PAGE NO.
PART I
Item 1	Business	3
Item 1A	Risk Factors	31
Item 1B	Unresolved Staff Comments	79
Item 1C	Cybersecurity	79
Item 2	Properties	79
Item 3	Legal Proceedings	80
Item 4	Mine Safety Disclosures	80
PART II
Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	80
Item 6	[Reserved]	83
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	83
Item 7A	Quantitative and Qualitative Disclosures About Market Risk	94
Item 8	Financial Statements and Supplementary Data	95
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	118
Item 9A	Controls and Procedures	118
Item 9B	Other Information	118
Item 9C	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	118
PART III
Item 10	Directors, Executive Officers and Corporate Governance	118
Item 11	Executive Compensation	118
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	119
Item 13	Certain Relationships and Related Transactions, and Director Independence	119
Item 14	Principal Accountant Fees and Services	119
Part IV
Item 15	Exhibits and Financial Statement Schedules	119
Item 16	Form 10-K Summary	120
SIGNATURES		121

•	our future operating results and distribution projections;

•	the ability of Silver Spike Capital, LLC (“SSC”) 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 current and future effects of the COVID-19 pandemic on us and our portfolio companies;

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

•	our limited operating history;

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

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

•	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 business development companies (“BDCs”) or regulated investment companies (“RICs”); and

•	other considerations that may be disclosed from time to time in our publicly disseminated documents and filings.

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Our Adviser’s CEO and founder, Scott Gordon, began investing in the cannabis health and wellness industry in 2013, and soon thereafter co-founded Egg Rock Holdings, LLC (“Egg Rock”). Egg Rock is the parent company of Papa & Barkley Essentials, LLC, a leading consumer-focused family of cannabis and CBD products. Mr. Gordon currently serves as a director of Egg Rock.

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exhibit institutional-level operations and financial controls. We intend to identify businesses in the cannabis space that have leading relying infrastructure and operations to survive and excel in this dynamic industry;

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The number of years in their current positions;

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Track record;

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Industry experience;

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Management incentive, including the level of direct investment in the enterprise;

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Background investigations; and

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Completeness of the management team (lack of positions that need to be filled).

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Sensitivity to economic cycles;

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Competitive environment, including number of competitors, threat of new entrants or substitutes;

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Fragmentation and relative market share of industry leaders;

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Growth potential; and

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Regulatory and legal environment.

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Historical and projected financial performance;

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Quality of earnings, including source and predictability of cash flows;

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Customer and vendor interviews and assessments;

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Potential exit scenarios, including probability of a liquidity event;

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Internal controls and accounting systems; and

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Assets, liabilities and contingent liabilities.

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Investment track record;

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Industry experience;

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Capacity and willingness to provide additional financial support to the company through additional capital contributions, if necessary; and

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Reference checks.

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Review of monthly and quarterly financial statements and financial projections for portfolio companies;

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Periodic and regular contact with portfolio company management to discuss financial position requirements and accomplishments;

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Attendance at board meetings;

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Periodic formal update interviews with portfolio company management and, if appropriate, the private equity sponsor; and

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Assessment of business development success, including product development, profitability and the portfolio company’s overall adherence to its business plan.

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Investments rated 1 involve the least amount of risk to our initial cost basis. The borrower is performing above expectations, and the trends and risk factors for this investment since origination or acquisition are generally favorable.

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Investments rated 2 involve an acceptable level of risk that is similar to the risk at the time of origination or acquisition. The borrower is generally performing as expected and the risk factors are neutral to favorable. All investments or acquired investments in new portfolio companies are initially assessed a rating of 2.

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Investments rated 3 involve a borrower performing below expectations and indicates that the loan’s risk has increased somewhat since origination or acquisition.

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Investments rated 4 involve a borrower performing materially below expectations and indicates that the loan’s risk has increased materially since origination or acquisition. In addition to the borrower being generally out of compliance with debt covenants, loan payments may be past due (but generally not more than 120 days past due).

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Investments rated 5 involve a borrower performing substantially below expectations and indicates that the loan’s risk has increased substantially since origination or acquisition. Most or all of the debt covenants are out of compliance and payments are substantially delinquent. Loans rated 5 are not anticipated to be repaid in full and we will reduce the fair market value of the loan to the amount we anticipate will be recovered.

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With respect to investments for which market quotations are readily available, those investments will typically be valued at the bid price of those market quotations;

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With respect to investments for which market quotations are not readily available, the valuation process begins with the Adviser’s valuation committee establishing a preliminary valuation of each investment, which may be based on valuations, or ranges of valuations, provided by independent valuation firm(s);

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Preliminary valuations are documented and discussed by the Adviser’s valuation committee and, where appropriate, the independent valuation firm(s); and

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The Adviser determines the fair value of each investment.

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Level 1 – Valuations based on quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date;

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Level 2 – Valuations based on quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or for which all significant inputs are observable, either directly or indirectly; and

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Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

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the net asset value of our common stock disclosed in the most recent periodic report that we filed with the SEC;

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our management’s assessment of whether any material change in the net asset value of our common stock has occurred (including through the realization of gains on the sale of our portfolio securities) during the period beginning on the date of the most recently disclosed net asset value of our common stock and ending as of a time within 48 hours (excluding Sundays and holidays) of the sale of our common stock; and

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the magnitude of the difference between (i) a value that our Board of Directors has determined reflects the current (as of a time within 48 hours, excluding Sundays and holidays) net asset value of our common stock, which is based upon the net asset value of our common stock disclosed in the most recent periodic report that we filed with the SEC, as adjusted to reflect our management’s assessment of any material change in the net asset value of our common stock since the date of the most recently disclosed net asset value of our common stock, and (ii) the offering price of the shares of our common stock in the proposed offering.

