DEF 14A of Chicago Atlantic Real Estate Finance, Inc.
Filed Apr 28, 20250001213900-25-036170
PROPOSAL I: ELECTION OF DIRECTORS
PROPOSAL I: ELECTION OF DIRECTORS Pursuant to the Company’s charter, the number of directors may be increased or decreased only by our Board pursuant to the Bylaws, but shall never be less than the minimum number required by the Maryland General Corporation Law (“MGCL”) (which is one), nor more than fifteen. In accordance with the Company’s charter, the Board of Directors has designated the current number of directors to be seven. Each of our directors will be elected by our stockholders to serve for a term ending at the next annual meeting of stockholders and when his or her successor is duly elected and qualified. John Mazarakis, Anthony Cappell, Peter Sack, Jason Papastavrou, Frederick C. Herbst, Brandon Konigsberg, and Michael L. Steiner are currently directors and each director, with the exception of Mr. Herbst, has been nominated to continue to serve as a director of the Company for a one-year term expiring in 2026. Elizabeth Stavola has been nominated to serve as a director of the Company for a one-year term expiring in 2026. If elected, each director will serve on the following Committees of the Board as indicated in the chart below.
PROPOSAL I: ELECTION OF DIRECTORS
| | Audit | Compensation | Nominating and Corporate Governance | | Interested Directors | | | | | John Mazarakis | | | | | Anthony Cappell | | | | | Peter Sack | | | | | Independent Directors | | | | | Jason Papastavrou | X* | | X Chair | | Elizabeth Stavola | X | X | | | Brandon Konigsberg | X* Chair | X Chair | X | | Michael L. Steiner | | X | X |
PROPOSAL I: ELECTION OF DIRECTORS
____________ * Qualifies as an “audit committee financial expert” under SEC rules and regulations Dr. Papastavrou and Messrs. Mazarakis, Cappell, Sack, Konigsberg, Steiner and Ms. Stavola are not being proposed for election to the Board of Directors pursuant to any arrangement or understanding between any of themselves and the Company or any other person. A stockholder can vote for or withhold his or her vote from the director-nominees. In the absence of instructions to the contrary, it is the intention of the persons named as proxies to vote such proxy “FOR” the election of the director-nominees named above. If any director-nominee should decline or be unable to serve as director, it is intended that the proxy will vote for the election of such person as is nominated by the Board of Directors as a replacement. The Board of Directors has no reason to believe that the director-nominees named above will be unable or unwilling to serve. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF THE DIRECTOR-NOMINEES NAMED IN THIS PROXY STATEMENT.
Information about the Director-Nominees and Directors
Information about the Director-Nominees and Directors As described below under “Corporate Governance — Committees of the Board of Directors — Nominating and Corporate Governance Committee,” the Board of Directors has identified certain desired talents and experience for director-nominees. Each of our directors and each of the director-nominees has demonstrated high character and integrity; the knowledge, skills and experience necessary to be able to offer advice and guidance to our management in light of prevailing business conditions; familiarity with national and international business matters; experience with accounting rules and practices; appreciation of the relationship of our business to the changing needs of society; and the desire to balance the considerable benefit of continuity with the periodic injection of fresh perspective. Each of our directors and each of the director-nominees also has sufficient time available to devote to the affairs of the Company, is able to work with the other members of the Board of Directors and contribute to the success of the Company and can represent the long-term interests of the Company’s stockholders as a whole. Our directors and the director-nominees have been selected such that the Board of Directors represents a range of backgrounds and experience. Certain information, as of the Record Date, with respect to Dr. Papastavrou and Messrs. Mazarakis, Cappell, Sack, Konigsberg, Steiner, and Ms. Stavola the director-nominees for election at the Annual Meeting, and Mr. Herbst, the director not up for election, is set forth below, including their names, ages, a brief description of their recent business experience, including present occupations and employment, certain directorships that each person holds, the year in which each person became a director of the Company, and a discussion of each person’s particular experience, qualifications, attributes or skills that lead us to conclude, as of the Record Date, that such individual should serve as a director of the Company, in light of the Company’s business and structure. The business address of the director-nominees and the directors listed below is 1680 Michigan Avenue, Suite 700, Miami Beach, FL 33139. Information regarding the Board of Directors is as follows:
Information about the Director-Nominees and Directors
