Chicago Atlantic BDC, Inc 10-Q for FY2024 Q3

Chicago Atlantic BDC, Inc. (LIEN)

10-Q 2024-11-08 For: 2024-09-30

Added on April 11, 2026

About this 10-Q

Chicago Atlantic BDC, Inc filed this 10-Q on November 8, 2024, covering the quarter ended September 30, 2024 (FY2024 Q3).

Headline figures

Quarter ended September 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net loss: $1.72M; compared with a net loss of $2.64M a year earlier
Diluted EPS: -$0.03; compared with $0.20 a year earlier

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Maryland		86-2872887
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

600 Madison Avenue, Suite 1800
New York, NY
		10022
(Address of principal executive offices)		(Zip Code)

Title of Each Class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.01 per share		LIEN		The NASDAQ Stock Market LLC

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
		Emerging growth company	☒

	TABLE OF CONTENTS
		PAGE NO.
PART I	FINANCIAL INFORMATION
Item 1	Financial Statements (unaudited)	5
	Statements of Assets and Liabilities	5
	Statements of Operations	6
	Statements of Changes in Net Assets	7
	Statements of Cash Flows	9
	Schedule of Investments	10
	Notes to Financial Statements	12
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3	Quantitative and Qualitative Disclosures About Market Risk	44
Item 4	Controls and Procedures	46
PART II	OTHER INFORMATION
Item 1	Legal Proceedings	46
Item 1A	Risk Factors	46
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	46
Item 3	Defaults Upon Senior Securities	46
Item 4	Mine Safety Disclosures	46
Item 5	Other Information	46
Item 6	Exhibits	46
SIGNATURES		48

	September 30, 2024			December 31, 2023
	(unaudited)
ASSETS
Investments at fair value:
Non-control/non-affiliate investments at fair value (amortized cost of $54,952,504 and $53,471,317, respectively)	$	55,788,511		$	54,120,000

Cash and cash equivalents		30,111,563			32,611,635
Interest receivable		1,635,943			1,755,360
Deferred offering costs		1,125,739			-
Other receivable		401,313			-
Prepaid expenses		103,554			39,276
Other assets		50,000			50,000
Deferred financing costs		41,061			-
Paydown receivable		21,000			-
Total assets		89,278,684			88,576,271

LIABILITIES
Transaction fees payable related to the Loan Portfolio Acquisition		4,795,549			711,264
Offering costs payable		986,806			-
Management fee payable		253,421			257,121
Audit fees payable		213,523			123,998
Capital gains incentive fees payable		125,048			87,583
Legal fees payable		88,435			84,824
Administrator fees payable		51,251			86,463
Due to affiliate		51,142			-
Unearned interest income		42,550			-
Deferred financing costs payable		41,061			-
Directors fees payable		25,992			94,760
Other payables		24,296			13,822
Valuation fees payable		22,468			24,675
Professional fees payable		17,500			17,233
Income-based incentive fees payable		-			1,511,253
Distributions payable		-			2
Excise tax payable		-			10,655
Total liabilities		6,739,042			3,023,653

Commitments and contingencies (Note 6)		-			-

NET ASSETS
Common Stock, $0.01 par value, 100,000,000 shares authorized, 6,214,995 and 6,214,941 shares issued and outstanding, respectively		62,149			62,149
Additional paid-in-capital		85,031,106			85,041,203
Distributable earnings (Accumulated losses)		(2,553,613	)		449,266
Total net assets	$	82,539,642		$	85,552,618
Total liabilities and net assets	$	89,278,684			88,576,271
NET ASSET VALUE PER SHARE	$	13.28		$	13.77

	Three Months Ended						Nine Months Ended
	September 30, 2024			September 30, 2023			September 30, 2024		September 30, 2023
INVESTMENT INCOME
Non-control/non-affiliate investment income
Interest income	$	2,686,771		$	2,885,725		$	8,203,601	$	8,106,013
Fee income		489,176			31,250			813,926		162,500
Total investment income		3,175,947			2,916,975			9,017,527		8,268,513

