ThZeal - The Zeal

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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐

No ☒

As of August 1, 2025 the Registrant had 24,494,793 shares of common stock, $0.001 par value per share, outstanding.

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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;

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

•United States 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;

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

•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;

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•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 or meet our goals, including our 2030 Goals (as defined herein);

•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 convince our portfolio companies to use our services platform, Worker Solutions®;

•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, and 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 of the U.S. Securities Exchange Act of 1934

Act, as amended (the “Exchange Act”).

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Lafayette Square USA, Inc.

Consolidated Statements of Assets and Liabilities

(dollar amounts in thousands, except per share data or otherwise noted)


	June 30, 2025	December 31, 2024
	(unaudited)
Assets
Investments, at fair value:
Non-controlled/non-affiliated investments at fair value (amortized cost of $701,216 and $522,945 as of June 30, 2025 and December 31, 2024, respectively)	$701,553	$522,935
Non-controlled/affiliated investments at fair value (amortized cost of $19,803 and $29,349 as of June 30, 2025 and December 31, 2024, respectively)	22,078	29,583
Controlled/affiliated investments at fair value (amortized cost of $8,584 and $4,569 as of June 30, 2025 and December 31, 2024, respectively)	8,584	4,569
Cash and cash equivalents	119,319	202,452
Deferred financing costs	9,592	8,575
Interest receivable	3,653	1,848
Other assets	2,327	329
Due from affiliate	438	260
Total assets	$867,544	$770,551

Liabilities
Secured borrowings (see Note 5)	$254,482	$208,232
SBA-guaranteed debentures (see Note 5)	230,000	192,505
Distributions payable	8,503	7,853
Interest and financing payable	4,686	3,044
Incentive fee payable (see Note 6)	1,620	1,578
Management fee payable (see Note 6)	1,585	1,375
Deferred revenue payable	1,505	2,517
Accounts payable and accrued expenses	760	649
Due to affiliate	744	221
Income tax payable	564	171
Total liabilities	504,449	418,145
Commitments and Contingencies (See Note 7)

Net assets
Preferred stock, par value $0.001 per share (50,000,000 shares authorized, 0 shares issued and outstanding as of June 30, 2025 and December 31, 2024)	—	—
Common stock, par value $0.001 per share (450,000,000 shares authorized, 24,293,039 and 23,797,438 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively)	24	24
Paid-in capital in excess of par	358,514	351,181
Distributable earnings (losses)	4,557	1,201
Total net assets	363,095	352,406
Total liabilities and net assets	$867,544	$770,551

Net asset value per common share	$14.95	$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 three months ended June 30, 2025	For the three months ended June 30, 2024	For the six months ended June 30, 2025	For the six months ended June 30, 2024
	(unaudited)	(unaudited)	(unaudited)	(unaudited)
Investment Income:
Interest income from non-controlled/non-affiliated investments:
Cash	$19,775	$10,766	$36,278	$19,559
Fee income	359	274	1,086	487
Interest income from non-controlled/affiliated investments:
Cash	69	767	716	1,590
Fee income	—	66	—	66
Interest from cash and cash equivalents	1,034	817	2,472	1,753
Total investment income	21,237	12,690	40,552	23,455

Expenses:
Interest and financing expenses (see Note 5)	$7,254	$1,625	$13,269	$2,547
Incentive fee (see Note 6)	1,620	1,213	3,134	2,382
Management fee (see Note 6)	1,585	872	3,063	1,614
Administrative services fee (see Note 6)	450	500	900	1,006
General and administrative expenses	590	773	840	1,103
Income tax expense	41	—	670	—
Professional fees	350	746	659	1,123
Directors' fees	80	80	160	160
Organizational costs (See Note 2)	75	—	75	—
Total expenses	12,045	5,809	22,770	9,935
Net investment income (loss)	9,192	6,881	17,782	13,520

Net realized and unrealized gains (losses) on investment transactions:
Net realized gains (losses) on investments:
Net realized gains (losses) on investments in non- controlled/non-affiliated investments	24	—	82	—
Total net realized gains (losses) on investments	24	—	82	—
Net change in unrealized gains (losses) on investments:
Net change in unrealized gains (losses) on investments in non-controlled/non-affiliated investments	(552)	(390)	347	740
Net change in unrealized gains (losses) on investments in non-controlled/affiliated investments	441	(10)	2,041	89
Total net change in unrealized gains (losses) on investments	(111)	(400)	2,388	829
Net increase (decrease) in net assets resulting from operations	$9,105	$6,481	$20,252	$14,349
Weighted average common shares outstanding	24,217,260	22,178,576	24,098,036	21,880,114

Lafayette Square USA, Inc.

Consolidated Statements of Changes in Net Assets

(dollar amounts in thousands, except per share data or otherwise noted)


	Common Stock
	Shares	Par Amount	Paid in Capital Excess of Par	Distributable Earnings (Losses)	Total net assets
Balance at March 31, 2024	21,584,341	$22	$318,883	$2,933	$321,838
Capital transactions:
Issuance of common stock	733,093	1	10,995	—	10,996
Reinvestment of stockholder distributions	140,902	—	1,794	—	1,794
Net increase in net assets from capital transactions	873,995	1	12,789	—	12,790
Net increase (decrease) in net assets resulting from operations:
Net investment income (loss)	—	—	—	6,881	6,881
Net change in unrealized gain (losses)	—	—	—	(400)	(400)
Total increase (decrease) in net assets resulting from operations	—	—	—	6,481	6,481
Distributions to stockholders from:
Distributable earnings	—	—	—	(6,738)	(6,738)
Total distributions to stockholders	—	—	—	(6,738)	(6,738)
Total increase (decrease) for the three months ended June 30, 2024	873,995	1	12,789	(257)	12,533
Balance, June 30, 2024	22,458,336	$23	$331,672	$2,676	$334,371


	Common Stock
	Shares	Par Amount	Paid in Capital Excess of Par	Distributable Earnings (Losses)	Total net assets
Balance at March 31, 2025	24,096,013	$24	$355,594	$3,955	$359,573
Capital transactions:
Issuance of common stock	—	—	—	—	—
Reinvestment of stockholder distributions	197,026	—	2,920	—	2,920
Net increase in net assets from capital transactions	197,026	—	2,920	—	2,920
Net increase (decrease) in net assets resulting from operations:
Net investment income (loss)	—	—	—	9,192	9,192
Net realized gain (loss)	—	—	—	24	24
Net change in unrealized gain (losses)	—	—	—	(111)	(111)
Total increase (decrease) in net assets resulting from operations	—	—	—	9,105	9,105
Distributions to stockholders from:
Distributable earnings	—	—	—	(8,503)	(8,503)
Total distributions to stockholders	—	—	—	(8,503)	(8,503)
Total increase (decrease) for the three months ended June 30, 2025	197,026	—	2,920	602	3,522
Balance, June 30, 2025	24,293,039	$24	$358,514	$4,557	$363,095

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Lafayette Square USA, Inc.

Consolidated Statements of Changes in Net Assets (continued)

(dollar amounts in thousands, except per share data or otherwise noted)


	Common Stock
	Shares	Par Amount*	Paid in Capital Excess of Par	Distributable Earnings (Losses)	Total net assets
Balance, December 31, 2023	21,502,768	$22	$317,677	$1,540	$319,239
Capital transactions:
Issuance of common stock	733,093	1	10,995	—	10,996
Reinvestment of stockholder distributions	222,475	—	3,000	—	3,000
Net increase in net assets from capital transactions	955,568	1	13,995	—	13,996
Net increase (decrease) in net assets resulting from operations:
Net investment income (loss)	—	—	—	13,520	13,520
Net change in unrealized gain (losses)	—	—	—	829	829
Total increase (decrease) in net assets resulting from operations	—	—	—	14,349	14,349
Distributions to stockholders from:
Distributable earnings	—	—	—	(13,213)	(13,213)
Total distributions to stockholders	—	—	—	(13,213)	(13,213)
Total increase (decrease) for the six months ended June 30, 2024	955,568	1	13,995	1,136	15,132
Balance, June 30, 2024	22,458,336	$23	$331,672	$2,676	$334,371

	Common Stock
	Shares	Par Amount	Paid in Capital Excess of Par	Distributable Earnings (Losses)	Total net assets
Balance at December 31, 2024	23,797,438	$24	$351,181	$1,201	$352,406
Capital transactions:
Issuance of common stock	116,132	—	1,721	—	1,721
Reinvestment of stockholder distributions	379,469	—	5,612	—	5,612
Net increase in net assets from capital transactions	495,601	—	7,333	—	7,333
Net increase (decrease) in net assets resulting from operations:
Net investment income (loss)	—	—	—	17,782	17,782
Net realized gain (loss)	—	—	—	82	82
Net change in unrealized gain (losses)	—	—	—	2,388	2,388
Total increase (decrease) in net assets resulting from operations	—	—	—	20,252	20,252
Distributions to stockholders from:
Distributable earnings	—	—	—	(16,896)	(16,896)
Total distributions to stockholders	—	—	—	(16,896)	(16,896)
Total increase (decrease) for the six months ended June 30, 2025	495,601	—	7,333	3,356	10,689
Balance, June 30, 2025	24,293,039	$24	$358,514	$4,557	$363,095

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 six months ended June 30, 2025	For the six months ended June 30, 2024
	(unaudited)	(unaudited)
Cash flows from operating activities
Net increase (decrease) in net assets resulting from operations	$20,252	$14,349
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Net realized (gain) loss on investments	(82)	—
Net change in unrealized (gain) loss on investments	(2,388)	(829)
Purchases of investments	(285,770)	(156,252)
Net accretion of discount on investments	(1,132)	(679)
Proceeds from sales and repayments of investments	114,244	8,988
Amortization of deferred financing costs	772	331
Changes in operating assets and liabilities:
Interest receivable	(1,805)	(863)
Due from affiliate	(178)	—
Other assets	(1,998)	(830)
Deferred revenue payable	(1,012)	5,411
Accounts payable and accrued expenses	111	(382)
Management fee payable	210	267
Incentive fee payable	42	647
Administrative services fee payable	—	(885)
Interest and financing payable	1,642	592
Income tax payable	393	—
Due to affiliate	523	(94)
Net cash provided by (used in) operating activities	(156,176)	(130,229)

Cash flows from financing activities
Proceeds from issuance of shares of common stock	1,721	10,996
Distributions paid	(10,634)	(7,412)
Proceeds from secured borrowings	118,750	113,400
Repayments of secured borrowings	(72,500)	(65,900)
Proceeds from reverse repurchase agreement	—	20,355
Proceeds from SBA-guaranteed debentures	37,495	51,500
Deferred financing costs paid	(1,789)	(3,129)
Net cash provided by (used in) financing activities	73,043	119,810

Net increase (decrease) in cash and cash equivalents	(83,133)	(10,419)
Cash and cash equivalents at beginning of period	202,452	109,771
Cash and cash equivalents at end of period	$119,319	$99,352

Supplemental information:
Cash paid for interest	$10,790	$1,641
Shares issued from dividend reinvestment plan	$5,612	$3,000
Accrual for deferred financing costs	$9,592	$3,892

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

Lafayette Square USA, Inc.

