UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 001-41123 CHICAGO ATLANTIC REAL ESTATE FINANCE, INC. (Exact name of registrant as specified in its charter) Maryland 86-3125 ...

Chicago Atlantic Real Estate Finance, Inc. (NASDAQ:REFI) Q1 2022 Earnings Conference Call May 12, 2022 10:00 AM ET Company Participants Tripp Sullivan – Investor Relations John Mazarakis – Executive Chairman Tony Cappell – Chief Executive Officer Andreas Bodmeier – Co-President and Chief Investment Officer Conference Call Participants Aaron Hecht – JMP Securities Mark Smith – Lake Street Capital Markets Gaurav Mehta – EF Hutton Operator Welcome to the Chicago Atlantic Real Estate Finance, Inc. First Quarter ...

[Part I. Financial Information](index=4&type=section&id=Part%20I.%20Financial%20Information) This part details the company's unaudited financial statements, management's analysis, market risk disclosures, and internal control assessments [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Presents the unaudited consolidated balance sheets, income statements, equity, and cash flows for the period ended March 31, 2022 [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheets Highlights (Unaudited) | | March 31, 2022 | December 31, 2021 | |:---|:---:|:---:| | **Assets** | | | | Loans held for investment, net | $278,644,076 | $196,850,024 | | Cash | $6,078,178 | $80,248,526 | | **Total Assets** | **$285,907,904** | **$278,170,455** | | **Liabilities** | | | | Total Liabilities | $16,523,388 | $14,092,487 | | **Stockholders' Equity** | | | | Total stockholders' equity | $269,384,516 | $264,077,968 | | **Total liabilities and stockholders' equity** | **$285,907,904** | **$278,170,455** | - Total assets grew to **$285.9 million** as of March 31, 2022, primarily driven by a significant increase in 'Loans held for investment, net' which rose to **$278.6 million** from $196.9 million at the end of 2021[13](index=13&type=chunk) - This growth was funded by a decrease in cash from **$80.2 million to $6.1 million**[13](index=13&type=chunk) [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) Consolidated Statements of Income (Unaudited) | | For the three months ended March 31, 2022 | |:---|:---:| | **Revenues** | | | Interest income | $9,833,053 | | Total revenues | $9,833,053 | | **Expenses** | | | Total expenses | $2,029,101 | | **Net Income** | **$7,803,952** | | **Earnings per common share:** | | | Basic EPS | $0.44 | | Diluted EPS | $0.44 | [Consolidated Statements of Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Equity) - Total stockholders' equity increased from **$264.1 million** at the start of the year to **$269.4 million** at March 31, 2022[17](index=17&type=chunk) - The increase was driven by net income of **$7.8 million** and net proceeds from stock issuance of **$4.5 million**, partially offset by dividends declared of **$7.1 million**[17](index=17&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows Highlights (Unaudited) | | For the three months ended March 31, 2022 | |:---|:---:| | Net cash provided by operating activities | $3,035,632 | | Net cash used in investing activities | ($77,175,374) | | Net cash (used in) provided by financing activities | ($30,606) | | **Change in cash** | **($74,170,348)** | | Cash, beginning of period | $80,248,526 | | Cash, end of period | $6,078,178 | - The significant decrease in cash during the quarter was primarily due to **$82.8 million** used for the issuance and funding of loans, which is classified under investing activities[19](index=19&type=chunk) [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) - The Company is a commercial mortgage REIT focused on originating, structuring, and investing in first mortgage loans, primarily to **state-licensed operators in the cannabis industry**[21](index=21&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk) - The Company adopted **ASC 326 (CECL)** at inception, which requires the recognition of lifetime expected credit losses for loans at the time of origination[34](index=34&type=chunk) - As of March 31, 2022, the Company had a secured revolving credit facility with a total commitment of **$45 million**, which was subsequently increased to **$65 million** in May 2022[87](index=87&type=chunk)[134](index=134&type=chunk) - On January 5, 2022, underwriters partially exercised their over-allotment option, resulting in the issuance of **302,800 shares** of common stock and raising **$4.5 million** in net proceeds[114](index=114&type=chunk) - A regular cash dividend of **$0.40 per share** was declared for the first quarter of 2022[129](index=129&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Analyzes the company's Q1 2022 operating results, financial condition, liquidity, and capital resources [Overview](index=30&type=section&id=Overview) - The company's primary objective is to provide attractive, risk-adjusted returns through income and capital appreciation by originating and investing in loans for **state-licensed cannabis operators**[139](index=139&type=chunk) - The company is an externally managed Maryland corporation that elected to be taxed as a **REIT**, commencing with the taxable year ending December 31, 2021[143](index=143&type=chunk) [Results of Operations](index=34&type=section&id=Results%20of%20Operations) Q1 2022 Financial Results | Metric | Amount | |:---|:---| | Net Income | ~$7.8 million | | Basic EPS | $0.44 | | Interest Income | ~$9.8 million | | Management & Incentive Fees | $671,505 | | Provision for CECL | $51,343 | - For the three months ended March 31, 2022, the company reported net income of approximately **$7.8 million**, or **$0.44 per basic weighted average common share**[160](index=160&type=chunk) [Loan Portfolio](index=34&type=section&id=Loan%20Portfolio) Loan Portfolio Growth | Metric | March 31, 2022 | December 31, 2021 | |:---|:---:|:---:| | Number of Loans | 22 | 21 | | Loans Receivable (Carrying Value) | ~$278.8 million | ~$197.0 million | | Aggregate Commitment | ~$321.1 million | ~$235.1 million | | Outstanding Principal | ~$282.7 million | ~$200.6 million | | Weighted-Average YTM IRR | 17.2% | 18.6% | - During Q1 2022, the company closed credit facilities with three new borrowers with aggregate commitments of **$75 million** and advanced **$29.2 million** on existing facilities[153](index=153&type=chunk) - As of March 31, 2022, approximately **63.4% of the portfolio consisted of floating-rate loans** tied to the prime rate, an increase from 53.2% at year-end 2021[165](index=165&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) - As of March 31, 2022, the company had approximately **$6.1 million in unrestricted cash**, down from $80.2 million at the end of 2021, reflecting the deployment of capital into new loans[181](index=181&type=chunk) - The company's secured revolving credit facility was increased from $10 million to $45 million in December 2021 and further to **$65 million** in May 2022[183](index=183&type=chunk)[184](index=184&type=chunk)[188](index=188&type=chunk) [Non-GAAP Financial Measures](index=37&type=section&id=Non-GAAP%20Financial%20Measures) Reconciliation of Net Income to Adjusted Distributable Earnings (Q1 2022) | | Amount (in thousands) | |:---|:---:| | Net Income | $7,804 | | Non-cash equity compensation expense | $121 | | Depreciation and amortization | $72 | | Provision for current expected credit losses | $51 | | **Distributable Earnings** | **$8,049** | | **Adjusted Distributable Earnings** | **$8,049** | | Adjusted Distributable Earnings per Weighted Average Share (Diluted) | $0.45 | [Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Details the company's primary market risk exposures, including interest rate, credit, and real estate risks - The company is primarily exposed to **interest rate risk**, with **63.4%** of the loan portfolio composed of floating-rate loans with prime rate floors as of March 31, 2022[211](index=211&type=chunk) - A hypothetical **100 basis point increase** in the prime rate would increase annual interest income by approximately **$1,245,000**[211](index=211&type=chunk) - Credit risk is concentrated, with the **top three borrowers representing 31.6%** of funded principal as of March 31, 2022[237](index=237&type=chunk) - To mitigate risk, **94% of the portfolio is secured by real estate**, and all loans are secured by equity pledges and all asset liens, with an average real estate collateral coverage of **1.9x**[232](index=232&type=chunk) [Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Reports that disclosure controls were not effective due to two material weaknesses in internal financial reporting controls - Management concluded that **disclosure controls and procedures were not effective** as of March 31, 2022[241](index=241&type=chunk) - The ineffectiveness is due to two previously reported material weaknesses: inadequate design of **IT general controls** and inadequate design of controls over the development of the **CECL allowance**[241](index=241&type=chunk) - **Remediation efforts are underway**, including hiring additional personnel, designing formal controls, and implementing a new ERP system[242](index=242&type=chunk)[243](index=243&type=chunk) [Part II. Other Information](index=52&type=section&id=Part%20II.%20Other%20Information) Covers legal proceedings, risk factors, and the use of proceeds from the company's recent equity offerings [Legal Proceedings](index=52&type=section&id=Item%201.%20Legal%20Proceedings) Confirms the absence of any material pending legal proceedings against the company - As of the reporting date, the company is **not involved in any material legal proceedings**[248](index=248&type=chunk) [Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20Factors) States there have been no material changes to risk factors previously disclosed in the 2021 Form 10-K - There have been **no material changes** to the risk factors disclosed in the company's 2021 Form 10-K[249](index=249&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=52&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details the deployment of net proceeds from the company's IPO and concurrent private placement - The company received net proceeds of approximately **$96.2 million** from its IPO and an additional **$7.5 million** from a concurrent private placement[250](index=250&type=chunk) - Since the IPO, proceeds have been used to fund approximately **$78.6 million** in loans to new portfolio companies and **$36.1 million** to existing portfolio companies[251](index=251&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-41123 CHICAGO ATLANTIC REAL ESTATE FINANCE, INC. (Exact name of Registrant as specified in its charter) | Maryland | | 86-3125132 | | --- | --- | --- | | (State or other jurisdi ...

