SSIC Silver Spike Investment Corporation

 

Filed by Silver Spike Investment Corp. 

pursuant to Rule 425 under the Securities Act of 1933 

and deemed filed under Rule 14a-12 of the Securities Exchange Act of 1934 

Subject Company: Chicago Atlantic Loan Portfolio, LLC

 

 

 

Silver Spike Investment Corp. Reports Second Quarter 2024 Financial Results and Announces Cash Dividend of $0.25 Per Share

 

NEW YORK, August 8, 2024 (GLOBE NEWSWIRE) --- Silver Spike Investment Corp. (“SSIC” or the “Company”) (NASDAQ: SSIC), a specialty finance company that has elected to be regulated as a business development company, today announced its financial results for the second quarter ended June 30, 2024.

 

Quarter Ended 6/30/24 Highlights

 

·

Total investment income of $3.1 million

·

Net investment income of $1.5 million, or $0.25 per share

·

Investment portfolio of $53.4 million at fair value

·

Net asset value (“NAV”) per share decreased from $13.60 on March 31, 2024 to $13.56 on June 30, 2024

·

A cash dividend of $0.25 per share was declared. The dividend is payable on September 27, 2024 to stockholders of record on September 19, 2024.

 

Scott Gordon, Chairman and Chief Executive Officer of the Company, commented “While there remains some uncertainty around federal cannabis regulatory reform in the near-term, we have seen positive momentum at the state level, with several meaningful catalysts expected over the coming months. Larger scaled cannabis operators and certain cannabis brands have performed well in what remains a generally difficult operating environment for cannabis companies. As expected, we have recently seen an increase in debt capital markets activity, a trend that we expect to continue and one that we believe that we are well-positioned to take advantage of. The Company’s existing portfolio has performed well against the challenging cannabis market backdrop, and we are pleased to announce another quarterly dividend of $0.25.”

 

Loan Portfolio Acquisition Agreement

 

On February 20, 2024, the Company announced that it entered into a definitive agreement to purchase from Chicago Atlantic Loan Portfolio, LLC (“CALP”) a portfolio of loans (the “CALP Loan Portfolio”) in exchange for newly issued shares of the Company’s common stock, subject to certain customary closing conditions (the “Loan Portfolio Acquisition”). The Company filed a registration statement on Form N-14 in connection with the Loan Portfolio Acquisition with the Securities and Exchange Commission (the “SEC”) on April 15, 2024, and filed pre-effective amendments thereto on June 20, 2024 and July 31, 2024.

 

Results of Operations

 

For the three months ended June 30, 2024, total investment income was $3.1 million. This compares to total expenses of $1.6 million, which includes $0.5 million of expenses related to the Loan Portfolio Acquisition, resulting in net investment income of $1.5 million, or $0.25 per share.

 

The Company recorded a net unrealized loss of $0.2 million during the quarter ended June 30, 2024, primarily related to the fair valuation of our debt investments. The Company generated a net increase in net assets from operations of $1.3 million, or $0.21 per share.

 

Net Asset Value

 

As of June 30, 2024, NAV per share decreased to $13.56, compared to $13.60 as of March 31, 2024. The decrease in NAV per share was primarily driven by dividend payments. Total net assets as of June 30, 2024 were $84.3 million, compared to $84.5 million as of March 31, 2024.

 

Portfolio and Investment Activity

 

·

As of June 30, 2024, the Company’s investment portfolio had an aggregate fair value of approximately $53.4 million, comprising $44.3 million in secured loans in four portfolio companies, $8.3 million in secured notes in two portfolio companies, and $0.8 million of equity in one portfolio company.

·

During the quarter ended June 30, 2024, the Company added one portfolio company to its portfolio. The Company made one additional investment on July 16, 2024 and funded a portion of its delayed draw loan commitments on July 30, 2024.

·

As of June 30, 2024, there were no loans on non-accrual status.

 

Liquidity and Capital Resources

 

As of June 30, 2024, the Company had $34.0 million in available liquidity, comprising $34.0 million in cash equivalents.

 

Dividend

 

The Company’s Board of Directors declared a cash dividend of $0.25 per share.