| Name | Age | Position | Director Since | Expiration of Term | | Interested Directors: | | | | | | John Mazarakis | 48 | Executive Chairman of the Board | 2021 | 2025 | | Anthony Cappell | 42 | Co-Chief Executive Officer, Director | 2021 | 2025 | | Peter Sack | 35 | Co-Chief Executive Officer, Director | 2021 | 2025 | | Independent Directors: | | | | | | Jason Papastavrou | 62 | Director | 2021 | 2025 | | Brandon Konigsberg | 54 | Director | 2021 | 2025 | | Michael Steiner | 55 | Director | 2021 | 2025 | | Elizabeth Stavola | 54 | Director Nominee | | | | Independent Directors (not up for election): | | | | | | Frederick C. Herbst | 67 | Director | 2021 | 2025 |
Interested Directors
Interested Directors John Mazarakis co-founded Chicago Atlantic Group in April 2019 and has served as our Executive Chairman since our inception. Mr. Mazarakis is the Co-Executive Chairman and Chief Executive Officer of Vireo Growth Inc., a Canada-based cannabis company whose mission is to provide safe access, quality products and value to its customers while supporting its local communities through active participation and restorative justice programs, since December 2024. As a proven entrepreneur and operator with successful ventures in real estate, retail, and hospitality, Mr. Mazarakis brings over 20 years of entrepreneurial, operational, and managerial experience. He has built a 30+ restaurant chain with more than 1,200 employees, established a real estate portfolio of over 30 properties, developed over 1 million square feet of commercial real estate, and completed multiple real estate financing transactions, at a cumulative annual growth rate exceeding 25%. He has invested in and served as an advisor to multiple successful startups. Mr. Mazarakis holds a Bachelor of Arts in Economics from the University of Delaware and an MBA from The University of Chicago Booth School of Business. Our Board of Directors has concluded that Mr. Mazarakis’s management experience and understanding of the real estate industry, and as a founder of Chicago Atlantic Group, L.P., make him an ideal choice to act as our Executive Chairman of the Board, and that therefore he is qualified to serve as a member of our Board of Directors, including as Chairman. Anthony Cappell co-founded Chicago Atlantic Group in April 2019 and served as our Chief Executive Officer from our inception until March 2024 and as our Co-Chief Executive Officer from March 2024 to the present. Prior to founding Chicago Atlantic, Mr. Cappell was a Managing Director and Head of Underwriting at Stonegate Capital, a private credit investment firm focused on lower middle market businesses and emerging brands from July 2016 to October 2018. At Stonegate, he was responsible for credit, underwriting, and the growth strategy of the loan portfolio. Previously, from January 2013 to June 2016, he was a Senior Underwriter at First Midwest Bank and at Gibraltar Business Capital where he worked on a number of specialty finance transactions including technology, software, turnaround/distressed and re-discount loans. He began his career at Wells Fargo Capital Finance focused on a wide array of industries and loan structures from November 2008 to December 2012. Mr. Cappell holds a BA from the University of Wisconsin — Milwaukee and an MBA from The University of Chicago Booth School of Business. Mr. Cappell’s extensive experience evaluating credit as a debt investor in the specialty finance space, and as a founder of Chicago Atlantic Group, L.P., provides our Board with critical understanding of our business and knowledge of how to craft and execute on our operational and strategic plans. Our Board of Directors has concluded that based on Mr. Cappell’s experience and role as founder of Chicago Atlantic Group, LLC, he is qualified to serve as a member of our Board of Directors. Peter Sack served as our Co-President from July 2021 until March 2024 and as our Co-Chief Executive Officer from March 2024 to the present. Mr. Sack is a credit investor and portfolio manager with experience investing across the capital structure. Mr. Sack also serves as the Chief Executive Officer of Chicago Atlantic BDC, Inc. (LIEN), a publicly traded business development company that primary lends to state-licensed cannabis owners and operators, since March 2025. Prior to joining Chicago Atlantic, Mr. Sack was a Principal at BC Partners Credit from July 2018 to June 2021, where he sourced and underwrote across the firm’s opportunistic and senior lending strategies in a wide array of industries. Previously, Mr. Sack was an Associate at Atlas Holdings LLC, a private-equity firm focused on supporting distressed manufacturing and distribution companies globally, from July 2012 to June 2016. Mr. Sack holds a BA in East Asian Studies from Yale University, a MBA from the Wharton School of the University of Pennsylvania, and was a Fulbright Scholar at Sun Yat-sen University China. Mr. Sack’s wealth of experience as a credit investor and portfolio manager across the capital structure will greatly benefit our Board’s discussions and decisions. Due to these skills and experiences he is qualified to serve as a member of our Board of Directors.
