Chicago Atlantic BDC, Inc. 8-K

What Happened
Chicago Atlantic BDC, Inc. (LIEN) announced on June 17, 2026 that it signed an Agreement and Plan of Merger to combine with Chicago Atlantic Real Estate Finance, Inc. (REFI). Under the agreement REFI will first elect to be regulated as a business development company (BDC) by filing Form N‑54A, then merge into LIEN with LIEN surviving. The Merger Consideration will be an exchange of REFI shares for LIEN shares using an Exchange Ratio equal to REFI’s closing NAV per share divided by LIEN’s closing NAV per share (values calculated in good faith within 48 hours before closing). The companies intend the transaction to qualify as a tax “reorganization” under Section 368(a) and for the surviving company to be treated as a regulated investment company (RIC).

Key Details

• Merger signed: June 17, 2026; outside termination date if not closed: June 30, 2027.
• Exchange Ratio: REFI NAV / LIEN NAV, each NAV calculated no earlier than 48 hours (excluding Sundays/holidays) before the Merger Effective Time; fractional LIEN shares paid in cash based on 5‑day VWAP.
• Stockholder approvals required: multiple REFI and LIEN votes (including supermajority thresholds for certain REFI BDC Election matters); no appraisal rights under Maryland law for REFI holders.
• Support Agreements executed covering ~4.8% of REFI common stock and ~12.9% of LIEN common stock; closing requires those agreements to remain in effect.
• REFI must pay Tax Dividends before the BDC Election to eliminate accumulated earnings and profits and reduce REIT taxable income to zero for its final REIT year.
• Expense allocation: most transaction costs split 50/50; REFI Manager will pay $2.0 million of REFI’s portion. LIEN Board will consider a post-close share repurchase program of up to $25 million.
• Independent special committees and Keefe, Bruyette & Woods provided a fairness opinion to LIEN’s special committee regarding the Exchange Ratio (excluding certain related parties).

Why It Matters
This is a corporate consolidation of two related Chicago Atlantic entities that will change REFI’s regulatory status (REIT → BDC) and combine the businesses under LIEN. The Exchange Ratio is NAV‑based, so the relative NAVs at closing determine the share exchange — not a fixed share swap — which matters for holders focused on per‑share value. The deal requires multiple regulatory filings and stockholder votes (including SEC filings, Nasdaq approval, and a Form N‑54A BDC election), so timing and regulatory approvals are key risks noted in the filing. Investors should watch the proxy/registration filings (N‑14), the timing of the BDC Election, the calculated NAVs at closing, and any material developments announced on these items.