As filed with the Securities and Exchange Commission on May 11, 2026

Securities Act File No. 333- [ ]

Investment Company Act File No. 814-01383

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-2

	REGISTRATION STATEMENT
	UNDER THE SECURITIES ACT OF 1933	☒
	Pre-Effective Amendment No.	☐
	Post-Effective Amendment No.	☐
	And
	REGISTRATION STATEMENT UNDER THE
	INVESTMENT COMPANY ACT OF 1940	☐
	Amendment No.	☐

CHICAGO ATLANTIC BDC, INC.

(Exact Name of Registrant as Specified in Its Charter)

600 Madison Avenue, Suite 1800

New York, NY 10022

(212) 905-4923

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

Peter Sack

Scott Gordon

Umesh Mahajan

Chicago Atlantic BDC, Inc.

600 Madison Avenue, Suite 1800

New York, NY 10022

(312) 625-9295

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service)

Copies to:

Owen J. Pinkerton, Esq.

Eversheds Sutherland (US) LLP

700 Sixth Street, NW, Suite 700

Washington, DC 20001

Tel: (202) 383-0262

Approximate date of proposed public offering:

From time to time after the effective date of this Registration Statement.

☐	Check box if the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans.

☒	Check box if any securities being registered on this Form will be offered on a delayed or continuous basis in reliance on Rule 415 under the Securities Act of 1933 (“Securities Act”), other than securities offered in connection with a dividend reinvestment plan.

☒	Check box if this Form is a registration statement pursuant to General Instruction A.2 or a post-effective amendment thereto.

☐	Check box if this Form is a registration statement pursuant to General Instruction B or a post-effective amendment thereto that will become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act.

☐	Check box if this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction B to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act.

It is proposed that this filing will become effective (check appropriate box):

☐	when declared effective pursuant to section 8(c)

If appropriate, check the following box:

☐	This [post-effective] amendment designates a new effective date for a previously filed [post-effective amendment] [registration statement].

☐	This Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, and the Securities Act registration statement number of the earlier effective registration statement for the same offering is:

☐	This Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, and the Securities Act registration statement number of the earlier effective registration statement for the same offering is:

☐	This Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, and the Securities Act registration statement number of the earlier effective registration statement for the same offering is:

Check each box that properly characterizes the Registrant:

☐	Registered Closed-End Fund (closed-end company that is registered under the Investment Company Act of 1940 (“Investment Company Act”)).

☒	Business Development Company (closed-end company that intends or has elected to be regulated as a business development company under the Investment Company Act).

☐	Interval Fund (Registered Closed-End Fund or a Business Development Company that makes periodic repurchase offers under Rule 23c-3 under the Investment Company Act).

☒	A.2 Qualified (qualified to register securities pursuant to General Instruction A.2 of this Form).

☐	Well-Known Seasoned Issuer (as defined by Rule 405 under the Securities Act).

☒	Emerging Growth Company (as defined by Rule 12b-2 under the Securities Exchange Act of 1934 (“Exchange Act”).

☐	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 7(a)(2)(B) of Securities Act.

☐	New Registrant (registered or regulated under the Investment Company Act for less than 12 calendar months preceding this filing).

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. The selling securityholders may not sell these securities until the registration statement filed with the U.S. Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED May 11, 2026

PRELIMINARY PROSPECTUS

Chicago Atlantic BDC, Inc.

$500,000,000

Common Stock

Preferred stock

Subscription Rights

Warrants

Debt Securities

Units

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 capital and technology companies, esoteric and asset-based lending opportunities, and liquidity solutions opportunities as described further in “Prospectus Summary” in this prospectus.

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. See Part I, Item 1A “RISK FACTORS - Risks Relating to Our Investments - Certain assets of our borrowers may not be used as collateral or transferred to us due to applicable state laws and regulations governing the cannabis industry, and such restrictions could negatively impact our profitability” in our most recent Annual Report on Form 10-K. 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.

We are an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). We have elected to be treated, and intend to qualify annually to be treated, as a regulated investment company (“RIC”) under the Internal Revenue Code of 1986, as amended (the “Code”) for U.S. federal income tax purposes. As a BDC and a RIC, we are required to comply with certain regulatory requirements. See Part I, Item 1 “BUSINESS – Business Development Company Regulations” in our most recent Annual Report on Form 10-K, and “Certain U.S. Federal Income Tax Considerations” in this prospectus.

We are an “emerging growth company,” as defined in Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and intend to take advantage of certain exemptions for emerging growth companies allowing us to temporarily forego the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002.

We are advised by Chicago Atlantic BDC Advisers, LLC (the “Adviser”) pursuant to an investment advisory agreement. The Adviser is registered as an investment adviser with the U.S. Securities and Exchange Commission (the “SEC”). The Adviser is an affiliate of Chicago Atlantic Group, LP (together with its affiliates, “Chicago Atlantic”) and part of Chicago Atlantic’s credit platform, which focuses on direct lending.

We may offer, from time to time, in one or more offerings or series, our common stock, preferred stock, debt securities, subscription rights to purchase shares of our common stock or warrants representing rights to purchase shares of our common stock, preferred stock or debt securities, or units comprised of any combination of the foregoing, which we refer to, collectively, as the “securities.” The preferred stock, debt securities, subscription rights and warrants offered hereby may be convertible or exchangeable into shares of our common stock. The securities may be offered at prices and on terms to be described in one or more supplements to this prospectus. The aggregate offering price of the securities we sell pursuant to this prospectus will not exceed $500,000,000.

In the event we offer common stock, the offering price per share of our common stock, less any underwriting discounts or commissions, will generally not be less than the net asset value per share of our common stock at the time we make the offering. However, we may issue shares of our common stock pursuant to this prospectus at a price per share that is less than our net asset value per share (i) in connection with a rights offering to our existing shareholders, (ii) with the prior approval of the majority of our outstanding voting securities or (iii) under such other circumstances as the SEC may permit.

The securities may be offered directly to one or more purchasers, or through agents designated from time to time by us, or to or through underwriters or dealers. Each prospectus supplement relating to an offering will identify any agents or underwriters involved in the sale of the securities, and will disclose any applicable purchase price, fee, discount or commissions arrangement between us and our agents or underwriters or among our underwriters or the basis upon which such amount may be calculated. See “Plan of Distribution” in this prospectus. We may not sell any of the securities pursuant to this registration statement through agents, underwriters or dealers without delivery of this prospectus and a prospectus supplement describing the method and terms of the offering of such securities.

On February 4, 2022, our common stock began trading on the Nasdaq Global Market (“NASDAQ”). Since October 2, 2024, our common stock trades on NASDAQ under the symbol “LIEN.” On May 7, 2026, the last reported sales price of our common stock on NASDAQ was $9.34 per share. The net asset value per share of our common stock at December 31, 2025 (the last date prior to the date of this prospectus for which we reported net asset value) was $13.30.

Investing in our securities involves a high degree of risk, including credit risk and the risk of the use of leverage, and is highly speculative. In addition, shares of closed-end investment companies, including BDCs, frequently trade at a discount to their net asset values. Before investing in our securities, you should read the discussion of the material risks of investing in our securities, including the risk of leverage, in “Risk Factors” beginning on page 18 of this prospectus, Part I, Item 1A “RISK FACTORS” in our most recent Annual Report on Form 10-K, as well as in any of our subsequent SEC filings, and in, or incorporated by reference into, the applicable prospectus supplement and in any free writing prospectuses we may authorize for use in connection with a specific offering, and under similar headings in the other documents that are incorporated by reference into this prospectus.

This prospectus contains important information you should know before investing in our securities. Please read this prospectus before investing and keep it for future reference. We also file periodic and current reports, proxy statements and other information about us with the SEC. This information is available free of charge by contacting us at 600 Madison Avenue, Suite 1800, New York, NY 10022, calling us at (312) 625-9295 or visiting our corporate website located at lien.chicagoatlantic.com. Information on our website is not incorporated into or a part of this prospectus. The SEC also maintains a website at www.sec.gov that contains this information.

Neither the SEC nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is , 2026.

TABLE OF CONTENTS

PROSPECTUS SUMMARY	1
FEES AND EXPENSES	15
FINANCIAL HIGHLIGHTS	17
RISK FACTORS	18
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS	19
USE OF PROCEEDS	21
PRICE RANGE OF COMMON STOCK AND DISTRIBUTIONS	22
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	25
THE COMPANY	26
SENIOR SECURITIES	27
PORTFOLIO COMPANIES	28
MANAGEMENT	31
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS	32
CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS	33
DETERMINATION OF NET ASSET VALUE	34
DIVIDEND REINVESTMENT PLAN	35
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS	36
DESCRIPTION OF OUR SECURITIES	45
DESCRIPTION OF OUR CAPITAL STOCK	45
DESCRIPTION OF OUR PREFERRED STOCK	53
DESCRIPTION OF OUR SUBSCRIPTION RIGHTS	54
DESCRIPTION OF OUR WARRANTS	56
DESCRIPTION OF OUR DEBT SECURITIES	58
DESCRIPTION OF OUR UNITS	73
REGULATION	74
CUSTODIAN, TRANSFER AND DIVIDEND PAYING AGENT AND REGISTRAR	75
BROKERAGE ALLOCATION AND OTHER PRACTICES	76
PLAN OF DISTRIBUTION	77
LEGAL MATTERS	79
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	80
AVAILABLE INFORMATION	81
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE	82

We have not authorized anyone to give you any information other than in this prospectus, any prospectus supplement to this prospectus, any free writing prospectus, or any information that we have incorporated by reference herein or therein and we take no responsibility for any other information that others may give you. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing or incorporated by reference in this prospectus, any prospectus supplements or any free writing prospectus is accurate only as of the date on their respective front covers. Our business, financial condition, results of operations and prospects may have changed since that date. We will update these documents to reflect material changes only as required by law.

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ABOUT THIS PROSPECTUS

This prospectus is part of a shelf registration statement that we have filed with the SEC. Under the shelf registration process, which constitutes a delayed offering in reliance on Rule 415 under the Securities Act of 1933, as amended, we may offer, from time to time, in one or more offerings or series, our common stock, preferred stock, debt securities, subscription rights to purchase shares of our common stock, warrants representing rights to purchase shares of our common stock, preferred stock or debt securities, or units comprised of any combination of the foregoing, on terms to be determined at the time of the offering.

The securities may be offered at prices and on terms described in one or more supplements to this prospectus. This prospectus provides you with a general description of the securities that we may offer. Each time we use this prospectus to offer securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering. We may also authorize one or more free writing prospectuses to be provided to you that may contain material information relating to these offerings. Such prospectus supplement and/or free writing prospectus (collectively referred to hereinafter as a “prospectus supplement”) may also add, update or change information contained in this prospectus or in the documents we incorporate by reference herein. This prospectus and the prospectus supplement, together with any documents incorporated by reference herein, will include all material information relating to the applicable offering.

Please carefully read this prospectus and the prospectus supplement, together with any documents incorporated by reference in this prospectus and the applicable prospectus supplement, any exhibits and the additional information described or incorporated by reference under the headings “Available Information,” “Incorporation of Certain Information by Reference,” “Prospectus Summary” and “Risk Factors” in this prospectus before you make an investment decision.

