Core Viewpoint - Chicago Atlantic BDC, Inc. reported its financial results for the second quarter ended June 30, 2025, highlighting significant investment activity and a slight increase in net asset value per share [1][2][5]. Financial Performance - Total investment income for the second quarter was approximately $13.1 million, with net investment income of about $7.7 million, translating to $0.34 per weighted average share [5][9]. - The company incurred net expenses of approximately $5.4 million during the same period, resulting in a net increase in net assets from operations of approximately $8.6 million, or $0.38 per weighted average share [5][19]. Investment Activity - The company deployed $56 million in gross fundings during the second quarter, with a growing originations pipeline of over $780 million across cannabis and non-cannabis opportunities [3][10]. - Nine portfolio companies were funded with an aggregate par value of $39.1 million during the second quarter, and an additional $17.2 million was funded across five borrowers subsequent to the quarter end [9][10]. Liquidity and Capital Resources - As of June 30, 2025, the company had $108.8 million in liquidity, including $13.8 million in cash and cash equivalents, and $5.0 million in borrowings outstanding on its $100 million senior credit facility [6][9]. - By August 14, 2025, the company had no outstanding borrowings on its senior credit facility and $125.4 million in liquidity [6]. Net Asset Value - The net asset value (NAV) per share increased to $13.23 as of June 30, 2025, compared to $13.19 as of March 31, 2025, driven by growth in net assets from operations [7][9]. - Total net assets as of June 30, 2025, were $301.8 million, up from $301.0 million as of March 31, 2025 [7][18]. Dividend Declaration - The company declared a cash dividend of $0.34 per share for the quarter ending September 30, 2025, payable on October 10, 2025, to shareholders of record as of September 29, 2025 [11][9].

Group 1 - The Company, Chicago Atlantic BDC, Inc., is a specialty finance company regulated as a business development company, focusing on maximizing risk-adjusted returns on equity by investing primarily in direct loans to privately held middle-market companies, particularly in the cannabis sector [4] - The financial results for the second quarter ended June 30, 2025, will be released before the market opens on August 14, 2025, followed by a conference call at 9:00 a.m. Eastern Time [2][6] - The conference call will be accessible to the general public via a live audio webcast on the Company's website [2][3]

Core Viewpoint - Chicago Atlantic BDC, Inc. is holding its Annual Meeting on June 25, 2025, to discuss key proposals including the re-election of a board member and the ratification of its independent accounting firm [1][2]. Group 1: Annual Meeting Details - The Annual Meeting will be conducted virtually and is open to stockholders of record as of April 25, 2025 [1]. - Stockholders will vote on the re-election of Supurna VedBrat to the Board until the 2028 annual meeting and on the selection of BDO USA, P.C. as the independent registered public accounting firm for the fiscal year ending December 31, 2025 [2]. Group 2: Voting Process - Stockholders are encouraged to submit their votes through various methods including online, by phone, or by mail [3]. Group 3: Company Overview - Chicago Atlantic BDC, Inc. is a specialty finance company regulated as a business development company, focusing on maximizing risk-adjusted returns by investing primarily 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].

