Fourth Quarter and Full Year 2024 Earnings Presentation March 31, 2025 Disclaimers and Forward-Looking Statements The information contained in this presentation should be viewed in conjunction with the earnings conference call of Chicago Atlantic BDC, Inc. (the "Company") (Nasdaq: LIEN) held on March 31, 2025, and the Company's Annual Report on Form 10-K for the year ended December 31, 2024. The information contained herein may not be used, reproduced or distributed to others, in whole or in part, for any o ...

Financial Reporting - Chicago Atlantic BDC, Inc. will report its financial results for Q4 and the year ended December 31, 2024, on March 31, 2025[4]. - The earnings conference call will take place at 8:30 a.m. Eastern Time on March 31, 2025[4]. - The company has not disclosed specific financial metrics or performance indicators in this report[5]. Dividends - The company announced a cash dividend for the quarter ending March 31, 2025, details of which will be provided in a press release[13]. - The press release regarding the cash dividend is included as Exhibit 99.2 to the Current Report[14]. Leadership Changes - Mr. Andreas Bodmeier resigned as CEO on March 13, 2025, with no disagreements reported regarding company operations[10]. - Mr. Peter Sack has been appointed as the new CEO, bringing experience as a credit investor and portfolio manager[11][12]. - Ms. Supurna VedBrat and Mr. Patrick McCauley were appointed as Class 1 and Class 3 Directors, respectively, following the resignation of previous directors[6][7]. - The company has a history of strategic leadership changes, indicating a focus on governance and operational effectiveness[10][11]. Company Classification - The company is classified as an emerging growth company under the Securities Act[2].

IPO and Acquisitions - The company completed its IPO on February 8, 2022, raising approximately $83.3 million from the sale of 6,071,429 shares at $14.00 per share[20]. - On October 1, 2024, the company acquired a loan portfolio valued at $219,621,125 by issuing 16,605,372 shares of common stock[23]. - The company’s common stock began trading on the Nasdaq Global Market under the symbol "LIEN" on October 2, 2024[22]. Investment Strategy and Focus - The company has an active pipeline of investments, currently reviewing approximately $644 million in potential investments[35]. - The company’s investment strategy was expanded on February 20, 2024, to include investments outside the cannabis and health and wellness sectors[22]. - The company focuses on investing in private leveraged lower middle-market and middle-market companies with up to $100 million in EBITDA[35]. - The company’s investment objective is to maximize risk-adjusted returns on equity for shareholders through secured and unsecured debt investments[32]. - Chicago Atlantic's investment strategy focuses on senior secured loans, subordinated loans, and equity investments, aiming for attractive risk-adjusted returns[72]. - The company aims to maximize risk-adjusted returns on equity for shareholders by focusing on the cannabis industry and lower middle-market investment opportunities[74]. Financial Performance and Market Trends - As of December 31, 2024, Chicago Atlantic managed $1.9 billion in Capital Under Management, which includes total committed investor capital and available leverage[48]. - Estimated U.S. state-legal cannabis retail sales reached $32 billion in 2024, projected to grow to approximately $58 billion by 2030[52]. - Public and private cannabis capital raises in 2024 included $0.5 billion in equity and $1.2 billion in debt, indicating a shift towards increased reliance on debt financing[58]. - The number of public and private cannabis mergers and acquisitions in 2024 decreased to 45 deals, down from 67 in 2023[59]. - The capital raising environment for private credit reached $209 billion in 2024, a 5% increase over 2023, highlighting strong momentum in the market[62]. - The cannabis industry is experiencing a significant increase in demand for credit-based solutions as companies prefer less dilutive forms of growth capital[61]. - Companies in the lower middle-market are expected to continue requiring access to debt capital for growth and refinancing, creating investment opportunities[67]. - The reliance on debt financing in the cannabis industry is expected to persist until significant federal reform is enacted[56]. Management and Operations - The company has restructured its Board and management team following the Loan Portfolio Acquisition and Joint Venture[28]. - The management team possesses extensive expertise in cannabis and non-cannabis industries, enhancing the company's ability to evaluate investment opportunities[76]. - The company plans to leverage its management team's networks to become a leading investor in the legal cannabis industry and lower middle-market[77]. - The company does not have any employees; day-to-day management is handled by the Adviser and its Investment Committee[125]. - The Adviser is responsible for determining fair value and is designated as the Valuation Designee, subject to Board oversight[111]. Investment Process and Due Diligence - The investment process involves direct origination networks and relationships with entrepreneurs, private equity firms, and investment banks to identify opportunities[81]. - The company seeks to invest primarily through loans, which typically have maturities of two to six years, with interest paid on a floating rate basis[84][85]. - The investment criteria focus on businesses with durable competitive advantages, consistent operational performance, and free cash flow generation[87]. - The company employs a multi-channel sourcing strategy to identify investment opportunities, emphasizing strong management teams[89]. - The due diligence process includes a structured call with management, financial analysis, and on-site meetings to assess the portfolio company's performance and plans[92][94]. - The company monitors portfolio companies' financial trends and employs a five-level numeric rating scale to evaluate credit profiles and expected returns[104]. Valuation and Financial Reporting - The company conducts quarterly NAV determinations, with NAV per share calculated as total assets minus liabilities divided by total shares outstanding[118]. - Investments rated 1 indicate the borrower is performing above expectations, while those rated 5 indicate substantial underperformance and non-compliance with debt covenants[106]. - The fair value of investments is determined based on observable market prices or valuation techniques, with a multi-step valuation process conducted quarterly[113][114]. - Changes in market conditions can lead to fluctuations in the fair value of investments, which may differ from realized gains or losses[116][117]. - The NAV per share is adjusted based on management's assessment of material changes since the last reported NAV[123]. - The company records investments at fair value, with realized gains or losses measured against the amortized cost basis[110]. Fees and Expenses - The base management fee is calculated at an annual rate of 1.75% of the company's gross assets, excluding cash and cash equivalents[135]. - The incentive fee on income is based on the company's "Pre-Incentive Fee Net Investment Income," with a hurdle rate of 1.75% per quarter (7% annualized)[136]. - The incentive fee on capital gains equals 20% of cumulative realized capital gains, less cumulative realized capital losses and unrealized capital depreciation[139]. - The company incurred a $6 million Incentive Fee on Capital Gains in Year 2 from the sale of Investment A, which generated $30 million in realized capital gains[153]. - In Year 3, the company recorded an Incentive Fee on Capital Gains of $1.4 million based on cumulative realized capital gains[153]. - The company has an annualized hurdle rate of 1.75% and a management fee of 0.4375%[149][150]. - The Expense Limitation Agreement caps operating expenses at an annualized rate of 2.15% of the company's net assets through September 30, 2025[168]. Compliance and Governance - The company has adopted a code of ethics to establish procedures for personal investments and restrict certain personal securities transactions[208]. - Compliance policies and procedures are in place to prevent violations of federal securities laws, with annual reviews for adequacy and effectiveness[209]. - Proxy voting responsibility has been delegated to the Adviser, which will vote in the best interest of stockholders[210]. - The company is subject to periodic examination by the SEC for compliance with the 1940 Act[216]. - None of the investment policies are fundamental and may be changed without stockholder approval[217].

