Chicago Atlantic Real Estate Finance (NASDAQ: REFI) issues 4.3M shares for $62.5M second-lien notes
Rhea-AI Filing Summary
Chicago Atlantic Real Estate Finance, Inc. entered into a Loan Agreement with Koach entities under which it issued 4,306,754 common shares at $14.53 per share in a private placement in exchange for approximately $62.5 million of second-lien promissory notes secured by 32 cannabis retail and related properties. The new shares represent about 16.8% of common stock outstanding immediately after the issuance. The Koach Notes bear interest at 12.0% annually, comprised of 10.0% cash and 2.0% payment-in-kind, have an aggregate weighted average maturity of approximately 12 years, and carry an exit fee equal to 2.5x the commitment amount of each note; they are subordinated to about $39 million of senior first-lien indebtedness. Koach investors agreed to a lock-up on the stock for 3 months for 20% of the shares and 6 months for the remaining 80%. The share issuance and note acquisition are permitted under a previously signed merger agreement with Chicago Atlantic BDC, Inc., and will be included in the inputs used to determine the merger exchange ratio.
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Filing Explained
REFI completed a share-for-notes transaction that diluted existing holders by 16.8%; the shares also enter the pending merger’s exchange-ratio inputs.
The
The issuance is complete, but the shares were not registered under the Securities Act. For existing common holders, the structural change is dilution: the new shares represent
This was a private placement to accredited investors, and the filing says the shares cannot be offered or sold in the United States without registration or an applicable exemption. The notes are secured by mortgages on 32 retail and related properties, rank behind approximately
The Koach investors are also subject to lock-ups covering
8-K Event Classification
Key Figures
Key Terms
second lien promissory notes financial
payment in kind financial
exit fee financial
Regulation D regulatory
capitalization rates financial
lock-up letter financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
What transaction did REFI (Chicago Atlantic Real Estate Finance, Inc.) disclose in this 8-K?
What are the key economic terms of the Koach Notes received by REFI (REFI)?
How are the Koach Notes secured and what senior debt ranks ahead of them for REFI (REFI)?
How does this Koach transaction interact with REFI’s pending merger with Chicago Atlantic BDC, Inc. (REFI)?
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
July 13, 2026 (
(Exact name of registrant as specified in its charter)
|
(State or other jurisdiction of |
(Commission File Number) |
(IRS Employer |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including
area code (
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
Item 1.01. Entry into a Material Definitive Agreement.
On July 9, 2026, Chicago Atlantic Real Estate Finance, Inc. (the “Company”) entered into a Loan Agreement (the “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 the Company’s common stock, par value $0.01 per share (the “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 (individually, each a “Note” and collectively, the “Koach Notes”). The shares of Common Stock issued to Koach represent approximately 16.8% of the shares of 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 and are subordinate to senior first lien indebtedness in an aggregate principal amount of approximately $39 million as of the closing date.
The Koach Notes bear interest at an aggregate rate of 12.0% per annum, comprised of 10.0% payable in cash and 2.0% payable in kind, with cash interest payments due and payable monthly, and have an aggregate weighted average time to maturity of approximately 12.0 years. The Koach Notes provide for an exit fee of 2.5x the commitment amount of each Note. The Koach Notes contain customary events of default, including failure to pay amounts when due, breaches of covenants, cross-defaults to the related senior first lien indebtedness, and bankruptcy and insolvency events with respect to the applicable Koach entity, upon the occurrence and during the continuance of which the holder may accelerate the amounts due under the applicable Note.
No underwriter or placement agent was engaged by the Company in connection with the transaction, and no underwriting discounts or commissions were or will be paid by the Company.
Additionally, all Koach investors are subject to the terms of a lock-up letter pursuant to which they agree not to sell, transfer, pledge, or otherwise dispose of the Common Stock for a period of (i) three months (with respect to 20% of the Common Stock issued to such investor) and (ii) six months (with respect to the remaining 80% of such Common Stock), in each case following the closing date, subject to limited exceptions.
