Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

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

The information contained in this section should be read in conjunction with "Item 1. Financial Statements" hereto and "Part II, Item 8-Financial Statements and Supplementary Data" of our Annual Report on Form 10-K for the year ended December 31, 2025, as updated from time to time by the Company's periodic filings with the Securities and Exchange Commission ("SEC"). This discussion contains forward-looking statements and involves numerous risks, uncertainties, and other factors outside the Company's control, including, but not limited to, those set forth in "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025 as updated by the Company's periodic filings with the SEC.

Overview

BIP Ventures Evergreen BDC (the "Company," "we," "us," or "our") is an externally managed, non-diversified closed-end management investment company focused on investing in a portfolio consisting of common and preferred equity investments, including through the use of convertible notes, in target U.S.-based portfolio companies, which qualify as "eligible portfolio companies" under the 1940 Act. We have elected to be regulated as a BDC under the 1940 Act. In addition, for tax purposes, we intend to be taxed as a partnership under the Code.

We intend to achieve our investment objectives by investing at least 70% of our total assets (including the amount of borrowings for investment purposes) in portfolio companies that qualify as eligible portfolio companies under the 1940 Act, with our core focus on investments in sectors including, but not limited to, healthcare IT, fintech, insurtech, enterprise SaaS, software development and infrastructure tools, and media and marketplace technology. We may also invest in other strategies and opportunities from time to time that we view as attractive.

We anticipate conducting one or more private placements of our Shares to investors in reliance on an exemption from the registration requirements of the Securities Act. We expect to enter into separate Subscription Agreements with a number of investors in each Private Offering. Subscriptions will be effective only upon our acceptance, and we reserve the right to reject any subscription in whole or in part. All purchases will be made at a per-Share price as determined by the Board (including any committee thereof). The per-Share price shall be at least equal to the NAV per Share. The Board (including any committee thereof) may set the per-Share price above the NAV per Share based on a variety of factors, including, without limitation, to ensure that investors acquiring Shares in the Company after other investors have already done so are apportioned their pro rata portion of the Company's organizational and offering expenses.

The Company was initially funded on July 12, 2023 when the Investment Adviser purchased 400 Shares of the Company, for an aggregate purchase price of $10,000. We completed our initial closing of capital commitments on August 24, 2023 and subsequently broke escrow and commenced investment activity. As part of the initial close, we issued 1,389,142 Shares for total proceeds of $34,728,548 as payment for such Shares.

Key Components of Our Results of Operations

Investments

We invest primarily in common and preferred equity investments, including through the use of convertible notes, in U.S.-based private companies in sectors including, but not limited to, healthcare IT, fintech, insurtech, enterprise SaaS, software development and infrastructure tools, and media and marketplace technology.

Our level of investment activity can and is expected to vary substantially from period to period depending on many factors, including the amount of capital available to target portfolio companies, the general economic environment, and the competitive environment for the type of investments we make.

Revenues

We generate revenue primarily in the form of capital gains on our equity investments in our portfolio companies. We also generate revenue in the form of interest or dividends on these investments as well as interest earned on cash and cash equivalents held at financial institutions.

Expenses

Operating Expenses

The Investment Adviser shall bear its own costs incurred in providing investment advisory services to the Company, including all personnel expenses. We will be responsible for all costs and expenses relating to the Company's activities, investments and ongoing business, including:

From time to time, the Investment Adviser may pay third-party providers of goods or services. We will reimburse the Investment Adviser for any such amounts paid on the Company's behalf.

Expense Support and Conditional Reimbursement Agreement

We entered into an Expense Support and Conditional Reimbursement Agreement with the Investment Adviser, whereby the Investment Adviser has agreed to pay all of our organization and offering costs related to the Private Offering of our Shares. We have agreed to reimburse the Investment Adviser for such advanced expenses up to $500,000 when we have raised $250 million from unaffiliated subscribers.

