UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 2.02 Results of Operations and Financial Condition.
On March 12, 2024, Chicago Atlantic Real Estate Finance, Inc. (the “Company”) issued a press release announcing its financial results for the fourth quarter and year ended December 31, 2023. The text of the press release is included as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.
The information set forth under this Item 2.02, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information set forth under this Item 2.02, including Exhibit 99.1, shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, unless it is specifically incorporated by reference therein.
Item 7.01 Regulation FD Disclosure.
On March 12, 2024, the Company disseminated a presentation to be used in connection with its conference call to discuss its financial results for the fourth quarter and year ended December 31, 2023, which will be held on Tuesday, March 12, 2024 at 9:00 a.m. (eastern time). A copy of the presentation has been posted to the Company’s Investor Relations page of its website and is included herewith as Exhibit 99.2, and by this reference incorporated herein.
The information disclosed under this Item 7.01, including Exhibit 99.2 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information provided herein shall not be deemed incorporated by reference into any filing made under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
d) Exhibits.
| Exhibit Number |
Description | |
| 99.1 | Press release, dated March 12, 2024. | |
| 99.2 | Fourth Quarter 2023 Earnings Supplemental Presentation, dated March 12, 2024. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.
| CHICAGO ATLANTIC REAL ESTATE FINANCE, INC. | |||
| Date: March 12, 2024 | By: | /s/ Peter Sack | |
| Name: | Peter Sack | ||
| Title: | Co-Chief Executive Officer | ||
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Exhibit 99.1
Chicago Atlantic Real Estate Finance Announces Fourth Quarter 2023 Financial Results
CHICAGO— (March 12, 2024) Chicago Atlantic Real Estate Finance, Inc. (NASDAQ: REFI) (“Chicago Atlantic” or the “Company”), a commercial mortgage real estate investment trust, today announced its results for the fourth quarter and year ended December 31, 2023.
John Mazarakis, Executive Chairman of Chicago Atlantic noted, “The improvement in the regulatory landscape has fed new investment opportunities for us while significantly improving the equity value of many of our borrowers. In addition, the wall of debt maturities we have anticipated among the larger cannabis operators is beginning to occur, with early indications this opportunity could be as meaningful over the next 12 to 18 months as we have previously predicted. We intend to utilize our direct lending expertise and leading platform in the cannabis space to continue to position us in front of these trends driving the improved sentiment and growth in the industry.”
Tony Cappell, Co-Chief Executive Officer, added, “With our continued growth in gross loan originations, increase in our weighted average yield to maturity to 19.4% and the improving credit quality of our operators, our diligent underwriting process and dedicated originations team has helped position us to remain selective in putting our capital to work. The recent extension of our credit facility until June 2026 with an increase in the accordion feature up to $150 million should help us execute on additional opportunities within our pipeline.”
Chicago Atlantic also announced two promotions among its senior management team. Peter Sack, formerly Co- President, has been promoted to Co-Chief Executive Officer alongside Tony Cappell. Phil Silverman, formerly Interim Chief Financial Officer, has been promoted to Chief Financial Officer. Both promotions were effective on March 7, 2024.
Portfolio Performance
| ● | As of December 31, 2023, total loan commitments of approximately $378.8 million ($371.3 million funded, $7.5 million in future fundings) across 27 portfolio investments. |
| ● | Weighted average yield to maturity was approximately 19.4% as of December 31, 2023 compared with approximately 19.3% as of September 30, 2023. |
| ● | Real estate collateral coverage was 1.5x as of December 31, 2023 and September 30, 2023. |
| ● | Loan to enterprise value (calculated as outstanding principal balance divided by total value of collateral on a weighted average basis) was approximately 44.1% as of December 31, 2023 compared with approximately 42.5% as of September 30, 2023. |
| ● | The percentage of loans which bear a variable interest rate was approximately 81% as of September 30, 2023 and December 31, 2023. |
Investment Activity
| ● | During the fourth quarter, Chicago Atlantic had total gross originations of $24.7 million, of which $8.6 million and $16.1 million was funded to new borrowers and existing borrowers, respectively. |
| ● | New originations were partially offset by principal repayments of $13.7 million, of which $10.9 million was attributable to unscheduled early repayments. |
| ● | During the fourth quarter, non-recurring fee income collected from early principal repayments was $1.8 million, compared with $0.7 million for the third quarter. |
Capital Activity and Dividends
| ● | On February 28, 2024, Chicago Atlantic amended its $100.0 million secured revolving credit facility, without any other change in terms or structure, to extend the maturity date to June 2026 with a one-year extension option, subject to customary conditions. The amendment also increased the accordion feature of the secured revolving credit facility to facilitate additional commitments up to $150.0 million. |
| ● | As of December 31, 2023, the Company had $66.0 million outstanding on its secured revolving credit facility, resulting in a leverage ratio (debt to book equity) of approximately 24%. |
| ● | As of March 11, 2024, the Company has $94.0 million outstanding, and total liquidity, net of estimated liabilities, of approximately $10 million. |
| ● | On January 12, 2024, Chicago Atlantic paid a regular quarterly cash dividend of $0.47 per share of common stock for the fourth quarter of 2023 to common stockholders of record on December 29, 2023. |
| ● | On January 12, 2024, Chicago Atlantic also paid a special cash dividend of $0.29 per share of common stock, which was included in the fiscal 2023 taxable income, to common stockholders of record on December 29, 2023. |
Fourth Quarter 2023 Financial Results
| ● | Net interest income of approximately $14.8 million, a sequential increase of 8.0% compared with the third quarter of 2023. Interest income included approximately $1.8 million of interest income from prepayment fees and acceleration of original issue discounts. These increases were offset by an increase in weighted average borrowings on the revolving credit facility contributing to a sequential increase in interest expense of approximately $0.2 million. |
| ● | Total expenses of approximately $5.8 million before provision for current expected credit losses, which is an increase when compared with the third quarter of 2023; primarily attributable to the $1.6 million increase in net management and incentive fees.. |
| ● | The total reserve for current expected credit losses of $5.0 million decreased sequentially by $0.2 million and amounts to approximately 1.4% of the portfolio principal balance of $355.7 million as of December 31, 2023. |
| ● | Net income of approximately $9.4 million, or $0.51 per weighted average diluted share, representing a sequential decrease of 5.8%, primarily due to the aforementioned increase in net management and incentive fees. |
| ● | Distributable Earnings of approximately $9.8 million, or $0.53 per weighted average diluted common share, representing a sequential decrease of 7.0%. |
| ● | Book value per common share decreased sequentially by 1.5% to $14.94 as of December 31, 2023 compared with $15.17 as of September 30, 2023, primarily due to the special dividend of $0.29 per share declared in the fourth quarter. |
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Full Year 2023 Financial Results
| ● | Net interest income of approximately $57.1 million, representing a year-over-year increase of 17.0%. |
| ● | Total expenses of approximately $17.7 million before provision for current expected credit losses, representing a year-over-year increase of 39.4%. |
| ● | Net Income of approximately $38.7 million, or $2.11 per weighted average diluted common share. |
| ● | Distributable Earnings of approximately $41.5 million, or $2.26 per weighted average diluted common share, representing a year-over-year increase of 7.6%. |
| ● | The Company declared a total of $2.17 in dividends per common share during 2023, compared to $2.10 during 2022, an increase of approximately 3.3% year over year. Total 2023 dividends included regular quarterly dividends totaling $1.88 per diluted share and a special dividend of $0.29 per diluted share. |
| ● | Book value per common share increased from $14.86 as of December 31, 2022 to $14.94 as of December 31, 2023. |
2024 Outlook
Chicago Atlantic offered the following outlook for full year 2024:
| ● | The Company expects to maintain a dividend payout ratio based on Distributable Earnings per weighted average diluted share of approximately 90% to 100% on a full year basis. |
| ● | If the Company’s taxable income requires additional distribution in excess of the regular quarterly dividend, in order to meet its 2024 taxable income distribution requirements, the Company expects to meet that requirement with a special dividend in the fourth quarter of 2024. |
This outlook does not include additional adjustments to the Prime rate subsequent to the date hereof or the impact of any unscheduled loan principal repayments.
