Financial Data and Key Metrics Changes - Gross investment income for Q2 2025 was $13.1 million, up from $11.9 million in Q1 2025, indicating a positive trend in income generation [14] - Net investment income remained consistent at $7.7 million or $0.34 per share, maintaining the same dividend rate for four consecutive quarters [7][14] - Net assets at the end of the quarter were $302 million, with a net asset value per share of $13.23 [14] Business Line Data and Key Metrics Changes - The company funded $39.1 million in new debt investments during Q2, with 100% being senior secured and 88% floating rate [15] - The portfolio consists of 33 companies, with 22% invested in non-cannabis sectors [11][12] - The average debt investment position size is 3% of the investment portfolio, and 76% of the portfolio has floating interest rates [12] Market Data and Key Metrics Changes - The current pipeline includes approximately $780 million in potential debt transactions, with $649 million in cannabis opportunities and $131 million in non-cannabis investments [16][19] - The company has approximately $125.4 million in liquidity, providing ample capacity for future investments [13] Company Strategy and Development Direction - The company focuses on lending to cannabis companies and underserved markets, positioning itself uniquely in the BDC sector [5][10] - The strategy includes underwriting investments based on current cash flow and collateral profiles, rather than relying on potential regulatory changes [9][10] - The company aims to grow returns to shareholders as it scales its platform and navigates market conditions [8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the cannabis market, noting that potential rescheduling could lead to increased cash flow for borrowers and higher valuations [8][9] - There is a belief that the current environment will continue to provide opportunities for growth, despite regulatory uncertainties [9][19] - The company remains focused on originating loans that deliver attractive risk-adjusted returns [20] Other Important Information - The company has no non-accrual loans, contrasting with the industry average of 3.8% [7] - The weighted average yield on debt investments is 16.1%, significantly higher than the average BDC yield of 11.8% [6] Q&A Session Summary Question: Overview on market sentiment about the BDC sector - Management noted that the BDC sector has been impacted by uncertainty around tariffs but is insulated from broader market dynamics due to its niche strategy [22][23] Question: Changes under the Trump administration regarding BDC regulation - Management indicated that it is too early to speculate on potential regulatory changes under the new administration [24] Question: Changes in pipeline and opportunities since becoming Chicago Atlantic BDC - The company has gained access to a broader pipeline of non-cannabis opportunities and identified new types of cannabis opportunities, including restructurings and ESOP transactions [25][26][27] Question: Impact of rescheduling news on potential clients - Management observed that operators are more optimistic and seeking capital earlier to execute growth strategies, rather than pausing for potential regulatory changes [28][29]