Chicago Atlantic Real Estate Finance Announces Second Quarter 2026 Financial Results
Rhea-AI Summary
Chicago Atlantic Real Estate Finance (NASDAQ: REFI) reported second quarter 2026 net income of $7.5 million, or $0.34 per share, and distributable earnings of $9.3 million, or $0.43 diluted per share. Net interest income was $12.8 million and regular dividends declared totaled $0.47 per share.
Total loan principal outstanding rose to $453.1 million across 26 portfolio companies, with a gross unlevered weighted average yield to maturity of 15.8% and a debt/equity ratio of 46.6%. The current expected credit loss reserve increased to $9.4 million.
On July 9, 2026, Chicago Atlantic issued 4,306,754 shares (about 16.8% of post-issuance shares) to Koach in exchange for approximately $62.5 million in second lien notes bearing 12.0% interest and secured by 32 cannabis-related properties. The company also highlighted its pending NAV-based stock-for-stock merger with Chicago Atlantic BDC (NASDAQ: LIEN), under which, using March 31, 2026 NAVs and before subsequent adjustments, former REFI stockholders would be expected to own about 50.5% of LIEN at closing, currently targeted for the fourth quarter of 2026.
Positive
- Net income $7.47 million vs. $4.84 million prior quarter
- Loan principal outstanding increased to $453.1 million
- Gross unlevered yield to maturity maintained at 15.8%
- Koach notes added approximately $62.5 million interest-bearing assets
- Pending LIEN merger implies about 50.5% post-merger REFI ownership
- Revolving and notes leverage totaled $141.1 million at June 30, 2026
Negative
- Distributable earnings diluted per share fell to $0.43
- Current expected credit loss reserve rose to $9.37 million
- Debt/equity ratio increased to 46.6% from 38.4%
- Koach issuance diluted existing holders by approximately 16.8%
- Total liquidity reported at about $16.0 million as of August 11, 2026
News Explained
Completed issuance reduces existing holders’ percentage ownership, while REFI reported $16.0 million of net liquidity as of August 11.
The July 9 Koach issuance is completed; as of
The exchanged Koach notes carry
The transaction was a private placement, meaning shares were sold to selected investors outside a public offering; issuing additional shares reduces existing holders’ percentage ownership absent offsetting changes.
The merger remains subject to REFI and LIEN stockholder approvals, including REFI’s proposed BDC election and new investment advisory agreement, plus regulatory approvals, third-party consents, and other closing conditions; the company expects a fourth-quarter 2026 closing if those conditions are satisfied.
Key Figures
Previous Earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| May 07 | 1Q26 earnings | Negative | -5.1% | Lower GAAP earnings followed a $3.8M credit-loss provision despite steady distributable earnings. |
| Mar 12 | 4Q25 earnings | Positive | -0.5% | Net interest income and annual distributable earnings were reported alongside portfolio growth. |
| Nov 04 | 3Q25 earnings | Positive | -1.3% | Net interest income and distributable earnings increased with a $399.95M loan portfolio. |
| Aug 07 | 2Q25 earnings | Positive | +2.7% | Net interest income and net income rose, with a 16.8% weighted average yield. |
| May 07 | 1Q25 earnings | Positive | +0.4% | Net income increased 20.5% sequentially while portfolio and yield remained strong. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Tag-matched earnings events showed three aligned and two divergent reactions, with an average move of -0.76%.
Key Terms
commercial mortgage real estate investment trust financial
distributable earnings financial
current expected credit losses financial
PIK interest financial
business development company regulatory
AI-generated analysis. How Rhea-AI works. Not financial advice.
CHICAGO, Aug. 11, 2026 (GLOBE NEWSWIRE) -- Chicago Atlantic Real Estate Finance, Inc. (NASDAQ: REFI, “Chicago Atlantic”, "REFI" or the “Company”), a commercial mortgage real estate investment trust, today announced its financial results for the second quarter ended June 30, 2026.