Independent Directors
Independent Directors Jason Papastavrou, Ph.D. has served as a member of our Board of Directors since 2021. Dr. Papastavrou founded ARIS Capital Management, LLC, a wealth management firm, in 2004 and currently serves as its Chief Executive Officer. Previously, Dr. Papastavrou was the founder and managing director of the Fund of Hedge Funds Strategies Group of Banc of America Capital Management (BACAP), president of BACAP Alternative Advisors, and a senior portfolio manager with Deutsche Asset Management. Dr. Papastavrou previously served as a member of the board of directors of LIEN from October 2024 to March 2025; GXO Logistics (NYSE: GXO), a publicly traded pure-play contract logistics company, since August 2021; XPO Logistics, Inc. (NYSE: XPO), a publicly traded leading provider of freight transportation, from September 2011 to August 2021; and previously served on the board of directors of United Rentals, Inc. (NYSE: URI), a publicly traded equipment rental company, from April 2005 to May 2020. He was a tenured professor at the School of Industrial Engineering at Purdue University and holds a B.S. in mathematics, and a M.S. and a Ph.D. in electrical engineering and computer science from the Massachusetts Institute of Technology. Dr. Papastavrou provides our Board with key insights to the financial markets, capital raising activities, and the management of a large, complex business. For these reasons, our Board of Directors has concluded that he is qualified to serve as a member of our Board of Directors. Brandon Konigsberg has served as a member of our Board of Directors since 2021. Mr. Konigsberg is the founder of Kobra Group, LLC, an executive and board level advisory and consulting firm, where he has served since December 2020. He previously served in various roles at JP Morgan Chase & Co., a global financial services firm, from September 1996 to December 2020, including as Managing Director, Global Chief Financial Officer for Human Resources, Global Chief Financial and Operating Officer, and Corporate Treasury, and at J.P. Morgan Securities (formerly Bear Stearns Private Client Services). Mr. Konigsberg has been a business and functional Chief Financial Officer and has held senior management roles in the treasury function of various companies. Prior to joining JP Morgan Chase & Co., Mr. Konigsberg was an auditor at Goldstein, Golub and Kessler, PC. He received a BS in Accounting from University of Albany and an MBA from New York University Stern School of Business. Mr. Konigsberg has served on the board of directors of GTJ REIT, Inc., a private commercial equity REIT, since September 2019, and Flora Growth Corp., a multi-national cannabis company, since September 2022. Mr. Konigsberg brings to our Board his broad experience in financial services, including as a director of a private commercial REIT and a multi-national cannabis company and as a certified public accountant. For these reasons, our Board of Directors has concluded that he is qualified to serve as a member of our Board of Directors. Michael Steiner has served as a member of our Board of Directors since 2021. Mr. Steiner previously served as President of Service Energy LLC, a third-generation family-owned company based in Dover, Delaware, from May 1992 to September 2021. Service Energy is a branded Liberty distributor, employs over 200 local residents, has a fleet of 25 tank trucks and eleven service vans, and owns a storage facility capable of holding over one million gallons of propane and 350,000 gallons of oil. Mr. Steiner also served as President of Petroleum Equipment, Inc. from May 1992 to September 2021. Mr. Steiner holds a BA in History from Wake Forest University and an MBA from the University of Delaware. Mr. Steiner’s near 30 years of management and financial experience are