |  |  |  |  |  |  |  |  |  |
| Standard Real Estate Investments LP | (6)(7) | First lien senior secured loan | S+ | 8.70% | 12.64% | 10/6/2023 | 10/6/2026 | 2044 | 2044 | 2038 | 0.5% |
| Standard Real Estate Investments LP | (6)(7) | First lien senior secured loan | S+ | 8.70% | 12.64% | 10/6/2023 | 10/6/2026 | 3067 | 3056 | 3056 | 0.7% |
|  |  |  |  |  |  |  |  |  | 5100 | 5094 | 1.2% |
| **Road & Rail** | **Road & Rail** | **Road & Rail** |  |  |  |  |  |  |  |  |  |
| 160 Driving Academy (a/k/a Rock Gate Capital, <br>LLC) | (6)(7)(12) | First lien senior secured loan | S+ | 6.75% | 10.75% | 5/31/2024 | 5/30/2029 | 43712 | 43155 | 37155 | 9.0% |
| 160 Driving Academy (a/k/a Rock Gate Capital, <br>LLC) | (6)(7)(12) | First lien senior secured loan | S+ | 6.75% | 10.75% | 7/3/2025 | 5/30/2029 | 1063 | 1015 | 903 | 0.2% |
| 160 Driving Academy (a/k/a Rock Gate Capital, <br>LLC) | (6)(7)(12) | First lien senior secured loan | S+ | 6.75% | 10.75% | 7/3/2025 | 5/30/2029 | 2158 | 2068 | 1834 | 0.4% |
| 160 Driving Academy (a/k/a Rock Gate Capital, <br>LLC) | (6)(7) | First lien senior secured loan | S+ | 6.75% | 10.75% | 10/30/2025 | 5/30/2029 | 1590 | 1517 | 1351 | 0.3% |
| 160 Driving Academy (a/k/a Rock Gate Capital, <br>LLC) | (6)(7) | First lien senior secured loan | S+ | 6.75% | 10.75% | 11/14/2025 | 5/30/2029 | 1057 | 1009 | 899 | 0.2% |
| 160 Driving Academy (a/k/a Rock Gate Capital, <br>LLC) | (6)(7) | First lien senior secured loan | S+ | 6.75% | 10.75% | 11/26/2025 | 5/30/2029 | 792 | 755 | 673 | 0.2% |
| 160 Driving Academy (a/k/a Rock Gate Capital, <br>LLC) | (6)(7) | First lien senior secured loan | S+ | 6.75% | 10.75% | 12/10/2025 | 5/30/2029 | 527 | 502 | 448 | 0.1% |
| 160 Driving Academy (a/k/a Rock Gate Capital, <br>LLC) | (6)(7) | First lien senior secured loan | S+ | 6.75% | 10.75% | 12/19/2025 | 5/30/2029 | 1052 | 1002 | 894 | 0.2% |
| 160 Driving Academy (a/k/a Rock Gate Capital, <br>LLC) | (6)(7) | First lien senior secured loan | S+ | 6.75% | 10.75% | 12/23/2025 | 5/30/2029 | 1156 | 1101 | 983 | 0.2% |
| 160 Driving Academy (a/k/a Rock Gate Capital, <br>LLC) | (12) | Warrants |  |  |  | 5/31/2024 | 5/30/2029 | 166108 |  |  | —% |
|  |  |  |  |  |  |  |  |  | 52124 | 45140 | 10.8% |
| **Specialized Consumer Services** | **Specialized Consumer Services** | **Specialized Consumer Services** |  |  |  |  |  |  |  |  |  |
| Best Friends Pet Care Holdings Inc. | (6)(7)(12)(23) | First lien senior secured loan | S+ | 6.95% | 10.88% | 12/21/2023 | 6/21/2028 | 24386 | 24217 | 24386 | 5.9% |
| Best Friends Pet Care Holdings Inc. | (6)(7)(12)(23) | First lien senior secured loan | S+ | 6.95% | 10.88% | 12/21/2023 | 6/21/2028 | 15498 | 15384 | 15498 | 3.8% |
| Soapy Joe's Midco OC Holdings LLC | (6)(7)(8)(12) | First lien senior secured loan | S+ | 5.85% | —% | 4/22/2025 | 4/22/2030 |  |  |  | —% |
| Soapy Joe's Midco OC Holdings LLC | (6)(7)(12) | First lien senior secured loan | S+ | 5.85% | 9.57% | 4/22/2025 | 4/22/2030 | 15196 | 15126 | 15196 | 3.7% |
|  |  |  |  |  |  |  |  |  | 54727 | 55080 | 13.4% |

---

<u>[**Table of Contents**](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_7)</u>

**Lafayette Square USA, Inc.**

**Consolidated Schedule of Investments (continued)**

**December 31, 2025**

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Company (1)(3)(11)(13)** | **Footnotes** | **Investment Type** | **Reference**<br>**Rate and** <br>**Spread** | **Reference**<br>**Rate and** <br>**Spread** | **Interest**<br>**Rate**<br>| **Acquisition**<br>**Date**<br>| **Maturity**<br>**Date**<br>| **Par**<br>**Amount/**<br>**Shares (4)**<br>| **Amortized**<br>**Cost**<br>| **Fair**<br>**Value**<br>| **Percentage**<br>**of Net**<br>**Assets (5)**<br>|
| **Transportation Infrastructure** | **Transportation Infrastructure** | **Transportation Infrastructure** |  |  |  |  |  |  |  |  |  |
| Tyler Distribution Centers LLC | (6)(7)(8)(12)(<br>23)<br>| First lien senior secured loan | S+ | 5.03% | —% | 3/12/2025 | 3/12/2030 | $— | $(51) | $— | —% |
| Tyler Distribution Centers LLC | (6)(7)(12)(23) | First lien senior secured loan | S+ | 5.03% | 8.71% | 3/12/2025 | 3/12/2030 | 32000 | 31722 | 31994 | 7.8% |
|  |  |  |  |  |  |  |  |  | 31671 | 31994 | 7.8% |
| **Water Utilities** | **Water Utilities** | **Water Utilities** |  |  |  |  |  |  |  |  |  |
| Puris LLC | (6)(7)(12) | First lien senior secured loan | S+ | 5.75% | 9.62% | 2/20/2025 | 6/28/2029 | 591 | 591 | 591 | 0.1% |
| Puris LLC | (6)(7)(12) | First lien senior secured loan | S+ | 5.75% | 9.44% | 6/28/2024 | 6/28/2029 | 2806 | 2790 | 2806 | 0.7% |
|  |  |  |  |  |  |  |  |  | 3381 | 3397 | 0.8% |
| **Total non-controlled/non-affiliated investments**  | **Total non-controlled/non-affiliated investments**  | **Total non-controlled/non-affiliated investments**  |  |  |  |  |  |  | **737077** | 736333 | 179.0% |
| **Non-controlled/affiliated investments (10)** | **Non-controlled/affiliated investments (10)** | **Non-controlled/affiliated investments (10)** |  |  |  |  |  |  |  |  |  |
| **Commercial Services & Supplies** | **Commercial Services & Supplies** | **Commercial Services & Supplies** |  |  |  |  |  |  |  |  |  |
| IVM GK9 Holdings LLC |  | Equity |  |  |  | 10/7/2022 |  | 14969 | 4881 | 5000 | 1.2% |
|  |  |  |  |  |  |  |  |  | 4881 | 5000 | 1.2% |
| **Diversified Consumer Services** | **Diversified Consumer Services** | **Diversified Consumer Services** |  |  |  |  |  |  |  |  |  |
| 3360 Frankford LLC | (17) | Equity |  |  |  | 9/23/2024 |  | 2458671 | 2459 | 2459 | 0.6% |
|  |  |  |  |  |  |  |  |  | 2459 | 2459 | 0.6% |
| **Hotels, Restaurants & Leisure** | **Hotels, Restaurants & Leisure** | **Hotels, Restaurants & Leisure** |  |  |  |  |  |  |  |  |  |
| Liberty Top Holdings, LLC | (15)(18) | Equity |  |  |  | 2/28/2025 |  | 3000000 | 3000 | 3000 | 0.7% |
|  |  |  |  |  |  |  |  |  | 3000 | 3000 | 0.7% |
| **Professional Services** | **Professional Services** | **Professional Services** |  |  |  |  |  |  |  |  |  |
| Sparrow Rock, Inc. | (15)(25) | Preferred Equity |  |  |  | 11/12/2025 |  | 2614379 | 2000 | 2000 | 0.5% |
|  |  |  |  |  |  |  |  |  | 2000 | 2000 | 0.5% |
| **Real Estate Management & Development** | **Real Estate Management & Development** | **Real Estate Management & Development** |  |  |  |  |  |  |  |  |  |
| NW1LS CO-INVEST LP | (8) | Equity |  |  |  | 4/10/2025 |  | 10000000 | 10103 | 9668 | 2.5% |
|  |  |  |  |  |  |  |  |  | 10103 | 9668 | 2.5% |
| **Total non-controlled/affiliated investments** | **Total non-controlled/affiliated investments** | **Total non-controlled/affiliated investments** |  |  |  |  |  |  | 22443 | 22127 | 5.5% |
| **Controlled/affiliated investments (10)** | **Controlled/affiliated investments (10)** | **Controlled/affiliated investments (10)** |  |  |  |  |  |  |  |  |  |
| **Diversified Financial Services** | **Diversified Financial Services** | **Diversified Financial Services** |  |  |  |  |  |  |  |  |  |
| Lafayette Square SBLC, LLC | (26) | Equity |  |  |  | 12/30/2025 |  | 100 | 5445 | 5445 | 1.3% |
|  |  |  |  |  |  |  |  |  | 5445 | 5445 | 1.3% |
| **Diversified Real Estate Activities** | **Diversified Real Estate Activities** | **Diversified Real Estate Activities** |  |  |  |  |  |  |  |  |  |
| Lafayette Square Mortgage Solutions, LLC | (6)(7)(8)(12) | First lien senior secured loan | S+ | 6.50% | —% | 11/6/2025 | 11/6/2030 |  |  |  | —% |
| Lafayette Square Mortgage Solutions, LLC | (24) | Equity |  |  |  | 11/6/2025 |  | 100 | 300 | 300 | 0.1% |
| LSA Affordable Housing LP | (8)(27) | Equity |  |  |  | 10/20/2025 |  | 3985639 | 4043 | 3986 | 1.0% |
|  |  |  |  |  |  |  |  |  | 4343 | 4286 | 1.1% |
| **Human Resource & Employment Services** | **Human Resource & Employment Services** | **Human Resource & Employment Services** |  |  |  |  |  |  |  |  |  |
| Studio Lafayette, LLC | (21) | Equity |  |  |  | 8/4/2025 |  | 100 | 1000 | 1000 | 0.2% |
|  |  |  |  |  |  |  |  |  | 1000 | 1000 | 0.2% |

---

<u>[**Table of Contents**](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_7)</u>

**Lafayette Square USA, Inc.**

**Consolidated Schedule of Investments (continued)**

**December 31, 2025**

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Company (1)(3)(11)(13)** | **Footnotes** | **Investment Type** | **Reference**<br>**Rate and** <br>**Spread** | **Interest**<br>**Rate**<br>| **Acquisition**<br>**Date**<br>| **Maturity**<br>**Date**<br>| **Par**<br>**Amount/**<br>**Shares (4)**<br>| **Amortized**<br>**Cost**<br>| **Fair**<br>**Value**<br>| **Percentage**<br>**of Net**<br>**Assets (5)**<br>|
| **Insurance** | **Insurance** | **Insurance** |  |  |  |  |  |  |  |  |
| GELDO Inc. | (15)(19) | Preferred Equity |  |  | 6/17/2025 |  | 3857032 | $3000 | $3000 | 0.7% |
|  |  |  |  |  |  |  |  | 3000 | 3000 | 0.7% |
| **IT Services** | **IT Services** | **IT Services** |  |  |  |  |  |  |  |  |
| Lafayette Square Technologies, LLC | (20) | Equity |  |  | 8/4/2025 |  | 100 | 3000 | 3000 | 0.7% |
|  |  |  |  |  |  |  |  | 3000 | 3000 | 0.7% |
| **Professional Services** | **Professional Services** | **Professional Services** |  |  |  |  |  |  |  |  |
| Worker Solutions LLC | (8)(16) | Equity |  |  | 12/30/2024 |  | 100 | 1850 | 1850 | 0.4% |
|  |  |  |  |  |  |  |  | 1850 | 1850 | 0.4% |
| **Real Estate Management & Development** | **Real Estate Management & Development** | **Real Estate Management & Development** |  |  |  |  |  |  |  |  |
| Neighborhood Grocery Catalyst Fund LLC | (8)(14) | Equity |  |  | 12/20/2024 |  | 100 | 7783 | 7672 | 1.9% |
| Truly Redlands LLC | (22) | Equity |  |  | 9/30/2025 |  | 4500 | 4500 | 4500 | 1.1% |
|  |  |  |  |  |  |  |  | 12283 | 12172 | 3.0% |
| **Total controlled/affiliated investments** | **Total controlled/affiliated investments** | **Total controlled/affiliated investments** |  |  |  |  |  | 30921 | 30753 | 7.4% |
| **Total Portfolio Investments** | **Total Portfolio Investments** | **Total Portfolio Investments** |  |  |  |  |  | $790441 | $789213 | 191.9% |
| **Cash and cash equivalents** | **Cash and cash equivalents** | **Cash and cash equivalents** |  |  |  |  |  |  |  |  |
| Cash and Cash Equivalents | (9)(23) | Money market fund |  |  |  |  | 199187 | 199187 | 199187 | 48.4% |
| **Total cash and cash equivalents** | **Total cash and cash equivalents** | **Total cash and cash equivalents** |  |  |  |  |  | 199187 | 199187 | 48.4% |
| **Total Portfolio Investments, Cash and Cash Equivalents** | **Total Portfolio Investments, Cash and Cash Equivalents** | **Total Portfolio Investments, Cash and Cash Equivalents** |  |  |  |  |  | $989628 | $988400 | 240.3% |

---

(1) Unless otherwise indicated, all investments are considered Level 3 investments. The fair value of the investment was determined using significant unobservable inputs. See Note 4 "Fair Value Measurement of Investments."

(2) Footnote is currently not in use.

(3) All investments are denominated in U.S. dollars unless otherwise noted.

(4) The total funded par amount is presented for debt investments, while the number of shares or units owned is presented for equity investments.

(5) Percentage is based on net assets of $411,329 as of December 31, 2025.

(6) Loan includes interest rate floor feature, which generally ranges from 1.00% to 4.00%.

(7) Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to the Secured Overnight Financing Rate ("SOFR" or "S") or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, the Company has indicated the reference rate used and provided the spread and the interest rate in effect as of each investment's most recent reset date prior to December 31, 2025. As of December 31, 2025, the reference rates for our variable rate loans were the 180-day SOFR at 3.57%, 90-day SOFR at 3.65%, and 30-day SOFR at 3.69%.

(8) Position or portion thereof is an unfunded loan or equity commitment, and no interest is being earned on the unfunded portion, although the investment may earn unused commitment fees. Negative cost and fair value, if any, results from unamortized fees, which are capitalized to the cost of the investment. The unfunded commitment may be subject to a commitment termination date that may expire prior to the maturity date stated. See below for more information on the Company's unfunded commitments as of December 31, 2025:

<u>[**Table of Contents**](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_7)</u>

**Lafayette Square USA, Inc.**

**Consolidated Schedule of Investments (continued)**

**December 31, 2025**

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Investments** | **Unused Fee Rate** | **Commitment Type** | **Commitment Expiration Date** | **Unfunded Commitment** |
| **First Lien Debt** |  |  |  |  |
| C Speed LLC | 0.50% | Revolver | 10/1/2029 | 4300 |
| Capital City LLC | —% | Delayed Draw Term Loan | 9/20/2029 | 2500 |
| CentralBDC Enterprises, LLC | 0.50% | Revolver | 6/11/2029 | 295 |
| Core Capital Partners II-S LP | —% | Revolver | 10/11/2027 | 7657 |
| DRS Imaging Services LLC | 0.50% | Delayed Draw Term Loan | 3/28/2030 | 4252 |
| DRS Imaging Services LLC | 0.50% | Revolver | 3/28/2030 | 4000 |
| Electro Technical Industries, LLC | 0.50% | Revolver | 3/31/2030 | 2222 |
| Flatworld Intermediate Corporation | 0.50% | Revolver | 3/25/2030 | 7200 |
| Genuine Food Lab LLC | 0.75% | Delayed Draw Term Loan | 6/6/2030 | 5000 |
| Lafayette Square Mortgage Solutions, LLC | —% | Delayed Draw Term Loan | 11/6/2030 | 10000 |
| Liberty Lenwich Holdings LLC | 0.50% | Revolver | 2/28/2030 | 3000 |
| Liberty Lenwich Holdings LLC | 0.50% | Delayed Draw Term Loan | 2/28/2030 | 3000 |
| MSPB MSO, LLC | 0.38% | Revolver | 11/10/2028 | 3390 |
| OWP International LLC | 0.50% | Delayed Draw Term Loan | 11/20/2030 | 2000 |
| OWP International LLC | 0.50% | Revolver | 11/20/2030 | 2000 |
| Prime IV Hydration & Wellness Inc. | 0.50% | Delayed Draw Term Loan | 11/25/2030 | 4000 |
| Rotolo Consultants, Inc. | 0.50% | Revolver | 1/31/2031 | 16472 |
| SMG Operating Company, LLC | 1.00% | Delayed Draw Term Loan | 12/5/2027 | 1500 |
| Soapy Joe's Midco OC Holdings LLC | 0.45% | Delayed Draw Term Loan | 4/22/2030 | 5000 |
| Straine Dental Management, LLC | 0.25% | Delayed Draw Term Loan | 11/25/2030 | 3741 |
| Synergi, LLC | 0.50% | Revolver | 12/17/2027 | 3750 |
| TEC Services LLC | 1.00% | Delayed Draw Term Loan | 12/31/2029 | 3000 |
| TEC Services LLC | 0.50% | Revolver | 12/31/2029 | 2000 |
| Trilon Group, LLC | 0.50% | Revolver | 5/25/2029 | 915 |
| truCurrent LLC | 0.50% | Delayed Draw Term Loan | 2/12/2029 | 15000 |
| Tyler Distribution Centers LLC | 0.50% | Revolver | 3/12/2030 | 6000 |
| Xpect Solutions, LLC | 0.50% | Delayed Draw Term Loan | 10/7/2029 | 2500 |
| Xpect Solutions, LLC | 0.50% | Revolver | 10/7/2029 | 2000 |
| ZRG Partners LLC | 1.50% | Delayed Draw Term Loan | 6/14/2029 | 1566 |
| ZRG Partners LLC | 0.50% | Revolver | 6/14/2029 | 926 |
| **Equity** |  |  |  |  |
| Lafayette Square Mortgage Solutions, LLC | —% | Equity |  | 19700 |
| LSA Affordable Housing LP | —% | Equity |  | 1014 |
| Neighborhood Grocery Catalyst Fund LLC | —% | Equity |  | 4828 |
| NW1LS CO-INVEST LP | —% | Equity |  | 332 |

---

<u>[**Table of Contents**](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_7)</u>

**Lafayette Square USA, Inc.**

**Consolidated Schedule of Investments (continued)**

**December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| Worker Solutions, LLC | —% | Equity | 1650 |
|  |  |  | $156710 |

---

(9) Cash and cash equivalents balance represents amounts held in the interest-bearing money market fund - Goldman Sachs Financial Square Government Fund (FGTXX). As of December 31, 2025, $199,187 was held in FGTXX and had an average one-year yield of 4.21%.

(10) Under the 1940 Act, the Company would be deemed to "control" a portfolio company if the Company owned more than 25% of its outstanding voting securities and/or held the power to exercise control over the management or policies of the portfolio company. Under the 1940 Act, the Company would be deemed an "affiliated person" of a portfolio company if the Company owns 5% or more of the portfolio company's outstanding voting securities. As of December 31, 2025, the Company's non-controlled/affiliated investments and controlled/affiliated investments were as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Non-controlled/affiliated investments** | **Fair Value as of** <br>**December 31, 2024**<br>| **Gross** <br>**Additions**<br>| **Gross** <br>**Reductions**<br>| **Change in Unrealized** <br>**Gains (Losses)**<br>| **Fair Value as of** <br>**December 31, 2025**<br>| **Investment**<br>**Income**<br>|
| 3360 Frankford LLC | $2459 | $— | $— | $— | $2459 | $— |
| GK9 Global Companies, LLC | 22124 | 115 | (22124) | (115) |  | 647 |
| IVM GK9 Holdings LLC | 5000 |  |  |  | 5000 | 147 |
| Liberty Top Holdings, LLC | **—** | 3000 |  |  | 3000 | 159 |
| Sparrow Rock, Inc. |  | 2000 |  |  | 2000 |  |
| NW1LS CO-INVEST LP |  | 10103 |  | (435) | 9668 |  |
| **Non-controlled/affiliated investments** | $29583 | $15218 | $(22124) | $(550) | $22127 | $953 |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Controlled/affiliated investments** | **Fair Value as of** <br>**December 31, 2024**<br>| **Gross** <br>**Additions**<br>| **Gross** <br>**Reductions**<br>| **Change in Unrealized** <br>**Gains (Losses)**<br>| **Fair Value as of** <br>**December 31, 2025**<br>| **Investment**<br>**Income**<br>|
| GELDO Inc. | **$—** | $3000 | $— | $— | $3000 | $— |
| Lafayette Square Mortgage Solutions, LLC |  | 300 |  |  | 300 |  |
| Lafayette Square Technologies, LLC |  | 3000 |  |  | 3000 |  |
| LSA Affordable Housing LP |  | 4043 |  | (57) | 3986 | 6 |
| Neighborhood Grocery Catalyst Fund LLC | 4219 | 4111 | (547) | (111) | 7672 | 68 |
| Lafayette Square SBLC, LLC |  | 5445 |  |  | 5445 |  |
| Studio Lafayette, LLC |  | 1000 |  |  | 1000 |  |
| Truly Redlands LLC |  | 4500 |  |  | 4500 |  |
| Worker Solutions LLC | 350 | 1500 |  |  | 1850 |  |
| **Controlled/affiliated investments** | $4569 | $26899 | $(547) | $(168) | $30753 | $74 |

---

<u>[**Table of Contents**](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_7)</u>

**Lafayette Square USA, Inc.**

**Consolidated Schedule of Investments (continued)**

**December 31, 2025**

(11) Securities exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"), and may be deemed to be "restricted securities." Except as noted by this footnote, all of the instruments on this table are subject to restrictions on resale.

(12) Investments, or portion thereof, held by the SBIC subsidiary (as defined in Note 1).

(13) Industries are classified by The Global Industry Classification Standard ("GICS").

(14) The Company owns 31.25% of the equity interests in Neighborhood Grocery Catalyst Fund LLC.

(15) Investments, or portion thereof, held by the SSBIC subsidiary (as defined in Note 1).

(16) The Company owns 100.00% of the equity interests in Worker Solutions, LLC.

(17) The Company owns a 66.25% of the equity interests in 3360 Frankford LLC.

(18) The Company owns a 7.02% share in Liberty Top Holdings, LLC.

(19) The Company owns a 27.00% share in GELDO Inc.

(20) The Company owns a 100.00% share in Lafayette Square Technologies, LLC.

(21) The Company owns a 100.00% share in Studio Lafayette, LLC.

(22) The Company owns a 47.37% share in Truly Redlands LLC.

(23) Assets are pledged as collateral for the ING Credit Facility. See Note 5 "Debt".

(24) The Company owns a 100.00% share in Lafayette Square Mortgage Solutions, LLC.

(25) The Company owns a 20.00% share in Sparrow Rock, Inc.

(26) The Company owns a 100.00% share in Lafayette Square SBLC, LLC.

(27) The Company owns a 90.89% share in LSA Affordable Housing LP.

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

**Lafayette Square USA, Inc.**

**Consolidated Schedule of Investments**

**December 31, 2024**

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Company (1)(2)(3)(11)(13)** | **Footnotes** | **Investment Type** | **Reference** <br>**Rate and** <br>**Spread** | **Reference** <br>**Rate and** <br>**Spread** | **Interest**<br>**Rate**<br>| **Acquisition**<br>**Date**<br>| **Maturity**<br>**Date**<br>| **Par**<br>**Amount/**<br>**Shares (4)**<br>| **Amortized**<br>**Cost**<br>| **Fair**<br>**Value**<br>| **Percentage**<br>**of Net**<br>**Assets (5)**<br>|
| **Non-controlled/non-affiliated investments** | **Non-controlled/non-affiliated investments** | **Non-controlled/non-affiliated investments** |  |  |  |  |  |  |  |  |  |
| **Aerospace & Defense** | **Aerospace & Defense** | **Aerospace & Defense** |  |  |  |  |  |  |  |  |  |
| C Speed LLC | (6)(7)(8)(12)<br>(19)<br>| First lien senior secured loan | S+ | 6.00% | 10.33% | 10/1/2024 | 10/1/2029 | $1000 | $952 | $991 | 0.3% |
| C Speed LLC | (6)(7)(12) | First lien senior secured loan | S+ | 6.00% | 10.33% | 10/1/2024 | 10/1/2029 | 15262 | 15117 | 15117 | 4.3% |
|  |  |  |  |  |  |  |  |  | 16069 | 16108 | 4.6% |
| **Application Software** | **Application Software** | **Application Software** |  |  |  |  |  |  |  |  |  |
| CentralBDC Enterprises, LLC | (6)(7)(8)(12) | First lien senior secured loan | S+ | 5.00% | 9.33% | 6/25/2024 | 6/11/2029 | 1642 | 1628 | 1642 | 0.5% |
| CentralBDC Enterprises, LLC | (6)(7)(12) | First lien senior secured loan | S+ | 5.00% | 9.33% | 6/25/2024 | 6/11/2029 | 16758 | 16660 | 16758 | 4.8% |
|  |  |  |  |  |  |  |  |  | 18288 | 18400 | 5.3% |
| **Commercial Services & Supplies** | **Commercial Services & Supplies** | **Commercial Services & Supplies** |  |  |  |  |  |  |  |  |  |
| Rotolo Consultants, Inc. | (6)(7)(19) | First lien senior secured loan | S+ | 6.95% | 11.73% | 12/20/2022 | 1/15/2029 | $20282 | $20195 | $20282 | 5.8% |
| Zero Waste Recycling LLC | (6)(7)(8)(19) | First lien senior secured loan | S+ | 6.45% | 11.23% | 6/29/2022 | 5/15/2026 | 4597 | 4664 | 4597 | 1.3% |
| Zero Waste Recycling LLC | (6)(7)(19) | First lien senior secured loan | S+ | 6.45% | 11.04% | 6/29/2022 | 5/15/2026 | 13186 | 13119 | 13186 | 3.7% |
| ZWR Holdings, Inc. | (19) | Subordinated debt | 14.00% (Inc. <br>10.00% PIK) | 14.00% (Inc. <br>10.00% PIK) | 14.00% | 8/16/2021 | 2/16/2027 | 1738 | 1738 | 1712 | 0.5% |
| ZWR Holdings, Inc. |  | Warrants |  |  |  | 8/16/2021 |  | 24953 |  |  | —% |
|  |  |  |  |  |  |  |  |  | 39716 | 39777 | 11.3% |
| **Construction & Engineering** | **Construction & Engineering** | **Construction & Engineering** |  |  |  |  |  |  |  |  |  |
| Synergi, LLC | (6)(7)(19) | First lien senior secured loan | S+ | 7.50% | 12.09% | 12/19/2022 | 12/17/2027 | 17561 | 17449 | 17451 | 5.0% |
| Synergi, LLC | (6)(7)(8)(19) | First lien senior secured loan | S+ | 7.50% | —% | 12/19/2022 | 12/17/2027 |  | (22) | (23) | —% |
|  |  |  |  |  |  |  |  |  | 17427 | 17428 | 5.0% |
| **Diversified Financial Services** | **Diversified Financial Services** | **Diversified Financial Services** |  |  |  |  |  |  |  |  |  |
| Core Capital Partners II-S LP | (6)(7)(8)(19) | First lien senior secured loan | S+ | 7.50% | 11.83% | 10/11/2024 | 10/11/2027 | 766 | 655 | 759 | 0.2% |
| Core Capital Partners II-S LP | (6)(7)(19) | First lien senior secured loan | S+ | 7.50% | 11.83% | 10/11/2024 | 10/11/2027 | 28000 | 27733 | 27733 | 7.9% |
|  |  |  |  |  |  |  |  |  | 28388 | 28492 | 8.1% |
| **Food & Staples Retailing** | **Food & Staples Retailing** | **Food & Staples Retailing** |  |  |  |  |  |  |  |  |  |
| Capital City LLC | (6)(7)(8)(15) | First lien senior secured loan | S+ | 8.00% | —% | 9/20/2024 | 9/20/2029 |  | (24) |  | —% |
| Capital City LLC | (6)(7)(15) | First lien senior secured loan | S+ | 8.00% | 12.33% | 9/20/2024 | 9/20/2029 | 499 | 494 | 494 | 0.1% |
|  |  |  |  |  |  |  |  |  | 470 | 494 | 0.1% |
| **Gas Utilities** | **Gas Utilities** | **Gas Utilities** |  |  |  |  |  |  |  |  |  |
| TCFIII Owl Buyer LLC | (6)(7)(19) | First lien senior secured loan | S+ | 5.50% | 9.96% | 1/31/2023 | 4/17/2026 | 10787 | 10737 | 10787 | 3.1% |
| TCFIII Owl Buyer LLC | (6)(7)(19) | First lien senior secured loan | S+ | 5.50% | 10.94% |  | 4/17/2026 |  |  |  | —% |
|  |  |  |  |  |  |  |  |  | 10737 | 10787 | 3.1 |
| **Health Care Equipment & Services** | **Health Care Equipment & Services** | **Health Care Equipment & Services** |  |  |  |  |  |  |  |  |  |
| MSPB MSO, LLC | (6)(7)(8)(19) | First lien senior secured loan | S+ | 5.75% | 10.08% | 11/10/2023 | 11/10/2028 | 9863 | 9758 | 9863 | 2.8% |
| MSPB MSO, LLC | (6)(7)(8)(19) | First lien senior secured loan | S+ | 5.75% | 10.08% | 11/10/2023 | 11/10/2028 | 1695 | 1629 | 1695 | 0.5% |
| MSPB MSO, LLC | (6)(7)(19) | First lien senior secured loan | S+ | 5.75% | 10.08% | 11/10/2023 | 11/10/2028 | 8391 | 8315 | 8391 | 2.4% |
|  |  |  |  |  |  |  |  |  | 19702 | 19949 | 5.7% |

