Related Party Agreements and Transactions

6 Months Ended

Jun. 30, 2025

Related Party Transactions [Abstract]

Related Party Agreements and Transactions

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%;

•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

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.

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.

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