Consolidated Schedule of Investments

June 30, 2025


Company (1)(3)(11)(13)	Footnotes	Investment Type	Reference Rate and Spread		Interest Rate	Acquisition Date	Maturity Date	Par Amount/ Shares (4)	Amortized Cost	Fair Value	Percentage of Net Assets (5)
Non-controlled/non-affiliated investments
Aerospace & Defense
C Speed LLC	(6)(7)(8)(12)	First lien senior secured loan	S+	6.00%	—%	10/1/2024	10/1/2029	$—	$(42)	$—	—%
C Speed LLC	(6)(7)(12)	First lien senior secured loan	S+	6.00%	10.30%	10/1/2024	10/1/2029	15,185	15,062	15,185	4.2%
									15,020	15,185	4.2%
Application Software
CentralBDC Enterprises, LLC	(6)(7)(8)(12)	First lien senior secured loan	S+	5.25%	9.55%	6/25/2024	6/11/2029	1,811	1,798	1,811	0.5%
CentralBDC Enterprises, LLC	(6)(7)(12)	First lien senior secured loan	S+	5.25%	9.55%	6/25/2024	6/11/2029	16,674	16,588	16,674	4.6%
									18,386	18,485	5.1%
Business Support Services
Flatworld Intermediate Corporation	(6)(7)(8)	First lien senior secured loan	S+	5.50%	—%	3/25/2025	3/25/2030	—	(71)	—	—%
Flatworld Intermediate Corporation	(6)(7)	First lien senior secured loan	S+	5.50%	9.80%	3/25/2025	3/25/2030	29,925	29,607	29,925	8.1%
									29,536	29,925	8.1%
Commercial Services & Supplies
Rotolo Consultants, Inc.	(6)(7)	First lien senior secured loan	S+	5.50%	9.80%	1/31/2025	1/31/2031	5,272	5,253	5,272	1.5%
Rotolo Consultants, Inc.	(6)(7)(8)	First lien senior secured loan	S+	5.50%	9.80%	1/31/2025	1/31/2031	5,783	5,728	5,783	1.6%
Rotolo Consultants, Inc.	(6)(7)	First lien senior secured loan	S+	5.50%	9.80%	1/31/2025	1/31/2031	20,181	20,159	20,181	5.6%
TEC Services LLC	(6)(7)(12)	First lien senior secured loan	S+	5.50%	9.90%	1/09/2025	12/31/2029	9,950	9,950	9,950	2.7%
Zero Waste Recycling LLC	(6)(7)	First lien senior secured loan	S+	6.45%	11.04%	6/29/2022	5/15/2026	4,952	5,051	4,952	1.4%
Zero Waste Recycling LLC	(6)(7)	First lien senior secured loan	S+	6.45%	11.04%	6/29/2022	5/15/2026	13,125	13,085	13,125	3.6%
ZWR Holdings, Inc.		Subordinated debt	14.00% (Inc. 10.00% PIK)		14.00%	8/16/2021	2/16/2027	1,808	1,808	1,808	0.5%
ZWR Holdings, Inc.		Warrants				8/16/2021		24,953	—	—	—%
									61,034	61,071	16.9%
Construction & Engineering
Synergi, LLC	(6)(7)	First lien senior secured loan	S+	7.45%	12.01%	12/19/2022	12/17/2027	16,324	16,244	16,324	4.5%
Synergi, LLC	(6)(7)(8)	First lien senior secured loan	S+	7.45%	12.01%	12/19/2022	12/17/2027	1,125	1,106	1,125	0.3%
									17,350	17,449	4.8%
Diversified Financial Services
Core Capital Partners II-S LP	(6)(7)(8)	First lien senior secured loan	S+	7.50%	11.80%	10/11/2024	10/11/2027	2,500	2,409	2,500	0.7%
Core Capital Partners II-S LP	(6)(7)	First lien senior secured loan	S+	7.50%	11.80%	10/11/2024	10/11/2027	28,000	27,787	28,000	7.6%
									30,196	30,500	8.3%
Diversified Telecommunication Services
Johnsoncomm LLC	(6)(7)(15)	First lien senior secured loan	S+	6.90%	11.20%	1/31/2025	1/31/2030	18,000	17,846	17,846	4.9%
									17,846	17,846	4.9%
Electrical Equipment
Electro Technical Industries, LLC	(6)(7)(8)(12)	First lien senior secured loan	S+	6.00%	—%	3/31/2025	3/31/2030	—	(16)	—	—%

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Lafayette Square USA, Inc.

Consolidated Schedule of Investments (continued)

June 30, 2025


Company (1)(3)(11)(13)	Footnotes	Investment Type	Reference Rate and Spread		Interest Rate	Acquisition Date	Maturity Date	Par Amount/ Shares (4)	Amortized Cost	Fair Value	Percentage of Net Assets (5)
Electro Technical Industries, LLC	(6)(7)(12)	First lien senior secured loan	S+	6.00%	10.33%	3/31/2025	3/31/2030	12,698	12,607	12,607	3.5%
									12,591	12,607	3.5%
Food Products
Capital City LLC	(6)(7)(8)(15)	First lien senior secured loan	S+	8.00%	12.30%	9/20/2024	9/20/2029	643	623	637	0.2%
Capital City LLC	(6)(7)(15)	First lien senior secured loan	S+	8.00%	12.30%	9/20/2024	9/20/2029	496	492	492	0.1%
									1,115	1,129	0.3%
Food Service Distributor
Genuine Food Lab LLC	(6)(7)(8)(12)	First lien senior secured loan	S+	8.25%	—%	6/06/2025	6/06/2030	—	(25)	—	—%
Genuine Food Lab LLC	(6)(7)(12)	First lien senior secured loan	S+	8.25%	12.55%	6/06/2025	6/06/2030	10,000	9,902	9,902	2.7%
									9,877	9,902	2.7%
Gas Utilities
TCFIII Owl Buyer LLC	(6)(7)	First lien senior secured loan	S+	5.50%	9.94%	1/31/2023	4/17/2026	10,730	10,702	10,730	3.0%
									10,702	10,730	3.0
Health Care Equipment & Services
MSPB MSO, LLC	(6)(7)	First lien senior secured loan	S+	6.50%	10.80%	11/10/2023	11/10/2028	9,863	9,838	9,839	2.7%
MSPB MSO, LLC	(6)(7)(8)	First lien senior secured loan	S+	6.50%	10.80%	11/10/2023	11/10/2028	1,695	1,638	1,691	0.5%
MSPB MSO, LLC	(6)(7)	First lien senior secured loan	S+	6.50%	10.80%	11/10/2023	11/10/2028	8,391	8,328	8,371	2.3%
									19,804	19,901	5.5%
Health Care Providers & Services
Salt Dental Collective LLC	(6)(7)	First lien senior secured loan	S+	6.75%	11.18%	3/20/2023	2/15/2028	17,677	17,539	17,677	4.9%
									17,539	17,677	4.9%
Hotels, Restaurants & Leisure
Aetius Holdings, LLC	(6)(7)	First lien senior secured loan	S+	7.00%	11.55%	1/25/2023	7/31/2025	979	979	979	0.3%
LC Hospitality, LLC	(6)(7)(12)	First lien senior secured loan	S+	5.45%	9.75%	7/25/2024	7/25/2031	10,060	9,985	10,060	2.8%
Liberty Lenwich Holdings LLC	(6)(7)(8)(15)	First lien senior secured loan	S+	5.75%	—%	2/28/2025	2/28/2030	—	(14)	—	—%
Liberty Lenwich Holdings LLC	(6)(7)(15)	First lien senior secured loan	S+	5.75%	10.03%	2/28/2025	2/28/2030	14,514	14,376	14,514	4.0%
Liberty Lenwich Holdings LLC	(6)(7)(8)(15)	First lien senior secured loan	S+	5.75%	—%	2/28/2025	2/28/2030	—	(28)	—	—%
									25,298	25,553	7.1%
Independent Power & Renewable
National Carbon Technologies – California, LLC	(8)	First lien senior secured loan		12.25%	12.25%	5/31/2024	5/31/2029	14,000	13,999	14,000	3.9%
									13,999	14,000	3.9%
Electric Utilities
truCurrent LLC	(6)(7)(8)	First lien senior secured loan	S+	7.20%	11.50%	2/12/2024	2/12/2029	10,000	9,912	10,000	2.8%
truCurrent LLC	(6)(7)	First lien senior secured loan	S+	7.20%	11.50%	2/12/2024	2/12/2029	12,500	12,408	12,500	3.4%
									22,320	22,500	6.2%
Insurance
Arrowhead Capital Group LLC		Equity				2/28/2025		15,000,000	15,000	15,000	4.1%
									15,000	15,000	4.1%

Table of Contents

Lafayette Square USA, Inc.

Consolidated Schedule of Investments (continued)

June 30, 2025


Company (1)(3)(11)(13)	Footnotes	Investment Type	Reference Rate and Spread		Interest Rate	Acquisition Date	Maturity Date	Par Amount/ Shares (4)	Amortized Cost	Fair Value	Percentage of Net Assets (5)
IT Services
DRS Imaging Services LLC	(6)(7)(8)(12)	First lien senior secured loan	S+	6.75%	—%	3/28/2025	3/28/2030	—	(30)	—	—%
DRS Imaging Services LLC	(6)(7)(8)(12)	First lien senior secured loan	S+	6.75%	—%	3/28/2025	3/28/2030	—	(66)	—	—%
DRS Imaging Services LLC	(6)(7)(12)	First lien senior secured loan	S+	6.75%	11.05%	3/28/2025	3/28/2030	4,637	4,559	4,559	1.3%
Xpect Solutions, LLC	(6)(7)(8)(12)	First lien senior secured loan	S+	5.75%	10.05%	10/7/2024	10/7/2029	7,463	7,425	7,463	2.1%
Xpect Solutions, LLC	(6)(7)(8)(12)	First lien senior secured loan	S+	5.75%	—%	10/7/2024	10/7/2029	—	(17)	—	—%
Xpect Solutions, LLC	(6)(7)(12)	First lien senior secured loan	S+	5.75%	10.05%	10/7/2024	10/7/2029	22,331	22,143	22,331	6.2%
									34,014	34,353	9.6%
Interactive Media & Services
Dance Nation Holdings LLC	(6)(7)	First lien senior secured loan	S+	6.95%	11.51%	8/24/2023	8/24/2028	31,741	31,542	31,741	8.6%
Dance Nation Holdings LLC	(6)(7)(8)	First lien senior secured loan	S+	6.95%	—%	8/24/2023	8/24/2028	—	(28)	—	—%
Dance Nation Topco LLC		Preferred Equity				8/24/2023		1,652,200	1,652	2,018	0.6%
									33,166	33,759	9.2%
Media
Direct Digital Holdings, LLC	(6)(7)	First lien senior secured loan	S+	8.50%	12.98%	6/29/2022	12/3/2026	7,596	7,582	7,141	2.0%
Direct Digital Holdings, LLC	(6)(7)	First lien senior secured loan	S+	8.50%	12.98%	6/29/2022	12/3/2026	20,766	20,582	19,520	5.4%
Direct Digital Holdings, LLC	(6)(7)	First lien senior secured loan	S+	8.50%	12.98%	6/29/2022	12/3/2026	6,000	6,000	5,640	1.6%
									34,164	32,301	9.0%
Pharmaceuticals
Med Learning Group, LLC	(6)(7)	First lien senior secured loan	S+	6.25%	10.55%	3/26/2024	12/30/2027	15,491	15,383	15,492	4.3%
Med Learning Group, LLC	(6)(7)(8)	First lien senior secured loan	S+	6.25%	10.55%	3/26/2024	12/30/2027	852	838	852	0.2%
									16,221	16,344	4.5%
Professional Services
M&S Acquisition Corporation	(6)(7)(12)	First lien senior secured loan	S+	6.50%	11.06%	12/19/2023	12/19/2028	42,003	41,712	42,003	11.5%
M&S Acquisition Corporation	(6)(7)(12)	First lien senior secured loan	S+	6.50%	11.06%	3/6/2025	12/19/2028	1,413	1,400	1,413	0.4%
Oakwell Holding LLC	(15)	Convertible Note		10.00%	10.00%	12/23/2024	12/31/2028	1,500	1,500	1,500	0.4%
ZRG Partners LLC	(6)(7)(8)	First lien senior secured loan	S+	6.00%	10.24%	10/21/2024	6/14/2029	3,527	3,500	3,527	1.0%
ZRG Partners LLC	(6)(7)(8)	First lien senior secured loan	P+	5.00%	12.50%	10/21/2024	6/14/2029	1,263	1,246	1,263	0.3%
ZRG Partners LLC	(6)(7)	First lien senior secured loan	S+	6.00%	10.31%	10/21/2024	6/14/2029	11,337	11,267	11,337	3.1%
									60,625	61,043	16.7%
Real Estate Management & Development
Standard Real Estate Investments LP	(6)(7)	First lien senior secured loan	S+	8.70%	13.26%	10/6/2023	10/6/2026	2,000	1,991	1,988	0.5%
Standard Real Estate Investments LP	(6)(7)	First lien senior secured loan	S+	8.70%	13.26%	10/6/2023	10/6/2026	3,000	2,985	2,982	0.8%
									4,976	4,970	1.3%
Road & Rail
160 Driving Academy (a/k/a Rock Gate Capital, LLC)	(6)(7)(12)	First lien senior secured loan	S+	6.75%	11.05%	5/31/2024	5/30/2029	42,200	41,870	40,090	11.0%
160 Driving Academy (a/k/a Rock Gate Capital, LLC)	(12)	Warrants				5/31/2024		166,108	—	—	—%