---

<u>[**Table of Contents**](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_7)</u>

**Lafayette Square USA, Inc.**

**Consolidated Schedule of Investments (continued)**

**December 31, 2024**

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Company (1)(2)(3)(11)(13)** | **Footnotes** | **Investment Type** | **Reference** <br>**Rate and** <br>**Spread** | **Reference** <br>**Rate and** <br>**Spread** | **Interest**<br>**Rate**<br>| **Acquisition**<br>**Date**<br>| **Maturity**<br>**Date**<br>| **Par**<br>**Amount/**<br>**Shares (4)**<br>| **Amortized**<br>**Cost**<br>| **Fair**<br>**Value**<br>| **Percentage**<br>**of Net**<br>**Assets (5)**<br>|
| **Health Care Providers & Services** | **Health Care Providers & Services** | **Health Care Providers & Services** |  |  |  |  |  |  |  |  |  |
| Salt Dental Collective LLC | (6)(7)(19) | First lien senior secured loan | S+ | 6.75% | 11.21% | 3/20/2023 | 2/15/2028 | 17768 | 17595 | 17768 | 5.0% |
|  |  |  |  |  |  |  |  |  | 17595 | 17768 | 5.0% |
| **Hotels, Restaurants & Leisure** | **Hotels, Restaurants & Leisure** | **Hotels, Restaurants & Leisure** |  |  |  |  |  |  |  |  |  |
| Aetius Holdings, LLC | (6)(7)(19) | First lien senior secured loan | S+ | 7.00% | 11.59% | 1/25/2023 | 3/31/2025 | 1034 | 1027 | 1034 | 0.3% |
| LC Hospitality, LLC | (6)(7)(12) | First lien senior secured loan | S+ | 5.50% | 9.83% | 7/25/2024 | 7/25/2031 | 9843 | 9661 | 9843 | 2.8% |
|  |  |  |  |  |  |  |  |  | 10688 | 10877 | 3.1% |
| **Independent Power & Renewable** | **Independent Power & Renewable** | **Independent Power & Renewable** |  |  |  |  |  |  |  |  |  |
| National Carbon<br>Technologies – California, LLC | (8)(19) | First lien senior secured loan |  | 12.25% | 12.25% | 5/31/2024 | 5/31/2029 | 8400 | 8388 | 8388 | 2.4% |
|  |  |  |  |  |  |  |  |  | 8388 | 8388 | 2.4% |
| **Electric Utilities** | **Electric Utilities** | **Electric Utilities** |  |  |  |  |  |  |  |  |  |
| truCurrent LLC | (6)(7)(8)(19) | First lien senior secured loan | S+ | 7.25% | —% | 2/12/2024 | 2/12/2029 |  | (103) |  | —% |
| truCurrent LLC | (6)(7)(19) | First lien senior secured loan | S+ | 7.25% | 11.58% | 2/12/2024 | 2/12/2029 | 12500 | 12389 | 12500 | 3.5% |
|  |  |  |  |  |  |  |  |  | 12286 | 12500 | 3.5% |
| **IT Services** | **IT Services** | **IT Services** |  |  |  |  |  |  |  |  |  |
| Dartpoints Operating Company, LLC | (6)(7)(9)<br>(12)<br>| First lien senior secured loan | S+ | 8.93% | 13.62% | 5/1/2023 | 5/14/2026 | 3425 | 3399 | 3425 | 1.0% |
| Xpect Solutions, LLC | (6)(7)(8)(12)<br>(19)<br>| First lien senior secured loan | S+ | 5.75% | 10.08% | 10/7/2024 | 10/7/2029 | 7500 | 7452 | 7427 | 2.1% |
| Xpect Solutions, LLC | (6)(7)(8)(12)<br>(19)<br>| First lien senior secured loan | S+ | 5.75% | 10.08% | 10/7/2024 | 10/7/2029 | 750 | 731 | 743 | 0.2% |
| Xpect Solutions, LLC | (6)(7)(12)<br>(19)<br>| First lien senior secured loan | S+ | 5.75% | 10.08% | 10/7/2024 | 10/7/2029 | 22444 | 22225 | 22225 | 6.3% |
|  |  |  |  |  |  |  |  |  | 33807 | 33820 | 9.6% |
| **Interactive Media & Services** | **Interactive Media & Services** | **Interactive Media & Services** |  |  |  |  |  |  |  |  |  |
| Dance Nation Holdings LLC | (6)(7)(19) | First lien senior secured loan | S+ | 6.95% | 11.54% | 8/24/2023 | 8/24/2028 | 31815 | 31565 | 31815 | 9.0% |
| Dance Nation Holdings LLC | (6)(7)(8)(19) | First lien senior secured loan | S+ | 6.95% | 11.54% | 8/24/2023 | 8/24/2028 | 826 | 794 | 826 | 0.2% |
| Dance Nation Topco LLC |  | Preferred Equity |  |  |  | 8/24/2023 |  | 1652200 | 1652 | 1652 | 0.5% |
|  |  |  |  |  |  |  |  |  | 34011 | 34293 | 9.7% |
| **Media** | **Media** | **Media** |  |  |  |  |  |  |  |  |  |
| Direct Digital Holdings, LLC | (6)(7)(19) | First lien senior secured loan | S+ | 8.45% | 13.11% | 6/29/2022 | 12/3/2026 | 7596 | 7576 | 7264 | 2.1% |
| Direct Digital Holdings, LLC | (6)(7)(19) | First lien senior secured loan | S+ | 8.45% | 12.93% | 6/29/2022 | 12/3/2026 | 26625 | 26564 | 25461 | 7.2% |
|  |  |  |  |  |  |  |  |  | 34140 | 32725 | 9.3% |
| **Pharmaceuticals** | **Pharmaceuticals** | **Pharmaceuticals** |  |  |  |  |  |  |  |  |  |
| Med Learning Group, LLC | (6)(7)(19) | First lien senior secured loan | S+ | 6.25% | 10.58% | 3/26/2024 | 12/30/2027 | 15570 | 15439 | 15570 | 4.4% |
| Med Learning Group, LLC | (6)(7)(8)(19) | First lien senior secured loan | S+ | 6.25% | 10.58% | 3/26/2024 | 12/30/2027 | 856 | 839 | 856 | 0.2% |
|  |  |  |  |  |  |  |  |  | 16278 | 16426 | 4.6% |

---

<u>[**Table of Contents**](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_7)</u>

**Lafayette Square USA, Inc.**

**Consolidated Schedule of Investments (continued)**

**December 31, 2024**

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Company (1)(2)(3)(11)(13)** | **Footnotes** | **Investment Type** | **Reference** <br>**Rate and** <br>**Spread** | **Reference** <br>**Rate and** <br>**Spread** | **Interest**<br>**Rate**<br>| **Acquisition**<br>**Date**<br>| **Maturity**<br>**Date**<br>| **Par**<br>**Amount/**<br>**Shares (4)**<br>| **Amortized**<br>**Cost**<br>| **Fair**<br>**Value**<br>| **Percentage**<br>**of Net**<br>**Assets (5)**<br>|
| **Professional Services** | **Professional Services** | **Professional Services** |  |  |  |  |  |  |  |  |  |
| M&S Acquisition Corporation | (6)(7)(12)<br>(19)<br>| First lien senior secured loan | S+ | 6.50% | 11.09% | 12/19/2023 | 12/19/2028 | 42215 | 41862 | 42216 | 12.0% |
| Oakwell Holding LLC | (15) | Convertible Note |  | 10.00% | 10.00% | 12/23/2024 | 12/31/2028 | 1500 | 1500 | 1500 | 0.4% |
| ZRG Partners LLC | (6)(7)(8)(19) | First lien senior secured loan | S+ | 6.00% | 10.46% | 10/21/2024 | 6/14/2029 | 2600 | 2568 | 2580 | 0.7% |
| ZRG Partners LLC | (6)(7)(8)(19) | First lien senior secured loan | P+ | 5.00% | 12.50% | 10/21/2024 | 6/14/2029 | 168 | 150 | 167 | —% |
| ZRG Partners LLC | (6)(7)(19) | First lien senior secured loan | S+ | 6.00% | 10.66% | 10/21/2024 | 6/14/2029 | 11402 | 11322 | 11322 | 3.2% |
|  |  |  |  |  |  |  |  |  | 57402 | 57785 | 16.3% |
| **Real Estate Management & Development** | **Real Estate Management & Development** | **Real Estate Management & Development** |  |  |  |  |  |  |  |  |  |
| Standard Real Estate Investments LP | (6)(7)(19) | First lien senior secured loan | S+ | 8.70% | 13.29% | 10/6/2023 | 10/6/2026 | 2000 | 1987 | 1985 | 0.6% |
| Standard Real Estate Investments LP | (6)(7)(19) | First lien senior secured loan | S+ | 8.70% | 13.29% | 10/6/2023 | 10/6/2026 | 3000 | 2978 | 2978 | 0.8% |
|  |  |  |  |  |  |  |  |  | 4965 | 4963 | 1.4% |
| **Restaurants** | **Restaurants** | **Restaurants** |  |  |  |  |  |  |  |  |  |
| Café Zupas, L.C | (6)(7)(8)<br>(12)<br>| First lien senior secured loan | S+ | 7.00% | 12.00% | 11/20/2023 | 12/31/2027 | 3121 | 3095 | 3112 | 0.9% |
| Café Zupas, L.C | (6)(7)(8)(12) | First lien senior secured loan | S+ | 7.00% | 12.02% | 11/20/2023 | 12/31/2027 | 334 | 330 | 333 | 0.1% |
| Café Zupas, L.C | (6)(7)(12) | First lien senior secured loan | S+ | 7.00% | 12.02% | 11/20/2023 | 12/31/2027 | 8359 | 8289 | 8338 | 2.4% |
|  |  |  |  |  |  |  |  |  | 11714 | 11783 | 3.4% |
| **Road & Rail** | **Road & Rail** | **Road & Rail** |  |  |  |  |  |  |  |  |  |
| 160 Driving Academy (a/k/a Rock Gate Capital, LLC) | (6)(7)(12)<br>(19)<br>| First lien senior secured loan | S+ | 6.75% | 11.08% | 5/31/2024 | 5/30/2029 | 42000 | 41613 | 39900 | 11.3% |
| 160 Driving Academy (a/k/a Rock Gate Capital, LLC) | (12) | Warrants |  |  |  | 5/31/2024 |  | 166108 |  |  | —% |
|  |  |  |  |  |  |  |  |  | 41613 | 39900 | 11.3% |
| **Specialized Consumer Services** | **Specialized Consumer Services** | **Specialized Consumer Services** |  |  |  |  |  |  |  |  |  |
| Best Friends Pet Care Holdings Inc. | (6)(7)(8)<br>(12)(19)<br>| First lien senior secured loan | S+ | 6.45% | 11.04% | 12/21/2023 | 6/21/2028 | 24632 | 24396 | 24632 | 7.0% |
| Best Friends Pet Care Holdings Inc. | (6)(7)(12)<br>(19)<br>| First lien senior secured loan | S+ | 6.45% | 11.04% | 12/21/2023 | 6/21/2028 | 15656 | 15501 | 15656 | 4.4% |
|  |  |  |  |  |  |  |  |  | 39897 | 40288 | 11.4% |
| **Transportation Infrastructure** | **Transportation Infrastructure** | **Transportation Infrastructure** |  |  |  |  |  |  |  |  |  |
| H.W. Lochner, Inc. | (6)(7)(19) | First lien senior secured loan | S+ | 6.25% | 10.99% | 3/29/2023 | 7/2/2027 | 13006 | 12740 | 13006 | 3.7% |
| Trilon Group, LLC | (6)(7) | First lien senior secured loan | S+ | 5.50% | 10.31% | 3/24/2023 | 5/25/2029 | 12157 | 12152 | 12157 | 3.4% |
| Trilon Group, LLC | (6)(7)(8) | First lien senior secured loan | S+ | 5.50% | 10.19% | 3/24/2023 | 5/25/2029 | 1253 | 1253 | 1253 | 0.4% |
| Trilon Group, LLC | (6)(7)(8) | First lien senior secured loan | S+ | 5.50% | 10.25% | 3/24/2023 | 5/25/2029 | 114 | 107 | 114 | —% |
|  |  |  |  |  |  |  |  |  | 26252 | 26530 | 7.5% |
| **Water Utilities** | **Water Utilities** | **Water Utilities** |  |  |  |  |  |  |  |  |  |
| Ironhorse Purchaser, LLC | (6)(7)(8)(19) | First lien senior secured loan | S+ | 5.25% | —% | 12/21/2023 | 9/30/2027 |  | (94) |  | —% |
| Ironhorse Purchaser, LLC | (6)(7)(19) | First lien senior secured loan | S+ | 5.25% | 9.61% | 12/21/2023 | 9/30/2027 | 10021 | 9868 | 10021 | 2.8% |
| Puris LLC | (6)(7)(12) | First lien senior secured loan | S+ | 5.75% | 10.07% | 6/28/2024 | 6/28/2029 | 13433 | 13338 | 13433 | 3.9% |
|  |  |  |  |  |  |  |  |  | 23112 | 23454 | 6.7% |

---

<u>[**Table of Contents**](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_7)</u>

**Lafayette Square USA, Inc.**

**Consolidated Schedule of Investments (continued)**

**December 31, 2024**

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Company (1)(2)(3)(11)(13)** | **Footnotes** | **Investment Type** | **Reference** <br>**Rate and** <br>**Spread** | **Reference** <br>**Rate and** <br>**Spread** | **Interest**<br>**Rate**<br>| **Acquisition**<br>**Date**<br>| **Maturity**<br>**Date**<br>| **Par**<br>**Amount/**<br>**Shares (4)**<br>| **Amortized**<br>**Cost**<br>| **Fair**<br>**Value**<br>| **Percentage**<br>**of Net**<br>**Assets (5)**<br>|
| **Total non-controlled/non-affiliated investments** | **Total non-controlled/non-affiliated investments** | **Total non-controlled/non-affiliated investments** |  |  |  |  |  |  | 522945 | 522935 | 148.4% |
| **Non-controlled/affiliated investments (10)** | **Non-controlled/affiliated investments (10)** | **Non-controlled/affiliated investments (10)** |  |  |  |  |  |  |  |  |  |
| **Commercial Services & Supplies** | **Commercial Services & Supplies** | **Commercial Services & Supplies** |  |  |  |  |  |  |  |  |  |
| GK9 Global Companies, LLC | (6)(7)(12) | First lien senior secured loan | S+ | 7.50% | 12.09% | 10/07/2022 | 10/07/2027 | 18734 | 18630 | 18734 | 5.3% |
| GK9 Global Companies, LLC | (6)(7)(8)(12) | First lien senior secured loan | S+ | 7.50% | 12.09% | 10/07/2022 | 10/07/2027 | 3390 | 3379 | 3390 | 1.0% |
| IVM GK9 Holdings LLC |  | Equity |  |  |  | 10/07/2022 |  | 14969 | 4881 | 5000 | 1.4% |
|  |  |  |  |  |  |  |  |  | 26890 | 27124 | 7.7% |
| **Diversified Consumer Services** | **Diversified Consumer Services** | **Diversified Consumer Services** |  |  |  |  |  |  |  |  |  |
| 3360 Frankford LLC | (2)(17) | Equity |  |  |  | 9/23/2024 |  | 2458671 | 2459 | 2459 | 0.7% |
|  |  |  |  |  |  |  |  |  | 2459 | 2459 | 0.7% |
| **Total non-controlled/affiliated investments** | **Total non-controlled/affiliated investments** | **Total non-controlled/affiliated investments** |  |  |  |  |  |  | 29349 | 29583 | 8.4% |
| **Controlled/affiliated investments (10)** | **Controlled/affiliated investments (10)** | **Controlled/affiliated investments (10)** |  |  |  |  |  |  |  |  |  |
| **Professional Services** | **Professional Services** | **Professional Services** |  |  |  |  |  |  |  |  |  |
| Worker Solutions LLC | (16) | Equity |  |  |  | 12/30/2024 |  | 350000 | 350 | 350 | 0.1% |
|  |  |  |  |  |  |  |  |  | 350 | 350 | 0.1% |
| **Real Estate Management & Development** | **Real Estate Management & Development** | **Real Estate Management & Development** |  |  |  |  |  |  |  |  |  |
| Neighborhood Grocery Catalyst Fund LLC | (2)(8)(14) | Equity |  |  |  | 3/28/2024 |  | 4218750 | 4219 | 4219 | 1.2% |
|  |  |  |  |  |  |  |  |  | 4219 | 4219 | 1.2% |
| **Total controlled/affiliated investments** | **Total controlled/affiliated investments** | **Total controlled/affiliated investments** |  |  |  |  |  |  | 4569 | 4569 | 1.3% |
| **Total Portfolio Investments** | **Total Portfolio Investments** | **Total Portfolio Investments** |  |  |  |  |  |  | $556863 | $557087 | 158.1% |
| **Cash and cash equivalents** | **Cash and cash equivalents** | **Cash and cash equivalents** |  |  |  |  |  |  |  |  |  |
| Cash and cash equivalents | (18) | Money market fund |  |  |  |  |  | 202452 | $202452 | $202452 | 57.4% |
| **Total cash and cash equivalents** | **Total cash and cash equivalents** | **Total cash and cash equivalents** |  |  |  |  |  |  | $202452 | $202452 | 57.4% |
| **Total Portfolio Investments, Cash and Cash Equivalents** | **Total Portfolio Investments, Cash and Cash Equivalents** | **Total Portfolio Investments, Cash and Cash Equivalents** |  |  |  |  |  |  | $759315 | $759539 | 215.5% |

---

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**Lafayette Square USA, Inc.**

**Consolidated Schedule of Investments (continued)**

**December 31, 2024**

(1) Unless otherwise indicated, all investments are considered Level 3 investments. The fair value of the investment was determined using significant unobservable inputs. See Note 4 "Fair Value Measurement of Investments."

(2) Represents an investment that is not a "qualifying asset" under Section 55(a) of the Investment Company Act of 1940, as amended (the 1940 Act"). As of December 31, 2024, non-qualifying assets represent 0.9% of the Company's portfolio at fair value. As a BDC, the Company generally has to invest at least 70% of its total assets in qualifying assets.

(3) All investments are denominated in U.S. dollars unless otherwise noted. Certain portfolio companies have been reclassified to updated GICS industry categories in the current year. The December 31, 2024 industry presentation has not been restated to reflect these reclassifications and therefore may not be directly comparable to the December 31, 2025 presentation.

(4) The total funded par amount is presented for debt investments, while the number of shares or units owned is presented for equity investments.

(5) Percentage is based on net assets of $352,406 as of December 31, 2024.

(6) Loan includes interest rate floor feature, which generally ranges from 1.00% to 4.00%.

(7) Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to the Secured Overnight Financing Rate ("SOFR" or "S") or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, the Company has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2024. As of December 31, 2024, the reference rates for our variable rate loans were the 90-day SOFR at 4.31% and 30-day SOFR at 4.33%.

(8) Position or portion thereof is an unfunded loan or equity commitment, and no interest is being earned on the unfunded portion, although the investment may earn unused commitment fees. Negative cost and fair value, if any, results from unamortized fees, which are capitalized to the cost of the investment. The unfunded commitment may be subject to a commitment termination date that may expire prior to the maturity date stated. See below for more information on the Company's unfunded commitments as of December 31, 2024:

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**Lafayette Square USA, Inc.**

**Consolidated Schedule of Investments (continued)**

**December 31, 2024**

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Investments** | **Unused Fee Rate** | **Commitment Type** | **Commitment**<br>**Expiration Date**<br>| **Unfunded** <br>**Commitment**<br>|
| **First Lien Debt** |  |  |  |  |
| Zero Waste Recycling LLC | 0.50% | Delayed Draw Term Loan | 5/15/2026 | $380 |
| Ironhorse Purchaser, LLC | 1.00% | Delayed Draw Term Loan | 9/30/2027 | 6377 |
| Core Capital Partners II-S LP | —% | Revolver | 10/11/2027 | 11234 |
| Synergi, LLC | 0.50% | Revolver | 12/17/2027 | 3750 |
| Med Learning Group LLC | 1.00% | Delayed Draw Term Loan | 12/30/2027 | 3425 |
| Café Zupas, L.C | 0.50% | Delayed Draw Term Loan | 12/31/2027 | 223 |
| Café Zupas, L.C | 0.50% | Revolver | 12/31/2027 | 223 |
| Dance Nation Holdings LLC | 0.50% | Revolver | 8/24/2028 | 3304 |
| MSPB MSO, LLC | 0.38% | Delayed Draw Term Loan | 11/10/2028 | 17630 |
| MSPB MSO, LLC | 0.38% | Revolver | 11/10/2028 | 6781 |
| truCurrent LLC | 0.50% | Delayed Draw Term Loan | 2/12/2029 | 25000 |
| Trilon Group, LLC | 1.00% | Delayed Draw Term Loan | 5/25/2029 | 1347 |
| Trilon Group, LLC | 0.50% | Revolver | 5/25/2029 | 801 |
| National Carbon Technologies – California, LLC | 2.50% | Bonds | 5/31/2029 | 11600 |
| CentralBDC Enterprises, LLC | 0.50% | Revolver | 6/11/2029 | 1516 |
| ZRG Partners LLC | 1.00% | Delayed Draw Term Loan | 6/14/2029 | 3435 |
| ZRG Partners LLC | 0.50% | Revolver | 6/14/2029 | 2357 |
| Capital City LLC | —% | Delayed Draw Term Loan | 9/20/2029 | 2500 |
| C Speed LLC | 0.50% | Revolver | 10/01/2029 | 4000 |
| Xpect Solutions, LLC | 0.50% | Revolver | 10/07/2029 | 2500 |
| Xpect Solutions, LLC | 0.50% | Delayed Draw Term Loan | 10/07/2029 | 1250 |
| **Equity** |  |  |  |  |
| Neighborhood Grocery Catalyst Fund LLC | —% | Equity |  | 8281 |
| Worker Solutions, LLC | —% | Equity |  | 3150 |
|  |  |  |  | $121064 |

---

(9) The Company categorized its unitranche loan as First Lien Senior Secured Loan. The First Lien Senior Secured Loan is comprised of two components: a first out tranche ("First Out") and last out tranche ("Last Out"). The Company syndicates the First Out tranche and retains the Last Out tranche. The First Out and Last Out tranches have the same maturity date. Interest disclosed reflects the contractual rate of First Lien Senior Secured Loan. The First Out tranche has priority over the Last Out tranche with respect to payments of principal, interest and any amounts due thereunder. The Company may be entitled to receive additional interest as a result of the Agreement Among Lenders ("AAL") entered into with the First Out lender. In exchange for the higher interest rate, the Last Out tranche is effectively subordinated in right of payment to the First Out tranche and risk of loss.

(10) Under the 1940 Act, the Company would be deemed to "control" a portfolio company if the Company owned more than 25% of its outstanding voting securities and/or held the power to exercise control over the management or policies of the portfolio company. Under the 1940 Act, the Company would be deemed an "affiliated person" of a portfolio company if the Company owns 5% or more of the portfolio company's outstanding voting securities. As of December 31, 2024, the Company's non-controlled/affiliated investments and controlled/affiliated investments were as follows:

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**Lafayette Square USA, Inc.**

**Consolidated Schedule of Investments (continued)**

**December 31, 2024**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Non-controlled/affiliated investments** | **Fair Value as of** <br>**December 31, 2023**<br>| **Gross** <br>**Additions**<br>| **Gross** <br>**Reductions**<br>| **Change in Unrealized** <br>**Gains (Losses)**<br>| **Fair Value as of** <br>**December 31, 2024**<br>| **Investment**<br>**Income**<br>|
| GK9 Global Companies, LLC | $22350 | $36 | $(227) | $(35) | $22124 | $3098 |
| IVM GK9 Holdings LLC | 4901 |  |  | 99 | 5000 | 84 |
| 3360 Frankford LLC |  | 2459 |  |  | 2459 |  |
| **Non-controlled/affiliated investments** | $27251 | $2495 | $(227) | $64 | $29583 | $3182 |
| **Controlled/affiliated investments** | **Fair Value as of** <br>**December 31, 2023**<br>| **Gross** <br>**Additions**<br>| **Gross** <br>**Reductions**<br>| **Change in Unrealized** <br>**Gains (Losses)**<br>| **Fair Value as of** <br>**December 31, 2024**<br>| **Investment**<br>**Income**<br>|
| Neighborhood Grocery Catalyst Fund LLC | $— | $4219 | $— | $— | $4219 | $— |
| Worker Solutions, LLC |  | 350 |  |  | 350 |  |
| **Controlled/affiliated investments** | $— | $4569 | $— | $— | $4569 | $— |

---

(11) Securities exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"), and may be deemed to be "restricted securities". Except as noted by this footnote, all of the instruments on this table are subject to restrictions on resale.

(12) Investments, or portion thereof, held by the SBIC subsidiary (as defined in Note 1).

(13) Industries are classified by The Global Industry Classification Standard ("GICS").

(14) The Company owns a 31.25% share in Neighborhood Grocery Catalyst Fund LLC.

(15) Investments, or portion thereof, held by the SSBIC subsidiary (as defined in Note 1).

(16) The Company owns a 100.00% share in Worker Solutions, LLC.

(17) The Company owns a 66.40% share in 3360 Frankford LLC.

(18) Cash and cash equivalents balance represents amounts held in the interest-bearing money market fund - Goldman Sachs Financial Square Government Fund (FGTXX). As of December 31, 2024, $202,452 was held in FGTXX and had an average one-year yield of 5.06%.

(19) Assets are pledged as collateral for the ING Credit Facility. See Note 5 "Debt".

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

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**Lafayette Square USA, Inc.**

**Notes to Consolidated Financial Statements**

**December 31, 2025**

**(dollar amounts in thousands, except per share data or otherwise noted)**

**Note 1. Organization**

Lafayette Square USA, Inc. (the "Company," which term refers to either Lafayette Square USA, Inc. or Lafayette Square

USA, Inc. together with its consolidated subsidiaries, as the context may require) is an externally managed, non-diversified,

closed-end investment company that has elected to be regulated as a business development company ("BDC") under the

1940 Act. On May 16, 2022, Lafayette Square Empire BDC, Inc. filed with the Secretary of State of the State of Delaware

a Certificate of Amendment to its Certificate of Incorporation to change its corporate name from "Lafayette Square Empire

BDC, Inc." to "Lafayette Square USA, Inc." In addition, for U.S. federal income tax purposes, the Company adopted an

initial tax year end of December 31, 2021, and was taxed as a corporation for the tax years ending December 31, 2021 and

December 31, 2022. The Company has elected to be treated, and intends to qualify annually thereafter, as a RIC under

Subchapter M of the IRC. However, there is no guarantee that the Company will qualify to make such an election for any

future taxable year.

The Company is externally managed by its Adviser pursuant to the Investment Advisory Agreement. The Adviser is a

subsidiary of Lafayette Square Holding Company, LLC (together with its controlled subsidiaries, including the Adviser and

LS Administration, LLC, "Lafayette Square").

The Company's investment objective is to generate favorable risk-adjusted returns, including current income and capital

appreciation, from directly originated investments in middle market companies.

The Company invests primarily in first and second lien loans and, to a lesser extent, in subordinated and mezzanine loans

and equity and equity-like securities, including common stock, preferred stock and warrants. The Company defines middle

market companies as those with annual revenues between $10 million and $1 billion, and annual earnings before interest,

taxes, depreciation, and amortization ("EBITDA") of between $10 million and $100 million, although the Company may

invest in larger or smaller companies. The Company also may purchase interests in loans, corporate bonds or other

instruments through secondary market transactions.

The Company has formed several wholly owned subsidiaries to support specific investment strategies. LS BDC Holdings,

LLC has elected to be a taxable entity to hold certain equity or equity-like investments in portfolio companies that are

'pass-through' entities for tax purposes. LS SBIC LP and LS SSBIC LP are each licensed by the U.S. Small Business

Administration (the "SBA") to invest in eligible 'small businesses' as defined by the SBA. Lafayette Square RBIC, LP ("LS

RBIC LP") is licensed by the U.S. Department of Agriculture (the "USDA") as a Rural Business Investment Company to

help meet equity capital investment needs in rural communities. All significant intercompany transactions and balances

have been eliminated in such consolidation.

**Note 2. Significant Accounting Policies**

**Basis of Presentation** 

The following is a summary of significant accounting policies consistently followed by the Company in the preparation of

its consolidated financial statements. The Company is an investment company and accordingly applies specific accounting

and financial reporting requirements under Accounting Standards Codification, as issued by the Financial Accounting

Standards Board ("ASC") Topic 946—Financial Services—Investment Companies ("Topic 946"). The accompanying

consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the

United States ("GAAP") and pursuant to Articles 6, 10 and 12 of Regulation S-X. Certain reclassifications have been made

to certain prior period balances to conform with current presentation.

