Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

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 8. Financial Statements and Supplementary Data." This discussion contains forward-looking statements, which relate to future events, our future performance or financial condition and involves numerous risks and uncertainties. Actual results could differ materially from those implied or expressed in any forward-looking statements.

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.

As of December 31, 2025 and December 31, 2024, the Investment Adviser has incurred reimbursable organizational expenses and offering costs of $364,014 and $135,986, respectively, that will be payable when we have raised $250 million of capital. As we have not raised capital of $250 million as of December 31, 2025, 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 years ended December 31, 2025 and 2024.

Portfolio and Investment Activity

For the year ended December 31, 2025, we acquired $25.2 million aggregate principal amount of investments and sold $2.5 million aggregate principal amount of investments as further described below.

On February 11, 2025 and March 11, 2025, we invested $1.4 million and $2.8 million, respectively, into senior secured convertible notes of Kythera Labs, Inc. ("Kythera") as part of a co-investment with an affiliated fund. The convertible notes have an interest rate of 12% and mature on October 1, 2027. Kythera specializes in offering a comprehensive data management and analytics platform designed to process healthcare data.

On April 4, 2025, we made an investment of $3.0 million into CareSave Technologies, Inc.'s (d/b/a ShiftMed) ("ShiftMed") Convertible Mezzanine Debt Facility (the "Facility") as part of a co-investment transaction with an affiliated fund in reliance on SEC co-investment exemptive relief. This Facility is subordinate to an existing asset-based lending facility and senior to all other securities on the ShiftMed capitalization table. The Facility has an interest rate of 10.5%, which is expected to be distributed quarterly, a term of 5 years, and a feature that enables it to convert to an equity investment. The first 30 months are interest-only, followed by a 30-month amortization period. ShiftMed is a technology-enabled marketplace within the healthcare industry designed to connect skilled workers (caregivers and nurses) with available shifts at acute and post-acute care facilities. A recent product launch, ShiftMed Flex, positions the company as a broader workforce solution platform, handling both internal and external employees for their customers. The platform makes it easier for facilities to staff shifts, which drives compliance and quality of care.

On June 6, 2025, we made an investment of $4.0 million into Istios Health, LLC's ("Istios") Preferred Series Seed equity financing round. The investment was consummated in connection with the merger of Istios and a provider of infectious disease-focused telehealth and in-person rounding services. The combined entity is expected to operate as a specialty virtual telehealth platform serving acute and post-acute care facilities, with an additional strategic focus on the collection and utilization of clinical data to enhance provider workflows and inform process optimization.

On June 18, 2025 and September 3, 2025, we invested $7.0 million and $3.5 million, respectively, into ChartSpan Medical Technologies, Inc. ("ChartSpan") as part of a secondary transaction, in which the Company and an affiliated fund purchased existing shares from third-party investors. We intend to fund up to $3.5 million at a later date to complete the secondary purchases. On August 12, 2025, we invested $1.9 million in ChartSpan's Preferred Series C equity financing round. ChartSpan partners with health systems to provide virtual care to Medicare patients managing chronic illness.

On December 31, 2025, we exited Pointivo, Inc. ("Pointivo") through an asset sale and wind down process. We received a 1.5x liquidation preference on $2.5 million of invested capital (an additional $1.5 million invested throughout 2025) for total proceeds of $3.8 million. This resulted in recognizing a net realized gain of $1.2 million as $0.1 million had previously been recognized as interest income.

For the year ended December 31, 2024, we acquired $24.6 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 December 31, 2025 and 2024 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:

Pipeline Considerations

Below is the near-term pipeline of potential deals, of which we are considering as of December 31, 2025. 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:

Results of Operations and Net Assets Attributable to Common Shareholders

Set forth below is a comparison of the results of operations for the years ended December 31, 2025 and 2024. The comparison of the fiscal year ended December 31, 2024 and the period from July 13, 2023 ("Commencement of Operations") through December 31, 2023 can be found within "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" included in Part II of our annual report on Form 10-K for the fiscal year ended December 31, 2024, which is incorporated herein by reference.

The following table represents the operating results for the years ended December 31, 2025 and 2024:

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 year ended December 31, 2025, the Incentive Allocation is displayed as a separate line item below net assets resulting from operations. As such, for the year ended December 31, 2024, the Incentive Fee is characterized within net expenses.

Investment Income

Investment income for the years ended December 31, 2025 and 2024 was as follows:

For the years ended December 31, 2025 and 2024, total investment income was $6,202,421 and $5,087,714, respectively. This was primarily driven by accrued interest on the senior secured convertible note investments.

Expenses

Expenses were as follows:

Management Fees

For the years ended December 31, 2025 and 2024, Management Fees were $2,128,355 and $1,326,418, respectively. Management Fees are payable quarterly in arrears at an annual rate of: (i) 1.75% of our average net assets if our total net asset balance is less than $500,000,000; and (ii) 1.50% of our average net assets if our total net asset balance is equal to or greater than $500,000,000. The average net asset balance will be the average of our total net assets at the end of the two most recently completed calendar quarters.

Incentive Fees (for periods prior to January 1, 2025)

For the year ended December 31, 2025, we recorded Incentive Fee expense of $0 as we no longer pay an Incentive Fee but rather pays an Incentive Allocation, as further described below. For the year ended December 31, 2024, we recorded Incentive Fee expense of $2,293,181.