Table of Contents

Lafayette Square USA, Inc.

Consolidated Schedule of Investments (continued)

June 30, 2025


Company (1)(3)(11)(13)	Footnotes	Investment Type	Reference Rate and Spread		Interest Rate	Acquisition Date	Maturity Date	Par Amount/ Shares (4)	Amortized Cost	Fair Value	Percentage of Net Assets (5)
									41,870	40,090	11.0%
Specialized Consumer Services
Best Friends Pet Care Holdings Inc.	(6)(7)(12)	First lien senior secured loan	S+	6.95%	11.51%	12/21/2023	6/21/2028	24,509	24,317	24,509	6.8%
Best Friends Pet Care Holdings Inc.	(6)(7)(12)	First lien senior secured loan	S+	6.95%	11.51%	12/21/2023	6/21/2028	15,577	15,449	15,577	4.3%
Soapy Joe's Midco OC Holdings LLC	(6)(7)(8)(12)	First lien senior secured loan	S+	6.60%	—%	4/22/2025	4/22/2030	—	—	—	—%
Soapy Joe's Midco OC Holdings LLC	(6)(7)(12)	First lien senior secured loan	S+	6.60%	10.93%	4/22/2025	4/22/2030	15,053	14,979	14,979	4.1%
									54,745	55,065	15.2%
Trading Companies & Distributors
Ickler Electric Corporation	(6)(7)(12)	First lien senior secured loan	S+	6.50%	10.80%	4/17/2025	4/17/2030	23,500	23,274	23,274	6.4%
Ickler Electric Corporation	(12)	Subordinated debt		12.00%	12.00%	4/17/2025	10/17/2030	1,500	1,485	1,485	0.4%
Ickler Electric Corporation	(12)	Warrants				4/17/2025		37,608	—	—	—%
									24,759	24,759	6.8%
Transportation Infrastructure
H.W. Lochner, Inc.	(6)(7)	First lien senior secured loan	S+	6.25%	10.68%	3/29/2023	7/2/2027	3,963	3,891	3,963	1.1%
H.W. Lochner, Inc.	(6)(7)	First lien senior secured loan	S+	6.25%	10.68%	1/31/2025	7/2/2027	3,659	3,659	3,659	1.0%
Trilon Group, LLC	(6)(7)	First lien senior secured loan	S+	4.75%	9.01%	3/24/2023	5/25/2029	4,719	4,717	4,719	1.3%
Trilon Group, LLC	(6)(7)	First lien senior secured loan	S+	4.75%	9.06%	3/24/2023	5/25/2029	1,012	1,012	1,012	0.3%
Trilon Group, LLC	(6)(7)(8)	First lien senior secured loan	S+	4.75%	9.05%	3/24/2023	5/25/2029	409	402	409	0.1%
Tyler Distribution Centers LLC	(6)(7)(8)(12)	First lien senior secured loan	S+	5.03%	9.33%	3/12/2025	3/12/2030	700	643	693	0.2%
Tyler Distribution Centers LLC	(6)(7)(12)	First lien senior secured loan	S+	5.03%	9.33%	3/12/2025	3/12/2030	32,000	31,691	31,690	8.7%
									46,015	46,145	12.7%
Water Utilities
Ironhorse Purchaser, LLC	(6)(7)(8)	First lien senior secured loan	S+	5.25%	—%	12/21/2023	9/30/2027	—	(77)	—	—%
Ironhorse Purchaser, LLC	(6)(7)	First lien senior secured loan	S+	5.25%	9.58%	12/21/2023	9/30/2027	9,846	9,726	9,846	2.7%
Puris LLC	(6)(7)(12)	First lien senior secured loan	S+	5.75%	10.07%	2/20/2025	6/28/2029	597	597	597	0.2%
Puris LLC	(6)(7)(12)	First lien senior secured loan	S+	5.75%	10.05%	6/28/2024	6/28/2029	2,821	2,802	2,821	0.8%
									13,048	13,264	3.7%
Total non-controlled/non-affiliated investments									701,216	701,553	193.2%
Non-controlled/affiliated investments (10)
Commercial Services & Supplies
IVM GK9 Holdings LLC		Equity				10/07/2022		14,969	4,881	6,856	1.9%
									4,881	6,856	1.9%
Diversified Consumer Services
3360 Frankford LLC	(17)	Equity				9/23/2024		2,458,671	2,459	2,459	0.7%
									2,459	2,459	0.7%
Hotels, Restaurants & Leisure
Liberty Top Holdings, LLC	(15)(18)	Equity				2/28/2025		3,000,000	3,000	3,300	0.9%
									3,000	3,300	0.9%

Table of Contents

Lafayette Square USA, Inc.

Consolidated Schedule of Investments (continued)

June 30, 2025


Company (1)(3)(11)(13)	Footnotes	Investment Type	Reference Rate and Spread	Interest Rate	Acquisition Date	Maturity Date	Par Amount/ Shares (4)	Amortized Cost	Fair Value	Percentage of Net Assets (5)
Real Estate Management & Development
NW1LS CO-INVEST LP	(8)	Equity			4/10/2025		100	9,463	9,463	2.6%
								9,463	9,463	2.6%
Total non-controlled/affiliated investments								19,803	22,078	6.1%
Controlled/affiliated investments (10)
Insurance
GELDO Inc.	(15)(19)	Equity			6/17/2025		3,857,032	3,000	3,000	0.8%
								3,000	3,000	0.8%
Professional Services
Worker Solutions LLC	(16)	Equity			12/30/2024		100	1,350	1,350	0.4%
								1,350	1,350	0.4%
Real Estate Management & Development
Neighborhood Grocery Catalyst Fund LLC	(2)(8)(14)	Equity			3/28/2024		4,234,000	4,234	4,234	1.2%
								4,234	4,234	1.2%
Total controlled/affiliated investments								8,584	8,584	2.4%

Total Portfolio Investments								$729,603	$732,215	201.7%


(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 June 30, 2025, non-qualifying assets represent 0.5% of the Company’s total assets. 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.
(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 $363,095 as of June 30, 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 June 30, 2025. As of June 30, 2025, the reference rates for our variable rate loans were the 180-day SOFR at 4.15%, 90-day SOFR at 4.29%, and 30-day SOFR at 4.32%.
(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 June 30, 2025:

Table of Contents

Lafayette Square USA, Inc.

Consolidated Schedule of Investments (continued)

June 30, 2025


Investments	Unused Fee Rate	Commitment Type	Commitment Expiration Date	Unfunded Commitment	Fair Value
First Lien Debt
C Speed LLC	0.50%	Revolver	10/01/2029	5,000	—
Capital City LLC	—%	Delayed Draw Term Loan	9/20/2029	2,500	(5)
CentralBDC Enterprises, LLC	0.50%	Revolver	6/11/2029	1,347	—
Core Capital Partners II-S LP	—%	Revolver	10/11/2027	9,500	—
Dance Nation Holdings LLC	0.50%	Revolver	8/24/2028	4,131	—
DRS Imaging Services LLC	0.50%	Delayed Draw Term Loan	3/28/2030	4,252	—
DRS Imaging Services LLC	0.50%	Revolver	3/28/2030	4,000	—
Electro Technical Industries, LLC	0.50%	Revolver	3/31/2030	2,222	—
Flatworld Intermediate Corporation	0.50%	Revolver	3/25/2030	7,500	—
Genuine Food Lab LLC	0.75%	Delayed Draw Term Loan	6/06/2030	5,000	—
Ironhorse Purchaser, LLC	1.00%	Delayed Draw Term Loan	9/30/2027	6,377	—
Liberty Lenwich Holdings LLC	0.50%	Revolver	2/28/2030	3,000	—
Liberty Lenwich Holdings LLC	0.50%	Delayed Draw Term Loan	2/28/2030	3,000	—
Ickler Electric Corporation	—%	Term Loan	4/17/2030	15,000	—
Med Learning Group LLC	1.00%	Delayed Draw Term Loan	12/30/2027	3,425	—
MSPB MSO, LLC	0.38%	Revolver	11/10/2028	6,781	(3)
Rotolo Consultants, Inc.	0.50%	Revolver	1/31/2031	10,217	—
Soapy Joe's Midco OC Holdings LLC	0.45%	Delayed Draw Term Loan	4/22/2030	5,000	—
Synergi, LLC	0.50%	Revolver	12/17/2027	2,625	—
TEC Services LLC	1.00%	Delayed Draw Term Loan	12/31/2029	3,000	—
TEC Services LLC	0.50%	Revolver	12/31/2029	2,000	—
Trilon Group, LLC	0.50%	Revolver	5/25/2029	506	—
truCurrent LLC	0.50%	Delayed Draw Term Loan	2/12/2029	15,000	—
Tyler Distribution Centers LLC	0.50%	Revolver	3/12/2030	5,300	(6)
Xpect Solutions, LLC	0.50%	Revolver	10/07/2029	2,500	—
Xpect Solutions, LLC	0.50%	Delayed Draw Term Loan	10/07/2029	2,000	—
ZRG Partners LLC	1.00%	Delayed Draw Term Loan	6/14/2029	2,492	—
ZRG Partners LLC	0.50%	Revolver	6/14/2029	1,263	—
Equity
Neighborhood Grocery Catalyst Fund LLC	—%	Equity	—	8,265	—
NW1LS CO-INVEST LP	—%	Equity	—	747	—
Worker Solutions LLC	—%	Equity	—	2,150	—
				$146,100	$(14)

Table of Contents

Lafayette Square USA, Inc.

