Chicago Atlantic Real Estate Finance, Inc.

Good day and welcome to the Chicago Atlantic Real Estate Financial, Inc., second quarter 2026 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 touchtone phone. To withdraw your question, please press star and then two. 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 information package furnished to 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 meeting prescribed by securities laws, including statements related to the future performance of our portfolio, our pipeline of potential loans, and other investments, future dividends, financing activities, the proposed merger of the company with and into Chicago Atlantic BDC, Inc., and its expected timing and benefits, and the anticipated benefits of our recent financing transaction to affiliates of Coach Capital. We will discuss certain non-GAAP measures, including but not limited to, distributable earnings. Definitions of these non-GAAP measures and reconciliations to the most directly comparable GAAP measures are included in our earnings release and supplemental information, available on our website and furnished to the FCC. I'd like to remind our listeners that today's remarks and accompanying investor presentations contain forward-looking statements that are subject to significant 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 risks and other information disclosed in the company's filings with the SEC. Risks and uncertainties include the ability to complete the merger of refi and lien on the anticipated timeline, to obtain shareholder and regulatory approvals and required lender consent, to realize the anticipated benefits of the transaction and developments in the cannabis regulatory environment, as well as other risks described in our SEC filings and in the legends in today's filed material. Actual results may differ materially, and we undertake no obligation to update except as required by law. The transcript of this call is being filed with the SEC pursuant to Rule 425 under the Securities Act of 1933, and is being filed under Rule 14A-12 under the Securities Exchange Act of 1934. In connection with the proposed merger, Lean filed with the SEC a registration statement on Form N-14, which includes a joint proxy statement of refi and lean and a prospectus of lean. Investors and stockholders are urged to read those materials and any amendments or supplements. when they become available because they will contain important information about the transaction. Lean, REFI, their respective directors and executive officers, Chicago Atlantic BDC Advisors, LLC, and Chicago Atlantic REIT Manager, LLC, and certain other people may be deemed participants in the solicitation. Information about those persons and their interests are included in the joint proxy statement and prospectus. Copies of all filed materials will be available free of charge on the SEC's website and on each company's investor relations website. Please note that nothing on this call constitutes an offer to sell or solicitation of an offer to purchase any securities. No offer of securities shall be made except by means of a perspective meeting requirements of Section 19 of the 1933 Act. I'll now turn the call over to Peter Sack. Please go ahead.

Thank you, Lisa. Good morning, everyone. Repi delivered a productive second quarter against the backdrop of continued geopolitical tensions and ongoing debate around inflation and interest rate expectations. While distributable earnings of 44 cents per basic weighted average common share came in below our dividend, this largely reflects the timing of capital redeployment rather than any material change in the underlying business or portfolio quality. Our experience in the cannabis ecosystem gives us the expertise, relationships, and ability to redeploy capital more quickly than the typical mortgage rate, but redeployment never comes at the expense of our underwriting discipline and stringent risk standards protecting an acceptable risk versus reward. In this case, early in the quarter, $16.3 million of loans were prepaid and the capital wasn't redeployed until later in the quarter. While the portfolio principal balance increased approximately $40 million quarter-to-quarter, income growth was affected by that redeployment timing gap. The pipeline of cannabis opportunities remains strong and currently stands at $649 million, though only $204 million is backed by real estate collateral as of June 30, 2026. We continue to monitor the regulatory environment and have also noticed a growing acceptance of the cannabis industry within capital markets recently, reflected in the New York Stock Exchange uplisting of two cannabis-related companies. This was on the heels of the Department of Justice's announcement that it was rescheduling certain medical marijuana products from Schedule 1 to Schedule 3. An administrative hearing, which could clear a pathway to reschedule recreational adult use, concluded on July 15th and we are awaiting the next steps following a deadline for briefs set in August. We are encouraged by the progress in federal policy changes and the broader acceptance of cannabis and what it could mean for our borrowers. That said, we remain conservative in our outlook. The success of our strategy does not depend on any of these changes. The cannabis industry, in many respects, is evolving and ReFi must plan to evolve with it. In June, we announced an agreement to merge Chicago Atlantic BDC and ReFi. Under the terms of the merger, as previously reported on Form 8K filed on June 18th, ReFi will first select to be treated as a business development company, or BDC, and then merge with and into Lean in an all-stock adjusted NAV-for-NAV transaction, with Lean continuing as a surviving company. The merger of ReFi and Lean is intended to unlock potential value for ReFi stockholders that we believe would be difficult to achieve for ReFi independently as a public mortgage rate. We believe Lean is the right partner to deliver the benefits of scale by virtue of the breadth of the Chicago Atlantic platform and ability to expand the asset class and cannabis industry investment where both companies have experienced success since their respective inception. Both boards have unanimously approved this transaction, believing that it has the opportunity to create meaningful opportunity for stockholders of both companies through increased portfolio diversification and improved scale and stock liquidity, which is expected to drive market visibility and the potential to unlock greater capital market opportunities. On July 31, 2026, Lean filed a preliminary registration statement on Form N-14, which included a joint proxy statement of refi and lean. The N-14 registration statement is subject to SEC review. We currently expect the transaction to close in the fourth quarter of 2026, subject to the required lien and refi stockholder approvals, lender consents, regulatory approvals, and other customary closing conditions. Additionally, subsequent to the end of the second quarter, we announced the second lien financing of 32 retail properties across the United States that are managed by affiliates of Coach Capital. Each of the 32 retail properties, which are leased to cannabis tenants, are individually secured by second lien mortgage notes with an aggregate principal balance of approximately $62.5 million. The notes bear interest at an annual rate of 12%. of which 10% is payable in cash and 2% paid in kind respectively. The notes also include an exit fee and an amount up to 2.5 times the commitment amount of each note calculated at the time of repayment, net of interest and principal, if any, paid through such date. Through these exit fees, which may be realized in whole or part, 35 may receive economic benefit from the sale of each of the 32 retail properties within the portfolio. The notes thereby have particular opportunity for convexity in potential value realization to refi. As we have noted, the regulatory landscape at the federal and state level is evolving rapidly. In the coach portfolio, we underwrote each property and the credit quality of each tenant. But as regulatory change leads to greater equity capital availability, we expect capitalization rate compression to take place and value appreciation within the market of retail real estate leased to cannabis operators. Refi now stands to benefit from this potential market dynamic. In exchange for the notes, Refi issued approximately 4.3 million new common shares. Phil will walk through certain aspects of the accounting treatment for this transaction, but I'd like to summarize again why this transaction was attractive to Chicagolandic. First, our newly issued stock was priced at a 1% premium to book value, preserving cash liquidity for other originations. Second, the transaction diversifies our revenue streams and provides exposure to a different asset class, one with longer durations than the existing portfolio that we expect to present further opportunities to generate alpha as the industry continues to evolve. Lastly, we believe the transaction has opportunity to provide refi stockholders significant potential yield upside beyond the 12% blended annual rate through the exit fee mechanism. The fee is structured to enable ReFi to capitalize on potential cap rate compression and economic gains, if any, earned by the borrower upon property realizations. In closing, ReFi continues to deliver strong returns through our differentiated approach, lending to operators and property owners in the cannabis industry in a niche market where competition remains limited. We remain confident in our ability to navigate a changing landscape while staying disciplined in our underwriting and true to the strategy that has driven our performance to date. David will now speak to the portfolio in greater detail.