Chicago Atlantic Real Estate Finance, Inc.

We're standing by. Welcome to the Chicago Atlantic Real Estate Finance, Inc. Second Quarter 2023 Earnings Conference Call. At this time, all participants are in listening mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 1-1 again. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Tripp Sullivan, please go ahead.

Good morning. Welcome to the Chicago Atlantic Real Estate Finance Conference call to review the company's results for the second quarter of 2023. On the call today will be John Mazarakis, Executive Chairman, Tony Kappel, Chief Executive Officer, Andreas Bodmeier, Co-President and Chief Investment Officer, Peter Sack, Co-President, and Phil Silverman, Interim Chief Financial Officer. Our results were released this morning in our earnings press release, which can be found in the Best Relations section of our website, along with our supplemental files with the SEC. A live audio webcast of this call is being made available today. For those who listened to the replay of this webcast, we remind you that the remarks made herein are as of today, August 8, 2023, and will not be updated subsequent to this call. During this call, certain comments and statements we make may be deemed forward-looking statements within the meaning prescribed by the securities law, including statements related to the future performance of our portfolio, our pipeline of potential loans and other investments, future dividends, and financing activities. All forward-looking statements represent Chicago's Atlantic's judgment as of the date of this conference call and are subject to risks and uncertainties that can cause actual results to differ materially from our current expectations. Investors are urged to carefully review various disclosures made by the company, including the risk and other information disclosed in the company's filing with the SEC. We also will discuss certain non-GAAP measures, including but not limited to distributable earnings and adjusted distributable earnings. Definitions of these non-GAAP measures and reconciliations to the most comparable GAAP measures are included in our filings with the SEC. I'll now turn the call over to John Masaryk. Please go ahead.

Thanks, Tripp. Good morning, everyone. After another quarter of volatility in the broader financial sector, and cannabis in particular, we can now add the fact that small-cap equity risk premiums are at the lowest level in a couple of decades. Things like yield will soon be king again. If you add in worries about a recession or not, that's a lot of ways to get distracted. I want to address some of these topics to stress how we've approached the creation, management, and execution of our platform at Chicago Atlantic. Over the past 25 plus years, I've been through three recessions and several economic cycles. I've seen cycles where there's catastrophic collapse or cycles where competition is feared. Our job as fund managers is to smooth out the peaks and troughs evident within the strategy that we're managing. No deal does that better than the partnership we've created with the state of New York that Peter will discuss in a moment. With the largest platform, our own originations team, experience in direct lending, a well-capitalized and conservative balance sheet, and a diversified loan portfolio, I believe we can make a stronger case than ever before that we're the leading capital provider in this space. The pipeline remains robust with actionable deals in excess of 400 million. There are a lot of good things happening in states such as Maryland and Missouri, and we're starting to see more transaction activity within the industry with the new states coming online that's leading to improved optimism among investors in different forms of capital allocation. There's also a growing recognition that the high rate environment isn't going away quickly, which is leading to decisions about whether to grow or not to grow, as well as increased M&A funded by debt financing. We're in front of several trends in limited license states that are moving from medical to adult use, and states that have seen the greatest price compression show improvements in wholesale pricing. We have been cautious for some time now, but it could be time to change that to cautiously optimistic. We're picking our spots and remaining incredibly disciplined in the pursuit of new opportunities. Our partnership with New York is a great example of picking the right opportunity backed by strong credit and an appropriate return that could potentially lead to other partnerships. I will now turn it over to Peter.