Chicago Atlantic Real Estate Finance, Inc.

Good day and welcome to the Chicago Atlantic Real Estate Finance Inc. Fourth Quarter 2025 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 a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the call over to Tripp Sullivan of SCR Partners. Tripp, please go ahead.

Thank you, Bailey. 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, President and Chief Operating Officer, and Phil Silverman, Chief Financial Officer. Our results were released this morning in our earnings press release, which can be found on the Investor Relations section of our website, along with our supplemental filed with the SEC. A live audio webcast of this call is being made available today. For those who will listen to the replay of this webcast, we remind you that the remarks made herein rather than today 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 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 filings with the SEC. We will also discuss certain non-GAAP measures, including but not limited to, 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.

Thank you, Tripp, and good morning, everyone. Chicago Atlantic operates within a unique intersection of real estate, credit, and the emerging sector of the U.S. cannabis industry. Our thesis is simple. We apply best-in-class sector expertise, highly developed relationship-based sourcing capabilities, and fundamental credit and real estate investment principles to make debt investments in an industry with limited sources of debt capital. We take advantage of limited lending competition to structure, first, what we believe to be differentiated downside risk of senior secured positions, and second, a highly outsized return profile relative to the broader credit and real estate lending portfolios. Most lending companies are limited in their ability to invest in underwriting and originations expertise in any one particular sector. They become masters of none and they're price takers, investing in whatever the next investment banker or private equity sponsor offers. Because we focus on one sector with limited lending competition, We have the luxury of investing in a highly respected originations team made up of the best known leaders in our space. We maintain an outsized underwriting real estate and analytics team that specializes solely in this unique niche of cannabis. We directly originated an agent, nearly all of our investments. We maintain a team of over 100 professionals overseeing only 2.3 billion in capital under management, because we know that with limited lending competition, Our investment in expertise and execution capabilities translates directly into alpha generation for our investors. Our discipline, our focus, and institutional investment platform built for the long run is reflected in the execution of Chicago Atlantic Real Estate Finance in 2025. And already nearly three months into 2026, we're exceeding our expectations and more enthusiastic than ever about our opportunity set for the coming year. Thank you for indulging me in this reappraisal of the fundamentals of Chicago Atlantic's differentiation. It's important to reinforce this in the context of the investor community's recent reconsideration of risk and reward in the broader private credit ecosystem. Our portfolio has extremely limited overlap with other private credit markets. The drivers of current private credit market pressure simply are not relevant to us. We have no exposure to software, receivables, factoring, nor recent examples of fraud in syndicated facilities. Our sector has not experienced an over-allocation of capital leading to compressed yields that is happening across other sectors of private credit. Our strategy is built on a disciplined focus on credit and collateral. We work collaboratively with our borrowers to create value. and our work is executed by a team of originators and underwriters with deep industry and rigorous risk management expertise. I spoke last quarter about how optimistic we are about our current environment. The pipeline remains strong and currently stands at $616 million. We continue to get first looks of the largest opportunities within the cannabis sector, but we're also leading when it comes to creative solutions for our borrowers as well. For example, during the fourth quarter, the Chicago Lending Platform closed on a credit facility to support the largest cannabis ESOP completed to date. We've talked about ESOPs as a compelling opportunity, and we believe this loan highlights our capabilities to trailblaze, bringing financial solutions common in broader lending markets to the more nascent cannabis lending market. Over recent months, there's been positive momentum in cannabis policy, with bills introduced in several states to change the legality of the product. In December 2025, President Trump signed an executive order directing his administration to reclassify cannabis from a Schedule I to a Schedule III regulated product. While this is not federal legalization, rescheduling would represent the most significant federal policy change in years. We highlight on a slide in this quarter's supplemental how this sets the stage for improved industry economics without opening the door for increased lending competition. We believe Chicago Atlantic is well positioned to benefit from these developments, but the success of our strategy is not dependent on these changes. As we mentioned in previous quarters, we underwrite every investment assuming no regulatory driven credit improvements. We continue to create a differentiated and low levered risk return profile that is insulated from cannabis equity volatility and outperforms our industry agnostic mortgage rate peers. As David will break down for you in a moment, Because we have structured our floating rate loans with high interest rate floors and no caps, only 9% of our total loan portfolio is exposed to further rate declines based on the prevailing prime rate. That discipline provides a meaningful measure of protection to the portfolio. We are focused on outperforming and delivering a consistent yield to our shareholders despite volatile industry sentiment. The pipeline is expanding, and we have already established strong momentum to kick off 2026. David, why don't you take it from here?