Chicago Atlantic BDC, Inc.

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 $609.7 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 $810.4 million of potential investments in varying stages of underwriting.

Previous wording

Our portfolio activity may also reflect the proceeds from sales of investments. We will recognize realized gains or losses on sales of investments based on the difference between the net proceeds from the disposition and the amortized cost basis of the investment, without regard to unrealized gains or losses previously recognized. We will record current-period changes in fair value of investments that are measured at fair value as a component of the net change in unrealized gains (losses) on investments on the Statements of Operations.

Current wording

Our portfolio activity may also reflect proceeds from sales of investments. We will recognize realized gains or losses on sales of investments based on the difference between the net proceeds from the disposition and the amortized cost basis of the investment, without regard to unrealized gains or losses previously recognized. We will record current-period changes in fair value of investments that are measured at fair value as a component of the net change in unrealized gains (losses) on investments on the Statements of Operations.

Previous 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.”

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 base management fee and any incentive fees compensate 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

We expect, but cannot assure, that our general and administrative expenses will increase in dollar terms during periods of asset growth, but will decline as a percentage of total assets during such periods.

Current wording

We expect, but cannot ensure, that our general and administrative expenses will increase in dollar terms during periods of asset growth, but will decline as a percentage of total assets during such periods.

Previous wording

As of September 30, 2025, our investment portfolio had an aggregate fair value of approximately $311.4 million and was comprised of approximately $269.3 million in first lien, senior secured loans, approximately $39.0 million in senior secured notes, approximately $1.5 million in second lien, senior secured loans, and approximately $1.5 million in equity securities across thirty-seven 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 March 31, 2026, our investment portfolio had an aggregate fair value of approximately $364.0 million and was comprised of approximately $331.2 million in first lien, senior secured loans, approximately $28.2 million in senior secured notes, approximately $1.4 million in second lien, senior secured loans, and approximately $3.2 million in equity securities across forty portfolio companies. As of December 31, 2025, our investment portfolio had an aggregate fair value of approximately $333.3 million and was comprised of approximately $292.7 million in first lien, senior secured loans, approximately $37.5 million in senior secured notes, approximately $1.4 million in second lien, senior secured loans, and approximately $1.7 million in equity securities across thirty-nine portfolio companies.

Previous wording

As of September 30, 2025 and December 31, 2024, we had three portfolio companies that represented 34.2% and 45.1% respectively, of our investments, at fair value. As of September 30, 2025 and December 31, 2024, our largest portfolio company represented 16.9% and 18.9%, respectively, of our investments, at fair value.

Current wording

As of March 31, 2026 and December 31, 2025, we had three portfolio companies that represented 32.5% and 31.8% respectively, of our investments, at fair value. As of March 31, 2026 and December 31, 2025, our largest portfolio company represented 17.8% and 15.7%, respectively, of our investments, at fair value.

Previous wording

The following table provides a summary of the changes in the investment portfolio for the nine months ended September 30, 2025 and 2024:

Current wording

The following table provides a summary of the changes in the investment portfolio for the three months ended March 31, 2026 and 2025:

Previous wording

As of September 30, 2025, the Company had $11,000,000 in outstanding borrowings and $89,000,000 available under the Revolving Line of Credit. Additionally, as of September 30, 2025, $192.5 million of loans held for investment, at principal, were pledged as collateral in the borrowing base of the Revolving Loan.

Current wording

As of March 31, 2026, the Company had $54,500,000 in outstanding borrowings and $45,500,000 available under the Revolving Line of Credit. The Revolving Line of Credit is secured by all of the Company's assets pledged as collateral.

Previous wording

The following discussion and analysis of our results of operations encompasses our results for the three and nine months ended September 30, 2025 and 2024.

Current wording

The following discussion and analysis of our results of operations encompasses our results for the three months ended March 31, 2026 and 2025.

Previous wording

On October 1, 2024, the Company completed the Loan Portfolio Acquisition and acquired a portfolio of loans with a fair value of $219.6 million. Following the Loan Portfolio Acquisition, the fair value of the Company’s investment portfolio grew from $55.8 million as of September 30, 2024, to $311.4 million as of September 30, 2025. The 458% growth in the fair value of our investment portfolio resulting from the Loan Portfolio Acquisition is the main driver for the changes in investment income, operating expenses, net investment income and change in unrealized appreciation (depreciation) for the three months and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024.

