Financial Performance - Total investment income for the three months ended September 30, 2025, was $15,070,603, a significant increase from $3,175,947 in the same period of 2024, representing a growth of approximately 373%[15] - Net investment income for the three months ended September 30, 2025, was $9,491,121, compared to $14,512 for the same period in 2024, indicating a substantial increase[15] - Interest income for the nine months ended September 30, 2025, was $37,012,196, compared to $8,203,601 for the same period in 2024, showing an increase of approximately 351%[15] - The company reported a net increase in net assets resulting from operations of $8,834,061 for the three months ended September 30, 2025, compared to a decrease of $165,012 in the same period of 2024[15] - For the nine months ended September 30, 2025, the net increase in net assets resulting from operations was $25,032,683, compared to $1,647,660 for the same period in 2024, indicating significant growth[22] Assets and Liabilities - Total assets as of September 30, 2025, amounted to $327,253,579, up from $309,561,041 as of December 31, 2024, reflecting an increase of about 5.6%[12] - Total liabilities rose to $24,333,000 as of September 30, 2025, compared to $8,398,463 as of December 31, 2024, marking an increase of approximately 189%[12] - The balance of net assets as of September 30, 2025, was $302,920,579, compared to $82,539,642 as of September 30, 2024, reflecting a significant increase[20] Investment Activity - The company purchased investments totaling $124,909,502 for the nine months ended September 30, 2025, compared to $5,141,250 for the same period in 2024, indicating a substantial increase in investment activity[22] - Total cannabis investments reached $222.052 million, representing 73.4% of the portfolio[24] - The company is actively pursuing market expansion through various term loans across different sectors, including cannabis and finance[24] Expenses - The company incurred total expenses of $5,809,901 for the three months ended September 30, 2025, compared to $3,161,435 for the same period in 2024, representing an increase of about 83%[15] - The management fee expenses for the three months ended September 30, 2025, were $1,399,845, a significant increase from $253,421 in the same period of 2024[127] - The Company recorded income-based incentive fee expenses of $2,347,473 for the three months ended September 30, 2025, compared to $0 for the same period in 2024[128] Cash and Cash Equivalents - Cash and cash equivalents at the end of the period on September 30, 2025, were $10,462,366, down from $30,111,563 at the end of September 30, 2024[22] - The company has a cash and cash equivalents balance of $10,462,366 as of September 30, 2025, down from $23,932,406 as of December 31, 2024[12] Debt and Financing - The company has a revolving line of credit of $11,000,000 as of September 30, 2025, which was not present as of December 31, 2024[12] - The Company entered into a senior secured revolving credit agreement with an initial aggregate amount of up to $100,000,000, with $89,000,000 available as of September 30, 2025[117][121] - The average interest rate on borrowings under the Credit Agreement was 7.33% for the three and nine months ended September 30, 2025[124] Regulatory and Market Risks - The company anticipates potential impacts from uncertainties related to the new U.S. Presidential administration, including tariff enactment and tax reductions, which could affect business prospects[10] - The company has identified various risk factors, including regulatory challenges in the cannabis industry, which could adversely affect its portfolio companies[107] Investment Strategy - The Company focuses on investing in the cannabis industry, aiming to maximize risk-adjusted returns on equity[41] - The Company’s investment strategy includes secured and unsecured debt, equity warrants, and direct equity investments[42] Shareholder Distributions - Total distributions paid to stockholders for the nine months ended September 30, 2025, amounted to $15,515,682, significantly higher than $4,660,638 for the same period in 2024[22] - A cash dividend of $0.34 per share was approved by the Board on November 11, 2025, payable on January 15, 2026[168] Valuation and Fair Value - The fair value of total investments is reported at $275,241,000, which is 91.4% of net assets[34] - The fair value of investments is determined using a multi-step valuation process, which includes inputs from independent third-party valuation firms[60] Tax and Compliance - The Company has transitioned to a regulated investment company (RIC) for U.S. federal income tax purposes[39] - The Company intends to maintain its tax treatment as a RIC and must distribute at least 90% of its investment company taxable income to avoid federal excise taxes[74]
Chicago Atlantic BDC, Inc.(LIEN) - 2025 Q3 - Quarterly Report