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PROSPECTUS SUMMARY

This summary highlights some of the information in this prospectus. It is not complete and may not contain all of the information that you may want to consider before investing in our securities. You should read our entire prospectus before investing in our securities. Throughout this prospectus we refer to Chicago Atlantic BDC, Inc. as “we,” “us,” “our” or the “Company,” and to “Chicago Atlantic BDC Advisers, LLC,” our investment adviser, as the “Adviser.”

The Company

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. See Part I, Item 1A “Risk Factors - Risks Relating to Our Investments - Certain assets of our borrowers may not be used as collateral or transferred to us due to applicable state laws and regulations governing the cannabis industry, and such restrictions could negatively impact our profitability” in our most recent Annual Report on Form 10-K. 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.

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.

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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.

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.

Cannabis

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 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 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 or EBITDA positive entities

•

Companies that require capital but do not want to dilute their equity

•

Companies that are showing strong cash flow performance with low leverage profiles

•

Transactions that tend to be attractively priced and have better than normal covenants and amortization due to complexity of the industry

•

Low debt to enterprise value

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.

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The Adviser seeks to invest in growth and technology focused companies that it believes have some or all of the following characteristics:

•

Industry leaders and disruptive companies experiencing strong growth

•

Companies that have raised significant equity capital validating market value

•

Industry focus typically includes software, hardware, e-commerce, direct to consumer and other fast-growing companies

•

Liquidity covenants that ensure such company has adequate cash runway

•

Low debt to enterprise value

•

Profitable or demonstrated path to near term profitability

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:

•

Companies that are showing strong cash flow performance with low leverage profiles, but the industries carry regulatory, reputational or other risks

•

Companies with attractive assets, including, but not limited to, accounts receivable, equipment or real estate

•

Transactions that tend to be attractively priced and have better than normal covenants and amortization due to complexity of the industry or situation

•

Low debt to asset value and/or enterprise value ratios

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:

•

Financing is typically event driven

•

Companies that are pursuing a merger, acquisition, refinancing, dividend recap, or other strategic liquidity need

•

Companies that are showing strong cash flow performance with low leverage profiles

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•

Companies that have multiple areas of value and liquidity in addition to the underlying business

•

Low debt to enterprise value ratios

None of our investment policies are fundamental, and thus may be changed without stockholder approval.

We are an externally managed, closed-end management investment company that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, for U.S. federal income tax purposes, we have elected to be treated, and intend to qualify annually, as a regulated investment company (“RIC”) under the Internal Revenue Code of 1986, as amended (the “Code”). As a BDC and a RIC, we are required to comply with certain regulatory requirements. See Part I, Item 1 “BUSINESS – Business Development Company Regulations” in our most recent Annual Report on Form 10-K, and “Certain U.S. Federal Income Tax Considerations” in this prospectus.

We generally intend to distribute, out of assets legally available for distribution, substantially all of our available earnings, on a quarterly basis, as determined by our board of directors (the “Board”) in its sole discretion.

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and intend to take advantage of certain exemptions for emerging growth companies allowing us to temporarily forego the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002.

We are advised by the Adviser pursuant to an investment advisory agreement (the “Investment Advisory Agreement”). See Part I, Item 1 “BUSINESS - Investment Advisory Agreement” in our most recent Annual Report on Form 10-K. The Adviser is an affiliate of Chicago Atlantic Group, LP (together with its affiliates, “Chicago Atlantic”) and part of Chicago Atlantic’s credit platform, which focuses on direct lending. To achieve our investment objective, we will leverage Chicago Atlantic’s, and, in particular, the Adviser’s investment team’s extensive network of relationships with other sophisticated institutions to source, evaluate and, as appropriate, partner with on transactions. There are no assurances that we will achieve our investment objective.

Investment Portfolio

As of December 31, 2025, we had investments in 39 portfolio companies with an aggregate fair value of approximately $333.3 million.

As of December 31, 2025, based on fair value, our portfolio consisted of 87.8% first lien senior secured debt investments, 11.2% senior secured debt investments, 0.4% second lien senior secured debt investments, 0.2% preferred equity investments and 0.4% warrants.

As of December 31, 2025, our portfolio was invested across 9 different industries. The largest industry in our portfolio as of December 31, 2025 was cannabis, which represented 74.7% of our total portfolio, based on fair value.

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The Adviser and Administrator

Chicago Atlantic BDC Advisers, LLC serves as our investment adviser pursuant to the Investment Advisory Agreement. See Part I, Item 1 “BUSINESS - Investment Advisory Agreement” in our most recent Annual Report on Form 10-K. The Adviser also serves as our Administrator pursuant to an administration agreement (the “Administration Agreement”) between us and the Adviser. See Part I, Item 1 “BUSINESS - Administration Agreement” in our most recent Annual Report on Form 10-K. The Adviser is a Delaware limited liability company that is registered with the U.S. Securities and Exchange Commission (the “SEC”) as an investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). The Adviser is an affiliate of Chicago Atlantic and part of Chicago Atlantic’s credit platform, which focuses on direct lending.

The Adviser’s investment team (the “Investment Team”) is led by Peter Sack, Scott Gordon, Umesh Mahajan, John Mazarakis and Andreas Bodmeier, and is supported by certain members of the Adviser’s senior executive team and Chicago Atlantic’s credit platform’s investment committees. The Investment Team sources investment opportunities, conducts research, performs due diligence on potential investments, structures the Company’s investments and monitors the Company’s portfolio companies on an ongoing basis. Subject to the overall supervision of the Board, the Adviser manages our day-to-day operations, and provides investment advisory and management services to us.

As of December 31, 2025, Chicago Atlantic had approximately $2.3 billion in capital under management (total committed investor capital, total available leverage including undrawn capital, and capital invested by co-investors and managed by the firm). Chicago Atlantic is an alternative investment manager focused on industries and companies where demand for capital exceeds traditional supply. Chicago Atlantic’s investment strategies include opportunistic private credit and equity with focuses on loans to esoteric industries, specialty asset-based loans, liquidity solutions and growth and technology finance. We refer to the Company, Chicago Atlantic Real Estate Finance, Inc. (NASDAQ: REFI) and the private funds and separately managed accounts managed by Chicago Atlantic as the “Chicago Atlantic Credit Clients.”

The Chicago Atlantic Credit Clients may have overlapping objectives with us. The Adviser and its affiliates may face conflicts in the allocation of investment opportunities to us and others. In order to address these conflicts, Chicago Atlantic has put in place an investment allocation policy that addresses the allocation of investment opportunities as well as co-investment restrictions under the 1940 Act. See “CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS” in our most recent Annual Proxy Statement.

In addition, we rely on an order for exemptive relief (the “Order”) that has been granted to the Adviser and its affiliates by the SEC to co-invest with other funds managed by the Adviser or its affiliates in a manner consistent with our investment objective, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent factors. Pursuant to such exemptive relief, we generally are permitted to co-invest with certain of our affiliates if a “required majority” (as defined in Section 57(o) of the 1940 Act) of our directors who are not “interested persons,” as defined in Section 2(a)(19) of the 1940 Act (the “Independent Directors”), make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the transaction, including the consideration to be paid, are reasonable and fair to us and our shareholders and do not involve overreaching by us or our shareholders on the part of any person concerned, (2) the transaction is consistent with the interests of our shareholders and is consistent with our investment objective and strategies, (3) the investment by our affiliates would not disadvantage us, and our participation would not be on a basis different from or less advantageous than that on which our affiliates are investing and (4) the proposed investment by us would not benefit the Adviser or its affiliates or any affiliated person of any of them (other than parties to the transaction), except to the extent permitted by the exemptive relief and applicable law, including the limitations set forth in Section 57(k) of the 1940 Act.

Chicago Atlantic’s allocation policy incorporates the conditions of the Order. As a result of the Order, there could be significant overlap in our investment portfolio and the investment portfolio of the Chicago Atlantic Credit Clients that could avail themselves of the exemptive relief and that have an investment objective similar to ours. See Part I, Item 1A “RISK FACTORS - Risks Relating to Conflicts of Interest – There are significant potential conflicts of interest that could adversely impact our investment returns” in our most recent Annual Report on Form 10-K.

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The Adviser or its affiliates may engage in certain origination activities and receive attendant arrangement, structuring or similar fees from portfolio companies. See Part I, Item 1A “RISK FACTORS - Risks Relating to Conflicts of Interest – Our Adviser and its affiliates may face conflicts of interest with respect to services performed for issuers in which we may invest” in our most recent Annual Report on Form 10-K.

The Adviser’s address is 600 Madison Avenue, Suite 1800, New York, NY 10022.

Investment Advisory Agreement

We and the Adviser entered into the Investment Advisory Agreement on October 1, 2024. See Part I, Item 1 “BUSINESS - Investment Advisory Agreement” in our most recent Annual Report on Form 10-K. The Adviser is responsible for managing our business and activities, including sourcing investment opportunities, conducting research, performing diligence on potential investments, structuring our investments, and monitoring our portfolio companies on an ongoing basis through a team of investment professionals.

We pay our Adviser a fee for its services under the Investment Advisory Agreement consisting of two components: a base management fee and an incentive fee. The cost of both the base management fee payable to our Adviser and any incentive fees payable to our Adviser is ultimately borne by our common stockholders.

Base Management Fee

The base management fee is calculated at an annual rate of 1.75% of our gross assets (i.e., total assets held before deduction of any liabilities), which includes any investments acquired with the use of leverage and excludes any cash and cash equivalents (as defined in the notes to our financial statements). The fair value of derivatives and swaps, which will not necessarily equal the notional value of such derivatives and swaps, will be included in our calculation of gross assets. The base management fee is calculated based on the average value of our gross assets at the end of the two most recently completed quarters. For example, the average value of our gross assets used for calculating the third quarter base management fee will be equal to our gross assets at the end of the second quarter plus our gross assets at the end of the third quarter, divided by two. The base management fee for any partial month or quarter, as the case may be, will be appropriately prorated and adjusted for any share issuances or repurchases during the relevant month or quarter, as the case may be.

Incentive Fee

The incentive fee has two parts. The first part of the incentive fee, the Incentive Fee on Income, is calculated and payable quarterly in arrears based on our “Pre-Incentive Fee Net Investment Income” for the immediately preceding quarter. For this purpose, “Pre-Incentive Fee Net Investment Income” means interest income, dividend income and any other income (including (i) any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, advisory, diligence and consulting fees or other fees that we receive from portfolio companies, (ii) any gain realized on the extinguishment of our own debt and (iii) any other income of any kind that we are required to distribute to our stockholders in order to maintain our RIC status) accrued during the quarter, minus our operating expenses for the quarter (including the base management fee, expenses payable under the Administration Agreement with the Adviser, and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature (such as original issue discount (“OID”) debt instruments with payment-in-kind (“PIK”) interest and zero coupon securities), accrued income that we have not yet received and may never receive in cash. Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. Pre-Incentive Fee Net Investment Income, expressed as a rate of return on the value of our net assets at the end of the immediately preceding quarter, will be compared to a “hurdle rate” of 1.75% per quarter (7% annualized), subject to a “catch-up” provision measured as of the end of each quarter. Our net investment income used to calculate the Incentive Fee on Income is also included in the amount of our gross assets used to calculate the 1.75% base management fee. The operation of the Incentive Fee on Income with respect to our Pre-Incentive Fee Net Investment Income for each quarter is as follows:

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No Incentive Fee on Income is payable to the Adviser in any quarter in which our Pre-Incentive Fee Net Investment Income does not exceed the “hurdle rate” of 1.75%;

•

100% of our Pre-Incentive Fee Net Investment Income, if any, that exceeds the “hurdle rate,” but is less than or equal to 2.19% in any quarter (8.76% annualized), will be payable to the Adviser. We refer to this portion of our Incentive Fee on Income as the catch up. It is intended to provide an Incentive Fee on Income of 20% on all of our Pre-Incentive Fee Net Investment Income when our Pre-Incentive Fee Net Investment Income exceeds 2.19% in any quarter;

•

For any quarter in which our Pre-Incentive Fee Net Investment Income exceeds 2.19%, the Incentive Fee on Income shall equal 20% of the amount of our Pre-Incentive Fee Net Investment Income, because the preferred return and catch up will have been achieved; and

•

For purposes of computing the Incentive Fee on Income, the calculation methodology will look through derivatives or swaps as if we owned the reference assets directly. Therefore, net interest income, if any, associated with a derivative or swap (which is defined as the difference between (i) the interest income and transaction fees received in respect of the reference assets of the derivative or swap and (ii) all interest and other expenses paid by us to the derivative or swap counterparty) will be included in the calculation of Pre-Incentive Fee Net Investment Income for purposes of the Incentive Fee on Income.

