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Gross Investment Income: $11.9 million for Q1 2025, compared to $12.7 million in Q4 2024.
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Net Expenses: $4.3 million, reflecting a waiver of the GNA expense reimbursement.
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Net Investment Income: $7.6 million or $0.34 per share, compared to $8 million or $0.35 per share in the previous quarter.
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Net Assets: $301 million at quarter end.
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NAV per Share: $13.19.
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Weighted Average Yield of Debt Investments: 16.6% as of March 31.
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Portfolio Companies: 31, with 21% of the portfolio invested outside of cannabis.
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Floating Rate Loans: 76% of the portfolio, with 99% having a rate floor.
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New Debt Commitments: $32.3 million in Q1 2025, with $20.8 million funded.
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Loan Repayments and Amortization: Approximately $7.7 million during the quarter.
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Total Unfunded Commitments: Approximately $12.8 million.
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New Credit Facility: $100 million closed during the quarter.
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Dividend: 34% dividend announced, marking the third consecutive quarter at that rate.
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Release Date: May 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Chicago Atlantic BDC Inc (NASDAQ:LIEN) has a unique focus on lending to cannabis companies, providing a differentiated risk-reward profile.
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The company's weighted average yield of debt investments is 16.6%, significantly higher than the BDC average of 12.1%.
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All debt investments are senior secured, with no exposure to second lien subordinated debt or equity, enhancing security.
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The company has no non-accruals, compared to an industry average of 3.9%, indicating strong credit quality.
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Chicago Atlantic BDC Inc (NASDAQ:LIEN) announced a 34% dividend, marking the third consecutive quarter at that rate, with a total of $1.27 in dividends declared over the last four quarters.
Negative Points
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Gross investment income decreased to $11.9 million from $12.7 million in the previous quarter.
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Net investment income per share decreased to $0.34 from $0.35 in the previous quarter.
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The timing of originations limited the impact on gross investment income for the first quarter.
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The outlook for federal regulatory changes in the cannabis industry remains uncertain, affecting future planning.
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The company is currently under-levered compared to other BDCs, which may limit growth potential if not managed carefully.
Q & A Highlights
Q: Given the cautious industry outlook, how does Chicago Atlantic BDC plan to deploy $100 million in loans this year, especially when other companies are more conservative? A: Peter Sack, Chief Executive Officer, explained that Chicago Atlantic BDC focuses on individual state markets rather than the broader U.S. cannabis industry. They build long-term relationships with successful operators in specific states, allowing them to deploy capital consistently, regardless of broader market perceptions.