Group 1 - The Company, Chicago Atlantic BDC, Inc., has declared a cash dividend of $0.34 per share for the quarter ending March 31, 2025 [1] - Key dates for the dividend include a record date of March 28, 2025, and a payment date of April 11, 2025 [1] - The Company has a dividend reinvestment plan (DRIP) that allows stockholders to reinvest dividends into additional shares unless they opt to receive cash [1] Group 2 - Chicago Atlantic BDC, Inc. is a specialty finance company regulated as a business development company under the Investment Company Act of 1940 [2] - The Company's investment objective is to maximize risk-adjusted returns on equity by primarily investing in direct loans to privately held middle-market companies, focusing on the cannabis sector [2] - The Company is managed by Chicago Atlantic BDC Advisers, LLC, which specializes in the cannabis industry and other niche sectors [2]

Core Viewpoint - Chicago Atlantic BDC, Inc. is set to release its financial results for the fourth quarter and full year ended December 31, 2024, on March 31, 2025, before market opening [1][2]. Group 1: Financial Results Announcement - The financial results will be announced before the market opens on March 31, 2025 [2]. - A conference call and live audio webcast will be held on the same day at 8:30 a.m. Eastern Time, accessible to the general public [2][6]. - The conference call can be accessed via phone at (833) 630-1956 for domestic callers and (412) 317-1837 for international callers [2]. Group 2: Company Overview - Chicago Atlantic BDC, Inc. is a specialty finance company regulated as a business development company under the Investment Company Act of 1940 [4]. - The company's investment objective focuses on maximizing risk-adjusted returns on equity by primarily investing in direct loans to privately held middle-market companies, particularly in the cannabis sector [4]. - The company is managed by Chicago Atlantic BDC Advisers, LLC, which specializes in the cannabis industry and other niche sectors [4].

