Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 2025
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 001-40564
CHICAGO ATLANTIC BDC, INC.
(Exact name of registrant as specified in its charter)
Maryland
86-2872887
(State or other jurisdiction of
incorporation or organization)
(IRS Employer Identification No.)
600 Madison Avenue, Suite 1800
New York, NY
10022
(Address of principal executive offices)
(Zip Code)
(212) 905-4923
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.01 per share
LIEN
The NASDAQ Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer
☐
Accelerated filer
Non-accelerated filer
☒
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
As of November 11, 2025, the registrant had 22,820,590 shares of common stock ($0.01 par value per share) outstanding.
TABLE OF CONTENTS
PAGE
NO.
PART I
FINANCIAL INFORMATION
Item 1
Financial Statements (unaudited)
2
Statements of Assets and Liabilities
Statements of Operations
3
Statements of Changes in Net Assets
4
Statements of Cash Flows
6
Schedule of Investments
7
Notes to Financial Statements
13
Item 2
Management’s Discussion and Analysis of Financial Condition and Results of Operations
34
Item 3
Quantitative and Qualitative Disclosures About Market Risk
51
Item 4
Controls and Procedures
PART II
OTHER INFORMATION
Legal Proceedings
53
Item 1A
Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds
Defaults Upon Senior Securities
Mine Safety Disclosures
Item 5
Other Information
54
Item 6
Exhibits
55
SIGNATURES
56
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Except where the context suggests otherwise, the terms “we,” “us,” “our,” “the Company,” and “LIEN” refer to Chicago Atlantic BDC, Inc. In addition, the terms “Adviser,” “investment adviser” and “administrator” refer to Chicago Atlantic BDC Advisers, LLC, our external investment adviser and administrator.
Some of the statements in this quarterly report on Form 10-Q constitute forward-looking statements because they relate to future events or our future performance or financial condition. The forward-looking statements contained in this quarterly report on Form 10-Q may include statements as to:
In addition, words such as “anticipate,” “believe,” “expect,” “seek,” “plan,” “should,” “estimate,” “project” and “intend” indicate forward-looking statements, although not all forward-looking statements include these words. The forward-looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “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. Other factors that could cause actual results to differ materially include:
We have based the forward-looking statements included in this quarterly report on Form 10-Q on information available to us on the date of this quarterly report on Form 10-Q, and we assume no obligation to update any such forward-looking statements. Although we undertake 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 we may make directly to you or through reports that we 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. The forward-looking statements contained in this quarterly report on Form 10-Q are excluded from the safe harbor protection provided by Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
1
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
Chicago Atlantic BDC, Inc.
September 30, 2025
December 31, 2024
(Unaudited)
ASSETS
Investments at fair value:
Non-control/non-affiliate investments at fair value (amortized cost of $310,270,261 and $274,346,711, respectively)
$
311,393,482
275,241,398
Cash and cash equivalents
10,462,366
23,932,406
Interest receivable
3,653,641
3,582,610
Prepaid expenses and other assets
1,074,337
321,108
Due from affiliates
669,753
2,361,019
Receivable for investment sold
-
4,122,500
Total assets
327,253,579
309,561,041
LIABILITIES
Revolving line of credit
11,000,000
Distributions payable
7,759,001
Income-based incentive fees payable
2,347,474
1,998,945
Management fee payable
1,399,845
758,362
Due to affiliates
985,882
905,129
Professional fees payable
477,094
458,809
Other payables
180,611
46,219
Capital gains incentive fees payable
167,594
121,887
Unearned interest income
15,499
37,752
Transaction fees payable related to the Loan Portfolio Acquisition
2,945,125
Offering costs payable
989,645
Excise tax payable
88,709
Deferred financing costs payable
47,881
Total liabilities
24,333,000
8,398,463
Commitments and contingencies (Note 6)
NET ASSETS
Common stock, $0.01 par value, 100,000,000 shares authorized, 22,820,590 and 22,820,386 shares issued and outstanding, respectively
228,206
228,204
Additional paid-in-capital
303,154,218
303,272,034
Distributable earnings (Accumulated loss)
(461,845
)
(2,337,660
Total net assets
302,920,579
301,162,578
NET ASSET VALUE PER SHARE
13.27
13.20
See notes to financial statements.
For the Three Months Ended
For the Nine Months Ended
September 30, 2024
INVESTMENT INCOME
Non-control/non-affiliate investment income
Interest income
13,826,674
2,686,771
37,012,196
8,203,601
Fee income
1,243,929
489,176
3,061,447
813,926
Total investment income
15,070,603
3,175,947
40,073,643
9,017,527
EXPENSES
Income-based incentive fees
2,347,473
6,232,387
328,503
Management fee
253,421
4,006,051
745,876
General and administrative expense
1,082,419
3,423,679
Interest expense
338,515
785,156
Professional fees
199,939
120,762
691,525
240,898
Legal expenses
103,733
60,200
667,798
200,073
Audit expense
153,750
95,675
497,502
299,225
Other expenses
157,903
107,485
472,042
306,643
Sub-administrator fees
154,939
98,489
441,529
298,132
Capital gains incentive fees
(131,412
(35,904
45,707
37,465
Excise tax expense
2,797
31,314
Transaction expenses related to the Loan Portfolio Acquisition
2,429,993
5,069,062
Total expenses
5,809,901
3,161,435
17,266,173
7,557,191
Waiver of General and administrative expense (Note 6)
(658,477
Expense limitation agreement (Note 6)
(230,419
(1,338,202
Net expenses
5,579,482
15,269,494
NET INVESTMENT INCOME (LOSS)
9,491,121
14,512
24,804,149
1,460,336
NET REALIZED GAIN (LOSS) FROM INVESTMENTS
Non-controlled non-affiliate investments
Net realized gain (loss) from investments
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS
(657,060
(179,524
228,534
187,324
Net change in unrealized appreciation (depreciation) on investments
Net realized and unrealized gains (losses)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS
8,834,061
(165,012
25,032,683
1,647,660
NET INVESTMENT INCOME (LOSS) PER SHARE - BASIC AND DILUTED
0.42
0.00
(1)
1.09
0.23
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS PER SHARE - BASIC AND DILUTED
0.39
(0.03
1.10
0.27
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED
22,820,568
6,214,965
22,820,454
6,214,952
(1) Represents less than $0.0005 per share
Common Stock
Shares
Par Value
DistributableEarnings/(AccumulatedLoss)
Total Net Assets
Balance, June 30, 2025
22,820,408
303,152,264
(1,536,905
301,843,563
Net increase (decrease) in net assets resulting from operations
Net investment income (loss)
Net change in unrealized appreciation (depreciation) from investments
Total net increase (decrease) in net assets resulting from operations
Distributions to stockholders from:
Investment income-net
(7,759,001
Capital transactions
Issuance of common stock, net of offering costs
Reinvestment of stockholder distributions
182
1,954
1,956
Total net increase (decrease) in net assets from capital transactions
Total increase (decrease) in net assets
1,075,060
1,077,016
Balance, September 30, 2025
22,820,590
Balance, June 30, 2024
6,214,964
62,149
85,030,784
(834,860
84,258,073
(1,553,741
31
322
(1,718,753
(1,718,431
Balance, September 30, 2024
6,214,995
85,031,106
(2,553,613
82,539,642
Balance, December 31, 2024
22,820,386
(23,276,871
204
2,187
2,189
1,755,812
1,758,001
Effect of permanent adjustments
(120,003
120,003
Balance, December 31, 2023
6,214,941
85,041,203
449,266
85,552,618
(4,661,215
579
(3,013,555
(3,012,976
(10,676
10,676
5
Cash flows from operating activities
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Net change in unrealized (appreciation) depreciation from investments
(228,534
(187,324
Net (accretion of discounts) and amortization of premiums
(2,105,692
(501,303
Purchase of investments
(124,909,502
(5,141,250
PIK interest capitalized
(1,499,341
(182,634
Proceeds from sales of investments and principal repayments
92,590,985
4,344,000
Amortization of deferred financing costs
426,745
(Increase) Decrease in operating assets:
(71,031
119,417
1,691,266
27,742
(64,278
Other receivable
(401,313
Paydown receivable
(21,000
Increase (Decrease) in operating liabilities:
348,529
(1,511,253
641,483
(3,700
18,285
(12,784
(2,945,125
4,084,285
134,392
10,474
80,753
51,142
(88,709
(10,655
(22,253
42,550
Payable for investments purchased
Net cash provided by (used in) operating activities
(6,709,117
2,299,499
Cash flows from financing activities
Offering costs paid
(1,090,931
(138,933
Distributions paid
(15,515,682
(4,660,638
Financing costs paid
(1,154,310
Proceeds from borrowings on revolving line of credit
Net cash provided by (used in) financing activities
(6,760,923
(4,799,571
Net increase (decrease) in cash and cash equivalents
(13,470,040
(2,500,072
Cash and cash equivalents, beginning of period
32,611,635
Cash and cash equivalents, end of period
30,111,563
Supplemental disclosures
Excise taxes paid
115,357
Non-cash operating, financing and investing activity
Reinvestment of dividend distribution
Accrual for deferred financing costs (Note 2)
1,106,429
41,061
Accrual for deferred offering costs (Note 2)
101,286
1,127,739
(In thousands)
Portfolio Company
FacilityType
All in Rate
Benchmark (3)
Spread
PIK
Floor
InitialAcquisitionDate
Maturity
Par (2)
Amortized Cost(15)
FairValue (4)
% of Net Assets
Footnotes
Investments at Fair Value US Corporate Debt First Lien Senior Secured U.S. Debt Cannabis
(1)(5)(16)
Aeriz Holdings Corp
Delayed Draw Term Loan
13.00
%
P
5.75
6/30/2025
6/30/2028
9,590
9,542
3.1%
(9)
Archos Capital Group, LLC
14.25
8.50
10/1/2024
10/30/2025
113
0.0%
(10)
BeLeaf Medical, LLC
Term Loan
5.50
7.50
8/20/2025
8/20/2028
12,892
4.3%
(10)(17)
CO Acquisition Vehicle, LLC
20.00
F
9/30/2025
12/31/2029
15,000
5.0%
Cresco Labs, LLC
12.50
8/13/2025
8/13/2030
7,500
7,208
2.4%
Kapple Holdings LLC (Cannabis & Glass)
14.53
S
10.25
4.00
3/28/2025
7/28/2028
2,000
1,983
2,010
0.7%
(11)(17)
Dreamfields Brands, Inc. (d/b/a Jeeter)
16.25
8.75
5/3/2023
5/3/2026
31,745
31,710
10.5%
Elevation Cannabis, LLC
7.75
12/31/2026
12,555
12,336
12,492
4.1%
Flowery - Bill's Nursery, Inc.
16.00
11.00
5.00
12/31/2027
13,803
13,780
13,734
4.5%
(12)(17)
FLUENT Corp.
12.00
1.00
3/31/2025
11/24/2028
10,078
9,937
9,876
3.3%
(12)
HA-MD, LLC
15.00
6/6/2026
2,975
2,973
1.0%
Kaleafa, Inc.
17.00
12/4/2024
12/3/2027
2,784
2,812
0.9%
Nova Farms, LLC
6.50
3/28/2027
14,567
13,898
13,984
4.6%
(9)(17)
Oasis - AZ GOAT AZ LLC
15.50
8.00
3/31/2026
4,574
4,549
4,528
1.5%
Shangri-La Columbia, LLC
13.25
11,760
11,545
11,584
3.8%
(10)(17)(18)
Silver Therapeutics, Inc.
7.25
3/26/2025
3/24/2028
5,700
5,643
1.9%
Subsero Holdings - Illinois, Inc
7.00
2.00
7/29/2026
2,765
2,733
2,821
TerrAscend Corporation
12.75
7/15/2025
8/1/2028
3,105
2,961
(14)
TheraTrue, Inc.
14.50
3/18/2025
3/13/2027
2,986
Verano Holdings Corp.
13.75
6.25
10/27/2024
10/30/2026
42,495
42,483
42,706
14.1%
Revolver
12.49
8.33
9/29/2028
10,000
Wellgreens 2.0, LLC
14.00
7/24/2025
7/31/2029
4,398
4,440
(11)(19)
Total Cannabis
221,601
222,052
73.4%
Finance and Insurance
Hartford Gold Group, LLC
13.98
9.85
1.50
1/6/2027
178
164
161
0.1%
(11)
Minden Holdings, LLC
5/31/2026
400
Total Finance and Insurance
564
561
0.2%
Information
AI Software, LLC (d/b/a Capacity)
6/13/2025
6/13/2029
5,019
4,618
4,718
1.6%
Engage3 Holdings, Inc.