The Incentive Fee is payable at the end of each calendar year in arrears and equals 20% of cumulative aggregate realized capital gains, plus interest received on portfolio assets (subsequent to July 1, 2024), from the date of our election to be regulated as a BDC to the end of each calendar year (with the final calendar year with respect to calculating the Incentive Fee deemed to have ended on December 31, 2024), less cumulative aggregate realized capital losses and aggregate unrealized capital depreciation, less the aggregate amount of any previously paid Incentive Fee. We will accrue quarterly, but will not pay, the Incentive Fee with respect to net unrealized appreciation. The Incentive Fee will only be paid on assets that have been partially or fully sold.

In determining the Incentive Fee payable to the Investment Adviser, we will calculate the cumulative aggregate realized capital gains and cumulative aggregate realized capital losses since the Company's inception, and the aggregate unrealized capital depreciation as of the date of the calculation, as applicable, with respect to each of the investments in our portfolio. For this purpose, cumulative aggregate realized capital gains, if any, equals the sum of the differences between the net sales price of each investment, when sold, and the original cost of such investment since the Company's inception. Cumulative aggregate realized capital losses equals the sum of the amounts by which the net sales price of each investment, when sold, is less than the original cost of such investment since the Company's inception. The net sales price shall include all cash received related to the portfolio asset throughout the asset's life, including amounts recorded as interest income on convertible notes or debt investments subsequent to July 1, 2024. The original cost shall include all cash that was deployed into the portfolio asset, which would not include converted interest on convertible notes or paid-in-kind interest ("PIK") on debt investments. Cumulative aggregate realized capital gains and cumulative aggregate realized capital losses will only include cash flows associated with assets that have been sold. Aggregate unrealized capital depreciation equals the sum of the difference, if negative, between the valuation of each investment as of the applicable calculation date and the original cost of such investment. At the end of the applicable year, the amount of capital gains that serves as the basis for our calculation of the Incentive Fee equals the cumulative aggregate realized capital gains less cumulative aggregate realized capital losses, less aggregate unrealized capital depreciation, with respect to our portfolio of investments.

As of July 1, 2024, the Investment Advisory Agreement was amended to clarify that interest received on portfolio assets is included in the net sales price when the asset is sold as described above. This amendment is being applied as of July 1, 2024 on a prospective basis. All other terms of the Investment Advisory Agreement, including the mechanics of the calculation, did not change as a result of this clarification.

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, it 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 years ended December 31, 2025 and 2024, we 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 for the years ended December 31, 2025 and 2024 was due to the appreciation of value in our portfolio investments.

Net Realized Gain (Loss)

Net realized gain (loss) for the years ended December 31, 2025 and 2024 was as follows:

The net realized gain for the year ended December 31, 2025 was related to the sale of Pointivo. We exited Pointivo through an asset sale and wind down process, which was executed on December 31, 2025. We received total proceeds of $3.8 million, which resulted in recognizing a net realized gain of $1.2 million. $0.1 million had previously been recognized as interest income. For the year ended December 31, 2024, we did not record any realized gains or losses.

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 year ended December 31, 2025, we recorded an Incentive Allocation of $6,049,239. 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 reduced the amount of net assets attributable to common shareholders and increased the Incentive Allocation attributable to the Investment Adviser commensurately. For the year ended December 31, 2025, we earned interest of $238,000 on the ShiftMed junior secured convertible note investment. This earned interest was intentionally excluded from the Incentive Allocation calculation and the waiver for the year ended December 31, 2025 was approved by the Board on January 14, 2026. For the year ended December 31, 2024, we recorded an Incentive Allocation of $0 as we were not subject to the Incentive Allocation but rather was subject to the Incentive Fee as further described above. 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 year ended December 31, 2025 and 2024:

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. Cash as of December 31, 2025 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 December 31, 2025.

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 year ended December 31, 2025:

(1)The special distribution declared on December 31, 2025 was attributable to proceeds received from the sale of a portfolio company.

We did not make any distributions to our shareholders for the year ended December 31, 2024. We did not make any share repurchases for the years ended December 31, 2025 or 2024. We intend to offer a share repurchase program beginning in 2026. See Note 8 - Net Assets.

Borrowings

We do not have any debt obligations nor any preferred shares as of December 31, 2025 or December 31, 2024. 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 December 31, 2025, we have committed but not yet funded up to $3.5 million in a secondary transaction with third-party investors of ChartSpan in connection with a co-investment with an affiliated fund. The final amounts are subject to capital availability and timing. As of December 31, 2024, we had no investments that were committed but not yet funded.

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 January 2, 2026, we sold 376,214 Shares at a NAV price of $34.51 per Share (with the final number of Shares being determined on January 14, 2026) to accredited investors in a private placement of Shares for an aggregate purchase price of $12,983,147.

Distributions

On January 9, 2026, we paid the distributions of $0.8019 and $0.0184 per share to shareholders of record as of December 31, 2025, for a total amount of $3,580,157.

Investment activity

On February 13, 2026, we invested $2.0 million into a senior secured convertible note of Korio, Inc. The 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. The note has an interest rate of 10% and matures on December 31, 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.