Since inception, the Investment Adviser has incurred reimbursable organizational expenses and offering costs of $364,014 and $135,986, respectively, that will be payable when the Company has raised $250 million of capital. As the Company has not raised capital of $250 million as of March 31, 2026, reimbursement of organization and offering costs was deemed not probable and therefore, is not recorded as a liability. These costs were incurred by the Investment Adviser prior to the Commencement of Operations and as such, are not presented on the statements of operations as an expense and corresponding waiver of expense for the three months ended March 31, 2026 or 2025.

Investment Activity

For the three months ended March 31, 2026, the Company acquired $5.0 million aggregate principal amount of investments as further described below.

On February 13, 2026, the Company invested $2.0 million into a senior secured convertible note of Korio, Inc. ("Korio"). The convertible note has an interest rate of 10% and matures on August 13, 2027.

On March 19, 2026, the Company invested $3.0 million into an unsecured convertible note of Peregrine Health, Inc. ("Peregrine"). The unsecured convertible note has an interest rate of 10% and matures on December 31, 2027.

For the three months ended March 31, 2025, the Company acquired $4.8 million aggregate principal amount of investments.

Our investment activity is presented below (information presented herein is at amortized cost unless otherwise indicated):

Our investments consisted of the following:

Our weighted average yields on the convertible notes as of March 31, 2026 and December 31, 2025 were as follows:

The weighted average yield of our income producing investments is not the same as a return on investment for our shareholders but, rather, relates to our investment portfolio and is calculated before the payment of all of our fees and expenses. The weighted average yield was computed using the effective interest rates for each respective period. There can be no assurance that the weighted average yield will remain at its current level.

The industry composition of investments at fair value was as follows:

The geographic composition of investments at fair value was as follows:

The Investment Adviser monitors our Portfolio Companies on an ongoing basis, including financial trends of each Portfolio Company to determine if they are meeting their respective business plans and to assess the appropriate course of action with respect to each Portfolio Company. The Investment Adviser has several methods of evaluating and monitoring the performance and fair value of our investments, which may include the following:

Portfolio Updates

The Company posted a net return of -3.3% for the three months ended March 31, 2026, ending ten consecutive quarters of positive performance, driven by $7.1 million of net unrealized losses resulting from broad market multiple compression affecting software and technology businesses - particularly those characterized by high recurring revenue and longer paths to peak profitability. This valuation decline reflects prevailing market conditions as of the measurement date rather than any deterioration in underlying business quality, as our portfolio continues to perform largely in line with underwriting expectations, demonstrating healthy revenue growth and sound business fundamentals. The Investment Adviser remains confident in the long-term prospects of the portfolio, supported by the durable competitive positioning of its portfolio companies and continued advances in artificial intelligence.

Below is a description of each portfolio company and relevant qualitative updates:

CareSave Technologies, Inc. (d/b/a ShiftMed) is a healthcare workforce solution that connects professionals and clinical facilities to fill open shifts in real time. Innovative technology and an on-demand workforce marketplace supports a thriving healthcare industry.

ChartSpan Medical Technologies, Inc. ("ChartSpan") provides turn-key, managed care coordination and compliance programs for doctors, clinics and health systems, managing patient care coordination and value-based programs for more than 100 of the most successful practices and health systems in the United States. ChartSpan is in the final stages of acquiring a leading connected health data and remote patient monitoring platform.

Istios Health, LLC is a healthcare technology company focused on delivering virtual specialty care, enabling physician collaboration, and accelerating clinical research through a nationwide specialist physician network.

Korio is a Randomization and Trial Supply Management (RTSM) platform that helps pharmaceutical companies randomize patient groups and coordinate drug supply for trial sites and complex global studies to support successful clinical trials.

Kythera Labs, Inc. ("Kythera") is a data management and analytics platform designed to process healthcare data. Leveraging the power of machine learning, Kythera diligently searches for signals within the data to report and predict behavioral patterns of patients, practitioners, health systems, and payers.

Mediafly, Inc. is a revenue enablement platform that market-facing teams use to plan, predict, coach, and engage at top performance levels to drive revenue growth and efficiency.