2.50
7/22/2025
7/22/2030
6,027
5,698
1.8%
Protect Animals With Satellites LLC (Halo Collar)
1.75
3.00
11/1/2026
3,613
3,473
3,504
1.2%
Incremental Term Loan
1,910
1,837
1,853
0.6%
Total Information
15,626
15,773
5.2%
Manufacturing
Action Target, Inc.
2.75
8/29/2025
7/19/2027
2,995
Total Manufacturing
Public Administration
Youth Opportunity Investments, LLC
12.02
9/18/2026
11,602
11,547
11,660
Total Public Administration
Real Estate and Rental and Leasing
Workbox Holdings, Inc.
6.00
5/20/2024
5/31/2029
2,200
1,936
1,947
Total Real Estate and Rental and Leasing
Retail Trade
Aura Home, Inc
10.77
3.75
9/22/2026
3,325
1.1%
10.52
4/11/2025
2,402
2,390
0.8%
519
Portofino Labs, Inc. (dba Because Market)
12.03
4.25
4/30/2025
4/30/2029
5,026
4,985
5,051
Total Retail Trade
11,231
11,285
3.7%
Total First Lien Senior Secured U.S. Debt
265,500
266,273
87.9%
Senior Secured U.S. Notes
Cannabis
Ascend Wellness Holdings, Inc.
Senior Secured Note
7/16/2024
7/16/2029
3,500
3,361
3,448
Curaleaf Holdings, Inc.
10/11/2022
12/15/2026
8,500
7,944
8,245
2.8%
(9)(14)
11,305
11,693
3.9%
RTCP, LLC
10/2/2028
22,000
21,979
7.3%
(13)
West Creek Financial Holdings, Inc. dba Koalafi
Series A Senior Note
18.80
13.80
11/29/2027
5,322
5,297
5,348
1.7%
27,276
27,348
9.0%
Total Senior Secured U.S. Notes
38,581
39,041
12.9%
Second Lien Senior Secured
Remedy - Maryland Wellness, LLC
20.25
9.00
3.50
1,466
1,473
0.5%
Total Second Lien Senior Secured U.S. Debt
Total U.S. Corporate Debt
305,547
306,787
101.3%
First Lien Senior Secured Canadian Debt
Tulip.io Inc.
11/4/2024
11/4/2028
3,076
3,061
(8)(14)
Total First Lien Senior Secured Canadian Debt
Total Canadian Corporate Debt
Total Debt Investments
308,623
309,848
102.3%
Class Series
InitialAcquisition Date
Cost
Fair Value
U.S. Preferred Stock
(6)
A-1 Preferred
358,950
500
Total U.S. Preferred Stock
U .S. Warrants
Warrants
139,435
431
491
342,439
342
773
833
0.3%
A-3 Warrants
791,258
97
44
A-4 Warrants
520,814
231
115
328
159
46
Total U.S. Warrants
1,147
1,045
Canadian Warrants
Total Canadian Warrants
Total Equity Investments
1,647
1,545
TOTAL INVESTMENTS
310,270
311,393
102.8%
8
Footnote Legend
F - Fixed
P - Prime
PIK - Payment-In-Kind
S - SOFR
9
Facility Type
All inRate
Amortized Cost (17)
% ofNet Assets
Footnote
Investments at Fair Value U.S. Corporate Debt First Lien Senior Secured U.S. Debt Cannabis
(1) (5)
10,075
9,927
9,873
2/28/2025
1,462
Deep Roots Harvest, Inc.
10/23/2024
8/15/2027
5,000
4,975
31,659
15.25
14,300
13,893
14,157
4.7%
12/31/2025
12,364
12,303
3,290
3,286
2,875
15,679
14,579
14,817
4.9%
5,146
5,073
5,069
Proper Holdings, LLC
11/28/2025
4,396
4,393
18.50
8/4/2025
3,146
3,086
3,130
STIIIZY, Inc. (f/k/a Shryne Group Inc.)
5/26/2022
5/26/2027
40,793
40,504
40,385
13.4%
16.50
2,941
2,873
2,882
51,768
51,760
52,027
17.2%
(10)(14)
202,673
203,447
67.6%
14.40
12/17/2025
162
144
156
1,682
1,431
1,455
14.75
2,197
3,772
3,811
1.3%
Health Care and Social Assistance
Sunny Days Enterprises, LLC
4.75
2,742
2,754
Total Health Care and Social Assistance
12.25
3,663
3,417
3,407
2,004
1,870
1,864
Simspace Corporation
17.50
10.00
11/1/2025
6,500
6,573
2.2%
11,860
11,771
12.28
10,375
10,273
10,323
3.4%
Workbox Holdings Inc.
1,622
1,406
1,452
9/22/2025
3,285
3,275
236,023
236,876
78.7%
Senior Secured Notes
3,331
3,308
4,500
4,142
4,253
1.4%
7,473
7,561
2.5%
21,980
5,148
5,115
5,096
27,095
27,096
10
34,568
34,657
11.5%
270,590
271,532
90.2%
3,014
2,984
273,604
274,516
91.2%
AmortizedCost (17)
500,000
(6)(10)
71,000
91
105,000
146
134
243
225
64,776
(6)(8)(14)
743
725
274,347
275,241
91.4%
Yield
FairValue
Cash & Cash Equivalents
State Street Institutional US Government Money Market Fund
4.43
23,932
7.9%
(15)(16)
Total Cash & Cash Equivalents
Total Portfolio Investments and Cash & Cash Equivalents
298,279
299,174
99.3%
11
12
NOTE 1 — ORGANIZATION
Chicago Atlantic BDC, Inc. (formerly, Silver Spike Investment Corp.) (an emerging growth company) (the “Company”, “we” or “our”) was formed on January 25, 2021 as a Maryland corporation structured as an externally managed, closed-end, non-diversified management investment company. The Company has elected to be regulated as a business development company (“BDC”), under the Investment Company Act of 1940, as amended (“1940 Act”). In addition, for U.S. federal income tax purposes the Company adopted an initial tax year end of December 31, 2021, and was taxed as a corporation for the tax period ended December 31, 2021. The Company adopted the tax year end of March 31 and elected to be treated for U.S. federal income tax purposes as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”) for the tax period January 1, 2022 through March 31, 2022, and has maintained (and intends to continue to maintain) such election in subsequent taxable years. However, there is no guarantee that the Company will qualify to make such an election for any taxable year.
The Company is managed by Chicago Atlantic BDC Advisers, LLC (formerly, Silver Spike Capital, LLC) (the “Adviser”), a registered investment adviser under the Investment Advisers Act of 1940 with the Securities and Exchange Commission (“SEC”). The Adviser has engaged SS&C Technologies, Inc. and ALPS Fund Services, Inc. (“SS&C”), as sub-administrator, to perform administrative services necessary for the Company's operations.
The Company is a specialty finance company focused on investing in companies in highly complex and highly regulated industries typically underserved by other capital providers, including investing across the cannabis ecosystem through investments in the form of direct loans to privately held cannabis companies. Although the Company focuses on investments in the cannabis industry, the Company may also invest in growth and technology companies, esoteric and asset-based lending opportunities, and liquidity solutions opportunities.
The Company’s investment objective is to maximize risk-adjusted returns on equity for its shareholders. The Company seeks to capitalize on, among other things, what it believes to be nascent cannabis industry growth, and drive return on equity by generating current income from its debt investments and capital appreciation from its equity and equity-related investments. The Company intends to achieve its investment objective by investing primarily in secured debt, unsecured debt, equity warrants and direct equity investments in privately held businesses. The Company intends that its debt investments will often be secured by either a first or second priority lien on the assets of the portfolio company, can include either fixed or floating rate terms and will generally have a term of between three and six years from the original investment date.
On October 1, 2024, the Company completed its 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”), pursuant to the Purchase Agreement, dated as of February 18, 2024, between the Company and CALP (the “Loan Portfolio Acquisition Agreement”). In accordance with the terms of the Loan Portfolio Acquisition Agreement, at the effective time of the Loan Portfolio Acquisition, the Company issued 16,605,372 shares of its common stock to CALP in exchange for the Loan Portfolio, which was determined by the Company to have a fair value of $219,621,125 as of September 28, 2024.
On October 1, 2024, the Adviser and Chicago Atlantic BDC Holdings, LLC (together with its affiliates, “Chicago Atlantic”), the investment adviser of CALP, consummated a previously announced transaction pursuant to which a joint venture between Chicago Atlantic and the Adviser has been created to combine and jointly operate the Adviser’s, and a portion of Chicago Atlantic’s, investment management businesses (the “Joint Venture”).
In connection with the Loan Portfolio Acquisition and the Joint Venture, the Company has been renamed “Chicago Atlantic BDC, Inc.,” and its ticker symbol has been changed to “LIEN,” and the Adviser has been renamed “Chicago Atlantic BDC Advisers, LLC.” The changes to the Company’s name and ticker symbol became effective in the market at the open of business on October 2, 2024.
NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company is an investment company following the accounting and reporting requirements set forth in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 946, Financial Services—Investment Companies ("ASC 946") and Articles 6 and 12 of Regulation S-X. The financial statements reflect all adjustments and reclassification that, in the opinion of management, are necessary for the fair statement of results of operations and financial condition
as of and for the periods presented. The current period’s results of operations are not necessarily indicative of results that may be achieved for the full fiscal year.
Consolidation
As provided under ASC 946, the Company will not consolidate its investment in a portfolio company other than an investment company subsidiary or a controlled operating company whose business consists of providing services to the Company. An investment company’s interests in portfolio companies that are not investment companies are measured at fair value in accordance with ASC 946.
Reclassifications
Certain reclassifications have been made in the presentation of prior year financial statements and accompanying notes to conform to the current period presentation.
Use of Estimates
The preparation of the financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions affecting reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income, expenses, and gains and losses during the reported period. These estimates are based on the information that is currently available to the Company and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ materially from those estimates under different assumptions and conditions.
Cash and Cash Equivalents
Cash and cash equivalents consists of funds deposited with financial institutions and short-term (maturity of 90 days or less) liquid investments and money market funds. Funds held in money market funds are considered Level 1 in the fair value hierarchy in accordance with ASC 820, Fair Value Measurement ("ASC 820"). Cash held in demand deposit accounts may exceed the Federal Deposit Insurance Corporation (“FDIC”) insured limit. The Company has not incurred any losses on these accounts, and the credit risk exposure is mitigated by the financial strength of the banking institution where the accounts are held. As of September 30, 2025 and December 31, 2024, cash and cash equivalents consisted of $10.5 million and $23.9 million, respectively, all of which are held with high credit quality financial institutions, which are members of the FDIC.
Investment Transactions
Investment transactions are recorded on the trade date. Realized gains or losses are recognized as the difference between the net proceeds received (excluding prepayment fees, if any) and the amortized cost basis of the investment using the specific identification method without regard to unrealized gains or losses previously recognized, and include investments written off during the period, net of recoveries. Current-period changes in the fair value of investments are reflected as a component of the net change in unrealized appreciation (depreciation) from investments on the Statements of Operations. The net change in unrealized appreciation (depreciation) primarily reflects the change in fair value of investments as of the last business day of the reporting period, including the reversal of previously recorded unrealized gains or losses with respect to investments realized during the period.
Investments traded but not yet settled, if any, are reported in payable for investments purchased and receivable for investments sold on the Statements of Assets and Liabilities.
Investment Valuation
The Company’s investments are recorded at their estimated fair value on the Statements of Assets and Liabilities.
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. Generally, the valuation approach used for debt investments is the income approach. The approach derives a value based on either determining the present value of a projected level of cash flow, including a terminal value, or by the capitalization of a normalized measure of future cash flow. The discounted cash flow (“DCF”) method, one of the methodologies under the income approach, involves estimating future cash flows under various scenarios and discounting them to the measurement date. The discount rate represents a return required by a market participant in order to make an investment in the subject company.