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Scott Gordon. Mr. Gordon has served as the Chairperson of our Board of Directors and our Chief Executive Officer since our inception. Mr. Gordon is the founder and Chief Executive Officer of Silver Spike Capital, an investment platform dedicated to the cannabis industry that includes our Adviser. Prior to founding Silver Spike Capital, Mr. Gordon had been the co-founder and chairman of Egg Rock Holdings, LLC (“Egg Rock”), the parent company of the Papa & Barkley family of cannabis products, with related subsidiary assets in manufacturing, processing, and logistics. Egg Rock also is the parent company of Papa & Barkley Essentials, a hemp-derived CBD business based in Colorado. From 2016 to 2019, Mr. Gordon was also President of Fintech Advisory Inc., the investment manager for a multi-billion dollar family office fund focused on long-term and opportunistic investments in emerging markets. From late 2013 to 2016, Mr. Gordon served as a Portfolio Manager at Taconic Capital Advisors, a multi-strategy investment firm. Prior to joining Taconic, Mr. Gordon was a Partner and Portfolio Manager at Caxton Associates from 2009 to 2012. He was also a Senior Managing Director and Head of Emerging Markets at Marathon Asset Management from 2007 to 2009. Earlier in his career, Mr. Gordon held leadership positions at Bank of America and ING Capital. Mr. Gordon was a founding member of the Emerging Markets business at JP Morgan where he worked upon graduating from Bowdoin College in 1983.

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Dino Colonna, CFA. Mr. Colonna, our Adviser’s Partner and Co-Head of Credit, is primarily responsible for the day-to-day management of our investment portfolio. Since 2001, Mr. Colonna has managed traditional and alternative investment portfolios, and advised corporations and institutional investors across the global capital markets. Prior to joining the Adviser, Mr. Colonna was managing partner at Madison Capital Advisors, a middle-market asset-backed lending and advisory firm focused on emerging growth companies in the cannabis, life sciences and tech sectors. Prior to Madison Capital Advisors, Mr. Colonna spent four years as an investment banker at the top-ranked Equity Capital Markets team at Barclays in London, and six years as a senior research analyst at Forest Investment Management, a global multi-strategy hedge fund. With Barclays, he advised on and structured over $8 billion of equity, derivative and debt transactions, and while at Forest Investment Management, he specialized in credit and equity research, and was part of the portfolio management team managing an over $500 million multi-strategy portfolio. Mr. Colonna holds a CFA Charter, a B.S.B.A. from the University of Delaware and an international M.B.A. from ESADE Business School (Spain).

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William Healy. Mr. Healy, our Adviser’s Partner and Head of Capital Formation, is primarily responsible for the day-to-day management of our investment portfolio. Since 1986, Mr. Healy has advised and covered institutional clients in a variety of roles spanning corporate finance, investment management, and investment banking in London, Brazil, and New York. Prior to joining the Adviser, he was President of Pantera Capital Management, a blockchain venture capital manager, from 2018 to May 2019. From 1998 to 2016, Mr. Healy managed several hedge fund and private equity dedicated institutional sales teams at Deutsche Bank and the firm’s wealth and asset management division. He began his career with The Chase Manhattan Bank based in London, Brazil, and New York where he advised multinational corporations on cross-border funding of their Latin America-domiciled operations. From 1993 to 1998, he formed and managed the ING Barings emerging markets institutional debt sales team where he covered clients and often traveled to Latin America, Europe, and Asia to structure, price, and pre-market many of the firm’s capital markets transactions. Mr. Healy received a BA, International Business from The George Washington University, Washington DC. He is multi-lingual (English, Spanish, and Portuguese) and a Chartered Alternative Investment Analyst Association (CAIA) member. Mr. Healy also serves as a member of the board of directors and president of Silver Spike Acquisition Corp. II and, from 2019 to June 2021, served as a member of the board of directors and president of Silver Spike Acquisition Corp.

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Umesh Mahajan. Mr. Mahajan, our Chief Financial Officer and our Adviser’s Partner and Co-Head of Credit, is primarily responsible for the day-to-day management of our investment portfolio. Prior to joining the Adviser, Mr. Mahajan was a Managing Director for four years at Ascribe Capital, a credit fund focused on value investing in middle market companies.  From September 2003 to August 2016, Mr. Mahajan worked at Merrill Lynch and Bank of America in various roles in their Global Markets and Investment Banking divisions in New York.  He specialized in credit and special situation investing as a Managing Director in the Global Credit and Special Situations group at Bank of America Securities and as a Vice President in the Principal Credit Group at Merrill Lynch.  Mr. Mahajan also worked in Merrill Lynch’s energy and power investment banking group for two years.  From 1994 to 2001, Mr. Mahajan worked in J.P. Morgan’s investment banking team in Asia.  Mr. Mahajan holds a Bachelor of Technology in Electrical Engineering from the Indian Institute of Technology, Bombay and an MBA from The Wharton School of the University of Pennsylvania where he graduated as a Palmer Scholar. Mr. Mahajan also holds a Certificate in ESG Investing from the CFA Institute.