Consolidated Schedule of Investments (continued)

June 30, 2025


(9)	Footnote is currently not in use.
(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 June 30, 2025, the Company’s non-controlled/affiliated investments and controlled/affiliated investments were as follows:


Non-controlled/affiliated investments	Fair Value as of December 31, 2024	Gross Additions	Gross Reductions	Change in Unrealized Gains (Losses)	Fair Value as of June 30, 2025	Investment Income
3360 Frankford LLC	$2,459	$—	$—	$—	$2,459	$—
GK9 Global Companies, LLC	22,124	115	(22,124)	(115)	—	647
IVM GK9 Holdings LLC	5,000	—	—	1,856	6,856	—
Liberty Top Holdings, LLC	—	3,000	—	300	3,300	69
NW1LS CO-INVEST LP	—	9,463	—	—	9,463	—
Non-controlled/affiliated investments	$29,583	$12,578	$(22,124)	$2,041	$22,078	$716


Controlled/affiliated investments	Fair Value as of December 31, 2024	Gross Additions	Gross Reductions	Change in Unrealized Gains (Losses)	Fair Value as of June 30, 2025	Investment Income
GELDO Inc.	$—	$3,000	$—	$—	$3,000	$—
Neighborhood Grocery Catalyst Fund LLC	4,219	562	(547)	—	4,234	—
Worker Solutions LLC	350	1,000	—	—	1,350	—
Controlled/affiliated investments	$4,569	$4,562	$(547)	$—	$8,584	$—


(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 66.40%% 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 30.00%% share in GELDO Inc.

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 Rate and Spread		Interest Rate	Acquisition Date	Maturity Date	Par Amount/ Shares (4)	Amortized Cost	Fair Value	Percentage of Net Assets (5)
Non-controlled/non-affiliated investments
Aerospace & Defense
C Speed LLC	(6)(7)(8)(12)	First lien senior secured loan	S+	6.00%	10.33%	10/1/2024	10/1/2029	$1,000	$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	15,262	15,117	15,117	4.3%
									16,069	16,108	4.6%
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	1,642	1,628	1,642	0.5%
CentralBDC Enterprises, LLC	(6)(7)(12)	First lien senior secured loan	S+	5.00%	9.33%	6/25/2024	6/11/2029	16,758	16,660	16,758	4.8%
									18,288	18,400	5.3%
Commercial Services & Supplies
Rotolo Consultants, Inc.	(6)(7)	First lien senior secured loan	S+	6.95%	11.73%	12/20/2022	1/15/2029	$20,282	$20,195	$20,282	5.8%
Zero Waste Recycling LLC	(6)(7)(8)	First lien senior secured loan	S+	6.45%	11.23%	6/29/2022	5/15/2026	4,597	4,664	4,597	1.3%
Zero Waste Recycling LLC	(6)(7)	First lien senior secured loan	S+	6.45%	11.04%	6/29/2022	5/15/2026	13,186	13,119	13,186	3.7%
ZWR Holdings, Inc.		Subordinated debt	14.00% (Inc. 10.00% PIK)		14.00%	8/16/2021	2/16/2027	1,738	1,738	1,712	0.5%
ZWR Holdings, Inc.		Warrants				8/16/2021		24,953	—	—	—%
									39,716	39,777	11.3%
Construction & Engineering
Synergi, LLC	(6)(7)	First lien senior secured loan	S+	7.50%	12.09%	12/19/2022	12/17/2027	17,561	17,449	17,451	5.0%
Synergi, LLC	(6)(7)(8)	First lien senior secured loan	S+	7.50%	—%	12/19/2022	12/17/2027	—	(22)	(23)	—%
									17,427	17,428	5.0%
Diversified Financial Services
Core Capital Partners II-S LP	(6)(7)(8)	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)	First lien senior secured loan	S+	7.50%	11.83%	10/11/2024	10/11/2027	28,000	27,733	27,733	7.9%
									28,388	28,492	8.1%
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
TCFIII Owl Buyer LLC	(6)(7)	First lien senior secured loan	S+	5.50%	9.96%	1/31/2023	4/17/2026	10,787	10,737	10,787	3.1%
TCFIII Owl Buyer LLC	(6)(7)	First lien senior secured loan	S+	5.50%	10.94%		4/17/2026	—	—	—	—%
									10,737	10,787	3.1
Health Care Equipment & Services
MSPB MSO, LLC	(6)(7)(8)	First lien senior secured loan	S+	5.75%	10.08%	11/10/2023	11/10/2028	9,863	9,758	9,863	2.8%
MSPB MSO, LLC	(6)(7)(8)	First lien senior secured loan	S+	5.75%	10.08%	11/10/2023	11/10/2028	1,695	1,629	1,695	0.5%
MSPB MSO, LLC	(6)(7)	First lien senior secured loan	S+	5.75%	10.08%	11/10/2023	11/10/2028	8,391	8,315	8,391	2.4%
									19,702	19,949	5.7%

Table of Contents

Lafayette Square USA, Inc.

Consolidated Schedule of Investments (continued)

December 31, 2024


Company (1)(2)(3)(11)(13)	Footnotes	Investment Type	Reference Rate and Spread		Interest Rate	Acquisition Date	Maturity Date	Par Amount/ Shares (4)	Amortized Cost	Fair Value	Percentage of Net Assets (5)
Health Care Providers & Services
Salt Dental Collective LLC	(6)(7)	First lien senior secured loan	S+	6.75%	11.21%	3/20/2023	2/15/2028	17,768	17,595	17,768	5.0%
									17,595	17,768	5.0%
Hotels, Restaurants & Leisure
Aetius Holdings, LLC	(6)(7)	First lien senior secured loan	S+	7.00%	11.59%	1/25/2023	3/31/2025	1,034	1,027	1,034	0.3%
LC Hospitality, LLC	(6)(7)(12)	First lien senior secured loan	S+	5.50%	9.83%	7/25/2024	7/25/2031	9,843	9,661	9,843	2.8%
									10,688	10,877	3.1%
Independent Power & Renewable
National Carbon Technologies – California, LLC	(8)	First lien senior secured loan		12.25%	12.25%	5/31/2024	5/31/2029	8,400	8,388	8,388	2.4%
									8,388	8,388	2.4%
Electric Utilities
truCurrent LLC	(6)(7)(8)	First lien senior secured loan	S+	7.25%	—%	2/12/2024	2/12/2029	—	(103)	—	—%
truCurrent LLC	(6)(7)	First lien senior secured loan	S+	7.25%	11.58%	2/12/2024	2/12/2029	12,500	12,389	12,500	3.5%
									12,286	12,500	3.5%
IT Services
Dartpoints Operating Company, LLC	(6)(7)(9) (12)	First lien senior secured loan	S+	8.93%	13.62%	5/1/2023	5/14/2026	3,425	3,399	3,425	1.0%
Xpect Solutions, LLC	(6)(7)(8)(12)	First lien senior secured loan	S+	5.75%	10.08%	10/7/2024	10/7/2029	7,500	7,452	7,427	2.1%
Xpect Solutions, LLC	(6)(7)(8)(12)	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)	First lien senior secured loan	S+	5.75%	10.08%	10/7/2024	10/7/2029	22,444	22,225	22,225	6.3%
									33,807	33,820	9.6%
Interactive Media & Services
Dance Nation Holdings LLC	(6)(7)	First lien senior secured loan	S+	6.95%	11.54%	8/24/2023	8/24/2028	31,815	31,565	31,815	9.0%
Dance Nation Holdings LLC	(6)(7)(8)	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		1,652,200	1,652	1,652	0.5%
									34,011	34,293	9.7%
Media
Direct Digital Holdings, LLC	(6)(7)	First lien senior secured loan	S+	8.45%	13.11%	6/29/2022	12/3/2026	7,596	7,576	7,264	2.1%
Direct Digital Holdings, LLC	(6)(7)	First lien senior secured loan	S+	8.45%	12.93%	6/29/2022	12/3/2026	26,625	26,564	25,461	7.2%
									34,140	32,725	9.3%
Pharmaceuticals
Med Learning Group, LLC	(6)(7)	First lien senior secured loan	S+	6.25%	10.58%	3/26/2024	12/30/2027	15,570	15,439	15,570	4.4%
Med Learning Group, LLC	(6)(7)(8)	First lien senior secured loan	S+	6.25%	10.58%	3/26/2024	12/30/2027	856	839	856	0.2%
									16,278	16,426	4.6%
Professional Services
M&S Acquisition Corporation	(6)(7)(12)	First lien senior secured loan	S+	6.50%	11.09%	12/19/2023	12/19/2028	42,215	41,862	42,216	12.0%
Oakwell Holding LLC	(15)	Convertible Note		10.00%	10.00%	12/23/2024	12/31/2028	1,500	1,500	1,500	0.4%
ZRG Partners LLC	(6)(7)(8)	First lien senior secured loan	S+	6.00%	10.46%	10/21/2024	6/14/2029	2,600	2,568	2,580	0.7%

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Lafayette Square USA, Inc.

