Chicago Atlantic BDC, Inc.
For the period ended Jun 30, 2025. Filed Aug 14, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 14, 2025
LIEN$9.07-0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-14.
0001140361-25-018734
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-14.
0000950170-25-108415
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 131 previous paragraphs and 183 current paragraphs.
83 unchanged; 34 reworded; 63 added; 14 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 79 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (63)
Current report
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Current report
Growth or EBITDA positive entities
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Companies that require capital but do not want to dilute their equity
Current report
Companies that are showing strong cash flow performance with low leverage profiles
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Transactions that tend to be attractively priced and have better than normal covenants and amortization due to complexity of the industry
Current report
Low debt to enterprise value
Current report
Companies that have raised significant equity capital validating market value
Current report
Industry focus typically includes software, hardware, e-commerce, direct to consumer and other fast-growing companies
Current report
Liquidity covenants that ensure such company has adequate cash runway
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Low debt to enterprise value
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Profitable or demonstrated path to near term profitability
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Companies that are showing strong cash flow performance with low leverage profiles, but the industries carry regulatory, reputational or other risks
Current report
Companies with attractive assets, including, but not limited to, accounts receivable, equipment or real estate
Current report
Transactions that tend to be attractively priced and have better than normal covenants and amortization due to complexity of the industry or situation
Current report
Low debt to asset value and/or enterprise value ratios
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Financing is typically event driven
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Companies that are pursuing a merger, acquisition, refinancing, dividend recap, or other strategic liquidity need
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Companies that are showing strong cash flow performance with low leverage profiles
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Companies that have multiple areas of value and liquidity in addition to the underlying business
Current report
Low debt to enterprise value ratios
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the cost of our organization and offerings;
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the cost of calculating our net asset value, including the cost of any third-party valuation services;
Current report
the cost of effecting sales and repurchases of shares of our common stock and other securities;
Current report
fees and expenses payable under any underwriting agreements, if any;
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debt service and other costs of borrowings or other financing arrangements;
Current report
costs of hedging;
Current report
expenses, including travel expenses, incurred by the Adviser, or members of the investment team, or payable to third-parties, performing due diligence on prospective portfolio companies and, if necessary, enforcing our rights;
Current report
management and incentive fees payable pursuant to the Investment Advisory Agreement;
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fees payable to third-parties relating to, or associated with, making investments and valuing investments (including third-party valuation firms);
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costs, including legal fees, associated with compliance under cannabis laws;
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transfer agent and custodial fees;
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fees and expenses associated with marketing efforts (including attendance at industry and investor conferences and similar events);
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federal and state registration fees;
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any exchange listing fees and fees payable to rating agencies;
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federal, state and local taxes;
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independent directors’ fees and expenses, including travel expenses;
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cost of preparing financial statements and maintaining books and records and filing reports or other documents with the SEC (or other regulatory bodies) and other reporting and compliance costs, and the compensation of professionals responsible for the preparation of the foregoing;
Current report
the cost of any reports, proxy statements or other notices to our stockholders (including printing and mailing costs), the costs of any stockholder or director meetings and the compensation of investor relations personnel responsible for the preparation of the foregoing and related matters;
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brokerage commissions and other compensation payable to brokers or dealers;
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research and market data;
Showing the first 40 of 63 passages. Open the source sections for the rest.
Removed paragraphs (14)
Previous report
Recent Developments
Previous report
Borrowings under the Credit Agreement bear interest at the annual rate of one-month term Secured Overnight Financing Rate plus 3.00%. The Company will pay a commitment fee of 0.50% per annum on the average daily unused portion of commitments under the Credit Agreement during the Revolving Period. The Company also will be required to pay letter of credit participation fees and a fronting fee on the average daily amount of the lenders’ exposure with respect to any letters of credit issued at the request of the Company under the Credit Agreement.
Previous report
In connection with the Company entering into the Credit Agreement, the Board approved a clarification, as proposed by the Company and the Adviser, of the Expense Limitation Agreement, that the interest expense, fees, and other costs associated with the Credit Agreement, and any future interest expense, fees, and other costs associated with raising debt and/or equity capital for the Company are not subject to, and do not count towards, the expense cap of 2.15% per annum under the Expense Limitation Agreement.
Previous report
Additionally, on February 11, 2025, WATC and the Company entered into a custody agreement (the “WATC Custody Agreement”), pursuant to which WATC was appointed to serve as the Company’s custodian to hold securities, loans, cash, and other assets on behalf of the Company. Either party may terminate the WATC Custody Agreement at any time upon sixty (60) days’ prior written notice. In addition, Western Alliance Bank (“WAB”) and the Company entered into two substantively identical custody agreements (the “WAB Custody Agreements” and together with the WATC Custody Agreement, the “Custody Agreements”), pursuant to which WAB was appointed to hold and act as the Company’s custodian with respect to all Deposit Accounts (as defined in the WAB Custody Agreements) for funds of the Company placed through the ICS Deposit Placement Agreement (included with the WAB Custody Agreements).