EXPENSES
Transaction expenses related to the Loan Portfolio Acquisition		2,429,993			-			5,069,062		-
Management fee		253,421			264,565			745,876		760,473
Income-based incentive fees		-			405,247			328,503		1,051,741
Audit expense		95,675			223,982			299,225		409,365
Administrator fees		98,489			84,617			298,132		250,314
Legal expenses		60,200			148,292			200,073		334,308
Insurance expense		66,939			67,122			199,430		202,597
Other expenses		40,546			22,210			107,213		61,918
Director expenses		25,992			38,223			80,311		105,913
Professional fees		59,780			15,841			74,694		51,808
Valuation fees		22,990			22,890			50,043		116,955
Capital gains incentive fees		(35,904	)		(5,000	)		37,465		-
Custodian fees		12,000			12,000			35,850		36,000
Excise tax expense		31,314			-			31,314		-
Total expenses		3,161,435			1,299,989			7,557,191		3,381,392

NET INVESTMENT INCOME (LOSS)		14,512			1,616,986			1,460,336		4,887,121

NET REALIZED GAIN (LOSS) FROM INVESTMENTS
Non-controlled/non-affiliate investments		-			-			-		(210,767	)
Net realized gain (loss) from investments		-			-			-		(210,767	)

NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) FROM INVESTMENTS
Non-controlled/non-affiliate investments		(179,524	)		(343,104	)		187,324		166,012
Net change in unrealized appreciation (depreciation) from investments		(179,524	)		(343,104	)		187,324		166,012
Net realized and unrealized gains (losses)		(179,524	)		(343,104	)		187,324		(44,755	)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	(165,012	)	$	1,273,882		$	1,647,660	$	4,842,366

NET INVESTMENT INCOME (LOSS) PER SHARE — BASIC AND DILUTED	$	0.00⁽¹⁾		$	0.26		$	0.23	$	0.79
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS PER SHARE — BASIC AND DILUTED	$	(0.03	)	$	0.20		$	0.27	$	0.78
WEIGHTED AVERAGE SHARES OUTSTANDING — BASIC AND DILUTED		6,214,965			6,214,673			6,214,952		6,214,672

	Common Stock
Three Months Ended September 30, 2024	Shares		Par Value		Additional paid-in-capital		Distributable Earnings/ (Accumulated Loss)			Total net assets
Balance, June 30, 2024		6,214,964	$	62,149	$	85,030,784	$	(834,860	)	$	84,258,073
Net increase (decrease) in net assets resulting from operations
Net investment income (loss)		-		-		-		14,512			14,512
Net realized gain (loss) from investments		-		-		-		-			-
Net change in unrealized appreciation (depreciation) from investments		-		-		-		(179,524	)		(179,524	)
Total net increase (decrease) in net assets resulting from operations		-		-		-		(165,012	)		(165,012	)
Distributions to stockholders from:
Investment income-net		-		-		-		(1,553,741	)		(1,553,741	)
Capital transactions
Reinvestment of stockholder distributions		31		-		322		-			322
Total net increase (decrease) in net assets from capital transactions		31		-		322		-			322
Total increase (decrease) in net assets		31		-		322		(1,718,753	)		(1,718,431	)
Balance, September 30, 2024		6,214,995	$	62,149	$	85,031,106	$	(2,553,613	)	$	82,539,642