Consolidated Schedule of Investments (continued)

December 31, 2024


Company (1)(2)(3)(11)(13)	Footnotes	Investment Type	Reference Rate and Spread		Interest Rate	Acquisition Date	Maturity Date	Par Amount/ Shares (4)	Amortized Cost	Fair Value	Percentage of Net Assets (5)
ZRG Partners LLC	(6)(7)(8)	First lien senior secured loan	P+	5.00%	12.50%	10/21/2024	6/14/2029	168	150	167	—%
ZRG Partners LLC	(6)(7)	First lien senior secured loan	S+	6.00%	10.66%	10/21/2024	6/14/2029	11,402	11,322	11,322	3.2%
									57,402	57,785	16.3%
Real Estate Management & Development
Standard Real Estate Investments LP	(6)(7)	First lien senior secured loan	S+	8.70%	13.29%	10/6/2023	10/6/2026	2,000	1,987	1,985	0.6%
Standard Real Estate Investments LP	(6)(7)	First lien senior secured loan	S+	8.70%	13.29%	10/6/2023	10/6/2026	3,000	2,978	2,978	0.8%
									4,965	4,963	1.4%
Restaurants
Café Zupas, L.C	(6)(7)(8) (12)	First lien senior secured loan	S+	7.00%	12.00%	11/20/2023	12/31/2027	3,121	3,095	3,112	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	8,359	8,289	8,338	2.4%
									11,714	11,783	3.4%
Road & Rail
160 Driving Academy (a/k/a Rock Gate Capital, LLC)	(6)(7)(12)	First lien senior secured loan	S+	6.75%	11.08%	5/31/2024	5/30/2029	42,000	41,613	39,900	11.3%
160 Driving Academy (a/k/a Rock Gate Capital, LLC)	(12)	Warrants				5/31/2024		166,108	—	—	—%
									41,613	39,900	11.3%
Specialized Consumer Services
Best Friends Pet Care Holdings Inc.	(6)(7)(8) (12)	First lien senior secured loan	S+	6.45%	11.04%	12/21/2023	6/21/2028	24,632	24,396	24,632	7.0%
Best Friends Pet Care Holdings Inc.	(6)(7)(12)	First lien senior secured loan	S+	6.45%	11.04%	12/21/2023	6/21/2028	15,656	15,501	15,656	4.4%
									39,897	40,288	11.4%
Transportation Infrastructure
H.W. Lochner, Inc.	(6)(7)	First lien senior secured loan	S+	6.25%	10.99%	3/29/2023	7/2/2027	13,006	12,740	13,006	3.7%
Trilon Group, LLC	(6)(7)	First lien senior secured loan	S+	5.50%	10.31%	3/24/2023	5/25/2029	12,157	12,152	12,157	3.4%
Trilon Group, LLC	(6)(7)(8)	First lien senior secured loan	S+	5.50%	10.19%	3/24/2023	5/25/2029	1,253	1,253	1,253	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	—%
									26,252	26,530	7.5%
Water Utilities
Ironhorse Purchaser, LLC	(6)(7)(8)	First lien senior secured loan	S+	5.25%	—%	12/21/2023	9/30/2027	—	(94)	—	—%
Ironhorse Purchaser, LLC	(6)(7)	First lien senior secured loan	S+	5.25%	9.61%	12/21/2023	9/30/2027	10,021	9,868	10,021	2.8%
Puris LLC	(6)(7)(12)	First lien senior secured loan	S+	5.75%	10.07%	6/28/2024	6/28/2029	13,433	13,338	13,433	3.9%
									23,112	23,454	6.7%
Total non-controlled/non-affiliated investments									522,945	522,935	148.4%
Non-controlled/affiliated investments (10)
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	18,734	18,630	18,734	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	3,390	3,379	3,390	1.0%
IVM GK9 Holdings LLC		Equity				10/07/2022		14,969	4,881	5,000	1.4%

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Lafayette Square USA, Inc.

Consolidated Schedule of Investments (continued)

December 31, 2024


Company (1)(2)(3)(11)(13)	Footnotes	Investment Type	Reference Rate and Spread	Interest Rate	Acquisition Date	Maturity Date	Par Amount/ Shares (4)	Amortized Cost	Fair Value	Percentage of Net Assets (5)
								26,890	27,124	7.7%
Diversified Consumer Services
3360 Frankford LLC	(2)(17)	Equity			9/23/2024		2,458,671	2,459	2,459	0.7%
								2,459	2,459	0.7%
Total non-controlled/affiliated investments								29,349	29,583	8.4%
Controlled/affiliated investments (10)
Professional Services
Worker Solutions LLC	(16)	Equity			12/30/2024		350,000	350	350	0.1%
								350	350	0.1%
Real Estate Management & Development
Neighborhood Grocery Catalyst Fund LLC	(2)(8)(14)	Equity			3/28/2024		4,218,750	4,219	4,219	1.2%
								4,219	4,219	1.2%
Total controlled/affiliated investments								4,569	4,569	1.3%

Total Portfolio Investments								$556,863	$557,087	158.1%


(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. The prior year table has been modified to conform to the current year.
(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 Expiration Date	Unfunded Commitment	Fair Value
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	6,377	—
Core Capital Partners II-S LP	—%	Revolver	10/11/2027	11,234	—
Synergi, LLC	0.50%	Revolver	12/17/2027	3,750	(23)
Med Learning Group LLC	1.00%	Delayed Draw Term Loan	12/30/2027	3,425	—
Café Zupas, L.C	0.50%	Delayed Draw Term Loan	12/31/2027	223	(1)
Café Zupas, L.C	0.50%	Revolver	12/31/2027	223	(1)
Dance Nation Holdings LLC	0.50%	Revolver	8/24/2028	3,304	—
MSPB MSO, LLC	0.38%	Delayed Draw Term Loan	11/10/2028	17,630	—
MSPB MSO, LLC	0.38%	Revolver	11/10/2028	6,781	—
truCurrent LLC	0.50%	Delayed Draw Term Loan	2/12/2029	25,000	—
Trilon Group, LLC	1.00%	Delayed Draw Term Loan	5/25/2029	1,347	—
Trilon Group, LLC	0.50%	Revolver	5/25/2029	801	—
National Carbon Technologies – California, LLC	2.50%	Bonds	5/31/2029	11,600	—
CentralBDC Enterprises, LLC	0.50%	Revolver	6/11/2029	1,516	—
ZRG Partners LLC	1.00%	Delayed Draw Term Loan	6/14/2029	3,435	—
ZRG Partners LLC	0.50%	Revolver	6/14/2029	2,357	—
Capital City LLC	—%	Delayed Draw Term Loan	9/20/2029	2,500	—
C Speed LLC	0.50%	Revolver	10/01/2029	4,000	—
Xpect Solutions, LLC	0.50%	Revolver	10/07/2029	2,500	—
Xpect Solutions, LLC	0.50%	Delayed Draw Term Loan	10/07/2029	1,250	—
Equity
Neighborhood Grocery Catalyst Fund LLC	—%	Equity	—	8,281	—
Worker Solutions LLC	—%	Equity	—	3,150	—
				$121,064	$(25)


(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 at a greater 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 December 31, 2023	Gross Additions	Gross Reductions	Change in Unrealized Gains (Losses)	Fair Value as of December 31, 2024	Investment Income
GK9 Global Companies, LLC	$22,350	$36	$(227)	$(35)	$22,124	$3,098
IVM GK9 Holdings LLC	4,901	—	—	99	5,000	84
3360 Frankford LLC	—	2,459	—	—	2,459	—
Non-controlled/affiliated investments	$27,251	$2,495	$(227)	$64	$29,583	$3,182

Controlled/affiliated investments	Fair Value as of December 31, 2023	Gross Additions	Gross Reductions	Change in Unrealized Gains (Losses)	Fair Value as of December 31, 2024	Investment Income
Neighborhood Grocery Catalyst Fund LLC	$—	$4,219	$—	$—	$4,219	$—
Worker Solutions LLC	—	350	—	—	350	—
Controlled/affiliated investments	$—	$4,569	$—	$—	$4,569	$—


(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.

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

June 30, 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.,” effective May 16, 2022. 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 Code. 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 invests in businesses that are primarily domiciled, headquartered and/or have a significant operating

presence in each of the ten regions below (each, a “Target Region”), with a goal to invest at least 5% of its assets in each

Target Region over time. However, the Company anticipates that it could take time to invest substantially all of the capital

it expects to raise in a geographically diverse manner due to general market conditions, the time necessary to identify,

evaluate, structure, negotiate and close suitable investments 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, the Company may have a disproportionate amount of investments in certain Target Regions, and there can be

no assurance that the Company will achieve geographic diversification across all ten Target Regions.

• Cascade Region: Alaska, Idaho, Oregon and Washington

• Empire Region: New York, New Jersey, Connecticut and Pennsylvania

• Far West Region: California, Hawaii and Nevada

• Four Corners Region: Arizona, Colorado, New Mexico and Utah

• Great Lakes Region: Illinois, Indiana, Michigan, Minnesota, Ohio and Wisconsin

• Gulf Coast Region: Arkansas, Louisiana, Oklahoma and Texas

• Mid-Atlantic Region: Delaware, Kentucky, Maryland, North Carolina, South Carolina, Tennessee, Virginia and West

Virginia and the District of Columbia

• Northeast Region: Maine, Massachusetts, New Hampshire, Rhode Island and Vermont

• Plains Region: Iowa, Kansas, Missouri, Montana, Nebraska, North Dakota, South Dakota and Wyoming

• Southeast Region: Alabama, Georgia, Florida, Mississippi and the territory of Puerto Rico

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 previously formed wholly-owned subsidiaries, LS BDC Holdings, LLC, LS BDC Holdings (DN), LLC, LS

BDC Holdings (160), LLC and LS SBIC Holdings (160), LLC, each of which were Delaware limited liability companies,

to hold certain equity or equity-like investments in portfolio companies to which the Company has also made loans. In

addition, LS BDC Holdings (NGCF), LLC, a wholly-owned subsidiary of the Company, was formed to co-own and co-

manage NGCF Manager LLC (the "NGCF Manager") with the affiliate of a third-party investor. The NGCF Manager

manages Neighborhood Grocery Catalyst Fund LLC (“NGCF”), a private real estate investment vehicle, whose investment

strategy focuses on necessity-based, ecommerce-resistant, and well-located neighborhood shopping centers anchored by

omni-channel grocers serving the essential needs of diverse communities.

In December of 2024, in an effort to simplify its internal structure, the Company consolidated its equity investments in LS

BDC Holdings, LLC. On December 18, 2024, LS BDC Holdings (NGCF), LLC transferred its interest in NGCF Manager

to LS BDC Holdings, LLC and on December 30, 2024, dissolved. On December 31, 2024, LS BDC Holdings (160), LLC

and LS BDC Holdings (DN), LLC merged into LS BDC Holdings, LLC.

Additionally, the Company formed two wholly-owned subsidiaries, LS SBIC LP and LS SSBIC LP, each licensed by the

U.S. Small Business Administration (the “SBA”), to invest in eligible “small businesses” as defined by the SBA. LS SBIC

LP received its SBIC license on February 1, 2023 (made effective as of January 27, 2023) and LS SSBIC LP received its

SSBIC license on September 12, 2024. SBA regulations currently permit SBIC LP to borrow up to $175.0 million in SBA-

guaranteed debentures with at least $87.5 million in regulatory capital (as defined in the SBA regulations), and SSBIC

license to borrow an additional $175.0 million of SBA-guaranteed debentures with at least $87.5 million in regulatory

capital, subject to the SBA’s approval. As a result, the Company has access to up to $350.0 million in SBA-guaranteed

debentures amongst its family of SBIC funds under common control. The Company consolidates its wholly-owned

subsidiaries in these consolidated financial statements from the date of each subsidiary’s formation. 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.

These consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial

statements and notes related thereto for the year ended December 31, 2024, included in the Company’s annual report on

Form 10-K, which was filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 14, 2025. The

results for the three and six months ended June 30, 2025 are not necessarily indicative of the results to be expected for the

full fiscal year, any other interim period or any future year or period.

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 June 30, 2025 and December 31, 2024, the Company held $119,319 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, $119,319 and $202,452 were held in an interest bearing accounts with U.S. Bank National

Association as of June 30, 2025 and December 31, 2024, respectively. For the three and six months ended June 30, 2025,

the Company earned $1,034 and $2,472, 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. For the three and six

months ended June 30, 2024, the Company earned $817 and $1,753, 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.

Organization and Offering Costs

Organization costs consist of costs incurred to establish the Company and enable it to do business legally. Organization

costs are expensed as incurred. 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 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

June 30, 2025, the Company incurred $925 (since inception) of organization and offering costs.