 

The following are the key dates for the dividend:

 

Record Date	September 19, 2024
Payment Date	September 27, 2024

 

The Company has adopted a dividend reinvestment plan (“DRIP”) that provides for reinvestment of dividends on behalf of its stockholders, unless a stockholder elects to receive cash. As a result, when the Company declares a cash dividend, stockholders who have not “opted out” of the DRIP in accordance with the terms of the DRIP and the procedures of their broker or other financial intermediary will have their cash dividends automatically reinvested in additional shares of the Company’s common stock. A stockholder whose shares are held by a broker or other financial intermediary should contact their broker or other financial intermediary as soon as possible in order to determine the time by which the stockholder must take action in order to receive dividends in cash.

 

Conference Call

 

The Company will host a conference call and webcast to discuss the Company's second quarter 2024 financial results at 8:00 a.m. Eastern Time on Friday, August 9, 2024. Participants may register for the call here. A live webcast of the call will also be available on the Company’s website at ssic.silverspikecap.com.

 

The presentation to be used in connection with the conference call and webcast will be available at ssic.silverspikecap.com.

 

A replay of the call will be available at ssic.silverspikecap.com by end of day August 9, 2024.

 

About Silver Spike Investment Corp.

 

The Company is a specialty finance company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended, and has elected to be treated as a regulated investment company for U.S. federal income tax purposes. The Company’s investment objective is to maximize risk-adjusted returns on equity for its shareholders by investing primarily in direct loans to privately held middle-market companies, with a focus on cannabis companies and other companies in the health and wellness sector. The Company is managed by Silver Spike Capital, LLC, an investment manager focused on the cannabis and alternative health and wellness industries. For more information, please visit ssic.silverspikecap.com.

 

Forward-Looking Statements

 

Some of the statements in this communication constitute forward-looking statements because they relate to future events, future performance or financial condition of the Company or the Loan Portfolio Acquisition. The forward-looking statements may include statements as to: future operating results of the Company and distribution projections; business prospects of the Company and the prospects of its portfolio companies; and the impact of the investments that the Company expects to make. In addition, words such as “may,” “might,” “will,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “estimate,” “anticipate,” “predict,” “potential,” “plan” or similar words indicate forward-looking statements, although not all forward-looking statements include these words. The forward-looking statements contained in this communication involve risks and uncertainties. Certain factors could cause actual results and conditions to differ materially from those projected, including the uncertainties associated with (i) the timing or likelihood of the Loan Portfolio Acquisition closing; (ii) the ability to realize the anticipated benefits of the Loan Portfolio Acquisition; (iii) the percentage of Company stockholders voting in favor of the proposals submitted for their approval; (iv) the possibility that competing offers or acquisition proposals will be made; (v) the possibility that any or all of the various conditions to the consummation of the Loan Portfolio Acquisition may not be satisfied or waived; (vi) risks related to diverting management’s attention from ongoing business operations; (vii) the risk that stockholder litigation in connection with the Loan Portfolio Acquisition may result in significant costs of defense and liability; (viii) changes in the economy, financial markets and political environment, including the impacts of inflation and rising interest rates; (ix) risks associated with possible disruption in the operations of the Company or the economy generally due to terrorism, war or other geopolitical conflict (including the current conflict between Russia and Ukraine), natural disasters or global health pandemics, such as the COVID-19 pandemic; (x) future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities); (xi) changes in political, economic or industry conditions, the interest rate environment or conditions affecting the financial and capital markets that could result in changes to the value of the Company’s assets; (xii) elevating levels of inflation, and its impact on the Company, on its portfolio companies and on the industries in which it invests; (xiii) the Company’s plans, expectations, objectives and intentions, as a result of the Loan Portfolio Acquisition; (xiv) the future operating results and net investment income projections of the Company; (xv) the ability of Silver Spike Capital, LLC (the “Adviser”) to locate suitable investments for the Company and to monitor and administer its investments; (xvi) the ability of the Adviser or its affiliates to attract and retain highly talented professionals; (xvii) the business prospects of the Company and the prospects of its portfolio companies; (xviii) the impact of the investments that the Company expects to make; (xix) the expected financings and investments and additional leverage that the Company may seek to incur in the future; (xx) conditions in the Company’s operating areas, particularly with respect to business development companies or regulated investment companies; (xxi) the ability of CALP to obtain the necessary consents for, or otherwise identify and obtain additional loans for including in the CALP Loan Portfolio; (xxii) the regulatory requirements applicable to the transaction and any changes to the transaction necessary to comply with such requirements; (xxiii) the satisfaction or waiver of the conditions to the consummation of the transaction, and the possibility in that in connection that the closing will not occur or that it will be significantly delayed; (xxiv) the realization generally of the anticipated benefits of the Loan Portfolio Acquisition and the possibility that the Company will not realize those benefits, in part or at all; (xxv) the performance of the loans included in the CALP Loan Portfolio, and the possibility of defects or deficiencies in such loans notwithstanding the diligence performed by the Company and its advisors; (xxvi) the ability of the Company to realize cost savings and other management efficiencies in connection with the transaction as anticipated; (xxvii) the reaction of the trading markets to the transaction and the possibility that a more liquid market or more extensive analyst coverage will not develop for the Company as anticipated; (xxviii) the reaction of the financial markets to the transaction and the possibility that the Company will not be able to raise capital as anticipated; (xxix) the diversion of management’s attention from the Company’s ongoing business operations; (xxx) the risk of stockholder litigation in connection with the transaction; (xxxi) the strategic, business, economic, financial, political and governmental risks and other risk factors affecting the business of the Company and the companies in which it is invested as described in the Company’s public filings with the SEC and (xxxii) other considerations that may be disclosed from time to time in the Company’s publicly disseminated documents and filings. The Company has based the forward-looking statements included in this communication on information available to it on the date of this communication, and it assumes no obligation to update any such forward-looking statements. Although the Company undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that the Company may make directly to you or through reports that the Company in the future may file with the SEC, including the Proxy Statement/Prospectus, annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. 