	Common Stock
Three Months Ended September 30, 2023	Shares		Par value		Additional paid-in-capital		Distributable Earnings/ (Accumulated Loss)			Total net assets
Balance, June 30, 2023		6,214,672	$	62,147	$	85,038,887	$	4,943,179		$	90,044,213
Net increase (decrease) in net assets resulting from operations
Net investment income (loss)		-		-		-		1,616,986			1,616,986
Net realized gain (loss) from investments		-		-		-		-			-
Net change in unrealized appreciation (depreciation) from investments		-		-		-		(343,104	)		(343,104	)
Total net increase (decrease) in net assets resulting from operations		-		-		-		1,273,882			1,273,882
Distributions to stockholders from:
Investment income-net		-		-		-		(3,915,564	)		(3,915,564	)
Capital transactions
Reinvestment of stockholder distributions		33		-		321		-			321
Total net increase (decrease) in net assets from capital transactions		33		-		321		-			321
Total increase (decrease) in net assets		33		-		321		(2,641,682	)		(2,641,361	)
Balance, September 30, 2023		6,214,705	$	62,147	$	85,039,208	$	2,301,497		$	87,402,852

	Common Stock
Nine Months Ended September 30, 2024	Shares		Par Value		Additional paid-in-capital			Distributable Earnings/ (Accumulated Loss)			Total net assets
Balance, December 31, 2023		6,214,941	$	62,149	$	85,041,203		$	449,266		$	85,552,618
Net increase (decrease) in net assets resulting from operations
Net investment income (loss)		-		-		-			1,460,336			1,460,336
Net realized gain (loss) from investments		-		-		-			-			-
Net change in unrealized appreciation (depreciation) from investments		-		-		-			187,324			187,324
Total net increase (decrease) in net assets resulting from operations		-		-		-			1,647,660			1,647,660
Distributions to stockholders from:
Investment income-net		-		-		-			(4,661,215	)		(4,661,215	)
Capital transactions
Reinvestment of stockholder distributions		54		-		579			-			579
Total net increase (decrease) in net assets from capital transactions		54		-		579			-			579
Total increase (decrease) in net assets		54		-		579			(3,013,555	)		(3,012,976	)
Effect of permanent adjustments		-		-		(10,676	)		10,676			-
Balance, September 30, 2024		6,214,995	$	62,149	$	85,031,106		$	(2,553,613	)	$	82,539,642

	Common Stock
Nine Months Ended September 30, 2023	Shares		Par value		Additional paid-in-capital		Distributable Earnings/ (Accumulated Loss)			Total net assets
Balance, December 31, 2022		6,214,672	$	62,147	$	84,917,788	$	1,495,794		$	86,475,729
Net increase (decrease) in net assets resulting from operations
Net investment income (loss)		-		-		-		4,887,121			4,887,121
Net realized gain (loss) from investments		-		-		-		(210,767	)		(210,767	)
Net change in unrealized appreciation (depreciation) from investments		-		-		-		166,012			166,012
Total net increase (decrease) in net assets resulting from operations		-		-		-		4,842,366			4,842,366
Distributions to stockholders from:
Investment income-net		-		-		-		(3,915,564	)		(3,915,564	)
Capital transactions
Issuance of common stock		-		-		-		-			-
Reinvestment of stockholder distributions		33		-		321		-			321
Total net increase (decrease) in net assets from capital transactions		33		-		321		-			321
Total increase (decrease) in net assets		33		-		321		926,802			927,123
Effect of permanent adjustments		-		-		121,099		(121,099	)		-
Balance, September 30, 2023		6,214,705	$	62,147	$	85,039,208	$	2,301,497		$	87,402,852