**Use of Estimates** 

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates

and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities

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at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting

period. Actual results could differ from those estimates.

**Cash and Cash Equivalents**

The Company deposits its cash in a financial institution and, at times, such deposits may exceed the Federal Deposit

Insurance Corporation insurance limits. As of December 31, 2025 and December 31, 2024, the Company held $199,187

and $202,452 in cash and cash equivalents, respectively, of which no cash or cash equivalents were restricted. Of the total

cash and cash equivalents balance, $199,187 and $202,452 were held in an interest bearing money market fund, Goldman

Sachs Financial Square Government Fund (FGTXX), with U.S. Bank National Association as of December 31, 2025 and

December 31, 2024, respectively. For the years ended December 31, 2025, December 31, 2024 and December 31, 2023,

the Company earned $4,497, $3,682 and $2,114, respectively, in interest on cash and cash equivalents balances, and the

balance is included under Interest from cash and cash equivalents in the Consolidated Statements of Operations.

Investments in money market funds are categorized as Level 1 in the fair value hierarchy.

**Organization and Offering Costs**

Organization costs consist of costs incurred to establish the Company and enable it to do business legally. Offering costs

consist of costs incurred in connection with the offering of the common stock of the Company.

The Company's initial organizational costs incurred were expensed as incurred, and initial offering costs are amortized

over one year. The Company reimburses the Adviser for the organization and offering costs it incurs on the Company's

behalf. If actual organization and offering costs incurred exceed $1 million, the Adviser or its affiliates will bear the excess

costs. As of December 31, 2025, the Company had incurred $989 of organization and offering costs since inception.

**Deferred Financing Costs**

Deferred financing costs, incurred in connection with any credit facility, SBA-guaranteed debentures, and Notes (see Note

5) are deferred and amortized over the life of the respective credit facility, Notes, and SBA-guaranteed debentures.

**Indemnifications**

In the ordinary course of its business, the Company may enter into contracts or agreements that contain indemnifications or

warranties. Future events could occur that lead to the execution of these provisions against the Company. Based on its

history and experience, management believes that the likelihood of such an event is remote.

**Revenue Recognition**

Investment transactions are accounted for on a trade-date basis. Realized gains or losses on investments are measured by

the difference between the net proceeds from the disposition and the amortized cost basis of investment using specific

identification method without regard to unrealized gains or losses previously recognized. The Company reports current

period changes in fair value of investments that are measured at fair value as a component of the net change in unrealized

appreciation (depreciation) on investments in the Consolidated Statements of Operations.

*Investment Income*

Interest income, including amortization of premium and accretion of discount, is recorded on the accrual basis to the extent

that such amounts are collected. The Company records amortized or accreted discounts or premiums as interest income

using the effective interest method or straight-line interest method, as applicable, and adjusted only for material

amendments or prepayments. Dividend income, which represents dividends from equity investments and distributions from

subsidiaries, if any, is recognized on an accrual basis to the extent that the Company collects such amount.

*Original Issue Discount*

Discounts to par on portfolio securities are accreted into income over the tenor of each instrument. Any remaining discount

is accreted into income upon prepayment or redemption of the instrument. The Company then amortizes such amounts

using the effective interest method as interest income over the expected life of the investment.

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*PIK Interest*

The Company may, from time to time, hold loans in its portfolio that contain a payment-in-kind ("PIK") interest provision.

PIK interest, computed at the contractual rate specified in each loan agreement, is periodically added to the principal

balance of the loan, rather than being paid to the Company in cash, and is recorded as interest income. Thus, the actual

collection of PIK interest in cash may be deferred until the debt principal is repaid.

PIK interest, which is a non-cash source of income at the time of recognition, is included in the Company's taxable income.

This affects the amount the Company would be required to distribute to its stockholders to maintain its tax treatment as a

RIC for federal income tax purposes, even though the Company has not yet collected the cash.

*Fee Income*

Origination fees received are recorded as deferred income and recognized as investment income over the term of the loan.

Upon prepayment of a loan, any unamortized origination fees are recorded as investment income. The Company receives

certain fees from portfolio companies, which are non-recurring in nature. Such fees include loan prepayment penalties,

structuring fees, covenant waiver fees and loan amendment fees, which are recorded as investment income when earned.

*Non-accrual loans*

A loan can be left on accrual status during the period the Company is pursuing repayment of the loan. Management reviews

all loans that become 90 days or more past due on principal and interest, or when there is reasonable doubt that principal or

interest will be collected, for possible placement on non-accrual status. When a loan is placed on non-accrual status, unpaid

interest credited to income is reversed. Additionally, any original issue discount and market discount are no longer accreted

to interest income as of the date such loan is placed on non-accrual status. Interest payments received on non-accrual loans

are recognized as income or applied to principal depending upon management's judgment regarding collectability. Non-

accrual loans are restored to accrual status when past due principal and interest is paid, and, in management's judgment,

future payments are likely to remain current. As of December 31, 2025, we had one investment partially on non-accrual

status. The non-accrual portion of this investment represents 0.9% of total investments at fair value. As of December 31,

2024, there were no investments on non-accrual status.

**Investment Classification**

The Company classifies its investments in accordance with the requirements of the 1940 Act. Under the 1940 Act, the

Company is deemed to be an "Affiliated Person" of a portfolio company if it owns more than 5% of a portfolio company's

outstanding voting securities. The Company refers to such investments in Affiliated Persons as "Affiliated Investments."

Under the 1940 Act, the Company is deemed to be an Affiliated Person and to "control" a portfolio company if it owns

more than 25% of its outstanding voting securities and/or has the power to exercise control over the management or

policies of such portfolio company. Such investments in portfolio companies that the Company "controls" are referred to as

"Control Investments." Investments which are neither Control Investments or Affiliated Investments are referred to as

"Non-Controlled/Non-Affiliated Investments."

**Fair Value of Financial Instruments** 

The Company applies fair value to all of its financial instruments in accordance with ASC Topic 820—Fair Value

Measurement ("ASC Topic 820"). ASC Topic 820 defines fair value, establishes a framework used to measure fair value

and requires disclosures for fair value measurements. In accordance with ASC Topic 820, the Company has categorized its

financial instruments carried at fair value, based on the priority of the valuation technique, into a three-level fair value

hierarchy.

The availability of observable inputs can vary depending on the financial instrument and is affected by a wide variety of

factors, including, for example, the type of product, whether the product is new, whether the product is traded on an active

exchange or in the secondary market and the current market conditions. To the extent that the valuation is based on models

or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment.

Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for financial

instruments classified as Level 3.

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Investments for which market quotations are not readily available are valued at fair value as determined in good faith

pursuant to Rule 2a-5 under the 1940 Act and ASC Topic 820. As a general principle, the fair value of a security or other

asset is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between

market participants at the measurement date. Pursuant to Rule 2a-5, the board of directors (the "Board") has designated the

Adviser as the valuation designee ("Valuation Designee") for the Company to perform the fair value determination relating

to all Company investments, subject to the oversight of the Board. The Adviser may carry out its designated

responsibilities as Valuation Designee through various teams and committees. The Valuation Designee's Board-approved

policies and procedures govern the Valuation Designee's selection and application of methodologies for determining and

calculating the fair value of Company investments. The Valuation Designee may value Company portfolio securities for

which market quotations are not readily available and other Company assets utilizing inputs from pricing sources,

quotation reporting systems, valuation agents and other third-party sources.

The Adviser has established a valuation committee (the "Valuation Committee") to carry out the day-to-day fair valuation

responsibilities and has adopted policies and procedures to govern activities of the Valuation Committee and the

performance of functions required to determine the fair value of the Company's investments in good faith. These functions

include periodically assessing and managing material risks associated with fair value determinations, selecting, applying,

reviewing, and testing fair value methodologies, monitoring for circumstances that may necessitate the use of fair value,

and overseeing and evaluating pricing services used.

**Distributions** 

Distributions to common stockholders are recorded on the record date. The Board authorizes and declares the ordinary cash

distributions of the Company on a quarterly basis. The amount to be paid out as a dividend or distribution is determined by

the Board each quarter and is generally based upon the earnings estimated by management. Net realized capital gains, if

any, are distributed to shareholders at least annually, although the Company can retain such capital gains for investment in

its discretion.

The Company has adopted a dividend reinvestment plan (the "DRIP") that provides for reinvestment of any distributions

the Company declares in cash on behalf of its stockholders, unless a stockholder elects to receive cash. As a result, if the

Board authorizes and the Company declares a cash distribution, then stockholders who have not "opted out" of the DRIP

will have their cash distribution automatically reinvested in additional shares of the Company's common stock, rather than

receiving a cash distribution. Shares issued under the DRIP are issued at a price per share equal to the most recent net asset

value ("NAV") per share as determined by the Board (subject to adjustment to the extent required by Section 23 of the

1940 Act).

**Recent Accounting Pronouncements**

The Company considers the applicability and impact of all accounting standard updates ("ASU") issued by the Financial

Accounting Standards Board ("FASB"). ASUs not listed below were assessed and either determined to be not applicable or

expected to have minimal impact on the Company's consolidated financial statements.

In December 2023, the FASB updated ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax

Disclosures," ("ASU 2023-09"). This standard is intended to enhance the transparency of income tax disclosures, including

requirement to disclose income tax paid disaggregated by jurisdiction, among other items. ASU 2023-09 is effective for

annual periods beginning after December 15, 2024. The new standard impacts the financial statement disclosures only and

does not affect the Company's financial position or results of its operations. Management has implemented the new

standard where applicable.

In November 2024, the FASB issued ASU 2024-03, "Income Statement—Reporting Comprehensive Income Expense

Disaggregation Disclosures (Subtopic 2200-40)," ("ASU 2024-03") which requires disaggregated disclosure of certain

costs and expenses, including purchases of inventory, employee compensation, depreciation, amortization and depletion, in

each relevant expense caption. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim

reporting periods beginning after December 15, 2027. Early adoption and retrospective application is permitted. The

Company is currently evaluating the impact on its consolidated financial statements.

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**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 both

current income, and to a lesser extent, capital appreciation through debt and equity investments. The chief operating

decision maker ("CODM") is comprised of the Company's chief executive officer and chief financial officer. The CODM

assesses the performance of the Company and makes operating decisions on behalf of the Company on a consolidated basis

primarily based on the Company's net increase in net assets resulting from operations ("net income"). In addition to

numerous other factors and metrics, the CODM utilizes net income as a key metric in determining the amount of any

distribution to the Company's stockholders. As the Company's operations comprise of a single reporting segment, the

segment assets are reflected on the accompanying consolidated balance sheet as "total assets," and the significant segment

expenses are listed on the accompanying consolidated statement of operations.

**Note 3. Investments**

The following tables show the composition of the Company's investment portfolio, at amortized cost and fair value (with

corresponding percentage of total portfolio investments) as of December 31, 2025 and December 31, 2024.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  | **Amortized Cost** | **Amortized Cost** | **Fair Value**  | **Fair Value**  |
| First lien senior secured loans | $690548 | 87.4% | $689683 | 87.4% |
| Equity | 48364 | 6.1% | 47880 | 6.1% |
| Preferred equity | 46604 | 5.9% | 46713 | 5.9% |
| Subordinated debt | 3425 | 0.4% | 3437 | 0.4% |
| Convertible Note | 1500 | 0.2% | 1500 | 0.2% |
| Warrants |  | —% |  | —% |
| **Total**  | $790441 | 100.0% | $789213 | 100.0% |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Amortized Cost** | **Amortized Cost** | **Fair Value** | **Fair Value** |
| First lien senior secured loans | $540064 | 97.0% | $540195 | 96.9% |
| Equity | 11909 | 2.1% | 12028 | 2.2% |
| Subordinated debt | 1738 | 0.3% | 1712 | 0.3% |
| Preferred equity | 1652 | 0.3% | 1652 | 0.3% |
| Convertible Note | 1500 | 0.3% | 1500 | 0.3% |
| Warrants |  | —% |  | —% |
| **Total** | $556863 | 100.0% | $557087 | 100.0% |

---

The following tables show the composition of the Company's investment portfolio by geographic region, at amortized cost

and fair value (with corresponding percentage of total portfolio investments) as of December 31, 2025 and December 31,

2024. The geographic composition is determined by the location of the corporate headquarters of the portfolio company,

which may not be indicative of the primary source of the portfolio company's business:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  | **Amortized Cost** | **Amortized Cost** | **Fair Value**  | **Fair Value**  |
| Empire | $246988 | 31.2% | $248561 | 31.4% |
| Far West | 136579 | 17.3% | 137161 | 17.4% |
| Gulf Coast | 128165 | 16.2% | 131514 | 16.7% |
| Mid-Atlantic | 121155 | 15.3% | 121341 | 15.4% |
| Great Lakes | 84567 | 10.7% | 77486 | 9.8% |
| Southeast | 37836 | 4.8% | 37735 | 4.8% |
| Cascade | 17461 | 2.2% | 17587 | 2.2% |
| Northeast | 9888 | 1.3% | 9986 | 1.3% |
| Four Corners | 7802 | 1.0% | 7842 | 1.0% |
| **Total**  | $790441 | 100.0% | $789213 | 100.0% |

---

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Amortized Cost** | **Amortized Cost** | **Fair Value** | **Fair Value** |
| Mid-Atlantic | $127815 | 22.9% | $128238 | 23.1% |
| Gulf Coast | 90857 | 16.3% | 90079 | 16.2% |
| Empire | 88743 | 15.9% | 89350 | 16.0% |
| Far West | 80838 | 14.5% | 81472 | 14.6% |
| Great Lakes | 77697 | 14.0% | 76300 | 13.7% |
| Southeast | 46592 | 8.4% | 47073 | 8.4% |
| Four Corners | 25226 | 4.5% | 25307 | 4.5% |
| Cascade | 17595 | 3.2% | 17768 | 3.2% |
| Northeast | 1500 | 0.3% | 1500 | 0.3% |
| **Total** | $556863 | 100.0% | $557087 | 100.0% |

---

The following tables show the composition of the Company's investment portfolio by industry, at amortized cost and fair

value (with corresponding percentage of total portfolio investments) as of December 31, 2025 and December 31, 2024.

<u>[**Table of Contents**](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_7)</u>

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  | **Amortized Cost** | **Amortized Cost** | **Fair Value**  | **Fair Value**  |
| Professional Services | $81543 | 10.3% | $82156 | 10.4% |
| Commercial Services & Supplies | 72767 | 9.3% | 72927 | 9.2% |
| Hotels, Restaurants & Leisure | 65740 | 8.3% | 65974 | 8.4% |
| Construction & Engineering | 55085 | 7.0% | 55241 | 7.0% |
| Specialized Consumer Services | 54727 | 6.9% | 55080 | 7.0% |
| Road & Rail | 52124 | 6.6% | 45140 | 5.7% |
| Media | 35757 | 4.5% | 39346 | 5.0% |
| Diversified Financial Services | 37532 | 4.7% | 37788 | 4.8% |
| Health Care Providers & Services | 37589 | 4.8% | 37723 | 4.8% |
| IT Services | 36875 | 4.7% | 37222 | 4.7% |
| Independent Power & Renewable | 36338 | 4.6% | 36499 | 4.6% |
| Transportation Infrastructure | 31671 | 4.0% | 31994 | 4.1% |
| Real Estate Management & Development | 27486 | 3.5% | 26934 | 3.4% |
| Health Care Equipment & Services | 23210 | 2.9% | 22990 | 2.9% |
| Diversified Consumer Services | 22028 | 2.8% | 22127 | 2.8% |
| Aerospace & Defense | 19657 | 2.5% | 19512 | 2.5% |
| Insurance | 18000 | 2.3% | 18000 | 2.3% |
| Food Products | 16924 | 2.1% | 16966 | 2.1% |
| Diversified Telecommunication Services | 15872 | 2.0% | 15870 | 2.0% |
| Electrical Equipment | 12441 | 1.6% | 12538 | 1.6% |
| Gas Utilities | 10661 | 1.3% | 10675 | 1.4% |
| Food & Staples Retailing | 9888 | 1.3% | 9986 | 1.3% |
| Health Care Distributors | 7802 | 1.0% | 7842 | 1.0% |
| Diversified Real Estate Activities | 4343 | 0.5% | 4286 | 0.5% |
| Water Utilities | 3381 | 0.4% | 3397 | 0.4% |
| Human Resource & Employment Services | 1000 | 0.1% | 1000 | 0.1% |
| **Total**  | $790441 | 100.0% | $789213 | 100.0% |

---

<u>[**Table of Contents**](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_7)</u>

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Amortized Cost** | **Amortized Cost** | **Fair Value** | **Fair Value** |
| Commercial Services & Supplies | $66606 | 12.0% | $66901 | 12.1% |
| Professional Services | 57752 | 10.4% | 58135 | 10.4% |
| Specialized Consumer Services | 39897 | 7.2% | 40288 | 7.2% |
| Road & Rail | 41613 | 7.5% | 39900 | 7.2% |
| Interactive Media & Services | 34011 | 6.1% | 34293 | 6.2% |
| IT Services | 33807 | 6.1% | 33820 | 6.1% |
| Media | 34140 | 6.1% | 32725 | 5.9% |
| Diversified Financial Services | 28388 | 5.1% | 28492 | 5.1% |
| Transportation Infrastructure | 26252 | 4.7% | 26530 | 4.8% |
| Water Utilities | 23112 | 4.2% | 23454 | 4.2% |
| Health Care Equipment & Services | 19702 | 3.5% | 19949 | 3.6% |
| Application Software | 18288 | 3.3% | 18400 | 3.3% |
| Health Care Providers & Services | 17595 | 3.2% | 17768 | 3.2% |
| Construction & Engineering | 17427 | 3.1% | 17428 | 3.1% |
| Pharmaceuticals | 16278 | 2.9% | 16426 | 2.9% |
| Aerospace & Defense | 16069 | 2.9% | 16108 | 2.9% |
| Electric Utilities | 12286 | 2.2% | 12500 | 2.2% |
| Restaurants | 11714 | 2.1% | 11783 | 2.1% |
| Hotels, Restaurants & Leisure | 10688 | 1.9% | 10877 | 2.0% |
| Gas Utilities | 10737 | 1.9% | 10787 | 1.9% |
| Real Estate Management & Development | 9184 | 1.6% | 9182 | 1.6% |
| Independent Power & Renewable | 8388 | 1.5% | 8388 | 1.5% |
| Diversified Consumer Services | 2459 | 0.4% | 2459 | 0.4% |
| Food & Staples Retailing | 470 | 0.1% | 494 | 0.1% |
| **Total** | $556863 | 100.0% | $557087 | 100.0% |

---

Certain portfolio companies have been reclassified to updated GICS industry categories in the current year. The December

31, 2024 industry presentation has not been restated to reflect these reclassifications and therefore may not be directly

comparable to the December 31, 2025 presentation.

**Note 4. Fair Value Measurement of Investments**

ASC Topic 820 defines fair value as the amount that would be received in the sale of an asset or paid in the transfer of a

liability in an orderly transaction between market participants at the measurement date. Where available, the Company uses

quoted market prices based on the last sales price on the measurement date.

In accordance with ASC Topic 820, the Company discloses the fair value of its investments in a hierarchy that prioritizes

the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to valuations based

upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest

priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). To the

extent that fair value is based on inputs that are less observable, the determination of fair value requires a significant

amount of management judgment.

The three-tier hierarchy of inputs is summarized below.

Level 1 - Quoted prices are available in active markets/exchanges for identical investments as of the reporting date.

<u>[**Table of Contents**](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_7)</u>

Level 2 - Pricing inputs are observable inputs including, but not limited to, prices quoted for similar assets or liabilities

in active markets/exchanges or prices quoted for identical or similar assets or liabilities in markets that are not active,

and fair value is determined through the use of models or other valuation methodologies.

Level 3 - Pricing inputs are unobservable for the investment and include activities where there is little, if any, market

activity for the investment. The inputs into determination of fair value require significant management judgment and

estimation.

The inputs used by management in estimating the fair value of Level 3 investments may include valuations and other

reporting provided by representatives of the portfolio companies, original transaction prices, recent transactions for

identical or similar instruments, and comparisons to fair values of comparable investments, and may include adjustments to

reflect illiquidity or non-transferability. The Adviser has policies with respect to its investments, which may assist the

Adviser in assessing the quality of information provided by, or on behalf of, each portfolio investment and in determining

whether such information continues to be provided by a reliable source or whether further investigation is necessary. Any

such investigation, as applicable, may or may not require the Adviser to forego its normal reliance on the value supplied

by, or on behalf of, such portfolio investment and to determine independently the fair value of the Company's interest in

such portfolio investments, consistent with the Adviser's valuation procedures.

The Company has engaged two independent third-party valuation providers to perform quarterly valuation procedures and

determine estimated fair value ranges for substantially all of its illiquid investments. Certain immaterial investments are

valued internally on a quarterly basis unless otherwise determined by the Valuation Committee, and are corroborated by an

independent valuation firm on an annual basis. Investments that have been completed within the past three months are fair

valued at cost unless there has been a material event since the completion date. If there has been a material event or if

material information emerges that was not known as of the close of the transaction, the independent third-party valuation

providers provide an independent valuation range. The types of valuation methodologies employed by the third-party

valuation providers include discounted cash flow, recent financing and enterprise value valuation methodologies. Pursuant

to the Rule 2a-5 under the 1940 Act, the Board has chosen to designate the Adviser as the Valuation Designee to perform

fair value determinations relating to the value of the assets for which market quotations are not readily available, subject to

the Board's oversight.

The Company's investments and borrowings are subject to market risk. Market risk is the potential for changes in the value

due to market changes. Market risk is directly impacted by the volatility and liquidity in the markets in which the

investments and borrowings are traded.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing

in these securities. The availability of valuation techniques and observable inputs can vary from security to security and is

affected by a wide variety of factors including the type of security, whether the security is new and not yet established in

the marketplace, and other characteristics particular to the transaction. Inputs may include price information, volatility

statistics, specific and broad credit data, liquidity statistics and other factors.

The use of these valuation models requires significant estimation and judgment by the Adviser. While the Company

believes its valuation methods are appropriate, other market participants may value identical assets differently than the

Company at the measurement date. The methods used by the Company may calculate a fair value that is not indicative of

net realizable value or of future fair values. The Company may also have risk associated with its concentration of

investments in certain geographic regions and industries.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the

determination of fair value requires more judgment. Those estimated values do not necessarily represent amounts that may

ultimately be realized due to future circumstances that cannot be reasonably anticipated. Accordingly, the degree of

judgment exercised by the Adviser in determining fair value is greatest for securities categorized in Level 3.

The determination of what constitutes "observable" requires significant judgment by the Adviser. The Adviser considers

observable data to be market data which are readily available, regularly distributed or updated, reliable and verifiable, not

proprietary. Such observable data may fall into different levels of the fair value hierarchy. In such cases, for disclosure

purposes, the level in the fair value hierarchy where the fair value measurement falls (in its entirety) is based on the lowest

level input that is significant to the fair value measurement. The categorization of an investment within the hierarchy is

<u>[**Table of Contents**](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_7)</u>

based upon the pricing transparency of the investment, and observability of prices and inputs may be reduced for many

investments. This condition could cause the investment to be reclassified to a lower level within the fair value hierarchy.

The consolidated financial statements include portfolio investments at fair value of $789,213 and $557,087 as of

December 31, 2025 and December 31, 2024, respectively. Because of the inherent uncertainty of valuation, the determined

values may differ significantly from the values that would have been used had a liquid market existed for the investments

as of December 31, 2025 and December 31, 2024.

The following tables present fair value measurements of investments, by major class according to the fair value hierarchy

as of December 31, 2025 and December 31, 2024.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  | **Fair Value Measurements**  | **Fair Value Measurements**  | **Fair Value Measurements**  | **Fair Value Measurements**  |
|  | **Level 1** | **Level 2** | **Level 3** | **Total**  |
| First lien senior secured loans | $— | $— | $689683 | $689683 |
| Equity |  |  | 47880 | 47880 |
| Preferred equity |  |  | 46713 | 46713 |
| Subordinated debt |  |  | 3437 | 3437 |
| Convertible note |  |  | 1500 | 1500 |
| Warrants |  |  |  |  |
| **Total Investments**  | $— | $— | $789213 | $789213 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Fair Value Measurements** | **Fair Value Measurements** | **Fair Value Measurements** | **Fair Value Measurements** |
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
| First lien senior secured loans | $— | $— | $540195 | $540195 |
| Equity |  |  | 12028 | 12028 |
| Subordinated debt |  |  | 1712 | 1712 |
| Preferred equity |  |  | 1652 | 1652 |
| Convertible note |  |  | 1500 | 1500 |
| Warrants |  |  |  |  |
| **Total Investments**  | $— | $— | $557087 | $557087 |

---

The carrying value of the Credit Facility and SBA guaranteed debentures approximates fair value as of December 31, 2025

and December 31, 2024 and would be categorized as Level 3 in the fair value hierarchy if determined as of the reporting

date.

The following tables provide a reconciliation of the beginning and ending balances for investments that use Level 3 inputs

for the years ended December 31, 2025 and December 31, 2024.

<u>[**Table of Contents**](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_7)</u>

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the year ended** <br>**December 31, 2025** | **For the year ended** <br>**December 31, 2025** | **For the year ended** <br>**December 31, 2025** | **For the year ended** <br>**December 31, 2025** | **For the year ended** <br>**December 31, 2025** | **For the year ended** <br>**December 31, 2025** | **For the year ended** <br>**December 31, 2025** |
|  | **Investments** | **Investments** | **Investments** | **Investments** | **Investments** | **Investments** | **Investments** |
|  | **First Lien** <br>**Senior** <br>**Secured** <br>**Loans**<br>| **Subordinated** <br>**Debt**<br>| **Equity** | **Preferred** <br>**Equity**<br>| **Convertible**<br>**Note**<br>| **Warrants** | **Total** <br>**Investments**<br>|
| Balance as of December 31, 2024 | $540195 | $1712 | $12028 | $1652 | $1500 | $— | $557087 |
| Purchases of investments and other <br>adjustments to cost<br>| 364865 | 1687 | 37002 | 54527 |  |  | 458081 |
| Proceeds from sales and repayments of <br>investments<br>| (217052) |  | (547) | (9575) |  |  | (227174) |
| Net realized gain (loss) | 203 |  |  |  |  |  | 203 |
| Net accretion of discount on <br>investments<br>| 2468 |  |  |  |  |  | 2468 |
| Net change in unrealized gain (loss) on <br>investments<br>| (996) | 38 | (603) | 109 |  |  | (1452) |
| **Balance as of December 31, 2025** | $689683 | $3437 | $47880 | $46713 | $1500 | $— | $789213 |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the year ended** <br>**December 31, 2024** | **For the year ended** <br>**December 31, 2024** | **For the year ended** <br>**December 31, 2024** | **For the year ended** <br>**December 31, 2024** | **For the year ended** <br>**December 31, 2024** | **For the year ended** <br>**December 31, 2024** | **For the year ended** <br>**December 31, 2024** |
|  | **Investments** | **Investments** | **Investments** | **Investments** | **Investments** | **Investments** | **Investments** |
|  | **First Lien** <br>**Senior** <br>**Secured** <br>**Loans**<br>| **Subordinated** <br>**Debt**<br>| **Equity** | **Preferred** <br>**Equity**<br>| **Convertible**<br>**Note**<br>| **Warrants** | **Total** <br>**Investments**<br>|
| Balance as of December 31, 2023 | $265287 | $1753 | $4901 | $1652 | $— | $— | $273593 |
| Purchases of investments and other <br>adjustments to cost<br>| 338916 | 178 | 7028 |  | 1500 |  | 347622 |
| Proceeds from sales and repayments of <br>investments<br>| (63442) | (312) |  |  |  |  | (63754) |
| Net realized gain (loss) | 98 |  |  |  |  |  | 98 |
| Net accretion of discount on <br>investments<br>| 1374 |  |  |  |  |  | 1374 |
| Net change in unrealized gain (loss) on <br>investments<br>| (2038) | 93 | 99 |  |  |  | (1846) |
| **Balance as of December 31, 2024** | $540195 | $1712 | $12028 | $1652 | $1500 | $— | $557087 |

---

For the year ended December 31, 2025, the net change in unrealized gain (loss) on investments attributable to Level 3

investments still held on December 31, 2025 was $(1,452) as shown on the Consolidated Statements of Operations. For the

year ended December 31, 2024, the net change in unrealized gain (loss) on investments attributable to Level 3 investments

still held on December 31, 2024 was $(1,846) as shown on the Consolidated Statements of Operations.

Purchases of investments and other adjustments to costs include purchases of new investments at cost, accretion/

amortization of income from discount/premium on debt securities and PIK.

Reclassifications impacting Level 3 of the fair value hierarchy are reported as transfers in or out of Level 3 as of the

beginning of the period which the reclassifications occur. There were no transfers between Levels 1, 2 and 3 during the

years ended December 31, 2025 and December 31, 2024.

**Significant Unobservable Inputs**

ASC Topic 820 requires disclosure of quantitative information about the significant unobservable inputs used in the

valuation of assets and liabilities classified as Level 3 within the fair value hierarchy. The table below is not intended to be

all-inclusive, but rather to provide information on significant unobservable inputs and valuation techniques used by the

Company.