See Part I, Item 1 “BUSINESS – Investment Advisory Agreement” in our most recent Annual Report on Form 10-K.

Administration Agreement

We have entered into an Administration Agreement with the Adviser, under which the Adviser provides administrative services for us, including office facilities and equipment and clerical, bookkeeping and record-keeping services at such facilities. Under the Administration Agreement, the Adviser also performs, or oversees the performance of, our required administrative services, which includes being responsible for the financial records which we are required to maintain and preparing reports to our stockholders and reports filed with the SEC. In addition, the Adviser assists us in determining and publishing our net asset value, overseeing the preparation and filing of our tax returns and the printing and dissemination of reports to our stockholders, and generally overseeing the payment of our expenses and the performance of administrative and professional services rendered to us by others. In addition, pursuant to the terms of the Administration Agreement, the Adviser may delegate its obligations under the Administration Agreement to an affiliate or to a third-party and we will reimburse the Adviser for any services performed for it by such affiliate or third-party.

We reimburse our administrator, the Adviser, for the costs and expenses incurred by the Adviser in performing its obligations and providing personnel and facilities under the Administration Agreement (including costs and expenses incurred by the Adviser in connection with the delegation of its obligations under the Administration Agreement to a sub-administrator).

See Part I, Item 1 “BUSINESS - Administration Agreement” in our most recent Annual Report on Form 10-K for further information.

Potential Market Trends

We believe the lower middle-market and the middle-market lending environment provides opportunities for us to meet our goal of making investments that generate attractive risk-adjusted returns based on a combination of the following factors, which continue to remain true in the current environment.

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Limited Availability of Capital for Both Cannabis Companies and Non-Cannabis Lower Middle-Market Companies. We believe that regulatory and structural changes in the market have generally reduced the amount of capital available to U.S. lower middle-market and middle-market companies, and, specifically, to cannabis companies. We believe that many commercial and investment banks have, in recent years, de-emphasized their service and product offerings to lower middle-market businesses in favor of lending to large corporate clients and managing capital markets transactions. In addition, these lenders may be constrained in their ability to underwrite and hold bank loans and high-yield securities for lower middle-market issuers as they seek to meet existing and future regulatory capital requirements. We also believe that there is a lack of market participants that are willing to hold meaningful amounts of certain lower middle-market loans. As a result, we believe our ability to minimize syndication risk for a company seeking financing by being able to hold its loans without having to syndicate them, coupled with reduced capacity of traditional lenders to serve the lower middle-market, present an attractive opportunity to invest in lower middle-market companies.

Robust Demand for Debt and Equity Capital. We believe U.S.-based cannabis companies and lower middle-market non-cannabis companies will continue to require access to debt capital to support growth, refinance existing debt, and finance acquisitions. We expect that private equity sponsors and entrepreneurs will continue to pursue acquisitions and leverage their equity investments with secured and unsecured loans provided by companies such as us.

Attractive Investment Dynamics. An imbalance between the supply of, and demand for, cannabis debt capital and lower middle-market loans creates attractive pricing dynamics. We believe the directly negotiated nature of direct lending also generally provides more favorable terms to the lender, including stronger covenant and reporting packages, better call protection, and lender-protective change of control provisions. Additionally, we believe our expertise in credit selection and in investing in the cannabis industry and other niche lower middle-market companies provides a strong basis for success.

Conservative Capital Structures. Given the limited access to credit for the cannabis industry and businesses in the lower middle-market, such companies have typically been funded with equity capital from entrepreneurs, family offices and, to a lesser extent, smaller private equity firms. The significant amount of equity invested in these companies should provide us with opportunities to lend to companies that have a larger percentage of equity as a percentage of their total capitalization than middle-market and upper middle-market companies. With more conservative capital structures, federally legal cannabis companies and other companies in the lower middle-market can have higher levels of cash flows available to service their debt. In addition, we generally expect borrowers we target to have simpler capital structures than larger borrowers, which facilitates a streamlined underwriting process and, when necessary, restructuring process.

Attractive Opportunities in Investments in Loans. We invest in senior secured or unsecured loans, subordinated loans or mezzanine loans, equity and equity-related securities. We believe that opportunities in loans are significant because of the floating rate structure of most senior secured debt issuances and because of the strong defensive characteristics of these types of investments. Given the current low interest rate environment, we believe that debt issued with floating interest rates and interest rate floors offer a superior return profile as compared with fixed-rate investments, since floating rate structures are generally less susceptible to declines in value experienced by fixed-rate securities in a volatile interest rate environment. Senior secured debt also provides strong defensive characteristics. Senior secured debt has priority in payment among an issuer’s security holders whereby holders are due to receive payment before junior creditors and equity holders. Further, these investments are secured by the issuer’s assets, which may provide protection in the event of a default.

Attractive Opportunities in Equity Investments. We believe that opportunities to invest in the equity of federally legal cannabis and non-cannabis businesses are significant. We expect that our ability to identify emerging businesses and to provide credit to these businesses will provide us with proprietary equity investment opportunities. Our management team’s experience investing in and operating businesses in the federally legal cannabis industry and in the lower middle-market will help us identify high-quality businesses, and our management team’s expertise will be beneficial to our portfolio companies.

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Potential Competitive Advantages

We believe that our Adviser is one of only a select group of specialty lenders that has its depth of knowledge, experience, and track record in lending to businesses in the cannabis industry and the lower middle-market. Our other potential competitive advantages include:

Deep Industry and Operating Expertise. Our Adviser has deep industry and operating expertise on its management team and advisory board. Our Adviser has the ability to tap into this expertise for each of our target investment opportunities. The expertise, knowledge and experience of these individuals allows them to understand and evaluate the business plans, products and financing needs of businesses in the cannabis industry and across the middle-market.

Direct Origination Networks That Benefit from Relationships with Entrepreneurs, Business Brokers and Private Equity Firms. Our Adviser seeks to be the first contact for professionals focused on raising capital for businesses in the cannabis industry and the lower middle-market. Given the history of our Adviser’s management team and advisory board as investors in the cannabis industry and the lower middle-market, they have established relationships with the major investment banks and business brokers across various industries. Our Adviser also focuses on sourcing investment opportunities from private equity and venture capital firms that have been active in cannabis or the lower middle-market more broadly. Given our Adviser’s reputation in lending to these types of companies, it also receives referrals directly from executive officers of businesses across many industries.

Dedicated Staff of Professionals Covering Investment Origination and Underwriting, as well as Portfolio Management Functions. Our Adviser has a broad team of professionals focused on every aspect of the industries and opportunities we focus on. Our Adviser has an investment team that manages and oversees our investment process from identification of investment opportunity through negotiations of final term sheet and investment in a portfolio company. The team members serving our investment management and oversight functions have significant industry and operating experience.

Structure of Investments

Our investment objective is to maximize risk adjusted returns on equity for our shareholders.

We expect that generally our portfolio composition will be majority debt or income producing securities, which may include “covenant-lite” loans, with a lesser allocation to equity or equity-linked opportunities. In addition, we may invest a portion of our portfolio in opportunistic investments, which will not be our primary focus, but will be intended to enhance returns to our shareholders and from time to time, we may evaluate and enter into strategic portfolio transactions which may result in additional portfolio companies which we are considered to control. These investments may include high-yield bonds and broadly-syndicated loans, which are typically originated and structured by banks on behalf of large corporate borrowers with employee counts, revenues, EBITDAs and enterprise values larger than the middle market characteristics described herein, and equity investments in portfolio companies that make senior secured loans or invest in broadly syndicated loans or structured products, such as life settlements and royalty interests. Our portfolio composition may fluctuate from time to time based on market conditions and interest rates.

Covenants are contractual restrictions that lenders place on companies to limit the corporate actions a company may pursue. Generally, the loans in which we expect to invest will have financial maintenance covenants, which are used to proactively address materially adverse changes in a portfolio company’s financial performance. However, to a lesser extent, we may invest in “covenant-lite” loans.

Debt Investments. The terms of our debt investments are tailored to the facts and circumstances of each transaction. The Adviser negotiates the structure of each investment to protect our rights and manage our risk. We generally invest in the following types of debt:

•

First-lien debt. First-lien debt typically is senior on a lien basis to other liabilities in the issuer’s capital structure and has the benefit of a first-priority security interest in assets of the issuer. The security interest ranks above the security interest of any second-lien lenders in those assets. Our first-lien debt may include stand-alone first-lien loans, “unitranche” loans (including “last out” portions of such loans), and secured corporate bonds with similar features to these categories of first-lien loans.

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•	Stand-alone first lien loans. Stand-alone first-lien loans are traditional first-lien loans. All lenders in the facility have equal rights to the collateral that is subject to the first-priority security interest.

•

Unitranche loans. Unitranche loans (including the “last out” portions of such loans) combine features of first-lien, second-lien and mezzanine debt, generally in a first-lien position. In many cases, we may provide the issuer most, if not all, of the capital structure above their equity. The primary advantages to the issuer are the ability to negotiate the entire debt financing with one lender and the elimination of intercreditor issues. “Last out” first-lien loans have a secondary priority behind super-senior “first out” first-lien loans in the collateral securing the loans in certain circumstances. The arrangements for a “last out” first-lien loan are typically set forth in an “agreement among lenders,” which provides lenders with “first out” and “last out” payment streams based on a single lien on the collateral. Since the “first out” lenders generally have priority over the “last out” lenders for receiving payment under certain specified events of default, or upon the occurrence of other triggering events under intercreditor agreements or agreements among lenders, the “last out” lenders bear a greater risk and, in exchange, receive a higher effective interest rate, through arrangements among the lenders, than the “first out” lenders or lenders in stand-alone first-lien loans. Agreements among lenders also typically provide greater voting rights to the “last out” lenders than the intercreditor agreements to which second-lien lenders often are subject. Among the types of first-lien debt in which we may invest, “last out” first-lien loans generally have higher effective interest rates than other types of first-lien loans, since “last out” first-lien loans rank below standalone first-lien loans.