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determine the composition of our portfolio, the nature and timing of the changes to our portfolio and the manner of implementing such changes;

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determine what securities and other assets we purchase, retain or sell;

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identify, evaluate and negotiate the structure of the investments we make;

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execute, monitor and service the investments we make;

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perform due diligence on prospective portfolio companies; and

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provide us with such other investment advisory, research and related services as we may, from time to time, reasonably require for the investment of our funds, including providing operating and managerial assistance to us and our portfolio companies as required.

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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%;

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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;

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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

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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.

(1)

Represents 7% annualized hurdle rate.

(2)

Represents 1.75% annualized base management fee.

(3)

The “catch-up” provision is intended to provide our Adviser with an Incentive Fee on Income of 20% on all Pre-Incentive Fee Net Investment Income as if a hurdle rate did not apply when our Pre-Incentive Fee Net Investment Income exceeds 2.19% in any quarter.

Year 1:

$20 million investment made in Company A (“Investment A”) and $30 million investment made in Company B (“Investment B”)

Year 2:

Investment A sold for $50 million and fair market value (“FMV”) of Investment B determined to be $32 million

Year 3:

FMV of Investment B determined to be $25 million

Year 4:

Investment B sold for $31 million

Year 1:

None

Year 2:

Incentive Fee on Capital Gains of $6 million — ($30 million realized capital gains on sale of Investment A multiplied by 20%)

Year 3:

None — $5 million (20% multiplied by ($30 million cumulative capital gains less $5 million cumulative capital depreciation)) less $6 million (Incentive Fee on Capital Gains paid in Year 2)

Year 4:

Incentive Fee on Capital Gains of $200,000 — $6.2 million ($31 million cumulative realized capital gains multiplied by 20%) less $6 million (Incentive Fee on Capital Gains paid in Year 2)

Year 1:

$20 million investment made in Company A (“Investment A”), $30 million investment made in Company B (“Investment B”) and $25 million investment made in Company C (“Investment C”)

Year 2:

Investment A sold for $50 million, FMV of Investment B determined to be $25 million and FMV of Investment C determined to be $25 million

Year 3:

FMV of Investment B determined to be $27 million and Investment C sold for $30 million

Year 4:

FMV of Investment B determined to be $24 million

Year 5:

Investment B sold for $20 million

Year 1:

None

Year 2:

$5 million Incentive Fee on Capital Gains — 20% multiplied by $25 million ($30 million realized capital gains on Investment A less $5 million unrealized capital depreciation on Investment B)

Year 3:

$1.4 million Incentive Fee on Capital Gains(1) — $6.4 million (20% multiplied by $32 million ($35 million cumulative realized capital gains less $3 million unrealized capital depreciation on Investment B)) less $5 million (Incentive Fee on Capital Gains paid in Year 2)

Year 4:

None

Year 5:

None — $5 million (20% multiplied by $25 million (cumulative realized capital gains of $35 million less realized capital losses of $10 million)) less $6.4 million (cumulative Incentive Fees on Capital Gains paid in Year 2 and Year 3)(2)

(1)

As illustrated in Year 3 of Scenario 2 above, if we were to be wound up on a date other than our fiscal year end of any year, we may have paid aggregate Incentive Fees on Capital Gains that are more than the amount of such fees that would be payable if we had been wound up on our fiscal year end of such year.

(2)

As noted above, it is possible that the cumulative aggregate Incentive Fees on Capital Gains received by our Adviser ($6.4 million) is effectively greater than $5 million (20% of cumulative aggregate realized capital gains less net realized capital losses or net unrealized depreciation ($25 million)).

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the cost of our organization and offerings;

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the cost of calculating our NAV, including the cost of any third-party valuation services;

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the cost of effecting sales and repurchases of shares of our common stock and other securities;

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fees and expenses payable under any underwriting agreements, if any;

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debt service and other costs of borrowings or other financing arrangements;

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costs of hedging;

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expenses, including travel expenses, incurred by the Adviser, or members of the investment team, or payable to third-parties, performing due diligence on prospective portfolio companies and, if necessary, enforcing our rights;

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management and incentive fees payable pursuant to the Investment Advisory Agreement;

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fees payable to third-parties relating to, or associated with, making investments and valuing investments (including third-party valuation firms);

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costs, including legal fees, associated with compliance under cannabis laws;

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transfer agent and custodial fees;

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fees and expenses associated with marketing efforts (including attendance at industry and investor conferences and similar events);

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federal and state registration fees;

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any exchange listing fees and fees payable to rating agencies;

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federal, state and local taxes;

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independent directors’ fees and expenses, including travel expenses;

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cost of preparing financial statements and maintaining books and records and filing reports or other documents with the SEC (or other regulatory bodies) and other reporting and compliance costs, and the compensation of professionals responsible for the preparation of the foregoing;

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the cost of any reports, proxy statements or other notices to our stockholders (including printing and mailing costs), the costs of any stockholder or director meetings and the compensation of investor relations personnel responsible for the preparation of the foregoing and related matters;

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brokerage commissions and other compensation payable to brokers or dealers;

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research and market data;

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fidelity bond, directors’ and officers’ errors and omissions liability insurance and other insurance premiums;

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direct costs and expenses of administration, including printing, mailing and staff;

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fees and expenses associated with independent audits, and outside legal and consulting costs;

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costs of winding up;

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costs incurred in connection with the formation or maintenance of entities or vehicles to hold our assets for tax or other purposes;

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extraordinary expenses (such as litigation or indemnification); and

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costs associated with reporting and compliance obligations under the 1940 Act and applicable federal and state securities laws.

