Chicago Atlantic Real Estate Finance, Inc. Q1 FY2025 earnings call

• Chicago Atlantic places credit and collateral first in cannabis lending, underwriting with federal regulatory uncertainty in mind. • Cannabis pipeline stands at $462 million, with deployments expected to accelerate in Q2 and Q3 2025. • Portfolio positioned to handle interest rate volatility with mix of fixed and floating rate loans. • Loan number 9 was restructured, including foreclosure proceeds, new loans acquired, and CECL reserve reversed. • Net interest income decreased due to lower fees and prime rate decrease. • CECL reserve reduced due to loan 9 restructuring. • ~$1 million net proceeds from equity issuance via ATM program. • Dividend payout ratio expected to be 90%-100% of distributable earnings for 2025 tax year.

As of March 31, the loan portfolio principal totaled $407 million across 30 portfolio companies with a weighted average yield to maturity of 16.9% (down from 17.2% due to loan restructuring). Gross originations during the quarter were $4.4 million, with $0.5 million to new borrowers and $3.9 million to existing borrowers on delayed draw term loan facilities, offset by sales and repayments of $9.2 million. The portfolio had 71.2% fixed rate loans and 28.8% floating rate with floors. Leverage was 28% of book equity (down from 34% in Q4 2024). Debt service coverage ratio was ~6.2 to 1. Liquidity was $65 million as of March 31, 2025. Loan number 9 was restructured, with proceeds distributed, new loans acquired, and CECL reserve reversed. Net interest income was $13 million (down from $14.1 million), interest expense was ~$2.1 million (consistent with Q4 2024). CECL reserve was $3.3 million (down from $4.4 million due to loan 9 reversal). Book value was $14.87 per share as of March 31, 2025, and distributable earnings were ~$0.47 per share. A dividend of $0.47 per common share was paid in April.

• Aim to achieve net portfolio growth in 2025. • Expect deployments to accelerate in Q2 and Q3 2025. • Dividend payout ratio expected to be 90%-100% of basic distributable earnings for 2025 tax year, with possible special dividend in Q4 if needed.

• Volatility in cannabis equity markets due to federal regulatory uncertainty. • Uncertainty around rescheduling of cannabis and its impact on business. • Dependence on specific market conditions and new entrants to the cannabis lending space. • Interest rate volatility affecting portfolio performance. • Regulatory uncertainties, including past due tax liabilities and rescheduling outcomes.

Q: About near-term pipeline, types of opportunities, CapEx vs M&A A: Peter Sack said the pipeline is $462 million, deployments expected to accelerate in Q2 and Q3, generally related to CapEx Q: Pricing assumptions in underwriting A: Peter Sack mentioned pricing evolves with state development, and they've reduced exposure to states like Massachusetts with pricing pressure Q: Visibility on repayments, net portfolio growth in 2025, impact of rescheduling A: Peter Sack said aim for net portfolio growth, rescheduling would increase after-tax cash flow, downside protection, and equity value, but new entrants may take time Q: Impact of rescheduling on yields and leverage A: Peter Sack said rescheduling could lead to more expansion, but new entrants needed for yield compression Q: Unfunded commitments, parallel with sell-lease back, allocation process of pipeline A: Phillip Silverman said unfunded commitments were ~$19.8 million, each fund is equal fiduciary, opportunities allocated based on vehicle requirements