Peter Sack, Co-Chief Executive Officer, noted, “Chicago Atlantic operates in a niche market the broader lending industry generally doesn't serve. This often gives us the leverage to set our own terms, protect our downside, and generate yields that are increasingly hard to find anywhere else in the private credit sector. We are proud to announce
Quarterly Results of Operations
| For the three months ended | ||||||||||||||||||||||||
| June 30, 2026 | March 31, 2026 | June 30, 2025 | ||||||||||||||||||||||
| Total Amount | Per Share | Total Amount | Per Share | Total Amount | Per Share | |||||||||||||||||||
| OPERATING RESULTS | ||||||||||||||||||||||||
| Net interest income | $ | 12,834,645 | $ | 0.59 | $ | 13,124,086 | $ | 0.61 | $ | 14,424,987 | $ | 0.67 | ||||||||||||
| Total expenses before provision for expected credit losses | $ | 4,586,025 | $ | 0.21 | $ | 4,239,871 | $ | 0.20 | $ | 4,565,322 | $ | 0.21 | ||||||||||||
| Net income | $ | 7,473,326 | $ | 0.34 | $ | 4,840,364 | $ | 0.23 | $ | 8,877,375 | $ | 0.41 | ||||||||||||
| (Benefit) provision for current expected credit losses | $ | 551,294 | $ | 0.03 | $ | 3,837,851 | $ | 0.18 | $ | 1,147,290 | $ | 0.05 | ||||||||||||
| Distributable earnings - basic | $ | 9,290,163 | $ | 0.44 | $ | 9,833,020 | $ | 0.47 | $ | 10,850,941 | $ | 0.52 | ||||||||||||
| Distributable earnings - diluted | $ | 9,290,163 | $ | 0.43 | $ | 9,833,020 | $ | 0.46 | $ | 10,850,941 | $ | 0.51 | ||||||||||||
| Diluted weighted average shares of common stock outstanding | 21,713,882 | - | 21,484,118 | - | 21,487,106 | - | ||||||||||||||||||
| Regular dividends declared | $ | 10,017,764 | $ | 0.47 | $ | 9,907,728 | $ | 0.47 | 9,905,074 | $ | 0.47 | |||||||||||||
| PORTFOLIO PERFORMANCE | ||||||||||||||||||||||||
| Total loan principal outstanding | $ | 453,125,652 | $ | 413,589,833 | $ | 421,918,148 | ||||||||||||||||||
| Portfolio companies | 26 | 25 | 30 | |||||||||||||||||||||
| Unfunded commitments | $ | 2,355,293 | $ | 4,450,293 | $ | 16,595,000 | ||||||||||||||||||
| Gross unlevered weighted average yield to maturity | 15.8 | % | 15.8 | % | 16.8 | % | ||||||||||||||||||
| Aggregate loan portfolio bearing a variable interest rate | 62.5 | % | 64.8 | % | 59.3 | % | ||||||||||||||||||
| Book value per share | $ | 14.15 | $ | 14.39 | $ | 14.71 | ||||||||||||||||||
| Debt/equity ratio | 46.6 | % | 38.4 | % | 38.8 | % | ||||||||||||||||||
Portfolio Activity
The following table summarizes the Company's primary investment portfolio activities:
| Three months ended March 31, 2026 | Three months ended June 30, 2026 | Six months ended June 30, 2026 | ||||||||||||||
| Principal | Principal | Principal | Portfolio Companies | |||||||||||||
| Loan principal, beginning of period | $ | 411,075,088 | $ | 413,589,833 | $ | 411,075,088 | 26 | |||||||||
| Principal Advances1 | ||||||||||||||||
| New portfolio companies | 16,211,500 | 56,225,081 | 72,436,581 | 4 | ||||||||||||
| Existing portfolio companies | 37,868,649 | 2,978,549 | 40,847,198 | 4 | ||||||||||||
| 54,080,149 | 59,203,630 | 113,283,779 | ||||||||||||||
| Scheduled Principal Repayments | ||||||||||||||||
| New portfolio companies | - | - | - | |||||||||||||
| Existing portfolio companies | (3,349,541 | ) | (3,341,880 | ) | (6,691,421 | ) | 13 | |||||||||
| (3,349,541 | ) | (3,341,880 | ) | (6,691,421 | ) | |||||||||||
| Unscheduled Principal Repayments | ||||||||||||||||
| New portfolio companies | - | - | - | |||||||||||||
| Existing portfolio companies | (48,215,862 | ) | (16,325,932 | ) | (64,541,794 | ) | 9 | |||||||||
| (48,215,862 | ) | (16,325,932 | ) | (64,541,794 | ) | |||||||||||
| Net change in principal outstanding | 2,514,745 | 39,535,819 | 42,050,564 | |||||||||||||
| Loan principal, end of period | $ | 413,589,833 | $ | 453,125,652 | $ | 453,125,652 | 26 | |||||||||
1 Principal advances include capitalized paid-in-kind ("PIK") interest and/or other fees, if any, that were capitalized to the outstanding loan balance of the subject loan(s).