(1)

Securities purchased in transactions not involving any public offering from the issuer of such securities, which issuer (subject to certain limited exceptions) is an eligible portfolio company, or from any person who is, or has been during the preceding 13 months, an affiliated person of an eligible portfolio company, or from any other person, subject to such rules as may be prescribed by the SEC. An eligible portfolio company is defined in the 1940 Act as any issuer which:

(a)

is organized under the laws of, and has its principal place of business in, the United States;

(b)

is not an investment company (other than a small business investment company wholly owned by the BDC) or a company that would be an investment company but for certain exclusions under the 1940 Act; and

(c)

satisfies any of the following:

(i)

does not have any class of securities that is traded on a national securities exchange;

(ii)

has a class of securities listed on a national securities exchange, but has an aggregate market value of outstanding voting and non-voting common equity of less than $250 million;

(iii)

is controlled by a BDC or a group of companies including a BDC and the BDC has an affiliated person who is a director of the eligible portfolio company; or

(iv)

is a small and solvent company having total assets of not more than $4 million and capital and surplus of not less than $2 million.

(2)

Securities of any eligible portfolio company that we control.

(3)

Securities purchased in a private transaction from a U.S. issuer that is not an investment company or from an affiliated person of the issuer, or in transactions incident thereto, if the issuer is in bankruptcy and subject to reorganization or if the issuer, immediately prior to the purchase of its securities was unable to meet its obligations as they came due without material assistance other than conventional lending or financing arrangements.

(4)

Securities of an eligible portfolio company purchased from any person in a private transaction if there is no ready market for such securities and we already own 60% of the outstanding equity of the eligible portfolio company.

(5)

Securities received in exchange for or distributed on or with respect to securities described in (1) through (4) above, or pursuant to the exercise of warrants or rights relating to such securities.

(6)

Cash, cash equivalents, U.S. government securities or high-quality debt securities maturing in one year or less from the time of investment.

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pursuant to Rule 13a-14 of the Exchange Act, our chief executive officer and chief financial officer will be required to certify the accuracy of the financial statements contained in our periodic reports;

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pursuant to Item 307 of Regulation S-K, our periodic reports will be required to disclose our conclusions about the effectiveness of our disclosure controls and procedures; and

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pursuant to Rule 13a-15 of the Exchange Act, our management will be required to prepare a report regarding its assessment of our internal control over financial reporting. When we are no longer an emerging growth company under the JOBS Act, our independent registered public accounting firm will be required to audit our internal control over financial reporting.

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certain financial institutions;

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regulated investment companies;

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real estate investment trusts;

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dealers or traders in securities that use a mark-to-market method of tax accounting;

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persons holding shares of our common stock as part of a straddle, wash sale, conversion transaction or integrated transaction or persons entering into a constructive sale with respect to the shares;

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U.S. Holders (as defined below) whose functional currency for U.S. federal income tax purposes is not the U.S. dollar;

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entities classified as partnerships or otherwise treated as pass-through entities for U.S. federal income tax purposes;

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certain former U.S. citizens and residents and expatriated entities;

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tax-exempt entities, including an “individual retirement account” or “Roth IRA”; or

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insurance companies.

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Economic recessions or downturns may have a material adverse effect on our business, financial condition and results of operations, and could impair the ability of our portfolio companies to repay debt or pay interest.

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Global economic, political and market conditions, including those caused by the current public health crisis, have (and in the future, could further) adversely affect our business, results of operations and financial condition and those of our portfolio companies.

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We have limited operating history and our Adviser is a recently registered investment adviser under the Advisers Act, with limited history of managing BDCs and limited history of making credit investments in the nascent cannabis industry.

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A significant portion of our investment portfolio will be recorded at fair value as determined in good faith in accordance with procedures established by our Board of Directors and, as a result, there will be uncertainty as to the value of our portfolio investments.

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Our ability to achieve our investment objective depends on our Adviser’s ability to support our investment process; if our Adviser were to lose key personnel or they were to resign, our ability to achieve our investment objective could be significantly harmed.

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Our business model depends to a significant extent upon strong referral relationships, and the inability of the personnel associated with our Adviser to maintain or develop these relationships, or the failure of these relationships to generate investment opportunities, could adversely affect our business.

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A failure on our part to maintain qualification as a BDC would significantly reduce our operating flexibility.

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Regulations that will govern our operation as a BDC and RIC may affect our ability to raise, and the way in which we raise, additional capital or borrow for investment purposes, which may have a negative effect on our growth.

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Changes in laws or regulations governing our operations, including laws and regulations governing cannabis, may adversely affect our business or cause us to alter our business strategy.

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Provisions of the Maryland General Corporation Law and of our charter and bylaws could deter takeover attempts and have an adverse impact on the price of our common stock.

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We may be unable to invest a significant portion of the net proceeds from our initial public offering, or any follow-on offering of shares of our common stock, on acceptable terms within an attractive time frame.