The foregoing descriptions of the Loan Agreement, the Koach Notes and the lock-up letters do not purport to be complete and are qualified in their entirety by reference to the form of Loan Agreement and the form of Lock-Up Letter, copies of which are filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
Pending Merger
As previously announced, on June 17, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Chicago Atlantic BDC, Inc. (“LIEN”) and the other parties thereto, pursuant to which, subject to the terms and conditions set forth therein, the Company will merge with and into LIEN, with LIEN continuing as the surviving company (the “Merger”). The issuance of the Common Stock and the acquisition of the Koach Notes described above are permitted under the terms of the Merger Agreement. The shares of Common Stock issued in the transaction will increase the number of shares of Common Stock outstanding and, accordingly, will be reflected in the inputs used to determine the exchange ratio for the Merger in accordance with the Merger Agreement.
Item 3.02. Unregistered Sales of Equity Securities.
The terms of the transaction are described under Item 1.01 of this Current Report on Form 8-K, which description is incorporated into this Item 3.02 by reference. The issuance of the shares of Common Stock was not registered under the Securities Act of 1933, as amended (the “Securities Act”). The Company issued the shares in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder for transactions by an issuer not involving any public offering. The shares were issued only to persons that represented that they were “accredited investors” within the meaning of Regulation D and may not be offered or sold in the United States absent registration or an applicable exemption from registration.
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Item 7.01. Regulation FD Disclosure.
On July 13, 2026, the Company issued a press release announcing the Koach transaction. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K. The information in this Item 7.01, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Securities Exchange Act of 1934, as amended, except as expressly set forth by specific reference in such filing.
Additional Information and Where to Find It
In connection with the Merger, LIEN intends to file with the U.S. Securities and Exchange Commission (the “SEC”) a registration statement on Form N-14 (the “Registration Statement”) that will include a joint proxy statement of the Company and LIEN and that also will constitute a prospectus of LIEN (the “Joint Proxy Statement/Prospectus”). INVESTORS AND SECURITY HOLDERS OF THE COMPANY AND LIEN ARE URGED TO READ THE REGISTRATION STATEMENT, THE JOINT PROXY STATEMENT/PROSPECTUS AND ALL OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, LIEN, THE MERGER AND RELATED MATTERS. Investors and security holders may obtain free copies of the Registration Statement, the Joint Proxy Statement/Prospectus and the other documents filed by the Company and LIEN with the SEC, when available, through the website maintained by the SEC at www.sec.gov or from the Company’s website at www.refi.reit.
No Offer or Solicitation
This Current Report on Form 8-K is for informational purposes only and 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 the solicitation of any vote or approval, in any jurisdiction, nor shall there be any sale, issuance or transfer 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 such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.
Participants in the Solicitation
The Company and LIEN and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of the Company and LIEN in connection with the Merger. Information regarding the directors and executive officers of the Company and LIEN, and a description of their direct and indirect interests in the Merger, by security holdings or otherwise, will be included in the Joint Proxy Statement/Prospectus when it becomes available and the other relevant materials filed or to be filed with the SEC. These documents may be obtained free of charge from the sources indicated above.
Forward-Looking Statements
This Current Report on Form 8-K contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements can be identified by terms such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “target,” “believe,” “plan,” “project,” “should,” “seek” and similar expressions, including statements regarding the Merger, the exchange ratio and the Koach transaction. These statements are based on the Company’s current expectations and assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied, including the timing, completion and effects of the Merger and the possibility that it may not be completed on the anticipated timeline or at all; the satisfaction or waiver of the conditions to the Merger; the exchange ratio and the value of the merger consideration; changes in market conditions, interest rates, borrower and tenant performance, real estate valuation, and regulatory developments affecting the cannabis industry; and the other risks described in the Company’s filings with the SEC. Except as required by law, the Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit Number |
Description | |
| 10.1 | Loan Agreement, dated July 9, 2026* | |
| 10.2 | Form of Lock-Up Letter | |
| 99.1 | Press Release, dated July 13, 2026. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
| * | In accordance with Item 601(b)(10) of Regulation S-K, certain provisions or terms of the Form of Loan Agreement have been redacted. The Company will provide an unredacted copy of the exhibit on a supplemental basis to the SEC or its staff upon request. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.