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Alternatively, the market approach or asset approach may be used. The market approach is a way of determining a value indication by using one or more methods that compare the portfolio company to similar businesses. Value indicators are applied to relevant financial information of the entity being valued to estimate its fair value. There are two methodologies to consider under the market approach: the guideline public company method (“GPC”) and the controlling transaction method (“CTM”). The GPC method is based on the premise that the pricing multiples of comparable publicly traded companies can be used as a tool to value privately held companies. The publicly traded companies’ ratios and business enterprise value provide guidance in the valuation process. Considerations of factors such as size, growth, profitability and return on investment are also analyzed and compared to the subject business. The CTM is based on the same premise as the GPC. Guideline transactions include change-of-control transactions involving public or private businesses for companies engaged in similar lines of business or with similar economic characteristics. The valuation considers the price at which the merger or acquisition took place to other factors in order to create a pricing multiple that can be used to determine an estimate of value for the subject company.
The asset approach provides an indication of the portfolio company’s value by developing a valuation-based balance sheet. This approach requires adjusting the historical assets and liabilities listed on the U.S. GAAP-based balance sheet to estimated fair values. The excess of assets over liabilities represents the tangible value of the business enterprise. The asset approach does not consider the relevant earnings capacity of a going concern business.
Pursuant to Rule 2a-5 under the 1940 Act, the Board of Directors of the Company (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.
As part of the valuation process, the Adviser takes into account relevant factors in determining the fair value of our investments, including: the estimated enterprise value of a portfolio company (i.e., the total fair value of the portfolio company’s debt and equity), the nature and realizable value of any collateral, the portfolio company’s ability to make payments based on its earnings and cash flow, the markets in which the portfolio company does business, a comparison of the portfolio company’s securities to any similar publicly traded securities, and overall changes in the interest rate environment and the credit markets. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, the Adviser considers whether the pricing indicated by the external event corroborates its valuation.
The Adviser undertakes a multi-step valuation process, which includes, among other procedures, the following:
We conduct this valuation process on a quarterly basis.
We apply 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:
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Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period. Additionally, the fair value of such investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that may ultimately be realized. Further, such investments are generally less liquid than publicly traded securities and may be subject to contractual and other restrictions on resale. If we were required to liquidate a portfolio investment in a forced or liquidation sale, it could realize amounts that are different from the amounts presented and such differences could be material. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the unrealized gains or losses reflected previously.
Equity Securities and Warrants
The Company may be issued warrants by portfolio companies as yield enhancements in connection with a related debt investment. These warrants are recorded as assets at estimated fair value on the grant date. The Company determines the cost basis of the warrants or other equity securities received based upon their respective fair values on the date of receipt in proportion to the total fair value of the debt and warrants or other equity securities received. Depending on the facts and circumstances, the Company generally utilizes a combination of one or several forms of the market approach and contingent claim analyses (a form of option analysis) to estimate the fair value of the securities as of the measurement date and determines the cost basis using a relative fair value methodology. As part of its application of the market approach, the Company estimates the enterprise value of a portfolio company utilizing customary pricing multiples, based on the development stage of the underlying issuers, or other appropriate valuation methods, such as considering recent transactions in the equity securities of the portfolio company or third-party valuations that are assessed to be indicative of fair value of the respective portfolio company. If appropriate, based on the facts and circumstances, the Company performs an allocation of the enterprise value to the equity securities utilizing a contingent claim analysis and/or other waterfall calculation by which it allocates the enterprise value across the portfolio company’s warrants and other equity securities in order of their preference relative to one another.
Earnings per share
Basic earnings per share is computed by dividing net increase (decrease) in net assets resulting from operations by the weighted-average number of common shares outstanding for the period. Other potentially dilutive common shares, and the related impact to earnings are considered when calculating earnings per share on a diluted basis using the treasury stock method.
Revenue Recognition
Interest Income
Interest income is recorded on an accrual basis and includes accretion and amortization of discounts or premiums, respectively. Discounts and premiums to par value on securities purchased are accreted and amortized, respectively, into interest income over the contractual life of the respective security using the effective yield method. The amortized cost of investments includes the original cost adjusted for the accretion and amortization of discounts and premiums, respectively. Upon prepayment of a loan or debt security, any prepayment premiums and unamortized discounts or premiums are recorded as interest income.
Certain investments may have contractual payment-in-kind ("PIK") interest or dividends. PIK interest or dividends represents accrued interest or dividends that is added to the principal amount of the investment on the respective interest or dividend payment dates rather than being paid in cash and generally becomes due at maturity.
Dividend Income
Dividend income on preferred equity securities is recorded on the accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies.
Fee Income
All transaction fees earned in connection with our investments are recognized as fee income and are generally non-recurring. Such fees typically include fees for services, including administrative, structuring (including with respect to amendments) and advisory services, provided to portfolio companies. We recognize income from fees for providing such structuring and advisory services when the services are rendered or the transactions are completed, and payment is received (generally immediately).
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Non-Accrual Policy
When a debt security becomes 90 days or more past due, or if management otherwise does not expect that principal, interest, and other obligations due will be collected in full, the Company will generally place the debt security on non-accrual status and cease recognizing interest income on that debt security until all principal and interest due has been paid or the Company believes the borrower has demonstrated the ability to repay its current and future contractual obligations. Any interest receivable is reversed from income in the period that a loan is placed on non-accrual status. However, the Company may make exceptions to this policy if the investment has sufficient collateral value and is in the process of collection. If PIK interest or dividends are not expected to be realized by the Company, the investment generating PIK interest or dividends will be placed on non-accrual status. When an investment with PIK is placed on non-accrual status, the accrued, uncapitalized interest or dividends are generally reversed through interest or dividend income, respectively. As of September 30, 2025 and December 31, 2024, there were no investments placed on non-accrual status.
Unearned Revenue
The Company utilizes interest reserves on certain loans which are applied to future interest payments. Such reserves are established at the time of loan origination. The interest reserve is recorded as a liability as it represents unearned interest revenue. The interest reserve is relieved when the interest on the loan is earned, and interest income is recorded in the period when the interest is earned in accordance with the credit agreement. The interest payment is deducted from the interest reserve deposit balance on the date when the interest payment is due.
The decision to establish an interest reserve is made during the underwriting process and considers the creditworthiness and expertise of the borrower, and the debt coverage provided by the pledged collateral. It is the Company’s policy to recognize income for this interest component as long as the subject loan is performing as originally projected and if there has been no deterioration in the financial condition of the borrower. The Company’s standard accounting policies for interest income recognition are applied to all loans, including those with interest reserves. As of September 30, 2025 and December 31, 2024, the Company recorded $15,499 and $37,752, respectively, of prepaid interest reserves, which are presented as unearned interest income on the Statements of Assets and Liabilities.
Income Taxes
The Company adopted an initial tax year end of December 31, 2021 and was taxed as a corporation for U.S. federal income tax purposes for the tax period ended December 31, 2021. The Company adopted the tax year end of March 31 and elected to be treated for U.S. federal income tax purposes as a RIC under Subchapter M of the Code for the tax period January 1, 2022 through March 31, 2022 and in subsequent years. The Company intends to maintain such election in the current and future taxable years. To maintain its tax treatment as a RIC, the Company must meet specified source-of-income and asset diversification requirements and timely distribute to its stockholders for each taxable year at least 90% of its investment company taxable income. 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. The Company, at its discretion (subject to the requirement to distribute 90% of its investment company taxable income as described above), may carry forward taxable income in excess of calendar year dividends and pay a 4% nondeductible U.S. federal excise tax on this income. If the Company chooses to do so, this generally would increase expenses and reduce the amount available to be distributed to stockholders.
For both the three and nine months ended September 30, 2025 and 2024, the Company accrued $2,797 and $31,314, respectively, of excise taxes. As of September 30, 2025 and December 31, 2024, $0 and $88,709, respectively, of accrued excise taxes remained payable.
During the quarter ended September 30, 2025, the Company determined that it had overpaid its estimated federal excise tax liability for the prior fiscal year by $23,851. This overpayment resulted in a deferred tax asset and is included in prepaid expenses and other assets on the Statements of Assets and Liabilities. The Company has evaluated the realizability of the deferred tax asset and believes it is more likely than not that the benefit will be realized in future periods through either a refund or application against future excise tax liabilities. Accordingly, no valuation allowance has been recorded against this deferred tax asset.
The Company evaluates tax positions taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority in accordance with ASC Topic 740, Income Taxes (“ASC 740”). Tax benefits of positions not deemed to meet the more-likely-than-not threshold, or uncertain tax positions, would be recorded as tax expense in the current year. It is the Company’s policy to recognize accrued interest and penalties related to uncertain tax benefits in income tax expense.
Based on the analysis of the Company’s tax position, the Company had no uncertain tax positions that met the recognition or measurement criteria as of September 30, 2025 and December 31, 2024. The Company does not anticipate any significant increase or
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decrease in unrecognized tax benefits for the next twelve months. The Company identifies its major tax jurisdiction as the United States. As of September 30, 2025, the tax years that remain subject to examination by the Internal Revenue Service are from 2022 (commencement of operations) forward.
Distributions
Distributions to common stockholders are recorded on the record date. The amount of taxable income to be paid out as a distribution is determined by our Board on a quarterly basis and is generally based upon the future taxable income estimated by management. Capital gains, if any, are distributed at least annually, although the Company may decide to retain all or some of those capital gains for investment and pay U.S. federal income tax at corporate rates on those retained amounts. If the Company chooses to do so, this generally will increase expenses and reduce the amount available to be distributed to stockholders. Our distributions may exceed our earnings, and therefore, portions of the distributions that we make may be a return of the money originally invested and represent a return of capital distribution to shareholders for tax purposes.
Offering Costs
These costs consist primarily of legal fees and other costs incurred in connection with issuances of the Company’s common stock, including the preparation of the Company’s registration statement, registration fees, transfer agent expenses, and other expenses relating to the offering. Offering costs are capitalized as deferred offering costs and, if any, are included in prepaid expenses and other assets on the Statements of Assets and Liabilities. As of September 30, 2025 and December 31, 2024, deferred offering costs were $151,284 and $49,998, respectively.
The deferred offering costs were charged to capital upon the issuance of shares subsequent to the completion of the Loan Portfolio Acquisition. For the three and nine months ended September 30, 2025, $0 of offering costs were charged to capital. For the year ended December 31, 2024, $1,214,375 of offering costs were charged to capital. As of September 30, 2025 and December 31, 2024, there were $0 and $989,645, respectively, of offering costs that remained payable by the Company.
Cumulative transaction expenses related to the Loan Portfolio Acquisition through September 30, 2025 and December 31, 2024 were $6,053,043 and $6,053,043, respectively, and consisted primarily of legal fees and valuation fees.
For the three and nine months ended September 30, 2025, the Company incurred transaction expenses related to the Loan Portfolio Acquisition of $0. For the three and nine months ended September 30, 2024, the Company incurred transaction expenses related to the Loan Portfolio Acquisition of $2,429,993 and $5,069,062, respectively. As of September 30, 2025 and December 31, 2024, $0 and $2,945,125, respectively, of transaction expenses related to the Loan Portfolio Acquisition remained payable, and are included in transaction fees payable on the Statements of Assets and Liabilities.
Deferred Financing Costs
Deferred financing costs consist of origination expenses incurred in connection with the closing, or anticipated closing, of a credit facility, and include legal, accounting, and other related expenses. These costs are deferred and amortized as interest expense using the straight-line method over the term of the applicable credit facility. In addition to origination expenses, the Company pays an annual upfront fee related to its credit facility. These fees are deferred and amortized as interest expense using the straight-line method over a one-year term. Deferred financing costs are included in prepaid expenses and other assets on the Statements of Assets and Liabilities. As of September 30, 2025 and December 31, 2024, deferred financing costs payable were $0 and $47,881, respectively.
New Accounting Standards
On January 1, 2025, the Company adopted Accounting Standards Update ("ASU") No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires, among other things, greater disaggregation of information in the income tax rate reconciliation and for paid income taxes to be disaggregated by jurisdiction. This ASU affects financial statement disclosure only, which is not required until year end 2025 and, as a result, does not affect our results of operations or financial condition.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40). ASU No. 2024-03 requires disaggregated disclosure of certain costs and expenses, including purchase of inventory, employee compensation, depreciation, amortization and depletion, within relevant income statement captions. ASU 2024-03 is effective for annual years beginning after December 15, 2026, and interim periods beginning after December
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15, 2027. Early adoption and retrospective application are permitted. The Company is currently evaluating the impact of adopting ASU No. 2024-03.
NOTE 3 — INVESTMENTS
The Company’s investments in portfolio companies are primarily in the form of debt investments, but may include equity warrants received in connection with debt investments, equity investments and derivative investments.