<u>[**Table of Contents**](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_7)</u>

The tables below summarize the quantitative inputs and assumptions used for items categorized in Level 3 of the fair value

hierarchy as of December 31, 2025 and December 31, 2024.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | | | | | **Range** | **Range** |
|  | <br>**Fair Value, as of** <br>**December 31, 2025**<br>| <br>**Valuation** <br>**Technique**<br>| <br>**Unobservable**<br>**Input**<br>| <br>**Weighted**<br>**Average Mean**<br>| **Minimum** | **Maximum** |
| Assets: |  |  |  |  |  |  |
| First lien senior secured loans | $575915 | Discounted Cash <br>Flow<br>| Discount Rate | 10.0% | 7.9% | 12.8% |
| First lien senior secured loans | 59426 | Waterfall Analysis | EV/EBITDA | 5.0x | 1.0x | 7.3x |
| First lien senior secured loans | 54342 | Transaction <br>Precedent<br>| Transaction Price | N/A | N/A | N/A |
| Equity | 39880 | Transaction <br>Precedent<br>| Transaction Price | N/A | N/A | N/A |
| Equity | 8000 | Waterfall Analysis | EV/EBITDA | 6.1x | 5.8x | 6.8x |
| Subordinated debt | 1883 | Waterfall Analysis | EV/EBITDA | 8.3x | 8.0x | 8.5x |
| Subordinated debt | 1554 | Discounted Cash <br>Flow<br>| Discount Rate | 14.4% | 14.4% | 14.4% |
| Preferred equity | 5000 | Transaction <br>Precedent<br>| Transaction Price | N/A | N/A | N/A |
| Preferred equity | 15000 | Discounted Cash <br>Flow<br>| Discount Rate | 12.0% | 12.0% | 12.0% |
| Preferred equity | 26713 | Waterfall Analysis | EV/EBITDA | 1.5x | 1.0x | 8.3x |
| Convertible note | 1500 | Transaction <br>Precedent<br>| Transaction Price | N/A | N/A | N/A |
| Warrants |  | Waterfall Analysis | EV/EBITDA | 0.0x | 0.0x | 0.0x |
| **Total Level 3 Assets** | $789213 |  |  |  |  |  |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | | | | | **Range** | **Range** |
|  | <br>**Fair Value, as of** <br>**December 31, 2024**<br>| <br>**Valuation** <br>**Technique**<br>| <br>**Unobservable**<br>**Input**<br>| <br>**Weighted**<br>**Average Mean**<br>| **Minimum** | **Maximum** |
| Assets: |  |  |  |  |  |  |
| First lien senior secured loans | $404750 | Discounted Cash <br>Flow<br>| Discount Rate | 11.2% | 8.4% | 18.9% |
| First lien senior secured loans | 39900 | Comparable <br>Multiples<br>| EV/EBITDA | 6.3x | 5.5x | 7.0x |
| First lien senior secured loans | 95545 | Amortized Cost | Cost | N/A | N/A | N/A |
| Subordinated debt | 1712 | Discounted Cash <br>Flow<br>| Discount Rate | 14.8% | 14.0% | 15.5% |
| Equity | 5000 | Comparable <br>Multiples<br>| EV/EBITDA | 6.3x | 6.0x | 6.5x |
| Equity | 7028 | Amortized Cost | Cost | N/A | N/A | N/A |
| Preferred equity | 1652 | Comparable <br>Multiples<br>| EV/EBITDA | 8.5x | 8.3x | 8.8x |
| Convertible note | 1500 | Amortized Cost | Cost | N/A | N/A | N/A |
| Warrants |  | Comparable <br>Multiples<br>| EV/EBITDA | 7.0x | 5.5x | 8.0x |
| **Total Level 3 Assets** | $557087 |  |  |  |  |  |

---

The significant unobservable input used in the income approach of fair value measurement of the Company's investments

is the discount rate used to discount the estimated future cash flows received from the underlying investment, which

include both future principal and interest payments. Increases (decreases) in the discount rate would result in a decrease

(increase) in the fair value estimate of the investment. Included in the consideration and selection of discount rates are the

following factors: risk of default, rating of the investment and comparable investments, and call provisions.

The significant unobservable inputs used in the market approach of fair value measurement of the Company's investments

are the market multiples of EBITDA or revenue of the comparable guideline public companies. The Company selects a

<u>[**Table of Contents**](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_7)</u>

population of public companies for each investment with similar operations and attributes of the portfolio company. Using

these guideline public company data, a range of multiples of enterprise value to EBITDA or revenue is calculated. The

Company selects percentages from the range of multiples for purposes of determining the portfolio company's estimated

enterprise value based on such multiple and generally the latest twelve months EBITDA or revenue of the portfolio

company (or other meaningful measure). Increases (decreases) in the multiple will result in an increase (decrease) in

enterprise value, resulting in an increase (decrease) in the fair value estimate of the investment.

**Note 5. Debt**

As a BDC, we are permitted, under specified conditions, to issue multiple classes of indebtedness and one class of stock

senior to shares of our common stock if our asset coverage, as defined in the 1940 Act, is at least equal to 150%, subject to

receipt of certain approvals and compliance with certain disclosure requirements, immediately after each such issuance.

Section 61(a) of the 1940 Act reduces the asset coverage requirement applicable to BDCs from 200% to 150% so long as

the BDC meets certain disclosure requirements and obtains certain approvals. In April 2021, our Board and initial

stockholder approved the reduced asset coverage ratio. The reduced asset coverage requirements permit us to increase the

maximum amount of leverage that we are permitted to incur by reducing the asset coverage requirements applicable to us

from 200% to 150%. As defined in the 1940 Act, asset coverage of 150% means that for every $100 of net assets we hold,

we may raise $200 from borrowing and issuing senior securities as compared to $100 from borrowing and issuing senior

securities for every $100 of net assets under a 200% asset coverage requirement. In addition, while any senior securities

remain outstanding, we are generally prohibited from making distribution to our stockholders or repurchasing of such

securities or shares unless we meet the applicable asset coverage ratios at the time of such distribution or repurchase. As of

December 31, 2025 and December 31, 2024, the Company's asset coverage ratios based on the aggregate amounts of

senior securities outstanding were 220.8% and 269.2%, respectively.

The facilities of the Company consist of the following:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Aggregate**<br>**Principal** <br>**Amount** <br>**Available**<br>| **Principal** <br>**Amount** <br>**Outstanding**<br>| **Unused** <br>**Portion**<br>| **Aggregate**<br>**Principal** <br>**Amount** <br>**Available**<br>| **Principal** <br>**Amount** <br>**Outstanding**<br>| **Unused** <br>**Portion**<br>|
| Secured borrowings | $300000 | $276982 | $23018 | $225000 | $208232 | $16768 |
| SBA-Guaranteed <br>Debentures<br>| 290000 | 230000 | 60000 | 192505 | 192505 |  |
| Note payable | 65000 | 65000 |  |  |  |  |
| **Total** | $655000 | $571982 | $83018 | $417505 | $400737 | $16768 |

---

The following table summarizes the interest expense, non-usage fees and amortization of financing costs incurred on the

Company's total debt for the years ended December 31, 2025, December 31, 2024 and December 31, 2023:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended** <br>**December 31, 2025**<br>| **For the year ended** <br>**December 31, 2024**<br>| **For the year ended**<br>**December 31, 2023**<br>|
| Interest expense | $27248 | $9328 | $1526 |
| Non-usage fee <sup>(1)</sup> | 168 | 92 | 82 |
| Amortization of deferred financing costs | 1813 | 835 | 441 |
| Weighted average stated interest rate | 6.07% | 6.40% | 7.08% |
| Weighted average outstanding balance | $449096 | $145828 | $21548 |

---

(1)Non-usage fee includes the portion of the facility agent fee applicable to the undrawn portion of the ING Credit

Facility.

<u>[**Table of Contents**](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_7)</u>

**Credit Facilities**

*ING Credit Facility*

On June 18, 2024, the Company entered into a Senior Secured Revolving Credit Agreement (as amended, restated,

supplemented, or otherwise modified from time to time, the "ING Credit Facility") with ING Capital, LLC, as

Administrative Agent, Lead Arranger, Bookrunner and Sustainability Structuring Agent. The ING Credit Facility is

guaranteed by certain subsidiaries of the Company in existence as of the closing date of the ING Credit Facility and

provides that such facility will be guaranteed by certain subsidiaries of the Company formed or acquired by the Company

after the date of such facility (collectively, the "Guarantors"). The ING Credit Facility permits the Company to borrow debt

under such facility in an amount (the "borrowing base") calculated based upon unused capital commitments made by

investors in the Company and the value of certain eligible portfolio investments. The amount of permissible borrowings

under the ING Credit Facility may be increased through an uncommitted accordion feature through which existing and new

lenders may, at their option, agree to provide additional financing to the Company. The ING Credit Facility is secured by a

first-priority interest in the unused commitments of the Company's investors and substantially all of the eligible portfolio

investments held by the Company and each Guarantor, subject to certain exceptions. The Company may use the proceeds

of the ING Credit Facility for general corporate purposes, including the funding of portfolio investments.

The Company may borrow amounts under the ING Credit Facility in U.S. dollars or certain other permitted currencies.

Amounts drawn under the ING Credit Facility in U.S. dollars bear interest at either (i) term SOFR plus margin of 2.70%

per annum, or (ii) the alternate base rate plus margin of 1.70% per annum. In each case, the annual interest rate is

adjustable based on a sustainability-linked loan pricing structure that directly references our 2030 Goals, with ING acting

as the sole Sustainability Structuring Agent. The Company may elect either the term SOFR or alternate base rate at the time

of each drawdown, and loans denominated in U.S. dollars may be converted from one rate to another at any time at the

Company's option, subject to certain conditions. Amounts drawn under the ING Credit Facility in other permitted

currencies bear interest at the relevant rate specified in such facility plus an applicable margin (including any applicable

credit spread adjustment).

The ING Credit Facility includes customary affirmative and negative covenants, including certain limitations on the

incurrence of additional indebtedness and liens, as well as usual and customary events of default for revolving credit

facilities of this nature.

The availability period with respect to the revolving credit facility under the ING Credit Facility terminates on June 19,

2028 ("Commitment Termination Date"), and the ING Credit Facility matures on June 18, 2029 ("Maturity Date"). During

the period from the Commitment Termination Date to the Maturity Date, the Company is obligated to make mandatory

prepayments under the ING Credit Facility out of the proceeds of certain asset sales and other recovery events.

On September 20, 2024, the Company entered into Amendment No. 1 to the Senior Secured Revolving Credit Agreement

(the "First Amendment"), to the ING Credit Facility. The parties to the First Amendment include the Company, the lenders

party thereto, Subsidiary Guarantors party thereto and ING Capital LLC, as Administrative Agent. The First Amendment

provides for, among other things, an upsize in the total commitments from lenders under the credit facility from

$75 million to $150 million.

On December 12, 2024, the Company entered into a joinder agreement (the "First Lender Joinder Agreement"), under the

accordion feature in the ING Credit Facility, the aggregate commitments under the ING Credit Facility increased from

$150 million to $175 million. The parties to the First Lender Joinder Agreement include the Company, BankUnited, N.A.,

as additional lender, the Subsidiary Guarantors party to such agreement and the Administrative Agent.

On December 20, 2024, the Company entered into a joinder agreement (the "Second Lender Joinder Agreement"), under

the accordion feature in the ING Credit Facility, the aggregate commitments under such facility increased from

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$175 million to $225 million. The parties to the Second Lender Joinder Agreement include the Company, Customers Bank,

as additional lender, the Subsidiary Guarantors party to such agreement and the Administrative Agent.

On March 20, 2025, the Company entered into a commitment increase agreement (the "First Commitment Increase

Agreement") under the accordion feature in the ING Credit Facility, the aggregate commitments under such facility

increased from $225 million to $250 million. The parties to the First Commitment Increase Agreement include the

Company, ING Capital LLC as lender, the Subsidiary Guarantors party to such agreement and the Administrative Agent.

On April 24, 2025, the Company entered into Amendment No. 2 to the Senior Secured Revolving Credit Agreement (the

"Second Amendment"), which amended the ING Credit Facility. The parties to the Second Amendment include the

Company, the lenders party to such amendment, Subsidiary Guarantors party to such amendment and ING Capital LLC, as

Administrative Agent. The Second Amendment provides for an increase of the accordion provision to permit increases in

the total facility amount of up to $300 million and permit the Company to enter into repurchase agreements in an aggregate

nominal amount of up to $30 million.

Also on April 24, 2025, the Company entered into a waiver letter permitting the Company to enter into a repurchase

agreement with Midcap Financial Trust dated as of April 17, 2025.

On May 30, 2025, the Company entered into a joinder agreement (the "Third Lender Joinder Agreement") under the

accordion feature in the ING Credit Facility pursuant to which aggregate commitments under such facility increased from

$250 million to $275 million. The parties to the Third Lender Joinder Agreement include the Company, City National

Bank, as additional lender, the Subsidiary Guarantors party to such agreement and the Administrative Agent.

On October 30, 2025, the Company entered into a commitment increase agreement (the "Second Commitment Increase

Agreement") under the accordion feature in the ING Credit Facility pursuant to which aggregate commitments under such

facility increased from $275 million to $300 million. The parties to the Second Commitment Increase Agreement include

the Company, City National Bank, as additional lender, the Subsidiary Guarantors party to such agreement and the

Administrative Agent.

As amended as of December 31, 2025, the ING Credit Facility allows us to borrow up to $300 million, subject to certain

restrictions, including availability under the borrowing base.

As of December 31, 2025 and December 31, 2024, we had $277.0 million and $208.2 million, respectively, in outstanding

borrowings from the ING Credit Facility and availability as determined under the borrowing base of the ING Credit

Facility of $23.0 million.

The following table summarizes the interest expense, non-usage fees and amortization of financing costs incurred on the

ING Credit Facility for the years ended December 31, 2025, December 31, 2024 and December 31, 2023:

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| | | | |
|:---|:---|:---|:---|
|  | **For the year ended** <br>**December 31, 2025**<br>| **For the year ended** <br>**December 31, 2024**<br>| **For the year ended**<br>**December 31, 2023**<br>|
| Interest expense | $14879 | $3601 | $— |
| Non-usage fee <sup>(1)</sup> | 168 | 66 |  |
| Amortization of financing costs | 660 | 169 |  |
| Weighted average stated interest rate | 7.06% | 7.79% | —% |
| Weighted average outstanding balance | $210745 | $46226 | $— |

---

(1)Non-usage fee includes the portion of the facility agent fee applicable to the undrawn portion of the ING Credit

Facility.

*Subscription Facility* 

On February 2, 2022, the Company entered into a subscription-based credit agreement with Sumitomo Mitsui Banking

Corporation, which was amended on June 28, 2022, December 21, 2022, and February 1, 2024 (and as may be further

amended, modified or supplemented, the "Subscription Facility"). The Subscription Facility allowed the Company to

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borrow up to $38.4 million, subject to certain restrictions, including availability under a borrowing base that was based

upon unused capital commitments made by investors in the Company. The amount of permissible borrowings under the

Subscription Facility could be increased to up to $1 billion with the consent of the lenders. The Subscription Facility bore

interest at an annual rate of: (i) with respect to reference rate loans, a reference rate for the period plus a margin equal to

2.50% (the "Applicable Margin") and (ii) with respect to alternative rate loans, the greatest of (a) the administrative agent's

prime rate, (b) Term SOFR with a one-month term plus the Applicable Margin and (c) the federal funds rate plus 0.50%.

Subject to certain exceptions, the Subscription Facility was secured by a first lien security interest in the Company's

unfunded investor equity capital commitments. The Subscription Facility included customary covenants, certain limitations

on the incurrence of additional indebtedness and liens, and other maintenance covenants, as well as usual and customary

events of default for credit facilities of this nature. The Subscription Facility matured on May 2, 2024 and, on such date, all

of the Company's obligations under the Subscription Facility terminated.

As of December 31, 2025 and December 31, 2024, the Company had no outstanding borrowings from the Subscription

Facility.

The following table summarizes the interest expense, non-usage fees and amortization of financing costs incurred on the

Subscription Facility for the years ended December 31, 2025, December 31, 2024 and December 31, 2023:

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| | | | |
|:---|:---|:---|:---|
|  | **For the year ended** <br>**December 31, 2025**<br>| **For the year ended** <br>**December 31, 2024**<br>| **For the year ended**<br>**December 31, 2023**<br>|
| Interest expense | $— | $492 | $584 |
| Non-usage fee <sup>(1)</sup> |  | 26 | 82 |
| Amortization of financing costs |  | 218 | 372 |
| Weighted average stated interest rate | —% | 7.83% | 7.19% |
| Weighted average outstanding balance | $— | $6286 | $8121 |

---

(1)Non-usage fee includes the portion of the facility agent fee applicable to the undrawn portion of the Subscription

Facility.

**SBA-Guaranteed Debentures**

LS SBIC LP and LS SSBIC LP are able to borrow funds from the SBA against their regulatory capital (which

approximates equity capital in LS SBIC LP and LS SSBIC LP) that is paid in and is subject to customary regulatory

requirements, including, but not limited to, periodic examination by the SBA. As of December 31, 2025 and December 31,

2024, LS SBIC LP and LS SSBIC LP had a regulatory capital of $175.0 million and $110.0 million, respectively, and have

$230.0 million and $192.5 million, respectively, in SBA-guaranteed debentures outstanding. SBA debentures are non-

recourse to us, have a 10-year maturity, and may be prepaid at any time without penalty. The interest rate of SBA

debentures is fixed at the time of issuance, often referred to as pooling, at a market-driven spread over 10-year U.S.

Treasury Notes. Current SBA regulations limit the amount that each of LS SBIC LP and LS SSBIC LP may borrow to a

maximum of $175.0 million, which is up to twice its potential regulatory capital.

The SBA-guaranteed debentures incurred an upfront commitment fee of 1.00% on the total commitment amount and a

2.435% issuance discount on drawdowns, which are amortized over the life of the SBA-guaranteed debentures. In addition,

an annual fee is charged on the SBA-guaranteed debentures which are amortized over the period.

The following table summarizes the Company's SBA-guaranteed debentures as of December 31, 2025:

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| | | | | |
|:---|:---|:---|:---|:---|
| **Issuance Date** | **Maturity Date** | **Debenture Amount** | **Interest Rate** | **SBA Annual Charge** |
| September 15, 2023 | March 1, 2034 | $31000 | 5.04% | 0.047% |
| March 15, 2024 | September 1, 2034 | 5960 | 4.38% | 0.047% |
| June 14, 2024 | September 1, 2034 | 45540 | 4.38% | 0.129% |
| September 16, 2024 | March 1, 2035 | 82505 | 4.96% | 0.129% |
| December 12, 2024 | March 1, 2035 | 27500 | 4.96% | 0.347% |
| March 28, 2025 | September 1, 2035 | 9995 | 4.53% | 0.347% |
| June 27, 2025 | September 1, 2035 | 27500 | 4.53% | 0.347% |

---

The following table summarizes the interest expense and amortization of financing costs incurred on the SBA-guaranteed

debentures for the years ended December 31, 2025, December 31, 2024 and December 31, 2023:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended** <br>**December 31, 2025**<br>| **For the year ended** <br>**December 31, 2024**<br>| **For the year ended**<br>**December 31, 2023**<br>|
| Interest expense | $10700 | $4610 | $566 |
| Non-usage fee |  |  |  |
| Amortization of financing costs | 1032 | 448 | 69 |
| Weighted average stated interest rate | 4.99% | 5.34% | 6.23% |
| Weighted average outstanding balance | $214309 | $86388 | $9088 |

---

**Notes Payable**

On August 19, 2025, Lafayette Square USA, Inc. (the "Company") entered into a Note Purchase Agreement (the "Note

Purchase Agreement") governing the issuance of $65.0 million in aggregate principal amount of 7.00% Senior Notes (the

"Notes") to qualified institutional investors in a private placement.

The Notes were issued on August 19, 2025 and will mature on August 19, 2030 unless redeemed, purchased or prepaid

prior to such date by the Company in accordance with their terms and have a fixed interest rate of 7.00% per annum.

Interest on the Notes will be due semiannually. These interest rates are subject to increase (up to a maximum increase of

2.00% above the stated rate for the Notes) in the event that, subject to certain exceptions, the Notes cease to have an

investment grade rating and the Company's minimum secured debt ratio exceeds certain thresholds.

The Notes are general unsecured obligations of the Company that rank at least pari passu, without preference or priority,

with all other unsecured and unsubordinated indebtedness of the Company. The Notes are guaranteed, on a senior

unsecured basis, by LS BDC Holdings, LLC (the "Guarantor"), a wholly owned subsidiary of the Company.

The Note Purchase Agreement contains customary terms and conditions for senior unsecured notes issued in a private

placement, including, without limitation, affirmative and negative covenants, such as maintenance of the Company's status

as a business development company within the meaning of the Investment Company Act of 1940, as amended, a minimum

consolidated net worth test and a minimum asset coverage ratio. The Note Purchase Agreement also contains customary

events of default with customary cure and notice periods.

In addition, the Company is obligated to offer to repay the Notes at 100% of the principal amount of such Notes, together

with interest on such Notes accrued to, if certain change in control events occur.

The Notes were offered in reliance on Section 4(a)(2) of Securities Act of 1933, as amended (the "Securities Act"). The

Notes have not and will not be registered under the Securities Act or any state securities laws and, unless so registered, may

not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the

registration requirements of the Securities Act, as applicable. The Company intends to use the net proceeds from this

offering for its general corporate purposes.

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As of December 31, 2025, the carrying amount of the Company's borrowings under the Notes approximated its fair value.

As of December 31, 2025, unamortized debt issuance costs of $1,598 are being deferred and amortized over the remaining

term of the Notes. As of December 31, 2025, the Notes had an outstanding balance of $65,000.

The following table summarizes the interest expense, non-usage fees and amortization of financing costs incurred on the

Notes for the years ended December 31, 2025, December 31, 2024 and December 31, 2023:

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| | | | |
|:---|:---|:---|:---|
|  | **For the year ended** <br>**December 31, 2025**<br>| **For the year ended** <br>**December 31, 2024**<br>| **For the year ended**<br>**December 31, 2023**<br>|
| Interest expense | $1669 | $— | $— |
| Non-usage fee |  |  |  |
| Amortization of financing costs | 121 |  |  |
| Weighted average stated interest rate | 6.94% | —% | —% |
| Weighted average outstanding balance | $24041 | $— | $— |

---

**Repurchase Obligations**

In order to finance certain investment transactions, the Company may, from time to time, enter into repurchase agreements

with Macquarie US Trading LLC ("Macquarie"), whereby the Company sells to Macquarie an investment that it holds and

concurrently enters into an agreement to repurchase the same investment (any such obligation, a "Repurchase Obligation")

at an agreed-upon price at a future date, not to exceed 90-days from the date it was sold.

The Company entered into two repurchase agreements on May 1, 2024 which were collateralized by the Company's term

loans to each of Salt Dental Collective (the "Salt Repurchase Obligation") and Med Learning Group, LLC (the "MLG

Repurchase Obligation" and together with the Salt Repurchase Obligation, the "May 2024 Repurchase Obligations").

Interest under each of the May 2024 Repurchase Obligations was calculated as (a) the product of the funded amount of the

loan and (b) the product of (i) the number of days the loan is outstanding (subject to number of minimum days per the

agreement) and (ii) daily fee rate. The Company maintained effective control over the security because it is entitled and

obligated to repurchase the security before its maturity. Therefore, the repurchase agreement was treated as a secured

borrowing and not a sale. On July 30, 2024 the Company repurchased its obligation under the MLG Repurchase

Obligation.

As of December 31, 2025 and December 31, 2024, the Company had no outstanding borrowings from the Repurchase

Obligations.

The following table summarizes the interest expense, non-usage fees and amortization of financing costs incurred on the

Repurchase Obligations for the years ended December 31, 2025, December 31, 2024 and December 31, 2023:

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| | | | |
|:---|:---|:---|:---|
|  | **For the year ended** <br>**December 31, 2025**<br>| **For the year ended** <br>**December 31, 2024**<br>| **For the year ended**<br>**December 31, 2023**<br>|
| Interest expense | $— | $625 | $376 |
| Non-usage fee |  |  |  |
| Amortization of financing costs |  |  |  |
| Weighted average stated interest rate | —% | 9.01% | 8.68% |
| Weighted average outstanding balance | $— | $6928 | $4339 |

---

(1)The Company's initial borrowing occurred on March 15, 2023.

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**Note 6. Related Party Agreements and Transactions**

**Investment Advisory Agreement** 

Under the Investment Advisory Agreement, the Adviser manages the day-to-day operations of, and provides investment

advisory services to the Company. The Board initially approved the Investment Advisory Agreement on April 26, 2021 and

most recently approved its renewal on May 8, 2025. The Adviser is a registered investment adviser with the SEC. The

Adviser receives fees for providing services, consisting of two components, a base management fee and an incentive fee.

*<u>Base Management Fee:</u>*

The base management fee ("Management Fee") is payable quarterly in arrears beginning in the period during the Initial

Drawdown at an annual rate of (i) prior to a Liquidity Event, 0.75%, and (ii) following a Liquidity Event, 1.0%, in each

case of the average value of our gross assets (gross assets equal the total assets of the Company as set forth on the

Company's Consolidated Statements of Assets and Liabilities) at the end of the two most recently completed calendar

quarters. No Management Fee is charged on committed but undrawn capital commitments.

We define a "Liquidity Event" as the earliest to occur of: (1) a quotation or listing of our common stock on a national

securities exchange, including an initial public offering or (2) a Sale Transaction. A "Sale Transaction" means (a) the sale

of all or substantially all of our capital stock or assets to, or another liquidity event with, another entity or (b) a transaction

or series of transactions, including by way of merger, consolidation, recapitalization, reorganization, or sale of stock in

each case for consideration of either cash and/or publicly listed securities of the acquirer. Potential acquirers could include

entities that are not BDCs that are advised by the Adviser or its affiliates.

For the years ended December 31, 2025, December 31, 2024 and December 31, 2023, the Company incurred Management

Fee expense of $6,617, $4,136 and $1,640, respectively. As of December 31, 2025 and December 31, 2024, $1,841 and

$1,375, respectively, of such expense remained payable as shown on the Consolidated Statements of Assets and Liabilities.

*<u>Incentive Fee:</u>*

The Company also pays the Adviser an incentive fee consisting of two parts: (i) an incentive fee based on pre-incentive fee

net investment income (the "Income-Based Fee"), and (ii) the capital gains component of the incentive fee (the "Capital

Gains Fee") of which is described in more detail below.

The Income-Based Fee, is based on Pre-Incentive Fee Net Investment Income Returns and is determined and payable in

arrears as of the end of each calendar year. "Pre-Incentive Fee Net Investment Income Returns" means, as the context

requires, either the dollar value of, or percentage rate of return on the value of our net assets at the end of the immediately

preceding quarter from, interest income, dividend income and any other income (including any other fees (other than fees

for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other

fees that we receive from portfolio companies) accrued during the calendar quarter, minus our operating expenses accrued

for the quarter (including the Management Fee, expenses payable under the 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 PIK interest and zero coupon securities), accrued income that we have not

yet received in cash. Pre-Incentive Net Investment Income Returns do not include any realized capital gains, realized

capital losses or unrealized capital appreciation or depreciation. Pre-Incentive Fee Net Investment Income Returns,

expressed as a rate of return on the value of our net assets at the end of the immediately preceding quarter, is compared to a

"hurdle rate" of return of 1.25% per quarter (5.0% annualized).

Prior to a Liquidity Event, we pay the Adviser the Income-Based Fee as follows:

• no incentive fee based on Pre-Incentive Fee Net Investment Income Returns in any calendar quarter in which our

Pre-Incentive Fee Net Investment Income Returns do not exceed the hurdle rate of 1.25%;

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• 100% of the dollar amount of our Pre-Incentive Fee Net Investment Income Returns with respect to that portion of

such Pre-Incentive Fee Net Investment Income Returns, if any, that exceeds the hurdle rate but is less than a rate

of return of 1.47% (5.88% annualized). We refer to this portion of our Pre-Incentive Fee Net Investment Income

Returns (which exceeds the hurdle rate but is less than 1.47%) as the "catch-up." The "catch-up" is meant to

provide the Adviser with approximately 15% of our Pre-Incentive Fee Net Investment Income Returns as if a

hurdle rate did not apply if this net investment income exceeds 1.47% in any calendar quarter; and

• 15% of the dollar amount of our Pre-Incentive Fee Net Investment Income Returns, if any, that exceed a rate of

return of 1.47% (5.88% annualized). This reflects that once the hurdle rate is reached and the catch-up is achieved,

15% of all Pre-Incentive Fee Net Investment Income Returns thereafter are allocated to the Adviser.

Following a Liquidity Event, we will pay the Adviser the Income-Based Fee as follows:

• no incentive fee based on Pre-Incentive Fee Net Investment Income Returns in any calendar quarter in which our

Pre-Incentive Fee Net Investment Income Returns do not exceed the hurdle rate of 1.25%;

• 100% of the dollar amount of our Pre-Incentive Fee Net Investment Income Returns with respect to that portion of

such Pre-Incentive Fee Net Investment Income Returns, if any, that exceeds the hurdle rate but is less than a rate

of return of 1.47% (5.88% annualized). The "catch-up" is meant to provide the Adviser with approximately 17.5%

of our Pre-Incentive Fee Net Investment Income Returns as if a hurdle rate did not apply if this net investment

income exceeds 1.47% in any calendar quarter; and

• 17.5% of the dollar amount of our Pre-Incentive Fee Net Investment Income Returns, if any, that exceed a rate of

return of 1.52% (6.06% annualized). This reflects that once the hurdle rate is reached and the catch-up is achieved,

17.5% of all Pre-Incentive Fee Net Investment Income Returns thereafter are allocated to the Adviser.

For the years ended December 31, 2025, December 31, 2024 and December 31, 2023, the Company incurred Income-

Based Fees of $6,259, $5,272 and $1,615, respectively. As of December 31, 2025 and December 31, 2024, $1,516 and

$1,578 of such fees, respectively, remained payable as shown on the Consolidated Statements of Assets and Liabilities.