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Because we intend to distribute at least 90% of our taxable income each taxable year to our stockholders in connection with our election to be treated as a RIC, we will continue to need additional capital to finance our growth.

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We may not be able to pay you distributions, and if we are able to pay you distributions, our distributions may not grow over time and/or a portion of our distributions may be a return of capital. We have not established any limit on the extent to which we may use offering proceeds to fund distributions.

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We will be subject to corporate-level U.S. federal income tax if we are unable to obtain and maintain qualification as a RIC under Subchapter M of the Code or do not satisfy the annual distribution requirement.

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Our investments in portfolio companies may be risky, and we could lose all or part of our investments.

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We intend to invest primarily in securities that are rated below investment grade by rating agencies or that would be rated below investment grade if they were rated. Below investment grade securities, which are often referred to as “junk,” have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and return principal. They may also be illiquid and difficult to value.

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Some of the loans in which we may invest may be “covenant-lite” loans, which may have a greater risk of loss as compared to investments in or exposure to loans with a complete set of financial maintenance covenants.

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The lack of liquidity in our investments may adversely affect our business.

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Shares of closed-end investment companies, including BDCs, may trade at a discount to their net asset value (“NAV”).

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The market price of our common stock may fluctuate significantly.

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Cannabis, except for hemp, is currently illegal under U.S. federal law and in other jurisdictions, and strict enforcement of federal laws would likely result in our inability to execute our business plan.

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Loans to relatively new and/or small companies and companies operating in the cannabis industry generally involve significant risks.

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Our investment opportunities are limited by the current illegality of cannabis under U.S. federal law, and change in the laws, regulations and guidelines that impact the cannabis industry may cause adverse effects on our ability to make investments.

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Strict enforcement of U.S. federal laws regarding cannabis would likely result in our portfolio companies’ inability to execute a business plan in the cannabis industry, and could result in the loss of all or part of any of our loans.

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The nascent status of the medical and recreational cannabis industry involves unique circumstances and there can be no assurance that the industry will continue to exist or grow as currently anticipated.

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Any potential growth in the cannabis industry continues to be subject to new and changing state and local laws and regulations.

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Portfolio companies may have difficulty borrowing from or otherwise accessing the service of banks, which may make it difficult to sell products and services.

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We, portfolio companies or the cannabis industry more generally may receive unfavorable publicity or become subject to negative consumer or investor perception.

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Third-parties with whom we do business may perceive themselves as being exposed to reputational risk by virtue of their relationship with us and may ultimately elect not to do business with us.

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Portfolio companies may be subject to regulatory, legal or reputational risk associated with potential misuse of their products by their customers.

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There may be a lack of access to U.S. bankruptcy protections for portfolio companies.

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U.S. federal courts may refuse to recognize the enforceability of contracts pertaining to any business operations that are deemed illegal under U.S. federal law, including cannabis companies operating legally under state law.

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Cybersecurity risks and cyber incidents may adversely affect our business or the business of our portfolio companies by causing a disruption to our operations or the operations of our portfolio companies, a compromise or corruption of our confidential information or the confidential information of our portfolio companies and/or damage to our business relationships or the business relationships of our portfolio companies, all of which could negatively impact the business, financial condition and operating results of us or our portfolio companies.

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sudden electrical or telecommunications outages;

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natural disasters such as earthquakes, tornadoes and hurricanes;

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disease pandemics;

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events arising from local or larger scale political or social matters, including terrorist acts; and

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cyber-attacks.

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The annual distribution requirement will be satisfied if we distribute to our stockholders each taxable year an amount generally at least equal to 90% of the sum of our net taxable income plus realized net short-term capital gains in excess of realized net long-term capital losses, if any. Because we may use debt financing, we are subject to an asset coverage ratio requirement under the 1940 Act and we may be subject to certain financial covenants under our debt arrangements that could, under certain circumstances, restrict us from making distributions necessary to satisfy the annual distribution requirement. If we are unable to obtain cash from other sources, we could fail to qualify for RIC tax treatment and thus could become subject to corporate-level income tax.

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The 90% gross income test will be satisfied if we earn at least 90% of our gross income for each taxable year from dividends, interest, gains from the sale of stock or securities or similar sources.

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The diversification test will be satisfied if, at the end of each quarter of our taxable year, at least 50% of the value of our assets consist of cash, cash equivalents, U.S. government securities, securities of other RICs, and other acceptable securities; and no more than 25% of the value of our assets can be invested in the securities, other than U.S. government securities or securities of other RICs, of one issuer, of two or more issuers that are controlled, as determined under applicable Code rules, by us and that are engaged in the same or similar or related trades or businesses or of certain “qualified publicly traded partnerships.” Failure to meet these requirements may result in our having to dispose of certain investments quickly in order to prevent the loss of RIC status. Because most of our investments will be in private companies, and therefore will be relatively illiquid, any such dispositions could be made at disadvantageous prices and could cause us to incur substantial losses.