In the tables presented below for the Company’s debt investments, the amortized cost represents the original cost adjusted for any accretion of discounts, amortization of premiums and PIK interest or dividends.
The following tables summarize the composition of the Company’s portfolio investments by investment type as of September 30, 2025 and December 31, 2024.
As of September 30, 2025
Investment Type
PrincipalBalance
Percentageat PrincipalBalance
AmortizedCost
Percentage atAmortizedCost
Percentageat FairValue
First Lien Senior Secured Loans
271,676,674
86.9
268,576,152
86.5
269,334,628
39,321,781
12.6
38,581,332
12.4
39,040,890
12.5
Second Lien Senior Secured Loans
1,465,697
0.5
1,465,696
1,473,025
0.0
1,147,081
0.4
1,044,939
0.3
Preferred Stock
0.2
Total
312,464,152
100.0
310,270,261
As of December 31, 2024
Percentageat AmortizedCost
Percentage atFair Value
242,269,725
87.3
239,036,463
87.1
239,860,206
35,147,669
12.7
34,567,422
34,656,192
242,826
0.1
225,000
277,417,394
274,346,711
The following tables summarize the composition of the Company’s debt portfolio based on rate characteristics as of September 30, 2025 and December 31, 2024.
Rate Type
Time toMaturity
Fixed-rate debt
96,968,593
95,363,231
95,727,796
3.0 years
Floating-rate debt (SOFR)
35,052,066
34,924,985
35,116,259
2.0 years
Floating-rate debt (PRIME)
180,443,493
178,334,964
179,004,488
1.7 years
Total Debt Instruments
308,623,180
309,848,543
56,819,862
55,954,923
56,158,027
2.6 years
15,543,708
15,134,388
15,209,230
1.5 years
205,053,824
202,514,574
203,149,141
1.8 years
273,603,885
274,516,398
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The Company’s portfolio investments are primarily in companies conducting business in or supporting the cannabis industry. The Company uses the North American Industry Classification System ("NAICS") for classifying the industry groupings of its portfolio companies, excluding any portfolio company operating in the cannabis industry. The following tables summarize the composition of the Company’s portfolio investments by industry as of September 30, 2025 and December 31, 2024.
Industry
234,372,073
75.5
235,218,000
27,839,521
9.0
27,909,690
19,474,988
6.3
19,667,570
11,547,379
3.7
11,659,571
11,277,093
3.6
11,337,888
2,994,731
1.0
2,764,476
0.9
2,606,032
210,144,841
76.6
211,007,307
76.7
30,866,942
11.3
30,907,369
11.2
14,873,810
5.4
14,754,624
10,273,444
10,322,928
3.8
3,285,390
1.2
3,275,125
2,753,852
2,796,946
2,148,432
0.8
2,177,099
0.7
The geographic composition is determined by the location of the principal place of business of each portfolio company. Geographic regions are defined as: West, for the states of WA, OR, ID, MT, WY, CO, AK, HI, UT, NV and CA; Midwest, for the states of ND, SD, NE, KS, MO, IA, MN, WI, MI, IL, IN and OH; Northeast, for the states of PA, NJ, NY, CT, RI, MA, VT, NH and ME; Southeast, for the states of AR, LA, MS, TN, KY, AL, FL, GA, SC, NC, VA, DE, WV and MD; and Southwest, for the states of AZ, NM, TX and OK.
The following tables summarize the composition of the Company’s portfolio investments by geographic region as of September 30, 2025 and December 31, 2024.
Geographic Region
United States:
Midwest
122,055,582
39.3
122,676,344
39.4
Northeast
68,514,604
22.1
68,926,063
West
59,696,233
19.2
59,835,851
Southeast
31,987,492
10.3
31,933,619
Southwest
21,979,366
7.1
22,000,000
International:
Canada
6,036,984
2.0
6,021,605
1.9
100
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Percentage atAmortized Cost
88,999,405
32.4
89,624,122
32.6
86,686,279
31.6
86,660,218
31.5
52,963,212
19.3
53,223,047
21,980,052
8.0
20,703,496
7.6
20,749,887
7.5
3,014,267
1.1
2,984,124
Certain Risk Factors
In the ordinary course of business, the Company manages a variety of risks including market risk, concentration risk, credit risk, liquidity risk, interest rate risk, prepayment risk, risks associated with financial, economic and other global market developments and disruptions, including those arising from war, terrorism, market manipulation, government interventions, defaults and shutdowns, political changes or diplomatic developments, public health emergencies (such as the spread of infectious diseases, pandemics and epidemics) and natural/environmental disasters, which can all negatively impact the securities markets generally. These events can also impair the technology and other operational systems upon which the Company’s service providers rely and could otherwise disrupt the Company’s service providers’ ability to fulfill their obligations to the Company. The Company identifies, measures and monitors risk through various control mechanisms, including trading limits and diversifying exposures and activities across a variety of instruments, markets and counterparties.
Market risk is the risk of potential adverse changes to the value of financial instruments because of changes in market conditions, including as a result of changes in the credit quality of a particular issuer, credit spreads, interest rates, and other movements and volatility in security prices or commodities. In particular, the Company may invest in issuers that are experiencing or have experienced financial or business difficulties (including difficulties resulting from the initiation or prospect of significant litigation or bankruptcy proceedings), which involves significant risks. The Company manages its exposure to market risk through the use of risk management strategies and various analytical monitoring techniques.
Concentration risk includes the risk that the Company’s focus on investments in cannabis companies may subject the Company to greater price volatility and risk of loss as a result of adverse economic, business or other developments affecting cannabis companies than funds investing in a broader range of industries or sectors. At times, the performance of investments in cannabis companies will lag the performance of other industries or sectors or the broader market as a whole. Investing in portfolio companies involved in the cannabis industry subjects us to the following risks:
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As of September 30, 2025 and December 31, 2024, we had three portfolio companies that represented 34.2% and 45.1%, respectively, of the fair values of our portfolio. As of September 30, 2025 and December 31, 2024, our largest portfolio company represented 16.9% and 18.9%, respectively, of the total fair values of our investments in portfolio companies.
Any of the foregoing could have an adverse impact on our and our portfolio companies’ businesses, financial condition and results of operations.
Credit risk is the risk that a decline in the credit quality of an investment could cause the Company to lose money. The Company could lose money if the issuer or guarantor of a portfolio security fails to make timely payment or otherwise honor its obligations. Fixed income securities rated below investment grade (high-yield bonds) involve greater risks of default or downgrade and are generally more volatile than investment grade securities. Below investment grade securities involve greater risk of price declines than investment grade securities due to actual or perceived changes in an issuer’s creditworthiness. In addition, issuers of below investment grade securities may be more susceptible than other issuers to economic downturns. Such securities are subject to the risk that the issuer may not be able to pay interest or dividends and ultimately to repay principal upon maturity. Discontinuation of these payments could substantially adversely affect the market value of the security.
The Company’s investments may, at any time, include securities and other financial instruments or obligations that are illiquid or thinly traded, making purchase or sale of such securities and financial instruments at desired prices or in desired quantities difficult. Furthermore, the sale of any such investments may be possible only at substantial discounts, and it may be extremely difficult to value any such investments accurately.
Interest rate risk refers to the change in earnings that may result from changes in the level of interest rates. To the extent that the Company borrows money to make investments, including under its credit facility, net investment income (loss) will be affected by the difference between the rate at which the Company borrows funds and the rate at which the Company invests these funds. In periods of rising interest rates, the Company’s cost of borrowing funds would increase, which may reduce net investment income (loss). As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on net investment income (loss).
Prepayment risk is the risk that a loan in the Company’s portfolio will prepay due to the existence of favorable financing market conditions that allow the portfolio company the ability to replace existing financing with less expensive capital. As market conditions change, prepayment may be possible for each portfolio company. In some cases, the prepayment of a loan may reduce the Company’s achievable yield if the capital returned cannot be invested in transactions with equal or greater expected yields, which could have a material adverse effect on our business, financial condition and results of operations.
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NOTE 4 — FAIR VALUE OF FINANCIAL INSTRUMENTS
ASC 820 defines fair value, establishes a framework for measuring fair value, and establishes a fair value hierarchy based on the quality of inputs used to measure fair value and enhances disclosure requirements for fair value measurements. The Company accounts for its investments at fair value. As of September 30, 2025 and December 31, 2024, the Company’s portfolio investments consisted primarily of investments in senior secured loans and secured notes. The fair value amounts have been measured as of the reporting date and have not been reevaluated or updated for purposes of these financial statements subsequent to that date. As such, the fair values of these financial instruments subsequent to the reporting date may be different than amounts reported.
The fair value determination of each portfolio investment categorized as Level 3 required the use of one or more unobservable inputs.
The use of significant unobservable inputs creates 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 debt investments may vary and may include debt investments’ yield (i.e. discount rate) and volatility assumptions. The significant unobservable inputs used in the fair value measurement of the Company’s equity and warrant investments may vary and may include EBITDA multiples, revenue multiples and asset multiples.
The Company’s investments measured at fair value by investment type on a recurring basis as of September 30, 2025 and December 31, 2024 were as follows:
Fair Value Measurements at September 30, 2025 Using
Quoted Prices inActive Marketsfor IdenticalAssets (Level 1)
SignificantOtherObservableInputs (Level 2)
SignificantUnobservableInputs (Level 3)
Fair Value Measurements at December 31, 2024 Using
The following tables provide a summary of the significant unobservable inputs used to fair value the Level 3 portfolio investments as of September 30, 2025 and December 31, 2024. The methodology for the determination of the fair value of the Company’s investments is discussed in “Note 2 – Significant Accounting Policies”. Discount rate ranges are shown as spread over the U.S. Prime Rate ("PRIME"), Secured Overnight Financing Rate ("SOFR") and/or U.S. Treasury Rates, as applicable, for senior secured first lien term loans, as of September 30, 2025 and December 31, 2024.
Fair Value as ofSeptember 30, 2025
ValuationTechniques/Methodologies
Unobservable Input
Range
WeightedAverage(1)
208,140,610
Discounted Cash Flow
Discount Rate
8.40% - 29.63%
61,194,018
Recent Transaction
N/A
6.37% - 18.23%
11.08
18.64% - 20.64%
19.64
Market Approach
Current Value
2.25x
885,939
159,000
Option Pricing Model
Volatility Factor
58.70
23
Fair Value as ofDecember 31, 2024
9.10% - 28.60%
13.38
7.40% - 17.20%
11.53
2.5x
47.20
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.
The following tables provide a summary of changes in the fair value of the Company’s Level 3 portfolio investments for the nine months ended September 30, 2025 and 2024:
SeniorSecured Notes
PreferredStock
Fair Value as of December 31, 2024
Purchases
120,405,247
3,600,000
904,255
124,909,502
Accretion of discount and fees (amortization of premium), net
1,857,239
239,798
8,655
2,105,692
PIK interest
1,311,017
174,112
14,212
1,499,341
(91,045,553
(1,545,432
(92,590,985
Net realized gain (loss) on investments
(26,642
370,788
(31,296
(84,316
Transfers between investment types
(3,026,886
3,026,886
Balance as of September 30, 2025
Net change in unrealized appreciation/depreciation on Level 3 investments still held as of September 30, 2025
(202,733
370,787
(37,400
46,338
First LienSenior SecuredLoans
Fair Value as of December 31, 2023
46,006,000
8,114,000
54,120,000
1,082,174
3,316,250
5,141,250
316,057
185,246
501,303
182,634
(4,344,000
127,135
127,015
(66,826
Balance as of September 30, 2024
43,370,000
11,742,511
176,000
55,788,511
Net change in unrealized appreciation/depreciation on Level 3 investments still held as of September 30, 2024
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NOTE 5 – DEBT
Revolving Line of Credit
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.
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.
Availability under the Credit Agreement (the “Revolving Period”) will terminate on February 11, 2027, and the Credit Agreement has a scheduled maturity date of March 31, 2028.
Borrowings under the Credit Agreement bear interest at the annual rate of one-month term SOFR plus 3.00%, subject to a minimum interest rate of 6.00%. 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. For the three and nine months ended September 30, 2025, the company recorded $125,465 and $318,243, respectively, of commitment fees which are included in interest expense on the Statements of Operations. The Company will also 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.