•

Second-lien debt. Our second-lien debt may include secured loans, and, to a lesser extent, secured corporate bonds, with a secondary priority behind first-lien debt. Second-lien debt typically is senior on a lien basis to unsecured liabilities in the issuer’s capital structure and has the benefit of a security interest over assets of the issuer, though ranking junior to first-lien debt secured by those assets. First-lien lenders and second-lien lenders typically have separate liens on the collateral, and an intercreditor agreement provides the first-lien lenders with priority over the second-lien lenders’ liens on the collateral.

•

Mezzanine debt. Structurally, mezzanine debt usually ranks subordinate in priority of payment to first-lien and second-lien debt, is often unsecured, and may not have the benefit of financial covenants common in first-lien and second-lien debt. However, mezzanine debt ranks senior to common and preferred equity in an issuer’s capital structure. Mezzanine debt investments generally offer lenders fixed returns in the form of interest payments, which could be paid-in-kind, and may provide lenders an opportunity to participate in the capital appreciation, if any, of an issuer through an equity interest. This equity interest typically takes the form of an equity co-investment or warrants. Due to its higher risk profile and often less restrictive covenants compared to senior secured loans, mezzanine debt generally bears a higher stated interest rate than first-lien and second-lien debt.

•

Broadly syndicated loans. Broadly syndicated loans (whose features are similar to those described under “First-lien debt” and “Second-lien debt” above) are typically originated and structured by banks on behalf of large corporate borrowers with employee counts, revenues, EBITDAs, and enterprise values larger than the middle-market characteristics described above. The proceeds of broadly syndicated loans are often used for leveraged buyout transactions, mergers and acquisitions, recapitalizations, refinancings, and financing capital expenditures. Broadly syndicated loans are typically distributed by the arranging bank to a diverse group of investors primarily consisting of: collateralized loan obligations; senior secured loan and high yield bond mutual funds; closed-end funds, hedge funds, banks, and insurance companies; and finance companies. A borrower must comply with various covenants contained in a loan agreement or note purchase agreement between the borrower and the holders of the broadly syndicated loan. The broadly syndicated loans in which we invest may include loans that are considered “covenant-lite” loans, because of their lack of a full set of financial maintenance covenants.

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Our debt investments are typically structured with the maximum seniority and collateral that we can reasonably obtain while seeking to achieve our total return target. The Adviser seeks to limit the downside potential of our investments by:

•	requiring a total return on our investments (including both interest and potential equity appreciation) that compensates us for credit risk;

•

negotiating covenants in connection with our investments consistent with preservation of our capital. Such restrictions may include affirmative covenants (including reporting requirements), negative covenants (including financial maintenance covenants), lien protection, limitations on debt incurrence, restrictions on asset sales, downside and liquidation cases, restrictions on dividends and other payments, cash flow sweeps, collateral protection, required debt amortization, change of control provisions and board rights, including either observation rights or rights to a seat on the board under some circumstances; and

•	including debt amortization requirements, where appropriate, to require the timely repayment of principal of the loan, as well as appropriate maturity dates.

Within our portfolio, the Adviser aims to maintain the appropriate proportion among the various types of first-lien loans, as well as second-lien debt and mezzanine debt, to allow us to achieve our target returns while maintaining our targeted amount of credit risk.

Equity Investments. Our investment in a portfolio company could be or may include an equity interest, such as common stock or preferred stock, or equity linked interest, such as a warrant or profit participation right. We may make direct and indirect equity investments with or without a concurrent investment in a more senior part of the capital structure of the issuer. Our equity investments are typically not control-oriented investments and we may structure such equity investments to include provisions protecting our rights as a minority-interest holder.

Operating and Regulatory Structure

We are an externally managed, closed-end, non-diversified management investment company that has elected to be treated as a BDC under 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 RIC under Subchapter M of the Code. See “Certain U.S. Federal Income Tax Considerations” in this prospectus. As a BDC and a RIC, we are required to comply with certain regulatory requirements. See Part I, Item 1 “BUSINESS – Business Development Company Regulations” in our most recent Annual Report on Form 10-K, and “Certain U.S. Federal Income Tax Considerations” in this prospectus. Our investment activities are managed by the Adviser and supervised by the Board, a majority of whom are Independent Directors.

Certain Relationships and Related Transactions

We have entered into both the Investment Advisory Agreement and the Administration Agreement with the Adviser. Pursuant to the Investment Advisory Agreement, we will pay the Adviser a base management fee and an incentive fee. See Part I, Item 1 “BUSINESS - Investment Advisory Agreement” in our most recent Annual Report on Form 10-K for a description of how the fees payable to the Adviser will be determined. Pursuant to the Administration Agreement, we will reimburse the Adviser for expenses necessary to perform services related to our administration and operations. See Part I, Item 1 “BUSINESS - Administration Agreement” in our most recent Annual Report on Form 10-K for a description of services for which we reimburse the Adviser. In addition, the Adviser or its affiliates may engage in certain origination activities and receive attendant arrangement, structuring or similar fees.

We have entered into a license agreement with the Adviser, pursuant to which the Adviser has agreed to grant us a nonexclusive, royalty-free license to use the name “Chicago Atlantic.” Under this agreement, we will have a right to use the “Chicago Atlantic” name for so long as the Adviser or one of its affiliates remains our investment adviser. Other than with respect to this limited license, we will have no legal right to the “Chicago Atlantic” name.

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 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.

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We have entered into indemnification agreements with our directors and executive officers. The indemnification agreements are intended to provide our directors and executive officers with the maximum indemnification permitted under Maryland law and the 1940 Act. Each indemnification agreement provides that we will indemnify the director or executive officer who is a party to the agreement, including the advancement of legal expenses, if, by reason of his or her corporate status, such director or executive officer is, or is threatened to be, made a party to or a witness in any threatened, pending, or completed proceeding, to the maximum extent permitted by Maryland law and the 1940 Act.

Our executive officers and directors, and certain members of the Adviser, serve or may serve as officers, directors or principals of entities that may operate in the same or a related line of business as us or as investment funds managed by our affiliates. For example, the Adviser and its affiliates manage the Chicago Atlantic Credit Clients, and may also manage other funds in the future that have investment mandates that are similar, in whole or in part, to our investment mandate. Accordingly, they may have obligations to investors in those entities, the fulfillment of which might not be in the best interests of us or our stockholders. For example, the principals of the Adviser may face conflicts of interest in the allocation of investment opportunities to us and such other funds. This conflict of interest could be amplified if our investment advisory fees are lower than those of such other funds.

In order to address potential conflicts of interest, the Adviser and its affiliates have adopted an investment allocation policy that governs the allocation of investment opportunities among the investment funds and other accounts managed by the Adviser and its affiliates. To the extent an investment opportunity is appropriate for either or both of the Company and/or any other investment fund or other account managed by the Adviser or its affiliates, and co-investment is not possible, the Adviser and its affiliates will adhere to their investment allocation policy in order to determine to which account to allocate the opportunity.

We, the Adviser and certain of our affiliates have been granted an order for exemptive relief (the “Order”) by the SEC to co-invest with other funds managed by the Adviser or its affiliates in a manner consistent with our investment objective, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent factors. Pursuant to the Order, we generally are permitted to co-invest with certain of our affiliates if a “required majority” (as defined in Section 57(o) of the 1940 Act) of our Independent Directors make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the transaction, including the consideration to be paid, are reasonable and fair to us and our shareholders and do not involve overreaching by us or our shareholders on the part of any person concerned, (2) the transaction is consistent with the interests of our shareholders and is consistent with our investment objective and strategies, (3) the investment by our affiliates would not disadvantage us, and our participation would not be on a basis different from or less advantageous than that on which our affiliates are investing and (4) the proposed investment by us would not benefit the Adviser or its affiliates or any affiliated person of any of them (other than the parties to the transaction), except to the extent permitted by the Order and applicable law, including the limitations set forth in Section 57(k) of the 1940 Act.

If the Company is unable to rely on the exemptive relief for a particular opportunity, such opportunity will be allocated in accordance with the investment allocation policy. Although the Adviser and its affiliates will endeavor to allocate investment opportunities in a fair and equitable manner, we and our stockholders could be adversely affected to the extent investment opportunities are allocated among us and other investment vehicles managed by the Adviser or its affiliates.

The investment allocation policy is also designed to manage and mitigate the conflicts of interest associated with the allocation of investment opportunities if we are able to co-invest, either pursuant to SEC interpretive positions or our exemptive order, with other accounts managed by the Adviser or its affiliates. Generally, under the investment allocation policy, co-investments will be allocated pursuant to the conditions of the exemptive order. Under the investment allocation policy, a portion of each opportunity that is appropriate for us and any affiliated fund or other account, which may vary based on asset class and liquidity, among other factors, will generally be offered to us and such other eligible accounts, as determined by the Adviser and its affiliates.

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If there is a sufficient amount of securities to satisfy all participants, each order will be fulfilled as placed. If there is an insufficient amount of securities to satisfy all participants, the securities will generally be allocated pro rata based on each participant’s order size or available capital.

In accordance with the investment allocation policy, the Company might not participate in each individual opportunity, but will, on an overall basis, be entitled to participate equitably with other accounts managed by the Adviser and its affiliates. The Adviser and its affiliates seek to treat all clients fairly and equitably in a manner consistent with their fiduciary duty to each of them; however, in some instances, especially in instances of limited liquidity, the factors may not result in pro rata allocations or may result in situations where certain accounts receive allocations where others do not.

See “CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS” in our most recent Annual Proxy Statement.

Corporate Information

Our principal executive offices are located at 600 Madison Avenue, Suite 1800, New York, NY 10022 and our telephone number is (212) 905-4923. Our corporate website is located at lien.chicagoatlantic.com. Information on our website is not incorporated into or a part of this prospectus.

Leverage

We may borrow money from time to time if, immediately after such borrowing, the ratio of our total assets (less total liabilities other than indebtedness represented by senior securities) to our total indebtedness represented by senior securities plus preferred stock, if any, is at least 150%. This means that generally, we can borrow up to $2 for every $1 of investor equity. See Part I, Item 1 “BUSINESS – Business Development Company Regulations” and Part I, Item 1A “Risk Factors - Risks Relating to Our Use of Leverage and Credit Facilities – If we borrow money, the potential for loss on amounts invested in us will be magnified and may increase the risk of investing in us.” in our most recent Annual Report on Form 10-K.

The Credit Agreement

On February 11, 2025, the Company entered into a senior secured revolving credit agreement (the “Credit Agreement”) 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 at their election. 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. The Company also will 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.

We expect to use the Credit Agreement, along with proceeds from the rotation of our portfolio, to finance our investment objectives. As of December 31, 2025, we had $25,000,000 in outstanding borrowings and approximately $75,000,000 available under the Credit Agreement. See Part II, Item 7 “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Debt” in our most recent Annual Report on Form 10-K.

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Risk Factors

An investment in our securities involves a high degree of risk and may be considered speculative. You should carefully consider the information found under the captions Part I, Item 1A “RISK FACTORS” in our most recent Annual Report on Form 10-K, any subsequent filings we have made with the SEC that are incorporated by reference into this prospectus or any prospectus supplement, and “Risk Factors” in this prospectus before deciding to invest in our securities.

