Chicago Atlantic BDC, Inc.

Good day and welcome to the Chicago Atlantic BDC Inc. Second Quarter 2025 Earnings Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Mr. Tripp Sullivan. Please go ahead, sir.

Thank you. Good morning. Welcome to the Chicago Atlantic BDC conference call to review the company's results. On the call today will be Peter Sack, Chief Executive Officer, Tom Jeffrey, Interim Chief Financial Officer, Dino Colonna, President, and Gianni Fazio, Chief Accounting Officer. Our results were released this morning in our earnings press release, which can be found on the Investor Relations section of our website, along with our supplemental earnings presentation filed with the SEC. A live audio webcast of this call is being made available today. For those who listened to the replay of this webcast, we remind you that the remarks made herein are as of today and will not be updated subsequent to this call. Before we begin, I'd like to remind everyone that certain statements that are not based on historical facts made during this call, including any statements related to financial guidance, may be deemed forward-looking statements under federal securities laws because these forward-looking statements involve known and unknown risk and uncertainties that are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. We encourage you to refer to our most recent SEC filings for information on some of these risk factors. The Cogger Atlantic BDC assumes no obligation or responsibility to update any forward-looking statements. Please note that the information reported on this call speaks only as of today, August 14, 2025. Therefore, you are advised that time-sensitive information may no longer be accurate at the time of any replay or transcript reading. I'll now turn the call over to Peter Sack. Please go ahead.

Thanks, Tripp. Good morning, everyone. During the second quarter, we continue to demonstrate how well positioned we are at Chicago Atlantic BDC. We remain the only BDC focused on and able to lend to cannabis companies, together with sub-strategies targeted in underserved markets where the more traditional lenders don't provide capital. In the second quarter, we were excited to announce that we executed on our pipeline and funded $39.1 million of new investments, of which three were to new borrowers. We have been able to support proven operators in strong markets while retaining diversity of cash flows, low leverage, high amortization, and strong collateral coverage. When stacked up against other BDCs, I would like to highlight our relative strengths. Our weighted average yield on debt investments as of June 30th was 16.1%. compared with the average BDC of 11.8%, according to recent public BDC research from Leidenberg Thelma. Our debt investments are all senior secured, compared with other BDCs who have an average of 18% exposure to second lien subordinated debt or equity. The weighted average secured net leverage for our portfolio companies is 1.9x, an interest coverage ratio of 3.2x. The portfolio is under levered with only $5 million of debt as of the quarter end, compared with the BDC average of 1.1%. Assuming full utilization of our $100 million credit facility during the year, we would still be well below industry averages. And we have no non-accruals, compared with an industry average of 3.8% of costs. Today we announced a $0.34 dividend, marking the fourth consecutive quarter at that rate. That brings us to a total of $1.36, in dividends declared over that period. As we scale the platform, we intend to grow this component of our return to shareholders. We have navigated the choppy equity and credit markets during the past six months and expect that as we continue to execute on portfolio growth, our shareholders will be the beneficiary of improved total returns as well. With all the news around rescheduling the past few weeks, it's worth reiterating how we continue to approach the cannabis market. Rescheduling would dramatically increase the cash flow after taxes for our borrowers. In the short term, that would translate to higher equity valuations of both public and private cannabis companies. There would likely be increased M&A activity and higher capital expenditure activity driven by the higher free cash flow, leading to greater opportunity for our platform. In the medium and long term, there's still lingering uncertainty that would continue to limit investment until federal regulators put in place a regulatory framework for cannabis as a Schedule III substance. This continued ambiguity will continue to create challenges for U.S. public listings and access to debt markets for cannabis operators. At Chicago Atlantic, we have always underwritten the regulatory status quo. We are not deploying capital based on rescheduling happening or federal legalization. We assume that the environment remains unchanged and underwrite our investments based on cash flow and collateral profiles that exist today. We have a new strategy with limited lending competition, generating yields above our BDC peers. We believe that with specialization and focus, we can better manage risk as well. This is a potent combination and unique strategy that positions us well for both the near and long term. Tom, why don't you take it from here?