The second part of the incentive fee, the Capital Gains Fee, is determined and payable in arrears as of the end of each

calendar year (or at the time of a Liquidity Event). The Capital Gains Fee is equal to 15% of (1) realized capital gains less

(2) realized capital losses, less unrealized capital losses on a cumulative basis from inception through the day before the

Liquidity Event, less the aggregate amount of any previously paid Capital Gains Fee.

Prior to a Liquidity Event, the Capital Gains Fee equals:

• 15% of cumulative realized capital gains less all realized capital losses and unrealized capital depreciation on a

cumulative basis from inception through the end of such calendar year (or upon a Liquidity Event), less the

aggregate amount of any previously paid Capital Gains Fee as calculated in accordance with GAAP.

Following a Liquidity Event, the amount payable equals:

• 17.5% of cumulative realized capital gains from inception through the end of such calendar year, computed net of

all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of

any previously paid Capital Gains Fee as calculated in accordance with GAAP.

If a Liquidity Event occurs on a date other than the first day of a fiscal year, the Capital Gains Fee will be calculated as of

the day before the Liquidity Event, with such Capital Gains Fee paid to the Adviser annually following the end of the fiscal

year in which the Liquidity Event occurred. Solely for purposes of calculating the Capital Gains Fee after a Liquidity

Event, the Company will be deemed to have previously paid a Capital Gains Fee prior to a Liquidity Event equal to the

product obtained by multiplying (a) the actual aggregate amount of previously paid Capital Gains Fee for all periods prior

to a Liquidity Event by (b) the percentage obtained by dividing (x) 17.5% by (y) 15%.

Each year, the Capital Gains Fee is calculated net of the aggregate amount of any previously paid Capital Gains Fee for all

prior periods. We will accrue, but will not pay, a Capital Gains Fee with respect to unrealized appreciation because a

Capital Gains Fee would be owed to the Adviser if we were to sell the relevant investment and realize a capital gain. In no

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event will the Capital Gains Fee payable pursuant to the Investment Advisory Agreement exceed the amount permitted by

the Investment Advisers Act of 1940, as amended (the "Advisers Act"), including Section 205 thereof.

For the purpose of computing the Capital Gains Fee, the calculation methodology looks through derivative financial

instruments or swaps as if we owned the reference assets directly.

For the years ended December 31, 2025, December 31, 2024 and December 31, 2023, the Company has not incurred any

Capital Gains Fees.

**Administration Agreement** 

Pursuant to the administration agreement between the Company and LS Administration, LLC (the "Administration

Agreement"), LS Administration, LLC (the "Administrator") furnishes the Company with office space, office services, and

equipment. Under the Administration Agreement, our Administrator performs or oversees the performance of our required

administrative services, which include providing assistance in accounting, legal, compliance, operations, technology,

internal audit, and investor relations, and loan agency services (including any third party service providers related to the

foregoing) and being responsible for the financial records that we are required to maintain and preparing reports to our

stockholders and reports filed with the SEC. In addition, our Administrator assists us in determining and publishing our net

asset value, overseeing the preparation and filing of our tax returns and the printing and disseminating reports to our

stockholders, assessing our internal controls under the Sarbanes-Oxley Act, and generally overseeing the payment of our

expenses and the performance of administrative and professional services rendered to us by others.

Payments under the Administration Agreement are equal to an amount that reimburses our Administrator for its costs and

expenses. Such payments include the Company's allocable portion of (i) the expenses incurred by our Administrator in

performing its obligations under the Administration Agreement, (ii) the compensation paid to our Chief Compliance

Officer and Chief Financial Officer and their respective staffs, and (iii) the cost of providing managerial assistance upon

request to portfolio companies. The Administration Agreement may be terminated by either party without penalty upon 60

days' written notice to the other party. Additionally, we ultimately bear the costs of any sub-administration agreements that

our Administrator may enter into. Our Administrator reserves the right to waive all or part of any reimbursements due from

us at its sole discretion.

The Administration Agreement provides that, absent willful misfeasance, bad faith or gross negligence in the performance

of its duties or by reason of the reckless disregard of its duties and obligations, our Administrator and its officers,

managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with it will

be entitled to indemnification from us for any damages, liabilities, costs, and expenses (including reasonable attorneys' fees

and amounts reasonably paid in settlement) arising from the rendering of our Administrator's services under the

Administration Agreement or otherwise as administrator for us.

For the years ended December 31, 2025, December 31, 2024 and December 31, 2023, the Company incurred $1,800,

$2,048 and $1,485, respectively, in fees under the Administrative Agreement. These fees are included in administrative

service fees in the accompanying Consolidated Statements of Operations. As of December 31, 2025 and December 31,

2024, $0 and $0, respectively, were unpaid and included in administrative services fee payable in the accompanying

Consolidated Statements of Assets and Liabilities. No administrative services fee was charged to the Company prior to the

Company's commencement of operations.

Additionally, pursuant to a sub-administration agreement with SS&C Technologies, Inc. ("SS&C"), SS&C performs

certain of the Company's required administrative services, which include providing assistance in accounting, legal,

compliance, operations, investor relations and technology, being responsible for the financial records that the Company is

required to maintain and preparing reports to the Company's stockholders and reports filed with the SEC. SS&C is also

reimbursed for certain expenses it incurs on our behalf.

Our Administrator and Adviser have entered into staffing agreements with affiliates of Lafayette Square pursuant to which

such Lafayette Square affiliates agree to provide our Administrator and Adviser with access to certain legal, operations,

financial, compliance, accounting, internal audit (in their role of performing our Sarbanes-Oxley Act internal control

assessment), clerical and administrative personnel.

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**Affiliated transactions**

The Adviser's investment allocation policy seeks to ensure allocation of investment opportunities on a fair and equitable

basis over time between the Company and other funds or investment vehicles managed by the Adviser or its affiliates. It is

expected that the Company may have overlapping investment strategies with such affiliated funds and/or investment

vehicles, but there are prohibitions under the 1940 Act from participating in certain transactions with such affiliates without

prior approval of the directors who are not interested persons, and in some cases, the prior approval of the SEC. As a result,

the Company, the Adviser and certain of their affiliates applied for, and have been granted, exemptive relief by the SEC for

the Company to co-invest with other funds or investment vehicles managed by the Adviser or certain of its affiliates, in a

manner consistent with the requirements of the Company's organizational documents and investment strategy as well as

applicable laws and regulations and the Adviser's fiduciary duties. As a result of such exemptive relief, there could be

significant overlap in the Company's investment portfolio and the investment portfolios of such other affiliated entities that

avail themselves of such exemptive relief and that have an investment objective similar to the Company. In addition, any

transaction fees (including break-up or commitment fees, but excluding transaction fees contemplated by Section 17(e) or

57(k) of the 1940 Act, as applicable, which are expected to be retained by the Adviser, to the extent permitted by applicable

law) received in connection with a co-investment transaction among the Company and its affiliated entities will be

distributed to the participating entities (including the Company) on a pro rata basis based on the amounts they invested or

committed, as the case may be, in such transaction. We and the Adviser have applied for a new exemptive relief order

which, if granted, would supersede the existing co-investment exemptive relief with respect to negotiated co-investment

transactions alongside the Adviser's affiliated private and SEC-registered funds. There can be no assurance that we will

obtain such new exemptive relief from the SEC.

**Due to/from Affiliate**

From time to time, the Administrator pays for certain unaffiliated third-party expenses incurred by the Company. These

expenses are not marked-up and represent the same amount the Company would have paid had the Company paid the

expenses directly. After the commencement of operations these expenses are reimbursed on an ongoing basis. As of

December 31, 2025 and December 31, 2024, $246 and $221, respectively, were included in the Due to Affiliate line item in

the Consolidated Statements of Assets and Liabilities for reimbursable expenses paid by the Administrator on behalf of the

Company. As of December 31, 2025 and December 31, 2024, $— and $260, respectively, were included in the Due from

Affiliate line item in the Consolidated Statements of Assets and Liabilities for reimbursable expenses due from the

Administrator on behalf of the Company.

**Expense Support and Conditional Reimbursement Agreement**

On December 30, 2021, the Company entered into an expense support and conditional reimbursement agreement (the

"Expense Support Agreement") with the Adviser. The Adviser may elect to pay certain Company expenses on the

Company's behalf (each, an "Expense Payment"), provided that no portion of the payment will be used to pay any interest

expense or shareholder servicing and/or distribution fees of the Company. Any Expense Payment that the Adviser has

committed to pay must be paid by the Adviser to the Company in any combination of cash or other immediately available

funds no later than 45 days after such commitment was made in writing, and/or offset against amounts due from the

Company to the Adviser or its affiliates.

Following any calendar quarter in which Available Operating Funds (as defined below) exceed the cumulative distributions

accrued to the Company's shareholders based on distributions declared with respect to record dates occurring in such

calendar quarter (the amount of such excess being hereinafter referred to as "Excess Operating Funds"), the Company will

pay such Excess Operating Funds, or a portion thereof, to the Adviser until such time as all Expense Payments made by the

Adviser to the Company within three years prior to the last business day of such calendar quarter have been reimbursed.

Any payments required to be made by the Company are referred to herein as a "Reimbursement Payment". "Available

Operating Funds" means the sum of (i) the Company's net investment company taxable income (including net short-term

capital gains reduced by net long-term capital losses), (ii) the Company's net capital gains (including the excess of net

long-term capital gains over net short-term capital losses) and (iii) dividends and other distributions paid to the Company

on account of investments in portfolio companies (to the extent such amounts listed in clause (iii) are not included under

clauses (i) and (ii) above).

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The Company's obligation to make a Reimbursement Payment will automatically become a liability of the Company on the

last business day of the applicable calendar quarter, except to the extent the Adviser has waived its right to receive such

payment for the applicable quarter.

As of December 31, 2025 and December 31, 2024, the Company has no Unreimbursed Expense Payable.

**Note 7. Commitments and Contingencies**

As of December 31, 2025, the Company was not subject to any legal proceedings, although the Company may, from time

to time, be involved in litigation arising out of operations in the normal course of business or otherwise.

The Company has and may in the future become obligated to fund commitments such as revolving credit facilities, bridge

financing commitments or delayed draw commitments. As of December 31, 2025 and December 31, 2024 the fair value of

unfunded commitments held by the Company was $(76) and $(25), respectively, as shown on the Consolidated Schedule of

Investments. The Company had the following unfunded commitments to fund investments as of the indicated dates:

---

| | | |
|:---|:---|:---|
|  | **Par Value as of** <br>**December 31, 2025** | **Par Value as of**<br>**December 31, 2024** |
| Unfunded debt securities | $129186 | $109633 |
| Unfunded equity securities | 27524 | 11431 |
| Total unfunded commitments | $156710 | $121064 |

---

**Note 8. Directors Fees**

Our independent directors receive an annual fee of $100 (prorated for any partial year). In addition, the chair of the Audit

Committee receives an additional annual fee of $20 (prorated for any partial year). We are also authorized to pay the

reasonable out-of-pocket expenses for each independent director incurred in connection with the fulfillment of his or her

duties as independent directors (provided that such compensation will only be paid if the committee meeting is not held on

the same day as any regular meeting of the Board).

For the years ended December 31, 2025, December 31, 2024 and December 31, 2023, independent directors fees will be

paid in the form of our common stock issued at a price per share equal to the greater of NAV or the market price, if any, at

the time of payment. On March 26, 2025, the Company issued 23,460 shares of common stock to our directors as

compensation for their services for the fiscal year ended December 31, 2024. On April 29, 2024, the Company issued

21,333 shares of common stock to our directors as compensation for their services for the fiscal year ended December 31,

2023. No compensation is paid to directors who are ''interested persons'' of the Company (as such term is defined in the 1940

Act). For the years ended December 31, 2025, December 31, 2024 and December 31, 2023, the Company accrued $320,

$348 and $320, for directors' fees expense, respectively.

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**Note 9. Share Data and Distributions**

**Earnings per Share**

The following table sets forth the computation of basic and diluted earnings per share for the years ended December 31,

2025, December 31, 2024 and December 31, 2023:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended** <br>**December 31, 2025**<br>| **For the year ended** <br>**December 31, 2024**<br>| **For the year ended**<br>**December 31, 2023**<br>|
| **Earnings (loss) per common share (basic and** <br>**diluted):**<br>|  |  |  |
| Net increase (decrease) in net assets resulting from <br>operations<br>| $34271 | $27839 | $10985 |
| Weighted average common shares outstanding | 24809858 | 22531521 | 10910180 |
| **Earnings (loss) per common share (basic and** <br>**diluted):**<br>| $1.38 | $1.24 | $1.01 |

---

**Capital Activity**

The Company is authorized to issue 50,000,000 shares of preferred stock at a par value of $0.001 per share and

450,000,000 shares of common stock at a par value of $0.001 per share. The Company has entered into subscription

agreements in which investors have made capital commitments to purchase shares of the Company's common stock (the

"Subscription Agreements") with several investors, providing for the private placement of the Company's common stock.

Under the terms of the Subscription Agreements, investors are required to fund drawdowns to purchase the Company's

common stock at a price per share equal to the most recent NAV per share as determined by the Board (subject to the

adjustment to the extent required by Section 23 of the 1940 Act) up to the amount of their respective capital subscriptions

on an as-needed basis as determined by the Company with a minimum of ten business days prior notice.

As of December 31, 2025 and December 31, 2024, the Company had closed capital commitments totaling $411.2 million

and $409.8 million, respectively, for the private placement of the Company's common stock, of which $20.4 million and

$66.7 million, respectively, were uncalled.

---

| | | | |
|:---|:---|:---|:---|
| **Share Issuance Date** | **Shares Issued** | **Amount** | **Average Offering** <br>**Price per Share**<br>|
| March 26, 2025 | 116132 | $1721 | $14.82 |
| September 29, 2025 | 1697972 | 25487 | 15.01 |
| December 18, 2025 | 1378018 | 20449 | 14.84 |
| **Total** | 3192122 | $47657 | $14.93 |

---

---

| | | | |
|:---|:---|:---|:---|
| **Share Issuance Date** | **Shares Issued** | **Amount** | **Average Offering** <br>**Price per Share**<br>|
| April 29, 2024 | 733093 | $10996 | $15.00 |
| September 25, 2024 | 1027611 | 15228 | 14.82 |
| **Total** | 1760704 | 26224 | $14.89 |

---

**Distributions**

Distributions to common stockholders are recorded on the ex-dividend date. The Company elected to be taxed as a RIC

under the IRC for its taxable year ending December 31, 2023, and the Company intends to continue making such elections

with respect to future taxable years. As a RIC, the Company is required to distribute dividends each tax year as a RIC to its

stockholders of an amount generally at least equal to 90% of its investment company taxable income, determined without

regard to any deduction for dividends paid, in order to be eligible for tax benefits allowed to a RIC under Subchapter M of

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the IRC. The Company anticipates paying out as a distribution all or substantially all of those amounts. The amount to be

paid out as a dividend is determined by the Board and is based on management's estimate of the Company's annual taxable

income. Net realized capital gains, if any, may be distributed to stockholders or retained for reinvestment.

The Company has adopted the DRIP that provides for the automatic reinvestment of all cash distributions declared by the

Board, unless a stockholder elects to "opt out" of the DRIP. As a result, if the Board declares a cash distribution, then the

stockholders who have not "opted out" of the DRIP will have their cash distributions automatically reinvested in additional

shares of common stock, rather than receiving a cash distribution. The Company reserves the right to use primarily newly

issued shares to implement the DRIP, whether the shares are trading at a price per share at or above NAV. NAV is

determined as of the latest available quarter end before such distribution. However, the Company reserves the right to

purchase shares in the open market in connection with the implementation of the DRIP. In the event the price per share is

trading at a discount to NAV, the Company intends to purchase shares in the open market rather than issue new shares.

For the year ended December 31, 2025 the following table summarizes the distributions declared on shares of the

Company's common stock:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Date Declared** | **Record Date** | **Payment Date** | **Amount** | **Amount Per** <br>**Share**<br>|
| March 25, 2025 | March 25, 2025 | May 6, 2025 | $8393 | $0.35 |
| June 27, 2025 | June 27, 2025 | August 1, 2025 | $8503 | $0.35 |
| September 26, 2025 | September 26, 2025 | October 24, 2025 | $8573 | $0.35 |
| December 19, 2025 | December 17, 2025 | January 7, 2026 | $9239 | $0.35 |

---

For the year ended December 31, 2024 the following table summarizes the distributions declared on shares of the

Company's common stock:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Date Declared** | **Record Date** | **Payment Date** | **Amount** | **Amount Per** <br>**Share**<br>|
| March 26, 2024 | March 22, 2024 | May 6, 2024 | $6475 | $0.30 |
| June 28, 2024 | June 25, 2024 | August 6, 2024 | $6738 | $0.30 |
| September 24, 2024 | September 24, 2024 | November 4, 2024 | $7460 | $0.33 |
| December 26, 2024 | December 26, 2024 | January 6, 2025 | $7853 | $0.33 |

---

For the year ended December 31, 2023 the following table summarizes the distributions declared on shares of the

Company's common stock:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Date Declared** | **Record Date** | **Payment Date** | **Amount** | **Amount Per** <br>**Share**<br>|
| April 21, 2023 | April 21, 2023 | May 15, 2023 | $1292 | $0.15 |
| June 23, 2023 | June 23, 2023 | August 14, 2023 | $1297 | $0.15 |
| September 29, 2023 | September 29, 2023 | November 13, 2023 | $2614 | $0.20 |
| December 13, 2023 | December 12, 2023 | January 4, 2024 | $3936 | $0.30 |

---

The Company has a dividend reinvestment plan, pursuant to which stockholders may elect to have their cash distributions

reinvested in additional shares of the Company's common stock. The Company satisfies DRIP participation through the

issuance of new shares. When the Company issues new shares in connection with the DRIP, the issue price is equal to the

net asset value per share most recently determined as of the distribution payment date. Dividend reinvestment plan activity

for the years ended December 31, 2025, December 31, 2024 and December 31, 2023 was as follows:

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---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended** <br>**December 31, 2025**<br>| **For the year ended** <br>**December 31, 2024**<br>| **For the year ended**<br>**December 31, 2023**<br>|
| Shares issued | 786462 | 533966 | 113931 |
| Average issue price per share | $14.88 | $14.29 | $14.82 |

---

**Note 10. Tax Matters**

The Company is subject to the U.S. federal income tax rules and filing requirements. The Company has elected to be

treated, and intends to qualify annually thereafter, as a RIC under Subchapter M of the IRC. As a result, the Company

generally does not expect to be subject to U.S. federal income taxes on its RIC operations. However, there is no guarantee

that the Company will qualify to make such an election for any taxable year.

The Company has not recorded a liability for any uncertain tax positions pursuant to the provisions of ASC 740, Income

Taxes, as of December 31, 2025 and December 31, 2024.

In the normal course of business, the Company is subject to examination by federal and certain state and local tax

regulators. The Company adopted a tax year-end of December 31. It is the Company's policy to recognize accrued interest

and penalties, if any, related to unrecognized tax benefits as a component of provision for income taxes.

The Company's taxable income for each period is an estimate and will not be finally determined until the Company files its

tax return for each year. Therefore, the final taxable income earned in each period and carried forward for distribution in

the following period may be different than this estimate.

For tax purposes, net realized capital losses may be carried over to offset future capital gains, if any. Funds are permitted to

carry forward capital losses for an indefinite period, and such losses will retain their character as either short-term or long-

term capital losses. As of December 31, 2025 the Fund did not have any capital loss carryforwards. During the calender

year, the fund utilized $12 of capital loss carryforwards to offset net realized gains.

In order to present certain components of the Company's capital accounts on a tax-basis, certain reclassifications have been

recorded to the Company's accounts. These reclassifications have no impact on the net asset value of the Company. For the

years ended December 31, 2025, December 31, 2024 and December 31, 2023 reclassifications resulted primarily from

non-deductible taxes paid and income from the wholly owned subsidiary, the Company reclassified balances as follows.

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
| Distributable earnings | $(210) | $348 | $527 |
| Paid-in capital in excess of par | 210 | (348) | (527) |

---

For U.S. federal income tax purposes, distributions paid to stockholders are reported as ordinary income, return of capital,

long term capital gains or a combination thereof. The tax character of distributions paid for the years ended December 31,

2025, December 31, 2024 and December 31, 2023, were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended** <br>**December 31, 2025**<br>| **For the year ended** <br>**December 31, 2024**<br>| **For the year ended**<br>**December 31, 2023**<br>|
| Ordinary Income | $34708 | $28526 | $9139 |
| Long-term Capital Gain | $— | $— | $— |
| Return of Capital | $— | $— | $— |

---

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As of December 31, 2025, December 31, 2024 and December 31, 2023, the tax cost and estimated gross unrealized

appreciation/(depreciation) from investments for federal income tax purposes were as follows.

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
| Tax cost | $791182 | $556863 | $271522 |
| Gross unrealized appreciation | $9209 | $3473 | $2217 |
| Gross unrealized depreciation | (11178) | (3249) | (147) |
| **Net unrealized investment appreciation /** <br>**(depreciation) on investments**<br>| $(1969) | $224 | $2070 |

---

For the years ended December 31, 2025 and December 31, 2024, the components of distributable earnings on a tax basis

detailed below differ from the amounts reflected in the Company's Statements of Assets and Liabilities by temporary and

other book/tax differences, primarily relating to the tax treatment of organizational costs and significant debt modifications,

as follows:

---

| | | |
|:---|:---|:---|
|  | **For the year ended** <br>**December 31, 2025**<br>| **For the year ended** <br>**December 31, 2024**<br>|
| Undistributed ordinary income | $1491 | $1405 |
| Undistributed Capital Gains | 1592 |  |
| Capital loss carry forwards |  | (12) |
| Other accumulated losses | (560) | (416) |
| Net unrealized appreciation/(depreciation) from <br>investments<br>| (1969) | 224 |
| Accumulated earnings/(deficit) on a tax basis | $554 | $1201 |

---

The Company has a wholly owned corporate subsidiary that is consolidated for financial statement purposes. This entity;

LS BDC Holdings, LLC (the "taxable subsidiary"), has elected to be taxed as regular c-corporation for federal income tax

purposes. This taxable subsidiary recognizes deferred tax assets and liabilities for the estimated future tax effects

attributable to temporary differences between the tax basis of certain assets and liabilities and the reported amounts

included in the accompanying consolidated balance sheet using the applicable statutory tax rates in effect for the year in

which any such temporary differences are expected to reverse.

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amount of assets and

liabilities for financial reporting and tax purposes. Components of the Company's deferred tax assets and liabilities for the

years ended December 31, 2025, December 31, 2024 and December 31, 2023, are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended** <br>**December 31, 2025**<br>| **For the year ended** <br>**December 31, 2024**<br>| **For the year ended**<br>**December 31, 2023**<br>|
| Deferred tax assets: |  |  |  |
| Net operating loss carryforward | $131 | $117 | $— |
| Excess business interest expense carryforward | 552 | 337 |  |
| Charitable contributions carryforward | 3 | 1 |  |
| Valuation allowance | (552) | (330) |  |
| **Total deferred tax assets** | 134 | 125 |  |
| Deferred tax liabilities: |  |  |  |
| Net unrealized gain on investments | (403) | (125) |  |
| **Total deferred tax liabilities** | (403) | (125) |  |
| **Net deferred tax assets and liabilities** | $(269) | $— | $— |

---

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The Company's income tax provision consists of the following for the years ended December 31, 2025, December 31,

2024 and December 31, 2023:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended** <br>**December 31, 2025**<br>| **For the year ended** <br>**December 31, 2024**<br>| **For the year ended**<br>**December 31, 2023**<br>|
| Current tax (expense)/benefit: |  |  |  |
| Federal | $(5) | $(302) | $— |
| State and Local | 12 | (69) |  |
| **Total current tax (expense)/benefit** | 7 | (371) |  |
| Deferred tax (expense)/benefit: |  |  |  |
| Federal | (38) | 270 |  |
| State and Local | (9) | 60 |  |
| Valuation allowance | (222) | (330) |  |
| **Total deferred tax (expense)/benefit** | $(269) | $— | $— |
| **Total income tax (expense)/benefit** | $(262) | $(371) | $— |

---

Total income tax (expense) benefit for the Company differs from the amount computed by applying the federal statutory

income tax rate of 21% to net increase (decrease) in net assets from operations for the years ended December 31, 2025,

December 31, 2024 and December 31, 2023, are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended** <br>**December 31, 2025**<br>| **For the year ended** <br>**December 31, 2024**<br>| **For the year ended**<br>**December 31, 2023**<br>|
| Income tax (expense)/benefit at federal statutory tax <br>rate<br>| $(7621) | $5846 | $— |
| Income attributable to the RIC and not subject to <br>corporate tax<br>| 7646 | (5797) |  |
| State and local income tax benefit (net of federal <br>benefit)<br>| 5 | 11 |  |
| Prior year net operating loss carryforward |  | 135 |  |
| Provision to Return True-up | (70) | (148) |  |
| Other |  |  |  |
| Permanent differences |  | (88) |  |
| Changes in Valuation Allowances | (222) | (330) |  |
| **Total income tax (expense)/benefits** | $(262) | $(371) | $— |

---

The provision to return true-up increased the effective tax rate by 0.19% from the federal statutory rate, for the year ended

December 31, 2025. This reconciling item represents changes to the calculation of taxable income after the receipt of

schedules K-1 from underlying investments.

State and local income taxes, net of federal benefit, decreased the effective tax rate by 0.01% from the federal statutory

rate, for the year ended December 31, 2025. This reconciling item reflects income taxes accrued in state and local

jurisdictions in which the Company operates and has taxable presence. The majority of state and local income tax expense

(approximately 57.31%) relates to California (18.89%), Illinois (14.24%), New York (9.19%), New Jersey (7.54%), and

Florida (7.45%), with the remaining balance attributable to other jurisdictions.

At December 31, 2025, the taxable subsidiary did not have any capital loss carryforwards.

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Net operating loss carryforwards are available to offset future taxable income. These net operating loss carryforwards can

be carried forward indefinitely and may offset up to 80% of taxable income in any given year. Any unused portion will

continue to be carried forward. As of December 31, 2025, the Company had a net operating loss carryforward for federal

income tax purposes of $511.

At December 31, 2025, the Company determined a partial valuation allowance of the Company's gross deferred tax asset

was required. The Company's assessment considered, among other matters, the nature, frequency and severity of current

and cumulative losses, the duration of statutory carryforward periods and the associated risk that operating loss and capital

loss carryforwards are limited or are likely to expire unused, and unrealized gains and losses on investments. Through the

consideration of these factors, the Company has determined that it is more likely than not that the Company's net deferred

tax asset would not be realized in full. As a result, the Company recorded a partial valuation allowance with respect to its

gross deferred tax asset for the year ended December 31, 2025. From time to time, the Company may modify its estimates

or assumptions regarding its deferred tax liability and/or asset balances and any applicable valuation allowance as new

information becomes available. Modifications to the Company's estimates or assumptions regarding its deferred tax

liability and/or asset balances and any applicable valuation allowance, changes in generally accepted accounting principles

or related guidance or interpretations thereof, limitations imposed on or expirations of the Company's net operating losses

and capital loss carryovers (if any) and changes in applicable tax law could result in increases or decreases in the

Company's NAV per share, which could be material.

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**Note 11. Financial Highlights**

Below is the schedule of financial highlights of the Company for the years ended December 31, 2025, December 31, 2024

and December 31, 2023:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Per Common Share Data:**<sup>(1)</sup> | **For the year** <br>**ended** <br>**December 31,** <br>**2025**<br>| **For the year** <br>**ended** <br>**December 31,** <br>**2024**<br>| **For the year** <br>**ended**<br>**December 31,** <br>**2023**<br>| **For the year** <br>**ended**<br>**December 31,** <br>**2022**<br>| **For the** <br>**period from** <br>**February 19,** <br>**2021 (Date of** <br>**Inception)** <br>**through** <br>**December 31,** <br>**2021**<br>|
| Net asset value, beginning of <br>period<br>| $14.81 | $14.85 | $14.60 | $(720.91) | $— |
| Net investment income (loss) | 1.43 | 1.31 | 0.80 | (0.11) | (735.91) |
| Net realized and unrealized gain <br>(loss)<br>| (0.05) | (0.07) | 0.21 | (0.21) |  |
| **Net increase (decrease) in net** <br>**assets resulting from operations**<br>| 1.38 | 1.24 | 1.01 | (0.32) | (735.91) |
| Initial issuance of Common Stock |  |  |  |  | 15.00 |
| Effect of offering price of <br>subscriptions<sup>(2)</sup><br>| 0.02 | (0.02) | 0.04 | 735.83 |  |
| Distributions declared | (1.40) | (1.26) | (0.80) |  |  |
| **Net asset value, end of period** | $14.81 | $14.81 | $14.85 | $14.60 | $(720.91) |
| Total return based on NAV<sup>(3)</sup> | 9.75% | 8.45% | 7.32% | (102.03)% | (4906.05)% |
| Common shares outstanding, end <br>of period<br>| 27776022 | 23797438 | 21502768 | 4916554 | 700 |
| Weighted average shares <br>outstanding<br>| 24809858 | 22531521 | 10910180 | 1481583 | 700 |
| Net assets, end of period | $411329 | $352406 | $319239 | $71782 | $(504) |
| **Ratio/Supplemental data**<sup>(4)</sup>**:** |  |  |  |  |  |
| Ratio of net investment income <br>(loss) to average net assets<br>| 9.47% | 8.82% | 4.81% | (55.00)% | (298.82)% |
| Ratio of expenses to average net <br>assets<br>| 13.10% | 7.95% | 6.65% | 12.39% | 298.82% |
| Ratio of expenses (before <br>management fees, incentive fees <br>and interest and financing <br>expenses) to average net assets<br>| 1.87% | 2.08% | 3.72% | 8.92% | 298.82% |
| Weighted average debt outstanding | $449096 | $145828 | $21548 | $19091 | $— |
| Total debt outstanding | $506982 | $400737 | $58500 | $31500 | $— |
| Asset coverage ratio<sup>(5)</sup> | 220.8% | 269.2% | 645.7% | 327.9% | —% |
| Portfolio turnover<sup>(6)</sup> | 24% | 16% | —% | 37% | N/A |

---

(1)The per share data were derived by using the weighted average shares from the date of the first issuance of shares,

through the years ended December 31, 2025, December 31, 2024, December 31, 2023 and December 31, 2022 and for

the period from February 19, 2021 (Date of Inception) through December 31, 2021.