The Company incurred $1,154,310 of financing costs in connection with the origination of the Revolving Line of Credit. As of September 30, 2025, the balance of $727,566 of deferred financing costs was included in prepaid expenses and other assets on the Statements of Assets and Liabilities. For the three and nine months ended September 30, 2025, $177,966 and $426,745 respectively, of such costs were amortized and included in interest expense on the Statements of Operations.
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.
The fair value of the Revolving Line of Credit is equal to its carrying value because the revolver is a floating rate facility that reprices to a market rate frequently. The fair value is categorized as Level 2 under ASC 820.
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The following table presents the components of interest expense for the following periods:
Commitment fee
125,465
318,243
177,966
35,084
40,168
Total interest expense
Average interest rate
7.33
Average daily borrowings
1,875,000
723,443
NOTE 6 — RELATED PARTY TRANSACTIONS
Investment Advisory Agreement
Pursuant to the investment advisory agreement between the Company and the Adviser (the “Investment Advisory Agreement”), fees payable to the Adviser are equal to (a) a base management fee of 1.75% of the average value of the Company’s gross assets at the end of the two most recent quarters (i.e., total assets held before deduction of any liabilities), which includes investments acquired with the use of leverage and excludes cash and cash equivalents and (b) an incentive fee based on the Company’s performance.
The incentive fee consists of two parts. The first part is calculated and payable quarterly in arrears and equals 20% of the Company’s “Pre-Incentive Fee Net Investment Income” for the quarter, subject to a preferred return, or “hurdle,” of 1.75% per quarter (7% annualized), and a “catch-up” feature. The second part is determined and payable in arrears as of the end of each fiscal year (or upon termination of the Investment Advisory Agreement) and equals 20% of the Company’s realized capital gains on a cumulative basis from inception through the end of the fiscal year, if any, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fee (the “Incentive Fee on Capital Gains”). While the Investment Advisory Agreement neither includes nor contemplates the inclusion of unrealized gains in the calculation of the Incentive Fee on Capital Gains, as required by U.S. GAAP, we accrue the Incentive Fee on Capital Gains on unrealized capital appreciation exceeding unrealized depreciation. This accrual reflects the Incentive Fee on Capital Gains that would be payable to the Adviser if the Company’s entire investment portfolio was liquidated at its fair value as of the balance sheet date even though the Adviser is not entitled to an Incentive Fee on Capital Gains with respect to unrealized capital appreciation unless and until such gains are actually realized.
The management fee is payable quarterly in arrears. For the three months ended September 30, 2025 and 2024, the Company incurred management fee expenses of $1,399,845 and $253,421, respectively. For the nine months ended September 30, 2025 and 2024, the Company incurred management fee expenses of $4,006,051 and $745,876, respectively. As of September 30, 2025 and December 31, 2024, $1,399,845 and $758,362, respectively, remained payable.
For the three months ended September 30, 2025 and 2024, the Company incurred income-based incentive fee expenses of $2,347,473 and $0, respectively. For the nine months ended September 30, 2025 and 2024, the Company incurred income-based incentive fee expenses of $6,232,387 and $328,503, respectively. As of September 30, 2025 and December 31, 2024, $2,347,474 and $1,998,945, respectively, remained payable.
For the three months ended September 30, 2025 and 2024, the Company incurred capital gains incentive fee expenses of $(131,412) and $(35,904), respectively. For the nine months ended September 30, 2025 and 2024, the Company incurred capital gains incentive fee expenses of $45,707 and $37,465, respectively. As of September 30, 2025 and December 31, 2024, $167,594 and $121,887, respectively, remained payable.
Expexnse Limitation Agreement
On October 1, 2024, in connection with the Investment Advisory Agreement, the Company and the Adviser entered into an expense limitation agreement (the “Expense Limitation Agreement”) pursuant to which the Adviser has agreed to cap the Company’s operating expenses (excluding base management fees, incentive fees, expenses related to the Loan Portfolio Acquisition, and litigation and indemnification expenses) at an annualized rate of 2.15% of the Company’s net assets through the period ending September 30, 2025.
On February 14, 2025, the Board approved a clarification, as proposed by the Company and the Adviser, of the Expense Limitation Agreement, that any 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.
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For the three months ended September 30, 2025 and 2024, $230,419 and $0, respectively, of the Company’s operating expenses were waived by the Adviser pursuant to the Expense Limitation Agreement. For the nine months ended September 30, 2025 and 2024 $1,338,202 and $0, respectively, of the Company’s operating expenses were waived by the Adviser pursuant to the Expense Limitation Agreement.
Administration Agreement
Pursuant to the administration agreement between the Company and the Adviser (the “Administration Agreement”), the Company is to reimburse 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 SS&C, the sub-administrator. The Company is generally not responsible for the compensation of the Adviser’s employees or any overhead expenses. However, we may reimburse the Adviser for an allocable portion of the compensation paid by the Adviser to our Chief Compliance Officer ("CCO") and Chief Financial Officer ("CFO") and their respective staffs (based on a percentage of time such individuals devote, on an estimated basis, to our business affairs).
License Agreement
The Company has also entered into a license agreement with the Adviser pursuant to which the Adviser has agreed to grant the Company a nonexclusive, royalty-free license to use the name “Chicago Atlantic.” Under this agreement, the Company will have a right to use the “Chicago Atlantic” name, for so long as the Adviser or one of its affiliates remains the Company’s investment adviser. Other than with respect to this limited license, the Company will have no legal right to the “Chicago Atlantic” name.
Related Party Fees & Expenses
The following table summarizes the related parties fees and expenses incurred by the Company for the three and nine months ended September 30, 2025 and 2024.
Affiliate Payments
Total management and incentive fees earned
3,615,906
217,517
10,284,145
1,111,844
General and administrative expenses
Expense limitation agreement
General and administrative expenses waiver
General and administrative expenses reimbursable to the Adviser
852,000
1,427,000
Total affiliate payments
4,467,906
11,711,145
General administrative expenses reimbursable to the Adviser are included in due to affiliates on the accompanying Statements of Assets and Liabilities as of September 30, 2025 and December 31, 2024. Due to affiliates as of September 30, 2025 was $985,882, of which $852,000 and $133,882, represented general and administrative expenses reimbursable to the Adviser and amounts due to Chicago Atlantic Admin, LLC, respectively. Total amounts payable to the Adviser and its affiliates as of December 31, 2024 were $905,129, of which $820,797 and $84,332, represented general and administrative expenses reimbursable to the Adviser and amounts due to Chicago Atlantic Admin, LLC, respectively.
For the three and nine months ended September 30, 2025, the Adviser voluntarily and irrevocably waived approximately $0 and $658,477, respectively, of general and administrative expenses incurred by the Adviser that would have otherwise been reimbursed and payable by the Company. The expenses waived for the three and nine months ended September 30, 2025 are not subject to recoupment by the Adviser or future reimbursement by the Company. There were no waived expenses for the three and nine months ended September 30, 2024.
Affiliated Loan Administrative and Collateral Agent
Chicago Atlantic Admin, LLC (the “Loan Administrator”), serves as a loan administrator and collateral agent for certain loans within the Company’s investment portfolio. Among other customary responsibilities as described in each respective loan document, the Loan Administrator is responsible for: (a) the collection of interest, loan fees, and principal payments from portfolio companies, and (b) the
27
subsequent disbursement of the allocable portion of such collections to the lender(s), including the Company. The Loan Administrator is a wholly-owned subsidiary of Chicago Atlantic Group, LP.
Interest and principal payments from our portfolio companies which were received by the Loan Administrator prior to September 30, 2025, but which were not remitted to the Company until after September 30, 2025, are included in due from affiliates on the Statements of Assets and Liabilities. As of September 30, 2025, the due from affiliates balance of $669,753 consists of $221,696 and $448,057 in interest and principal payments receivable, respectively. The amounts due from affiliates as of September 30, 2025 were collected in October 2025.
Interest and principal payments from our portfolio companies which were received by the Loan Administrator prior to December 31, 2024, but which were not remitted to the Company until after December 31, 2024, are included in due from affiliates on the Statements of Assets and Liabilities. As of December 31, 2024, the due from affiliates balance of $2,361,019 consists of $1,559,758 and $801,261 in interest and principal payments receivable, respectively. The amounts due from affiliates as of December 31, 2024 were collected in January 2025.
Co-Investments
From time to time, the Company may co-invest with other investment vehicles managed by its affiliates, in accordance with the Company’s co-investment exemptive order and the Adviser’s co-investment allocation policies. The Company is not obligated to provide, nor has it provided, any financial support to the other managed investment vehicles. As such, the Company’s risk is limited to the carrying value of its investment in any such co-investment. As of September 30, 2025 and December 31, 2024, $258,783,889 and $272,816,695, respectively, of the Company’s investments were co-investments with affiliates of the Company.
Other Related Party Transactions
The Adviser was the seed investor of the Company and provided initial funding to the Company by purchasing approximately 4.5 million shares of the Company’s common stock in the Company’s initial public offering. The Adviser provided this “seed capital” to the Company for the purpose of facilitating the launch and initial operation of the Company, as opposed to for long term investment purposes. The Adviser does not expect to hold the Company’s common stock indefinitely, and may sell the Company’s common stock, or distribute the Company’s common stock to its members (who may, in turn, sell the Company’s common stock subject to certain holding period requirements), at a future point in time. In order for the Adviser’s sales of the shares of the Company not to be deemed to have been made “on the basis of” material nonpublic information, such sales may be made pursuant to a pre-approved trading plan that complies with Rule 10b5-1 under the Exchange Act and that may obligate the Adviser to make recurring sales of the Company’s common stock on a periodic basis. Sales of substantial amounts of the Company’s common stock, including by the Adviser, its members or other large stockholders, or the availability of such common stock for sale, could adversely affect the prevailing market prices for the Company’s common stock. If this occurs and continues for a sustained period of time, it could impair the Company’s ability to raise additional capital through the sale of securities, should the Company desire to do so.
During the nine months ended September 30, 2025 and 2024, the Adviser and certain related parties received dividend distributions from the Company relating to their shares held. Refer to “Note 8 – Common Stock” for further details on the Company’s dividend reinvestment plan and the distributions declared.
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NOTE 7 — COMMITMENTS AND CONTINGENCIES
Off-Balance Sheet Arrangements
The Company’s commitments and contingencies include unfunded commitments to extend credit, typically in the form of delayed draw term loans to the Company’s portfolio companies. A portion of these unfunded contractual commitments are generally dependent upon the portfolio company reaching certain milestones before the debt commitment becomes available. Furthermore, the Company’s credit agreements with its portfolio companies generally contain customary lending provisions that allow the Company relief from funding obligations for previously made commitments in instances where the underlying portfolio company experiences materially adverse events that affect the financial condition or business outlook of the company. Since a portion of these commitments may expire without being drawn, unfunded contractual commitments do not necessarily represent future cash requirements. As such, the Company’s disclosure of unfunded contractual commitments includes only those commitments that are available at the request of the portfolio company and are unencumbered by milestones or additional lending provisions. As of September 30, 2025 and December 31, 2024, the Company had the following unfunded commitments on existing loans:
As ofSeptember 30, 2025
As ofDecember 31, 2024
Unfunded delayed draw loan commitments
18,285,715
1,250,000
Undrawn revolver commitments
8,333,333
Total unfunded commitments
26,619,048
The Company did not have any other off-balance sheet commitments or liabilities as of September 30, 2025 or December 31, 2024. The Company will fund its unfunded commitments, if any, from the same sources it uses to fund its investment commitments that are funded at the time they are made (which are typically through existing cash and cash equivalents) and maintains adequate liquidity to fund its unfunded commitments through these sources.
The Company may, from time to time, be involved in litigation arising out of its operations in the normal course of business or otherwise. Furthermore, third parties may try to seek to impose liability on the Company in connection with the activities of its portfolio companies. As of September 30, 2025, there were no material legal matters or material litigation pending of which the Company is aware.
NOTE 8 — COMMON STOCK
As of September 30, 2025, 100,000,000 shares of $0.01 par value common stock were authorized.
Loan Portfolio Acquisition
On October 1, 2024, the Company completed its previously announced the Loan Portfolio Acquisition, pursuant to the Loan Portfolio Acquisition Agreement. In accordance with the terms of the Loan Portfolio Acquisition Agreement, at the effective time of the Loan Portfolio Acquisition, the Company issued 16,605,372 shares of its common stock to CALP in exchange for the Loan Portfolio, which was determined by the Company to have a fair value of $219,621,125 as of September 28, 2024. Upon the closing of the Loan Portfolio Acquisition, there were 22,820,367 shares of the Company’s common stock outstanding.
