Chicago Atlantic Real Estate Finance, Inc.

Good day, and welcome to the Chicago Atlantic Real Estate Finance Third Quarter 2024 Earnings Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Tripp Sullivan, Investor Relations. Please go ahead.

Thank you. Good morning. Welcome to the Chicago Atlantic Real Estate Finance Conference call to review the company's results. On the call today will be Peter Sack, Co-Chief Executive Officer, David Kite, Chief Operating Officer, and Phil Silverman, Chief Financial Officer. Our results were released this morning in our earnings press release. which can be found in the Investor 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 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 laws. 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 Atlantic's judgment as of the date of this conference call and are subject to risk 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 and 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 Peter Sack. Please go ahead.

Thanks, Chip. Good morning, everyone. These are fascinating times to operate a business and invest. Cannabis is uniquely enmeshed in this country's debates on health and wellness, criminal justice, individual choice, and cultural identity. This week, a majority of voters in Florida supported legalization of adult-use cannabis, but they fell short of the 60% threshold needed for the measure to pass. Nebraska voters overwhelmingly approved a medical cannabis program And in the Dakotas, voters rejected initiatives that would have legalized adult-use cannabis. On this news yesterday, the ETF MSOS, which tracks U.S. cannabis equities, fell by more than 25%. For Chicago Atlantic Real Estate Finance, it is business as usual, and we are as enthusiastic as ever. From inception, we aim to build an investment platform focused on serving the strongest operators in the most attractive markets with fundamental underwriting, differentiated returns, and downside protection in an industry known for volatility. We execute through a platform that includes the industry's most expansive origination, real estate diligence, analytics, and operational teams. We underwrite to leverage levels well below the traditional private credit and commercial mortgage markets. and returns well above the traditional mortgage rate market. We can do so because of our unique competitive position and our market focus. The election results change little for ReFi. Florida represents 7% of our portfolio, and as always, we underwrote our Florida investments assuming the continuance of the existing medical market. We do not invest based upon the expectation of speculative political or regulatory events, And that principle is fundamental to our focus on comfortable debt service coverage, collateral quality, and deep understanding of our limited license markets. Still, the passage of Amendment 3 in Florida would have opened up additional opportunities for investment. We do believe that federal rescheduling will likely occur in 2025 as President-elect Trump has endorsed the effort. And conceivably, an aligned Republican Senate and House could facilitate bipartisan progress on other initiatives such as safe banking. The translation of campaign promises to congressional and executive action is an arena in which we can speculate, but is not a basis on which we invest. Chicago Atlantic Real Estate Finance will continue to focus on generating differentiated risk-adjusted returns by its focus on discipline, expertise, and the unique competitive position. Today, we report positive Q3 earnings results and subsequent events that reflect the fruits of these efforts. The pipeline across the Chicago Atlantic platform has grown to $560 million, and we continue to prioritize operators in limited license states and those positions to transition from medical to adult use. We have liquidity in excess of $75 million to fund new investments. Last quarter, we noted that we were exploring other sources of accretive capital to accelerate our deployment this year and next. In October, we entered into a $50 million unsecured term loan from two institutional private lending platforms. The interest-only unsecured loan matures in October 2028, bears a fixed interest rate of 9% and may be repaid in whole or in part at any time. After two years, the loan may be repaid without penalty. We also received a rating of BBB plus from Egan Jones on both the company and this unsecured term loan. Before I close, there are two data points on portfolio management that I'd like to highlight and at which I'd like to congratulate our team for execution. First, on interest rates, which David will touch on in more detail. We have successfully taken actions to limit our exposure to benchmark interest rate declines. Second, on 2024 maturities, we entered 2024 with $151 million in loans maturing this year, excluding Loan 9, which remains on non-agrual status. $89 million of these loans we successfully retained and extended through amendment. $15 million were extended with new terms. and $47 million were repaid with full recovery of principal and accrued interest. By every available metric we track, the portfolio's credit quality has improved throughout this transition and our management of rate risk. David, why don't you take it from here?