Financial Data and Key Metrics Changes - Gross investment income for Q1 2025 was $11.9 million, down from $12.7 million in Q4 2024 [12] - Net investment income was $7.6 million or $0.34 per share, compared to $8 million or $0.35 per share in the previous quarter [13] - Net assets at the end of the quarter were $301 million, with NAV per share at $13.19 [13] Business Line Data and Key Metrics Changes - The company has 31 portfolio companies, with 21% of the portfolio invested outside of cannabis [14] - The average debt position size is 3% of the debt portfolio, with 76% of the portfolio being floating rate [14] - The gross weighted average yield on company debt investments is approximately 16.6% [14] Market Data and Key Metrics Changes - The company originated $52.8 million in gross fundings since October 1, 2024, with $32.3 million committed and $20.8 million funded in Q1 2025 [8][16] - The pipeline includes approximately $590 million in potential debt transactions across 35 unique companies, with $462 million in cannabis opportunities and $128 million in non-cannabis investments [18] Company Strategy and Development Direction - The company focuses on lending to cannabis companies and other underserved markets, aiming to deploy capital with differentiated risk-reward profiles [6][11] - The strategy includes maintaining a disciplined underwriting approach and being selective with borrowers to build durable investment portfolios [20] - The company plans to grow its dividend component as it scales its platform, with a current dividend of $0.34 per share [10] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the potential for federal regulatory changes, although the timing is unpredictable [10] - The company believes it is well-positioned for 2025, focusing on proven operators and strong markets [11] - Management emphasizes a long-term view of partnership building with operators, regardless of broader market conditions [24][26] Other Important Information - The company has no non-accruals compared to an industry average of 3.9% [8] - The company closed on a new $100 million credit facility during the quarter, providing ample liquidity for new investments [15] Q&A Session Summary Question: General macro outlook and deployment of $100 million in loans - Management views the U.S. cannabis industry as a collection of individual state markets, allowing for a more focused investment strategy [24][26] Question: Pipeline activity in cannabis vs. non-cannabis sectors - No significant difference in deployment ratios is expected; fluctuations are considered ordinary [28] Question: Flexibility to increase the credit facility - Management believes there is room to grow the senior secured credit facility and add modest unsecured notes in a disciplined manner [29] Question: Debt leverage threshold - The company expects to maintain leverage well below industry averages for the foreseeable future [30] Question: Dividend growth expectations - Management does not provide specific dividend guidance but emphasizes that nearly all income will be distributed by year-end [32]

Financial Data and Key Metrics Changes - Gross investment income for Q1 2025 was $11.9 million, a decrease from $12.7 million in Q4 2024 [11] - Net investment income was $7.6 million or $0.34 per share, compared to $8.0 million or $0.35 per share in the previous quarter [12] - Net expenses were $4.3 million, slightly down from $4.4 million in the last quarter [12] - Net assets at quarter end were $301 million, with NAV per share at $13.19 [12] Business Line Data and Key Metrics Changes - The company has 31 portfolio companies, with 21% of the portfolio invested outside of cannabis [12] - The average debt position size is 3% of the debt portfolio, with 76% of the portfolio being floating rate [13] - The gross weighted average yield on company debt investments is approximately 16.6% [13] Market Data and Key Metrics Changes - The company has originated $52.8 million in gross fundings since October 1, 2024, with $32.3 million committed and $20.8 million funded in Q1 2025 [7] - The pipeline includes approximately $590 million in potential debt transactions across 35 unique companies, with $462 million in cannabis opportunities and $128 million in non-cannabis investments [16] Company Strategy and Development Direction - The company focuses on lending to cannabis companies and other underserved markets, aiming to deploy capital with differentiated risk-reward profiles [5] - The strategy includes maintaining a disciplined underwriting approach and being selective with borrowers to build durable investment portfolios [19] - The company aims to grow its dividend component as it scales its platform, having declared a total of $1.27 in dividends over the last four quarters [8] Management's Comments on Operating Environment and Future Outlook - Management believes the outlook for common sense reforms in the cannabis industry is positive, but the timing remains unpredictable [10] - The company is positioned well for 2025, focusing on proven operators and strong markets to support growth initiatives [10] - Management emphasizes a long-term view of partnership building with operators, regardless of broader market conditions [23] Other Important Information - The company has no non-accruals compared to an industry average of 3.9% [7] - A new $100 million credit facility was closed during the quarter, providing ample liquidity for future investments [14] Q&A Session Summary Question: General macro outlook and deployment readiness - The company maintains a focus on individual state markets rather than the broader U.S. cannabis industry, allowing for disciplined deployment of capital [23][25] Question: Pipeline activity comparison to previous quarters - There is no significant difference in the ratio of cannabis to non-cannabis investments, with fluctuations being ordinary [26] Question: Flexibility to increase the credit facility - The company sees room to grow its senior secured credit facility and add modest unsecured notes in a disciplined manner [27] Question: Debt leverage threshold - The company expects to remain well below industry averages for debt leverage in the foreseeable future [28] Question: Dividend growth expectations - The company does not provide specific dividend guidance but will distribute nearly all of its income by the end of the year [30]