Previous report
On February 14, 2025, Mr. Mahajan resigned from his position as Chief Financial Officer of the Company. Mr. Mahajan’s decision to resign from his position as Chief Financial Officer of the Company was due to his desire to focus more attention on his duties as the Co-Chief Investment Officer of the Company, and was not due to a disagreement on any matter related to the Company’s operations, policies or practices.
Previous report
On February 14, 2025, the Board appointed Martin Rodgers to the position of Chief Financial Officer of the Company. Mr. Rodgers will serve as Chief Financial Officer of the Company until his successor has been duly elected and qualified, or until the earlier of his resignation or removal.
Previous report
Mr. Rodgers has over 35 years of accounting, finance, project and risk management experience, and serves as the Senior Managing Director of Finance and Accounting at Chicago Atlantic Group, LP. Prior to joining Chicago Atlantic, Mr. Rodgers spent 15 years at First Eagle Alternative Credit, a $20 billion alternative credit manager specializing in bank syndicated loans and direct lending debt, in various roles, including Director of Finance and Administration and Director of Alternative Credit Risk, with responsibilities for fund accounting, performance measurement, enterprise risk management, and special projects. Mr. Rodgers started his career in the United Kingdom and spent 4 years in the audit practice at PricewaterhouseCoopers. He has also held positions at Goldman Sachs, Abbot Laboratories, and Jefferson Wells. Mr. Rodgers holds a Bachelor of Arts (Accountancy and Economics) degree from the University of Stirling in Scotland and is a member of the Institute of Chartered Accountants of Scotland.
Previous report
On March 13, 2025, each of Mr. Frederick Herbst and Mr. Jason Papastavrou resigned from his position as Director of the Company. Each of Mr. Herbst’s and Mr. Papastavrou’s decision to resign from his position as Director of the Company was not due to a disagreement on any matter related to the Company’s operations, policies or practices.
Previous report
On March 13, 2025, the Board appointed Ms. Supurna VedBrat to replace Mr. Herbst as a Class 1 Director of the Company, to serve until the Company’s annual meeting of stockholders to be held in 2025, or until her successor is duly elected and qualified. On March 13, 2025, the Board appointed Mr. Patrick McCauley to replace Mr. Papastavrou as a Class 3 Director of the Company, to serve until the Company’s annual meeting of stockholders to be held in 2027, or until his successor is duly elected and qualified.
Previous report
Ms. VedBrat has had a professional career spanning over 25 years of experience in both the U.S. and Europe, and within the financial and technologies industries. Since 2023, Ms. VedBrat has served as a consultant. Previously, Ms. VedBrat was Head of Global Trading at BlackRock from July 2011 to February 2023, where she oversaw the company’s trading function across asset classes and regions. Ms. VedBrat was responsible for driving innovation and setting the trading platform’s strategic vision focused on growth and sustainable scalable trading solutions. Ms. VedBrat also served as a member of BlackRock’s Global Operating Committee and the Investment Subcommittee. Ms. VedBrat served as the President of Strategic Solutions Consulting from January 2009 to July 2011 and as a fixed income, commodities and distressed debt analyst at Bank of America from March 2004 to January 2009. Ms. VedBrat has served two terms each on the Commodity Futures Trading Commission (CFTC) Technology Advisory Committee (TAC) and the CFTC Global Markets Advisory Committee (GMAC). Previously, Ms. VedBrat held various positions at Bank of America, ING Barings in London, and Lehman Brothers in New York. She started her career as a software engineer with IBM at their research center. Ms. VedBrat serves on the boards of directors of Roadzen, Inc. and South Street Securities LLC. She also serves on the board of Women in Derivatives (WIND), a non-profit with a mission to advance women in the workforce. Ms. VedBrat was given the Financial Markets Luminary award by Women in Derivatives. Ms. VedBrat was ranked #8 on the Institutional Investor’s 2018 Trading Tech 40 list. She was also a recipient of the Markets Media Women in Finance Award for Excellence in Leadership. Ms. VedBrat holds a Bachelor of Arts (Honors) degree in Mathematics from Delhi University and a Bachelor of Arts (High Honors) degree in Computer Science from Rutgers University.