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may have limited financial resources, may have limited or negative EBITDA and may be unable to meet their obligations under their debt instruments that we hold, which may be accompanied by a deterioration in the value of any collateral and a reduction in the likelihood of us realizing any guarantees from subsidiaries or affiliates of our portfolio companies that we may have obtained in connection with our investments, as well as a corresponding decrease in the value of the equity components of our investments;

•

may have shorter operating histories, narrower product lines, smaller market shares and/or significant customer concentrations than larger businesses, which tend to render them more vulnerable to competitors’ actions and market conditions, as well as general economic downturns;

•

may operate in regulated industries and/or provide services to federal, state or local governments, or operate in industries that provide services to regulated industries or federal, state or local governments, any of which could lead to delayed payments for services or subject the company to changing payment and reimbursement rates or other terms;

•

may not have collateral sufficient to pay any outstanding interest or principal due to us in the event of a default by these companies;

•

are more likely to depend on the management talents and efforts of a small group of people; therefore, the death, disability, resignation or termination of one or more of these persons could have a material adverse impact on our portfolio company and, in turn, on us;

•

may have difficulty borrowing or otherwise accessing the capital markets to fund capital needs, which may be more acute because such companies are operating in the cannabis industry, and which limit their ability to grow or repay outstanding indebtedness at maturity (see “— Risks Related to the Cannabis and Hemp Industries” below);

•

may not have audited financial statements or be subject to the Sarbanes-Oxley Act and other rules that govern public companies;

•

generally have less predictable operating results, may from time to time be parties to litigation, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position; and

•

generally have less publicly available information about their businesses, operations and financial condition.

•

OID and PIK instruments may have higher yields, which reflect the payment deferral and credit risk associated with these instruments;

•

OID and PIK accruals may create uncertainty about the source of our distributions to stockholders;

•

OID and PIK instruments may have unreliable valuations because their continuing accruals require continuing judgments about the collectability of the deferred payments and the value of the collateral;

•

OID and PIK instruments may represent a higher credit risk than coupon loans; and

•

Our net investment income used to calculate the Incentive Fee on Income will include OID and PIK interest, and the Adviser is not obligated to return the Incentive Fee on Income it receives on OID and PIK interest that is later determined to be uncollectible in cash.

•

The cannabis industry is extremely speculative and raises a host of legality issues, making it subject to inherent risk;

•

The manufacture, distribution, sale, or possession of cannabis that is not in compliance with the U.S. Controlled Substances Act is illegal under U.S. federal law. Strict enforcement of U.S. federal laws regarding cannabis would likely result in our portfolio companies’ inability to execute a business plan in the cannabis industry, and could result in the loss of all or part of any of our loans;

•

The Biden Administration’s or specifically the U.S. Department of Justice’s change in policies or enforcement with respect to U.S. federal cannabis laws could negatively impact our portfolio companies’ ability to pursue their prospective business operations and/or generate revenues;

•

U.S. federal courts may refuse to recognize the enforceability of contracts pertaining to any business operations that are deemed illegal under U.S. federal law, including cannabis companies operating legally under state law;

•

Consumer complaints and negative publicity regarding cannabis-related products and services could lead to political pressure on states to implement new laws and regulations that are adverse to the cannabis industry, to not modify existing, restrictive laws and regulations, or to reverse current favorable laws and regulations relating to cannabis;

•

Assets collateralizing loans to cannabis businesses may be forfeited to the U.S. federal government in connection with government enforcement actions under U.S. federal law;

•

U.S. Food and Drug Administration regulation of cannabis and the possible registration of facilities where cannabis is grown could negatively affect the cannabis industry, which could directly affect our financial condition and the financial condition of our portfolio companies;

•

Due to our proposed strategy of investing in portfolio companies engaged in the regulated cannabis industry, our portfolio companies may have a difficult time obtaining the various insurance policies that are needed to operate such businesses, which may expose us and our portfolio companies to additional risks and financial liabilities;

•

The cannabis industry may face significant opposition from other industries that perceive cannabis products and services as competitive with their own, including but not limited to the pharmaceutical industry, adult beverage industry and tobacco industry, all of which have powerful lobbying and financial resources;

•

Many national and regional banks have been resistant to doing business with cannabis companies because of the uncertainties presented by federal law and, as a result, we or our portfolio companies may have difficulty borrowing from or otherwise accessing the service of banks, which may inhibit our ability to open bank accounts or otherwise utilize traditional banking services;

•

Due to our proposed strategy of investing in portfolio companies engaged in the regulated cannabis industry, we or our portfolio companies may have a difficult time obtaining financing in connection with our investment strategy; and

•

Laws and regulations affecting the regulated cannabis industry are varied, broad in scope and subject to evolving interpretations, and may restrict the use of the properties our portfolio companies acquire or require certain additional regulatory approvals, which could materially adversely affect our investments in such portfolio companies.

•

these companies may have limited financial resources and may be unable to meet their obligations, which may be accompanied by a deterioration in the value of any collateral securing our loan and a reduction in the likelihood of us realizing a return on our loan;

•

they typically have shorter operating histories, narrower product lines and smaller market shares than larger and more established businesses, which tend to render them more vulnerable to competitors’ actions and market conditions (including conditions in the cannabis industry), as well as general economic downturns;

•

they typically depend on the management talents and efforts of a small group of persons; therefore, the death, disability, resignation or termination of one or more of these persons could have a material adverse effect on such borrower and, in turn, on us;

•

there is generally less public information about these companies. Unless publicly traded, these companies and their financial information are generally not subject to the regulations that govern public companies, and we may be unable to uncover all material information about these companies, which may prevent us from making a fully informed lending decision and cause us to lose money on our loans;

•

they generally have less predictable operating results and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position;

•

we, our executive officers and directors and our Adviser may, in the ordinary course of business, be named as defendants in litigation arising from our loans to such borrowers and may, as a result, incur significant costs and expenses in connection with such litigation;

•

changes in laws and regulations, as well as their interpretations, may have a disproportionate adverse effect on their business, financial structure or prospects compared to those of larger and more established companies; and

•

they may have difficulty accessing capital from other providers on favorable terms or at all.

