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]
Chicago Atlantic BDC, Inc.(LIEN) - 2025 Q1 - Quarterly Report