Executive Summary

Q1 2024 total investment income was $2.8M; net investment income (NII) was $(0.1)M, or $(0.01) per share, driven by $2.1M of transaction expenses tied to the Chicago Atlantic Loan Portfolio (CALP) acquisition .
NAV/share declined to $13.60 from $13.77 in Q4 2023, mainly due to dividend payments; total net assets were $84.5M at quarter-end .
The Board declared a $0.25/share cash dividend, payable June 28, 2024 to holders of record June 20, 2024 .
Management expects an acceleration in cannabis capital markets activity in 2H24 given the DEA’s proposed rescheduling of cannabis; transaction (CALP) aimed to scale and diversify the portfolio and be accretive to NII post-close .
Street consensus via S&P Global was unavailable for SSIC for Q1 2024; therefore beat/miss vs estimates cannot be assessed for this quarter (S&P Global consensus unavailable).

What Went Well and What Went Wrong

What Went Well
- Portfolio credit quality remained clean with no loans on non‑accrual status; weighted‑average gross YTM on loans ~18.0%–18.01% persisted, supporting attractive risk‑adjusted returns .
- Liquidity was strong at $33.2M in cash and equivalents at March 31, 2024, providing flexibility to fund pipeline opportunities .
- Management highlighted a potentially favorable regulatory inflection (DEA rescheduling to Schedule III), anticipating increased capital markets activity in 2H24: “we anticipate an increase in cannabis capital markets activity in the second half of 2024” .
What Went Wrong
- NII turned slightly negative ( $(0.1)M; $(0.01)/sh) due to $2.1M of deal‑related transaction expenses for the CALP acquisition; absent these expenses, NII would have been positive as per management’s slide metrics .
- NAV/share edged down to $13.60 from $13.77 QoQ, primarily due to dividend payments (and transaction expenses), though the company recorded $0.6M in net unrealized gains on investments .
- Lack of Street consensus (S&P Global) limited external benchmarking of results and may constrain near‑term investor framing of beat/miss (S&P Global consensus unavailable).

Financial Results

Financials vs prior periods (oldest → newest)

Metric	Q1 2023	Q3 2023	Q4 2023	Q1 2024	Vs Estimates
Total Investment Income ($M)	$2.458	$2.917	$3.600	$2.760	NA (S&P Global unavailable)
Net Investment Income ($M)	$1.371	$1.617	$1.700	$(0.080)	NA (S&P Global unavailable)
NII per Share ($)	$0.22	$0.26	$0.28	$(0.01)	NA (S&P Global unavailable)
Net Inc. in Net Assets from Ops per Share ($)	—	$0.20	$0.40	$0.08	NA (S&P Global unavailable)
NAV per Share (period‑end) ($)	—	$14.06	$13.77	$13.60	NA (S&P Global unavailable)
Total Net Assets ($M)	—	$87.4	$85.6	$84.5	NA (S&P Global unavailable)

KPI and portfolio metrics (oldest → newest)

KPI	Q3 2023	Q4 2023	Q1 2024
Dividend Declared ($/sh)	$0.70 (incl. $0.45 special)	$0.25	$0.25
Portfolio Fair Value ($M)	$57.4	$54.1	$54.8
Cash & Equivalents ($M)	$29.8	$32.6	$33.2
Non‑accrual Status	None	None	None
Weighted Avg Gross YTM on Loans	18.2%	18.0%	18.01%
Portfolio Mix (Loans/Notes; # Cos)	$49.4M loans (4 cos), $8.0M notes (2 cos)	$46.0M loans (3 cos), $8.1M notes (2 cos)	$46.6M loans (3 cos), $8.2M notes (2 cos)

Notes:

Q1 2024 NII reflects $2.106M of transaction expenses related to the CALP loan portfolio acquisition .
Management’s slides show “investment income excluding loan portfolio acquisition expenses” of $2.0M and NII/share excluding those expenses of $0.33 for Q1 2024 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend	Q2 2024 payment cycle	$0.25/share in Q4 2023	$0.25/share declared; record 6/20/24; pay 6/28/24	Maintained
CALP Loan Portfolio Acquisition (timing/impact)	Mid‑2024 (anticipated)	Announced Feb 20, 2024; pro forma benefits outlined; anticipated mid‑2024 close	Registration statement on Form N‑14 filed Apr 15, 2024; anticipated mid‑2024 close; accretive to NII and increases scale/liquidity/diversification per presentation	Reaffirmed timeline and strategic rationale