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Conference Call and Quarterly Earnings Supplemental Details
The Company will host a conference call later today at 9:00 a.m. Eastern Time. Interested parties may access the conference call live via webcast on Chicago Atlantic’s investor relations website or may participate via telephone by registering using this online form. Upon registration, all telephone participants will receive the dial-in number along with a unique PIN number that can be used to access the call. A replay of the conference call webcast will be archived on the Company’s website for at least 30 days.
Chicago Atlantic posted its Fourth Quarter 2023 Earnings Supplemental on the Investor Relations page of its website. Chicago Atlantic routinely posts important information for investors on its website, www.refi.reit. The Company intends to use this website as a means of disclosing material information, for complying with our disclosure obligations under Regulation FD and to post and update investor presentations and similar materials on a regular basis. The Company encourages investors, analysts, the media and others interested in Chicago Atlantic to monitor the Investor Relations page of its website, in addition to following its press releases, SEC filings, publicly available earnings calls, presentations, webcasts and other information posted from time to time on the website. Please visit the IR Resources section of the website to sign up for email notifications.
About Chicago Atlantic Real Estate Finance, Inc.
Chicago Atlantic Real Estate Finance, Inc. (NASDAQ: REFI) is a market-leading commercial mortgage REIT utilizing significant real estate, credit and cannabis expertise to originate senior secured loans primarily to state-licensed cannabis operators in limited-license states in the United States. REFI is part of the Chicago Atlantic platform, which has over 70 employees and has deployed over $2.0 billion across more than 70 loans.
Forward-Looking Statements
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect our current views and projections with respect to, among other things, future events and financial performance. Words such as “believes,” “expects,” “will,” “intends,” “plans,” “guidance,” “estimates,” “projects,” “anticipates,” and “future” or similar expressions are intended to identify forward- looking statements. These forward-looking statements, including statements about our future growth and strategies for such growth, are subject to the inherent uncertainties in predicting future results and conditions and are not guarantees of future performance, conditions or results. More information on these risks and other potential factors that could affect our business and financial results is included in our filings with the SEC. New risks and uncertainties arise over time, and it is not possible to predict those events or how they may affect us. We do not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Contact:
Tripp Sullivan
SCR Partners
IR@REFI.reit
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CHICAGO ATLANTIC REAL ESTATE FINANCE, INC.
CONSOLIDATED BALANCE SHEETS
December 31, 2023 | December 31, 2022 | |||||||
| Assets | ||||||||
| Loans held for investment | $ | 337,238,122 | $ | 339,273,538 | ||||
| Loans held for investment - related party (Note 7) | 16,402,488 | - | ||||||
| Loans held for investment, at carrying value | 353,640,610 | 339,273,538 | ||||||
| Current expected credit loss reserve | (4,972,647 | ) | (3,940,939 | ) | ||||
| Loans held for investment at carrying value, net | 348,667,963 | 335,332,599 | ||||||
| Cash and cash equivalents | 7,898,040 | 5,715,827 | ||||||
| Debt securities, at fair value | 842,269 | - | ||||||
| Interest receivable | 1,004,140 | 1,204,412 | ||||||
| Other receivables and assets, net | 705,960 | 1,018,212 | ||||||
| Related party receivables | 107,225 | - | ||||||
| Total Assets | $ | 359,225,597 | $ | 343,271,050 | ||||
| Liabilities | ||||||||
| Revolving loan | $ | 66,000,000 | $ | 58,000,000 | ||||
| Dividend payable | 13,866,656 | 13,618,591 | ||||||
| Management and incentive fees payable | 3,243,775 | 3,295,600 | ||||||
| Related party payables | 2,051,531 | 1,397,515 | ||||||
| Accounts payable and other liabilities | 1,135,355 | 1,058,128 | ||||||
| Interest reserve | 1,074,889 | 1,868,193 | ||||||
| Total Liabilities | 87,372,206 | 79,238,027 | ||||||
| Commitments and contingencies (Note 8) | ||||||||
| Stockholders’ equity | ||||||||
| Common stock, par value $0.01 per share, 100,000,000 shares authorized and 18,197,192 and 17,685,952 shares issued and outstanding, respectively | 181,972 | 176,859 | ||||||
| Additional paid-in-capital | 277,483,092 | 268,995,848 | ||||||
| Accumulated deficit | (5,811,673 | ) | (5,139,684 | ) | ||||
| Total stockholders’ equity | 271,853,391 | 264,033,023 | ||||||
| Total liabilities and stockholders’ equity | $ | 359,225,597 | $ | 343,271,050 | ||||
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CHICAGO ATLANTIC REAL ESTATE FINANCE, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
| For the three months ended | ||||||||||||
December 31, 2023 | September 30, 2023 | December 31, 2022 | ||||||||||
| Revenues | ||||||||||||
