Chicago Atlantic Real Estate Finance, Inc. Q4 FY2025 earnings call

• Chicago Atlantic operates in real estate, credit, and U.S. cannabis industry, focusing on best-in-class sector expertise, relationship-based sourcing, and credit/real estate investment principles. - Portfolio has limited overlap with other private credit markets, with no exposure to certain sectors and no over-allocation of capital. - Pipeline stands at $616 million, with examples like closing a credit facility for the largest cannabis ESOP. - Discussed portfolio structure including fixed and floating rate loans, leverage at 32% of book equity as of Dec 31, and real estate coverage of 1.2 times. - Team of originators and underwriters with deep industry and risk management expertise, working collaboratively with borrowers to create value.

Loan portfolio principal totaled approximately $411 million across 26 portfolio companies as of December 31, with a weighted average yield to maturity of 16.3% (compared to 16.5% in Q3). As of Dec 31, 37.6% were fixed rate loans and 62.4% were floating rate loans (benchmarked to prime rate). Net interest income for Q4 was $14.2 million (4% increase from Q3). Distributable earnings per weighted average share for Q4 were approximately 44 cents (basic) and 43 cents (fully diluted), and $1.92 and $1.88 respectively for the year. Book value per common share outstanding was $14.60 as of Dec 31, 2025, with ~21.5 million common shares outstanding on a fully diluted basis. From Jan 1, 2026 through the call, advanced new gross loan principle of ~$51.1 million and received $40.4 million in loan repayments.

• Targeting net portfolio growth for 2026. - Expect to maintain dividend payout ratio based on basic distributable earnings per share of 90 to 100% for 2026 tax year. - If taxable income requires additional distributions beyond regular quarterly dividend, expect a special dividend in Q4.

• Forward-looking statements subject to risks and uncertainties causing actual results to differ. - Pipeline repayments difficult to forecast. - Arizona having a challenging pricing environment for certain borrowers.

Q: Regarding pipeline, line of sight on originations fruition and net portfolio growth; outlook on current yields for pipeline deals and rescheduling impact on rate negotiations.

A: Targeting net portfolio growth, $50 million liquidity available, but repayments hard to forecast. Rescheduling drives demand but hasn't changed pricing or underwriting.

Q: On regulatory reform, whether no increased competition is current or assumes Schedule III finalized; what would increase competition.

A: No new lenders due to rescheduling yet. Full legalization, regulatory framework for Schedule III, cannabis companies listed on exchanges, and broader financial ecosystem opening up would increase competition.

Q: On loan number nine, logic of lending more to troubled borrower; early repayments on loan number one and 27; pipeline increase vs risk evaluation.

A: Loan number nine is an opportunity, borrower made Jan and Feb payments recognized on cash basis. Loan one refinanced with new credit facility, loan 27 paid off with some decisions. Pipeline is opportunity set, rescheduling hasn't changed underwriting standards.

Q: On cash flow and tax perspective despite rescheduling; comment on practical impact.

A: Focus on unpaid taxes in underwriting, rescheduling leading to credit improvement as taxes no longer accrued go-forward.