	For the nine months ended
	September 30, 2024			September 30, 2023
Cash flows from operating activities
Net increase (decrease) in net assets resulting from operations	$	1,647,660		$	4,842,366
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Net realized (gain) loss from investments		-			210,767
Net change in unrealized (appreciation) depreciation from investments		(187,324	)		(166,012	)
Net (accretion of discounts) and amortization of premiums		(501,303	)		(431,052	)
Purchase of investments		(5,141,250	)		(8,442,000	)
PIK interest capitalized		(182,634	)		(78,153	)
Proceeds from sales of investments and principal repayments		4,344,000			1,780,000
(Increase)/Decrease in operating assets:
Other receivable		(401,313	)		-
Interest receivable		119,417			(270,594	)
Paydown receivable		(21,000	)		-
Prepaid expenses		(64,278	)		(71,515	)
Other assets		-			(50,000	)
Increase/(Decrease) in operating liabilities:
Income-based incentive fees payable		(1,511,253	)		1,051,741
Management fee payable		(3,700	)		93,600
Capital gains incentive fees payable		37,465			-
Legal fees payable		3,611			108,452
Transaction fees payable related to the Loan Portfolio Acquisition		4,084,285			-
Valuation fees payable		(2,207	)		94,130
Administrator fees payable		(35,212	)		24,648
Audit fees payable		89,525			25,165
Directors fees payable		(68,768	)		2,719
Professional fees payable		267			(10,679	)
Other payables		10,474			(22,740	)
Unearned interest income		42,550			-
Due to affiliate		51,142			261
Excise tax payable		(10,655	)		(80,566	)
Net cash provided by (used in) operating activities		2,299,499			(1,389,462	)

Cash flows from financing activities
Offering costs paid		(138,933	)		-
Distributions paid		(4,660,638	)		(3,914,922	)
Net cash provided by (used in) financing activities		(4,799,571	)		(3,914,922	)

Net increase (decrease) in cash and cash equivalents		(2,500,072	)		(5,304,384	)
Cash and cash equivalents, beginning of period		32,611,635			35,125,320
Cash and cash equivalents, end of period	$	30,111,563		$	29,820,936

Supplemental and non-cash financing activities
Reinvestment of dividend distributions	$	579		$	321
Accrual for deferred financing costs (Note 2)	$	41,061		$	-
Accrual for deferred offering costs (Note 2)	$	1,127,739		$	-

Portfolio Company ^(1)(10)(13)	Type of Investment ⁽²⁾	Investment Date ⁽³⁾	Maturity Date	Interest Rate ⁽⁴⁾	Fair Value Hierarchy⁽⁵⁾		Geographic Region ⁽⁶⁾	Non- Qualifying Asset ⁽⁷⁾	Principal Amount ⁽⁸⁾			Amortized Cost		Fair Value ⁽⁹⁾		% of Net Assets
Debt Securities - United States
Real Estate Services
Workbox Holdings, Inc.	Senior Secured First Lien Term Loan	5/20/2024	5/31/2029	Fixed interest rate 6.0% + 6.0% PIK		3	Midwest	No		$	1,352	$	1,119	$	1,260		1.53	%
											1,352		1,119		1,260		1.53
Wholesale Trade
Ascend Wellness Holdings, Inc.	Senior Secured Note	7/16/2024	7/16/2029	Fixed interest rate 12.75%		3	Northeast	No			3,500		3,322		3,322		4.02
Curaleaf Holdings, Inc.	Senior Secured Note	10/11/2022	12/15/2026	Fixed interest rate 8.0%		3	Northeast	Yes			4,500		4,102		4,298		5.21
Dreamfields Brands, Inc. (d/b/a Jeeter)	Senior Secured First Lien Term Loan	5/3/2023	5/3/2026	Variable interest rate PRIME⁽¹¹⁾ + 8.75% (7.5% PRIME Floor)		3	West	No			4,320		4,254		4,320		5.23
PharmaCann, Inc.	Senior Secured Note	6/30/2022	6/30/2025	Fixed interest rate 12.0%		3	Midwest	No			4,250		4,177		4,123		5.00
STIIIZY, Inc. (f/k/a Shryne Group Inc.)	Senior Secured First Lien Term Loan	5/26/2022	5/26/2027	Variable interest rate PRIME⁽¹¹⁾ + 8.5% (4.0% PRIME Floor) + 1.0% PIK		3	West	No			20,066		19,800		19,865		24.06
Verano Holdings Corp.	Senior Secured First Lien Term Loan	10/27/2022	10/30/2026	Variable interest rate PRIME⁽¹¹⁾ + 6.5% (6.25% PRIME Floor)		3	Midwest	Yes			17,748		17,436		17,925		21.72
											54,384		53,091		53,853		65.24

