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Chicago Atlantic BDC, Inc. Reports Third Quarter 2024 Financial Results

NEW YORK, Nov. 07, 2024 (GLOBE NEWSWIRE) — Chicago Atlantic BDC, Inc. (“LIEN” or the “Company”) (NASDAQ: LIEN), formerly Silver Spike Investment Corp., a specialty finance company that has elected to be regulated as a business development company, today announced its financial results for the third quarter ended September 30, 2024.

Third Quarter 2024 Highlights and Subsequent Events

  • Total investment income of $3.2 million
  • Net investment income of $0.0 million, or $0.00 per share
  • Investment portfolio of $55.8 million at fair value
  • Net asset value (“NAV”) per share was $13.28 on September 30, 2024
  • As previously announced, on October 1, 2024, the Company acquired 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”)
  • As a result of the Loan Portfolio Acquisition, the Company had net assets of approximately $302 million and investments in 28 portfolio companies as of October 1, 2024. In connection with the Loan Portfolio Acquisition, the Company was renamed “Chicago Atlantic BDC, Inc.,” and its ticker symbol was changed to “LIEN.” The changes to the Company’s name and ticker symbol became effective in the market at the open of business on October 2, 2024.

Scott Gordon, Executive Chairman and Co-Chief Investment Officer of the Company, commented, “LIEN is the only publicly listed BDC primarily focused on lending to cannabis companies and is a primary source of capital for high quality companies in both the cannabis and other typically underserved sectors. The Loan Portfolio Acquisition has allowed us to increase the size of our net assets by more than three and half times to approximately $302 million and significantly increases our diversification by increasing our number of portfolio companies from 7 to 28. With the added scale and diversification of our portfolio, and access to the originations engine of the Chicago Atlantic platform, we are well positioned to work with borrowers across industries to meet their capital needs.”

Andreas Bodmeier, Chief Executive Officer of the Company, noted, “We are in an exciting time in the cannabis sector with federal and state regulatory environments becoming more favorable, and the credit quality of borrowers improving in our markets. In the non-cannabis sectors we target, we are seeing lower middle-market and middle-market companies increasingly underserved by larger banks and private credit providers. Chicago Atlantic has carved a niche with opportunities that are time-sensitive, highly complex or in dislocated sectors where risk is fundamentally mispriced with attractive risk-adjusted returns. We look forward to the prospect of these opportunities contributing to the growth of LIEN.”

Loan Portfolio Acquisition Closing
On October 1, 2024, the Company completed its previously announced acquisition from CALP of the Loan Portfolio in exchange for 16,605,372 newly issued shares of the Company’s common stock. The Loan Portfolio was determined by the Company to have a fair value of $219.6 million as of September 28, 2024. As a result of the Loan Portfolio Acquisition, CALP and legacy Company stockholders owned approximately 72.8% and 27.2%, respectively, of the outstanding shares of the Company’s common stock as of October 1, 2024. As a result of the Loan Portfolio Acquisition, the Company had net assets of approximately $302 million and investments in 28 portfolio companies as of October 1, 2024. Upon the closing of the Loan Portfolio Acquisition, there were 22,820,367 shares of the Company’s common stock outstanding.

Results of Operations
For the three months ended September 30, 2024, total investment income was $3.2 million. This compares to total expenses of $3.2 million, which includes $2.4 million of expenses related to the Loan Portfolio Acquisition, resulting in net investment income of $0.0 million, or $0.00 per share.

The Company recorded a net unrealized loss of $0.2 million during the quarter ended September 30, 2024, primarily related to the fair valuation of our debt investments. The Company experienced a net decrease in net assets from operations of $0.2 million, or $0.03 per share.

Net Asset Value
As of September 30, 2024, NAV per share decreased to $13.28, compared to $13.56 as of June 30, 2024. The decrease in NAV per share was primarily driven by dividend payments and transaction expenses related to the Loan Portfolio Acquisition. Total net assets as of September 30, 2024 were $82.5 million, compared to $84.3 million as of June 30, 2024.

Portfolio and Investment Activity

  • As of September 30, 2024, the Company’s investment portfolio had an aggregate fair value of approximately $55.8 million, comprising approximately $43.4 million in first lien, senior secured loans, approximately $11.7 million in secured notes, and approximately $0.7 million of equity securities across seven portfolio companies.
  • During the quarter ended September 30, 2024, the Company made one additional investment and funded a portion of one of its loan commitments.
  • As of September 30, 2024, there were no loans on non-accrual status.

Liquidity and Capital Resources
As of September 30, 2024, the Company had $30.1 million in available liquidity, comprising $30.1 million in cash equivalents.

Subsequent Events

Subsequent to the quarter end, in addition to the Loan Portfolio Acquisition, the Company funded three investments with an aggregate value of $14.5 million and received $9.0 million in proceeds from the repayment of one investment.

Conference Call and Quarterly Earnings Presentation
The Company will host a conference call and webcast to discuss the Company’s third quarter 2024 financial results at 8:00 a.m. Eastern Time on Friday, November 8, 2024. Participants may register for the call here. A live webcast of the call will also be available on the Company’s website at lien.chicagoatlantic.com.

A replay of the call will be available at lien.chicagoatlantic.com by the end of day on November 8, 2024.

