Chicago Atlantic BDC, Inc. Q4 FY2025 earnings call

• Chicago Atlantic BDC is uniquely positioned, primarily investing in direct loans to privately held companies in niche markets like cannabis and lower middle market, with differentiated credit opportunities. • Net investment income for the quarter and full year demonstrated the business model's potential. • The broader BDC market was impacted by negative sentiment, but Chicago Atlantic BDC is differentiated with limited overlap in investments, high senior secured exposure, and insulated portfolio from interest rate drops. • Announced a $0.34 dividend, sixth consecutive quarter at that rate. • Fourth quarter funded $31.7 million across seven new investments. • First quarter of 2026 funded $93.9 million in new investments, with $55.7 million in payoffs. • Pipeline across the platform is significant, with cannabis and non-cannabis opportunities. • Disciplined approach to underwriting and structuring investments, with portfolio having low correlation to other asset classes.

Net investment income for the fourth quarter of 2025 was $0.36 per share and $1.45 for the full year, demonstrating a yield to book value of 2.7% for the fourth quarter and 11% for the year. Weighted average yield on debt investments as of December 31, 2025, was 15.8% compared to 10.8% for the average public BDC. 99.5% of the portfolio is senior secured. 73% of the portfolio at par is either fixed rate or floating rate at floor. Only 3% of the portfolio is exposed to the software industry. Net assets totaled $303.4 million at quarter end, with net asset value per share $13.30. During the fourth quarter, $31.7 million was funded across seven new investments. In the first quarter of 2026, $93.9 million was funded in new investments, with $55.7 million in payoffs resulting in approximately $40 million in net originations. The pipeline across the platform as of quarter end totaled approximately $732 million, with approximately $616 million in cannabis opportunities and $116 million in non-cannabis opportunities.

• Negative sentiment surrounding private credit markets influencing Chicago Atlantic BDC stock. • Concerns about froth in private credit markets leading to looser underwriting standards, portfolio performance pressure, and higher defaults. • Drop in Fed funds rate causing fears of weighing on earnings and dividends. • Concerns about banks that have backed private credit. • Uncertainty in cannabis policy at federal level with lingering ambiguity limiting investment until regulatory framework for cannabis as Schedule III substance is in place.

Q: Pablo Zuanich asked about the pipeline (across the entire platform, increase from last quarter), rescheduling impact on borrowers, state-level activity, credit facility increase potential, loan ratio between cannabis and non-cannabis, details of bespoke solution, and repayments.

A: Pipeline is across the platform, increased from ~600 million to ~732 million. Rescheduling has increased transaction activity, creating more financing opportunities. Activity in Virginia, Ohio, Missouri, Maryland, Colorado, California. Credit facility increase is possible. Non-cannabis positions are more diversified. Bespoke solution was a first out, last out financing with a large financial institution. Repayments are idiosyncratic, reflective of broader transaction activity.

Q: Mitchell Penn asked about state disclosures for companies, valuation services using third parties, and portfolio overlap with refi.

A: Will explore state disclosures for next quarter. Utilize third-party valuation provider to value every position each quarter. Will consider portfolio overlap with refi for next quarter in conjunction with state exposure.