| Interest income | $ | 16,530,028 | $ | 15,183,450 | $ | 15,993,588 | ||||||
| Interest expense | (1,690,543 | ) | (1,449,143 | ) | (1,230,966 | ) | ||||||
| Net interest income | 14,839,485 | 13,734,307 | 14,762,622 | |||||||||
| Expenses | ||||||||||||
| Management and incentive fees, net | 3,243,775 | 1,601,387 | 3,295,600 | |||||||||
| General and administrative expense | 1,426,554 | 1,251,307 | 1,118,171 | |||||||||
| Professional fees | 555,623 | 491,107 | 502,355 | |||||||||
| Stock based compensation | 537,131 | 540,426 | 107,267 | |||||||||
| Provision for current expected credit losses | (253,495 | ) | (41,351 | ) | 2,483,512 | |||||||
| Total expenses | 5,509,588 | 3,842,876 | 7,506,905 | |||||||||
| Change in unrealized gain on debt securities, at fair value | (37,163 | ) | 85,567 | - | ||||||||
| Realized gain on debt securities, at fair value | 104,789 | - | - | |||||||||
| Net Income before income taxes | 9,397,523 | 9,976,998 | 7,255,717 | |||||||||
| Income tax expense | - | - | - | |||||||||
| Net Income | $ | 9,397,523 | $ | 9,976,998 | $ | 7,255,717 | ||||||
| Earnings per common share: | ||||||||||||
| Basic earnings per common share | $ | 0.52 | $ | 0.55 | $ | 0.41 | ||||||
| Diluted earnings per common share | $ | 0.51 | $ | 0.54 | $ | 0.41 | ||||||
| Weighted average number of common shares outstanding: | ||||||||||||
| Basic weighted average shares of common stock outstanding | 18,182,403 | 18,175,467 | 17,657,913 | |||||||||
| Diluted weighted average shares of common stock outstanding | 18,564,530 | 18,562,930 | 17,742,065 | |||||||||
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Distributable Earnings and Adjusted Distributable Earnings
In addition to using certain financial metrics prepared in accordance with GAAP to evaluate our performance, we also use Distributable Earnings and Adjusted Distributable Earnings to evaluate our performance. Each of Distributable Earnings and Adjusted Distributable Earnings is a measure that is not prepared in accordance with GAAP. We define Distributable Earnings as, for a specified period, the net income (loss) computed in accordance with GAAP, excluding (i) non-cash equity compensation expense, (ii) depreciation and amortization, (iii) any unrealized gains, losses or other non-cash items recorded in net income (loss) for the period, regardless of whether such items are included in other comprehensive income or loss, or in net income (loss); provided that Distributable Earnings does not exclude, in the case of investments with a deferred interest feature (such as OID, debt instruments with PIK interest and zero coupon securities), accrued income that we have not yet received in cash, (iv) provision for current expected credit losses and (v) one-time events pursuant to changes in GAAP and certain non-cash charges, in each case after discussions between our Manager and our independent directors and after approval by a majority of such independent directors. We define Adjusted Distributable Earnings, for a specified period, as Distributable Earnings excluding certain non-recurring organizational expenses (such as one- time expenses related to our formation and start-up).
We believe providing Distributable Earnings and Adjusted Distributable Earnings on a supplemental basis to our net income as determined in accordance with GAAP is helpful to stockholders in assessing the overall performance of our business. As a REIT, we are required to distribute at least 90% of our annual REIT taxable income and to pay tax at regular corporate rates to the extent that we annually distribute less than 100% of such taxable income. Given these requirements and our belief that dividends are generally one of the principal reasons that stockholders invest in our common stock, we generally intend to attempt to pay dividends to our stockholders in an amount equal to our net taxable income, if and to the extent authorized by our Board. Distributable Earnings is one of many factors considered by our Board in authorizing dividends and, while not a direct measure of net taxable income, over time, the measure can be considered a useful indicator of our dividends.
In our Annual Report on Form 10-K, we defined Distributable Earnings so that, in addition to the exclusions noted above, the term also excluded from net income Incentive Compensation paid to our Manager. We believe that revising the term Distributable Earnings so that it is presented net of Incentive Compensation, while not a direct measure of net taxable income, over time, can be considered a more useful indicator of our ability to pay dividends. This adjustment to the calculation of Distributable Earnings has no impact on period-to-period comparisons.
Distributable Earnings and Adjusted Distributable Earnings should not be considered as substitutes for GAAP net income. We caution readers that our methodology for calculating Distributable Earnings and Adjusted Distributable Earnings may differ from the methodologies employed by other REITs to calculate the same or similar supplemental performance measures, and as a result, our reported Distributable Earnings and Adjusted Distributable Earnings may not be comparable to similar measures presented by other REITs.