The following table summarizes distributions declared by the Company during the nine months ended September 30, 2025:
Declaration Date
Type
Record Date
Payment Date
Per Share Amount
Dividends Paid
March 14, 2025
Quarterly
March 28, 2025
April 11, 2025
0.34
7,758,931
May 12, 2025
June 27, 2025
July 11, 2025
7,758,939
August 14, 2025
September 29, 2025
October 10, 2025
The following table summarizes distributions declared and paid by the Company during the nine months ended September 30, 2024:
March 8, 2024
March 20, 2024
March 28, 2024
0.25
1,553,736
May 9, 2024
June 20, 2024
June 28, 2024
1,553,738
August 8, 2024
September 19, 2024
September 27, 2024
1,553,741
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Dividend Reinvestment Plan
The Company’s dividend reinvestment plan (the “DRIP”) provides for the reinvestment of distributions in the form of common stock on behalf of its stockholders, unless a stockholder has elected to receive distributions in cash. As a result, if the Company declares a cash distribution, its stockholders who have not “opted out” of the DRIP by the opt out date will have their cash distribution automatically reinvested into additional shares of the Company’s common stock. The share requirements of the DRIP may be satisfied through the issuance of common shares or through open market purchases of common shares by the DRIP plan administrator.
The DRIP is administered by its transfer agent on behalf of the Company’s record holders and participating brokerage firms. Brokerage firms and other financial intermediaries may decide not to participate in the DRIP but may provide a similar dividend reinvestment plan for their clients.
During the nine months ended September 30, 2025, the Company issued the following shares of common stock under the DRIP:
During the nine months ended September 30, 2024, the Company issued the following shares of common stock under the DRIP:
NOTE 9 — INDEMNIFICATION
Under the Company’s organizational documents, the Company’s officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the Company. In addition, in the normal course of business the Company enters into contracts that contain a variety of representations which provide general indemnifications. The Company’s maximum exposure under these agreements cannot be known; however, the Company expects any risk of loss to be remote.
In the normal course of business, the Company enters into contracts that provide a variety of representations and warranties, and general indemnifications. Such contracts include those with certain service providers, brokers and trading counterparties. Any exposure to the Company under these arrangements is unknown as it would involve future claims that may be made against the Company; however, based on the Company’s experience, the risk of loss is remote and no such claims are expected to occur. As such, the Company has not accrued any liability in connection with such indemnifications.
NOTE 10 — EARNINGS PER SHARE
The following table sets forth the computation of the weighted average basic and diluted net increase (decrease) in net assets per share resulting from operations for the three and nine months ended September 30, 2025 and 2024:
Weighted Average Shares Outstanding - basic and diluted
Net increase (decrease) in net assets resulting from operations per share - basic and diluted
NOTE 11 — INCOME TAXES
The Company adopted a tax year end of March 31 and elected to be treated as a RIC for U.S. federal income tax purposes under Subchapter M of the Code. However, there is no guarantee that the Company will qualify to make such an election for any taxable year. As a RIC, the Company generally will not pay corporate-level income tax if it distributes to stockholders at least 90% of its investment company taxable income (“ICTI”) (which is generally its net ordinary taxable income and realized net short-term capital gains in excess of realized net long-term capital losses) and 90% of its tax-exempt income to maintain its RIC status. Depending on the level of ICTI earned in a tax year, the Company may choose to carry forward ICTI in excess of the current year distribution into the next tax year.
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Any such carryover ICTI must be distributed before the end of that next tax year through a dividend declared prior to filing the final tax return related to the year which generated such ICTI. The amount to be paid out as a distribution is determined by the Board each quarter and is based upon the annual earnings estimated by the management of the Company. To the extent the Company’s earnings fall below the amount of dividend distributions declared, however, a portion of the total amount of the Company’s distributions for the tax year may be deemed a return of capital for tax purposes to the Company’s stockholders.
The amounts and sources of distributions reported are only estimates and are not being provided for U.S. federal income tax reporting purposes. The timing and character of distributions for U.S. federal income tax purposes will be determined in accordance with the U.S. federal tax rules which may differ from U.S. GAAP. The final determination of the source of all distributions in 2025 will be made after the tax year-end and the amounts represented may be materially different from the amounts disclosed in the final Form 1099-DIV notice. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Company’s investment performance and may be subject to change based on tax regulations.
Because federal income tax regulations differ from U.S. GAAP, distributions in accordance with tax regulations may differ from net investment income (loss) and realized gains recognized for financial reporting purposes. Differences may be permanent or temporary in nature. Permanent differences are reclassified among the capital accounts in the financial statements to reflect their appropriate tax character. Temporary differences arise when certain items of income, expense, gain or loss are recognized in different periods for book and tax purposes. The Company had not recorded a liability for any uncertain tax positions pursuant to the provisions of ASC 740 as of September 30, 2025 and December 31, 2024. In the normal course of business, the Company is subject to examination by federal and certain state and local tax regulators.
In the normal course of business, the Company is subject to examination by federal and certain state and local tax regulators.
For tax purposes, net realized capital losses may be carried over to offset future capital gains, if any. Funds are permitted to carry forward capital losses for an indefinite period, and such losses will retain their character as either short-term or long-term capital losses. As of March 31, 2025, the Company’s most recent tax year end, the Company had a net short-term capital loss carryforward of $210,767 and a net long-term capital loss carryforward of $74,483, each of which may be carried forward for an indefinite period.
The Company’s taxable income for each period is an estimate and will not be finally determined until the Company files its tax return for each year. Therefore, the final taxable income earned in each year and carried forward for distribution in the following year may be different than this estimate.
For the tax years ended March 31, 2025 and March 31, 2024, the Company reclassified for book purposes amounts arising from permanent book to tax differences primarily related to non-deductible excise tax paid.
March 31, 2025
March 31, 2024
Increase (decrease) in additional paid in capital
Increase (decrease) in distributable earnings (accumulated loss)
For income tax purposes, distributions paid to shareholders are reported as ordinary income, return of capital, long-term capital gains, or a combination thereof. The tax character of distributions paid for the six months ended September 30, 2025 and the tax year ended March 31, 2025, were as follows:
For the tax period from April 1, 2025through September 30, 2025
For the tax year from April 1, 2024through March 31, 2025
Ordinary income
15,517,940
18,625,335
Long-term Capital Gain
Return of Capital
Total Distributions
As of March 31, 2025 and March 31, 2024, the components of distributable earnings on a tax basis detailed below differ from the amounts reflected in the Company’s Statements of Assets and Liabilities by temporary book or tax differences primarily arising from the tax treatment of organizational costs, the tax treatment of transaction expenses related to the Loan Portfolio Acquisition, and the tax treatment of uncrystallized capital gain incentive fees, and distributions payable.
Undistributed ordinary income
9,344,744
1,782,017
Net unrealized appreciation (depreciation) on investments
(3,210,239
1,248,303
Capital Gain/(Loss) Carry Forwards
(285,250
(210,767
Other temporary differences
(8,211,487
(3,393,536
(2,362,232
(573,983
The following table sets forth the tax cost basis and the estimated aggregate gross unrealized appreciation and depreciation from investments and cash equivalents for federal income tax purposes as of September 30, 2025 and March 31, 2025:
Tax cost of investments and cash equivalents
324,803,488
307,394,719
Unrealized appreciation
1,553,354
1,286,665
Unrealized depreciation
(4,500,995
(4,496,904
Net unrealized appreciation (depreciation) from investments and cash equivalents
(2,947,641
NOTE 12 — FINANCIAL HIGHLIGHTS
The following presents financial highlights for the nine months ended September 30, 2025 and 2024:
Per share data:
Net asset value at beginning of period
13.77
Net investment income (loss) (1)
Net realized and unrealized gains/(losses) on investments (1)
(5)
0.03
Net increase/(decrease) in net assets resulting from operations (1)
0.26
Distributions from net investment income (loss) (2)
(1.02
(0.75
Net asset value at end of period
13.28
Net assets at end of period
Shares outstanding at end of period
Weighted average net assets
301,347,821
84,768,322
Per share market value at end of period
10.50
10.64
Total return based on market value (3)
(8.31
)%
35.15
Total return based on net asset value (3)
7.01
3.39
Ratio/Supplemental data:
Ratio of net investment income (loss) to average net assets (4)
8.23
1.72
Ratio of expenses to average net assets (3)
5.73
8.92
Ratio of waived expenses to average net assets(4)
(0.66
Ratio of net expenses to average net assets(4)
5.07
Portfolio turnover (4)
31.30
7.96
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NOTE 13 — SEGMENT REPORTING
The Company uses the management approach to determine reportable operating segments. The Company operates through a single operating and reporting segment with an investment objective of maximizing risk-adjusted returns on equity for its shareholders. The management approach considers the internal organization and reporting used by the Company’s Chief Executive Officer, Chief Financial Officer, and Co-Chief Investment Officers, which comprise the chief operating decision maker (“CODM”) for making decisions, allocating resources and assessing performance. The CODM assesses the performance of, and makes operating decisions for, the Company primarily based on the Company’s net asset value, net investment income, and net increase (decrease) in net assets resulting from operations. These measures of segment performance are the same as those presented in the Company’s Statements of Assets and Liabilities and Statements of Operations, prepared in accordance with U.S. GAAP. In addition to other factors and metrics, the CODM utilizes net increase (decrease) in net assets resulting from operations, as reported on the Statements of Operations, as a key determinant of the amount of dividends to be distributed to the Company’s stockholders.
As the Company’s operations comprise of a single reporting segment, the segment assets are reflected on the accompanying Statements of Assets and Liabilities as “total assets” and the significant segment expenses are listed on the accompanying Statements of Operations.
NOTE 14 — SUBSEQUENT EVENTS
The Company’s management evaluated subsequent events through the date on which the financial statements were issued. Other than the item listed below, there have been no subsequent events that occurred during such period that have required adjustment or disclosure in the financial statements.
On November 11, 2025, the Board approved a cash dividend of $0.34 per share. The dividend is payable on January 15, 2026 to stockholders of record on December 31, 2025.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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.”
Overview
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.
We are a specialty finance company focused on investing in companies in highly complex and highly regulated industries typically underserved by other capital providers, including investing across the cannabis ecosystem through investments in the form of direct loans to privately held cannabis companies. Although we primarily focus on investments in the cannabis industry, we may also invest in growth and technology companies, esoteric and asset-based lending opportunities, and liquidity solutions opportunities as described further below.
Our investment objective is to maximize risk-adjusted returns on equity for our shareholders. We seek to capitalize on, among other things, what we believe to be nascent cannabis industry growth, and drive return on equity by generating current income from our debt investments and capital appreciation from our equity and equity-related investments. We intend to achieve our investment objective by investing primarily in secured debt, unsecured debt, equity warrants and direct equity investments in privately held businesses. We intend that our debt investments will often be secured by either a first or second priority lien on the assets of the portfolio company, can include either fixed or floating rate terms and will generally have a term of between three and six years from the original investment date. To date, we have been focused on investing in first lien secured, fixed and floating rate debt with terms of two to four years. We expect our secured loans to be secured by various types of assets of our borrowers. While the types of collateral securing any given secured loan will depend on the nature of the borrower’s business, common types of collateral we expect to secure our loans include real property and certain personal property, including equipment, inventory, receivables, cash, intellectual property rights and other assets to the extent permitted by applicable laws and the regulations governing our borrowers. Certain attractive assets of our cannabis borrowers, such as cannabis licenses and cannabis inventory, may not be able to be used as collateral or transferred to us. In some of our portfolio investments, we expect to receive nominally priced equity warrants and/or make direct equity investments in connection with a debt investment. In addition, a portion of our portfolio may be comprised of derivatives, including total return swaps.
Generally, the loans we invest in have a complete set of financial maintenance covenants, which are used to proactively address materially adverse changes in a portfolio company’s financial performance. However, we may invest in “covenant-lite” loans. We use the term “covenant-lite” to refer generally to loans that do not have a complete set of financial maintenance covenants. Generally, “covenant-lite” loans provide borrower companies more freedom to negatively impact lenders because their covenants are incurrence-based, which means they are only tested and can only be breached following an affirmative action of the borrower, rather than by a deterioration in the borrower’s financial condition. Accordingly, to the extent we invest in “covenant-lite” loans, we may have fewer rights against a borrower and may have a greater risk of loss on such investments as compared to investments in or exposure to loans with a complete set of financial maintenance covenants.