Total: Debt Securities - United States (66.77%):													54,210		55,113		66.77

Total: Debt Securities (66.77%):													54,210		55,113		66.77

Equity Securities - United States									Shares/ Units
Real Estate Services
Workbox Holdings, Inc.	Series A-1 Preferred Shares	5/20/2024				3	Midwest				358,950	$	500	$	500		0.60	%
Workbox Holdings, Inc.	Series A-3 Preferred Stock Warrant	5/20/2024				3	Midwest				791,258		97		71		0.09
Workbox Holdings, Inc.	Series A-4 Preferred Stock Warrant	5/20/2024				3	Midwest				1,191,769		146		105		0.13
													743		676		0.82

Total: Equity Securities - United States (0.82%):													743		676		0.82

Total: Equity Securities (0.82%):													743		676		0.82

Total Investment in Securities (67.59%):												$	54,953	$	55,789		67.59	%

Cash Equivalents
State Street Institutional U.S. Government Money Market Fund ⁽¹²⁾						1						$	30,112	$	30,112		36.48	%
Cash Equivalents (36.48%):													30,112		30,112		36.48

Total Portfolio Investments and Cash Equivalents (104.07%):												$	85,065	$	85,901		104.07	%

(in millions) Portfolio Company	Total loan commitments				Less: funded commitments				Total unfunded commitments				Less: commitments substantially at discretion of the Company				Less: unavailable commitments due to borrowing base or other covenant restrictions				Total net commitments
Workbox Holdings, Inc.		$	2.83			$	1.33			$	1.50			$	-			$	-			$	1.50

Portfolio Company ⁽¹⁾	Type of Investment ⁽²⁾	Investment Date ⁽³⁾	Maturity Date	Interest Rate ⁽⁴⁾	Fair Value Hierarchy⁽⁵⁾		Geographic Region ⁽⁶⁾	Non- Qualifying Asset ⁽⁷⁾	Principal Amount ⁽⁸⁾		Amortized Cost		Fair Value ⁽⁹⁾		% of Net Assets
Debt Securities - United States
Wholesale Trade ⁽¹⁰⁾
Curaleaf Holdings, Inc.	Senior Secured Note	10/11/2022	12/15/2026	Fixed interest rate 8.0%		3	Northeast	Yes	$	4,500	$	3,989	$	4,140		4.84	%
Dreamfields Brands, Inc. (d/b/a Jeeter)	Senior Secured First Lien Term Loan	5/3/2023	5/3/2026	Variable interest rate PRIME⁽¹¹⁾ + 8.75% (7.5% PRIME Floor)		3	West	No		4,320		4,229		4,320		5.05
PharmaCann, Inc.	Senior Secured Note	6/30/2022	6/30/2025	Fixed interest rate 12.0%		3	Midwest	No		4,250		4,109		3,974		4.65
STIIIZY, Inc. (f/k/a Shryne Group Inc.)	Senior Secured First Lien Term Loan	5/26/2022	5/26/2026	Variable interest rate PRIME⁽¹¹⁾ + 8.5% (4.0% PRIME Floor) “1.0% PIK”		3	West	No		21,065		20,682		20,749		24.25
Verano Holdings Corp.	Senior Secured First Lien Term Loan	10/27/2022	10/30/2026	Variable interest rate PRIME⁽¹¹⁾ + 6.5% (6.25% PRIME Floor)		3	Midwest	Yes		20,937		20,462		20,937		24.47
									$	55,072		53,471		54,120		63.26

Total: Debt Securities - United States (63.26%):												53,471		54,120		63.26