Recent Developments
- Koach Transaction. On July 9, 2026, the Company entered into a Loan Agreement with Koach Capital Fund I LLC, Koach Capital Fund II LP, Koach Capital Fund III LP and their respective wholly owned subsidiaries (collectively, “Koach”), pursuant to which the Company issued 4,306,754 shares of Common Stock at a price of
$14.53 per share, in a private placement transaction, in exchange for second lien promissory notes issued by Koach in an aggregate principal amount of approximately$62.5 million (the “Koach Notes”). The shares issued represent approximately16.8% of the Common Stock outstanding immediately after giving effect to the issuance. The Koach Notes are individually secured by mortgages on 32 retail and related properties leased to cannabis operators, are subordinate to senior first lien indebtedness of approximately$39 million as of the closing date, bear interest at an aggregate rate of12.0% per annum (10.0% cash and2.0% payable in kind), provide for an exit fee of 2.5x the commitment amount of each Note, and have an aggregate weighted average time to maturity of approximately 12.0 years. Additional information regarding the transaction is contained in the Company’s Current Report on Form 8-K filed with the SEC on July 13, 2026.
- Pending Merger with Chicago Atlantic BDC, Inc. On June 17, 2026, the Company entered into an Agreement and Plan of Merger with Chicago Atlantic BDC, Inc. (NASDAQ: LIEN); “LIEN”), an affiliated business development company that is externally managed by an affiliate of the Company’s manager, pursuant to which the Company will merge with and into LIEN, with LIEN continuing as the surviving company (the “Merger”). At closing, REFI stockholders will receive a number of shares of LIEN common stock determined based on the ratio of REFI’s net asset value (“NAV”) per share, as adjusted in accordance with the Merger Agreement, to LIEN’s NAV per share, similarly adjusted, in each case as determined shortly prior to closing. Based on the respective NAVs of REFI and LIEN as of March 31, 2026, and without giving effect to the Koach transaction described above or any other changes in the inputs to the exchange ratio occurring after March 31, 2026, former REFI stockholders would be expected to own approximately
50.5% of LIEN immediately following the Merger. The shares of Common Stock issued in the Koach transaction will be reflected in the inputs used to determine the exchange ratio at closing, and the actual pro forma ownership percentage will depend on the NAV ratio calculated shortly prior to closing and may differ from the March 31, 2026 estimate. Completion of the Merger is subject to the approval of stockholders of both REFI and LIEN, including approval by REFI stockholders of REFI’s election to be regulated as a business development company under the Investment Company Act of 1940 and approval of a new investment advisory agreement, as well as regulatory approvals, third-party consents and other customary closing conditions. Assuming these conditions are satisfied, the Merger is expected to close in the fourth quarter of 2026. There can be no assurance that the Merger will be completed on the anticipated terms or timing, or at all. Additional information regarding the Merger is set forth below under “Additional Information and Where to Find It.”
Capital Activity
- As of June 30, 2026, the Company had approximately
$141.1 million of total drawn leverage, comprised of$91.1 million drawn on the secured revolving credit facility and$50.0 million of outstanding senior unsecured notes due 2028.