Peregrine is a national mental health platform with a comprehensive behavioral health solution that provides telehealth technology, operational support, and expert guidance. With it, they streamline care coordination and accessibility for underserved markets. Peregrine divested their brick-and-mortar business into a separate entity, Integrative Life Network, LLC.

Pipeline Considerations

Below is the near-term pipeline of potential deals, of which the Company is considering as of March 31, 2026. Note that all deals listed are speculative and for illustrative purposes. There is no guarantee any of the deals listed will be executed as listed below:

(1) Funded subsequent to March 31, 2026. Refer to the "Recent Developments" section for more information.

Results of Operations and Net Assets Attributable to Common Shareholders

The following table represents the operating results for the three months ended March 31, 2026 and 2025:

Net increase (decrease) in net assets resulting from operations and net assets attributable to common shareholders can vary from period to period as a result of various factors, including the level and type of new investment commitments, expenses, the recognition of realized gains and losses, and changes in unrealized gains and losses on the investment portfolio. As a result, comparisons may not be meaningful.

As of January 1, 2025, the Investment Advisory Agreement was amended to re-characterize the Incentive Fee to an Incentive Allocation for tax purposes. For the three months ended March 31, 2026 and 2025, the Incentive Allocation is displayed as a separate line item below net assets resulting from operations.

Investment Income

Investment income for the three months ended March 31, 2026 and 2025 was as follows:

For the three months ended March 31, 2026 and 2025, total investment income was $1,703,999 and $1,431,891, respectively. This was primarily driven by accrued interest on the secured convertible note investments.

Expenses

Expenses were as follows:

Management Fees

For the three months ended March 31, 2026 and 2025, management fees were $675,359 and $443,101, respectively. Management Fees are payable quarterly in arrears at an annual rate of: (i) 1.75% of the Company's average net assets attributable to common shareholders if the Company's total net asset balance is less than $500,000,000; and (ii) 1.50% of the Company's average net assets attributable to common shareholders if the Company's total net asset balance is equal to or greater than $500,000,000. The average net asset balance is the average of our total net assets at the end of the two most recently completed calendar quarters.

Other Expenses

Professional fees include legal, audit, tax, and valuation fees incurred related to the management and reporting of the Company. Administration fees include transfer agent and legal administration services. Other general and administrative expenses include custody fees, insurance costs, and other miscellaneous expenses.

We entered into an Expense Support and Conditional Reimbursement Agreement with the Investment Adviser. For additional information, see Note 3 - Related Party Transactions.

Income Taxes

We have elected to be taxed as a partnership. As a partnership, we generally will not have to pay corporate-level federal income taxes on any net ordinary income or net capital gains that are allocated to our shareholders from our tax earnings and profits. For the three months ended March 31, 2026 and 2025, the Company did not incur any U.S. federal income taxes.

Net Change in Unrealized Gain (Loss)

We value our portfolio investments quarterly and any changes in fair value are recorded as unrealized gains or losses. Net change in unrealized gain (loss) was composed of the following:

The net change in unrealized gains (losses) for the three months ended March 31, 2026 and 2025 was due to the appreciation/depreciation in value in the Company's portfolio investments.

Incentive Allocation Attributable to the Investment Adviser (for periods beginning on or subsequent to January 1, 2025)

As of January 1, 2025, the Investment Advisory Agreement was amended to re-characterize the Incentive Fee to an Incentive Allocation for tax purposes. The method in which the Incentive Allocation will be calculated on a prospective basis, and the amount of Incentive Allocation ultimately apportioned and distributed, is intended to track the calculation and payment of the Incentive Fee as closely as possible.