a great benefit to our Board in overseeing our operations. For these reasons, our Board of Directors has concluded that he is qualified to serve as a member of our Board of Directors. Elizabeth (Beth) Stavola is a leading female entrepreneur in the cannabis industry, ranked #1 on the Cannabis Business Executive Women in Cannabis list in 2019. She founded CBD for Life in 2015, a company that produced luxurious and effective CBD infused pain management and beauty products. She founded and served as the Chief Operating Officer, President of US Operations, and Board Member of MPX Bioceutical Corporation, a US national and international diversified cannabis company which she sold in 2019. Prior to her time in cannabis, Ms. Stavola spent her last 10 years on Wall Street with Jefferies & Co as an institutional equity salesperson. She was born and raised in New Jersey and is a graduate of Monmouth University where she received her degree in Finance.
COMPENSATION OF DIRECTORS
COMPENSATION OF DIRECTORS The following table sets forth the compensation that we paid during the year ended December 31, 2024 to our directors. Directors who are employees of the Manager do not receive compensation for their services as directors.
COMPENSATION OF DIRECTORS
| Name of Director | Fees Earned or Paid in Cash | Stock Awards | Total(1) | | Independent Directors: | | | | | Jason Papastavrou | $92,500 | $75,000 | $167,500 | | Frederick C. Herbst | $97,500 | $75,000 | $172,500 | | Donald Gulbrandsen(2) | $72,500 | $75,000 | $147,500 | | Brandon Konigsberg | $82,500 | $75,000 | $157,500 | | Michael Steiner | $72,500 | $75,000 | $147,500 |
COMPENSATION OF DIRECTORS
____________ (1) For a discussion of the independent directors’ compensation, see below. (2) Mr. Gulbrandsen resigned from the Board effective January 1, 2025. For fiscal year 2024, we paid each of our directors an annual retainer of $72,500 in cash in equal quarterly payments of’ $18,125. Each director is entitled to reimbursement of reasonable expenses associated with attending board meetings. However, we do not pay our directors any fees for attending individual board or committee meetings. The lead independent director receives an additional $15,000 annual retainer in cash in equal quarterly payments of $3,750. The Audit Committee chairperson receives an additional $25,000 annual retainer in cash in equal quarterly payments of $6,250. The Compensation Committee chairperson receives an additional $10,000 annual retainer in cash in equal quarterly payments of $2,500. The Nominating and Corporate Governance Committee chairperson receives an additional $5,000 annual retainer in cash in equal quarterly payments of $1,250. Directors must attend at least 75% of all meetings of our Board and all committees on which the director sits (including separate meetings of non-management directors or independent directors) in any specified fiscal year in order to be eligible to receive director compensation. If a director is also one of our executive officers, we will not pay any compensation to such person for services rendered as a director. Additionally, all of our directors are entitled to receive awards in the future under our 2021 Omnibus Incentive Plan. For additional information regarding our 2021 Omnibus Incentive Plan, see “— 2021 Omnibus Incentive Plan.”
Management Agreement
| | For the year Ended December 31 | | | | 2024 | 2023 | | Affiliate Payments | | | | Management fees earned | $4,437,447 | $4,200,148 | | Less: Outside Fees earned | (299,046) | (153,750) | | Base management fees, net | 4,138,401 | 4,046,398 | | Incentive fees | 3,923,495 | 4,736,436 | | Total management and incentive fees earned | 8,061,896 | 8,782,834 | | General and administrative expenses reimbursable to Manager | 4,821,373 | 4,799,210 | | Total | $12,883,269 | $13,582,044 |