The loans in which we tend to invest typically pay interest at rates which are determined periodically on the basis of U.S. Prime Rate (“PRIME”) or Secured Overnight Financing Rate (“SOFR”) plus a premium. The loans in which we have invested and expect to invest are typically made to U.S. and, to a limited extent, non-U.S. (including emerging market) corporations, partnerships and other business entities which operate in various industries and geographical regions. These loans typically are not rated or are rated below investment grade. Securities rated below investment grade are often referred to as “high-yield” or “junk” securities, and may be considered a higher risk than debt instruments that are rated above investment grade.
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.
The following describes the four primary current sub-strategies of our principal investment strategy. We are not required to have a minimum investment in any of these sub-strategies.
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.
The Adviser seeks to invest in cannabis companies that it believes have some or all of the following characteristics:
Growth & Technology
Our growth and technology sub-strategy is focused on industry leaders and disruptive companies that are experiencing strong growth trajectories and typically need capital to support continued revenue growth or expansion of the business. In most cases, these businesses have found a niche in their respective markets, proven their customer value proposition, and have already reached significant revenue milestones. These businesses include both private equity and venture capital backed businesses, as well as non-sponsor backed companies. In most cases, a significant amount of equity capital has been raised, resulting in low overall loan to enterprise value.
The Adviser seeks to invest in growth and technology focused companies that it believes have some or all of the following characteristics:
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Esoteric & Asset-Based Lending
The esoteric and asset-based lending sub-strategy is focused on established companies with strong cash flow profiles in industries that carry idiosyncratic or reputational risks, which limit access to traditional sources of capital. The sub-strategy also includes companies or opportunities that have strong asset collateral coverage, low loan values or other attractive risk-reward features. The lack of access to traditional sources of capital typically enables us to extract lender-friendly terms and covenants from companies with relatively low leverage and overall credit risk.
The Adviser seeks to invest in esoteric industries or companies in need of asset-based loans that it believes have some or all of the following characteristics:
Liquidity Solutions
The liquidity solutions lending sub-strategy is typically focused on event-driven opportunities including, but not limited to, mergers, acquisitions, refinancings, dividend recaps or other strategically driven liquidity needs to established businesses. These businesses also tend to be in complex industries, have time-sensitive aspects to financing, or require idiosyncratic structuring expertise that enables us to extract relatively lender friendly terms and covenants.
The Adviser seeks to invest in liquidity solutions opportunities that it believes have some or all of the following characteristics:
None of our investment policies are fundamental, and thus may be changed without stockholder approval.
We are externally managed by the Adviser. The Adviser also provides the administrative services necessary for us to operate. We believe that our ability to leverage the existing investment management platform of Chicago Atlantic enables us to operate more efficiently and with lower overhead costs than other funds of comparable size.
Revenues
We generate revenues primarily in the form of interest income from the investments we hold. In addition, we may generate income from dividends on either direct equity investments or equity interests obtained in connection with originating loans, such as options, warrants or conversion rights. Our debt investments typically have a term of two to six years. Our loan portfolio will bear interest at a fixed or floating rate, subject to interest rate floors in certain cases. Interest on our debt investments will generally be payable either monthly or quarterly, but may be semi-annually.
Our investment portfolio consists of fixed and floating rate loans, and our revolving credit facility also bears interest at a floating rate, when drawn. Macro trends in base interest rates like PRIME or SOFR may affect our net investment income (loss) over the long term.
36
We accrete premiums or amortize discounts into interest income using the effective yield method for term instruments. Repayments of our debt investments will reduce interest income in future periods. The frequency or volume of these repayments may fluctuate significantly. We will record prepayment premiums on loans as interest income. We may also generate revenue in the form of commitment, structuring, or due diligence fees, fees for providing managerial assistance to our portfolio companies, and consulting fees.
Dividend income on equity investments, if applicable, will be recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded companies.
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.
Expenses
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.”
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:
37
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.
Hedging
To the extent that any of our investments are denominated in a currency other than U.S. dollars, we may enter into currency hedging contracts to reduce our exposure to fluctuations in currency exchange rates. We may also enter into interest rate hedging agreements. Such hedging activities, which will be subject to compliance with applicable legal requirements, may include the use of futures, options, swaps and forward contracts. Costs incurred in entering into such contracts or in connection with settling them will be borne by us.
Portfolio Composition and Investment Activity
Portfolio Composition
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.
38
A summary of the composition of our investment portfolio at amortized cost and fair value as a percentage of total investments as of September 30, 2025 and December 31, 2024 are shown in the following tables.
Amortized Cost
The following tables show the composition of our investment portfolio by geographic region of the United States at amortized cost and fair value as a percentage of total investments as of September 30, 2025 and December 31, 2024. The geographic composition is determined by the location of the headquarters of the portfolio company.
Geographic regions are defined as: West, for the states of WA, OR, ID, MT, WY, CO, AK, HI, UT, NV and CA; Midwest, for the states of ND, SD, NE, KS, MO, IA, MN, WI, MI, IL, IN and OH; Northeast, for the states of PA, NJ, NY, CT, RI, MA, VT, NH and ME; Southeast, for the states of AR, LA, MS, TN, KY, AL, FL, GA, SC, NC, VA, DE, WV and MD; and Southwest, for the states of AZ, NM, TX and OK.
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The tables below present the industry composition of our investment portfolio at amortized cost and fair value as a percentage of total investments as of September 30, 2025 and December 31, 2024.
Industry(1)
Concentrations of Credit Risk
Credit risk is the risk of default or non-performance by portfolio companies, equivalent to the investment’s carrying amount. Industry and sector concentrations will vary from period to period based on portfolio activity.
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.
Investment Activity
The following table provides a summary of the changes in the investment portfolio for the nine months ended September 30, 2025 and 2024:
Beginning Portfolio, at fair value
Ending Portfolio, at fair value
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Portfolio Asset Quality
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.
InvestmentPerformanceRisk Rating
Summary Description
Grade 1
Investments rated 1 involve the least amount of risk to our initial cost basis. The borrower is performing above expectations, and the trends and risk factors for this investment since origination or acquisition are generally favorable. Full return of principal, interest and dividend income is expected.
Grade 2
Investment is performing in-line with expectations. Investments rated 2 involve an acceptable level of risk that is similar to the risk at the time of origination or acquisition. Risk factors remain neutral or favorable compared with initial underwriting. All investments or acquired investments in new portfolio companies are initially assessed a rating of 2.
Grade 3
Investments rated 3 involve a borrower performing below expectations and indicates that the loan’s risk has increased somewhat since origination or acquisition. Capital impairment or payment delinquency is not anticipated. The investment may also be out of compliance with certain financial covenants.
Grade 4
Investments rated 4 involve a borrower performing materially below expectations and indicates that the loan’s risk has increased materially since origination or acquisition. In addition to the borrower being generally out of compliance with debt covenants, loan payments may be past due (but generally not more than 120 days past due). Delinquency of interest and / or dividend payments in anticipated. No loss of principal is anticipated.
Grade 5
Investments rated 5 involve a borrower performing substantially below expectations and indicates that the loan’s risk has increased substantially since origination or acquisition. It is anticipated that the Company will not recoup its initial cost and may realize a loss upon exit. Most or all of the debt covenants are out of compliance and payments are substantially delinquent. Loans rated 5 are not anticipated to be repaid in full and we will reduce the fair market value of the loan to the amount we anticipate will be recovered.
The following tables show the distribution of our loan investments on the 1 to 5 investment risk rating scale at fair value as of September 30, 2025 and December 31, 2024:
Investment Performance Risk Rating
Investmentsat FairValue
Percentageof TotalInvestments
308,787,450
99.2
Debt Investments on Non-Accrual Status
As of September 30, 2025 and December 31, 2024, there were no loans in our portfolio placed on non-accrual status.
41
Debt
Results of Operations
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.
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.
Investment Income
The following table sets forth the components of investment income for the three and nine months ended September 30, 2025 and 2024:
Stated interest income
12,402,672
2,465,150
33,202,422
7,519,664
889,590
152,124
534,412
69,497
1,704,082
Total interest income
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.
The Company also recognizes certain fees as one-time fee income, including, but not limited to, structuring fees.
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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.
Operating Expenses
Our operating expenses for the nine months ended September 30, 2025 and 2024 are presented below:
$ Change
% Change
5,903,884
1797.2%
3,260,175
437.1%
100.0%
450,627
187.1%
467,725
233.8%
198,277
66.3%
165,399
53.9%
143,397
48.1%
8,242
22.0%
(28,517
-91.1%
(5,069,062
-100.0%
Total operating expenses
9,708,982
128.5%
Net operating expenses
7,712,303
102.1%
Net Investment Income
Net investment income was approximately $9.5 million and $24.8 million for the three and nine months ended September 30, 2025, respectively, as compared to approximately $15 thousand and $1.5 million for the three and nine months ended September 30, 2024, respectively.
Net Realized Gains and Losses
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.
Net Change in Unrealized Appreciation (Depreciation) from Investments
Net change in unrealized appreciation (depreciation) from investments primarily reflects the net change in the fair value as of the last business day of the reporting period, including the reversal of previously recorded unrealized gains or losses with respect to investments realized during the period. We record current-period changes in fair value of investments that are measured at fair value as a component of the net change in unrealized appreciation (depreciation) on investments on the Statements of Operations.
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:
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Gross unrealized appreciation
579,668
101,825
1,198,129
282,329
Gross unrealized depreciation
(1,236,728
(281,349
(969,595
(95,005
Total net change in unrealized appreciation (depreciation) from investments
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:
101,271
AI Software, LLC (d/b/a Capacity) - Warrants
59,649
53,418
Aeriz Holdings Corp (Maturity: 6/30/2028)
(47,949
(203
52
Ascend Wellness
25,742
110,167
(12,441
10,266
Aura Home, Inc - Term DDTL B
(12,013
Cannabis & Glass (Kapple Holdings LLC)
8,489
26,929
(21,189
50,692
190,398
45,173
(797,813
25,000
(14,913
(8,223
(51,633
(25,429
4,479
(107,706
(73,642
(107,222
Fluent Corp. (f/k/a Consortium)
(61,938
(60,489
(637
(2,090
Hartford Gold Group, LLC: (Maturity: 1/6/2027)
4,552
(25,452
Hartford Gold Group, LLC: (Maturity: 12/17/2025)
(12,063
(479
27,840
(516
(2,966
(43,819
(151,251
11,456
(16,721
PharmaCann, Inc.
40,560
81,842
66,058
Portofino Labs, Inc. (dba Because Market) - Warrants
6,750
(1,587
(3,130
Protect Animals With Satellites LLC (Halo Collar): Term Loan
2,632
40,614
Protect Animals With Satellites LLC (Halo Collar): Incremental Term Loan
1,279
22,511
(1,731
686
39,061
30,300
(57,000
72,959
129,965
(134,430
118,971
(2,750
30,122
78,523
(43,094
14,928
(15,381
14,763
(49,621
(33,696
(44,305
13,915
(2,540
69,536
(20,020
10,573
(36,396
141,399
Workbox Holdings Inc.: A-3 Warrants
(7,000
(41,000
(47,000
(25,785
Workbox Holdings Inc.:A-4 Warrants
(20,000
(64,000
(103,715
(41,041
42,935
62,707
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Financial Condition, Liquidity and Capital Resources
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.
The amount of leverage that we employ will depend on our assessment of market conditions and other factors at the time of any proposed borrowing, such as the maturity, covenant package and rate structure of the proposed borrowings, our ability to raise funds through the issuance of shares of our common stock and the risks of such borrowings within the context of our investment outlook. Ultimately, we only intend to use leverage if the expected returns from borrowing to make investments will exceed the cost of such borrowing.
We believe we have sufficient liquidity available to meet our short-term and long-term obligations for at least the next 12 months and for the foreseeable future thereafter. We cannot, however, be certain that these sources of funds will be available at a time and upon terms acceptable to us in sufficient amounts in the future.
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.
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.
Dividends may also be distributed in accordance with the DRIP, which provides for the reinvestment of distributions in the form of common stock on behalf of its stockholders, unless a stockholder has elected to receive distributions in cash. As a result, if the Company declares a cash distribution, its stockholders who have not “opted out” of the DRIP by the opt out date will have their cash distribution automatically reinvested into additional shares of the Company’s common stock. The share requirements of the DRIP may be satisfied through the issuance of common shares or through open market purchases of common shares by the DRIP plan administrator.