Deferred Financing Costs

Deferred financing costs, incurred in connection with any credit facility and SBA-guaranteed debentures (see Note 5) are

deferred and amortized over the life of the respective credit facility 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 feels 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

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Discounts to par on portfolio securities are accreted into income over the tenor of the 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.

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 time of debt principal repayment.

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 June 30, 2025, we had 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.

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Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for financial

instruments classified as Level 3.

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. Subject to the discretion of and as determined by the

Board, the Company will authorize and declare ordinary cash distributions approved by the Board 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 the cash distribution. Shares issued under the DRIP will be 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.

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 and assesses

the performance and makes operating decisions 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

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CODM utilizes net income as a key metric in determining the amount of dividends to be distributed 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 June 30, 2025 and December 31, 2024.


	June 30, 2025
	Amortized Cost		Fair Value
First lien senior secured loans	$679,771	93.2%	$679,742	92.9%
Equity	43,387	5.9%	45,662	6.2%
Subordinated debt	3,293	0.5%	3,293	0.4%
Preferred equity	1,652	0.2%	2,018	0.3%
Convertible Note	1,500	0.2%	1,500	0.2%
Warrants	—	—%	—	—%
Total	$729,603	100.0%	$732,215	100.0%


	December 31, 2024
	Amortized Cost		Fair Value
First lien senior secured loans	$540,064	97.0%	$540,195	96.9%
Equity	11,909	2.1%	12,028	2.2%
Subordinated debt	1,738	0.3%	1,712	0.3%
Preferred equity	1,652	0.3%	1,652	0.3%
Convertible Note	1,500	0.3%	1,500	0.3%
Warrants	—	—%	—	—%
Total	$556,863	100.0%	$557,087	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 June 30, 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:


	June 30, 2025
	Amortized Cost		Fair Value
Empire	$204,842	28.1%	$206,882	28.3%
Far West	135,992	18.6%	136,883	18.7%
Gulf Coast	129,587	17.8%	128,127	17.5%
Mid-Atlantic	122,595	16.8%	123,171	16.7%
Great Lakes	78,355	10.7%	76,676	10.5%
Southeast	24,685	3.4%	26,757	3.7%
Cascade	17,539	2.4%	17,677	2.4%
Northeast	9,877	1.4%	9,902	1.4%
Four Corners	6,131	0.8%	6,140	0.8%
Total	$729,603	100.0%	$732,215	100.0%

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	June 30, 2025
	Amortized Cost		Fair Value
Commercial Services & Supplies	$65,915	9.0%	$67,927	9.3%
Professional Services	61,975	8.5%	62,393	8.5%
Specialized Consumer Services	54,745	7.5%	55,065	7.5%
Transportation Infrastructure	46,015	6.3%	46,145	6.3%
Road & Rail	41,870	5.7%	40,090	5.5%
IT Services	34,014	4.7%	34,353	4.7%
Interactive Media & Services	33,166	4.5%	33,759	4.6%
Media	34,164	4.7%	32,301	4.4%
Diversified Financial Services	30,196	4.1%	30,500	4.2%
Business Support Services	29,536	4.0%	29,925	4.1%
Hotels, Restaurants & Leisure	28,298	3.9%	28,853	3.9%
Trading Companies & Distributors	24,759	3.4%	24,759	3.4%
Electric Utilities	22,320	3.1%	22,500	3.1%
Health Care Equipment & Services	19,804	2.7%	19,901	2.7%
Real Estate Management & Development	18,673	2.6%	18,667	2.5%
Application Software	18,386	2.5%	18,485	2.5%
Insurance	18,000	2.5%	18,000	2.5%
Diversified Telecommunication Services	17,846	2.4%	17,846	2.4%
Health Care Providers & Services	17,539	2.4%	17,677	2.4%
Construction & Engineering	17,350	2.4%	17,449	2.4%
Pharmaceuticals	16,221	2.2%	16,344	2.2%
Aerospace & Defense	15,020	2.1%	15,185	2.1%
Independent Power & Renewable	13,999	1.9%	14,000	1.9%
Water Utilities	13,048	1.8%	13,264	1.8%
Electrical Equipment	12,591	1.7%	12,607	1.7%
Gas Utilities	10,702	1.5%	10,730	1.5%
Food Service Distributor	9,877	1.4%	9,902	1.4%
Diversified Consumer Services	2,459	0.3%	2,459	0.3%
Food Products	1,115	0.2%	1,129	0.2%
Total	$729,603	100.0%	$732,215	100.0%

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	December 31, 2024
	Amortized Cost		Fair Value
Commercial Services & Supplies	$66,606	12.0%	$66,901	12.1%
Professional Services	57,752	10.4%	58,135	10.4%
Specialized Consumer Services	39,897	7.2%	40,288	7.2%
Road & Rail	41,613	7.5%	39,900	7.2%
Interactive Media & Services	34,011	6.1%	34,293	6.2%
IT Services	33,807	6.1%	33,820	6.1%
Media	34,140	6.1%	32,725	5.9%
Diversified Financial Services	28,388	5.1%	28,492	5.1%
Transportation Infrastructure	26,252	4.7%	26,530	4.8%
Water Utilities	23,112	4.2%	23,454	4.2%
Health Care Equipment & Services	19,702	3.5%	19,949	3.6%
Application Software	18,288	3.3%	18,400	3.3%
Health Care Providers & Services	17,595	3.2%	17,768	3.2%
Construction & Engineering	17,427	3.1%	17,428	3.1%
Pharmaceuticals	16,278	2.9%	16,426	2.9%
Aerospace & Defense	16,069	2.9%	16,108	2.9%
Electric Utilities	12,286	2.2%	12,500	2.2%
Restaurants	11,714	2.1%	11,783	2.1%
Hotels, Restaurants & Leisure	10,688	1.9%	10,877	2.0%
Gas Utilities	10,737	1.9%	10,787	1.9%
Real Estate Management & Development	9,184	1.6%	9,182	1.6%
Independent Power & Renewable	8,388	1.5%	8,388	1.5%
Diversified Consumer Services	2,459	0.4%	2,459	0.4%
Food & Staples Retailing	470	0.1%	494	0.1%
Total	$556,863	100.0%	$557,087	100.0%

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.

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.

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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 independently determine the fair value of the Company’s interest in

such portfolio investments, consistent with the Adviser’s valuation procedures.

The Company has engaged an independent third-party valuation provider, which performs valuation procedures to arrive at

estimated valuation ranges of the illiquid investments on a quarterly basis (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). Investments that have been completed within the past

three months are fair valued approximating cost unless there has been a material event since the completion date. If there

has been a material event or material information that was not known as of the close of the transaction, the independent

third-party valuation provider provides an independent valuation range. The types of valuation methodologies employed by

the third-party valuation provider 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 produce a fair value calculation that may not

be indicative of net realizable value or reflective 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 the amounts that

may be ultimately realized due to the occurrence of future circumstances that cannot be reasonably determined.

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 is 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

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.

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The consolidated financial statements include portfolio investments at fair value of $732,215 and $557,087 as of June 30,

2025 and December 31, 2024, respectively. The fair value of the Company's portfolio investments was determined in good

faith by the Company’s Board. 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 June 30, 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 June 30, 2025 and December 31, 2024.


	June 30, 2025
	Fair Value Measurements
	Level 1	Level 2	Level 3	Total
First lien senior secured loans	$—	$—	$679,742	$679,742
Equity	—	—	45,662	45,662
Subordinated debt	—	—	3,293	3,293
Preferred equity	—	—	2,018	2,018
Convertible note	—	—	1,500	1,500
Warrants	—	—	—	—
Total Investments	$—	$—	$732,215	$732,215


	December 31, 2024
	Fair Value Measurements
	Level 1	Level 2	Level 3	Total
First lien senior secured loans	$—	$—	$540,195	$540,195
Equity	—	—	12,028	12,028
Subordinated debt	—	—	1,712	1,712
Preferred equity	—	—	1,652	1,652
Convertible note			1,500	1,500
Warrants	—	—	—	—
Total Investments	$—	$—	$557,087	$557,087

The carrying value of the Credit Facility and SBA-guaranteed debentures approximates fair value as of June 30, 2025 and

December 31, 2024, and would be categorized as Level 3 of 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 six months ended June 30, 2025 and June 30, 2024.

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	For the six months ended June 30, 2025
	Investments
	First Lien Senior Secured Loans	Subordinated Debt	Equity	Preferred Equity	Convertible Note	Warrants	Total Investments
Balance as of December 31, 2024	$540,195	$1,712	$12,028	$1,652	$1,500	$—	$557,087
Purchases of investments and other adjustments to cost	252,190	1,555	32,025	—	—	—	285,770
Proceeds from sales and repayments of investments	(113,697)	—	(547)	—	—	—	(114,244)
Net realized gain (loss)	82	—	—	—	—	—	82
Net accretion of discount on investments	1,132	—	—		—	—	1,132
Net change in unrealized gain (loss) on investments	(160)	26	2,156	366	—	—	2,388
Balance as of June 30, 2025	$679,742	$3,293	$45,662	$2,018	$1,500	$—	$732,215


	For the six months ended June 30, 2024
	Investments
	First Lien Senior Secured Loans	Subordinated Debt	Equity	Preferred Equity	Warrants	Total Investments
Balance as of December 31, 2023	$265,287	$1,753	$4,901	$1,652	$—	$273,593
Purchases of investments and other adjustments to cost	156,156	96	—	—	—	156,252
Proceeds from sales and repayments of investments	(8,988)	—	—	—	—	(8,988)
Net realized gain (loss)	—	—	—	—	—	—
Net accretion of discount on investments	679	—	—	—	—	679
Net change in unrealized gain (loss) on investments	598	41	99	91	—	829
Balance as of June 30, 2024	$413,732	$1,890	$5,000	$1,743	$—	$422,365

For the six months ended June 30, 2025, the net change in unrealized gain (loss) on investments attributable to Level 3

investments still held on June 30, 2025 was $2,388 as shown on the Consolidated Statements of Operations. For the six

months ended June 30, 2024, the net change in unrealized gain (loss) on investments attributable to Level 3 investments

still held on June 30, 2024 was $829 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 six

months ended June 30, 2025 and June 30, 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.

The tables below summarize the quantitative inputs and assumptions used for items categorized in Level 3 of the fair value

hierarchy as of June 30, 2025 and December 31, 2024.