Previous report
Mr. McCauley is Chief Executive Officer and Owner of Bridgewell Agribusiness LLC (SWAB), a commodity-based sales and trading company headquartered in Portland, Oregon. SWAB sources food and agricultural products for industrial and retail food companies. In January 2018, Mr. McCauley purchased SWAB from Bridgewell Resources, where he served as President and Chief Executive Officer since October 2013. Bridgewell Resources is a similar platform to SWAB, focusing on sales and trading of lumber-based products across a range of construction, utility, and retail markets. Prior to working at Bridgewell Resources, Mr. McCauley spent 22 years at Susquehanna International Group (SIG), a global quantitative financial trading firm based in Philadelphia, Pennsylvania. At SIG, Mr. McCauley held a number of key positions including Chief Operating Officer, Head of Business Development, Head of Equity Trading and Head of Trader Development and Education. Mr. McCauley regularly conducts seminars that explore the principles of Decision Science applied to managerial decision-making and strategic business management. In addition, he has developed a curriculum that he has taught as an independent study course for local high school students. Mr. McCauley holds a Bachelor of Arts degree from Swarthmore College and a Master of Business Administration degree from Vanderbilt University.
Previous report
On March 13, 2025, Dr. Andreas Bodmeier resigned from his position as Chief Executive Officer of the Company. Dr. Bodmeier’s decision to resign from his position as Chief Executive Officer of the Company was not due to a disagreement on any matter related to the Company’s operations, policies or practices.
Previous report
On March 13, 2025, the Board appointed Mr. Peter Sack to the position of Chief Executive Officer of the Company. Mr. Sack will serve as Chief Executive Officer of the Company until his successor has been duly elected and qualified, or until the earlier of his resignation or removal.
Previous report
Mr. Sack is a Managing Partner at Chicago Atlantic Group, LP. Mr. Sack is a credit investor and portfolio manager with experience investing across the capital structure. Prior to joining Chicago Atlantic, Mr. Sack was a Principal at BC Partners Credit from July 2018 to June 2021, where he sourced and underwrote across the firm’s opportunistic and senior lending strategies in a wide array of industries including cannabis-related direct lending. Previously, Mr. Sack was an Associate at Atlas Holdings LLC, a private-equity firm focused on supporting distressed manufacturing and distribution companies globally, from July 2012 to June 2016. Mr. Sack serves on the boards of directors of Chicago Atlantic Real Estate Finance, Inc., Ability Insurance Company, and the New York City Charter School of the Arts. Mr. Sack speaks Mandarin Chinese and Spanish. Mr. Sack holds a Bachelor of Arts degree in East Asian Studies from Yale University, and a Master of Business Administration degree from the Wharton School of the University of Pennsylvania, and was a Fulbright Scholar at Sun Yat-sen University in China.
Reworded paragraphs (34)
Previous wording
The following discussion and analysis or our financial condition and results of operations should be read together with the financial statements and the related notes that are included in Item 1 of Part I of this quarterly report on Form 10-Q. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the section entitled “Item 1A. Risk Factors” in our annual report on Form 10-K for the fiscal year ended December 31, 2024 and elsewhere in this quarterly report on Form 10-Q. Please also see the section entitled “Special Note Regarding Forward-Looking Statements.”
Current wording
The following discussion and analysis of our financial condition and results of operations should be read together with the financial statements and the related notes that are included in Item 1 of Part I of this quarterly report on Form 10-Q. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the section entitled “Item 1A. Risk Factors” in our annual report on Form 10-K for the fiscal year ended December 31, 2024 and elsewhere in this quarterly report on Form 10-Q. Please also see the section entitled “Special Note Regarding Forward-Looking Statements.”
Previous wording
We were formed in January 2021 as a Maryland corporation and are structured as an externally managed, closed-end, non-diversified management investment company. We have elected to be treated as a BDC under the 1940 Act. In addition, for U.S. federal income tax purposes we have elected to be treated, and intend to qualify annually to be treated, as a RIC under Subchapter M of the Code, commencing with our taxable year ended March 31, 2022.
Current wording
We were formed in January 2021 as a Maryland corporation and are structured as an externally managed, closed-end, non-diversified management investment company. We have elected to be regulated as a business development company ("BDC") under the Investment Company Act of 1940 (the "1940 Act"). In addition, for U.S. federal income tax purposes we have elected to be treated, and intend to qualify annually to be treated, as a regulated investment company ("RIC") under Subchapter M of the Internal Revenue Code (the "Code"), commencing with our taxable year ended March 31, 2022.
Previous wording
We have typically invested in and expect to continue to invest in loans made primarily to private leveraged lower middle-market and middle-market companies with up to $100 million of earnings before interest, taxes, depreciation and amortization, or “EBITDA.” Our business model is focused primarily on the direct origination of investments through portfolio companies or their financial sponsors. We expect that our investments will generally range between $2 million and $50 million each, although we expect that this investment size will vary proportionately with the size of our capital base. We have an active pipeline of investments and are currently reviewing approximately $590 million of potential investments in varying stages of underwriting.
Current wording
We have typically invested in and expect to continue to invest in loans made primarily to private leveraged lower middle-market and middle-market companies with up to $100 million of earnings before interest, taxes, depreciation and amortization, or “EBITDA.” Our business model is focused primarily on the direct origination of investments through portfolio companies or their financial sponsors. We expect that our investments will generally range between $2 million and $50 million each, although we expect that this investment size will vary proportionately with the size of our capital base. We have an active pipeline of investments and are currently reviewing approximately $780.3 million of potential investments in varying stages of underwriting.