- On July 9, 2026, the Company issued 4,306,754 shares of Common Stock to Koach in a private placement transaction in exchange for approximately
$62.5 million of second lien promissory notes. See “Recent Developments — Koach Transaction” above.
- As of August 11, 2026, the Company has
$15.7 million available on its secured revolving credit facility, and total liquidity, net of estimated liabilities, of approximately$16.0 million .
2026 Outlook
Chicago Atlantic offered the following outlook for full year 2026:
- The Company expects to maintain a dividend payout ratio based on Distributable Earnings per weighted average diluted share of approximately
90% to100% on a full year basis.
- If the Company’s taxable income requires additional distribution in excess of the regular quarterly dividend, in order to meet its 2026 taxable income distribution requirements, the Company expects to meet that requirement with a special dividend in the fourth quarter of 2026.
The foregoing outlook assumes that the Company continues to operate on a standalone basis and does not reflect the effects of the pending Merger, including any restrictions on dividends or other actions during the pendency of the Merger under the terms of the Merger Agreement. The declaration of any dividend, including any special dividend, remains subject to authorization by the Board and to the terms of the Merger Agreement.
Conference Call and Quarterly Earnings Supplemental Details
Chicago Atlantic will host a conference call and live audio webcast, both open for the general public to hear, later today at 9:00 a.m. Eastern Time. The number to call for this interactive teleconference is (833) 630-1956 (international callers: 412-317-1837). The live audio webcast of the Company’s quarterly conference call will be available online in the Investor Relations section of the Company’s website at www.refi.reit. The online replay will be available approximately one hour after the end of the call and archived for one year.
Chicago Atlantic posted its Second Quarter 2026 Earnings Supplemental on the Investor Relations page of its website. Chicago Atlantic routinely posts important information for investors on its website, www.refi.reit. The Company intends to use this website as a means of disclosing material information, for complying with our disclosure obligations under Regulation FD and to post and update investor presentations and similar materials on a regular basis. The Company encourages investors, analysts, the media and others interested in Chicago Atlantic to monitor the Investor Relations page of its website, in addition to following its press releases, SEC filings, publicly available earnings calls, presentations, webcasts and other information posted from time to time on the website. Please visit the IR Resources section of the website to sign up for email notifications.
About Chicago Atlantic Real Estate Finance, Inc.
Chicago Atlantic Real Estate Finance, Inc. (NASDAQ: REFI) is a market-leading commercial mortgage REIT utilizing significant real estate, credit and cannabis expertise to originate senior secured loans primarily to state-licensed cannabis operators in limited-license states in the United States. REFI is part of the Chicago Atlantic platform, which has offices in Chicago, Miami, New York, and London.
Forward-Looking Statements
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company’s current views and projections with respect to, among other things, future events and financial performance, including statements regarding the proposed Merger with LIEN and its expected timing and effects, the expected pro forma ownership of former REFI stockholders in LIEN following the Merger, the Company’s July 2026 acquisition of second lien notes from Koach and the performance of such notes and their underlying collateral, the expected implementation and effects of federal rescheduling of medical cannabis, the Company’s dividend expectations, and the Company’s future operations and strategies. Words such as “believes,” “expects,” “will,” “intends,” “plans,” “guidance,” “estimates,” “projects,” “anticipates,” “future” and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to numerous risks and uncertainties, including, without limitation: (i) the risk that the proposed Merger may not be completed on the anticipated terms or timing, or at all; (ii) the failure to obtain the required stockholder approvals of REFI or LIEN, including approval of REFI’s election to be regulated as a business development company and approval of a new investment advisory agreement; (iii) the failure to satisfy other conditions to closing, including regulatory approvals and third-party consents; (iv) the effect of the announcement or pendency of the Merger on the Company’s business, operating results, and relationships with borrowers, employees and other counterparties; (v) risks that the Merger may divert management’s attention from the Company’s ongoing business; (vi) the outcome of any legal proceedings that may be instituted against REFI or LIEN related to the Merger; (vii) the amount of costs, fees and expenses related to the Merger; (viii) developments in the cannabis industry, including federal, state and local legal and regulatory changes and the implementation of federal rescheduling; (ix) changes in interest rates, credit spreads and macroeconomic conditions; (x) risks related to the Koach transaction, including credit and collateral risks associated with the Koach Notes, the subordination of the Koach Notes to senior first lien indebtedness, and the impact of the associated share issuance on the exchange ratio for the Merger; and (xi) the other risks identified in the Company’s filings with the SEC, including its Annual Report on Form 10-K for the year ended December 31, 2025 and subsequent Quarterly Reports on Form 10-Q, and in the registration statement on Form N-14 filed by LIEN with the SEC on July 31, 2026, including the joint proxy statement/prospectus contained therein. New risks and uncertainties arise over time, and it is not possible to predict those events or how they may affect us. We do not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
No Offer or Solicitation
This press release is not intended to and shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended (the “Securities Act”), or in a transaction exempt from the registration requirements of the Securities Act.