Total: Debt Securities (63.26%):												53,471		54,120		63.26

Total Investment in Securities (63.26%):											$	53,471	$	54,120		63.26	%

Cash Equivalents
State Street Institutional U.S. Government Money Market Fund ⁽¹²⁾						1					$	32,612	$	32,612		38.12	%
Cash Equivalents (38.12%):												32,612		32,612		38.12

Total Portfolio Investments and Cash Equivalents (101.38%):											$	86,083	$	86,732		101.38	%

	September 30, 2024
	Amortized Cost					Fair Value
Industry	Amount		%			Amount		%
Wholesale Trade	$	53,091,077		96.6	%	$	53,852,511		96.5	%
Real Estate Services		1,861,427		3.4			1,936,000		3.5
Total	$	54,952,504		100.0	%	$	55,788,511		100.0	%

	Fair Value Measurements at September 30, 2024 Using
Assets	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Senior Secured First Lien Term Loans	$	-	$	-	$	43,370,000	$	43,370,000
Senior Secured Notes		-		-		11,742,511		11,742,511
Equity		-		-		676,000		676,000
Total	$	-	$	-	$	55,788,511	$	55,788,511

	Fair Value Measurements at December 31, 2023 Using
Assets	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Senior Secured First Lien Term Loans	$	-	$	-	$	46,006,000	$	46,006,000
Senior Secured Notes		-		-		8,114,000		8,114,000
Total	$	-	$	-	$	54,120,000	$	54,120,000

Investment Type	Fair Value as of September 30, 2024		Valuation Techniques/ Methodologies	Unobservable Input	Range			Weighted Average ⁽¹⁾

Senior Secured First Lien Term Loans	$	43,370,000	Discounted Cash Flow	Discount Rate		9.9% - 13.5	%		11.9	%
Senior Secured Notes		11,742,511	Discounted Cash Flow	Discount Rate		7.1% - 12.9	%		10.2	%
Preferred Equity Securities		500,000	Enterprise Value Market Approach	Enterprise Valuation Multiple		2.25	x		2.25	x
Warrants and Other Equity Securities		176,000	Option Pricing Model	Volatility Factor		47.0	%		47.0	%
Total	$	55,788,511

Investment Type	Fair Value as of December 31, 2023		Valuation Techniques/ Methodologies	Unobservable Input	Range			Weighted Average ⁽¹⁾

Senior Secured First Lien Term Loans	$	46,006,000	Discounted Cash Flow	Discount Rate		10.1% - 13.5	%		12.2	%
Senior Secured Notes		8,114,000	Discounted Cash Flow	Discount Rate		7.4% - 13.7	%		10.5	%
Total	$	54,120,000

	Senior Secured First Lien Term Loans			Senior Secured Notes		Equity			Total Investments
Fair Value as of December 31, 2023	$	46,006,000		$	8,114,000	$	-		$	54,120,000
Purchases		1,082,174			3,316,250		742,826			5,141,250
Accretion of discount and fees (amortization of premium), net		316,057			185,246		-			501,303
PIK interest		182,634			-		-			182,634
Proceeds from sales of investments and principal repayments		(4,344,000	)		-		-			(4,344,000	)
Net realized gain (loss) on investments		-			-		-			-
Net change in unrealized appreciation (depreciation) from investments		127,135			127,015		(66,826	)		187,324
Balance as of September 30, 2024	$	43,370,000		$	11,742,511	$	676,000		$	55,788,511

Net change in unrealized appreciation/depreciation on Level 3 investments still held as of September 30, 2024	$	127,135		$	127,015	$	(66,826	)	$	187,324

Declaration Date	Type	Record Date	Payment Date	Per Share Amount		Dividends Paid
March 8, 2024	Quarterly	March 20, 2024	March 28, 2024	$	0.25	$	1,553,736
May 9, 2024	Quarterly	June 20, 2024	June 28, 2024	$	0.25	$	1,553,738
August 8, 2024	Quarterly	September 19, 2024	September 27, 2024	$	0.25	$	1,553,741