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Range

Fair Value, as of

June 30, 2025

Valuation

Technique

Unobservable

Input

Weighted

Average Mean

Minimum

Maximum

Assets:

First lien senior secured loans

$517,024

Discounted Cash

Flow

Discount Rate

10.6%

8.2%

20.5%

First lien senior secured loans

40,090

Waterfall Analysis

EV/EBITDA

6.3x

5.5x

7.0x

First lien senior secured loans

122,628

Amortized Cost

Cost

N/A

Equity

38,806

Amortized Cost

Cost

N/A

Equity

6,856

Waterfall Analysis

EV/EBITDA

5.8x

5.5x

6.0x

Subordinated debt

1,808

Discounted Cash

Flow

Discount Rate

14.8%

14.0%

15.5%

Subordinated debt

1,485

Amortized Cost

Cost

N/A

Preferred equity

2,018

Waterfall Analysis

EV/EBITDA

7.0x

6.8x

7.3x

Convertible note

1,500

Amortized Cost

Cost

N/A

Warrants

—

Waterfall Analysis

EV/EBITDA

7.3x

5.5x

8.5x

Total Level 3 Assets

$732,215

Range

Fair Value, as of

December 31, 2024

Valuation

Technique

Unobservable

Input

Weighted

Average Mean

Minimum

Maximum

Assets:

First lien senior secured loans

$404,750

Discounted Cash

Flow

Discount Rate

11.2%

8.4%

18.9%

First lien senior secured loans

39,900

Comparable

Multiples

EV/EBITDA

6.3x

5.5x

7.0x

First lien senior secured loans

95,545

Amortized Cost

Cost

N/A

Subordinated debt

1,712

Discounted Cash

Flow

Discount Rate

14.8%

14.0%

15.5%

Equity

5,000

Comparable

Multiples

EV/EBITDA

6.3x

6.0x

6.5x

Equity

7,028

Amortized Cost

Cost

N/A

Preferred equity

1,652

Comparable

Multiples

EV/EBITDA

8.5x

8.3x

8.8x

Convertible note

1,500

Amortized Cost

Cost

N/A

Warrants

—

Comparable

Multiples

EV/EBITDA

7.0x

5.5x

8.0x

Total Level 3 Assets

$557,087

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

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

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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 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

June 30, 2025 and December 31, 2024, the Company’s asset coverage ratio based on the aggregate amount outstanding of

senior securities was 242.7% and 269.2%.

The following table summarizes the interest expense, non-usage fees and amortization of financing costs incurred on the

Company's total debt for the three and six months ended June 30, 2025 and June 30, 2024:


	For the three months ended June 30, 2025	For the three months ended June 30, 2024	For the six months ended June 30, 2025	For the six months ended June 30, 2024
Interest expense	$6,854	$1,469	$12,453	$2,190
Non-usage fee (1)	(3)	10	44	26
Amortization of deferred financing costs	403	146	772	331
Weighted average stated interest rate	6.06%	7.17%	6.08%	6.93%
Weighted average outstanding balance	$453,411	$82,486	$412,810	$63,612

(1)Non-usage fee includes the portion of the facility agent fee applicable to the undrawn portion of the Subscription

Facility.

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.

On September 20, 2024, the Company entered into Amendment No. 1 to the Senior Secured Revolving Credit Agreement

(the “First Amendment”), which amends 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 that certain Lender Joinder Agreement (the “First Lender Joinder

Agreement”), pursuant to which, through 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

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Agreement include the Company, BankUnited, N.A., as additional lender, the Subsidiary Guarantors party thereto and the

Administrative Agent.

On December 20, 2024, the Company entered into that certain Lender Joinder Agreement (the “Second Lender Joinder

Agreement”), pursuant to which, through the accordion feature in the ING Credit Facility, the aggregate commitments

under the ING Credit Facility increased from $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 thereto and the

Administrative Agent.

On March 20, 2025, the Company entered into that certain Lender Joinder Agreement (the “Third Joinder Agreement”),

pursuant to which, through the accordion feature in the ING Credit Facility, the aggregate commitments under the ING

Credit Facility increased from $225 million to $250 million. The parties to the Third Lender Joinder Agreement include the

Company, Customers Bank, as additional lender, the Subsidiary Guarantors party thereto 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 amends the ING Credit Facility. The parties to the Second Amendment include the

Company, the lenders party thereto, Subsidiary Guarantors party thereto and ING Capital LLC, as Administrative Agent.

The Second Amendment provides for, among other things, an increase of the accordion provision to permit increases to a

total facility amount of up to $275 million and permit the Company to do up to $30 million of financing under repurchase

agreements.

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 that certain Lender Joinder Agreement (the “Fourth Joinder Agreement”),

pursuant to which, through the accordion feature in the ING Credit Facility, the aggregate commitments under the ING

Credit Facility increased from $250 million to $275 million. The parties to the Fourth Lender Joinder Agreement include

the Company, City National Bank, as additional lender, the Subsidiary Guarantors party thereto and the Administrative

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 will be guaranteed by certain subsidiaries of the Company that are formed or acquired by the Company

in the future (collectively, the “Guarantors”). Proceeds of the ING Credit Facility may be used for general corporate

purposes, including the funding of portfolio investments.

The ING Credit Facility allows the Company to borrow up to $275 million, subject to certain restrictions, including

availability under a borrowing base, which is based upon unused capital commitments made by investors in the Company

and the value of 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 up to an aggregate of $300 million. The ING Credit Facility is secured by a perfected 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 availability period with respect to the revolving credit facility under the ING Credit Facility will terminate on June 19,

2028 (“Commitment Termination Date”) and the ING Credit Facility will mature on June 18, 2029 (“Maturity Date”).

During the period from the Commitment Termination Date to the Maturity Date, the Company will be obligated to make

mandatory prepayments under the ING Credit Facility out of the proceeds of certain asset sales and other recovery events.

The Company may borrow amounts in U.S. dollars or certain other permitted currencies. Amounts drawn under the ING

Credit Facility in U.S. dollars will 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 will be 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

drawdown, and loans denominated in U.S. dollars may be converted from one rate to another at any time at the Company’s

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option, subject to certain conditions. Amounts drawn under the ING Credit Facility in other permitted currencies will bear

interest at the relevant rate specified therein 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.

As of June 30, 2025 and December 31, 2024, the Company had $254.5 million and $208.2 million, respectively, in

outstanding borrowings from the ING Facility.

The following table summarizes the interest expense, non-usage fees and amortization of financing costs incurred on the

ING Facility for the three and six months ended June 30, 2025 and June 30, 2024:


	For the three months ended June 30, 2025	For the three months ended June 30, 2024	For the six months ended June 30, 2025	For the six months ended June 30, 2024
Interest expense	$4,327	$215	$7,525	$215
Non-usage fee (1)	(3)	—	44	—
Amortization of financing costs	158	9	296	9
Weighted average stated interest rate	6.95%	8.08%	7.08%	8.08%
Weighted average outstanding balance	$249,702	$10,714	$214,452	$5,357

(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

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

matured on May 2, 2024 and 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 is 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. On May 2, 2024, the

Subscription Facility and all obligations thereunder were terminated.

As of June 30, 2025 and December 31, 2024, the Company had $0.0 million and $0.0 million, respectively, in 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 three and six months ended June 30, 2025 and June 30, 2024:

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	For the three months ended June 30, 2025	For the three months ended June 30, 2024	For the six months ended June 30, 2025	For the six months ended June 30, 2024
Interest expense	$—	$253	$—	$492
Non-usage fee (1)	—	10	—	26
Amortization of financing costs	—	75	—	218
Weighted average stated interest rate	—%	8.07%	—%	7.83%
Weighted average outstanding balance	$—	$12,659	$—	$12,642

(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 June 30, 2025 and December 31, 2024,

the Company funded LS SBIC LP and LS SSBIC LP with an aggregate total of $115.0 million and $110.0 million,

respectively, of regulatory capital, 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 June 30, 2025:


Issuance Date	Maturity Date	Debenture Amount	Interest Rate	SBA Annual Charge
September 15, 2023	March 1, 2034	$31,000	5.04%	0.047%
March 15, 2024	September 1, 2034	$5,960	4.38%	0.047%
June 14, 2024	September 1, 2034	$45,540	4.38%	0.129%
September 16, 2024	March 1, 2035	$82,505	4.96%	0.129%
December 12, 2024	March 1, 2035	$27,500	4.96%	0.347%
March 28, 2025	September 1, 2035	$9,995	4.76%	0.347%
June 27, 2025	September 1, 2035	$27,500	4.86%	0.347%

The following table summarizes the interest expense and amortization of financing costs incurred on the SBA-guaranteed

debentures for the three and six months ended June 30, 2025 and June 30, 2024:


	For the three months ended June 30, 2025	For the three months ended June 30, 2024	For the six months ended June 30, 2025	For the six months ended June 30, 2024
Interest expense	$2,526	$611	$4,928	$1,093
Non-usage fee	—	—	—	—
Amortization of financing costs	246	62	476	104
Weighted average stated interest rate	4.98%	5.40%	5.01%	5.67%
Weighted average outstanding balance	$203,709	$45,467	$198,359	$38,790

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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 June 30, 2025 and December 31, 2024, the Company had $0.0 million and $0.0 million, respectively, in 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 three and six months ended June 30, 2025 and June 30, 2024:


	For the three months ended June 30, 2025	For the three months ended June 30, 2024	For the six months ended June 30, 2025	For the six months ended June 30, 2024
Interest expense	$—	$390	$—	$390
Non-usage fee	—	—	—	—
Amortization of financing costs	—	—	—	—
Weighted average stated interest rate	—%	11.50%	—%	11.50%
Weighted average outstanding balance (1)	$—	$13,645	$—	$6,822

The facilities of the Company consist of the following:


	June 30, 2025			December 31, 2024
	Aggregate Principal Amount Available	Principal Amount Outstanding	Unused Portion	Aggregate Principal Amount Available	Principal Amount Outstanding	Unused Portion
Secured borrowings	$275,000	$254,482	$20,518	$225,000	$208,232	$16,768
SBA-Guaranteed Debentures	230,000	230,000	—	192,505	192,505	—
Total	$505,000	$484,482	$20,518	$417,505	$400,737	$16,768

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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 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.

Base Management Fee:

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 three and six months ended June 30, 2025, the Company incurred Management Fee expense of $1,585 and $3,063,

respectively. For the three and six months ended June 30, 2024, the Company incurred Management Fee expense of $872

and $1,614, respectively. As of June 30, 2025 and December 31, 2024, $1,585 and $1,375, respectively, remained payable

as shown on the Consolidated Statements of Assets and Liabilities.

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”) 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 payment-in-kind 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 three and six months ended June 30, 2025, the Company incurred Income-Based Fee of $1,620 and $3,134,

respectively. For the three and six months ended June 30, 2024, the Company incurred Income-Based Fee of $1,213 and

$2,382, respectively. As of June 30, 2025 and December 31, 2024, $1,620 and $1,578, 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

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Capital Gains Fee would be owed to the Adviser if we were to sell the relevant investment and realize a capital gain. In no

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 three and six months ended June 30, 2025 and June 30, 2024, there were no Capital Gains Fees incurred.

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 three and six months ended June 30, 2025, the Company incurred $450 and $900, respectively, in fees under the

Administrative Agreement. For the three and six months ended June 30, 2024, the Company incurred $500 and $1,006,

respectively, in fees under the Administrative Agreement. These fees are included in administrative service fees in the

accompanying Consolidated Statements of Operations. As of June 30, 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

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 June 30, 2025 and

December 31, 2024, $744 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

June 30, 2025 and December 31, 2024, $438 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).

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.

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As of June 30, 2025 and December 31, 2024, the Company has no Unreimbursed Expense Payable.