For periods beginning on or subsequent to January 1, 2025, the Incentive Allocation shall be equal to 20% of our Cumulative Realized Gain Amount (as defined below), less the aggregate amount of any previously allocated Incentive Allocation, and shall be allocated to the Investment Adviser's Capital Account. The Incentive Allocation amount, or the calculations pertaining thereto, as appropriate, shall account for any period less than a full calendar year. The Incentive Allocation will only be allocated to the Investment Adviser with respect to investments that have been sold or otherwise disposed of, including partially sold or disposed of. Any Incentive Allocation apportioned to the Investment Adviser's Capital Account during a calendar year may be distributed to the Investment Adviser whether or not any amounts are distributed to our shareholders. We will accrue quarterly, but will not pay, the Incentive Allocation with respect to net unrealized appreciation, such that the impact of the expected Incentive Allocation adjusts the net assets attributable to common shareholders and the Incentive Allocation attributable to the Investment Adviser commensurately.

As used for purposes of calculating our Cumulative Realized Gain Amount and the Incentive Allocation, the following terms shall have the following meanings:

For the three months ended March 31, 2026 and 2025, the Company recorded an Incentive Allocation of $(977,958) and $1,247,483, respectively. This amount was recorded as an allocation of net assets, allocating the amount estimated to be due to the Investment Adviser related to the current portfolio. This allocation adjusted the amount of net assets attributable to common shareholders and the Incentive Allocation attributable to the Investment Adviser commensurately, with a positive allocation reducing common shareholder net assets and increasing the Investment Adviser's allocation, and a negative allocation having the opposite effect. For the three months ended March 31, 2026, the Company waived $15,750 of Incentive Allocation, which was approved by the Board on April 17, 2026. The Company did not waive any Incentive Allocation payable for the three months ended March 31, 2025. After the Incentive Fee payable has been distributed as described above, all future accruals and distributions related to the Incentive Allocation, when realized and distributed, will be paid as the Incentive Allocation and treated as such for tax purposes.

The following table represents the Incentive Allocation attributable to the Investment Adviser for the three months ended March 31, 2026 and 2025:

Financial Condition, Liquidity and Capital Resources

We generate cash primarily from the proceeds of any offering of Shares and from cash flows from proceeds from sales of our investments. We may also fund a portion of our investments through borrowings from banks and issuances of senior securities, including before we have fully invested the proceeds of the Private Offering. While credit facilities are permitted to be utilized, we do not expect them to be a large portion of the funding of investments. The primary use of cash will be investments in portfolio companies, payments of expenses and payment of cash distributions to shareholders. The cash balance as of March 31, 2026 is expected to be sufficient for our investing activities and to continue to conduct our operations.

Net Assets

In connection with the formation, we have the authority to issue unlimited common shares, $0.01 per Share par value. On July 12, 2023, the Investment Adviser purchased 400 Shares to capitalize the Company. On August 24, 2023, we accepted subscription requests, broke escrow, and commenced investment activities.

The following table sets forth Share issuances life-to-date through the period ended March 31, 2026.

Distributions and Share Repurchases

We expect to make distributions following the liquidation of one or more of our investments and upon receipt of cash interest payments from our convertible note investments. Distributions will only be available to the extent there is cash flow from any such liquidations. The following table summarizes distributions declared by the Company during the three months ended March 31, 2026:

We did not make any distributions to our shareholders during the three months ended March 31, 2025. We did not make any share repurchases for the three months ended March 31, 2026 or March 31, 2025. We intend to offer a share repurchase program beginning in the second half of 2026. See Note 8 - Net Assets.

Borrowings

We do not have any debt obligations nor any preferred shares as of March 31, 2026 or December 31, 2025. As such, we are in compliance with the 200% asset coverage requirement under the 1940 Act.

Off-Balance Sheet Arrangements

From time to time, the Investment Adviser may allocate future expected amounts to an investment on behalf of the investment vehicles it manages, including the Company. Certain terms of these investments are not finalized at the time of the allocation and our allocation may change prior to the date of funding. Our disclosure of unfunded contractual commitments includes only those commitments that are available at the request of the Portfolio Company and are unencumbered by milestones. In this regard, as of March 31, 2026 and December 31, 2025, the Company has committed but not yet funded up to $3.5 million in a secondary transaction with third-party investors of ChartSpan Medical Technologies, Inc. in connection with a co-investment with an affiliated fund. The final amounts are subject to capital availability and timing.