•

significant volatility in the market price and trading volume of securities of BDCs or other companies in our sector, which are not necessarily related to the operating performance of these companies;

•

inability to obtain any exemptive relief that may be required by us from the SEC, if any;

•

changes in regulatory policies, accounting pronouncements or tax guidelines, particularly with respect to RICs and BDCs;

•

loss of our BDC or RIC status;

•

changes in earnings or variations in operating results or distributions that exceed our net investment income;

•

increases in expenses associated with defense of litigation and responding to SEC inquiries;

•

changes in accounting guidelines governing valuation of our investments;

•

changes in the value of our portfolio of investments and any derivative instruments, including as a result of general economic conditions, interest rate shifts and changes in the performance of our portfolio companies;

•

any shortfall in investment income or net investment income or any increase in losses from levels expected by investors or securities analysts;

•

sales of our common stock by the Seed Investor (as defined below);

•

departure of our Adviser’s key personnel; and

•

general economic trends and other external factors, including those related to the COVID-19 pandemic.

Item 1B.

Unresolved Staff Comments

Item 2.

Properties

Item 3.

Legal Proceedings

Item 4.

Mine Safety Disclosures

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

						Price Range
Class and Period		Net Asset Value(1)				High				Low				High Sales Price Premium (Discount) to Net Asset Value(2)				Low Sales Price Premium (Discount) to Net Asset Value(2)				Cash Dividend Per Share(3)
Year Ended December 31, 2024
First Quarter (Through March 22, 2024)			*			$	10.28			$	7.65				*				*				0.25	(6)
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 the Nasdaq Global Market on February 4, 2022 under the trading symbol “SSIC.”

Declaration Date		Type		Record Date		Payment Date		Per Share Amount				Dividends Paid
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

Declaration Date		Type		Record Date		Payment Date		Shares
August 10, 2023		Quarterly		September 15, 2023		September 29, 2023			12
August 10, 2023		Special		September 15, 2023		September 29, 2023			21
November 9, 2023		Quarterly		December 20, 2023		December 29, 2023			84
November 9, 2023		Special		December 20, 2023		December 29, 2023			152

Item 6.

[Reserved]

•

the cost of our organization and offerings;

•

the cost of calculating our NAV, including the cost of any third-party valuation services;

•

the cost of effecting sales and repurchases of shares of our common stock and other securities;

•

fees and expenses payable under any underwriting agreements, if any;

•

debt service and other costs of borrowings or other financing arrangements;

•

costs of hedging;

•

expenses, including travel expenses, incurred by the Adviser, or members of the investment team, or payable to third-parties, performing due diligence on prospective portfolio companies and, if necessary, enforcing our rights;

•

management and incentive fees payable pursuant to the Investment Advisory Agreement;

•

fees payable to third-parties relating to, or associated with, making investments and valuing investments (including third-party valuation firms);

•

costs, including legal fees, associated with compliance under cannabis laws;

•

transfer agent and custodial fees;

•

fees and expenses associated with marketing efforts (including attendance at industry and investor conferences and similar events);

•

federal and state registration fees;

•

any exchange listing fees and fees payable to rating agencies;

•

federal, state and local taxes;

•

independent directors’ fees and expenses, including travel expenses;

•

cost of preparing financial statements and maintaining books and records and filing reports or other documents with the SEC (or other regulatory bodies) and other reporting and compliance costs, and the compensation of professionals responsible for the preparation of the foregoing;

•

the cost of any reports, proxy statements or other notices to our stockholders (including printing and mailing costs), the costs of any stockholder or director meetings and the compensation of investor relations personnel responsible for the preparation of the foregoing and related matters;

•

brokerage commissions and other compensation payable to brokers or dealers;

•

research and market data;

•

fidelity bond, directors’ and officers’ errors and omissions liability insurance and other insurance premiums;

•

direct costs and expenses of administration, including printing, mailing and staff;

•

fees and expenses associated with independent audits, and outside legal and consulting costs;

•

costs of winding up;

•

costs incurred in connection with the formation or maintenance of entities or vehicles to hold our assets for tax or other purposes;

•

extraordinary expenses (such as litigation or indemnification); and

•

costs associated with reporting and compliance obligations under the 1940 Act and applicable federal and state securities laws.