 

Additional Information and Where to Find It

 

This communication relates to a proposed business combination involving the Company and CALP, along with the related proposals for which stockholder approval will be sought. In connection with the proposals, the Company has filed relevant materials with the SEC, including a registration statement on Form N-14, which includes a proxy statement and a prospectus of the Company (the “Proxy Statement/Prospectus”). This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended. STOCKHOLDERS OF THE COMPANY ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS, AND OTHER DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, THE LOAN PORTFOLIO ACQUISITION AND THE PROPOSALS. Investors and security holders are able to obtain the documents filed with the SEC free of charge at the SEC’s website, www.sec.gov, or from the Company’s website at ssic.silverspikecap.com. 

 

Participants in the Solicitation

 

The Company and its directors, executive officers and certain other members of management and employees of the Adviser and its affiliates may be deemed to be participants in the solicitation of proxies from the stockholders of the Company in connection with the Loan Portfolio Acquisition. Information regarding the persons who may, under the rules of the SEC, be considered participants in the solicitation of the Company stockholders in connection with the Loan Portfolio Acquisition is contained in the Proxy Statement/Prospectus and other relevant materials filed with the SEC. This document may be obtained free of charge from the sources indicated above.

 

No Offer or Solicitation

 

This communication is not, and under no circumstances is it to be construed as, a prospectus or an advertisement and the communication is not, and under no circumstances is it to be construed as, an offer to sell or a solicitation of an offer to purchase any securities in the Company or in any fund or other investment vehicle managed by the Adviser or any of its affiliates.

 

Contacts

Investors: 

Bill Healy
Bill@silverspikecap.com 

212-905-4933

 

SILVER SPIKE INVESTMENT CORP.