Additional Information and Where to Find It
This communication includes information relating to the proposed merger (the “Merger”) of REFI with and into Chicago Atlantic BDC, Inc. (“LIEN”), along with related proposals for which stockholder approval will be sought, pursuant to the Agreement and Plan of Merger, dated as of June 17, 2026 (the “Merger Agreement”) by and between LIEN and REFI. The Merger Agreement was unanimously approved by the Boards of Directors of both LIEN and REFI, each acting on the unanimous recommendation of its special committee of independent directors (each, a “Special Committee”). In connection with the proposals, LIEN intends to file relevant materials with the SEC, including a registration statement on Form N-14 (filed July 31, 2026), which includes a joint proxy statement of LIEN and REFI and a prospectus of LIEN (the “Proxy Statement/Prospectus”). This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act. STOCKHOLDERS OF LIEN AND REFI ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS, AND OTHER DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT LIEN, REFI, THE MERGER AND THE PROPOSALS. Investors and security holders will be able to obtain the documents filed with the SEC free of charge at the SEC’s website, www.sec.gov, or from each company’s investor relations website at www.investors.chicagoatlanticbdc.com (LIEN) and www.investors.refi.reit (REFI), or by directing a request to LIEN@chicagoatlantic.com (LIEN) or IR@REFI.reit (REFI).
Participants in the Solicitation
LIEN, REFI and their respective directors and executive officers, Chicago Atlantic BDC Adviser, LLC, the external investment adviser to LIEN (the “LIEN Adviser”), and Chicago Atlantic REIT Manager, LLC, the external manager of REFI (the “Company Manager”), and their respective directors, officers, members, managers, partners, employees and affiliates, and other persons may be deemed to be participants in the solicitation of proxies from the stockholders of LIEN and REFI in connection with the Merger and the related proposals. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of the stockholders of LIEN and REFI in connection with the Merger and the related proposals, including a description of their direct or indirect interests, by security holdings or otherwise, will be included in the Proxy Statement/Prospectus and other relevant materials to be filed with the SEC when they become available. Additional information regarding the ownership of LIEN and REFI securities by their respective directors and executive officers is included in their SEC filings on Forms 3, 4 and 5, which can be found through the SEC’s website at www.sec.gov. Information about the directors and executive officers of LIEN set forth in LIEN’s proxy statement for its 2026 annual meeting of stockholders, filed with the SEC on April 30, 2026, and in LIEN’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on March 19, 2026. Information about the directors and executive officers of REFI set forth in REFI’s proxy statement for its 2026 annual meeting of stockholders, filed with the SEC on April 23, 2026, and in REFI’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on March 12, 2026. Each of these documents is available free of charge at the SEC’s website, www.sec.gov, or from LIEN’s or REFI’s investor relations website, as applicable.