7
| For the year ended | (Unaudited) | |||||||||||||||
| December 31, 2023 | December 31, 2022 | December 31, 2023 | September 30, 2023 | |||||||||||||
| Net Income | $ | 38,710,248 | $ | 32,292,477 | $ | 9,397,523 | $ | 9,976,998 | ||||||||
| Adjustments to net income | ||||||||||||||||
| Stock based compensation | 1,479,736 | 435,623 | 537,131 | 540,426 | ||||||||||||
| Amortization of debt issuance costs | 550,906 | 563,464 | 145,128 | 146,676 | ||||||||||||
| Provision for current expected credit losses | 940,385 | 3,887,405 | (253,495 | ) | (41,351 | ) | ||||||||||
| Change in unrealized gain on debt securities, at fair value | (75,604 | ) | - | 37,163 | (85,567 | ) | ||||||||||
| Realized gain on debt securities, at fair value | (104,789 | ) | - | (104,789 | ) | - | ||||||||||
| Distributable Earnings | $ | 41,500,882 | $ | 37,178,969 | $ | 9,758,661 | $ | 10,537,182 | ||||||||
| Adjustments to Distributable Earnings | - | - | ||||||||||||||
| Adjusted Distributable Earnings | $ | 41,500,882 | $ | 37,178,969 | $ | 9,758,661 | $ | 10,537,182 | ||||||||
| Basic weighted average shares of common stock outstanding (in shares) | 18,085,088 | 17,653,765 | 18,182,403 | 18,175,467 | ||||||||||||
| Adjusted Distributable Earnings per Weighted Average Share | $ | 2.30 | $ | 2.11 | $ | 0.54 | $ | 0.58 | ||||||||
| Diluted weighted average shares of common stock outstanding (in shares) | 18,343,725 | 17,746,214 | 18,564,530 | 18,562,930 | ||||||||||||
| Adjusted Distributable Earnings per Weighted Average Share | $ | 2.26 | $ | 2.10 | $ | 0.53 | $ | 0.57 | ||||||||
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Exhibit 99.2
Fourth Quarter 2023 Earnings Supplemental March 12, 2024
This presentation contains forward - looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995 , regarding future events and the future results of the Company that are based on current expectations, estimates, forecasts, projections about the industry in which the Company operates and the beliefs and assumptions of the management of the Company . Words such as “address,” “anticipate,” “believe,” “consider,” “continue,” “develop,” “estimate,” “expect,” “further,” “goal,” “intend,” “may,” “plan,” “potential,” “project,” “seek,” “should,” “target,” “will,” variations of such words and similar expressions are intended to identify such forward - looking statements . Such statements reflect the current views of the Company and its management with respect to future events and are subject to certain risks, uncertainties and assumptions . Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, the Company’s actual results, performance or achievements could differ materially from the results expressed in, or implied by, these forward - looking statements . This presentation has been prepared by the Company based on information it has obtained from sources it believes to be reliable . Summaries of documents contained in this presentation may not be complete . The Company does not represent that the information herein is complete . The information in this presentation is current only as of December 31 , 2023 , or such other date noted in this presentation, and the Company’s business or financial condition and other information in this presentation may change after that date . The Company undertakes no obligation to update any forward - looking statements in order to reflect any event or circumstance occurring after the date of this presentation or currently unknown facts or conditions . You are urged to review and carefully consider any cautionary statements and other disclosures, including the statements under the heading “Risk Factors” and elsewhere in the Company’s filings with the Securities and Exchange Commission . Factors that may cause actual results to differ materially from current expectations include, among others : the Company’s business and investment strategy ; the impact of COVID - 19 on the Company’s business and the global economy ; the war between Russia and the Ukraine and market volatility resulting from such conflict ; the ability of Chicago Atlantic REIT Manager, LLC (the “Manager”) to locate suitable loan opportunities for the Company, monitor and actively manage the Company’s loan portfolio and implement the Company’s investment strategy ; allocation of loan opportunities to the Company by the Manager ; the Company’s projected operating results ; actions and initiatives of the U . S . or state governments and changes to government policies and the execution and impact of these actions, initiatives and policies, including the fact that cannabis remains illegal under federal law ; the estimated growth in and evolving market dynamics of the cannabis market ; the demand for cannabis cultivation and processing facilities ; shifts in public opinion regarding cannabis ; the state of the U . S . economy generally or in specific geographic regions ; economic trends and economic recoveries ; the amount and timing of the Company’s cash flows, if any, from the Company’s loans ; the Company’s ability to obtain and maintain financing arrangements ; the Company’s expected leverage ; changes in the value of the Company’s loans ; the Company’s expected portfolio of loans ; the Company’s expected investment and underwriting process ; rates of default or decreased recovery rates on the Company’s loans ; the degree to which any interest rate or other hedging strategies may or may not protect the Company from interest rate volatility ; changes in interest rates and impacts of such changes on the Company’s results of operations, cash flows and the market value of the Company’s loans ; interest rate mismatches between the Company’s loans and the Company’s borrowings used to fund such loans ; the departure of any of the executive officers or key personnel supporting and assisting the Company from the Manager or its affiliates ; impact of and changes in governmental regulations, tax law and rates, accounting guidance and similar matters ; the Company’s ability to maintain the Company’s exclusion or exemption from registration under the Investment Company Act ; the Company’s ability to qualify