<u>[**Table of Contents**](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_7)</u>

(2)Increase (decrease) was due to the offering price of subscriptions during the period (See note 9).

(3)Total return was based upon the change in net asset value per share between the opening and ending net assets per

share and the issuance of common stock in the period. Total return is not annualized.

(4)Annualized, except for organizational expenses, if any, which are non-recurring.

(5)On September 30, 2024, the Company received exemptive relief from the SEC allowing the Company to modify the

asset coverage requirement under the 1940 Act to exclude the SBA-guaranteed debentures from this calculation. The

inclusion of unfunded commitments in the calculation of the asset coverage ratio would not cause us to be below the

required amount of regulatory coverage.

(6)Portfolio turnover is calculated using the lesser of year-to-date sales and principal repayments or year-to-date

purchases over the average of the total investments at fair value.

**Note 12. Subsequent Events**

The Company's management evaluated subsequent events through the date of issuance of the consolidated financial

statements. Other than the subsequent events disclosed below, no subsequent events occurred during such period that

would require disclosure in, or would be required to be recognized in, the consolidated financial statements of the

Company.

As of the date of this Report, the Company repaid principal and interest on its outstanding balance on the ING Credit

Facility in the amount of $87.0 million. The Company borrowed an additional amount of $20.0 million. As of the date of

this Report, the outstanding principal balance on the ING Credit Facility is $210.0 million.

On March 16, 2026, the Company issued a capital call notice to its investors in the amount of $21.0 million, with funding

due on March 27, 2026.

On March 24, 2026, the board of directors of the Company declared a regular distribution to stockholders in the amount of

$0.28 per share and a supplemental distribution in the amount of $0.05 per share, or approximately $9.2 million. The

distribution will paid on or about April 23, 2026 to stockholders of record as of March 24, 2026.

<u>[**Table of Contents**](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_7)</u>

**ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND** 

**FINANCIAL DISCLOSURE**

There are not and have not been any disagreements between us and our accountant on any matter of accounting principles,

practices, or consolidated financial statement disclosure.

**ITEM 9A. CONTROLS AND PROCEDURES**

***Disclosure Controls and Procedures***

As of December 31, 2025, our management, including our Chief Executive Officer and Chief Financial Officer, evaluated

the effectiveness and design and operation of our disclosure controls and procedures. Based on that evaluation, our

management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and

procedures were effective at a reasonable assurance level in timely alerting management, including the Chief Executive

Officer and Chief Financial Officer, of material information about us required to be included in periodic SEC filings.

However, in evaluation of the disclosure controls and procedures, management recognized that any controls and

procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired

control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit

relationship of possible controls and procedures.

***Management's Report on Internal Control Over Financial Reporting***

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as

defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control system is a process designed to

provide reasonable assurance to our management and Board regarding the preparation and fair presentation of published

consolidated financial statements.

Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records

that, in reasonable detail, accurately and fairly reflect transactions recorded necessary to permit the preparation of

consolidated financial statements in accordance with U.S. generally accepted accounting principles. Our policies and

procedures also provide reasonable assurance that receipts and expenditures are being made only in accordance with

authorizations of management and our directors, and provide reasonable assurance regarding prevention or timely detection

of unauthorized acquisition, use or disposition of our assets that could have a material effect on our consolidated financial

statements.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems

determined to be effective can provide only reasonable assurance with respect to consolidated financial statement

preparation and presentation. Also, projections of any evaluation of effectiveness as to future periods are subject to the risk

that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies

or procedures may deteriorate.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2025. In making

this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission

in Internal Control — Integrated Framework issued in 2013. Based on the assessment, management believes that, as of

December 31, 2025, our internal control over financial reporting is effective based on those criteria.

***Changes in Internal Control Over Financial Reporting***

There have been no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f)

under the Exchange Act, that occurred during our most recently completed fiscal year that have materially affected, or are

reasonably likely to materially affect, our internal control over financial reporting.

**ITEM 9B. OTHER INFORMATION**

None.

**ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS**

<u>[**Table of Contents**](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_7)</u>

None.

**PART III**

**ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE**

The information required by Item 10 with respect to executive officers is incorporated by reference to the information

presented in the section captioned "Executive Officers" in our definitive proxy statement for the 2026 Annual Meeting of

Shareholders, which will be filed with the SEC pursuant to Regulation 14A within 120 days of the Company's fiscal year-

end (the "Proxy Statement").

**ITEM 11. EXECUTIVE COMPENSATION**

The information required by Item 11 is incorporated by reference to the information presented in the sections captioned

"Board of Directors - Committees of the Board of Directors" and "Executive Compensation" in the Proxy Statement.

**ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND** 

**RELATED STOCKHOLDER MATTERS**

The information required by Item 12 is incorporated by reference to the information presented in the sections captioned

"Security Ownership of Certain Beneficial Owners and Management" and "Executive Compensation - Equity

Compensation Plan Information" in the Proxy Statement.

**ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTORS** 

**INDEPENDENCE**

The information required by Item 13 is incorporated by reference to the information presented in the sections captioned

"Certain Relationships and Related Party Transactions" and "Board of Directors" in the Proxy Statement.

**ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES**

The information required by Item 14 is incorporated by reference to the information presented in the section captioned

"Audit Function" in the Proxy Statement.

**PART IV**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES**

The following exhibits are included, or incorporated by reference, in this Annual Report on Form 10-K for the year ended

December 31, 2025 (and are numbered in accordance with Item 601 of Regulation S-K).

**(a)(1) and (2) Consolidated Financial Statements and Schedules**

---

| | |
|:---|:---|
| **No.** | **Description** |
| 3.1 | <u>[Certificate of Incorporation of the Registrant (filed as part of the Registrant's Registration Statement on Form 10](https://www.sec.gov/Archives/edgar/data/0001849089/000110465921073554/tm2113860d1_ex3-1.htm)</u><br><u>[(File No. 000-56289) filed on May 28, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/0001849089/000110465921073554/tm2113860d1_ex3-1.htm)</u><br>|
| 3.2 | <u>[Amendment to Certificate of Incorporation (filed as part of Registrant's Current Report on Form 8-K filed on](https://www.sec.gov/Archives/edgar/data/1849089/000184908922000015/exhibit31certificateofamen.htm)</u><br><u>[May 19, 2022 and incorporated herein by reference.)](https://www.sec.gov/Archives/edgar/data/1849089/000184908922000015/exhibit31certificateofamen.htm)</u><br>|
| 3.3 | <u>[Bylaws (filed as part of the Registrant's Registration Statement on Form 10 (File No. 000-56289) filed on May](https://www.sec.gov/Archives/edgar/data/0001849089/000110465921073554/tm2113860d1_ex3-2.htm)</u><br><u>[28, 2021 and incorporated herein by reference.)](https://www.sec.gov/Archives/edgar/data/0001849089/000110465921073554/tm2113860d1_ex3-2.htm)</u> <br>|

---

<u>[**Table of Contents**](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_7)</u>

---

| | |
|:---|:---|
| 3.4 | <u>[First Amendment to Bylaws (filed as part of Registrant's Current Report on Form 8-K filed on May 16, 2022](https://www.sec.gov/Archives/edgar/data/1849089/000184908922000015/exhibit32-firstamendmentto.htm)</u><br><u>[and incorporated herein by reference.)](https://www.sec.gov/Archives/edgar/data/1849089/000184908922000015/exhibit32-firstamendmentto.htm)</u> <br>|
| 3.5 | <u>[Second Amendment to Bylaws (filed as part of Registrant's Current Report on Form 8-K filed on June 8, 2023](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849089/000184908923000039/ls-20230608.htm)</u><br><u>[and incorporated herein by reference.)](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849089/000184908923000039/ls-20230608.htm)</u><br>|
| 4.1 | <u>[Description of the Registrant's Securities (filed as Exhibit 4.1 to the Registrant's Annual Report on Form 10-K](https://www.sec.gov/Archives/edgar/data/0001849089/000184908922000006/exhibit41descriptionofsecu.htm)</u><br><u>[for the year ended December 31, 2021 filed on March 25, 2022 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/0001849089/000184908922000006/exhibit41descriptionofsecu.htm)</u><br>|
| 10.1 | <u>[Investment Advisory Agreement\*](lsusa-investmentadvisoryag.htm)</u> |
| 10.2 | <u>[Administration Agreement\*](lsusa-administrationagreem.htm)</u> |
| 10.3 | <u>[Form of Custody Agreement (filed as part of the Registrant's Registration Statement on Form 10 (File No.](https://www.sec.gov/Archives/edgar/data/0001849089/000110465921095981/tm2123283d1_ex10-3.htm)</u><br><u>[000-56289) filed on May 28, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/0001849089/000110465921095981/tm2123283d1_ex10-3.htm)</u> <br>|
| 10.4 | <u>[Form of Indemnification Agreement (filed as part of the Registrant's Registration Statement on Form 10 (File](https://www.sec.gov/Archives/edgar/data/0001849089/000110465921073554/tm2113860d1_ex10-5.htm)</u><br><u>[No. 000-56289) filed on May 28, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/0001849089/000110465921073554/tm2113860d1_ex10-5.htm)</u><br>|
| 10.5 | <u>[Dividend Reinvestment Plan (filed as part of the Registrant's Registration Statement on Form 10 (File No.](https://www.sec.gov/Archives/edgar/data/0001849089/000110465921073554/tm2113860d1_ex10-6.htm)</u><br><u>[000-56289) filed on May 28, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/0001849089/000110465921073554/tm2113860d1_ex10-6.htm)</u> <br>|
| 10.6 | <u>[Form of Subscription Agreement (filed as part of the Registrant's Registration Statement on Form 10 (File No.](https://www.sec.gov/Archives/edgar/data/0001849089/000110465921091101/tm2121796d1_ex10-6.htm)</u><br><u>[000-56289) filed on May 28, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/0001849089/000110465921091101/tm2121796d1_ex10-6.htm)</u> <br>|
| 10.7 | <u>[Insider Trading Policy\*](lsbdcadviser-insidertradin.htm)</u> |
| 10.8 | <u>[Senior Secured Revolving Credit Agreement dated June 18, 2024, among the Registrant, the subsidiary](https://www.sec.gov/ix?doc=/Archives/edgar/data/1849089/000110465924074554/tm2418111d1_8k.htm)</u><br><u>[guarantors party thereto, the lenders party thereto and ING Capital LLC, as administrative agent, lead arranger,](https://www.sec.gov/ix?doc=/Archives/edgar/data/1849089/000110465924074554/tm2418111d1_8k.htm)</u><br><u>[bookrunner and sustainability structuring agent (filed as Exhibit 10.1 to the Registrant's Current Report on Form](https://www.sec.gov/ix?doc=/Archives/edgar/data/1849089/000110465924074554/tm2418111d1_8k.htm)</u><br><u>[8-K, filed on June 18, 2024 and incorporated herein by reference).](https://www.sec.gov/ix?doc=/Archives/edgar/data/1849089/000110465924074554/tm2418111d1_8k.htm)</u><br>|
| 10.9 | <u>[Amendment No.1 to Senior Secured Revolving Credit Agreement dated September 20, 2024, among the](https://www.sec.gov/ix?doc=/Archives/edgar/data/1849089/000110465924102446/tm2424598d1_8k.htm)</u><br><u>[Registrant, the subsidiary guarantors party thereto, the lenders party thereto and ING Capital LLC, as](https://www.sec.gov/ix?doc=/Archives/edgar/data/1849089/000110465924102446/tm2424598d1_8k.htm)</u><br><u>[administrative agent, lead arranger, bookrunner and sustainability structuring agent (filed as Exhibit 10.1 to the](https://www.sec.gov/ix?doc=/Archives/edgar/data/1849089/000110465924102446/tm2424598d1_8k.htm)</u><br><u>[Registrant's Current Report on Form 8-K, filed on September 24, 2024 and incorporated herein by reference).](https://www.sec.gov/ix?doc=/Archives/edgar/data/1849089/000110465924102446/tm2424598d1_8k.htm)</u><br>|
| 10.10 | <u>[Lender Joinder Agreement, dated as of December 12, 2024, pursuant to which the aggregate commitments under](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849089/000110465924129373/tm2431228d1_8k.htm)</u><br><u>[the Senior Secured Revolving Credit Facility were increased from $150,000,000 to $175,000,000 (filed as](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849089/000110465924129373/tm2431228d1_8k.htm)</u><br><u>[Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on December 12, 2024 and incorporated](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849089/000110465924129373/tm2431228d1_8k.htm)</u><br><u>[herein by reference).](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849089/000110465924129373/tm2431228d1_8k.htm)</u><br>|
| 10.11 | <u>[Lender Joinder Agreement, dated as of December 20, 2024, pursuant to which the aggregate commitments under](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849089/000110465924131535/tm2431951d1_8k.htm)</u><br><u>[the Senior Secured Revolving Credit Facility were increased from $175,000,000 to $225,000,000 (filed as](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849089/000110465924131535/tm2431951d1_8k.htm)</u><br><u>[Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on December 20, 2024 and incorporated](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849089/000110465924131535/tm2431951d1_8k.htm)</u><br><u>[herein by reference).](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849089/000110465924131535/tm2431951d1_8k.htm)</u><br>|
| 10.12 | <u>[Lender Joinder Agreement, dated as of March 20, 2025, pursuant to which the aggregate commitments under the](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849089/000110465925026996/tm2510020d1_8k.htm)</u><br><u>[Senior Secured Revolving Credit Facility were increased from $225,000,000 to $250,000,000 (filed as Exhibit](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849089/000110465925026996/tm2510020d1_8k.htm)</u><br><u>[10.01 to the Registrant's Current Report on Form 8-K filed on March 20, 2025 and incorporated herein by](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849089/000110465925026996/tm2510020d1_8k.htm)</u><br><u>[reference).](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849089/000110465925026996/tm2510020d1_8k.htm)</u><br>|
| 10.13 | <u>[Amendment No.2 to Senior Secured Revolving Credit Agreement dated April 24, 2025, among the Registrant,](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849089/000110465925042501/tm2513555d1_8k.htm)</u><br><u>[the subsidiary guarantors party thereto, the lenders party thereto and ING Capital LLC, as administrative agent,](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849089/000110465925042501/tm2513555d1_8k.htm)</u><br><u>[lead arranger, bookrunner and sustainability structuring agent (filed as Exhibit 10.1 to the Registrant's Current](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849089/000110465925042501/tm2513555d1_8k.htm)</u><br><u>[Report on Form 8-K, filed on April 30, 2025 and incorporated herein by reference).](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849089/000110465925042501/tm2513555d1_8k.htm)</u><br>|
| 10.14 | <u>[Lender Joinder Agreement, dated as of May 30, 2025, pursuant to which the aggregate commitments under the](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849089/000110465925055944/tm2517004d1_8k.htm)</u><br><u>[Senior Secured Revolving Credit Facility were increased from $250,000,000 to $275,000,000 (filed as Exhibit](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849089/000110465925055944/tm2517004d1_8k.htm)</u><br><u>[10.1 to the Registrant's Current Report on Form 8-K filed on May 30, 2025 and incorporated herein by](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849089/000110465925055944/tm2517004d1_8k.htm)</u><br><u>[reference).](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849089/000110465925055944/tm2517004d1_8k.htm)</u><br>|
| 10.15 | <u>[Lender Joinder Agreement, dated as of October 30, 2025, pursuant to which the aggregate commitments under](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849089/000110465925106196/tm2530106d1_8k.htm)</u><br><u>[the Senior Secured Revolving Credit Facility were increased from $275,000,000 to $300,000,000 (filed as](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849089/000110465925106196/tm2530106d1_8k.htm)</u><br><u>[Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on October 30, 2025 and incorporated herein](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849089/000110465925106196/tm2530106d1_8k.htm)</u><br><u>[by reference).](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849089/000110465925106196/tm2530106d1_8k.htm)</u><br>|

---

<u>[**Table of Contents**](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_7)</u>

---

| | |
|:---|:---|
| 10.16 | <u>[Note Purchase Agreement, dated as of August 19, 2025, by and among the Registrant and the purchasers party](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849089/000110465925080344/tm2523835d1_8k.htm)</u><br><u>[thereto, governing the issuance of $65,000,000 aggregate principal amount of 7.00% Senior Notes due 2030](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849089/000110465925080344/tm2523835d1_8k.htm)</u><br><u>[(filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on August 19, 2025 and incorporated](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849089/000110465925080344/tm2523835d1_8k.htm)</u><br><u>[herein by reference).](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849089/000110465925080344/tm2523835d1_8k.htm)</u><br>|
| 14.1 | <u>[Code of Business Conduct and Ethics\*](lsusacodeofbusinessconduct.htm)</u> |
| 21.1 | <u>[Subsidiaries of the Registrant.\*](exhibit-listofsubsidiaries.htm)</u> |
| 31.1 | <u>[Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities](exhibit311-lsusaform10xk20.htm)</u><br><u>[Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.\*](exhibit311-lsusaform10xk20.htm)</u><br>|
| 31.2 | <u>[Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange](exhibit312-lsusaform10xk20.htm)</u><br><u>[Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.\*](exhibit312-lsusaform10xk20.htm)</u><br>|
| 32.1 | <u>[Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section](exhibit321-lsusaform10xk20.htm)</u><br><u>[906 of the Sarbanes-Oxley Act of 2002.\*](exhibit321-lsusaform10xk20.htm)</u><br>|
| 32.2 | <u>[Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906](exhibit322-lsusaform10xk20.htm)</u><br><u>[of the Sarbanes-Oxley Act of 2002.\*](exhibit322-lsusaform10xk20.htm)</u><br>|

---

\*Filed herewith.

**ITEM 16. FORM 10-K SUMMARY**

Not Applicable.

<u>[**Table of Contents**](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_7)</u>

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed

on its behalf by the undersigned thereunto duly authorized.

---

| | |
|:---|:---|
|  | **Lafayette Square USA, Inc.** |
| Date: March 25, 2026 | By: /s/ Damien Dwin |
|  | Name: Damien Dwin |
|  | Title: President and Chief Executive Officer |
| Date: March 25, 2026 | By: /s/ Seren Tahiroglu |
|  | Name: Seren Tahiroglu |
|  | Title: Chief Financial Officer |

---

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following

persons on behalf of the Registrant and in the capacities indicated on March 25, 2026.

<u>[**Table of Contents**](#ifb9ec8fda9de4af6bfe69b5d0e2b04d4_7)</u>

---

| | |
|:---|:---|
| **Name** | **Title** |
| /s/ Damien Dwin | President, Chief Executive Officer and Chairman of the Board of Directors |
| Damien Dwin |  |
| /s/ Seren Tahiroglu | Chief Financial Officer |
| Seren Tahiroglu |  |
| /s/ Jacqueline Bradley | Director |
| Jacqueline Bradley |  |
| /s/ Levee Brooks | Director |
| Levee Brooks |  |
| /s/ Sashi Brown | Director |
| Sashi Brown |  |
| /s/ Jamila Mayfield | Director |
| Jamila Mayfield |  |

---

## Exhibit 10.1

**<u>INVESTMENT ADVISORY AGREEMENT <br>BETWEEN <br>LAFAYETTE SQUARE USA, INC.<br>AND <br>LS BDC ADVISER, LLC</u>**

This Investment Advisory Agreement (this "<u>Agreement</u>") is made on June 4, 2024, by and between Lafayette Square USA, Inc., a Delaware corporation (the "<u>Company</u>"), and LS BDC Adviser, LLC, a Delaware limited liability company (the "<u>Adviser</u>").

WHEREAS, the Company is a newly organized, non-diversified, closed-end management investment company that has elected to be regulated as a business development company ("<u>BDC</u>") under the Investment Company Act of 1940, as amended (together with the rules promulgated thereunder, the "<u>Investment Company Act</u>");

WHEREAS, the Adviser is registered as an investment adviser under the Investment Advisers Act of 1940, as amended (together with the rules promulgated thereunder, the "<u>Advisers Act</u>"); and

WHEREAS, the Company desires to retain the Adviser to provide investment advisory services to the Company in the manner and on the terms and conditions hereinafter set forth, and the Adviser wishes to be retained to provide such services.

NOW, THEREFORE, in consideration of the premises and the covenants hereinafter contained and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and the Adviser hereby agree as follows:

Section 1.<u>Duties of the Adviser</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Retention of Adviser</u>. The Company hereby appoints the Adviser to act as the investment adviser to the Company and to manage the investment and reinvestment of the assets of the Company, subject to the supervision of the board of directors of the Company (the "<u>Board</u>"), for the period and upon the terms herein set forth in accordance with:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)the investment objectives, policies and restrictions that are set forth in the Company's Registration Statement on Form 10 filed with the Securities and Exchange Commission (the "<u>SEC</u>"), as supplemented, amended or superseded from time to time, and in the Company's confidential private placement memorandum, as amended from time to time or as may otherwise be set forth in the Company's reports or registration statements filed in compliance with the Securities Exchange Act of 1934, as amended, as applicable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)during the term of this Agreement, all other applicable federal and state laws, rules and regulations, and the Company's certificate of incorporation and bylaws, as they may be amended from time to time (the "<u>Organizational Documents</u>");

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)such investment policies, directives, regulatory restrictions as the Company may from time to time establish or issue and communicate to the Adviser in writing; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)the Company's compliance policies and procedures as applicable to the Adviser and as administered by the Company's chief compliance officer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Responsibilities of Adviser</u>. Without limiting the generality of the foregoing, the Adviser shall, during the term and subject to the provisions of this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)determine the composition and allocation of the Company's investment portfolio, the nature and timing of any changes therein and the manner of implementing such changes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)identify, evaluate and negotiate the structure of the investments made by the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)perform due diligence on prospective portfolio companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)execute, close, monitor and service the Company's investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)determine the securities and other assets that the Company shall purchase, retain or sell;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)arrange financings and borrowing facilities for the Company; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)provide the Company with such other investment advisory, research and related services as the Company may, from time to time, reasonably require for the investment of its funds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Power and Authority</u>. To facilitate the Adviser's performance of these undertakings, but subject to the restrictions contained herein, the Company hereby delegates to the Adviser (which power and authority may be delegated by the Adviser to one or more Sub-Advisers), and the Adviser hereby accepts, the power and authority to act on behalf of and in the name of the Company to effectuate investment decisions for the Company, including the negotiation, execution and delivery of all documents relating to the acquisition and disposition of the Company's investments, the placing of orders for other purchase or sale transactions on behalf of the Company or any entity in which the Company has a direct or indirect ownership interest, including any interest rate, currency or other derivative instruments, and the engagement of any services providers deemed necessary or appropriate by the Adviser to the exercise of such power and authority. In the event that the Company determines to incur or arrange debt or other financing (or to refinance existing debt or other financing), the Adviser shall use commercially reasonable efforts to arrange for such financing on the Company's behalf, subject to the oversight and approval of the Board. If it is necessary for the Adviser to make investments or obtain financing on behalf of the Company through a special purpose vehicle or a special tax blocker vehicle, the Adviser shall have authority to create, or arrange for the creation of, such special purpose vehicles and to make investments or obtain financing through such special purpose vehicles in accordance with applicable law. In connection with providing significant managerial assistance, the Adviser may contract service providers to provide services to portfolio companies' employees. The Company also grants to the Adviser power and authority to engage in all activities and transactions (and anything incidental thereto) that the Adviser deems, in its sole discretion, appropriate, necessary or advisable to carry out its duties pursuant to this Agreement, including the authority to open accounts and deposit, maintain and withdraw funds

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of the Company or any of its subsidiaries in any bank, savings and loan association, brokerage firm or other financial institution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)<u>Acceptance of Appointment</u>. The Adviser hereby accepts such appointment and agrees during the term hereof to render the services described herein for the compensation provided herein, subject to the limitations contained herein. Unless and until it resigns or is removed as investment adviser to the Company in accordance with this Agreement, the Adviser, to the extent of its powers as set forth in this Agreement, shall be an agent of the Company for the purpose of the Company's business, and action taken by the Adviser in accordance with such powers shall bind the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)<u>Sub-Advisers</u>. The Adviser is hereby authorized to enter into one or more sub-advisory agreements (each a "<u>Sub-Advisory Agreement</u>") with other investment advisers (each a "<u>Sub-Adviser</u>") pursuant to which the Adviser may obtain the services of the Sub-Adviser(s) to assist the Adviser in fulfilling its responsibilities hereunder, subject to the oversight of the Adviser and/or the Company, with the scope of such services and oversight to be set forth in each Sub-Advisory Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)The Adviser and not the Company shall be responsible for any compensation payable to any Sub-Adviser; provided, however, that the Adviser shall have the right to direct the Company to pay directly any Sub-Adviser the amounts due and payable to such Sub-Adviser from the fees and expenses otherwise payable to the Adviser under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Any Sub-Advisory Agreement entered into by the Adviser shall be in accordance with the requirements of the Investment Company Act and the Advisers Act, including without limitation, the requirements of the Investment Company Act relating to Board and Company stockholder approval thereunder, and other applicable federal and state law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)Any Sub-Adviser shall be subject to the same fiduciary duties as are imposed on the Adviser pursuant to this Agreement, the Investment Company Act and the Advisers Act, as well as other applicable federal and state law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)<u>Independent Contractor Status</u>. The Adviser shall, for all purposes herein provided, be deemed to be an independent contractor and, except as expressly provided or authorized herein, shall have no authority to act for or represent the Company in any way or otherwise be deemed an agent of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)<u>Record Retention</u>. Subject to review by and the overall control of the Board, the Adviser shall maintain and keep all books, accounts and other records of the Adviser that relate to activities performed by the Adviser hereunder as required under the Investment Company Act and the Advisers Act. The Adviser agrees that all records that it maintains and keeps for the Company shall at all times remain the property of the Company, shall be readily accessible during normal business hours, and shall be promptly surrendered to the Company upon the termination of this Agreement or otherwise on written request by the Company. The Adviser further agrees that the records that it maintains and keeps for the Company shall be preserved in the manner and for the periods prescribed by the Investment Company Act, unless any such records are earlier surrendered as provided above. The Adviser shall have the right to retain copies, or originals where required by Rule 204-2 promulgated under the Advisers Act, of such records to the extent required by applicable law. The Adviser shall maintain records of the

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locations where books, accounts and records are maintained among the persons and entities providing services directly or indirectly to the Adviser or the Company.

Section 2.<u>Expenses Payable by the Company</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Adviser Personnel</u>. All investment personnel of the Adviser, when and to the extent engaged in providing investment advisory services hereunder, and the compensation and routine overhead expenses of such personnel allocable to such services, shall be provided and paid for by the Adviser and not by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Company's Costs</u>. Subject to the limitations on expense reimbursement of the Adviser as set forth in Sections 2(a) and (c), the Company, either directly or through reimbursement to the Adviser, shall bear all out-of-pocket costs and expenses of its operations and its transactions, including, but not limited to, expenses incurred by the Adviser and payable to third parties, including agents, consultants and other advisors, in monitoring the financial and legal affairs of the Company, news and quotation subscriptions, and market or industry research expenses; the cost of calculating the Company's net asset value; the cost of effecting sales and repurchases of shares of the Company's common stock and other securities; management and incentive fees payable pursuant to this Agreement; fees payable to third parties, including agents, consultants and other advisors, relating to, or associated with, making investments, and, if necessary, enforcing its rights, and valuing investments (including third-party valuation firms); expenses related to consummated or unconsummated investments, including out-of-pocket due diligence expenses and dead deal or broken deal expenses; rating agency expenses; fees to arrange debt financings for the Company; distributions on the Company's shares; administration fees payable under the administration agreement (the "<u>Administration Agreement</u>"), by and between the Company and LS Administration LLC, a Delaware limited liability company (the "<u>Administrator</u>"); the allocated costs incurred by the Administrator in providing managerial assistance to those portfolio companies that request it, including the allocated costs of providing services to portfolio companies' employees (including cost incurred by service providers); transfer agent and custodial fees; fees and expenses associated with marketing efforts (including attendance at investment conferences and similar events); accounting, audit and tax preparation expenses; federal and state registration fees; any exchange listing fees; federal, state, local, and other taxes; costs and expenses incurred in relation to compliance with applicable laws and regulations and the operation and administration of the Company generally; independent directors' fees and expenses, including any legal counsel or other advisors retained by, or at the discretion or for the benefit of, the independent directors; brokerage commissions; costs of proxy statements, stockholders' reports and notices; costs of preparing government filings, including periodic and current reports with the SEC; the Company's fidelity bond, directors and officers/errors and omissions liability insurance, and any other insurance premiums; indemnification payments; expenses relating to the development and maintenance of the Company's website; other operations and technology costs; direct costs and expenses of administration, including printing, mailing, copying, telephone, fees of independent accountants and outside legal costs; and all other expenses incurred by the Company or the Administrator in connection with administering the Company's business, including, but not limited to, payments under the Administration Agreement based upon the Company's allocable portion of the Administrator's overhead in performing its obligations under the Administration Agreement, including rent, travel and the allocable portion of the cost of the Company's chief compliance officer and chief financial officer and their respective staffs, including operations and tax professionals, and administrative staff providing support services in respect of the Company.

