LIEN — Chicago Atlantic BDC, Inc.

Summary of Chicago Atlantic BDC, Inc. Q3 2025 Earnings Call

1. Key Financial Results and Metrics

• Net Investment Income: $9.5 million, or 42¢ per share, up from $7.7 million (34¢ per share) in Q2 2025.
• Gross Investment Income: $15.1 million, compared to $13.1 million in the previous quarter.
• Dividend: Declared at 34¢ per share, marking the fifth consecutive quarter at this rate, well-covered by net investment income.
• Net Assets: Totaled $302.9 million, with a net asset value per share of $13.27, slightly up from $13.23 in Q2.
• Debt: Only $11 million outstanding, indicating a low leverage ratio compared to industry averages.

2. Strategic Updates and Business Highlights

• Funded $66.7 million across 13 new investments, setting a record for the company.
• Portfolio Composition: 37 portfolio companies, with 24% invested in non-cannabis sectors. 99.5% of the portfolio consists of senior secured loans.
• Yield: The weighted average yield on debt investments was 15.8%, significantly higher than the average BDC yield of 11.4%.
• Liquidity: Approximately $97.8 million available for further investments, comprised of cash and borrowing capacity.

3. Forward Guidance and Outlook

• The company plans to continue diversifying its portfolio while maintaining a disciplined approach to underwriting and structuring investments.
• Anticipates a more measured pace of deployment in Q4 2025, despite a robust pipeline of approximately $610 million in potential debt transactions.
• Management remains optimistic about the cannabis industry, viewing it as a collection of diverse markets rather than a single entity.

4. Bad News, Challenges, or Points of Concern

• The company acknowledged challenges in the broader private credit markets, including borrower defaults and interest rate sensitivity, although it claims to be insulated from these issues due to its unique positioning.
• There is ongoing uncertainty regarding the cannabis industry's outlook, with some lenders expressing bearish views, although management maintains a more constructive perspective.
• Concerns were raised about the potential impact of uncertain tax liabilities on borrowers, which could pose risks to their financial health.

5. Notable Q&A Insights

• Management clarified that while there were higher-than-expected loan repayments in Q3, it did not affect their deployment pace due to a well-established pipeline.
• The company views the hemp derivatives market's regulation as a potential positive catalyst for state-regulated cannabis markets.
• There was discussion about the risks associated with lending to smaller, mid-sized companies, with management emphasizing their ability to negotiate favorable terms and maintain strong portfolio monitoring.

Overall, Chicago Atlantic BDC, Inc. reported solid financial performance in Q3 2025, with strategic initiatives focused on capitalizing on unique market opportunities while navigating industry challenges.