and maintain the Company’s qualification as a REIT for U . S . federal income tax purposes ; estimates relating to the Company’s ability to make distributions to its stockholders in the future ; the Company’s understanding of its competition ; and market trends in the Company’s industry, interest rates, real estate values, the securities markets or the general economy . Market and Industry Data In this presentation, the Company relies on and refers to certain information and statistics obtained from third - party sources which it believes to be reliable, including reports by market research firms . The Company has not independently verified the accuracy or completeness of any such third - party information . Because the cannabis industry is relatively new and rapidly evolving, such market and industry data may be subject to significant change in a relatively short time period . Chicago Atlantic Real Estate Finance, Inc. | 2 Important Disclosure Information
▪ Successful IPO in December 2021 (NASDAQ: REFI) ▪ Track record of identifying market inefficiencies, particularly where risk is fundamentally mispriced ▪ Ability to redeploy capital quickly ▪ Access to Sponsor’s leading cannabis lending platform as lead or co - lead ▪ Proprietary sourcing network and direct originations team ▪ Experienced and robust origination team responsible for sourcing and closing over $2.0B in credit facilities since 2019 ▪ Sizable and growing loan portfolio offering compelling risk - adjusted returns ▪ Diversified across operators, geographies and asset types with strong real estate collateral coverage as well as additional collateral Chicago Atlantic Real Estate Finance, Inc. | 3 Company Overview ~$620mm near - term pipeline under evaluation (1) $2.0B+ in loans closed since platform inception (1) 70+ cannabis loans closed across platform (1) $378.8mm current commitments (2) with substantial pipeline 19.4% gross portfolio yield (2) 1.5x real estate collateral coverage in current portfolio (2) Note: (1) As of March 1, 2024, includes potential syndications. (2) As of December 31, 2023
Investment Highlights Pioneer in cannabis lending with first - mover advantage Proprietary and extensive deal sourcing capabilities Differentiated investment approach Compelling opportunity in rapidly growing cannabis market Lender of choice to leading cannabis operators Chicago Atlantic Real Estate Finance, Inc. | 4
Industry - Leading Management and Investment Team Deep Cannabis, Credit and Real Estate Expertise With Entrepreneurial Approach Peter Sack (1) Co - CEO ▪ Former Principal at BC Partners Credit, leading their cannabis practice ▪ Former private equity investor, focusing on distressed industrial opportunities ▪ MBA from University of Pennsylvania’s Wharton School of Business and BA from Yale University Phil Silverman CFO ▪ Finance and accounting expert, with over 10 years of experience, focusing on financial reporting, operations, and internal controls within the asset management industry ▪ Previously served as CFO of Chicago Atlantic Group, LLC., the Company’s Sponsor, since January 2021 ▪ B.S in Finance from Indiana University and is CPA certified Andreas Bodmeier (1) President and CIO ▪ Underwritten over $500mm in cannabis credit transactions ▪ Former Principal of consulting firm focused on FX and commodity risk management ▪ Former Senior Advisor, U.S. Dept. of Health and Human Services ▪ PhD in Finance and MBA from Chicago Booth and MSc from Humboldt University (Berlin) John Mazarakis (1) Executive Chairman ▪ Originated over $500mm in cannabis credit transactions ▪ Developed and owns over 1mm sf of real estate across 4 states ▪ Founded restaurant group with 30 + units and 1 , 200 + employees ▪ MBA from Chicago Booth and BA from University of Delaware Tony Cappell (1) Co - CEO ▪ Debt investor with over 15 years of experience, beginning at Wells Fargo Foothill ▪ Completed over 150 deals, comprising over $5bn in total credit ▪ Former Managing Director and Head of Underwriting at Stonegate Capital ▪ MBA from Chicago Booth and BA from University of Wisconsin 1 0 0 Y E AR S O F CO M BI N E D E X P E R I E N C E AND O V E R $ 8 BI L L I O N I N RE AL E S T AT E A ND C O M M E RCI A L C RE DI T Note: (1) Denotes member of Investment Committee Chicago Atlantic Real Estate Finance, Inc. | 5
Veteran Independent Directors Significant Public Board, REIT, Financial and Corporate Governance Expertise Michael Steiner ▪ Current investor in Chicago Atlantic ▪ Founder and President of Service Energy and Petroleum Equipment, which are engaged in distribution of petroleum products ▪ Expert in highly regulated industries ▪ BA in History from Wake Forest University and MBA from University of Delaware Donald Gulbrandsen ▪ Current investor in Chicago Atlantic ▪ Founder and CEO of Gulbrandsen Companies, a holding company for specialty chemical manufacturing companies ▪ Products sold in over 45 countries ▪ Over 900 employees in 7 facilities worldwide ▪ BS in Chemical Engineering and BA in History from Cornell University Brandon Konigsberg ▪ Former CFO at J.P. Morgan Securities and Managing Director at JPMorgan Chase ▪ Current member of board of directors of GTJ REIT, SEC - registered equity REIT ▪ Former auditor at Goldstein, Golub and Kessler ▪ CPA and BA in Accounting from University of Albany and MBA from New York University’s Stern School of Business Jason Papastavrou ▪ Lead Independent Director ▪ Founder and CIO of ARIS Capital Management ▪ Current member of board of directors of GXO Logistics (NYSE:GXO); and, previous board member of XPO Logistics (NYSE:XPO) and United Rentals (NYSE:URI) ▪ BS in Mathematics and MS and PhD in Electrical Engineering and Computer Science from MIT Fredrick C. Herbst ▪ Audit Committee Chair ▪ Former CFO of Ready Capital (NYSE:RC) and Arbor Realty Trust (NYSE:ABR), two publicly traded, commercial mortgage REITs ▪ Former Managing Director of Waterfall Asset Management ▪ Former CFO of Clayton Holdings and The Hurst Companies ▪ CPA and BA in Accounting from Wittenberg University Chicago Atlantic Real Estate Finance, Inc. | 6