Core Viewpoint - Chicago Atlantic BDC, Inc. has secured a new $100 million senior secured revolving credit facility, enhancing its liquidity and flexibility for future portfolio growth [1][2] Group 1: Credit Facility Details - The new credit facility matures in March 2028 and has an interest rate of SOFR plus 3.00% [1] - The facility is led by an FDIC-insured financial institution, indicating a strong banking partnership [2] Group 2: Company Strategy and Performance - The company currently has no outstanding debt, allowing it to leverage the new credit facility for disciplined portfolio growth [2] - A recent dividend of $0.34 per share was announced, representing a 36% increase from the previous quarter's dividend of $0.25 per share [2] Group 3: Investment Focus and Portfolio Metrics - Chicago Atlantic BDC is primarily focused on the U.S. cannabis industry and seeks to invest in niche opportunities that are typically underserved by traditional capital sources [3][8] - As of October 1, 2024, the company reported a gross weighted-average yield of 17.2% on debt investments, with 79% of the portfolio consisting of floating rate loans [5]

Financial Reporting - Chicago Atlantic BDC, Inc. will report its financial results for Q3 2024 on November 8, 2024, before market open[2] - An earnings conference call and webcast will be held at 8:00 a.m. Eastern Time on November 8, 2024, to discuss the financial results[2]

Investment Portfolio - As of September 30, 2024, the investment portfolio had an aggregate fair value of approximately $55.8 million, consisting of $43.4 million in first lien, senior secured loans, $11.7 million in senior secured notes, and $0.7 million in equity securities across seven portfolio companies[89]. - The investment portfolio as of December 31, 2023, had a fair value of approximately $54.1 million, with $46.0 million in first lien, senior secured loans and $8.1 million in senior secured notes across five portfolio companies[89]. - As of September 30, 2024, the investment portfolio's fair value was $55,788,511, an increase from $54,120,000 on December 31, 2023[94]. - The largest portfolio company represented 35.6% of the total fair values of investments as of September 30, 2024, down from 38.7% on December 31, 2023[93]. - The investment portfolio's industry composition as of September 30, 2024, was 96.6% in Wholesale Trade and 3.4% in Real Estate Services[92]. - Senior Secured First Lien Term Loans accounted for 77.5% of the amortized cost as of September 30, 2024, slightly down from 84.9% on December 31, 2023[90]. - The geographic distribution of the portfolio as of September 30, 2024, showed 43.8% in the West and 42.7% in the Midwest, indicating a slight shift in regional investment focus[91]. - As of September 30, 2024, 100% of the company's portfolio investments are categorized at Level 3, requiring significant estimates for fair value assessment[106]. Investment Strategy - The company is currently reviewing approximately $559 million of potential investments in various stages of underwriting[82]. - The investment strategy includes a focus on the cannabis industry, with investments only in companies compliant with applicable laws, targeting entities that derive at least 50% of revenues from cannabis-related activities[83]. - The company aims to maximize risk-adjusted returns on equity for shareholders by generating current income from debt investments and capital appreciation from equity investments[82]. - The company has a strategy focused on growth capital and technology, targeting industry leaders and disruptive companies with strong growth trajectories[84]. - The liquidity solutions sub-strategy focuses on event-driven opportunities, including mergers and acquisitions, with companies showing strong cash flow performance and low leverage profiles[85]. - The company may invest in "covenant-lite" loans, which provide borrowers more freedom and may increase the risk of loss compared to loans with complete financial maintenance covenants[82]. - A new investment strategy was approved on February 20, 2024, allowing investments in companies outside of the cannabis and health and wellness sectors, effective April 22, 2024[114]. Financial Performance - Total investment income for the three months ended September 30, 2024, was approximately $3.2 million, compared to $2.9 million for the same period in 2023, reflecting a year-over-year increase of about 10.0%[98]. - The company had no loans in its portfolio placed on non-accrual status as of September 30, 2024, and December 31, 2023, indicating strong credit performance[97]. - The company reported a net change in unrealized appreciation on investments of $187,324 for the nine months ended September 30, 2024, compared to $166,012 for the same period in 2023[94]. - The company experienced a net realized gain/loss of $0 on investments for the nine months ended September 30, 2024, compared to a loss of $210,767 for the same period in 2023[94]. - Fee income for the three months ended September 30, 2024, was $489,176, significantly higher than $31,250 for the same period in 2023[98]. - Net investment income was approximately $0.0 million for the three months ended September 30, 2024, down from $1.6 million in the same period of 2023[99]. - Total operating expenses for the nine months ended September 30, 2024, were $7,557,191, a 123% increase from $3,381,392 in the same period of 2023[99]. - The company declared a quarterly dividend of $0.25 per share for the third quarter of 2024, with total dividends paid amounting to $1,553,676[113]. Market and Economic Conditions - The company is subject to financial market risks, including valuation risk, interest rate risk, and credit risk, due to political tensions and market volatility[120]. - The fair value of investments may fluctuate significantly due to the inherent uncertainty in determining fair value, especially for investments without readily available market quotations[121]. - As of September 30, 2024, 75.6% of the company's debt investments were floating-rate based on PRIME, while 24.4% were fixed-rate investments[122]. - For the year ended December 31, 2023, a 300 basis points increase in interest rates would result in a net income increase of $1,264 million[124]. - A 200 basis points increase in interest rates would lead to a net income increase of $843 million for the same period[124]. - Conversely, a 100 basis points decrease in interest rates would result in a net income loss of $400 million[124]. - A 300 basis points decrease in interest rates would lead to a net income loss of $934 million[124]. Corporate Governance and Structure - The company has a base management fee and an incentive fee structure under its Investment Advisory Agreement, which is based on a percentage of the value of average gross assets[107]. - The company has undergone a leadership change, with Andreas Bodmeier appointed as CEO and Umesh Mahajan as Co-Chief Investment Officer, among other board changes[117]. - The Company has been renamed "Chicago Atlantic BDC, Inc." with a new ticker symbol "LIEN," effective October 2, 2024[119]. - The company intends to maintain its tax treatment as a RIC by distributing at least 90% of its investment company taxable income annually[102]. - The company plans to enter into a credit facility in the future, depending on market conditions and other factors[101]. - The company’s primary use of funds will be investments in debt and equity securities, dividend payments, and operating expenses[101]. Legal and Regulatory Matters - The company is not currently subject to any material legal proceedings that could materially affect its financial condition or results of operations[128]. - The company does not expect any future legal or regulatory proceedings to have a material effect on its financial condition[128]. - The company recorded no sales or redemptions of investments during the three and nine months ended September 30, 2024[99]. - The company has not accrued any liability in connection with indemnifications due to the remote risk of loss based on past experience[108]. - The company reported no changes in internal control over financial reporting that materially affected its financial reporting during the three months ended September 30, 2024[127]. - The company has effective disclosure controls and procedures as of the end of the reporting period[126].