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FEES AND EXPENSES

The following table is intended to assist you in understanding the costs and expenses that you will bear directly or indirectly. We caution you that some of the percentages indicated in the table below are estimates and may vary. The expenses shown in the table under “Annual expenses” are based on estimated amounts for our current fiscal year. The following table should not be considered a representation of our future expenses. Actual expenses may be greater or less than shown. Except where the context suggests otherwise, whenever this prospectus contains a reference to fees or expenses paid by “us” or “the Company” or that “we” will pay fees or expenses, you will indirectly bear these fees or expenses as an investor in the Company.

Shareholder transaction expenses:
Sales load (as a percentage of offering price)	-	%	⁽¹⁾
Offering expenses (as a percentage of offering price)	-	%	⁽²⁾
Total shareholder transaction expenses (as a percentage of offering price)	-	%

Annual expenses (as a percentage of net assets attributable to common stock):
Base management fee payable under the Investment Advisory Agreement	1.81	%	⁽³⁾
Incentive fee payable under the Investment Advisory Agreement	2.75	%	⁽⁴⁾
Interest payments on borrowed funds	0.41	%	⁽⁵⁾
Other expenses	2.71	%	⁽⁶⁾
Total annual expenses	7.68	%

(1)	In the event that the securities are sold to or through underwriters, a related prospectus supplement will disclose the applicable sales load (underwriting discount or commission).

(2)	A related prospectus supplement will disclose the estimated amount of offering expenses, the offering price and the estimated amount of offering expenses borne by the Company as a percentage of the offering price.

(3)

Our base management fee under the Investment Advisory Agreement is calculated at an annual rate of 1.75% of our average gross assets (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 (as defined in the notes to our financial statements). Consequently, if we have borrowings outstanding, the base management fee as a percentage of net assets attributable to common stock would be higher than if we did not utilize leverage. The base management fee shown in the table above is based on actual amounts incurred during the twelve months ended December 31, 2025. The base management fee of the Company assuming that our average gross assets (excluding cash and cash equivalents) are $311.6 million, which was the actual amount of our average gross assets (excluding cash and cash equivalents) as of December 31, 2025, would be 1.75% of average gross assets.

(4)

Our incentive fee consists of two parts. The first part of the incentive fee, the incentive fee on income, which is payable quarterly in arrears, is equal to 20% of the excess, if any, of our “pre-incentive fee net investment income” that exceeds a 1.75% quarterly (7% annualized) hurdle rate, subject to a “catch up” provision measured at the end of each quarter. The incentive fee on income is computed and paid on income that may include interest that is accrued but not yet received, and may never be received, in cash. The second part of the incentive fee, the incentive fee on capital gains, payable at the end of each fiscal year (or upon termination of the Investment Advisory Agreement) in arrears, equals 20% of cumulative realized capital gains from inception to the end of each fiscal year, less cumulative realized capital losses, unrealized capital depreciation and unrealized capital appreciation from inception to the end of each fiscal year, less the aggregate amount of any previously paid incentive fees on capital gains for prior periods. The incentive fee shown in the table is based on actual amounts of incentive fees on income incurred during the twelve months ended December 31, 2025. The incentive fee amount excludes accrued incentive fees on capital gains as of December 31, 2025, which are reflected on a hypothetical liquidation basis in accordance with GAAP and were not payable as of December 31, 2025.

(5)

As of December 31, 2025, we have $25,000,000 in outstanding borrowings under the Credit Agreement. Borrowings under the Credit Agreement bear interest at the annual rate of one-month term Secured Overnight Financing Rate 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. The Company also will 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. We may borrow funds to make investments, including before we have fully invested the proceeds of this continuous offering. To the extent that we determine it is appropriate to borrow funds to make investments, the costs associated with such borrowing will be indirectly borne by shareholders. The interest payment on borrowed funds referenced in the table above is based on actual amounts of the interest payment on borrowed funds (including unused fees, amortization of deferred financing cost, and debt issuance costs incurred during the twelve months ended December 31, 2025, divided by our net assets as of December 31, 2025. Our ability to incur leverage depends, in large part, on the amount of money we are able to raise through the sale of shares registered in this offering and the availability of financing in the market.

(6)

Our other expenses include sub-administrator, legal, audit, insurance, valuation and custodian fees, and general and administrative expenses as well as other professional fees, fees payable to the Independent Directors, and excise tax expense. The amount shown in the table reflects actual amounts incurred during the twelve months ended December 31, 2025.

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Example

The following example demonstrates the projected dollar amount of total cumulative expenses over various periods with respect to a hypothetical investment in our common stock. In calculating the following expense amounts, we have assumed we would have no additional leverage and that our annual operating expenses would remain at the levels set forth in the table above.

	1 year		3 years		5 years		10 years
You would pay the following expenses on a $1,000 common stock investment, assuming a 5% annual return (assumes no return from net realized capital gains) (none of which is subject to the capital gains incentive fee)	$	49	$	148	$	247	$	495
You would pay the following expenses on a $1,000 common stock investment, assuming a 5% annual return resulting entirely from net realized capital gains (all of which is subject to the capital gains incentive fee)	$	59	$	175	$	290	$	566

The above table is intended to assist you in understanding the various costs and expenses that an investor in shares of our common stock will bear directly or indirectly. While the example assumes, as required by the SEC, a 5% annual return, our performance will vary and may result in a return greater or less than 5%. Because the income portion of the incentive fee for the Company, assuming a 5% annual return and annualized incentive fee hurdle of 7%, would either not be payable or would have an insignificant impact on the expense amounts shown above, the example assumes that the 5% annual return will be generated entirely through net realized capital gains and, as a result, will trigger the payment of the capital gains portion of the incentive fee. If we were to achieve sufficient returns on our investments, including through the realization of capital gains, to trigger income-based incentive fees or capital gains incentive fees of a material amount, our expenses, and returns to our investors, would be higher. The example assumes that, as of December 31, 2025, the sum of realized capital losses and unrealized capital depreciation on a cumulative basis since inception is zero.

This example and the expenses in the table above should not be considered a representation of our future expenses, and actual expenses (including the cost of debt, if any, and other expenses) may be greater or less than those shown.

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FINANCIAL HIGHLIGHTS

Information regarding our financial highlights is incorporated by reference herein from our most recent Annual Report on Form 10-K.

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RISK FACTORS

Investing in our securities involves a number of significant risks. Before you invest in our securities, you should be aware of and carefully consider the various risks associated with the investment, including those described in this prospectus, any accompanying prospectus supplement, any free writing prospectus we may authorize in connection with a specific offering, Part I, Item IA “RISK FACTORS” in our most recent Annual Report on Form 10-K, which is incorporated by reference into this prospectus in its entirety, and any document incorporated by reference herein. You should carefully consider these risk factors, together with all of the other information included in this prospectus, any accompanying prospectus supplement and any related free writing prospectus we may authorize in connection with a specific offering, before you decide whether to make an investment in our securities. The risks set out and described in these documents are not the only risks we face. Additional risks and uncertainties not presently known to us or not presently deemed material by us may also impair our operations and performance. If any of the following events occur, our business, financial condition and results of operations could be materially and adversely affected. In such case, you may lose all or part of your investment. Please also read carefully the section titled “Special Note Regarding Forward-Looking Statements” in this prospectus

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus, any accompanying prospectus supplement, any related free writing prospectus and any documents we may incorporate by reference herein contain forward-looking statements that involve substantial risks and uncertainties. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “intends” and similar words or phrases. Accordingly, these statements are only predictions and involve estimates, known and unknown risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed in them. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of several factors more fully described or referenced under the section entitled “Risk Factors” and elsewhere in this prospectus, any accompanying prospectus supplement, any related free writing prospectus and any documents we may incorporate by reference herein, including the following factors, among others:

•

uncertainties related to the new U.S. Presidential administration, including the potential impact of tariff enactment and tax reductions, and the risk of recession or a shutdown of government services, which could impact our business prospects and the prospects of our portfolio companies;

•

our future operating results and distribution projections;

•

the ability of the Adviser to attract and retain highly talented professionals;

•

our business prospects and the prospects of our portfolio companies;

•

the impact of interest and inflation rates on our business prospects and the prospects of our portfolio companies;

•

the impact of the investments that we expect to make;

•

the ability of our portfolio companies to achieve their objectives;

•

our expected financings and investments and the timing of our investments in our initial portfolio;

•

changes in regulation impacting the cannabis industry;

•

the adequacy of our cash resources and working capital;

•

the timing of cash flows, if any, from the operations of our portfolio companies;

•

the ability to realize benefits anticipated by the previously announced acquisition from Chicago Atlantic Loan Portfolio, LLC (“CALP”) of a portfolio of loans (the “Loan Portfolio”) in exchange for newly issued shares of the Company’s common stock (the “Loan Portfolio Acquisition”);

•

changes or potential disruptions in our operations, the economy, financial markets or political environment;

•

risks associated with possible disruption in our operations or the economy generally due to terrorism, natural disasters, the conflicts between Russia and Ukraine and in the Middle East, and the potential for volatility in energy prices and other commodities and their impact on the industries in which we invest;

•

the impact of information technology system failures, data security breaches, data privacy compliance, network disruptions, and cybersecurity attacks; and

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•

future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities) and conditions in our operating areas, particularly with respect to BDCs or RICs.

Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions also could be inaccurate. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this prospectus, any accompanying prospectus supplement, any related free writing prospectus and any documents we may incorporate by reference should not be regarded as a representation by us that our plans and objectives will be achieved. These forward-looking statements apply only as of the dates of this prospectus, any accompanying prospectus supplement, any related free writing prospectus and any documents we may incorporate by reference. Moreover, we assume no duty and do not undertake to update the forward-looking statements. Because we are an investment company, the forward-looking statements and projections contained in this prospectus, any accompanying prospectus supplement, if any, and any documents we may incorporate by reference herein are excluded from the safe harbor protection provided by Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

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USE OF PROCEEDS

Unless otherwise specified in any applicable prospectus supplement or in any free writing prospectus we have authorized for use in connection with a specific offering, we intend to use the net proceeds from the sale of our securities pursuant to this prospectus for general corporate purposes, which may include, among other things, investing in accordance with our investment objective and strategies, repayment of any outstanding indebtedness, paying operating expenses and other general corporate purposes.

We anticipate that substantially all of the net proceeds of an offering of securities pursuant to this prospectus and any applicable prospectus supplement or free writing prospectus will be used for the above purposes within three months of any such offering, depending on the availability of attractive opportunities, market conditions and the amount raised, but in no event longer than within six months of any such offering.

Pending such uses and investments, we intend to invest any net proceeds from an offering primarily in cash, cash equivalents, U.S. government securities and other high-quality investment grade investments that mature in one year or less from the date of investment. The income we earn on such temporary investments generally will be less than what we would expect to receive from investments in the types of investments we intend to target. Our ability to achieve our investment objective may be limited to the extent that the net proceeds from an offering, pending full investment, are held in interest-bearing deposits or other short-term instruments. The prospectus supplement relating to an offering will more fully identify the use of proceeds from any offering.

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PRICE RANGE OF COMMON STOCK AND DISTRIBUTIONS

The following information is qualified by reference to, and should be read in conjunction with, the information in our most recent Annual Report on Form 10-K regarding the price range of our common stock, distributions and stockholders of record, which is incorporated by reference herein.

Market Information

Our common stock began trading on NASDAQ 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 NASDAQ 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 NASDΑQ, 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 NASDAQ.