Contact:
Tripp Sullivan, Lisa Kampf
SCR Partners
IR@REFI.reit
| CHICAGO ATLANTIC REAL ESTATE FINANCE, INC. CONSOLIDATED BALANCE SHEETS | ||||||||
| June 30, 2026 | December 31, 2025 | |||||||
| (unaudited) | ||||||||
| Assets | ||||||||
| Loans held for investment | $ | 304,479,345 | $ | 332,772,244 | ||||
| Loans held for investment - related party (Note 8) | 103,420,472 | 76,183,323 | ||||||
| Loans held for investment, at carrying value | 407,899,817 | 408,955,567 | ||||||
| Current expected credit loss reserve | (9,370,918 | ) | (5,062,785 | ) | ||||
| Loans held for investment at carrying value, net | 398,528,899 | 403,892,782 | ||||||
| Loans, at fair value - related party (amortized cost of | 40,612,435 | - | ||||||
| Cash and cash equivalents | 13,351,699 | 14,948,884 | ||||||
| Interest receivable | 5,077,545 | 4,009,800 | ||||||
| Other receivables and assets, net | 2,946,847 | 874,245 | ||||||
| Related party receivables | 1,181,661 | 1,189,937 | ||||||
| Total Assets | $ | 461,699,086 | $ | 424,915,648 | ||||
| Liabilities | ||||||||
| Revolving loan | $ | 91,050,000 | $ | 49,100,000 | ||||
| Notes payable, net | 49,452,551 | 49,334,459 | ||||||
| Dividend payable | 10,639,254 | 11,157,220 | ||||||
| Related party payables | 2,061,428 | 2,214,920 | ||||||
| Management and incentive fees payable | 1,604,328 | 3,098,576 | ||||||
| Interest payable | 1,673,514 | 1,348,334 | ||||||
| Accounts payable and other liabilities | 1,039,790 | 834,977 | ||||||
| Interest reserve | 2,530,183 | 12,686 | ||||||
| Total Liabilities | 160,051,048 | 117,101,172 | ||||||
| Commitments and contingencies (Note 9) | ||||||||
| Stockholders' equity | ||||||||
| Common stock, par value | 213,144 | 210,803 | ||||||
| Additional paid-in-capital | 324,946,445 | 323,125,854 | ||||||
| Accumulated deficit | (23,511,551 | ) | (15,522,181 | ) | ||||
| Total stockholders' equity | 301,648,038 | 307,814,476 | ||||||
| Total liabilities and stockholders' equity | $ | 461,699,086 | $ | 424,915,648 | ||||
| CHICAGO ATLANTIC REAL ESTATE FINANCE, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | ||||||||||||||||
| For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenues | ||||||||||||||||
| Interest income | $ | 15,219,022 | $ | 16,502,035 | $ | 30,383,710 | $ | 31,609,350 | ||||||||
| Interest expense | (2,384,377 | ) | (2,077,048 | ) | (4,424,979 | ) | (4,142,430 | ) | ||||||||
| Net interest income | 12,834,645 | 14,424,987 | 25,958,731 | 27,466,920 | ||||||||||||
| Expenses | ||||||||||||||||
| Management and incentive fees, net | 1,604,328 | 1,932,957 | 3,323,823 | 3,668,490 | ||||||||||||
| General and administrative expense | 1,529,035 | 1,271,124 | 2,680,508 | 2,467,231 | ||||||||||||
| Professional fees | 495,084 | 480,113 | 998,633 | 973,059 | ||||||||||||
| Stock based compensation | 957,578 | 881,128 | 1,822,932 | 1,530,440 | ||||||||||||
| Provision (benefit) for current expected credit losses | 551,294 | 1,147,290 | 4,389,145 | 74,014 | ||||||||||||
| Total expenses | 5,137,319 | 5,712,612 | 13,215,041 | 8,713,234 | ||||||||||||
| Change in unrealized (loss)/gain on investment | (224,000 | ) | 165,000 | (430,000 | ) | 165,000 | ||||||||||
| Net income before income taxes | 7,473,326 | 8,877,375 | 12,313,690 | 18,918,686 | ||||||||||||
| Income tax expense | - | - | - | - | ||||||||||||
| Net income | $ | 7,473,326 | $ | 8,877,375 | $ | 12,313,690 | $ | 18,918,686 | ||||||||
| Earnings per common share: | ||||||||||||||||
| Basic earnings per common share | $ | 0.35 | $ | 0.42 | $ | 0.58 | $ | 0.90 | ||||||||
| Diluted earnings per common share | $ | 0.34 | $ | 0.41 | $ | 0.57 | $ | 0.89 | ||||||||
| Weighted average number of common shares outstanding: | ||||||||||||||||
| Basic weighted average shares of common stock outstanding | 21,242,557 | 21,002,787 | 21,161,863 | 20,931,025 | ||||||||||||