Previous wording
All of our cannabis investments are designed to be compliant with all applicable laws and regulations within the jurisdictions in which they are made or to which we are otherwise subject, including U.S. federal laws. We will make equity investments only in companies that are compliant with all applicable laws and regulations within the jurisdictions in which they are located or operate, including U.S. federal laws. We may make loans to companies that we determine based on our due diligence are licensed in, and complying with, state-regulated cannabis programs, regardless of their status under U.S. federal law, so long as the investment itself is designed to be compliant with all applicable laws and regulations in the jurisdiction in which the investment is made or to which we are otherwise subject, including U.S. federal law. We are externally managed by the Adviser and seek to expand the compliant cannabis investment activities of the Adviser’s leading investment platform in the cannabis industry. We primarily seek to partner with private equity firms, entrepreneurs, business owners and management teams to provide credit and equity financing alternatives to support buyouts, recapitalizations, growth initiatives, refinancings and acquisitions across cannabis companies, including cannabis-enabling technology companies, cannabis-related health and wellness companies, and hemp and cannabidiol (“CBD”) distribution companies. Under normal circumstances, each such cannabis company derives at least 50% of its revenues or profits from, or commits at least 50% of its assets to, activities related to cannabis at the time of our investment in the cannabis company. We are not required to invest a specific percentage of our assets in such cannabis companies, and we may make debt and equity investments in other companies regardless of sector.
Current wording
All of our cannabis investments are designed to be compliant with all applicable laws and regulations within the jurisdictions in which they are made or to which we are otherwise subject, including U.S. federal laws. We will make equity investments only in companies that are compliant with all applicable laws and regulations within the jurisdictions in which they are located or operate, including U.S. federal laws. We may make loans to companies that we determine based on our due diligence are licensed in, and complying with, state-regulated cannabis programs, regardless of their status under U.S. federal law, so long as the investment itself is designed to be compliant with all applicable laws and regulations in the jurisdiction in which the investment is made or to which we are otherwise subject, including U.S. federal law. We are externally managed by Chicago Atlantic BDC Advisers, LLC (the "Adviser") and seek to expand the compliant cannabis investment activities of the Adviser’s leading investment platform in the cannabis industry. We primarily seek to partner with private equity firms, entrepreneurs, business owners and management teams to provide credit and equity financing alternatives to support buyouts, recapitalizations, growth initiatives, refinancings and acquisitions across cannabis companies, including cannabis-enabling technology companies, cannabis-related health and wellness companies, and hemp and cannabidiol (“CBD”) distribution companies. Under normal circumstances, each such cannabis company derives at least 50% of its revenues or profits from, or commits at least 50% of its assets to, activities related to cannabis at the time of our investment in the cannabis company. We are not required to invest a specific percentage of our assets in such cannabis companies, and we may make debt and equity investments in other companies regardless of sector.
Previous wording
Our primary operating expenses are a base management fee and any incentive fees under the Investment Advisory Agreement. Our investment management fee compensates our Adviser for its work in identifying, evaluating, negotiating, executing, monitoring, servicing and realizing our investments. See “Item 1. Business—Investment Advisory Agreement.”
Current wording
Our primary operating expenses are a base management fee and any incentive fees under the investment advisory agreement between the Company and the Adviser (the "Investment Advisory Agreement"). Our investment management fee compensates our Adviser for its work in identifying, evaluating, negotiating, executing, monitoring, servicing and realizing our investments. See “Item 1. Business—Investment Advisory Agreement.”
Previous wording
Except as specifically provided below, all investment professionals and staff of the Adviser, when and to the extent engaged in providing investment advisory and management services to us, the base compensation, bonus and benefits, and the routine overhead expenses of such personnel allocable to such services, are provided and paid for by the Adviser. We may bear our allocable portion of the compensation paid by the Adviser (or its affiliates) to our CFO and CCO and their respective staffs (based on a percentage of time such individuals devote, on an estimated basis, to our business affairs). We may bear any other expenses of our operations and transactions, including (without limitation) fees and expenses relating to:
Current wording
Except as specifically provided below, all investment professionals and staff of the Adviser, when and to the extent engaged in providing investment advisory and management services to us, the base compensation, bonus and benefits, and the routine overhead expenses of such personnel allocable to such services, are provided and paid for by the Adviser. We may bear our allocable portion of the compensation paid by the Adviser (or its affiliates) to our Chief Financial Officer ("CFO") and Chief Compliance Officer ("CCO") and their respective staffs (based on a percentage of time such individuals devote, on an estimated basis, to our business affairs). We may bear any other expenses of our operations and transactions, including (without limitation) fees and expenses relating to:
Previous wording
As of March 31, 2025, our investment portfolio had an aggregate fair value of approximately $289.3 million and was comprised of approximately $253.7 million in first lien, senior secured loans, approximately $34.9 million in senior secured notes and approximately $0.7 million in equity securities across thirty-one portfolio companies. As of December 31, 2024, our investment portfolio had an aggregate fair value of approximately $275.2 million and was comprised of approximately $239.9 million in first lien, senior secured loans, approximately $34.7 million in senior secured notes and $0.7 million in equity securities across twenty-eight portfolio companies.
