Chicago Atlantic BDC, Inc. Q2 FY2024 earnings call

• Loan portfolio acquisition: Announced on Feb 20, 2024, to purchase loans from Chicago Atlantic; registration statements filed, with pre-effective amendments on June 20 and July 31, expected to close in early Q4 2024.
• Deal pipeline: Robust and growing over $550 million, with increased conversations with cannabis operators; investment strategy expanded to non-cannabis sectors effective April 22.
• Portfolio update: In Q2, received partial paydown from Company D, invested in non-cannabis Company F (Workbox Holdings) in a $13.3 million syndication, and later invested in Company G (Ascent Wellness) in July. All positions are secured loans, no non-accrual, gross portfolio yield 18% vs broader BDC universe.
• Scott Gordon's remarks: Macro environment for cannabis lending has confusion around rescheduling timing; state momentum continues with Ohio launching adult-use and Florida vote; operating trends stable for larger operators; capital market activity up for MSOs refinancing; building pipeline outside cannabis sector with first non-cannabis loan in Q2.

Gross investment income for the second quarter of 2024 was $3.1 million, compared to $2.9 million in the same quarter last year. Expenses excluding those related to the loan portfolio acquisition were approximately $1 million, resulting in net investment income excluding transaction expenses of $2.1 million (vs $1.9 million last year). Transaction-related expenses in the quarter were about $0.6 million, leading to net investment income of $1.5 million. Net assets at the end of the period were $84.3 million, down from the previous year primarily due to dividend payments and transaction expenses. On a per share basis, investment income excluding transaction expenses was $0.33, net investment income was $0.25, and net asset value per share was $13.56. The loan portfolio acquisition announced in Q1 is anticipated to close in early fourth quarter 2024.

• Loan portfolio acquisition: Anticipated to close in early fourth quarter 2024.
• Dividend: Board declared regular quarterly cash dividend of $0.25 per share, payable on September 27 to stockholders of record on September 19.

• Forward-looking statements involve known and unknown risks and uncertainties; refer to most recent SEC filings for risk factors.
• Macro environment challenges for cannabis-related lending, including confusion around rescheduling timing and upcoming November election with potential regime change.

Q: No questions shown initially A: No questions answered during the call