On May 7, the last reported closing sales price of our common stock on NASDAQ was $9.34 per share, which represented a discount of approximately 29.8% to our net asset value per share of $13.30 as of December 31, 2025.

	Net Asset		Price Range				High Sales Price Premium (Discount) to Net Asset			Low Sales Price Premium (Discount) to Net Asset			Cash Dividend Per
Class and Period	Value⁽¹⁾		High		Low		Value⁽²⁾			Value⁽²⁾			Share⁽³⁾
Year Ended December 31, 2026
Second Quarter (Through May 7, 2026)		*	$	9.56	$	9.21		*			*
First Quarter		*	$	10.91	$	9.31		*			*		$	0.34	⁽⁶⁾
Year Ended December 31, 2025
Fourth Quarter	$	13.30	$	11.22	$	10.03		-15.6	%		-24.6	%	$	0.34
Third Quarter	$	13.27	$	11.12	$	10.12		-16.2	%		-23.7	%	$	0.34
Second Quarter	$	13.23	$	11.11	$	9.71		-16.0	%		-26.6	%	$	0.34
First Quarter	$	13.19	$	12.56	$	10.92		-4.8	%		-17.2	%	$	0.34
Year Ended December 31, 2024
Fourth Quarter	$	13.20	$	13.24	$	10.74		0.3	%		-18.7	%	$	0.34
Third Quarter	$	13.28	$	12.00	$	10.64		-9.6	%		-19.9	%	$	0.25
Second Quarter	$	13.56	$	12.38	$	9.61		-8.7	%		-29.1	%	$	0.25
First Quarter	$	13.60	$	10.28	$	7.65		-24.4	%		-43.8	%	$	0.25
Year Ended December 31, 2023
Fourth Quarter	$	13.77	$	9.81	$	8.32		-28.8	%		-39.6	%	$	0.70	⁽⁷⁾
Third Quarter	$	14.06	$	10.37	$	7.65		-26.3	%		-45.6	%	$	0.63	⁽⁷⁾
Second Quarter	$	14.49	$	9.19	$	7.82		-36.3	%		-45.8	%
First Quarter	$	14.29	$	9.98	$	8.25		-30.2	%		-42.3	%
Year Ended December 31, 2022⁽⁴⁾
Fourth Quarter	$	13.91	$	10.55	$	9.57		-24.2	%		-31.2	%		-
Third Quarter	$	13.73	$	10.74	$	9.00		-21.8	%		-34.5	%		-
Second Quarter	$	13.64	$	13.50	$	7.80		-1.0	%		-42.8	%		-
First Quarter⁽⁵⁾	$	13.61	$	14.41	$	12.57		5.9	%		-7.6	%		-

(1)	Net asset value per share is determined as of the last day in the relevant quarter and therefore may not reflect the net asset value per share on the date of the high and low closing sales prices. The net asset values shown are based on outstanding shares at the end of the relevant quarter.

(2)	Calculated as the respective high or low closing sales price less net asset value, divided by net asset value (in each case, as of the end of the applicable quarter).

(3)	Represents the dividend or distribution declared in the relevant quarter.

(4)	On November 8, 2022, our Board of Directors approved a change to our fiscal year end from March 31 to December 31.

(5)	Shares of our common stock began trading on NASDAQ on February 4, 2022. Since October 2, 2024, our common stock trades on NASDAQ under the symbol “LIEN.”

(6)	The dividend is payable on April 14, 2026 to stockholders of record on March 30, 2026.

(7)	Consists of a quarterly dividend and a special dividend.

*Not determined at time of filing.

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Distribution Policy

To maintain our tax treatment as a RIC, we must distribute (or be treated as distributing) in each taxable year dividends of an amount equal to at least the sum of (i) 90% of our investment company taxable income (which includes, among other items, dividends, interest, the excess of any net short-term capital gains over net long-term capital losses, as well as other taxable income (excluding any net capital gains) reduced by deductible expenses) and (ii) 90% of our net tax-exempt income for that taxable year. As a RIC, we generally will not be subject to corporate-level U.S. federal income tax on our investment company taxable income and net capital gains that we timely distribute to shareholders. In addition, to avoid the imposition of a nondeductible 4% U.S. federal excise tax, we must distribute (or be treated as distributing) in each calendar year an amount at least equal to the sum of:

•	98% of our net ordinary income, excluding certain ordinary gains and losses, recognized during a calendar year;

•	98.2% of our capital gain net income, adjusted for certain ordinary gains and losses, recognized for the twelve-month period ending on October 31 of such calendar year; and

•	100% of any ordinary income and capital gain net income that we recognized in preceding years, but were not distributed in such years, and on which we paid no U.S. federal income tax.

We have previously incurred, and can be expected to incur in the future, such excise tax on a portion of our income and gains. While we intend to distribute income and capital gains to minimize exposure to the 4% excise tax, we may not be able to, or may not choose to, distribute amounts sufficient to avoid the imposition of the tax entirely. In that event, we will be liable for the tax only on the amount by which we do not meet the foregoing distribution requirement. See Part I, Item 1A “RISK FACTORS – Risks Relating to Distributions – We will be subject to corporate-level U.S. federal income tax if we are unable to obtain and maintain our qualification as a RIC under Subchapter M of the Code or do not satisfy the annual distribution requirement” in our most recent Annual Report on Form 10-K.

Distributions Declared

The following table reflects the distributions declared on shares of the Company’s common stock from inception through December 31, 2025:

Declaration Date	Type	Record Date	Payment Date	Per Share Amount		Dividends Declared
August 10, 2023	Quarterly	September 15, 2023	September 29, 2023	$	0.23	$	1,429,375
August 10, 2023	Special	September 15, 2023	September 29, 2023	$	0.40	$	2,485,869
November 9, 2023	Quarterly	December 20, 2023	December 29, 2023	$	0.25	$	1,553,676
November 9, 2023	Special	December 20, 2023	December 29, 2023	$	0.45	$	2,796,617
March 8, 2024	Quarterly	March 20, 2024	March 28, 2024	$	0.25	$	1,553,736
May 9, 2024	Quarterly	June 20, 2024	June 28, 2024	$	0.25	$	1,553,738
August 8, 2024	Quarterly	September 19, 2024	September 27, 2024	$	0.25	$	1,553,741
December 9, 2024	Quarterly	December 19, 2024	December 27, 2024	$	0.34	$	7,758,925
March 14, 2025	Quarterly	March 28, 2025	April 11, 2025	$	0.34	$	7,758,931
May 12, 2025	Quarterly	June 27, 2025	July 11, 2025	$	0.34	$	7,758,939
August 14, 2025	Quarterly	September 29, 2025	October 10, 2025	$	0.34	$	7,759,001
November 11, 2025	Quarterly	December 31, 2025	January 15, 2026	$	0.34	$	7,759,001

Dividend Reinvestment Plan

Prior to December 31, 2025, we had an “opt out” DRIP for our stockholders. As a result, if we declared a dividend, then stockholders’ cash distributions were automatically reinvested in additional shares of our common stock, unless they specifically chose to “opt out” of the DRIP so as to receive cash distributions. Stockholders who received distributions in the form of shares of our common stock generally were subject to the same U.S. federal income tax consequences as were stockholders who elected to receive their distributions in cash.

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On November 26, 2025, in accordance with the terms of the DRIP and by unanimous written consent of our Board, the DRIP was terminated with an effective date of December 31, 2025. Following the termination of the DRIP, all cash dividends or distributions on our common stock with a record date for payment after December 31, 2025 will be paid in cash rather than in shares of our common stock.

During the year ended December 31, 2025, the Company issued the following shares of common stock under the DRIP:

Declaration Date	Type	Record Date	Payment Date	Shares
March 14, 2025	Quarterly	March 28, 2025	April 11, 2025	22
May 12, 2025	Quarterly	June 27, 2025	July 11, 2025	182

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

The information contained in Part II, Item 7 “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” of our most recent Annual Report on Form 10-K is incorporated by reference herein and should be read in conjunction with, and are qualified by reference to, our financial statements and notes thereto included in such Annual Report on Form 10-K.

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THE COMPANY

The information contained in Part I, Item 1 “BUSINESS,” Part I, Item 2 “PROPERTIES” and Part I, Item 3 “LEGAL PROCEEDINGS” of our most recent Annual Report on Form 10-K is incorporated herein by reference.

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SENIOR SECURITIES

Information about our senior securities as of the end of the fiscal year ended December 31, 2025 is included in Note 5 to our audited financial statements appearing in our most recent Annual Report on Form 10-K. The report of BDO USA, P.C., an independent registered public accounting firm, on our consolidated financial statements as of December 31, 2025, of which the Senior Securities table is a part, has been incorporated by reference herein.

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PORTFOLIO COMPANIES

The following table sets forth certain information regarding each of the portfolio companies in which we had a debt or equity investment as of December 31, 2025. We offer to make available significant managerial assistance to our portfolio companies. We may receive rights to observe the meetings of our portfolio companies’ board of directors. Other than these investments, our only relationships with our portfolio companies are the managerial assistance we may separately provide to our portfolio companies, which services would be ancillary to our investments. As of December 31, 2025, we did not “control” any of our portfolio companies, and we were not an “affiliate” of any of our portfolio companies, as defined in the 1940 Act. In general, under the 1940 Act, we would “control” a portfolio company if we owned 25.0% or more of its voting securities and would be an “affiliate” of a portfolio company if we owned 5.0 % or more of its voting securities.

Portfolio Company

Address

Nature of

Business

Investment

Type

Fair

Value

Interest

Terms¹

Maturity

Relationship

Action Target, Inc.

3411 S. Mountain Vista Parkway
Provo, UT 84606

Manufacturing

Delayed Draw Term Loan

2,440,172

12.00% (P + 2.00%; 1.50% PIK; 8.50% Floor)

7/19/2027

Non-Control,

Non-Affiliate

Aeriz Holdings Corp

351 W. Hubbard Street
Chicago, IL 60654

Cannabis

Delayed Draw Term Loan

9,589,710

12.50% (P + 5.75%)

6/30/2028

Non-Control,

Non-Affiliate

AI Software, LLC (d/b/a Capacity)

6665 Delmar Blvd., Suite 300
St. Louis, MO 63130

Information

Delayed Draw Term Loan

5,094,858

16.00% (P + 6.50%; 2.00% PIK; 7.50% Floor)

6/13/2029

Non-Control,

Non-Affiliate

AI Software, LLC (d/b/a Capacity)

6665 Delmar Blvd., Suite 300
St. Louis, MO 63130

Information

Warrants

539,000

n.a

Non-Control,

Non-Affiliate

Archos Capital Group, LLC

1504 N. Highland Avenue
Arlington Heights, IL 60004

Cannabis

Delayed Draw Term Loan

113,065

14.25% (P + 5.75%; 8.50% Floor)

1/5/2026

Non-Control,

Non-Affiliate

Ascend Wellness Holdings, Inc.