Current wording
As of June 30, 2025, our investment portfolio had an aggregate fair value of approximately $307.5 million and was comprised of approximately $267.6 million in first lien, senior secured loans, approximately $38.9 million in senior secured notes and approximately $1.0 million in equity securities across thirty-three portfolio companies. As of December 31, 2024, our investment portfolio had an aggregate fair value of approximately $275.2 million and was comprised of approximately $239.9 million in first lien, senior secured loans, approximately $34.7 million in senior secured notes and $0.7 million in equity securities across twenty-eight portfolio companies.
Previous wording
A summary of the composition of our investment portfolio at amortized cost and fair value as a percentage of total investments are shown in the following tables as of March 31, 2025 and December 31, 2024.
Current wording
A summary of the composition of our investment portfolio at amortized cost and fair value as a percentage of total investments as of June 30, 2025 and December 31, 2024 are shown in the following tables.
Previous wording
As of March 31, 2025 and December 31, 2024, we had three portfolio companies that represented 42.9% and 45.1% respectively, of our investments, at fair value. As of March 31, 2025 and December 31, 2024, our largest portfolio company represented 17.9% and 18.9%, respectively, of our investments, at fair value.
Current wording
As of June 30, 2025 and December 31, 2024, we had three portfolio companies that represented 39.5% and 45.1% respectively, of our investments, at fair value. As of June 30, 2025 and December 31, 2024, our largest portfolio company represented 16.8% and 18.9%, respectively, of our investments, at fair value.
Previous wording
The following table provides a summary of the changes in the investment portfolio for the three months ended March 31, 2025 and March 31, 2024:
Current wording
The following table provides a summary of the changes in the investment portfolio for the six months ended June 30, 2025 and 2024:
Previous wording
Our portfolio management team uses an ongoing investment risk rating system to characterize and monitor our outstanding loans. Our portfolio management team monitors and, when appropriate, recommends changes to the investment risk ratings. Our Adviser’s Valuation Committee reviews the recommendations and/or changes to the investment risk ratings, which are submitted on a quarterly basis to the Board of Directors and its Audit Committee.
Current wording
Our portfolio management team uses an ongoing investment risk rating system to characterize and monitor our outstanding loans. Our portfolio management team monitors and, when appropriate, recommends changes to the investment risk ratings. Our Adviser’s valuation committee reviews the recommendations and/or changes to the investment risk ratings, which are submitted on a quarterly basis to the Company's Board of Directors (the "Board") and the Audit Committee of the Board.
Previous wording
On February 11, 2025, the Company entered into a senior secured revolving credit agreement (the “Credit Agreement”) among the Company, as borrower, Western Alliance Trust Company, N.A. (“WATC”), as administrative agent, Western Alliance Bank, as an issuing bank and as the initial lender, and the other lenders party thereto from time to time.
Current wording
On February 11, 2025, the Company entered into a senior secured revolving credit agreement (the “Credit Agreement”, the "Revolving Line of Credit") by and among the Company, as borrower, Western Alliance Trust Company, N.A. (“WATC”), as administrative agent, Western Alliance Bank, as an issuing bank and as the initial lender, and the other lenders party thereto from time to time.
Previous wording
Under the Credit Agreement, the lenders have agreed to extend credit to the Company on a revolving basis in an initial aggregate amount of up to $100,000,000 with an option for the Company to request additional commitments, in a minimum amount of $5,000,000, at one or more times from existing and/or new lenders at their election. The Credit Agreement also provides for the issuance of letters of credit in an aggregate face amount of up to $5,000,000.
Current wording
Under the Credit Agreement, the lenders have agreed to extend credit to the Company on a revolving basis in an initial aggregate amount of up to $100,000,000 with an option for the Company to request additional commitments, in a minimum amount of $5,000,000, at one or more times from existing and/or new lenders. The Credit Agreement also provides for the issuance of letters of credit in an aggregate face amount of up to $5,000,000.
Previous wording
The following discussion and analysis of our results of operations encompasses our results for the three months ended March 31, 2025 and March 31, 2024.
Current wording
The following discussion and analysis of our results of operations encompasses our results for the three and six months ended June 30, 2025 and 2024.