No formal quantitative guidance on revenue/EPS/margins was provided in the 8‑K or slides for Q1 2024 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2023)	Previous Mentions (Q4 2023)	Current Period (Q1 2024)	Trend
Regulatory/legal (DEA rescheduling; SAFE)	Encouraging signs; challenging environment persists	Continued challenging environment; disciplined adds	DEA reportedly moving to Schedule III; management anticipates increased activity 2H24	Improving tone
Capital markets & deal pipeline	Attractive opportunities; $57.4M FV; no new investments	No new investments; one full repayment in Q4	Active pipeline referenced in call press; post‑CALP expected scale/diversification	Building toward 2H24
Portfolio credit quality	No non‑accruals	No non‑accruals	No non‑accruals	Stable
Yield profile	Gross YTM 18.2%	Gross YTM 18.0%	Gross YTM 18.01%	Steady
Corporate actions (CALP acquisition)	—	Announced Feb 20, 2024	N‑14 filed; mid‑2024 close anticipated; accretive to NII	Advancing to close
Dividend policy	Special + regular ($0.70 total)	Regular $0.25	Regular $0.25	Normalized after special

Management Commentary

CEO on regulatory backdrop and outlook: “It was recently reported that the U.S. Drug Enforcement Administration (‘DEA’) is moving to reclassify cannabis to a Schedule III substance… Based on this news and an expected acceleration in refinancings, we anticipate an increase in cannabis capital markets activity in the second half of 2024.” — Scott Gordon, Chairman & CEO .
Strategic rationale for CALP loan portfolio acquisition: pro forma net assets ~$212–213M, ~$184–187M of portfolio investments across ~27 companies, ~$25–28M cash, and ~19.0%+ pro forma gross weighted‑average loan YTM; expected benefits include increased scale/liquidity, diversification, improved capital markets access, and NII accretion .
Liquidity posture: $33.2M cash & equivalents at March 31, 2024 .

Q&A Highlights

Transaction process/timing: CFO indicated the N‑14 was submitted on April 15, with SEC review expected to take another month or two followed by a shareholder vote; closing expected in summer/mid‑2024 .
Rescheduling implications: Management expressed cautious optimism; longer‑term it may reduce borrowing costs and improve capital availability, but immediate impacts may be mixed as some operators could delay decisions 3–6 months while others proceed with available capital .
Structure clarification: CFO noted the transaction is with Chicago Atlantic Loan Portfolio, LLC and is separate from the REIT; entities are independent .
Financial impact: Acquisition expected to enhance asset base, diversify exposures and be accretive to NII post close .

Estimates Context

S&P Global consensus estimates for SSIC Q1 2024 were unavailable in our system at this time; consequently, we cannot present a definitive beat/miss vs Wall Street for revenue or EPS for the quarter (S&P Global consensus unavailable).
External transcript pages summarize headline comparisons, but per policy we anchor on S&P Global for consensus; absent that feed, we refrain from citing third‑party consensus figures for investment income or per‑share metrics .

Key Takeaways for Investors

Q1 headline NII loss was driven by $2.1M one‑time transaction expenses; underlying earnings power remained supported by an ~18% gross loan yield and clean credit (no non‑accruals) .
The CALP portfolio acquisition is the key 2024 catalyst: adds scale and diversification with potential NII accretion post‑close; management expects mid‑2024 close pending SEC review and shareholder vote .
Regulatory momentum (DEA Schedule III proposal) could spur refi activity and deal flow in 2H24; SSIC’s $33.2M cash provides dry powder to deploy into higher‑yielding secured loans .
NAV drifted modestly due to dividends and transaction costs, but unrealized gains of $0.6M reflect supportive fair value marks in the portfolio .
Dividend maintained at $0.25/share with regular cadence; near‑term income optics may improve as transaction expenses subside and post‑acquisition earnings scale .
With consensus unavailable, focus near‑term on execution milestones (N‑14 progress, vote date, close timing) and deployment pace as primary trading catalysts .

Additional Source Documents Reviewed

Q1 2024 8‑K + Exhibit 99.1 press release and Exhibit 99.2 earnings presentation (read in full) .
FY 2023/Q4 2023 8‑K + exhibits for trend context (read in full) .
Q3 2023 8‑K + exhibits for additional comparison (read in full) .
Q1 2024 earnings call transcript (external) .
Q1 2024 call announcement press release (external) .

Footnote: S&P Global consensus data for SSIC Q1 2024 was unavailable in our system at this time; thus, estimate comparisons are shown as NA.

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