Investment Income and Assets - Total investment income for Q2 2024 was $3.1 million, with net investment income of $1.5 million, or $0.25 per share[2] - Total investment income for the three months ended June 30, 2024, was $3,081,333, an increase of 6.5% compared to $2,893,699 for the same period in 2023[18] - Net investment income for the three months ended June 30, 2024, was $1,525,633, compared to $1,899,412 for the same period in 2023, reflecting a decrease of 19.7%[18] - The investment portfolio had a fair value of $53.4 million, consisting of $44.3 million in secured loans, $8.3 million in secured notes, and $0.8 million in equity[8] - Total assets increased to $90,076,727 as of June 30, 2024, up from $88,576,271 at December 31, 2023, representing a growth of 1.69%[17] - As of June 30, 2024, total net assets were $84.3 million, down from $84.5 million as of March 31, 2024[7] - Cash and cash equivalents rose to $34,003,851 as of June 30, 2024, compared to $32,611,635 at December 31, 2023, marking an increase of 4.25%[17] Dividends and Shareholder Returns - The company declared a cash dividend of $0.25 per share, payable on September 27, 2024, to stockholders of record on September 19, 2024[2] - Net asset value (NAV) per share decreased from $13.60 on March 31, 2024, to $13.56 on June 30, 2024, primarily due to dividend payments[7] - The net asset value per share decreased to $13.56 as of June 30, 2024, down from $13.77 at December 31, 2023, a decline of 1.53%[17] Expenses and Financial Performance - Total expenses for the three months ended June 30, 2024, were $1,555,700, an increase of 56.4% from $994,287 in the same period last year[18] - The net increase in net assets resulting from operations for the three months ended June 30, 2024, was $1,292,861, compared to $1,211,404 for the same period in 2023, indicating a growth of 6.7%[18] - Transaction expenses related to the Loan Portfolio Acquisition for the three months ended June 30, 2024, were $533,019, with no expenses recorded for the same period in 2023[18] - The company reported a net realized gain (loss) from investments of $0 for the three months ended June 30, 2024, compared to a loss of $(210,767) in the same period last year[18] - Distributable earnings (accumulated losses) stood at $(834,860) as of June 30, 2024, compared to $449,266 at December 31, 2023[17] Strategic Activities - The company added one portfolio company during the quarter and made an additional investment on July 16, 2024[8] - The company is well-positioned to take advantage of increased debt capital markets activity, despite uncertainties in federal cannabis regulatory reform[3] - The company entered into a definitive agreement to purchase a loan portfolio from Chicago Atlantic Loan Portfolio, LLC, in exchange for newly issued shares of common stock[4] Unrealized Losses - The company recorded a net unrealized loss of $0.2 million during the quarter, mainly related to the fair valuation of debt investments[6]