For avoidance of doubt, it is agreed and understood that, from time to time, the Adviser or its affiliates may pay amounts or bear costs properly constituting Company expenses as set forth

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herein or otherwise and that the Company shall reimburse the Adviser or its affiliates for all such costs and expenses that have been paid by the Adviser or its affiliates on behalf of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Portfolio Company's Compensation</u>. In certain circumstances the Adviser, any Sub-Adviser, or any of their respective Affiliates (as defined below), may receive compensation from a portfolio company, in connection with the Company's investment in such portfolio company. Any compensation received by the Adviser, Sub-Adviser, or any of their respective Affiliates, attributable to the Company's investment in any portfolio company, in excess of any of the limitations in or exemptions granted from the Investment Company Act, any interpretation thereof by the staff of the SEC, or the conditions set forth in any exemptive relief granted to the Adviser, any Sub-Adviser or the Company by the SEC, shall be delivered promptly to the Company, and the Company will retain such excess compensation for the benefit of its stockholders.

Section 3.<u>Compensation of the Adviser</u>.

The Company agrees to pay, and the Adviser agrees to accept, as compensation for the services provided by the Adviser hereunder, a base management fee ("<u>Base Management Fee</u>") and an incentive fee ("<u>Incentive Fee</u>") as hereinafter set forth. Any of the fees payable to the Adviser under this Agreement for any partial calendar quarter shall be appropriately prorated based on the actual number of days elapsed during such partial quarter as a fraction of the number of days in the relevant calendar year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Base Management Fee</u>. The Base Management Fee is payable quarterly in arrears. The Base Management Fee shall be based on the average value of the Company's gross assets at the end of the two most recently completed calendar quarters (the "<u>Average Gross Assets</u>"). For periods ending on or prior to the date of the closing of (i) a quotation or listing of shares of common stock on a national securities exchange, including an initial public offering, (ii) the sale of all or substantially all of the Company's capital stock or assets to, or another liquidity event with, another entity or (iii) a transaction or series of transactions, including by way of merger, consolidation, recapitalization, reorganization, or sale of stock in each case for consideration of either cash and/or publicly listed securities of the acquirer (each, a "Liquidity Event"), the Base Management Fee shall be calculated at an annual rate of 0.75% of the Average Gross Assets. For periods ending after the date of the closing of a Liquidity Event, the Base Management Fee shall be calculated at an annual rate of 1.00% of the Average Gross Assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Incentive Fee</u>. The Incentive Fee shall consist of two parts, as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)The first part, referred to as the "Incentive Fee on Income," shall be calculated and payable quarterly in arrears based on the Company's "Pre-Incentive Fee Net Investment Income" for the immediately preceding quarter. "<u>Pre-Incentive Fee Net Investment Income</u>" means 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 for the quarter (including the Base Management Fee, expenses payable under the Administration Agreement and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature (such as original issue discount debt instruments with payment-in-kind ("<u>PIK</u>") interest and zero coupon securities), accrued income that the Company has not yet received in cash. Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or

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depreciation. For purposes of computing the Company's Pre-Incentive Fee Net Investment Income, the calculation methodology will look through total return swaps as if the Company owned the referenced assets directly. The payment of the Incentive Fee on Income shall be subject to payment of a preferred return to investors each quarter, expressed as a quarterly rate of return on the value of the Company's net assets at the end of the most recently completed calendar quarter, subject to a "catch up" feature (as described below).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)For periods ending on or prior to the date of the closing of a Liquidity Event, the calculation of the Incentive Fee on Income is as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)No Incentive Fee on Income shall be payable to the Adviser in any calendar quarter in which the Company's Pre-Incentive Fee Net Investment Income does not exceed the preferred return rate of 1.25% per quarter (or 5.00% annualized) (the "<u>Hurdle Rate Return</u>") on net assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)100% of the Company's Pre-Incentive Fee Net Investment Income, if any, that exceeds the Hurdle Rate Return but is less than or equal to 1.47% in any calendar quarter (or 5.88% annualized) shall be payable to the Adviser. This portion of the Incentive Fee on Income is referred to as the "catch up" and is intended to provide the Adviser with an incentive fee of 15.0% on all of the Company's Pre-Incentive Fee Net Investment Income when the Company's Pre-Incentive Fee Net Investment Income reaches 1.47% (or 5.88% annualized) in any calendar quarter; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)For any quarter in which the Company's Pre-Incentive Fee Net Investment Income exceeds 1.47% in any calendar quarter (or 5.88% annualized), the Incentive Fee on Income shall equal 15.0% of the amount of the Company's Pre-Incentive Fee Net Investment Income as the Hurdle Rate Return and catch up will have been achieved.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)For any period ending after the closing of a Liquidity Event, the calculation of the Incentive Fee on Income is as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)No Incentive Fee on Income shall be payable to the Adviser in any calendar quarter in which the Company's Pre-Incentive Fee Net Investment Income does not exceed the Hurdle Rate Return on net assets

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)100% of the Company's Pre-Incentive Fee Net Investment Income, if any, that exceeds the Hurdle Rate Return but is less than or equal to 1.47% in any calendar quarter (or 5.88% annualized) shall be payable to the Adviser. This portion of the Incentive Fee on Income is referred to as the "catch up" and is intended to provide the Adviser with an incentive fee of 17.5% on all of the Company's Pre-Incentive Fee Net Investment Income when the Company's Pre-Incentive Fee Net Investment Income reaches 1.47% (or 5.88% annualized) in any calendar quarter; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)For any quarter in which the Company's Pre-Incentive Fee Net Investment Income exceeds 1.47% in any calendar quarter (or 5.88% annualized), the Incentive Fee on Income shall equal 17.5% of the amount of the Company's Pre-Incentive Fee Net Investment Income as the Hurdle Rate Return and catch up will have been achieved.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)The second part of the incentive fee, referred to as the "Incentive Fee on Capital Gains," shall be determined and payable in arrears as of the end of each calendar year (or upon termination of this Agreement, if earlier). The Incentive Fee on Capital Gains shall be calculated based on the Company's "incentive fee capital gains," which shall equal the

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Company's realized capital gains on a cumulative basis from the date of the Company's election to be regulated as a business development company, as of the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid Incentive Fee on Capital Gains. For the purpose of computing the Incentive Fee on Capital Gains, the calculation methodology will look through derivative financial instruments or swaps as if the Company owned the reference assets directly. Therefore, realized gains and realized losses on the disposition of any reference assets, as well as unrealized depreciation on reference assets retained in the derivative financial instrument or swap, will be included on a cumulative basis in the calculation of the Incentive Fee on Capital Gains. For periods ending on or prior to the closing of a Liquidity Event, the Incentive Fee on Capital Gains shall equal 15.0% of the Company's incentive fee capital gains, and for periods ending after the date of the closing of a Liquidity Event, the Incentive Fee on Capital Gains shall equal 17.5% of the Company's incentive fee capital gains.

Section 4.<u>Covenant of the Adviser</u>.

The Adviser covenants that it is registered as an investment adviser under the Advisers Act on the effective date of this Agreement, and shall maintain such registration until the expiration or termination of this Agreement. The Adviser agrees that its activities shall at all times be in compliance in all material respects with all applicable federal and state laws governing its operations and investments, except to the extent that any such noncompliance would not reasonably be expected to have a material adverse effect on the ability of the Adviser to fulfill its obligations under this Agreement. The Adviser agrees to observe and comply with applicable provisions of the code of ethics adopted by the Company pursuant to Rule 17j-1 under the Investment Company Act, as such code of ethics may be amended from time to time.

Section 5.<u>Brokerage Commissions</u>.

The Adviser is hereby authorized, to the fullest extent now or hereafter permitted by law, to cause the Company to pay a member of a national securities exchange, broker or dealer an amount of commission for effecting a securities transaction in excess of the amount of commission another member of such exchange, broker or dealer would have charged for effecting that transaction, if the Adviser determines in good faith, taking into account factors, including without limitation, price (including the applicable brokerage commission or dealer spread), size of order, difficulty of execution, and operational facilities of the firm and the firm's risk and skill in positioning blocks of securities, that such amount of commission is reasonable in relation to the value of the brokerage and/or research services provided by such member, broker or dealer, viewed in terms of either that particular transaction or its overall responsibilities with respect to the Company's portfolio, and is consistent with the Adviser's duty to seek the best execution on behalf of the Company. Notwithstanding the foregoing, with regard to transactions with or for the benefit of the Company, the Adviser may not pay any commission or receive any rebates or give-ups, nor participate in any business arrangements which would circumvent this restriction.

Section 6.<u>Other Activities of the Adviser</u>.

The services of the Adviser to the Company are not exclusive, and the Adviser may engage in any other business or render similar or different services to others including, without

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limitation, the direct or indirect sponsorship or management of other investment-based accounts or commingled pools of capital, however structured, having investment objectives similar to those of the Company, so long as its services to the Company hereunder are not impaired thereby, and nothing in this Agreement shall limit or restrict the right of any manager, partner, member (including its members and the owners of its members), officer or employee of the Adviser to engage in any other business or to devote his or her time and attention in part to any other business, whether of a similar or dissimilar nature, or to receive any fees or compensation in connection therewith (including fees for serving as a director of, or providing consulting services to, one or more of the Company's portfolio companies, subject to applicable law). The Adviser assumes no responsibility under this Agreement other than to render the services called for hereunder.

Section 7.<u>Responsibility of Dual Directors, Officers and/or Employees</u>.

If any person who is a manager, partner, member, officer or employee of the Adviser is or becomes a director, officer and/or employee of the Company and acts as such in any business of the Company, then such manager, partner, member, officer and/or employee of the Adviser shall be deemed to be acting in such capacity solely for the Company, and not as a manager, partner, member, officer or employee of the Adviser or under the control or direction of the Adviser, even if paid by the Adviser.

Section 8.<u>Indemnification</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Subject to Section 9, the Adviser, any Sub-Adviser, each of their respective directors, trustees, officers, managers, partners, stockholders or members (and their stockholders or members, including the owners of their stockholders or members), agents, employees, controlling persons (as determined under the Investment Company Act ("<u>Controlling Persons</u>")), any other person or entity Affiliated with the Adviser or Sub-Adviser (including each of their respective directors, trustees, officers, stockholders or members (and their stockholders or members, including the owners of their stockholders or members), agents, employees or Controlling Persons) and any other person or entity acting on behalf of, the Adviser or Sub-Adviser (each an "<u>Indemnified Party</u>" and, collectively, the "<u>Indemnified Parties</u>") shall not be liable to the Company or any stockholder thereof for any action taken or omitted to be taken by the Adviser or any Sub-Adviser in connection with the performance of any of their duties or obligations under this Agreement or otherwise as an investment adviser of the Company (except to the extent specified in Section 36(b) of the Investment Company Act concerning loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services), and the Company shall indemnify, defend and protect the Indemnified Parties (each of whom shall be deemed a third party beneficiary hereof) and hold them harmless from and against all losses, damages, liabilities, costs and expenses (including reasonable attorneys' fees and amounts reasonably paid in satisfaction of judgments, in compromises and settlement, as fines and penalties and legal or other costs and reasonable expenses of investigating or defending against any claim or alleged claim) of any nature whatsoever, known or unknown, liquidated or unliquidated) ("<u>Losses</u>") incurred by the Indemnified Parties in or by reason of any pending, threatened or completed action, suit, investigation or other proceeding (including an action or suit by or in the right of the Company or its security holders) arising out of or otherwise based

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upon the performance of any of the Indemnified Parties' duties or obligations under this Agreement, any Sub-Advisory Agreement, or otherwise as an investment adviser of the Company to the extent such Losses are not fully reimbursed by insurance and otherwise to the fullest extent such indemnification would not be inconsistent with the Organizational Documents, the Investment Company Act, the laws of the State of New York and other applicable law.

For purposes of this Agreement, "<u>Affiliate</u>" or "<u>Affiliated</u>" or any derivation thereof means with respect to any individual, corporation, partnership, trust, joint venture, limited liability company or other entity or association ("<u>Person</u>"): (a) any Person directly or indirectly owning, controlling, or holding, with the power to vote, 10% or more of the outstanding voting securities of such other Person; (b) any Person 10% or more of whose outstanding voting securities are directly or indirectly owned, controlled or held, with the power to vote, by such other Person; (c) any Person directly or indirectly controlling, controlled by or under common control with such other Person; (d) any executive officer, director, trustee or general partner of such other Person; or (e) any legal entity for which such Person acts as an executive officer, director, trustee or general partner.

Section 9.<u>Limitation on Indemnification</u>.

Notwithstanding anything in Section 8 to the contrary, nothing contained herein shall protect or be deemed to protect any of the Indemnified Parties against, or entitle or be deemed to entitle any of the Indemnified Parties to indemnification in respect of, any Losses to the Company or its security holders to which the Indemnified Parties would otherwise be subject primarily attributable to the willful misfeasance, bad faith or gross negligence in the performance of the Adviser's or Sub-Adviser's duties or by reason of the reckless disregard of the Adviser's or Sub-Adviser's duties and obligations under this Agreement or any Sub-Advisory Agreement (to the extent applicable, as the same shall be determined in accordance with the Investment Company Act and any interpretations or guidance by the SEC or its staff thereunder).

In addition, notwithstanding any of the foregoing to the contrary, the provisions of Section 8 and this Section 9 shall not be construed so as to provide for the indemnification of any Indemnified Party for any liability (including liability under federal securities laws which, under certain circumstances, impose liability even on persons that act in good faith), to the extent (but only to the extent) that such indemnification would be in violation of applicable law, but shall be construed so as to effectuate the provisions of Section 8 and this Section 9 to the fullest extent permitted by law.

Section 10.<u>Effectiveness, Duration and Termination of Agreement</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Term and Effectiveness</u>. This Agreement shall become effective as of the date first written above. This Agreement shall remain in effect for two years, and thereafter shall continue automatically for successive one-year periods; provided that such continuance is specifically approved at least annually by: (i) the vote of the Board, or by the vote of a majority of the outstanding voting securities of the Company and (ii) the vote of a majority of the

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Independent Directors, in accordance with the requirements of the Investment Company Act, or as otherwise permitted under Section 15 of the Investment Company Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Termination</u>. This Agreement may be terminated at any time, without the payment of any penalty, (i) by the Company upon 60 days' prior written notice to the Adviser: (A) upon the vote of a majority of the outstanding voting securities of the Company (as "<u>majority of the outstanding voting securities</u>" is defined in Section 2(a)(42) of the Investment Company Act) or (B) by the vote of the Independent Directors; or (ii) by the Adviser upon not less than 60 days' prior written notice to the Company. This Agreement shall automatically terminate in the event of its "<u>assignment</u>" (as such term is defined for purposes of construing Section 15(a)(4) of the Investment Company Act). The provisions of Sections 8 and 9 shall remain in full force and effect, and the Adviser shall remain entitled to the benefits thereof, notwithstanding any termination of this Agreement. Further, notwithstanding the termination or expiration of this Agreement as aforesaid, the Adviser shall be entitled to any amounts owed to it under Section 3 through the date of termination or expiration and Sections 8 and 9 shall continue in force and effect and apply to the Adviser and its representatives as and to the extent applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Duties of Adviser Upon Termination</u>. The Adviser shall promptly upon termination:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)deliver to the Board a full accounting, including a statement showing all payments collected by it and a statement of all money held by it, covering the period following the date of the last accounting furnished to the Board;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)deliver to the Board all assets and documents of the Company then in custody of the Adviser; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)cooperate with the Company to provide an orderly transition of services.

Section 11.<u>Notices</u>.

Any notice under this Agreement shall be given in writing, addressed and delivered or mailed, postage prepaid, to the other party at the address listed below or at such other address for a party as shall be specified in a notice given in accordance with this Section.

Section 12.<u>Amendments</u>.

This Agreement may be amended by mutual written consent of the parties; provided that the consent of the Company is required to be obtained in conformity with the requirements of the Investment Company Act.

Section 13.<u>Severability</u>.

If any provision of this Agreement shall be declared illegal, invalid, or unenforceable in any jurisdiction, then such provision shall be deemed to be severable from this Agreement (to the extent permitted by law) and in any event such illegality, invalidity or unenforceability shall not affect the remainder hereof.

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Section 14.<u>Counterparts</u>.

This Agreement may be executed in counterparts, each of which shall be deemed to be an original copy and all of which together shall constitute one and the same instrument binding on all parties hereto, notwithstanding that all parties shall not have signed the same counterpart.

Section 15.<u>Governing Law</u>.

Notwithstanding the place where this Agreement may be executed by any of the parties hereto and the provisions of Sections 8 and 9, this Agreement shall be construed in accordance with the laws of the State of New York. For so long as the Company is regulated as a BDC under the Investment Company Act, this Agreement shall also be construed in accordance with the applicable provisions of the Investment Company Act and the Advisers Act. In such case, to the extent the applicable laws of the State of New York or any of the provisions herein conflict with the provisions of the Investment Company Act or the Advisers Act, the Investment Company Act and the Advisers Act shall control.

Section 16.<u>Third Party Beneficiaries</u>.

Except for any Sub-Adviser and any Indemnified Party, such Sub-Adviser and the Indemnified Parties each being an intended beneficiary of this Agreement, this Agreement is for the sole benefit of the parties hereto and their permitted assigns and nothing herein express or implied shall give or be construed to give to any person, other than the parties hereto and such assigns, any legal or equitable rights hereunder.

Section 17.<u>Entire Agreement</u>.

This Agreement contains the entire agreement of the parties and supersedes all prior agreements, understandings and arrangements with respect to the subject matter hereof.

Section 18.<u>Insurance</u>.

The Company shall acquire and maintain a directors and officers liability insurance policy or similar insurance policy, which may name the Adviser and any Sub-Adviser each as an additional insured party (each an "<u>Additional Insured Party</u>" and collectively the "<u>Additional Insured Parties</u>"). Such insurance policy shall include reasonable coverage from a reputable insurer. The Company shall make all premium payments required to maintain such policy in full force and effect; provided, however, each Additional Insured Party, if any, shall pay to the Company, in advance of the due date of such premium, its allocated share of the premium. Irrespective of whether the Adviser and any Sub-Adviser is a named Additional Insured Party on such policy, the Company shall provide the Adviser and any Sub-Adviser with written notice upon receipt of any notice of: (a) any default under such policy; (b) any pending or threatened termination, cancellation or non-renewal of such policy or (c) any coverage limitation or reduction with respect to such policy. The foregoing provisions of this Section 18 notwithstanding, the Company shall not be required to acquire or maintain any insurance policy to the extent that the same is not available upon commercially reasonable pricing terms or at all,

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as determined in good faith by the required majority (as defined in Section 57(o) of the Investment Company Act) of the Board.

(*signature page follows*)

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on the date above written.

**LAFAYETTE SQUARE USA, INC.**<br>a Delaware corporation

By:&nbsp;&nbsp;&nbsp;&nbsp;<u>/s/Damien Dwin&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp;<u>Damien Dwin&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Title:&nbsp;&nbsp;&nbsp;&nbsp;<u>CEO&nbsp;&nbsp;&nbsp;&nbsp;</u>

**LS BDC ADVISER, LLC**<br>a Delaware limited liability company

By:&nbsp;&nbsp;&nbsp;&nbsp;<u>/s/ Damien Dwin&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp;<u>Damien Dwin&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Title:&nbsp;&nbsp;&nbsp;&nbsp;<u>CEO&nbsp;&nbsp;&nbsp;&nbsp;</u>

[Signature Page to Investment Advisory Agreement]

## Exhibit 10.2

**ADMINISTRATION AGREEMENT**

This ADMINISTRATION AGREEMENT (the "<u>Agreement</u>") made as of August <u>8th</u>, 2023 by and between Lafayette Square USA, Inc., a Delaware corporation (the "<u>Corporation</u>"), and LS Administration LLC, a Delaware limited liability company (the "<u>Administrator</u>").

**WITNESSETH:**

WHEREAS, the Corporation is a closed-end management investment company that intends to elect to be treated as a business development company under the Investment Company Act of 1940, as amended (the "<u>Investment Company Act</u>");

WHEREAS, the Corporation desires to retain the Administrator to provide administrative services to the Corporation in the manner and on the terms hereinafter set forth; and

WHEREAS, the Administrator is willing to provide administrative services to the Corporation on the terms and conditions hereafter set forth.

NOW, THEREFORE, in consideration of the premises and the covenants hereinafter contained and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the Corporation and the Administrator hereby agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<u>Duties</u> <u>of</u> <u>the</u> <u>Administrator</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Appointment of Administrator</u>*.* The Corporation hereby appoints the Administrator to act as administrator of the Corporation, and to furnish, or arrange for others to furnish, the administrative services, personnel and facilities described below, subject to review by and the overall control of the Board of Directors of the Corporation (the "<u>Board</u>"), for the period and on the terms and conditions set forth in this Agreement. The Administrator hereby accepts such appointment and agrees during such period to render, or arrange for the rendering of, such services and to assume the obligations herein set forth subject to the reimbursement of costs and expenses provided for below. The Administrator and any such other persons providing services arranged for by the Administrator shall for all purposes herein be deemed to be independent contractors and shall, unless otherwise expressly provided or authorized herein, have no authority to act for or represent the Corporation in any way or otherwise be deemed agents of the Corporation.

<u>Services</u>*.* The Administrator shall perform (or oversee, or arrange for, the performance of) the administrative services necessary for the operation of the Corporation, which include providing assistance in accounting, legal, compliance, operations, technology and internal audit and investor relations. Without limiting the generality of the foregoing, the Administrator shall provide the Corporation with office facilities, equipment, clerical, bookkeeping and record keeping services at such facilities and such other services as the Administrator, subject to review by the Board, shall from time to time determine to be necessary or useful to perform its obligations under this Agreement. The Administrator shall also, on behalf of the Corporation, conduct relations with custodians, depositories, transfer agents, dividend disbursing agents, other stockholder servicing agents, accountants, attorneys, underwriters, brokers and dealers, corporate fiduciaries, insurers, banks and such other persons in any such other capacity deemed to be necessary or desirable. The Administrator shall make reports to the Board of its performance of obligations hereunder and furnish advice and recommendations with respect to such other aspects of the business and affairs of the Corporation as it shall determine to be desirable or as requested by the Board; *provided* 

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that nothing herein shall be construed to require the Administrator to, and the Administrator shall not provide any advice or recommendation relating to the securities and other

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assets that the Corporation should purchase, retain or sell or any other investment advisory services to the Corporation. The Administrator shall be responsible for the financial and other records that the Corporation is required to maintain and shall prepare reports to stockholders, and reports and other materials filed with the Securities and Exchange Commission (the "<u>SEC</u>") or any other regulatory authority, including, but not limited to, current reports on Form 8-K, quarterly reports on Form 10-Q, annual reports on Form 10-K and proxy or information statements to stockholders. If requested by the Corporation, the Administrator will provide on the Corporation's behalf significant managerial assistance to those portfolio companies to which the Corporation is required to provide such assistance, including to portfolio companies' employees, if requested. In addition, the Administrator will assist the Corporation in determining and publishing the Corporation's net asset value, overseeing the preparation and filing of the Corporation's tax returns, and the printing and dissemination of reports to stockholders of the Corporation, and generally overseeing the payment of the Corporation's expenses and the performance of administrative and professional services rendered to the Corporation by others.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.<u>Records</u>

The Administrator agrees to maintain and keep all books, accounts and other records of the Corporation that relate to activities performed by the Administrator hereunder and, if required by the Investment Company Act, will maintain and keep such books, accounts and records in accordance with that Act. In compliance with the requirements of Rule 31a-3 under the Investment Company Act, the Administrator agrees that all records that it maintains for the Corporation shall at all times remain the property of the Corporation, shall be readily accessible during normal business hours, and shall be promptly surrendered upon the termination of the Agreement or otherwise on written request. The Administrator further agrees that all records which it maintains for the Corporation pursuant to Rule 31a-1 under the Investment Company Act will be preserved for the periods prescribed by Rule 31a-2 under the Investment Company Act unless any such records are earlier surrendered as provided above. Records shall be surrendered in usable machine-readable form. The Administrator shall have the right to retain copies of such records subject to observance of its confidentiality obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.<u>Confidentiality</u>

The parties hereto agree that each shall treat confidentially all information provided by each party to the other regarding its business and operations. All confidential information provided by a party hereto, including nonpublic personal information of natural persons pursuant to Regulation S-P of the SEC, shall be used by any other party hereto solely for the purpose of rendering services pursuant to this Agreement and, except as may be required in carrying out this Agreement, shall not be disclosed to any third party without the prior consent of such providing party. The foregoing shall not be applicable to any information that is publicly available when provided or thereafter becomes publicly available other than through a breach of this Agreement, or that is required to be disclosed by any regulatory authority, any authority or legal counsel of the parties hereto, by judicial or administrative process or otherwise by applicable law or regulation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.<u>Compensation;</u> <u>Allocation</u> <u>of</u> <u>Costs</u> <u>and</u> <u>Expenses</u>

In full consideration of the provision of the services of the Administrator, the Corporation shall reimburse the Administrator for the costs and expenses incurred by the Administrator in performing its obligations and providing personnel and facilities hereunder, including the costs and expenses charged by any sub-administrator that may be retained by the Administrator to provide services to the Corporation or on the Administrator's behalf.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The Corporation will bear all costs and expenses that are incurred in its operation, administration, and transactions and not specifically assumed by the Corporation's investment adviser (the "<u>Adviser</u>"), pursuant to that certain Investment Advisory Agreement, dated as of July 27, 2021, by and between the Corporation and the Adviser (the "<u>Advisory Agreement</u>"). Costs and expenses to be borne by the Corporation include, but are not limited to, those relating to: expenses deemed to be "organization and offering expenses" of the Corporation for purposes of Conduct Rule 2310(a)(12) of the Financial Industry Regulatory Authority (for purposes of this Agreement, such expenses, exclusive of commissions, the dealer manager fee and any discounts, are hereinafter referred to as "<u>Organization and</u> <u>Offering Expenses</u>"); expenses incurred by the Adviser and payable to third parties, including agents, consultants and other advisors, in monitoring the financial and legal affairs of the Corporation, and news and quotation subscriptions; the cost of calculating the Corporation's net asset value; the cost of effecting sales and repurchases of shares of the Corporation's common stock and other securities; management and incentive fees payable pursuant to the Advisory Agreement; fees payable to third parties, including agents, consultants and other advisors, relating to, or associated with, making investments, and, if necessary, enforcing its rights, and valuing investments (including third-party valuation firms); placement agent fees and expenses, rating agency expenses; fees to arrange debt financings for the Corporation; distributions on the Corporation's shares; administration fees payable under this Agreement; the allocated costs incurred by the Administrator in providing managerial assistance to those portfolio companies that request it; transfer agent and custodial fees; fees and expenses associated with marketing efforts (including attendance at investment conferences and similar events); federal and state registration fees; any exchange listing fees; federal, state, local, and other taxes; independent directors' fees and expenses, including any legal counsel or other advisors retained by, or at the discretion or for the benefit of, the independent directors; brokerage commissions; costs of proxy statements, stockholders' reports and notices; costs of preparing government filings, including periodic and current reports with the SEC; the Corporation's fidelity bond, directors and officers/errors and omissions liability insurance, and any other insurance premiums; indemnification payments; expenses relating to the development and maintenance of the Corporation's website; other operations and technology costs; direct costs and expenses of administration, including printing, mailing, copying, telephone, fees of independent accountants and outside legal costs; and all other expenses incurred by the Corporation or the Administrator in connection with administering the Corporation's business, including, but not limited to, payments under this Agreement based upon the Corporation's allocable portion of the Administrator's overhead in performing its obligations under this Agreement, including rent, travel and the allocable portion of the cost of the Corporation's chief compliance officer and chief financial officer and their respective staffs, including operations and tax professionals, and administrative staff providing support services in respect of the Corporation (including loan agency services provided by such staff and/or any third party service providers).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.<u>Limitation</u> <u>of</u> <u>Liability</u> <u>of</u> <u>the</u> <u>Administrator;</u> <u>Indemnification</u>

The Administrator, its affiliates and their respective directors, officers, managers, partners, agents, employees, controlling persons, members, and any other person or entity affiliated with any of them including the Adviser, shall not be liable to the Corporation for any action taken or omitted to be taken by the Administrator in connection with the performance of any of its duties or obligations under this Agreement or otherwise as administrator for the Corporation, and the Corporation shall indemnify, defend and protect the Administrator (and its officers, managers, partners, agents, employees, controlling persons, members, and any other person or entity affiliated with the Administrator, including without limitation, the Adviser, each of whom shall be deemed a third party beneficiary hereof) (collectively, the "<u>Indemnified Parties</u>"), and hold them harmless from and against all damages, liabilities, costs and expenses (including reasonable attorneys' fees and amounts reasonably paid in settlement) incurred by the Indemnified Parties in or by reason of any pending, threatened or completed action, suit, investigation or other proceeding (including an action or suit by or in the right of the Corporation or its security holders)

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arising out of or otherwise based upon the performance of any of the Administrator's duties or obligations under this Agreement or otherwise as administrator for the Corporation. Notwithstanding the preceding sentence of this Section 5 to the contrary, nothing contained herein shall protect or be deemed to protect the Indemnified Parties against or entitle or be deemed to entitle the Indemnified Parties to indemnification in respect of, any liability to the Corporation or its security holders to which the Indemnified Parties would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of the Administrator's duties or by reason of the reckless disregard of the Administrator's duties and obligations under this Agreement (to the extent applicable, as the same shall be determined in accordance with the Investment Company Act and any interpretations or guidance by the SEC or its staff thereunder).