Call Details – Chicago Atlantic BDC, Inc. Third Quarter 2024 Financial Results:

LIEN posted its Third Quarter 2024 Earnings Presentation on the Events and Presentations page of its website, lien.chicagoatlantic.com. LIEN routinely posts important information for investors on its website. The Company intends to use this website as a means of disclosing material information, for complying with our disclosure obligations under Regulation FD and to post and update investor presentations and similar materials on a regular basis. The Company encourages investors, analysts, the media and others interested in LIEN to monitor the Investor Relations page of its website, in addition to following its press releases, Securities and Exchange Commission (“SEC”) filings, publicly available earnings calls, presentations, webcasts and other information posted from time to time on the website. Please visit the IR Resources section of the website to sign up for email notifications.

About Chicago Atlantic BDC, Inc.
The Company is a specialty finance company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended, and has elected to be treated as a regulated investment company for U.S. federal income tax purposes. The Company’s investment objective is to maximize risk-adjusted returns on equity for its stockholders by investing primarily in direct loans to privately held middle-market companies, with a primary focus on cannabis companies. The Company is managed by Chicago Atlantic BDC Advisers, LLC, an investment manager focused on the cannabis and other niche or underfollowed sectors. For more information, please visit lien.chicagoatlantic.com.

Forward-Looking Statements
Some of the statements in this communication constitute forward-looking statements because they relate to future events, future performance or financial condition of the Company or the Loan Portfolio Acquisition. The forward-looking statements may include statements as to: future operating results of the Company and distribution projections; business prospects of the Company and the prospects of its portfolio companies; and the impact of the investments that the Company expects to make. In addition, words such as “may,” “might,” “will,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “estimate,” “anticipate,” “predict,” “potential,” “plan” or similar words indicate forward-looking statements, although not all forward-looking statements include these words. The forward-looking statements contained in this communication involve risks and uncertainties. Certain factors could cause actual results and conditions to differ materially from those projected, including the uncertainties associated with (i) the ability to realize the anticipated benefits of the Loan Portfolio Acquisition; (ii) risks related to diverting management’s attention from ongoing business operations; (iii) the risk that stockholder litigation in connection with the Loan Portfolio Acquisition may result in significant costs of defense and liability; (iv) changes in the economy, financial markets and political environment, including the impacts of inflation and rising interest rates; (v) risks associated with possible disruption in the operations of the Company or the economy generally due to terrorism, war or other geopolitical conflict (including the current conflict between Russia and Ukraine and the current conflict between Israel and Hamas), natural disasters or global health pandemics, such as the COVID-19 pandemic; (vi) future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities); (vii) changes in political, economic or industry conditions, the interest rate environment or conditions affecting the financial and capital markets that could result in changes to the value of the Company’s assets; (viii) elevating levels of inflation, and its impact on the Company, on its portfolio companies and on the industries in which it invests; (ix) the Company’s plans, expectations, objectives and intentions, as a result of the Loan Portfolio Acquisition; (x) the future operating results and net investment income projections of the Company; (xi) the ability of the Chicago Atlantic BDC Advisers, LLC (the “Adviser”) to locate suitable investments for the Company and to monitor and administer its investments; (xii) the ability of the Adviser or its affiliates to attract and retain highly talented professionals; (xiii) the business prospects of the Company and the prospects of its portfolio companies; (xiv) the impact of the investments that the Company expects to make; (xv) the expected financings and investments and additional leverage that the Company may seek to incur in the future; (xvi) conditions in the Company’s operating areas, particularly with respect to business development companies or regulated investment companies; (xvii) the realization generally of the anticipated benefits of the Loan Portfolio Acquisition and the possibility that the Company will not realize those benefits, in part or at all; (xviii) the performance of the loans included in the Loan Portfolio, and the possibility of defects or deficiencies in such loans notwithstanding the diligence performed by the Company and its advisors; (xix) the ability of the Company to realize cost savings and other management efficiencies in connection with the Loan Portfolio Acquisition as anticipated; (xx) the reaction of the trading markets to the Loan Portfolio Acquisition and the possibility that a more liquid market or more extensive analyst coverage will not develop for the Company as anticipated; (xxi) the reaction of the financial markets to the Loan Portfolio Acquisition and the possibility that the Company will not be able to raise capital as anticipated; (xxii) the strategic, business, economic, financial, political and governmental risks and other risk factors affecting the business of the Company and the companies in which it is invested as described in the Company’s public filings with the SEC and (xxiii) other considerations that may be disclosed from time to time in the Company’s publicly disseminated documents and filings. The Company has based the forward-looking statements included in this communication on information available to it on the date of this communication, and it assumes no obligation to update any such forward-looking statements. Although the Company undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that the Company may make directly to you or through reports that the Company in the future may file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

Contact
Tripp Sullivan
SCR Partners
LIEN@chicagoatlantic.com

CHICAGO ATLANTIC BDC, INC.
Statements of Assets and Liabilities
 
   
    September 30,
2024
    December 31,
2023
 
ASSETS   (unaudited)        
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            
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  

CHICAGO ATLANTIC BDC, INC.
Statements of Operations
(Unaudited)
 
   
    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  

      (1)     Represents less than $0.005 per share

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