Chicago Atlantic Bdc, Inc. · NASDAQ:LIEN
Chicago Atlantic Bdc — Q3 2024 Earnings Presentation
18 slides from Chicago Atlantic Bdc's earnings presentation, Nov 8, 2024
Slide 1: Third Quarter 2024 Earnings Presentation
Third Quarter 2024 Earnings Presentation November 8, 2024
Slide 2: Disclaimers and Forward-Looking Statements
Disclaimers and Forward-Looking Statements The information contained in this presentation should be viewed in conjunction with the earnings conference call of Chicago Atlantic BDC, Inc. (the “Company”) (Nasdaq: LIEN) held on November 8, 2024 and the Company’s Quarterly Report on Form 10- Q for the q
Slide 3: Chicago Atlantic BDC, Inc.
Chicago Atlantic BDC, Inc. ➢ Chicago Atlantic BDC, Inc. (NASDAQ: LIEN) (the “Company” is $2.3B+ 80+ externally managed by Chicago Atlantic BDC Advisers, LLC. (the in loans closed since loans closed across “Adviser”) platform inception(1) platform (1) ➢ The Company acquired a portfolio of loans (the
Slide 4: Investment Highlights
Investment Highlights ➢ Strong credit metrics ➢ Only BDC that is primarily focused on the cannabis industry ➢ All loans are first-lien A DIFFERENTIATED BDC ➢ Seventy-nine percent of the portfolio are floating rate loans, and almost all have floors ➢ No current leverage – currently exploring various
Slide 5: Experienced Credit and Cannabis Leadership Team
Experienced Credit and Cannabis Leadership Team SCOTT GORDON ANDREAS BODMEIER UMESH MAHAJAN DINO COLONNA Executive Chairman & Co-CIO CEO Co-CIO, CFO and Secretary President ➢ Former Founding Partner, CEO ➢ Co-Founder and Partner of ➢ Former Partner, Co-Head Credit of ➢ Former Partner, Co-Head Credit
Slide 6: About Chicago Atlantic
About CHICAGOATLANTIC INCEPTION A private credit-focused investment firm founded in 2019 SIZE Assets under management: $1.6B1 TEAM 80+ professionals, including over 30 investment professionals Seeking attractive returns, preservation of capital and income generation INVESTMENT PRINCIPLES predominant
Slide 7: Advantage: Established Relationships with Deal Sources
CHICAGOATLANTIC Advantage: Established Relationships with Deal Sources Direct Outreach Over the past years, Chicago Atlantic has expanded existing and developed new deal sources, providing for Attorneys, Accountants a robust opportunity set. Limited Partners Deal Sources Intermediaries Club Deals/Ot
Slide 8: Core Strategy
Core Strategy Chicago Atlantic focuses on INVESTMENT STRATEGY DIFFERENTIATORS senior-secured lending in the ✓ Seek above market returns and the ✓ Ability to underwrite highly complex top of the capital structure to preservation of capital industries the lower middle market and ✓ Take advantage of op
Slide 9: Financial Highlights
Financial Highlights Pro Forma Portfolio Quarter Ended Quarter Ended September 30, 2024 September 30, 2023 GROSS INVESTMENT INCOME $3.2 million $2.9 million EXPENSES EXCLUDING LOAN PORTFOLIO ACQUISITION EXPENSES $0.8 million $1.3 million NET INVESTMENT INCOME EXCLUDING LOAN PORTFOLIO ACQUISITION EXP
Slide 10: Pro Forma Differentiated Investment Portfolio
A ProDifferentiated Forma Portfolio Investment Portfolio Chicago Atlantic BDC Inc. Portfolio as of 10/1/2024 (Unaudited) Portfolio Diversification 6 NET ASSET VALUE (INCLUDING CASH)1 $302mm INVESTMENTS AT FAIR VALUE (EXCLUDING ACCRUED INTEREST)2 $273mm NUMBER OF PORTFOLIO COMPANIES 28 23% Cannabis G
Slide 11: The Cannabis Landscape in the U.S.
The Cannabis Landscape in the U.S. Where Chicago Atlantic Sees Timely Opportunities LACK OF TRADITIONAL FINANCING Banks generally don’t lend to companies in the cannabis industry, allowing higher interest rates, attractive collateral, and lender-friendly covenants. HIGH BARRIERS TO ENTRY THE CANNABI
Slide 12: The Cannabis Landscape in the U.S.
The Cannabis Landscape in the U.S. 2019 2024 Legalized recreational and medical use Legalized medical use only No regulated use ✓ Legal in 35 states and the District of Columbia1 ✓ Legal in 40 states and the District of Columbia1 ✓ Medical use only: 25 states ✓ Medical use only: 16 states ✓ Recreati
Slide 13: The Cannabis Landscape in the U.S.: The Addressable Market is Growing
The Cannabis Landscape in the U.S. The Addressable Market is Growing U.S. Legal Cannabis Legal Cannabis Sales as Retail Sales ($BN) 1 a % of Alcohol Sales2 11.2% 13.6% ➢ Assuming the cannabis market enterprise value at 1x revenue, and a $58 35% debt to 65% equity capital structure, 6 the current val
Slide 14: Impact of Further Cannabis Legalization
Impact of Further Cannabis Legalization More states may legalize cannabis, presenting numerous new financing INCREASED MARKET prospects for the industry. Cannabis businesses no longer being subject to OPPORTUNITIES Section 280E of the Internal Revenue Code would enable them to deduct expenses, reduc
Slide 15: Target Borrowers
Target Borrowers Investment Sub-Strategies Although we focus on investments in the cannabis industry, sub-strategies of our principal investment strategy may also consist of growth capital and technology companies, esoteric and asset-based lending opportunities, and companies in need of liquidity so
Slide 16: Loan Origination Pipeline
Loan Origination Pipeline Driven by proprietary deal sourcing ▪ Continued cannabis legalization at the Over 1,000 Qualified Deals state level creates a new influx of Sourced and Reviewed opportunities ▪ Increase in M&A activity in both cannabis and non-cannabis verticals Total current active pipelin
Slide 17: Appendix: Schedule of Investments
Appendix Schedule of Investments
Slide 18: Schedule of Investments (as of October 1, 2024)
Schedule of Investments (as of October 1, 2024)1 Floating Reference Prime/SOFR Cash Inv estme nt Portfolio Company 2 Sec urity Type Maturity Date Fix ed vs. Floating PIK Rate % of Net Asset s Rate Floor Spread/Coupon Value2 Company 1 Sen ior Secured Note 7/16/2029 Fixe d n/a n/a 12.75% - $3,322 ,00