 

Statements of Assets and Liabilities

 

		June 30, 2024				December 31, 2023
			(unaudited)
ASSETS
Investments at fair value:
Non-control/non-affiliate investments at fair value (amortized cost of $52,382,633 and $53,471,317, respectively)		$	53,398,164			$	54,120,000
Cash and cash equivalents			34,003,851				32,611,635
Interest receivable			1,638,987				1,755,360
Deferred offering costs			761,867				-
Prepaid expenses			182,945				39,276
Other assets			69,913				50,000
Paydown receivable			21,000				-
Due from affiliate			-				-
Deferred financing costs			-				-
Total assets			90,076,727				88,576,271
LIABILITIES
Transaction fees payable related to the Loan Portfolio Acquisition			2,506,784				711,264
Income-based incentive fees payable			1,839,756				1,511,253
Offering costs payable			676,791				-
Management fee payable			246,324				257,121
Capital gains incentive fees payable			160,953				87,583
Audit fees payable			147,848				123,998
Unearned interest income			62,189				-
Legal fees payable			56,595				84,824
Valuation fees payable			34,485				24,675
Directors fees payable			32,974				94,760
Administrator fees payable			28,019				86,463
Other payables			16,628				13,822
Professional fees payable			8,815				17,233
Due to affiliate			493				-
Distributions payable			-				2
Excise tax payable			-				10,655
Total liabilities			5,818,654				3,023,653
Commitments and contingencies (Note 6)			-				-
NET ASSETS
Common Stock, $0.01 par value, 100,000,000 shares authorized, 6,214,964 and  6,214,941 shares issued and outstanding, respectively			62,149				62,149
Additional paid-in-capital			85,030,784				85,041,203
Distributable earnings (Accumulated losses)			(834,860	)			449,266
Total net assets		$	84,258,073			$	85,552,618
Total liabilities and net assets		$	90,076,727				88,576,271
NET ASSET VALUE PER SHARE		$	13.56			$	13.77

SILVER SPIKE INVESTMENT CORP.

 

Statements of Operations

(Unaudited)

 

		Three Months Ended								Six Months Ended
		June 30, 2024				June 30, 2023				June 30, 2024				June 30, 2023
INVESTMENT INCOME
Non-control/non-affiliate investment income
Interest income		$	2,790,333			$	2,762,449			$	5,516,830			$	5,220,288
Fee income			291,000				131,250				324,750				131,250
Total investment income			3,081,333				2,893,699				5,841,580				5,351,538
EXPENSES
Transaction expenses related to the Loan Portfolio Acquisition			533,019				-				2,639,069				-
Management fee			246,324				257,489				492,455				495,908
Income-based incentive fees			328,503				442,673				328,503				646,494
Audit expense			96,925				87,500				203,550				185,383
Administrator fees			101,187				87,853				199,643				165,697
Legal expenses			81,822				87,256				139,873				186,016
Insurance expense			66,212				66,393				132,491				135,475
Capital gains incentive fees			(46,555	)			(137,602	)			73,369				5,000
Other expenses			47,476				20,204				66,667				39,708
Director expenses			48,793				31,746				54,319				67,690
Valuation fees			25,080				21,000				27,053				94,065
Custodian fees			12,000				12,000				23,850				24,000
Professional fees			14,914				17,775				14,914				35,967
Total expenses			1,555,700				994,287				4,395,756				2,081,403
NET INVESTMENT INCOME (LOSS)			1,525,633				1,899,412				1,445,824				3,270,135
NET REALIZED GAIN (LOSS) FROM INVESTMENTS
Non-controlled/non-affiliate investments			-				(210,767	)			-				(210,767	)
Net realized gain (loss) from investments			-				(210,767	)			-				(210,767	)
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) FROM INVESTMENTS
Non-controlled/non-affiliate investments			(232,772	)			(477,241	)			366,848				509,116
Net change in unrealized appreciation (depreciation) from investments			(232,772	)			(477,241	)			366,848				509,116
Net realized and unrealized gains (losses)			(232,772	)			(688,008	)			366,848				298,349
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		$	1,292,861			$	1,211,404			$	1,812,672			$	3,568,484
NET INVESTMENT INCOME (LOSS) PER SHARE — BASIC AND DILUTED		$	0.25			$	0.31			$	0.23			$	0.53
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS PER SHARE — BASIC AND DILUTED		$	0.21			$	0.19			$	0.29			$	0.57
WEIGHTED AVERAGE SHARES OUTSTANDING — BASIC AND DILUTED			6,214,949				6,214,672				6,214,945				6,214,672

 

 

 

 

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