Investment Portfolio Activity $336.3 $313 .7 $315 .6 $344.7 $371 .3 $15.0 $14.2 $13.6 $11 .2 $7 .5 Q4 2022 Q1 2023 Q4 2023 Q2 2023 Q3 2023 Drawn Future Funding C OMMIT ME N T S (in millions) $ 351.3 $ 327.9 $ 329.2 $ 355.9 Weighted average yield to maturity of ~19.4% as of December 31, 2023 $378 .8 Chicago Atlantic Real Estate Finance, Inc. | 7
Portfolio Diversification Our portfolio is diversified across operators, geographies, and asset types P RI N CI P A L O UT S T AN D I NG ( 1 ) By Loan By Location 71 . 0% 7 . 3% 2 . 7% 18 . 9% R e t a il/ I n du st r i al Retail None I nd u s t r i al By Real Estate Collateral Type $356M Note: (1) As of December 31, 2023 16% 15% 14% 8% 7% 7% 7% 6% 6% 4% 2% 2% 0% 3% 3% Michigan Florida Illinois Arizona P en n s ylv an i a Massachusetts N e v ada Oregon Maryland Ohio Missouri New York Nebraska West Virginia Connecticut $356M 40 . 8% 25 . 7% 33 . 4% Top 5 Loans Next 5 Loans Remaining Loans Top 10 Loans = 66.6% of principal outstanding Chicago Atlantic Real Estate Finance, Inc. | 8 W A Loan Size = 5.8%
Portfolio Diversity (Continued) Our portfolio is diversified across operators, geographies, and asset types P RI N CI P A L O UT S T AN D I NG 1 By Operator Integration By Construction Component 2 1 . 0% 99 . 0% Construction No Construction $356M Note: (1) As of December 31, 2023 (2) Represents principal committed to fund greenfield construction (3) SSO = single state operator, MSO = multi - state operator 76 . 2% 23 . 8% Vertical Non - Vertical $356M Percentage of Real Estate Collateral by State and Operator Type 3 0 .0% 5 .0% 1 0. 0% 1 5. 0% 2 0. 0% 2 5. 0% 3 0. 0% AZ CT FL IL MA MD MI MO NE NY NV OH OR PA WV MSO SSO Chicago Atlantic Real Estate Finance, Inc. | 9
Loan Collateral Coverage 44.1% loan to enterprise value and 1.5x real estate collateral coverage RE A L E S T A T E C O L L A T E R A L CO V E R A G E ( 2 ) 0.51 - 1.00x 1.01 - 1.50x 1.51 - 2.00x Portfolio Weighted Average (1.5x) P R IN C IP A L B Y LTE V R A TIO ( 1 ) (1) Our loans to owner operators in the state - licensed cannabis industry are secured by additional collateral, including personal and corporate guarantee(s), where applicable subject to local laws and regulations. Loan to enterprise value ratio (LTEV) is calculated as total loan principal outstanding divided by total value of collateral on a weighted average basis . (2) See page 18 for real estate collateral coverage by loan. Expressed as percentage of total carrying value, before reserve for current expected credit losses of $353.6 million as of December 31, 2023. $ - $20,000,000 $40,000,000 $60,000,000 $80,000,000 $100,000,000 $120,000,000 20%< 21 - 40% 41 - 60% Portfolio Weighted Average (44.1%) 6 1 - 8 0% > 80% 14% Chicago Atlantic Real Estate Finance, Inc. | 10 16% 35% 11% 24% 0% 5% 1 0% 1 5% 2 0% 2 5% 3 0% 3 5% 4 0% < . 5 0x > 2 . 0x
Total Commitments: $378.8M Chicago Atlantic Real Estate Finance, Inc. | 11 Portfolio Overview 1 (as of December 31, 2023) YTM IRR (5) All - In Rate PIK Rate (4) Cash Rate (4) Fixed/Floating Future Fund i ngs Percent of Portfolio Ca rr y i n g Value Pri ncipal Balance Total Comm i tm e n t ( 3) Ma tu ri ty Date (2) Initial Funding Date (1) Location(s) Loan 17.3% 15.00% - 15.00% (6) Floating - 8.3% $ 29,274,344 $ 29,910,000 $ 30,000,000 10/30/26 10/27/22 Various 1 18.0% 16.75% 4.25% 12.50% (7) Floating - 11.0% 38,729,046 38,810,119 35,891,667 12/31/24 1/3/22 Michigan 2 23.5% 40.50% 2.75% 18.88% (6) Floating - 5.8% 20,481,909 20,657,606 14,240,129 11/29/24 3/25/21 Various 3 (8) 25.9% 20.25% 20.25% 20.25% (6) Floating - 4.4% 15,396,370 15,396,370 14,120,000 2/4/24 4/19/21 Arizona 4 22.8% 20.75% - 20.75% (6) Floating - 0.9% 3,194,180 3,194,180 3,500,000 4/30/25 4/19/21 Massachusetts 5 20.8% 17.50% - 17.50% (6) Floating - 1.2% 4,263,886 4,264,421 6,000,000 2/20/24 8/20/21 Michigan 6 19.5% 16.50% 2.00% 14.50% (6) Floating - 5.7% 20,055,454 20,055,454 25,000,000 6/30/25 8/24/21 Illinois, Arizona 7 25.1% 19.75% 2.00% 17.75% (6) Floating - 3.3% 11,663,586 11,663,586 9,500,000 9/1/24 9/1/21 West Virginia 8 16.2% 22.25% 3.00% 19.25% (6) Floating - 4.6% 16,402,488 16,402,488 15,000,000 6/30/24 9/3/21 Pennsylvania 9 (9) 22.0% 19.25% 2.00% 17.25% (6) Floating - 9.3% 33,042,269 33,310,259 32,000,000 9/30/24 9/30/21 Maryland 11 19.5% 15.50% - 15.50% (6) Floating - 2.4% 8,657,616 8,710,222 20,000,000 10/31/24 11/8/21 Various 12 19.5% 16.00% 1.50% 14.50% (6) Floating - 3.8% 13,332,846 13,392,094 13,100,000 11/1/24 11/22/21 Michigan 13 22.8% 22.25% 2.50% 19.75% (6) Floating - 1.5% 5,253,125 5,253,125 5,000,000 12/27/26 12/27/21 Various 14 36.3% 17.75% - 17.75% (6) Floating - 1.2% 4,418,442 4,437,500 13,000,000 12/31/24 12/30/21 Florida 16 14.8% 13.25% - 13.25% (6) Floating - 4.2% 14,863,333 15,000,000 15,000,000 1/31/25 1/18/22 Florida 17 20.4% 15.25% 5.00% 10.25% (6) Floating - 4.8% 17,063,431 17,155,637 11,662,050 2/28/25 2/3/22 Ohio 18 15.5% 14.00% 3.00% 11.00% Fixed - 5.7% 20,031,667 20,080,084 20,000,000 8/29/25 3/11/22 Florida 19 14.7% 13.00% 2.00% 11.00% Fixed - 5.0% 17,613,043 17,691,575 17,000,000 5/30/25 5/9/22 Missouri 20 25.6% 20.00% 3.00% 17.00% (6) Floating - 1.5% 5,296,309 5,353,186 9,000,000 7/29/26 7/1/22 Illinois 21 19.4% 16.00% - 16.00% (6) Floating - 0.5% 1,822,681 1,860,000 2,000,000 3/31/26 3/27/23 Arizona 23 21.7% 19.00% - 19.00% (6) Floating - 0.2% 820,000 820,000 1,000,000 9/27/26 3/31/23 Oregon 24 16.7% 15.00% - 15.00% Fixed - 6.4% 22,611,938 22,611,938 23,309,588 6/29/36 8/1/23 Ne w Y o rk 25 19.1% 14.00% - 14.00% Fixed - 1.5% 5,331,996 5,450,000 5,450,000 2/27/26 8/31/23 Connecticut 26 19.0% 17.25% - 17.25% (6) Floating - 3.7% 13,061,667 13,061,667 13,061,667 6/30/27 8/15/23 Nebraska 27 17.4% 15.00% - 15.00% Fixed - 0.7% 2,466,705 2,466,705 2,466,705 3/13/25 9/13/23 Ohio 28 17.4% 15.00% - 15.00% Fixed - 0.3% 1,066,065 1,066,065 1,062,564 10/9/26 10/11/23 Illinois 29 17.4% 15.00% - 15.00% Floating 7,500,000 2.1% 7,425,814 7,500,000 15,000,000 12/31/26 12/20/23 Missouri, Arizona 30 19.4% 17.90% 2.7% 15.3% 7,500,000 100.0% 353,640,610 355,745,305 378,849,998 Subtotal 1 Refer to page 7 of the Company’s Annual Report on Form 10 - K as of and for the year ended December 31, 2023, for supplemental footnote disclosures.