	For the tax period from April 1, 2024 through September 30, 2024		For the tax year from April 1, 2023 through March 31, 2024
Ordinary income	$	3,107,479	$	9,819,273
		3,107,479		9,819,273

	March 31, 2024			March 31, 2023
Undistributed ordinary income	$	1,782,017		$	3,418,714
Net unrealized appreciation (depreciation) on investments		1,248,303			713,009
Capital loss carry forwards		(210,767	)		-
Other temporary differences		(3,393,536	)		(399,948	)
Total	$	(573,983	)	$	3,731,775

	September 30, 2024
Geographic Region	Amortized Cost			Fair Value
West		43.8	%		43.3	%
Midwest		42.7			43.0
Northeast		13.5			13.7
Total		100.0	%		100.0	%

Investment Performance Risk Rating		Summary Description
Grade 1		Investments rated 1 involve the least amount of risk to our initial cost basis. The borrower is performing above expectations, and the trends and risk factors for this investment since origination or acquisition are generally favorable. Full return of principal, interest and dividend income is expected.
Grade 2		Investment is performing in-line with expectations. Investments rated 2 involve an acceptable level of risk that is similar to the risk at the time of origination or acquisition. Risk factors remain neutral or favorable compared with initial underwriting. All investments or acquired investments in new portfolio companies are initially assessed a rating of 2.
Grade 3		Investments rated 3 involve a borrower performing below expectations and indicates that the loan’s risk has increased somewhat since origination or acquisition. Capital impairment or payment delinquency is not anticipated. The investment may also be out of compliance with certain financial covenants.
Grade 4		Investments rated 4 involve a borrower performing materially below expectations and indicates that the loan’s risk has increased materially since origination or acquisition. In addition to the borrower being generally out of compliance with debt covenants, loan payments may be past due (but generally not more than 120 days past due). Delinquency of interest and / or dividend payments in anticipated. No loss of principal is anticipated.
Grade 5		Investments rated 5 involve a borrower performing substantially below expectations and indicates that the loan’s risk has increased substantially since origination or acquisition. It is anticipated that the Company will not recoup its initial cost and may realize a loss upon exit. Most or all of the debt covenants are out of compliance and payments are substantially delinquent. Loans rated 5 are not anticipated to be repaid in full and we will reduce the fair market value of the loan to the amount we anticipate will be recovered.

	September 30, 2024
Investment Performance Risk Rating	Investments at Fair Value		Percentage of Total Investments
1	$	-		-	%
2		55,788,511		100.00
3		-		-
4		-		-
5		-		-
Total	$	55,788,511		100.00	%

	December 31, 2023
Investment Performance Risk Rating	Investments at Fair Value		Percentage of Total Investments
1	$	-		-	%
2		54,120,000		100.00
3		-		-
4		-		-
5		-		-
Total	$	54,120,000		100.00	%

	For the Nine months ended		For the Nine months ended
	September 30, 2024		September 30, 2023		$ Change			% Change
Transaction expenses related to the Loan Portfolio Acquisition	$	5,069,062	$	-	$	5,069,062			100	%
Management fee		745,876		760,473		(14,597	)		-2	%
Income-based incentive fees		328,503		1,051,741		(723,238	)		-69	%
Audit expense		299,225		409,365		(110,140	)		-27	%
Administrator fees		298,132		250,314		47,818			19	%
Legal expenses		200,073		334,308		(134,235	)		-40	%
Insurance expense		199,430		202,597		(3,167	)		-2	%
Other expenses		107,213		61,918		45,295			73	%
Director expenses		80,311		105,913		(25,602	)		-24	%
Professional fees		74,694		51,808		22,886			44	%
Valuation fees		50,043		116,955		(66,912	)		-57	%
Capital gains incentive fees		37,465		-		37,465			100	%
Custodian fees		35,850		36,000		(150	)		0	%
Excise tax expense		31,314		-		31,314			100	%
Total expenses	$	7,557,191	$	3,381,392	$	4,175,799			123	%