		December 31, 2023
Type		Amortized Cost				Fair Value
Senior Secured First Lien Term Loans			84.9	%			85.0	%
Senior Secured Notes			15.1				15.0
Total			100.0	%			100.0	%

		December 31, 2023
Geographic Region		Amortized Cost				Fair Value
West			46.5	%			46.4	%
Midwest			46.0				46.0
Northeast			7.5				7.6
Total			100.0	%			100.0	%

	December 31, 2022
Industry		Amortized Cost				Fair Value
Wholesale Trade			100.0	%			100.0	%
Total			100.0	%			100.0	%

		Year Ended December 31, 2023				Nine Months Ended December 31, 2022
Beginning Portfolio, at fair value		$	50,254,550			$	-
Purchases			8,442,000				50,362,500
Accretion of discount and fees (amortization of premium), net			810,554				165,398
PIK interest			115,725				-
Proceeds from sales of investments and principal repayments			(6,214,093	)			-
Net realized gain/(loss) on investments			(210,767	)			-
Net change in unrealized appreciation/(depreciation) on investments			922,031				(273,348	)
Ending Portfolio, at fair value		$	54,120,000			$	50,254,550

Investment Performance Risk Rating		Summary Description
Grade 1		Investments rated 1 involve the least amount of risk to our initial cost basis. The borrower is performing above expectations, and the trends and risk factors for this investment since origination or acquisition are generally favorable.  Full return of principal, interest and dividend income is expected.
Grade 2		Investment is performing in-line with expectations. Investments rated 2 involve an acceptable level of risk that is similar to the risk at the time of origination or acquisition. Risk factors remain neutral or favorable compared with initial underwriting. All investments or acquired investments in new portfolio companies are initially assessed a rating of 2.
Grade 3		Investments rated 3 involve a borrower performing below expectations and indicates that the loan’s risk has increased somewhat since origination or acquisition. Capital impairment or payment delinquency is not anticipated. The investment may also be out of compliance with certain financial covenants.
Grade 4		Investments rated 4 involve a borrower performing materially below expectations and indicates that the loan’s risk has increased materially since origination or acquisition. In addition to the borrower being generally out of compliance with debt covenants, loan payments may be past due (but generally not more than 120 days past due). Delinquency of interest and / or dividend payments in anticipated. No loss of principal is anticipated.
Grade 5		Investments rated 5 involve a borrower performing substantially below expectations and indicates that the loan’s risk has increased substantially since origination or acquisition. It is anticipated that the Company will not recoup its initial cost and may realize a loss upon exit. Most or all of the debt covenants are out of compliance and payments are substantially delinquent. Loans rated 5 are not anticipated to be repaid in full and we will reduce the fair market value of the loan to the amount we anticipate will be recovered.

			December 31, 2023
Investment Performance Risk Rating			Investments at Fair Value				Percentage of Total Investments
1			$	-				-	%
2				54,120,000				100.00
3				-				-
4				-				-
5				-				-
Total			$	54,120,000				100.00	%

		Year Ended December 31, 2023				Nine Months Ended December 31, 2022
Stated interest income		$	10,810,370			$	3,461,394
Accretion of discount and fees (amortization of premium), net			810,554				165,398
Payment in-kind interest			115,725				-
Total interest income			11,736,649				3,626,792
Other fee income			196,251				410,000
Total investment income		$	11,932,900			$	4,036,792

		Year Ended December 31, 2023				Nine Months Ended December 31, 2022				$ Change				% Change
Total operating expenses		$	5,304,056			$	1,839,805			$	3,464,251				188%

		Year Ended December 31, 2023				Nine Months Ended December 31, 2022
Total net realized gain (loss)		$	(210,767	)		$	-
Value change from previous year			(210,767	)			-
Percentage change from previous year			-				-

		Year Ended December 31, 2023				Nine Months Ended December 31, 2022
Gross unrealized appreciation		$	995,334			$	-
Gross unrealized depreciation			(73,303	)			(273,348	)
Total net change in unrealized appreciation (depreciation) from investments		$	922,031			$	(273,348	)

		Year Ended December 31, 2023				Nine Months Ended December 31, 2022
Verano Holdings Corp.		$	475,172			$	-
STIIIZY, Inc. (f/k/a Shryne Group Inc.)			278,258				(211,281	)
Curaleaf Holdings, Inc.			150,678				-
Dreamfields Brands, Inc.   (d/b/a Jeeter)			91,226				-
PharmaCann, Inc.			(73,303	)			(62,067	)
Total net change in unrealized appreciation (depreciation) on investments		$	922,031			$	(273,348	)

•

With respect to investments for which market quotations are readily available, those investments will typically be valued at the bid price of those market quotations;

•

With respect to investments for which market quotations are not readily available, the valuation process begins with the Adviser’s valuation committee establishing a preliminary valuation of each investment, which may be based on valuations, or ranges of valuations, provided by independent valuation firm(s);

•

Preliminary valuations  are documented and discussed by the Adviser’s valuation committee and, where appropriate, the independent valuation firm(s); and

•

The Adviser determines the fair value of each investment.

•

Level 1 – Valuations based on quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date;

•

Level 2 – Valuations based on quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or for which all significant inputs are observable, either directly or indirectly; and

•

Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Change in Interest Rates		Interest Income				Interest expense				Net Income/(Loss)
Up 300 basis points		$	1,390			$	-			$	1,390
Up 200 basis points			926				-				926
Up 100 basis points			463				-				463
Down 100 basis points			(463	)			-				(463	)
Down 200 basis points			(883	)			-				(883	)
Down 300 basis points			(1,146	)			-				(1,146	)

Change in Interest Rates		Interest Income				Interest expense				Net Income/(Loss)
Up 300 basis points		$	1,260			$	-			$	1,260
Up 200 basis points			840				-				840
Up 100 basis points			420				-				420
Down 100 basis points			(420	)			-				(420	)
Down 200 basis points			(683	)			-				(683	)
Down 300 basis points			(893	)			-				(893	)