Loan Origination Pipeline Driven by proprietary deal sourcing Total current pipeline of ~$600mm 1 ▪ Continued legalization at the state level creates a new influx of opportunities ▪ Increase in M&A activity requires additional debt financing ▪ Robust set of profitable operators and refinancing opportunities Note: (1) As of March 1 , 2024 Over 700 Qualified Deals Sourced and Reviewed $47mm 1 in Potential Fundings $42.5mm 1 Terms Issued Chicago Atlantic Real Estate Finance, Inc. | 12
$19.3 $22.5 $26.9 $32.0 $36.8 $40.0 $42.8 $10.7 $11.1 $11.6 $12.3 $12.9 $13.5 $14.1 2 0 22 2 0 23 2026 Medical Sales 2 0 27 2 0 28 2024 2025 Adult - Use Sales $30 .0 $33 .6 $38 .4 $44 .3 $49 .7 $53 .5 $56 .9 Note: (1) Source: MJBiz Factbook 2023; ($ in billions) U. S . CAN N A B I S S A L E S (1) M A RKE T DRI V E R S Compelling Market Opportunity ▪ Sales of the U.S. cannabis industry expected to rival beer ($100bn), spirits ($97bn) and wine ($62bn) by 2030 ▪ Continued legalization at state level expected to drive continued demand for capital ▪ Highly fragmented industry ripe for consolidation ▪ Wave of East Coast and Midwest Adult - Use Legalization appears imminent Chicago Atlantic Real Estate Finance, Inc. | 13 ($ in billions)
Note: (1) Per MJBiz Daily, as of November 2023 Compelling Market Opportunity LE G IS LA TIV E TA ILWIN D S C U R R E N T LE G A LIZA TIO N (1) : 4 0 S TA TE S ▪ Continued state - level legalization, including transition from medical to adult - use cannabis. ▪ Adult - use sales began during the first quarter of 2023 in Missouri and Connecticut. ▪ Adult - use sales began in Maryland on July 1, 2023. ▪ Adult - use sales expected to commence in Ohio in 2024. Legalized recreational and medical use Legalized medical use only No regulated use Chicago Atlantic Real Estate Finance, Inc. | 14
Better diversification Shorter loan durations Deal leads Lower LTVs Close relationships with management teams Ability to upsize REIT shares 50% of the origination fee We negotiate the deal Our borrower’s only source of debt Underwrite enterprise value in the borrowers Competitive Landscape C OMP E T I T OR S : GR OU P S M o rt gage REITs BDCs Sale/ Leaseback REITs Cannab i s - Focused Lenders Co mm un ity Banks Chicago Atlantic Real Estate Finance, Inc. | 15 C O M PET I T I VE A DVA N T A G E S
Market Performance | Total Net Returns vs. Selected Indexes Sources: Bloomberg, S&P Global Data Repository (Indexed from December 2021) Assumes dividend re - investment 27.3% Chicago Atlantic Real Estate Finance, Inc. | 16 12.6% 9.4% 5.7% 4.0% (7.4%) (20.4%) (33.8%)
Market Performance | Price to Book Value per Share vs. Selected Peers Sources: Bloomberg, S&P Global Data Repository Chicago Atlantic Real Estate Finance, Inc. | 17
Q4 2023 Financial Overview A ppendix Chicago Atlantic Real Estate Finance, Inc. | 18
Collateral Overview 1 (as of December 31, 2023) Chicago Atlantic Real Estate Finance, Inc. | 19 Our Real Estate Collateral Coverage as of 12/31/2023 Implied Real Estate Collateral for REIT P ri nc i pa l Balance as of 12/31/2023 P r ope rty Type Location Investment Loan 0.2x 5,514,857 $ 29,910,000 $ Retail/Industrial Multi - State Senior Real Estate Corporate Loan 1 1.5x 56,962,428 $ 38,810,119 $ Retail/Industrial Michigan Senior Real Estate Corporate Loan 2 0.9x 19,356,702 $ 20,657,606 $ Retail/Industrial Multi - State Senior Real Estate Corporate Loan 3 1.6x 23,900,000 $ 15,396,370 $ Industrial Arizona Senior Real Estate Corporate Loan 4 0.3x 900,000 $ 3,194,180 $ Retail/Industrial Massachusetts Senior Real Estate Corporate Loan 5 3.7x 15,850,000 $ 4,264,421 $ Retail/Industrial Michigan Senior Real Estate Corporate Loan 6 2.1x 41,675,040 $ 20,055,454 $ Retail/Industrial Multi - State Senior Real Estate Corporate Loan 7 1.2x 14,255,000 $ 11,663,586 $ Retail/Industrial W est V irgi n ia Senior Real Estate Corporate Loan 8 1.0x 17,000,000 $ 16,402,488 $ Retail/Industrial Pennsylvania Senior Real Estate Corporate Loan 9 0.9x 30,400,000 $ 33,310,259 $ Industrial Maryland Senior Real Estate Corporate Loan 11 0.2x 2,049,733 $ 8,710,222 $ Retail/Industrial Multi - State Senior Real Estate Corporate Loan 12 3.1x 42,064,044 $ 13,392,094 $ Retail/Industrial Michigan Senior Real Estate Corporate Loan 13 0.0x - $ 5,253,125 $ None Multi - State Senior Loan 14 0.0x - $ 4,437,500 $ None Florida Senior Loan 16 2.2x 32,840,000 $ 15,000,000 $ Retail/Industrial Florida Senior Real Estate Corporate Loan 17 2.3x 40,080,000 $ 17,155,637 $ Retail/Industrial Ohio Senior Real Estate Corporate Loan 18 1.4x 27,700,000 $ 20,080,084 $ Retail/Industrial Florida Senior Real Estate Corporate Loan 19 1.5x 27,400,000 $ 17,691,575 $ Retail/Industrial Missouri Senior Real Estate Corporate Loan 20 1.8x 9,770,000 $ 5,353,186 $ Retail/Industrial Illinois Senior Real Estate Corporate Loan 21 2.1x 3,887,500 $ 1,860,000 $ Retail/Industrial Arizona Senior Real Estate Corporate Loan 23 4.4x 3,600,000 $ 820,000 $ Retail/Industrial Oregon Senior Real Estate Corporate Loan 24 1.5x 33,631,119 $ 22,611,938 $ Retail New York Senior Delayed Draw Term Loan 25 1.4x 7,699,497 $ 5,450,000 $ Industrial Connecticut Senior Real Estate Corporate Loan 26 4.0x 52,853,593 $ 13,061,667 $ Industrial Nebraska Senior Real Estate Corporate Loan 27 0.8x 2,000,000 $ 2,466,705 $ Retail Ohio Senior Real Estate Corporate Loan 28 1.3x 1,400,000 $ 1,066,065 $ Retail Illinois Senior Real Estate Corporate Loan 29 1.2x 9,217,500 $ 7,500,000 $ Retail/Industrial Missouri, Arizona Senior Real Estate Corporate Loan 30 1.5x 522,007,013 $ 355,745,305 $ 1 Refer to page 9 of the Company’s Annual Report on Form 10 - K as of and for the year ended December 31, 2023, for supplemental footnote disclosures.