| CHICAGO ATLANTIC REAL ESTATE FINANCE, INC. | |||
| Date: July 13, 2026 | By: | /s/ Peter Sack | |
| Name: | Peter Sack | ||
| Title: | Co-Chief Executive Officer | ||
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Exhibit 99.1
Chicago Atlantic Real Estate Finance, Inc. Announces Second-Lien Financing of Thirty-Two Cannabis Retail Properties
Issued 4,306,754 common shares at price of $14.53
per share in exchange for approximately
$62,500,000 of second lien notes secured by thirty-two retail properties.
CHICAGO – (July 13, 2026) Chicago Atlantic Real Estate Finance, Inc. (NASDAQ: REFI; “Chicago Atlantic”, the “Company” or “REFI”), a commercial mortgage real estate investment trust, today announced, it completed the financing (the “Transaction”) of second-lien notes secured by retail properties managed by Koach Properties Manager LLC (together with its affiliates, “Koach”).
Koach issued to REFI second lien notes (the “Notes”) with an aggregate principal balance of approximately $62,500,000, in exchange for 4,306,754 common shares of REFI issued valued at a price of $14.53 per share. The Notes bear a cash interest rate of 10.0% per annum, and an incremental PIK interest rate of 2.0% per annum. The Notes also provide for an exit fee of 2.5 times the commitment amount of each Note. The Notes have an aggregate weighted average time to maturity of approximately 12 years. The Notes are secured on a second-lien basis by the retail properties that are leased to a portfolio of leading cannabis operators.
The Notes provide REFI with exposure to a portfolio of retail properties that the Company believes are leased at attractive capitalization rates relative to broader retail markets. REFI expects to benefit from Koach’s continued execution of its strategy of acquiring and stabilizing retail properties, managing its portfolio, and opportunistically disposing of properties over time. The Company believes that potential changes in the regulatory environment for cannabis, together with broader market developments, could over time support capitalization rate compression, a broader universe of potential property owners, and increased availability of debt financing for cannabis-leased retail real estate. Koach and Chicago Atlantic expect to continue to collaborate in the origination, development and financing of retail properties.
Peter Sack, Co-Chief Executive Officer of REFI states, “We are pleased to support Koach’s financing. The Transaction offers REFI the opportunity to support a leading portfolio of retail assets and cannabis tenants, particularly to the extent regulatory changes in cannabis markets are expected to lead to compression of capitalization rates on retail properties leased to cannabis operators.”
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 managed by Chicago Atlantic REIT Manager, LLC, an investment manager focused on the cannabis industry and other niche or underfollowed sectors. Please visit https://www.refi.reit/.
About Koach Capital
Koach Capital is a leading owner, developer, financier, and lessor of cannabis retail real estate across the United States. Through innovative sale-leaseback financing, the firm provides cannabis operators with a critical source of non-dilutive growth capital while acquiring high-quality retail assets. Since its founding in 2019, Koach Capital has developed and financed dozens of properties leased to many of the nation’s premier cannabis retailers. For more information, visit https://koachcap.com/
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of U.S. federal securities laws. Forward-looking statements can be identified by terms such as “may”, “will”, “expect”, “intend”, “target”, “believe”, and similar expressions. These statements are based on REFI’s current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially, including changes in market conditions, interest rates, borrower performance, real estate valuation, regulatory developments, the regulatory status of cannabis at the federal and state levels, restrictions on banking and capital markets activity affecting cannabis businesses, and the other risks described in the Company’s filings with the SEC, including its most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. Actual results may differ materially, including the possibility of loss of invested capital. The Company undertakes no obligation to update any forward-looking statement, 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.
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Additional Information and Where to Find It
This communication relates 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, which will include 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
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