Current wording

The fair value of the Company’s investment portfolio grew from $289.3 million as of March 31, 2025, to $364.0 million as of March 31, 2026. The 26% growth in the fair value of our investment portfolio resulting from originations is the main driver for the changes in investment income, operating expenses, net investment income and change in unrealized appreciation (depreciation) for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Previous wording

The following table sets forth the components of investment income for the three and nine months ended September 30, 2025 and 2024:

Current wording

The following table sets forth the components of investment income for the three months ended March 31, 2026 and 2025:

Previous wording

We generate revenues primarily in the form of investment income from the investments we hold, generally in the form of interest income from our debt securities. We also generate revenues in the form of investment income from the cash we hold, generally in the form of interest income from our investment in a money market fund. Stated interest income represents interest income recognized as earned in accordance with the contractual terms of the loan agreement. Stated interest income from original issue discount (“OID”) and market discount represent the accretion into interest income over the term of the loan as a yield enhancement. Interest income from payment-in-kind (“PIK”) represents contractually deferred interest added to the loan balance recorded on an accrual basis to the extent such amounts are expected to be collected.

Current wording

We generate revenues primarily in the form of investment income from the investments we hold, generally in the form of interest income from our debt securities. We also generate revenues in the form of investment income from cash we hold, generally in the form of interest income from our cash deposits held by our custodian. Stated interest income represents interest income recognized as earned in accordance with the contractual terms of the loan agreement. Stated interest income from original issue discount (“OID”) and market discount represent the accretion into interest income over the term of the loan as a yield enhancement. Interest income from payment-in-kind (“PIK”) represents contractually deferred interest added to the loan balance recorded on an accrual basis to the extent such amounts are expected to be collected.

Previous wording

For the three and nine months ended September 30, 2025, total investment income was approximately $15.1 million and $40.1 million, respectively, which was attributable to approximately $1.2 million and $3.1 million of fee income related to commitment fees, success fees, amendment fees and administrative fees and approximately $13.8 million and $37.0 million of interest income, respectively. Approximately $1.9 million of prepayment premiums were included in interest income for the three and nine months ended September 30, 2025. For the three and nine months ended September 30, 2024, total investment income was approximately $3.2 million and $9.0 million, respectively, which was attributable to approximately $0.5 million and $0.8 million of fee income related to commitment fees, advisory fees, and administrative fees and approximately $2.7 million and $8.2 million of interest income, respectively. Approximately $0.1 million of prepayment premiums were included in interest income for the three and nine months ended September 30, 2024.

Current wording

For the three months ended March 31, 2026 and 2025, total investment income was approximately $16.7 million and $11.9 million, respectively, which was attributable to approximately $2.1 million and $0.6 million of fee income related to commitment fees, success fees, amendment fees and administrative fees and approximately $ 14.6 million and $11.3 million of interest income, respectively. Approximately $0.6 million of prepayment premiums were included in interest income for the three months ended March 31, 2026. There were no prepayment premiums included in interest income for the three months ended March 31, 2025.

Previous wording

Our operating expenses for the nine months ended September 30, 2025 and 2024 are presented below:

Current wording

Our operating expenses for the three months ended March 31, 2026 and 2025 are presented below:

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 and nine months ended September 30, 2025 and 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 months ended March 31, 2026 and 2025.

Previous wording

Net change in unrealized appreciation (depreciation) from investments for the three and nine months ended September 30, 2025 and 2024 is comprised of the following:

Current wording

Net change in unrealized appreciation (depreciation) from investments for the three months ended March 31, 2026 and 2025 is comprised of the following:

Previous wording

The following table details net change in unrealized appreciation (depreciation) for our portfolio for the three and nine months ended September 30, 2025 and 2024:

Current wording

The following table details net change in unrealized appreciation (depreciation) for our portfolio for the three months ended March 31, 2026 and 2025:

Previous wording

Our liquidity and capital resources are generated primarily from the offerings of our securities, borrowing under our Revolving Line of Credit, as well as cash flows from operating activities, including proceeds from sales of investments and principal repayments, and interest and fee income earned on investments. The primary uses of our cash includes (i) investments in portfolio companies, (ii) payment of operating expenses, and (iii) dividend payments to holders of our common stock who opt out of the Company’s dividend reinvestment plan (the “DRIP”). We have used, and expect to continue to use, our borrowings, including our Revolving Line of Credit, as well as proceeds from investment income and the turnover of our portfolio, to finance our investment objectives and activities.