Balance Sheet Chicago Atlantic Real Estate Finance, Inc. | 20 December 31, 2022 December 31, 2023 Assets 339,273,538 $ 337,238,122 $ Loans held for investment - 16 , 402 , 488 Loan held for investment – related party (Note 7) 339,273,538 353,640,610 Loans held for investment at carrying value ( 3 , 940 , 939) ( 4 , 972 , 647) Current expected credit loss reserve 335,332,599 348,667,963 Loans held for investment at carrying value, net 5,715,827 7,898,040 Cash and cash equivalents - 842,269 Debt securities, at fair value 1,204,412 1,004,140 Interest receivable 1,018,212 705,960 Other receivables and assets, net - 107 , 225 Related party receivables 343 , 271 , 050 $ 359 , 225 , 597 $ Total Assets Liabilities 58,000,000 $ 66,000,000 $ Revolving loan 13,618,591 13,866,656 Dividend payable 3,295,600 3,243,775 Management and incentive fees payable 1,397,515 2,051,531 Related party payables 1,058,128 1,135,355 Accounts payable and other liabilities 1 , 868 , 193 1 , 074 , 889 Interest reserve 79 , 238 , 027 87 , 372 , 206 Total Liabilities Commitments and contingencies (Note 8) Stockholders' equity 176,859 181,972 Common stock, par value $0.01 per share, 100,000,000 shares authorized and 18,197,192 and 17,658,952 shares issued and outstanding, respectively 268,995,848 277,483,092 Additional paid - in - capital ( 5 , 139 , 684) ( 5 , 811 , 673) Accumulated earnings (deficit) 264 , 033 , 023 271 , 853 , 391 Total stockholders' equity 343 , 271 , 050 $ 359 , 225 , 597 $ Total liabilities and stockholders' equity
Statement of Operations Chicago Atlantic Real Estate Finance, Inc. | 21 Year ended December 31, 2022 Year ended December 31, 2023 Three months ended September 30, 2023 (unaudited) Three months ended December 31, 2023 (unaudited) Revenues 51,471,766 62,900,004 15,183,450 $ 16,530,028 $ Interest income (2,614,138) (5,752,908) (1,449,143) (1 , 6 90,543) Interest expense 48,857,628 57,147,096 13,734,307 14,839,485 Net interest income Expenses 6,562,087 8,782,834 1,601,387 3,243,775 Management and incentive fees, net 3,528,322 5,260,287 1,251,307 1,426,554 General and administrative expense 2,151,714 2,153,999 491,107 555,623 Professional fees 435,623 1,479,736 540,426 537,131 Stock based compensation 3,887,405 940,385 (41,351) (25 3 , 4 9 5) (Reversal)/provision for current expected credit losses 16,565,151 18,617,241 3,842,876 5,509,588 Total expenses - 75,604 85,567 (37,163) Change in unrealized gain on debt securities, at fair value - 104,789 - 10 4 , 7 8 9 Realized gain on debt securities, at fair value 32,292,477 38,710,248 9,976,998 9,397,523 Net Income before income taxes - - - - Income tax expense 32,292,477 38,710,248 9,976,998 $ 9 , 3 97,523 $ Net Income Earnings per common share: 1.83 $ 2.14 $ 0.55 $ 0.52 $ Basic earnings per common share (in dollars per share) 1.82 $ 2.11 $ 0.54 $ 0.51 $ Diluted earnings per common share (in dollars per share) Weighted average number of common shares outstanding: 17,653,765 18,085,088 18,175,467 18,182,403 Basic weighted average shares of common stock outstanding (in shares) 17,746,214 18,343,725 18,562,930 18,564,530 Diluted weighted average shares of common stock outstanding (in shares)
Reconciliation of Distributable Earnings and Adjusted Distributable Earnings to GAAP Net Income Chicago Atlantic Real Estate Finance, Inc. | 22 Three Months ended September 30, 2023 (unaudited) Three Months ended December 31, 2023 (unaudited) 9,976,998 $ 9,397,523 $ Net Income Adjustments to net income 540,426 537,131 Non - cash equity compensation expense 146,676 145,128 Depreciation and amortization (41,351) (253,495) (Reversal)/provision for current expected credit losses (85,567) 37,163 Change in unrealized gain on debt securities, at fair value - (10 4 , 7 8 9) Realized gain on debt securities, at fair value 10,537,182 $ 9,758,661 $ Distributable Earnings - - Adjustments to Distributable Earnings 10,537,182 $ 9,758,661 $ Adjusted Distributable Earnings 18,175,467 18,182,403 Basic weighted average shares of common stock outstanding (in shares) 0.58 $ 0.54 $ Adjusted Distributable Basic Earnings per Weighted Average Share 18,562,930 18,564,530 Diluted weighted average shares of common stock outstanding (in shares) 0.57 $ 0.53 $ Adjusted Distributable Diluted Earnings per Weighted Average Share
1.5% Annual Base Management Fee (on Equity) 50.0% Origination Fees (Rebated to REIT) Incentive Compensation Terms: 20.0% Incentive Fees (of Core Earnings) 8.0% Hurdle Amount (on Avg. Equity); No Catch - up Provision Chicago Atlantic Real Estate Finance, Inc. | 23 External Manager ▪ Externally - managed by Chicago Atlantic REIT Manager, LLC, a subsidiary of Chicago Atlantic Group, LLC ▪ John Mazarakis (Executive Chairman), Tony Cappell (Co - CEO) and Andreas Bodmeier (President & CIO) control and beneficially own the Manager ▪ The Manager is comprised of an experienced team of investment professionals, who currently manage several externally - managed vehicles with over $ 800 mm in additional assets – Synergies from over 70 professionals, spanning real estate credit, asset - based lending and real estate private equity, as well as robust accounting and compliance functions Management Agreement Overview Management Agreement and Equity Incentive Plan ▪ Initial term of three years ▪ Following the initial term, the agreement automatically renews every year for an additional one - year period, unless Chicago Atlantic or the Manager elects not to renew ▪ Shareholder - friendly management agreement: ▪ 8.5% equity incentive plan: – 0.5 % granted at completion of IPO – 8% granted at discretion of Board based on Company performance after IPO M AN AG EM E N T F EES