From time to time, the Company may become a party to certain legal proceedings incidental to the normal course of our business. As of March 31, 2026 and December 31, 2025, management was not aware of any pending or threatened litigation.

Related Party Transactions

We have entered into business relationships with affiliated or related parties, including the following:

Further, we co-invest from time to time and intend to continue making co-investments with certain affiliates of the Investment Adviser. See Note 3 - Related Party Transactions.

Recent Developments

Subscriptions

As of April 1, 2026, the Company sold 176,348 Shares at a price of $33.36 per Share (with the final number of Shares being determined on April 17, 2026) to accredited investors in a private placement of Shares for an aggregate purchase price of $5,882,975.

Distributions

On April 16, 2026, the Company paid the distribution of $0.0166 per share to shareholders of record as of March 31, 2026, for a total amount of $78,695.

Investments

On April 30, 2026, the Company invested $0.7 million into an unsecured convertible note of LynkCare, Inc. d/b/a OncoLens. The note has an interest rate of 8% and matures on July 30, 2027.

Critical Accounting Estimates

The preparation of the financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Change in the economic environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ.

Valuation of Investments

We value our investments, upon which our NAV is based, in accordance with FASB ASC 820, Fair Value Measurements ("ASC 820"), which defines fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the applicable measurement date. ASC 820 also provides a framework for measuring fair value, establishes a fair value hierarchy based on the observability of inputs used to measure fair value, and prescribes disclosure requirements for fair value measurements.

Pursuant to Rule 2a-5 under the 1940 Act, the Board has designated the Investment Adviser as the valuation designee responsible for valuing all of our investments, including making fair valuation determinations as needed. The Investment Adviser has established a valuation committee (the "Valuation Committee") to carry out the ongoing fair valuation responsibilities and has adopted policies and procedures to govern the fair valuation of our investments.

Investments for which market quotations are readily available are typically valued at the bid price of those market quotations. To validate market quotations, we utilize a number of factors to determine if the quotations are representative of fair value, including the source and number of the quotations. Investments that are not publicly traded or whose market prices are not readily available, as is the case for substantially all of our investments, are valued at fair value as determined in good faith by the Investment Adviser, as valuation designee, based on, among other things, the input of the Valuation Committee and independent third-party valuation firm(s).

As part of the valuation process, the Investment Adviser takes into account relevant factors in determining the fair value of our investments, including, but not limited to:

With respect to investments for which market quotations are not readily available or when such market quotations are deemed not to represent fair value, the Investment Adviser, as valuation designee, has approved a multi-step valuation process that will be performed on a quarterly basis, as described below:

This valuation process is conducted on a quarterly basis.

ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. ASC 820 also provides guidance regarding a fair value hierarchy, which prioritizes information used to measure fair value and the effect of fair value measurements on earnings and provides for enhanced disclosures determined by the level within the hierarchy of information used in the valuation. In accordance with ASC 820, these inputs are summarized in the three levels listed below:

Level 1 - Valuations are based on unadjusted, quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date.

Level 2 - Valuations are based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

Transfers between levels, if any, are recognized at the beginning of the period in which the transfer occurred. In addition to using the above inputs in investment valuations, we apply the valuation policy approved by our Board that is consistent with ASC 820.

Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period. Additionally, the fair value of such investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that may ultimately be realized. Further, such investments are generally less liquid than publicly traded securities and may be subject to contractual and other restrictions on resale. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we could realize amounts that are different from the amounts presented and such differences could be material.

In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the unrealized gains or losses reflected herein.

Our accounting policy regarding the fair value of our investments is critical because the determination of fair value involves subjective judgments and requires the use of estimates. Due to the inherent uncertainty of determining fair value measurements, the fair values of our investments may differ from the amounts that we ultimately realize or collect from sales or maturities of our investments, and the differences could be material. In addition, changes in the market environment and other events that may occur over the life of an investment may cause the gains or losses ultimately realized on our investments to be different than the unrealized gains or losses reflected herein.