Previous wording
The following table sets forth the components of investment income for the three months ended March 31, 2025 and March 31, 2024:
Current wording
The following table sets forth the components of investment income for the three and six months ended June 30, 2025 and 2024:
Previous wording
For the three months ended March 31, 2025, total investment income was approximately $11.9 million, which is attributable to $0.6 million of fee income related to commitment fees, success fees, amendment fees and administrative fees and $11.3 million of interest income. For the three months ended March 31, 2024, total investment income was approximately $2.8 million, which is attributable to less than $0.1 million of fee income related to administrative fees and $2.7 million of interest income.
Current wording
For the three and six months ended June 30, 2025, total investment income was approximately $13.1 million and $25.0 million, respectively, which was attributable to $1.2 million and $1.8 million of fee income related to commitment fees, success fees, amendment fees and administrative fees and approximately $11.9 million and $23.2 million of interest income, respectively. For the three and six months ended June 30, 2024, total investment income was approximately $3.1 million and $5.8 million, respectively, which was attributable to approximately $0.3 million and $0.3 million of fee income related to commitment fees, advisory fees, and administrative fees and approximately $2.8 million and $5.5 million of interest income, respectively.
Previous wording
Our operating expenses for the three months ended March 31, 2025 and March 31, 2024 are presented below:
Current wording
Our operating expenses for the six months ended June 30, 2025 and 2024 are presented below:
Previous wording
Net investment income was approximately $7.6 million for the three months ended March 31, 2025, as compared to approximately $(0.1) million for the three months ended March 31, 2024. The fluctuation in net investment income is attributable to the increase in complexity, portfolio size and growth of the Company following the close of the Loan Portfolio Acquisition. The amortized cost of the Company’s investment portfolio increased by $234.8 million from March 31, 2024 to March 31, 2025.
Current wording
Net investment income was approximately $7.7 million and $15.3 million for the three and six months ended June 30, 2025, respectively, as compared to approximately $1.5 million and $1.4 million for the three and six months ended June 30, 2024, respectively. The fluctuation in net investment income is attributable to the increase in complexity, portfolio size and growth of the Company following the close of the previously announced acquisition of a portfolio of loans (the “Loan Portfolio”) from Chicago Atlantic Loan Portfolio, LLC (“CALP”) in exchange for newly issued shares of the Company’s common stock (the “Loan Portfolio Acquisition”). The amortized cost of the Company’s investment portfolio increased by $253.3 million from June 30, 2024 to June 30, 2025.
Previous wording
Realized gains or losses are measured by the difference between the net proceeds from the sale or redemption of an investment or a financial instrument and the amortized cost basis of the investment or financial instrument, without regard to unrealized appreciation or depreciation previously recognized, and includes investments written-off during the period. There were no net realized gains or losses from investments during the three month periods ended March 31, 2025 and March 31, 2024.
Current wording
Realized gains or losses are measured by the difference between the net proceeds from the sale or redemption of an investment or a financial instrument and the amortized cost basis of the investment or financial instrument, without regard to unrealized appreciation or depreciation previously recognized, and includes investments written-off during the period. There were no net realized gains or losses from investments during the three and six months ended June 30, 2025 and 2024.
Previous wording
Net change in unrealized appreciation (depreciation) from investments for the three months ended March 31, 2025 and March 31, 2024 is comprised of the following:
Current wording
Net change in unrealized appreciation (depreciation) from investments for the three and six months ended June 30, 2025 and 2024 is comprised of the following:
Previous wording
The following table details net change in unrealized appreciation (depreciation) for our portfolio for the three months ended March 31, 2025 and March 31, 2024:
Current wording
The following table details net change in unrealized appreciation (depreciation) for our portfolio for the three and six months ended June 30, 2025 and 2024:
Previous wording
Our primary use of funds will be investments in portfolio companies, dividend payments to holders of our common stock who opt out of the DRIP, and the payment of operating expenses. As of March 31, 2025 and December 31, 2024, we had cash and cash equivalents of approximately $14.9 million and $23.9 million, respectively, and no indebtedness.
Current wording
Our primary use of funds will be investments in portfolio companies, dividend payments to holders of our common stock who opt out of the Company’s dividend reinvestment plan (the “DRIP”), and the payment of operating expenses. As of June 30, 2025 and December 31, 2024, we had cash and cash equivalents of approximately $13.8 million and $23.9 million, respectively, and no indebtedness.