Core Insights - Chicago Atlantic BDC, Inc. reported a quarterly loss of $0.34 per share, matching the Zacks Consensus Estimate, but a significant decline from a loss of $0.01 per share a year ago, indicating a 3,300% increase in losses [1] - The company posted revenues of $11.92 million for the quarter, missing the Zacks Consensus Estimate by 4.31%, but showing a substantial increase from $2.76 million in the same quarter last year [2] - The stock has underperformed, losing about 19% since the beginning of the year, while the S&P 500 has gained 0.1% [3] Financial Performance - Over the last four quarters, Chicago Atlantic BDC has surpassed consensus EPS estimates only once [2] - The current consensus EPS estimate for the upcoming quarter is $0.32, with expected revenues of $12.09 million, and for the current fiscal year, the EPS estimate is $1.44 on revenues of $55.71 million [7] Industry Context - The Financial - SBIC & Commercial Industry, to which Chicago Atlantic BDC belongs, is currently ranked in the bottom 20% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Chicago Atlantic BDC's stock performance [5]

Financial Reporting - Chicago Atlantic BDC, Inc. will report its financial results for Q1 2025 on May 14, 2025, before market open[5] - The earnings conference call and live audio webcast will take place at 9:00 a.m. Eastern Time on May 14, 2025[5] - The press release regarding the financial results is included as Exhibit 99.1 to the Current Report[5]

Financial Performance - For the first quarter ended March 31, 2025, total investment income was approximately $11.9 million, with net investment income of approximately $7.6 million, or $0.34 per weighted average share [6][19]. - The net asset value (NAV) per share was $13.19 as of March 31, 2025, slightly down from $13.20 as of December 31, 2024, primarily due to dividend payments [7][9]. - Total net assets as of March 31, 2025, were $301.0 million, compared to $301.2 million as of December 31, 2024 [9]. Investment Activity - The company committed $32.3 million for four new credit facilities, with $20.8 million in aggregate par value advanced in the first quarter of 2025 [8]. - The investment portfolio had an aggregate fair value of approximately $289.3 million across 31 portfolio companies as of March 31, 2025 [8]. - The company funded $7.2 million in investments across four borrowers subsequent to the quarter end [7]. Credit Facility - On February 11, 2025, the company closed a new $100 million senior secured revolving credit facility, maturing in March 2028, with an interest rate of SOFR plus 3.00% and a floor of 6.00% [4]. Dividends - The company declared a cash dividend of $0.34 per share for the quarter ended March 31, 2025, payable on April 11, 2025, to shareholders of record as of March 28, 2025 [10]. - A similar dividend of $0.34 per share for the quarter ended June 30, 2025, is scheduled for payment on July 11, 2025 [10]. Management Commentary - The CEO noted a measured deployment strategy, with gross fundings by principal value reaching $52.8 million since October 1, 2024, and emphasized the focus on senior-secured lending in the lower-middle and middle markets [3].