In addition, notwithstanding any of the foregoing to the contrary, the provisions of this Section 5 shall not be construed so as to provide for the indemnification of any Indemnified Party for any liability (including liability under federal securities laws which, under certain circumstances, impose liability even on persons that act in good faith), to the extent (but only to the extent) that such indemnification would be in violation of applicable law, but shall be construed so as to effectuate the provisions of this Section 5 to the fullest extent permitted by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.<u>Activities</u> <u>of</u> <u>the</u> <u>Administrator</u>

The services of the Administrator to the Corporation are not to be deemed to be exclusive, and the Administrator and each other person providing services as arranged by the Administrator is free to render services to others. It is understood that directors, officers, employees and stockholders of the Corporation are or may become interested in the Administrator and its affiliates, as directors, officers, members, managers, employees, partners, stockholders or otherwise, and that the Administrator and directors, officers, members, managers, employees, partners and stockholders of the Administrator and its affiliates are or may become similarly interested in the Corporation as officers, directors, stockholders or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.<u>Duration</u> <u>and</u> <u>Termination</u> <u>of</u> <u>this</u> <u>Agreement</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)This Agreement shall remain in force with respect to the Corporation for two years from the date of effectiveness and thereafter continue from year to year, but only so long as such continuance is specifically approved at least annually by (i) the Board and (ii) a majority of the members of the Board who are not parties to this Agreement or "interested persons" (as defined in Section 2(a)(19) of the Investment Company Act) of any such party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)This Agreement may be terminated at any time, without the payment of any penalty, by vote of the Board, or by the Administrator, upon 60 days' written notice to the other party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)This Agreement may not be assigned by a party without the consent of the other party. The provisions of Section 3 and Section 5 of this Agreement shall remain in full force and effect, and the Administrator shall remain entitled to the benefits thereof, notwithstanding any termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.<u>Amendments</u> <u>of</u> <u>this</u> <u>Agreement</u>

This Agreement may be amended pursuant to a written instrument by mutual consent of the

parties.

<u>Severability</u>

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If any provision of this Agreement shall be declared illegal, invalid, or unenforceable in any jurisdiction, then such provision shall be deemed to be severable from this Agreement (to the extent permitted by law) and in any event such illegality, invalidity or unenforceability shall not affect the remainder hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.<u>Governing</u> <u>Law</u>

This Agreement shall be construed in accordance with the laws of the State of New York and the applicable provisions of the Investment Company Act. To the extent that the applicable laws of the State of New York, or any of the provisions herein, conflict with the applicable provisions of the Investment Company Act, the latter shall control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.<u>Entire</u> <u>Agreement</u>

This Agreement contains the entire agreement of the parties and supersedes all prior agreements, understandings and arrangements with respect to the subject matter hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.<u>Notices</u>

All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier service (with signature required), by facsimile, or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at their respective principal executive office addresses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.<u>Miscellaneous</u>

The captions in this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. This Agreement shall be binding on, and shall inure to the benefit of the parties hereto and their respective successors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.<u>Counterparts</u>

This Agreement may be executed in counterparts by the parties hereto, each of which shall constitute an original counterpart, and all of which, together, shall constitute one Agreement.

[*REMAINDER OF PAGE INTENTIONALLY LEFT BLANK*]

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first above written.

**LAFAYETTE SQUARE USA, INC.**

By:<u>&nbsp;&nbsp;&nbsp;&nbsp;/s/ Damien Dwin&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: <u>&nbsp;&nbsp;&nbsp;&nbsp;Damien Dwin&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>

Title: <u>&nbsp;&nbsp;&nbsp;&nbsp;CEO&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>

**LS ADMINISTRATION, LLC**

By: <u>&nbsp;&nbsp;&nbsp;&nbsp;/s/ Damien Dwin&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: <u>&nbsp;&nbsp;&nbsp;&nbsp;Damien Dwin&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>

Title: <u>&nbsp;&nbsp;&nbsp;&nbsp;CEO&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>

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## Exhibit 10.7

**LS BDC Adviser, LLC - Insider Trading Policy** 

**as adopted by Lafayette Square USA, Inc. (Nov. 2025)**

Employees are strictly forbidden from engaging in Insider Trading, either personally or on behalf of Lafayette Square's Clients. Lafayette Square's Insider Trading policies and procedures apply to all Employees and designated Access Persons, as well as any transactions in any securities by immediate family members, trusts, or corporations, directly or indirectly controlled by such persons. The policy also applies to transactions by corporations in which the Employee is an officer, director, or 10% or greater stockholder, as well as transactions by partnerships and limited liability companies of which the Employee is a partner or a member unless the Employee has no direct or indirect control over the partnership or limited liability company. The Clients will invest primarily in privately-placed securities purchased from issuers, and therefore, Lafayette Square does not expect to come into possession of Material Nonpublic Information ("**MNPI**") with any regularity.

**<u>Procedures for Recipients of Material Nonpublic Information</u>** 

If an Employee has questions as to whether they are in possession of MNPI, they should inform the Legal department as soon as possible. The Legal department will conduct research to determine if the information is likely to be considered material and whether the information has been publicly disseminated.

Given the severe penalties imposed on individuals and firms engaging in Insider Trading, an Employee:

• Must immediately report the potential receipt of MNPI to the Legal department;

• Must not trade the securities of any company about which they may possess MNPI or derivatives related to the issuer in question;

• Must not discuss potential MNPI with colleagues, except as specifically required by their position; and

• Must not conduct research, trading, or other investment activities regarding a security for which they may have MNPI until the Legal department dictates an appropriate course of action.

When it is deemed by the Legal department that Lafayette Square or its Employees are in possession of MNPI, the associated security is added to the restricted list (the "**Restricted List**"), which is maintained and is accessible to Employees in ComplianceAlpha. Employees are prohibited from placing any trades in securities on the Restricted List, unless the trade is pre-approved by the CCO after evaluating the facts and circumstances of the trade (e.g., selling pre-existing trade). The CCO or another member of the Legal department will amend the Restricted List when it is determined that the information has become public and/or immaterial.

To monitor activities related to securities on the Restricted List, the CCO, in consultation with other members of the Legal department, may also take some or all of the following steps:

• Provide Employees with annual training with regards to Lafayette Square's *Insider Trading* policies and procedures;

• Periodically ask Employee(s) to sign certifications that they have not improperly shared MNPI;

• Review the emails of certain Employees more frequently; and

• Remind Employees that they should take reasonable steps to avoid inadvertent receipt of the information.

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**<u>Selective Disclosure</u>** 

Nonpublic information about Lafayette Square's investment strategies and Client holdings may not be shared with third parties except as is necessary to implement investment decisions and conduct other legitimate business. Federal Securities Laws may prohibit the dissemination of such information, and doing so may be considered a violation of the fiduciary duty that Lafayette Square owes to its Clients.

**<u>Relationships with Potential Insiders</u>** 

Lafayette Square's Clients, Investors, third-party research providers, portfolio companies, and Board members may possess MNPI.

Individuals with access to MNPI may have an incentive to disclose the information to Lafayette Square due to the potential for personal gain. Employees should be extremely cautious about investment recommendations, or information about issuers, that it receives from Clients, Investors, third-party research providers, and Board members. Employees should inquire about the basis for any such recommendations or information and should consult with the CCO or other members of the Legal department if there is any appearance that the recommendations or information are based on MNPI. Further, Employees should consult with the CCO or other members of the Legal department if there is any question regarding the appropriate types of information that can be provided to, or received from, an outside individual or entity.

**<u>Conducting Research and Use of Third-Party Consultants</u>** 

Lafayette Square's underwriting and portfolio management process is partially informed by external research consisting of publicly available information obtained from third parties.

In an effort to understand or to obtain new perspectives on various issues such as regional credit markets, economies, and industries, the use of paid third-party expert network consulting firms ("**Expert Networks**") or individual experts (including public company insiders) providing these consulting services outside of Expert Networks ("**Experts**") is an important part of Lafayette Square's investment process. Retaining the services of Expert Networks or Experts poses risks associated with the receipt of MNPI, therefore the following procedures have been put into place:

*Expert Networks* 

&nbsp;&nbsp;&nbsp;&nbsp;• Employees must obtain the written approval of a member of the Legal department prior to engaging an Expert Network or an Expert outside of an Expert Network;

&nbsp;&nbsp;&nbsp;&nbsp;• Lafayette Square's Legal department will conduct initial and on-going due diligence of every Expert Network engaged which will include reviewing insider trading controls in place;

&nbsp;&nbsp;&nbsp;&nbsp;• In-network Experts selected by the Expert Networks are required to complete a questionnaire to determine more about their background and exposure to MNPI. The Legal department will review the questionnaire and conduct any further analysis and approve or disapprove use of that Expert;

&nbsp;&nbsp;&nbsp;&nbsp;• Employees attending each approved Expert call will receive an invitation from the Expert Network that will include the names and biographies of the Expert. The Expert Networks will also

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invite members of the Legal department as potential observers for calls. The Legal department, via a dedicated compliance dashboard provided by the Expert Network, can also access background information on individual Experts as well as the list of all historic and upcoming calls with Experts;

&nbsp;&nbsp;&nbsp;&nbsp;• At the outset of every call with an Expert, an automated Compliance Script is read prohibiting the sharing of MNPI, among other instructions for participants of the call;

&nbsp;&nbsp;&nbsp;&nbsp;• Employee notes taken during calls may be reviewed by a member of the Legal department;

&nbsp;&nbsp;&nbsp;&nbsp;• A member of the Legal department may monitor calls unannounced and on a sample basis as a control against the inappropriate dissemination and use of information; and

&nbsp;&nbsp;&nbsp;&nbsp;• If available, a member of the Legal department may review call transcripts, as necessary.

If an Employee is researching a private company that operates in a concentrated market with other public companies where information about the private company may materially impact a public company, contact the CCO or another member of the Legal department to discuss how these guidelines may apply.

*Political Intelligence Firms* 

The Stop Trading on Congressional Knowledge Act (the "**STOCK Act**") aims to prohibit insider trading by Members of Congress and other public officials and imposes a fiduciary duty on Members and employees of Congress with respect to MNPI derived from such person's position as a Member or employee of Congress or gained from the performance of such person's official responsibilities. Although the focus of the STOCK Act is on political officials, the STOCK Act also exposes investment advisers that obtain MNPI from public officials to potential liability for insider trading. An investment adviser that employs a political intelligence firm may be exposed to insider trading liability as a "tippee" if (i) the political intelligence firm receives MNPI from Members or employees of Congress and (ii) the investment adviser trades on such information.

Prior to engaging a political intelligence firm, or any other Expert Network that engages with current or former government persons, Employees must obtain written approval from the Legal department. Lafayette Square will perform adequate due diligence on the firm, which will include reviewing insider trading controls in place.

**<u>Market Rumors</u>** 

Creating or passing false rumors with the intent to manipulate securities prices or markets may violate the antifraud provisions of Federal Securities Laws. Such conduct is contradictory to Lafayette Square's Code, as well as the Adviser's expectations regarding the appropriate behavior of its Employees. Employees are prohibited from knowingly circulating false rumors or sensational information that might reasonably be expected to affect market conditions for one or more securities, sectors, or markets or improperly influencing any person or entity.

This policy is not intended to discourage or prohibit appropriate communications between Employees of Lafayette Square and other market participants and trading counterparties. Employees should consult with the Legal department regarding questions about the appropriateness of any communications.

**<u>Value-Added Investors</u>** 

Clients may accept investments from so-called "value-added" investors. Although the term value-added investor is not defined in the Advisers Act or elsewhere, it is generally understood to refer to an investor

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who may provide some benefit to the adviser (such as industry expertise or access to individuals in the investor's network) beyond just the value of their investment. Examples of such investors could include, without limitation, executive-level officers or directors of a company or personnel that are affiliated with other investment advisers and/or private funds.

Due to the nature of their position, such investors may possess MNPI. Therefore, Employees should always remain alert to the possibility that they could inadvertently come into possession of MNPI when communicating with such Investors. Employees should refrain from discussing potentially sensitive topics (e.g., specific information about the investor's employer) with a known value-added investor.

If there is any question as to whether information received from an Investor could be MNPI, Employees are expected to notify the CCO or another member of the Legal department immediately, and otherwise to act in accordance with the procedures described above.

## Exhibit 14.1

**LAFAYETTE SQUARE USA, INC.**

**CODE OF BUSINESS CONDUCT AND ETHICS**

Ethics are important to Lafayette Square USA, Inc. (the "**Company**", "**our**", "**us**", or "**we**") and to our management. The Company is committed to the highest ethical standards and to conducting our business with the highest level of integrity.

All officers, directors and employees of the Company and our investment adviser, LS BDC Adviser, LLC (the "**Investment Adviser**") are responsible for maintaining this level of integrity and for complying with the policies contained in this Code of Business Conduct and Ethics (the "**Code**"). If you have a question or concern about what is proper conduct for you or anyone else, please raise these concerns with any member of the Company's management, or follow the procedures outlined in applicable sections of this Code.

**<u>Purpose</u>**

This Code is intended to:

• help you recognize ethical issues and take the appropriate steps to resolve these issues;

• deter ethical violations;

• assist you in reporting any unethical or illegal conduct; and

• reaffirm and promote our commitment to a corporate culture that values honesty and accountability.

**<u>Conflicts</u> <u>of</u> <u>Interest</u>**

You must avoid any conflict, or the appearance of a conflict, between your personal interests and our interests. A conflict exists when your personal interest in any way interferes with our interests, or when you take any action or have any interest that may make it difficult for you to perform your job objectively and effectively. For example, a conflict of interest probably exists if:

• you cause us or the Investment Adviser to enter into business relationships with you or a member of your family, or invest in companies affiliated with you or a member of your family;

• you use any nonpublic information about us or the Investment Adviser, our customers or our other business partners for your personal gain, or the gain of a member of your family; or

• you use or communicate confidential information obtained in the course of your work for your or another's personal benefit.

**<u>Corporate</u> <u>Opportunities</u>**

Each of us has a duty to advance the legitimate interests of the Company when the opportunity to do so presents itself. Therefore, you may not:

• take for yourself personal opportunities, including investment opportunities, discovered through the use of your position with us or the Investment Adviser, or through the use of either's property or information;

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• use our or the Investment Adviser's property, information, or position for your personal gain or the gain of a family member; or

• compete, or prepare to compete, with us or the Investment Adviser.

**<u>Confidentiality</u>**

You must not disclose confidential information regarding us, the Investment Adviser, our affiliates, our lenders, our clients, or our other business partners, unless disclosure is authorized or required by law. Confidential information includes all non-public information that might be harmful to, or useful to the competitors of, the Company, our affiliates, our lenders, our clients, or our other business partners.

**<u>Fair</u> <u>Dealing</u>**

You must endeavor to deal fairly with our customers, suppliers and business partners, or any other companies or individuals with whom we do business or come into contact with, including fellow employees and our competitors. You must not take unfair advantage of these or other parties by means of:

• manipulation;

• concealment;

• abuse of privileged information;

• misrepresentation of material facts; or

• any other unfair-dealing practice.

**<u>Protection</u> <u>and</u> <u>Proper</u> <u>Use</u> <u>of</u> <u>Company</u> <u>Assets</u>**

Our assets are to be used only for legitimate business purposes. You should protect our assets and ensure that they are used efficiently. To ensure robust security and compliance with applicable legal, regulatory, and contractual obligations, we may routinely monitor activity on networks, log and review actions taken on company-issued devices, and otherwise passively and actively monitor technology use. By using these resources, employees consent to such monitoring.

**<u>Compliance</u> <u>with</u> <u>Applicable</u> <u>Laws,</u> <u>Rules</u> <u>and</u> <u>Regulations</u>**

Each of us has a duty to comply with all laws, rules and regulations that apply to our business. Highlighted below are some of the key compliance guidelines that must be followed.

**Insider Trading**. It is against the law to buy or sell securities using material non-public information. Individuals who give this "inside" information to others may be liable to the same extent as the individuals who trade while in possession of such information. You must not trade in our securities, or the securities of our affiliates, our lenders, our clients, or our other business partners while in the possession of "inside" information.

**"Whistleblower" Protections**. Please refer to the Whistleblower Protection Policy in **Appendix A** to this document.

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**Investment Company Act Requirements**. A separate code of ethics has been established to comply with the Investment Company Act of 1940 as amended and is applicable to those persons designated in such code.

**Document Retention**. You must adhere to appropriate procedures governing the retention and destruction of records consistent with applicable laws, regulations and our policies. You may not destroy, alter or falsify any document that may be relevant to a threatened or pending lawsuit or governmental investigation.

Please talk to any member of senior management if you have any questions about how to comply with the above regulations and other laws, rules and regulations.

**<u>Equal</u> <u>Opportunity,</u> <u>Harassment</u>**

We provide equal employment opportunities to all employees and applicants in all company facilities without regard to race (including hair texture and hairstyles), color, religious creed, sex, national origin, ancestry, citizenship status, pregnancy, childbirth, (or related medical conditions, including, but not limited to lactation), physical disability, mental and/or intellectual disability, age, military status or status as a Vietnam-era or special disabled veteran, marital status, registered domestic partner or civil union status, gender (including sex stereotyping and gender identity or expression), medical condition (including, but not limited to, cancer related or HIV/AIDS related), genetic information, or sexual orientation in accordance with applicable federal, state and local laws. There are certain behaviors that will not be tolerated, including harassment, violence, intimidation, and discrimination of any kind.

**<u>Accuracy</u> <u>of</u> <u>Company</u> <u>Records</u>**

We require honest and accurate recording and reporting of information in order to make responsible business decisions. This includes such data as quality, safety, and personnel records, as well as financial records.

All financial books, records and accounts must accurately reflect transactions and events, and conform both to required accounting principles and to our system of internal controls. No false or artificial entries may be made.

**<u>Public</u> <u>Reporting</u>**

As a public company, it is of critical importance that the Company's filings with the U.S. Securities and Exchange Commission ("**SEC**") and reports distributed to stockholders be accurate and timely. You may be called upon to provide the necessary information to ensure that our public reports are complete, fair and understanding. The Company expects you to take this responsibility very seriously and to provide prompt and accurate answers to inquiries to our public disclosure requirements.

**<u>Retaining</u> <u>Business</u> <u>Communications</u>**

The law requires us to maintain certain types of corporate records, usually for specified periods of time. Failure to retain those records for those minimum periods could subject us to penalties and fines, cause the loss of rights, obstruct justice, place us in contempt of court, or seriously disadvantage us in litigation.

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From time to time, we establish retention or destruction policies in order to ensure legal compliance. We expect you to fully comply with any published records retention or destruction policies, provided that you should note the following exception: if you believe, or we inform you, that our records are relevant to any litigation or governmental action, or any potential litigation or action, then you must preserve those records until we determine the records are no longer needed. This exception supersedes any previously or subsequently established destruction policies for those records. If you believe that this exception may apply or have any questions regarding the possible applicability of that exception, please contact our Chief Compliance Officer ("**CCO**").

**<u>Political</u> <u>Contributions</u>**

No funds of the Company may be given directly to political candidates. Employees may not make any individual political contributions or engage in any third-party solicitation activity, either directly or indirectly, which includes but is not limited to political contributions through a spouse or other family member or friend. Contributions to Political Action Committees ("**PACs**") must be pre-cleared by the CCO's office, and contributions to national parties (i.e., DNC and RNC) must be reported to the CCO.

**<u>Media</u> <u>Relations</u>**

We must speak with a unified voice in all dealings with the press and other media. Therefore, any media inquiries should be promptly forwarded to the Marketing department. All Employees must obtain pre-clearance from the Marketing department, who will consult with the Legal department prior to communicating with the media.

**<u>Intellectual</u> <u>Property</u> <u>Information</u>**

Information generated in our business is a valuable asset. Protecting this information plays an important role in our growth and ability to compete. Such information includes business and research plans; objectives and strategies; trade secrets; unpublished financial information; salary and benefits data; lender and other business partner lists. Employees who have access to our intellectual property information are obligated to safeguard it from unauthorized access and:

• not disclose this information to persons outside of the Company;

• not use this information for personal benefit or the benefit of persons outside of the Company; and

• not share this information with other employees except on a legitimate "need to know" basis.

**<u>Internet and E-Mail Policy</u>**

We provide an e-mail system and internet access to employees to help them do their work. You may use the e-mail system and the internet only for legitimate business purposes in the course of your duties. Incidental and occasional personal use is permitted, but never for personal gain or any improper use. Employees are prohibited from using unapproved messaging applications, such as WeChat, WhatsApp, other video conferencing messaging applications (Zoom, etc.), to transmit

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substantive business-related communications. Employees may not use instant messages, other than Microsoft Teams, for business-related purposes.

**<u>Reporting</u> <u>Violations</u> <u>and</u> <u>Complaint</u> <u>Handling</u>**

You are responsible for compliance with the rules, standards and principles described in this Code. In addition, you should be alert to possible violations of the Code by the Company's or the Investment Adviser's employees, officers and directors, and you are expected to report a violation promptly. Normally, reports should be made to one's immediate supervisor. Under some circumstances, it may be impractical, or you may feel uncomfortable raising a matter with your supervisor. In those instances, you are encouraged to contact our CCO who will investigate and report the matter to our Chief Executive Officer and/or Board of Directors, as the circumstance dictates. You will also be expected to cooperate in an investigation of a violation.

There will be no reprisal, retaliation or adverse action taken against any employee who, in good faith, reports or assists in the investigation of, a violation or suspected violation of this Code, or who makes an inquiry about the appropriateness of an anticipated or actual course of action.

**<u>Sanctions</u> <u>for</u> <u>Code</u> <u>Violations</u>**

All violations of the Code will result in appropriate corrective action, up to and including dismissal. If the violation involves potentially criminal activity, the individual or individuals in question will be reported, as warranted, to the appropriate authorities.

**<u>Application/Waivers</u>**

All the trustees or directors, officers and employees of the Company and the Investment Adviser are subject to this Code.

Any amendment or waiver of the Code for an executive officer or member of our Board of Directors must be made by our Board of Directors and disclosed on a Form 8-K filed with the SEC within four business days following such amendment or waiver.

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**APPENDIX A**

**Whistleblower Protection Policy**

It is the policy of Lafayette Square USA, Inc. and its affiliates ("**us**", "**we**", or the "**Company**") that our operations are conducted according to the highest standard of integrity. The Company requires its officers, directors, employees, and service providers to observe high standards of business and personal ethics in the conduct of their duties and responsibilities. As employees and representatives of the Company, we must practice honesty and integrity in fulfilling our responsibilities and comply with all applicable laws and regulations.

Additionally, as Lafayette Square USA, Inc. has elected to be regulated as a business development company ("**BDC**") under the Investment Company Act of 1940, Section 806 of the Sarbanes-Oxley Act of 2002 (the "**SOX Act**") is applicable to the Company. The SOX Act requires us to maintain "Whistleblower Policies" and establish procedures for the handling of complaints regarding accounting, internal accounting controls or auditing matters; including the confidential, anonymous submission by specified persons of concerns regarding questionable accounting or auditing matters ("**Suspected Improper Activities**").

In accordance with these requirements, we maintain this Whistleblower Protection Policy (the "**Policy**") affirming that the Company will not retaliate, and prohibits retaliation, against any individual ("Reporting Person") directly or indirectly, for reporting a good-faith concern or complaint or for participating in the investigation of a complaint. This protection applies to all officers and regular full-time, part-time, and temporary employees of the Company and employees of specified services providers engaged by the Company who provide management, administrative, custodial, accounting, auditing and other services to the Company ("**Applicable Service Providers**")

Suspected Improper Activities by the Company and its officers, employees, or Applicable Service Providers must be reported immediately in accordance with this Policy and are expected and encouraged to report incidents of alleged improper discharge, intimidation, or discrimination as soon as possible.

**Improper Activities** 

Improper Activities covered by this Policy include the following:

• fraud or deliberate error in the preparation, evaluation, review or audit of any financial statement of the Company;

• fraud or deliberate error in the recording and maintaining of financial records of the Company;

• deficiencies in, or non-compliance with, the Company's internal accounting controls;

• misrepresentation or false statement to or by a senior officer or accountant regarding a matter contained in the financial records, financial reports or audit reports of the Company;

• deviation from full and fair reporting of the Company's financial situation; and

• the retaliation, directly or indirectly, or encouragement of others to do so, against anyone who reports a violation of this Policy.

**Reporting Allegations of Suspected Improper Activities**

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***Reporting to Management*** Reporting of Suspected Improper Activities may be made either in person or via written correspondence to a direct supervisor. If a Reporting Person feels that their reports are not being taken seriously, or if they do not feel comfortable reporting the suspected incident to a supervisor, they must escalate the matter to senior management, including the office of the Chief Executive Officer, Chief Financial Officer, or CCO of the Company.

***Reporting to the Company's Chief Compliance Officer*** In addition to reporting in person or by written correspondence, a Reporting Person may report Suspected Improper Activities to the Company's CCO. Reporting may be made in an anonymous manner. Correspondence may be sent to: P.O. Box 25250, PMB 13941, Miami, FL, 33102-5250, Attn: Chief Compliance Officer

***Reporting to the Audit Committee*** In addition to reporting to the Company's management and CCO, a Reporting Person may report Suspected Improper Activities to the Chairperson of the Audit Committee. Reporting may be made in an anonymous manner. Correspondence may be sent to: COMPLY, Inc., Attn: Jamila Mayfield - Chairperson of Lafayette Square BDC's Audit Committee, 136 Madison Avenue, 6th Floor, New York, NY 10016.**Roles, Rights and Responsibilities of Reporting Persons**

A person or entity making a protected communication or disclosure is commonly referred to as a whistleblower ("**Whistleblower**"). The Whistleblower's role is as a reporting party. Such person or entity is not an investigator or finder of fact and only participates in investigations when requested. Whistleblowers have the role of providing initial information related to a reasonable belief that a Suspected Improper Activity has occurred. However, the intentional filing of a false report, whether orally or in writing, is itself a Suspected Improper Activity upon which the Company has the right to act.

The Company expects Whistleblowers to be candid and set forth all known information regarding reported allegations to investigators. Persons making a report of Suspected Improper Activities may be asked to be interviewed by Company investigators.

Anonymous Whistleblowers are expected to provide sufficient corroborating evidence to justify the commencement of an investigation. Unspecified wrongdoing or broad allegations without verifiable evidentiary support will not cause an investigation to be undertaken.

Confidentiality of the identity of Whistleblowers will be maintained to the extent possible within the legitimate needs of law and the investigation. If the Whistleblower discloses his/her identity beyond the person to whom the Suspected Improper Activity is reported, the Company will no longer be obligated to maintain such confidence.

A Whistleblower's right to protection from retaliation does not extend immunity for any complicity in the matters that are the subject of the allegations or an ensuing investigation.

Whistleblowers have a right to be informed of the outcome of their protected disclosure unless there exist overriding legal or public interest reasons not to do so.

**This Document is Not a Contract**

This Policy does not constitute a contract of any kind, nor does it limit the Company's right to take disciplinary action in other circumstances. Employment at the Company is "at will" and may be

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terminated at any time by the Company or the employee, with or without any previous notice, unless applicable law or a formal written agreement between the Company and the employee provides otherwise.

**Available Assistance**

It is essential that all officers and employees understand this Policy and prevent conduct that could bring the Company's integrity into question. Since many of the issues that arise under this Policy may involve interpretive questions, the Company's CCO has been entrusted with providing guidance and answering day-to-day questions on this Policy.

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September 23, 2025

## Exhibit 21.1

**<u>List of Subsidiaries</u>**

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| | |
|:---|:---|
| **Name** | **State of Organization** |
| Lafayette Square SBIC GP, LLC | Delaware |
| Lafayette Square SBIC, LP | Delaware |
| Lafayette Square SSBIC GP, LLC | Delaware |
| Lafayette Square SSBIC, LP | Delaware |
| LS BDC Holdings, LLC | Delaware |
| LS SBIC Holdings, LLC | Delaware |

---

## Exhibit 31.1

**Exhibit 31.1**

**Certification of Chief Executive Officer**

**Of Periodic Report Pursuant to Rule 13a-14(a) and 15d-14(a)** 

I, Damien Dwin, Chief Executive Officer, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;I have reviewed this Annual Report on Form 10-K of Lafayette Square USA, Inc. (the "Registrant");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. &nbsp;&nbsp;&nbsp;&nbsp;The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: March 25, 2026 | By: | /s/ Damien Dwin |
|  |  | Damien Dwin |
|  |  | President and Chief Executive Officer |
|  |  | (Principal Executive Officer) |

---

## Exhibit 31.2

**Exhibit 31.2**

**Certification of Chief Financial Officer**

**Of Periodic Report Pursuant to Rule 13a-14(a) and 15d-14(a)** 

I, Seren Tahiroglu, Chief Financial Officer, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;I have reviewed this Annual Report on Form 10-K of Lafayette Square USA, Inc. (the "Registrant");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. &nbsp;&nbsp;&nbsp;&nbsp;The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: March 25, 2026 | By: | /s/ Seren Tahiroglu |
|  |  | Seren Tahiroglu |
|  |  | Chief Financial Officer |
|  |  | (Principal Financial Officer) |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350**

**AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the accompanying Annual Report of Lafayette Square USA, Inc. (the "Company") on Form 10-K for the year ended December 31, 2025 (the "Report"), I, Damien Dwin, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | | |
|:---|:---|:---|
| Date: March 25, 2026 | By: | /s/ Damien Dwin |
|  |  | Damien Dwin |
|  |  | President and Chief Executive Officer |
|  |  | (Principal Executive Officer) |

---

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350**

**AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the accompanying Annual Report of Lafayette Square USA, Inc. (the "Company") on Form 10-K for the year ended December 31, 2025 (the "Report"), I, Seren Tahiroglu, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | | |
|:---|:---|:---|
| Date: March 25, 2026 | By: | /s/ Seren Tahiroglu |
|  |  | Seren Tahiroglu |
|  |  | Chief Financial Officer |
|  |  | (Principal Financial Officer) |

---

<br>