| Diluted weighted average shares of common stock outstanding | 21,713,882 | 21,487,106 | 21,599,634 | 21,376,645 | ||||||||||||
Distributable Earnings
In addition to using certain financial metrics prepared in accordance with GAAP to evaluate our performance, we also use Distributable Earnings to evaluate our performance. Distributable Earnings is a measure that is not prepared in accordance with GAAP. We define Distributable Earnings as, for a specified period, the net income (loss) computed in accordance with GAAP, excluding (i) non-cash equity compensation expense, (ii) depreciation and amortization, (iii) any unrealized gains, losses or other non-cash items recorded in net income (loss) for the period, regardless of whether such items are included in other comprehensive income or loss, or in net income (loss); provided that Distributable Earnings does not exclude, in the case of investments with a deferred interest feature (such as OID, debt instruments with PIK interest and zero coupon securities), accrued income that we have not yet received in cash, (iv) provision for current expected credit losses and (v) one-time events pursuant to changes in GAAP and certain non-cash charges, in each case after discussions between our Manager and our independent directors and after approval by a majority of such independent directors. We believe providing Distributable Earnings on a supplemental basis to our net income as determined in accordance with GAAP is helpful to stockholders in assessing the overall performance of our business. As a REIT, we are required to distribute at least
In our Annual Report on Form 10-K for the year ended December 31, 2025, we defined Distributable Earnings so that, in addition to the exclusions noted above, the term also excluded from net income Incentive Compensation paid to our Manager. We believe that revising the term Distributable Earnings so that it is presented net of Incentive Compensation, while not a direct measure of net taxable income, over time, can be considered a more useful indicator of our ability to pay dividends. This adjustment to the calculation of Distributable Earnings has no impact on period-to-period comparisons. Distributable Earnings should not be considered as substitutes for GAAP net income. We caution readers that our methodology for calculating Distributable Earnings may differ from the methodologies employed by other REITs to calculate the same or similar supplemental performance measures, and as a result, our reported Distributable Earnings may not be comparable to similar measures presented by other REITs.
| Three months ended | Six months ended | |||||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | |||||||||||||
| Net Income | $ | 7,473,326 | $ | 8,877,375 | $ | 12,313,690 | $ | 18,918,686 | ||||||||
| Adjustments to net income | ||||||||||||||||
| Stock based compensation | 957,578 | 881,128 | 1,822,932 | 1,530,440 | ||||||||||||
| Amortization of debt issuance costs | 83,965 | 110,148 | 167,415 | 220,458 | ||||||||||||
| Provision (benefit) for current expected credit losses | 551,294 | 1,147,290 | 4,389,145 | 74,014 | ||||||||||||
| Change in unrealized (loss)/gain on investment | 224,000 | (165,000 | ) | 430,000 | (165,000 | ) | ||||||||||
| Distributable Earnings | $ | 9,290,163 | $ | 10,850,941 | $ | 19,123,182 | $ | 20,578,598 | ||||||||
| Basic weighted average shares of common stock outstanding (in shares) | 21,242,557 | 21,002,787 | 21,161,863 | 20,931,025 | ||||||||||||
| Basic Distributable Earnings per Weighted Average Share | $ | 0.44 | $ | 0.52 | $ | 0.90 | $ | 0.98 | ||||||||
| Diluted weighted average shares of common stock outstanding (in shares) | 21,713,882 | 21,487,106 | 21,599,634 | 21,376,645 | ||||||||||||
| Diluted Distributable Earnings per Weighted Average Share | $ | 0.43 | $ | 0.51 | $ | 0.89 | $ | 0.96 | ||||||||