Current wording

Our liquidity and capital resources are generated primarily from cash flows from operating activities, including proceeds from sales of investments and principal repayments, and interest and fee income earned on investments, as well as borrowings under our Revolving Line of Credit and potentially from future offerings of our securities. The primary uses of our cash includes (i) investments in portfolio companies, (ii) payment of operating expenses, and (iii) dividend payments to holders of our common stock. We have used, and expect to continue to use, our borrowings, including our Revolving Line of Credit, as well as proceeds from investment income and the turnover of our portfolio, to finance our investment objectives and activities.

Previous wording

As of September 30, 2025 and December 31, 2024, we had cash and cash equivalents of approximately $10.5 million and $23.9 million, respectively. During the nine months ended September 30, 2025, we experienced a net decrease in cash and cash equivalents of approximately $13.5 million. During the period, cash used in operating activities was $6.7 million, primarily driven by the purchase of investments of $124.9 million, partially offset by proceeds from sales of investments and principal repayments of portfolio investments of $92.6 million and net investment income of $25 million. Cash used in financing activities was $6.8 million, primarily driven by distributions paid of $15.5 million, financing costs paid of $1.2 million, and offering costs paid of $1.1 million, offset by proceeds from borrowings on revolving line of credit of $11 million.

Current wording

As of March 31, 2026 and December 31, 2025, we had cash of approximately $3.3 million and $2.9 million, respectively. During three months ended March 31, 2026, we experienced a net increase in cash of approximately $0.4 million. During the period, cash used in operating activities was approximately $20.8 million, primarily driven by the purchase of investments of approximately $92.7 million, partially offset by proceeds from sales of investments and principal repayments of portfolio investments of $63.4 million and net investment income of approximately $10 million. Cash provided by financing activities was approximately $21.2 million, primarily driven by net borrowings and repayments under our Revolving Line of Credit of $29.5 million, offset by distributions paid of approximately $7.8 million and financing costs paid of approximately $0.5 million.

Previous wording

To maintain its tax treatment as a RIC, the Company must meet specified source-of-income requirements and timely distribute to its stockholders for each taxable year at least 90% of its investment company taxable income. Additionally, in order for the Company not to be subject to U.S. federal excise taxes, it must distribute annually an amount at least equal to the sum of (i) 98% of its net ordinary income for the calendar year, (ii) 98.2% of its capital gains in excess of capital losses for the one-year period ending on October 31 of the calendar year and (iii) any net ordinary income and capital gains in excess of capital losses for preceding years that were not distributed during such years.

Current wording

We elected to be treated, and intend to qualify annually to be treated, as a RIC under Subchapter M of the Code for federal income tax purposes. To maintain our tax treatment as a RIC, we must meet specified source-of-income requirements and timely distribute to our stockholders for each taxable year at least 90% of our investment company taxable income. Additionally, in order for us not to be subject to U.S. federal excise taxes, we must distribute annually an amount at least equal to the sum of (i) 98% of our net ordinary income for the calendar year, (ii) 98.2% of our capital gains in excess of capital losses for the one-year period ending on October 31 of the calendar year and (iii) any net ordinary income and capital gains in excess of capital losses for preceding years that were not distributed during such years.

Previous wording

Investments for which market quotations are readily available will typically be valued at the bid price of those market quotations. To validate market quotations, we utilize a number of factors to determine if the quotations are representative of fair value, including the source and number of the quotations. Debt and equity securities that are not publicly traded or whose market prices are not readily available are valued at fair value as determined in good faith by the Adviser, as the Company’s valuation designee (the “Valuation Designee”), based on inputs that may include valuations, or ranges of valuations, provided by independent third-party valuation firm(s) engaged by the Adviser. Pursuant to Rule 2a-5 under the 1940 Act, the Board designated the Adviser as the Valuation Designee to perform the fair value determinations for the Company, subject to the oversight of the Board and certain Board reporting and other requirements.