			Price Range
Class and Period	Net Asset Value⁽¹⁾		High		Low		High Sales Price Premium (Discount) to Net Asset Value⁽²⁾			Low Sales Price Premium (Discount) to Net Asset Value⁽²⁾			Cash Dividend Per Share⁽³⁾
Year Ended December 31, 2024
Fourth Quarter (Through November 5, 2024)		*	$	13.24	$	10.73		*			*			*
Third Quarter	$	13.28	$	12.00	$	10.64		-9.6	%		-19.9	%	$	0.25
Second Quarter	$	13.56	$	12.38	$	9.61		-8.7	%		-29.1	%	$	0.25
First Quarter	$	13.60	$	10.28	$	7.65		-24.4	%		-43.8	%	$	0.25
Year Ended December 31, 2023
Fourth Quarter	$	13.77	$	9.81	$	8.32		-28.8	%		-39.6	%	$	0.70	⁽⁶⁾
Third Quarter	$	14.06	$	10.37	$	7.65		-26.3	%		-45.6	%	$	0.63	⁽⁶⁾
Second Quarter	$	14.49	$	9.19	$	7.82		-36.3	%		-45.8	%		-
First Quarter	$	14.29	$	9.98	$	8.25		-30.2	%		-42.3	%		-
Year Ended December 31, 2022⁽⁴⁾
Fourth Quarter	$	13.91	$	10.55	$	9.57		-24.2	%		-31.2	%		-
Third Quarter	$	13.73	$	10.74	$	9.00		-21.8	%		-34.5	%		-
Second Quarter	$	13.64	$	13.50	$	7.80		-1.0	%		-42.8	%		-
First Quarter⁽⁵⁾	$	13.61	$	14.41	$	12.57		5.9	%		-7.6	%		-

Change in Interest Rates	Interest Income			Interest expense		Net Income/(Loss)
Up 300 basis points	$	1,264		$	-	$	1,264
Up 200 basis points		843			-		843
Up 100 basis points		421			-		421
Down 100 basis points		(400	)		-		(400	)
Down 200 basis points		(734	)		-		(734	)
Down 300 basis points		(934	)		-		(934	)

Exhibit Number		Description of Exhibit
2.1		Purchase Agreement by and between the Company and Chicago Atlantic Loan Portfolio, LLC dated as of February 18, 2024⁽¹⁾
3.1		Articles of Amendment and Restatement of the Company⁽²⁾
3.2		Articles of Amendment of the Company*
3.3		Amended and Restated Bylaws of the Company⁽²⁾
10.1		Investment Advisory Agreement, dated October 1, 2024, between the Company and the Adviser⁽³⁾
10.2		License Agreement, dated October 1, 2024, between the Company and the Adviser⁽⁴⁾
10.3		Expense Limitation Agreement, dated October 1, 2024, between the Company and the Adviser⁽⁵⁾
31.1		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
31.2		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
32.1		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
32.2		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

	CHICAGO ATLANTIC BDC, INC.

	By:	/s/ Andreas Bodmeier
		Andreas Bodmeier
		Chief Executive Officer (Principal Executive Officer)

	By:	/s/ Umesh Mahajan
		Umesh Mahajan
		Chief Financial Officer (Principal Financial and Accounting Officer)

		Silver Spike Investment Corp.

Attest:	/s/ Umesh Mahajan	By:	/s/ Scott Gordon
Name: Umesh Mahajan		Name: Scott Gordon
Title: Secretary		Title: Chief Executive Officer

Date: November 7, 2024	By:	/s/ Andreas Bodmeier
		Andreas Bodmeier
		Chief Executive Officer (Principal Executive Officer)