Company Overview - Chicago Atlantic Real Estate Finance, Inc completed a successful IPO in December 2021 (NASDAQ: REFI)[6] - The company has closed $1.2 billion in loans since its platform inception[6] - The company has closed 38 cannabis loans across its platform[6] - The company has a near-term pipeline under evaluation of $979 million[6] - The current portfolio size is $324 million with a substantial pipeline[6] - The current portfolio has 1.8x real estate collateral coverage[6] - The gross portfolio yield is 17.3%[6] Portfolio Diversity - The portfolio is diversified across operators, geographies, and asset types[15] - $285 million is the principal outstanding as of March 17, 2022[15] - 89.9% of the real estate collateral type is industrial, while 9.7% is retail[15] Market Opportunity - The U S cannabis sales are estimated to have a 20%+ annual growth rate[29] - U S cannabis sales are projected to reach $42.9 billion[29]

Chicago Atlantic Real Estate Finance, Inc. (NASDAQ:REFI) Q4 2021 Earnings Conference Call March 22, 2022 10:00 AM ET Company Participants Tripp Sullivan - Investor Relations John Mazarakis - Executive Chairman Anthony Cappell - Chief Executive Officer Andreas Bodmeier - Co-President, Chief Investment Officer Lindsay Menze - Chief Financial Officer and Secretary Conference Call Participants Aaron Hecht - JMP Securities Mark Smith - Lake Street Capital Operator Thank you for standing by and welcome to Chicago ...