Current wording

Investments for which market quotations are readily available will typically be valued at the bid price of those market quotations. To validate market quotations, the Adviser utilizes a number of factors to determine if the quotations are representative of fair value, including the source and number of the quotations. Debt and equity securities that are not publicly traded or whose market prices are not readily available are valued at fair value as determined in good faith by the Adviser, as the Company’s valuation designee (the “Valuation Designee”), based on inputs that may include valuations, or ranges of valuations, provided by independent third-party valuation firm(s) engaged by the Adviser. Pursuant to Rule 2a-5 under the 1940 Act, the Board designated the Adviser as the Valuation Designee to perform the fair value determinations for the Company, subject to the oversight of the Board and certain Board reporting and other requirements.

Previous wording

We conduct this valuation process on a quarterly basis.

Current wording

The Adviser conducts this valuation process on a quarterly basis.

Previous 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:

Current wording

The Adviser applies 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, the Adviser considers 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

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 November 12, 2025, the last reported closing sales price of our common stock on the Nasdaq Global Market was $10.04 per share, which represented a discount of approximately 24.34% to our net asset value per share of $13.27 as of September 30, 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 May 13, 2026, the last reported closing sales price of our common stock on the Nasdaq Global Market was $9.07 per share, which represented a discount of approximately 31.96% to our net asset value per share of $13.33 as of March 31, 2026.

Previous wording

As of November 11, 2025, there were approximately 198 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 May 13, 2026, there were approximately 113 holders of record of our common stock, which does not include stockholders for whom shares are held in “nominee” or “street name.”

Previous wording

Depending on the level of taxable income earned in a tax year, we may choose to carry forward taxable income in excess of current-year distributions into the next tax year. We will be subject to a 4% excise tax on a certain portion of these undistributed amounts. Please refer to “Item 1. Business — Material U.S. Federal Income Tax Considerations” for further information regarding the consequences of our retention of net capital gains. We may, in the future, make actual distributions to our stockholders of our net capital gains. We can offer no assurance that we will achieve results that will permit the payment of any cash distributions and, if we issue senior securities, we may be prohibited from making distributions if doing so causes us to fail to maintain the asset coverage ratios stipulated by the 1940

Current wording

Depending on the level of taxable income earned in a tax year, we may choose to carry forward taxable income in excess of current-year distributions into the next tax year. We will be subject to a 4% excise tax on a certain portion of these undistributed amounts. Please refer to “Item 1. Business — Material U.S. Federal Income Tax Considerations” for further information regarding the consequences of our retention of net capital gains. We may, in the future, make actual distributions to our stockholders of our net capital gains. We can offer no assurance that we will achieve results that will permit the payment of any cash distributions and, if we issue senior securities, we may be prohibited from making distributions if doing so causes us to fail to maintain the asset coverage ratios stipulated by the 1940 Act or if distributions are limited by the terms of any of our borrowings. See “Item 1. Business — Business Development Company Regulations” and “Item 1. Business —Material U.S. Federal Income Tax Considerations.”

Previous 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.

Current wording

Prior to December 31, 2025, we operated an “opt out” Dividend Reinvestment Plan (“DRIP”) for our stockholders. As a result, if we declared a dividend, then stockholders’ cash distributions were automatically reinvested in additional shares of our common stock, unless they specifically chose to “opt out” of the DRIP so as to receive cash distributions. Stockholders who received distributions in the form of shares of our common stock generally were subject to the same U.S. federal income tax consequences as were stockholders who elected to receive their distributions in cash.

Previous wording

During the nine months ended September 30, 2025, the Company issued the following shares of common stock under the DRIP:

Current wording

During the three months ended March 31, 2026 and 2025, the Company issued no shares of common stock under the DRIP.

Previous wording

We did not repurchase any of our equity securities during the nine months ended September 30, 2025 or the fiscal year ended December 31, 2024.

Current wording

We did not repurchase any of our equity securities during the three months ended March 31, 2026 or the fiscal year ended December 31, 2025.