Note 7. Commitments and Contingencies

As of June 30, 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 June 30, 2025 and December 31, 2024 the fair value of

unfunded commitments held by the Company was $(14) 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	Par Value as of
	June 30, 2025	December 31, 2024
Unfunded debt securities	$134,938	$109,633
Unfunded equity securities	11,162	11,431
Total unfunded commitments	$146,100	$121,064

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 June 30, 2025 and December 31, 2024, 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 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 three and six months ended June 30, 2025, the Company accrued $80 and $160 for directors’ fees expense,

respectively. For the three and six months ended June 30, 2024, the Company accrued $80 and $160 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 three and six months ended

June 30, 2025 and June 30, 2024:


	For the three months ended June 30, 2025	For the three months ended June 30, 2024	For the six months ended June 30, 2025	For the six months ended June 30, 2024
Earnings (loss) per common share (basic and diluted):
Net increase (decrease) in net assets resulting from operations	$9,105	$6,481	$20,252	$14,349
Weighted average common shares outstanding	24,217,260	22,178,576	24,098,036	21,880,114
Earnings (loss) per common share (basic and diluted):	$0.38	$0.29	$0.84	$0.66

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 June 30, 2025 and December 31, 2024, the Company had closed capital commitments totaling $410.7 million and

$409.8 million, respectively, for the private placement of the Company's common stock, of which $66.1 million and $66.7

million, respectively, were uncalled.


Share Issuance Date	Shares Issued	Amount	Average Offering Price per Share
March 26, 2025	116,132	$1,721	$14.82


Share Issuance Date	Shares Issued	Amount	Average Offering Price per Share
April 29, 2024	733,093	$10,996	$15.00

Distributions

Distributions to common stockholders are recorded on the ex-dividend date. The Company elected to be taxed as a RIC

under the Code for its taxable year ending December 31, 2024, and anticipates continuing to make such election in 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 the Code. The

Company anticipates paying out as a distribution all or substantially all of those amounts. The amount to be paid out as a

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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 the 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 six months ended June 30, 2025 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 Share	DRIP Shares Issued
March 25, 2025	March 25, 2025	May 6, 2025	$8,393	$0.35	182,443
June 27, 2025	June 27, 2025	August 1, 2025	$8,503	$0.35	201,754

For the six months ended June 30, 2024 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 Share	DRIP Shares Issued
March 26, 2024	March 22, 2024	May 06, 2024	$6,475	$0.30	140,902
June 28, 2024	June 25, 2024	August 06, 2024	$6,738	$0.30	147,220

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 Code. 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 June 30, 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.

As of June 30, 2025, the company did not have a capital loss carryforward.

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 six months ended June 30,

2025 and for the year ended December 31, 2024, were as follows:

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	For the six months ended June 30, 2025	For the year ended December 31, 2024
Ordinary Income	$16,896	$28,526
Long-term Capital Gain	$—	$—
Return of Capital	$—	$—

As of June 30, 2025 and December 31, 2024, the tax cost and estimated gross unrealized appreciation/(depreciation) from

investments for federal income tax purposes are as follows.


	June 30, 2025	December 31, 2024
Tax cost	$729,603	$556,863
Gross unrealized appreciation	$6,361	$3,473
Gross unrealized depreciation	(3,749)	(3,249)
Net unrealized investment appreciation / (depreciation) on investments	$2,612	$224

The Company has a wholly-owned corporate subsidiary that is consolidated for financial statement purposes. This entity

("taxable subsidiary"); LS BDC Holdings, LLC; 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.

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 period January 1, 2025 through

June 30, 2025, as follows:


	Period ended ended June 30, 2025
Income tax (expense)/benefit at federal statutory tax rate	$(4,253)
Income attributable to the RIC and not subject to corporate tax	3,704
State and local income tax benefit (net of federal detriment)	(118)
Prior year net operating loss carryforward	—
Prior year provision to return adjustments	—
Other	(1)
Permanent differences	—
Change in Valuation Allowance	(2)
Total income tax (expense)/benefits	$(670)

At June 30, 2025, the taxable subsidiaries did not have any capital loss carryforwards.

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 June 30, 2025, the Company had a net operating loss carryforward for federal income

tax purposes of $425.

At June 30, 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

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Note 11. Financial Highlights

Below is the schedule of financial highlights of the Company for the six months ended June 30, 2025 and June 30, 2024:


Per Common Share Data:(1)	For the six months ended June 30, 2025	For the six months ended June 30, 2024
Net asset value, beginning of period	$14.81	$14.85
Net investment income (loss)	0.74	0.62
Net realized and unrealized gain (loss)	0.10	0.04
Net increase (decrease) in net assets resulting from operations	0.84	0.66
Initial issuance of Common Stock	—	—
Effect of offering price of subscriptions(2)	—	(0.02)
Distributions declared	(0.70)	(0.60)
Net asset value, end of period	$14.95	$14.89

Total return based on NAV(3)	5.75%	4.33%
Common shares outstanding, end of period	24,293,039	22,458,336
Weighted average shares outstanding	24,098,036	21,880,114
Net assets, end of period	$363,095	$334,371

Ratio/Supplemental data(4):
Ratio of net investment income (loss) to average net assets	10.03%	8.36%
Ratio of expenses to average net assets	12.79%	6.14%
Ratio of expenses (before management fees, incentive fees and interest and financing expenses) to average net assets	1.84%	2.10%
Weighted average debt outstanding	$412,810	$63,612
Total debt outstanding	$484,482	$177,855
Asset coverage ratio(5)	242.7%	288.0%
Portfolio turnover	18%	3%

(1)The per share data were derived by using the weighted average shares from the date of the first issuance of shares,

through June 30, 2025 and June 30, 2024.

(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 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.

1 “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.

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Item 2. 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.

Business Overview

We are an externally managed, closed-end, non-diversified management investment company that has elected to be

regulated as a business development company under the 1940 Act. In addition, for U.S. federal income tax purposes, we

have elected to be treated as a RIC under Subchapter M of the Code. As a business development company and a RIC, we

are also subject to certain constraints, including limitations imposed by the 1940 Act and the Code.

The Company is externally managed by Adviser pursuant to the Investment Advisory Agreement and supervised by our

Board of which a majority of the members are independent of us, the Adviser and its affiliates. 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 Adviser is a limited liability company that is registered as an investment

adviser under the Advisers Act. The Adviser oversees the management of the Company’s activities and is responsible for

making investment decisions with respect to the Company’s portfolio.

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” middle market businesses. 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 Target Regions. We expect to 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 investments

identified as qualifying for CRA credit under the OCC and/or Federal Reserve guidance.

Our primary investment strategy is to create a portfolio of investments across a range of industries and communities to

mitigate risks and achieve our investment objective of generating favorable risk-adjusted returns while promoting public

welfare and community development in Working Class Areas1. We believe that many BDCs focus primarily on lending to

businesses located in high income places and that demand for capital investment and enhanced managerial assistance is

particularly acute among middle market companies located in overlooked places. We believe inflationary pressures and an

2 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. 2 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.

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increasing gap in employee benefits between Working Class2 and middle and high income employees exacerbates this

demand, enabling us to utilize our investment approach to identify and select favorable risk-adjusted investment return

opportunities.

We generate revenue primarily in the form of interest and fee income derived from debt investments we hold and capital

gains, if any, on our investments. We generally expect to hold our investments until they are refinanced by the portfolio

company borrowers. From time to time, we may invest in loans with other lenders, or “club loans,” and we may serve as

agent in connection with any such loans. Currently, approximately 15% of the portfolio consists of “club loans”, with

Lafayette Square being lead agent on 64% of those deals. We may also participate in loans in the broadly syndicated loan

market. Our debt investments in portfolio companies typically have principal amounts of up to $50 million, bear interest at

floating rates tied to a widely available risk-free indices such as the U.S. Prime Rate, or the Secured Overnight Financing

Rate (“SOFR”). These rates reset periodically and generally are not guaranteed by the U.S. federal government or

otherwise. The debt instruments in which we invest are typically not rated by any rating agency. If they were rated, we

believe they would be rated 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). Under the guidelines established

by these rating agencies, such ratings are an indication of such debt instruments having predominantly speculative

characteristics with respect to the issuer’s capacity to pay interest and repay principal. Debt instruments that are rated

below investment grade are sometimes referred to as “high yield bonds” or “junk bonds.”

We primarily focus our origination efforts on “non-sponsored” businesses. 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. We believe such companies offer us an opportunity to establish

direct lending relationships without the involvement or backing of a traditional buyout fund sponsor. We believe this focus

will enable us over time to source investments through a less competitive lending process than if we focused on

“sponsored” businesses, which should put us in a better position to achieve favorable economic and structural terms for our

investments. We intend to complement this investment strategy with robust risk management practices and rigorous

ongoing portfolio monitoring. For a discussion of the risks inherent in our portfolio investments, please see the discussion

under “Item 1A. Risk Factors.”

While we are generally industry agnostic with respect to our focus on investment sectors, we tend to primarily invest in the

business services, franchising, technology & telecommunications, transportation & logistics, and healthcare sectors. In

addition, we opportunistically seek exposures in the real estate industry (including with companies that manage real estate

and with real estate-related projects that advance our 2030 Goals). We intend to diversify our portfolio across sectors that

are resilient to market volatility, with limited commodity and direct consumer spending exposure.

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 previously formed wholly-owned subsidiaries, LS BDC Holdings, LLC, LS BDC Holdings (DN), LLC, LS

BDC Holdings (160), LLC and LS SBIC Holdings (160), LLC, each of which were Delaware limited liability companies,

to hold certain equity or equity-like investments in portfolio companies to which the Company has also made loans. In

addition, LS BDC Holdings (NGCF), LLC, a wholly-owned subsidiary of the Company, was formed to co-own and co-

manage NGCF Manager LLC (the “NGCF Manager”) with the affiliate of a third-party investor. The NGCF Manager

manages Neighborhood Grocery Catalyst Fund LLC (“NGCF”), a private real estate investment vehicle, whose investment

3 Lafayette Square analysis of U.S. Securities and Exchange Commission's Electronic Data Gathering, Analysis, and Retrieval (EDGAR)

database of BDC portfolio companies as of Q1 2025 and Dun and Bradstreet middle market companies (173,423 companies) as of

March, 2025. The Federal Financial Institutions Examination Council's (FFIEC) defines middle to upper income as median family

incomes making greater than 80% of the area median income. A total of 6,981 portfolio company investments were identified by their

headquartered addresses. Of these, this analysis includes 6,683 (96%) portfolio companies where we had enough data to determine if an

address was located in a Low-Moderate-Income tract. Cross investments is for all public and private BDCs; fair value has been

considered to calculate overlap in assets.

4 Turnover rates are calculated by dividing the total terminations, voluntary and involuntary, for the period by the average number of

employees who worked during or received pay for the same period. National turnover includes private employee data from the U.S.

Bureau of Labor Statistics - Job Openings and Labor Turnover Survey for calendar year 2025. Data was extracted as of July 29, 2025.

5 Two-thirds of consumers, or 65%, reported living paycheck to paycheck according to a December survey of 2,986 U.S. consumers

according to a report conducted by PYMNTS and Lending Club in February 2025 titled, “The New Reality Check: The Paycheck-To-

Paycheck Report”.

6 National private sector retirement benefits participation data is sourced from the U.S. Bureau of Labor Statistics – March 2024

National Compensation Survey. “Lower wage workers” refers to those earning less than 25% of average wages.

7 Jobs employing Working Class People.