174 NJ-17
Rochelle Park, NJ 07662

Cannabis

Senior Secured Note

3,482,500

12.75% (F @ 12.75%)

7/16/2029

Non-Control,

Non-Affiliate

Aura Home, Inc

30 Cooper Square, Floor 8
New York, NY 10003-7120

Retail Trade

Term Loan

3,308,375

10.77% (S + 6.50%; 3.75% Floor)

9/22/2026

Non-Control,

Non-Affiliate

Aura Home, Inc

30 Cooper Square, Floor 8
New York, NY 10003-7120

Retail Trade

Term Loan

516,336

10.77% (S + 6.50%; 3.75% Floor)

9/22/2026

Non-Control,

Non-Affiliate

BeLeaf Medical, LLC

1551 Wall Street, Suite 280
Saint Charles, Missouri 63303

Cannabis

Term Loan

14,074,362

13.25% (P + 5.75%; 7.50% Floor)

8/20/2028

Non-Control,

Non-Affiliate

CO Acquisition Vehicle, LLC

5845 Centre Avenue
Pittsburgh, PA 15206

Cannabis

Term Loan

15,521,257

20.00% (F @ 0.00%; 20.00% PIK)

12/31/2029

Non-Control,

Non-Affiliate

Cresco Labs, LLC

600 West Fulton Street, Suite 800
Chicago, IL 60661

Cannabis

Term Loan

7,162,500

12.50% (F @ 12.50%)

8/13/2030

Non-Control,

Non-Affiliate

Curaleaf Holdings, Inc.

Burrard Street, Suite 1700-666
Vancouver, British Columbia, Canada

Cannabis

Senior Secured Note

8,330,000

8.00% (F @ 8.00%)

12/15/2026

Non-Control,
Non-Affiliate

Dreamfields Brands, Inc. (d/b/a Jeeter)

65441 Two Bunch Palms Trail
Desert Hot Springs, CA 92240

Cannabis

Delayed Draw Term Loan

31,745,000

16.25% (P + 8.75%; 7.50% Floor)

9/30/2028

Non-Control,

Non-Affiliate

Elevation Cannabis, LLC

6120 E Connecticut Avenue
Kansas City, MO 64120

Cannabis

Delayed Draw Term Loan

10,767,866

16.25% (P + 7.75%; 8.50% Floor)

12/31/2026

Non-Control,

Non-Affiliate

Energize Holdings, Inc. (d/b/a Exos)

2629 E. Rose Garden Lane
Phoenix, AZ 85050

Educational Services

Term Loan

4,966,078

11.99% (S + 8.00%; 3.99% Floor)

10/24/2029

Non-Control,

Non-Affiliate

Energize Holdings, Inc. (d/b/a Exos)

2629 E. Rose Garden Lane
Phoenix, AZ 85050

Educational Services

Warrants

35,603

n.a

Non-Control,

Non-Affiliate

Engage3 Holdings, Inc.

9375 E. Shea Boulevard, Suite 100
Scottsdale, AZ 85260

Information

Term Loan

5,784,080

14.00% (P + 2.50%; 4.00% PIK; 7.50% Floor)

7/22/2030

Non-Control,

Non-Affiliate

Engage3 Holdings, Inc.

9375 E. Shea Boulevard, Suite 100
Scottsdale, AZ 85260

Information

Warrants

268,000

n.a

Non-Control,

Non-Affiliate

Flowery - Bill's Nursery, Inc.

30003 SW 197 Avenue
Homestead, FL 33030

Cannabis

Delayed Draw Term Loan

13,908,331

16.00% (F @ 11.00%; 5.00% PIK)

12/31/2027

Non-Control,

Non-Affiliate

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Portfolio Company

Address

Nature of

Business

Investment

Type

Fair

Value

Interest

Terms¹

Maturity

Relationship

FLUENT Corp.

5540 W. Executive Drive, Suite 100
Tampa, FL 33609

Cannabis

Term Loan

8,311,228

13.00% (F @ 12.00%; 1.00% PIK)

11/24/2028

Non-Control,

Non-Affiliate

HA-MD, LLC

1007 Church Road, Bear
Delaware 19702

Cannabis

Term Loan

2,870,000

15.00% (F @ 15.00%)

6/6/2026

Non-Control,

Non-Affiliate

Hugo Technologies, Inc.

401 N. Michigan Ave., Suite 1200
Chicago, IL 60611

Administrative and Support and Waste Management and Remediation Services

Term Loan

3,000,000

11.79% (S + 8.00%; 3.25% Floor)

12/10/2030

Non-Control,

Non-Affiliate

Illicit - S1 Enterprises, Inc.

3823 N. Cobbler Road
Independence, MO 64058

Cannabis

Term Loan

14,610,356

13.96% (S + 10.24%; 3.72% Floor)

12/31/2028

Non-Control,

Non-Affiliate

Kaleafa, Inc.

16489 Oaktree Terrace
Oregon City, Oregon 97045

Cannabis

Term Loan

2,768,319

17.00% (P + 8.50%; 8.50% Floor)

12/3/2027

Non-Control,

Non-Affiliate

Kapple Holdings LLC (Cannabis & Glass)

605 East Francis Avenue

Spokane, WA 99208

Cannabis

Delayed Draw Term Loan

3,685,000

14.53% (S + 10.25%; 4.00% Floor)

7/28/2028

Non-Control,

Non-Affiliate

Nova Farms, LLC

1000 Washington Street
Attleboro, MA 02703

Cannabis

Term Loan

13,770,063

15.00% (P + 6.50%; 8.50% Floor)

3/28/2027

Non-Control,

Non-Affiliate

Oasis - AZ GOAT AZ LLC

30 N Gould St., Suite R
Sheridan, WY 82801

Cannabis

Term Loan

4,295,859

15.50% (P + 7.50%; 8.00% Floor)

3/31/2027

Non-Control,

Non-Affiliate

Ocular Science, Inc.

118 Center Street
El Segundo, CA 90245

Manufacturing

Term Loan

4,851,017

13.00% (P + 5.25%; 1.00% PIK; 6.75% Floor)

6/17/2029

Non-Control,

Non-Affiliate

Ocular Science, Inc.

118 Center Street
El Segundo, CA 90245

Manufacturing

Warrants

150,752

n.a

Non-Control,

Non-Affiliate

Portofino Labs, Inc. (dba Because Market)

350 Cambridge Ave, Suite 100
Palo Alto, CA 94306

Retail Trade

Term Loan

5,070,190

12.03% (S + 6.25%; 1.50% PIK; 4.25% Floor)

4/30/2029

Non-Control,

Non-Affiliate

Portofino Labs, Inc. (dba Because Market)

350 Cambridge Ave, Suite 100
Palo Alto, CA 94306

Retail Trade

Warrants

19,250

n.a

Non-Control,

Non-Affiliate

Protect Animals With Satellites LLC (Halo Collar)

50 Tice Boulevard, Suite 340
Woodcliff Lake, NJ 07677

Information

Term Loan

3,470,145

13.25% (P + 1.75%; 3.00% PIK; 8.50% Floor)

11/1/2026

Non-Control,

Non-Affiliate

Protect Animals With Satellites LLC (Halo Collar)

50 Tice Boulevard, Suite 340
Woodcliff Lake, NJ 07677

Information

Incremental Term Loan

1,802,485

13.25% (P + 1.75%; 3.00% PIK; 8.50% Floor)

11/1/2026

Non-Control,

Non-Affiliate

Remedy - Maryland Wellness, LLC

4128 Hayward Ave. Baltimore, MD 21215

Cannabis

Delayed Draw Term Loan

1,447,186

20.25% (P + 9.00%; 3.50% PIK; 7.75% Floor)

8/1/2028

Non-Control,

Non-Affiliate

RTCP, LLC

4215 E McDowell Rd #108
Mesa, AZ 85215

Finance and Insurance

Senior Secured Note

22,000,000

15.00% (F @ 15.00%)

10/2/2028

Non-Control,

Non-Affiliate

Shangri-La Columbia, LLC

1401 Creekwood Parkway
Columbia, MO 65202

Cannabis

Delayed Draw Term Loan

11,343,000

13.25% (P + 5.75%; 7.50% Floor)

6/30/2028

Non-Control,

Non-Affiliate

Silver Therapeutics, Inc.

89 Court Street
Saratoga Springs, NY 12866

Cannabis

Delayed Draw Term Loan

6,009,300

15.00% (P + 7.25%; 7.75% Floor)

3/24/2028

Non-Control,

Non-Affiliate

Subsero Holdings - Illinois, Inc

1000 S Old Woodward Ave, Suite 105
Birmingham, MI 48009

Cannabis

Delayed Draw Term Loan

2,791,834

16.00% (P + 7.00%; 2.00% PIK; 7.00% Floor)

7/29/2026

Non-Control,

Non-Affiliate

TerrAscend Corporation

77 City Centre Drive Suite 501 - East Tower
Mississauga, Ontario, Canada

Cannabis

Term Loan

2,936,905

12.75% (F @ 12.75%)

8/1/2028

Non-Control,

Non-Affiliate

TheraTrue, Inc.

4062 Peachtree Road SE, Suite A300
Atlanta, Georgia 30319

Cannabis

Delayed Draw Term Loan

3,015,571

14.50% (F @ 14.50%)

3/13/2027

Non-Control,

Non-Affiliate

Tulip.io Inc.

210-137 Glasgow Street, Office #192
Kitchener, N2G 4X8, Ontario, Canada

Information

Term Loan

3,052,998

15.00% (P + 4.00%; 3.00% PIK; 8.00% Floor)

11/4/2028

Non-Control,

Non-Affiliate

Tulip.io Inc.

210-137 Glasgow Street, Office #192
Kitchener, N2G 4X8, Ontario, Canada

Information

Warrants

n.a

Non-Control,

Non-Affiliate

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Portfolio

Company

Address

Nature of

Business

Investment

Type

Fair

Value

Interest

Terms¹

Maturity

Relationship

Verano Holdings Corp.

224 W Hill Street, Suite 400
Chicago, IL 60610

Cannabis

Term Loan

42,248,731

13.25% (P + 6.50%; 6.25% Floor)

10/30/2026

Non-Control,

Non-Affiliate

Verano Holdings Corp.

224 W Hill Street, Suite 400
Chicago, IL 60610

Cannabis

Revolver

10,000,000

12.49% (S + 8.33%; 4.00% Floor)

9/29/2028

Non-Control,

Non-Affiliate

Wellgreens 2.0, LLC

6859 Federal Blvd., Suite B

Lemon Grove, CA 91945

Cannabis

Term Loan

4,332,519

14.00% (P + 6.50%; 7.50% Floor)

7/31/2029

Non-Control,

Non-Affiliate

West Creek Financial Holdings, Inc. dba Koalafi

424 Hull Street, Suite 600,
Richmond, VA 23224

Finance and Insurance

Series A Senior Note

3,660,999

18.80% (F @ 13.80%; 5.00% PIK)

11/29/2027

Non-Control,

Non-Affiliate

Workbox Holdings, Inc.

420 North Wabash Avenue, Suite 500
Chicago, IL 60611

Real Estate and Rental and Leasing

Term Loan

1,987,879

12.00% (F @ 6.00%; 6.00% PIK)

5/31/2029

Non-Control,

Non-Affiliate

Workbox Holdings, Inc.

420 North Wabash Avenue, Suite 500
Chicago, IL 60611

Real Estate and Rental and Leasing

A-1 Preferred

500,000

n.a

Non-Control,

Non-Affiliate

Workbox Holdings, Inc.

420 North Wabash Avenue, Suite 500
Chicago, IL 60611

Real Estate and Rental and Leasing

A-3 Warrants

44,000

n.a

Non-Control,

Non-Affiliate

Workbox Holdings, Inc.