Previous wording
We apply Financial Accounting Standards Board Accounting Standards Codification 820, Fair Value Measurement (“ASC 820”), which establishes a framework for measuring fair value in accordance with U.S. GAAP and required disclosures of fair value measurements. ASC 820 determines fair value to be the price that would be received for an investment in a current sale, which assumes an orderly transaction between market participants on the measurement date. Market participants are defined as buyers and sellers in the principal or most advantageous market (which may be a hypothetical market) that are independent, knowledgeable, and willing and able to transact. In accordance with ASC 820, we consider the principal market to be the market that has the greatest volume and level of activity. ASC 820 specifies a fair value hierarchy that prioritizes and ranks the level of observability of inputs used in determination of fair value. In accordance with ASC 820, these levels are summarized below:
Current wording
We apply Accounting Standards Codification ("ASC") 820, Fair Value Measurement (“ASC 820”), which establishes a framework for measuring fair value in accordance with U.S. GAAP and required disclosures of fair value measurements. ASC 820 determines fair value to be the price that would be received for an investment in a current sale, which assumes an orderly transaction between market participants on the measurement date. Market participants are defined as buyers and sellers in the principal or most advantageous market (which may be a hypothetical market) that are independent, knowledgeable, and willing and able to transact. In accordance with ASC 820, we consider the principal market to be the market that has the greatest volume and level of activity. ASC 820 specifies a fair value hierarchy that prioritizes and ranks the level of observability of inputs used in determination of fair value. In accordance with ASC 820, these levels are summarized below:
Previous wording
All of our investments as of March 31, 2025 and December 31, 2024 are categorized at Level 3, and therefore, 100% of our portfolio requires significant estimates. Our investments may not have readily available market quotations (as such term is defined in Rule 2a-5 under the 1940 Act), and those investments which do not have readily available market quotations are valued at fair value as determined in good faith in accordance with our valuation policy. There is no single standard for determining fair value in good faith. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make. Significant unobservable inputs create uncertainty in the measurement of fair value as of the reporting date. The significant unobservable inputs used in the fair value measurement of the Company’s investments may vary and may include the debt investments’ yield and volatility fluctuations. Significant increases (decreases) in discount rate in isolation would result in a significantly lower (higher) fair value assessment. Significant increases (decreases) in volatility in isolation would result in a significantly lower (higher) fair value assessment.
Current wording
All of our investments as of June 30, 2025 and December 31, 2024 were categorized at Level 3, and therefore, 100% of our portfolio requires significant estimates. Our investments may not have readily available market quotations (as such term is defined in Rule 2a-5 under the 1940 Act), and those investments which do not have readily available market quotations are valued at fair value as determined in good faith in accordance with our valuation policy. There is no single standard for determining fair value in good faith. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make. Significant unobservable inputs create uncertainty in the measurement of fair value as of the reporting date. The significant unobservable inputs used in the fair value measurement of the Company’s investments may vary and may include the debt investments’ yield and volatility fluctuations. Significant increases (decreases) in discount rate in isolation would result in a significantly lower (higher) fair value assessment. Significant increases (decreases) in volatility in isolation would result in a significantly lower (higher) fair value assessment.
Previous wording
We have certain commitments pursuant to our Investment Advisory Agreement that we have entered into with the Adviser. We have agreed to pay a fee for investment advisory services consisting of two components: a base management fee and an incentive fee. Payments under the Investment Advisory Agreement will be equal to (1) a percentage of the value of our average gross assets and (2) a two-part incentive fee. See “Item 1. Business—Investment Advisory Agreement.” We have also entered into a contract with the Adviser to serve as our administrator. Payments under the Administration Agreement will be reimbursements to the Adviser for the costs and expenses incurred by the Adviser in performing its obligations, including but not limited to maintaining and keeping all books and records and providing personnel and facilities. This includes costs and expenses incurred by the Adviser in connection with the delegation of its obligations to a sub-administrator. The Company is not responsible for the compensation of the Adviser’s employees and overhead expenses. See “Item 1. Business—Administration Agreement.”
Current wording
We have certain commitments pursuant to our Investment Advisory Agreement. We have agreed to pay a fee for investment advisory services consisting of two components: a base management fee and an incentive fee. Payments under the Investment Advisory Agreement will be equal to (1) a percentage of the value of our average gross assets and (2) a two-part incentive fee. See “Item 1. Business—Investment Advisory Agreement.” We have also entered into a contract with the Adviser to serve as our administrator. Payments under the administration agreement between the Company and the Adviser (the "Administration Agreement") will be reimbursements to the Adviser for the costs and expenses incurred by the Adviser in performing its obligations, including but not limited to maintaining and keeping all books and records and providing personnel and facilities. This includes costs and expenses incurred by the Adviser in connection with the delegation of its obligations to a sub-administrator. The Company is not responsible for the compensation of the Adviser’s employees and overhead expenses. See “Item 1. Business—Administration Agreement.”
Previous wording
Our common stock began trading on the Nasdaq Global Market on February 4, 2022 in connection with our IPO of shares of our common stock. Since October 2, 2024, our common stock trades on the Nasdaq Global Market under the symbol “LIEN.”
Current wording
Our common stock began trading on the Nasdaq Global Market on February 4, 2022 in connection with our initial public offering of shares of our common stock. Since October 2, 2024, our common stock trades on the Nasdaq Global Market under the symbol “LIEN.”