U.S. Federal Income Taxes
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. As a RIC, we generally will not have to pay corporate-level federal income taxes on any ordinary income or capital gains that we distribute to our stockholders from our tax earnings and profits. To obtain and maintain our RIC tax treatment, we must, among other things, meet specified source-of-income and asset diversification requirements and distribute annually at least 90% of our ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any.
Critical Accounting Estimates
The Company’s financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and pursuant to Regulation S-X under the Securities Act of 1933, as amended (the “Securities Act”). The Company follows accounting and reporting guidance as determined by the Financial Accounting Standards Board (“FASB”) Topic 946 Financial Services – Investment Companies.
The preparation of financial statements in accordance with U.S. GAAP requires management to make certain estimates and assumptions affecting amounts reported in our financial statements. We will continuously evaluate our estimates, including those related to the matters described below. These estimates will be based on the information that is currently available to us and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ materially from those estimates under
different assumptions or conditions. For additional information, please refer to “Note 2 – Significant Accounting Policies” in the notes to the financial statements included with this quarterly report on Form 10-Q. Valuation of investments is considered to be our critical accounting policy and estimates. A discussion of our critical accounting estimates follows.
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.
As part of the valuation process, the Adviser takes into account relevant factors in determining the fair value of our investments, including: the estimated enterprise value of a portfolio company (i.e., the total fair value of the portfolio company’s debt and equity), the nature and realizable value of any collateral, the portfolio company’s ability to make payments based on its earnings and cash flow, the markets in which the portfolio company does business, a comparison of the portfolio company’s securities to any similar publicly traded securities, and overall changes in the interest rate environment and the credit markets that may affect the price at which similar investments may be made in the future. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, the Adviser considers whether the pricing indicated by the external event corroborates its valuation.
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:
All of our investments as of September 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
47
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.
Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period. Additionally, the fair value of such investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that may ultimately be realized. Further, such investments are generally less liquid than publicly traded securities and may be subject to contractual and other restrictions on resale. If we were required to liquidate a portfolio investment in a forced or liquidation sale, it could realize amounts that are different from the amounts presented and such differences could be material.
In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the unrealized gains or losses reflected previously.
Assumptions, or unobservable inputs, fluctuate based on both market and company specific factors. Please refer to “Note 4 – Fair Value of Financial Instruments” in the notes to the financial statements included with this quarterly report on Form 10-Q for specific unobservable inputs.
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.”
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.
Price Range
High SalesPricePremium(Discount)to
Low SalesPricePremium(Discount) to
Cash
Class and Period
Net AssetValue(1)
High
Low
Net AssetValue(2)
DividendPer Share(3)
Year Ended December 31, 2025
Fourth Quarter (Through November 12, 2025)
*
10.67
10.03
Third Quarter
11.12
10.12
-16.2
-23.7
Second Quarter
13.23
11.11
9.71
-16.0
-26.6
First Quarter
13.19
12.56
10.92
-4.8
-17.2
Year Ended December 31, 2024
Fourth Quarter
13.24
10.74
-18.7
-9.6
-19.9
13.56
12.38
9.61
-8.7
-29.1
13.60
10.28
7.65
-24.4
-43.8
Year Ended December 31, 2023
9.81
8.32
-28.8
-39.6
0.70(6)
14.06
10.37
-26.3
-45.6
0.63(6)
14.49
9.19
7.82
-36.3
-45.8
14.29
9.98
8.25
-30.2
-42.3
Year Ended December 31, 2022(4)
13.91
10.55
9.57
-24.2
-31.2
13.73
-21.8
-34.5
13.64
13.50
7.80
-1.0
-42.8
First Quarter(5)
13.61
14.41
12.57
5.9
-7.6
48
* Not determined at time of filing.
Shares of BDCs may trade at a market price that is less than the value of the net assets attributable to those shares. At times, our shares of common stock have traded at prices both above and below our net asset value per share. The possibility that our shares of common stock will trade at a discount from net asset value per share or at premiums that are unsustainable over the long term are separate and distinct from the risk that our net asset value per share will decrease. It is not possible to predict whether our common stock will trade at, above, or below net asset value per share.
Holders
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.”
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.
We have elected to be treated, and intend to qualify annually to be treated, as a RIC under Subchapter M of the Code, for U.S. federal income tax purposes, commencing with our taxable year ended March 31, 2022. As long as we qualify as a RIC, we will not be taxed on our investment company taxable income or realized net capital gains, to the extent that such taxable income or gains are distributed, or deemed to be distributed, to stockholders on a timely basis.
To obtain and maintain RIC tax treatment, we must distribute (or be deemed to distribute) at least 90% of the sum of our: investment company taxable income (which is generally our ordinary income plus the excess of realized short-term capital gains over realized net long-term capital losses), determined without regard to the deduction for dividends paid, for such taxable year; and net tax-exempt interest income (which is the excess of our gross tax-exempt interest income over certain disallowed deductions) for such taxable year.
As a RIC, we (but not our stockholders) generally will not be subject to U.S. federal tax on investment company taxable income and net capital gains that we distribute to our stockholders. The discussion below assumes that we will qualify to be treated as a RIC for U.S. federal tax purposes each year.
We intend to distribute annually all or substantially all of such income. To the extent that we retain our net capital gains or any investment company taxable income, we generally will be subject to corporate-level U.S. federal income tax. We can be expected to carry forward our net capital gains or any investment company taxable income in excess of current-year dividend distributions, and pay the U.S. federal excise tax as described below.
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
49
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.”
While we intend to distribute any income and capital gains in the manner necessary to minimize imposition of the 4% U.S. federal excise tax, sufficient amounts of our taxable income and capital gains may not be distributed and as a result, in such cases, the excise tax will be imposed. In such an event, we will be liable for this tax only on the amount by which we do not meet the foregoing distribution requirement.
To the extent our current taxable earnings for a year fall below the total amount of our distributions for that year, a portion of those distributions may be deemed a return of capital to our stockholders for U.S. federal income tax purposes. Thus, the source of a distribution to our stockholders may be the original capital invested by the stockholder rather than our income or gains. Stockholders should read written disclosure carefully and should not assume that the source of any distribution is our ordinary income or gains.
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.
The following table summarizes distributions declared and/or paid by the Company from inception through September 30, 2025:
Per ShareAmount
August 10, 2023
September 15, 2023
September 29, 2023
1,429,375
Special
0.40
2,485,869
November 9, 2023
December 20, 2023
December 29, 2023
1,553,676
0.45
2,796,617
December 9, 2024
December 19, 2024
December 27, 2024
7,758,925
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.
Issuer Purchases of Equity Securities
50
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.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Uncertainty with respect to the economic effects of political tensions in the United States and around the world (including the current conflicts between Russia and Ukraine and in the Middle East) have introduced significant volatility in the financial markets, and the effect of the volatility could materially impact our market risks, including those listed below. We are subject to financial market risks, including valuation risk, interest rate risk and credit risk.
Valuation Risk
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. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and it is possible that the difference could be material.
Interest Rate Risk
Interest rate sensitivity and risk refer to the change in earnings that may result from changes in the level of interest rates. To the extent that we borrow money to make investments, including under our credit facility, our net investment income will be affected by the difference between the rate at which we borrow funds and the rate at which we invest these funds. In periods of rising interest rates, our cost of borrowing funds would increase, which may reduce our net investment income. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income.
As of September 30, 2025, 69.0% of our debt investments based on outstanding principal balance represented floating-rate investments based on PRIME or SOFR and approximately 31.0% of our debt investments based on outstanding principal balance represented fixed rate investments. As of December 31, 2024, 79.5% of our debt investments based on outstanding principal balance represented floating-rate investments based on PRIME or SOFR and approximately 20.5% of our debt investments based on outstanding principal balance represented fixed rate investments.
Based on our Statements of Assets and Liabilities as of September 30, 2025,the following table shows the annualized impact on net investment income of hypothetical base rate changes in the benchmark rate on our debt investments (considering interest rate floors/ceilings for floating rate instruments) and hypothetical changes in the SOFR on our Revolving line of credit, assuming that there is no change in our investment and borrowing structure (in thousands):
Change inInterest Rates
Increase (Decrease)in Interest Income
Increase (Decrease)in Interest Expense
Increase (Decrease)in Net Investment Income
Up 300 basis points
5,682
330
5,352
Up 200 basis points
3,540
220
3,320
Up 100 basis points
1,493
110
1,383
Down 100 basis points
(622
(110
(512
Down 200 basis points
(724
(128
(596
Down 300 basis points
(824
(696
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
In accordance with Rules 13a-15(b) and 15d-15(b) under the Securities Exchange Act of 1934 (the “Exchange Act”), we, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) as of the end of the period covered by this quarterly report on Form 10-Q and determined that our disclosure controls and procedures are effective as of the end of the period covered by this quarterly report on Form 10-Q.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the three months ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II: OTHER INFORMATION
Item 1. Legal Proceedings
We are not currently subject to any material legal proceedings, nor, to our knowledge, are any material legal proceedings threatened against us. From time to time, we may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. Furthermore, third parties may seek to impose liability on us in connection with the activities of our portfolio companies. Our business is also subject to extensive regulation, which may result in regulatory proceedings against us. While the outcome of any future legal or regulatory proceedings cannot be predicted with certainty, we do not expect that any such future proceedings will have a material effect upon our financial condition or results of operations.
Item 1A. Risk Factors
Except as set forth below, there have been no material changes during the nine months ended September 30, 2025 to the risk factors discussed in “Item 1A. Risk Factors” in our annual report on Form 10-K for the fiscal year ended December 31, 2024.
Risks Relating to Our Use of Leverage and Credit Facilities
Our existing credit facility and any credit facility we may enter into in the future would likely subject all or significant amounts of our assets to security interests and if we default on our obligations under such a credit facility, we may suffer adverse consequences, including foreclosure on our assets.
In February 2025, we entered into a senior secured revolving credit agreement, under which, 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 facility also provides for the issuance of letters of credit in an aggregate face amount of up to $5,000,000. Availability under the credit agreement will terminate on February 11, 2027, and the credit agreement has a scheduled maturity date of March 31, 2028.
Pursuant to the credit facility, all or significant amounts of our assets are pledged as collateral to secure borrowings thereunder. If we default on our obligations under the facility, the lenders may have the right to foreclose upon and sell, or otherwise transfer, the collateral subject to their security interests or their superior claim. In such event, we may be forced to sell our investments to raise funds to repay our outstanding borrowings in order to avoid foreclosure and these forced sales may be at times and at prices we would not consider advantageous. Moreover, such deleveraging of our company could significantly impair our ability to effectively operate our business in the manner in which we intend to operate. As a result, we could be forced to curtail or cease new investment activities and lower or eliminate the dividends that we intend to pay to our stockholders.
In addition, if the lenders exercise their right to sell the assets pledged under the credit facility, such sales may be completed at distressed sale prices, thereby diminishing or potentially eliminating the amount of cash available to us after repayment of the amounts outstanding under such facility.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On July 11, 2025, pursuant to its DRIP, the Company issued 182 shares of its common stock, at a price of $10.71 per share, to stockholders of record as of June 27, 2025 that did not opt out of the DRIP in order to satisfy the reinvestment portion of the Company’s dividends. This issuance was not subject to the registration requirements of the Securities Act. See “Item 1. Financial Statements – Note 8 – Common Stock – Dividend Reinvestment Plan” for more information.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
During the three months ended September 30, 2025, none of our officers or directors adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”
Item 6. Exhibits
The following exhibits are filed as part of this quarterly report on Form 10-Q or hereby incorporated by reference to exhibits previously filed with the SEC:
Exhibit
Number
Description of Exhibit
3.1
Articles of Amendment and Restatement of the Company(1)
3.2
Articles of Amendment of the Company(2)
3.3
Amended and Restated Bylaws of the Company(3)
10.1
WATC Custody Agreement(4)
10.2
WAB Custody Agreement(5)
Credit Agreement(6)
31.1
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
31.2
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
32.1
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
32.2
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
101.INS
Inline XBRL Instance Document (this instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)*
101.SCH
Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents*
104
Cover page formatted as Inline XBRL and contained in Exhibit 101*
* Filed herewith.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on November 13, 2025.
By:
/s/ Peter Sack
Peter Sack
Chief Executive Officer (Principal Executive Officer)
/s/ Thomas Geoffroy
Thomas Geoffroy
Interim Chief Financial Officer (Principal Financial Officer)