420 North Wabash Avenue, Suite 500
Chicago, IL 60611

Real Estate and Rental and Leasing

A-4 Warrants

115,000

n.a

Non-Control,

Non-Affiliate

Youth Opportunity Investments, LLC

12775 Horseferry Rd #230
Carmel, IN 46032

Public Administration

Term Loan

11,504,108

12.02% (S + 7.75%; 4.00% Floor)

9/18/2026

Non-Control,

Non-Affiliate

1. F – Fixed, P – Prime, PIK – Payment-In-Kind, S - SOFR

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MANAGEMENT

The information in the sections entitled “PROPOSAL 1: ELECTION OF DIRECTOR NOMINEE” and “CORPORATE GOVERNANCE” in our most recent Annual Proxy Statement, and Part I, Item 1 “BUSINESS” in our most recent Annual Report on Form 10-K, are incorporated herein by reference.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

The information in the section entitled “CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS” in our most recent Annual Proxy Statement is incorporated herein by reference.

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CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS

The information in the sections titled “PROPOSAL 1: ELECTION OF DIRECTOR NOMINEE” and “SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS” in our most recent Annual Proxy Statement are incorporated herein by reference.

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DETERMINATION OF NET ASSET VALUE

The net asset value per share of our outstanding shares of common stock is determined quarterly by dividing the value of total assets minus liabilities by the total number of shares outstanding. More detailed information regarding our determination of net asset value is incorporated by reference herein from the sections titled Part I, Item 1 “BUSINESS – Valuation of Portfolio Investments and Net Asset Value (“NAV”) Determinations” and Part II, Item 7 “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Critical Accounting Estimates - Investment Valuation” of our most recent Annual Report on Form 10-K, which is incorporated herein by reference.

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DIVIDEND REINVESTMENT PLAN

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CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS

The following discussion is a general summary of certain U.S. federal income tax considerations applicable to us and to an investment in shares of our common stock. This summary does not purport to be a complete description of the income tax considerations applicable to us or to investors in such an investment. For example, we have not described tax consequences that we assume to be generally known by investors or certain considerations that may be relevant to certain types of holders subject to special treatment under U.S. federal income tax laws, including stockholders subject to the alternative minimum tax, tax-exempt organizations, insurance companies, dealers in securities, pension plans and trusts, financial institutions, U.S. stockholders (as defined below) whose functional currency is not the U.S. dollar, persons who mark-to-market our shares, persons who hold our shares as part of a “straddle,” “hedge” or “conversion” transaction, certain former citizens and long-term residents of the United States, regulated investment companies, real estate investment trusts, personal holding companies, persons required to accelerate the recognition of gross income as a result of such income being recognized on an applicable financial statement, and persons who acquire an interest in the Company in connection with the performance of services. Such persons should consult with their own tax advisers as to the U.S. federal income tax consequences of an investment in our common stock, which may differ substantially from those described herein.

This summary assumes that investors hold shares of our common stock as capital assets (within the meaning of the Code). The discussion is based upon the Code, U.S. Department of Treasury regulations, (“Treasury Regulations”), and administrative and judicial interpretations, each as of the date of this prospectus and all of which are subject to change, possibly retroactively, which could affect the continuing validity of this discussion. We have not sought and do not intend to seek any ruling from the Internal Revenue Service, or the “IRS”, regarding any offer and sale of our securities under this prospectus. Prospective investors should be aware that, although we intend to adopt positions we believe are in accord with current interpretations of the U.S. federal income tax laws, the IRS may not agree with the tax positions taken by us and that, if challenged by the IRS, our tax positions might not be sustained by the courts. This summary does not discuss any aspects of U.S. estate or gift tax or foreign, state or local tax. It does not discuss the special treatment under U.S. federal income tax laws that could result if we invested in tax-exempt securities or certain other investment assets. Tax counsel has not rendered any legal opinion regarding any tax consequences relating to us or our stockholders. Stockholders are urged to consult their own tax advisors to determine the U.S. federal, state, local and foreign tax consequences to them of investing in our shares.

For purposes of our discussion, a “U.S. stockholder” means a beneficial owner of shares of our common stock that is for U.S. federal income tax purposes:

•

a citizen or individual resident of the United States;

•

a corporation, or other entity treated as a corporation, created or organized in or under the laws of the United States or any state thereof or the District of Columbia;

•

an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or

•

a trust if (1) a U.S. court is able to exercise primary supervision over the administration of such trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) it has a valid election in place to be treated as a domestic trust for U.S. federal income tax purposes.

For purposes of our discussion, a “Non-U.S. stockholder” means a beneficial owner of shares of our common stock that is neither a U.S. stockholder nor a partnership (including an entity or arrangement treated as a partnership for U.S. federal income tax purposes).

If a partnership (including an entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds shares of our common stock, the tax treatment of a partner or member of the partnership will generally depend upon the status of the partner and the activities of the partnership. Each partner in a partnership that is considering acquiring shares of our common stock should consult his, her or its tax advisors with respect to the purchase, ownership and disposition of shares of our common stock.

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Tax matters are very complicated and the tax consequences to an investor of an investment in our shares will depend on the facts of his, her or its particular situation. We encourage investors to consult their own tax advisors regarding the specific consequences of such an investment, including tax reporting requirements, the applicability of U.S. federal, state, local and non-U.S. tax laws, eligibility for the benefits of any applicable tax treaty and the effect of any possible changes in the tax laws.

Taxation in Connection with Holding Securities other than our Common Stock

We intend to describe in any prospectus supplement related to the offering of preferred stock, subscription rights, debt securities, or warrants to purchase our common stock, preferred stock or debt securities, the U.S. federal income tax considerations applicable to such securities as will be sold by us pursuant to that prospectus supplement, including the taxation of any debt securities that will be sold at an original issue discount, and the tax treatment of sales, exchanges or retirements of our debt securities.

Election to be Taxed as a RIC

We have elected and intend to qualify annually to be treated as a RIC under Subchapter M of the Code. However, no assurance can be given that we will be able to maintain our RIC tax treatment. As a RIC, we generally will not be subject to U.S. federal income tax on any net ordinary income or capital gain net income that we timely distribute to our stockholders as dividends. To maintain our tax status as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements (as described below). In addition, in order to maintain our tax treatment as a RIC, we generally must distribute to our stockholders, for each taxable year, at least 90% of our “investment company taxable income,” which is generally our net ordinary income plus the excess, if any, of realized net short-term capital gain over realized net long-term capital loss, or the “Annual Distribution Requirement”. 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 and pay a nondeductible 4% U.S. federal excise tax on such income. In such case, we must distribute any such carryover taxable income through a distribution declared prior to filing the final tax return for the year in which we generated such taxable income. Even if we maintain our status as a RIC, we generally will be subject to U.S. federal income tax imposed at corporate rates on our undistributed taxable income and could be subject to U.S. federal excise, state, local and foreign taxes.

Taxation as a RIC

Provided that we maintain our status as a RIC and satisfy the Annual Distribution Requirement, we will not be subject to U.S. federal income tax on the portion of our investment company taxable income and net capital gain (which is defined as net long-term capital gain in excess of net short-term capital loss) that we timely distribute (or are deemed to distribute) to stockholders as dividends. We will be subject to U.S. federal income tax imposed at corporate rates on any income or capital gain not distributed (or deemed distributed) to our stockholders.

We will be subject to a nondeductible 4% U.S. federal excise tax on certain undistributed income unless we distribute in a timely manner an amount at least equal to the sum of (1) 98% of our investment company taxable income for each calendar year, (2) 98.2% of our capital gain net income for the one-year period ending October 31 in that calendar year and (3) any net ordinary income and net capital gains that we recognized in preceding years, but were not distributed during such years, and on which we paid no U.S. federal income tax.

In order to maintain our status as a RIC for U.S. federal income tax purposes, we must, among other things:

•

continue to qualify as a BDC or be registered as a management investment company under the 1940 Act at all times during each taxable year;

•

derive in each taxable year at least 90% of our gross income from dividends, interest, payments with respect to certain securities loans, gains from the sale or other disposition of stock or other securities or foreign currencies, other income derived with respect to our business of investing in such stock, securities or foreign currencies and net income derived from an interest in a “qualified publicly traded partnership” (as defined in Subchapter M of the Code), or the “90% Income Test”;

•

satisfy the Annual Distribution Requirement; and

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•

diversify our holdings so that at the end of each quarter of the taxable year:

•

at least 50% of the value of our assets consists of cash, cash equivalents, U.S. Government securities, securities of other RICs, and other securities if such other securities of any one issuer do not represent more than 5% of the value of our assets or more than 10% of the outstanding voting securities of the issuer (which for these purposes includes the equity securities of a “qualified publicly traded partnership”); and

•

no more than 25% of the value of our assets is invested in (i) the securities, other than U.S. government securities or securities of other RICs, of one issuer (ii) the securities, other than securities of other RICs, of two or more issuers that are controlled, as determined under applicable tax rules, by us and that are engaged in the same or similar or related trades or businesses or (iii) the securities of one or more “qualified publicly traded partnerships,” or the Diversification Tests.

To the extent that we invest in entities treated as partnerships for U.S. federal income tax purposes (other than a “qualified publicly traded partnership”), we generally must include our allocable share of the items of gross income derived by the partnerships for purposes of the 90% Income Test, and the income that is derived from a partnership (other than, a “qualified publicly traded partnership”) will be treated as qualifying income for purposes of the 90% Income Test only to the extent that such income is attributable to items of income of the partnership which would be qualifying income if realized by us directly. In addition, we generally must take into account our proportionate share of the assets held by partnerships (other than a “qualified publicly traded partnership”) in which we are a partner for purposes of the Diversification Tests.

In order to meet the 90% Income Test, we have established several special purpose corporations, and in the future may establish additional such corporations, to hold assets from which we do not anticipate earning dividends, interest or other qualifying income under the 90% Income Test (the “Taxable Subsidiaries”). Any investments held through the Taxable Subsidiaries are generally subject to U.S. federal income tax imposed at corporate rates, and therefore we can expect to achieve a reduced after-tax yield on such investments.

We may be required to recognize taxable income in circumstances in which we do not receive a corresponding payment in cash. For example, if we hold debt instruments that are treated under applicable tax rules as having OID or debt instruments with PIK interest, we must include in income each year a portion of the OID that accrues over the life of the instrument and PIK interest, regardless of whether cash representing such income is received by us in the same taxable year. We may also have to include in income other amounts that we have not yet received in cash, such as deferred loan origination fees that are paid after origination of the loan or are paid in non-cash compensation such as warrants or stock. We anticipate that a portion of our income may constitute OID or other income required to be included in taxable income prior to our receipt of cash.

Because any OID or other amounts accrued will be included in our investment company taxable income for the year of the accrual, we may be required to make a distribution to our stockholders in order to satisfy the Annual Distribution Requirement, even though we will not have received any corresponding cash amount. As a result, we may have difficulty meeting the Annual Distribution Requirement. We may have to sell some of our investments at times and/or at prices we would not consider advantageous, raise additional debt or equity capital or forgo new investment opportunities for this purpose. If we are not able to obtain cash from other sources, we may fail to qualify for RIC tax treatment and thus become subject to U.S. federal income tax.

Gain or loss realized by us from warrants acquired by us as well as any loss

SEC Form N-2 filed by Chicago Atlantic BDC Inc.