Previous wording
The following table lists the net asset value per share of our common stock, the range of high and low closing sales prices of our common stock reported on the Nasdaq Global Market, the closing sale prices as a premium (or discount) to our net asset value per share and dividends per share for each fiscal quarter since our common stock began trading on the Nasdaq Global Market. On May 12, 2025, the last reported closing sales price of our common stock on the Nasdaq Global Market was $9.98 per share, which represented a discount of approximately 24.34% to our net asset value per share of $13.19 as of March 31, 2025.
Current wording
The following table lists the net asset value per share of our common stock, the range of high and low closing sales prices of our common stock reported on the Nasdaq Global Market, the closing sale prices as a premium (or discount) to our net asset value per share and dividends per share for each fiscal quarter since our common stock began trading on the Nasdaq Global Market. On August 13, 2025, the last reported closing sales price of our common stock on the Nasdaq Global Market was $10.41 per share, which represented a discount of approximately 21.32% to our net asset value per share of $13.23 as of June 30, 2025.
Previous wording
As of May 12, 2025, there were approximately 397 holders of record of our common stock, which does not include stockholders for whom shares are held in “nominee” or “street name.”
Current wording
As of August 12, 2025, there were approximately 285 holders of record of our common stock, which does not include stockholders for whom shares are held in “nominee” or “street name.”
Previous wording
We intend to pay quarterly distributions to our stockholders out of assets legally available for distribution. All distributions will be paid at the discretion of our Board of Directors and will depend on our earnings, financial condition, maintenance of our tax treatment as a RIC, compliance with applicable BDC regulations and such other factors as our Board of Directors may deem relevant from time to time.
Current wording
We intend to pay quarterly distributions to our stockholders out of assets legally available for distribution. All distributions will be paid at the discretion of our Board and will depend on our earnings, financial condition, maintenance of our tax treatment as a RIC, compliance with applicable BDC regulations and such other factors as our Board may deem relevant from time to time.
Previous wording
A return of capital is a return of a portion of your original investment in shares of our common stock. As a result, a return of capital will (i) lower your tax basis in your shares and thereby increase the amount of capital gain (or decrease the amount of capital loss) realized upon a subsequent sale or redemption of such shares and (ii) reduce the amount of funds we have for investment in portfolio companies. We have not established any limit on the extent to which we may use offering proceeds to fund distributions. However, our Board of Directors, including a majority of our independent directors, will be required to determine that making return of capital distributions from our offering proceeds is in the best interests of our stockholders based upon our then-current financial condition and our expected future growth prospects.
Current wording
A return of capital is a return of a portion of your original investment in shares of our common stock. As a result, a return of capital will (i) lower your tax basis in your shares and thereby increase the amount of capital gain (or decrease the amount of capital loss) realized upon a subsequent sale or redemption of such shares and (ii) reduce the amount of funds we have for investment in portfolio companies. We have not established any limit on the extent to which we may use offering proceeds to fund distributions. However, our Board, including a majority of our independent directors, will be required to determine that making return of capital distributions from our offering proceeds is in the best interests of our stockholders based upon our then-current financial condition and our expected future growth prospects.
Previous wording
We have adopted an “opt out” dividend reinvestment plan (“DRIP”) for our stockholders. As a result, if we declare a dividend, then stockholders’ cash distributions will be automatically reinvested in additional shares of our common stock, unless they specifically “opt out” of the dividend reinvestment plan so as to receive cash distributions. Stockholders who receive distributions in the form of shares of our common stock generally are subject to the same U.S. federal income tax consequences as are stockholders who elect to receive their distributions in cash.
Current wording
We have adopted an “opt out” DRIP for our stockholders. As a result, if we declare a dividend, then stockholders’ cash distributions will be automatically reinvested in additional shares of our common stock, unless they specifically “opt out” of the DRIP so as to receive cash distributions. Stockholders who receive distributions in the form of shares of our common stock generally are subject to the same U.S. federal income tax consequences as are stockholders who elect to receive their distributions in cash.
Previous wording
During the three months ended March 31, 2024, the Company issued the following shares of common stock under the DRIP:
Current wording
During the six months ended June 30, 2025, the Company issued the following shares of common stock under the DRIP:
Previous wording
During the three months ended March 31, 2025, the Company did not issue any shares of common stock under the DRIP.
Current wording
During the six months ended June 30, 2024, the Company issued the following shares of common stock under the DRIP:
Previous wording
We did not repurchase any of our equity securities during the three months ended March 31, 2025 or the fiscal year ended December 31, 2024.
Current wording
We did not repurchase any of our equity securities during the six months ended June 30, 2025 or the fiscal year ended December 31, 2024.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Industry leaders and disruptive companies experiencing strong growth
Current report — wording carried from elsewhere
With respect to investments for which market quotations are readily available, those investments will typically be valued at the bid price of those market quotations;
Current report — wording carried from elsewhere
Shares of our common stock began trading on the Nasdaq Global Market on February 4, 2022. Since October 2, 2024, our common stock trades on the Nasdaq Global Market under the symbol “LIEN.”