Financial Performance - For the three months ended March 31, 2025, total investment income was $11,923,002, a significant increase from $2,760,247 for the same period in 2024, representing a growth of approximately 332%[13] - Net investment income for the three months ended March 31, 2025, was $7,648,421, compared to a net loss of $79,809 for the same period in 2024, indicating a turnaround in performance[13] - Total expenses for the three months ended March 31, 2025, were $5,249,058, up from $2,840,056 in the same period of 2024, reflecting an increase of approximately 84%[13] - The net increase in net assets resulting from operations for the three months ended March 31, 2025, was $7,614,357, compared to $519,811 for the same period in 2024, showing a substantial improvement[13] - The net investment income per share for the three months ended March 31, 2025, was $0.34, compared to a loss of $0.01 per share for the same period in 2024[13] - The weighted average shares outstanding for the three months ended March 31, 2025, were 22,820,386, a significant increase from 6,214,941 shares for the same period in 2024[13] Asset Management - The balance of net assets as of March 31, 2025, was $301,018,004, compared to $84,518,767 as of March 31, 2024, indicating a substantial growth in net assets[17] - The company reported a net change in unrealized depreciation on investments of $(34,064) for the three months ended March 31, 2025, compared to an appreciation of $599,620 for the same period in 2024[13] - Cash and cash equivalents at the end of the period were $14,921,739, down from $33,160,294 at the end of March 31, 2024, reflecting a decrease of approximately 55.1%[20] - The company had a receivable for investment sold amounting to $4,122,500, which was not present in the prior year[20] - The increase in operating liabilities included a rise in management fee payable to $580,888 from $(10,990) in the previous year[20] Investment Strategy - The company focuses on investing in the cannabis industry and other complex, regulated industries, aiming to maximize risk-adjusted returns on equity[47] - The Company’s investment strategy includes secured and unsecured debt, equity warrants, and direct equity investments, typically with terms of three to six years[48] - The company has entered into a Loan Portfolio Acquisition, which may impact future performance and investment strategies[8] - The company anticipates potential risks related to changes in regulation impacting the cannabis industry, which could affect business prospects[8] Sector Investments - Total Cannabis investments amount to $210,854 million, with a fair value of $211,431 million, representing 70.2% of net assets[23] - Dreamfields Brands, Inc. (d/b/a Jeeter) has a delayed draw term loan with a principal of $31,745 million and a fair value of $31,675 million, accounting for 10.6% of net assets[23] - Verano Holdings Corp. has a term loan with a principal of $51,584 million and a fair value of $51,577 million, representing 17.2% of net assets[23] - Total U.S. Corporate Debt stands at $287,660 million, with a fair value of $288,576 million, indicating 95.9% of total debt investments[23] Financial Obligations - The company incurred offering costs of $989,645 during the current period, compared to $756 in the previous year[20] - The net cash used in financing activities was $(1,746,345), compared to $(1,554,420) in the same period last year, indicating an increase in cash outflow[20] - The company recorded $0 of offering costs charged to capital for the three months ended March 31, 2025, following $1,214,375 charged for the year ended December 31, 2024[85] Risk Management - The company expects to continue monitoring the impact of interest and inflation rates on its business prospects and those of its portfolio companies, as indicated in the risk factors section[8] - The company may face challenges in obtaining financing due to the regulatory environment surrounding cannabis investments, which could adversely affect its financial condition[22] - The company manages various risks, including market risk and concentration risk, particularly due to its focus on cannabis investments[102] Shareholder Returns - The Company declared a quarterly dividend of $0.34 per share on March 14, 2025, resulting in total dividends paid of $7,758,931, compared to $0.25 per share and $1,553,736 paid in the same period of 2024[155] - Total distributions for the tax year ended March 31, 2025, were $18,625,335, up from $9,819,273 for the tax year ended March 31, 2024, reflecting a 89.5% increase[173] Compliance and Reporting - The Company transitioned to a regulated investment company (RIC) for U.S. federal income tax purposes, effective from the tax period January 1, 2022, through March 31, 2022[45] - The Company’s financial statements are prepared in accordance with U.S. GAAP, reflecting necessary adjustments for fair presentation[53] - The fair value of investments is determined using a combination of market approach and contingent claim analyses, with valuations categorized into Level 1, Level 2, and Level 3 based on the observability of inputs[68]

Company Overview - Chicago Atlantic BDC, Inc. (LIEN) is anticipated to report a year-over-year increase in earnings due to higher revenues for the quarter ended March 2025 [1] - The consensus EPS estimate for the upcoming report is $0.31 per share, reflecting a significant year-over-year change of +3200% [3] - Expected revenues are projected to be $12.46 million, which is an increase of 351.5% from the same quarter last year [3] Earnings Expectations - The consensus EPS estimate has been revised 12.5% higher in the last 30 days, indicating a positive reassessment by analysts [4] - The company has an Earnings ESP of +9.68%, suggesting a likelihood of beating the consensus EPS estimate [11] - Historical performance shows that Chicago Atlantic BDC has beaten consensus EPS estimates only once in the last four quarters [13] Industry Context - In comparison, Gladstone Investment (GAIN), another player in the Zacks Financial - SBIC & Commercial Industry, is expected to post earnings of $0.23 per share, indicating a year-over-year decline of -4.2% [17] - Gladstone Investment's revenue is expected to be $24.78 million, reflecting a modest increase of 4.8% from the previous year [17] - The consensus EPS estimate for Gladstone has been revised 1.4% lower, resulting in a negative Earnings ESP of -1.43%, making it challenging to predict an earnings beat [18]