Financial Position - Total assets as of June 30, 2024, were $90,076,727, an increase from $88,576,271 on December 31, 2023, representing a growth of approximately 1.7%[6] - Cash and cash equivalents increased to $34,003,851 from $32,611,635, reflecting a growth of about 4.2%[6] - Total liabilities rose to $5,818,654 from $3,023,653, indicating a significant increase of approximately 92.5%[6] - Net assets decreased to $84,258,073 from $85,552,618, a decline of about 1.5%[6] - The total net assets as of June 30, 2024, were $84,258,073, a decrease from $90,044,213 as of June 30, 2023, reflecting a decline of 6.4%[8] - Total net assets as of June 30, 2024, decreased to $84,258,073 from $86,475,729 as of December 31, 2022[9] Investment Income and Expenses - Interest income for the three months ended June 30, 2024, was $2,790,333, compared to $2,762,449 for the same period in 2023, reflecting a growth of 1.0%[7] - Total investment income for the six months ended June 30, 2024, was $5,841,580, an increase from $5,351,538 in the prior year, representing a growth of 9.1%[7] - Total expenses for the three months ended June 30, 2024, were $1,555,700, up from $994,287 in the same period last year, indicating a rise of 56.4%[7] - Net investment income for the three months ended June 30, 2024, was $1,525,633, down from $1,899,412 in the prior year, a decrease of 19.7%[7] - The company recorded a net investment income of $1,445,824 for the six months ended June 30, 2024, down from $3,270,135 for the same period in 2023[9] - The company incurred management fee expenses of $492,455 for the six months ended June 30, 2024, compared to $495,908 for the same period in 2023, reflecting a slight decrease of 0.3%[46] Shareholder Distributions - Distributions to stockholders from investment income-net for the six months ended June 30, 2024, totaled $(1,553,738)[8] - Distributions to stockholders from investment income-net amounted to $(3,107,474) for the six months ended June 30, 2024[9] - The company declared two quarterly distributions during the six months ended June 30, 2024, with the first on March 8, 2024, and the second on May 9, 2024[49] - The company declared a quarterly dividend of $0.25 per share on March 8, 2024, with a payment date of March 28, 2024, and issued 8 shares under the dividend reinvestment plan (DRIP) during this period[51] Investment Strategy and Portfolio - The company expanded its investment strategy to include companies outside the cannabis and health sectors effective April 22, 2024[14] - The company’s investment objective focuses on maximizing risk-adjusted returns through secured and unsecured debt investments, as well as equity investments in private leveraged middle-market cannabis companies[14] - The company’s investment portfolio is entirely located in the United States, as determined by the location of the portfolio companies' headquarters[13] - The company is currently reviewing approximately $560 million of potential investments in various stages of underwriting[75] - The company primarily seeks to invest in private leveraged middle-market companies with up to $100 million in EBITDA[75] Risk Management - The company reported a concentration risk due to its focus on investments in cannabis companies, which may lead to greater price volatility[38] - The company utilizes various risk management strategies to mitigate market risk, credit risk, and liquidity risk associated with its investments[38] - The company is exposed to prepayment risk, which may affect its yield if loans are prepaid due to favorable market conditions[38] Valuation and Fair Value - The fair value of investments is determined using various methodologies, including the discounted cash flow (DCF) method and market approach[17] - The company’s valuation process for investments includes a multi-step approach, with preliminary valuations documented and discussed by the Adviser's valuation committee[94] - As of June 30, 2024, 100% of the company's portfolio investments are categorized at Level 3, requiring significant estimates for fair value assessment[95] - The fair value of investments may fluctuate significantly due to the lack of readily available market values, impacting the overall valuation process[18] Market Conditions and Future Outlook - The company anticipates future operating results and distribution projections to be influenced by market conditions and regulatory changes in the cannabis industry[4] - The company is evaluating the potential effects of interest and inflation rates on its business prospects and those of its portfolio companies[4] - The company anticipates potential impacts from political tensions and economic conditions, including the Russia-Ukraine war and the Israel-Hamas war, which may introduce volatility in financial markets[39] Legal and Compliance - The company has no uncertain tax positions as of June 30, 2024, indicating a stable tax compliance status[27] - The company is not currently subject to any material legal proceedings, nor are any material legal proceedings threatened against it[108]