Chicago Atlantic BDC (LIEN) Q2 2024 earnings summary

Executive summary

• Entered into a definitive agreement to acquire a $130 million+ loan portfolio from Chicago Atlantic Loan Portfolio, LLC, with closing anticipated in early to mid-Q4 2024, subject to customary conditions.

• Net asset value per share was $13.56 as of June 30, 2024, down from $13.77 at December 31, 2023.

• Investment portfolio fair value was $53.4 million across six portfolio companies, with $34.0 million in cash and cash equivalents.

• The investment strategy was expanded in April 2024 to include companies outside cannabis and health and wellness sectors.

• Declared and paid two quarterly dividends of $0.25 per share during the first half of 2024, with another $0.25 dividend approved for Q3 2024.

Financial highlights

• Total investment income for Q2 2024 was $3.1 million, with $5.84 million for the six months ended June 30, 2024.

• Net investment income for Q2 2024 was $1.5 million ($0.25 per share), with $1.53 million for the six months, impacted by $2.64 million in non-recurring transaction expenses.

• Net assets at period end were $84.3 million, with available liquidity of $34.0 million in cash equivalents.

• Net increase in net assets from operations was $1.3 million for Q2 2024 and $1.81 million for the six months.

• Net realized and unrealized gains for the six months were $0.13 million.

Outlook and guidance

• The Loan Portfolio Acquisition is expected to close in early to mid-Q4 2024, significantly increasing the investment portfolio.

• The company continues to review a pipeline of $550–560 million in potential investments.

• Management noted positive momentum at the state level for cannabis regulatory reform, but regulatory and political uncertainty remains.

• A $0.25 per share dividend was approved for Q3 2024, payable September 27, 2024.